Lo recovered a $1 million judgment against Lee, which went uncollected. Lee paid Northwestern University $100,000 in tuition for his son, You’s, college education. Lo sued You, claiming that the tuition payment was a fraudulent transfer under Civ. Code 3439.04(a)(1). Held, Lo’s complaint was properly dismissed. To be liable for a fraudulent transfer as a person for whose benefit the transfer was made, the defendant (here, You) must have (1) actually received the benefit; (2) which must be quantifiable; and (3) inaccessible to the defendant. Even assuming a college education is a sufficient benefit that You received, it was not a quantifiable benefit nor one accessible to him in the sense of being convertible into a monetary equivalent and, of course, You had no access to the tuition funds themselves as they were paid directly to Northwestern.
California Court of Appeal, First District, Division 1 (Dondero, J.); May 30, 2018 (published June 27, 2018); 2018 Cal. App. LEXIS 593