Najam, J.
Statement of the Case
In April 2017, the trial court entered a default judgment against Angela Lawson on the State of Indiana’s complaint to recover public funds stolen by Angela during her tenure as Owen County Auditor. In its complaint, the State alleged that, when her theft was about to be discovered, Angela had fraudulently conveyed to her husband, Larry Lawson, her interest in certain real estate. The State named Larry as a defendant and sought to void the allegedly fraudulent transfer. Following a bench trial on the State’s claim against Larry, the trial court found that the conveyance was fraudulent, but the court ordered that Larry was entitled to one-half of the proceeds from a sale of the real estate for his “equitable interest in the Property.” On appeal, the State presents a single dispositive issue for our review, namely, whether the trial court misinterpreted Indiana’s Uniform Fraudulent Transfer Act when it awarded the State only one-half of the proceeds from the sale of Larry’s interest in the property.
We reverse and remand with instructions.
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The State contends that the trial court misinterpreted Indiana Code Section 32-18-2-18 (2018) of the Uniform Fraudulent Transfer Act (“the Act”) when it ordered that Larry would receive $7,500 of the proceeds from the sale of the property “for his equitable interest in the property.” Appellant’s App. Vol. 2 at 118. “Matters of statutory interpretation, which inherently present pure questions of law, are reviewed de novo.” Paquette v. State, 101 N.E.3d 234, 237 (Ind. 2018). As this Court has recently stated, “[t]he primary purpose of statutory interpretation is to ascertain and give effect to the intent of the legislature. The best evidence of legislative intent is the statutory language itself, and we strive to give the words in a statute their plan and ordinary meaning.” 21st Amendment, Inc. v. Ind. Alcohol & Tobacco Comm’n, 84 N.E.3d 691, 696 (Ind. Ct. App. 2017) (citations and quotations marks omitted).
Under the Act, a creditor may bring a claim to set aside a fraudulent conveyance made by a debtor. Ind. Code § 32-18-2-17…
The State points out that, since the Act was enacted in 1994, “neither this Court nor the Indiana Supreme Court ha[s] interpreted the meaning of ‘subject to adjustments as [the] equities may require.’”…
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Our Supreme Court has held that the comments to a uniform act are indicative of our Legislature’s intent in enacting a statute based on the uniform act. Basileh v. Alghusain, 912 N.E.2d 814, 821 (Ind. 2009). Given that the 1984 version of Section 8(c) of the UFTA and Indiana Code Section 32-18-2-18(c) are identical, we consider the language of the Comment to be a strong indicator of the legislative intent underlying the statute. Accordingly, we must agree with the State that, under Indiana Code Section 32-18-2-18, a defrauded creditor is entitled to the full value of the fraudulently transferred property at the time of the transfer, and an “equitable adjustment is permitted only when an inequitable windfall would result by granting the creditor the full value of the property.” Appellant’s Br. at 19.
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Again, “[t]he measure of the recovery of a defrauded creditor against a fraudulent transferee is usually limited to the value of the asset transferred at the time of the transfer.” [Footnote omitted.] Unif. Fraudulent Transfer Act § 8 cmt. The only exception that might have been relevant here is that “a good faith transferee should be reimbursed for the outlay” for improvements made to fraudulently conveyed property after the transfer “to the extent the sale proceeds were increased thereby.” Id. Because there is no evidence that Larry’s gardening, landscaping, repair work, or maintenance done after the fraudulent transfer increased the value of the property or the sale proceeds, we conclude that the equities did not require that Larry be reimbursed. We therefore hold that the State is entitled to recover the entire $15,000 from the sale of Larry’s one-half interest in the property. Thus, we reverse and remand with instructions for the trial court to enter judgment in favor of the State in the amount of $15,000.
Reversed and remanded with instructions.
Baker, J., and Robb, J., concur.