CACI 4204 Transfer Explained

California Civil Jury Instructions CACI

4204 “Transfer” Explained

“Transfer” means every method of parting with a debtor’s property or an interest in a debtor’s property.

[Read one of the following options:]

[A transfer may be direct or indirect, absolute or conditional, voluntary or involuntary. A transfer includes [the payment of money/a release/a lease/a license/ [and] the creation of a lien or other encumbrance].]

[In this case, [describe transaction] is a transfer.]

Directions for Use

This instruction sets forth the statutory definition of a “transfer” within the Uniform Voidable Transactions Act (formerly the Uniform Fraudulent Transfer Act). (See Civ. Code, § 3439.01(m).) Read the second bracketed option for the second sentence if the transaction has been stipulated to or determined as a matter of law. Otherwise, read the first bracketed option. Include only the bracketed terms at the end of the first option that are at issue in the case.

Sources and Authority

“Transfer” Defined. Civil Code section 3439.01(m).

“On its face, the UFTA applies to all transfers. Civil Code, section § 3439.01, subdivision (i) defines ‘[t]ransfer’ as ‘every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with an asset or an interest in an asset … .’ The UFTA excepts only certain transfers resulting from lease terminations or lien enforcement.” (Mejia v. Reed (2003) 31 Cal.4th 657, 664 [3 Cal.Rptr.3d 390, 74 P.3d 166], internal citations omitted.)

“Civil Code section 3439.01, subdivision (m) broadly defines ‘transfer’ to mean “every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with an asset or an interest in an asset, and includes payment of money, release, lease, license, and creation of a lien or other encumbrance.’ This definition is broad enough to include transfers of assets by means of executing on a judgment obtained by fraud or collusion.” (Chen v. Berenjian (2019) 33 Cal.App.5th 811, 817 [245 Cal.Rptr.3d 378], internal citation omitted.)

“Under this definition, there is no doubt that an agreement made during marriage in which a debtor-spouse agrees that the nondebtor-spouse’s future earnings, income, or assets would be the nondebtor-spouse’s separate property constitutes a transfer because the debtor-spouse is parting with an interest in an asset—the community property represented by the other spouse’s earnings—in which he or she has a ‘present [and] existing … interest[] during continuance of the marriage.’ ” (Sturm v. Moyer (2019) 32 Cal.App.5th 299, 308 [243 Cal.Rptr.3d 556], original italics, internal citations omitted.)

“In light of the suggestions raised by the legislative language and history, and the strong policy—advanced by both the UFTA and section 911 of the Family Code—of protecting the rights of creditors from fraudulent transfers, we conclude that the Legislature must have intended that UFTA can apply to premarital agreements in which the prospective spouses agree that each spouse’s earnings, income, and property acquired during marriage will be that spouse’s separate property.” (Sturm, supra, 32 Cal.App.5th at p. 315.)

“Transfers to bogus corporations that are wholly owned and controlled by the debtor are ‘transfers’ for purposes of the UFTA.” (PGA West Residential Assn., Inc. v. Hulven Internat., Inc. (2017) 14 Cal.App.5th 156, 173 [221 Cal.Rptr.3d 353].)

Secondary Sources

Ahart, California Practice Guide: Enforcing Judgments & Debts, Ch. 3-C, Prelawsuit Considerations, ¶ 3:319 et seq. (The Rutter Group)
23 California Forms of Pleading and Practice, Ch. 270, Fraudulent Conveyances, §§ 270.35[1], 270.37 (Matthew Bender)
1 Matthew Bender Practice Guide: California Debt Collection and Enforcement of Judgments, Ch. 4, Voidable Transactions, 4.07