Nagel v. Westen
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In the underlying action, plaintiffs filed suit against sellers after the house plaintiffs bought from sellers was uninhabitable based on extensive water intrusion. The arbitrator found that sellers had failed to disclose material facts regarding the water damage; found that the house was worthless and its only value was the land; and awarded plaintiffs over $4.5 million for the loss of the home, the futile efforts to repair it, plus attorney fees and costs.
This appeal is from the subsequent lawsuit filed by plaintiffs to unwind sellers' transfers of their assets under the Uniform Voidable Transactions Act (UVTA). The action was dismissed because plaintiffs could not identify a "third party transferee" who received sellers' assets.
The Court of Appeal reversed the trial court's order to the extent it dismissed plaintiffs' causes of action for statutory fraudulent transfer and the companion claims for conspiracy and aiding and abetting. The court concluded that plaintiff stated a cause of action for fraudulent transfer under the plain language of the UVTA, and that limiting the UVTA to third-party transfers would neither conform to legislative intent nor serve the public's interest. The court affirmed the order's dismissal of plaintiff's common law cause of action for fraudulent transfer.
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