Opinion ID: 2827594
Heading Depth: 2
Heading Rank: 1

Heading: mr. rupp has statutory standing as a creditor

Text: PURSUANT TO HIS RIGHTS AS A BANKRUPTCY TRUSTEE ¶9 Ms. Moffo asserts that Mr. Rupp lacks statutory standing. To resolve this issue, we must determine to what class of plaintiffs the Act grants a right to sue and whether Mr. Rupp is within that 2 Bahr v. Imus, 2011 UT 19, ¶ 16, 250 P.3d 56. 3 Wash. Cnty. Water Conservancy Dist. v. Morgan, 2003 UT 58, ¶ 7, 82 P.3d 1125. 4 UTAH CODE § 25-6-9(2). 5 LeBeau v. State, 2014 UT 39, ¶ 20, 337 P.3d 254. 6 Id. 3 RUPP v. MOFFO Opinion of the Court class.7 Ms. Moffo argues that only those with an actual interest in the property transferred are within the class of parties with standing. Because Bayrock held the trust deed for the home, had priority over Mr. Rupp, and because the first mortgage exceeded the home’s value, Ms. Moffo reasons that Bayrock is the only creditor with standing to assert a claim against her under the Act. Mr. Rupp argues that the Act does not limit standing to those with an actual interest in the property transferred. Rather, he asserts that his status as a creditor of Mr. Rich pursuant to the United States Bankruptcy Code is sufficient to confer standing. We agree with Mr. Rupp. ¶10 A “creditor” has the right to recover judgment for the value of a fraudulently transferred asset.8 A “creditor” is “a person who has a claim.”9 And a “claim” is a right to payment [from the debtor], whether or not the right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured.10 Notably absent is any indication that a creditor’s standing is contingent on any actual interest in the property at issue. Instead, the 7 See Cedar Mountain Envtl., Inc. v. Tooele Cnty. ex rel. Tooele Cnty. Comm’n, 2009 UT 48, ¶ 8, 214 P.3d 95; Ball v. Pub. Serv. Comm’n (In re Questar Gas Co.), 2007 UT 79, ¶¶ 45–50, 175 P.3d 545; Wash. Cnty. Water Conservancy Dist., 2003 UT 58, ¶¶ 7–10. Statutory standing implicates a different analysis than constitutional standing. Statutory standing springs from an affirmative grant of authority by the Legislative and Executive branches for the courts to hear a case. In contrast, constitutional standing arises from the courts’ inherent constitutional power to hear a case. See Wash. Cnty. Water, 2003 UT 58, ¶ 17; Utah Chapter of the Sierra Club v. Utah Air Quality Bd., 2006 UT 74, ¶¶ 17–18, 148 P.3d 960. 8 UTAH CODE § 25-6-9(2); see also id. § 25-6-8(1) (“In an action for relief against a transfer or obligation under this chapter, a creditor, subject to the limitations in Section 25-6-9, may obtain . . . avoidance[,] . . . attachment[,] . . . injunction[,] . . . appointment of a receiver[, or] . . . any other relief the circumstances may require.” (emphasis added)). 9 Id. § 25-6-2(4). 10 Id. § 25-6-2(3) (emphasis added). 4 Cite as: 2015 UT 71 Opinion of the Court Act gives standing to anyone with a “right to payment” from the debtor. ¶11 Our conclusion that all creditors have standing under the Act is buttressed by other provisions. For example, the Act provides that “[a] transfer made . . . is fraudulent as to a creditor . . . if the debtor made the transfer . . . with actual intent to hinder, delay, or defraud any creditor of the debtor.”11 The use of the word any is significant. It triggers standing for all of the debtor’s creditors if the debtor has actual intent to defraud any single creditor. ¶12 Accordingly, we hold that a party has standing as a creditor under the Act if the party has a right to payment from the debtor. And a creditor has that standing regardless of whether the creditor has any actual interest in the transferred property. ¶13 In this case, Mr. Rupp, as the trustee for Mr. Rich’s bankruptcy, qualifies as a creditor under the Act. Pursuant to the United States Bankruptcy Code, a “trustee . . . [has], as of the commencement of the case, . . . the rights and powers of . . . a creditor.”12 The Bankruptcy Code defines “creditor” as an “entity that has a claim against the debtor.”13 And a “claim” is a “right to payment.”14 These definitions are strikingly similar to those provided by the Act.15 Accordingly, we hold that Mr. Rupp, as the bankruptcy trustee, has standing as a creditor under the Act.16 We 11 Id. § 25-6-5(1) (emphasis added). 12 11 U.S.C. § 544(a) (emphasis added). 13 Id. § 101(10)(A). 14 Id. § 101(5)(A). 15 See UTAH CODE § 25-6-2(3), (4). 16 In concluding that Mr. Rupp does not have standing, Justice Lee fails to look to the terms of Utah’s Uniform Fraudulent Transfer Act. The Utah statute requires only that the plaintiff have a right to payment from the debtor. Mr. Rupp has asserted that he has that right. Under the plain language of section 544(a) of the Bankruptcy Code, Mr. Rupp has “the rights and powers of . . . a creditor,” which the Bankruptcy Code in section 101 defines as a “right to payment” from the debtor. Justice Lee has never asserted the contrary. As Justice Lee points out, Mr. Rupp cannot co-opt the rights of (continued...) 5 RUPP v. MOFFO Opinion of the Court therefore proceed to the second issue: What is a “transfer” under the Act?