By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Fraudulent Transfer Law Attorney
A recent case came down from our state’s Appellate Division which held that the date of recording a property transfer deed, not the date of deed signature, determines whether a fraudulent transfer lawsuit is considered timely. In Nationwide Registry & Sec. Ltd. v. Melhem, an individual ran up some steep debts while gambling at the Las Vegas Hilton. The defendant wrote out some checks to the Hilton to make good on the debt, but the checks were dishonored. This led the hotel to pursue the delinquent debtholder in court. Later, the Hilton assigned the debt to Nationwide Registry & Sec. Ltd., the plaintiff in this case, and the company began to pursue the debt. The plaintiff secured a judgment in Nevada, registered it in New Jersey, and docketed it in 2015. It then began its pursuit to satisfy the judgment against the defendant.
Twenty years earlier, (1995), the defendant was at a sheriff sale, where he successfully bided for and purchased a piece of property in Brigantine. Fifteen years later, he executed a deed transferring this property to his sister for the stated consideration of one dollar. Defendant testified that he bought the property with her money, and that he was holding it in his name as a favor to her. The deed was recorded in 2012. In 2012, the sister transferred the property to herself and her father as joint tenants with a right of survivorship, and her father passed away, making the sister the sole owner of the property in question.
Plaintiff filed suit against the family, claiming the transfer was fraudulent and therefore void under our state’s fraudulent transfer laws. Defendants filed a motion for summary judgment and dismissal, claiming the complaint was untimely filed, as the date the transfer occurred was 2010. Because the transfer of property would need to have occurred within four years before the date of the complaint, it would be out of time. Plaintiff contended that the date the deed was recorded should hold. The motion judge agreed with the defendant and dismissed the complaint. But the Appellate Division disagreed, holding from case law precedent that the date of transfer in these cases is the day of recording, the deed not the date of delivery of the deed, and therefor the complaint was timely filed.
It is just another case where I remind every one of you that the only way to make transfers official is through recording with your local county clerk’s office. It might cost (maybe) $50 to do, but it spares the need for a headache down the road, especially if your title to the property is not marketable.
To discuss your NJ fraudulent transfer case, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at firstname.lastname@example.org. Please ask us about our video conferencing consultations if you are unable to come to our office.