Geriatrics, Inc. v. McGee , 332 Conn. 1 ( 2019 )

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GERIATRICS, INC. v. MCGEE—DISSENT
D’AURIA, J., with whom MULLINS and KAHN, Js.,
join, concurring in part and dissenting in part. Although
I agree with part II of the majority’s opinion, I disagree
with part I. I would affirm the judgment of the trial
court on both the Connecticut Uniform Fraudulent
Transfer Act (CUFTA or act); General Statutes § 52-
552a et seq.; and unjust enrichment counts of the com-
plaint, and therefore respectfully dissent in part.
The issue we are asked to determine is whether
CUFTA applies to a transfer of a debtor’s assets made
by the debtor’s attorney-in-fact with no participation
by the debtor. Under CUFTA, a transfer can only be
fraudulent ‘‘as to a creditor’’; General Statutes § 52-552e
(a); if it is ‘‘made by a debtor . . . .’’ General Statutes
§ 52-552f (b). Relying on this language and decisions
from out of state interpreting identical statutes, the trial
court concluded that CUFTA did not apply to a transfer
made solely by a third party, such as the attorney-in-
fact of a debtor, with no participation from the debtor.
Because the trial court found that ‘‘all of the transfers
at issue were made by [the defendant Stephen McGee
(Stephen)]’’ and that ‘‘[n]one were made by [Stephen’s
mother, the named defendant, Helen McGee (Helen)],’’
and because the court found no evidence that Helen
‘‘participated in any fashion in the claimed fraudulent
transfers,’’ it concluded that the plaintiff, Geriatrics,
Inc., had failed to make out a claim under CUFTA.
The majority reverses the trial court’s judgment in
favor of Stephen on this count. I disagree and instead
would affirm.
I
With few exceptions, which I will note, I have no
quarrel with the majority’s factual recitation. The trial
court’s findings are sparse, at least in part, because the
live testimony in the case was brief (it was a one-half
day trial) and because the trial court’s ruling on the
CUFTA count (that Stephen was not a ‘‘debtor’’) is
ultimately a legal issue. Another explanation for the
sparse record could be the plaintiff’s failure to develop
its case, including by failing to present a clear legal
theory for proceeding against Stephen.1
To many dispassionate readers, the facts of this case
might resemble a familiar family experience. An elderly
parent is in failing health. Rather than move the parent
immediately to a nursing facility, a child chooses to
care for the parent himself, eventually moving into her
home. This choice comes at significant cost to the child.
As the parent’s health worsens, the parent and child
agree that to continue this arrangement and keep the
parent at home as long as possible, the child must
assume greater charge of the parent’s needs—health
and financial. No one begrudges the caregiver some
compensation for his efforts to keep the parent in the
home or for reimbursement for food, bills and other
necessities paid out of his own pocket. Record keeping,
however, is spotty at best and the timing of payments
varies. Of course, no one knows how long the parent
will live or how long the child will be able to provide
the care. Eventually, though, the parent’s needs exceed
what the child can provide, the parent is moved to a
nursing home, and the parent’s remaining assets are
‘‘spent down’’ to qualify for government assistance. If
at any point there is a gap in the payments to the nursing
home or a delay in routing the government benefits to
the nursing home—even due to the nursing home’s own
actions—the parent will become a debtor of the nurs-
ing home.
Stephen’s case resembles this fact pattern. In Febru-
ary, 2013, after caring for Helen for several years, Ste-
phen’s own health deteriorated, and Helen was
admitted to the plaintiff’s skilled nursing home, Bel Air
Manor, where she agreed to pay for residency. Medicare
initially covered much of her expenses. It is fair to
assume that Helen and Stephen (and perhaps the plain-
tiff) believed she would remain eligible for Medicare
throughout her stay. But two efforts to qualify for con-
tinued benefits failed, and the plaintiff refused to assist
Stephen in applying, despite his requests. Finally, a third
application was granted, but only with a penalty.
Throughout those delays, debt to the plaintiff accumu-
lated, and at the time of her death, Helen owed the
plaintiff about $208,000. Stephen was not a party to
Helen’s contract with the nursing home and was not
liable to the nursing home for Helen’s debt.
Given the trial court’s finding that Helen began accu-
mulating debt once government benefits were stopped,
it is perhaps fair to assume she had other creditors at
the end of her life. This appeal involves only one credi-
tor, her nursing home. The count on which I disagree
with the majority involves that creditor’s allegations of
fraud. Because the case was tried to judgment, there
is no need to construe the facts in the light most favor-
able to the plaintiff. See Lyme Land Conservation
Trust, Inc. v. Platner, 325 Conn. 737, 755, 159 A.3d 666
(2017) (‘‘[i]n reviewing factual findings [of a trial court]
. . . we make every reasonable presumption . . . in
favor of the trial court’s ruling’’ [internal quotation
marks omitted]). In fact, the trial court found that the
plaintiff had failed to prove ‘‘that it has a better legal
or equitable right to the funds of Helen’’ and therefore
refused to find that Stephen had been unjustly enriched
at the plaintiff’s expense. Although the trial court agreed
that the plaintiff had a rightful claim to Helen’s assets
because of its contract with Helen, it also found that
Stephen had a rightful claim to those assets because
of the services and loans he had provided to Helen
before and after her debt to the plaintiff arose. The
court made no findings that the payments Stephen
received were somehow illegitimate. Rather, the trial
court specifically found that on this record the plaintiff
had failed to demonstrate that its claim was superior
to Stephen’s.
Therefore, Stephen’s compensation and reimburse-
ment, which the trial court found that he was entitled
to, is only potentially subject to CUFTA because of its
timing. Had he received these funds before his mother’s
debt began to accumulate or had her Medicare coverage
never lapsed, there would be no claim. Indeed, the plain-
tiff did not appear to argue to the trial court that Helen
was even aware of—much less colluded with Stephen
in making—the transfers.
II
CUFTA permits creditors to set aside or void certain
transfers of a debtor’s assets when those transfers are
made with the purpose of frustrating the creditor’s abil-
ity to collect its debt. General Statutes § 52-552a et seq.
Not all transfers that frustrate creditors are fraudulent
transfers under CUFTA, however. Instead, CUFTA sets
out four distinct bases for fraudulent transfer liability,
each with its own distinct elements. See General Stat-
utes §§ 52-552e and 52-552f.
One basis for liability requires proof of actual fraudu-
lent intent. General Statutes § 52-552e (a) (1) (transfer
made with ‘‘actual intent to hinder, delay or defraud
any creditor’’). The other three require only construc-
tive fraud, in which fraud is presumed under the circum-
stances. See General Statutes § 52-552e (a) (2) (transfer
made without debtor ‘‘receiving a reasonably equivalent
value in exchange,’’ leaving debtor with few assets or
inability to pay debts); General Statutes § 52-552f (a)
(transfer made while debtor was insolvent or causing
debtor to become insolvent and debtor did not receive
reasonably equivalent value); General Statutes § 52-552f
(b) (transfer to insider of debtor when insider had rea-
son to believe debtor was insolvent).
A transfer does not, however, fall within any of these
four bases for liability unless it was ‘‘made by a debtor
. . . .’’ General Statutes § 52-552f (b); see also General
Statutes § 52-552e (a).2 The transfers at issue in the
case before us were actually carried out by Stephen,
pursuant to a power of attorney executed by Helen,
and the trial court found that Helen did not participate
in any of them. On these facts, I agree with the trial
court that the transfer at issue was not ‘‘made by a
debtor’’ within the meaning of CUFTA.
A
To determine the meaning of the statute at issue,
we look first to its text, giving any undefined term its
ordinary meaning. See General Statutes §§ 1-1 (a) and
1-2z. Neither the plaintiff nor the majority contend that
the term ‘‘debtor’’ in §§ 52-552e and 52-552f is ambigu-
ous. Therefore, extratextual evidence of the legisla-
ture’s intent is not relevant. Neither under § 1-2z is it
relevant whether the majority’s conclusion ‘‘best
serve[s]’’ the ‘‘policy underlying the act . . . .’’ Finally,
although it might be expedient to call CUFTA a ‘‘credi-
tor-protection’’ statute, in my view such shorthand is
no more useful to the exercise of statutory construction
than calling the Bankruptcy Code a ‘‘debtor-protection’’
statute. In truth, like many acts—including uniform
acts—CUFTA reflects a legislative balance of policies.
Our challenge is not to advance policy, but to divine
the legislative will from the statutory text.3
We are admonished by the legislature to construe
the provisions of this uniform act ‘‘to effectuate their
general purpose to make uniform the law . . . among
states enacting them.’’ General Statutes § 52-552l.
Although, admittedly, not many courts have confronted
the issue before us, those that have addressed it in any
detail have uniformly taken a position contrary to the
majority. See Folmar & Associates, LLP v. Holberg, 776
So. 2d 112, 116–18 (Ala. 2000), overruled in part on
other grounds by White Sands Group, L.L.C. v. PRS II,
LLC, 32 So. 3d 5, 14 (Ala. 2009); Methodist Manor Health
Center, Inc. v. Py, 307 Wis. 2d 501, 505, 746 N.W.2d 824
(App. 2008); Presbyterian Medical Center v. Budd, 832
A.2d 1066, 1074 (Pa. Super. 2003). Although the majori-
ty’s reasoning is plausible, its conclusion is not so obvi-
ous that any other court—or the plaintiff itself—has
made the argument.
The act defines a ‘‘debtor’’ as ‘‘a person who is liable
on a claim.’’ (Emphasis added.) General Statutes § 52-
552b (6). The term ‘‘person’’ extends to ‘‘an individual,
partnership, corporation, limited liability company,
association, organization, government or governmental
subdivision or agency, business trust, estate, trust or
any other legal or commercial entity.’’ General Statutes
§ 52-552b (9). ‘‘Liable’’ is not defined in the act, but
means ‘‘[r]esponsible or answerable in law; legally obli-
gated’’; Black’s Law Dictionary (10th Ed. 2014) p. 1055;
or ‘‘obligated according to law or equity’’; Merriam-
Webster’s Collegiate Dictionary (11th Ed. 1993) p. 715.
And a ‘‘claim’’ is defined as ‘‘a right to payment . . . .’’
General Statutes § 52-552b (3).
The phrase ‘‘made by’’—modifying ‘‘a debtor’’—is
also relevant, signaling that the debtor caused the trans-
fer and that the debtor was not passively acted on by
the transfer (e.g., ‘‘a transfer involving a debtor’’). It
also specifies that we are to focus on who made the
transfer. The subject is the actor, rather than the status
of the property (e.g., ‘‘a transfer of the debtor’s assets’’)
or the result (e.g., ‘‘a transfer for the debtor’s benefit’’).
Thus, construed according to its plain meaning, the act
in my view refers only to transfers actually made, in
some capacity, by the party who owes the debt. See
General Statutes § 1-2z.
Nor does the definition of ‘‘transfer’’ change this.
I agree with the majority that CUFTA’s definition of
‘‘transfer’’ is unquestionably expansive. See General
Statutes § 52-552b (12). But that definition is informed
by the qualifiers—‘‘made by a debtor’’—that follow.
Even for ‘‘indirect’’ transfers, which the majority asserts
occurred in this case, participation by the debtor is an
essential predicate: ‘‘An example of an indirect transfer
is when A has a claim against B, and instead of B paying
A directly for the claim, A directs B to pay C. . . . In
such a scenario, the debtor never has possession of the
funds, but directs a third party to transfer those funds
to a recipient.’’ (Citations omitted; emphasis added.) In
re FBN Food Services, Inc., 175 B.R. 671, 683 (Bankr.
N.D. Ill. 1994) (describing indirect transfer under 11
U.S.C. § 548 [2012]), aff’d, 185 B.R. 265 (N.D. Ill. 1995).
Nothing in CUFTA expressly extends its reach to trans-
fers of the debtor’s assets made solely by a third party,
including a debtor’s agents.
Indeed, a number of other courts have declined to
find liability for transfers of a debtor’s assets made by
various third parties, including spouses; see, e.g., SPQR
Venture, Inc. v. Robertson, 237 Ariz. 270, 273, 349 P.3d
1107 (App. 2015); subsidiary companies; see, e.g., Crys-
tallex International Corp. v. Petroleos de Venezuela,
S.A., 879 F.3d 79, 85–89 (3d Cir. 2018); and contractual
parties; see, e.g., Ford-Torres v. Cascade Valley Tele-
com, Inc., 374 Fed. Appx. 698, 700 (9th Cir. 2010).
As mentioned previously, courts that have analyzed
at all this provision of the uniform act as it applies to
agents and attorneys-in-fact have concluded that the
plain language the legislatures in their jurisdictions have
chosen simply does not accomplish what the majority
holds today and declined to permit liability in a credi-
tor’s favor under the Uniform Fraudulent Transfer Act
on the basis of a transfer made by an attorney-in-fact
of a debtor. The few Connecticut trial courts to address
similar issues have also followed this approach. See
Peterson v. Hume, Superior Court, judicial district of
Hartford, Docket No. CV-XX-XXXXXXX-S (May 14, 2013)
(56 Conn. L. Rptr. 133, 135–36) (relying on language
originating in Folmar & Associates, LLP, and holding
that ‘‘[CUFTA], by its plain language, does not apply to
claims against third-party transferors’’ [internal quota-
tion marks omitted]); Coan v. Geddes, Superior Court,
judicial district of Waterbury, Docket No. CV-09-
4020994 (January 30, 2013) (55 Conn. L. Rptr. 458, 462)
(relying on Folmar & Associates, LLP, and holding that
‘‘definition of ‘debtor’ under [CUFTA] [cannot] be
expanded to bring third-party transferors equitably
owned by the debtor within its scope’’); Ferri v. Powell-
Ferri, judicial district of Middlesex, Docket No. CV-11-
6006351-S (July 30, 2012) (54 Conn. L. Rptr. 414, 416)
(Relying on Folmar & Associates, LLP, the trial court
rejected the defendant’s argument urging the court ‘‘to
adopt a more expansive view of ‘debtor’ to include
anyone who was acting on the behalf of the debtor.’’
The court ruled that the defendant had ‘‘not alleged that
the debtor-beneficiary . . . participated in the claimed
fraudulent transactions [executed by the trustees of
two trusts in her husband’s name]. Though the court
agrees that there are strong policy arguments for
extending the definition of a debtor under these circum-
stances, the court cannot ignore the plain language of
the statute.’’).
In the leading out-of-state case, Folmar & Associates,
LLP v. Holberg, supra, 776 So. 2d 116–18, the defendant
was an attorney-in-fact for the debtor, her husband, and
transferred funds in her husband’s name to herself. The
court rejected the creditor’s claim, stating: ‘‘Even if we
accepted [the creditor’s] argument that [the third-party
transferors] engaged in a conspiracy to defraud her,
the Alabama Uniform Fraudulent Transfer Act, by its
plain language, does not apply to claims against third-
party transferors.’’ (Internal quotation marks omitted.)
Id., 118. ‘‘Even a liberal construction of the statute
requires some demonstration that the debtor has put
his property beyond the reach of a creditor.’’ (Emphasis
in original.) Id., 117. ‘‘While there may be valid policy
arguments for extending the [a]ct to apply to transferors
who are in control of the debtor’s assets, it is not for
the [j]udiciary to impose its view on the [l]egislature.’’
(Internal quotation marks omitted.) Id., 118.
Methodist Manor Health Center, Inc. v. Py, supra,
307 Wis. 2d 501, involved facts similar to the present
case. The debtor had unpaid bills from a nursing home.
Id., 505. Under a power of attorney, the debtor’s grand-
daughter had written checks and transferred the debt-
or’s assets on her behalf, thereby preventing the nursing
home from collecting those assets for itself. Id., 505–
506. The court rejected the nursing home’s argument
that ruling against it would permit a debtor to avoid
fraudulent transfer liability ‘‘by simply having the fraud-
ulent transfers performed by an agent under a durable
power of attorney.’’ (Internal quotation marks omitted.)
Id., 515. The court reasoned that ‘‘[i]f there are any
perceived shortcomings in the statutes, and we do not
conclude that there are in this instance . . . it is the
function of the legislature, not this court, to resolve
them.’’ Id. Instead, the court acknowledged that strictly
applying agency principles in this scenario would disfa-
vor ‘‘unknowing and, in many cases, unsophisticated
agents who were doing nothing more than attempting
to assist an elderly parent or grandparent with their
finances.’’ (Internal quotation marks omitted.) Id., 517.
Although the attorney-in-fact in that case was not also
a transferee, as Stephen is here, the court’s decision
did not turn on that fact. It overtly relied on the plain
language of the statute and the practical impact that
strict application of agency law not included in the
statute would have on unsophisticated agents.
In Presbyterian Medical Center v. Budd, supra, 832
A.2d 1066, again on facts similar to this case, the court
rejected a nursing home’s fraudulent transfer claim
against a debtor’s attorney-in-fact. Id., 1074. There, the
debtor had unpaid bills that were owed to a nursing
home, and, under a power of attorney for the debtor,
the debtor’s daughter transferred the debtor’s assets
to herself, thereby preventing the nursing home from
collecting these assets for itself. Id., 1069. Citing no
evidence that the debtor otherwise participated in the
transfers at issue, the court rejected the nursing home’s
fraudulent transfer claim under Pennsylvania’s version
of the Uniform Fraudulent Transfer Act. Id., 1074. While
it acknowledged that ‘‘under certain circumstances, an
attorney-in-fact of a debtor may also qualify as a ‘debtor’
under [Pennsylvania’s Uniform Fraudulent Transfer
Act],’’ the court held that the nursing home had failed
in that case to plead sufficient facts to establish such
a connection. Id.4
This is not to say that under some circumstances,
as the court in Presbyterian Medical Center suggests,
courts might not consider a transfer made by a third
party to be a transfer ‘‘made by a debtor . . . .’’ General
Statutes § 52-552f (b). For example, while CUFTA
requires a transfer to be ‘‘made by a debtor,’’ it does
not require that the debtor actually execute it himself.
As stated previously, a ‘‘transfer’’ may be ‘‘indirect.’’
See General Statutes § 52-552b (12). Thus, a debtor may
execute a transfer in a variety of ways, including
through the use of a third-party intermediary, although
the statute is clear that the debtor must play a role.
To find liability based on a transfer executed by a
third party, courts have required that the debtor partici-
pated in the transfer in some fashion, which the trial
court found Helen did not do here. For example, a
transfer made by a third party may be considered a
transfer ‘‘made by a debtor’’ when the third party is the
debtor’s alter ego. In Thompson Properties v. Bir-
mingham Hide & Tallow Co., 839 So. 2d 629 (Ala. 2002),
the court reasoned that the parties ‘‘could be considered
‘one and the same’ ’’ under Alabama’s version of the
Uniform Fraudulent Transfer Act because the third
party was subject to the debtor’s liabilities and control.
Id., 634; see also Kraft Power Corp. v. Merrill, 464 Mass.
145, 154–55, 981 N.E.2d 671 (2013); Dwyer v. Meramec
Venture Associates, L.L.C., 75 S.W.3d 291, 295 (Mo.
App. 2002).5
A transfer made by a third party also may be consid-
ered a transfer ‘‘made by a debtor’’ if the debtor
‘‘directed or orchestrated’’ the transfer. Hart v. Pugh,
878 So. 2d 1150, 1157 (Ala. 2003). In Hart, the debtor
violated the terms of a divorce decree. Id., 1152–53.
The next week, he gave his mother a power of attorney,
explicitly permitting her to sell his land on his behalf.
Id. Later, the debtor’s mother sold a parcel of his land.
Id. The debtor’s former spouse argued that this was a
transfer by a ‘‘debtor’’ because the debtor ‘‘directed’’
his mother to make the transfer. Id., 1156. Although the
court ultimately rejected the claim because of insuffi-
cient evidence that the debtor had ‘‘participated in’’ his
mother’s decision to transfer the property, the court in
Hart indicated that a transfer could indeed be attributed
to a debtor if the debtor had ‘‘directed or orchestrated’’
a transfer made by a third party. Id., 1157. This court
has relied on similar participation by the debtor before
attributing a third-party transfer to a debtor. See D.H.R.
Construction Co. v. Donnelly, 180 Conn. 430, 433, 429
A.2d 908 (1980) (debtor ‘‘caus[ed]’’ fraudulent convey-
ance, although wife actually executed it); see also Vir-
ginia Corp. v. Galanis, 223 Conn. 436, 445 n.12, 613
A.2d 274 (1992) (debtor fraudulently conveyed property
by ‘‘direct[ing]’’ the conveyance, even though he did
not ‘‘actually convey’’ it).
Bankruptcy law follows similar rules. Courts applying
an analogous provision of the federal Bankruptcy Code
attribute an agent’s conduct to a principal only in limited
circumstances. Under 11 U.S.C. § 548, an agent’s actual
fraudulent intent may be imputed to a principal; In re
Tribune Co. Fraudulent Conveyance Litigation, No.
11-md-2296 (RJS), 2017 WL 82391, *5 (S.D.N.Y. January
6, 2017); but only if the agent is also the transferee and
‘‘in a position to dominate or control’’ the principal. In
re Elrod Holdings Corp., 421 B.R. 700, 711 (Bankr. D.
Del. 2010). This is a high standard: ‘‘[V]icarious intent
is an extreme situation that is dependent upon nearly
total control of a debtor by a transferee.’’ (Internal quo-
tation marks omitted.) Id. It requires ‘‘formal, legal con-
trol as well as functional control.’’ Id., 712. Thus,
imputed intent cases almost exclusively arise in the
corporate context, ‘‘typically involv[ing] sole sharehold-
ers of the transferor, with complete control of the trans-
feror, transferring assets to themselves as transferee.’’
Id. Although intertwined with general agency principles,
the rule is driven by policies inapplicable to the vast
majority of individual debtors: ‘‘With respect to individ-
uals, section 548 (a) (1) (A)’s application is obvious:
the inquiry is into the actual intent held by the flesh-and-
blood individual. With a corporation or other juridical
entity, the inquiry is blurred: which of the corporation’s
officers or directors matter? What if not all of the offi-
cers and directors agree? . . . ‘[A] corporation can
speak and act only through its agents and so must be
accountable for any acts committed by one of its agents
within his actual or apparent scope of authority and
while transacting corporate business.’ ’’ R. Levin & H.
Sommer, 5 Collier on Bankruptcy ¶ 548.04 (16th Ed.
2018) § 548 (a) (1) (A) [1] [iv], pp. 548-65 and 548-66
(quoting In re Personal & Business Ins. Agency, 334
F.3d 239, 243 [3d Cir. 2003]).6
Applying these principles to the present case, I would
not conclude on this record that the trial court improp-
erly determined that CUFTA did not reach the transfers
Stephen made exercising his power of attorney. As the
trial court found: ‘‘[A]ll of the transfers at issue were
made by Stephen McGee, under a power of attorney
from his mother. None were made by Helen McGee.’’
Therefore, Stephen was not the ‘‘debtor’’ inasmuch as
he was not ‘‘liable on a claim’’ to the plaintiff. Addition-
ally, even if we were to construe CUFTA under some
set of circumstances to reach transfers made by a third
party at the behest of the debtor, as have some courts
discussed previously, the trial court observed that ‘‘the
plaintiff does not allege, and the evidence does not
show, that Helen McGee participated in any fashion in
the claimed fraudulent transfers . . . .’’ Stephen was
not acting as Helen’s alter ego, nor did Helen ‘‘direct
or orchestrate’’ or ‘‘cause’’ Stephen’s transfers in such
a way that the court could attribute the transfers to
her. Because the transfers at issue in this case were
not ‘‘made by a debtor,’’ in my view, the plaintiff failed to
make out a claim that Stephen was liable under CUFTA.7
As construed by the majority, Stephen’s transfers are
attributed to Helen regardless of whether she partici-
pated in (or even knew about) them. Under General
Statutes § 52-552k, the supplementary provisions of
CUFTA on which the majority relies: ‘‘the principles of
law and equity, including . . . the law relating to prin-
cipal and agent,’’ supplement CUFTA, ‘‘[u]nless dis-
placed’’ by other provisions of the act. In this light, the
majority relies on the rule that a principal is presump-
tively bound by the acts of an attorney-in-fact. Kindred
Nursing Centers East, LLC v. Morin, 125 Conn. App.
165, 167, 7 A.3d 919 (2010). But strict application of
agency principles is inconsistent with the limited reach
of the language in CUFTA, which states that the transfer
must be ‘‘made by a debtor’’; General Statutes § 52-552f
(b); as well as with the general approach to third-party
transfers this court and others use, and with the
approach that every court to consider the issue has
taken with respect to attorneys-in-fact. In my view, even
under § 52-552k, when a court has found that the princi-
pal did not otherwise participate in the transfer, the
phrase, ‘‘made by a debtor,’’ ‘‘displace[s]’’ agency law
to the extent that a principal is automatically held liable
for a transfer by its agent.
Just because CUFTA does not provide a remedy does
not mean one is not available, though. For example, a
nursing facility may require ‘‘an individual, who has
legal access to a resident’s income or resources avail-
able to pay for care in the facility, to sign a contract
. . . to provide payment from the resident’s income or
resources for such care.’’ 42 U.S.C. § 1396r (c) (5) (B)
(ii) (2012); see, e.g., Sunrise Healthcare Corp. v. Azari-
gian, 76 Conn. App. 800, 810, 821 A.2d 835 (2003) (‘‘if
the [agent] acted in breach of the contract by not using
[the patient’s] assets as the contract required, then [the
agent] is responsible for reimbursing the [nursing
home]’’). In fact, the plaintiff’s ‘‘Resident Admissions
Agreement’’ contemplates a ‘‘responsible party’’ who
agrees to undertake certain duties on behalf of ‘‘the
resident’’ and bears personal financial liability for fail-
ure to do so. Stephen was not named a responsible
party in the agreement. More generally, a plaintiff in a
breach of contract case can also obtain a prejudgment
remedy on a showing of probable cause, thereby pre-
serving the defendant’s assets before any transfer to a
third party. See General Statutes §§ 52-278a and 52-
278d. Or a breaching principal might have a cause of
action against its attorney-in-fact for improperly trans-
ferring assets. See, e.g., Kindred Nursing Centers East,
LLC v. Morin, supra, 125 Conn. App. 173.
Therefore, I respectfully concur in part and dissent
in part.
1
For this reason, I do not think it is fair to blame the trial court for
addressing an essential element of the plaintiff’s CUFTA claim that the
plaintiff had failed to address. Nothing the plaintiff ever submitted to the
trial court cited General Statutes § 52-552k, on which the majority principally
relies. The plaintiff’s complaint based the CUFTA claim on General Statutes
§ 52-552h, which is merely a remedial provision. The plaintiff’s pretrial and
posttrial briefs reference General Statutes § 52-552 only generally—a statute
that was repealed in 1991—without citation to a specific provision of CUFTA.
After pretrial briefing, a trial and posttrial briefing, the trial court issued an
order indicating that it was still ‘‘unclear’’ about ‘‘which specific provision’’
of CUFTA ‘‘the plaintiff claims the defendant Stephen McGee violated.’’ It
therefore ordered the plaintiff to file a supplemental brief clarifying its
position. The plaintiff complied, and for the first time, cited General Statutes
§§ 52-552e and 52-552f, which are CUFTA’s provisions on liability. In its
motion to reargue to the trial court, the plaintiff again failed to mention
any provisions of CUFTA.
Nor in its briefing to this court did the plaintiff mention § 52-552k. It did,
however, mention the concept of agency, asking this court to accept its
argument under the plain error doctrine. See Practice Book § 60-5. I take
its invocation of the plain error doctrine, which provides an avenue for
reviewing unpreserved claims, as a concession that this claim was not
preserved. See State v. Darryl W., 303 Conn. 353, 372, 33 A.3d 239 (2012)
(plain error is a ‘‘doctrine that this court invokes in order to rectify a trial
court ruling that, although either not properly preserved or never raised at
all in the trial court, nonetheless requires reversal’’ of a trial court’s judgment
[internal quotation marks omitted]).
The majority does not explain how this legal theory, never raised during
trial, qualifies for plain error review. See id., 373 (‘‘party seeking plain error
review must demonstrate that the claimed impropriety was so clear, obvious
and indisputable as to warrant the extraordinary remedy of reversal’’ [inter-
nal quotation marks omitted]). As I will discuss, the position the majority
adopts today is hardly ‘‘obvious and indisputable.’’ It is at best a minority
view.
Regardless, the majority is entitled to reach this issue if it has concluded
that the parties have had an opportunity to brief the issue. See Blumberg
Associates Worldwide, Inc. v. Brown & Brown of Connecticut, Inc., 311
Conn. 123, 161–62, 84 A.3d 840 (2014); id., 162 (‘‘if the reviewing court would
have the discretion to review the issue if raised by a party . . . the court
may raise the claim sua sponte, as long as it provides an opportunity for
all parties to be heard on the issue’’). However, it is at least ironic (and in
my view unfair) to scold the trial court for not ordering yet another round
of supplemental briefing, given that the trial court provided the plaintiff
with ample briefing opportunities; the plaintiff only belatedly landed on a
theory of agency before this court, and has still never cited the statute the
majority holds to govern.
2
General Statutes § 52-552f provides: ‘‘(a) A transfer made or obligation
incurred by a debtor is fraudulent as to a creditor whose claim arose before
the transfer was made or the obligation was incurred if the debtor made the
transfer or incurred the obligation without receiving a reasonably equivalent
value in exchange for the transfer or obligation and the debtor was insolvent
at that time or the debtor became insolvent as a result of the transfer
or obligation.
‘‘(b) A transfer made by a debtor is fraudulent as to a creditor whose
claim arose before the transfer was made if the transfer was made to an
insider for an antecedent debt, the debtor was insolvent at that time and
the insider had reasonable cause to believe that the debtor was insolvent.’’
(Emphasis added.)
General Statutes § 52-552e provides in relevant part: ‘‘(a) A transfer made
or obligation incurred by a debtor is fraudulent as to a creditor, if the
creditor’s claim arose before the transfer was made or the obligation was
incurred and if the debtor made the transfer or incurred the obligation: (1)
With actual intent to hinder, delay or defraud any creditor of the debtor;
or (2) without receiving a reasonably equivalent value in exchange for the
transfer or obligation . . . .’’ (Emphasis added.)
3
Although in construing legislative language it is sometimes useful to
draw on related or analogous statutes, one statutory scheme that the majority
relies on as analogous, the Uniform Commercial Code (UCC), General Stat-
utes § 42a-1-101 et seq., contains a specific legislative admonition, missing
in CUFTA, to ‘‘liberally [construe]’’ that title. General Statutes § 42a-1-103
(a). This can perhaps be explained by the fact that the UCC governs all
commercial transactions while CUFTA creates a cause of action for fraud.
4
As the majority admits, the authorities it relies on reach their results
‘‘without any analysis . . . .’’ The majority ‘‘surmise[s]’’ that ‘‘the parties in
these cases were operating under the same logical assumption reflected in
the parties’ pleadings in the present case, that the act of the agent would
be imputed to the principal as a matter of law.’’
In my view, this assumption is a logical stretch, both in the present case
and in the cases ‘‘without any analysis . . . .’’ In the present case, the
plaintiff’s complaint never mentions the terms agent, principal or impute.
In fact, as discussed previously, the plaintiff never mentioned principles of
agency until its brief before this court, in which it invoked the plain error
doctrine; see Practice Book § 60-5; and it has never mentioned the supple-
mentary provisions of CUFTA, General Statutes § 52-552k. See footnote 1
of this concurring and dissenting opinion. Given that the cases that provide
any analysis whatsoever (Folmar & Associates, LLP, Methodist Manor
Health Center, Inc., and Presbyterian Medical Center, as well as Connecticut
trial court cases) go against the plaintiff’s and the majority’s position, and
would have easily been found if searched for, the better explanation in the
out-of-state cases with no analysis is that the parties simply did not consider
the issue. Although the majority is perhaps free to arrive at the conclusion
it does today, it does so against the weight of considered authority and on
a theory the plaintiff did not pursue before the trial court.
5
At the time Helen granted Stephen a power of attorney, Connecticut’s
statutory short form power of attorney provided that when the principal
‘‘confer[s] general authority,’’ it ‘‘shall be construed to mean that the principal
authorizes the agent to act as an alter ego of the principal with respect to
any matters and affairs not enumerated’’ in the power of attorney agreement.
General Statutes (Rev. to 2015) § 1-55. The power of attorney agreement
used by the parties in this case is not in the record, however. Therefore, it
is unclear whether Stephen executed the transfers pursuant to a general
authority, and, if so, whether Helen authorized him to act as her alter ego
in such cases.
6
The majority argues that courts in bankruptcy cases simply presume
that the conduct of a debtor’s agent is attributable to a debtor and instead
focus only on whether the intent of the agent is attributable to the debtor.
But some courts do, in fact, analyze whether conduct was attributable to
the debtor, before addressing intent. E.g., In re Maletta, 159 B.R. 108, 116
(Bankr. D. Conn. 1993) (‘‘The transfers of the $83,600 bonus funds in Febru-
ary and March of 1990 were within one year of the commencement of this
case. . . . [T]hose transfers were made by the defendant or authorized by
him . . . .’’ [Citation omitted; emphasis added.]).
7
The plaintiff argues that Stephen admitted in his answer that Helen
transferred the assets and that this admission bound the trial court. But
this portion of Stephen’s answer can neither be construed as an acknowl-
edgement that Helen actually transferred the funds herself nor that Stephen’s
transfer of the funds was attributable, as a matter of law, to Helen. The
first interpretation is contrary to the record, and the trial court therefore
was entitled to find to the contrary. ‘‘[A] court may be justified in deviating
from any such admission if [it is] unsupported by the underlying facts in
evidence.’’ Dreier v. Upjohn Co., 196 Conn. 242, 248, 492 A.2d 164 (1985).
No evidence suggests that Helen actually made these transfers herself, and
the plaintiff did not argue as much. The second interpretation suggests a
legal conclusion, and thus, did not bind the trial court in its factual findings.
See Borrelli v. Zoning Board of Appeals, 106 Conn. App. 266, 271, 941 A.2d
966 (2008) (‘‘[a]dmissions, whether judicial or evidentiary, are concessions
of fact, not concessions of law’’). Whether a transfer made by a third party
is attributable to a debtor is, at least in part, a question of law.