Legal Question in Wills and Trusts in California
Hi,
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.
But what happens when an unusual Legal situation occurs, but one that could STILL fall under under the provision's requirements?
For example, the Debtor, who feels they've been ripped off by the Creditor, when it was found that someone ELSE Owned the property that the Debtor used the Creditor for a Loan to buy, when there's proof that the Creditor should have known about the other owner?
Or, one who owned the property (Bona Fide Purchaser), who got ripped off by the Debtor, who stole the property from them, then deeded it to him or herself, thus constituting a "Fraudulent Transfer". Then, the Debtor took out a loan (Obligation) with the Creditor for their OWN benefit, when the Creditor had "Notice" of the True Ownership on Record; Then this Debtor Died, leaving the True Owner with the Debt the Owner isn't responsible for?
If these two scenarios fall within the seven year Statute of said Provision, and an Obligation was based on a Fraudulent transfer, can either the Debtor OR the Owner use this same provision to file their own, perspective suits as well?? Is it written to be OPEN to interpretation by the Courts who can then apply it, under these different types scenarios in order to Rule on them??
It would seem unfair, that ONLY a Creditor could take advantage of this particular Provision, otherwise WHY would the "Transfer Act" (under which this provision is ONE), be called "Uniform"?
And if the NOT, then WHAT other Law or Provision could either the Debtor or Owner in the above scenarios USE, that would give them the SAME, fair amount of time (the seven years), in which to FILE a Suit?
1 Answer from Attorneys
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.
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