Legal Question in Business Law in California

My question is a treasurer for a homeowners assoc. in California has been writing checks to himself and putting the money back in short periods of time with no one knowing. He owned 1/2 a home in the assoc. His immediate relative owning the other half. Before the board members learned of the money being taken he deeded the home to the relative. 8 months or so later the board learned he had emptied the assoc account of all funds. Days after confronted he committed suicide. Can the assoc. go after the house Also my understanding he has a life insurance policy that would go to the wife. Could the funds be taken from that?


Asked on 1/30/20, 5:09 pm

1 Answer from Attorneys

Timothy McCormick Haapala, Thompson & Abern, LLP

There is a reasonable but not bullet-proof case against the relative for up to 1/2 the house, IF the relative did not pay market value for the 1/2 interest. There is a legal principle called "fraudulent conveyance" which allows creditors to undo transfers of money or other things of value, including real estate if the transfer then renders the transferor unable to answer for their debts. Creditors can sue the recipient of the property to undo the transfer, and for attorneys' fees and money damages as well if the recipient knew they were participating in a fraudulent transfer.

If he had any other assets, you can also open a probate case (if no one else does) and file a claim against his estate, which might catch the other assets ahead of the wife or anyone else inheriting them.

The insurance proceeds are probably out of reach.

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Answered on 1/30/20, 5:41 pm


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