Connecticut Nat. Bank v. D'Onofrio

• Decision Date: 30 September 1997
• Docket Number: 16141,Nos. 14201,s. 14201
• Citation: 46 Conn.App. 199,699 A.2d 237
• Court: Connecticut Court of Appeals
• Parties: CONNECTICUT NATIONAL BANK et al. v. Louis D'ONOFRIO et al.

Page 237

699 A.2d 237

46 Conn.App. 199

CONNECTICUT NATIONAL BANK et al. v. Louis D'ONOFRIO et al.

Nos. 14201, 16141.

Appellate Court of Connecticut.

Argued April 28, 1997.

Decided Aug. 19, 1997.

Certification Denied Sept. 30, 1997.

Joseph Glass, New Haven, for appellants-appellees (defendants).

Brian B. Staines, with whom, on the brief, was Edward P. Jurkiewicz, Hartford, for appellees-appellants (plaintiffs).

Before DUPONT, C.J., and LANDAU and FRANCIS X. HENNESSY, JJ.

LANDAU, Judge.

The defendants ¹ appeal and the plaintiffs cross appeal from the judgment of the trial court, rendered after a jury trial, awarding damages to the plaintiffs, Connecticut National Bank (CNB) and the trustee in bankruptcy, Richard Coan, and voiding certain fraudulent conveyances by the defendants. On appeal, the defendants argue that the trial court improperly (1) denied their request to charge, (2) denied their motion to set aside the verdict and motion for a directed verdict, and (3) set aside the transfers of personal and real property. On cross appeal, the plaintiffs argue that the trial court improperly denied their motion to set aside the verdict because the verdict form was inconsistent with the jury interrogatories. We affirm the judgment of the trial court.

The jury could reasonably have found the following facts. In July, 1992, CNB filed a second amended complaint, in which it alleged that it had obtained a judgment against Louis D'Onofrio and Marshall D'Onofrio in the amount of $154,232, inclusive of interest and attorney's fees, as a result of their default on a number of promissory notes. The complaint also alleged that, prior to the judgment's being entered, Louis D'Onofrio and Marshall D'Onofrio fraudulently conveyed certain real and personal property to their respective spouses, Janice D'Onofrio and Emma D'Onofrio, without consideration or with the intent of avoiding CNB's debt or in an effort to hinder the collection of a judgment. The complaint further alleged that Janice and Emma, the defendant transferees, knew that Louis and Marshall were indebted to CNB and, by accepting the conveyances knowingly aided, abetted and conspired with their respective husbands to avoid the debt. ² CNB sought damages, punitive damages, attorney's fees, and that the conveyances be set aside.

In January, 1993, Marshall filed a Chapter 7 bankruptcy petition in the United States Bankruptcy Court for the District of Connecticut. Subsequently, Richard Coan, the appointed trustee, instituted adversary proceedings in the bankruptcy court, pursuant to 11 U.S.C. §§ 544(b) and 548(a), against Emma to avoid the transfers of certain property by Marshall to Emma and to recover such property or its value pursuant to 11 U.S.C. § 550(a). In August, 1994, the bankruptcy court entered an order suspending the adversary proceeding in bankruptcy court and granting the plaintiff Coan relief from bankruptcy stay to proceed in the state court. Subsequently, Coan filed a motion to be added as a party plaintiff in this action, which the trial court granted in September, 1994. Coan also filed an amended complaint on August 30, 1994, against Marshall and Emma, to avoid fraudulent transfers and to recover the value of the property. The defendants filed an answer and a special defense that the statute of limitations had run pursuant to General Statutes § 52-552j. ³

Following a jury trial, the case was submitted to the jury with interrogatories as to Louis and Janice, and Marshall and Emma. The jury returned a verdict of $77,500 in favor of CNB against Louis and Janice and a verdict of $77,500 in favor of Coan against Marshall and Emma. The trial court accepted the plaintiffs' verdicts on November 4, 1994. On November 7, the defendants filed postverdict motions to set aside the verdicts, which the trial court denied. On that same day, the plaintiffs also filed a motion to set aside the verdict, which the trial court denied. The plaintiffs filed a motion for order dated November 15, 1994, requesting that the trial court set aside certain fraudulent conveyances in favor of CNB and Coan. On November 22, 1994, the defendants appealed from the judgment for the plaintiffs, and the plaintiffs subsequently cross appealed from the denial of their motion to set aside the verdict. The trial court granted the plaintiffs' motion for order setting aside the conveyances on December 28, 1994, and the defendants amended their appeal to include this order.

In February, 1996, during oral argument in this court, it came to light that the bankruptcy court had reopened the case against Marshall, and, as a result, we ordered the appeal stayed pending notification that the automatic bankruptcy stay had been lifted. In April, 1996, the bankruptcy court, in response to the plaintiff Coan's unopposed motion for relief from stay filed in that court, ordered that the automatic stay pursuant to 11 U.S.C. § 362(a) was annulled ab initio to permit the appeal to proceed in state court. ⁴

Meanwhile, in March, 1996, Coan filed a motion to correct the judgment because the wrong plaintiff, CNB and not Coan, was named in the verdict as to the defendants Marshall and Emma. The trial court, over the defendants' objection, granted the motion to correct on June 24, 1996, and the defendants appealed from that order. ⁵

Marshall filed a motion to vacate the relief from stay order dated August 20, 1996, which the Bankruptcy Court denied. On August 30, 1996, the defendants filed a motion in this court seeking permission to file a motion to vacate the judgment in the trial court, arguing that Coan did not obtain relief from stay from the bankruptcy court prior to filing his complaint against Marshall and Emma in the trial court. This court denied that motion on November 5, 1996.

I

The defendants first claim that the trial court improperly denied their request to charge. The defendants, relying on Katz v. Richman, 114 Conn. 165, 170, 158 A. 219 (1932), requested that the jury be charged that if the defendants were not insolvent at the time of the transfers of their respective property, notwithstanding future misfortune, no fraudulent conveyances occurred. ⁶ The plaintiffs contend that the defendants' rely on language in Katz that is taken out of context and therefore inappropriate. We agree with the plaintiffs.

Here, the defendants' requested charge was an inadequate statement of the law and, thus, the trial court was not bound to give such a charge. State v. Manganella, 113 Conn. 209, 218, 155 A. 74 (1931). In the area of fraudulent conveyances, we have held that " '[t]he party seeking to set aside a conveyance as fraudulent bears the burden of proving either: (1) that the conveyance was made without substantial consideration and rendered the transferor unable to meet his obligations; or (2) that the conveyance was made with a fraudulent intent in which the grantee participated. Bizzoco v. Chinitz, 193 Conn. 304, 312, 476 A.2d 572 (1984); Zapolsky v. Sacks, 191 Conn. 194, 200, 464 A.2d 30 (1983). The party seeking to set aside the conveyance need not satisfy both alternatives. Bizzoco v. Chinitz, [supra, at 312, 476 A.2d 572].' ... Tyers v. Coma, 214 Conn. 8, 11, 570 A.2d 186 (1990); see also Virginia Corp. v. Galanis, 223 Conn. 436, 443-44 n. 10, 613 A.2d 274 (1992)." Wendell Corp. Trustee v. Thurston, 239 Conn. 109, 115, 680 A.2d 1314 (1996). See General Statutes § 52-552f. ⁷ We conclude that the trial court properly instructed the jury on the law of fraudulent conveyance.

II

The defendants next argue that the trial court improperly denied their motions to set aside the verdict and for a directed verdict. The defendants contend that the jury verdicts should not have been entered against Janice and Emma because the prior judgment sued upon by the plaintiffs was against only Louis and Marshall. Therefore, the judgments rendered against Janice and Emma should have been set aside as they were not previous judgment debtors on the promissory notes.

Before we can review the defendants' claim, we must first determine whether the defendants properly preserved this claim for appeal. " 'It is an established rule of appellate practice in this state that in order to obtain a full review of claims of error in civil jury cases, parties must raise those errors with the trial court....' " Barrese v. DeFillippo, 45 Conn.App. 102, 104, 694 A.2d 797 (1997). Here, the defendants made a written motion for a directed verdict at the close of the plaintiffs' case based on their special defense that the plaintiffs' action was barred by the statute of limitations provided for in § 52-552j. The court reserved decision on that motion. Following the court's acceptance of the plaintiffs' verdict, the defendants then filed a motion to set aside the verdict, in which they again relied on their statute of limitations special defense. The trial court denied both motions. In their brief, the defendants argue, for the first time on appeal, that the trial court should have granted their motions for a directed verdict and to set aside the verdict as to Janice and Emma, relying not on their statute of limitations special defense, but rather on the ground that Janice and Emma were improperly named in the judgment. Because the defendants' claim was not properly preserved, we decline to review it. See Barrese v. DeFillippo, supra, at 104, 694 A.2d 797.

III

The defendants next argue that the trial court improperly set aside the transfers of the personal and real property of the defendants after it accepted the verdicts because the applicable statute of limitations had run.

We must first determine which statute of limitations applies to these causes of action. At the time CNB filed its original complaint against the defendants in September, 1990, the applicable statute of limitations for fraudulent conveyance actions brought pursuant to General Statutes (Rev. to 1989) § 52-552 was the three year tort statute of...