Opinion ID: 1227802
Heading Depth: 2
Heading Rank: 2

Heading: The State Trial Court's Jurisdiction

Text: Julie contends the state trial court lacked jurisdiction, within the context of the tort suit between her brother and Kessel, to decide whether the transfer of the three condominium properties was fraudulent. Relying upon North Dakota statutory law relating to the execution of judgments, she argues a separate action is required to determine whether she has title to the three properties. See N.D. Cent.Code § 28-25-14 (governing the procedure on adverse claims and indicating property claims adverse to a judgment debtor are recoverable only in an action against such person [brought] by the receiver) (emphasis added); N.D. Cent. Code § 13-02.1-07(1) (governing the remedies of creditors under the Uniform Fraudulent Transfer Act and referring to an action for relief against a transfer) (emphasis added). She also relies upon a passage from an 1889 decision of the Supreme Court of Dakota (presiding over the Dakota territories before North and South Dakota became states) which discussed the difference between proceedings supplementary to execution of a judgment under the Code of Civil Procedure and a creditor's bill sustainable in a court of chancery. See Feldenheimer v. Tressel, 43 N.W. 94, 96 (Dakota 1889) ([T]he question of title cannot be summarily disposed of by the court or judge before whom the proceedings [supplementary to execution] may be pending. Such questions must be adjudicated and determined by an action brought for that purpose.) (emphasis added). The issue in Feldenheimer was whether post-judgment motions to execute on a judgment entirely supplanted the right of a judgment creditor to bring a separate actionsimilar to a creditor's bill historically allowed in a court of equityto challenge a fraudulent transfer. In other words, Feldenheimer involved the opposite of what occurred here. Here, Kessel obtained a judgment at law against Robert Rutherford and then brought a post-judgment motion in the same action to challenge a fraudulent transfer. In Feldenheimer, the judgment creditor obtained a judgment at law against the defendant and then brought a separate action to challenge a fraudulent transfer. The defendant responded by claiming the judgment creditor's only remedy was to do what Kessel did in this case, i.e., bring a post-judgment motion in the suit at law (a proceeding supplementary to execution) to challenge the fraudulent transfer. The Supreme Court of Dakota rejected the argument, holding the judgment creditor could bring a separate action similar to a creditor's bill historically brought in chancery court. The court emphasized the fact, however, that both choices for remedies were available to the judgment creditor: [S]upplemental proceedings ... in many respects ... may serve as a substitute for a creditor's bill [but] they are by no means the exclusive remedy to which the creditor may resort. He may still have his creditor's suit. Feldenheimer, 43 N.W. at 96. North Dakota, like most states, has a unified court system. Claims which were historically viewed as equitable ones, such as a creditor's bill to set aside a fraudulent transfer, are brought in the same court as those claims historically brought in a court of law, such as a personal injury tort claim. Thus, the state trial court clearly had jurisdiction over Kessel's personal injury claim, as well as his fraudulent transfer claim, as both of those causes of action would be filed in the state district courts. North Dakota law did not prohibit Kessel from adjudicating both of his causes of action against Robert (the tort claim and the fraudulent transfer claim) in the same lawsuit. The North Dakota Rules of Civil Procedure provide [a] party may also state as many separate claims or defenses as the party has [in a single action], regardless of consistency and whether based on legal or on equitable grounds or on both. N.D. R. Civ. P. 8(e)(2). A majority of courts allow a tort plaintiff to challenge a tortfeasor's allegedly fraudulent transfer of property in the same action as the tort suit. See Travelers Indem. Co. v. Rubin, 209 Conn. 437, 551 A.2d 1220, 1223 (1988) (The plaintiff ... could incorporate in a single complaint a claim for damages in tort and a petition that a fraudulent conveyance made to defeat her claim be set aside.); Downs v. Powell, 215 Ga. 62, 108 S.E.2d 715, 718 (1959) (holding a tort plaintiff may proceed in one action against the tortfeasor and the grantee in such voluntary deed, to obtain (1) a judgment for damages against the tortfeasor for the negligent tortious homicide of her child, and (2) a decree adjudging null and void as to her conveyances of real and personal property executed by the defendant tortfeasor subsequently to the commission of the tort.); Rachal v. Balthazar, 32 So.2d 483, 484 (La.Ct.App.1947) (involving a case in which a fraudulent conveyance was set aside in favor of a plaintiff in the same lawsuit as the tort action brought by the plaintiff against the tortfeasor/fraudulent conveyor); Exchange Nat'l Bank of Tulsa v. Washington, 30 N.Y.S.2d 43, 45 (N.Y.Sup.Ct.1941) ([C]reditors may now assail fraudulent conveyances without first obtaining a judgment, and may assail them in the same suit in which they seek to establish their debt[.]); McMakin v. Stratton, 82 Ky. 226, 1884 WL 7369, at  (1884) (It is certain that the appellee ... had the right to combine with his prayer for [a tort] judgment the further prayer for subjecting the property fraudulently conveyed to the payment of his debt.); see also Right of tort claimant, prior to judgment, to attack conveyance or transfer as fraudulent, 73 A.L.R.2d 749 § 4[a] (1960) (discussing those cases in which courts allowed an action for damages to be combined with a claim to set aside a fraudulent conveyance). Thus, we reject Julie's contention the state trial court lacked jurisdiction over Kessel's fraudulent transfer claim simply because Kessel did not bring the cause of action in a separate lawsuit.