201 Conn.App. 774
Conn. App. Ct.2020Background
- In 2012 plaintiff Featherston obtained a $216,972.83 judgment against Katchko Construction Services (renamed Katchko & Son Constr. Servs., "Son Singular").
- Son Singular ceased operations July 1, 2012; a new corporation (Katchko & Sons Constr. Servs., "Sons Plural") was incorporated August 6, 2012.
- Featherston sued Sons Plural and Son Singular alleging fraudulent transfers under CUFTA (§52-552e, §52-552f) and a CUTPA claim, alleging assets (notably two excavators) were moved to frustrate collection of the 2012 judgment.
- Trial court found fraudulent transfer(s), enjoined transfers, allowed attachment execution for the judgment amount against defendants’ equipment, and awarded CUTPA attorney’s fees; judgment issued November 8, 2018.
- Plaintiff later moved (post-judgment) to amend to add a standalone successor-liability count and sought punitive damages under CUTPA; court granted the amendment and later denied punitive damages; defendants filed an amended appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Appeal finality / jurisdiction | Final judgment existed because liability and fees were decided | Original appeal was final and timely | Original appeal was not final because punitive damages remained; amended appeal is jurisdictionally proper (original appeal dismissed) |
| Post-judgment motion to amend (add successor-liability count) | Amendment merely conforms pleadings to proof; no new facts; no prejudice | Untimely, no special circumstances, and asserts successor liability improperly as standalone claim | Court abused discretion granting post-judgment amendment; successor liability cannot be pleaded as an independent cause of action; motion to amend should be denied |
| CUFTA §52-552e(a)(1) (actual intent fraudulent transfer) | Assets (two excavators) were transferred to Sons Plural shortly after judgment with intent to hinder collection | No clear-and-convincing proof of specific transfers or fraudulent intent | Affirmed as to §52-552e(a)(1): clear-and-convincing evidence supported transfer of two excavators and indicia of actual intent to hinder/delay/defraud creditor |
| CUFTA §52-552f(a) (constructive fraud / insolvency) | Transfer lacked reasonably equivalent value and rendered debtor insolvent | No evidence Son Singular was insolvent at the time of transfer or became insolvent as a direct result | Reversed as to §52-552f(a): insufficient evidence about timing/value to show insolvency at transfer or that transfer caused insolvency; judgment for Count Two vacated |
| CUFTA relief (§52-552h / §52-552i) scope and valuation | Attachment/execution and injunction against equipment are proper remedies; valuation not required because relief was provisional | Order was overbroad (authorized attachment of "other" equipment) and court failed to value assets as required if awarding damages | Court may permit attachment/execution and enjoin transfer of the two excavators, but the relief was overbroad insofar as it encompassed unspecified "other" property; no damages were awarded under CUFTA so §52-552i(b) valuation did not apply |
| CUTPA claim | Fraudulent transfer scheme constitutes unfair/deceptive trade practice; fees and punitive damages allowable | CUTPA depends on CUFTA finding; if CUFTA fails, CUTPA fails | CUTPA judgment (attorney's fees) affirmed because fraudulent transfer under §52-552e(a)(1) was established |
Key Cases Cited
- Perkins v. Colonial Cemeteries, Inc., 53 Conn. App. 646 (1999) (appeal is not final while postjudgment punitive-damages request remains pending)
- Wolfork v. Yale Medical Group, 335 Conn. 448 (2020) (appellate courts must dismiss appeals taken from nonfinal judgments)
- Burton v. Stamford, 115 Conn. App. 47 (2009) (postverdict/postjudgment amendments may be allowed only under special circumstances)
- Geriatrics, Inc. v. McGee, 332 Conn. 1 (2019) (overview of CUFTA remedies and bases for fraudulent-transfer liability)
- Robbins v. Physicians for Women’s Health, LLC, 311 Conn. 707 (2014) (successor liability is a theory transferring predecessor liability, not an independent cause of action)
- Certain Underwriters at Lloyd’s v. Cooperman, 289 Conn. 383 (2008) (burden for fraudulent-transfer elements and clear-and-convincing evidence standard)