2018 UT App 31

THE UTAH COURT OF APPEALS

PAUL TIMOTHY AND JANICE TIMOTHY,

Appellants,

v.

PIA, ANDERSON, DORIUS, REYNARD & MOSS LLC

AND BRENNAN MOSS,

Appellees.

Opinion

No. 20150051-CA

Filed February 23, 2018

Third District Court, Salt Lake Department

The Honorable Todd M. Shaughnessy

No. 120905780

Nelson Abbott, Attorney for Appellants

J. Ryan Mitchell, John P. Mertens, and William O. 

Kimball, Attorneys for Appellees

JUDGE MICHELE M. CHRISTIANSEN authored this Opinion, in 

which JUDGE GREGORY K. ORME and SENIOR JUDGE STEPHEN L.

ROTH concurred.

1

CHRISTIANSEN, Judge:

¶1 Paul Timothy and Janice Timothy (collectively, Creditors) 

appeal the district court’s grant of summary judgment in favor 

of Pia, Anderson, Dorius, Reynard & Moss LLC (Law Firm) and 

Brennan Moss (collectively, Appellees). We affirm.

 

1. Senior Judge Stephen L. Roth began work on this case as an 

active member of the Utah Court of Appeals. He completed his 

work as a senior judge sitting by special assignment as 

authorized by law. See generally Utah R. Jud. Admin. 11-201(6).
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BACKGROUND

¶2 In 2002, Creditors brought suit against Thomas Keetch 

and Teri Keetch (collectively, Debtors) alleging, among other 

things, breach of contract and fraud. The case ultimately resulted 

in a 2009 judgment in Creditors’ favor.2

¶3 In July 2009, approximately four months after entry of the

judgment, all of Debtors’ bank accounts were closed.3 Then, in

March 2010, Teri Keetch’s high-school-aged son (Son) opened a 

bank account.4 The district court later determined that both Teri 

Keetch and Son had access to all of the money in the account and

that “[m]uch of the money in [Son’s] bank account belonged to 

[Debtors].”5

¶4 On February 12, 2011, Son wrote a check for $50,000 from

“his” account, payable to Law Firm. The check’s memo line read 

“Terry Keetch.” Law Firm deposited the check into its trust

account around March 15, 2011. The district court later found 

that the $50,000 was Debtors’ money.

 

2. A more detailed summary of the facts surrounding Creditors’ 

suit against Debtors may be found in Timothy v. Keetch, 2011 UT 

App 104, 251 P.3d 848, in which this court affirmed the trial 

court’s ruling. Id. ¶¶ 1–9.

3. According to Teri Keetch, Debtors’ bank closed the accounts. 

As of July 29, 2014, Debtors had not paid the judgment. And 

according to Creditors, Debtors “have not paid [the judgment] to 

this day.”

4. Son’s bank account appears to have been a joint account with 

Teri Keetch’s mother.

5. For example, the district court found that since May 2010, 

Debtors had collectively made around seventy deposits into 

Son’s bank account, totaling $186,283.93, and that Teri Keetch 

had written checks on Son’s account totaling at least $6,462.34.
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¶5 Four days before Law Firm deposited the $50,000 into its

trust account, Debtors and Creditors attended a supplemental 

hearing to determine whether Debtors had assets that could be 

applied to the judgment. Brennan Moss, an attorney from Law 

Firm, represented Debtors at the hearing. During the hearing, 

Thomas Keetch testified that “he did not have a checking

account, but that friends and family, specifically [Son], ‘cashed’ 

checks for him.” Teri Keetch testified that she had no assets.

6

¶6 On March 16, 2011, after the $50,000 was deposited into 

Law Firm’s trust account, Thomas Keetch signed an addendum 

to a real estate purchase contract, which stated that Debtors 

would “place in a trust [with] their attorney, Brennan Moss, a 

sum of no less than 30,000” to help secure a home Debtors 

 

6. Although Law Firm did not deposit the $50,000 check into its 

trust account until March 15, 2011, the record suggests that Law 

Firm was in possession of the check at the time of the 

supplemental hearing. Creditors observe that “Brennan Moss sat 

in the supplemental proceeding and heard [Debtors] testify that 

they had no assets, could not pay the judgment[,] and were 

insolvent,” and Creditors fault Moss for “not correct[ing] this 

false testimony.”

If Moss knew that Debtors had misrepresented their 

financial circumstances during the supplemental hearing, his 

failure to correct them, while not per se unlawful, may have run 

afoul of the Utah Rules of Professional Conduct. See, e.g., Utah R. 

Prof’l Cond. 3.3(b) (“If a lawyer, the lawyer’s client, or a witness 

called by the lawyer has offered material evidence and the 

lawyer comes to know of its falsity, the lawyer shall take 

reasonable remedial measures, including, if necessary, disclosure 

to the tribunal.”); id. R. 3.3(c) (“A lawyer who represents a client 

in an adjudicative proceeding and who knows that a person 

intends to engage, is engaging, or has engaged in criminal or 

fraudulent conduct related to the proceeding shall take 

reasonable remedial measures, including, if necessary, disclosure 

to the tribunal.”).
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wanted to purchase. Subsequently, Law Firm transferred $20,000 

from the trust account to a title company for Debtors as a down 

payment on the home. Two months later, at the request of 

Debtors, Law Firm transferred an additional $20,560.75 out of its 

trust account and paid $2,745 to itself, $16,451.75 to one of 

Debtors’ family members, and $1,364 to Creditors.7 The payment 

to Creditors was made in response to a court order entered on 

May 27, 2011.

¶7 In August 2012, Creditors filed suit against Appellees. 

Creditors later filed an amended complaint, alleging various 

theories of fraudulent transfer against Law Firm, participation in 

wrongful conduct against Moss individually, and civil 

conspiracy against Appellees collectively. Appellees filed a 

motion for summary judgment, arguing that Law Firm was not a 

transferee under Utah’s Uniform Fraudulent Transfer Act. See 

Utah Code Ann. §§ 25-6-1 to -14 (LexisNexis 2013).

8 The district 

court agreed and granted Appellees’ motion for summary 

judgment, concluding that

[b]ecause the relevant provisions of the Utah 

Uniform Fraudulent Transfer Act were modeled on 

federal Bankruptcy law, the court is persuaded that 

“transferee” as used in the Act is most logically 

 

7. Appellees correctly note that the district court’s finding that 

the $50,000 was actually Debtors’ money, supra ¶ 4, was entered 

after Law Firm had distributed the funds.

8. Utah’s version of the Uniform Fraudulent Transfer Act was 

amended, renumbered, and renamed as the Uniform Voidable 

Transactions Act, effective May 9, 2017. See Utah Code Ann. 

§§ 25-6-101 to -502 (LexisNexis Supp. 2017). Because the 2017 

amendment took effect after the relevant events in this case 

occurred and after oral argument before this court, we cite the 

2013 version of the Uniform Fraudulent Transfer Act throughout 

this opinion. See id. §§ 25-6-1 to -14 (2013).
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defined in the manner it has been defined in the 

Bankruptcy context. That is, a “transferee” must 

exercise dominion or control over the transferred 

asset. Here, the law firm did not—and could not—

exercise dominion and control over funds held in 

the firm’s trust account. The Rules of Professional 

Conduct explicitly prevent a law firm from using 

those funds at their discretion. Accordingly, the 

Law Firm was not a “transferee” within the 

meaning of the Act and the Judgment Creditors’ 

fraudulent conveyance claims fail as a matter of 

law. Those claims are hereby dismissed with 

prejudice.

Appellees then filed a second motion for summary judgment, 

arguing that Creditors’ claim that Appellees “conspired to assist 

[Debtors] in transfers that violated the [Uniform Fraudulent 

Transfer Act]” was “insufficient to support [Creditors’] civil 

conspiracy claim because it is not a valid tort claim against 

[Appellees].” The district court observed that

[a]lthough the question has not been addressed by 

Utah’s appellate courts, the majority view appears 

to be that state and federal statutes governing 

“fraudulent” conveyances are not based on tort 

principles. Moreover, and perhaps more important, 

the majority view appears to be that tort principles, 

such as civil conspiracy and aiding and abetting, 

cannot be used to get around the statutory limits of 

fraudulent conveyance actions; namely, those that 

limit the reach of such statutes to “transferees.”

The court was “persuaded that if presented with the question, 

Utah’s appellate courts would . . . not permit civil conspiracy, 

aiding and abetting, or similar theories to extend the reach of the 

Utah Uniform Fraudulent [Transfer] Act.” Consequently, the 
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district court granted Appellees’ second motion for summary 

judgment and dismissed Creditors’ remaining claims with 

prejudice. Creditors appeal.

ISSUES AND STANDARDS OF REVIEW

¶8 Creditors contend that the district court erred in granting 

Appellees’ motions for summary judgment. First, Creditors 

argue that “[a] law firm that receives money into its [trust]

account is a transferee as defined by the Utah Fraudulent 

Transfer Act” and that the district court “erroneously 

determined that a transferee is defined by bankruptcy law rather 

than by Utah Statute.” Second, Creditors contend that

“[v]iolation of the Utah Fraudulent Transfer Act may serve as a 

predicate act to support a claim for civil conspiracy.”

¶9 We review “a [district] court’s legal conclusions and 

ultimate grant or denial of summary judgment for correctness, 

and view[] the facts and all reasonable inferences drawn 

therefrom in the light most favorable to the nonmoving party.” 

Orvis v. Johnson, 2008 UT 2, ¶ 6, 177 P.3d 600 (citations and 

internal quotation marks omitted). Likewise, “[w]e review a 

district court’s interpretation and application of a statute for 

correctness.” Robinson v. Robinson, 2016 UT App 32, ¶ 35, 368 

P.3d 147.

ANALYSIS

I. 

¶10 Creditors first contend that “[a] law firm that receives 

money into its [trust] account is a transferee as defined by the

Utah Fraudulent Transfer Act.”

¶11 Utah’s Uniform Fraudulent Transfer Act (the Act), see 

Utah Code Ann. §§ 25-6-1 to -14 (LexisNexis 2013), was designed 
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to prevent fraudulent transfers of assets by debtors who seek to 

defraud creditors or avoid debts by placing assets beyond 

creditors’ reach, see Bradford v. Bradford, 1999 UT App 373, ¶ 14, 

993 P.2d 887. Pursuant to section 25-6-5 of the Act, a fraudulent 

transfer occurs when a debtor (a) transfers property with actual 

intent to hinder, delay, or defraud any creditor, or (b) transfers 

property under certain conditions without receiving reasonably 

equivalent value in exchange. Utah Code Ann. § 25-6-5(1). If a

transfer is demonstrated to be fraudulent, the Act provides 

creditors with various remedies “for relief against a transfer or 

obligation,” including, among others, “avoidance of the transfer 

or obligation to the extent necessary to satisfy the creditor’s 

claim.” Id. § 25-6-8(1)(a).

¶12 Generally, “[a] transfer or obligation is not voidable under 

Subsection 25-6-5(1)(a) against a person who took in good faith 

and for a reasonably equivalent value or against any subsequent 

transferee or obligee.” Id. § 25-6-9(1). “[T]o the extent a transfer is 

voidable in an action by a creditor under Subsection 25-6-8(1)(a), 

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. § 25-6-9(2). Relevant to this case, the 

judgment may be entered against “the first transferee of the asset 

or the person for whose benefit the transfer was made.” Id. § 25-

6-9(2)(a) (emphasis added). The primary issue on appeal is 

whether, pursuant to subsection 25-6-9(2)(a) of the Act, Law 

Firm was the “first transferee” of the $50,000. See id.

A. The definition of “first transferee”

¶13 The Act does not define “first transferee” for purposes of 

subsection 25-6-9(2)(a), and Utah appellate courts have not yet

articulated a definition.

¶14 Creditors assert that we “should adopt a definition of the 

word ‘transferee’ as used in the [Act] as any person who receives 
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an asset by transfer”9 and that under this definition, Law Firm 

was a transferee. In making their argument, Creditors rely on the 

definition of “transferee” from other sections of the Utah Code. 

For example, Creditors cite the Utah Uniform Partnership Act, 

which defines transferee as “a person to which all or part of a 

transferable interest has been transferred, whether or not the 

transferor is a partner.” Utah Code Ann. § 48-1d-102(26)

(LexisNexis 2015); see also id. § 48-2e-102(27) (similar definition of 

transferee in the Utah Uniform Limited Partnership Act); id. 

§ 48-3a-102(30) (similar definition of transferee in the Utah 

Revised Uniform Limited Liability Company Act). Creditors also 

rely on Black’s Law Dictionary, which defines “transferee” as 

“[o]ne to whom a property interest is conveyed.” Transferee, 

Black’s Law Dictionary (10th ed. 2014).

¶15 Appellees, on the other hand, assert that this court should 

look to federal bankruptcy law for guidance and “require a 

‘transferee’ to be someone who exercise[s] dominion or control 

over an asset” and that “[u]nder the dominion and/or control 

tests, [Law Firm] is not a transferee.”10 According to Appellees, 

this court should “turn to bankruptcy law for guidance” because 

subsection 25-6-9(2) of the Act “parallels the Bankruptcy Code, 

which provides for recovery ‘from . . . the initial transferee of 

 

9. The Act defines “‘[t]ransfer’” as “every mode, direct or 

indirect, absolute or conditional, or voluntary or involuntary, of 

disposing of or parting with an asset or an interest in an asset, 

and includes payment of money, release, lease, and creation of a 

lien or other encumbrance.” Utah Code Ann. § 25-6-2(12)

(LexisNexis 2013). The Bankruptcy Code’s definition of 

“transfer” is substantially similar to the Act’s definition. Compare 

id., with 11 U.S.C. § 101(54) (2012).

10. Alternatively, Appellees contend that “[d]epositing money 

into a law firm’s [trust] account does not dispose of the money, 

and thus is not a ‘transfer’ under the [Act].” We address this 

argument infra ¶ 28.
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such transfer or the entity for whose benefit such transfer was 

made.’” (Quoting 11 U.S.C. § 550(a) (2012).) See also Newsome v. 

Charter Bank Colonial, 940 S.W.2d 157, 165 (Tex. App. 1996) 

(observing that “[s]imilar to the fraudulent transfer statutes . . . 

the Bankruptcy Code allows the bankruptcy trustee to avoid 

certain transfers”). Appellees rely on a long line of cases decided 

under subsection 550(a)(1) of the Bankruptcy Code, which hold 

that one must have dominion or control over the debtor’s funds 

to be an initial transferee.

¶16 Similar to the Act, the Bankruptcy Code allows the 

bankruptcy trustee to avoid certain transfers. Compare Utah 

Code Ann. §§ 25-6-8, -9, with 11 U.S.C. §§ 547, 550 (2012). Section 

550 of the Bankruptcy Code provides that the bankruptcy trustee 

may recover a preference avoided under section 547 from the 

“initial transferee of such transfer or the entity for whose benefit 

such transfer was made.” 11 U.S.C. § 550(a)(1). Because the 

Bankruptcy Code does not define “initial transferee,” the courts 

have sought to articulate a definition.

¶17 The leading case on this issue is Bonded Financial Services, 

Inc. v. European American Bank, 838 F.2d 890 (7th Cir. 1988), in 

which the Seventh Circuit Court of Appeals articulated the 

“dominion test.” The court held that “the minimum requirement 

of status as a ‘transferee’ is dominion over the money or other 

asset, the right to put the money to one’s own purposes.” Id. at 

893; see also id. (“When A gives a check to B as agent for C, then 

C is the ‘initial transferee’; the agent may be disregarded.”); 

accord In re Incomnet, Inc., 463 F.3d 1064, 1070 (9th Cir. 2006) 

(observing that the Bonded decision is “the leading case in this 

area” and that “[t]he inquiry focuses on whether an entity had 

legal authority over the money and the right to use the money 

however it wished” (emphasis added)). The Seventh Circuit 

clarified that an entity does not have “dominion” over funds 

until it is, in essence, “free to invest the whole [amount] in 

lottery tickets or uranium stocks.” Bonded, 838 F.2d at 894. 

Applying the dominion test, the Bonded court concluded that the 

financial intermediary (a bank), which “[u]nder the law of 
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contracts . . . had to follow the instructions that came with the 

check,” was not the initial transferee of the check because the 

bank held the funds “only for the purpose of fulfilling an 

instruction to make the funds available to someone else.” Id.

¶18 The Eleventh Circuit Court of Appeals took a slightly 

different, but similar, approach and set forth the “control test.” 

See Nordberg v. Societe Generale (In re Chase & Sanborn Corp.), 848 

F.2d 1196, 1199 (11th Cir. 1988). This test “requires courts to step 

back and evaluate a transaction in its entirety to make sure that 

their conclusions are logical and equitable.” Id.; see also id. (“This 

approach is consistent with the equitable concepts underlying 

bankruptcy law.”). Thus, under the control test, “the outcome of 

the cases turn on whether the [receiving parties] actually 

controlled the funds or merely served as conduits, holding 

money that was in fact controlled by either the transferor or the 

real transferee.” Id. at 1200; see also id. (“When banks receive 

money for the sole purpose of depositing it into a customer’s 

account . . . the bank never has actual control of the funds and is 

not a section 550 initial transferee.”). The court noted that as a 

matter of public policy, it would be “especially inequitable to 

hold conduits liable in situations in which the conduits cannot 

always ascertain the identity of the transferor.” Id. at 1201.

¶19 “A number of circuits combined these tests—or at least 

combined their names—creating a ‘dominion and control test’ to 

determine whether a party is an initial transferee.” In re 

Incomnet, 463 F.3d at 1069, 1070–71 (applying the dominion test 

from Bonded and observing that the dominion and control tests 

“do differ”); see also Jessica D. Gabel & Paul R. Hage, Who Is A 

“Transferee” Under Section 550(a) of the Bankruptcy Code?: The 

Divide Over Dominion, Control, and Good Faith in Applying the Mere 

Conduit Defense, 21 J. Bankr. L. & Prac. 1 Art. 3 (Jan. 2012) 

(observing that nearly all of the federal appellate courts that 

have “opined on the mere conduit defense” “have adopted 

Bonded’s ‘dominion test’ in one form or another, although many 

of the courts appear to have combined the ‘dominion test’ with 

the ‘control test,’ at least by name, applying what they refer to as 
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a ‘dominion and control’ test”); see also, e.g., In re Hurtado, 342 

F.3d 528, 533 (6th Cir. 2003) (observing that the Bonded test “has 

come to be known as the dominion-and-control test, and has 

been ‘widely adopted’” and stating that “[a]n initial transferee

must have ‘dominion’ over the funds to be an ‘initial transferee’”

(citation omitted)); In re Ogden, 314 F.3d 1190, 1202, 1204 (10th 

Cir. 2002) (applying the “dominion and control test” from Bonded

and observing that “[i]n order to be a transferee of the debtor’s 

funds, one must (1) actually receive the funds, and (2) have full

dominion and control over them for one’s own account, as 

opposed to receiving them in trust or as agent for someone else”

(alteration in original) (citation and internal quotation marks 

omitted)); Christy v. Alexander & Alexander of New York Inc. (In re 

Finley, Kumble, Wagner, Heine, Underberg, Manley, Myerson, 

& Casey), 130 F.3d 52, 56–58 (2d Cir. 1997) (stating that “[t]he 

Seventh Circuit’s logic [in Bonded] has been widely adopted,” 

joining “these other circuits in adopting the ‘mere conduit’ test,”

and observing that “the wording of section 550(a) is not so plain 

as to compel, or persuasively argue for, the principle that every 

conduit is an initial transferee”); id. at 56 (“The statutory term is 

‘transferee’—not ‘recipient’—and is not self-defining. Numerous 

courts have recognized the distinction between the initial 

recipient—that is, the first entity to touch the disputed funds—

and the initial transferee under section 550.”); Bowers v. Atlanta 

Motor Speedway, Inc. (In re Southeast Hotel Props. Ltd.), 99 F.3d 151, 

155–56 (4th Cir. 1996) (reviewing “the decisions of courts that 

have required legal dominion and control over the funds to 

constitute an ‘initial transferee’ and the decisions of courts that 

have required merely physical dominion and control” and 

adopting “the dominion and control test as set forth in Bonded,”

i.e., “a person or entity must have exercised legal dominion and 

control over the property” to be an initial transferee).

¶20 In Security First National Bank v. Brunson (In re Coutee), 984 

F.2d 138 (5th Cir. 1993), the Fifth Circuit Court of Appeals 

applied a “dominion or control test” to circumstances similar to 

this case. Id. at 141. In that case, the debtors received a check in 

satisfaction of a judgment and endorsed it to a law firm. Id. at 
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140. The law firm then deposited the funds into its trust account, 

claimed its legal fees out of the funds, returned a portion of the 

award to the debtors, and transferred the remaining funds to a 

bank in satisfaction of the debtors’ loan. Id. In concluding that 

the bank, not the law firm, was the initial transferee of the funds 

under section 550(a)(1) of the Bankruptcy Code, the Fifth Circuit 

explained:

Adopting the dominion or control test, we find that 

the bank, not the [law] firm, was the initial 

transferee of the funds. As the district court noted, 

the funds were deposited into the firm’s trust 

account, as opposed to its business account, 

indicating that they were held merely in a fiduciary 

capacity for the [debtors]. Moreover, the 

negotiations regarding the firm’s legal fees, which 

occurred after it received the funds, indicate that 

the firm was not free at that time simply to keep 

the money. The only control exercised over the 

funds was the control delegated to the law firm by 

the [debtors]. As the bankruptcy court noted, “[t]he 

law firm, under Louisiana law, was required to 

keep the client’s funds in an identifiable trust 

account in order to avoid the charge of 

conversion.”

. . . The firm’s role with respect to the received 

money was to accept the funds in settlement of its 

client’s case, deposit the money in trust, keep as 

fees only what the [debtors] agreed to, and pay the 

rest to the bank on behalf of the [debtors] in 

satisfaction of their loan. The law firm had no legal 

right to put the funds to its own use, and thus 

lacked the requisite dominion required to be the 

initial transferee.

Id. at 141 (citations omitted).
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¶21 Turning to the Act, the analog of subsection 25-6-9(2) of 

the Act is contained in section 8(b) of the Uniform Fraudulent 

Transfer Act (the Uniform Act).

11 See Uniform 

Fraudulent Transfer Act § 8(b) (Nat’l Conference of Comm’rs on

Unif. State Laws 1984), http://www.uniformlaws.org/

shared/docs/fraudulent%20transfer/UFTA_Final_1984.pdf [https

://perma.cc/M9JM-4BVG]. As the district court correctly noted, 

“[t]he drafter’s comments to the Uniform Act give little insight 

into what they intended ‘transferee’ to mean.” Indeed, the

comment from the Uniform Act relating to section 8(b) simply 

states, “Subsection (b) is derived from § 550(a) of the Bankruptcy 

Code. The value of the asset transferred is limited to the value of 

the levyable interest of the transferor, exclusive of any interest 

encumbered by a valid lien.” Uniform Fraudulent Transfer Act 

§ 8(b) cmt. 2 (emphasis added). See generally Carlie v. Morgan, 922 

P.2d 1, 7 (Utah 1996) (Howe, J., concurring) (“[C]omments by the 

drafters of uniform acts are not written into the statute when 

 

11. The Uniform Fraudulent Transfer Act is now titled the 

Uniform Voidable Transactions Act (UVTA). See http://www.uni

formlaws.org/Act.aspx?title=Voidable%20Transactions%20Act%

20Amendments%20(2014)%20-%20Formerly%20Fraudulent%20

Transfer%20Act [https://perma.cc/L7R4-FBHK]. The Uniform 

Act was amended in 2014 to “address a small number of 

narrowly-defined issues.” Id. The retitling was not motivated by 

the “relatively minor” 2014 amendments, but because “the word 

‘Fraudulent’ in the original title, though sanctioned by 

historical usage, was a misleading description of the [Uniform] 

Act as it was originally written. Fraud is not, and never has been, 

a necessary element of a claim for relief under the [Uniform] 

Act.” Uniform Voidable Transactions Act § 15 cmt. 1 

(Nat’l Conference of Comm’rs on Unif. State Laws

2014), http://www.uniformlaws.org/shared/docs/Fraudulent

%20Transfer/2014_AUVTA_Final%20Act_2016mar8.pdf [https://

perma.cc/YV7Y-YWB3]. The amended UVTA does not provide 

any further guidance on the primary issue in this case—the 

meaning of “first transferee.”
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Utah adopts a version of a uniform act but are nevertheless 

considered relevant when seeking legislative intent.”); Schurtz v. 

BMW of North Am., Inc., 814 P.2d 1108, 1113 (Utah 1991) (stating 

that “the comments of the drafters of the Uniform Commercial 

Code” provide “the only thing that could be described as 

legislative history”).

¶22 In apparent recognition of the fact that subsection 8(b) of 

the Uniform Act was derived from section 550(a) of the 

Bankruptcy Code, some state courts have relied on the dominion 

or control tests articulated by the federal circuit courts in 

interpreting the “first transferee” provision of the Uniform Act. 

For example, in Newsome v. Charter Bank Colonial, 940 S.W.2d 157 

(Tex. App. 1996), the Texas Fourteenth Court of Appeals noted 

that “[n]either the former nor current fraudulent transfer statutes 

defined a ‘transferee.’” Id. at 165. Recognizing the similarities 

between the Uniform Act and the Bankruptcy Code, and that the 

Fifth Circuit Court of Appeals has “defined a transferee as a 

party who has legal dominion or control over the funds; that is, 

the right to put the money to one’s own use,” the court applied a

“dominion or control” test. Id. at 165–66 (citing In re Coutee, 984 

F.2d at 141). The court then concluded that a bank that was 

“simply complying with its depositors’ instructions to pay” a 

doctor “in accordance with applicable law and prudent banking 

standards” was not a transferee because the bank “did not 

exercise ‘dominion or control’ over the[] funds.” Id. at 166 

(citation omitted).

¶23 In PHI Financial Services, Inc. v. Johnston Law Office, PC, 

2016 ND 20, 874 N.W.2d 910, a North Dakota case with facts

similar to the case before this court, the debtors deposited funds 

into a law firm’s trust account via two transactions. Id. ¶ 5. The 

first check was for the law firm’s attorney fees. Id. The second 

check was sent to the law firm with instructions to forward the 

money to the father of one of the debtors. Id. The law firm 

transferred the requested amount from its trust account to the 

father and retained the remaining funds for legal fees. Id. The 

debtors’ creditors brought suit against the law firm, alleging 
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theories of conversion and fraudulent transfer. Id. ¶ 6. After a 

bench trial, the district court found that the transfer to the father 

was fraudulent and that the creditors were entitled to recover 

the amount of the transfer from the law firm. Id. The law firm 

appealed, arguing that the district court erred in voiding the 

transfer from its trust account to the father at the direction of the 

debtors. Id. ¶ 11.

¶24 On appeal, the Supreme Court of North Dakota observed 

that section 8(b) of the Uniform Act was derived from section 

550(a) of the Bankruptcy Code and concluded that “the ‘mere 

conduit’ cases decided under the Bankruptcy Code [were] 

helpful in analyzing the issue” in the case. Id. ¶ 14. The court 

noted that it was undisputed that the funds at issue were placed 

in the law firm’s trust account and that pursuant to the North 

Dakota Rules of Professional Conduct, “[c]lient funds must be 

held in a trust account to ensure their safekeeping from loss and 

to maintain ready availability to the client upon termination of 

the representation” and that “[a]ll property that is the property 

of clients . . . must be kept separate from the lawyer’s business 

and personal property.” Id. ¶ 15 (citations and internal quotation 

marks omitted). The court further observed that “[a] law firm is 

not free to put monies deposited in a client trust account to its 

own use.” Id. Applying the “mere conduit” rule, the court 

concluded that because the law firm “held this portion of the 

funds ‘only for the purpose of fulfilling an instruction to make 

the funds available to someone else,’” the father, not the law 

firm, was the “first transferee” under North Dakota’s fraudulent 

transfer statute. Id. ¶ 17 (quoting In re Coutee, 984 F.2d at 141). 

Thus, the supreme court concluded that the district court had 

erred as a matter of law in holding the law firm liable for the 

transfer to the father. Id.

¶25 We find the reasoning of the federal and state courts 

applying a dominion or control test to be both persuasive and 

consistent with the Act’s text and history. See generally Wing v. 

Harrison, 2004 WL 966298, at *3–5 (D. Utah Apr. 29, 2004) 

(observing that “the Bankruptcy Code was the model for the 
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provision of Utah’s Fraudulent Transfer Act that distinguishes 

between initial and subsequent transferees” and that “[t]he focus 

of the analysis [under the Act] is whether a party exercised 

dominion and control over the transferred funds”). We therefore 

apply the dominion or control test to determine whether Law 

Firm was the first transferee of the $50,000 under the Act, i.e., we 

examine whether Law Firm exercised legal dominion and 

control over the funds.

12 See id. We conclude that Law Firm was 

not the first transferee of the $50,000.

B. Law Firm was not the first transferee of the $50,000

¶26 In Utah, money belonging to a client or third party must 

be placed in a trust account. Utah R. Jud. Admin. 14-1001(a) (“A 

lawyer or law firm shall create and maintain an interest or 

dividend-bearing account for client funds (‘IOLTA account’). All 

client funds shall be placed into this account except those funds 

which can earn net income for the client in excess of the costs to 

secure such income . . . .” (emphasis added)). Pursuant to rule 

1.15 of the Utah Rules of Professional Conduct, “[a] lawyer shall 

hold property of clients or third persons that is in a lawyer’s 

possession in connection with a representation separate from the 

lawyer’s own property.” Utah R. Prof’l Cond. 1.15(a); id. R. 1.15 

cmt. 1 (“All property which is the property of clients or third 

persons . . . must be kept separate from the lawyer’s business 

and personal property and, if monies, in one or more trust 

accounts.”). In addition, “[a] lawyer should hold property of 

others with the care required of a professional fiduciary.” Id. 

R. 1.15 cmt. 1. Simply put, “[a] law firm is not free to put monies 

deposited in a client trust account to its own use.” PHI Fin. 

Services, 2016 ND 20, ¶ 15; see also, e.g., In re Discipline of Ince, 957 

P.2d 1233, 1234–35, 1239 (Utah 1998) (concluding that a lawyer 

“must be disbarred” where, among other things, he 

 

12. For purposes of this decision, any distinctions which may 

exist between the dominion test and the control test do not affect 

our conclusion that Law Firm was not the first transferee.
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“misappropriate[ed] law firm and client funds for his own use 

and benefit”).

¶27 Here, it is undisputed that Debtors were Law Firm’s 

clients and that the $50,000 was placed in Law Firm’s trust

account not its business account, indicating that Law Firm held 

the $50,000 in a fiduciary capacity for Debtors. Thus, based on 

Law Firm’s ethical obligations with respect to funds placed in its 

trust account, we conclude that Law Firm did not have the 

requisite legal dominion (or control) over the $50,000, because 

Law Firm “had no legal right to put the funds to its own use.” 

See In re Coutee, 984 F.2d 138, 141 (5th Cir. 1993). Consequently, 

Law Firm “lacked the requisite dominion” required to be the 

first transferee of the funds under subsection 25-6-9(2) of the Act. 

See id. And because Law Firm was not the first transferee of the 

$50,000, “there was no transfer giving rise to liability” on the 

part of Law Firm. See Newsome v. Charter Bank Colonial, 940 

S.W.2d 157, 166 (Tex. App. 1996).

13

¶28 Our conclusion is bolstered by the definition of “transfer” 

in the Act. Under the Act, a transfer is defined as “every mode, 

direct or indirect, absolute or conditional, or voluntary or 

involuntary, of disposing of or parting with an asset or an 

interest in an asset, and includes payment of money, release, 

lease, and creation of a lien or other encumbrance.”14 Utah Code 

Ann. § 25-6-2(12) (LexisNexis 2013). Here, Debtors’ actions did 

not effectuate a transfer within the meaning of section 25-6-

2(12)—even after the $50,000 was deposited in Law Firm’s trust

 

13. Our decision in no way excuses or condones Debtors’ 

deliberate disregard for the 2009 judgment. Nor does our 

decision free Debtors or Appellees from any potential liability 

arising under common-law fraud or related legal theories.

14. The Act’s definition of “transfer” is substantially similar to 

the Bankruptcy Code’s definition. Compare Utah Code Ann. § 25-

6-2(12), with 11 U.S.C. § 101(54) (2012).
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account, Debtors retained their interest in, and legal control of, 

the $50,000. See, e.g., Bakwin v. Mardirosian, 6 N.E.3d 1078, 1089 

(Mass. 2014) (concluding that no transfer was made under 

Massachusetts’s version of the Uniform Act where there was no 

evidence that the debtor “relinquished control of [a savings 

account], or changed title in the account at any point” and his

“right to the proceeds of the . . . savings account never 

changed”). As such, we are persuaded that the $50,000 was not 

transferred to Law Firm as that term is defined in the Act.15

¶29 Because we have applied the dominion or control test, 

Creditors urge us to go one step further and “also adopt the 

Harwell test.” See Martinez v. Hutton (In re Harwell), 628 F.3d 1312 

(11th Cir. 2010). In Harwell, the Eleventh Circuit Court of 

Appeals clarified that “good faith is a requirement under [the 

Eleventh] Circuit’s mere conduit or control test.”16 Id. at 1323

& n.10. See generally Redmond v. NCMIC Fin. Corp. (In re Brooke 

Corp.), 568 B.R. 378, 421 (Bankr. D. Kan. 2017) (“Harwell is a 

refinement of the control test.”). The court first observed “that a 

 

15. We note that Creditors’ arguments on appeal only concern 

the $50,000 deposited into Law Firm’s trust account. Although 

Creditors briefly observe that Law Firm later “paid . . . itself” 

$2,745 from its trust account to its operating account at Debtors’ 

behest, Creditors do not assert that this action constituted a 

“transfer” under the Act or that Law Firm was the “first 

transferee” of the $2,745. Consequently, we need not consider 

whether the $2,745 transfer (assuming it can be called one) to 

Law Firm’s operating account is voidable under section 25-6-9 of 

the Act.

16. Appellees correctly observe that “Harwell has received almost 

no attention outside of the Eleventh Circuit, being cited by a 

handful of . . . Bankruptcy Courts” outside of the Eleventh 

Circuit. Indeed, our own research indicates that no federal 

circuit court outside of the Eleventh Circuit has addressed, much 

less accepted or rejected, the control test as set forth in Harwell.
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literal or rigid interpretation of the statutory term ‘initial 

transferee’ in § 550(a) [of the Bankruptcy Code] means that the 

first recipient of the debtor’s fraudulently-transferred funds is an 

‘initial transferee.’” In re Harwell, 628 F.3d at 1322; id. at 1323–24

(noting that the defendant was the initial recipient of the 

debtor’s funds and concluding that he was therefore the initial 

transferee of the funds under section 550(a)). The court then 

noted that over time, it had “carved out an equitable exception 

to the literal statutory language of ‘initial transferee,’ known as 

the mere conduit or control test, for initial recipients who are 

‘mere conduits’ with no control over the fraudulentlytransferred funds.” Id. at 1322. The court further explained that 

“as part of the mere conduit or control test, this Court considers 

whether the intermediary acts without bad faith, and is simply 

an innocent participant to the fraudulent transfer.” Id. at 1323 

(citation and internal quotation marks omitted). In sum, under 

the Eleventh Circuit’s mere conduit or control test as articulated

in Harwell,

initial recipients of the debtor’s fraudulentlytransferred funds who seek to take advantage of 

equitable exceptions to § 550(a)(1)’s statutory 

language must establish (1) that they did not have 

control over the assets received, i.e., that they 

merely served as a conduit for the assets that were 

under the control of the debtor-transferor and

(2) that they acted in good faith and as an innocent 

participant in the fraudulent transfer.

Id. But see id. at 1324 (“In the vast majority of cases, a client’s 

settlement funds transferred in and out of a lawyer’s trust 

account will be just like bank transfers, and lawyers as 

intermediaries will be entitled to mere conduit status because 

they lack control over the funds.”).

¶30 We decline to adopt the good faith requirement from 

Harwell. To begin with, Creditors concede that under both the 
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Act and the Bankruptcy Code, true “initial” or “first” transferees 

are “not given a good faith exception.” Moreover, Creditors

spend the majority of their briefing on this issue explaining why 

“[t]his court should not adopt the conduit and control test,” and

they maintain that adopting a good-faith test, like that in 

Harwell, “is not consistent with the scheme of the [Act].” 

Creditors then assert that if we adopt the dominion or control 

test, as we do, we should also adopt the reasoning from Harwell. 

However, having previously argued only against Harwell, 

Creditors fail to then explain or provide any compelling reason 

why we should adopt Harwell separately. In light of that failure, 

we conclude that Creditors have not carried their burden of 

persuasion on appeal on this issue, and we decline to address it 

further. See Utah R. App. P. 24(a)(8).

¶31 In sum, we conclude that Law Firm was not a “first 

transferee” under the Act, because Law Firm held the $50,000 in 

its trust account in a fiduciary capacity and did not have legal 

dominion or control over the funds. Accordingly, the district 

court did not err in granting Appellees’ motion for summary 

judgment on this issue.

II. 

¶32 Creditors next contend that “[v]iolation of the [Act] may 

serve as a predicate act to support a claim for civil conspiracy.”

¶33 To establish a claim of civil conspiracy, five elements 

must be shown: “‘(1) a combination of two or more persons, 

(2) an object to be accomplished, (3) a meeting of the minds on 

the object or course of action, (4) one or more unlawful, overt 

acts, and (5) damages as a proximate result thereof.’” Peterson v. 

Delta Air Lines, Inc., 2002 UT App 56, ¶ 12, 42 P.3d 1253 (quoting 

Alta Indus. Ltd. v. Hurst, 846 P.2d 1282, 1290 n.17 (Utah 1993)). 

“The claim of civil conspiracy require[s], as one of [its] essential 

elements, an underlying tort.” Puttuck v. Gendron, 2008 UT App 

362, ¶ 21, 199 P.3d 971 (alterations in original) (citation and 

internal quotation marks omitted). “Thus, in order to sufficiently 
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plead a claim for civil conspiracy, a plaintiff is obligated to 

adequately plead the existence of such a tort.” Id. (citation and 

internal quotation marks omitted). “Where plaintiffs have not 

adequately pleaded any of the basic torts they allege . . . 

dismissal of their civil conspiracy claim is appropriate.” Id. 

(omission in original) (citation and internal quotation marks 

omitted).

¶34 Creditors assert that only “[t]wo cases have used the

word ‘tort,’ rather than the term ‘one or more unlawful, overt 

acts.’” (Citing Puttuck, 2008 UT App 362, ¶ 21, and Coroles v. 

Sabey, 2003 UT App 339, ¶ 36, 79 P.3d 974.) According to 

Creditors, even though this distinction has not been developed 

by Utah courts, “[i]n reality, these words do not describe 

different predicate acts,” and “[c]onspiring to violate the [Act] is 

a sufficient predicate act to support a claim of civil conspiracy.”

Appellees contend that “the only underlying conduct alleged to 

support [Creditors’] conspiracy claim is that [Law Firm] engaged 

in transfers that violated the [Act]” and that “[t]his alleged 

conduct is insufficient to support a civil conspiracy claim 

because it is not a valid tort claim against [Law Firm].” 

Alternatively, Appellees assert that because “[Law Firm] is not a 

transferee under the [Act], . . . the fraudulent conveyance claims 

against [Law Firm] fail as a matter of law”; therefore, “Creditors 

have failed as a matter of law to state any valid underlying claim 

as to [Law Firm] upon which to predicate their civil conspiracy 

claim.” We agree with Appellees’ alternative argument.

¶35 Creditors’ conspiracy claim is predicated on the existence 

of a fraudulent transfer of the $50,000 from Debtors to Law Firm.

In the civil conspiracy section of their complaint, Creditors 

alleged that Debtors and Appellees “conspired with each other 

to carry out the means to effectuate a fraudulent transfer” and

that “[t]he transfer of the $50,000 to [Law Firm] was in violation 

of the [Act].” Even assuming, without deciding, that there is no 

requirement for an underlying “tort” to establish a claim for civil 

conspiracy and that a violation of the Act could serve as the 

unlawful, overt act necessary to support a civil conspiracy claim, 
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Creditors have not established that a violation of the Act 

occurred in this case.

17 See generally National Loan Inv’rs, LP v. 

Givens, 952 P.2d 1067, 1070 (Utah 1998) (“To state a claim for 

relief [under the Act], a plaintiff must allege that he or she is a 

creditor who has a right to payment from the defendant and that 

the defendant has made transfers of property or incurred 

obligations that meet the criteria of sections 25-5-5 and -6.”). As 

previously discussed, there was no transfer of legal dominion or 

control of the $50,000 from Debtors to Law Firm, and thus Law 

Firm was not the first transferee of the funds. As such, Creditors’ 

fraudulent transfer claims against Law Firm fail and cannot 

serve as the basis for Creditors’ civil conspiracy claim as they 

describe it. See generally GATX Corp. v. Addington, 879 F. Supp. 2d 

633, 650 (E.D. Ky. 2012) (concluding that “even if Kentucky 

recognized a claim of conspiring to effect a fraudulent 

conveyance,” “a nontransferee cannot be directly liable for a 

fraudulent conveyance and, thus, cannot engage in [the] 

underlying unlawful act” necessary to support a claim of civil 

conspiracy).

¶36 In the same section of their complaint, Creditors also 

alleged that Debtors’ “failure to disclose the $50,000 when asked 

about their assets during the supplemental hearing, the transfer 

of the $50,000 to [Law Firm], and the subsequent transfer of the 

$50,000 from [Law Firm] to itself and various other third parties 

were all unlawful, overt acts.” However, the complaint does not 

specify how those acts were “unlawful.” Creditors did not 

specifically allege that Law Firm’s “subsequent transfer” of a 

portion of the $50,000 from its trust account to its operating 

account constituted a violation of the Act or that Law Firm’s 

“subsequent transfer[s]” to itself and other third parties 

constituted, for example, conspiracy to commit common-law 

fraud. See generally Utah R. Civ. P. 9(c) (“In alleging fraud . . . , a 

party must state with particularity the circumstances 

 

17. Creditors did not assert any common-law fraud or aiding 

and abetting claims.
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20150051-CA 23 2018 UT App 31

constituting fraud . . . .”). Moreover, as we previously observed, 

supra note 15, on appeal, Creditors only briefly mention the fact 

that Law Firm ultimately paid itself $2,745 from the $50,000, and 

Creditors do not assert that this action constituted a “transfer”

under the Act or that Law Firm was the “first transferee” of the 

$2,745.

¶37 Accordingly, we agree with Appellees that Creditors have 

failed “to state any valid underlying claim as to [Law Firm] upon 

which to predicate their civil conspiracy claim.” We therefore 

conclude that the district court did not err in granting Appellees’ 

motion for summary judgment on Creditors’ civil conspiracy 

claim.

CONCLUSION

¶38 The district court did not err in granting Appellees’ 

motions for summary judgment. Law Firm was not the first 

transferee of the $50,000, because it lacked the requisite legal 

dominion or control required to be the first transferee of the 

money. In addition, because Creditors have not established that 

a violation of the Act occurred as between Debtors and Law 

Firm regarding the $50,000, Creditors’ civil conspiracy claim 

must fail. We affirm the judgment of the district court.