December 12, 2018
Certiorari to the Utah Court of Appeals
District, Salt Lake The Honorable Todd M. Shaughnessy No.
Abbott, Provo, for petitioners
Ryan Mitchell, John P. Mertens, William O. Kimball, Salt Lake
City, for respondents
Justice Petersen authored the opinion of the Court, in which
Chief Justice Durrant, Associate Chief Justice Lee, Justice
Himonas, and Justice Pearce joined.
We granted certiorari in this case to address whether a law
firm that deposited funds from a client into its trust
account is a "transferee" under the former Uniform
Fraudulent Transfer Act (UFTA). However, while this case was
before the court of appeals, Petitioners allowed the judgment
that formed the basis of their fraudulent-transfer claim to
expire. Respondents filed a suggestion of mootness with this
court. They argue that Petitioners have no remedy under the
UFTA because they are no longer creditors, so even if
Petitioners were to prevail on the transferee issue, it would
not affect their rights.
We agree and dismiss the petition as moot. We further vacate
the judgment of the court of appeals because Petitioners'
fraudulent-transfer claim became moot before that court's
opinion was issued. The judgment of the district court
Paul and Janice Timothy prevailed in a lawsuit against Thomas
and Teri Keetch for, among other things, fraud and breach of
contract. The Timothys obtained a judgment against the
Keetches on May 6, 2009. But they were never able to collect it.
The record indicates that the Keetches took measures to avoid
paying this debt, including depositing their money into an
account held in a minor son's name. Despite this, the
Keetches testified at a supplemental hearing in March 2011
that they had no assets. And Brennan Moss, an attorney with
the law firm of Pia, Anderson, Dorius, Reynard & Moss
(PADRM), wrote letters stating that the Keetches did not have
Although the Keetches claimed to have no assets, less than a
week after the supplemental hearing, PADRM deposited into its
trust account (IOLTA) a check for $50, 000 drawn from the
minor's bank account. The check had been written over a
month earlier, and its memo line read: "Terry
Keetch." With representation from Moss, the Keetches
later used $20, 000 from those funds to make a down payment
on a house.
The Timothys tried to access the proceeds in the IOLTA by
obtaining a writ of garnishment against PADRM that required
the firm to hold all funds owned by the
Keetches. But PADRM twice refused to accept service
of the writ. And by the time it did accept service, the
Keetches had moved all of their money out of the IOLTA.
Finally, in August 2012, the Timothys sued both Moss and
PADRM, alleging various theories of fraudulent transfer under
the UFTA, civil conspiracy, and wrongful conduct.
Respondents filed a motion for partial summary judgment in
the district court, arguing that they were not
"transferees" under the UFTA and were thus immune
from liability on the fraudulent-transfer claims. The
district court agreed and granted Respondents' motion,
Because 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, [defendants] did not-and could
not- exercise dominion and control over funds held in the
firm's trust account. . . . Accordingly, [defendants
were] not "transferee[s]" within the meaning of the
Act and the ...