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Statute of Limitations for Fraudulent Conveyances
What I am curious about is what is the trustee charged with?
Obviously, the trustee had no knowledge of the transfer - does he
get the extra time then? or is he limited to the 4 years. I believe
the code says that the extra time applies only when the avoidance is
based on actual fraud, ie if the avoidance is based on constructive
fraud, a transfer for less than fair value, there is no additional
time - its 4 years from the transfer.
As to the issue that the statute doesn't start until judgment is
entered:
1) Can the trustee use that? Section 544 seems to make him a
judgment creditor as of the petition date.
2) I have done a bunch of research trying to find some law that
says the trustee can't go back more than 4 years. There are 2 Cal
cases (which Dennis references) which seem to say that the 4 years
never even starts until the creditor gets a judgment. The cases
seem to say that a creditor can avoid any transfer no matter when
they were made as long as suit is brought within 4 years after
judgment is entered. This may be limited to the actual fraud portion
of 3439.
The cases are (headnotes below)
Statute of limitations began to run on action to set aside alleged
fraudulent transfer under the Uniform Fraudulent Transfer Act
(UFTA), not from date of challenged transfer, but only from date of
final judgment establishing existence of debtor-creditor
relationship between parties, where challenged transfer occurred
during pendency of underlying lawsuit that resulted in plaintiff's
becoming judgment creditor. Cortez v. Vogt (App. 4 Dist. 1997) 60
Cal.Rptr.2d 841, 52 Cal.App.4th 917.
Even if belated discovery is proven, the maximum elapsed time for a
suit under either the Uniform Fraudulent Transfer Act (UFTA) or at
common law is seven years after the transfer; a statute imposes the
seven-year period notwithstanding any other provision of law and
thus prescribes an all-embracing maximum time period to attack a
fraudulent transfer whether brought under the UFTA or otherwise.
Macedo v. Bosio (App. 1 Dist. 2001) 104 Cal.Rptr.2d 1, 86
Cal.App.4th 1044
The three-year statute of limitations for relief on the ground of
fraud or mistake applies equally to litigation timely commenced
after entry of a court order that first establishes the existence of
a creditor-debtor relationship, although outside of the period of
limitations established by the Uniform Fraudulent Transfer Act
(UFTA). Macedo v. Bosio (App. 1 Dist. 2001) 104 Cal.Rptr.2d 1, 86
Cal.App.4th 1044
Jon
>
>
> --- jonhayes6666 wrote:
>
> > I have a case now where the trustee is going back 6
> > years.
>
>
> The statute has three components:
> 1 a regular 4 year statute
> 2 the 4 years doesn't start until a judgement is
> reached against the person making the fraudulent
> transfer; and
> 3 there is an absolute cap of seven years.
>
> dennis
>
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