Appellate Division Finds Claims Against Estates Under The UFTA Are Cognizable

Rubenstein v. Estate of Rubenstein, 2016 N.J. Super. Unpub. LEXIS 2119 (App. Div. Sept. 21, 2016).

Plaintiffs were the decedent’s former wife and his two children.  They alleged that the decedent intentionally and wrongfully rendered his estate insolvent through inter vivos transfers to the individually named defendants and that those defendants cooperated with his plan. Plaintiffs asserted claims for breach of the property settlement agreement between the decedent and his former wife that required him to maintain a life insurance policy for her benefit, intentional interference with a contract, and a violation of the Uniform Fraudulent Transfer Act (“UFTA”).

One of the plaintiffs appealed the trial court’s orders dismissing all claims but the one concerning the life insurance policy and denying plaintiffs’ post-judgment relief.

The Appellate Division found that several issues were not specifically addressed in the trial court’s ruling, and noted the standard for summary judgment.

The appeals panel also explained that claims against estates under the UFTA are cognizable:

Defendants contend plaintiff’s assertions of improper transfer are legally inconsequential under the UFTA, which is pled in count six of the complaint, because defendants construe the UFTA to only apply to commercial transactions.  The UFTA is not, however, limited to commercial transactions, even though that may be its primary focus.  In fact, the Act more broadly defines a “debtor” as “a person who is liable on a claim” and more broadly a “creditor” as “a person who has a claim.”  N.J.S.A. 25:2-21 (emphasis added).  It further defines a “person” as including an “individual. . . .estate, trust, or any other legal or commercial entity.”  N.J.S.A. 25:2-22 (emphasis added).

Id. at *13-14.

In the end, the Appellate Division vacated the grant of summary judgment dismissing plaintiffs’ claims and remanded the substantive issues to the trial court for further consideration.