Varbero v. Belesis

Background

Antony Varbero, an attorney and Florida resident, sued Anastasios P. Belesis, Tabitha Belesis, the 2008 Anastasios Belesis Irrevocable Trust US Dated Sept. 2008, Tomtab LLC, Crown Enterprises, LLC, and Lugano Ventures, LLC. The defendants moved under Federal Rule of Civil Procedure 12(b)(6), which permits dismissal when a complaint does not state a legally sufficient claim.

Varbero alleged that Anastasios P. Belesis signed two promissory notes related to Varbero’s legal representation of him. The first note promised payment of $550,000, and the second promised payment of $325,000. The notes were secured by confessions of judgment and included provisions concerning interest, collection costs, and attorney’s fees. Varbero alleged that Belesis defaulted and made no payments.

Varbero also alleged that Belesis and the other defendants transferred property and funds without payment between approximately 2012 and 2016 to shield assets from creditors. The complaint asserted breach of contract against Anastasios P. Belesis; claims against the other defendants based on aiding and abetting and on disregarding the separate legal existence of the companies; claims under New York Debtor and Creditor Law §§ 273, 275, and 276 to set aside allegedly fraudulent transfers; and a claim for attorney’s fees.

Corporate-veil claim

The defendants’ motion specifically argued that Count Two should be dismissed as to Tomtab. The court applied Delaware law because the complaint alleged that Tomtab was incorporated in Delaware. Under the standard discussed by the court, a plaintiff must plausibly allege that the entities operated as one economic unit and that failing to disregard the corporate form would cause injustice or unfairness.

The court held that the allegations were sufficient at the pleading stage. The complaint alleged that Tomtab was solely owned and controlled by Tabitha Belesis, operated from the family residence, and was used in transfers of property and funds without consideration as part of an effort to shield assets from creditors. The court therefore allowed the claim based on piercing the corporate veil to proceed.

Fraudulent-transfer claims

The complaint asserted constructive fraud under New York Debtor and Creditor Law §§ 273 and 275 and actual fraud under § 276. The court explained that constructive fraud generally requires an allegation that the transfer lacked fair consideration and that the transferor was or would become unable to pay debts. Actual fraud under § 276 requires an intent to hinder, delay, or defraud present or future creditors, which may be shown through surrounding circumstances.

The court held that some constructive-fraud claims were barred by the statute of limitations. In the conclusion, the court stated that the complaint was dismissed to the extent it alleged constructive fraud under §§ 273 and 275 concerning conveyances in 2013 and 2014. The court also stated that claims under §§ 273 and 275 concerning transactions after March 2014, particularly transactions in 2016, could proceed. The body of the opinion instead described the time-barred transfers as certain 2012 and 2013 transfers. This creates an internal date inconsistency; the conclusion states the formal disposition.

The court denied the motion to dismiss the § 276 actual-fraud claims in its entirety. It held that the complaint did not establish on its face that Varbero knew or should have known about the alleged fraud more than two years before filing the action. Whether Varbero had earlier knowledge was a factual question that could not be resolved at the motion-to-dismiss stage.

Attorney’s-fee claim

The court denied the motion to dismiss the attorney’s-fee claim. It held that the promissory notes and confessions of judgment clearly required Anastasios P. Belesis to pay reasonable attorney’s fees and collection costs associated with collecting the debt.

As to the other defendants, the court explained that fees could not be recovered if Varbero proved only constructive fraud. But New York Debtor and Creditor Law § 276-a permits attorney’s fees when a creditor proves actual intent to defraud and obtains the specified relief. Because the complaint alleged actual intent and was not limited to constructive fraud, the court allowed the fee claim against the other defendants to proceed at this stage.

Disposition

Judge Lewis J. Liman’s conclusion states: “Defendants’ motion to dismiss is GRANTED IN PART.” The complaint was dismissed to the extent it pleaded (1) constructive fraud under §§ 273 and 275 as to the specified 2013 and 2014 conveyances, and (2) an entitlement to attorney’s fees from defendants other than Anastasios P. Belesis based solely on constructive fraud. “As to the remaining claims,” the motion was denied.