Texas

Warning: The following opinion is provided for purposes of discussion only. We have not Shepardized™ this opinion, and do not know the subsequent disposition of this case nor whether the effect of the opinion has been overruled or superceded by other law.

Williams v. Performance Diesel, Inc.,
2002.TX.0002366 (Tex.App. Dist.14 04/18/2002)

In The Fourteenth Court of Appeals Of The State of Texas

No. 14-00-00063-CV

2002.TX.0002366

April 18, 2002

DONNA LEE WILLIAMS, COMMISSIONER OF INSURANCE FOR THE STATE OF DELAWARE, AS RECEIVER FOR NATIONAL HERITAGE LIFE INSURANCE COMPANY, A COMPANY IN LIQUIDATION, APPELLANT

v.

PERFORMANCE DIESEL, INC., MERRILL LYNCH PIERCE FENNER & SMITH, INC., MOMENTUM MOTOR CARS, LTD., SHANNON AUTOMOTIVE, LTD. D/B/A CROWN DODGE, MCGINNIS CADILLAC, INC., AND MACHAIK CHEVROLET, APPELLEES

On Appeal from the 281st District Court Harris County, Texas Trial Court Cause No. 97-59427

Panel consists of Justices Yates, Edelman, and Wittig.*fn1

The opinion of the court was delivered by: Don Wittig Senior Justice

AFFIRMED.

OPINION

This lawsuit involves an attempt to recover funds under the Texas Uniform Fraudulent Transfer Act. Donna Lee Williams, the Delaware Commissioner of Insurance, originally filed the lawsuit and now appeals from a summary judgment favoring Merrill Lynch and a final judgment favoring the remaining appellees, Performance Diesel, Momentum Motor Cars, Shannon Automotive, McGinnis Cadillac, and MacHaik Chevrolet.

On appeal, the Commissioner contends that the evidence proves the existence of constructive fraud as a matter of law. Specifically, she argues that the trial court erred, inter alia, (1) in determining that she was not a creditor before, or in a reasonable time after, the fraudulent transfers and (2) in holding that Merrill Lynch was merely a financial conduit. We affirm.

I. Background

A. Plato & Ford

In December 1993, Richard Plato and William Ford fraudulently obtained proceeds from the sale of a portfolio of Preferred Amortization Class Bonds owned by National Heritage Life Insurance Company (NHL), a Delaware-chartered company. Plato and Ford sold the bonds and diverted over $7 million in proceeds to Phoenix Trust, Ltd., a company which they controlled. They then caused Phoenix Trust to transfer $1,960,761 to a bank account of Momentum Energy Resources Corporation (MERC), a company controlled by Plato, and $1,382,000 to a bank account of American Capital Business Loans, Inc. (ACBL), a company controlled by Ford. Plato and Ford caused MERC and ACBL to issue corporate checks to each of the appellees. The checks in question were variously issued as follows:

to Performance Diesel to pay for repairs to a boat purportedly owned by Plato; to the car dealers to purchase vehicles for Plato's wife and American Classic Motor Co., a company controlled by Ford; and to Merrill Lynch to establish Cash Management Accounts (CMAs) for Plato and Ford. These transfers all occurred in December 1993.

Thereafter, NHL became insolvent, and the Delaware Chancery Court appointed the Commissioner as receiver in May 1994. The Commissioner later sued MERC and ACBL and received default judgments against them in 1998 and 1999.

B. The Commissioner's Claims

The Commissioner filed the present action in 1997, seeking to recover funds allegedly fraudulently transferred from ACBL and MERC to the appellees. The Commissioner, in her claimed status as a creditor of ACBL and MERC, alleged both actual and constructive fraud under the Texas Uniform Fraudulent Transfer Act (TUFTA). See TEX. BUS. & COM. CODE ANN. §§ 24.001-.012 (Vernon 1987 & Supp. 2002). TUFTA provides creditors with a vehicle to pursue claims against certain transferees of debtors. See id. § 24.008 ("Remedies of Creditors"). Under section 24.005(a)(1) of TUFTA, an actual fraudulent transfer occurs in relation to a particular creditor when: (1) the creditor's claim arose before or within a reasonable time after the transfer was made; and (2) the debtor acted with "actual intent to hinder, delay, or defraud any creditor of the debtor." See id. § 24.005(a)(1). Under section 24.005(a)(2), a constructive fraudulent transfer occurs when:

(1) the creditor's claim arose before or within a reasonable time after the transfer was made; (2) the debtor did not receive reasonably equivalent value in exchange for the transfer; and (3) the debtor was engaged in a business or transaction for which its remaining assets were unreasonably small or the debtor intended to incur, or believed or reasonably should have believed that the debtor would incur debts beyond its ability to pay as they became due. See id. § 24.005(a)(2). TUFTA also contains a second provision regarding constructive fraud, section 24.006, under which a constructive fraud occurs when: (1) the creditor's claim arose before the transfer was made; (2) the debtor made the transfer without receiving reasonably equivalent value in exchange; and (3) the debtor was insolvent at that time or became insolvent as a result of the transfer. See id. § 24.006.

The trial court granted summary judgment on behalf of Merrill Lynch but did not specify on which ground in the motion the judgment was granted. After a trial to the bench, the court granted final judgment on behalf of the remaining appellees. The court also entered extensive findings of fact and conclusions of law. These findings and conclusions demonstrate that although the court found that ACBL and MERC acted with the actual intent to hinder, delay, or defraud their creditors, the court also found that the appellees acted in "good faith" in their transactions with the two companies. This latter finding defeated the Commissioner's actual fraud claims.

Although the trial court found in the Commissioner's favor regarding several elements of constructive fraud,*fn2 the court further found: (1) that the evidence was insufficient to establish that the Commissioner's claims arose before or within a reasonable time after ACBL and MERC made the transfers to the defendants; and (2) that ACBL and MERC received reasonably equivalent value in return for the transfers. Either one of these findings was sufficient to defeat the Commissioner's constructive fraud claims under sections 24.005(a)(2) and 24.006.

On appeal, the Commissioner expressly does not attack the court's findings on actual fraud. However, as she must, the Commissioner attacks each of the negative findings regarding constructive fraud. In regards to Performance Diesel and the car dealers, we address only the issue concerning proof of claims. Because we find the evidence sufficient to support the trial court's finding that the Commissioner failed to establish that her claims arose before or within a reasonable time after ACBL and MERC made the transfers to the appellees, we affirm the trial court's judgment and need not consider the other issues raised in regard to these appellees. Additionally, because we find that Merrill Lynch acted as a mere financial conduit, we need not address the Commissioner's other issues concerning Merrill Lynch's summary judgment.

II. Analysis

A. Performance Diesel & the Car Dealers

The Commissioner contends that the trial court erred in finding that "the evidence is insufficient to establish that the Commissioner's claims arose before or within a reasonable time after the transfers in this case were made."*fn3 She maintains that the evidence establishes the timely existence of a claim as a matter of law. As stated above, in order to maintain an action under section 24.006, a creditor's claim must have arisen before the transfer in question was made, and in order to maintain an action under section 24.005(a)(2), a creditor's claim must have arisen before or within a reasonable time after the transfer. See TEX. BUS. & COM. CODE ANN. §§ 24.005(a), 24.006 (Vernon 1987 & Supp. 2002). TUFTA defines a "creditor" as "a person . . . who has a claim."*fn4 See id. § 24.002(4). It defines a "claim" as "a right to payment or property, whether or not the right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured." See id. § 24.002(3). Thus, in order to prevail on a constructive fraud claim under TUFTA, a plaintiff must demonstrate that he or she had a right to payment or property that existed at the time of the fraudulent transfers or that arose within a reasonable time afterwards. See id. §§ 24.005(a), 24.006.

Legal sufficiency challenges to a trial court's findings of fact are reviewable under the same standards that are applied in reviewing evidence supporting a jury's answer. Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex. 1994). When a legal sufficiency challenge is raised by a party who bears the burden of proof on an issue, we must first examine the record for evidence and inferences supporting the challenged finding, ignoring all evidence to the contrary, to determine whether any evidence exists to support that finding. Dow Chem. Co. v. Francis, 46 S.W.3d 237, 241 (Tex. 2001). If no evidence supports the court's finding, we must review the record to determine if the contrary proposition is established as a matter of law. Id.*fn5

Neither party cites us to any evidence in the record that affirmatively supports the trial court's finding on the issue of a timely claim, and our review has discovered none.*fn6 We will assume, without deciding, that there is no evidence to support the finding. We therefore consider whether the contrary position was established as a matter of law. See id.

In her initial brief, as to the existence of a claim, the Commissioner argued simply that under both Delaware and Texas law, when she was appointed as receiver, she "stepped into the shoes" of NHL so that she could prosecute any claim as a creditor that NHL had against ACBL and MERC, citing DEL. CODE ANN. tit.18, § 5913(b); Carpenter v. Pink, 124 S.W.2d 981, 986-87 (Tex. 1939); and Cotten v. Republic National Bank, 395 S.W.2d 930, 941 (Tex. Civ. App.--Dallas 1965, writ ref'd n.r.e.). See generally Sec. & Exch. Comm'n v. Cook, No. CA3:00-CV-272-R, 2001 WL 256172, at *2 (N.D. Tex. 2001) (receiver has standing to assert TUFTA claims); Chitex Communication, Inc. v. Kramer, 168 B.R. 587, 590 (S.D. Tex. 1994) (receiver for insolvent corporation has full rights of corporation); Haas v. Sinaloa Explor. & Dev. Co., 152 A. 216, 219 (Del. Ch. 1930) ("receiver stands in the shoes of the debtor"). The Commissioner then states that "NHL's claim indisputably arose on December 3, 1993, when ACBL and MERC began to receive and disburse the stolen funds."

Appellees' brief accurately responds to this argument by pointing out that the Commissioner failed to identify any evidence in the record supporting her position that NHL had a claim against ACBL and MERC. In her reply brief, the Commissioner points only to the default judgment pleadings and judgments against ACBL and MERC and a brief snippet of her own expert's conclusory testimony that ACBL and MERC were debtors to NHL. However, the existence of the default judgments is only proof of a claim as of the date of the default judgments, December 1998 and December 1999, which are well after the transfers at issue in this case. Although a default judgment may sometimes be used to prove the truth of matters asserted when used against the non-answering party (as an admission by silence), they cannot be used to prove the alleged matters against third parties. Cf. 4 WIGMORE, EVIDENCE §§ 1066, 1072 (Chadbourn rev. 1972). Specifically, in the present case, the trial court admitted the default judgments and associated pleadings into evidence solely for proof of the existence of the default judgments and expressly not for the truth of any matters asserted therein. Consequently, the default judgments and related pleadings are no evidence of any claim against ACBL and MERC existing prior to the entry of the default judgments.

The Commissioner's expert attempted to tie together bank records in such a way as to suggest that the money in accounts of ACBL and MERC came from the proceeds of the fraudulent sale of the NHL bonds.*fn7 As factfinder, the court could well have disregarded the expert's testimony. See Waltrip v. Bilbon Corp., 38 S.W.3d 873, 882 (Tex. App.--Beaumont 2001, pet denied) (factfinder is not necessarily bound by expert testimony even when uncontroverted).*fn8 In order to establish that NHL was a creditor of ACBL and MERC, the Commissioner was required to prove a fraudulent or otherwise unlawful or improper monetary link between the three companies--NHL, ACBL, and MERC--that apparently also ran through Phoenix Trust. The mere alleged passing of money from company to company (shown by bank documents) is not sufficient in this case to prove such a link as a matter of law, particularly since the records reflect numerous other transactions coming in and out of the same accounts. While the expert testimony and documentary evidence may be some evidence of receipt of stolen funds by ACBL and MERC, the sum total of the Commissioner's cited evidence falls well short of conclusively establishing that NHL (and hence the Commissioner) was a contemporaneous creditor of ACBL and MERC, as a matter of law. The Commissioner cites us to no additional evidence in the record to establish the existence of a creditor-debtor relationship between NHL and ACBL or MERC (via Phoenix Trust or otherwise), and our review of the record has discovered none.*fn9 At most, the Commissioner proved that she was a judgment creditor of ACBL and MERC from the time the default judgments were entered in January 1998 and January 1999.*fn10

The Commissioner does not argue that claims arising in 1998 or 1999 would be within a reasonable time of transfers occurring in 1993. However, even if she did, such argument would not have merit. Although we have found no cases giving a definition of "reasonable time" under TUFTA, the statute itself imposes a four-year statute of repose (based on the date of the transfers at issue) on the filing of lawsuits pursuing claims under the act. See TEX. BUS. & COM. CODE ANN. § 24.010(a)(2) (Vernon Supp. 2002); see also Duran v. Henderson, No. 06-01-00053-CV, slip op. at 7, 2002 WL 255536, at *3 (Tex. App.--Texarkana Feb. 22, 2002, no pet. h.) (explaining that section 24.010 is in nature of statute of repose and not statute of limitations). A claim that does not even arise until after the running of the statute of repose most certainly does not arise within a reasonable time under the statute.*fn11

We find that the Commissioner has failed to meet her burden to demonstrate that her claim arose before or within a reasonable time after the transfers at issue in this case. See Francis, 46 S.W.3d at 241. The evidence is legally sufficient to support the trial court's finding of fact on that issue. Accordingly, we overrule the Commissioner's first issue. Because our resolution of this issue affirms the trial court's negative finding as to an element of the Commissioner's claims, we need not address her additional arguments regarding her claims against Performance Diesel and the car dealers.

B. Merrill Lynch Pierce Fenner & Smith

The trial court granted summary judgment favoring Merrill Lynch. Because the court's order does not specify the ground or grounds upon which it was granted, we will uphold the judgment if it is properly supported by any ground alleged in the motion. Carr v. Brasher, 776 S.W.2d 567, 569 (Tex. 1989). In a traditional motion for summary judgment, the movant has the burden of showing, with competent proof, that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law. See TEX. R. CIV. P. 166a; Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex. 1985). When a defendant is the movant for summary judgment, it has the burden to conclusively negate at least one essential element of the plaintiff's cause of action, or conclusively establish each element of an affirmative defense. Castillo v. Westwood Furn., Inc., 25 S.W.3d 858, 860 (Tex. App.--Houston [14th Dist.] 2000, no pet.). If the movant's motion and summary judgment proof facially establish its right to judgment as a matter of law, the burden shifts to the non-movant to raise a material fact issue sufficient to defeat summary judgment. Id. In deciding whether a disputed material fact issue exists precluding summary judgment, we resolve every reasonable inference in favor of the non-movant and take all evidence favorable to it as true. See Nixon, 690 S.W.2d at 548-49; Castillo, 25 S.W.3d at 860.

The appellees' motion for summary judgment argued, among other things, that Merrill Lynch was merely a financial conduit through which the funds passed and was not an initial transferee. Essentially, Merrill Lynch is contending that Plato and Ford, acting as agents of MERC and ACBL, used checks drawn on accounts of those companies to fund Merrill Lynch CMA accounts in the names of Plato and Ford,*fn12 thus effecting a transfer from ACBL and MERC to Plato and Ford, as initial transferees, through Merrill Lynch, as a mere financial conduit. The Commissioner asserts that in funding the accounts, ACBL and MERC were actually purchasing securities being sold by Merrill Lynch, so that Merrill Lynch was the initial transferee but only gave value to Plato and Ford and not back to the two companies.

Both sides agree that the key issue here is whether Merrill Lynch was a transferee or a mere financial conduit. Both also agree that the relevant test is the so-called "dominion" or "control" test. See Security First Nat'l Bank v. Brunson (In re Coutee), 984 F.2d 138, 141 (5th Cir. 1993); Bonded Fin. Servs., Inc. v. European Am. Bank, 838 F.2d 890, 893 (7th Cir. 1988).*fn13 Under this test, a party that receives a transfer directly from a debtor will not be considered an initial transferee unless the party gained actual dominion or control over the funds. In re Coutee, 984 F.2d at 141 (citing Bonded, 838 F.2d at 893). "Dominion" in this context means the right to put the money to one's own use. Id. As the court stated in Bonded, a transferee must be "free to invest the whole [amount] in lottery tickets or uranium stocks." 838 F.2d at 894. In Bonded, the court held that the intermediary party, a bank, was not the initial transferee because it held funds solely for the purpose of fulfilling instructions to make the funds available to someone else. See id. at 893. In In re Coutee, the court held that the intermediary party, a law firm, was not an initial transferee, because it merely held settlement proceeds for a client in order to disburse the funds according to the client's directions (including to the firm pursuant to agreement). See 984 F.2d at 141.

In the present case, Merrill Lynch accepted cash from ACBL and MERC for the purpose of opening CMAs for Plato and Ford. These accounts were multi-functional and offered the capacity to buy, sell, and hold securities, write checks, and make Visa charges. The accounts also contained a provision that unassigned cash was to be automatically swept into money funds pre-selected for that purpose by the account holder. The Commissioner contends that the creation of these accounts by checks drawn from ABCL and MERC accounts were no more than the purchase of securities for Plato and Ford, thus making Merrill Lynch an initial transferee of the two companies.

The nature of the accounts at issue in the present case is very similar to that of the account considered in Poonja v. Charles Schwab & Co. (In re Dominion Corp.), 199 B.R. 410 (B.A.P. 9th Cir. 1996). In In re Dominion, the principal of a debtor corporation caused the corporation to open accounts with Schwab and then used the accounts for his own personal benefit. See id. at 411. Like the Plato and Ford accounts, the Schwab accounts included the ability to buy and sell securities, write checks against the account, and make Visa charges. A creditor brought suit against Schwab, alleging that it was an initial transferee, but the court held that Schwab was a mere financial conduit. Id. at 413. The key difference between In re Dominion and the present case is the fact that the Schwab account was opened in the name of the debtor and the Merrill Lynch accounts were opened in the names of Plato and Ford, et al. The court in In re Dominion held that the initial transfer occurred not when the account was opened but only when the principal instructed Merrill Lynch to transfer the funds to merchants for his own benefit. 199 B.R. at 415. As the court stated: "[T]he intended and actual transfers ran from [the debtor] to [the principal] and then from [the principal] to his purveyors of goods and services." Id. On that basis, the court concluded that Schwab was an intermediary or conduit both between the debtor and the principal and between the principal and the purveyors. See id.

In the present case, the initial transfer ran from ACBL and MERC to Plato and Ford when the companies funded the CMAs in Plato and Ford's names. Under the terms of the CMA agreements, only the parties in whose names the accounts were opened could direct the distribution or transfer of funds from the accounts. In the case of Ford's account, the party with such authority was Ford as trustee for Jason and Rachel. In Plato's account, the authorized parties were Richard and Dianne Plato. Records submitted as summary judgment proof indicate that Plato and Ford used the accounts to buy and sell securities and that they used the check-writing and Visa card features to make significant purchases of merchandise and services. There is no indication on any of the account forms that ACBL or MERC were authorized to direct the transfer of funds from the accounts or that Plato or Ford were acting as agents of ACBL or MERC in directing such transfers.*fn14 To the contrary, the proof fully supports the conclusion that a transfer occurred when the accounts were opened, sending money from ACBL and MERC to Plato and Ford, with Merrill Lynch merely acting as a financial conduit between the two. Merrill Lynch also acted as a financial conduit from Plato and Ford to the merchants, as securities were purchased and the checks and Visa cards were used.*fn15 Both ends of these transactions occurred analogously to the transactions in In re Dominion. See 199 B.R. at 411-12.

Douglas K. Hale, a financial consultant for Merrill Lynch familiar with the Plato and Ford accounts, stated in his affidavit that Merrill Lynch never acquired dominion or control over the funds deposited into the Plato and Ford accounts and that Merrill Lynch lacked the discretion to transfer any funds from the accounts without the express permission of the account holders. At no time did Merrill Lynch obtain dominion or control over the funds between the time of ownership of the funds by ACBL and MERC and the time of ownership of Plato and Ford. It was a two-step process: ACBL and MERC deposited the funds that were then swept or otherwise transferred pursuant to Plato and Ford's directions. See generally Bonded, 838 F.2d 894 (discussing bank transaction as two-step process). Merrill Lynch merely followed the account holder's instructions in making transfers out of the accounts. See In re Coutee, 984 F.2d at 141; Bonded, 838 F.2d at 893; see also Keller v. Blinder (In re Blinder, Robinson & Co.), 162 B.R. 555, 562 (D. Colo. 1994) (holding that securities broker was not an initial transferee because it merely followed instructions of shareholders). Merrill Lynch was therefore a mere financial conduit. See In re Coutee, 984 F.2d at 141 n.3.

In conclusion, the summary judgment proof demonstrates that Merrill Lynch was entitled to judgment as a matter of law because the Commissioner failed to meet her burden of raising a material fact issue. See Castillo, 25 S.W.3d at 860. The trial court properly granted the summary judgment. Accordingly, we overrule the Commissioner's fourth issue. Because of our resolution of this issue, we need not address any of the Commissioner's other issues attacking the granting of summary judgment.

The trial court's judgment is affirmed.

Do Not Publish -- TEX. R. APP. P. 47.3(b).

Opinion Footnotes

*fn1 Senior Justice Don Wittig sitting by assignment.

*fn2 In regard to constructive fraud under section 24.005(a)(2), the trial court found that MERC and ACBL believed or reasonably should have believed that they would incur debts beyond their ability to pay as they became due. In regard to both constructive fraud provisions, sections 24.005(a)(2) and 24.006(2), the trial court found that Performance Diesel and the car dealers were initial transferees as opposed to subsequent transferees. The trial court also made an "alternative" finding that these appellees were the subsequent transferees of Phoenix Trust for the same purposes. Our resolution of the appeal does not hinge on which alternative finding is used or on whether the court was authorized to make such findings.

*fn3 This statement actually appears in the court's "Conclusions of Law;" however, finding of fact number fifteen states that: "[a]ny conclusion of law which is properly a finding of fact is herewith adopted and incorporated as a finding of fact."

*fn4 "Person" is defined as an "individual, . . . corporation, . . . government or governmental subdivision or agency, . . . or any other legal or commercial entity." TEX. BUS. & COM. CODE ANN. § 24.002(9) (Vernon Supp. 2002).

*fn5 The Commissioner does not attack the factual sufficiency of the evidence on this issue.

*fn6 It should be reiterated, however, that the trial court's finding actually states that the evidence is insufficient to demonstrate the existence of a claim within the relevant time period. It is not surprising that evidence is lacking to prove the court's negative statement. Apparently, appellant failed to furnish the trial court with evidence of a timely claim. Therefore the trial court's negative finding would be supported.

*fn7 In her brief, the Commissioner does not cite to the bank records or attempt to explain their import other than by reference to two pages of the expert's testimony.

*fn8 We find that the facts of the present case are not within the category of cases requiring expert testimony to be understood. As the Texas Supreme Court stated in McGalliard v. Kuhlmann, 722 S.W.2d 694 (Tex. 1986): It has long been the rule of this State that opinion testimony does not establish any material fact as a matter of law. Further, the judgments and inferences of experts or skilled witnesses, even when uncontroverted, are not conclusive on the jury or trier of fact, unless the subject is one for experts or skilled witnesses alone, where the jury or court cannot properly be assumed to have or be able to form correct opinions of their own based upon evidence as a whole and aided by their own experience and knowledge of the subject of inquiry. 722 S.W.2d at 697 (quoted in Waltrip, 38 S.W.3d at 882).

*fn9 To the extent there may exist additional, uncited, supportive evidence in the record, this court is under no duty to make an independent search through the voluminous record to find such evidence. See R.R. Street & Co. v. Pilgrim Enters., Inc., No. 01-98-01429-CV, 2001 WL 1047540 at *23 (Tex. App.--Houston [1st Dist.] Aug. 31, 2001, no pet. h.); Checker Bag Co. v. Washington, 27 S.W.3d 625, 635 (Tex. App.--Waco 2000, pet. denied). This is particularly true where, as here, the appellees' brief put appellant on notice of any deficiencies in this regard. See Rendleman v. Clarke, 909 S.W.2d 56, 59 (Tex. App.--Houston [14th Dist.] 1995, pet. dism'd as moot).

*fn10 Furthermore, in opening argument, counsel for the Commissioner stated that his client was acting in her capacity as receiver for NHL and that "[s]he is merely a judgment creditor of ACBL and a judgment creditor of MERC." The only judgments against these two companies relied on by the Commissioner are the two default judgments entered in January 1998 and January 1999. As discussed, these judgments are insufficient evidence that a claim existed either prior to or in a reasonable time after the transfers at issue in the present case.

*fn11 TUFTA does contain certain tolling provisions, but the Commissioner does not claim that they are applicable to the present case, much less argue how they could apply to toll the accrual of the claim as opposed to the running of the statute of repose. See, e.g., TEX. BUS. & COM. CODE ANN. § 24.010(a)(2) (Vernon Supp. 2002) (application of discovery rule under TUFTA).

*fn12 The "Ford account" was actually placed in the name of "W.J. Ford Trustee for the benefit of Jason Ford and Rachel Ford." The "Plato account" was placed in the name of "Richard M. Plato and Michael Dianne Plato."

*fn13 Because the UFTA and the United States Bankruptcy Code, 11 U.S.C.A. § 548 (West 1993 & Supp. 2001), are of common ancestry, cases under one are considered authoritative under the other. Interpool Ltd. v. Patterson, 890 F. Supp. 259, 268 n.8 (S.D.N.Y. 1995); see also 5 LAWRENCE P. KING, COLLIER ON BANKRUPTCY § 548.01[4] (1999).

*fn14 Indeed, the existence of other parties and/or fiduciary relationships on the accounts (Dianne Plato, Ford as trustee) seems to militate against any suggestion that Plato and Ford were acting as agents for the two companies. In contrast, the trial court specifically found after the trial that Plato and Ford were acting as agents of ACBL or MERC when dealing with the Performance Diesel and the car dealers. There was no such finding or proof in regard to the direction of the CMAs.

*fn15 The Commissioner suggests that if Merrill Lynch provided checking and Visa services to Plato and Ford, it may have violated federal banking laws. In In re Dominion, the court noted that Schwab's providing of the same services was accomplished through a partner, Bank of America. 199 B.R. at 411. Although the CMA agreements signed by Plato and Ford do not reference a specific bank as a partner, the agreements do note that the services are being provided "by or through" Merrill Lynch. Whether or not Merill Lynch's CMA offerings violated any banking regulations is not a material issue in the present case.

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