Fraudulent Conveyance Claim Dismissed For Failure to Plead with Particularity

On April 10, 2018, the First Department issued a decision in Carlyle, LLC v. Quik Park 1633 Garage LLC, 2018 NY Slip Op. 02436, dismissing a fraudulent conveyance claim for failure to plead the claim with particularity, explaining:

The actual fraudulent conveyance claims, under the common law and Debtor and Creditor Law (DCL) § 276, should be dismissed because plaintiff failed to allege fraudulent intent with the particularity required by CPLR 3016(b). The key allegations were made upon information and belief, without identifying the source of the information. Moreover, the timing of the allegedly fraudulent transfers - beginning two years before the judgment debtors incurred the subject debts - undermines the claim of fraudulent intent.

(Internal quotations and citations omitted).

We have substantial experience in helping judgment creditors collect on judgments and search for and attach assets worldwide. A big part of that effort is using the legal tools--such as claims for fraudulent conveyance discussed in this opinion--for recovering property that has been transferred to a third party to avoid its being seized to satisfy a judgment. As this decision shows, there are special pleading requirements for fraud-related claims. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client need help collecting on a judgment.