Bueneman v. Zykan

In Bueneman v. Zykan (Mo. App. 2005) 181 S.W.3d 105, in 1993, defendant Zykan, knowing that he was under investigation for environmental violations, deeded certain land to his wife. in March 1994, the plaintiffs sued Zykan based on the environmental violations. in September 1994, Zykan and his wife further deeded the land to the wife's parents. In 1997, the plaintiffs obtained a judgment against Zykan. In 1998, they filed a fraudulent transfer action against Zykan and his wife's parents. (Id. at pp. 108, 110.) The defendants argued that the statute of limitations under the Uniform Fraudulent Transfer Act had run because the plaintiffs were on notice of the 1993 transfer from recordation of the deed. (Bueneman v. Zykan, supra, 181 S.W.3d at pp. 110-111.) The plaintiffs, on the other hand, argued "that they only discovered the fraudulent transfer when they attempted to execute on the judgment, and they should not reasonably have been expected to discover the fraud prior to the date they obtained a judgment against Zykan." (Id. at p. 110.) The appellate court agreed with the plaintiffs: "We don't believe that [plaintiffs] reasonably could be expected to search the recorder of deeds before they even obtained a judgment against Zykan, or before they realized their judgment was not going to be paid by Zykan. It is not reasonable to expect [plaintiffs] to see into the future and realize that they will obtain judgment against Zykan, Zykan will flee the country and not pay the judgment, and therefore [plaintiffs] are going to have to investigate his property and transactions concerning his property to determine if any have been fraudulent, so that they can bring an action for fraudulent transfer of such property if such fraud is found, in order to finally fulfill their judgment. Such a scenario suggested by [defendants] is unreasonable. "Further, the purpose of the recording laws in general is to establish a priority between innocent claimants to the same property, not to give security to the perpetrators of fraud as against their victims. " (Bueneman v. Zykan, supra, 181 S.W.3d at p. 111.)