A suit to cancel a deed of trust defendant gave his wholly-owned corporation to avoid paying his debts was barred by the California Uniform Fraudulent Transfer Act’s a 7-year statute of repose on fraudulent transfer claims. This decision holds that Civ. Code 3439.09(c)’s seven year limit is a statute of repose, not a statute of limitations and so (a) the defendant need not plead it in the answer as an affirmative defense, rather plaintiff must prove suit before the deadline as an element of its claim, and (b) delayed discovery does not toll the seven year deadline. Here, a homeowner signed a note and deed of trust in favor of a corporation that was his alter ego specifically to avoid creditors’ claims, including those of the homeowners’ association to which his property belonged. But since the association sued more than seven years after the deed of trust was recorded, the suit, which sought to set the deed of trust aside as a fraudulent conveyance, was barred by sec. 3439.09(c).
California Court of Appeal, Fourth District, Division 2 (McKinster, J.); August 9, 2017; 2017 WL 3405061