July 22, 2019

A Cup of Joe | If You Think You Are Getting Sued, Is It A Good Bet To Sell Your House?

This week we travel to Somers, New York --  about a 70-minute Metro-North train ride from Grand Central Station. Somers is known for being the cradle of American circus. It gained this notoriety after Bailey bought an African elephant, which he named "Old Bet". Bailey intended to use the elephant for farm work, but the number of people it attracted caused Bailey to take her throughout the Northeast. And the circus was born.

But this week’s case is not fun. It begins with the tragic assault of a 15-year-old autistic boy by a predator he met online. Here we go:

Enter: Paul Hines, a 73-year-old college professor from Connecticut; Ann Hines, his wife; PB, a 15-year-old autistic boy from Somers; and, PB’s parents.

On October 13, 2013, PB and the Professor met online and chatted. Professor, 73, pretended that he was much younger to PB. (A New York State Police investigator informed the press that the boy had portrayed himself as being 19 while exchanging messages with Professor in an Internet chat room frequented by gay men.).

Professor agreed to meet PB at his home in Somers. While at PB’s home, Professor engaged in sexual conduct despite being told by PB to stop. Professor finished. And then Professor left.

PB's parents contacted police the next day, and an investigator, claiming to be a 20-year-old male, lured Professor back to New York by contacting him through the same site and arranging to meet him for sex. Professor was arrested when he arrived at the rendezvous in White Plains with the police.

During the criminal case Professor transferred his ownership rights in his home to his wife, Ann.  He had no other assets or money. That becomes important in a little while.

Professor was convicted for the sexual assault of the boy.

PB’s parents then sued Professor for money damages and sued Ann for being part of the transfer of the house into her name.  But what did Ann do? Why was she being sued?  Here is why:

PB’s lawyers found out that Professor had transferred his ownership in the house to his wife when the criminal action was looking bad for him. They sued the Professor for the assault on PB and they sued Professor and Ann alleging that the transfer of the property was done so that Professor would be judgment-proof. He had nothing else. So PB would not be able to collect any money. But in New York, there is a law that prevents this type of maneuver: what Professor and his wife did might have been what is called a fraudulent conveyance.

Let’s take a look at the testimony taken in the civil case. 

Testimony of the Professor:

Q: Why did you make this transfer to your wife?

A: The reason for it, was that in February, I had no idea what my future is going to be. Whether I was going to be in jail the rest of my life; what was going to transpire. All the legal situations were totally up in the air, and my wife had virtually nothing. I – the only thing was half-the-house. And I – my concern was that if I ended up going to jail, the reality is that her life would be -- is already complicated, because of my actions. And it seemed to be only fair to give up the house to her, because she had nothing else.

Q: And did you have conversations with her prior to this?

A: Just a short one.

Q: And what was -- what was the sum and substance of that conversation?

A: Sum and substance was she said, “What about the house?” I said, “I’ll be glad to give it to you. It’s the least I can do.” And that was it.

Q: You mentioned, a couple of questions ago, that the legal situations were up in the air, something like that. Do you remember saying that?

A: Yes.

Q: Okay. What did you mean by that?

A: I mean that, nothing had been resolved, because of the incident with PB. So, at that point, I had no knowledge in terms of what my future was that.

Q: So was part of your thinking that you wanted your wife to have money if you were in prison, or have additional assets, because you were in prison and didn't have a job?

A: I wanted her life to be as free from encumbrances because of my actions.

Q: And you mentioned encumbrances; what kind of encumbrances?

A: I didn’t mean that. I meant just for her life to be free of anything.

Q: What did you get in return for your transfer of the house, your portion of the house, to your wife?

A: I think we paid a dollar or something like that, and that was it.

Q: So that’s all that you got – got back?

A: That’s correct.

Q: Did she physically give you a dollar, or was it just on the paper, that it was a dollar?

A: I don’t recall.

Ann similarly testified that she paid him $1, but that they did not actually exchange currency.

PB’s Argument:

The boy’s lawyers argued, that Professor transferred the property after he was arrested and while his criminal case was pending. Such timing reflects a lack of good faith.

Ann and Professor’s Argument:

Their attorneys argued, that because at the time of the Property Transfer Professor had not been convicted in any criminal court of law for the crime alleged against him, he had no actual knowledge that a civil judgment could be entered against him in relation to the alleged sexual battery.

The Court’s Ruling:

The relationship of debtor and creditor arose the moment Professor assaulted PB. The moment Professor hurt that boy, his assets became exposed to a lawsuit. So any transfer of property that took place after that moment comes under the scrutiny of the Fraudulent Conveyance laws in New York. It did not matter whether a civil action was contemplated by the victim or even considered by Professor.

The Court found that PB established that Professor and his wife made the Property Transfer to create a safety net from the financial consequences of sexually assaulting PB.

The Court ordered Ann to transfer back to Professor his ownership to the house.

PB will be able to recover money to compensate him for his suffering at the hands of the twisted professor.

Here is the case: https://casetext.com/case/lb-v-hines

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