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GASSER v. INFANTI INTERNATIONAL

January 6, 2005.

GEORGE GASSER and GASSER CHAIR COMPANY, INC., Plaintiffs,
v.
INFANTI INTERNATIONAL, INC., MARK INFANTI, NANCY APONTE INFANTI, VITTORIA INFANTI, MARGUERITA INFANTI, MARIELLA INFANTI, AMBOY NATIONAL BANK, GEORGE E. SCHARPF and SANDERS W. GROPPER, in his capacity as Receiver of Infanti International, Inc., Defendants.



The opinion of the court was delivered by: I. LEO GLASSER, Senior District Judge

MEMORANDUM AND ORDER

INTRODUCTION

  Plaintiffs Gasser Chair Company, Inc. and George Gasser (collectively, "Gasser" or "Plaintiffs") filed this case seeking, among other things, to set aside a fraudulent conveyance and to satisfy a more than $15 million judgment (the "Judgment") previously entered by this Court in favor of Plaintiffs against Infanti Chair Manufacturing Corporation ("Infanti Chair") and Vittorio Infanti ("Mr. Infanti"). Several of the defendants in this case are Mr. Infanti's children, who are shareholders of defendant Infanti International ("Infanti International"), a company founded and incorporated more than two years after entry of the Judgment (the Infanti children and Infanti International are collectively referred to as "Defendants").*fn1 In this case, Plaintiffs ultimately seek to impose liability upon Infanti International, as a successor to Infanti Chair, and to hold Infanti International liable on the Judgment.

  Now pending before the Court is Defendants' motion for partial summary judgment on the twelfth, thirteenth, fifteenth and seventeenth causes of action in the Amended Complaint to the extent that Plaintiffs seek a declaration that a patent once owned by Mr. Infanti, which he subsequently conveyed to his daughter, Vicky, is owned by Plaintiffs because Mr. Infanti's assignment of the Patent to his daughter, without consideration, constituted a fraudulent conveyance under New York law. Defendants argue that because Mr. Infanti was President of Infanti International at the time he obtained the patent, he did not have the legal authority to transfer his interest in it to his daughter, but rather it was and still is rightfully owned by Infanti International. In opposition, Plaintiffs cross-move for summary judgment on the twelfth cause of action for fraudulent conveyance arguing that in deposition testimony, Mr. Infanti admitted that he did not assume the position of President of Infanti International until 2001 — after he filed the application for the patent which was subsequently granted and recorded in the United States Patent & Trademark Office on October 24, 2000. Plaintiffs thus argue that the facts are undisputed that Mr. Infanti's purported transfer of the patent to his daughter without consideration constituted a fraudulent conveyance in Mr. Infanti's on-going effort to evade the payment of the Judgment. For the reasons set forth below, the Court denies Defendants' partial motion for summary judgment and grants Plaintiffs' cross-motion for partial summary judgment.*fn2

  BACKGROUND

  The following material facts are undisputed.*fn3 The prior litigation between Plaintiffs, on the one hand, and Vittorio Infanti and Infanti Chair, on the other hand, which resulted in the Judgment against Mr. Infanti and Infanti Chair on August 9, 1996, after a seven-day bench trial, has been the subject of several decisions, familiarity with which is assumed. See, e.g., Gasser Chair Co, Inc. v. Infanti Chair Mfg. Corp., 943 F. Supp. 201 (E.D.N.Y. 1997), judgment vacated by, 95 F.3d 1165 (Fed. Cir. 1996), judgment entered by, 1996 WL 683240 (E.D.N.Y. Aug. 9, 1996), aff'd, 155 F.3d 565 (Fed. Cir. 1998). On August 28, 1996, just nineteen days after the Judgment was entered, Infanti Chair filed a voluntary Chapter 11 petition in the United States Bankruptcy Court for the Eastern District of New York, bearing index number 96-18413 (CBD). (Defs. Rule 56.1 Statement ¶ 1; Am. Compl. ¶ 26). Consequently, Infanti Chair terminated its business and was subsequently dissolved. (Id.) The bankruptcy court did not discharge the Judgment. (Am. Compl. ¶ 33). Mr. Infanti also filed a voluntary personal Chapter 11 bankruptcy petition on September 18, 1996 in the United States Bankruptcy Court for the District of New Jersey. (Id. ¶ 23). The bankruptcy court did not discharge the Judgment as against Mr. Infanti. (Id. ¶ 25). On August 30, 1996, Plaintiffs caused an execution to be delivered to the United States Marshal for the District of New Jersey where Mr. Infanti resided. (Affidavit of Mark Gasser sworn to on October 27, 2004 ("Gasser Aff.") ¶ 11 & Exh. C).

  Infanti International was incorporated under the laws of New York State on February 9, 1999. (Defs. Rule 56.1 Statement ¶ 2). Sometime in 1999 after Infanti International was founded, Mr. Infanti designed a chair with "releasably detachable and interchangeable cushions," which he has termed the "Versi-Chair." (Id. ¶ 6). On September 10, 1999, Mr. Infanti, as inventor, filed an application for a patent for the Versi Chair with the United States Patent and Trademark Office. (Id. ¶ 8). The United States Patent and Trademark Office issued patent number 6,135,562 for the Versi-Chair (the "Patent") on October 24, 2000. (Id. ¶ 9).

  Mr. Infanti was deposed over the course of three days in 2002 in connection with Plaintiffs' effort to enforce the Judgment. During preliminary questioning, Mr. Infanti, who was represented by counsel, acknowledged that even though English was his second language, he would inform Plaintiffs' counsel if he was unable to understand any deposition question. (Vittorio Infanti Deposition, January 16, 2002 ("Infanti 1/16/02 Dep.") at 4-5). At no time was an interpreter requested, nor did Mr. Infanti indicate a lack of understanding. Mr. Infanti testified that he was able to form Infanti International due in large part to $1,300,000 in loans that he received collectively from Amboy and Scharpf in his individual capacity.*fn4 (Id. at 38-39). When Infanti International was founded, Mr. Infanti's daughter, Vicky, was named as the corporation's first president. (Vittorio Infanti Deposition, February 21, 2002 ("Infanti 2/21/02 Dep.") at 121-22).*fn5 Mr. Infanti stated that during the time that Vicky was President of Infanti International, he served as its "engineering advisor." (Id. at 121). Mr. Infanti was absolutely "positive" that he did not become President of Infanti International until sometime in 2001. (Id. at 122). Mr. Infanti testified that he has "never been a shareholder or director of" Infanti International (Infanti 9/15/04 Aff. ¶ 3), nor is there any suggestion in his deposition testimony that prior to his appointment as President in 2001, he was ever an officer of Infanti International.

  In an affidavit submitted in support of Defendants' motion for partial summary judgment and in opposition to Plaintiffs' cross-motion for partial summary judgment, Mr. Infanti testified that he is currently in charge of Infanti International, and has been since Infanti International was founded in 1999. (Affidavit of Vittorio Infanti sworn to November 19, 2004 ("Infanti 11/19/04 Aff.") ¶ 3). His sworn affidavit is at odds with his deposition testimony given more than two years earlier that he served as an "engineering advisor" during Vicky's tenure as President of Infanti International. (Infanti 2/21/02 Dep. at 121). Mr. Infanti claims that based on his "credit history" and the Judgment, he "was unable to sign loan documents on behalf of" Infanti International, and thus his daughter Vicky "may have been listed as President when executing a loan document on behalf of International." (Id. ¶ 7). His "credit history" and bankruptcy notwithstanding, loans were made to Infanti International, in reliance, presumably, upon Mr. Infanti's signature as "guarantor." With respect to his deposition testimony given in early 2002, Mr. Infanti stated that he "was asked a lot of questions using complex legal terms" and that he "did not understand those terms then, and [he is] still not certain of their meaning today." (Id. ¶ 8). Mr. Infanti further commented that the "Court knows" that "English is not [his] first language" as he is "much more comfortable speaking in either Italian or Spanish." (Id. ¶ 9). Further, according to Mr. Infanti, "[a]lthough there was a lawyer present at [his] deposition, [counsel] was of no assistance to [him] because he did not object to the questions that used technical terms, and because [counsel] did not explain those terms to [Mr. Infanti] or require that the lawyer asking the questions do so." (Id. ¶ 10). As was previously noted, at no time did Mr. Infanti ask for clarification or claim a lack of understanding.

  The inconsistencies between Mr. Infanti's affidavits and deposition testimony are of a piece with his testimony during the course of the earlier trial at which he acknowledged that he testified falsely under oath, that he sought to suborn the perjury of a deposition witness, that he sat silently by while he knew other witnesses testified falsely, that he forged documents, and which led the Court to conclude that his testimony confirmed Professor Wigmore's observation that "the moral efficacy of an oath has long ceased to be what it once was." Gasser Chair Co., 943 F. Supp. at 207 (citing VI Wigmore on Evidence (Chadbourne Revision) § 1847).

  In opposing Plaintiffs' cross-motion for partial summary judgment, Amboy submitted documents relating to, inter alia, two loans (in the amounts of $200,000 and $500,000) which Amboy extended to Infanti International. Two relevant documents for this motion are revolving credit notes, dated July 14, 1999 and April 18, 2000, respectively, that Vicky signed as President of Infanti International and delivered to Amboy, together with commercial security agreements and UCC-1 financing statements, purportedly granting Amboy a perfected security interest in, among other things, the Patent. (Affidavit of Stanley J. Koreyva dated November 18, 2004 ("Koreyva Aff.") ¶¶ 3, 7 & Exhs. A & B). The revolving credit notes, loan agreements and at least one financing statement were signed by "Vittoria Infanti Valentino" as President of Infanti International.*fn6 (Id. Exhs. A & B). Mr. Infanti served as guarantor for the notes, but did not execute the guarantees in a corporate capacity but merely as "Vittorio Infanti," with a personal residence at 33 Disbrow Road, Matawan, New Jersey 07747. (Id.)

  Mr. Infanti has never received a salary from Infanti International. (Infanti 1/16/02 Dep. at 73). All of Mr. Infanti's living expenses, including such things as his rent, utilities, cable service, and food, are paid by Infanti International in consideration for the services he renders to the corporation. (Id. at 58-60, 85-86).

  Mr. Infanti testified that he transferred the Patent to his daughter Victoria "as a gift" at or around the time (September 10, 1999) he filed his patent application with the United States Patent and Trademark Office. (Infanti 1/16/02 Dep. at 103; Gasser Aff. Exh. D). Mr. Infanti did not receive any consideration from Vicky for the assignment of his rights in the Patent to her. (Infanti 1/16/02 Dep. at 103; Gasser Aff. ¶ 13 & Exh. D).

  On September 6, 2002, the Board of Directors of Infanti International adopted resolutions that stated in relevant part that "all acts previously taken with respect to contracts of the Corporation, its Board of Directors, stockholders or Vittorio Infanti, as acting President . . . from the date of the Corporation's incorporation in the State of New York to the date of these resolutions are hereby ratified, confirmed and approved in all respects." (Tieri Aff. Exh. C). The resolutions also reflected Mr. Infanti's election to the position of President of Infanti International as of September 6, 2002, and approved an employment agreement entered into by Mr. Infanti and the corporation as of September 6, 2002, pursuant to which Mr. Infanti would serve in the position of President and Chief Executive Officer. (Id.). Contrary to his deposition testimony that he served as "engineering advisor" until he became president in 2001, Mr. Infanti stated in an affidavit that the September 6, 2002 resolutions "confirm? what had in effect ...


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