WELLS FARGO FINANCIAL LEASING,
INC., Plaintiff-Respondent,
v.
MISOOK KIM, Defendant-Appellant,
and
KI C. KIM, Defendant.
No. A-3693-13T1. Superior Court of
New Jersey, Appellate Division.
Submitted March 24, 2015.
Decided April 1, 2015.
Law Offices of Jae Y. Kim, L.L.C., attorneys for appellant (Raymond Marelic, of counsel and on the brief; Mr. Kim, on the brief).
Fleischer, Fleischer & Suglia, attorneys for respondent (Allison L. Domowitch, on the brief).
Before Judges Fasciale and Hoffman.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
PER CURIAM.
Defendant Misook Kim appeals from a March 7, 2014 order denying her motion to vacate an order granting summary judgment to plaintiff. We affirm.
Plaintiff obtained a judgment against Hanna Kim Corporation ("Hanna"). Hanna allegedly attempted to defraud and evade its creditors by making post-judgment transfers to defendant and co-defendant Ki C. Kim, who is defendant's husband and Hanna's president. Plaintiff essentially maintained in this action that Hanna was a shell corporation created to conceal defendant's personal transactions.
Plaintiff filed its complaint demanding damages under the Uniform Fraudulent Transfer Act (the "Act"), N.J.S.A. 25:2-20 to -34. Plaintiff attempted to pierce Hanna's corporate veil seeking to collect the money that Hanna allegedly transferred fraudulently. Co-defendant successfully sought protection from plaintiff's claim by filing a Chapter 7 bankruptcy petition and obtaining a discharge.[1] Defendant did not seek similar protection.
Plaintiff pursued its claim solely against defendant under the Act. Plaintiff and defendant both filed motions for summary judgment. In January 2014, the court granted summary judgment to plaintiff, and denied defendant's motion.
Defendant sought to vacate summary judgment pursuant to Rule 4:50-1(d). She argued that the court lacked subject matter jurisdiction because co-defendant had filed for bankruptcy. Defendant conceded, however, that she did not file a petition for bankruptcy. Plaintiff contended that its summary judgment against defendant was independent from anything that co-defendant had done leading to his filing of the Chapter 7 petition. Plaintiff argued that it obtained judgment against defendant based on fraudulent transfers that Hanna had made directly to defendant, unrelated to any transfers that co-defendant may have made, or any transfers that Hanna may have made to co-defendant.
The judge denied defendant's motion to vacate plaintiff's summary judgment, entered the order under review, and then denied defendant's motion for reconsideration.
On appeal, defendant contends that co-defendant's Chapter 7 petition prevents plaintiff from pursuing its claim against her under the Act. As a result, defendant repeats her Rule 4:50-1(d) argument that the judge erred by not vacating plaintiff's summary judgment because the court arguably lacked subject matter jurisdiction.
After reviewing the record and the briefs, we conclude that defendant's argument is without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). We add the following brief remarks.
In reviewing a grant of summary judgment, we apply the same standard under Rule 4:46-2(c) that governed the trial court. Wilson ex rel. Manzano v. City of Jersey City, 209 N.J. 558, 564 (2012). Here, there are no genuine issues of material fact. Because the judge resolved legal questions, we review her conclusions on issues of law de novo. Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995).
"The purpose of the [Act] is to prevent a debtor from placing his or her property beyond a creditor's reach." Gilchinsky v. Nat'l Westminster Bank N.J., 159 N.J. 463, 475 (1999). The Act defines "transfer" as "every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with an asset or an interest in an asset, and includes payment of money, release, lease, and creation of a lien or other encumbrance." N.J.S.A. 25:2-22. A transfer of assets may be fraudulent under the Act if the transaction was completed (1) with the actual intent to defraud the creditor, or (2) through constructive fraud, where the debtor had no actual intent to commit fraud. State Dep't of Envtl. Prot. v. Caldeira, 171 N.J. 404, 409 (2002).
Plaintiff's damages against defendant under the Act pertain to fraudulent transfers that Hanna made to defendant. Here, Hanna attempted to place its assets beyond plaintiff's reach by making fraudulent transfers to defendant. This violates the underlying policy of the Act, which is to prevent debtors from deliberately defrauding creditors "by removing [their] property from the jaws of execution." Gilchinsky, supra, 159 N.J. at 475 (citation and internal quotation marks omitted).
Moreover, plaintiff's claims against defendant are separate from its discharged claims against co-defendant. Plaintiff did not seek from defendant damages related to any transfer of money that co-defendant may have made to defendant in anticipation of co-defendant's Chapter 7 petition filing. In other words, plaintiff did not attempt to recover its damages from co-defendant's bankruptcy estate or from any transfer that co-defendant may have made. Rather, plaintiff premised its claims against defendant pursuant to the Act and successfully pierced Hanna's corporate veil.
Although defendant did not file a petition for bankruptcy, she made numerous applications seeking to stay plaintiff's collection efforts against her. The judge correctly denied those efforts because defendant was not a bankruptcy debtor entitled to an automatic stay. Defendant therefore never availed herself of protection under the bankruptcy code and her suggestion that the court somehow lacked subject matter jurisdiction is without merit.
As a result, we reject defendant's contention that there is a basis for relief under Rule 4:50-1(d).
Affirmed.
[1] Co-defendant is not involved in this appeal.
