Federal National Mortgage Association v. Olympia Mortgage Corporation et al

Filing 800

OPINION & ORDER re 762 Motion for Partial Summary Judgment. Summary judgment is granted to Fannie Mae on its constructive fraud claim against Samuel Pinter in the amount of $853,790.34. Fannie Mae asks the court to award interest starting o n July 1, 2000, the date halfway between the first and last fraudulent transfer. The court finds July 1, 2000 to be a reasonable intermediate date on which to begin calculating interest on the transfers from which Sam benefitted. So Ordered by Judge Nina Gershon on 10/22/2012. (Lee, Tiffeny)

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FILED

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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FEDERAL NATIONAL MORTGAGE
ASSOCIATION,
Plaintiff,

IN CLERK'S OFFICE
J S DISTRICT COURT E.D.NY

* NOV 0 5 2012 *
BROOKLYN OFFICE
OPINION & ORDER
04-CV -4971 (NG)(MDG)

- againstOL YMPIA MORTGAGE CORPORATION,
et al.,
Defendants.
------------------------------------------------------)C

OLYMPIA MORTGAGE CORPORATION,
et al.,
Crossclaim Plaintiff,
- againstLeib Pinter, et al.,
Crossclaim Defendants.
-------------------------------------------------------)C

GERSHON, United States District Judge:
Plaintiff Federal National Mortgage Association ("Fannie Mae") seeks partial summary
judgment against Samuel Pinter ("Pinter") on its claim of constructive fraud under New York Debtor
and Creditor Law § 273. In a previous opinion, the court, after a lengthy and detailed discussion,
granted Fannie Mae's motion to pierce Olympia Mortgage Corporations's ("Olympia") corporate
veil and hold Samuel Pinter personally responsible for Olympia's liabilities to Fannie Mae. Federal

Nat. Martg. Ass'n

v,

Olympia Martg. Carp., 724 F.Supp.2d 308 (E.D.N.Y. 2010). The court

subsequently granted Olympia's motion to pierce its own corporate veil and hold Samuel Pinter
responsible for its liabilities. Federal Nat. Martg. Ass'n v. Olympia Martg. Carp., 04-CV-4971,
2011 WL 2414685 (E.D.N.Y. Jun. 8,2011).

Fannie Mae now seeks to recover $853,790.34 in transfers made by Olympia from which
Pinter has benefitted. Under § 273, "if a conveyance is made without fair consideration and the
transferor is a debtor who is insolvent or will be rendered insolvent by the transfer, the conveyance
is deemed constructively fraudulent." Capital Distrib. Servs., Ltd. v. Ducor Express Airlines, Inc.,
440 F.Supp.2d 195, 203 (E.D.N.Y.2006); Zanani v. Meisels, 78 A.D.3d 823 (2d Dep't 2010).
Therefore, in order to succeed under § 273, Fannie Mae must show (1) that Olympia transferred
money; (2) that the money was transferred while Olympia was insolvent or that the transfers rendered
Olympia insolvent; and (3) that the transfers were not made in exchange for fair consideration. See

In re Sharp Inter. Corp., 403 F.3d 43,53 (2d Cir. 2005). "A fraudulent conveyance claim seeking
to recover money damages can only be maintained against a person who participates in the
fraudulent transfer as either the transferee of the assets or the beneficiary of the conveyance."

Fundacion Presidente Allende v. Banco de Chile, 2006 WL 2796793 at *3 (S.D.N.Y. May 29,2006)
(citing Stochastic Decisions, Inc. v. DiDomenico, 995 F.2d 1158,1172 (2d Cir. 1993)(othercitations
omitted»; see also In re Shore to Shore Realty Inc., No. 8-08-72760, 2011 WL 350526 (Bankr.
E.D.N.Y. Feb. 1,2011); Cf Sullivan v. Kodsi, 373 F.Supp.2d 302 (S.D.N.Y. 2005) (as discussed in

Federal Nat. Mortg. Ass'n v. Olympia Mortg. Corp., 2006 WL 2802092 at *10 (E.D.N.Y. Sept. 28,
2006), distinguishing Sullivan on the ground that the transferees in Sullivan were not participants
because they received the fraudulent transfers passively via a trust managed by two successive
trustees).
Pinter does not dispute that Olympia made the transfers for his benefit or that Olympia was
insolvent at the time the transfers in question occurred. Olympia was insolvent at least from
December 31, 1997, and possibly for its entire existence. Federal Nat. Mortg. Ass 'n v. Olympia
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Mortg. Corp., 792 F.Supp.2d 645,648 (E.D.N.Y. 2011). He also does not dispute that he gave no
fair consideration in exchange for the transfers.
Pinter's only objection to this motion is that Fannie Mae lacks standing to bring this action
against him because Fannie Mae is not "a creditor of the transferor of the alleged fraudulent
conveyance," as defined in N.Y. Debt. & Credo Law §§ 270-281. Pinter argues that Fannie Mae is
not his creditor, and that Olympia, and not he, made all the transfers. New York Debtor and Creditor
Law, however, is clear that the plaintiff, Fannie Mae in this instance, must be a creditor of the

transferor. See Eberhard v. Marcu, 530 F.3d 122 (2d Cir. 2008). Here, the transferor is Olympia,
not Pinter, and there is no dispute that Fannie Mae is a creditor of Olympia and Pinter is the
beneficiary of those transfers.
In any event, by piercing the corporate veil between Pinter and Olympia, Pinter has become
personally liable for Olympia's debts, Federal Nat. Mortg. Ass 'n

V.

Olympia Mortg. Corp., 724

F.Supp.2d 308 (E.D.N.Y. 2010), and thus Fannie Mae is Pinter's creditor. UBS Securities LLC v.

Highland Capital Management, L.P., 924 N.Y.S.2d 312,2011 N.Y. Slip Op. 50297 (U) (N.Y. Sup.
Ct. N.Y. Cnty. Mar. 1,2011), aff'd as modified, 93 A.D.3d 489 (1 st Dept. 2012).
Summary judgment is therefore granted to Fannie Mae on its constructive fraud claim against
Samuel Pinter in the amount of$853,790.34.
Olympia requests prejudgment interest pursuant to N.Y. C.P.L.R. § 5001(a). "Where ...
damages were incurred at various times, interest shall be computed upon each item from the date it
was incurred or upon all of the damages from a single reasonable intermediate date." See N. Y.
C.P.L.R. § 5001(b); Marfia v. TC Ziraat Bankasi, 147 F.3d 83 (2d Cir. 1998) ("New York law
leaves to the discretion of the court the choice of whether to calculate prejudgment interest based
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upon the date when damages were incurred or 'a single reasonable intermediate date,' which can be
used to simplify the calculation."). Based on this provision, Fannie Mae asks the court to award
interest starting on July 1, 2000, the date halfway between the first and last fraudulent transfer. The
court finds July 1,2000 to be a reasonable intermediate date on which to begin calculating interest
on the transfers from which Sam benefitted.
SO ORDERED.

s/Nina Gershon
NINA GERSHON
United States District Judge
Dated: Brooklyn, New York
October)~ ,2012

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