IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

TRUSTCO BANK, a federal savings bank, ) and ORE PROPERTY TWO, INC., a ) Corporation, )

Plaintiffs, ) ) v. ) C.A. No. 8374

- VCP ) SUSAN M. MATHEWS, RBC TRUST ) COMPANY ( DELAWARE) LIMITED, a ) Delaware Corporation, solely in its capacity as ) trustee, THE SUSAN M. MATHEWS ) DELAWARE TRUST I, a Delaware Trust, ) THE SUSAN M. MATHEWS DELAWARE ) TRUST II, a Delaware trust, THE SUSAN M. ) MATHEWS DELAWARE TRUST III, a ) Delaware trust, COLIN R. MATHEWS, ) BRENDAN R. MATHEWS, DEVIN R. ) MATHEWS, KIERNAN R. MATHEWS, and ) DOES I through X, ) ) Defendants. )

MEMORANDUM OPINION Submitted: September 19, 2014 Decided: January 22, 2015 William J. Burnett, Esq., FLASTER/GREENBERG, P.C., Wilmington, Delaware; Harry J . Giacometti, Esq., Alexis Arena, Esq., FLASTER/GREENBERG, P.C., Philadelphia, Pennsylvania; Attorneys for Plaintiffs. Robert A. Penza, Esq., Christopher M. Coggins, Esq., POLSINELLI PC, Wilming ton, Delaware; Attorneys for Defen d ants Susan M. Mathews, Colin R. Mathews, Brendan R. Mathews, Devin R. Mathews , and Kiernan R. Mathews. William M. Kelleher, Esq., GORDON, FOURNARIS & MAMMARELLA, P.A., Wilmington, Delaware; Attorneys for the Trust Defend ants

. PARSONS, Vice Chancellor.1

This action involves alleged ly fraudulent transfers. The parties dispute which state‟s law and, more importantly , which state‟s statute of limitations applies. The plaintiffs assert that New York‟s six

- year or two

- years - from

- discovery statute of limitations governs the plaintiffs‟ claims. The defendants argue that either Delaware or
Florida law control s and that most of the plaintiffs ‟ claims are barred by the identical
four

- year or one - year - from

- notice statute s of limitations adopted by both of those states. Before the Court is the defendants‟ motion for partial summary judgment on the statute of
limit ations issue. For the reasons that follow, I conclude that New York‟s statute of limitations does not apply to this case and grant the defendants‟ motion for partial summary judgment. Even if New York law did apply, however, the defendants still
would b e entitled to summary judgment. T he plaintiffs‟ primary fraudulent transfer claims, therefore, are time barred.
I. BACKGROUND 1
A. The Parties Plaintiff TrustCo Bank (“TrustCo”) is a federal savings bank with a principal place
of business in Glenville, New York. TrustCo provided a construction loan to StoreSmart of North Ft. Pierce, LLC (“StoreSmart”), a Florida limited liability company.

1 T he uncontested facts recited herein are drawn from the pleadings. All other facts are derived from the documentary record submitted by the parties. I confine the facts only to what is necessary to understand and resolve this motion for partial summary judgment.2

Plaintiff ORE Property Two , Inc. (“ORE,” and together with TrustCo , “Plaintiffs”)
is a Florida corporation 2 and the assignee of TrustCo‟s rights, title, and interest in the
StoreSmart loan and related agreements

. Defendant Susan M. Mathews (“Ms. Mathews”) has homes in both Cambridge, Massachusetts and Fort Pierce, Florida, with Florida as her primary residence. Before 2009, M s. Mathews was a resident of New York

. 3 Ms. Mathews was a manager and member of StoreSmart and personally guaranteed the loan from TrustCo to StoreSmart. Defendants Colin R. Mathews, Brendan R. Mathews, Devin R. Mathews, and Kiernan R. Mathews ( collective ly the “Mathews Children,” and together with Ms. Mathews, the “Mathews Defendants”) are the purported beneficiaries of several trusts established by Ms. Mathews.
Defendants The Susan M. Mathews Delaware Trust I (“Trust I”) , The Susan M.
Mathews Delaware Trust II (“Trust II”) , and The Susan M. Mathews Delaware Trust III ( “Trust III,” and collectively, the “Three Trusts”) are Delaware trusts established on December 21, 2006. Ms. Mathews is the grantor of each of the Three Trusts. Defendant RBC Trust Compa ny (Delaware) Limited (“RBC,” and together with the Three Trusts, the “Trust D efendants”) is a Delaware corporation with its principal place of business in

2 The First Amended Verified Compla int (the “Complaint”) states only that ORE‟s principal place of business is in Florida. Records on the Florida Department of State website confirm that ORE is a Florida corporation. I take judicial notice of this fact pursuant to D.R.E. 201(b)(2).

3 M athews Defs.‟ Opp. Br. to Pls.‟ Renewed Mot. for a Prelim. Inj. (“Mathews Defs.‟ PI Opp.”), Ex. E (“Mathews Dep.”) 8

- 9.3

Wilmington, Delaware. RBC is the trustee of each of the Three Trusts and is named as a
defendant so lely in that capacity. Doe Defendants I through X (the “Doe Defendants”) are unidentified persons who allegedly received transfers of property from Ms. Mathews or an entity in which she held an interest. The Doe Defendants, the Mathews Defendants, and t he Trust Defendants collectively comprise the “Defendants” in this action.
B. Pertinent Facts TrustCo lent $9,300,000 to StoreSmart in July 2006 for the purpose of constructing a self

- storage facilit y in St. Lucie, Florida (the “StoreSmart Loan”). The
StoreS mart Loan was secured by StoreSmart‟s real estate and other assets. Ms. Mathews
also executed a personal guaranty of the StoreSmart Loan. That loan was modified twice, first in June 2008 and again in March 2009. StoreSmart defaulted in April 2011. On
A pril 25, 2011, TrustCo filed a foreclosure action against StoreSmart and Ms. Mathews
in Florida state court . That case resulted in a judgment on July 12, 2011, in favor of TrustCo of roughly $8.2 million plus post

- judgment interest (the “Foreclosure Judgm ent”). TrustCo assigned its rights, title, and interest in the StoreSmart Loan , including the related security agreements, and the Foreclosure Judgment to ORE in August 2012. Plaintiffs , StoreSmart, and Ms. Mathews agreed to entry of a deficiency judgmen t of about $2.3 million and submitted a stipulation to that effect to the Florida

co urt in February 2013, which the court approved (the “Deficiency Judgment”). Plaintiffs allege that various transfers to the Three Trusts constituted fraudulent
transfers. The parties dispute whether the initial transfers that funded the Three Trusts4

were fraudulent at all. Plaintiffs, as evidenced by this lawsuit, assert that the transfers

were effected to place Ms. Mathews‟ s assets out of their reach. Defendants conten d that
Ms. Mathews created the Three Trusts as part of her estate planning, which was underway before she guaranteed the StoreSmart Loan. For purposes of the pending motion for summary judgment, however, I need not resolve this dispute. This
Memorandum O pinion focuses on Defendants‟ statute of limitations defense and, in that regard, I assume, without deciding, that the challenged transfers were fraudulent

. Plaintiffs‟ Complaint challenges s everal transfers. The most important of these
seem to be the t ransfers of ITRAX stock. Ms. Mathews co

- founded a company called Corporat e Health Dimensions (“CHD”). C H D grew substantially and by 2000 had about 700 employees. 4 Ms. Mathews retired from C H D in 1999, but remained on the board of
directors. She retaine d her C H D stock, which apparently was a significant, if not the
pr imary, source of her wealth. C H D was purchased by a company called ITRAX in 2004. Walgreens later purchased ITRAX in 2008. 5 In two sets of transfers that took place on January 9 and 22, 2 007, Ms. Mathews transferred her ITRAX stock to Trust II
and Trust III (generally, the “ ITRAX Transfers ”)

. 6 Ms. Mathews also held an interest in Terra Opt ima Ventures, LLC (“TOV”).
TOV was an investment vehicle for a business owned by Colin R. Mathews. Ms.

4 Id. at 31

- 33.

5 Id. at 38.

6 Mathews Defs.‟ PI Opp., Exs. 8

- 9.5

Mathews sold her interest in TOV to one of the Three Trusts in or about March 2010 for $63,000 (generally, the “TOV Transfer”). 7 Because the TOV interest had been valued at

one - half million dollars only about a year earlier , Plaintiffs contend that t he TOV s ale
was a fraudulent transfer. 8 Defendants contend that they have produced all relevant
information and that the ITRAX Transfers and the TOV Transfer constitute the entire
universe of relevant transfers. The parties devoted the lion‟s share of t he ir briefing to the ITRAX Transfers

. T hey vigorously dispute when Plaintiffs had notice of those transfers . Accordingly, I
focus on th at issue as well. Plaintiffs maintain that they did not have legally sufficient
notice of the ITRAX transfers

— such tha t the statute of limitations would begin to run

— until July 19, 2011. 9 Defendants contend that Plaintiffs had notice at numerous time s before that date. In particular, Defendants contend that the July 19, 2011 date is a litigation

- contrived fabrication be cause Plaintiffs responded to Defendants‟

7 Mathews Dep. 140

- 43.

8 Plaintiffs assert that additional disco very likely will reveal other fraudulent transfers. At this point, however, the specifically identified transfers are the ITRAX Transfers and the TOV Transfer. Defendants do not contend that Plaintiffs‟ challenge to the TOV Transfer is untimely.

9 Pls.‟ Supplemental Br. in Supp. of Mot. for Prelim. Inj. (“Pls.‟ Suppl. PI Br.”) 20 (“Until approximately July 19, 2011, TrustCo did not have sufficient documented facts from which it could have reasonably concluded that that [sic] the Transfers of ITRAX stock to the Delaware Trusts were actually or constructively fraudulent.”).6

interrogatories by listing June 2010 as the earliest date that they learned that Ms. Mathews “had transferred funds to „Delaware Trusts

. ‟” 10
Defendants also note several significantly earlier dates when Plaintiffs allegedly
received information about the ITRAX Transfers that should have put them on notice

. In connection with the discussions leading up to the first modification of the StoreSmart Loan, Ms. Mathews submitted a net worth statement to TrustCo on March 25, 2008 , that reported her net worth at $11,773,446. On April 11, 2008, Ms. Mathews supplied a
revised net worth statement to TrustCo indicating her net worth to be $5,578,857. That revised statement included the annotation: “I am the discretionary bene ficiary of each of the 3 Delaware trusts that have been established as part of estate planning.” 11 As part of
the loan modification process , Ms. Mathews wrote in a May 6, 2008 email to Paul Steenburgh, a TrustCo A ssistant V ice P resident and one of TrustCo‟ s Rule 30(b)(6) deponents, that TrustCo had requested that she either “guarantee the loan with all 3 Delaware Trusts or put up another $1MM in collateral.” 12 At his deposition, Steenburgh recalled receiving this email and stated that Ms. Mathews‟s descript ion of Trustco‟s position was correct. 13 The final terms of the first modification did include an additional $1,000,000 in collateral, as well as several other conditions, such as opening a $250,000

10 Trust Defs.‟ Resp. to Pls.‟ Mot. for Prelim. Inj. (“Trust Defs.‟ PI Resp.”), Ex. C (“Pls.‟ Interrog. Resps.”) No. 25.

11 Mathews Defs.‟ PI Opp., Ex. 10 (net worth statements).

12 Id. , Ex. 13.

13 Id. , Ex. B (“Steenburgh Dep.”) 28

- 32.7

escrow account with TrustCo. 14 The first modification to the StoreSmart loan closed on June 27, 2008. The accompanying closing binder included a copy of Trust II‟s Trust Agreement. 15 Finally, a series of conversations between Ms. Mathews and Michelle Simmonds,
a TrustCo V ice P resident, occurred in May, June, a nd July 2010. Simmonds testified at her deposition that those conversations concerned transfers to Delaware trusts now
known to be the ITRAX Transfers , which Simmonds understood rendered Ms. Mathews
insolvent. 16 This testimony comports with Plaintiffs‟ in terrogatory response that they were aware of the transfers to the Three Trusts in June 2010. In sum, Defendants contend that Plaintiffs had: (1) inquiry notice in March and April of 2008; (2) inquiry notice on May 6, 2008; (3) inquiry notice on June 27, 2 008; and (4) both inquiry notice and actual
notice of the alleged fraudulent ITRAX Transfers in May 2010.
C. Procedural History Plaintiffs filed their initial complaint on March 1, 2013, along with a motion to expedite and a motion for a preliminary injunct ion. That complaint specifically alleged
violations of Delawar e‟s fraudulent transfer statute

. 17 On May 28, 2013, Plaintiffs

14 Id. , Ex. 17.

15 Id. , Ex. 16, Item 15.

16 Mathews Defs.‟ PI Opp., Ex. C (“Simmonds Dep.”) 15

- 16.

17 6 Del. C. §§ 1304

- 05.8

amended their complaint to remove all referen ces to substantive Delaware law. That pleading is the operative Complaint . Defendan ts answered on June 7 , 2013

. In an effort to halt all distributions from the Three Trusts, Plaintiffs renewed their motion for a preliminary injunction (“PI”) on July 2, 2013

. Briefing on that motion proceeded in a staccato fashion, with the parties mak ing r elatively short initial submissions followed by supplemental briefing. 18 I heard argument on the PI motion on September 27 , 2013 (the “Argument”). The parties later stipulated to a limited PI , which required that any TOV shares in the possession of t he Three Trusts not be disposed of,
and I issued an oral ruling on December 31 , 2013 , denying the other aspects of Plaintiffs‟
PI motion (the “December Ruling”)

. During briefing on the PI, it became clear that the statute of limitations issue likely
woul d be outcome determinative as to significant portions of Plaintiffs‟ claims in this

case. Not surprisingly, therefore, the parties devoted a large portion of the PI briefing to
that issue. 19 The parties frame the dispute as whether Plaintiffs‟ claims are subject to the
statute of limitations under Delaware law or New York law. After the Argument and at the Court‟s suggestion , Defendants requested that the Court treat their submissions on the

18 The briefing consisted of: (1) Plaintiffs‟ Opening Br. in Supp. of Their Renewed Mot. for a PI (“Pls.‟ Opening PI Br.”); (2) Trust Defs.‟ PI Resp.; (3) Pls.‟ Suppl. PI Br.; (4) Trust Defs.‟ Resp. to Pls.‟ Supplemental Br. in Supp. of Their Mot. for Prelim. Inj. (“Trust Defs.‟ Suppl. PI Resp.”); (5) Mathews Defs.‟ PI Opp.; and ( 6) Pls.‟ Reply in Supp. of Their Renewed Mot. for a Prelim. Inj. (“Pls.‟ PI Reply”).

19 Indeed, anticipating this problem, Plaintiffs included on the second page of their opening brief in support of a PI a half

- page footnote explaining why their claims w ere not time barred.9

PI as the equivalent of a motion for partial summary judgment on the statute of
limitations issue. Plaintiffs changed counsel immediately before the December Ruling and, in early 2014, the parties agreed to proceed on Defendants‟ motion as to the statute of limitations question. Following further limited discovery, t he parties filed another round of supplemental briefing on that motion. 20 On July 28, 2014, Plaintiffs moved to file still further supplemental briefing or, in the alternative, a supplemental pleading under Court of Chancery Rule 15(d). Defendants
oppose d this belated request , and I denied it on September 19.
II. STANDARDS OF REVIEW A. Summary Judgment

“ Summary judgment is granted if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment
as a matter of law. ” 21 When considering a motion for summary judgment, the evidence and the inferences drawn from the evidence are to be viewed in the light most f avorable to the nonmoving party. 22 Summary judgment will be denied when the legal question

20 The now

- summary judgment briefing consisted of: (7) Pls.‟ Opp. to Defs.‟ Mot. for Summ. J. (“Pls.‟ SJ Br.”); (8) Trust Defs.‟ Supplemental Memo. in Supp. of Summ. J. (“Trust Defs.‟ SJ Br.”); and (9) Mathews Defs.‟ Answering Supple mental Memo. in Supp. of Summ. J. (“Mathews Defs.‟ SJ Br.”).

21 Twin Bridges Ltd. P’ ship v. Draper , 2007 WL 2744609 , at *8 (Del. Ch. Sept. 14, 2007) (citing Ct. Ch. R. 56(c)).

22 Judah v. Del. Trust Co. , 378 A.2d 624, 632 (Del. 1977)

.10

presented needs to be assessed in the “more highly textured factual setting of a trial.” 23
The Court also “maintains the discretion to deny summary judgment if it de cides that a more thorough development of the record would clarify the law or its application.” 24

B. Laches v ersus Statute of Limitations The parties focused their briefing on the proper statute of limitations, which is not necessarily conclusive. The Court o f Chancery is a court of equity and follows the doctrine of laches. Laches is the equitable analog of the statute of limitations defense. Laches will prevent someone who slumbers on her rights and delays unreasonably in filing suit from being permitted t o prosecute her claims. “To prevail on a laches defense, a defendant must prove that: (1) the plaintiff had knowledge of his claim; (2) he delayed unreasonably in bringing that claim; and (3) the defendant suffered resulting prejudice.” 25 Generally, this Court will look to the analogous statute of limitations to determine whether a plaintiff‟s delay was unreasonable. As the Delaware Supreme Court has stated, “ Absent a tolling of the limitations period, a party‟ s failure to file within the analogous perio d of limitations will be given great weight in deciding whether the claims

23 Schick Inc. v. Amalga mated Clothing & Textile Workers Union , 533 A.2d 1235, 1239 n.3 (Del. Ch. 1987) (citing Kennedy v. Silas Mason Co. , 334 U.S. 249, 257 (1948)).

24 Tunnell v. Stokley , 2006 WL 452780, at *2 (Del. Ch. Feb. 15, 2006) (quoting Cooke v. Oolie, 2000 WL 710199, at *11 (Del. Ch. May 24, 2 000) )

. 25 Petroplast Petrofisa Plasticos S.A. v. Ameron Int’l Corp. , 2009 WL 3465984, at *14 (Del. Ch. Oct. 28, 2009).11

are barred by laches. ” 26 Indeed, a “filing after the expiration of the analogous limitations period is presumptively an unreasonable delay for purposes of laches.” 27 In this case,
P laintiffs presented no persuasive justification as to why the relevant statute of limitations period should not guide the laches analysis

. As such, and because I am unable to articulate any independent reason for concluding otherwise, 28 I find that the app licable
statute of limitations here should be determinative as to whether Plaintiffs delayed unreasonably in filing suit m o r e than six years after the allegedly fraudulent transfers took place. Even if another state‟s substantive law may govern the parties ‟ rights in a given case, the “general rule is that the forum state‟s statute of limitations applies.” 29 This is consistent with the general principle that the procedural law of the forum state (here , Delaware) usually applies. One exception to this rule ar is es when “the procedural law of the foreign state is „so inseparably interwoven with substantive rights as to render a modification of the foregoing rule necessary, lest a party be thereby deprived of his legal

26 Whittington v. Dragon Gp., L.L.C. , 991 A.2d 1, 9 (Del. 2009).

27 Levey v. Brownstone Asset Mgmt., LP , 76 A.3d 764, 769 (Del. 2013).

28 See IAC/InterActiveCorp v. O’Brien , 26 A.3d 174, 178 (Del. 2011) (listing factors indicative of “unusual conditions or extraordinary circumstances” when laches should not follow the statute of limitations, none of which are present here).

29 Furnari v. W

allpang, Inc. , 2014 WL 1678419, at *4 (Del. Super. Apr. 16, 2014); see also MPEG LA, L.L.C. v. Dell Global B.V. , 2013 WL 812489, at *3 (Del. Ch. Mar. 6, 2013).12

rights. ‟” 30 Thus, for example, in a case i nvolving a dispute over a Missouri insurance policy, the Delaware Superior Court concluded that Missouri‟s law regarding the allocation of the burden of proof

— a procedural issue

— in insurance coverage and exclusion disputes was so intertwined with the parti es‟ substantive rights as to trigger the exception. 31 This exception is inapplicable in this case, however. The statute of limitations for fraudulent transfers in New York is merely New York‟s general statute of limitations for fraud. Nor is there any ev idence that New York‟s statute of limitations for fraud claims has any special connection to that state‟s fraudulent transfer law, or that the two are so “inseparably interwoven” as to warrant an exception to the general rule of applying the forum state‟s procedural law. 32 Nevertheless, in this case, the general rule of following the forum state‟s relevant statute of limitations arguably may be modified by either Delaware‟s borrowing statute or Delaware‟s Qualified Dispositions in Trust Act , both of which a re discussed infra

. III. ANALYSIS Defendants see k partial summary judgment that Plaintiffs‟ claims for fraudulent transfer as to the ITRAX Transfers are barred by the relevant statute of limitations and

30 MPEG LA , 2013 WL 812489, at *3 (quoting Monsanto Co. v. Aetna Cas. & Sur. Co. , 1994 WL 317557 , at *4 (Del. Super. Apr. 15, 1994)).

31 Monsanto Co. , 1994 WL 317557, at *4 (“ Thi s Court has determined Missouri‟ s allocation of the burden of proof regarding coverage provisions and exclusions are designed primarily to affect the outcome of trial and a re intertwined with the parties‟ substantive rights. ”).

32 Id. (quoting Connell v. Del. Aircraft Indus. , 55 A.2d 637, 640 (Del. Super. 1947)).13

laches . Those transfers occurred in January 2007. An add itional disputed transfer, the TOV Transfer, occurred in March 2010

. 33 As such, regardless of which statute of
limita tions applies, the TOV Transfer does not appear to be barred by laches and I do not understand it to be subject to Defendants‟ motion for p artial summary judgment. Plaintiffs initially filed suit in March 2013. Plaintiffs also admit that they discovered the potentially fraudulent ITRAX Transfers by July 19, 2011. 34 Accordingly, this Memorandum Opinion first uses the July 19, 2011 date as th e undisputed, key date by
which Plaintiffs had discovered the fraudulent transfers under the various statutes of
limitations. Plaintiffs argue that New York‟s statute of limitations applies to their fraudulent transfer claims. Under New York law, an actio n to avoid a fraudulent transfer must be brought within “the greater of six years from the date the cause of action accrued or two years from the time the plaintiff or the person under whom the plaintiff claims discovered the fraud, or could with reasonabl e diligence have discovered it.” 35 Defendants contend that Delaware‟s statute of limitations governs. Under Delaware law, an action to avoid a fraudulent transfer must be brought “within 4 years after the transfer was made or the

33 It is not clear to what extent Plaintiffs also challenge additional transactions, other than the TOV Transfer, a s being fraudulent. Any additional transfers that Plaintiffs may challenge presumably occurred more recently and, therefore, would not be subject to a laches defense.

34 Pls.‟ Supp. PI Br. 8.

35 N.Y. C.P.L.R. § 213(8).14

obligation was incurred o r, if later, within 1 year after the transfer or obligation was or could reasonably have been discovered by the claimant.” 36 Plaintiffs filed their initial complaint more than six years after the January 2007
ITRAX Transfers occurred. Even under New York l aw, therefore , Plaintiffs must rely on having filed within two years of discovery of the allegedly fraud ulent transfer . Assuming
the undisputed July 19, 2011 discovery date

— which, considering Plaintiffs‟ earlier interrogatory responses stating a June 2010 date, is generous 37

— Plaintiffs ‟ filing of their
claims to avoid the ITRAX Transfers in March 2013 would be sufficiently timely to survive summary judgment if New York law governed

. 38 If Delaware‟s (or Florida‟s) statute of limitations applies, Plaintiffs‟ fraudulent transfer claims as to the ITRAX
Transfers are substantially outside the relevant limitations period , which would have run by July 19, 2012, at the latest

. 39

36 6 Del. C. § 1309.

37 See infr

a Section III.D.

38 Defendants, however, still would be able to prove that those claims are time barred if they could show that Plaintiffs could with reasonable diligence have discovered the fraud before March 2011. For the reasons discussed in Section I II.D, infra , I find that the unrebutted evidence adduced by Defendants in connection with their pending motion provides a separate and independent reason for granting that motion. That is, the record shows that Plaintiffs were on at least inquiry notice o f their claim that the ITRAX Transfers were fraudulent in or before July 2010.

39 F.S.A. § 726.110; 6 Del. C. § 1309.15 A. The Delaware Borrowing Statute The Delaware Legislature has altered the usual rule of app lying the forum state‟s
statute of limitations through 10 Del. C. § 8121 (the “Borrowing Statute”). That statute provides that: Where a cause of action arises outside of this State, an action

cannot be brought in a court of this State to enforce such cau se of action after the expiration of whichever is shorter, the time limited by the law of this State, or the time limited by the law of the state or country where the cause of action arose, for bringing an action upon such cause of action. Where the cause of action originally accrued in favor of a person who at the time of such accrual was a resident of this State, the time limited by the law of this State shall apply. 40 Plaintiffs argue that the ir cause s of action arose in New York. Because Plaintiffs sue d in Delaware, which has a shorter statute of limitations than New York , the clear and unambiguous language of the Borrowing Statute would seem to require application of Delaware‟s statute of limitations. T he analysis , however, is not so simple.
The Dela ware Supreme Court has held that there are certain situations in which the Borrowing Statute does not apply, notwithstanding the fact that the statute‟s literal language would seem to make it applicable. In Saudi Basic Industries Corp. v. Mobil
Yanbu Petr ochemical Co. , 41 Saudi Basic, a Saudi Arabian participant in a joint venture,
sued its venture partners in the Superior Court seeking a declaratory judgment that certain royalty payments were not overage charges under any contract between it and the other

40 10 Del. C. § 8121.

41 866 A.2d 1 (Del. 2005).16

j oint venturers. The joint venturers counterclaimed, sought damages, overcame a statute of limitations defense, and initially prevailed following a jury trial

. On appeal, Saudi Basic argued that the Delaware Borrowing Statute required application of Delaw are‟s
relevant thre e - year statute of limitations; under Saudi law, by contrast, the joint venturers‟ claims were “eternal” and thus subject to no limitations period whatsoever. The Supreme Court stated that applying the statute so literally to require use of Delaware‟s three

- year time limit would “subvert the statute‟s fundamental purpose by enabling [Saudi Basic] to prevail on a limitations defense that would never have been available to it had the overage charge claims been brought in the jurisdiction wh ere the cause of action arose, i.e. , Saudi Arabia.” 42 T he Supreme Court , therefore, declined to apply the Borrowing Statute in the circumstances before it . Plaintiffs urge a similar result
here.
The Saudi Basic decision appears to have engendered some un certainty as to when the Borrowing Statute applies, with some cases taking the view that the statute simply does not apply if there is no evidence of forum shopping. 43 Generally speaking, c ourts interpret statutes to give effect to the intent of the Legisl ature , but are not free to

42 Id. at 18

- 19 (footnote omitted).

43 See Furnari , 2014 WL 1678419, at *5 (“The Court is not satisfied that the Borrowing Statute applies here . . . . Importantly, Florida has longer limitations periods than Delaware, making the facts of this case the opposite of what the Borrowing Statute seeks to prevent; Plaintiff . . . only seeks jurisd iction over the parties.”).17

disregard the unambiguous language of a statute. 44 The Delaware courts, however, have recognized that exceptions can be crafted even to clear and unambiguous statutes when absurdity otherwise would result. 45 T he Supreme Court did not mention the absurdity principle in Saudi Basic . The language of that decision, however, suggests that the Court
concluded that literal application of the Borrowing Statute to the facts before it would render an absurd and unjust result. 46 Indeed, a l iteral application of the Borrowing
Statute in Saudi Basic would have led to the absurd outcome that a litigant, by forum shopping and filing in Delaware, could brandish as a sword to defeat claims that would
not be time barred where the claims arose a sta tute designed as a shield to prevent parties from having to defend against claims that otherwise would be time barred.
A gainst this backdrop, t he Saudi Basic case has been read as delivering a fairly narrow holding that the Borrowing Statute does n ot appl y when a litigant engages in the very practice the statute sought to prevent

— i.e. , forum shopping

— and would benefit

44 See Eliason v. Englehart , 733 A.2d 944, 946 (Del. 1999) (“ The goal of statutory construction is to determine and give eff ect to legislative intent. If a statute is unambiguous, there is no need for judicial interpretation, a nd the plain meaning of the statutory language controls. ”) (footnote omitted).

45 Reddy v. PMA Ins. Co. , 20 A.3d 1281, 1287

- 89 (Del. 2011) (describing the history of the “absurd result” principle and its acceptance and application in Delaware).

46 The Co urt employed language indicating that application of the Borrowing Statute would “undercut the overriding purpose of borrowing statutes,” Saudi Basic , 866 A.2d at 17, and “subvert the statute‟s fundamental purpose,” id. at 18. Those phrases comport with t he trial court‟s language, which was quoted in the Supreme Court‟s opinion, that applying the Borrowing Statute as Saudi Basic argued would “„basically turn the borrowing statute on its head for the purpose for which it was enacted.‟” Id. at 15.18

unjustly from the Borrowing Statute‟s application. 47 This reading recognizes that courts have a duty to apply statutes faithfully and that t he literal language of a statute will be set
aside only in extraordinary circumstances

. 48 Presumptively, therefore, the Borrowing
Statute does apply when a plaintiff‟s cause of action arose out of state , irrespective of whether the plaintiff is forum shopp ing

. 49 Thus, o nly on a set of facts similar to Saudi

47 Huffin gton v. T.C. Gp., LLC , 2012 WL 1415930, at *9 (Del. Super. Apr. 18, 2012) (“ Saudi Basic did not create a broad rule banning the use of the borrowing statute in all situations except for the „typical‟ scenario. Rather, it demonstrates the Delaware Supreme Court‟s unwillingness to allow the borrowing statute to be abused by a party shopping for a forum to avoid an adversary‟s counterclaims.”) (footnote omitted).

48 In this regard, I note that the Supreme Court in Saudi Basic provided as an independent justif

ication for its holding that, even if the Borrowing Statute did apply to the facts before it, Delaware‟s statute of limitations would have been tolled and the joint venturers‟ counterclaims still would not have been time barred. Saudi Basic , 866 A.2d at 1 8

- 19.

49 The United States District Court for the District of Delaware recently reached a similar conclusion in a case with facts analogous to this dispute: Unlike in Saudi Basic , application of the borrowing statute here does not unfairly prejudice a part y other than the party that chose to file suit in Delaware. While the situation here may not present the circumstances with which Delaware was most concerned when it adopted its borrowing statute

— as the Court is not confronted with a party that has brough t its case to Delaware for the purpose of benefiting from Delaware‟s longer statute of limitations

— it remains the fact that the literal language of Delaware‟s borrowing statute makes it applicable to the circumstances presented here. TL of Fla. v. Terex Corp. , 2014 WL 3362367, at *4 (D. Del. July 3, 2014). See also Cent. Mortg. Co. v. Morgan Stanley Capital Hldgs. LLC , 2012 WL 3201139, at *16 (Del. Ch. Aug. 7, 2012) (applying Borrowing Statute and using Delaware‟s statute of limitations over New York‟s l onger statute of limitations in a case with no forum shopping without citation to Saudi Basic ); In re Winstar Commc’ns , 435 B.R. 33, 44

- 46 (Bankr. D. Del. 2010) (same).19

Basic , where an absurd outcome or a result that subverts the Borrowing Statute‟s fundamental purpose otherwise would occu r, will a party be able to avoid the Borrowing
S tatute‟s unambiguous language. 50 I n my opinion, a ny greater alteration to the statute , such as limiting its application solely to situations where there is evidence of forum shopping, is the province of the Legislature. 51

50 Such a situation occurred in In re Washington Mutual, Inc. , 2010 WL 3238903 (Bankr. D. Del. Aug. 13, 2010). There, the Bankruptcy Judge concluded that the Borrowing Statute did not apply in a bankruptcy proceeding because applying the statute would allow a debtor to forum

- shop to seek the shortest possible statute of limitations for clai ms against it, just as Saudi Basic filed in Delaware in an apparent effort to defeat its joint venturers‟ counterclaims. “To allow [a debtor] to use the benefit of Delaware‟s shorter limitations period would subvert the anti

forum

- shopping purpose of the borrowing statute.” Id. at *5. In both Washington Mutual and Saudi Basic , the party that would be the “natural defendant” in a lawsuit, i.e. , the delinquent debtor and the party allegedly in breach of a contract, respectively, sought to avail themselves of the Borrowing Statute in order to avoid having to answer for otherwise valid claims against them. See Nat’l Union Fire Ins. Co. of Pittsburg h v. Turner Constr. Co. , 2014 WL 703808, at *3 (Del. Super. Feb. 17, 2014) (discussing the natural alignment of parties in litigation and stating that “Delaware courts take a „rather dim view of declaratory judgment claims of non - breach made for purposes of forum shopping ‟”) (quoting E

- Birchtree, LLC v. Enter. Prods. Operating L.P. , 2007 WL 914644, at *3 (Del. Super . Jan. 18, 2007)).

51 Citing a line of cases from the Superior Court and the United States Bankruptcy Court for District of Delaware (the “Delaware Bankruptcy Court”) that have interpreted Saudi Basic , some of which are in conflict, the Court of Chancery recently concluded that “the Borrowing Statute only applies when a party seeks to take advantage of a longer Delaware statute of limitations to bring a claim that would be time

- barred under the law of the jurisdiction governing the claim.” Bear Stearns Mor tg. Funding Trust 2006

- SL1 v. EMC Mortg. LLC , 2015 WL 139731, at *8 (Del. Ch. Jan. 12, 2015). The Court in Bear Stearns noted that, “Although the court believes that the holding in Central Mortgage better reflects the plain language of the Borrowing Statu te, this court is bound to follow the Delaware Supreme Court‟s opinion in Saudi Basic .” Id. at *9.20

Finally, having concluded that the Borrowing Statute presumptively a pplies here , despite the absence of evidence of forum shopping, I note that Plaintiffs rely heavily on
Juran v. Bron 52 as supporting a contrary conclusion . There, the Court determined that the
existence of innumerable contacts to California showed that the dispute truly was a “California case” and presented “one of those „unusual‟ or „ special‟ circumstances where the Court, as a Court of Equity, should not look to the applicable statute of limitation s at law for guidance.” 53 Similarly, Plaintiffs here argue that this case involves an exclusively New York dispute and that it would be inequitable , therefore, rigidly to apply the statute
of limitations including the Borrowing Statute. As the next Section demonstrates, however, the contacts to New York are sign ificantly less important than Plaintiffs assert and certainly not as compelling as the situation in Juran

.

As the foregoing discussion indicates, however, the Saudi Basic decision involved an unusual set of facts and there are compelling rationales, such as affo rding appropriate deference to the language employed by the Legislature, for not expanding that decision beyond its arguably limited holding. Moreover, there is no uniform line of decisions that has revealed a consistent interpretation of the Supreme Cour t‟s holding. In fact, the relevant case law on the issue is in conflict, with three groups of decisions: (1) those cases interpreting Saudi Basic broadly, such as Furnari (Del. Super.) and Bear Stearns (Del. Ch.); (2) those cases interpreting Saudi Basic narrowly, such as TL of Florida (D. Del.) and Huffington (Del. Super.); and (3) those cases that have applied the Borrowing Statute without citing Saudi Basic , such as Central Mortgage (Del. Ch.) and In re Winstar (Bankr. D. Del.).

52 2000 WL 1521478 (Del. Ch. Oct. 6, 2000).

53 Id. at *11.21 B. The Most Significant Relationship Test For Delaware ‟s Borrowing Statute to have any applicability, the cause s of action
must have arisen outside of D elaware. 54 To determine where the cause s of action arose in
this case , I look to Delaware‟s conflict of law rules. “Delaware conflict of law rules direct that the Court determine where a plaintiff‟s claims arose by application of the „most significant rel ationship‟ test, as set forth in the Restatement (Second) Conflict of
Laws (“Restatement”).” 55 The parties dispute which state has the most significant relationship to Plaintiffs‟ claims . Defendants argue that Delaware or, alternatively,
Florida has the g reatest connection . Plaintiffs maintain that New York has the most significant relationship

. But Defendants counter that, even if the cause of action arose in New York, the Delaware Borrowing Statute still renders Plaintiffs‟ claims untimely. As
noted p reviously , however, Plaintiffs contend that the connection to New York is so strong here that application of the Borrowing Statute would be inequitable, for the
reasons stated in Juran

. T he Restatement factors differ slightly depending on whether the all eged wrong sounds in tort or contract. For torts, the relevant factors are: “(a) the place where the injury occurred, (b) the place where the conduct causing the injury occurred, (c) the domicil, residence, nationality, place of incorporation and place of business of the parties,

54 10 Del. C. § 8121 (“ Where a cause of action arises outside of this State . . . .”).

55 TL of Fla. , 2014 WL 3362367, at *5 (citing Travelers Indem. Co. v. Lake , 594 A.2d 38, 47 (Del. 1991)).22

and (d) the place where the relationship, if any , between the parties is centered.” 56 For contract claims, the relevant factors are: “(a) the place of contracting, (b) the place of negotiation of the contract, (c) the place of per formance, (d) the location of the subject matter of the contract, and (e) the domicil, residence, nationality, place of incorporation and place of business of the parties.” 57 In both the tort and the contract contexts, the
Restatement directs that t hese fa ctors “are to be evaluated according to their relative importance with respect to the particular issue.” 58
Fraudulent transfers bea r some resemblance to both tort and contract claims and do not fit neatly into either category. Fraud claims, for example, so und in tort. 59 A fraudulent transfer, however, does not necessarily require misrepresentation or scienter. Indeed, such a transfer can occur even without proof of fraudulent intent if, for example,
the debtor did not receive reasonably equivalent value in the exchange and the transfer results in the debtor having unreasonably small assets in relation to its business. 60
Transactions of this kind can reduce the likelihood that the debtor will be able to satisfy its contractual obligations, such as , for examp le, paying off a loan obtained from a

56 Restatement (Second) Conf lict of Laws § 145 (1971).

57 Id. § 188.

58 Id. §§ 145, 188.

59 See In re Wayport, Inc. Litig. , 76 A.3d 296, 325

- 27 (Del. Ch. 2013) (discussing elements of a fraud claim as a tort with numerous citations to the Restatement of Torts ).

60 6 Del. C. § 130 4.23

creditor . From this perspective, a fraudulent transfer may appear more like a contract
claim and some courts have so concluded. 61 Based on this uncertainty as to how best to classify a fraudulent transfer claim, I address both the Restatement‟s tort and contract
factors in turn. I note at the outset that, fundamentally, this case is an action to recover on a deficiency judg ment resulting from an unfulfilled personal guaranty by Ms. Mathews to pay the StoreSmart Loan. Plaintiffs‟ efforts to avoid the ITRAX T ransfers to one or more of the Three Trusts are merely a means to that end. With that in mind , I start with the place of injury. A corporation sustains its injuries where it is incorporated and where it has its principal place of business , with the latter location generally being considered more important

. 62 Plaintiff TrustCo is a New York bank with operations in New Yor k, Florida, Massachusetts, and Vermont. According to the Complaint, Plaintiff ORE‟s principal place of business is Florida. Plaintiffs assert that the place of injury is New York, because t he breach of the personal guaranty injured TrustCo in New York, w here it is headquartered. The amount owed on the personal guaranty, however, is the amount of the Deficiency Judgment, a Florida judgment. TrustCo assigned its rights in the Deficiency Judgment to ORE, a Florida corporation with its principal place of bu siness in

61 See In re Astropower Liquid. Trust , 2006 WL 2850110, at *5 (Bankr. D. Del. Oct. 2, 2006) (citing federal cases).

62 See UbiquiTel Inc. v. Sprint Corp. , 2005 WL 3533697, at *4 (Del. Ch. Dec. 19, 2005); Eureka Res., LLC v. Range Resources

- Appalachia, LLC , 62 A.3d 1233, 1238 (Del. Super. 2012).24

Florida. It is unclear from the Complaint whether TrustCo also assigned Ms. Mathews‟ s personal guaranty to ORE. In any event, b ecause the Complaint seeks the exact amount of the Deficiency Judgment (plus interest and costs of collection), ORE a ppears to be the plaintiff with the most significant interest here. ORE suffered its injury in Florida, the
site of its principal place of business. Although the Complaint alleges that ORE “is a corporation related to TrustCo,” the two plaintiffs are sep arate legal entities with principal places of business in different states. On those facts, I consider t he place of the injury factor to be neutral as between New York and Florida

. The conduct causing the injury occurred mostly in Florida and Delaware.
Plaintiffs emphasize that the StoreSmart Loan was entered into in New York, that payment was due to TrustCo in New York, and that the Three Trusts were created and funded by Ms. Mathews while she lived in New York. 63 I find, however, that these facts

are outweighed by the additional fact s that : (1) the StoreSmart Loan was for construction

o f a business in Florida , which did occur ; (2) the event giving rise to this entire dispute
was the fai lure of the StoreSmart business; (3) TrustCo foreclosed on that pro perty in a Florida court; (4) TrustCo assigned its interest in the StoreSmart Loan, including the subsequent Deficiency Judgment from a Florida court , to a Florida corporation; (5) the
ITRAX Transfers were made to Delaware trusts governed by Delaware law; and (6) the trustee of the Three Trusts is a Delaware entity. In terms of the relative importance of these considerations, the failure of the Florida business endeavor and the transfers to the

63 Pls.‟ PI Reply 6

- 7.25

Delaware trusts were the pivotal events leading to the dispute in this case

. T hus, t h e conduct causing the injury factor favors Florida somewhat and Delaware somewhat, but only minimally implicates New York

. The parties to this dispute reside in or are incorporated in numerous states.
Plaintiffs are a New York ba nk and a Florida corporation. Defendants include three
Delaware trusts and a Delaware c orporation, as well a s several individuals. Of the
individual defendants , Ms. Mathews was a New York resident when the first actions giving rise to this dispute occurr ed , but now resides in Florida. Her children, the beneficiaries of the Three Trusts, reside mostly in Massachusetts, with one child in Illinois. Plaintiffs assert that the “two main actors , ” TrustCo and Ms. Mathews, resided in New York; thus, they conten d that this factor favor s New York. 64 The primary purpose of Plaintiffs‟ claims , however, is to claw back the proceeds of the ITRAX stock
from the Three Trusts or their beneficiaries

. But , neither the trusts nor their beneficiaries
are located in New York . This factor does not obviously favor any state but , based on the
location of and law governing the Three T rusts , may weigh slightly in favor of Delaware. The parties‟ relationship probably is centered in Florida, but it also may be in
Delaware. Althoug h New York loan documents may have caused the money to move from TrustCo to StoreSmart, this case fundamentally is about the StoreSmart Loan , Ms. Mathews‟s guaranty of it , and ORE‟s attempt to enforce the Deficiency Judgment by reaching funds held by the T hree Trusts and their beneficiaries . StoreSmart was a Florida

64 Id. at 8.26

entity operating its business in Florida , the Deficiency Judgment is a Florida Judgment,
and ORE is a Florida corporation. Hence, a case can be made for Florida

. Focusing on
the state of the parties at the time this action was filed , the relationship also may be centered in Delaware, where the Three Trusts are located. It is money held by those trusts that Plaintiffs seek to recover. Overall, I conclude that the tort factors from the
Restate ment moderately favor Florida. Delaware has the next strongest connection to this case, with New York having the weakest relationship to it

. Many of the contract factors have been discussed already. I n terms of the place of contracting, negotiation, an d performance, those factors favor New York, but only slightly. Moreover, b ecause TrustCo assigned its interests to a Florida corporation and
this action centers on enforcement of a Deficiency Judgment from Florida , the importance of those factors and New York ‟s connection to the StoreSmart Loan is
less ened here . The subject matter of the contract shifts the focus back to Florida and, as with the tort analysis, the residence and place of business of the parties is neutral. The
contract factors therefore are either in equipoise between New York and Florida or only weakly favor New York. For the foregoing reasons , I find that Florida has the most significant relationship
to this case. Delaware is close behind. Because both states have identical statutes of limitations, the choice of Florida over Delaware has minimal importance , if any, to the
outcome of Defendants‟ motion for partial summary judgment . Notably, even if I did
conclude that New York has the most significant relationship, the preceding analy sis
shows that that relationship certainly does not dominate the focus of this action

. That is ,27

the totality of the relevant factors does not reveal a strong New York

- centric relationship between the parties and the dispute before this Court

. Accordingly , even if I found that New York law should apply, there is nothing in this set of facts that would lead me to
conclude that application of the Delaware Borrowing Statute would be inequitable. “The matter before this Court does not exhibit any of the „spec ial circumstances‟ present in
Juran , because the underlying facts are not tied solely to New York.” 65

In sum , Florida likely has the most significant relationship to this case and its four

year statute of limitations should apply. Alternatively, Delaware h as the next most significant relationship and has essentially an identical statute of limitations . Under either of those scenarios, the Borrowing Statute is not applicable. 66 As a third alternative, even if New York did have the most significant relations hip, its contacts are not sufficient to make this case a “special circumstance” where application of the Borrowing Statute to preclude use of New York‟s longer statute of limitations would be inequitable . As such, if New York did have the most significant relationship, then the Borrowing Statute wo uld be triggered and Delaware‟s statute of limitations nevertheless would apply. R egardless
of which of the se three state s has the most significant relationship with this case, therefore, I conclude that Plainti ffs still would be subject to a statute of limitations

65 In re Winstar Commc’ns , 435 B.R. at 45.

66 See In re W.R. Grace & Co. , 418 B.R. 511, 518 (D. Del. 2009) (noting that where both of the possible states have the same statu te of limitations, the Borrowing Statute does not resolve the question of the applicable limitations period and the most significant relationship test is applied).28

equivalent to Delawa r e‟s of four years from the time the transfer was made or one year from when discovery of the transfer occurred or reasonably should have occurred , whichever is longer

. Because Pla intiffs did not file this action relating to the ITRAX
Transfers until after the expiration of that time period , I hold that their claims regarding
the ITRAX Transfers are barred by laches

.

C. The Qualified Dispositions in Trust Act Defendants argue that De laware‟s statute of limitations applies for the independent
reason that the Qualified Dispositions in Trust Act (the “QDTA” ) controls this dispute

. 67 The QDTA limits a creditor‟s available remedies when attempting to avoid a “qualified disposition.” A “qu alified disposition” is a “ disp osition by or from a transferor . . . to 1 or more trustees, at least 1 of which is a qualified trustee, with or without consideration, by means of a trust instrument .” 68 Defendants contend that this case involves such
q ualif ied dispositions

. In that regard, they aver that: Ms. Mathews was a “transferor” in that she owned property and disposed of that property; 69 RBC satisfies the definition of a qualified trustee; 70 and the Three Trusts each are governed by a “trust instrument .” 71 T he QDTA requires that any claim by a creditor

— a term defined to include Plaintiffs

— to

67 12 Del. C. §§ 3570

- 3576.

68 Id. § 3570(7).

69 Id. § 3570(10).

70 Id. § 3570(8).

71 Id. § 3570(11).29

avoid a qualified disposition must be brought pursuant to 6 Del. C. §§ 1304 or 1305, Delaware‟s fraudulent transfer statutes. 72 The QDTA also specifically provides that a creditor‟s claim will be extinguished unless, as relevant here, it is brought within the time
constraints of 6 Del. C. § 1309, Delaware‟s statute of limitations for fraudulent
transfers. 73 Finally, the QDTA states that: “ The Court of Chancery shall have exclusive jurisdiction over any action brought with respect to a qualified disposition. ” 74 Defendants argue that the QDTA is a statutory command requiring both that
Plaintiffs file their suit here in Delaware, specifically in the Court of Chancery, and that this Court apply Delaware‟s statute of limitations in Section 1309 without regard to any most significant relationshi p analysis. Plaintiffs contend, primarily, that the QDTA is
substantive law and that , under the most significant relationship test , this Court must apply New York l aw. In the previous Section, I rejected the proposition that New York has the most significant relationship with this case. Therefore, I do not consider
Plaintiffs ‟ primary contention persuasive. Plaintiffs further argue that the restrictions of the QDTA are inapplicable to this case because Ms. Mathews maintains impermissible control over the property transferred to the Three Trusts. 75

72 In their initial complaint, Plaintiffs explicitly asserted claims under Sections 1304 and 1305.

73 12 Del. C. § 3572(b)(2).

74 Id. § 3572(a).

75 See id . § 3571 (providing that, subject to certain exceptions in 12 Del. C. §§ 3570( 8) and 3570(11)(b), “ a transferor shall have no rights or authority with30

I n Section III.C supra , I concluded that Plaintiffs‟ claims relating to the ITRAX
Trans fers are barred because of either the most significant relationship choice of law analysis , which points to the use of Florida or , perhaps , Delaware law , or Delaware‟s Borrowing Statute, which requires the application of Delaware‟s statute of limitations

e ven if New York had been found to have the most significant relationship to this case

. As a result, I find it unnecessary to resolve the question of whether in this case the QDTA requires application of Delaware‟s fraudulent transfer statute of limitation s without regard to the normal choice of law analysis or the Borrowing Statute

. I do note the following , however

. First, little case law interpreting the QDTA
exists and some of the issues implicated here appear to be ones of first impression. Second, after conclusion of the briefing on the motion for partial summary judgment currently before me , the Court of Chancery rejected the argument that the QDTA requires suits to avoid a qualified disposition to be brought exclusively in Delaware. 76 Third,
wheth er Ms. Mathews maintains impermissible control over the assets transferred to the

respect to the property that is the subject of a qualified disposition or the income therefrom, and any agreement or understanding purporting to grant or permit the retention of any g reater rights or authority shall be void ”).

76 In re Daniel Kloiber Dynasty Trust , 2014 WL 3924309, at *10

- 13 (Del. Ch. Aug. 6, 2014) (concluding that 12 Del. C. § 3572(a) confers exclusive jurisdiction on the Court of Chancery as against other Delaware co urts, not to the exclusion of other states‟ courts, and stating that, “ Delaware has not sought through the Qualified Dispositions Act to arrogate exclusive jurisd iction for itself, nor could it”).31

Three Trusts such that the QDTA‟s restrictions would not apply presents a material question of disputed fact not appropriate for summary resolution on the current record.
F or all of these reasons, and because the previous Section of this Memorandum Opinion provides a sufficient basis for resolving the pending motion, I decline to reach the question of whether the QDTA requires application of 6 Del. C. § 1309

. Moreover , base d on the existence of disputed facts as to Ms. Mathew s ‟s control of the Three Trusts , that question cannot be decided on summary judgment

.

D. Analysis Under New York’s Statute of Limitations Summary judgment also is appropriate for the independent reason th at Plaintiffs‟ claims are untimely even if New York‟ s statute of limitations applies

. Under New York law, an action to avoid a fraudulent transfer must be brought within “the greater of six years from the date the cause of action accrued or two years from the time the plaintiff or the person under whom the plaintiff claims discovered the fraud, or could with reasonable diligence have discovered it.” 77 “The inquiry as to whether a plaintiff could, with reasonable diligence, have discovered the fraud turns o n whether the plaintiff was „possessed of knowledge of facts from which [the fraud] could be reasonably inferred.‟” 78

77 N.Y. C.P.L.R. § 213(8). This discussion assumes that P laintiffs are alleging actual fraud. Constructive fraud claims have a six

- year statute of limitations. N.Y. C.P.L.R. § 213(1); Wall Street Assocs. v. Brodsky , 684 N.Y.S.2d 244, 258 (A.D. 1999). The concept of inquiry notice only applies to actual fraudu lent conveyances. Jaliman v. D.H. Blair & Co. , 964 N.Y.S.2d 112, 114 (A.D. 2013).

78 Sargiss v. Magarelli , 909 N.E.2d 573, 576 (N.Y. 2009) (quoting Erbe v. Lincoln Rochester Trust Co. , 144 N.E.2d 78, 80 (N.Y. 1957)).32

Furthermore , New York law imposes a duty of inquiry. “„[W]here the circumstances are such as to suggest to a person of ordinary intellige nce the probability that he has been defrauded, a duty of inquiry arises, and if he omits that inquiry when it would have developed the truth

. . . knowledge of the fraud will be imputed to him.‟” 79

T he preceding portions of this Memorandum Opinion assu med a July 19, 2011 discovery date, because the present motion seeks summary judgment and Plaintiffs concede that they had at least inquiry notice of the alleged fraud by that date . On a motion for summary judgment, the evidence is viewed in the light mos t favorable to the nonmoving party , in this case, Plaintiffs . “However, once the moving party has satisfied its initial burden of „demonstrating the absence of a material factual dispute,‟ the burden shifts to the nonmovant to present some specific, admis sible evidence that there is a genuine issue of fact for a trial.” 80 Defendants presented evidence of four dates earlier than July 19, 2011, on which Plaintiffs arguably had notice. T he Simmonds deposition testimony as to discussions about the ITRAX Trans fers in May, June, and July of 2010 provide s particularly strong evidence that Plaintiffs were on at least inquiry notice by
mid

- 2010 . In fact, that testimony is consistent with Plaintiffs‟ own interrogatory
responses , which referred to a June 2010 discov ery date.

79 Gutkin v. Siegal , 926 N.Y.S.2d 48 5, 486 (A.D. 2011) (quoting Armstrong v. McAlpin , 699 F.2d 79, 88 (2d Cir. 1983)) (internal quotations omitted).

80 In re Transkaryotic Therapies, Inc. , 954 A.2d 346, 356 (Del. Ch. 2008) (quoting Levy v. HLI Operating Co. , 924 A.2d 210, 219 (Del. Ch. 2007) ) (footnote omitted).33

Plaintiffs have offered no explanation as to why they should not be bound by their own admission and the consistent testimony of their Rule 30(b)(6) witnesses. Mere ipse
dixit in their briefing that they did not have adequate notice until July 19, 2011, is insufficient to create a genuine dispute of material fact. 81 In their supplemental brief in support of a preliminary injunction, for instance, Plaintiffs make the conclusory assertion that none of the information provided around the time of the first modification to the
StoreSmart loan in 2008 sufficed to put them on notice

. 82 Even if true

— a questionable assumption 83

— Plaintiffs made no mention of Simmonds ‟s deposition testimony, or the testimony of Robert Leonard, a Senior Vice President of Tr ustCo, both of which occurred nearly a month before the filing of that brief, nor did Plaintiffs make any attempt to explain their own interrogatory responses. In their reply brief in support of a preliminary injunction, Plaintiffs argue d that
Defendants misstate d the record regarding Simmonds‟s testimony and that her deposition

81 Cf. Shimko v. Honeywell Int’l Inc. , 2014 WL 4942189, at *5

- 6 (Del. Super. Sept. 30, 2014) (discussing the “sham affidavit” doctrine, which precludes the submission of affidavits contradicting prior sworn deposition testimony, witho ut explanation, in an effort to defeat summary judgment by creating a dispute of fact where none exists).

82 Pls.‟ Suppl. PI Br. 20

- 22.

83 Although Plaintiffs dismiss the statement relating to Ms. Mathews being a beneficiary of Delaware trusts as only a “v ague footnote,” the relevant documents instead reveal a series of one

- page net worth statements. A comparison of the March 25, 2008 statement and the April 11, 2008 document shows a net worth reduction of six million dollars with a conspicuous statement r eferring to Delaware trusts appearing immediately beneath the total net worth amount on the April 11 document.34

does not support the conclusion that TrustCo had notice of the ITRAX Transfers. Having reviewed that testimony, and drawing all reasonable inferences in Plaintiffs‟ favor, I find that, while Simmonds may not have known exactly what specific assets were transferred,
she knew that some transfers had taken place. Although unaware of the exact time of the transfers, Simmonds understood the time frame to have coincided with one of the two loan modifications , which occurred in 2008 and 2009, respectively

. 84 She further testified as to having three discussions with Ms. Mathews, a meeting in May 2010 and phone conversations in June and July 2010. 85 Simmonds specifically was asked whether “from Ms. Mathews‟ statements to you that you understood that at the time Ms. Mathews

. . . made the transfers, whenever she made them, that those transfers rendered her insolvent? Do you contend that‟ s what Ms. Mathews told you?” 86 Simmonds replied
affirm atively. 87
Simmonds‟s testimony shows that, by July 2010, a TrustCo official was aware that
Ms. Mathews had transferred assets to Delaware trusts and believed that those transfers
had rendered Ms. Mathews insolvent. Simmonds ‟s testimony supports the infe rence

— particularly in light of the other evidence TrustCo received at the time of the first modification of the StoreSmart Loan, which is discussed in Section I.B supra

— that

84 Simmonds Dep. 9.

85 Id. at 15.

86 Id. at 15

- 16.

87 Id. at 16.35

TrustCo was on at least inquiry notice by July 2010 and with reasonable diligence should
have discovered the allegedly fraudulent transfers Ms. Mathews made.
This conclusion is bolstered by the deposition testimony of Leonard, another Rule 30(b)(6) deponent for TrustCo . According to Leonard, at a May 2010 meeting, Ms.
Mathews informe d him that she “took moneys and put them in a trust to hide them from creditors.” 88 Leonard understood that Ms. Mathews‟s stated intent was to protect those assets from her boyfriend‟s creditors, but he also testified that “I felt at the time that she

was protecting them from us, TrustCo Bank.” 89 Indeed, in a letter to Ms. Mathews date d June 21, 2010, Leonard wrote “You have indicated the majority of these [equity] funds
were transferred to Delaware Trusts” and requested that she provide to TrustCo all
docu ments relating to the trust accounts. 90 Thus, between May and July 2010, two TrustCo officers discussed with Ms.
Mathews the fact that she had made significant transfers of her assets to Delaware trusts. Plaintiffs also indicated in a sworn interrogatory r esponse that they had notice of transfers
to Delaware trusts as early as June 2010

. In response to Defendants‟ request for partial summary judgment, Plaintiffs have failed to present any evidence that would contradict the sworn deposition testimony of the ir own deponents, nor any persuasive rationale for disregarding their interrogatory responses. Accordingly, I conclude that Plaintiffs were

88 Mathews Defs.‟ PI Opp., Ex. D (“Leonard Dep.”) 17.

89 Id. at 19.

90 Mathews D efs.‟ SJ Br., Ex. 21.36

on inquiry notice by July 2010 at the latest and that the statute of limitations began running at that time. Becau se Plaintiffs filed suit in March 2013, their claims relating to the ITRAX Transfers are untimely even under New Y ork‟s statute of limitations. Thus,
f or this second, independent reason, partial summary judgment in favor of Defendants is appropriate as to those transfers

. IV. CONCLUSION For the reason stated i n this Memorandum Opinion , I grant Defendants‟ motion for partial summary judgment that Plaintiffs‟ claims based on the ITRAX Transfers were brought after the expiration of the applicable statute of lim itations and are barred by laches. Accordingly, those claims are dismissed with prejudice. This ruling is without prejudice to any claims Plaintiffs may have based on other transfers.
IT IS SO ORDERED.