PJC Business

F RAUD AND N EGLIGENT M ISREPRESENTATION

PJC 105.25

3. [ Asset or obligation 3. ] Answer: _______________

COMMENT When to use. PJC 105.25 should be used when the plaintiff alleges that a transfer was made or obligation incurred with actual intent to hinder, delay, or defraud a credi tor of the debtor. See Tex. Bus. & Com. Code § 24.005(a)(1). Broad-form submission. PJC 105.25 is a broad-form question designed to be accompanied by one or more appropriate instructions. Tex. R. Civ. P. 277 requires that “the court shall, whenever feasible, submit the cause upon broad-form questions.” Tex. R. Civ. P. 277; see Thota v. Young , 366 S.W.3d 678, 689 (Tex. 2012) (rule 277’s use of “whenever feasible” mandates broad-form submission in any or every instance in which it is capable of being accomplished). For further discussion, see PJC 116.2 regarding broad-form issues and the Casteel doctrine. Source of question. The question and list of factors used in determining actual intent are based on Tex. Bus. & Com. Code § 24.005(a)(1), (b). Debtor and creditor. If there is a factual dispute regarding the status of a perti nent person or entity as a debtor or creditor, a predicate question should be submitted to determine that status. Appropriate definitions of “debtor” and “debt,” or “creditor” and “claim,” should accompany the question. See Tex. Bus. & Com. Code § 24.002(3)–(6). The defrauded creditor need not be the plaintiff, and defendants may include the debtor and the transferee. See Tex. Bus. & Com. Code §§24.005(a)(1), 24.008. If there is a dispute regarding when the creditor’s claim arose, a predicate question should be submitted to determine whether the creditor’s claim arose before or within a reasonable time after the transfer was made or the obligation was incurred. See Tex. Bus. & Com. Code § 24.005(a). Asset. The question assumes the thing transferred is an asset of the debtor. If there is a factual dispute about the thing’s status as an asset, a predicate question should be submitted to determine that status. See Tex. Bus. & Com. Code §§ 24.002(2) (defining “asset” as “property of a debtor” but excluding certain property), 24.002(10) (defining “property” as “anything that may be the subject of ownership”). Whether one of the exclusions from the asset definition applies in a given case may present a question of law for the court. If there is no dispute regarding what the asset or obligation at issue is, it may be preferable not to list it or to specifically identify the asset or obligation in the text of the question, as opposed to listing the potential assets or obligations in the instruction. Insider. The statute includes a lengthy, nonexclusive definition of “insider,” parts of which incorporate definitions of “affiliate” and “relative.” See Tex. Bus. & Com.

263