Opinion ID: 1870025
Heading Depth: 1
Heading Rank: 9

Heading: Present Claims

Text: [9] ETSI and the Abbotts next contend that Dominguez did not have a claim at the time of the December 2004 transfer, as required by § 36-706(b). Under § 36-702(3), a claim is defined as a right to payment, whether or not the right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured. Under § 36-702(5), a debt is defined as liability on a claim, while under § 36-702(6), a debtor is defined as a person who is liable on a claim. [10] The district court found that Dominguez' claim arose at the time of ATI's discriminatory conduct and that therefore, for purposes of § 36-706(b), Dominguez was a present creditor when the December 2004 transfer occurred. ETSI and the Abbotts claim that Dominguez did not have a right to payment until the judgment was rendered in 2005. We currently do not have any case law regarding when a person with a tort or other legal claim against another becomes a creditor for purposes of the UFTA. However, § 36-712 requires that the UFTA be applied and construed in conformity with other states. [11, 12] Courts deciding this issue under the UFTA have held that a creditor includes a person with unlitigated legal claims against the debtor. [8] In support of this decision, courts point to the `whether or not the right is reduced to judgment' language contained in the definition of claim. [9] Certainly, a person holding any disputed, contingent, or unliquidated tort or contract claim has no right to enforce payment of damages until a judgment enters against the defendant. Nonetheless, this does not diminish the claim for payment of damages that the plaintiff asserts when filing a lawsuit. [10] These courts have generally held that a debtor-creditor relationship is created not by a judgment, but by the wrong which produces the injury; and it is the date of the wrongful act, not the date of the filing of the suit or of the judgment, which fixes the status and rights of the parties. [11] Based on the requirements of § 36-712 and the decisions of other courts, we find that the district court did not err when it found that Dominguez had a claim at the time the December 2004 transfer took place. Under § 36-706(b), a transfer is considered fraudulent when the transfer is made to an insider for an antecedent debt, the debtor was insolvent at the time, and the insider knew or reasonably should have known that the debtor was insolvent. The Abbotts have admitted that ATI was insolvent at the time of the December 2004 transfer, and as the sole shareholders and directors of ATI, the Abbotts were insiders and knew that ATI was insolvent at the time of the December 2004 transfer. Finally, as previously mentioned, the December 2004 transfer was made to secure an antecedent debt, as memorialized by the promissory statements. Under § 36-708(a)(1), Dominguez is entitled to an avoidance of the December 2004 transfer to the extent necessary to satisfy his judgment. Section 36-709(b)(1) entitles the court to enter judgment against the first transferee of the asset, which the Abbotts were. In reviewing a summary judgment, an appellate court views the evidence in a light most favorable to the party against whom the judgment is granted and gives such party the benefit of all reasonable inferences deducible from the evidence. [12] Having viewed the evidence in a light most favorable to ETSI and the Abbotts, we find that the district court did not err in determining that the December 2004 transfer was fraudulent as a matter of law, or in entering judgment against the Abbotts personally. We therefore affirm the judgment of the district court.