I. Billings, Justice.
was conducted in this matter on December 13, 2018. Plaintiff
brought suit under the Uniform Fraudulent Transfer Act
§§ 3571-3582 ("UFTA").
following facts were established at trial: Defendant Dean
Jacobs ("Dean") purchased land at 85 Old County
Road in Damariscotta in 1990 and subsequently built a home
there. 85 Old County Road ("Property" or
"marital home") is the center of this dispute. Dean
married Defendant Sarah Plummer ("Sarah") in 2000.
The two of them treated the Property as their marital home
and raised their two minor children there. The Property
remained solely in Dean's name for thirteen or fourteen
years. In September 2002 Dean bought shares of a
pharmaceutical company from John Higgins ("John")
and signed a promissory note for $1, 040, 000. Sarah was
aware that Dean was purchasing a business from John, but was
not aware of the purchase price. Sarah became aware of the
purchase price sometime between 2010 and 2012. Through that
time only interest payments were made towards the debt and
nothing was paid towards the principal.
spring 2014/ Dean told Sarah that John said he was going to
sue him for the debt owed. Sarah was upset because of how
that would affect the family. In September 2014, Sarah asked
Dean to transfer a one-half interest of the Property to her.
She had not been aware that she had no legal interest in the
home she had been contributing to and raising a family in
with Dean. Dean testified credibly that this was a marital
decision, and he felt it was the right thing to do as Sarah
had been living there for so many years. Dean made this
transfer and recorded it in the Registry of Deeds, Dean did
not believe he was insolvent at this time and was generally
paying the family's living expenses and other bills as
they came due. Sarah did not pay any monetary value for the
2015, John and Dean entered into a settlement agreement in
which Dean acknowledged that he owed John over $1.7 million.
Sarah was generally aware of this agreement. Dean did not pay
John all that was owed under the agreement. Dean paid John
$100, 000 but nothing more.
in 2015, or the first half of 2016, Dean and Sarah's
marriage deteriorated. In late June 2016 Sarah had filed a
petition for judicial separation. In July 2016, they were
still married but not living together in the marital home.
Dean had moved out in the spring and was not welcome in the
home. Sometime in July a sheriff came to the home to serve
Dean with a lawsuit from John. This increased Sarah's
concerns about maintaining the marital home for her minor
children. In July 2016, at Sarah's request, Dean
transferred his remaining one-half interest in the Property
to Sarah and recorded it with the Registry of
Deeds. At the time of the transfer, Dean knew the
marriage was uncertain but was hoping to save it and agreed
to the transfer. Dean would have done anything at that point
to save the marriage. Dean did not believe he was insolvent
at this time and was generally paying his and the
family's living expenses and other bills.
the transfer in 2016, Dean lost his job and driving
privileges due to personal issues. Dean had been the primary
financial provider during the marriage and he and Sarah
had amassed various assets over the course of their marriage.
These assets included a condo in Carrabassett Valley. Dean
and Sarah owned three cars together with a net value of
approximately $25/000. Marital personal property totaled
roughly $50, 000.
also owned some separate real estate. Dean had inherited the
home he was residing in separately from Sarah, owned two
properties as a tenant in common with his sister, and owned a
small lot that he inherited individually. Dean owned an
inherited one-quarter interest in the Professional Building
of Damariscotta, LLC.
also owned Jacobs LTC Pharmaceutical Holdings, LLC. That LLC
did not operate a business, but instead owned one-quarter of
another LLC, Guardian Pharmacy of Maine. Dean had owned
shares in Guardian Pharmacy, but was bought out as part of a
separation agreement for $1, 262 million on July 14, 2016.
also owned debts, including the debt to John and a home
equity line of credit for just under $98, 000. Sarah had no
debts to speak of and no significant assets other than the
marital home that Dean transferred to her.
16, 2017, the District Court (Wiscasset, Raimondi,
J.) granted the parties a judicial
separation. The Judgment of Judicial Separation
incorporated a Marital Settlement Agreement ("MSA")
of the same date executed by the parties. In its equitable
division of the property, the court awarded Dean the
non-marital real estate in his name, and Sarah the marital
home at 85 Old County Road. The court determined that the
remainder of the other property, assets, and debts had been
equitably divided and allocated according to the MSA and
adopted it. Specifically, the MSA addressed the marital debt
owed by Dean to John's estate, and the remaining funds
totaling $830, 000 that were paid to Dean from Guardian
Pharmacy LLC as a result of the buyout.
required that the parties establish an escrow account to
repay the debt to John's estate. It obligated $250, 000
to Sarah as her equitable share of the marital debt to John.
Out of the $830, 000 in remaining funds, $165, 000 was set
aside to Sarah as her separate property, and $250, 000 was
set aside to the escrow account. The remaining funds were set
aside to Dean as his separate property and a portion towards
his share of the escrow account. On November 3, 2017, the
District Court (Wiscasset, Martin, Mag.) entered a
Divorce Judgment. A second MSA of even date was incorporated
into the Judgment. The Property at 85 Old County Road was set
aside to Sarah and the remaining property in Dean's name
was set aside to him.
Counts of Plaintiff's Complaint are before this
court. Count I alleges that Dean's transfers
of the Property to Sarah are both fraudulent under 14 M.R.S.
§ 3576(1), which provides that a transfer is fraudulent
under the UFTA if the transfer is made without receiving a
reasonably equivalent value in exchange for the transfer and
the debtor was either insolvent at that time or became
insolvent as a result of the transfer. Count II alleges
that both the transfers were made with "actual intent to
hinder, delay or defraud" the Plaintiff as Dean's
creditor. § 3575(1)(A). Alternatively, the Plaintiff
alleges fraudulent transfers under section 3575(1)(B). Under
that theory, Plaintiff first claims that Dean received no
"reasonably equivalent value in exchange for the
transfer" and Dean was engaged in a transaction for
which his remaining assets were unreasonably small in
relation to the transaction. Id. §
3575(1)(B)(1). Next, Plaintiff avers that Dean received
nothing in exchange for the transfer, and that he intended,
believed, or "reasonably should have believed that he
would incur debts beyond his ability to pay as the debts
became due." Id. § 3575(1)(B)(2). Because
Plaintiff's claims under sections 3575(1)(B) and 3576(1)
both involve whether Dean received reasonably equivalent
value in exchange for the transfers, this court first
addresses whether Dean made the transfer with an actual
intent to defraud the Plaintiff.
Did Dean Make the Transfers to Sarah with Actual
Intent to Hinder, Delay, or Defraud the
creditor challenging the validity of a transfer must prove by
clear and convincing evidence that the conveyance was
fraudulent. Morin v. Dubois, 1998 ME 160, ¶ 3,
713 A.2d 956. Because debtors are unlikely to admit an intent
to defraud creditors, the UFTA provides a comprehensive, but
not exclusive, list of factors for courts to consider in
determining whether a transfer was made with the requisite
intent. Id. ¶ 4. The factors to be considered
A. The transfer or obligation was to an insider;
B. The debtor retained possession or control of the property
transferred after the transfer;
C. The transfer or obligation was disclosed or concealed;
D. Before the transfer was made or obligation was incurred,
the debtor [was] sued or threatened with suit;
E. The transfer was of substantially all the debtor's
F. The debtor absconded;
G. The debtor removed or concealed assets;
H. The value of the consideration received by the debtor was
reasonably equivalent to the value of the asset transferred
or the amount of the obligation incurred;
I. The debtor was insolvent or became insolvent shortly after
the transfer was made or the obligation was incurred;
J. The transfer occurred shortly before or shortly after a
substantial debt was incurred; and
K. The debtor transferred the essential assets of the
business to a lienor who had transferred the assets to an
insider of the debtor.
case at bar, this court determines that the Plaintiff has not
proven, by clear and convincing evidence, that Dean made the
transfers with the intent to hinder, defraud, or delay the
Plaintiff. Although some of the factors to be considered
weigh in the Plaintiff's favor, they are not
overwhelming. Dean did make the transfer to an insider as
Sarah was his wife at the time of the transfers, but it is
clear to the court that this is not a sham separation and
divorce. This is evidenced by Dean's credible testimony
that he would have done anything to save his marriage.
Moreover, Sarah is not the typical insider but rather a sort
of hostile insider. This is shown by ...