State v. Tucci
| Decision Date | 04 April 2019 |
| Docket Number | Docket: Cum-18-292 |
| Citation | 206 A.3d 891 |
| Parties | STATE of Maine v. Daniel B. TUCCI Sr. et al. |
| Court | Maine Supreme Court |
Lawrence C. Winger, Esq. (orally), Portland, for appellants Daniel B. Tucci, Sr., Beatrix T. Tucci, and March 21, LLC
Janet T. Mills, Attorney General, and Thomas A. Knowlton, Asst. Atty. Gen. (orally), Office of the Attorney General, Augusta, for appellee State of Maine
Panel: SAUFLEY, C.J., and ALEXANDER, MEAD, GORMAN, JABAR, HJELM, and HUMPHREY, JJ.
[¶1] Daniel B. Tucci Sr., Beatrix T. Tucci, and March 31, LLC (collectively, the Tuccis) appeal from a judgment of the Superior Court (Cumberland County, L. Walker, J. ) in favor of the State on the State's complaint against the Tuccis for fraudulent transfer pursuant to 14 M.R.S. § 3575(1)(A) (2018). The Tuccis argue that the State's action is barred by 14 M.R.S. § 3580(1) (2018), pursuant to which a cause of action with respect to a fraudulent transfer is extinguished unless brought within six years after the transfer or, if later, within one year after the transfer was or could reasonably have been discovered. Although we conclude that section 3580 is a statute of repose that has displaced the common law doctrine of estoppel on which the court relied in rejecting the Tuccis' section 3580(1) defense, we nevertheless affirm the judgment because the court's factual findings apply with equal force to trigger the one-year discovery exception to the six-year limitation provided in section 3580(1).
[¶2] The following facts are drawn from the Superior Court's judgment and are supported by the record. The Tuccis are longtime residents of property on Monument Street in Portland. Beginning no later than the year 2000, Daniel Tucci was engaged in business as a sole proprietor doing various handyman and home repair projects. Tucci was the subject of numerous customer complaints. For example, in 2008 he was convicted of Class B theft after charging $ 10,000 to a customer's credit card without her permission. In 2009, two other customers obtained judgments against him in the amounts of $ 3,500 and $ 1,800.
[¶3] On January 23, 2009, Tucci inherited a one-quarter interest in the Monument Street property, which was valued at approximately $ 81,000. On February 24, 2009, Tucci transferred his interest in the property to himself and his wife, as joint tenants, for no consideration. The release deed was recorded in the Cumberland County Registry of Deeds. On September 23, 2009, Tucci formed March 31, LLC, of which his wife and the couple's three children were named members—Tucci was not a member. On November 24, 2009, Tucci and his wife conveyed their joint one-quarter interest in the property to March 31, LLC, for no consideration. The release deed was also recorded in the Cumberland County Registry of Deeds.
[¶4] In 2009 and 2010, Tucci claimed on his tax returns that he paid $ 6,000 in rent and paid no property taxes. Following a stroke in 2010, Tucci began to receive Social Security Disability Income (SSDI) and temporary assistance for needy families (TANF) benefits. At this time, however, Tucci had a substantial amount of cash hidden in his bedroom ceiling that he failed to disclose to the Maine Department of Health and Human Services.
[¶5] Around 2011, after receiving a number of complaints, the Consumer Protection Division of the Attorney General's Office began investigating Tucci's handyman business. The Attorney General issued Tucci a civil investigative demand for documents and testimony. Tucci produced no documents and testified that he was receiving food stamps and SSDI. Based on his receipt of needs-based benefits and his repeated representations of poverty, the Attorney General concluded that Tucci could not pay any civil judgment that might be entered against him but continued to pursue a permanent injunction barring him from conducting business.
[¶6] In February 2012, the State commenced an action against Tucci alleging that he had violated the Unfair Trade Practices Act (UTPA), see 5 M.R.S. §§ 205-A to 214 (2018). Throughout the course of discovery, he never disclosed the existence of March 31, LLC. At the trial on the UTPA complaint, Tucci again testified to having no assets, and several consumers also testified that Tucci had stated that he had no assets. In April 2013, the court permanently enjoined Tucci from operating a home repair or handyman business. He was ordered to pay $ 236,500.50 in restitution for the benefit of the consumers he had harmed, as well as $ 140,000 in civil penalties, which were suspended as long as he paid $ 250 per month toward the restitution.
[¶7] Although Tucci did not make payments, the State chose not to commence a disclosure hearing during which Tucci would have been required to disclose under oath his income and assets, see 14 M.R.S. §§ 3122 - 3125 (2018) ; neither did the State search registries of deeds to determine whether Tucci owned any real property.
[¶8] The Superior Court found that "based on the various representations Tucci made to the [Attorney General], his tax returns, and testimony of consumers at the UTPA trial, [the Attorney General] believed Tucci had no significant assets and was a tenant in an apartment at [the] Monument Street [property]." On March 29, 2016, the Attorney General's office received a tip that Tucci may have an ownership interest in the property and that the property was listed for sale for $ 2.5 million. The Attorney General then undertook a title search and discovered the 2009 transfers to Tucci and his wife and to March 31, LLC.
[¶9] Within days of that discovery, on April 8, 2016, the State brought a complaint for fraudulent transfer pursuant to the Uniform Fraudulent Transfer Act (UFTA), 14 M.R.S. §§ 3571 - 3582 (2018) against the Tuccis. A bench trial was held on February 12 and 13, 2018. Thereafter the parties submitted extensive proposed findings of fact and conclusions of law. After considering the evidence introduced at trial and the parties' proposed findings, the Superior Court entered a judgment and order in the State's favor. The court determined that the Tuccis were equitably estopped from asserting the bar set out in section 3580(1) as an affirmative defense and that the State had shown by clear and convincing evidence that Tucci transferred his property with actual intent to hinder, delay, or defraud creditors in violation of 14 M.R.S. § 3575(1)(A).1 The Tuccis appeal.
[¶10] The Tuccis argue that the State's fraudulent transfer claim is barred by the time limitations established by section 3580. Pursuant to that statute, "[a] cause of action with respect to a fraudulent transfer or obligation under [the UFTA] is extinguished unless action is brought ... [u]nder section 3575 [ (1)(A) ] within 6 years after the transfer was made or the obligation was incurred or, if later, within one year after the transfer or obligation was or could reasonably have been discovered by the claimant." In response, the State asserts that (1) section 3580(1) does not apply to the State because the statute does not specifically name the State, (2) even if the statute applies to the State, the Tuccis are equitably estopped from raising section 3580(1) as an affirmative defense, and (3) even if the statute applies to the State and the Tuccis are not estopped from raising the defense, the Tuccis did not prove their section 3580(1) defense by a preponderance of the evidence. Each of the State's arguments will be discussed in turn.
[¶11] The State asserts that it is not bound by any statute unless it is expressly named in it. See State v. Crommett , 151 Me. 188, 193, 116 A.2d 614, 616 (1955) (). The plain language of section 3580(1) does not explicitly name the State; it uses only the term "claimant." "Claimant" is not defined by the UFTA, but, pursuant to section 3572, a creditor "means a person who has a claim" and a person "means an individual, partnership, corporation, association, organization, government or governmental subdivision or agency , business trust, estate, trust or any other legal or commercial entity." 14 M.R.S. § 3572(4), (9) (emphasis added).
[¶12] Because the State, by definition, is a "person" with a claim under the statute, the Tuccis' contention that section 3580(1) is broad enough to apply to the State is not without merit. However, we need not resolve the issue because we hold that section 3580 is a statute of repose.2 "A statute of repose is a statute barring any suit that is brought after a specified time since the defendant acted ...." Baker v. Farrand , 2011 ME 91, ¶ 16 n.4, 26 A.3d 806 (quotation marks omitted). It "effect[s] a legislative judgment that a defendant should be free from liability after the legislatively determined period of time." Cal. Pub. Emps.' Ret. Sys. v. ANZ Sec., Inc. , 582 U.S. ––––, 137 S.Ct. 2042, 2049, 198 L.Ed.2d 584 (2017) (quotation marks omitted).
[¶13] That section 3580 is a statute of repose is confirmed by the language of the statute, which "reflects the legislative objective to give a defendant a complete defense to any suit after a certain period." Id. ; see also CTS Corp. v. Waldburger , 573 U.S. 1, 8, 134 S.Ct. 2175, 189 L.Ed.2d 62 (2014) ; Nat'l Auto Serv. Ctrs. v. F/R 550, LLC , 192 So.3d 498, 510 (Fla. Dist. Ct. App. 2016). In particular, the term "extinguished" used in section 3580 sets an outer limit on the right to bring an action, rather than merely barring the remedy. See Nat'l Auto Serv. Ctrs. , 192 So.3d at 510. Furthermore, the UFTA's official comments specifically express the statutory intent to bar the underlying right and not merely the remedy upon expiration of the statutory periods prescribed. Unif. Fraudulent Transfer Act Prefatory Note, 7A Pt. II U.L.A. 249 (2017).
[¶14] Accordingly, because ...
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Martin v. Somerset Cnty.
...of Corrs., 2018 ME 103, ¶ 12, 190 A.3d 237 (mentioning equitable tolling but finding it not applicable); State v. Tucci, 2019 ME 51, ¶ 16, 206 A.3d 891 (finding that equitable tolling was not an available remedy). --------- ...