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Foisie v. Worcester Polytechnic, Institute

United States District Court, D. Massachusetts

September 30, 2019

JANET H. FOISIE, Plaintiff,
v.
WORCESTER POLYTECHNIC, INSTITUTE, Defendant.

          MEMORANDUM OF DECISION AND ORDER

          TIMOTHY S. HILLMAN, DISTRICT JUDGE.

         Background

         Janet H. Foisie (“Janet” or “Plaintiff”) has filed suit against Worcester Polytechnic Institute (“WPI”) alleging claims for fraudulent transfer and/or constructive fraudulent transfer in violation of Connecticut statutory and common law. This arises as the result of a transfer which Robert Foisie (“Robert”)[1] made to this alma mater, WPI, after his divorce from Janet. Janet alleges that during the divorce proceedings Robert hid millions of dollars in an offshore account in Switzerland. She alleges that Robert’s transfer of that hidden wealth, and much of his other assets, to WPI was done for the purpose of defrauding her. This Memorandum of Decision and Order addresses Defendant’s Motion To Dismiss (Docket No. 14). For the reasons set forth below, that motion is granted.

         Standard of Review

         On a Rule 12(b)(6) motion to dismiss, the Court “must assume the truth of all well-plead[ed] facts and give plaintiff the benefit of all reasonable inferences therefrom.” Ruiz v. Bally Total Fitness Holding Corp., 496 F.3d 1, 5 (1st Cir. 2007) (citing Rogan v. Menino, 175 F.3d 75, 77 (1st Cir. 1999)). To survive a motion to dismiss, the plaintiff must state a claim that is plausible on its face. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955 (2007). That is, “[f]actual allegations must be enough to raise a right to relief above the speculative level, ... on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Id. at 555 (internal citations omitted). The standard “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id.

         “The plausibility standard is not akin to a ‘probability requirement, ’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937 (2009) (quoting Twombly, 550 U.S. at 556). Dismissal is appropriate if plaintiff’s well-pleaded facts do not “possess enough heft to show that plaintiff is entitled to relief.” Ruiz Rivera v. Pfizer Pharm., LLC, 521 F.3d 76, 84 (1st Cir. 2008) (internal quotations and original alterations omitted). “The relevant inquiry focuses on the reasonableness of the inference of liability that the plaintiff is asking the court to draw from the facts alleged in the complaint.” Ocasio-Hernàndez v. Fortuño-Burset, 640 F.3d 1, 13 (1st Cir. 2011).

         Facts

         The Divorce; Robert’s Financial Disclosures

         In or about September 2010, after approximately fifty years of marriage, Janet and her then-husband, nonparty Robert decided to divorce. They jointly engaged a private mediator in West Hartford, Connecticut, Attorney Eliot Nerenberg, to facilitate their negotiations. Janet and Robert entered into an oral agreement (the “Mediation Agreement”) to make candid and complete disclosure of their assets and financial circumstances in order to facilitate a fair settlement.

         On or about September 28, 2010, during Janet and Robert’s initial meeting with the mediator in his Connecticut office, Janet and Robert agreed to equally divide their assets as part of the planned dissolution of their marriage. During the meeting, Robert enumerated the assets that he owned and stated to Janet that he did not have “any offshore assets, ” or any assets other than those that he had enumerated in the meeting. The mediator memorialized the enumeration of assets and Robert’s statement in a letter, dated September 28, 2010, addressed to Janet and Robert.

         On or about October 4, 2010, as part of the mediation process, Robert sent a letter to Janet (the “October 2010 Letter”), enclosing documents purporting to reflect “our total assets within ±1%.” In the letter, Robert asked Janet “to accept the enclosed summary as accurate, ” and he stated that “[h]idden money or offshore assets do not exist.” Robert and Janet eventually reached an agreement on settlement terms, including a division of the assets that had been discussed in the mediation process. In or about January 2011, Janet commenced a marital dissolution action in the Connecticut Superior Court for the Judicial District of New London at Norwich, docket number KNO-FA-1 I -4115278-S (the “Divorce Action”), for the purpose of obtaining a stipulated judgment of dissolution on the agreed-upon terms.

         In or about January 2011, Janet and Robert entered a written Marital Settlement Agreement (the “Settlement Agreement”). The Settlement Agreement included a recital that “each of the parties hereto is fully advised as to the property, prospects, and estate of the other and is aware of their respective rights and liabilities, each against the other and to and upon the property and estate of the other.” By signing the Settlement Agreement, Robert affirmatively represented as a statement of fact that this recital was true, including representing that he had fully advised Janet of all his assets.

         In or about August 2011, Janet and Robert submitted the Settlement Agreement to the Connecticut Superior Court in the Divorce Action, and jointly moved for a judgment of dissolution on the agreed terms. On or about September 8, 2011, the court granted the requested stipulated judgment (the “Judgment”). Janet and Robert mutually exchanged sworn financial statements and submitted them to the Connecticut Superior Court, purporting to disclose all their respective assets, subject to perjury, in their then-current “financial affidavit” forms. (The sworn financial affidavit that Robert provided to Janet shall hereafter be referred to as the “Financial Affidavit”).

         The Financial Affidavit form called for the disclosure of Robert's “assets” and of his “bank accounts, ” without limitation or exception. By completing the form and providing it to Janet, debtor Robert impliedly represented, as a statement of fact, that all his assets and bank accounts were listed in the Financial Affidavit. Furthermore, Robert specifically represented in the Financial Affidavit, as a statement of fact, that the disclosures therein were “true and accurate to the best of [his] knowledge and belief.” In agreeing to the Settlement Agreement and in moving for the entry of judgment in accordance with those terms, Janet specifically relied upon (i) Robert’s statements in the September 28, 2010, meeting and the October 2010 Letter; (ii) the recital in the Settlement Agreement that Robert had fully informed her of his assets; (iii) the truth and completeness of the information that Robert disclosed to her in the Financial Affidavit; and (iv) Robert’s profession of such truth and completeness. Robert’s financial condition, and the amount of his assets, were material considerations in her decision whether to stipulate to a judgment of marital dissolution and on what terms. In particular, they were material considerations in whether and on what terms to stipulate to a division of the parties’ assets.

         Robert lied in the September 28, 2010, meeting. He lied in the October 2010 Letter, and he lied in the Settlement Agreement and his Financial Affidavit. His representations that he had no offshore assets, that he had fully advised Janet of his assets, and that all his assets were included in his Financial Affidavit, were all untrue. Furthermore, Robert knew, at the time that he made those representations, that they were untrue. Robert willfully and repeatedly failed to disclose the existence of secret offshore assets that he held, including, but not necessarily limited to, the “Vaduz Trust, ” consisting of securities held for his benefit in Switzerland.

         In post-judgment discovery responses Robert provided in the Divorce Action, he acknowledges not having disclosed the existence of the Vaduz Trust to Janet, and gives the value of the trust at the time of the dissolution of their marriage as $4, 513, 729.36. Robert also failed to disclose, or affirmatively misrepresented, the existence, the accurate values of, and/or his ability or intention to collect upon, various promissory notes payable to him from nonparty Michael R. Foisie (“Michael”), Robert and Janet’s son, and from nonparties Michachunk Development, Inc. (“Michachunk”) and Riverheights Development, Inc. (“Riverheights”), entities owned or partly owned by Michael.

         At the times of Robert and Janet’s September 28, 2010 meeting with Attorney Nerenberg, and of the October 2010 Letter, Robert held:

• a March 23, 2010 promissory note from Michael for $1, 000, 000 (one million dollars)
• a February 2, 2010 promissory note from Riverheights for $1, 000, 000 (one million dollars); and • a February 2, 2010 promissory note from Riverheights for $234, 000 (two hundred thirty-four thousand dollars).

         Robert did not disclose the existence of these notes in the September 28, 2010 meeting, or in the October 2010 Letter.

         On August 2, 2011, the date that Robert signed the copy of the Settlement Agreement that was submitted to the court as part of the parties’ motion for stipulated judgment, Robert still held the ...


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