Opinion ID: 2523244
Heading Depth: 2
Heading Rank: 2

Heading: Property transfer

Text: ¶ 21 The trial court found four distinct bases for voiding the Wilsons' property transfer: (1) actual fraud under RCW 19.40.041(a)(1), (2) conclusive common law fraud, (3) constructive fraud as to present creditors under RCW 19.40.051(a), and (4) constructive fraud as to present and future creditors under RCW 19.40.041(a)(2). ¶ 22 Ms. Wilson challenges only two of the trial court's four findings of fraud. If the Supreme Court accepts review of a Court of Appeals decision, the Supreme Court will review only the questions raised in the motion for discretionary review. . . . RAP 13.7(b); see also State v. Radcliffe, 164 Wash.2d 900, 907, 194 P.3d 250 (2008). In this case the two grounds not raised by Ms. Wilson each independently appliesand independently voids the transfereven if we were to reverse on the two claimed grounds. [6] ¶ 23 In any event the two grounds claimed by Ms. Wilson do not merit reversal. The trial court properly applied the law to the facts to void the property transfer.
¶ 24 Under the Uniform Fraudulent Transfer Act (UFTA) [7] a transfer is fraudulent whether the creditor's claim arose before or after the transfer was made or the obligation was incurred if the debtor conducted it with actual intent to hinder, delay, or defraud any creditor of the debtor. RCW 19.40.041(a)(1). Subsection (b) of the statute provides 11 nonexclusive factors for determining actual intent. [8] Moreover RCW 26.16.210 requires spouses to prove good faith in the transfer if a plaintiff questions their motive. In every case, where any question arises as to the good faith of any transaction between spouses or between domestic partners, whether a transaction between them directly or by intervention of third person or persons, the burden of proof shall be upon the party asserting the good faith. RCW 26.16.210. ¶ 25 Based on RCW 19.40.041(b)'s 11 factors, the facts of the present matter strongly suggest fraud in the Wilsons' property transfer: The Wilsons were married, [9] Mr. Wilson continued to live on one of the properties rent free after the transfer, the transfer occurred at breakneck speed between Mr. Wilson's release from jail and eventual incarceration, Ms. Wilson received over 90 percent of the assets, the spouses knew and discussed their exposure to tort liability, Mr. Wilson gave no equivalent consideration for transferring the property, and the transfer left Mr. Wilson insolvent. Under the UFTA these factors overwhelmingly suggest fraudulence in the transfer.
¶ 26 Issues explicitly addressed in the UFTA displace common law principles. RCW 19.40.902. But when the UFTA is silent on a particular issue, common law tenets supplement its provisions. Id. The UFTA does not explicitly address transfers between spouses. However, the UFTA does mention insider[s] (a broad group that includes relatives, as well as partnerships, general partners, and corporations) in the statute determining fraudulent transfers affecting present creditors. See RCW 19.40.051(b). A transfer made by a debtor is fraudulent as to a creditor whose claim arose before the transfer was made if the transfer was made to an insider for an antecedent debt, the debtor was insolvent at that time, and the insider had reasonable cause to believe that the debtor was insolvent. Id. ¶ 27 In contrast the common law pinpoints transfers between spouses instead of lumping them among an amorphous group of entities. See, e.g., Davison v. Hewitt, 6 Wash.2d 131, 135-36, 106 P.2d 733 (1940) (Irrespective of the motive actuating the transfers by the husband of his separate property to his wife, it is clear that, at the time the transfers were made to appellant, her husband was insolvent; hence, the act of transferring the property is conclusive evidence of fraud, and the intent is presumed from the act.). Both the trial court and Court of Appeals [10] found the UFTA did not displace the common law because the UFTA has no provision specifically governing transfers between spouses. The question, then, is whether RCW 19.40.051(b) and the definition of insider displace the common law approach to transfers between spouses. ¶ 28 The plain language of the UFTA broadly encompasses relatives, among many business relationships. However the common law rule is far more precise, dealing specifically and exclusively with transfers between spouses. The common law provides a thorough, long-standing, and examined history we should apply to supplement [the UFTA's] provisions for interspousal transfers. RCW 19.40.902. The common law's specificity on interspousal transfers deals more precisely with interspousal property transfers than the insider statute, RCW 19.40.051(b).
¶ 29 Ms. Wilson did not raise these two independent grounds, which the trial court partly relied upon to void the property transfer. Under RAP 13.7(b) we review only those claims raised in petitioner's petition for review.