UNITED STATES COURT OF APPEALS

Tenth Circuit

Byron White United States Courthouse

1823 Stout Street

Denver, Colorado 80294

(303) 844-3157

Patrick J. Fisher, Jr. Elisabeth A. Shumaker

Clerk Chief Deputy Clerk

January 21, 1998

TO: ALL RECIPIENTS OF THE CAPTIONED OPINION

RE: 96-4100, In re: Hal Taylor

 January 12, 1998

Please be advised of the following correction to the captioned decision:

On the cover page of the opinion, counsel for the appellant, Julia W. Taylor,

should read as follows:

J. Kent Holland of Anderson & Holland, Salt Lake City, Utah, and Brenda L.

Flanders of Flanders & Associates, Salt Lake City, Utah, for Appellant.

A copy of the corrected cover page is attached for your convenience.

Very truly yours,

Patrick Fisher, Clerk

Keith Nelson

Deputy Clerk

encl.
F I L E D

United States Court of Appeals

Tenth Circuit

JAN 12 1998

PATRICK FISHER

Clerk

PUBLISH

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

In re: HAL TAYLOR,

Debtor.

----------------------------------------------

JULIA W. TAYLOR,

Appellant,

v.

STEPHEN W. RUPP, Trustee,

Appellee.

No. 96-4100

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF UTAH

(D.C. No. 95-CV-961-C)

J. Kent Holland of Anderson & Holland, Salt Lake City, Utah, and Brenda L.

Flanders of Flanders & Associates, Salt Lake City, Utah, for Appellant.

Jeffrey E. Nelson of Van Cott, Bagley, Cornwall & McCarthy, Salt Lake City,

Utah, for Appellee.
*

 The Honorable Vicki Miles-LaGrange, United States District Judge for

the Western District of Oklahoma, sitting by designation.

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Before MURPHY and LOGAN, Circuit Judges, and MILES-LaGRANGE, District

Judge.*

LOGAN, Circuit Judge.

Julia W. Taylor (Julia) appeals the district court’s judgment imposing a

trust for the benefit of creditors upon real and personal property titled in her

name. In an earlier proceeding, her husband, Harold Taylor (Harold), was denied

discharge in bankruptcy on the basis that he had willfully and fraudulently

omitted material information from his statements and schedules. Steven W. Rupp,

bankruptcy trustee, then brought this proceeding against Julia, claiming that

Harold’s transfers to Julia of the assets at issue here were void or voidable as

fraudulent conveyances or, in the alternative, that Harold had equitable interests

in them such that the court should impose a constructive or resulting trust.

The bankruptcy judge determined that Harold retained a one-half equitable

interest in the couple’s Park City home even though he had conveyed his share of

a joint tenancy title to Julia seven years before when he was solvent, and that this

equitable interest was part of Harold’s bankruptcy estate. The judge imposed a

resulting and constructive trust for the benefit of creditors on an undivided one-
1

 Because the district court simply adopted the bankruptcy judge’s findings

and conclusions, throughout this opinion we refer to the bankruptcy judge’s

decision as the judgment being reviewed.

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half interest in the home. The judge also determined that the bankruptcy estate

was entitled to a money judgment against Julia for $5,743.50, one-half the

allowance for a jointly owned Jeep the couple traded in on another, which they

titled in Julia’s name alone, about two weeks before Harold filed bankruptcy. The

district court summarily affirmed.1 Julia has appealed both determinations.

I

We have no problem affirming the judgment respecting the Jeep

transaction. In 1991 the Taylors purchased a 1990 Jeep and titled it jointly. In

June 1992, seventeen days before Harold filed for bankruptcy, they traded that

Jeep in as partial payment, receiving $11,487 credit, for a new 1993 Jeep Grand

Cherokee titled only to Julia.

 Under both the Uniform Fraudulent Transfer Act, Utah Code Ann. §§ 25-6-

1 through -13 (1988), and the Bankruptcy Code, 11 U.S.C. § 548(a)(1), when a

person has transferred his assets with actual intent to hinder, delay or defraud his

creditors, such a transfer can be avoided. Whether the trustee must show actual

fraud by a clear and convincing standard, see, e.g., Glinka v. Bank of Vermont (In

re Kelton Motors, Inc.), 130 B.R. 170, 179 (Bankr. D. Vt. 1991), or only by a

preponderance of the evidence, see Thompson v. Jonovich (In re Food & Fibre
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Protection, Ltd.), 168 B.R. 408, 418 (Bankr. D. Az. 1994), we need not decide

because, as the court found, the trustee’s evidence met the higher standard.

The Uniform Fraudulent Transfer Act includes a nonexclusive list of

“badges of fraud” that may be considered as actual evidence of a debtor’s intent

to defraud. The factors are:

(a) the transfer or obligation was to an insider;

(b) the debtor retained possession or control of the property

transferred after the transfer;

(c) the transfer or obligation was disclosed or concealed;

(d) before the transfer was made or obligation was incurred,

the debtor had been sued or threatened with suit;

(e) the transfer was of substantially all the debtor’s assets;

(f) the debtor absconded;

(g) the debtor removed or concealed assets;

(h) the value of the consideration received by the debtor was

reasonably equivalent to the value of the asset transferred or the

amount of the obligation incurred;

(i) the debtor was insolvent or became insolvent shortly after

the transfer was made or the obligation was incurred;

(j) the transfer occurred shortly before or shortly after a

substantial debt was incurred; and

(k) the debtor transferred the essential assets of the business to

a lienor who transferred the assets to an insider of the debtor.

Utah Code Ann. § 25-6-5(2) (1988). When one or more of these badges are

present fraudulent intent can be inferred. Likewise, under 11 U.S.C. § 548(a)(1)

bankruptcy courts consider similar badges of fraud as evidence of actual

fraudulent intent. See Max Sugarman Funeral Homes, Inc. v. A.D.B. Investors,

926 F.2d 1248, 1254 (1st Cir. 1991).
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As the bankruptcy judge pointed out, in this case there are several badges

of fraud. Harold transferred his half interest in the 1990 Jeep to an insider, his

wife, two weeks before declaring himself insolvent. In his bankruptcy filing,

Harold listed Lynn Knight as his only creditor. Knight had sued Harold in June

1990 in relation to a real estate transaction, and received a $36,879 judgment

against him, on which she had pursued a writ of execution in December 1991. 

The Jeep title transfer occurred after that judgment and only a few days before

Harold’s filing as a bankrupt. Further, Harold concealed the transfer when he did

not disclose it in his statement of financial affairs or list it as an asset in his

schedule when he took bankruptcy.

Julia claims that the 1990 Jeep was improperly titled, that it had been

purchased with a trade-in from a vehicle which should have been titled in her

name, and that the two were merely correcting this error when they purchased the

1993 Jeep. The bankruptcy judge rejected these arguments and also Julia’s

argument that she used her money to purchase both of the vehicles. The record

supports the bankruptcy judge’s determination on this issue.

II

A

We have much more difficulty with the findings and conclusions respecting

the real estate transfer.
2

 The trustee’s complaint appears to acknowledge that Julia paid off the

mortgage. App. of Plaintiff/Appellee at 3.

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Harold and Julia Taylor purchased their Park City home in November 1973

for approximately $70,000, which they financed by paying $14,000 down and

taking a mortgage of approximately $56,000. They took title to the home in joint

tenancy. In 1982 Harold suffered a heart attack. In May 1985 he executed and

recorded a warranty deed conveying his interest in the home to Julia, so that

thereafter it was titled solely in her name. Shortly after the 1985 conveyance to

Julia they retired the remaining $25,000 mortgage, with funds which the

bankruptcy judge stated “may have come from an inheritance received by” Julia. 

Appellant’s App. 26.2

The bankruptcy judge found that until 1985 Harold’s income from his real

estate business was the primary source for the mortgage payments. The court also

found that, although until around 1985 Harold earned a much higher income than

Julia, they treated the marriage as a financial partnership and considered income

earned by either spouse as part of their joint family funds. Both continued living

in the home, sharing the expenses of taxes, utilities, and insurance--with many

payments made by checks signed by Harold.

From 1986 to 1989 Harold’s income from his real estate business declined

dramatically, partly because he was serving as mayor of Park City. During this
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time Julia’s income increased. In 1989 Harold suffered a stroke and ceased

earning any income. He began receiving social security benefits in 1992. In

March 1989, the Taylors cosigned a $60,000 line of credit secured by the Park

City home and utilized at least $29,000 of this line of credit for living expenses. 

Harold did not include any equitable interest in the Park City home in his

schedule of assets filed in the bankruptcy proceeding.

B

Julia first argues that the statute of limitations barred the trustee’s equitable

claims against the Park City home. The trustee filed suit in March 1994. The

applicable Utah statute of limitations on equitable claims is four years. See Utah

Code Annotated § 78-12-25(3) (four-year statute of limitations on actions “for

relief not otherwise provided for by law”); see also American Tierra Corp. v. City

of West Jordan, 840 P.2d 757, 760-61 (Utah 1992) (applying § 78-12-25(3) to

equity action). The bankruptcy judge determined that the four-year statute began

to run in July 1992, when Harold filed his bankruptcy schedules and did not claim

an equitable interest in the Park City home. She said this failure to list his

equitable interest was the first time Harold took a position contrary to the

equitable interest claimed by the plaintiffs. See Carnesecca v. Carnesecca, 572

P.2d 708, 711 (Utah 1977). Julia counters that the statute began to run when

Harold transferred his interest and recorded the deed in May 1985. She quotes
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from Baker v. Patee, 684 P.2d 632 (Utah 1984), that “[n]o resulting trust could

come into being, as the plaintiff did not prove that [the grantor] intended anything

but an unconditional conveyance of her property. . . . The date of delivery of the

deed set the period of limitations in motion and those actions were barred years

before [the grantor’s] death.” Id. at 638.

In Baker, the Utah Supreme Court affirmed the district court’s decision

because it found that the evidence did not support a resulting trust. “Had [a

resulting trust] been the finding in the instant case, the statute of limitations

would not begin to run until the trustees affirmatively repudiated the trust. 

Therefore this action would not be barred.” 684 P.2d at 635 (citing Parks v.

Zions First Nat’l Bank, 673 P.2d 590 (Utah 1983)). Baker indicates that the

statute of limitations is intertwined with the substantive question whether Harold

had an equitable interest in the home. If the bankruptcy judge correctly

determined that Harold retained an equitable interest, under Utah law the statute

of limitations would not have run until he took an action to repudiate that interest

when he filed his bankruptcy schedules. If, however, Harold did not retain any

equitable interest, then the trustee would not be entitled to recover in any event. 

We thus must review the merits of the case.
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C

The bankruptcy judge’s opinion imposed “both a resulting trust . . . and a

constructive trust” on the undivided one-half equitable interest she found Harold

to own in the Park City home titled in Julia’s name. The judge reasoned as

follows:

[Harold] Taylor had an equitable interest in the Park City Home at

the time he transferred legal title to [Julia] and he continued to have

an equitable interest in the property up to and through the time his

bankruptcy petition was filed. [Harold’s] equitable interest is

evidenced by his original purchase of the Park City Home in 1973

and his continuing payments on the underlying mortgage debt. The

Park City Home was purchased and the transfer was made at times

when [he] had substantial income. When the Taylors later obtained

the $60,000 Line of Credit in March of 1989, both [Harold] and

[Julia] were liable on the loan. Subsequently [Harold] made

payments on the Line of Credit and paid taxes, insurance and utilities

on the Park City Home.

The Taylors testified that they transferred legal title because of

estate planning and inheritance tax concerns after [Harold’s] heart

attack. However, the fact that [Harold] never intended to convey the

full beneficial interest in the Park City Home to [Julia] as a gift is

evidenced by the Taylors’ conduct after [Harold] transferred legal

title to [Julia] in 1985. The Taylors treated the Park City Home as

their joint marital property and their family home throughout their

marriage, both before and after [Harold] transferred legal title to the

property to [Julia].

Appellant’s App. 49-50. The judge found, however, that there was no evidence

Harold was insolvent when he transferred title to the Park City home to Julia or

that the transfer was made in anticipation of litigation. Id. at 39. She found that

Harold received “some consideration for the transfer because [Julia] paid off the
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$25,000 mortgage remaining . . . an obligation for which [Harold] would have

been jointly liable.” Id. The judge also found that Harold “is a real estate broker

by profession and understands real estate transactions including the nature of

equitable, as opposed to legal, interests in property.” Id. at 22.

We may not set aside the bankruptcy judge’s fact findings unless they are

clearly erroneous. Fed. R. Civ. P. 52(a). The appellate record does not contain a

transcript of the testimony presented to the judge. But the apparently undisputed

testimony was that Harold intentionally transferred title to the home to Julia

“because of estate planning and inheritance tax concerns after [Harold’s] heart

attack.” Appellant’s App. 49. Therefore, the judge’s finding that Harold

“intended” to retain an equitable one-half interest was the judge’s inference from

the other undisputed facts.

In these circumstances we believe the bankruptcy judge’s finding that

Harold retained an equitable undivided one-half interest in the home is not a fact

finding but a legal conclusion that we review de novo. “Resolution of this issue

requires a determination of whether the facts satisfy the proper legal standard, a

mixed question of law and fact.” Jobin v. McKay (In re M & L Business Machine

Co., Inc.), 84 F.3d 1330, 1338 (10th Cir.), cert. denied, 117 S. Ct. 608 (1996). 

See Hall v. Vance, 887 F.2d 1041, 1043 (10th Cir. 1989) (“This court . . . may

exercise de novo review over the bankruptcy court’s conclusions of law.”).
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A bankruptcy estate includes “all legal or equitable interests of the debtor

in property as of the commencement of the case,” 11 U.S.C. § 541(a)(1). The

existence and extent of such an interest is determined by state law, in this case the

law of Utah. See, e.g., United States v. Rodgers, 461 U.S. 677, 683, 690-91

(1983). The bankruptcy judge, in imposing both a resulting and constructive trust

in favor of Harold which his creditors could reach relied principally upon Parks v.

Zions First National Bank, 673 P.2d 590 (Utah 1983). We turn our attention first

to whether the bankruptcy judge correctly imposed a “resulting trust.”

D

The Parks court indicated that a resulting trust requires an intent to retain a

beneficial interest, and cited Restatement (Second) of Trusts § 442 (1959) which

provides that 

Where a transfer of property is made to one person and the purchase

price is paid by another and the transferee is a wife, child or other

natural object of bounty of the person by whom the purchase price is

paid, a resulting trust does not arise unless the latter manifests an

intention that the transferee should not have the beneficial interest in

the property.

673 P.2d at 598 (quoting Restatement (Second) of Trusts § 442) (emphasis

added). Restatement § 442 thus reverses the usual presumption that when one

person provides the purchase money for property but another takes legal title to
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the property, it is intended that the legal owner holds the property for the benefit

of the one providing the purchase price. The Parks court rejected a claim of

resulting trust because it found no manifestation that the husband there intended

to retain a beneficial interest in properties to which he contributed money and

labor but which were titled in his wife’s name.

In the instant case the bankruptcy judge found that Harold was a real estate

broker who “understands real estate transactions.” Appellant’s App. 22. She

acknowledged that the Taylors “testified that they transferred legal title because

of estate planning and inheritance tax concerns after [Harold’s] heart attack.” Id.

at 49. Yet she found Harold never intended to convey the entire beneficial

interest because of his later conduct: living on the premises, paying bills,

cosigning a letter of credit. In reviewing this determination we must keep in mind

that the proof required to impose a resulting trust “must be strong, clear, and

convincing, such as to leave no doubt of the existence of the trust,” Chambers v.

Emery, 45 Pac. 192, 195 (Utah 1896), and that it is the intention “at the time of

the transfer and not at some subsequent time which determines whether a

resulting trust arises.” Restatement (Second) of Trusts § 443 comment a. So

viewed, there is no basis for the bankruptcy judge’s determination that the facts

rebut the presumption that when a husband pays (or here, signs over his interest)

for property that is placed in his wife’s name, he intends a gift. In fact, Harold’s
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act of conveying his interest was more deliberate because he and Julia already

held title to their home jointly. The Taylors’ explanation--that Harold had seen

his brother’s widow experience difficulty selling a home that had been co-owned,

that he had heart trouble and wanted to ensure Julia would have the home if he

died--while perhaps not a model of legal reasoning must have been discounted for

the judge to have reached her conclusion.

The bankruptcy judge appears to have adopted a per se rule that when a

husband conveys to his wife his interest in the home but intends to continue to

reside there and help pay real estate taxes, insurance, and other household bills

that accrue, he intends to continue to hold a fifty percent beneficial interest in the

property. As a practical matter such a rule would prevent transfers of title to the

home between spouses to accomplish such objectives as avoiding probate and

arranging the two estates to take advantage of the estate and inheritance tax laws

exemptions. See 26 U.S.C. §§ 2001(c), 2010(a).

We are satisfied Harold’s intention to continue to live with his wife on the

premises and to pay a portion of the bills incurred during that occupancy does not

establish clear and convincing proof of his intention to retain an ownership

interest in property that he conveyed to his wife for estate planning purposes. 

Thus, we reject the bankruptcy judge’s conclusions to the contrary.
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E

We turn next to whether the bankruptcy judge correctly imposed a

“constructive trust.” “A constructive trust is imposed not because of the intention

of the parties but because the person holding title to property would profit by a

wrong or would be unjustly enriched if [s]he were permitted to keep the property. 

A constructive trust, unlike an express or resulting trust is remedial in character.” 

Restatement (Second) of Trusts at 326.

The Parks court noted that constructive trusts are equitable remedies

imposed for a variety of circumstances; “[a]n attempt to define or describe a

constructive trust would be inadequate because such definition or description

would be too narrow in its scope and fail to include important types of

constructive trusts.” 673 P.2d at 597 (quotation, citation, and footnote omitted). 

Nevertheless, the circumstances requiring imposition of a constructive trust must

be found to exist by “clear and convincing evidence.” Nielson v. Rasmussen, 558

P.2d 511, 513 (Utah 1976). We also must remember that we view the situation

from Harold’s position--not his creditor’s--to determine whether it would be a

wrong to Harold to let Julia keep the property. The bankruptcy judge already had

found Harold transferred the property while he was solvent and not in anticipation

of litigation. Appellant’s App. 39. The trustee here stands in Harold’s shoes in

claiming ownership of an equitable half of the real estate.
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Parks, heavily relied upon by the bankruptcy judge and the trustee, is quite

distinguishable from the case before us. In Parks, a husband and wife

accumulated significant real estate holdings and made improvements on them

during a long-term marriage. The husband was employed throughout the marriage

and the wife for the most part was not; they both contributed labor in maintaining

and improving the properties. She did the bookkeeping and kept the accounts;

and all of the property eventually was titled in her name alone. The wife died;

her will left her husband only a conditional life estate in a farm house in which

they had lived and a small monthly payment. These benefits terminated if he

remarried. The will designated a children’s hospital as the ultimate beneficiary of

the testamentary trust assets. The husband did not elect against the will or

otherwise timely challenge it, but obtained relief by the court’s imposition of a

constructive trust.

We read Parks as based on the Restatement of Restitution § 160 (1937) idea

of unjust enrichment and as such it is imminently reasonable. The court there

prevented an injustice by applying equitable remedies where no trust intent

existed. In contrast, in the case before us the supposed equitable owner is the one

who made the gift, and he manifested no intent that his wife not have the legal

and equitable title to the home. The fact that he paid real estate taxes, insurance

and utility bills could certainly be seen as his contributing to the expenses in
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return for living in the home which she owned. Indeed, a Utah statute imposes on

both husband and wife “[t]he expenses of the family,” Utah Code Ann. § 30-2-9;

many of these payments would surely fall into that category.

The bankruptcy court seemed to rely to some extent on the fact that Harold

co-signed the line of credit; but any financial institution loaning money on the

security of a home would require a consent or guarantee by a spouse of the title

holder because of the spousal elective share and homestead exemptions law. See

Utah Constitution, Art. XXII § 1, and Utah Code Ann. §§ 75-2-201, 75-2-202, 75-

2-401, 78-23-3, 78-23-4. There were no “badges of fraud” in this case. At the

time of the transfer the couple was solvent, and the district court found there was

no indication that they were not paying their debts. In contrast, in Parks, a man

who worked hard all his life and contributed quite substantially to the property

that was accumulated in his wife’s name would have been left with virtually

nothing unless the court imposed a constructive trust on some of that property.

The bankruptcy judge applied Parks too broadly, adopting a per se rule that

would effectively nullify any attempt by one spouse to transfer all right, title and

interest in a home in which he or she continues to reside, at least if the grantor

continues to pay any costs of the occupancy. We believe that is not the law of

Utah. Parks should not be read to eviscerate such plans where a “breadwinning”

spouse continues to live in a home owned solely by the other spouse. We found
3

 The closest Utah case on the facts is Mattes v. Olearain, 759 P.2d 1177

(Utah App. 1988), in which a plaintiff testified she conveyed title to real estate to

another to avoid her former husband’s creditors. The district court imposed a

constructive trust in her favor. Reversing, the Utah Court of Appeals, quoting a

Utah Supreme Court case, stated: “‘Absent fraud, duress, mistake, or the like

attributable to the grantee, a competent grantor will not be permitted to attack or

impeach his own deed.’ Plaintiff testified she signed the deed of her own will,

free of fraud, trick, or threat. She alleged no mistake. As we find no basis to

disregard plaintiff’s deed . . . the award of the [] property to plaintiff is reversed.” 

Id. at 1180.

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no other case remotely similar that imposed such a trust.3 We thus reverse the

finding that Harold Taylor had an equitable one-half undivided share in the Park

City property.

AFFIRMED IN PART, REVERSED IN PART AND REMANDED for

further proceedings consistent with this opinion.