Nader Abouelmakarem v. Mahmoud Mustafa and Sadiya Mustafa

Summary

The United States District Court for the District of New Jersey granted Plaintiff Nader Abouelmakarem’s motion for summary judgment against Sadiya Mustafa on a claim under New Jersey’s Uniform Voidable Transactions Act. The court held that the transfer of Mahmoud Mustafa’s New Jersey property to Sadiya for one dollar was both actually and constructively fraudulent, and rejected Sadiya’s asserted divorce-settlement defense. The court reserved the determination of damages and ordered further briefing.

Holdings

1. Summary judgment was warranted because the undisputed evidence established that Mahmoud transferred the property without receiving reasonably equivalent value and intended, or reasonably should have believed, that he would incur debts beyond his ability to pay, satisfying constructive fraud under N.J. Stat. Ann. § 25:2-25(a)(2).
2. The undisputed badges of fraud established that Mahmoud made the transfer with actual intent to hinder his creditors, satisfying N.J. Stat. Ann. § 25:2-25(a)(1).
3. Sadiya's defenses did not create a genuine dispute of material fact because the property transfer occurred nearly two years before she filed for divorce, and her general assertion that the property was promised to her and her children did not provide a credible factual basis for the transfer.
4. The court reserved the damages award and required further briefing concerning the appropriate relief under the UVTA.

Questions Presented

1. Whether Plaintiff was entitled to summary judgment on his claim that Mahmoud's transfer of the New Jersey property to Sadiya violated the New Jersey Uniform Voidable Transactions Act.
2. Whether Sadiya's asserted divorce-settlement and family-security defenses created a genuine dispute of material fact.
3. Whether the court could determine the remedies and damages award on the existing briefing.

Disposition

other