PGA West Residential Assn. v. Hulven International
E064270M
| Cal. Ct. App. | Aug 23, 2017Background
- In 2004 Mork recorded a deed of trust naming Hulven (a sham corporation later incorporated) as beneficiary, securing a fake note; no payments were made and no consideration passed.
- PGA West obtained a judgment against Mork in 2011 and recorded abstracts creating judgment liens on the condominium.
- In 2012–2013 Hulven (via a purported president and substitution of trustee) initiated nonjudicial foreclosure proceedings.
- PGA West sued in March 2013 seeking declaratory/injunctive relief, alleging the deed and foreclosure were fraudulent transfers to defeat creditors.
- Hulven demurred, arguing the action was barred by the UFTA’s seven-year limitations/section of repose (§ 3439.09(c)); the trial court overruled the demurrer, tried the case, and ruled for PGA West. Hulven appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether naming a sham entity as deed beneficiary is a "transfer" under the UFTA | PGA West: No real transfer occurred because Hulven was fictitious and no obligation existed | Hulven: Yes — transfers to sham entities are transfers under UFTA | Held: Yes; transfers to sham/dummy entities qualify as "transfer" under the UFTA |
| Whether claims attacking the deed are governed by UFTA § 3439.09(c)’s 7‑year limit | PGA West: Its suit seeks property-priority/declaratory relief, not a UFTA voiding action; alternative doctrines and tolling apply | Hulven: The gravamen is an attack on a fraudulent transfer, so § 3439.09(c) applies | Held: The complaint’s gravamen is attacking a fraudulent transfer; § 3439.09(c) applies |
| Whether § 3439.09(c) is a statute of limitations (forfeitable/tollable) or a statute of repose (non‑forfeitable, non‑tolled) | PGA West: Characterize § 3439.09(c) as a limitations rule subject to forfeiture and tolling | Hulven: § 3439.09(c) is a statute of repose that extinguishes the right and cannot be forfeited or tolled | Held: § 3439.09(c) is a statute of repose—it extinguishes the right, is not tolled, and cannot be forfeited |
| Effect of § 3439.09(c) on this case (timeliness) | PGA West: Filed within relevant accrual/tolling rules; reversal would reward fraud | Hulven: Complaint filed more than 7 years after the 2004 deed, so the claim is extinguished | Held: PGA West filed in 2013, beyond the 7‑year repose (deadline Jan 27, 2011); claims were extinguished and demurrer should have been sustained without leave to amend |
Key Cases Cited
- Mejia v. Reed, 31 Cal.4th 657 (2003) (describing UFTA scope and definitions of transfer and remedies)
- Macedo v. Bosio, 86 Cal.App.4th 1044 (2001) (recognizing § 3439.09(c) as an overarching maximum time to attack fraudulent transfers)
- Cortez v. Vogt, 52 Cal.App.4th 917 (1997) (tolling/relationship between UFTA limitations and common‑law accrual rules)
- Lantzy v. Centex Homes, 31 Cal.4th 363 (2003) (discussion of statutes of limitations principles)
- Blank v. Kirwan, 39 Cal.3d 311 (1985) (pleading/demurrer standards)
- Minton v. Cavaney, 56 Cal.2d 576 (1961) (statute of limitations as affirmative defense and forfeiture principles)
- CTS Corp. v. Waldburger, 573 U.S. 1 (2014) (distinguishing statutes of limitations from statutes of repose and purpose of repose)
- ANZ Securities v. [name omitted], 137 S. Ct. 2042 (2017) (Supreme Court discussion of repose and when repose begins to run)