* This order and judgment is not binding precedent, except under the

doctrines of law of the case, res judicata, and collateral estoppel. The court

generally disfavors the citation of orders and judgments; nevertheless, an order

and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3. 

F I L E D

United States Court of Appeals

Tenth Circuit

AUG 12 1997

PATRICK FISHER

Clerk

UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

In re:

HERBERT A. DELAP,

Debtor.

DAVID E. LEWIS, trustee,

Plaintiff-Appellee,

v.

VIRGINIA N. DELAP,

Defendant-Appellant.

No. 96-1327

(D.C. No. 95-M-413)

(D. Colo.)

ORDER AND JUDGMENT*

Before ANDERSON, LOGAN, and EBEL, Circuit Judges.
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After examining the briefs and appellate record, this panel has determined

unanimously that oral argument would not materially assist the determination of

this appeal. See Fed. R. App. P. 34(a); 10th Cir. R. 34.1.9. The case is therefore

ordered submitted without oral argument.

Trustee David E. Lewis (trustee) commenced an adversary proceeding in

the bankruptcy case of debtor Herbert A. Delap under 11 U.S.C. § 544(a) and (b)

and Colo. Rev. Stat. § 38-10-117, to avoid a transfer by him of his interest in the

family residence to his wife, defendant Virginia A. Delap. When Mrs. Delap

demanded a jury trial, the district court withdrew reference of the matter from the

bankruptcy court. The district court granted the trustee’s motion for summary

judgment, voided the transfer as fraudulent, and remanded the case to the

bankruptcy court for further proceedings. Mrs. Delap has appealed, arguing there

are issues of material fact whether the trustee had standing to proceed with this

case under § 544 and whether she and her husband made a sufficient showing that

the transfer was not made with fraudulent intent. We affirm. 

The following facts are undisputed. Mr. Delap was a partner in a law firm. 

He and his three law partners formed another partnership, Brind Investments, to

purchase an historic mansion for their law offices. Security Savings & Loan held

a note secured by the mansion, and the partners individually guaranteed the
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mortgage. The law firm ceased doing business in 1988, but the Brind Investments

partnership continued. 

On December 8, 1989, Mr. Delap quit claimed his joint tenancy interest in

their home to his wife. The transfer was made without any consideration. At that

time, Mrs. Delap had multiple sclerosis. According to the couple, the transfer

was a compassionate act, made due to her health to provide for her financial

security. Mrs. Delap recorded the transfer on December 27, 1989. They both

continued to live in the home. 

On December 23, 1992, Mr. Delap filed a Chapter 7 bankruptcy petition. 

The trustee proceeded against Mrs. Delap to avoid the conveyance of the home. 

Stating that the trustee asserted rights as a hypothetical lien creditor, the district

court determined that the compassionate transfer placed assets beyond the reach

of creditors. The district court concluded that the circumstances surrounding the

transfer indicated a fraudulent intent. 

I

We first address whether we have jurisdiction to consider this appeal. 

After the district court granted summary judgment, it remanded the case to the

bankruptcy court for further proceedings. Despite the remand, Mrs. Delap

prematurely appealed from the district court’s order. During the pendency of this

appeal, however, the bankruptcy court concluded its proceedings. Because a final
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order has been entered by the bankruptcy court, we have jurisdiction. See

Interwest Bus. Equip., Inc. v. United States Trustee (In re Interwest Bus. Equip.,

Inc.), 23 F.3d 311, 314-15 (10th Cir. 1994); see also Lewis v. B.F. Goodrich Co.,

850 F.2d 641, 645 (10th Cir. 1988) (holding when trial court adjudicates all

outstanding claims before appeal is decided, appeal is considered on merits, rather

than dismissed for lack of jurisdiction). We deny the trustee’s motion to dismiss

the appeal for lack of jurisdiction.

II

“We review the grant or denial of summary judgment de novo,

applying the same legal standard used by the district court pursuant

to Fed. R. Civ. P. 56(c). Summary judgment is appropriate if the

pleadings, depositions, answers to interrogatories, and admissions on

file, together with the affidavits, if any, show that there is no genuine

issue as to any material fact and that the moving party is entitled to

judgment as a matter of law. When applying this standard, we

examine the factual record and reasonable inferences therefrom in

the light most favorable to the party opposing summary judgment.

. . . 

While the movant bears the burden of showing the absence of a

genuine issue of material fact, the movant need not negate the

non-movant’s claim. . . . If the movant carries this initial burden, the

non-movant may not rest upon [her] pleadings, but must set forth

specific facts showing a genuine issue for trial as to those dispositive

matters for which [she] carries the burden of proof. An issue of

material fact is genuine if a reasonable jury could return a verdict for

the non-movant.”

Kaul v. Stephan, 83 F.3d 1208, 1212 (10th Cir. 1996) (quoting Wolf v. Prudential

Ins. Co. of Am., 50 F.3d 793, 796 (10th Cir. 1995)). Substantive law determines
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which facts are material. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248

(1986). 

A

Mrs. Delap argues that the district court erred in failing to address whether

the trustee had standing to bring this action pursuant to 11 U.S.C. § 544(a) and

(b). Although the district court did not discuss standing in its order granting

summary judgment, it stated that the trustee was asserting rights as a hypothetical

lien creditor under § 544(a). Under § 544(a), the trustee has standing to assert the

rights of hypothetical lien creditors on the date the bankruptcy petition was filed

to bring state law claims to recover property for the estate. See Virginia Beach

Fed. Sav. & Loan Ass’n v. Wood, 901 F.2d 849, 852 (10th Cir. 1990). 

Mrs. Delap contends that the statute of limitations bars the trustee’s claim

under § 544(a) because the transfer was made three years before Mr. Delap’s 

bankruptcy. The parties agree that the relevant statute of limitations is three

years. See Colo. Rev. Stat. § 13-80-101(1)(c) (1987). A cause of action for

fraudulent transfer claims under § 38-10-117 must be filed within three years

after the aggrieved party discovers the facts or should have discovered the facts

by an exercise of reasonable diligence. See id. § 13-80-108(3) (1987); see also

Larsen v. Munoz (In re Munoz), 111 B.R. 928, 932 (D. Colo. 1990) (noting action

accrues on date fraud is discovered or should have been discovered by exercise of
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reasonable diligence). If the state statute of limitations has not run at the time the

bankruptcy was filed the trustee has two additional years to bring an avoidance

action. See 11 U.S.C. § 546; Rosania v. Haligas (In re Dry Wall Supply, Inc.),

111 B.R. 933, 935-37 (D. Colo. 1990). 

Colorado law makes it clear that neither a transfer of property nor a

recording of a deed provides notice to creditors for statute of limitations purposes

in Colorado fraudulent conveyance cases. See Greco v. Pullara, 444 P.2d 383,

384 (Colo. 1968) (holding record of deed of trust or other instrument is notice

only to those persons claiming under same chain of title who are bound to search

for it, such as judgment creditors); see also Fish v. East, 114 F.2d 177, 183 (10th

Cir. 1940) (same). “[T]he statute of limitations runs from the time that the

general creditor receives actual notice, or absent such actual notice, from the time

when the duty to investigate the assets of the debtor arises; that is, when judgment

enters.” Hill v. Walden (In re Walden), 207 B.R. 1, 5 (D. Colo. 1997). Thus, the

limitations period in Colorado for the avoidance action would appear to

commence on the date the bankruptcy petition was filed. The trustee’s avoidance

action was commenced within two years thereafter.

But even if we were to look to the time lapse before the bankruptcy was

filed, the bankruptcy was filed less than three years after the recording of the

deed in the conveyance at issue here, which seems the earliest possible date
1 On July 1, 1991, the Colorado Uniform Fraudulent Transfer Act, Colo. Rev.

Stat. § 38-8-101 through 112, was adopted. See Sands v. New Age Family

Partnership, Ltd., 897 P.2d 917, 919 (Colo. Ct. App. 1995). Because the transfer

at issue occurred before the effective date of the Act, § 38-10-117 applies here. 

See id. at 920; see also Colo. Rev. Stat. § 38-10-117(2) (1996 Cum. Supp.). 

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anyone could be held to have discovered the existence of the transfer. We

conclude the statute of limitations did not bar this action, and the trustee had

standing to assert claims under § 544(a). 

B

On the merits, Mrs. Delap argues that there are material facts precluding

summary judgment on the trustee’s claim under § 38-10-117.1

 Section 38-10-117

allows creditors to void transfers of property made with “the intent to hinder,

delay, or defraud creditors . . . .” A conveyance made with the requisite intent is

void as to both present and future creditors. See Fish, 114 F.2d at 182-83. Fraud

may be inferred from the facts and circumstances. See East Plains Dev. Corp. v.

King (In re Faires), 123 B.R. 397, 402 (Bankr. D. Colo. 1991). When a transfer

from a husband to a wife is challenged under the statute and the transfer was

made when the husband was insolvent or rendered insolvent by the transfer, they

have the burden to show that the transaction was honest, made in good faith for

valuable consideration, and without intent to hinder or defraud creditors. See

Thuringer v. Trafton, 144 P. 866, 868 (Colo. 1914); Helm v. Brewster, 93 P.

1101, 1104 (Colo. 1908); Harvey v. Harvey, 841 P.2d 375, 377 (Colo. Ct. App.
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1992); Erjavec v. Herrick, 827 P.2d 615, 617 (Colo. Ct. App. 1992). The

husband, as transferor, must show that he did not “intentionally hinder or delay

. . . creditors by acting with covin, malice, or for his own benefit or advantage.” 

Erjavec, 827 P.2d at 618. 

Mrs. Delap challenges the district court’s determination that the only way

to rebut the presumption of intent to hinder, delay, or defraud creditors is to prove

that Mr. Delap was solvent at the time of the transfer of the home and remained

so as a result of the transfer. Rather, she suggests that because Mr. Delap made

the transfer for compassionate purposes, to financially protect her for health

reasons, they rebutted the presumption. There is no Colorado case law addressing

a transfer as a compassionate act. Although Mr. Delap may have intended to

perform a compassionate act, that does not preclude him from also having the

intent to hinder, delay, or defraud creditors. A successful transfer of the home

would make it unavailable to meet his creditors’ claims, yet he retained the

benefit of staying in the home and provided some financial security to his wife. 

Cf. Erjavec, 827 P.2d at 618 (even though property was titled in wife’s name, it

was used for husband and wife’s mutual benefit and husband still retained access

and spousal rights in it). Thus, Mrs. Delap must prove Mr. Delap’s solvency to

rebut the presumption. See Harvey, 841 P.2d at 377. 
2 The couple’s joint federal income tax return for 1989 showed an adjusted

gross income of $40,282, with the largest item $30,000 from a pension or annuity. 

Appellant’s App. 42. 

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Mrs. Delap argues that there are disputed material facts regarding Mr.

Delap’s solvency at the time of and after the transfer. She relies on Mr. Delap’s

testimony that he was not being chased by creditors, that they paid their debts for

the three years following the transfer, and that Mr. Delap’s contingent obligation

to Security Savings or the Brind Investments partners was not ascertainable at the

time of the transfer. None of this, nor his accountant’s affidavit that Mr. Delap’s

obligation on the note was not ascertainable, establishes that Mr. Delap was

solvent in 1989, even if that were all of the evidence. See Elsken v. Network

Multi-Family Sec. Corp., 49 F.3d 1470, 1476 (10th Cir. 1995) (unsupported

conclusory allegations do not create an issue of fact). Other evidence indicated

that Mr. Delap’s earned income was only $12,000 in 1989,2 the note on the

mansion was in arrears, and, according to the Brind Investments partners, the debt

on the mansion exceeded its value by approximately $500,000. We agree with the

district court that the Delaps have not established a disputed issue of material fact

sufficient to carry their burden of showing Mr. Delap’s solvency at the time of the

transfer in December 1989. See Genova v. Champion, 33 B.R. 930, 932, 933

(Bankr. D. Colo. 1983). 
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The district court properly concluded, from all the facts and circumstances,

that the purpose of the transfer of the residence was to hinder and delay creditors

and, therefore, was void. Cf. Harvey, 841 P.2d at 377-78 (holding facts created

strong circumstantial evidence of intent to hinder, delay, or defraud, and no

evidence submitted by husband and wife to refute inference created by facts);

Love v. Olson, 645 P.2d 861, 864 (Colo. Ct. App. 1982) (holding where there was

conveyance by insolvent husband to wife, husband obtained benefit of property

and there was no consideration for the conveyance, facts supported trial court’s

finding husband intended to delay, hinder or defraud creditors). 

AFFIRMED. 

Entered for the Court

James K. Logan

Circuit Judge