Rios de Martinez v. Landaverde.
2024 COA 115. No. 24CA0192. Dissolution of Marriage—Real Property—Colorado Uniform Fraudulent Transfer Act—Civil Conspiracy—Spouse as Creditor.
October 17, 2024
Wife initiated a dissolution of marriage proceeding that was pending at the time of this case. Wife later filed a separate civil action alleging that (1) husband violated the Colorado Uniform Fraudulent Transfer Act (CUFTA) by conveying certain properties (the properties) via quitclaim deeds for no consideration to insiders (his children or entities his children controlled) to avoid disposition in the dissolution of marriage proceeding; and (2) husband, two of husband’s children from a prior marriage, an entity allegedly controlled by the children, and an entity allegedly controlled by husband (collectively, defendants) engaged in a civil conspiracy to transfer the properties to avoid the disposition of marital property during a dissolution of marriage proceeding, in violation of CUFTA. Defendants moved to dismiss wife’s complaint for failure to state a claim. The district court granted the motion, reasoning that the complaint failed to allege sufficient facts for the court to find that wife was a creditor under CUFTA, that husband’s transfers were fraudulent, and that wife had a plausible ownership interest in the properties.
On appeal, wife argued that the district court erred by concluding that she failed to plead facts sufficient to support her CUFTA and civil conspiracy claims. To prevail on her CUFTA claim, wife had to show that she had a right to payment from husband that existed when he made the allegedly fraudulent transfers. The court of appeals held that one spouse may become a creditor of the other for purposes of CRS § 38-8-105(1)(a) when the transferring spouse had reason to know that dissolution proceedings were imminent. The complaint here identified the properties at issue and dates of husband’s acquisitions and transfers of these properties, and alleged that the transfers occurred under the knowledge and in anticipation of wife’s filing for dissolution of marriage. Viewed in the light most favorable to wife, these allegations sufficiently alleged that wife was husband’s creditor under CUFTA. Wife’s complaint also sufficiently alleged fraud. As to the civil conspiracy claim, defendants conceded that a fraudulent transfer in violation of CUFTA can support a creditor’s civil conspiracy claim, so if the district court erroneously dismissed wife’s underlying CUFTA claim, it also erroneously dismissed her derivative civil conspiracy claim. Because the complaint alleged facts sufficient to support wife’s CUFTA claim, her civil conspiracy claim also should not have been dismissed.
The judgment was reversed and the case was remanded to reinstate wife’s complaint.