The Uniform Voidable Transactions Act (previously known as the Uniform Fraudulent Transfer Act) essentially provides for a mechanism to void transfers made with the actual intent to “hinder, delay, or defraud any creditor.” (Code of Civ. Proc., 3439.04(a)(1).) The Act provides authority for the avoidance of a transfer as well as the obtainment of an injunction to prevent any further transfers. (Code of Civ. Proc., § 3439.07(a)(1); Code of Civ. Proc., § 3439.07(a)(3)(A).) It also “permits defrauded creditors to reach property in the hands of a transferee.” (Mejia v. Reed (2003) 31 Cal.4th 657, 663.)

“[A] suit under the [Uniform Voidable Transactions Act] is not the exclusive remedy by which fraudulent transfers may be attacked. Principles of law and equity, including estoppel, fraud, misrepresentation ‘or other validating or invalidating cause,’ are available to supplement an action under UFTA.” (Jhaveri v. Teitelbaum (2009) 176 Cal.App.4th 740, 755, 98 Cal.Rptr.3d 268.)

Legal Standard

A plaintiff may make either, or both, a common law fraudulent conveyance claim and a fraudulent transfer claim pursuant to the Uniform Voidable Transactions Act (UVTA). (Macedo v. Bosio (2001) 86 Cal.App.4th 1044, 1051; PGA West Residential Assn., Inc. v. Hulven Internat., Inc. (2017) 14 Cal.App.5th 156, 170; Wisden v. Super. Ct. (2004) 124 Cal.App.4th 750, 758.) A fraudulent conveyance under the Act involves “a transfer by the debtor of property to a third person undertaken with the intent to prevent a creditor from reaching that interest to satisfy its claim.” (Kirkeby v. Super. Ct. (2004) 33 Cal.4th 642, 648.) Case law establishes that these fraudulent conveyance actions are real property claims. (Id. at p. 649.)

“A transfer made or obligation incurred by a debtor is voidable as to a creditor, whether the creditor's claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation as follows:

1. With actual intent to hinder, delay, or defraud any creditor of the debtor.
2. Without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor either:
1. Was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction.
2. Intended to incur, or believed or reasonably should have believed that the debtor would incur, debts beyond the debtor's ability to pay as they became due.”

(Code of Civ. Proc., § 3439.04(a).)

In determining “actual intent,” any or all of the following factors may be considered:

1. Whether the transfer or obligation was to an insider.
2. Whether the debtor retained possession or control of the property transferred after the transfer.
3. Whether the transfer or obligation was disclosed or concealed.
4. Whether before the transfer was made or obligation was incurred, the debtor had been sued or threatened with suit.
5. Whether the transfer was of substantially all the debtor's assets.
6. Whether the debtor absconded.
7. Whether the debtor removed or concealed assets.
8. Whether the value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred.
9. Whether the debtor was insolvent or became insolvent shortly after the transfer was made or the obligation was incurred.
10. Whether the transfer occurred shortly before or shortly after a substantial debt was incurred.
11. Whether the debtor transferred the essential assets of the business to a lienor that transferred the assets to an insider of the debtor.