Court of Appeals of New York

In a dispute arising from an action seeking disgorgement of proceeds acquired by a relief defendant through a separation agreement and divorce decree, certified questions concerning relief defendant's entitlement to proceeds are answered as follows: 1) without knowledge of the underlying fraud, monies obtained by fraud cannot be followed by the original owner into the hands of an innocent former spouse who now holds them as a result of a divorce proceeding where that spouse in good faith and without knowledge of the fraud gave fair consideration for the transferred property; and 2) a determination that a spouse paid fair consideration under New York Debtor and Creditor Law section 272 is not precluded, as a matter of law, where part or all of the marital estate consists of the proceeds of fraud.

Appellate Information

• Decided 06/23/2011
• Published 06/23/2011

Judges

• GRAFFEO

Court

• Court of Appeals of New York

Counsel