District Court, Salt Lake Department The Honorable Todd M.
Shaughnessy No. 120905780
Abbott, Attorney for Appellants
Ryan Mitchell, John P. Mertens, and William O. Kimball,
Attorneys for Appellees
Michele M. Christiansen authored this Opinion, in which Judge
Gregory K. Orme and Senior Judge Stephen L. Roth concurred.
MICHELE M. CHRISTIANSEN, Judge
Paul Timothy and Janice Timothy (collectively, Creditors)
appeal the district court's grant of summary judgment in
favor of Pia, Anderson, Dorius, Reynard & Moss LLC (Law
Firm) and Brennan Moss (collectively, Appellees). We affirm.
In 2002, Creditors brought suit against Thomas Keetch and
Teri Keetch (collectively, Debtors) alleging, among other
things, breach of contract and fraud. The case ultimately
resulted in a 2009 judgment in Creditors'
In July 2009, approximately four months after entry of the
judgment, all of Debtors' bank accounts were
closed. Then, in March 2010, Teri Keetch's
high-school-aged son (Son) opened a bank
account. The district court later determined that
both Teri Keetch and Son had access to all of the money in
the account and that "[m]uch of the money in [Son's]
bank account belonged to [Debtors]."
On February 12, 2011, Son wrote a check for $50, 000 from
"his" account, payable to Law Firm. The check's
memo line read "Terry Keetch." Law Firm deposited
the check into its trust account around March 15, 2011. The
district court later found that the $50, 000 was Debtors'
¶5 Four days before Law Firm deposited the $50, 000 into
its trust account, Debtors and Creditors attended a
supplemental hearing to determine whether Debtors had assets
that could be applied to the judgment. Brennan Moss, an
attorney from Law Firm, represented Debtors at the hearing.
During the hearing, Thomas Keetch testified that "he did
not have a checking account, but that friends and family,
specifically [Son], 'cashed' checks for him."
Teri Keetch testified that she had no assets.
On March 16, 2011, after the $50, 000 was deposited into Law
Firm's trust account, Thomas Keetch signed an addendum to
a real estate purchase contract, which stated that Debtors
would "place in a trust [with] their attorney, Brennan
Moss, a sum of no less than 30, 000" to help secure a
home Debtors wanted to purchase. Subsequently, Law Firm
transferred $20, 000 from the trust account to a title
company for Debtors as a down payment on the home. Two months
later, at the request of Debtors, Law Firm transferred an
additional $20, 560.75 out of its trust account and paid $2,
745 to itself, $16, 451.75 to one of Debtors' family
members, and $1, 364 to Creditors. The payment to Creditors was
made in response to a court order entered on May 27, 2011.
In August 2012, Creditors filed suit against Appellees.
Creditors later filed an amended complaint, alleging various
theories of fraudulent transfer against Law Firm,
participation in wrongful conduct against Moss individually,
and civil conspiracy against Appellees collectively.
Appellees filed a motion for summary judgment, arguing that
Law Firm was not a transferee under Utah's Uniform
Fraudulent Transfer Act. See Utah Code Ann.
§§ 25-6-1 to -14 (LexisNexis 2013). The district
court agreed and granted Appellees' motion for summary
judgment, concluding that
[b]ecause the relevant provisions of the Utah Uniform
Fraudulent Transfer Act were modeled on federal Bankruptcy
law, the court is persuaded that "transferee" as
used in the Act is most logically defined in the manner it
has been defined in the Bankruptcy context. That is, a
"transferee" must exercise dominion or control over
the transferred asset. Here, the law firm did not-and could
not- exercise dominion and control over funds held in the
firm's trust account. The Rules of Professional Conduct
explicitly prevent a law firm from using those funds at their
discretion. Accordingly, the Law Firm was not a
"transferee" within the meaning of the Act and the
Judgment Creditors' fraudulent conveyance claims fail as
a matter of law. Those claims are hereby dismissed with
then filed a second motion for summary judgment, arguing that
Creditors' claim that Appellees "conspired to assist
[Debtors] in transfers that violated the [Uniform Fraudulent
Transfer Act]" was "insufficient to support
[Creditors'] civil conspiracy claim because it is not a
valid tort claim against [Appellees]." The district
court observed that
[a]lthough the question has not been addressed by Utah's
appellate courts, the majority view appears to be that state
and federal statutes governing "fraudulent"
conveyances are not based on tort principles. Moreover, and
perhaps more important, the majority view appears to be that
tort principles, such as civil conspiracy and aiding and
abetting, cannot be used to get around the statutory limits
of fraudulent conveyance actions; namely, those that limit
the reach of such statutes to "transferees."
court was "persuaded that if presented with the
question, Utah's appellate courts would . . . not permit
civil conspiracy, aiding and abetting, or similar theories to
extend the reach of the Utah Uniform Fraudulent [Transfer]
Act." Consequently, the district court granted
Appellees' second motion for summary judgment and
dismissed Creditors' remaining claims with prejudice.
AND STANDARDS OF REVIEW
Creditors contend that the district court erred in granting
Appellees' motions for summary judgment. First, Creditors
argue that "[a] law firm that receives money into its
[trust] account is a transferee as defined by the Utah
Fraudulent Transfer Act" and that the district court
"erroneously determined that a transferee is defined by
bankruptcy law rather than by Utah Statute." Second,
Creditors contend that "[v]iolation of the Utah
Fraudulent Transfer Act may serve as a predicate act to
support a claim for civil conspiracy."
We review "a [district] court's legal conclusions
and ultimate grant or denial of summary judgment for
correctness, and view the facts and all reasonable
inferences drawn therefrom in the light most favorable to the
nonmoving party." Orvis v. Johnson, 2008 UT 2,
¶ 6, 177 P.3d 600 (citations and internal quotation
marks omitted). Likewise, "[w]e review a district
court's interpretation and application of a statute for
correctness." Robinson v. Robinson, 2016 UT App
32, ¶ 35, 368 P.3d 147.
Creditors first contend that "[a] law firm that receives
money into its [trust] account is a transferee as defined by
the Utah Fraudulent Transfer Act."
Utah's Uniform Fraudulent Transfer Act (the Act),
see Utah Code Ann. §§ 25-6-1 to -14
(LexisNexis 2013), was designed to prevent fraudulent
transfers of assets by debtors who seek to defraud creditors
or avoid debts by placing assets beyond creditors' reach,
see Bradford v. Bradford, 1999 UT App 373, ¶
14, 993 P.2d 887. Pursuant to section 25-6-5 of the Act, a
fraudulent transfer occurs when a debtor (a) transfers
property with actual intent to hinder, delay, or defraud any
creditor, or (b) transfers property under certain conditions
without receiving reasonably equivalent value in exchange.
Utah Code Ann. § 25-6-5(1). If a transfer is
demonstrated to be fraudulent, the Act provides creditors
with various remedies "for relief ...