Opinion
No. 12–P–1046.
2013-10-24
Robert SNIDER v. Warren I. GREEN & another.
By the Court (MEADE, RUBIN & CARHART, JJ.).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The plaintiff, Robert Snider, a lawyer, appeals from the dismissal under Mass.R.Civ.P. 12(b)(6), 365 Mass. 754 (1974), of his complaint against his former client Warren Green (Warren) and his wife Marsha Green (Marsha). The judge dismissed Snider's four-count complaint which sought satisfaction of a judgment for attorney's fees pursuant to (1) a common law claim for a creditor's bill; (2) a reach and apply claim under G.L. c. 214, § 3(6); (3) a reach and apply claim under G.L. c. 214, § 3(8); and (4) G.L. c. 109A, the Uniform Fraudulent Transfer Act (UFTA). We reverse the dismissal of counts I and II, and affirm the dismissal of counts III and IV.
Count I. Snider's complaint established the three necessary elements of a creditor's bill. See Cavadi v. Deyeso, 458 Mass. 615, 625 (2011). Snider is a judgment creditor. He holds a $59,068 judgment for legal fees against Warren.
After failing to obtain satisfaction of the judgment at law, Snider now seeks equitable relief. In count I, Snider petitioned the court to impose a resulting trust. A resulting trust “is a reversionary, equitable interest implied by law in property that is held by a transferee, in whole or in part, as trustee for the transferor or the transferor's successors in interest.” Eaton v. Federal Natl. Mort. Assn., 462 Mass. 569, 577 n. 10 (2012), quoting from Restatement (Third) of Trusts § 7 (2003). A presumption of a resulting trust arises where a purchaser takes title, in whole or in part, in the name of another. See Frank v. Frank, 335 Mass. 130, 135 (1956); Cavadi v. DeYeso, supra at 631. Where a transfer of property is made gratuitously to a family member, there is no presumption of a resulting trust, but rather, the presumption of a gift. See Robinson v. Robinson, 366 Mass. 582, 585 (1974); Citizens Bank of Mass. v. Coleman, 83 Mass.App.Ct. 609, 613–614 (2013).
The judgment was affirmed by a panel of this court. Snider v.. Green, 79 Mass.App.Ct. 1102 (2011).
The presumption of a gift may be rebutted by showing the transferor's contrary intention. Id. at 614, 616–617. Where the transferor did not intend to convey the beneficial interest, and the transferee acquiesced, the presumption of a gift may be overcome and a resulting trust may be imposed. Id. at 616–617. To make this determination, the entire course of the parties' conduct may be considered. Id. at 617. The transferee need not be a complete straw; the court may determine that a fixed fraction of the conveyance is held in a resulting trust. See Frank v. Frank, supra; Cavadi v. DeYeso, supra at 632–633. Whether the transferor exhibits characteristics of ownership or control of the property is indicative of intent. Citizens Bank of Mass. v. Coleman, supra at 618–619.
Snider alleged that Warren repeatedly promised that he would pay the balance of his legal fees after he sold his house. On January 11, 2006, the Greens sold their house, which they owned as tenants by the entirety, for $1,057,875. On April 17, 2006, Marsha acquired title, in her name only, to a $900,000 condominium. It is uncontested that Warren lives in the condominium and that it was financed, in significant part, with proceeds from the sale of the house. Snider was never paid.
Snider has alleged enough in his pleadings to (1) rebut the presumption that Warren's share of the proceeds from the sale of the home were a gift, and (2) permit a finding that after the sale of the marital home, Warren intended, with the assent of Marsha, to retain a beneficial interest in the condominium that replaced it.
See Cavadi v. DeYeso, supra at 631–632.
In January, 2013, Warren filed for Chapter 7 bankruptcy. While not dispositive, we take judicial notice of the following items in Warren's verified bankruptcy petition: Green is the cosigner of a home equity loan on the condominium, the condominium is his business address, and he significantly contributes to the mortgage, utility expenses, and condominium fees. In re Warren, Ch. 7 Case No. 13–BK–10204 (Bankr.D.Mass. Jan. 16, 2013).
Furthermore, the fact that “real property is owned by the entirety does not mean that the interest of a debtor spouse has no value to his or her creditors.” Innis v. Robertson, 67 Mass.App.Ct. 388, 391 (2006). Because the “proceeds of the sale of real estate held by the entirety are personal property held by the entirety,” a resulting trust may be established in a party's liquid assets. Smith v. Tipping, 349 Mass. 590, 592 (1965). The judge's premature assessment, that Snider can satisfy his judgment only if Marsha predeceases Warren, is not a relevant consideration when analyzing the sufficiency of the complaint. Count I should not have been dismissed.
Count II. In order to prevail on his statutory reach and apply claim under G.L. c. 214, § 3(6), Snider is not required to show fraud. The UFTA “is designed to establish a uniform statutory baseline for fraudulent transfer actions which is supplemented by the common law unless there is an inherent conflict.” Cavadi v. DeYeso, 458 Mass. at 630. Under § 3(6), a creditor may “reach and apply” a debtor's interest in property that “cannot be reached and applied until a future time.” Contrary to the plain language of § 3(6), which does not include a fraud requirement, the judge concluded that count II (and count III) failed because it was “descriptive of fraudulent transfers” and therefore “governed by the UFTA limitation periods.” Count II should not have been dismissed.
Count III. Snider's reach and apply claim under G.L. c. 214, § 3(8), overlaps with his UFTA claim because both require proof of a fraudulent conveyance. This is the type of “inherent conflict” discussed in Cavadi v. DeYeso, supra. Accordingly, count III is preempted by the UFTA and was properly dismissed.
Count IV. Snider's UFTA claim is time-barred. Snider's cause of action under the UFTA terminated, at the latest, on April 17, 2010, four years after Marsha Green took title to the condominium. G.L. c. 109A, § 10 (cause of action extinguished four years after fraudulent transfer). Snider admits that he was aware of the property transfers, and he was on notice that Green was loath to pay in 2009, after the arbitration award. Count IV was properly dismissed.
So much of the judgment as dismisses counts I and II is reversed; so much of the judgment as dismisses counts III and IV is affirmed; and the case is remanded to the Superior Court for further proceedings consistent with this memorandum and order. The Greens' request for attorney's fees is denied.
So ordered.