482 F. App'x 750
4th Cir.2012Background
- Creditors obtained a judgment in 1994 against Debtors for $2.84 million plus fees; Debtors later filed Chapter 11 in 2008 and converted to Chapter 7.
- Cheyenne Sales Co. used as conduit; Debtors transferred assets to Transferees Virgil D. LaRosa and Sandra La-Rosa in alleged WVUFTA violations.
- Creditors pursued WVUFTA claims in West Virginia; district court awarded $1,191,609 and attached assets valued at $6.799 million.
- Transfer categories included a $491,609 ante-judgment transfer and Cheyenne’s purchase of annuities funded by a $700,000 line-of-credit drawdown.
- Court held the WVUFTA claims on the line of credit were time-barred under the statute of repose, but vacated and remanded on other WVUFTA issues.
- Court remanded to determine valuations for Cheyenne-Regal transfers and specify the Debtors’ transferred assets.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether WVUFTA claim on line-of-credit drawdown is time-barred | Creditors argue tolling of repose began with fraudulent transfers | Transferees contend accrual and repose ran from 2001 write-and-deliver dates | Claim time-barred; but reversed on this point and remanded for further findings on related transfers |
| Whether district court abused Rule 59(e) in denying increased damages | Creditors sought larger award including Cheyenne-Regal transfers | Transferees argued no basis for higher award | Abuse of discretion; remanded to determine asset transfers and award amount |
| What assets were transferred from Debtors to trigger WVUFTA violations and amount | Creditors seek damages for assets transferring from Debtors | District court failed to specify asset transfers and values | Remand to identify transferred assets and recalculate award; specify asset transferred under WVUFTA |
Key Cases Cited
- Higgins v. E.I. DuPont de Nemours & Co., 863 F.2d 1162 (4th Cir. 1988) (statute of repose interpretation and testing period guidance)
- Rubin v. Manufacturers Hanover Trust Co., 661 F.2d 979 (2d Cir. 1981) (obligation incurred timing for guaranties under UFTA amendments)
- Collison v. International Chem. Workers Union, 34 F.3d 233 (4th Cir. 1994) (abuse of discretion standards and Rule 59(e) review)