Background
Itria Ventures LLC, a judgment creditor, pursued post-judgment collection proceedings against Carjavi 2, LLC. It alleged that Carjavi constructively fraudulently transferred $50,000 to Christopher Ruwe under Florida’s Uniform Fraudulent Transfer Act.
The parties agreed that Carjavi gave Ruwe the money to cover a security deposit and six months’ rent on a residence leased to a family member of Carjavi’s owner. The trial court entered final summary judgment for Itria, finding that Carjavi had received no reasonably equivalent value for the transfer.
The Court’s Holding
The Third District affirmed. Ruwe did not dispute that Itria’s claim predated the transfer or that Carjavi was insolvent at the time of, or because of, the transfer. Thus, the only disputed statutory element was whether Carjavi received reasonably equivalent value.
The summary-judgment record conclusively showed it did not. Itria’s evidence that Carjavi received no economic or other benefit from paying its owner’s family member’s lease obligations was unrebutted. Ruwe’s statutory good-faith defense was unavailable because it applies to actual-fraud claims, not constructive-fraud claims under section 726.106(1). His indirect-benefit argument was raised for the first time in his reply brief and, in any event, was unsupported by evidence.
Key Takeaways
- A transfer may be constructively fraudulent without proof that the debtor intended to hinder, delay, or defraud a creditor.
- Paying residential lease obligations for an owner’s family member did not supply reasonably equivalent value to the debtor on this record.
- The FUFTA good-faith defense in section 726.109(1) does not apply to a constructive-fraud claim under section 726.106(1).
Why It Matters
The decision confirms that a judgment creditor can establish a constructive fraudulent transfer through undisputed proof that an insolvent debtor diverted funds without receiving commensurate value. A transferee asserting an indirect benefit must timely raise the issue and produce evidence of sufficient concrete value to the debtor.