THE CADLE COMPANY v. MARGUERITE FLETCHER et al., SC 19583

On Certification from the United States Court of Appeals for the Second Circuit

      Fraudulent Transfer; Wage Execution; Whether Post-Garnishment Wages Held in Third Party’s Bank Account Exempt from Further Execution Under General Statutes §§ 52-361a and 52-367b and Therefore Not Subject to Fraudulent Transfer Claim.  The plaintiff brought an action in the United States District Court for the District of Connecticut, claiming that judgments that it had secured against defendant Terry Fletcher remained unsatisfied and that the defendants, Terry Fletcher and Marguerite Fletcher, had violated the Connecticut Uniform Fraudulent Transfer Act (CUFTA).  The plaintiff claimed that Terry Fletcher had fraudulently transferred substantially all of his income to Marguerite Fletcher by depositing his wages into her bank accounts.  The defendants argued that the wages, which were subject to garnishment by another judgment creditor before the remaining money was deposited into Marguerite Fletcher’s bank account, were exempt from further execution and therefore not subject to claims under CUFTA.  They argued that General Statutes §§ 52-367b and 52-361a, read together, supported their position.  Section 52-367b (a) provides that execution may be granted against “any debts due from a financial institution to a judgment debtor . . . except to the extent such debts are protected from execution by . . . [§] 52-361a.”  Section 52-361a governs executions on wages after judgment, and § 52-361a (f) provides that “only one execution under this section shall be satisfied at one time.”  The District Court rendered judgment in favor of the plaintiff, finding that the transferred assets were not exempt from CUFTA, that the transfer of money from Terry Fletcher to Marguerite Fletcher was fraudulent and that the plaintiff was entitled to judgment in the amount of $400,000.  The defendants’ appeal from that judgment is now pending before the United States Court of Appeals for the Second Circuit.  The Supreme Court has accepted the following question from the federal appeals court under the Uniform Certification of Questions of Law Act:  “Do Connecticut General Statutes §§ 52-361a and 52-367b, read together, exempt post-garnishment residual wages held in a third party’s bank account from further execution, so that they become freely transferable under the Connecticut Uniform Fraudulent Transfer Act, Connecticut General Statutes §§ 52-552a et seq.?”