Whether the common law theory of fraudulent conveyance survived the passed of the Uniform Fraudulent Transfer Act.

The plaintiff brought suit against Stephen Barnes and Christina DeYeso, alleging that he was owed substantial money by Barnes that he had been unable to collect; that Barnes had transferred funds to DeYeso to avoid payment; and therefore that the plaintiff should be able to collect from DeYeso.

The plaintiff’s claims under the Uniform Fraudulent Transfer Act, G.L. c. 109A, §§ 1-13, (“UFTA”) were dismissed as barred by the statute of repose. However, the plaintiff succeeded under on his common law fraudulent conveyance claims, for which the judge found the statute of limitations was 20 years. DeYeso appealed, and the Court granted direct appellate review.

The central question on appeal is whether the UFTA implicitly repealed and superseded common law fraudulent conveyance. The defendant argues that it did, because comprehensive legislative action in an area of law should be read to replace existing common law, particularly where the reform is intended to establish uniformity among the states. The plaintiff argues that it did not, relying largely on Foster v. Evans, 364 Mass. 687 (1981), which at least implicitly assumed that the predecessor to the UFTA had left common law fraudulent conveyance intact.

It seems reasonable that the passage of a uniform statutory cause of action, with a statute of repose of four years, should preempt a previous common law theory with a much longer limitation period. The Court did not take that view in Foster; however, the argument does not appear to have been squarely presented at that point. To decide the question, the Court will have to decide whether the traditional common law theory is sufficiently distinct from the statutory enactment to justify its ongoing existence.

It is worth noting that the trial judge found blatant, ongoing fraud under multiple false identities, and apparently came to wholly reject the defendants’ testimony; the decision is worth reading for entertainment value alone (see Addendum p. 1 of the Appellant’s Brief linked above). It will be interesting to see whether and how the extreme facts in this case affect the Court’s analysis of the law.