Opinion
April 19, 1996
Appeal from the Supreme Court, Monroe County, Ark, J.
Present — Green, J.P., Pine, Fallon and Callahan, JJ.
Judgment unanimously modified on the law and as modified affirmed without costs in accordance with the following Memorandum: On March 6, 1994 defendant Lauer's Furniture Acquisition, Inc. (LFA) conveyed all its assets to defendant Pittsford Furniture, Inc. (PFI) in exchange for PFI's assumption of LFA's debts. At the time of the transfer, LFA was indebted to plaintiff and defendant John M. Summers, the president and sole shareholder of both LFA and PFI. Plaintiff commenced this action to set aside the conveyance on the grounds that it was constructively fraudulent under sections 273 Debt. Cred. and 274 Debt. Cred. of the Debtor and Creditor Law and that it was made with actual intent to hinder, delay or defraud creditors under Debtor and Creditor Law § 276.
Supreme Court properly granted plaintiff's motion insofar as it sought summary judgment on the causes of action alleging that the conveyance was constructively fraudulent. Plaintiff established as a matter of law that the transfer of all the assets of LFA to PFI, benefitting the president and sole shareholder of both corporations over other creditors, was not made in good faith ( see, Matter of Superior Leather Co. v. Lipman Split Co., 116 A.D.2d 796; Farm Stores v. School Feeding Corp., 102 A.D.2d 249, affd 64 N.Y.2d 1065; Laco X-Ray Sys. v. Fingerhut, 88 A.D.2d 425, lv dismissed 58 N.Y.2d 606; Southern Indus. v. Jeremias, 66 A.D.2d 178; Julien J. Studley, Inc. v. Lefrak, 66 A.D.2d 208, affd 48 N.Y.2d 954).
As a general rule, the creditor's remedy in a fraudulent conveyance action is "limited to reaching the property which would have been available to satisfy the judgment had there been no conveyance" ( Marine Midland Bank v. Murkoff, 120 A.D.2d 122, 133, appeal dismissed 69 N.Y.2d 875; accord, Blakeslee v Rabinor, 182 A.D.2d 390, 392, lv denied 82 N.Y.2d 655). In the instant action, however, where the assets of LFA have been sold and commingled with those of PFI, a money judgment was properly granted as a substitute for those assets ( see, Valentine v Richardt, 126 N.Y. 272, 277). The amount of that judgment against PFI, the transferee, is "limited only by the value of the transferred property" ( Brown v. Kimmel, 68 A.D.2d 896, 897). Because the record establishes that the value of the property exceeds the amount of LFA's indebtedness to plaintiff, judgment was properly granted against PFI for the full amount of that debt.
The judgment against the individual defendant, however, must be modified. Summers is liable to plaintiff only "to the extent of the value of the money or property he or she wrongfully received" ( Farm Stores v. School Feeding Corp., supra, at 255; see also, Federal Deposit Ins. Corp. v. Porco, 75 N.Y.2d 840). Summers received only $150,000 as the result of the fraudulent conveyance and we modify the judgment, therefore, by reducing the award against him to that amount plus interest.
The court properly denied plaintiff's motion insofar as it sought summary judgment on the fifth cause of action, alleging that the conveyance from LFA to PFI was made with actual intent "to hinder, delay, or defraud" plaintiff (Debtor and Creditor Law § 276). The determination of fraudulent intent "is ordinarily a question of fact which cannot be resolved on a motion for summary judgment" ( Grumman Aerospace Corp. v. Rice, 199 A.D.2d 365, 366). Those parts of the order granting summary judgment to plaintiff on its first and third causes of action are subsumed within the judgment. Defendants' appeal from that order, therefore, is dismissed ( see, Hughes v. Nussbaumer, Clarke Velzy, 140 A.D.2d 988).