Argued Dec. 8, 1989.
Jeffrey D. Ginzberg, for appellant (plaintiff).
Donald W. McGill, with whom, on the brief, was Rene G. Martineau, Watertown, for appellees (defendants).
Before ARTHUR H. HEALEY, SHEA, CALLAHAN, COVELLO and HULL, JJ.
COVELLO, Associate Justice.
This is an appeal from a judgment of the trial court, Hon. James T. Healey, state trial referee, refusing to set aside an allegedly fraudulent transfer of real property. The dispositive issues are:[214 Conn. 9] (1) whether the trial court failed to consider one of the two alternative tests required to establish a fraudulent conveyance; and (2) whether the trial court's factual determinations are supported by the evidence. We find no error.
The trial court found the following: On July 31, 1984, the Travelers Insurance Company paid the defendant Arzije Coma $115,000 in satisfaction of a workers' compensation claim. This sum represented compensation for a permanent injury to Mrs. Coma's right arm. Mrs. Coma thereafter deposited the entire amount of the compensation settlement into a passbook money market bank account that she owned jointly with her husband, the named defendant Medi Coma. Each defendant could withdraw the entire sum of money at any time.
Thereafter, Mr. Coma requested permission from Mrs. Coma to borrow funds from the settlement proceeds for his own business purposes. Mrs. Coma consented to the withdrawals, but only upon the express condition that all funds withdrawn be repaid. Mr. Coma agreed. Mrs. Coma never withdrew any of the funds herself, but consented to the withdrawals made by Mr. Coma.
On November 22, 1985, Mr. Coma purchased a restaurant business from the plaintiff. Mr. Coma gave the plaintiff an unsecured $50,000 promissory note as part of the purchase price. Both defendants intended the restaurant to be a gift for their twenty-one year old son. For a variety of reasons the business was not profitable.
On November 1, 1987, Mr. Coma defaulted on the payment of the promissory note held by the plaintiff. On April 24, 1988, he closed the doors of the restaurant. By that date, the contents of the joint money market[214 Conn. 10] bank account had been exhausted. Mrs. Coma thereupon demanded immediate repayment of all sums that Mr. Coma owed her.
On May 25, 1988, Mr. Coma executed a quitclaim deed transferring to Mrs. Coma his one-half interest in the marital premises, located in Wolcott. The stated consideration on the deed was $75,000. At the time of the conveyance, the fair market value of the property was approximately $250,000, and it was subject to mortgages approximating $150,000. Mr. Coma had no other assets at that time.
On June 20, 1988, nearly one month after the conveyance, the plaintiff began a collection action seeking the balance due on the note. Incident thereto, the plaintiff sought, by way of prejudgment remedy, to attach Mr. Coma's interest in the marital premises. On January 23, 1989, the plaintiff, having discovered the earlier conveyance, commenced a second action, this time against both defendants, seeking to set aside the transfer as a fraudulent conveyance. The two actions were thereafter consolidated for trial.
On June 26, 1989, the trial court rendered judgment in the collection action in favor of the plaintiff, against Mr. Coma, in the amount of $45,695.70 together with interest of $7824.21. In the fraudulent conveyance action, however, the trial court rendered judgment in favor of the defendants. The plaintiff appealed from the judgment in the fraudulent conveyance action to the Appellate Court. We thereafter transferred the matter to ourselves pursuant to Practice Book § 4023.
On appeal, the plaintiff raises three claims of error: (1) the trial court erred in considering only one of the two alternative tests for establishing a fraudulent transfer; (2) the trial court erred by concluding that there was good consideration for the transfer
of the property from Mr. Coma to Mrs. Coma; (3) the trial court [214 Conn. 11] erred in failing to conclude that Mrs. Coma made an inter vivos gift to Mr. Coma of the compensation settlement proceeds, rather than a loan.
The party seeking to set aside a conveyance as fraudulent  bears the burden of proving either: (1) that the conveyance was made without substantial consideration and rendered the transferor unable to meet his obligations; or (2) that the conveyance was made with a fraudulent intent in which the grantee participated. Bizzoco v. Chinitz,193 Conn. 304, 312, 476 A.2d 572 (1984); Zapolsky v. Sacks, 191 Conn. 194, 200, 464 A.2d 30 ...