21-202
Mirlis v. Greer
In the
United States Court of Appeals
For the Second Circuit
______________
August Term, 2022
(Argued: February 21, 2023 Decided: August 30, 2023)
Docket No. 21-202
______________
ELIYAHU MIRLIS,
Plaintiff-Appellee,
–v.–
SARAH GREER,
Defendant-Appellant.
______________
Before: WALKER, LYNCH, and ROBINSON, Circuit Judges.
______________
Defendant-Appellant Sarah Greer appeals the district court’s
judgment awarding damages to Plaintiff-Appellee Eliyahu Mirlis to
recover funds Greer received as the result of various alleged
fraudulent transfers. The district court entered a default against
Greer as a sanction under Federal Rule of Civil Procedure 37(b) for
her repeated failure to comply with discovery orders, and ultimately
entered a default judgment against Greer for fraudulent transfers,
awarding Mirlis damages calculated based on three checks Greer
drew from bank accounts she held jointly with her debtor husband.
We conclude that the district court did not abuse its discretion
in determining that Greer’s noncompliance during discovery
warranted a default. We also conclude that, on this record, Greer’s
withdrawals from accounts she held jointly with her husband
constitute fraudulent transfers under Connecticut law. We
accordingly AFFIRM.
AFFIRMED.
______________
MATTHEW K. BEATMAN, James M. Moriarty, John
L. Cesaroni (on the brief), Zeisler & Zeisler, P.C.,
Bridgeport, CT, for Plaintiff-Appellee
RICHARD P. COLBERT, Matthew J. Letten (on the
brief), Day Pitney LLP, New Haven, CT; Jonathan
J. Einhorn (on the brief), Law Office of Jonathan J.
Einhorn, New Haven, CT, for Defendant-Appellant.
______________
ROBINSON, Circuit Judge:
Defendant-Appellant Sarah Greer appeals the district court’s judgment
awarding damages to Plaintiff-Appellee Eliyahu Mirlis to recover funds Greer
received as the result of an alleged fraudulent transfer—namely, money she
withdrew from bank accounts she held jointly with her debtor husband and placed
into her personal, individually held bank accounts.
2
The district court entered a default against Greer as a sanction under Federal
Rule of Civil Procedure 37(b) for her repeated failure to comply with discovery
orders, and ultimately entered a default judgment against Greer for fraudulent
transfers, awarding Mirlis damages calculated based on three checks Greer drew
from bank accounts she held jointly with her debtor husband.
For the reasons set forth below, we conclude that the district court did not
abuse its discretion in determining that Greer’s noncompliance during discovery
warranted a default. We also conclude that, on this record, Greer’s withdrawals
constitute fraudulent transfers under the Connecticut Uniform Fraudulent
Transfer Act (“CUFTA”), Conn. Gen. Stat. §§ 52-552e, 52-552f, and Connecticut
common law. We accordingly AFFIRM.
BACKGROUND
Mirlis is a creditor of Greer’s husband, having secured a judgment against
him of over $21 million in June 2017. 1 See Mirlis v. Daniel Greer, No. 3:16-cv-678
(MPS), Judgment, Dkt. No. 163 (D. Conn. June 6, 2017). Greer’s husband was on
notice of the claims that gave rise to Mirlis’ underlying lawsuit since at least 2002,
1 Unless otherwise specified, the facts set forth here are drawn from the district court’s Ruling on
Motion for Default Judgment, Mirlis v. Greer, No. 3:18cv2082(MPS), 2021 WL 405886 (D. Conn.
Jan. 4, 2021), reconsideration denied,
2021 WL 1711649 (D. Conn. Apr. 30, 2021), and the facts alleged
in Mirlis’s complaint. Because the district court’s judgment was based on an order of default
against Greer, the district court appropriately accepted the facts alleged in Mirlis’s complaint as
true.
3
when the conduct giving rise to Mirlis’s claims against him began, and Greer
herself was on notice since at least May 2016, when the underlying lawsuit was
filed.
As relevant to this appeal, in order to collect on the judgment against her
husband, Mirlis brought claims against Greer arising from three allegedly
fraudulent transfers to her. Greer and her husband held joint checking accounts
at Liberty Bank and Start Community Bank. The Liberty Bank account was
opened in January 2010, after Greer’s husband was on notice of the claims that
gave rise to the suit against him, see J. App’x 439 (reflecting a “Consumer Signature
Card” for the Liberty account dated January 13, 2010), and the Start account was
opened in February 2017, after Mirlis sued Greer’s husband, see also J. App’x 405-
07 (reflecting a “New Account Review Form” for the Start account dated February
17, 2017). Greer’s husband contributed all of the funds in the Liberty account, and
almost all of the funds in the Start account. 2
2 Greer testified that she did not know whether she had deposited any funds into the Start
account, and that, “[b]esides Social Security,” she would have had no funds available in 2017 to
have deposited in that account. J. App’x 425. In addition, Mirlis alleged that Greer deposited the
money she earned into a separate account owned solely by her. A review of the May and June
2017 Start bank statements (the only statements for this account in the record) confirms that the
4
In May 2017, about a week before the jury returned its verdict in the
underlying action between Mirlis and Greer’s husband, Greer drafted a $5,000
check from the Start account payable to herself. This check was then deposited
into an account Greer held solely in her own name. The next month, in June 2017,
after the jury verdict but a day before judgment was entered against Greer’s
husband, Greer drafted a $220,000 check from the Liberty account payable to
herself. Greer deposited this check into an account at another bank that she
recently opened solely in her name. Greer testified at her deposition that she
transferred the funds from the Liberty account “[b]ecause [she] did not want it
taken.” J. App’x 427. After judgment was entered in Mirlis’s action against Greer’s
husband, Greer wrote a $13,000 check drawn from the Start account; that check
Start account balance as of April 29, 2017 was $10,932.26, and that a total of approximately
$30,641.80 was deposited into the account between April 29 and Greer’s second withdrawal of
$13,000 on June 16, 2017. J. App’x 430-31, 434-35. The only record evidence of a deposit of social
security benefits for Greer reflects a $1,997.70 payment from the Social Security Administration
on May 24. J. App’x 431. (There was also a deposit of the same amount on June 28, 2017, but that
was after Greer made the withdrawals at issue in this case. J. App’x 435.) This is substantially
less than the $18,000 she withdrew that Mirlis contends constituted fraudulent transfers, and only
a small portion of the monies in the account as of April 29 or deposited thereafter by Greer’s
husband. In addition, Greer’s contributions to the Start account were further offset by payments
she made from the account to third parties. See, e.g., J. App’x 420, 422 (Greer acknowledging that
she made payments to third parties from the Start account in May and June 2017); J. App’x 432,
436 (copies of checks with Greer’s signature). Because Greer has not argued on appeal or in the
proceedings below that she personally contributed funds to the Start account, we need not
determine with more specificity her precise contributions to the account.
5
was likewise deposited into an account held solely in her name. Greer did not
provide consideration for any of these checks.
In December 2018, Mirlis sued Greer under Connecticut statutory and
common law to recover the funds Greer withdrew from the joint accounts. 3 Mirlis
alleged that Greer’s husband transferred the funds to Greer “to avoid paying” the
debt owed to Mirlis, J. App’x 18 ¶ 1, and that the transfers “were made with the
actual intent to hinder, delay or defraud” Greer’s husband’s creditors, J. App’x 25
¶ 49.
Mirlis first served Greer with interrogatories and requests for production
regarding her finances in May 2019. Greer did not respond. In August 2019, the
district court ordered Greer to comply with the discovery requests within 14 days.
Greer did not timely respond. In October 2019, the court granted Mirlis’s motion
for sanctions and again ordered Greer to “respond in full to the outstanding
discovery requests.” J. App’x 269. The court also ordered Greer to pay Mirlis’s
attorney’s fees relating to the motion for sanctions and to file an affidavit setting
3 Mirlis also sued to recover funds transferred from the Yeshiva of New Haven to Greer’s
retirement accounts. Greer’s appeal with respect to those transfers and the related denial of her
motion for reconsideration is now moot because, after Greer filed her opening brief in the instant
appeal, this Court—at Mirlis’s request—remanded the case, and the district court amended its
judgment to exclude damages associated with these retirement transfers. For that reason, we
need not address the arguments in Greer’s opening brief challenging the district court’s award of
damages as to the retirement account transfers.
6
forth with specificity the steps she had taken to comply with the discovery
requests. It warned that “[f]ailure to comply with this order may result in a default
judgment . . . .” J. App’x 269-70 (emphasis omitted). Greer filed an affidavit, but
her response to the court’s order was incomplete because she failed to produce the
requested financial documents, gave unresponsive answers to the interrogatories,
and failed to pay the sanctions award.
In November 2019, Mirlis filed a second motion for sanctions, this time
seeking entry of default judgment in addition to an award of attorney’s fees. Greer
did not oppose the motion. In January 2020, the court ordered Greer to show cause
within 14 days as to why it should not enter a default against her for
noncompliance, explicitly warning Greer that her failure to respond would result
in the entry of default. Greer did not timely respond. Thereafter, the district
court stayed further proceedings pending this Court’s resolution of the appeal in
the underlying case that led to the judgment against Greer’s husband. After this
Court affirmed that judgment in April 2020, Mirlis v. Daniel Greer, 952 F.3d 36 (2d
Cir. 2020), the district court again ordered Greer to show cause within 14 days as
to why it should not enter a default against her. Greer did not respond. On June
2, 2020, the district court entered a default against Greer pursuant to Fed. R. Civ.
P. 37(b). The court then invited Mirlis “to file a motion for default judgment as to
7
damages, together with evidence[,] . . . that will allow the Court to calculate
damages with reasonable certainty.” Sp. App’x 7. Mirlis and Greer each
responded to the court’s order, and Greer requested an evidentiary hearing with
respect to damages. 4
In January 2021, after reviewing Mirlis’s and Greer’s submissions and
determining that an evidentiary hearing was unnecessary, the district court
entered a default judgment against Greer for $238,000.00 plus $51,215.02 in
prejudgment interest on the claims at issue in this appeal. 5 In entering default
judgment, the court concluded that Greer’s three withdrawals from the joint
accounts held with her husband constituted intentional fraudulent transfers in
violation of CUFTA, Conn. Gen. Stat. § 52-552e(a)(1), constructive fraudulent
transfers in violation of § 52-552f(a) and § 52-552e(a)(2), and common law
fraudulent transfers.
On appeal, Greer argues that the district court abused its discretion by
imposing the sanction of default, and she contends that, as a matter of law, the
three check transfers for which the district court awarded damages were not
4 Notably, Greer’s request for an evidentiary hearing focused on the uncertainties in calculating
damages for the retirement account transfers. See Greer’s Motion for Evidentiary Hearing, Dist.
Ct. Dkt. No. 112-1, at 4–5. With respect to the check transfers, Greer “conceded that [the] two
amounts [in the Start Account] might be suitable to calculation with reasonable certainty, upon
presentation of the required and appropriate affidavits.” Id. at 5.
5 For the reasons explained in note 3 above, the district court’s total judgment was higher.
8
fraudulent transfers under CUFTA, Conn. Gen. Stat. §§ 52-552a-5521, or
Connecticut common law.
DISCUSSION
I. Default Sanction
We review a district court’s imposition of sanctions under Rule 37 for abuse
of discretion, and the factual findings in support of the district court’s decision for
clear error. S. New England Tel. Co. v. Global NAPs Inc., 624 F.3d 123, 143 (2d Cir.
2010).
Rule 37(b) provides that when a party fails to comply with a discovery
order, a court may impose sanctions, including “rendering a default judgment
against the disobedient party.” Fed. R. Civ. P. 37(b)(2)(A)(vi). A district court
judge should only enter the harsh penalty of default judgment in “extreme
circumstances,” where “a party fails to comply with the court’s discovery orders
willfully, in bad faith, or through fault.” John B. Hull, Inc. v. Waterbury Petroleum
Prods., Inc., 845 F.2d 1172, 1176 (2d Cir. 1988) (internal quotation marks omitted);
see also Marfia v. T.C. Ziraat Bankasi, N.Y. Branch,
100 F.3d 243, 249 (2d Cir. 1996).
In those extreme circumstances, however, “[d]efault procedures . . . provide a
useful remedy when a litigant is confronted by an obstructionist adversary. Under
such circumstances those procedural rules play a constructive role in maintaining
9
the orderly and efficient administration of justice.” Enron Oil Corp. v. Diakuhara,
10 F.3d 90, 96 (2d Cir. 1993).
In considering whether case-dispositive sanctions are within a district
court’s discretion under Rule 37, we have relied on the following non-exclusive
factors: “(1) the willfulness of the non-compliant party or the reason for
noncompliance; (2) the efficacy of lesser sanctions; (3) the duration of the period
of noncompliance; and (4) whether the non-compliant party had been warned of
the consequences of . . . noncompliance.” Agiwal v. Mid Island Mortg. Corp., 555
F.3d 298, 302 (2d Cir. 2009) (internal quotation marks omitted).
Greer argues that the district court abused its discretion by imposing a
sanction—default judgment—that was “grossly disproportionate” to her actual
conduct. Appellant’s Br. 17. She contends that the district court gave insufficient
weight to the fact that Mirlis already had many of the records he requested in
discovery, that she did not have possession of the requested financial records and
was not sufficiently familiar with her and her husband’s finances to have gotten
them, and that she had been preoccupied with her husband’s then-pending
criminal trial.
We conclude that the district court did not abuse its discretion. As set forth
above, Greer repeatedly failed to respond to interrogatories and produce the
10
documents Mirlis requested, in violation of the district court’s many orders. This
record supports the district court’s determination that Greer acted willfully, that
lesser sanctions would have been inadequate given Greer’s continued
noncompliance after multiple explicit warnings about the consequences of further
noncompliance, that Greer was given ample notice that her continued
noncompliance would result in sanctions, including the entry of default judgment,
and that her noncompliance spanned more than six months.
With respect to Greer’s argument that her involvement in her husband’s
then-pending criminal trial interfered with her ability to respond to the discovery
requests and court orders, the district court did not abuse its discretion in relying
on the fact that Greer was originally obligated to respond to Mirlis’s discovery
requests well before her husband’s trial and that she failed to respond to the
court’s numerous show cause orders long after trial had ended. In addition, Greer
offers no support for her suggestion that, merely because she thought Mirlis
already had some of the requested financial documents, she could ignore the
discovery requests and the district court’s orders compelling her to make an
adequate response. And we have found none. Cf. Penthouse Int'l, Ltd. v. Playboy
Enterprises, Inc., 663 F.2d 371, 390 (2d Cir. 1981) (“Rule 37(d) makes it explicit that
a party properly served has an absolute duty to respond, that is, to . . . serve a
11
response to requests for discovery under Rule 34[,] . . . and that the court in which
the action is pending may enforce this duty by imposing sanctions for its
violation.” (emphasis added)).
Moreover, Greer’s lack of physical possession of certain bank records does
not excuse her noncompliance with the court’s order. Mirlis was entitled to
request records in Greer’s “possession, custody, or control.” Fed. R. Civ. P.
34(a)(1). “Control” does not require “actual physical possession of the documents
at issue; rather, documents are considered to be under a party’s control when that
party has the right, authority, or practical ability to obtain the documents . . . .”
Coventry Cap. US LLC v. EEA Life Settlements Inc., 333 F.R.D. 60, 64 (S.D.N.Y. 2019),
on reconsideration in part,
439 F. Supp. 3d 169 (S.D.N.Y. 2020) (quoting Bank of New
York v. Meridien BIAO Bank Tanzania Ltd.,
171 F.R.D. 135, 146-47 (S.D.N.Y. 1997)).
For that reason, “if a party has access and the practical ability to possess
documents not available to the party seeking them, production may be required.”
Shcherbakovskiy v. Da Capo Al Fine, Ltd.,
490 F.3d 130, 138 (2d Cir. 2007). Greer failed
to establish that she had neither access to, nor the practical ability to obtain, the
financial documents Mirlis sought.
Finally, Greer failed to demonstrate that lesser sanctions short of entry of
default would have been enough to compel her compliance with the discovery
12
requests. In light of the attorney’s fee award that she had already ignored, the
district court did not abuse its discretion in concluding that Greer was unlikely to
respond to additional monetary penalties.
For these reasons, we conclude that the district court did not abuse its
discretion in imposing a sanction of default in response to Greer’s sustained failure
to comply with discovery requests and orders from the court.
II. Fraudulent Transfers
Greer argues that, even if the district court did not abuse its discretion in
imposing default as a Rule 37(b) sanction, the default judgment should
nevertheless be vacated because Mirlis’s allegations do not establish as a matter of
law that Greer’s withdrawals from the joint accounts were fraudulent transfers by
a debtor under CUFTA or Connecticut common law.
On a motion for default judgment after default has entered, “a court is
required to accept all of the [plaintiff’s] factual allegations as true and draw all
reasonable inferences in [the plaintiff’s] favor, but it is also required to determine
whether the [plaintiff’s] allegations establish [the defendant’s] liability as a matter
of law.” Finkel v. Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009) (internal citations
omitted). We review the district court’s application of law on a motion for default
judgment without deference to the district court.
Id.
13
CUFTA establishes various circumstances in which a “transfer . . . by a
debtor” is fraudulent as to a creditor whose claim arose before the transfer was
made. Conn. Gen. Stat. § 52-552e(a); see
id. § 52-552e(a)(1) (intentional fraudulent
transfer made where debtor “inten[ded] to hinder, delay or defraud a creditor of
the debtor”); id. § 52-552f(a) (constructive fraudulent transfer made where debtor
did not receive “a reasonably equivalent value in exchange . . . and the debtor was
insolvent at that time or the debtor became insolvent as a result of the transfer”);
id. § 52-552e(a)(2) (constructive fraudulent transfer made where debtor did not
receive “a reasonably equivalent value in exchange . . . and the debtor (A) was
engaged or was about to engage in a business or transaction” in relation to which
the debtor’s remaining assets were “unreasonably small,” or “(B) intended to
incur, or believed or reasonably should have believed that [the debtor] would
incur, debts beyond [the debtor’s] ability to pay as they came due”). Under
Connecticut common law, which is largely coextensive with CUFTA as to
fraudulent transfers, a party alleging a fraudulent transfer must show “either: (1)
that the conveyance was made without substantial consideration and rendered the
transferor unable to meet [the transferor’s] obligations or (2) that the conveyance
was made with a fraudulent intent in which the grantee participated.” Certain
14
Underwriters at Lloyd’s, London v. Cooperman, 289 Conn. 383, 394 (2008) (quoting
Bizzoco v. Chinitz,
193 Conn. 304, 312 (1984)).
Under any legal theory, the existence of a “transfer . . . by a debtor” is an
essential element of a fraudulent transfer claim. Conn. Gen. Stat. §§ 52-552e(a), 52-
552f(a). “Debtor” is defined as “a person who is liable on a claim.”
Id. § 52-552b(6).
The central question in this appeal is whether Greer’s independent withdrawals
of funds from the joint accounts qualify as “transfer[s] . . . by a debtor.”6 Id. §§ 52-
552e(a), 52-552f(a).
Greer says no. She argues that the funds she withdrew from her joint
accounts with her husband were not transfers of her debtor husband’s property.
Greer points to Connecticut case law recognizing a rebuttable presumption that a
spouse’s deposit into a bank account held jointly with the other spouse is a gift.
See Trenchard v. Trenchard, 141 Conn. 627, 630 (Conn. 1954) (“[A] transfer from a
wife to a husband is presumed to be a gift.”); Wright v. Mallett,
94 Conn. App. 789,
792 (Conn. App. Ct. 2006) (noting that “[a] rebuttable presumption of donative
intent exists when the grantee is the natural object of the grantor’s bounty” and
6 Mirlis has not alleged that Greer made the withdrawals at her debtor husband’s direction. Cf.
Geriatrics, Inc. v. McGee,
332 Conn. 1, 11-24 (2019) (applying agency principles and holding that
“CUFTA’s requirement that the fraudulent transfer be ‘made by the debtor’ encompasses a
transfer made by a debtor’s attorney-in-fact”).
15
that Connecticut courts “traditionally have recognized such a presumption
between husband and wife” (internal citation omitted)). In Greer’s view, her
debtor husband’s deposit of his funds into the joint accounts may have constituted
a “transfer,” but once the money was in the joint accounts, that money had been
gifted to her and her withdrawals cannot be viewed as fraudulent transfers by her
debtor husband.
We disagree. We predict that the Connecticut Supreme Court would
conclude that, even assuming Greer’s husband’s deposits into their joint accounts
were gifts from him to her, under the broad terms of CUFTA her withdrawals
nevertheless constitute “transfer[s] . . . by a debtor.” Conn. Gen. Stat. §§ 52-552e(a),
52-552f(a); see also Tom Rice Buick-Pontiac v. Gen. Motors Corp.,
551 F.3d 149, 154 (2d
Cir. 2008) (explaining that, in the absence of authoritative law from a state’s
highest court, a federal court must predict how the state court would resolve the
state law question unless state law is so uncertain that the federal court can make
no reasonable prediction).
Our conclusion relies primarily on two features of Connecticut law. First,
CUFTA’s broad definition of “transfer,” see Conn. Gen. Stat. § 52-552b(12), and
second, CUFTA’s provision that a transfer occurs, or is “perfected,” when the
debtor’s funds are no longer potentially subject to a lien in favor of the debtor’s
16
judgment creditors, see id. § 52-552g(1)(B), which, in this case, would have occurred
at the moment the funds were withdrawn from the Greers’ joint accounts, see Fleet
Bank Connecticut, N.A. v. Carillo,
240 Conn. 343 (1997).
Significantly, CUFTA broadly defines “transfer” as “every mode, direct or
indirect, absolute or conditional, voluntary or involuntary, of disposing of or
parting with an asset or an interest in an asset, and includes payment of money,
release, lease and creation of a lien or other encumbrance.” Conn. Gen. Stat. § 52-
552b(12) (emphasis added). The Connecticut Supreme Court’s decision in Canty
v. Otto is instructive as to the wide scope of this definition as applied to property
jointly owned by spouses.
304 Conn. 546 (2012). In that case, the court considered
a CUFTA claim by a creditor against the ex-wife of a debtor to recover funds
awarded to the ex-wife pursuant to an allegedly collusive divorce decree entered
after the claim against the debtor husband arose.
Id. at 549-52. In concluding that
the dissolution decree distributing property to the debtor’s wife could qualify as a
“transfer” under CUFTA, the Supreme Court emphasized the broad definition of
“transfer” under the statute. See
id. at 558. In particular, it explained, “the use of
the phrases ‘every mode’ and ‘voluntary or involuntary’ supports the conclusion
that the term transfer is defined very broadly under the act.”
Id. The court also
noted that strong policy considerations supported that view: “in view of the
17
overall policy of protecting creditors, it is unlikely that the legislature intended to
grant married couples a one-time-only opportunity to defraud creditors by
including the fraudulent transfer in a marital separation agreement.” Id. at 562
(internal quotation marks and alterations omitted) (quoting Mejia v. Reed,
31 Cal.
4th 657, 668 (Cal. 2003)).
Moreover, CUFTA provides that a transfer is not completed until it “is so
far perfected that a creditor on a simple contract cannot acquire a judicial lien
otherwise than under [CUFTA] that is superior to the interest of the transferee.”
Conn. Gen. Stat. § 52-552g(1)(B). Thus, to the extent that the funds deposited by
Greer’s husband remained potentially subject to a lien by Greer’s husband’s
judgment creditors, his deposit of the funds did not complete any donative
“transfer” to Greer for purposes of CUFTA.
Finally, under Connecticut law, the funds were subject to a lien in favor of
Greer’s husband’s judgment creditors until the time she withdrew them. See Fleet
Bank, 240 Conn. at 350-52. In Fleet Bank, the Connecticut Supreme Court
considered whether a judgment creditor could enforce a statutory right to a bank
execution “against the entire balance of a joint bank account to which both a
judgment debtor and his nondebtor spouse ha[d] contributed funds.”
Id. at 345.
The court held that each coholder of a joint account “has a sufficient property
18
interest to permit a judgment creditor to exercise a bank execution” pursuant to
Connecticut’s bank execution statute. Id. at 352 (emphasis omitted) (citing
Conn.
Gen. Stat. § 52-367b). The court explained that “a coholder’s property interest in
the joint account exposes that account, in its entirety, to the creditor’s collection
powers, in the absence of statutory or common law protections.”
Id. (emphasis
added). Thus, even if Greer’s husband’s deposits constituted gifts to her, as she
argues, her withdrawals of those funds perfected the transfers by him and thus
constituted “transfer[s] . . . by a debtor” for purposes of CUFTA.
Conn. Gen. Stat.
§§ 52-552e(a), 52-552f(a).
Given these principles of Connecticut law, the record supports the district
court’s conclusion that the three withdrawals in question constituted fraudulent
transfers under CUFTA and Connecticut common law. Mirlis, 2021 WL 405886 at
*3-5. Indeed, although Greer’s husband did not himself withdraw funds from the
joint accounts and deposit them into Greer’s personal accounts, he set the transfers
in motion by depositing his funds into the joint accounts. We can reasonably
predict that, if the Connecticut Supreme Court were to reach this question, it
would hold that the text of CUFTA and the strong policy considerations
underlying it would support a broad reading of “transfer . . . by a debtor” that
would encompass the situation presented here—namely, a debtor’s funding of a
19
joint account from which a spouse can withdraw funds without accountability to
the debtor’s creditors.
As set forth above, the Liberty and Start accounts—which were funded
primarily or entirely by Greer’s debtor husband—were created after Greer’s
husband had notice of the claims against him. In addition, Mirlis alleged that
Greer’s husband transferred the funds to Greer “to avoid paying” his debt to Mirlis
and that the transfers “were made with the actual intent to hinder, delay or
defraud” Greer’s husband’s creditors. J. App’x 25 ¶ 49. These allegations are
supported by a host of factors identified in CUFTA as supporting an inference of
fraudulent intent, including the facts that, as the debtor’s spouse, Greer was an
“insider,” Conn. Gen. Stat. § 52-552b(7)(A)(i); her husband had been sued before
the transfers were perfected; and Greer did not provide consideration for the
money withdrawn.
Conn. Gen. Stat. § 52-552e(b) (listing non-exclusive factors a
court may consider in determining whether a transfer was made with fraudulent
intent). Moreover, Greer testified that she transferred the funds from the Liberty
account “[b]ecause [she] did not want it taken.” J. App’x 427. These facts are
sufficient to establish Greer’s liability under CUFTA and Connecticut common law
for effectuating fraudulent transfers initiated by her debtor husband.
20
In sum, the district court did not err in concluding that Greer is liable for the
alleged fraudulent transfers as a matter of Connecticut law, and the district court
properly entered default judgment against her.
…
For the reasons set forth above, we AFFIRM the district court’s judgment.
21
