BankFirst v. UBS Paine Webber Case Analysis

In BankFirst v. UBS Paine Webber, Inc., 842 So. 2d 155 (Fla. 5th DCA 2003), the Fifth District held that neither § 222.30 nor Chapter 726 reaches an advisor who helps a debtor move assets but never receives the property. Chapter 726 is Florida’s fraudulent transfer statute, and § 222.30 is its companion provision on a debtor’s conversion of assets into exempt form.

The holding does not make planning risk-free for attorneys or advisors. The court decided only that the statutes create no cause of action and left open whether a common-law civil conspiracy claim could reach an advisor, a question the Florida Supreme Court left unanswered in Freeman v. First Union.

The Facts: BankFirst, Legendre, and the Bahamas Trust

BankFirst made a loan to a corporation owned by Legendre, who personally guaranteed repayment. At the time, Legendre represented to the bank that he had substantial non-exempt assets. That representation was accurate when made.

When the corporation ran into financial difficulty, Legendre consulted his financial advisor at Paine Webber (Thomas Lavecchia), who advised him to stop putting money into the failing corporation. Lavecchia referred Legendre to Jon Alper for asset protection planning.

According to the complaint, Alper structured an asset protection trust administered by a Bahamian bank. Paine Webber assisted with investment management on the U.S. side. Substantial assets formerly in Legendre’s name were transferred into the trust. Alper also formed a corporation to manage Legendre’s investments and served as its registered agent. Another attorney, Mark Koteen, served as manager and attorney for the new corporation.

Legendre subsequently filed bankruptcy, and BankFirst’s $650,000 judgment went unsatisfied. The bank sued not only Legendre but also his professional advisors: Alper, Koteen, Lavecchia, and UBS Paine Webber. The claim alleged that the advisors conspired with Legendre to hinder and delay the bank’s collection by structuring the fraudulent transfer of assets.

The trial court dismissed the claims against all professional defendants with prejudice.

The Holding: No Liability for Advisors Who Do Not Receive the Property

Chief Judge Thompson wrote the majority opinion, affirming the dismissal. The holding was direct: neither § 222.30 nor Chapter 726 creates a cause of action against a party who assists a debtor’s fraudulent conversion or transfer but does not receive the property.

The majority opinion is one paragraph long. It states that conclusion and follows it with a string citation to federal fraudulent-conveyance decisions, including Elliott v. Glushon from the Ninth Circuit and Mack v. Newton from the Fifth Circuit, and gives no further reasoning.

Florida’s fraudulent transfer statutes distinguish between a transferee who receives the debtor’s assets and an advisor who helps structure the transfer but never holds the assets. The attorney who drafts the trust, the financial consultant who recommends the planning, and the accountant who assists with implementation are advisors, not transferees. Under BankFirst, the statutes do not reach them.

A related limit is territorial. In Beta Real v. Lawrence Graham (Fla. 3d DCA 2003), Florida’s long-arm statute gave no personal jurisdiction over an out-of-state transferee, and the creditor’s remedy was a constructive trust or equitable lien on the assets in Florida.

The Dissent and the Civil Conspiracy Question

Senior Judge Harris dissented. His central question: if a debtor’s asset transfer is fraudulent, what policy reason justifies immunizing the attorney who knowingly made it possible?

Judge Harris would have reversed the dismissal and allowed BankFirst to proceed to trial on its conspiracy claim. He cited Blatt v. Green, Rose, Kahn & Piotrkowski, 456 So. 2d 949 (Fla. 3d DCA 1984), for the rule that a lawyer who willingly and knowingly participates in a proven conspiracy has no immunity from civil liability. He also pointed to Joel v. Weber, 197 A.D.2d 396 (N.Y. App. Div. 1993), where a New York court held the plaintiff had adequately pled that a lawyer aided and abetted a fraudulent conveyance under New York’s debtor-creditor law.

The dissent raised a question the majority did not answer: whether a claim for civil conspiracy to commit a fraudulent transfer might exist as a separate tort, independent of the FUFTA cause of action itself. The majority held only that the statute does not create the cause of action. It did not address whether a common-law conspiracy claim could survive on different grounds.

The Florida Supreme Court’s Footnote in Freeman v. First Union

The Florida Supreme Court addressed the FUFTA question in Freeman v. First Union National Bank, 865 So. 2d 1272 (Fla. 2004). The Court held that FUFTA creates no cause of action for aiding and abetting a fraudulent transfer against a non-transferee, and it treated First Union as a non-transferee even though the bank had held the debtor’s account and wired the money out. Transferee status turns on control over the assets, not on whether money passed through a defendant’s hands.

In a footnote, the Court cautioned that its answer was confined to FUFTA and that it was not deciding whether relief is available under any other theory of liability. The footnote cited Judge Harris’s BankFirst dissent and quoted his statement that BankFirst had stated a cause of action for civil conspiracy.

The holding in BankFirst remains the law on the statutory question. The Florida Supreme Court left the door open for civil conspiracy claims against advisors on other grounds, and no Florida appellate decision since has resolved that question.

What BankFirst Means for Asset Protection Practice

The BankFirst decision draws a clear line for attorneys and financial advisors who practice in the asset protection field. Structuring a trust, forming an entity, advising on exempt asset conversions, and implementing a transfer strategy do not create FUFTA liability for the professional, provided the professional does not personally receive or hold the debtor’s assets.

Creditors who lose access to a debtor’s assets after an asset protection plan is implemented sometimes target the professionals involved. The attorney who structured the plan and the financial advisor who handled the investment transfers are obvious candidates. The BankFirst holding forecloses the most direct theory of recovery against those professionals.

The decision does not make asset protection planning risk-free for attorneys. The civil conspiracy question remains open. An attorney who knowingly helps a debtor commit common-law fraud (not merely a statutory fraudulent transfer) may still face liability. A fraudulent transfer claim under Chapter 726 is a statutory remedy targeting asset movements that harm creditors. Common-law fraud requires a false representation, reliance, and damages. The two overlap in extreme cases but are not the same.

Florida courts have developed an extensive body of fraudulent transfer case law analyzing the line between lawful planning and transfers that courts set aside. Once a creditor obtains a judgment, collection remedies focus on locating and seizing the debtor’s assets. BankFirst sits at the intersection. It protects the professionals who implement lawful planning while leaving open the possibility that genuinely fraudulent schemes could expose participating advisors.

Jon Alper was a named defendant in the case. BankFirst sought damages on the theory that the attorney who structured the planning was liable for the debtor’s fraudulent transfer, and the Fifth District affirmed the dismissal of that claim with prejudice.