IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 13-10171

GE CAPITAL COMMERCIAL, INCORPORATED; GENERAL ELECTRIC 

CAPITAL CORPORATION; GE CAPITAL FINANCIAL, INCORPORATED,

Plaintiffs - Appellees

v.

WORTHINGTON NATIONAL BANK,

Defendant - Appellant

Appeal from the United States District Court

for the Northern District of Texas

Before JOLLY, GARZA, and HIGGINSON, Circuit Judges.

EMILIO M. GARZA, Circuit Judge:

GE Capital Commercial, Inc., General Electric Capital Corporation, and 

GE Capital Financial, Inc. (collectively “GE Plaintiffs”), sued Worthington

National Bank (“Worthington”) under the Texas Uniform Fraudulent Transfer 

Act (“TUFTA”). The GE Plaintiffs sought to void transfers that Worthington 

received from the GE Plaintiffs’ predecessor-in-interest, allegedly with notice 

of the transfers’ fraudulent nature. The jury found in favor of the GE Plaintiffs, 

and the district court entered judgment for the amount of the transfers. On 

appeal, Worthington contends that either TUFTA or the common-law onesatisfaction rule entitles it to a settlement credit for the GE Plaintiffs’ prior 

settlement with a non-defendant, and that the district court erred in 

United States Court of Appeals

Fifth Circuit

FILED

June 10, 2014

Lyle W. Cayce

Clerk

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construing TUFTA’s “good faith” defense as an objective, rather than 

subjective, standard in its jury instructions and evidentiary rulings. We 

affirm.

I

In 2006, David Ashley Wright (“Wright”) and Justin Prather (“Prather”) 

applied for a line of credit from Worthington, on behalf of Wright’s company 

Wright & Wright, Inc. (“Wright & Wright”). When applying, Wright and 

Prather represented to Worthington that the company brokered heavy 

equipment on a nationwide scale and enjoyed extraordinary revenue growth. 

Worthington failed to verify Wright & Wright’s representations.1 Nonetheless, 

the following year, the bank extended a line of credit to Wright & Wright in 

the amount of $2.5 million.

Months later, Worthington employees noticed suspicious activity 

involving Wright & Wright’s accounts, including numerous wire transfers into 

Prather’s personal account and cash withdrawals by Wright. After initially 

flagging Wright & Wright’s accounts for risks of money laundering, 

Worthington employees later concluded that nothing was amiss after Wright 

explained that the company’s investors preferred to be compensated in cash. 

Although the frequency of transfers subsequently increased, Worthington took 

minimal action.

By three wire transfers in July 2008, CitiCapital Commercial 

Corporation (“CitiCapital”), then a subsidiary of Citibank, N.A. (“Citibank”), 

wired a total of $2,471,330 to Wright & Wright’s checking account at 

Worthington to pay off the balance of the loan. A month after receiving those 

transfers, Worthington closed Wright & Wright’s accounts. 

1 Because the jury found in favor of the GE Plaintiffs, and because Worthington does 

not contest the jury’s factual findings, we present the facts in the light most favorable to that 

verdict. See Brown v. Sudduth, 675 F.3d 472, 477 (5th Cir. 2012). 

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CitiCapital was then acquired from Citibank by various GE entities 

under a Purchase and Sale Agreement. The GE entities subsequently 

investigated the three wire transfers and concluded that Prather, then an 

employee of CitiCapital, had fraudulently appropriated funds from CitiCapital 

to repay Wright & Wright’s loan. In total, Prather ultimately induced his 

employers CitiCapital and, later, GE Capital to transfer $12.5 million to 

various bank accounts, including the $2.5 million transferred to Worthington.

In April 2009, the GE Plaintiffs sent a Notice of Claim and Demand to 

Citibank. The Notice sought three remedies under the Purchase and Sale 

Agreement—a purchase price adjustment, indemnification for breaches of the 

Purchase and Sale Agreement, and indemnification from later claims by other 

parties. In explaining the purchase price adjustment, the Notice contended 

that “[b]ased on GE’s review to date, the damage and lost value caused by the 

Fraud Scheme to the Business and Portfolio Assets was no less than 

$12,500,000.” In summarizing the amount of the claim, the Notice explained: 

“GE currently estimates that it has suffered and incurred losses in the amount 

of at least $12,500,000 in respect of the Employee Fraud Scheme and the 

Fraudulent Documents, as well as substantial costs and fees to investigate the 

Employee Fraud Scheme, assess and modify business processes and systems, 

mitigate damages and recover losses.”

In June 2009, the GE Plaintiffs named Worthington as a defendant in a 

lawsuit that they had initiated in the district court as successors-in-interest to 

CitiCapital. The GE Plaintiffs alleged that the bank had accepted the wire 

transfers “in bad faith or with willful ignorance as to the fraudulent nature of

the fraudulent conduct,” in violation of TUFTA, and sought to void the 

transfers and recover the funds. Second Amended Complaint at ¶ 43. In 

response, Worthington pleaded numerous affirmative defenses, including that

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it had accepted the transfers in good faith under TUFTA. Tex. Bus. & Comm. 

Code § 24.009(a); Answer at ¶ 129.

Months later, the GE Plaintiffs and Citibank settled their dispute. 

Under the terms of the Settlement Agreement, the GE Plaintiffs and Citibank 

aimed “to settle, compromise, resolve amicably and discontinue . . . their 

dispute under [the Purchase and Sale Agreement] arising out of, relating to or 

in connection with” the allegedly fraudulent transfers and ongoing lawsuit 

involving Worthington. Settlement Agreement at ¶ G (“Recitals”). They 

further agreed to a mutual release from all liability under the Purchase and 

Sale Agreement or relating to the fraudulent transfers at issue in the lawsuit. 

Id. at ¶¶ 2, 3. Under the Settlement Agreement, Citi paid the GE Plaintiffs an 

amount that exceeded $2.5 million, the total amount of the transfers to 

Worthington.

Meanwhile, the GE Plaintiffs’ suit against Worthington proceeded 

toward trial. During a pretrial conference, the GE Plaintiffs and Worthington 

agreed to stipulate to the dates and amounts of every settlement related to the 

dispute. They further agreed that settlement-related issues would not go to 

the jury and would be addressed post-verdict to determine the availability of a 

settlement credit. Accordingly, in a pretrial order, the district court denied as 

moot the GE Plaintiffs’ request to exclude all evidence, statements, or 

arguments regarding the GE Plaintiffs’ settlements with third parties. In the 

same order, the district court reiterated its prior determination that an 

objective standard of the “good faith” defense applies and, over Worthington’s 

objection, allowed the GE Plaintiffs to introduce evidence that Worthington 

“should have known” of the fraudulent nature of the transfers.2

2 On the same basis that the “good faith” defense was an objective standard, the 

district court had earlier denied Worthington’s motion for summary judgment that argued, 

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At trial, the parties disputed whether Worthington accepted the 

transfers from Wright & Wright in “good faith” under TUFTA. The GE 

Plaintiffs’ expert testified that Worthington’s loan review process deviated 

from industry standards and that the bank knew of facts that put it on notice 

that the transfers were likely fraudulent. The district court instructed the jury 

as follows:

To establish that it acted in good faith, Worthington 

must prove by a preponderance of the evidence that it 

lacked actual and constructive knowledge of the 

debtor’s fraud. Actual knowledge is what one actually 

knows, and constructive knowledge means facts or 

circumstances that excite the suspicions of a person of 

ordinary prudence under the same or similar 

circumstances and put him on inquiry of the 

fraudulent transfer. Stated another way, you may not 

find that Worthington acted in good faith if the 

evidence shows that it had actual or constructive 

knowledge of a fraudulent transfer.

The jury ultimately found that the GE Plaintiffs had proven by a 

preponderance of the evidence that Wright & Wright transferred the $2.5 

million to Worthington with the intent to hinder, delay, or defraud GE Capital,

and that Worthington failed to prove that it accepted the transfers in good 

faith.3

Following the verdict, the district court ordered the GE Plaintiffs to 

provide Worthington with copies of all relevant settlement agreements. 

Subsequently, the GE Plaintiffs disclosed the Settlement Agreement. 

among other things, that the GE Plaintiffs could not overcome Worthington’s evidence of its 

subjective good faith.

3 Additionally, the jury found that Worthington failed to prove that the GE Plaintiffs’ 

conduct in connection with the transfers was unconscientious, unjust, or inequitable; that 

Worthington was seriously harmed by the GE Plaintiffs’ conduct; that it was entitled to the 

defense of equitable estoppel; or that its own conduct was not unconscientious, unjust, or 

inequitable.

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Worthington then moved for a mistrial and requested a settlement credit on 

the grounds that the settlement proceeds received from Citibank exceeded the 

amount of the judgment. The district court denied Worthington’s requests and 

voided the three transfers.4 This appeal followed.

II

We review a district court’s conclusions of law concerning the calculation 

of a settlement credit de novo. See Davis v. Odeco, Inc., 18 F.3d 1237, 1245 

(5th Cir. 1994). Likewise, when “a jury instruction hinges on a question of 

statutory construction, this court’s review is de novo.” United States v. GarciaGonzales, 714 F.3d 306, 312 (5th Cir. 2013) (citation omitted). We review a 

district court’s evidentiary rulings for abuse of discretion. United States v. 

Miller, 520 F.3d 504, 510 (5th Cir. 2008). However, “[a] trial court abuses its 

discretion when its ruling is based on an erroneous view of the law,” Bocanegra 

v. Vicmar Servs., Inc., 320 F.3d 581, 584 (5th Cir. 2003), and our review of legal 

conclusions is plenary, Johnston & Johnston v. Conseco Life Ins. Co., 732 F.3d 

555, 562 (5th Cir. 2013).

III

Worthington’s first claim is that the district court erred as a matter of 

law in entering its post-verdict judgment by failing to apply a settlement credit 

for the GE Plaintiffs’ settlement proceeds received from Citibank. 

Worthington contends that it is entitled to such credit for two reasons: First, 

TUFTA limits recovery to “the amount necessary to satisfy the creditor’s 

claim,” and second, Texas’s common-law one-satisfaction rule permits only one 

recovery for a single injury. Below, we consider each in turn.

4 Worthington does not appeal the denial of its motion for mistrial.

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A

Worthington first submits that the plain text of TUFTA mandates that 

a settlement credit offset the judgment.

The Texas Uniform Fraudulent Transfer Act (“TUFTA”) aims to prevent 

debtors from fraudulently placing assets beyond the reach of creditors. 

Challenger Gaming Solutions, Inc. v. Earp, 402 S.W.3d 290, 293 (Tex. App.—

Dallas 2013). TUFTA provides that a “transfer made or obligation incurred by 

a debtor is fraudulent as to a creditor . . . if the debtor made the transfer or 

incurred the obligation . . . with actual intent to hinder, delay, or defraud any 

creditor of the debtor . . . .” Tex. Bus. & Comm. Code § 24.005(a)(1). “A 

fraudulent transfer under [TUFTA] is a tort,” Challenger, 402 S.W.3d at 295, 

and the defrauded creditor “may obtain . . . avoidance of the transfer or 

obligation to the extent necessary to satisfy the creditor’s claim,” Tex. Bus. & 

Comm. Code § 24.008(a)(1).

Section 24.009(b) provides that to the extent a transfer is voidable under 

§ 24.008(a)(1), the creditor may “recover judgment for the value of the asset 

transferred . . . or the amount necessary to satisfy the creditor’s claim,

whichever is less.” Id. § 24.009(b) (emphasis added). The statute defines 

“claim” as “a right to payment or property, whether or not the right is reduced 

to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, 

disputed, undisputed, legal, equitable, secured, or unsecured.” Id. § 24.002(3). 

Such judgment may be entered against “the first transferee of the asset . . . .” 

Id. § 24.009(b)(1). 

Under Worthington’s reading of the § 24.009(b) recovery-limiting 

provision, because the settlement proceeds that the GE Plaintiffs received from 

Citibank exceeded the value of the fraudulent transfers at issue in the TUFTA 

action, the settlement “satisf[ied] the creditor’s claim” in full. Id. § 24.009(b). 

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That is, as the “amount necessary to satisfy the creditor’s claim” is zero, the 

GE Plaintiffs cannot recover anything from Worthington. Id.

To support its reading of § 24.009(b), Worthington contends that the GE 

Plaintiffs’ two claims—their contractual claim against Citibank and their 

TUFTA claim against Worthington—are actually one single “claim.” 

Worthington points first to factual commonalities; both claims implicate the 

same three fraudulent transfers. Second, Worthington submits that TUFTA 

defines “claim” broadly as “a right to payment or property . . . .” Tex. Bus. & 

Comm. Code § 24.002(3). Accordingly, by Worthington’s logic, the fact that one 

claim sounds in contract and the other in tort does not give rise to two separate 

“claims” for the purposes of § 24.009(b). Rather, both actions asserted an 

identical “right” to the same “payment or property”—i.e., the fraudulently 

transferred $2.5 million—and, therefore, the settlement proceeds from 

Citibank satisfy the GE Plaintiffs’ avoidance “claim” against Worthington.

The Texas Supreme Court has not considered whether “claim” in 

§ 24.009(b) encompasses a separate legal right arising not from TUFTA, but 

from the same underlying factual injury. Thus, because the law is not fully 

clear, we must decide how the Texas Supreme Court would resolve the issue. 

“In making an Erie guess, we defer to intermediate state appellate court 

decisions, unless convinced by other persuasive data that the highest court of 

the state would decide otherwise.” See Mem’l Hermann Healthcare Sys. Inc. v. 

Eurocopter Deutschland, GMBH, 524 F.3d 676, 678 (5th Cir. 2008) (citation 

and internal quotations marks omitted). We are mindful that “our task is to 

attempt to predict state law, not to create or modify it.” Id. (citation, alteration, 

and internal quotation marks omitted). “While the decisions of the 

intermediate Texas courts of appeals provide guidance, they do not necessarily 

bind us.” RSR Corp. v. Int’l Ins. Co., 612 F.3d 851, 857–58 (5th Cir. 2010). “If 

the Supreme Court of Texas has not ruled on an issue before us, we must 

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determine, to the best of our ability, what it would decide under the same 

circumstances.” Id. at 858.

We predict that the Texas Supreme Court would conclude that the term 

“claim” cannot withstand such an expansive interpretation. We look first to 

the statute’s text. While TUFTA defines a “claim” to include any “right to 

payment or property,” Tex. Bus. & Comm. Code § 24.002(3), nowhere does the 

statute reduce multiple rights arising from distinct legal theories to a single 

“claim,” even where such rights arise from the same facts. Furthermore, 

“claim” must be read in the context of the specific “action” mentioned earlier in 

the same provision—an action to void a transfer under § 24.008(a)(1). Tex. 

Bus. & Comm. Code § 24.009(b). That is, “the amount necessary to satisfy the 

creditor’s claim,” id., means strictly the amount necessary to satisfy the 

creditor’s avoidance claim. Under Worthington’s reading, notwithstanding the 

specific avoidance “action” referenced earlier in the provision, the word “claim” 

at the end of the very same provision would take on a much broader meaning 

and encompass other types of actions remedying the same factual loss—such 

as the GE Plaintiffs’ contractual claim against Citibank. See Lamar Homes, 

Inc. v. Mid-Continent Cas. Co., 242 S.W.3d 1, 19 (Tex. 2007) (“In determining 

[a statute’s] meaning, we must . . . consider the statute as a whole and construe 

it in a manner which harmonizes all of its various provisions.”).

Additionally, at least one Texas court of appeals has interpreted “claim” 

under § 24.009(b) to exclude claims for damages beyond the value of the 

fraudulently transferred asset. In Citizens National Bank of Texas v. NXS 

Construction, Inc., 387 S.W.3d 74 (Tex. Ct. App.—Houston [14th Dist.] 2012),

after NXS sued Westex Communications on a defaulted promissory note, 

Westex’s president transferred company assets without informing NXS. NXS 

then sued the asset transferees under TUFTA. Id. at 78–79. After the trial 

court entered judgment for NXS on its TUFTA claim, the parties disputed on 

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appeal whether attorneys’ fees, court costs, and post-judgment interest were 

encompassed within the amount of NXS’s “claim” under § 24.009(b). The court 

of appeals held that recovery of attorneys’ fees, in addition to the amount of 

the note, was permitted under § 24.009 because the fees were bargained-for 

contractual damages under the terms of note itself, whose payment the 

fraudulent transfers aimed to avoid. Id. at 89–91. By contrast, the court 

determined that “claim” as defined in § 24.002(3) could not encompass court 

costs and post-judgment interest on attorneys’ fees, which were merely 

“incidental expense[s] associated with the creditor’s underlying ‘right to 

payment.’” Id. at 91. NXS thus teaches that the “creditor’s underlying ‘right 

to payment’” in the avoidance action circumscribes the term “claim” in 

§ 24.009(b). Id.

Here, the GE Plaintiffs’ “right to payment” against Worthington under 

TUFTA does not encompass its contractual rights against Citibank under the 

Purchase and Sale Agreement. Unlike the attorneys’ fees in NXS, which were 

provided under the promissory note for which the debtor and creditor had 

specifically bargained, here, the debtor Wright & Wright had no obligations to 

the creditor CitiCapital (now GE Capital) under the Purchase and Sale 

Agreement. Thus, any right that the GE Plaintiffs had under the Agreement 

are “incidental” to the GE Plaintiffs’ right against Worthington under TUFTA. 

Id. Put differently, Worthington’s liability for receiving fraudulent transfers

cannot, as a matter of law, include Citibank’s liability under the Purchase and 

Sale Agreement. Accordingly, the funds the GE Plaintiffs received from 

Citibank in satisfaction of their contractual claim cannot count toward the 

satisfaction of their TUFTA claim under § 24.009(b).

The text of TUFTA, standing alone, does not support Worthington’s 

position that the GE Plaintiffs’ “claim” has already been satisfied by the 

settlement, because the “claim” at issue here is an avoidance action arising 

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under TUFTA, distinct from the contractual claim that precipitated the 

settlement.

B

Worthington also claims that, alternatively, the one-satisfaction rule

entitles it to a settlement credit for the proceeds the GE Plaintiffs received 

from Citibank, because the settlement ended a contractual dispute arising in 

part from the fraudulent transfers at issue in the TUFTA action.

Texas’s one-satisfaction rule provides that “a plaintiff is entitled to only 

one recovery for any damages suffered.” Crown Life Ins. Co. v. Casteel, 22 

S.W.3d 378, 390 (Tex. 2000). The rule applies when “multiple defendants 

commit the same act as well as when defendants commit technically different 

acts that result in a single injury.” Id. Under the rule, “the nonsettling 

defendant may only claim a credit based on the damages for which all 

tortfeasors are jointly liable.” Id. at 391. This common-law doctrine evolved 

from Texas courts’ application of the state’s original contribution statute, 

which “address[ed] liability between tortfeasors” but not “the implications of a 

partial settlement on contribution.” Stewart Title Guar. Co. v. Sterling, 822 

S.W.2d 1, 5 (Tex. 1992); see also Tex. Civ. Prac. & Rem. Code § 32.001 et seq. 

(1986) (contribution statute).5 The policy behind the one-satisfaction rule is to 

5 The original contribution statute was one of four contribution schemes addressed by 

the Supreme Court of Texas in Sterling; the others are former Tex. Civ. Prac. & Rem. Code 

§ 33.001 et seq. (1986) (the comparative negligence statute), Tex. Civ. Prac. & Rem. Code 

§ 33.001 et seq. (2013) (the comparative responsibility statute), and common-law contribution 

by comparative causation under Duncan v. Cessna Aircraft Co., 665 S.W.2d 414, 429 (Tex. 

1984). See also Ray C. Brooks, Addendum: Applicability of the Four Schemes, in A Proposed 

Change to Texas Contribution and Partial Settlements Laws, 24 Tex. Tech. L. Rev. 891, 917–

920 (1993). When the comparative responsibility statute took effect on September 2, 1987, it 

displaced the comparative negligence statute and the Duncan doctrine for cases involving 

pure negligence, strict liability, and breach of warranty, but those prior rules applied to cases 

filed before the statute’s effective date. See Sterling, 822 S.W.2d at 5; First Title Co. of Waco 

v. Garrett, 860 S.W.2d 74, 78 & n.5 (Tex. 1993). Thus, for claims filed after 1987, the two 

remaining operative contribution schemes are the original contribution statute, Tex. Civ. 

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prevent a plaintiff from “receiv[ing] a windfall” where “a settling defendant has 

already partially contributed” to his recovery. First Title Co. of Waco v. 

Garrett, 860 S.W.2d 74, 78 (Tex. 1993).

1

The Texas Supreme Court has not considered the applicability of the onesatisfaction rule where a tortfeasor seeks a settlement credit based on the 

settlement of a contractual dispute with a non-defendant third party involving 

the same underlying factual injury. Again, we are faced with an Erie guess.6

The Texas Supreme Court’s one-satisfaction rule jurisprudence 

illuminates two contours of the doctrine relevant to this case. First, the onesatisfaction rule derives from tort law principles of contribution. The Court 

first articulated the one-satisfaction rule in Bradshaw v. Baylor University, 84 

S.W.2d 703 (Tex. 1935), a tort case arising from a collision between a train and 

Baylor University’s bus.7 At trial, the bus-passenger plaintiff sued Baylor, 

Prac. & Rem. Code § 32.001 et seq. (1986), as developed by common law doctrines such as the 

one-satisfaction rule, and the comparative responsibility statute, id. § 33.001 et seq (2013), 

for actions in pure negligence, strict liability, and breach of warranty, Garrett, 860 S.W.2d at

78 & n.5.

6 In RSR, we declined to decide a related, but distinct, question of whether Texas’s 

one-satisfaction rule precludes multiple recoveries for the same injury under different 

insurance contracts. See RSR Corp., 612 F.3d at 857. In that case, the insured party RSR 

had settled with other insurers after initially suing them for payment under various 

insurance contracts. Later, it sought to recover from the non-settling insurer International 

additional amounts allegedly remaining to be paid under their contract. Id. at 855–57. We 

declined to consider whether RSR’s recovery from International was barred by the onesatisfaction rule and instead affirmed the district court on the alternate grounds that the 

“other insurance” provision in the International insurance contract precluded additional 

recovery. Id. Like this case, the issue we reserved in RSR involves the applicability of the 

one-satisfaction rule beyond the domain of tort law. Id. But in contrast, in RSR, the allegedly 

overlapping recoveries all sounded in contract, and the settling and non-settling parties 

shared the alleged same contractual liability. Here, one claim sounds in contract and the 

other in tort, and the settling party (Citibank) and non-settling party (Worthington) do not 

share a common theory of legal liability.

7 Because the Texas Supreme Court subsequently adopted this decision of the 

Commission of Appeals of Texas, we will discuss Bradshaw as a decision of the Supreme 

Court.

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which then impleaded the train operator, alleging among other claims that it 

was due contribution from the operator. The plaintiff prevailed and recovered 

from Baylor $6,500, but he had settled with the train operator for the same 

amount prior to suing Baylor. Id. at 703–705. The Bradshaw Court affirmed 

a take-nothing judgment for the plaintiff, explaining that the one-satisfaction 

rule applies where “more than one wrongdoer contributed” to an injury. Id. at 

705.

Second, the Court has applied the one-satisfaction rule to limit recovery 

only where the settling and non-settling parties share common liability. In 

Sterling, the Court emphasized that the damages all arose from the “alleged 

misrepresentations of all of the defendants” and that the plaintiff “himself 

alleged [that the defendants] were joint tortfeasors . . . .” Sterling, 822 S.W.2d 

at 8. Most recently, the Court again explained that under the one-satisfaction 

rule, “the nonsettling defendant may only claim a credit based on the damages 

for which all tortfeasors are jointly liable.” Casteel, 22 S.W.3d at 391 (emphasis 

added). “[S]eparate or punitive damages paid by the settling defendant” on his 

own behalf cannot offset a judgment against a non-settling defendant, since 

such amounts would not constitute “common damages.” Id. at 391–92.

We also find guidance in CTTI Priesmeyer, Inc. v. K & O Ltd. P’ship, 164 

S.W.3d 675 (Tex. Ct. App.—Austin 2005), a decision of the Austin Court of 

Appeals. In that case, K & O contracted with the general contractor CTTI for 

the construction of an office and warehouse, and separately contracted with 

Garwood Architects for design services. After K & O concluded that faulty 

design and construction had caused cracks in the completed structure’s 

concrete foundation, it sued CTTI and Garwood, but settled its negligence 

claims against Garwood before the case was submitted to the jury. The jury 

found that CTTI had breached the construction contract and that Garwood was 

negligent, and awarded damages against both defendants. The trial court 

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denied CTTI’s request for a settlement credit on the basis of the Garwood 

settlement. Id. at 678–80.

The Austin Court of Appeals affirmed, reasoning that the onesatisfaction rule had no application outside of tort claims under the Texas

Supreme Court decisions in Sterling, Garrett, and Casteel. The court first 

emphasized that under these precedents, the one-satisfaction rule “applies 

only to tort claims, not to breach of contract claims.” See id. at 684. The court 

further explained that the Casteel Court’s use of the terms “joint and several 

damages” would preclude application of the rule to a case involving contractual 

claims against a non-settling defendant and tort claims against a settling 

defendant, given that requirements for establishing joint liability are distinct 

in contract and in tort.8 Applying these principles, the court reasoned that 

CTTI’s promises to deliver a defect-free building were unique to its contract 

with K & O. Because Garwood did not make such promises and was liable 

“only for its own negligence,” CTTI could not enjoy a settlement credit based 

on the settlement proceeds that K & O received from Garwood. Id. at 685.9

8 Joint liability in tort requires shared causation, though percentages of responsibility 

can vary, while joint liability in contract requires “what amounts to joint promises.” CTTI, 

164 S.W.3d at 684. The CTTI court further explained that applying the one-satisfaction rule 

in that case would be akin to “hold[ing] a person not a party to a contract liable for the breach 

of that contract.” Id. at 685.

9 We do not find persuasive the Austin court of appeals decisions cited by Worthington 

for the proposition that the one-satisfaction rule applies beyond tort claims. In those cases, 

the court explained in passing that the one-satisfaction rule’s applicability is “not limited to 

tort claims.” Galle, Inc. v. Pool, 262 S.W.3d 564, 573 (Tex. App.—Austin 2008); Osborne v. 

Jauregui, Inc., 252 S.W.3d 70, 75 (Tex. App.—Austin 2008). But neither case involved 

defendants that lacked common alleged tort liability, as we confront here. See RSR Corp. v. 

Int’l Ins. Co., 2009 WL 927527, at *12–13 (N.D. Tex. 2009) (unpublished) (reviewing Galle 

and Osborne), aff’d on other grounds 612 F.3d 851 (5th Cir. 2010).

Moreover, we doubt that the Texas Supreme Court would adopt the sweeping 

principle that the one-satisfaction rule is “not limited to tort claims” and apply it in this case. 

In Galle and Osborne, the Austin court of appeals derived this observation from a Texas 

Supreme Court case involving alter ego liability for usury. In El Paso Natural Gas Co. v. 

Berryman, 858 S.W.2d 362, 364 (Tex. 1993), the Supreme Court held that in the context of a 

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Worthington claims that the Texas Supreme Court’s opinion in Garrett

expanded the one-satisfaction rule beyond the domain of tort, but it 

misunderstands this case.

In Garrett, the plaintiffs contracted to buy a plot of land, with plans to 

convert it into an automobile salvage yard. The sellers had acquired the land 

subject to a restrictive covenant prohibiting such usage, but never informed 

the plaintiffs. Subsequently, a title company failed to discover the covenant 

during its title search, and a second title company issued a title commitment 

representing that no restrictive covenants existed. Later, having begun 

converting the land into a salvage yard, the plaintiffs were told of the 

restriction. They sued the sellers alleging misrepresentations and settled for 

$69,000, and then separately sued the title companies for negligence and 

breach of the Texas Deceptive Trade Practices Act (“DTPA”), Tex. Bus. & 

Comm. Code §§ 17.41–.63. The trial court awarded the plaintiffs 

approximately $115,000, plus attorneys’ fees. Garrett, 860 S.W.2d at 75–76. 

On motion for rehearing, the court of appeals held that the title companies 

were not entitled to a settlement credit because they had not “met their burden 

of establishing that [the sellers] were joint tortfeasors.” Id. at 76. 

The Texas Supreme Court reversed and remanded to the trial court. The 

Court provided an overview of the one-satisfaction rule, emphasizing that the 

settling defendant, after the plaintiff had already settled with that defendant’s alleged alter 

ego. The Court explained that the non-settling defendant’s liability was purely “derivative,” 

and that the two defendants were “jointly and severally liable” for damages assessed against 

the settling defendant. 

Thus, while El Paso suggests that the one-satisfaction rule might apply beyond tort 

(though the Court did not consider whether a usury suit sounds in tort), the Court applied 

the one-satisfaction rule because it had concluded that the two defendants were jointly liable. 

That is, consistent with the Austin court of appeals’ reasoning in CTTI, we understand El 

Paso to permit, at most, application of the one-satisfaction rule where defendants are jointly 

liable, even when their common liability is not based in tort. Here, however, Worthington 

and Citibank shared no common liability; thus, even under El Paso, the one-satisfaction rule 

is unavailable.

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doctrine determines “the effects of a partial settlement on the contribution 

rights between joint tortfeasors” and applies where “a plaintiff files suit 

alleging that multiple tortfeasors are responsible for the plaintiff’s injury” and 

receives a settlement therein. Id. at 78. The Court then concluded that here, 

the settlement agreement between the plaintiffs and the sellers arose from 

“claims based on ‘alleged misrepresentations made by [the sellers].’” Id. at 79. 

“Although not adjudicated to be joint tortfeasors,” the Court reasoned, “the title 

companies and the sellers cannot reasonably be said to have caused separate 

injuries.” Id. Because both suits “compensate an indivisible injury,” the Court 

concluded that the title companies should receive a settlement credit. Id. 

While the Court’s observation that the title companies and sellers were 

“not adjudicated to be joint tortfeasors” might suggest that the one-satisfaction 

rule extends to settlements received in connection with non-tort actions, we 

reject such an interpretation. Rather, Garrett must be read together with 

Bradshaw and Sterling, whose formulation of the one-satisfaction rule the 

Garrett Court expressly “reaffirm[ed].” Id. 

A principle common to Bradshaw, Sterling, and Garrett is that for 

purposes of applying the one-satisfaction rule, a settling party’s status as joint 

tortfeasor need not be proven by evidence, so long as there is an allegation to 

this effect. In Bradshaw, the Court deemed the train operator as a joint 

tortfeasor where Baylor alleged this in its cross-claim, Bradshaw, 84 S.W.2d 

at 704, and in Sterling, the plaintiff had “alleged [that the defendants] were 

joint tortfeasors,” Sterling, 822 S.W.2d at 8. Likewise, in Garrett, the Court 

explained that the one-satisfaction rule applies only when “a plaintiff files suit 

alleging that multiple tortfeasors are responsible for the plaintiff’s injury” and 

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subsequently receives a settlement. Garrett, 860 S.W.2d at 78 (emphasis 

added).10

In sum, the one-satisfaction rule emerges in Texas Supreme Court 

jurisprudence as a tort law contribution doctrine, and its application has 

generally been limited to cases in which a plaintiff settles with an alleged joint 

tortfeasor.

2

Applying the above principles, we predict that the Texas Supreme Court 

would conclude that the one-satisfaction rule is inapplicable here and would 

not entitle Worthington to a settlement credit.

Here, the GE Plaintiffs have never alleged that Citibank was a joint 

tortfeasor alongside Worthington.11 Garrett, 860 S.W.2d at 78; Sterling, 822 

S.W.2d at 8. Nor did Worthington ever file a cross-claim against Citibank 

seeking contribution under a theory that Citibank was a joint tortfeasor. See 

Bradshaw, 84 S.W.2d at 704.12 In the absence of any such allegation, we must 

conclude that Worthington and Citibank did not “commit the same act” or 

“commit technically different acts that result in a single injury.” Casteel, 22 

10 Indeed, if allegations alone could not establish joint tortfeasor status, then the onesatisfaction rule would be dramatically narrowed; only settlements received from parties 

actually adjudicated to be tortfeasors could offset judgments against non-settling parties.

11 For instance, a negligence action would require a finding that Citibank, as the 

parent company of CitiCapital at the relevant time, caused the fraudulent transfers. Even 

less conceivable is Citibank’s liability for an intentional tort. In short, Worthington has not 

alleged, nor does the record show, that Citibank would be liable in tort.

12 In its reply brief, Worthington suggests that the GE Plaintiffs’ action is actually a 

claim for “contribution” on behalf of Citibank. There is no authority cited for the proposition 

that a defendant in tort and non-party to a contract could be liable under that contract under 

a “contribution” theory. Cf. CTTI, 164 S.W.3d at 684 (distinguishing between tort and 

contractual theories of joint liability). This theory aside, if Worthington and Citibank were 

indeed “potentially liable for the same injury,” as Worthington asserts, and if Worthington

seeks “contribution” from Citibank, claiming that the latter is a joint tortfeasor, then there 

should have been allegations to this effect in the district court. We reject Worthington’s tardy 

attempt on appeal to deem Citibank a joint tortfeasor, in the absence of any allegations below.

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S.W.3d at 390. By the same logic, Worthington cannot be joined to Citibank’s 

alleged violations of the Purchase and Sale Agreement, as it was not a party to 

that contract and no such contractual claim was ever advanced. CTTI, 164 

S.W.3d at 685.

Thus, as a matter of law, there is no “indivisible injury” to which the onesatisfaction rule would apply. Garrett, 860 S.W.2d at 79. 

C

Citibank’s alleged contractual breach and the TUFTA action against 

Worthington may share common underlying facts—the three fraudulent 

transfers from CitiCapital to Worthington totaling $2.5 million, induced by 

Wright & Wright. But such factual commonality does not suffice to count the 

contractual dispute’s settlement against TUFTA’s limit on recovery for a single 

avoidance “claim,” Tex. Bus. & Comm. Code § 24.009(b), or to render Citibank 

a joint tortfeasor for one-satisfaction rule purposes,13 Casteel, 22 S.W.3d at 390; 

Garrett, 860 S.W.2d at 78. Accordingly, the district court did not err in denying 

Worthington a settlement credit for the settlement proceeds that the GE 

Plaintiffs received from Citibank.14

13 The fact that the outcomes under both TUFTA’s recovery-limiting provision and the 

one-satisfaction rule are identical is supported by Worthington’s own contention that the two 

are “entirely consistent.”

14 Because we have concluded that neither TUFTA’s § 24.009(b) nor the onesatisfaction rule entitles Worthington to a settlement credit, we need not address the GE 

Plaintiffs’ submission that a credit is barred by the collateral source rule, which “precludes 

any reduction in a tortfeasor’s liability because of benefits received by the plaintiff from 

someone else—a collateral source.” Haygood v. De Escabedo, 356 S.W.3d 390, 394–95 (Tex. 

2011). Likewise, we do not consider Worthington’s contention that the district misapplied 

the settlement credit burden-shifting framework, because, as a non-settling defendant not 

privy to settlement negotiations, it failed to meet its initial burden of showing that “the 

plaintiff settled with another party the claim on which the nonsettling defendant is liable.” 

McFarland v. Leyh (In re Tex. Gen. Petroleum Corp.), 52 F.3d 1330, 1340 (5th Cir. 1995) 

(internal quotations omitted). As discussed above, the GE Plaintiffs never alleged that 

Citibank was liable in tort or under TUFTA, and thus there is no “claim on which 

[Worthington] is liable” that is also common to Worthington and Citibank. Id. 

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IV

Worthington next submits that the district court erred as a matter of law 

in interpreting TUFTA’s good faith defense as an objective standard. This 

error, Worthington claims, infected both the district court’s evidentiary ruling

allowing testimony that Worthington should have detected the fraud, and its 

jury instructions explaining that Worthington’s constructive knowledge of 

fraud would defeat a good faith defense.

Under TUFTA, “[a] transfer or obligation is not voidable under Section 

24.005(a)(1) . . . against a person who took in good faith and for a reasonably 

equivalent value . . . .” Tex. Bus. & Comm. Code § 24.009(a).15 Worthington 

contends that to avail itself of TUFTA’s “good faith” defense, it had to prove 

only that it lacked subjective knowledge of the transferor’s “secret agreement” 

to defraud another creditor under Hawes v. Cent. Tex. Prod. Credit Ass’n, 503 

S.W.2d 234, 235–36 (Tex. 1973). In response, the GE Plaintiffs maintain that 

Hawes was superseded by TUFTA and that this case should be controlled by 

the objective “good faith” test articulated in Hahn v. Love, 321 S.W.3d 517 (Tex. 

App.—Houston [1st Dist.] 2009). 

A

As a preliminary matter, we need not decide today whether Hawes 

survived TUFTA’s enactment. Even if it did, the district court correctly 

recognized that that case deals only with preferential transfers, which are not 

implicated here.

In Hawes, the Supreme Court of Texas articulated a “good faith” 

exception to TUFTA’s predecessor statute in the case of “preferences,” where a 

debtor conveys property to one creditor, with preference over another. In that 

15 The parties stipulated that Worthington took the transfers for reasonably 

equivalent value. See Tex. Bus. & Comm. Code § 24.009(a).

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case, Parker owed his son-in-law Hawes $1,900 and the Central Texas 

Production Credit Association $100,000. Parker conveyed land to Hawes in 

exchange for cancellation of his $1,900 debt, and the Association sued to set 

aside the conveyance, alleging fraud upon its rights as creditor. Hawes, in 

response, contended that he, too, was a creditor entitled to payment. Hawes, 

503 S.W.2d at 234–35. The trial court voided Parker’s conveyance to Hawes, 

and the court of appeals affirmed. 

The Supreme Court of Texas affirmed the appeals court. The Court 

considered the predecessor statute to the TUFTA, which provided that “[t]he 

title of a purchaser for value is not void [as fraudulent] . . . unless he purchased 

with notice of . . . the intent of his transferor to delay, hinder, or defraud.” Id. 

at 235 (citing former Tex. Bus. & Comm. Code § 24.02). The Court then 

explained a long-standing common-law exception to the statute in the case of 

“preferences”—“conveyances of property by an insolvent debtor to one of his 

unsecured creditors in payment of a debt.” Id. The Court explained that such 

conveyance is “valid notwithstanding the statute, if the value of the property 

does not exceed the amount of the debt and the grantee creditor receives the 

conveyance in good faith, meaning without a secret agreement to benefit the 

grantor in some way other than by discharge of his debt.” Id. at 235–36. So 

long as these two requirements are met, the conveyance is valid even if the 

“grantee had notice of [the grantor’s] intent [to favor one of his creditors].” Id. 

at 236. But despite this good-faith exception in the case of a debtor’s 

“preference,” the Court concluded that the conveyance was properly voided 

because the evidence supported a finding that Hawes did not act in good faith.16

16 Under Rule 279 of the Texas Rules of Civil Procedure, in the absence of written 

findings on a necessary element of a claim or defense, an appeals court can deem the element 

to have been established by the trial court if there is evidence to support the finding. Hawes, 

503 S.W.2d at 236.

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Worthington contends that even if Hawes governs only preferential 

transfers, Wright & Wright’s transfers to Worthington constitute “preferences” 

because Worthington and GE Capital were both Wright & Wright’s creditors. 

But Worthington and GE Capital were not creditors concurrently; GE Capital 

became a creditor only after Wright & Wright allegedly appropriated its funds 

to execute the fraudulent transfers to Worthington. Thus, Wright & Wright 

did not give preferential treatment to debt owed to Worthington, over debt 

owed to GE Capital.17 Rather, it fraudulently used GE Capital’s (previously 

CitiCapital’s) funds to repay its debt to Worthington, whereupon GE Capital 

became a new creditor. 

In sum, because this action does not concern a preferential transfer, even 

if Hawes is still good law, it is inapplicable here.18

B

Because Hawes is inapposite, and because no opinions of the Texas 

Supreme Court have applied TUFTA’s “good faith” defense, we must look to 

the lower state courts and other persuasive authorities to predict how the 

Supreme Court would define TUFTA’s “good faith” standard. See Temple, 720 

F.3d at 307; SMI Owen Steel Co. v. Marsh USA, Inc., 520 F.3d 432, 437 (5th 

17 Worthington also suggests that Wright & Wright preferred Worthington over 

PlainsCapital Bank, another creditor at the time of the transfers to Worthington. But even 

if these facts might support a preferential transfer action, PlainsCapital did not actually 

bring such an action (as the creditor who was not preferred). Rather, the claim at issue is 

the GE Plaintiffs’ avoidance action, not a preferential transfer action. 18 We observe that TUFTA’s preferential transfer provision seems rather difficult to 

reconcile with Hawes. See Tex. Bus. & Comm. Code § 24.006(b) (“A transfer made by a debtor 

is fraudulent as to a creditor whose claim arose before the transfer was made if the transfer 

was made to an insider for an antecedent debt, the debtor was insolvent at that time, and the 

insider had reasonable cause to believe that the debtor was insolvent.” (emphasis added)). 

This statutory language, coupled with the legislative history cited by the GE Plaintiffs, 

suggests that Hawes might have been superseded by TUFTA. See House Research 

Organization Bill Analysis, HB 2193 (May 13, 1987) (“CSHB 2193 would replace current 

fraudulent-transfer law with the Uniform Fraudulent Transfer Act (UFTA).”). But we 

decline to decide this question today.

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Cir. 2008) (“In making the Erie guess, we may consider, among other sources, 

treatises, decisions from other jurisdictions, and the ‘majority rule.’”).

Worthington cites two decisions of Texas courts of appeals that applied 

Hawes’s subjective test outside of a “preference” context—Yokogawa Corp. of 

Am. v. Skye Int’l Holdings, Inc., 159 S.W.3d 266 (Tex. App.—Dallas 2005, no 

pet.), and Senior Commodity Co. v. Econo-Rail Corp., 2000 WL 350508 (Tex. 

App.—Houston [14th Dist.] 2000) (unpublished). However, both Yokogawa 

and Senior Commodity apply Hawes in rather conclusory fashion. Yokogawa, 

159 S.W.3d at 270–71; Senior Commodity, 2000 WL 350508, at *8. And since 

we have already determined that Hawes does not govern this case, we predict 

that the Texas Supreme Court would likewise not be persuaded by Yokogawa 

and Senior Commodity in deciding this case.19

The GE Plaintiffs, in response, contend that this case is controlled by the 

objective “good faith” standard of Hahn. In that case, a judgment debtor sold 

a property to an entity allegedly owned and operated by the debtor’s family, 

and the entity subsequently sold it to Love. Hahn, the judgment creditor, 

sought an execution sale of the property to satisfy the judgment. The entity 

sued Hahn, seeking an injunction prohibiting the execution sale. Love 

intervened and sought an injunction prohibiting the sale and removal of the 

cloud from his title, and Hahn filed counter-claims against Love. The trial 

court granted Love’s motion for summary judgment on grounds that he was a 

good-faith purchaser of the property under § 24.009(a) of TUFTA. Id. at 520–

23.

19 Worthington cites other cases that undermine its reading of Hawes. Worthington 

cites the dissenting opinion in Tigrett v. Pointer, 580 S.W.2d 375 (Tex. App.—Dallas 1978, no 

pet.), but even the dissent recognized that Hawes applied to preferences. Id. at 396–97 (Akin, 

J., dissenting). Worthington also invokes Bossier Bank & Trust Co. v. Phelan, 615 S.W.2d 

872 (Tex. App.—Houston [1st Dist.] 1981, no pet.). But Worthington omits from its discussion 

of that case the court’s recognition that Hawes governs only “preference” cases. Id. at 874. 

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The court of appeals reversed, concluding that there were fact questions 

“both as to whether the transfer of the property to Love was fraudulent and as 

to Love’s actual or constructive notice of facts and circumstances indicating the 

intent to defraud . . . .” Id. at 531. In reaching this conclusion, the court 

articulated an objective definition of “good faith,” explaining that “[a] 

transferee who takes property with knowledge of such facts as would excite the 

suspicions of a person of ordinary prudence and put him on inquiry of the 

fraudulent nature of an alleged transfer does not take the property in good 

faith and is not a bona fide purchaser.” Id. at 527. Hahn thus stands for the 

proposition that TUFTA’s “good faith” defense requires an objective 

assessment of what the transferee “should have known,” rather than a 

subjective inquiry into what he actually knew.

Hahn’s objective “good faith” standard finds support in the federal courts 

and in other states with similar statutes, to which we may look for persuasive 

authority in making our Erie guess. See Temple, 720 F.3d at 307; SMI Owen 

Steel, 520 F.3d at 437. We have previously understood TUFTA’s “good faith”

defense to represent an objective standard, though we have not yet considered 

the question squarely in a published opinion.20 At least one bankruptcy court 

has interpreted the “good faith” defense similarly. See Smith v. Suarez (In re 

IFS Fin. Corp.), 417 B.R. 419, 442 (Bankr. S.D. Tex. 2009). Lastly, we as well 

as the Ninth Circuit have interpreted other states’ uniform fraudulent transfer 

acts to follow the same objective “good faith” approach. See, e.g., Warfield v. 

20 See Spring Street Partners-IV, L.P. v. Lam, 730 F.3d 427, 439 (5th Cir. 2013) 

(applying objective “good faith” standard under § 24.009(b)(2) in affirming district court’s 

grant of summary judgment to TUFTA plaintiff and reasoning that the defendant-transferees 

were “closely related to [the debtor-transferor] and they are familiar business partners; 

therefore, [the transferees] would have been aware of [the transferor’s] financial predicament 

and maneuvering tactics” (emphasis added)); Wren Alexander Invs. LLC v. I.R.S., 530 F. 

App’x 302, 306–307 (5th Cir. 2013) (unpublished) (citing Hahn).

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Byron, 436 F.3d 551, 558–60 (5th Cir. 2006) (interpreting Washington’s 

UFTA); Hayes v. Palm Seedlings Partners-A (In re Agric. Research & Tech. 

Grp., Inc.), 916 F.2d 528, 535–36 (9th Cir. 1990) (interpreting Hawaii’s UFTA).

Moreover, we conclude that the Texas Supreme Court would not welcome 

the practical consequences of adopting the subjective “secret agreement” 

standard of Hawes. Such a lenient standard would protect even those 

transferees who “look the other way” in questionable transactions; other 

jurisdictions allowing a subjective “good faith” defense still do not sanction 

such willful blindness. See, e.g., Gowan v. Westford Asset Mgmt. LLC (In re 

Dreier LLP), 462 B.R. 474, 487–93 (Bankr. S.D.N.Y. 2011) (“[T]he appropriate 

test for determining constructive knowledge, and hence ‘good faith,’ under DCL 

§ 272 is the subjective ‘conscious turning away’ standard under which the 

defendant . . . is charged with the knowledge of what was obvious but ignored, 

or doubtful but not explored,” id. at 491).21 Worthington has identified no other 

jurisdiction that uses the “secret agreement” standard in an analogous 

statutory context, and we decline to guess that the Texas Supreme Court would 

wish its state to become the first.22

21 We do not base our Erie guess on bankruptcy jurisprudence under Section 548 of 

the Bankruptcy Code, which establishes a transferee’s good faith defense to the trustee’s 

power to avoid a debtor’s fraudulent transfers. 11 U.S.C. § 548(c). Certain authorities 

indicate that § 548 is not necessarily substantively congruent with state-law counterparts, 

despite a common ancestry. See In re Dreier LLP, 462 B.R. at 487–93 (distinguishing 

objective “good faith” test under § 548 from New York’s Debtor & Creditor Law § 272); 

FRAUDULENT TRANSFERS, PREBANKRUPTCY PLANNING AND EXEMPTIONS § 4.14 n.11 (2014) 

(reviewing various “good faith” standards); COLLIER ON BANKRUPTCY § 5-548.01 (“Given the 

elemental nature of fraudulent transfer law, . . . there was no preemption intended [by 

codification of state fraudulent transfer laws in the Bankruptcy Code], and states (as well as 

the federal government) continued to adapt parts of fraudulent transfer law for their own 

purposes.”).

22 For the good faith defense to alleged preferential transfers, New York law has a 

“secret agreement” standard, but one that lacks the fraudulent import of Hawes. As the 

Second Circuit explained in Sharp Int’l Corp. v. State Street Bank & Trust Co. (In re Sharp 

Int’l Corp.), 403 F.3d 43 (2d Cir. 2005), in New York, preferential transfers are “neither 

fraudulent nor otherwise improper,” notwithstanding “knowledge on the part of the 

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Because Hahn is the most thorough and well-reasoned Texas case 

applying TUFTA’s “good faith” defense, and because its objective definition of 

“good faith” accords with numerous other persuasive authorities, we predict 

that the Supreme Court of Texas would adopt Hahn’s approach if presented 

with the question. Accordingly, the district court’s jury instructions and 

evidentiary ruling, premised on this objective standard, were not erroneous.

V

For the foregoing reasons, we AFFIRM the judgment of the district court.

transferee that the transferor is preferring him to other creditors, even by virtue of a secret 

agreement to that effect.” Id. at 54–55 (emphasis added) (citation omitted). Thus, the “secret 

agreement” of Sharp is only an agreement to give preferential treatment, not to defraud the 

other creditor. By contrast, under Hawes, a “secret agreement to benefit the grantor in some 

way other than by discharge of his debt” implies that the agreement implicates some 

improper benefit (e.g. the shielding of assets from the other creditor). This difference is borne 

out by the Sharp court’s subsequent conclusion that the “secret agreement” standard is 

consistent with the rule that “the statutory requirement of ‘good faith’ is satisfied if the 

transferee acted without either actual or constructive knowledge of any fraudulent scheme.” 

Id. at 55 (emphasis added) (citation omitted).

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