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In Dillard v. Schlussel, No. 315485, 2014 Mich. App. LEXIS 1985, at *1 (Mich. Ct. App. Oct. 21, 2014), the Michigan Court of Appeals held that "a debtor's transfer of assets for the purpose of paying the debtor's ordinary household expenses [did not] immun

In Dillard v. Schlussel, No. 315485, 2014 Mich. App. LEXIS 1985, at *1 (Mich. Ct. App. Oct. 21, 2014), the Michigan Court of Appeals held that "a debtor's transfer of assets for the purpose of paying the debtor's ordinary household expenses [did not] immunize the transfers from challenge under the MUFTA." Dillard stemmed from a creditor's efforts to collect on a judgment rendered against Schlussel. During discovery, the creditor learned that Schlussel endorsed approximately $1,540,000 worth of checks to his wife, who would deposit the checks into a personal account and use the funds to pay for living expenses. The creditor subsequently sued Schlussel under the Michigan Uniform Fraudulent Transfer Act for actual and constructive fraud. Citing Sixth Circuit precedent, the circuit court granted summary disposition in favor of Schlussel, holding that the use of the funds to pay for living expenses provided reasonably equivalent value to Schlussel and thus barred the creditor's claims. On appeal, the Michigan Court of Appeals reversed. In addition to holding that the creditor's actual fraud claim should be decided by a jury, the appellate court held that the payments from Schlussel to his wife for household expenses did not automatically trump the creditor's constructive fraud claim. "If it did, the MUFTA would be a useless waste of ink and paper, as every debtor would simply transfer any cash in his possession to a covert account, spend it freely, and thereby avoid liability on a court-entered judgment." Id. at *40. Yet, while not a complete defense, the appellate court also held that the finder of fact would have to decide whether Schlussel received reasonably equivalent value when his wife made the payments. Accordingly, the case was remanded for further proceedings.

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