Churchill v. Palmer

226 N.W.2d 60, 57 Mich. App. 210, 1974 Mich. App. LEXIS 686
CourtMichigan Court of Appeals
DecidedDecember 5, 1974
DocketDocket 18663
StatusPublished
Cited by8 cases

This text of 226 N.W.2d 60 (Churchill v. Palmer) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Churchill v. Palmer, 226 N.W.2d 60, 57 Mich. App. 210, 1974 Mich. App. LEXIS 686 (Mich. Ct. App. 1974).

Opinion

Holbrook, P. J.

This case arises from the death of plaintiffs husband by gunshot wounds inflicted by defendant Dr. Gene Wallace Fredericks. 1 Plaintiff brought an action as administratrix of her husband’s estate for money damages for wrongful death in the Oakland County Circuit Court. After the commencing of the wrongful death action, defendant Janet Fredericks was granted a divorce from Gene Fredericks pro confesso. Thereafter, certain entireties property belonging to the Fredericks’ was conveyed to Robert Palmer in trust. Palmer later conveyed certain trust property to defendants Mr. and Mrs. Harold Waltman. The conveyance was recorded. 2

In March of 1972, plaintiffs attorney received a letter from one of the attorneys for defendant Gene Fredericks informing plaintiff that Dr. Fredericks had no assets or property. Later, plaintiffs wrongful death complaint was amended to add Mrs. Fredericks as co-defendant.

Plaintiff filed a complaint in Oakland County Circuit Court based upon the Uniform Fraudulent Conveyance Act, MCLA 566.11 et seq.; MSA 26.881 *213 et seq., alleging certain fraudulent conveyances made by defendants Gene and Janet Fredericks to defendant Robert Palmer, as trustee, and grantees of Robert Palmer. Summary judgment was granted to defendants Ted R. Fredericks, Gene Wallace Fredericks, Robert J. Palmer, Harold C. Waltman, Margaret Waltman, Eraldo J. Valle, and Grace Valle, "but without prejudice as to any proceedings permitted by law in aid of execution of any judgment obtained by the Estate of Neil Churchill”. (Emphasis supplied.) Further, an order was entered dismissing plaintiffs second amended complaint as to defendants Valle and Waltman. Plaintiff here appeals as of right and sets out a number of issues, decision in only two of which is necessary for just resolution of the case, at this time.

I

Must plaintiff have judgment in her wrongful death action prior to beginning an action under the Uniform Fraudulent Conveyance Act?

In pertinent part, MCLA 566.11; MSA 26.881 provides:

" 'Creditor’ is a person having any claim, whether matured or unmatured, liquidated or unliquidated, absolute, fixed or contingent. 'Debt’ includes any legal liability, whether matured or unmatured, liquidated or unliquidated, absolute, fixed or contingent.”

MCLA 566.20; MSA 26.890 reads as follows:

"Where a conveyance made or obligation incurred is fraudulent as to a creditor whose claim has not matured, he may proceed in a court of competent jurisdiction against any person against whom he could have proceeded had his claim matured, and the court may,
"(a) Restrain the defendant from disposing of his property,
*214 "(b) Appoint a receiver to take charge of the property,
"(c) Set aside the conveyance or annul the obligation, or
"(d) Make any order which the circumstances of the case may require.”

It has been said that the purpose of the legislation was to make available to a creditor, as defined by the act, a remedy which theretofore had not been available until the creditor had first reduced his claim to judgment. Hartford Accident & Indemnity Co v Jirasek, 254 Mich 131, 140; 235 NW 836, 839 (1931). Further, it was said that the act is remedial and should be given a liberal construction. Id at 141; NW 839.

One with a tort claim is a creditor from the date of the tort; any liabilities are considered as existing from the date the cause of action arose. Ashbaugh v. Sauer, 268 Mich 467, 472; 256 NW 486, 487 (1934). It has been held that a judgment creditor’s bill may precede judgment. Lucking v Barker, 274 Mich 103; 264 NW 306 (1936). By analogy, there seems no viable reason why a uniform fraudulent conveyance proceeding should not precede a wrongful death judgment. See Annot, Right of tort claimant, prior to judgment, to attack conveyance or transfer as fraudulent, 73 ALR2d 749, 751; 37 Am Jur 2d, Fraudulent Conveyances, § 145, pp 818-819; and, 37 CJS, Fraudulent Conveyances, § 331d, p 1164. Cf. 9 Callaghan’s Michigan Pleading & Practice, Creditors’ Suits, § 68.05, p 503. Support to this interpretation is aided by MCLA 566.221; MSA 26.971, which provides:

"Every conveyance or assignment, in writing or otherwise, of any estate or interest in lands, or in goods or things in action, or of any rents or profits issuing therefrom, and any charge upon lands, goods or things in action, or upon the rents or profits thereof, made *215 with the intent to hinder, delay or defraud creditors or other persons of their lawful suits, damages, forfeitures, debts or demands, and every bond or other evidence of debt given, suit commenced, decree or judgment suffered, with the like intent, as against the persons so hindered, delayed or defrauded, shall be void.”

Thus, we rule that plaintiff may maintain her action under the Uniform Fraudulent Conveyance Act as one who is a tort claimant and, thus, a creditor. As such, we find that the preferred view, which follows the spirit of the legislation, is to allow an action to be brought prior to the rendering of a judgment in a preceding action.

II

Did plaintiff state facts sufficient to state a claim upon which relief could be granted?

An argument similar to that made by defendants herein was proffered in Zuniga v Evans, 87 Utah 198, 209; 48 P2d 513, 517; 101 ALR 532, 538-539 (1935). The Utah Supreme Court wrote:

"It ought to be sufficient, we think, in a case of this kind, to allege, in addition to necessary matters of inducement, that at a certain time the defendant accused made the conveyance which is attacked; that he was then insolvent, if such be the fact, or that he was thereby rendered insolvent, if that be the fact; and that such conveyance was made without any consideration passing from the grantee to the grantor therefor, or that a fair consideration was not paid, according to the fact which the pleader intends to prove.”

See also 37 Am Jur 2d, supra, § 210, p 867. 3 In the *216 author’s comments to GCR 1963, 112.2, 1 Honigman & Hawkins, Michigan Court Rules Annotated, p 238, in pertinent part, it is said:

"It should not be necessary to have formal allegations expressly covering each technical element of a fraud cause of action, if the facts pleaded show that these elements might be proved. Facts showing the time, place, contents of the misrepresentation or nature of the misleading act, facts misrepresented, and identification of what was obtained thereby, should be sufficient.

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Cite This Page — Counsel Stack

Bluebook (online)
226 N.W.2d 60, 57 Mich. App. 210, 1974 Mich. App. LEXIS 686, Counsel Stack Legal Research, https://law.counselstack.com/opinion/churchill-v-palmer-michctapp-1974.