332 Conn. 1
Conn.2019Background
- Helen McGee, an elderly nursing-home resident, accrued approximately $208,000 in debt to Bel Air Manor after gaps/delays in government benefits; her son Stephen cared for her and held a power of attorney.
- Stephen, acting under the power of attorney, made transfers of Helen’s assets to himself; Helen did not personally execute or participate in those transfers according to the trial court’s findings.
- Geriatrics, Inc. (the nursing home) sued, alleging fraudulent transfers under the Connecticut Uniform Fraudulent Transfer Act (CUFTA) and unjust enrichment.
- The trial court found the transfers were made by Stephen (not Helen), found competing equitable claims (Stephen had provided services/loans), and concluded the plaintiff failed to prove CUFTA liability or that its claim was superior.
- The majority reversed part of that ruling on grounds relying on agency principles and CUFTA’s supplemental clause; Justice D’Auria (joined by two justices) concurred in part and dissented in part, arguing CUFTA does not reach transfers made solely by a non-debtor attorney-in-fact.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held (Dissent) |
|---|---|---|---|
| Does CUFTA apply when a debtor’s assets are transferred solely by the debtor’s attorney‑in‑fact with no participation by the debtor? | Agency principles (principal bound by agent) and CUFTA §52‑552k permit imputing the agent’s transfers to the debtor, making them "made by a debtor." | CUFTA requires the transfer to be "made by a debtor" (i.e., caused/authorized by the person liable on the claim); transfers executed solely by a third party without debtor participation do not qualify. | Dissent: No — where the principal did not participate, CUFTA does not reach transfers made solely by the agent; trial court correct to dismiss CUFTA claim. |
| Can CUFTA’s supplementary incorporation of general law (including principal‑agent law) be used to displace the statute’s "made by a debtor" requirement? | Yes — §52‑552k incorporates principles of law and equity (including agency) unless displaced, so agency can attribute transfers to the debtor. | No — the statutory phrase "made by a debtor" limits CUFTA’s reach and displaces automatic imputation of agent conduct absent statutory text. | Dissent: The plain statutory text controls; §52‑552k does not override "made by a debtor" to automatically attribute agent acts where principal did not participate. |
| May a debtor be charged under CUFTA when a third party acts as alter ego, or when the debtor directed/orchestrated the transfer? | N/A (plaintiff relied mainly on agency/§52‑552k). | Such circumstances can justify attributing a third‑party transfer to a debtor (alter ego, direction/orchestration, or other participation). | Dissent: Agrees — CUFTA can reach third‑party transfers if debtor participated (alter ego, directed/orchestrated transfers), but not where there is no participation as found here. |
| Was plaintiff’s agency theory preserved for appellate review (plain‑error invoked)? | Asked this court to consider agency theory (invoking plain error) despite not advancing it below. | Trial record and briefs did not raise §52‑552k or agency theory; claim not preserved; plain error is extraordinary. | Dissent: Skeptical that plain‑error review is appropriate; the agency theory was not properly preserved and is not "obvious and indisputable." |
Key Cases Cited
- Folmar & Associates, LLP v. Holberg, 776 So. 2d 112 (Ala. 2000) (Alabama court held UFTA does not apply to transfers made solely by third‑party transferors).
- Methodist Manor Health Center, Inc. v. Py, 307 Wis. 2d 501 (Wis. App. 2008) (Wisconsin appellate court rejected UFTA claim against an attorney‑in‑fact who made transfers without debtor participation).
- Presbyterian Medical Center v. Budd, 832 A.2d 1066 (Pa. Super. Ct. 2003) (Pennsylvania Superior Court declined to attribute agent’s transfers to debtor absent facts showing debtor’s participation).
- Thompson Properties v. Birmingham Hide & Tallow Co., 839 So. 2d 629 (Ala. 2002) (alter‑ego/control can justify treating a third party as the debtor under UFTA).
- Kraft Power Corp. v. Merrill, 981 N.E.2d 671 (Mass. 2013) (Massachusetts court recognizing attribution where corporate control/alter‑ego warrants it).
- Kindred Nursing Centers East, LLC v. Morin, 7 A.3d 919 (Conn. App. 2010) (Connecticut appellate case discussing agent/principal liability in the nursing‑home/contract context).