United States District Court, D. Maryland, Southern Division
BROOKE GROVE FOUNDATION, INC. et al., Plaintiffs,
EDGAR C. BRADFORD et al. Defendants.
W. Grimm United States District Judge.
Brooke Grove Foundation, Inc. ("Brooke Grove") is a
creditor of a decedent's estate. The company here seeks
to return a parcel of real property to the estate, arguing
the personal representative (the decedent's son, Edgar C.
Bradford) violated the Maryland Uniform Fraudulent Conveyance
Act ("MUFCA") when he transferred the property to
himself for no consideration. It also seeks a declaration
that the son's preexisting federal and state tax liens do
not encumber the property.
can be little doubt that the conveyance was fraudulent under
Section 15-204 of Maryland's Commercial Law, which
proscribes conveyances that leave a transferor insolvent and
that are unsupported by fair consideration. See Md.
Code Ann., Com. Law § 15-204. Accordingly, I am granting
Plaintiffs' Motion for Summary Judgment, ECF No. 41, and
setting aside the conveyance. In doing so, I reject the
United States's argument that its liens with respect to
Mr. Bradford's unpaid taxes apply to the real property in
question in spite of the unlawful way in which he acquired
it. The United States's Cross-Motion for Summary
Judgment, ECF No. 47, is accordingly denied.
a dispute over rights in property. The property in question,
located at 1413 Morningside Drive in Silver Spring, Maryland,
is the former home of Mr. Bradford's parents, Christine
H. Bradford and Edgar E. Bradford Jr. The Bradfords bought
the property in 1968 as tenants by the entirety. ECF No.
41-5. When Edgar E. Bradford Jr. died in 1983, his interest
in the property extinguished, leaving his wife as the sole
owner in fee simple. ECF No. 41-4. The property was part of
her estate, and was far and away its most valuable asset,
when she died on October 14, 2014. Amended Inventory 1, ECF
Bradford had spent the final year of her life at the Brooke
Grove Rehabilitation and Nursing Center in Montgomery County,
Maryland. Answer, ECF No. 18. A few weeks after she died, and
after Mr. Bradford submitted her will to the Orphans'
Court for Montgomery County, Petition for Administration 1,
ECF No. 41-6, Brooke Grove filed a claim of $84, 798.31
against the estate, Claim, ECF No. 41-9. The court soon
admitted the will into probate and named Mr. Bradford as
personal representative of the estate, consistent with the
terms of the will. Administrative Probate Order, ECF No.
41-8; Petition for Administration 1.
19, 2017, the Orphans' Court entered a judgment approving
Brooke Grove's claim for $84, 798.31. June 2017 Order,
ECF No. 41-10. The order gave Mr. Bradford 45 days to obtain
financing to pay the claim or, failing that, to enter into a
listing agreement with a real estate agent to sell his
mother's house. Id. Mr. Bradford, however, had
just preempted that latter option only a few days earlier,
when he signed a deed transferring the Morningside Drive
property to himself. Deed, ECF No. 41-11. The deed, signed
and notarized on June 14, 2017, could not have been less
subtle, stating that the transfer was "for and in
consideration of ZERO DOLLARS ($-0-)." Mat 1-3.
Grove soon filed an emergency petition to enforce the
court's order and remove Mr. Bradford as personal
representative, which the court granted on September 21,
2017. September 2017 Order, ECF No. 41-12. The order named
attorney Helen M. Smith as the new personal representative of
the estate. Id.
Grove and Ms. Smith (collectively, "Plaintiffs")
filed this action on October. 2, 2017, seeking an order
invalidating the June 14, 2017 transfer to Mr.
Bradford' Complaint, ECF No. 2. Their Complaint
accused Mr. Bradford of fraudulently conveying property in
violation of the Maryland Uniform Fraudulent Conveyance Act
("MUFCA"), Md. Code Ann., Com. Law § 15-201 to
-214; breaching his fiduciary duty as personal representative
of the estate; and unjust enrichmen., Id. at 6-9.
The suit also named the State of Maryland and the United
States as defendants, noting that both had obtained tax liens
against Mr. Bradford in the Circuit Court for Montgomery
County before he transferred the Morningside Drive property
to himself. Id. at 5-6. Plaintiffs sought a
judgment declaring the tax liens did not encumber the
property. Id. at 7.
Maryland Comptroller's Office asked this Court to grant
Plaintiffs' request for relief. ECF No. 13. The United
States, though, opposed Plaintiffs' Motion for Summary
Judgment,  Pls.' Mot. for Summ. J., ECF No. 41,
and filed a Cross-Motion for Summary Judgment of its own,
Cross-Mo.. for Summ. J., ECF No. 47. It argued that its
preexisting liens against Mr. Bradford applied to property he
subsequently acquired (albeit fraudulently, and voidably),
including the Morningside Drive property, and that these
liens enjoy priority over Plaintiffs' claim. Cross-Motion
for Summ. 1. 4-6.
in response, argued the federal tax liens never attached to
the property because the transfer was void as an illegal
fraudulent conveyance. Pls.' Reply 1-2, ECF No. 49. The
United States did not dispute that this Court might have
grounds to set aside the transfer under MUFCA. U.S. Surreply
2, ECF No. 51. It maintained, though, that the federal tax
liens would nevertheless be enforceable against the property
because the Court's judgment would have no retroactive
effect - that is, it would declare the transfer void, but not
void ab initio. Id.
parties have brief their arguments in full. No. hearing is
necessary. See Loc. R. 105.6.
56(a) of the Federal Rules of Civil Procedure oblige a court
to enter summary judgment in a movant's favor upon a
showing that "there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a
matter of law." Fed.R.Civ.P. 56(a). "A dispute of
material fact is genuine if the evidence would allow the
trier of fact to return a verdict for the nonmoving
party." United Bank v. Buckingham, 301
F.Supp.3d 561, 568 (D. Md. 2018). In reviewing the motion,
the court must view the facts and make all reasonable
inferences "in the light most favorable to the nonmoving
party." Bauer v. Lynch, 812 F.3d 340, 347 (4th
seek two forms of relief. First, they urge the Court to set
aside the June 2017 conveyance of the Morningside Drive
property, returning the property to Mr. Bradford's
mother's estate. Second, they ask the Court to declare
that the state and federal tax liens are not attached to the
property. These requests present distinct legal issues. I
will address each in turn.
contention that the 2017 conveyance violated MUFCA rests on
two alternative theories. They first argue the conveyance was
illegal under Md. Code Ann., Com. Law § 15-204 because
it rendered the estate insolvent. They argue, in the
alternative, that it violated § 15-207 because Mr.
Bradford had the "actual intent" of hindering,
delaying, or defrauding creditors. Because I conclude
Plaintiffs are entitled to judgment as a matter of law under
§ 15-204, there is no need to address their second
15-204 provides: "Every conveyance made ... by a person
who is or will be rendered insolvent by it is fraudulent as
to creditors without regard to his actual intent, if the
conveyance is made ... without a fair
consideration"" Md. Code Ann., Com. Law §
15-204. Maryland courts have carved this provision into its
constituent elements, holding that a fraudulent conveyance
under § 15-204 requires: "(1) a conveyance, (2) the
debtor either already is insolvent, or will be made insolvent
by this conveyance; (3) the existence of a debtor-creditor
relationship; and (4) lack of fair consideration""
Greystone Operations, LLC v. Steinberg, No. 454,
2077 WL 1365365, at *3 (Md. Ct. Spec. App. Apr. 12, 2017).
Bradford has not placed any of these elements in dispute. As
to the first element, the statute defines the term
"conveyance" as broadly including "every
payment of money, assignment, release, transfer, lease,
mortgage, or pledge of tangible or intangible property, and
also the creation of any lien or incumbrance." Md. Code
Ann. § 15-201(c). Mr. Bradford has not denied that the
2017 transfer comes within this definition.
on, the statute provides that a person is considered
"insolvent" for purposes of § 15-204 "if
the present fair market value of his assets is less than the
amount required to pay his probable liability on his existing
debts as they become absolute and matured." Id.
§ 15-202(a). Here, Mr. Bradford filed with the
Orphans' Court an amended inventory dated March 31, 2016,
showing the estate was worth $320, 944.17. Amended Inventory,
ECF No. 41-3. Of that, the Morningside Drive property
accounted for $315, 400. Id. at 2. In transferring
the property to himself for no consideration, Mr. Bradford
appears to have left the estate with less than $6, 000 in
assets - far less than the roughly $85, 000 Brooke Grove had
been seeking from the estate over the previous three years.
Plainly, the transfer left the estate insolvent within the
meaning of § 15-202(a). See In re Anton Motors,
Inc., 177 B.R. 58, 61 (Bankr. D. Md. 1995). Again, Mr.
Bradford has not disputed this.
is no dispute over the remaining two elements, either. Mr.
Bradford has not denied that Brooke Grove was a creditor of
the estate. He likewise has not disputed that the June 2017
transfer lacked fair consideration. The Maryland statute
specifies that consideration is considered fair where it is
given "[i]n exchange for the property ..., as a fair
equivalent for it and in good faith." Md. Code Ann.,
Com. Law § 15-203(1). "Proof of the absence of any
consideration whatsoever. . places significant burdens upon
the transferee to establish the validity of the
transfer." In re Colandrea,17 B.R. 568, 579
(Bankr. D. Md. 1982). Here, the June 14, 2017 deed indicates
that Mr. Bradford, acting as personal representative for his
mother's estate, transferred the ...