TOOLEY v. CORP (2009)

Plaintiffs commenced this action seeking, inter alia, to impose a constructive trust on the proceeds of the lease and subsequent sale of a gravel quarry on a portion of property owned by defendant and on defendant's remaining interest in that property.   As limited by their brief on appeal, plaintiffs contend that Supreme Court erred in granting those parts of defendant's motion for summary judgment dismissing the second and third causes of action based on the doctrine of unclean hands.   Those causes of action were asserted by Neal Tooley (plaintiff).   We agree with plaintiffs that the court erred in granting those parts of defendant's motion.   Although plaintiff's admitted purpose for the transfer of the land to defendant was to avoid the potential creditors of either plaintiff Hazel Tooley, the original owner of the land, or plaintiff himself, defendant failed to meet her burden on those parts of the motion inasmuch as she failed to establish that either Hazel Tooley or plaintiff had any actual creditor at the time of the transfer (see Trager v. Vigliotti, 42 A.D.2d 912, 347 N.Y.S.2d 604, affd. 35 N.Y.2d 865, 363 N.Y.S.2d 951, 323 N.E.2d 189;  Guggenheim v. Lieber, 42 A.D.2d 778, 346 N.Y.S.2d 550;  cf. Muscarella v. Muscarella, 93 A.D.2d 993, 994, 461 N.Y.S.2d 621;  see also Debtor and Creditor Law § 270).   We therefore reverse the order insofar as appealed from, deny those parts of the motion for summary judgment dismissing the second and third causes of action and reinstate those causes of action.

It is hereby ORDERED that the order insofar as appealed from is unanimously reversed on the law without costs, those parts of the motion for summary judgment dismissing the second and third causes of action are denied and those causes of action are reinstated.

MEMORANDUM: