Caldwell Company v. Yousif

Filing 56

OPINION and ORDER on 21 Plaintiff's Motion to Avoid Fraudulent Transfer. Signed by District Judge F. Kay Behm. (KCol)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
THE CALDWELL COMPANY
v.

Case No. 23-cv-10976

Plaintiff,

Hon. F. Kay Behm
United States District Judge

MILAD YOUSIF and
JUMANA YOUSIF
Defendants.
___________________________ /
OPINION AND ORDER ON PLAINTIFF’S MOTION TO AVOID
FRAUDULENT TRANSFER (ECF No. 21)
I.

PROCEDURAL HISTORY
Before the court is Plaintiff’s motion to avoid a fraudulent transfer

(ECF No. 21). On August 2, 2023, this court entered a stipulated money
judgment in favor of Plaintiff and against Defendant. ECF No. 8.
Plaintiff has since sought to collect on this judgment. See ECF Nos. 914 (relating to judgment liens against Defendant). However, Plaintiff
alleges that in June 2023, Defendant transferred real property from
himself to joint ownership between himself and his spouse, Jumana
Yousif, for $1.00 (the transaction was recorded in July 2023). ECF No.
21, PageID.171. Plaintiff alleges this transfer was an effort to defraud
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Plaintiff as a creditor of Defendant in violation of the Michigan Uniform
Voidable Transactions Act (MUVTA), Mich. Comp. Laws § 566.31, et.
seq., and seeks to void that transfer. Defendant does not dispute that
the transfer occurred, but disputes that this was a fraudulent transfer
in violation of MUVTA. See generally ECF No. 22.
The motion has been fully briefed. See ECF No. 22 (Defendant’s
Response), ECF No. 23 (Plaintiff’s Reply), ECF No. 24 (Defendant’s surreply), ECF No. 25 (Plaintiff’s Corrected Reply), ECF No. 49 (Defendant
and Third Party Defendant Jumana Yousif’s Response to ECF No. 21).
An evidentiary hearing and argument was held on February 27, 2025,
in which witnesses, including both Defendants, testified, and this order
follows.1
For the reasons set out below, the court GRANTS the motion and
adjudges the transfer to be VOID.
II.

FACTUAL BACKGROUND
This case was filed on April 26, 2023 against Milad Yousif

(“Yousif”). ECF No. 1. A stipulated money judgment was entered in the

1 The court does not consider Yousif’s late-filed “Supplemental Notice” at ECF

No. 55 for purposes of this motion.

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present case on August 2, 2023 against Yousif, for just under one
million dollars plus interest and fees. ECF No. 8.
Plaintiff alleges the following. To date, Yousif has remitted $0.00
in voluntary payments towards satisfaction of this judgment. ECF No.
21, PageID.171. On or about June 30, 2023, Yousif transferred his
marital residence from himself, individually, to joint ownership as
tenants by the entireties by Yousif and his spouse, Jumana Yousif,
allegedly for consideration of $1.00. Id.; ECF No. 21, PageID.183 (“Quit
Claim Deed”). Plaintiff argues that this transfer was only made after
suit had been filed against Defendant and after Defendant had filed his
answer (and so was plainly aware of the efforts to seek judgment
against him), and that there was in fact no consideration or payment
from his spouse in exchange for executing the transfer. Practically, the
real estate at issue appears to be Defendant’s only substantial asset
though which Plaintiff could satisfy a substantial amount of the
judgment entered in this matter.
Before hearing evidence on this motion, the parties agreed, and
the court ordered, joinder of Jumana Yousif as a necessary party. ECF
No. 31. Jumana Yousif is currently on the title for the property at
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issue, and she is “entitled to the due process protections of notice and
the opportunity to be heard in a meaningful manner” before the court
can deprive her of her title in the property. Daws Excavating, LLC v.
Camp Retreats Found., No. 335313, 2018 Mich. App. LEXIS 255, at *11
(Ct. App. Feb. 13, 2018); see Mihajlovski v. Elfakir, 135 Mich. App. 528,
534-35 (1984) (“A grantee who retains title to the property is a
necessary party in an action to set aside a fraudulent conveyance.”).
The court therefore ordered that she be joined to this action pursuant to
Mich. Comp. L. § 600.6128, Mich. Ct. R. 2.205, and Fed. R. Civ. P.
69. She was served with the summons and motion and was properly
joined and noticed of the hearing on February 27, 2025 to make factual
findings on the issue of fraudulent transfer. See ECF No. 29,
PageID.280; ECF No. 51. She also signed her name to a response to the
present motion (ECF No. 49), which the court has accepted as her
responsive briefing (ECF No. 50). Both Milad and Jumana Yousif
appeared, made arguments, and testified at the motion and evidentiary
hearing on February 27, 2025. She has therefore been sufficiently
“apprised of the pendency of the action and afforded an opportunity to

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present [her] objections.” See Daws Excavating, LLC, 2018 Mich. App.
LEXIS 255 at *12.
Defendant Yousif and Third-Party Defendant Jumana Yousif
allege that when they bought their residence at 2410 Bella Magnolia Ct,
Oakland Twp., MI, they understood that both of their names would be
on the title. ECF No. 49, PageID.353. In 2023, they discovered that the
house was erroneously only in Milad’s name. They executed a quitclaim
deed to correct the title.
III. STANDARD OF REVIEW
A creditor seeking relief under Mich. Comp. L. § 566.34(1) has the
burden of proving the elements of the claim for relief by a
preponderance of the evidence. Id. at 4(1)(3).
The court sits as fact-finder on this matter. In proceedings
supplemental to judgment, an evidentiary hearing is a proper vehicle
for a court to make factual findings and resolve the motion. See Can IV
Packard Square, LLC v. Schubiner (Schubiner I), Nos. 352510, 354185,
354821, 354186, 2021 Mich. App. LEXIS 2697, at *37 (Ct. App. Apr. 29,
2021) (reversing trial court for failing to make factual findings on
alleged UVTA violation in post-judgment proceedings); Can IV Packard
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Square LLC v. Schubiner (Schubiner II), No. 365820, 2024 Mich. App.
LEXIS 2237, at *16 (Ct. App. Mar. 21, 2024) (finding clear error in trial
court’s factual findings at evidentiary hearing but finding no error in
the mechanism itself); Daws Excavating, LLC, 2018 Mich. App. LEXIS
255 at *13 (in post-judgment proceedings on MUVTA violations, “[t]he
opportunity to be heard does not mean a full trial-like proceeding, . . .
[but] it does require a hearing to allow a party the chance to know and
respond to the evidence.”); see also United States v. Porath, 764 F. Supp.
2d 883, 892 (E.D. Mich. 2011) (jury not required and court may make
factual findings to set aside allegedly fraudulent conveyance of real
property).
IV.

ANALYSIS
MUVTA permits a creditor to void a fraudulent disposal of

property belonging to a person who is liable on a claim. Mich. Comp. L.
§ 566.37; see also Helena Agri-Enterprises, LLC v. Great Lakes Grain,
LLC, 988 F.3d 260, 268 (6th Cir. 2021) (citing Swirple v. MGM Grand
Detroit, LLC, No. 345284, 2020 WL 561904, at *2-3 (Mich. Ct. App. Feb.
4, 2020) (per curiam)). MUVTA provides for two types of voidable
fraudulent transfers: those with fraudulent intent (Mich. Comp. L.
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§ 566.34(1)(a)) and those which are “constructively” fraudulent (Mich.
Comp. L. §§ 566.34(1)(b) and 566.35(1)). See Dillard v. Schlussel, 308
Mich. App. 429, 433 (2014); Gold v. Wall (In re Wall), 661 B.R. 365, 377
(Bankr. E.D. Mich. 2024). The first type encompasses transfers made
with actual intent to hinder, delay, or defraud a creditor and applies to
transfers made either before or after the creditor’s claim arose. Dillard,
308 Mich. App. at 433; Mich. Comp. Laws § 566.34(1)(a). The second
type under § 566.34(1)(b) and § 566.35(1), commonly called constructive
fraud, deems certain transactions fraudulent regardless of the creditor’s
ability to prove the debtor’s actual intent, such as when a debtor
transfers his assets when the debtor knew they would incur a
substantial debt they would not be able to pay (§ 566.34(1)(b)), or when
the creditor has a claim against the debtor but the debtor then transfers
his assets and becomes insolvent or was insolvent at the time of the
transfer (§ 566.35(1)). Here, Plaintiff alleges the fraudulent transfers
under Mich. Comp. L. § 566.34, and the court proceeds on that basis.
See ECF No. 21, PageID.201-02 (arguing that both § 566.34(1)(a) and
(1)(b) are satisfied).
A.

Mich. Comp. L. § 566.34(1)(a)
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Section 566.34(1)(a) makes a transfer voidable by a creditor if it
was made with actual intent to defraud a creditor or hinder collection
efforts:
A transfer made or obligation incurred by a
debtor is voidable as to a creditor, whether the
creditor’s claim arose before or after the transfer
was made or the obligation was incurred, if the
debtor made the transfer or incurred the
obligation . . . [w]ith actual intent to hinder,
delay, or defraud any creditor of the debtor.
Mich. Comp. L. § 566.34(1)(a) (emphasis added).
As noted, no party disputes that the transfer from Yousif to
himself and Jumana Yousif as tenants by the entireties occurred;
Defendant and Third-Party Defendant argue only that 1) the transfer of
the house to joint ownership was not an attempt to defraud creditors
because, they allege, the property was always intended to be jointly
owned, 2) that the “corrected” deed did not create or remove any equity
available to Plaintiff, and 3) Plaintiff has advanced only speculation as
to fraud rather than evidence.
First, the court addresses the argument that the transfer from
Yousif’s individual ownership to tenancy by the entireties with his wife
does not affect Plaintiff’s attempt to collect equity in the property. As
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defined by Mich. Comp. L. § 566.31(s), a “transfer” means “. . . disposing
of or parting with an asset or an interest in an asset. Transfer includes
payment of money, release, lease, license, and creation of a lien or other
encumbrance.” Although Yousif still owns the property as a tenant by
the entireties, there is no question that the transfer changed
Defendant’s rights and interests in the property. In the familiar
description of property as a “bundle of sticks” comprised of various
individual rights, the bundle held by Defendant as the sole owner of the
property prior to the transfer was materially different than
the tenancy by the entirety bundle that he had after the transfer. See
In re Mickens, 575 B.R. 797, 801-02 (Bankr. W.D. Mich. 2017). Plaintiff
has indicated that, if Defendant’s personal property is not sufficient to
satisfy the judgment, they may ask this court to allow for levy and
execution of the residence at issue. ECF No. 21, PageID.175. And of
particular importance to that remedy, the creditors of one only spouse
cannot levy on the entireties property. See In re Mickens, 575 B.R. at
801-02 (citing Sanford v. Bertrau, 204 Mich. 244, 247 (1918) (It is well
settled in Michigan that “land held by husband and wife as tenants by
entirety is not subject to levy under execution on judgment rendered
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against either husband or wife alone.”); Mich. Comp. L. § 600.6023a;
Mich. Comp. L. § 566.31(b)(iii) (Property of a debtor under MUVTA does
not include “an interest in property held in tenancy by the entireties to
the extent it is not subject to process by a creditor that holds a claim
against only 1 tenant.”). The transfer of the home therefore disposed of
some portion of Milad Yousif’s interest in the property, would
significantly alter Plaintiff’s ability to collect, and can fall within the
reach of the statute.
Second, Defendant and Third Party Defendant argue that Plaintiff
is relying on “speculation” to prove that this was a fraudulent transfer,
but a clear statement of fraudulent intent is not required to prove
actual fraud. “[D]ebtors rarely admit to having deliberately placed
assets out of the reach of their creditors[,]” so to facilitate proving
fraudulent intent, courts developed “badges of fraud,” or factors, to help
establish proof of intent. Dillard v. Schlussel, 308 Mich. App. 429, 44849 (2014). MUVTA therefore sets out a non-exhaustive list of factors for
courts to consider:
In determining actual intent under subsection
(1)(a) . . . , consideration may be given, among
other factors, to whether 1 or more of the
following occurred:
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(a)

The transfer or obligation was to an insider
(note: an “insider” includes a “relative of the
debtor” when the debtor is an individual, see
Mich. Comp. L. 566.31(i))

(b)

The debtor retained possession or control of
the property transferred after the transfer.

(c)

The transfer or obligation was disclosed or
concealed.

(d)

Before the transfer was made or obligation
was incurred, the debtor had been sued or
threatened with suit.

(e)

The transfer was of substantially all of the
debtor’s assets.

(f)

The debtor absconded.

(g)

The debtor removed or concealed assets.

(h)

The value of the consideration received by
the debtor was reasonably equivalent to the
value of the asset transferred or the amount
of the obligation incurred. 2

2 The phrasing of this badge of fraud is odd, but consistent with the other forms

of voidable transfers under the statute, courts have assumed that this was intended
to merely mean that courts should “consider” whether reasonably equivalent value
was given, and the absence of reasonably equivalent value is one indicator of fraud.
See Dillard, 308 Mich. App. at 452 (when debtor “received no value for transferring”
his asset, factor (h) leaned in favor of a finding of actual fraudulent intent); Morland
Prop. Servs., LLC v. J.J. Dev., Inc., No. 363581, 2024 Mich. App. LEXIS 262, at *27
(Ct. App. Jan. 11, 2024) (the same); see also Mich. Comp. L. § 566.34(1)(b) (specific
kind of transfer voidable when made without receiving reasonably equivalent
value); § 566.35 (the same).
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(i)

The debtor was insolvent or became
insolvent shortly after the transfer was
made or the obligation was incurred.

(j)

The transfer occurred shortly before or
shortly after a substantial debt was
incurred.

(k)

The debtor transferred the essential assets
of the business to a lienor that transferred
the assets to an insider of the debtor.

Mich. Comp. L. § 566.34(2).
Here, the transfer was unquestionably to an insider (a), and the
Defendant remained in possession of the property (b). These two on
their own are significant. Cf. Dillard, 308 Mich. App. at 450 (“A classic
example of such transfers is a debtor spouse subject to a money
judgment who ‘buries’ the titles to the house, car, stocks, bank accounts,
and other assets in the other spouse’s name.”) (quoting citation
omitted).
Additionally, Yousif was already aware of a lawsuit against him
(d), the transfer occurred shortly before stipulated judgment was
entered (j), and because Yousif admitted in his testimony that he could
not satisfy any of the judgment in June 2023, the house can be fairly
assumed to be the bulk or entirety of Defendant’s collectible assets (e).
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Finally, because no payment was made, the transfer was not made for
“reasonably equivalent value” (h). “Badges of fraud are not conclusive,
but are more or less strong or weak according to their nature and
number concurring in the same case, and may be overcome
by evidence establishing the bona fides of the transaction.” Ryan
Racing, LLC v. Gentilozzi, 231 F. Supp. 3d 269, 286 (W.D. Mich. 2017)
(quoting Wells v. Salmo (In re Select One, Inc.), 556 B.R. 826, 2013 WL
4084103, at *17 (Bankr. E.D. Mich. 2013) (quoting Bentley v. Caille, 286
N.W. 163, 164 (Mich. 1939)). “A ‘concurrence of several [of these
factors] will always make out a strong case’ in support of fraudulent
intent.” John Ceci, P.L.L.C. v. Johnson, No. 288856, 2010 Mich. App.
LEXIS 851, 2010 WL 1872927, at *4 (Mich. Ct. App. May 11, 2010)
(quoting Bentley, 286 N.W. at 164).” These six factors all indicate that
the transfer was made in an attempt to prevent a forced sale of
Defendant’s marital residence by Defendant’s creditors.
Against the weight of this evidence, the only argument that
Defendants present is that they always intended their deed to be one of
tenancy by the entireties, and that this transfer was just a correction of
a mistake. The court assesses this purported reason against the case
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for intent to hinder or delay creditors. See, e.g., Morland Prop. Servs.,
LLC v. J.J. Dev., Inc., No. 363581, 2024 Mich. App. LEXIS 262, at *29
(Ct. App. Jan. 11, 2024) (the debtor’s identification of a nonfraudulent
reason for the transfer of assets created a factual issue for a fact-finder .
. .”). Both Defendants testified at the hearing that they intended the
house to be titled in both of their names in 2017. A few times, they and
other witnesses referenced the practice of listing a husband as a
“married man” on title documents, which under Michigan’s previous
system of dower rights, may have been sufficient to include Jumana
Yousif on the title. However, dower rights were abolished by statute in
Michigan as of April 6, 2017. Mich. Comp. L. § 588.30. The mortgage
for the property at issue here was done in July 2017 and does list Milad
Yousif as “a married man” (ECF No. 53, PageID.372), however, the
warranty deed itself was filed August 4, 2017 and lists “Milad Yousif”
(nothing more) as the owner of the home. ECF No. 53, PageID.370.
Defendants have no other evidence, other than their testimony in 2024,
that they intended the house to be in both of their names in 2017. The
most that other witnesses testified to was that the Yousifs used the
home as, and understood it to be, their marital residence – but that is
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not the same thing as joint legal ownership. Multiple witnesses, for
example, testified that Jumana Yousif was present at the purchase
transaction in 2017, but her name is not anywhere on the 2017 deed.
ECF No. 21, PageID.180. There are many good reasons why one spouse
might be listed on a deed and not the other, and the burden is on the
Defendant and Third-Party Defendant to show – not just that the house
was jointly used and occupied – but that they intended at purchasing to
title the house in both of their names. No contemporaneous document
clearly proves that intent. Given that the timing of the transfer fell
about a month after Yousif filed an answer in this suit and only a few
weeks before he stipulated to a million-dollar judgment, the court finds
that the Yousifs’ testimony does not meet the standard of proving that
the deed was in fact intended to be legally titled in both of their names,
rather than proving their practical intent to use the home as a marital
residence. Cf. Rhodes v. Rhodes Tr., No. 291974, 2011 Mich. App.
LEXIS 273, at *4-5 (Ct. App. Feb. 1, 2011) (When parties seek to reform
a contract in Michigan based on mistake, the “burden of proof is upon
the party seeking reformation to present clear and convincing evidence .
. . .”) (quoting E.R. Brenner Co v. Brooker Engineering Co, 301 Mich.
15

719, 724 (1942)). Or, even crediting their explanation, it does not prove
that the transfer in 2024 was intended only to correct that mistake and
not also to shield the home from Yousif’s creditors.
The court therefore finds by the preponderance of the evidence
that the transfer by the Defendant Yousif to tenancy by the entireties
with his spouse was made with actual intent to hinder, delay, or
defraud his creditors, and the transfer is voidable under Mich. Comp. L.
§ 566.34(1)(a).
B.

Mich. Comp. L. § 566.34(1)(b)

Although not strictly necessary, the court notes that the transfer
is also voidable under § 566.34(1)(b). Subsection 1(b) functions
similarly to (1)(a). The difference is that (1)(a) looks for evidence of
actual intent to hinder, delay, or defraud creditors and lists out some
factors to assist in measuring that intent; (1)(b) instead declares a
specific set of circumstances sufficient: if the debtor transferred an asset
without receiving reasonably equivalent value, while the debtor was
aware that they were about to incur a debt that they would not be able
to repay, then the transfer is voidable regardless of “actual” intent:
A transfer is voidable if the debtor made the
transfer “[w]ithout receiving a reasonably
16

equivalent value in exchange for the transfer or
obligation, and the debtor did either of the
following:
(i)

...

(ii) Intended to incur, or believed or
reasonably should have believed that the
debtor would incur, debts beyond the
debtor’s ability to pay as they became due.
Mich. Comp. L. § 566.34(1)(b).
Here, Milad Yousif transferred the house to joint ownership after
this lawsuit (seeking well over $1,000,000) was filed, and 30 days or less
before a stipulated money judgment was entered (holding Defendant
liable for $980,398.90 plus interest and fees). Yousif has testified that
he was aware that Plaintiff had filed suit alleging a debt of over
$1,000,000 due and owing, and post-judgment, Yousif has still made no
payments to Plaintiff. See, e.g., ECF No. 21, PageID.181 (Yousif
testimony) (“[Y]ou were aware of the lawsuit that my client had brought
against you?” “Yes.”). Yousif also testified at the hearing that he would
“probably not” have been able to pay any amount of a $980,000
judgment in June 2023. Therefore, Yousif believed or should have
believed that he was about to incur a debt beyond his ability to pay.
Finally, Yousif has testified that he received nothing in consideration of
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the transfer, and therefore did not receive reasonably equivalent value
for the change of ownership of the house. See Orix Fin. Servs. v. Arms,
No. 2:09-CV-88, 2009 U.S. Dist. LEXIS 120244, at *5 (E.D. Tenn. Dec.
24, 2009) (transfer of property from one person individually to herself
and her spouse as tenants by the entireties for no value found to be
without reasonably equivalent value). Notably, Defendants’ argument
that they did not in fact have actual fraudulent intent and that the
original title document was a mistake is relevant only to actual intent
under subsection 1(a), and is not a defense to this second basis for
liability under 1(b).
Therefore, independent of whether there was actual fraudulent
intent, and unrelated to Defendants’ argument that the transfer was a
correction of a mistake, Plaintiff has also proven by the preponderance
of the evidence that the transfer is voidable as constructive fraud under
Mich. Comp. L. § 566.34(1)(b).
V.

CONCLUSION
Therefore, the court GRANTS Plaintiff’s motion (ECF No. 21).
IT IS FURTHER ORDERED that pursuant to the authority

granted to the Court under applicable Rules and Statutes governing
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proceedings supplemental to judgment, including the Michigan
Voidable Transactions Act, Defendant Milad Yousif’s June 30, 2023
transfer of the following property to himself and Jumana Yousif as
tenants by the entireties (filed and recorded with the Oakland County
Register of Deeds on July 20, 2023 at Liber 58746, Pg. 452), located
within the City of Rochester, Oakland County and State of Michigan
bearing the following legal description:
Unit 18, The Pinnacle at Oaklands, a
Condominium according to the Master Deed
recorded in Liber 46478, Pages 87 through 152
inclusive, amended by First Amendment recorded
in Liber 46540, Pages 884 through 898 inclusive,
Second Amendment recorded in Liber 46554,
Pages 145 through 148 inclusive, and Third
Amendment recorded in Liber 47327, Pages 209
through 221 inclusive, Oakland County Records
and designated as Oakland County Condominium
Subdivision Plan No. 2058, together with rights
in general, common elements and limited
common elements as set forth in the above
described Master Deed, as amended, and as
described in Act 59 of the Public Acts of 1978, as
amended; commonly known as 2410 Bella
Magnolia Court, Rochester, MI 48306 (Tax
I.D.#10-29-401-018).
is adjudged to be void under the Michigan Uniform Voidable
Transactions Act and is hereby set aside. Plaintiff may record this

19

Order with the Oakland County Register of Deeds, State of Michigan to
effectuate the avoidance of the aforementioned deed.
The Motion to Avoid Fraudulent Transfer having been decided, it
is FURTHER ORDERED that Jumana Yousif is DISMISSED from
this case.
It is FURTHER ORDERED that Plaintiff’s motion for writ to
seize property and appoint court officer Michael Jones to execution is
DENIED WITHOUT PREJUDICE as underdeveloped, because
Plaintiff’s motion and subsequent arguments focused entirely on the
fraudulent transfer issue and not the seizure of personal property, and
Plaintiff’s motion includes only citations to the relevant statutes in
support of their motion to seize Defendant’s property. Plaintiff may
refile their motion for writ to seize property and appoint a court officer
with additional supporting authority.
It is FURTHER ORDERED that Plaintiff is hereby awarded
attorney fees in the amount of $500.00 as the prevailing party of this
Motion, pursuant to the terms of the stipulated judgment which allows
for recovery of fees in post-judgment proceedings. ECF No. 8,
PageID.146.
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It is FURTHER ORDERED that this court retains jurisdiction to
enforce the terms of this Order.
SO ORDERED.

Date: March 7, 2025

s/F. Kay Behm
F. Kay Behm
United States District Judge

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