Kilker v. Stillman
Plaintiffs Terence A. Kilker and Paula J. Kilker (the Kilkers) attempted to enforce a $92,500 judgment, which had been entered in their favor and against defendant Frank C. Stillman in connection with their negligence claim against him. The Kilkers executed a levy on real property that had been owned by Stillman. A day or two before the date scheduled for the sheriff’s sale of that property, Luis Arriaga, as successor trustee of the Walla Walla Group Trust (WWG), filed a third party claim, asserting that Stillman had conveyed the subject property to WWG years earlier. The Kilkers petitioned the trial court to determine that WWG’s third party claim was invalid because the transfer of the subject property was fraudulent within the meaning of the Uniform Fraudulent Transfer Act (UFTA) (Civ. Code, § 3439 et seq.). (All further statutory references are to the Civil Code unless otherwise specified.) The Kilkers also asserted WWG’s claim was invalid because Stillman remained the equitable owner of the property as the alter ego of WWG.
Following a bench trial on the Kilkers’ petition, the court found WWG’s third party claim to the property invalid. On appeal, Stillman and Arriaga, as successor trustee of WWG (collectively, appellants), argue the trial court misinterpreted the UFTA, and insufficient evidence showed Stillman had the actual intent to hinder, delay, or defraud any creditor by transferring the subject property to WWG.
We affirm. “A fraudulent conveyance under the UFTA involves ‘“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.â€â€™â€ (Filip v. Bucurenciu (2005) 129 Cal.App.4th 825, 829.) Substantial evidence, most notably Stillman’s testimony, showed Stillman transferred the property to WWG with the actual intent to hinder, delay, or defraud any creditor, within the meaning of section 3439.04. Because WWG’s third party claim was invalid based on the application of the UFTA, we do not decide whether the claim was invalid based on an alter ego theory as well.
Comments on Kilker v. Stillman