United Jersey Bank v. Vajda

299 N.J. Super. 161, 690 A.2d 693 (App. Div. 1997)
  • Opinion Date: March 27, 1997

JUDGMENTS; FRAUDULENT TRANSFERS— A judgment debtor who transfers assets to his sister after entry of a judgment in repayment of an undocumented loan has committed a fraud against creditors.

A judgment debtor transferred his interest in a corporation and other assets to his sister subsequent to entry of judgment against him. He then appealed the trial court’s order setting aside the transfers. The Appellate Division analyzed the New Jersey Uniform Fraudulent Transfer Act (N.J.S. 25:2-20 et seq.) and found both that the judgment debtor had been insolvent at the time of the transfers and that the transfers had been made to an “insider,” as defined in the Act, without equivalent value and in such a way as to come within the purview of the Act.

The judgment debtor claimed that the transfer was in satisfaction of a pre-existing debt to his sister, but conceded that the debt was not evidenced by a note or other documentation. Under the circumstances, the Appellate Division considered the evidence so one-sided that the judgment creditor must prevail as a matter of law.

The judgment debtor’s sister contended that she is not bound by the trial court proceedings as she was not a party to them. The Appellate Division held that by its granting of her motion to intervene in the appeal, she became a party to the action and was bound by the Court’s determination. Her defenses were found to be baseless.