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