Legal Question in Real Estate Law in California

This Was Part Of The Question I Posted a few days ago:"I'm REALLY confused about THIS CA. Civil Code Provision, and was hoping someone could clarify for it me:

"3439.09. (c) Notwithstanding any other provision of law, a cause of action with respect to a fraudulent transfer or obligation is extinguished if no action is brought or levy made within seven years after the transfer was made or the obligation was incurred."

From what I've read online, this, CA Civil Code Provision seems to only benefit Creditors, who feel they're being taken advantage of by someone in a situation where the asset used for an obligation with the Creditor is Fraudulently Transferred, so the Debt doesn't have to be paid back to the Creditor...."

This was the answer:

"It only applies to creditors. It is called "Uniform" because it was adopted from a standardized draft law prepared for nationwide use by any state that wanted to use it by the national Uniform Laws Commission. ULC laws are available for states to adopt as is or with any modifications the state legislature may choose. Your description of the situation is too vague and hypothetical to answer what other laws might apply. If you post with specific facts we might have suggestions.

-Timothy McCormick

Okay then, I'll be as specific as possible, based on the 2nd example that I used in the original question:

"A scenario in which one who owned the property (Bona Fide Purchaser./BFP), got ripped off by the Debtor, who stole the property from the BFP, by deeding title on it to him/herself on December 5, 2005, thus constituting a "Fraudulent Transfer".

Then, the Debtor took out a loan (Obligation) with a Creditor for their OWN benefit that "Closed" on March 7th, 2006, when the Creditor had Constructive "Notice" of the BFP's Prior Recorded Ownership, but approved the loan anyway.

Incredibly, 2 and a half years went by, before the BFP learned of the theft by the Debtor, and when the Debtor finally got Caught, the property was deeded back to the BFP . But before something could be done to address the loan, the Debtor Died, leaving the BFP's property with an Debt (in the Debtor's name) that the BFP isn't responsible for"

With California being a "Race/Notice" State, and the property having been recorded by the BFP 1st, if the BFP filed a Cause Of Action against the Creditor as The BFP, based on the March 7th 2006 "Date Of Obligation" before the Statute runs on March 7th of 2013, would the BFP be allowed to use THIS Provision to DO so?

Or would the Court state to the BFP, "since you are NOT a Creditor, you cannot sue under Provision 3439.09. (c), since it is Legally "Exclusive" to Creditors, and not any other party, even though they are connected to the Obligation" ??

If the answer is NO, then being the BFP and victim in this situation, THIS is where I feel that being unable to use this Provision is confusing as well as unfair, particularly if there is NO other Legal option available with the SAME 7 year Statute, that could be used by either a BFP, or other parties for the SAME purpose.


Asked on 10/16/12, 1:08 am

1 Answer from Attorneys
Anthony Roach Law Office of Anthony A. Roach

You're mixing up legal issues that don't have anything to do with each other. A "fraudulent transfer" under the statutes is a fraudulent conveyance or transfer to avoid creditors, An example is where a defendant conveys property to a family member or close friend, with no consideration, to avoid that property being taken when the creditor obtains a judgment.

It has nothing to do with a title dispute whereby a deed was forged or someone was defrauded into giving up title.

I can tell you from experience that people often ruin what would otherwise be a good case by misreading statutory or case law, and then going to an attorney and insisting that their understanding of the law is correct. (It usually isn't.) It's not hard to find an attorney who will gladly tell you that you are correct, just to get you to sign a retainer for hefty legal fees. That's not the job of a good attorney. A good attorney will sit down and get the facts (not your twisted legal theories) from you, and then tell you where your legal remedies are.

You need to get legal advice based on the facts of your situation, not what you want the outcome to be.

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Answered on 10/16/12, 10:01 am


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