State Farm Mutual Automobile Insurance v. Cordua
834 F. Supp. 2d 301
E.D. Pa.2011Background
- This action arises from PUFTA/NJUFTA and common-law conspiracy/tort claims tied to fraudulent transfers linked to Midtown Medical defendants and a check-cashing entity, United Cut Rate Store, owned by D’Amico.
- State Farm obtained bank records showing checks cashed at United by Midtown entities and Nestel; Cordua allegedly acted as the bailor/bailee with Nestel.
- The latest cancelled check in plaintiffs’ possession is dated August 1, 2002, with transfers alleged to have occurred through United.
- Plaintiffs allege that United and Cordua aided in fraudulent transfers to hinder creditors, and they seek relief under PUFTA, NJUFTA, and related conspiracy/concerted-tort claims.
- The court grants summary judgment to dismiss constructive fraud claims but denies summary judgment on the actual-intent and conspiracy claims, leaving those issues to trial.
- The case involves cross-motions for summary judgment and related briefing on timeliness and evidentiary sufficiency.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| PUFTA constructive-fraud timeliness | Plaintiffs argue discovery tolls apply | Latest transfer in 2002; four-year bar | Constructive-fraud claims time-barred; dismissed. |
| PUFTA actual-intent timeliness | Discovery rule tolls the one-year window | Limitation runs from transfer or discovery per §5109(1) | Genuine issue for trial; not time-barred as to the actual-intent claim. |
| NJUFTA claims timeliness | Same discovery-based tolling applies | Same four-year/one-year framework applies | Claims timely; conspiracy and related claims survive for trial. |
| United as debt/transferee and sufficiency of proofs | Evidence shows United cashed checks and engaged in transfers | Need stronger prima facie showing of PUFTA/NJUFTA elements | Issue of material fact exists; summary judgment denied on these grounds. |
Key Cases Cited
- Bohus v. Beloff, 950 F.2d 919 (3d Cir. 1991) (discovery rule and what plaintiff knew or should have known standard apply to tolling)
- Urland v. Merrell-Dow Pharmaceuticals, Inc., 822 F.2d 1268 (3d Cir. 1987) (knew or should have known standard for discovery rules)
- Freitag v. McGhie, 133 Wash.2d 816, 947 P.2d 1186 (Wash. 1997) (one-year savings provision begins upon discovery of fraud)
- Duran v. E.G. Henderson, 71 S.W.3d 833 (Tex.App.2002) (creditor’s discovery of fraud governs accrual under UFTA)
- In re Sw. Supermarkets, L.L.C., 315 B.R. 565 (Bankr. D. Ariz. 2004) (fraudulent transfer claims governed by discovery of fraud rule)
- In re Bushey, 210 B.R. 95 (Bankr. N.D. Ohio 1997) (bankruptcy context applying discovery-of-fraud rule)
- Taylor v. Tukanowicz, 290 Pa. Super. 581, 435 A.2d 181 (Pa. Super. Ct. 1981) (due diligence factual issue for jury to decide)
- Hecht v. Malvern Preparatory School, 716 F. Supp. 2d 395 (E.D. Pa. 2010) (discovery rule and statute of limitations principles in fraud contexts)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (summary judgment standard requiring no genuine issue of material fact)