2021 Nagel California Opinion Voidable Transactions And Fraudulent Transfers

 

VOIDABLE TRANSACTIONS

The Creditor's Primary Tool For Avoiding Fraudulent Transfers And Obligations

2021 - California - Nagel

 

Nagel v. Westen, 2021 WL 58119 (Cal.App., Distr. 2, Jan. 7, 2021).

 

Court of Appeal, Second District, Division 6, California.

 

Nicole NAGEL et al., Plaintiffs and Appellants,

 

v.

 

Tracy A. WESTEN et al., Defendants and Respondents.

 

2d Civil No. B300552

 

Filed 1/7/2021

 

Colleen K. Sterne, Judge, Superior Court County of Santa Barbara. (Super. Ct. No. 15CV01178) (Santa Barbara County)

 

Attorneys and Law Firms

 

Valle Makoff, Jeffrey B. Valle, Los Angeles, and Jennifer Laser, El Segundo, for Plaintiffs and Appellants.

 

The Law Office of John Derrick, John Derrick, Santa Barbara, for Defendants and Respondents, Westen Family Group, LLC, Derek Westen, Peter K. Westen & Westen Family Trust.

 

Schley Look Guthrie & Locker, Ian M. Guthrie, Santa Barbara, for Defendants and Respondents Tracy A. Westen, Linda Lawson, and the Westen-Lawson Trust.

 

Rogers, Sheffield & Campbell, Scott B. Campbell, Santa Barbara, and Nathan C. Rogers, for Defendant and Respondent Westen Family Group, LLC, Derek Westen, and Westen Family Trust

 

Opinion

 

PERREN, J.

 

*1 In the early 1990’s, Tracy Westen and Linda Lawson (Sellers) built and lived in an architecturally significant home in the Brentwood area of West Los Angeles. They sold it to appellants Nicole Nagel and “ESY Investments” (Nagel) in 2011 for $2.2 million. Shortly after the sale Nagel learned that over the 19 years Sellers owned the home it had suffered extensive water intrusion, that Sellers knew this and that the home was uninhabitable despite Nagel’s best efforts to repair and to save it. Nagel sued.

 

In the ensuing arbitration, the arbitrator found that Sellers had failed to disclose material facts regarding the water damage, that the house was worthless and its only value was the land. It awarded Nagel over $4.5 million for the loss of the home, the futile efforts to repair it, plus attorney fees and costs. This, however, was just the beginning, not the end of the litigation.

 

As the arbitration was winding down, the likely result became clear to Sellers. By the time ensuing and relatively fruitless efforts at collection were undertaken, Sellers had sent the bulk of their assets out of California including applying the proceeds of the sale to an expensive home in Texas to take advantage of that state’s unlimited homestead exemption; and, with aid and counsel of Tracy Westen’s siblings, masking additional assets in a variety of funds, annuities and investments in Nevada and Minnesota.

 

This appeal is from a subsequent lawsuit filed by Nagel to unwind these transfers under the Uniform Voidable Transactions Act (UVTA). (Civil Code, § 3439 et seq.)1 The action was dismissed, however, because Nagel could not identify a “third-party transferee” who received Westen and Lawson’s assets; or as respondents describe it, “a meritless attempt to raid deeper pockets.” The Court reasoned that no transfer had occurred when Westen and Lawson simply converted their assets from non-exempt to exempt but did not relinquish ownership or control.

 

fn1. Unlabeled statutory references in this opinion are to the Civil Code.

 

The order dismissing the case is reversed in part and affirmed in part. We reverse the order to the extent it dismissed plaintiffs’ causes of action for statutory fraudulent transfer and the companion claims for conspiracy and aiding and abetting. We affirm the order’s dismissing of plaintiff’s common law cause of action for fraudulent transfer.

 

FACTUAL AND PROCEDURAL BACKGROUND

 

Nagel bought the Brentwood house of Westen and Lawson in 2011. Westen and Lawson had commissioned Los Angeles-based Eric Owen Moss, a renowned avant-garde architect, to design the structure in the early 1990s. It served as the couple’s primary residence until the sale.

 

Nagel later discovered pervasive mold and structural damage caused by long term water intrusion. An arbitrator awarded her over $4.5 million for repairs, attorney’s fees, costs, and interest. The Los Angeles Superior Court confirmed the award and entered judgment against Westen and Lawson.2

 

fn2. Nicole Nagel et al v. Tracy A. Westen et al. (Super. Ct. Los Angeles County, 2013, No. SS023693).

 

*2 In the instant matter, Nagel alleges Lawson and Westen enlisted Westen’s brothers, attorneys Derek and Peter Westen, to help them design and implement an “Asset Protection plan” when it became apparent the arbitrator would rule in Nagel’s favor. The plan had three components. First, they converted respondent Westen Family Group, LLC (“WFG”), of which Lawson and Westen held a 20.7 percent membership interest, from a California LLC into a Nevada LLC. Second, they placed a portion of the Brentwood sale proceeds into an annuity. Third, they bought a house in Texas and improved it with the balance of their sale proceeds. Nagel further alleges Lawson and Westen promptly moved to Texas upon receiving the arbitrator’s preliminary award so they could invoke the state’s unlimited homestead exemption to shield the new house and annuity from creditors.

 

Nagel filed this action when she learned about these asset protection measures. She named Lawson and Westen as defendants along with Derek Westen, Peter Westen, WFG, and two Westen family trusts. Her first amended complaint included three causes of action at issue here: (1) to set aside fraudulent transfer of assets under both the UVTA3 and common law (as to WFG only); (2) civil conspiracy (as to all parties); and (3) aiding and abetting (as to Derek Westen, Peter Westen, WFG, and the family trusts).4 Nagel sought to annul the transfers and to restrain Lawson and Westen from disposing of their assets, among other remedies.

 

fn3. Nagel pleaded her claim under the UVTA’s former title, the “Uniform Fraudulent Transfers Act” or “UFTA.” The Legislature retitled the UFTA as the UVTA effective January 1, 2016. We use the current title throughout this opinion.

 

fn4. Nagel dismissed her fourth cause of action for imposition of constructive trust.

 

Nearly four years of pleading challenges, discovery disputes, and law and motion proceedings followed. Nagel supplemented her complaint with allegations about post-filing conduct, including Lawson’s and Westen’s petitioning for bankruptcy in Texas.5 A sojourn to Minnesota courts yielded partial satisfaction of the arbitration award when Nagel collected the proceeds of the couple’s annuity. She also obtained a charge order directing WFG to direct the couple’s share of membership proceeds to her. This brought the Texas house purchase to center stage as trial approached.

 

fn5. We granted the request of respondents WFG, Derek Westen, Peter Westen, and both Westen trusts for judicial notice of Lawson’s and Westen’s order of discharge in bankruptcy, among other materials. (In re Tracy A. Westen and Linda Lawson) , No. 17-40030 (E.D.Tex. Jan. 3, 2017.) We take judicial notice on our own motion of the bankruptcy court’s order dated September 18, 2017 granting Nagel’s motion for relief from automatic stay to continue the case giving rise to this appeal.

 

The trial court received 42 motions in limine and competing versions of nearly all pre-trial filings, including witness lists, verdict forms, and jury instructions. It heard argument in the course of conducting nine pre-trial conferences over a two month period. The instructions for Nagel’s first cause of action for fraudulent transfer, particularly CACI 4200, “Actual Intent to Hinder, Delay, or Defraud a Creditor,” were hotly contested.

 

Nagel proposed modifying CACI 4200 to include not just third-party transfers but any transaction intended to evade creditors. Defining “transfer” more broadly, she argued, was “entirely harmonious with the premise of fraudulent transfer theory under California common law and as reflected in its statutory embodiment.” WFG and Derek Westen proposed CACI 4200 in its standard configuration. Their version instructed the jury to decide whether Lawson and Tracy Westen “transferred the property [to WFG] with the intent to hinder, delay, or defraud one or more of their creditors.” They argued Nagel could not maintain a cause of action for fraudulent transfer without identifying a third party transferee who received their assets. Defining internal asset shifts like a house purchase for one’s self as actionable transfers, they contended, strayed far beyond the UVTA and what little case law informed the issue. The court invited the parties to offer modifications to CACI 4200 and other 4200-series instructions to better reflect the current state of law.

 

*3 Shortly after this pre-trial conference, Nagel sought to amend her first amended complaint by adding Lawson and Westen as defendants to her first cause of action for fraudulent transfer. She described the amendment as correcting a “labeling oversight.” The couple would suffer no prejudice, she reasoned, because her prior pleading clearly described their role in the scheme. In opposition, Lawson and Westen described the proposed amendment as a belated about-face with a profound conceptual flaw – the couple would need to wear the hats of both “transferor” and “transferee” of their own assets at trial.

 

At the final pre-trial conference, the trial court said it had not yet decided the third-party transferee issue. The court told the parties it would consider supplemental briefing and directed them to return a week later prepared to select a jury. The parties promptly submitted briefs reiterating their positions.

 

The court issued a tentative ruling the day before trial denying leave to amend. It found Nagel could not maintain a cause of action under the UVTA against Lawson and Westen without identifying a third party transferee who benefitted from the debtor’s transfer. While their establishing a Texas homestead affected Nagel’s ability to enforce her judgment, the court reasoned, the purchase did not convey assets to a third party or otherwise alter the couple’s rights with respect to their property. It refrained from deciding whether a common law cause of action existed because Nagel could not articulate its elements or explain how to instruct the jury on such a claim.

 

The parties appeared for trial the next day. Nagel’s counsel explained how the court’s tentative ruling would eliminate a critical component of his client’s case and leave little incentive to proceed with trial if adopted. He requested a stay to seek writ relief of the third-party transferee issue as a matter of first impression in California. The court expressed concern that writ review would result in a “postcard” denial and leave the case in the same position four or five weeks later. Defendants shared this concern. After a brief recess, WFG and Derek Westen moved to dismiss on the grounds they, like Lawson and Westen, could not face liability under the UVTA in the absence of an actionable transfer. Peter Westen joined the motion. The court granted it as both a common law motion for judgment on the pleadings and a dispositive motion in limine. In addition, it granted a separate motion in limine filed by Lawson and Westen to preclude all evidence relating to Nagel’s first cause of action for fraudulent transfer.

 

The clerk entered an order dismissing the entire action on July 9, 2019. Nagel appealed.

 

DISCUSSION

 

A. Standard of Review

 

We review the first amended complaint de novo, assuming the truth of all factual allegations, “ ‘to determine whether it alleges facts sufficient to state a cause of action under any legal theory.’ ” (Committee for Green Foothills v. Santa Clara County Bd. of Supervisors (2010) 48 Cal.4th 32, 42, 105 Cal.Rptr.3d 181, 224 P.3d 920.) We review the trial court’s rulings on the pre-trial motions for abuse of discretion. (Freeny v. City of San Buenaventura (2013) 216 Cal.App.4th 1333, 1339, 157 Cal.Rptr.3d 768; Piedra v. Dugan (2004) 123 Cal.App.4th 1483, 1493, 21 Cal.Rptr.3d 36.)

 

B. The Uniform Voidable Transactions Act

 

The UVTA is a contemporary retooling of the common law remedies available to unsecured creditors seeking payment from debtors who evade collection. (See Chen v. Berenjian (2019) 33 Cal.App.5th 811, 817, 245 Cal.Rptr.3d 378 [“The purpose of the UVTA is to prevent debtors from placing, beyond the reach of creditors, property that should be made available to satisfy a debt”].) Originally enacted as the “Uniform Fraudulent Transfer Act” in 1986, its retitling in 2016 reflected the Legislature’s intent to “reduce misconceptions that the law requires proof of fraudulent intent.” (Sen. Com. on Judiciary, Analysis of Sen. Bill. No. 161 (2015-2016 Reg. Sess.) p. 2.) Little else changed in substance. (See § 3439.14, subd. (d) [“The provisions of this chapter, insofar as they are substantially the same as the provisions of this chapter in effect on December 31, 2015, shall be construed as restatements and continuations, and not as new enactments”].)

 

*4 The UVTA provides a variety of tools to achieve its ends. For example, the court may void a transfer of assets, attach assets, or employ equitable remedies such as injunctive relief or receivership. (§ 3439.07.) A creditor may also supplement the UVTA’s remedies with any others available at law or in equity. (§ 3439.12 [“Unless displaced by the provisions of this chapter, the principles of law and equity, ... supplement its provisions”].) The UVTA enumerates eleven characteristics or “ ‘badges of fraud’ ” to help the trier of fact discern when a debtor has crossed the often blurry line between legitimate asset protection planning and voidable maneuvering. (PGA West Residential Assn., Inc. v. Hulven Internat., Inc. (2017) 14 Cal.App.5th 156, 174, 221 Cal.Rptr.3d 353 (PGA West); § 3439.04, subd. (b).)

 

C. Nagel Stated a Cause of Action for Fraudulent Transfer Under the Plain Language of the UVTA

 

Nagel alleges respondents’ asset protection efforts bear the hallmarks of a fraudulent transfer. We are, however, confronted with a narrower and more foundational question – did a “transfer” under the UVTA occur in the first place? Specifically, do Nagel’s allegations give rise to a cause of action for fraudulent transfer if Lawson and Westen, in essence, transferred assets to themselves? We look to the UVTA’s text for our answer. (See Ceja v. Rudolph & Sletten, Inc. (2013) 56 Cal.4th 1113, 1119, 158 Cal.Rptr.3d 21, 302 P.3d 211 [a statute’s words “ ‘ “ ‘generally provide the most reliable indicator of legislative intent’ ” ’ ”]; Estate of Griswold (2001) 25 Cal.4th 904, 910, 108 Cal.Rptr.2d 165, 24 P.3d 1191 [“In statutory construction cases, our fundamental task is to ascertain the intent of the lawmakers so as to effectuate the purpose of the statute”].) “ ‘ “We give the words their usual and ordinary meaning [citation], while construing them in light of the statute as a whole and the statute’s purpose [citation].” ’ ” (Ceja, at p. 1119, 158 Cal.Rptr.3d 21, 302 P.3d 211, quoting Pineda v. Williams-Sonoma Stores, Inc. (2011) 51 Cal.4th 524, 529-530, 120 Cal.Rptr.3d 531, 246 P.3d 612.) “ ‘ “ ‘If there is no ambiguity in the language, we presume the Legislature meant what it said and the plain meaning of the statute governs.’ ” ’ ” (Ceja, at p. 1119, 158 Cal.Rptr.3d 21, 302 P.3d 211 quoting In re Ethan C. (2012) 54 Cal.4th 610, 627, 143 Cal.Rptr.3d 565, 279 P.3d 1052.)

 

“ ‘In order for a fraudulent transfer to occur, among other things, there must be a transfer of an asset as defined in the UFTA.’ ” (PGA West, supra, 14 Cal.App.5th at p. 169, 221 Cal.Rptr.3d 353, quoting Fidelity National Title Ins. Co. v. Schroeder (2009) 179 Cal.App.4th 834, 841, 101 Cal.Rptr.3d 854.) “ ‘Transfer’ under the [UVTA] has a broad meaning.” (Sturm v. Moyer (2019) 32 Cal.App.5th 299, 308, 243 Cal.Rptr.3d 556.) The term is defined as “every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with an asset or an interest in an asset, and includes payment of money, release, lease, license, and creation of a lien or other encumbrance.” (§ 3439.01, subd. (m).) The law defines “ ‘[a]sset’ ” broadly as well. An asset includes the “property of a debtor” with just three exceptions: (1) property encumbered by a valid lien; (2) property exempt under nonbankruptcy law; and (3) property held in tenancy in the entireties “to the extent it is not subject to process by a creditor holding a claim against only one tenant.” (§ 3439.01, subd. (a).) The UVTA uses the term “transferee” throughout its text but does not define it. (E.g., §§ 3439.06 to 3439.08.)

 

The first amended complaint alleges Lawson and Westen moved their personal belongings and financial assets, including a portion of the Brentwood sale proceeds, to a foreign jurisdiction. It further alleges they used the Brentwood sale proceeds to buy and improve foreign real estate for the purpose of shrinking the corpus of assets available for collection. We hold that under the UVTA, physically relocating personal property and transmitting or transporting sale proceeds out of state, then transmuting them into a different legal form, may constitute a direct or indirect mode of parting with assets or one’s interest in those assets. As such, Nagel adequately alleged a “transfer” under the UVTA. In this posture the trier of fact must now determine if grantor’s title is but, “a mere cloak under which is hidden the hideous skeleton of deceit ....”6

 

fn6. Cortez v. Vogt (1997) 52 Cal.App.4th 917, 936, 60 Cal.Rptr.2d 841.

 

*5 The issue as framed is a matter of first impression. (See Renda v. Nevarez (2014) 223 Cal.App.4th 1231, 1236, 167 Cal.Rptr.3d 874, italics omitted [“Although these cases suggest the UFTA does not authorize entry of a money judgment against a debtor under any circumstances, we need not (and do not) decide that broad issue to resolve this appeal”].) We recognize most authorities concern transactions in which a third party received the debtor’s assets. We also note the term “ ‘third party’ ” embedded in high court dicta defining “fraudulent conveyance.” (See Kirkeby v. Superior Court (2004) 33 Cal.4th 642, 648, 15 Cal.Rptr.3d 805, 93 P.3d 395, quoting Yaesu Electronics Corp. v. Tamura (1994) 28 Cal.App.4th 8, 13, 33 Cal.Rptr.2d 283 [“ ‘A fraudulent conveyance is a transfer by the debtor of property to a third person undertaken with the intent to prevent a creditor from reaching that interest to satisfy its claim’ ”].) The existing landscape of authorities left the trial court few clear reference points. However, this did not warrant grafting a third-party transferee requirement onto a broad but plainly worded statute.

 

Reading the definition of “transfer” in context with other UVTA provisions leads us to the same conclusion. Section 3439.04(b) anticipates imaginative debtors will employ an array of tactics to evade payment obligations. For example, the trier of fact may look to whether “the transfer or obligation was to an insider”; “the debtor retained possession or control of the property transferred after the transfer”; or “the debtor removed or concealed assets.” These badges of fraud indicate one’s liability under the UVTA is not contingent upon recruiting conspirators. It may include situations in which the debtor “parts” with property without alienating ownership rights or possession. Further, the UVTA does not limit its enforcement measures to third parties. (See § 3439.07, subd. (a)(3)(C) [creditor may obtain avoidance, injunctive relief, receivership, or “[a]ny other relief the circumstances may require”].)

 

D. Limiting the UVTA to Third-Party Transfers Would Neither Conform to Legislative Intent nor Serve the Public’s Interest

 

Resolving this appeal does not require us to look beyond the UVTA’s text. (See In re Ethan C. (2012) 54 Cal.4th 610, 627, 143 Cal.Rptr.3d 565, 279 P.3d 1052 [court turns to extrinsic aids “ ‘ “[o]nly when the statute’s language is ambiguous or susceptible of more than one reasonable interpretation” ’ ”].) If it did, however, we would again arrive at the same result.7

 

fn7. Nagel requests judicial notice of the UFTA and UVTA as approved by the NCCUSL in 1984 and 2016, respectively, in addition to legislative history materials for Senate Bills 2150 (1985-1986 Reg. Sess.) and 161 (2015-2016 Reg. Sess.). We grant appellants’ request. (Evid. Code, §§ 452, subds. (c) & (h), 453.)

 

“[A] creditor-debtor relationship can alter an owner’s power over the property owned.” (Sen. Com. on Judiciary, Analysis of Sen. Bill. No. 161 (2015-2016 Reg. Sess.) p. 2.) “Unsecured creditor-debtor relationships necessarily raise questions as to a creditor’s rights and remedies when the debtor manipulates property to defeat the creditor’s potential interest in that property.” (Ibid.) It is not surprising the UVTA defines the term “asset” not from the debtor’s perspective, but from that of a creditor with a potential interest in any property that could satisfy the underlying debt. (See, e.g., Yaesu Electronics Corp. v. Tamura, supra, 28 Cal.App.4th at p. 13, 33 Cal.Rptr.2d 283 [“a conveyance will not be considered fraudulent if the debtor merely transfers property which is otherwise exempt from liability for debts”]; Tassone v. Tovar (1994) 28 Cal.App.4th 765, 769, 33 Cal.Rptr.2d 786 [“The February 1986 conveyance of the property by grant deed to appellant ... did not affect respondents’ rights. Respondents were left in the same position as they were in before the conveyance: with no claim to the property.”].)

 

Nagel alleges Lawson and Westen transferred property during the closing stages of arbitration that otherwise would have been available to satisfy her judgment. Her interest had already arisen at the time of transfer. Creating a bright line “third-party transferee” requirement would allow debtors to unilaterally extinguish this interest, and, it follows, their UVTA liability, by simply manipulating an asset’s form or location without vesting legal title or ownership in a third party. This result would contravene the UVTA’s stated purpose: “to prevent debtors from placing, beyond the reach of creditors, property that should be made available to satisfy a debt.” (Chen v. Berenjian, supra, 33 Cal.App.5th at p. 817, 245 Cal.Rptr.3d 378.) Statutes such as the Fair Debt Collections Practices Act (28 U.S.C. § 3001 et seq.) and Rosenthal Fair Debt Collection Practices Act (§ 1788 et seq.) focus on protecting debtors’ rights and restraining creditors’ collection practices. The UVTA does not. It focuses on creditors’ rights and restraining debtors’ evasive maneuvering. We decline to interpret the statute in a way that not only subordinates creditors’ interests to debtors, but encourages debtors to devise new and more creative ways to circumvent valid obligations.

 

*6 PGA West, supra, 14 Cal.App.5th 156, 221 Cal.Rptr.3d 353 presented the Fourth District with a situation similar in concept (if not fact) to ours. Debtor recorded a deed of trust on his condominium. He named an unincorporated sham entity as the deed’s beneficiary and then foreclosed to insulate his equity from a creditor’s claims. Many years later the creditor tried to avoid the UVTA’s seven-year period of repose by arguing a transfer did not occur until debtor incorporated the sham entity. Prior to then, the creditor argued, debtor had effectively given a property interest to himself. The Fourth District declined to adopt the creditor’s rigid characterization of the term “transfer” by focusing on the legal distinctions between the debtor and the purported transferee. The debtor’s intent to insulate his assets and defraud creditors brought the transaction within the UVTA. (See id. at p. 174, 221 Cal.Rptr.3d 353 [“although Mork never incurred a real obligation to Hulven under the deed of trust and note, and Hulven apparently never really existed as a corporate entity, Mork’s fraudulent attempt to transfer the equity in his condominium to Hulven to insulate that asset from potential creditors constitutes a ‘transfer’ as defined in section 3439.01, subdivision (m)”].) We agree. The creditor’s interests should drive the court’s interpretation of the term “transfer” rather than the form of debtors’ asset manipulations.

 

E. Nagel’s Common Law Cause of Action for Fraudulent Transfer

 

Nagel styles her first cause of action as one for fraudulent transfer under both the UVTA and common law. The trial court remarked in its ruling that “[p]recisely what the Plaintiff claims to be the elements of a common law cause, and how such would be reflected in jury instruction, remains unclear.” Perhaps Nagel’s allegations do give rise to such a claim.8 We decline to decide the issue where, as here, the opening brief does not address this part of the trial court’s ruling. (Tisher v. California Horse Racing Bd. (1991) 231 Cal.App.3d 349, 361, 282 Cal.Rptr. 330, citing Balboa Ins. Co. v. Aguirre (1983) 149 Cal.App.3d 1002, 1010, 197 Cal.Rptr. 250 [“plaintiffs’ failure to raise an issue in their opening brief waives the issue on appeal”].)

 

fn8. See Berger v. Varum (2019) 35 Cal.App.5th 1013, 1019, 248 Cal.Rptr.3d 51 (“Traditionally, creditors could bring fraudulent transfer cases under common law. [Citations.] Because the UVTA is not intended to replace such common law but merely supplement it, we conclude Berger may bring such a claim under common law.”).

 

CONCLUSION

 

We reverse the order dismissing Nagel’s causes of action for fraudulent transfer under the UVTA, for conspiracy, and for aiding and abetting. We affirm the order to the extent it dismisses Nagel’s common law cause of action for fraudulent transfer. Appellants shall recover their costs on appeal.

 

We concur:

 

GILBERT, P. J.

 

YEGAN, J.

 

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____________________

Many more articles on voidable transactions law found here

 

UVTA - LOGICAL ORGANIZATION

(Designed For Litigators)

 

Click here to go to the Voidable Transactions Decision Chart

 

Overview of UVTA -- The process and result

 

Learn The Vocabulary Of The Act (Main Page)

 

Has A Voidable Transaction Occurred? (Main Page)

 

Does The Transferee Have A Defense? (Main Page)

 

What Remedies Are Available? (Main Page)

 

Other Helpful Provisions (Main Page)

 

UVTA - NUMERICAL ORGANIZATION

(Confusing & Difficult To Use)

 

The Uniform Law Commission's complete copy of the UVTA with comments in PDF format is available here. The webpage for the UVTA, showing states that have enacted and much other information regarding the Act is found here.

 

1 - Definitions

(1) Affiliate -- (2) Asset -- (3) Claim -- (4) Creditor -- (5) Debt -- (6) Debtor -- (7) Electronic -- (8) Insider -- (9) Lien -- (10) Organization -- (11) Person -- (12) Property -- (13) Record -- (14) Relative -- (15) Sign -- (16) Transfer -- (17) Valid Lien

2 - Insolvency - How insolvency is calculated

3 - Value - Issues relating to calculating value

4 - Transfer Or Obligation Voidable As To Present Or Future Creditor

(a)(1) {Intent Test} - To hinder, delay or defraud any creditor

(a)(2)(i) {Overextending Insolvency Test} - The debtor engages in a transaction for which it does not have the financial strength

(a)(2)(ii) {Sinking Insolvency Test} - The debtor is not technically insolvent but headed for insolvency

(b) {Badges of Fraud} - Circumstances available to prove the debtor's intent

5 - Transfer or Obligation Voidable As To Present Creditor

(a) {Insolvency Test} - The test preferred by creditors

(b) {Insider Preference Test} - Not really a fraudulent transfer test at all

6 - When Transfer Is Made Or Obligation Is Incurred - Determines the time of the transfer

7 - Remedies Of Creditor

      {Non-Money Judgment Remedies} - Avoidance, attachment, etc.

8 - Defenses, Liability, And Protection Of Transferee Or Obligee

{Main Provisions} -The transferee's good faith for-value defense

(b) and (c) {Money Judgment Remedy} - Alternative remedy for creditors when avoidance is not good enough

9 - Extinguishment Of Claim For Relief - Similar to Statutes of Limitation

10 - Governing Law - Conflicts of Laws provisions

11 - Application To Series Organization - Applies to intra-series transfers

12 - Supplementary Provisions - Allows application of other law to issues unresolved by the UVTA

13 - Uniformity Of Application And Construction - Court opinions from other states may be looked to for guidance

14 - Relation To Electronic Signatures In Global And National Commerce - Waste of statutory space

15 - Short Title - From fraudulent transfers to voidable transactions

16 - Repeals; Conforming Amendment - Information for enacting legislatures

 

OTHER SOURCES OF

FRAUDULENT TRANSFER LAW

 

Fraudulent Transfers In Bankruptcy - Main Page

 

28 U.S.C. § 3301, et seq. - Where United States is the creditor

 

Common Law Fraudulent Transfer - Still exists in most states

 

Criminal Statutes -- Jurisdictions that criminalize fraudulent transfers

 

Fraudulent Conveyances Act of 1571 a/k/a Statute of 13 Elizabeth - The medieval statute to which the modern American UVTA traces some of its roots.

 

Statutes Of The U.S. Jurisdictions -- State and Territorial Voidable Transaction and Fraudulent Transfer Laws

 

TOPICAL COURT OPINIONS

 

DEFINITIONS

     Creditor Definition - Court opinions on the definition of creditor

     Debtor Insider Affiliate Relative Organization Person Definitions   - Court opinions on the definitions of debtor, insider, etc.

     Claim And Debt Definitions  - Court opinions on the definitions of claim and debt

     Asset And Property Definitions  - Court opinions on the definitions of assets and property

     Lien And Valid Lien Definitions  - Court opinions on the definitions of lien and valid lien

     Transfer Definition  - Court opinions on the definition of transfer

     Value And Reasonably Equivalent Value (REV) Definition  - Court opinions on the definitions of value and reasonably equivalent value

     Insolvency Definition  - Court opinions on the definition of insolvency

TESTS

     Insolvency Test  - Court opinions relating to the Insolvency Test

     Insider Preference Test  - Court opinions relating to the Insider Preference Test

     Overextending Insolvency Test  - Court opinions relating to the Overextending Insolvency Test

     Sinking Insolvency Test  - Court opinions relating to the Sinking Insolvency Test

     Intent Test  - Court opinions relating to the Intent Test

           Badges Of Fraud  - Court opinions relating to the Badges of Fraud

DEFENSES

     Extinguishment Periods a/k/a (incorrectly) Statute Of Limitations  - Court opinions relating to the extinguishment periods

     Transferee Good Faith  - Court opinions relating to the transferee good faith for-value defense

REMEDIES

     Non-Money Remedies  - Court opinions relating to avoidance and other non-money remedies

     Money Judgment Remedies  - Court opinions relating to money judgments

     Attorney Fees -- Court opinions relating to awards of attorney fees

     Punitive Damages - Court opinions relating to punitive and exemplary damages

OTHER

     Burdens of Proof  - Court opinions relating to the burdens of proof

     Conflict Of Laws  - Court opinions relating to conflict of laws

     Uniformity  - Court opinions relating to uniformity with the laws of other jurisdictions

     Supplementary Law  - Court opinions relating to the interplay of the UVTA with other law

     Jurisdictional Issues - Court opinions relating to jurisdiction of UVTA actions.

BANKRUPTCY

     Section 548  - Court opinions relating to 11 USC 548

 

OTHER RESOURCES

 

 

OTHER INFORMATIONAL WEBSITES

by Jay Adkisson

 

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  • Asset Protection - The all-time best-selling book on asset protection planning by Jay Adkisson and Chris Riser.

 

  • Creditor-Debtor - An explanation of common creditor remedies, strategies and tactics to enforce a judgment, including a discussion of common debtor asset protection strategies.

 

  • Private Retirement Plans - An exploration of a unique creditor exemption allowed under California law which can be very beneficial but is often misused.

 

  • Charging Orders - The confusing remedy against a debtor's interest in an LLC or partnership is explained in reference to the Uniform Partnership Act, the Uniform Limited Partnership Act, and the Uniform Limited Liability Company Act.

 

  • Protected Series - An examination of the single most complex statutory legal structure yet created, with particular reference to the Uniform Protected Series Act of 2017.

 

  • California Enforcement of Judgments Law - Considers the topic of judgment enforcement in California, including the California Enforcement of Judgments Law and other laws related to California creditor-debtor issues.

 

  • Anti-SLAPP Laws - A collection of and commentary about Anti-SLAPP laws and significant court decisions on the subject within the United States, and special section on California Anti-SLAPP.

 

 

Voidable Transactions:

Fraudulent Transfers In American Law

 

by Jay D. Adkisson (Available 2021)

 

Click here for more information

Contact Jay Adkisson:

 

Las Vegas Office: 6671 S. Las Vegas Blvd., Suite 210, Las Vegas, NV 89119, Ph: 702-953-9617, Fax: 877-698-0678. By appointment only.

 

Newport Beach Office: 100 Bayview Circle, Suite 210, Newport Beach, California 92660. Ph: 949-200-7773, Fax: 877-698-0678. By appointment only.

 

Phone: 702-953-9617     E:Mail: jay [at] jayad.com

 

Unless a dire emergency, please send me an e-mail first in lieu of calling to set up a telephone appointment for a date and time certain.

 

Social Media Contact: Twitter and LinkedIn

 

Admitted to practice law in Arizona, California, Nevada, Oklahoma and Texas.

 

Jay is a Managing Partner of Adkisson Pitet LLP.

 

© 2021 Jay D. Adkisson. All rights reserved. No claim to government works or the works of the Uniform Law Commission. The information contained in this website is for general educational purposes only, does not constitute any legal advice or opinion, and should not be relied upon in relation to particular cases. Use this information at your own peril; it is no substitute for the legal advice or opinion of an attorney licensed to practice law in the appropriate jurisdiction. This site https://voidabletransactions.com Contact: jay [at] jayad.com or by phone to 702-953-9617 or by fax to 877-698-0678.