## Facts

- Massachusetts residents executed a promissory note to finance a tax-motivated yacht purchase arranged through an intermediary.
- Defendants claimed they were told the note was “without recourse” and secured only by the yacht, but the note contained no such limitation; the lender also required an asset statement.
- After default, the lender sued on the note in federal court in Florida, obtained a default judgment, and the yacht was sold by the U.S. Marshal in partial satisfaction.
- The lender then sued in federal court in Massachusetts to collect the remaining balance on the Florida judgment and to void a transfer of defendants’ residence to their daughter as a fraudulent conveyance.
- In the Massachusetts action, defendants asserted claims against the lender for negligence, fraud, abuse of process, and unfair and deceptive business practices arising from the yacht financing and collection efforts.

## Issues

1. Whether defendants’ tort and statutory claims arose from the same “transaction or occurrence” as the earlier Florida action on the note, making them compulsory counterclaims under Fed. R. Civ. P. 13(a) and thus barred in the later Massachusetts action.
2. Whether defendants’ failure to file any pleading in the Florida action (resulting in default) avoided Rule 13(a)’s compulsory-counterclaim bar.
3. Whether the transfer of defendants’ residence to their daughter was a fraudulent conveyance void as to the lender under Massachusetts law.

## Decision

- The First Circuit affirmed summary judgment for the lender.
- Defendants’ claims were compulsory counterclaims that should have been asserted in the Florida action and were barred in the later suit.
- Defendants could not evade Rule 13(a) by declining to appear; default for failure to plead extends to matters the party should have pleaded, including compulsory counterclaims.
- The transfer of the residence to the daughter was properly set aside as a fraudulent conveyance.

## Legal Principles

- Under Fed. R. Civ. P. 13(a), a claim that exists at the time the responsive pleading is due and arises out of the same transaction or occurrence as the opposing party’s claim must be asserted as a counterclaim or it is generally forfeited in later litigation.
- “Transaction or occurrence” is satisfied where the plaintiff’s claim and the defendant’s claims are factually and legally interconnected and would substantially overlap in proof.
- A default judgment does not preserve omitted compulsory counterclaims; failure to appear does not insulate a party from the preclusive effect of Rule 13(a).
- A creditor enforcing a judgment may obtain relief against asset transfers that lack fair consideration and are made with intent to hinder creditors; such transfers are voidable as to the creditor.

## Conclusion

The court held that defendants’ claims arising from the yacht financing and collection efforts were compulsory counterclaims that were lost by defaulting in the original suit, and it affirmed voiding the later transfer of defendants’ residence to their daughter as a fraudulent conveyance made without fair consideration and with intent to hinder the creditor.


Carteret Sav. & Loan Ass’n, F.A. v. Jackson, 812 F.2d 36 (1st Cir. 1987)