Rosenfeld v. Brody (2025): Pleading Standards for Fraudulent Conveyance Claims under New York’s Uniform Voidable Transactions Act

1. Introduction

Parties & Background: Yaakov Rosenfeld (“Plaintiff”) and Samuel Brody (“Defendant”), long–time business associates, became embroiled in a dispute over a residential property at 2139 60^th Street, Brooklyn. Pursuant to a February 2020 arbitration agreement, the matter was submitted to the Rabbinical Court of Givas Hamorah, which issued an award ordering Brody to: (i) release a mortgage on the Brooklyn property and (ii) pay Rosenfeld $57,888.

Brody did neither. Instead, in September 2020 he caused 1418 Orange Turnpike, LLC (“the LLC”)—of which he is sole managing member—to acquire real property in Orange County (“Orange County Property”). Rosenfeld subsequently confirmed the arbitration award in Supreme Court, obtaining a money judgment and mandate that Brody release the Brooklyn mortgage.

Believing the Orange County Property purchase to be a fraudulent scheme to shield assets, Rosenfeld sued Brody and the LLC to:

• Set aside the conveyance as fraudulent under Debtor & Creditor Law former §273-a and current §§273(a) & 274 (Uniform Voidable Transactions Act, “UVTA”);
• Attach his judgment lien to the Orange County Property;
• Recover attorney’s fees under §276-a;
• Pierce the corporate veil of the LLC; and
• Recover on a theory of unjust enrichment.

The Supreme Court (Orange County) dismissed the complaint and cancelled Rosenfeld’s notice of pendency. The Appellate Division, Second Department, affirmed in the decision now under review.

2. Summary of the Judgment

The Second Department held:

1. CPLR 3211(a)(1) – Documentary Evidence: Defendants failed to provide qualifying “documentary evidence” that conclusively refuted the complaint; thus dismissal could not rest on subdivision (a)(1).
2. CPLR 3211(a)(7) – Failure to State a Cause of Action: The complaint nevertheless failed on the pleadings because:
   • Former DCL §273-a was repealed on 4 Apr 2020; it cannot ground a post-2020 transfer claim.
   • The complaint did not allege essential elements of UVTA §§273(a) or 274—i.e., actual intent to hinder/delay/defraud or transfer without reasonably equivalent value while insolvent.
   • Absent a viable voidable-transfer claim, derivative claims for attorney’s fees (§276-a), unjust enrichment, and veil-piercing also failed.
3. The judgment of dismissal and cancellation of the notice of pendency was therefore affirmed with costs.

3. Analysis

3.1 Precedents Cited and Their Influence

• Mohawk Constr. & Supply Co. v. Walsh/Consigli JV, 222 AD3d 965 (2023) & Goshen v. Mutual Life, 98 NY2d 314 (2002) – Reaffirm the stringent rule that documentary evidence must “utterly refute” allegations to warrant dismissal under CPLR 3211(a)(1).
• Granada Condominium III Assn. v. Palomino, 78 AD3d 996 (2010); Porat v. Rybina, 177 AD3d 632 (2019); Phillips v. Taco Bell, 152 AD3d 806 (2017) – Define “documentary evidence” (authentic, undeniable writings such as contracts, deeds). The court rejected defendants’ affidavit and email as non-documentary.
• Leon v. Martinez, 84 NY2d 83 (1994); Old Republic National Title v. 1152–53 Mgt., 227 AD3d 824 (2024) – Articulate the liberal standard favoring plaintiffs on an (a)(7) motion: pleadings accepted as true, every favorable inference afforded.
• Guggenheimer v. Ginzburg, 43 NY2d 268 (1977); Alleyne v. Rutland Dev., 213 AD3d 887 (2023) – Clarify that when evidentiary material is considered on an (a)(7) motion, the issue becomes whether plaintiff “has” a cause, not whether he has “stated” one.
• Matter of Morris v. NYS Dept. of Taxation & Fin., 82 NY2d 135 (1993); Cortlandt St. Recovery Corp. v. Bonderman, 31 NY3d 30 (2018) – Theories of veil-piercing cannot stand alone absent substantive tort/contract claims.
• Georgia Malone & Co. v. Rieder, 19 NY3d 511 (2012) – Elements of unjust enrichment reiterated; used to dismiss that count.

3.2 Legal Reasoning of the Court

1. Documentary evidence analysis (CPLR 3211[a][1]). The court rejected defendants’ reliance on an affidavit and email. Only writings “essentially undeniable” (e.g., deeds, mortgages) qualify. Defendants’ materials did not conclusively negate the complaint; thus subdivision (a)(1) was inapplicable.
2. Pleading sufficiency under UVTA.
   • New York adopted the Uniform Voidable Transactions Act in 2019, effective 4 Apr 2020. Former DCL provisions (including §273-a) governing fraudulent conveyances were repealed for transfers made after that date.
   • Rosenfeld’s complaint invoked §273-a although the property transfer occurred in September 2020—squarely within UVTA’s reach; hence that statutory hook was unavailable.
   • The complaint did not compensate by pleading facts satisfying UVTA §273(a) (actual intent or constructive fraud) or §274(a) (transfer by insolvent debtor for less-than-equivalent value).
   • Because essential elements (intent, lack of equivalent value, insolvency) were missing, the complaint was fatally defective.
3. Cascade dismissal of dependent causes.
   • Attorney’s-fee claim under §276-a is not an independent cause; it rides on a viable voidable-transfer claim—none existed.
   • Unjust enrichment lacked allegations that defendants benefited at plaintiff’s expense.
   • Veil-piercing cannot create liability where no underlying wrongdoing survives.

3.3 Impact of the Judgment

This decision crystallises several points likely to guide litigants and courts:

1. UVTA Pleading Standards: Post-April 2020 conveyances must be pleaded under UVTA. Litigants relying on repealed §273-a will face immediate dismissal.
2. Mandatory Allegations: Complaints must specifically plead (a) actual intent to hinder/delay/defraud or (b) lack of reasonably equivalent value and insolvency/unreasonably small capital. Generic assertions will not survive.
3. Documentary Evidence Clarified: Affidavits and emails are not documentary evidence for CPLR 3211(a)(1); defendants must attach official writings (deeds, contracts, judgments) to trigger that ground.
4. Derivative Claims Vulnerable: Attorney’s-fee requests, unjust-enrichment counts, and veil-piercing theories rise or fall with the core voidable-transfer claim.
5. Arbitration Awards & Enforcement: Although not dispositive here, the court implicitly affirmed the finality and enforceability of a confirmed rabbinical arbitration award even in the face of a subsequent fraudulent-conveyance dispute.

4. Complex Concepts Simplified

• Uniform Voidable Transactions Act (UVTA): A modernised statute replacing New York’s dated fraudulent-conveyance provisions. It distinguishes:
  • Actual Fraud – transfer made with intent to hinder, delay, or defraud creditors.
  • Constructive Fraud – transfer for less-than-reasonably-equivalent value while debtor is insolvent or under-capitalised.
• CPLR 3211(a)(1) vs. (a)(7):
  • (a)(1) – dismissal based on “documentary evidence” that conclusively defeats the claim.
  • (a)(7) – dismissal for failure to state a claim; court accepts allegations as true but tests legal sufficiency.
• Notice of Pendency (Lis Pendens): A filing alerting the world that title to real property is under litigation. If the underlying claim dies, the notice must be cancelled.
• Piercing the Corporate Veil: An equitable doctrine permitting creditors to look past an entity to reach individual owners if the entity is used to defraud or defeat legitimate claims. It is remedial, not a standalone cause of action.
• Reasonably Equivalent Value: UVTA’s economic yardstick. A debtor transferring property for roughly what it’s worth is generally protected, whereas transfers for a nominal sum signal potential constructive fraud.

5. Conclusion

Rosenfeld v. Brody is the Second Department’s first robust application of New York’s Uniform Voidable Transactions Act in the post-pandemic era. By affirming dismissal it:

• Signals that litigants must ground fraudulent-transfer claims squarely within UVTA’s language and elements;
• Reinforces a restrictive view of “documentary evidence” under CPLR 3211(a)(1);
• Highlights that derivative remedies—fees, unjust enrichment, veil-piercing—cannot survive absent a viable core claim.

Practitioners prosecuting or defending fraudulent-conveyance actions must now craft complaints (and motions) with UVTA-specific precision, or risk swift dismissal and concomitant loss of lis pendens protection—sometimes the only leverage a judgment creditor has. The case therefore stands as the leading New York precedent on UVTA pleading standards and will likely be cited in both trial and appellate courts for years to come.