Estate of Juhnke v. Marquardt, No. 21574.

• Court: Supreme Court of South Dakota
• Writing for the Court: GILBERTSON, Justice.
• Citation: 623 N.W.2d 731,2001 SD 26
• Parties: The ESTATE OF Kerry JUHNKE, Deceased, by Janice JUHNKE, Administratrix, and the Estate of Thomas Juhnke, Deceased, by Teresa Juhnke, Administratrix, Plaintiffs and Appellants, v. George MARQUARDT, as Special Administrator of the Estate of Calvin Marquardt, Deceased, George Marquardt, Darlene Engelmeyer, Edward Engelmeyer, Dotty Adams, Carol Marnach, and Steve Marnach, Defendants and Appellees.
• Docket Number: No. 21574.
• Decision Date: 07 March 2001

623 N.W.2d 731
2001 SD 26

The ESTATE OF Kerry JUHNKE, Deceased, by Janice JUHNKE, Administratrix, and the Estate of Thomas Juhnke, Deceased, by Teresa Juhnke, Administratrix, Plaintiffs and Appellants,
v.
George MARQUARDT, as Special Administrator of the Estate of Calvin Marquardt, Deceased, George Marquardt, Darlene Engelmeyer, Edward Engelmeyer, Dotty Adams, Carol Marnach, and Steve Marnach, Defendants and Appellees

No. 21574.

Supreme Court of South Dakota.

Argued January 10, 2001.

Decided March 7, 2001.

Jonathan K. Van Patten, Vermillion, Robert J. Burns, Burns Law Firm, Sioux Falls, Attorneys for plaintiffs and appellants.

John H. Billion, Lon J. Kouri of May, Johnson, Doyle & Becker, Sioux Falls, Attorneys for defendants and appellees.

GILBERTSON, Justice.

[¶ 1.] The estates of Thomas and Kerry Juhnke (Juhnkes) brought this action under South Dakota's version of the Uniform Fraudulent Transfers Act (UFTA) to set aside various gifts made by Calvin Marquardt (Marquardt) to the defendants. The circuit court granted summary judgment in favor of the defendants as to certain transfers, finding that the date of transfer under UFTA was the date the gifts were received. Therefore, the UFTA

623 N.W.2d 732

claims were barred by the statute of limitation. We affirm

FACTS AND PROCEDURE

[¶ 2.] Marquardt operated a feed and chemical business under the name of Marquardt Feed. As part of the business operation, Calvin would often extend credit to his customers and receive promissory notes in return. Over time, Marquardt loaned substantial amounts of money to Juhnkes, who operated a hog facility near Marquardt's home. The relationship between Marquardt and Juhnkes deteriorated as the parties began to dispute the actual amount of the loan. This dispute led to a tragic confrontation on July 10, 1993, during which Marquardt shot and killed both Thomas and Kerry. Marquardt was convicted of first degree manslaughter and sentenced to twenty-five (25) years in prison. On August 13, 1996, Marquardt died while still incarcerated.

[¶ 3.] On December 15, 1994, a wrongful death action was commenced against Marquardt by Janice Juhnke, the wife of Kerry, and Teresa Juhnke, the wife of Thomas. Default judgment was entered in favor of each estate in the amount of $1.5 million. During the course of the wrongful death action, it was discovered that Marquardt had made substantial gifts to his children and nieces, who are the defendants in this action. Those gifts consisted of a number of promissory notes payable to Marquardt Feed by various customers of the business.

[¶ 4.] This present action was commenced on July 9, 1996 to set aside a number of those gifts as fraudulent transfers pursuant to SDCL chapters 54-8 and 54-8A. Specifically, Juhnkes challenged certain transfers they claimed were made after July 10, 1993, the date they became creditors of Marquardt. While the promissory notes in question were all gifted to the defendants prior to August 28, 1992, Juhnkes claimed they were not "transferred" under UFTA terminology until the payors made payment on the notes. The defendants received multiple payments from the payors on the notes after July 10, 1993. Juhnkes claimed the notes were not "transferred" until the defendants received those payments and therefore, Juhnkes were entitled to avoid those payments under SDCL 54-8A-5(a). The defendants claimed the notes were transferred when they received physical possession of the notes. The circuit court granted summary judgment in favor of the defendants as to Juhnkes' claim under SDCL 54-8A-5, finding that the notes were transferred on the date they were received by the defendants. Juhnkes appeal raising the following issue:

Whether the circuit court erred in holding that the notes were "transferred" when delivered to the defendants, rather than when payments on the notes were received.

STANDARD OF REVIEW

[¶ 5.] When reviewing a trial court's decision to grant summary judgment, we will affirm only if all legal questions have been decided correctly and there are no genuine issues of material fact. Holzer v. Dakota Speedway, 2000 SD 65, ¶ 8, 610 N.W.2d 787, 791 (citations omitted). The nonmoving party will receive the benefit of all reasonable inferences that can be drawn from the facts. Id. It is the responsibility of the moving party to demonstrate the absence of genuine issues of material fact. Id. at 791-92. Only if that burden is met will the moving party be entitled to judgment as a matter of law. Id. Additionally, summary judgment will be affirmed if it is correct for any reason. Id. at 792.

ANALYSIS AND DECISION

[¶ 6.] This Court recently discussed UFTA in Prairie Lake Health Care Sys., Inc. v. Wookey, 1998 SD 99, 583 N.W.2d 405. We noted that "the purpose of the UFTA is to thwart depletion of debtors' estates to the disadvantage of unsecured creditors." Id. ¶ 6, 583 N.W.2d

623 N.W.2d 733

at 410. Under UFTA, both actually fraudulent transfers and constructively fraudulent transfers are subject to avoidance. Id. ¶ 7, 583 N.W.2d at 411. While a finding of fraudulent intent is...