What You Need to Know
- The UFTA exists to protect creditors, and it requires an actual one. The New Jersey Appellate Division held that a transfer cannot be voided under the UFTA where no actual creditor is seeking to set it aside; speculation that a creditor could have been affected is not enough.
- Unclean hands can bar UFTA relief. A party who participated in the fraudulent transfers cannot invoke the statute to reclaim title and reap a windfall from her own misconduct.
- The absence of a promissory note is not fatal to a mortgage. On remand, the trial court must consider whether a debt or obligation existed despite the lack of supporting notes, subject to the statute of frauds and its exceptions.
- An LLC's revoked status does not automatically void its mortgages. Under the winding-up provision of New Jersey's LLC statute, a revoked entity may still enforce a mortgage if enforcement is part of winding up its affairs.
Introduction
The New Jersey Appellate Division addressed New Jersey’s Uniform Fraudulent Transfer Act (UFTA), N.J.S.A. 25:2-20 to -34, in reversing the trial court’s decision on a series of transfers of real property and mortgage liens relating to an intra-family dispute. The case concerns the title of a property (“Property”) in Vernon, New Jersey, and the validity of the three mortgages granted to the Plaintiffs Charles K. Geyer, CCLLGG, LLC, and GFTA, LLC. Charles K. Geyer, et al. v. Charles W. Geyer, et al., No. A-1259-24 (N.J. Super. Ct. App. Div. Apr. 16, 2026) (hereinafter “Geyer v. Geyer”). In doing so, the Court clarified the scope of the UFTA and the effect of a business’s revocation on the enforceability of its mortgages under N.J.S.A. 43:2C-53(d).
The Machinations of the Geyer Family Play Out in a Lawsuit
A. The Geyers’ Allegations Against Each Other
In October 2020, Plaintiffs Charles K. Geyer (“Charles”), CCLLGG, LLC, and GFTA, LLC, filed a complaint alleging that the Property he owned in Vernon, New Jersey was fraudulently deeded to SYAS, LLC (SYAS). SYAS is a company owned by his mother, Defendant Arlyne D. Geyer (“Arlyne”). He also named as defendants his father (“Charles W.”), two sisters, Reverse Mortgage Lending, LLC, counsel, and two notaries.
Charles was the sole owner of the two businesses, CCLLGG and GFTA. On October 28, 2004, his mother Arlyne granted CCLLGG a mortgage on the Property for a loan of $418,360.08. On December 13, 2006, Arlyne granted GFTA a mortgage for $747,458.08.
On March 12, 2015, the Property was deeded to SYAS. Charles claims that his signature was forged on the deed. He also maintained that at this point, the mortgages were not paid off and that his father, Charles W., discharged these mortgages as “Pres and CEO” of CCLLGG and GFTA, even though he had no such authority. On January 30, 2017, the property was transferred from SYAS to Arlyne, who signed the deed as the sole owner of SYAS.
On November 3, 2017, Arlyne granted Charles a mortgage for $1,000,000. Charles claimed that this mortgage was also discharged on September 19, 2019 over his forged signature and was never satisfied. However, there were no notes or papers to support CCLLGG and GFTA’s mortgages.
Defendants Arlyne and Charles W. filed counterclaims alleging that Charles owed them more than $1,000,000 and that he had misrepresented Arlyne’s signature on a mortgage to the Property.
B. The Trial Court Voids Charles’ Companies’ Mortgages in Pre-Trial Motions
In the motion practice, the trial court granted Charles’ motion for partial summary judgment voiding Arlyne's and Charles's mortgage to Goldberg and Monod as neither Goldberg nor Monod had opposed the motion and denied any knowledge of making a loan to Charles and Arlyne.
In a separate dispositive motion, the trial court denied reinstating the CCLLGG and GFTA mortgages as (1) they were not in the chain of title because they are against the wrong party; (2) there were no notes or papers to back these mortgages up; and (3) the status of both businesses was revoked.
C. The Drama Continues to Play Out at Trial
The trial court issued a seven-page opinion after a four-day bench trial. It began its opinion by laying out the Property’s chain of title. Namely, the Property was originally purchased by Charles W. and Arlyne on August 16, 1978. Charles W. transferred his interest to Arlyne on January 2, 1998. The next day, Arlyne transferred the Property to her son Charles. In March 2002, Charles transferred the Property back to Arlyne. During this time, Charles W. and Arlyne were still living on the Property while Charles lived elsewhere. On October 29, 2004, however, Arlyne deeded the Property to Charles.
The trial court relied on findings from a previous matter that Charles W. was found to have engaged in a fraudulent transfer in a prior action to make clear that there were no innocent parties here. Namely, in Arch Financial Services v. Geyer, Geyer was found to have fraudulently transferred his only asset to the plaintiff to avoid creditors; the court voided that transfer. Arch Financial Services v. Geyer, No. A-2332-11 (N.J. Super. Ct. App. Div. Oct. 10, 2013) (hereinafter “Arch”). The court in Arch also found that Charles W. had a history of conducting fraudulent transfers and being untruthful. Id.
The trial court ultimately found that Charles did not actually execute a deed to SYAS on March 12, 2015. It also concluded by a preponderance of the evidence that the deed from Charles W. to Charles on October 20, 2004, was fraudulent and designed to avoid creditors. Thus, the title to the Property reverts to Arlyne under the UFTA.
Finally, the court also found that Arlyne’s signature on the November 3, 2017 mortgage was fraudulent. Under a clear and convincing standard, the transfers from Arlyne to Plaintiff were for the purpose of avoiding creditors. Further, the court held that the earlier CCLLGG and GFTA mortgages were invalid and unenforceable because their business status was revoked at the time they were executed.
The Appellate Division Weighs In on the 2004 CCLLGG and GFTA Mortgages
On appeal, Charles contended that the trial court erred in denying reinstatement of the two earlier CCLLGG and GFTA by concluding that Arlyne’s October 2004 transfer to him violated the UFTA.
First, the Court began by emphasizing that the purpose of the UFTA is to prevent debtors from cheating creditors. While the Appellate Division recited the badges of fraud set forth in the statute, it focused on two basic inquiries of the UFTA: (1) the debtor’s actual intent to defraud creditors and (2) whether the debtor placed the property beyond the reach of the creditors, which would have been available to them but for the transfer. The Court first found that the trial court incorrectly applied the UFTA to Arlyne’s transfer because there was no evidence that a creditor was attempting to set aside the transfer. The purpose of the UFTA is to protect creditors and its language specifically includes the word “creditors.” The trial court notes that a creditor could have been affected, but the Appellate Division rejected such reasoning as speculation.
Moreover, the Appellate Division found that the application of the UFTA to revert title back to Arlyne was inequitable under the doctrine of unclean hands. As Arlyne was involved in the fraudulent transfers, the trial court’s decision would have unjustly rewarded her by allowing her to void the transfer to her son and get full title to the property.
Next, the Court also found that the trial court erred in determining that Arlyne could not grant CCLLGG and GFTA mortgages simply because she was not in-title in 2006. It needed to reconsider whether Arlyne created a future interest.
The Court, in its remand, also directed that the trial court must consider whether there was a debt or obligation even if there were no notes. Gotlib v. Gotlib, 399 N.J. Super. 295, 312 (App. Div. 2008). While the Court acknowledged that New Jersey does require a writing under N.J.S.A. 25:1-5(f), there are not enough facts set forth by the trial to ensure there were no exceptions to the statute.
Additionally, CCLLGG and GFTA’s revocation was not dispositive in concluding that the two mortgages are unenforceable. Under N.J.S.A. 43:2C-53(d), an LLC that is inactive can still conduct activities that are necessary to “wind up” its activities and liquidate its assets. N.J.S.A. 43:2C-53(d). Thus, the trial court should consider whether the enforcement of CCLLGG and GFTA’s mortgages was for the purpose of winding them up. If it was, then their revoked status is insufficient to preclude enforcement. Further, if the trial court determines that the two businesses did in fact have enforceable mortgages, it must determine whether CCLLGG and GFTA are creditors who brought suit and whether Charles W. and Arlyne violated the UFTA.
Takeaways
First, in considering whether the UFTA applies to a property transfer, it is imperative that a factfinder determine whether applying the UFTA results in any unfair windfall or in awarding a wrongdoer complicit with the other parties’ schemes as the Geyer family was. Second, if a party does make a loan and facts demonstrate that a mortgage was intended, a lien on the property can be established. Third, the fact that a business was revoked is insufficient to conclude that the business’s mortgages are unenforceable if the mortgages are being enforced for the purpose of winding up.
This blog was authored by Michael O’Donnell and Summer Associate Sharanya Thondapu. For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com.
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