Pleading Actual-Intent UVTA Claims in New York: Third Department Aligns § 273(a)(1) with CPLR 3016(b), Permits Information‑and‑Belief Allegations with Factual Basis, and Rejects Affidavits as “Documentary Evidence” on CPLR 3211 Motions

Introduction

In Neptune Issue Inc. Profit Sharing Plan v. Eliopoulos (2025 NY Slip Op 06001, App Div, 3d Dept, Oct. 30, 2025), the Third Department addresses how New York’s 2019 enactment of the Uniform Voidable Transactions Act (UVTA) intersects with established state pleading rules. The court clarifies that “actual intent” claims under Debtor and Creditor Law (DCL) § 273(a)(1)—the UVTA’s replacement for former § 276—must be pleaded with the heightened particularity required by CPLR 3016(b). At the same time, it reaffirms that allegations made “upon information and belief” may satisfy that standard when key facts lie within the defendants’ exclusive knowledge and the pleading supplies enough factual detail to permit a reasonable inference of fraud (Pludeman v Northern Leasing Systems, Inc., 10 NY3d 486).

The case arises from a creditor’s attempt to set aside a transfer of multiple parcels—including Lake George properties—from a debtor and her controlled LLC to a new LLC owned by the debtor’s son, while deficiency-judgment motions were pending. The transferee LLC moved pre-answer to dismiss under CPLR 3211(a)(1) and (7), arguing inadequate particularity and “documentary evidence” establishing reasonably equivalent value. The Third Department largely affirmed the denial of that motion, holding that the complaint stated viable claims under DCL § 273(a)(1) and (a)(2), while dismissing two additional causes of action the plaintiff elected not to pursue.

Summary of the Opinion

The court holds:

• Actual-intent claims under DCL § 273(a)(1) are subject to CPLR 3016(b)’s heightened pleading requirement—the same standard historically applied to former § 276 (Avilon Automotive Group v Leontiev, 194 AD3d 537; Old Republic Natl. Title Ins. Co. v 1152 53 Mgt., LLC, 227 AD3d 824)—but information-and-belief allegations can suffice where material facts are peculiarly within defendants’ knowledge and the complaint details facts supporting a reasonable inference of fraud (Pludeman; Paolucci v Mauro, 74 AD3d 1517).
• The complaint adequately alleged badges of fraud codified in DCL § 273(b)—including a transfer to an insider and the pendency of creditor litigation seeking deficiency judgments—satisfying § 273(a)(1) and (a)(2) at the pleading stage.
• For constructive-fraud claims under § 273(a)(2) and present-creditor claims under § 274, the complaint’s allegations that defendants failed to receive “reasonably equivalent value” were sufficiently supported, including by the stark disparity between the 2020 insider sale price ($529,000 for multiple parcels, two with Lake George features) and a later third-party sale (~$1.25 million).
• Insolvency may be presumed under DCL § 271(b) when a debtor is generally not paying debts as they become due; plaintiff’s allegations of prior mortgage defaults and disregard of an information subpoena sufficed at this stage.
• An affidavit from the insider transferee’s managing member cannot constitute “documentary evidence” within the meaning of CPLR 3211(a)(1) (Crepin v Fogarty, 59 AD3d 837). Thus, the affidavit’s assertions of higher actual consideration and market conditions did not warrant dismissal.
• The court modified the order only to dismiss the third and fourth causes of action, which plaintiff expressly declined to pursue (see footnote 3).

The court also used the case to remind trial courts of CPLR 2219(a)’s directive regarding the form of orders on motions. While it declined to reverse based solely on the absence of written or oral findings here, it reiterated that orders without articulated rationale are disfavored (Dworetsky v Dworetsky, 152 AD2d 895; Charalabidis v Elnagar, 188 AD3d 44).

Factual and Procedural Background

In 2016, the creditor (Neptune Issue Inc. Profit Sharing Plan) brought two mortgage-foreclosure actions against Mary Ellen Eliopoulos and her controlled LLC (Estates of Glenburnie LLC) on Essex and Washington County properties. While those suits were pending, Eliopoulos and the LLC encumbered the “Putnam parcels” (Washington County) with two mortgages to Mako International, LLC, later adding a third in 2019.

After plaintiff obtained judgments of foreclosure and sale in late 2018, it moved for deficiency judgments. Before those deficiency determinations, Eliopoulos and the LLC conveyed the Putnam parcels and two “Lake George Way” parcels (together, the “subject properties”) to a new LLC—Glenburnie Estates LLC (GEL)—for $529,000 in June 2020. GEL’s sole member is Eliopoulos’s son.

Plaintiff sued to void the transfer under DCL §§ 273, 274, and 275, alleging actual and constructive fraudulent transfer. GEL moved pre-answer to dismiss under CPLR 3211(a)(1) and (7). Supreme Court denied the motion without findings. On appeal, the Third Department affirmed the denial as to the first two causes of action (§ 273(a)(1) and § 273(a)(2)), but dismissed the third and fourth causes after plaintiff stated it would not pursue them.

Analysis

1. Precedents and Statutes That Anchored the Decision

• UVTA Adoption and Continuity with Prior Law: The court situates New York’s 2019 UVTA enactment (L 2019, ch 580) within a largely uniform national framework, citing legislative history and national sources (Assembly Mem in Support; United States v Miller, 604 US 518, 524 [2025]; Silber Inv. Props., Ltd. v BJG Islandia Realty, LLC, 236 AD3d 953).
• DCL § 273(a): Defines voidable transfers based on either (1) actual intent to hinder, delay, or defraud, or (2) constructive grounds (no reasonably equivalent value and unreasonably small assets or intent/belief of incurring debts beyond ability to pay).
• DCL § 273(b): Codifies common-law “badges of fraud,” e.g., transfers to insiders, pendency of litigation, insolvency, lack of reasonably equivalent value, and timing relative to substantial debts (Matter of Schiffman v Affordable Shoes, Ltd., 238 AD3d 770; 245 E. 19 Realty LLC v 245 E. 19th St. Parking LLC, 223 AD3d 604).
• DCL § 271(b): Presumption of insolvency where a debtor is generally not paying debts as they come due, absent bona fide dispute.
• Pleading Particularity—CPLR 3016(b): Historically applied to actual-intent claims under former § 276 (Old Republic, 227 AD3d 824; Avilon, 194 AD3d 537). The court expressly carries that requirement forward to § 273(a)(1), citing Drip Capital, Inc. v JY Imports of NY Inc. (EDNY 2025).
• Information-and-Belief Pleading: While information-and-belief allegations alone are generally insufficient for fraud (Avilon; Carlyle, LLC v Quik Park 1633 Garage LLC, 160 AD3d 476), Pludeman permits them if material facts are peculiarly within defendants’ control and the pleading presents enough detail to allow a reasonable inference of fraud (Pludeman, 10 NY3d at 491–492; Paolucci, 74 AD3d at 1520–1521; Phone Admin. Servs. Inc. v Verizon N.Y., Inc., 211 AD3d 493).
• Reasonably Equivalent Value Allegations: Plaintiffs may plead inadequate consideration upon information and belief (477 Realty, L.L.C. v Wing Soho, LLC, 234 AD3d 469, 471).
• CPLR 3211(a)(1) “Documentary Evidence”: Affidavits are not “documentary evidence” sufficient to defeat well-pleaded claims at the motion-to-dismiss stage (Crepin v Fogarty, 59 AD3d 837, 838). Documentary evidence must “utterly refute” allegations; typical qualifying documents include contracts, deeds, and publicly filed instruments, not partisan affidavits.
• CPLR 3211(a)(7) Standard: Liberal construction of pleadings; facts presumed true; plaintiff afforded every favorable inference (Pludeman).
• Orders Without Findings—CPLR 2219(a): While not reversible error here (compare Bergin v Peplowski, 173 AD2d 1012, with People v Kwiatkowski, 197 AD3d 1363), the Third Department reiterates the disfavor toward orders lacking written or oral reasoning (Dworetsky; Jones v Peacock, 183 AD2d 1039; Charalabidis, 188 AD3d 44).

2. The Court’s Legal Reasoning

a. Applying CPLR 3016(b) to § 273(a)(1) (Actual Intent). The court recognizes that New York’s shift from “fraudulent conveyance” to “voidable transaction” did not change the core structure of the actual-intent claim. Because § 273(a)(1) is the successor to former § 276, it inherits the same heightened pleading requirement. That alignment preserves doctrinal consistency across New York’s Departments and with federal courts applying New York law (Drip Capital).

b. Satisfying Particularity Through Badges of Fraud and Exclusive Knowledge. The complaint alleges:

• Transfer from the debtor and her wholly owned LLC to an entity owned by her son—an “insider” (DCL § 270[h][1][i]; [2][vi]).
• Timing amid active litigation and pending deficiency judgment motions—classic badges of fraud under § 273(b).
• Allegations that the debtor would incur or reasonably should have believed she would incur debts beyond her ability to pay (relevant to § 273[a][2][ii]).

Although some allegations were pleaded “upon information and belief,” the court held that the pleading paired those allegations with concrete facts (insider status, litigation posture, transfer timing, and asset composition) sufficient to permit a reasonable inference of fraudulent intent at the pre-discovery stage. The court emphasized that key financial details supporting or rebutting insolvency and intent lie within defendants’ exclusive knowledge, which militates against early dismissal and favors allowing disclosure (Pludeman; Paolucci; CPLR 3211[d]).

c. Constructive Fraud Under § 273(a)(2) and § 274—Reasonably Equivalent Value. The complaint’s reasonably-equivalent-value allegations were held sufficient. The debtor had layered $475,000 in Mako mortgages on the Putnam parcels and then conveyed those parcels plus two Lake George properties—including at least one with deeded lake access—for an aggregate $529,000. Three years later, all four properties sold to a third party for approximately $1.25 million. At the pleadings stage, that disparity plausibly supports inadequate consideration; the court rejected appellant’s attempt to overcome those allegations with an affidavit asserting greater actual consideration and market-impairing litigation risk. Such affidavit is not cognizable “documentary evidence” under CPLR 3211(a)(1) and cannot conclusively refute well-pleaded allegations (Crepin).

d. Presumption of Insolvency. The court invoked DCL § 271(b)’s presumption of insolvency when a debtor is not generally paying debts, noting the debtor’s prior mortgage defaults and apparent disregard of an information subpoena connected to at least one deficiency proceeding. Those facts, combined with the timing and structure of the transfer, allowed the insolvency component to proceed to discovery even though granular balance-sheet allegations were not pleaded.

e. Trial-Court Orders Without Findings. Though not outcome-determinative here, the panel’s footnote guidance is practical: trial courts retain discretion under CPLR 2219(a), but reasoned orders aid appellate review and assure litigants that the law has been applied in a considered, coherent way.

3. Likely Impact and Use in Future Litigation

This decision has several immediate and systemic effects:

• Uniform Pleading Standard Across Departments: The Third Department joins other courts in applying CPLR 3016(b) to § 273(a)(1), confirming that plaintiffs must plead actual-intent UVTA claims with particularity. This promotes statewide uniformity post-UVTA.
• Pathway for Early-Stage UVTA Claims: By affirming that information-and-belief allegations can meet CPLR 3016(b) when paired with specific facts and badges of fraud, the court preserves a viable pleading path for creditors who lack access to the debtor’s internal financial information before discovery.
• Limits on CPLR 3211(a)(1) Defense: Affidavits from insiders asserting fair value or market impairments will not qualify as “documentary evidence.” Defendants seeking dismissal must marshal unambiguous, incontrovertible documents (e.g., recorded instruments, contracts) that utterly refute the pleaded claims.
• Insolvency Presumption Invoked More Readily: Demonstrations of chronic nonpayment (e.g., multiple mortgage defaults and ignored subpoenas) can activate § 271(b)’s presumption, reducing the burden on creditors at the pleading stage.
• Foreclosure and Deficiency Context: The opinion underscores that transfers to insiders, executed while deficiency motions are pending, are fertile ground for voidable-transfer scrutiny. Timing relative to debt accrual and enforcement will matter—both as “badges of fraud” and as constructive-fraud predicates.
• Valuation Evidence: The court’s acceptance of a subsequent third-party sale price as part of the plausibility calculus (without treating it as dispositive) signals that later arms-length transactions may be referenced to support inadequate-value allegations at the pleadings stage.

Complex Concepts Simplified

• Voidable Transaction vs. Fraudulent Conveyance: New York’s 2019 UVTA rebranded and updated the law but preserved core principles. Transfers can be set aside if made with actual intent to hinder, delay, or defraud creditors, or constructively if made without reasonably equivalent value when certain financial conditions are present.
• Badges of Fraud: Circumstantial indicators of fraudulent intent. Examples include transfers to relatives or controlled entities (insiders), transfers while lawsuits or judgments are pending, inadequate consideration, and insolvency. Under DCL § 273(b), many badges are codified.
• Insider: Under DCL § 270, “insider” includes, among others, a debtor’s relatives and entities they control. A transfer to an LLC owned by the debtor’s child can qualify.
• Reasonably Equivalent Value: Not a strict fair-market-value test. Courts consider the totality of the circumstances (including liens, marketability, timing, and risks). A large disparity between consideration and later sale price can support an inference of inadequacy but is not conclusive.
• Insolvency Presumption (DCL § 271[b]): If a debtor generally does not pay debts when due (and those debts aren’t in bona fide dispute), the law presumes insolvency—relieving a creditor from pleading detailed financial metrics at the outset.
• CPLR 3016(b) Particularity: Fraud-based claims must set forth the circumstances (who, what, when, where, how) with specificity. However, if crucial facts are uniquely within the defendant’s knowledge, the standard is applied flexibly, permitting information‑and‑belief allegations accompanied by detailed supporting facts enabling reasonable inferences.
• CPLR 3211(a)(1) “Documentary Evidence”: A narrow category of evidence (e.g., contracts, deeds, mortgages, judicial records) that can conclusively refute a claim on a motion to dismiss. Affidavits—especially from interested parties—are not “documentary evidence” for this purpose.
• Deficiency Judgment: After a foreclosure sale, if proceeds do not cover the debt, the lender can seek a deficiency judgment against the borrower for the balance. Transfers occurring before those judgments may still be voidable if they undermine creditors.

Practical Guidance for Litigants

• For Creditors/Plaintiffs:
  • Plead both actual-intent (§ 273[a][1]) and constructive (§ 273[a][2] and § 274) theories where facts support them.
  • Detail badges of fraud: insider relationships, pending litigation, timing, asset composition, and any price disparities or unusual encumbrances.
  • Invoke the § 271(b) insolvency presumption with factual support (e.g., defaults, nonpayment, ignored subpoenas).
  • Use later arms-length sales, tax assessments, or appraisals to bolster inadequate-value allegations, while acknowledging that final valuation is a merits question.
  • If key facts are within defendants’ control, flag CPLR 3211(d) to forestall premature dismissal and obtain discovery.
• For Debtors/Transferees/Defendants:
  • Expect CPLR 3016(b) to govern § 273(a)(1) claims; prepare to meet specific allegations of badges of fraud.
  • Avoid overreliance on affidavits for CPLR 3211(a)(1) dismissal; procure objective, unambiguous documents (e.g., contracts of sale, recorded instruments) that “utterly refute” the claims.
  • Consider contemporaneous, independent valuations and marketability analyses at closing, especially in insider transactions, to support reasonably equivalent value.
  • Document use of sale proceeds (e.g., payoff of liens) and the business rationale for the timing and structure of transfers.
  • Anticipate discovery into finances and communications; early transparency can mitigate adverse inferences tied to exclusive knowledge.
• For Trial Courts:
  • Provide concise reasoning under CPLR 2219(a) in motion orders, particularly where statutes have recently changed; it aids both litigants and appellate review.

Conclusion

Neptune Issue Inc. Profit Sharing Plan v. Eliopoulos is a timely and instructive application of New York’s UVTA to a familiar fact pattern: a transfer to an insider in the shadow of foreclosure and looming deficiency judgments. The Third Department both tightens and opens the pleading aperture—tightening by confirming that § 273(a)(1) actual-intent claims must satisfy CPLR 3016(b), and opening by reaffirming Pludeman’s practical flexibility for information‑and‑belief allegations when defendants control key facts. The court also reinforces two important guardrails: insolvency can be presumed under § 271(b) based on nonpayment, and affidavits cannot function as “documentary evidence” to defeat a complaint at the 3211 stage.

Beyond its immediate effect—sending the first two causes of action forward to discovery—this opinion aligns Third Department practice with other Departments and federal courts applying New York law, promotes uniformity in UVTA litigation, and offers clear guidance to parties structuring or challenging insider transactions. Its reminders on the form of motion orders and the evidentiary limits of CPLR 3211(a)(1) will reverberate in commercial and creditor-debtor cases across the state.