`INDEX VO.
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`INDEX NO. 55034/2017
`FILED: WESTCHESTER COUNTY CLERK 05/21/2018 02:45 PM
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`FILED: WES CHESTER COUNTY CLERK 05m2018 02:45 PM
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`fiIVfiD NYSCEF:
`NYSCEF DOC. NO. 33
`RfiC
`05/21/2018
`NYSCEF DOC. NO. 33
`RECEIVED NYSCEF: 05/21/2018
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`SUPREME COURT OF THE STATE OF NEW YORK
`COUNTY OF WESTCHESTER
`________________________________________________________________________x
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`MIRELLA SALEMI,
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`Plaintif‘f‘,
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`-against-
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`DECISION & ORDER
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`INDEX NO.:
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`5503439017
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`EDWARD GLOBAKAR and GLORIA GLOBAKAR,,
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`Defendants.
`————————————————————————————————————————————————————————————————————————x
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`BLACKWOOD, A.J.S.C.
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`The following papers (e—filed documents 16-32) were read on the E-filed motion by
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`plaintiff, MIRELLA SALEMI, for an order granting summary judgment on the causes of action
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`in the complaint and dismissing the answer and affirmative defenses:
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`Em
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`Notice ofMotion, Affirmation in Support, Memorandum of Law (Exhibits 1-6)
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`Affirmation in Opposition (Exhibits A-C)
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`Reply Affirmation (Exhibits 1 & 2)
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`Upon reading the foregoing papers it is
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`ORDERED that the branch of the motion which seeks summary judgment on each of the
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`causes of action in the complaint is granted; and it is further
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`ORDERED that the branch of the motion which seeks dismissal of the answer and each
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`of the affirmative defenses is granted; and it is further
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`ORDERED the parties are directed to appear on June 1], 2018, at 9:15 am in the
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`Settlement Conference Part, Courtroom 1600, Westchester County Supreme Court, 111 Dr.
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`INDEX NO. 55034/2017
`FILED: WESTCHESTER COUNTY CLERK 05/21/2018 02:45 PM
`INDEX “0' 55034/2017
`FILED: WES CHESTER COUNTY CLERK 05m2018 02:45 PM
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`NYSCEF DOC. NO. 33
`RnCnIVnD NYSCEF: 05/21/2018
`NYSCEF DOC. NO. 33
`RECEIVED NYSCEF: 05/21/2018
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`Martin Luther King Boulevard, White Plains, New York, prepared to select a court date for the
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`inquest on the matter, which shall
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`include a determination as to the value of the shares
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`fraudulently conveyed to Gloria Globakar, as well as reasonable attorney’s fees.
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`MIRELLA SALEMI
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`("Plaintiff“)
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`filed a summons and verified complaint against
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`husband and wife EDWARD GLOBAKAR and GLORIA GLOBAKAR (“Defendants”) to
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`recover certain assets that she alleges were fraudulently transferred from the defendant, Edward
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`Globakar, to his wife, Gloria Globakar while Edward was a defendant in a civil action which
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`resulted in a money judgment in favor of the plaintiff.
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`In 2007,
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`the plaintiff filed a lawsuit alleging that while she was an employee of
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`Edwar ’5, he discriminated against her on the basis of her religion and sexual orientation. A
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`jury trial was held in the matter from February 23, 2012, to March 19, 2012. The jury found in
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`favor of the plaintiff and awarded her $1.6 milliOn. The matter was appealed and the verdict and
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`judgment unanimously affirmed (Salemi v. Gloria’s Tribeca Inc., 115 A.D.3d 569 [1St Dept.
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`2014]). The defendant has failed to make any payment on the judgment to the plaintiff to date.
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`011 or about April 21, 2011, prior to the jury verdict, but while the lawsuit was pending,
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`Edward transferred all of his shares in Mary Ann’s Post Road, Inc., a corporation that owned a
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`Port Chester, New York restaurant, Mary Ann’s Restaurant, to his wife, Gloria. Edward was the
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`sole shareholder of the company prior to transferring the shares. Using the corporation, Gloria
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`opened a new restaurant in the same name of Mary Ann’s Restaurant in a different location in
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`Port Chester, New York. Edward was heavily involved in the opening of the new restaurant,
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`including signing the lease, obtaining the liquor license, and hiring and training the staff,
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`amongst other integral tasks.
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`Discovery having been completed, plaintiff now moves for an order granting summary
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`INDEX NO. 55034/2017
`FILED: WESTCHESTER COUNTY CLERK 05/21/2018 02:45 PM
`INDEX “0' 55034/2017
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`NYSCEF DOC. NO. 33
`RnCnIVnD NYSCEF: 05/21/2018
`NYSCEF DOC. NO. 33
`RECEIVED NYSCEF: 05/21/2018
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`judgment and argues that no material issues of fact exist as to whether or not the defendant is in
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`violation of Sections 273-a and 276 of the Debtor and Creditor Law (“DCL”), and that defendant
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`Gloria Globakar is the recipient of unjust enrichment as a result of the fraudulent conveyance.
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`Furthermore, the plaintiff argues that the affirmative defenses put forth by the defendants should
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`be dismissed as being without merit.
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`Defendants respond first by arguing that the motion should be dismissed, as plaintiff has
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`failed to attach the pleadings to the summary judgment motion in violation of section 3212(b) of
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`the Civil Practice Law and Rules (“CPLR”). Additionally, the defendants argue that even if the
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`court considers the motion on its merits, it should be denied since the plaintiff has failed to Show
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`that there has been an actual conveyance, nor has the plaintiff demonstrated that the defendant
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`intended to hinder, delay, or defraud by conveying the shares. Finally, defendants emphasize
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`that the shares were transferred in good faith and solely for the purpose of allowing Gloria
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`Globakar to independently fund and open a completely new restaurant at a new location.
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`Turning first to the threshold issue of plaintiff’s failure to attach the pleadings to her
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`motion for summary judgment, the court
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`is unpersuadcd by defendant’s argument that this
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`oversight compels the court to dismiss the motion. While the defendants direct the court to
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`caselaw in support of its contention (see Wider v. Heller, 24 A.D.3d 433 [2d Dept. 2005]; Stil
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`Tenants Owners Corp. V. Chumpitz, S A.D.3d 663 [2d Dept. 2004]), they overlook the authority
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`granted to the court in CPLR 200l, which allows the court to disregard an oversight such as this
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`one, as long as a “substantial right of a party is not prejudiced” (CPLR 2001; see also Long
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`Island Pine Barrens Society, Inc. V. County of Suffolk, 122 A.D.3d 688 [2d Dept. 2014]).
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`Noting that all pleadings have been e-flled in this case, and that the plaintiff attached the
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`pleadings to her reply, the court finds that no rights of the defendant have been prejudiced by the
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`NYSCEF DOC. NO. 33
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`omission and therefore, the court will consider the motion on its merits.
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`Turning to the merits of the motion, the court first considers whether the plaintiff has met
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`her burden of establishing a right to summary judgment on the first cause of action - a violation
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`of DCL §2?3-a. “A party moving for summary judgment must make a prima facie showing of
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`entitlement to judgment as a matter of law, offering sufficient evidence to demonstrate the
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`absence of any material issues of fact” (Pinto v. Pinto, 308 A.D.2d 571 [2d Dept. 2003]). Should
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`the plaintiff meet this burden, the burden then shifts to the defendant to show that there exists a
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`material issue of fact, thus defeating the motion (see Alvarez v. Prospect Hosp., 68 N.Y.2d 320
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`[1986]). The court finds that the plaintiff has met her burden and the defendant has failed to
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`overcome it.
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`DCL §273-a, commonly referred to as a “constructive fraud claim,” states, “[e]very
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`conveyance made without fair consideration when the person making it is a defendant in an
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`action for money damages .
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`.
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`. is fraudulent as to the plaintiff in that action without regard to the
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`actual intent of the defendant if, after final judgment for the plaintiff, the defendant fails to
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`satisfy the judgment.” Therefore,
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`the three criteria that must be met before a plaintiff can
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`establish that there has been a violation of this statute are that (I) a conveyance has been made
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`without fair consideration; (2) at the time of the conveyance, the defendant was a defendant in a
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`lawsuit; and (3) the judgment has not been paid. The plaintiff establishes the latter two elements
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`effortlessly. The first, however, requires further analysis.
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`Conveyance is defined as to include “every payment of money, assignment, release,
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`transfer,
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`lease, mortgage or pledge of tangible or intangible property,” (DCL §270). The
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`defendants argues that no conveyance has been made since the conveyance “was in shares of
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`stock of a previously formed corporation but was for a completely new and separate restaurant
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`NYSCEF DOC. NO. 33
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`that defendant did not fund nor desire to open” (Affirmation in Opposition, 1119). While the
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`value of these shares has not been established by either party, the defendant’s argument that they
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`were worthless is belied by the act of the transfer itself.
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`In other words, the defendant would
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`have no reason to transfer the shares to his wife if they were truly worthless. Moreover,
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`Edward’s deposition establishes that Mary Ann’s Restaurant, the asset of Mary Ann’s Post Road,
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`lnc., had been in business for several years. The defendant
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`incorrectly characterizes that
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`fraudulent transfer as the relocation of the restaurant. To the contrary, the transfer was that of
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`the cerporation SO that Gloria Globakar could open a new restaurant with the same name to
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`attract the same local clientele. While the value of its goodwill has not been established, that
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`goodwill was an integral part of the transfer and is certainly an asset to be conveyed (see
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`Constitution Realty, LLC v. Oltarsh, 309 A.D.2d 714 [15' Dept. 2003]). Simply because Gloria
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`funded the opening of the new restaurant does not mean that she did not benefit from the value
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`of the transferred assets once the new restaurant opened.
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`Turning next to the issue of fair consideration, the statute indicates that fair consideration
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`is given for property, or an obligation, “[w]hen in exchange for such property, or obligation, as a
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`fair equivalent
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`therefor, and in good faith, property is conveyed or an antecedent debt
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`is
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`satisfied” (DCL {$272) Since neither party has established the value of the shares that were
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`transfbrred, it is impossible to determine whether the “fair equivalent therefor” was exchanged.
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`However, in determining whether any consideration was exchanged, the court relies upon the
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`defendant’s own words.
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`in his affidavit attached to the affirmation in opposition, the defendant
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`refers the court to a portion of his deposition, wherein he states, “[a]ll of the funds were provided
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`by Mrs. Globakar and one of the things was the $140,000.00 of the pension funds that I used, so
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`you can say that she gave it to me for the shares or you can say she gave it to me because I did
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`NYSCEF DOC. NO. 33
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`the renovation or you could say that she gave it to me because I relocated the business and did all
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`the paperwork and got everything going and established the business” (Globakar Affidavit, 1|25).
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`The defendant’s uncertainty and equivocation regarding the exchange of the $140,000.00, as
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`well as the defendant’s failure to provide any documentation whatsoever regarding the transfer,
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`leads the court to the conclusion that there is insufficient evidence that any consideration was
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`exchanged for the shares (see Gelbard v. Esses, 96 A.D.2d 573 [2d Dept. 1983]).
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`Furthermore, the court finds that the transfer was not made in “good faith” (see DCL
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`§272)L “The good faith of both the transferer and transferee is an indispensable element of fair
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`consideration” (American Panel Tec. V. Hyrise, Inc., 3] A.D.3d 586, 587 [2d Dept. 2006].
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`In
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`assessing whether the transferor and the transferee acted in good faith, the court must consider
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`whether both sides of the exchange had knowledge of “an impending enforceable judgment
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`against the transferor” (Sardis v. Frankel, 113 A.D.3d 135, 14] [ISI Dept. 2014]). The records
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`provided by both sides are replete with evidence that Edward Globakar was aware of the
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`impending judgment against him, and it would defy logic to believe that Gloria, Edward’s wife
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`and business partner, would not be aware of such judgment, as well. For those reasons, the court
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`has determined that neither the transferor nor the transferee acted in good faith and finds that the
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`plaintiff has satisfied all three elements required to establish a violation of DCL §273 -a.
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`Turning next to the second cause of action, section 276 of the DCL states, “[e]very
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`conveyance made and every obligation incurred with actual
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`intent
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`.
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`.
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`to hinder, delay, or
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`defraud either present or future creditors, is fraudulent as to both present and future creditors.”
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`The burden to prove actual fraud lies with the plaintiff and in assessing whether or not a
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`conveyance has been made with actual intent to defraud, the court must consider several factors
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`including, but not limited to, the relationship between the transferor and transferee, the timing of
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`NYSCEF DOC. NO. 33
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`the conveyance,
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`the adequacy of the consideration, and whether the transferor has retained
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`control over the transferred property (Marine Midland Bank v. Murkoff, 120 A.D.2d 122 [2d
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`Dept. 1986]). After considering the circumstances herein as they relate to each of these factors,
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`the court finds that there was actual fraud on the part of the defendant.
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`The relationship between the transferor and transferee is that of husband and wife. “A
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`transfler from husband to wife is ordinarily scrutinized carefully” (Marine Midland Bank v.
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`Murkoff, 120 A.D.2d at 128). Particularly with respect to the sufficiency of the consideration,
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`“[a]n intra-family transaction places a heavier burden on defendant to demonstrate fairness”
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`(Wall Street Associates v. Brodsky, 275 A.D.2d 526, 528 [lSt Dept. 1999]). Furthermore, in
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`addition to being husband and wife,
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`the parties involved in the transfer acted as business
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`partners. Edward’s deposition lays out the many ways that he assisted his wife in both this new
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`business, as well as those in the past. He indicates that she was “not a business person” and
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`often relied upon him to answer questions regarding her business ventures (Affirmation in
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`Opposition, Exhibit B). For these reasons, the court finds that the relationship between the
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`parties involved in the transfer is a “badge of fraud” and weighs heavily against the defendant.
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`The same is true for the timing of the conveyance. The lawsuit was filed by the plaintiff
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`in 200'? and was pending for several years. Finally, after almost four years, after discovery was
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`completed, and only several months prior to the trial, the defendant transferred all of the Shares
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`of his corporation to his wife. The defendant relies on the expiration of the lease of the original
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`Mary iAnn’s Restaurant to explain the timing of the conveyance. However, the court notes that
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`the lease expired in December of 2010, but the restaurant continued to operate until March 31,
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`201 1, and the shares were transferred on April 21, 2011. Therefore, since the expiration of the
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`lease for the original restaurant in December of 2010, did not immediately precede the transfer
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`INDEX V0.
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`INDEX NO. 55034/2017
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`NYSC
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`RfiCfiIVfiD NYSCEF:
`05/21/2018
`NYSCEF DOC. NO. 33
`RECEIVED NYSCEF: 05/21/2018
`3F DOC. N04 33
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`i i
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`I
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`of the shares, the court is unconvinced that the expiration of the lease is what precipitated t
`transfer of the corporation.
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`he
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`Bank, at 129; see also Scola v. Morgan, 66 A.D.2d 228 [1St
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`Dept. 1979]). In the defendant’s own
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`(Affirmation in Opposition, Exhibit B).
`Moreover, the liquor license for the new establishment was in Edward Globakar’s name, and he
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`hinder, delay, or defraud the plaintiff(Steinberg v. Levine, 6 A.D.3d 620 [2d Dept. 2004]). For
`these reasons, the 001111 finds that the plaintiffhas established a violation ofDCL §276.
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`NYSC
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`RfiCfiIVfiD NYSCEF:
`3F DOC. NO. 33
`05/21/2018
`NYSCEF DOC. NO. 33
`RECEIVED NYSCEF: 05/21/2018
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`Dated: White Plains, New York
`MayS‘f, 2018
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`Via E-tiling to the attorneys of record
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`HON. HELEN M. BLACKWOOD
`Acting Justice of the Supreme Court
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