[WSBARP] Corporations Question

[Eric Nelsen]

Catherine--Did you get any response on this? I don't know of a specific case, but I think the analysis is the same as for the chains of BFPs under UCC law, so you might look there. Also there might be some "holder in due course" cases that provide a good analogy.

If I remember correctly, it has to do with direct knowledge of the title defect. For example, with three parties X, Y, and Z, where X and Z know of the title defect, it's not possible to launder the title by X conveying to Y (who is a BFP without notice), and Y conveying to Z (who isn't). In your case, the LLC is Z and has knowledge because your client Y's knowledge is imputed to the wholly-owned entity.

However--again going off of memory--I think there is an exception when title has been cleaned at the "Y" stage by a judgment confirming Y's status as BFP, and quieting title to Y. At that point the title defect is eliminated by the court, and it's possible for Y to convey to Z because Z no longer has "knowledge of a defect"--the defect no longer exists, per adjudication. (And assuming no conspiracy between the parties.) This exception might be classified more as res judicata than BFP doctrine.

Sincerely,

Eric

Eric C. Nelsen
SAYRE LAW OFFICES, PLLC
1320 University St
Seattle WA  98101-2837
phone 206-625-0092
fax 206-625-9040



From: wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Clark, Catherine
Sent: Tuesday, September 08, 2015 8:42 AM
To: WSBA Real Property Listserv
Subject: [WSBARP] Corporations Question

All:

Do you know of any cases in which a person, who acquired property and was determined by a tribunal to be an innocent purchaser/BFP, and who later transfers that property into a LLC (in which they are the sole member) which held that they lost that innocent purchaser/BFP status by the transfer.  Do you know of any cases the other way around?

Thank You.



Catherine C. Clark
Law Office of Catherine C. Clark PLLC
701 Fifth Avenue, Suite 4105
Seattle, WA  98104
Direct Dial:  (206) 342-6276
Fax: (206) 374-3003
Email:  cat at loccc.com<mailto:cat at loccc.com>

NOTICE: The information contained in this electronic information transmission is confidential. If you are not the intended recipient, or the employee or agent responsible for delivering it to the intended recipient, you are hereby notified that any use, dissemination, distribution or copying of this communication is prohibited.  If you received this communication in error, please immediately notify the sender by telephone at (206) 838-2528. Thank you.

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mailman.fsr.com/pipermail/wsbarp/attachments/20150911/a439c199/attachment.html>