Richard Arzu v. Frank Arzu and Estanisalo Arzu 597 N. Y. S. 2 d 322 Brief PROCEDURAL HISTORY: Richard Arzu brought action against his father, Frank Arzu, and step-mother, Estanisalo Arzu, alleging misrepresentation and fraud in connection with a medical malpractice action settlement monies which Frank entrusted to his father; and seeking compensatory damages and related relief.
The Supreme Court, Bronx County, Silver J. , vacated ex parte order of attachment against defendants’ real and personal property. The son appealed to the Supreme Court, Appellate Division. Justice Sullivan held that the son was entitled to attachment of defendant’s property in light of evidence that they had disposed of or secreted son’s money, with intent to defraud son. The Supreme Court, Appellate Division, reversed the decision of the lower court. STATEMENT OF FACTS: Richard Arzu underwent a surgical procedure to correct a condition he was born with; known as dwarfism.
He became paralyzed from the waist down as a result of the operation. Through legal representatives, Richard was awarded a substantial structured settlement from his malpractice action against the hospital that performed the said surgical procedure. The settlement payments were deposited into a joint account between Richard and Frank. Over a period of a few years, the father withdrew numerous times, large amounts of money. These transactions were not authorized or to the knowledge of the son. When Richard turned eighteen, the funds in the account were turned over to him.
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The son gave the money to defendants on representations that the amount given and all further monies would be deposited and held in the account for Richard’s sole use and benefit. Richard commenced action against his father and step mother, alleging fraud and misrepresentation in connection with the settlement monies plaintiff entrusted to his father. This action was brought after it was discovered that the remaining balance in the account was only $45, 000. 00 and his father quit his job as a cable television technician and made plans to move back to is home country of Belize to begin a cable television company. This was further supported when it was found that the step mother sold her beauty salon in the Bronx and shipped all of the remaining items to Belize. Thus, Richard Arzu seeks compensatory damages and related relief.
ISSUE: Is the son entitled to attachment of the defendants’ property in light of evidence that they had disposed or secreted son’s money with intent to defraud son? ANSWER: Yes. Attachment may be granted when the defendant; with intent to defraud his creditors or frustrate the enforcement of the judgment that might be rendered in plaintiff’s favor has assigned, disposed of, or removed it from the state or is about to do any of these facts. REASONING: The reason attachment is permitted to be granted is because the first time that Richard’s father removed funds from his son’s account without an authorized purpose, the latter became his creditor within the meaning of the C PLR 6201 (3).
A creditor is defined as a person buying, whether matured or un matured, liquidated or un liquidated, absolute, fixed or contingent. HOLDING: The Supreme Court, Appellate Division, First Department, reversed the decision of The Supreme Court, Bronx County.
It was reversed on the law and the facts with cost and disbursements, the motion to confirm the attachment was granted and the attachment was reinstated.
