ARDENT HARMONY FUND INC v. FUSCHETTO HOME IMPROVEMENTS LLC (2026)

DECISION & ORDER

In an action, inter alia, to set aside certain transfers pursuant to Debtor and Creditor Law former article 10, the plaintiffs appeal from an order of the Supreme Court, Nassau County (Lisa A. Cairo, J.), dated June 14, 2024.  The order, insofar as appealed from, granted the motion of the defendant Fuschetto Home Improvements, LLC, for summary judgment dismissing the complaint insofar as asserted against it.

ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and the motion of the defendant Fuschetto Home Improvements, LLC, for summary judgment dismissing the complaint insofar as asserted against it is denied.

In May 2018, the plaintiffs commenced this action against, among others, the defendant Fuschetto Home Improvements, LLC (hereinafter the defendant), inter alia, to set aside certain transfers pursuant to Debtor and Creditor Law former article 10 made to the defendant by nonparties Donald Barrick and Nancy Barrick (hereinafter together the Barricks).  The plaintiffs alleged, in relevant part, that the Barricks are judgment debtors of the plaintiffs and that the Barricks fraudulently transferred large sums of money to the defendant without fair consideration to avoid paying the plaintiffs' judgments against them.  The plaintiffs asserted causes of action pursuant to Debtor and Creditor Law former §§ 273, 274, and 278 and to recover damages for those statutory violations and for unjust enrichment.  Thereafter, the defendant moved for summary judgment dismissing the complaint insofar as asserted against it.  The plaintiffs opposed.  In an order dated June 14, 2024, the Supreme Court, among other things, granted the motion.

To establish a claim pursuant to Debtor and Creditor Law former §§ 273 or 274, a plaintiff was required to show that the transferor made the conveyance without fair consideration and was thereby left insolvent or with unreasonably small capital (see Debtor and Creditor Law former §§ 273, 274).  Debtor and Creditor Law former § 278(1) permitted a creditor whose claim has matured to have a fraudulent conveyance set aside “as against any person except a purchaser for fair consideration.”

Here, the defendant does not dispute that the transfers at issue rendered the Barricks insolvent and left with unreasonably small capital (see id. former §§ 273, 274).  Contrary to the determination of the Supreme Court, the defendant did not submit sufficient evidentiary proof in admissible form to establish that the transfers of funds it received from the Barricks constituted “fair consideration” for the work it purported to have undertaken for them.  Consequently, the court should have denied those branches of the defendant's motion which were for summary judgment dismissing the causes of action alleging violations of Debtor and Creditor Law former §§ 273, 274, and 278 insofar as asserted against it as the defendant failed to establish its prima facie entitlement to judgment as a matter of law dismissing those causes of action insofar as asserted against it (see Can Man Carting, LLC v. Spiezio, 165 A.D.3d 1029, 1031, 86 N.Y.S.3d 182).

The defendant also failed to establish its prima facie entitlement to judgment as a matter of law dismissing the cause of action to recover for unjust enrichment insofar as asserted against it.  “The elements of a cause of action to recover for unjust enrichment are (1) the defendant was enriched, (2) at the plaintiff's expense, and (3) that it is against equity and good conscience to permit the defendant to retain what is sought to be recovered” (Deerin v. Ocean Rich Foods, LLC, 158 A.D.3d 603, 606, 71 N.Y.S.3d 123 [internal quotation marks omitted] ).  Here, the defendant did not show, prima facie, that it was not enriched at the plaintiffs' expense and that it is not against equity and good conscience to permit it to retain the sums sought to be recovered (see S.J. Fuel Co., Inc. v. Dorann Resources, Ltd., 165 A.D.3d 995, 996, 86 N.Y.S.3d 198).

In light of our determination, we need not reach the plaintiffs' remaining contention.

DUFFY, J.P., FORD, LOVE and GOLIA, JJ., concur.