3CM Holdings, LLC, Appellant, v. Michael Willerton, et al., Respondents.

1

3CM HO LDINGS, LLC, Appellant, v.

MICHAE L WILLERTON, ET AL., Responden ts. ) ) ) ) ) ) ) ) ) ) No. ED113280

9, 2025 App eal from the Circuit Court of St. Louis County The Honorable John R. Lasater, Judge 3CM Hol dings, LLC, appeals a judgment in favor of Richard and Susan Willerton on its petition to recover damages under the Uniform Fraudulent Transfer Act ("UFTA"), section 428.005, et seq. 1 3CM claims the circuit court misapplied the law and that the judgment is against the weight of the evidence. The judgment is affirmed. Background In July 2018, Richard and Susan's home was destroyed by fire. Richard's brother, Michael Willerton, allowed Richard, Susan, and their daughter to live at his home (the 1 All statutory citations are to RSMo 2016.

2

"Property") in St. Peters, Missouri. Richard and Susan paid rent to Michael. They were interested in purchasing a home in the area so their daughter could stay in the same school district. In the autumn of 2018, Michael defaulted on a business loan he personally guaranteed. The lender demanded payment. Michael did not pay. Around the time Michael defaulted on the loan, he suggested that Richard and Susan buy the Property. On September 28, 2018, Michael sold the Property to Richard. The closing documents showed the sale price was $125,900, with Richard receiving a credit of $7,298.62 and a $23,355.38 gift of equity from Michael. Michael received no other compensation at the time of the sale. The sale satisfied Michael's $92,138.33 mortgage balance. Richard subsequently granted Susan an interest in the Property. While the closing documents showed a sale price of $125,900, Richard testified he and Michael agreed on a sale price of $185,000, with Richard transferring his future interest in Warren County farmland he stood to inherit. As of the sale date, the Property had a fair market value of $194,000. Richard and Susan made improvements to the property and, in June 2022, during the pendency of this case, sold it to a third party for $300,000. In September 2019, Michael's lender assigned his loan and personal guaranty to 3CM. 3CM filed suit against Michael in 2020, and later filed an amended petition joining Richard and Susan as defendants. 3CM alleged Michael fraudulently transferred the Property to Richard and Susan to shield his assets from his creditors in violation of the UFTA. 3CM alleged Richard and Susan were liable as transferees.

3

The circuit court held a bench trial and found Michael structured the sale of the Property "with the actual intent to hinder, delay, or defraud his creditors" and awarded 3CM $476,610 in damages against Michael. The circuit court found there was insufficient evidence Richard and Susan were aware of Michael's financial troubles and that they "were in need of a home for their family and this opportunity presented itself." The circuit court entered judgment for Richard and Susan because they purchased the Property "in good faith and for reasonably equivalent value under [section] 428.044.1[.]" 3CM appeals. Standard of Review Following a bench trial, this Court will affirm the judgment "unless there is no substantial evidence to support it, unless it is against the weight of the evidence, unless it erroneously declares the law, or unless it erroneously applies the law." Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976). "Claims that the circuit court erroneously declared or applied the law are reviewed de novo." McCrackin v. Mullen, 701 S.W.3d 868, 873 (Mo. banc 2024) (internal quotation omitted). A claim the judgment is against the weight of the evidence "necessarily involves review of the [circuit] court's factual determinations" and warrants reversal only if this Court has a "firm belief" the judgment is wrong. Pearson v. Koster, 367 S.W.3d 36, 43 (Mo. banc 2012). The Circuit Court Did Not Misapply The Law 3CM claims the circuit court misapplied section 428.044.1 by entering judgment for Richard and Susan "based solely" on a finding they took the property in good faith. Section 428.044.1 provides "[a] transfer or obligation is not voidable under subdivision

4

(1) of subsection 1 of section 428.024 against a person who took in good faith and for a reasonably equivalent value or against any subsequent transferee or obligee." (Emphasis added). 3CM argues the circuit court ignored the "reasonably equivalent value" requirement by not detailing the facts supporting this finding and, therefore, "misapplied the law by failing to analyze both components of the defense separately and distinctly." The circuit court did not misapply the law by entering judgment for Richard and Susan "based solely" on a finding they took the property in good faith. The circuit court found "Richard and Susan Willerton ... purchased [the Property] in good faith and for reasonably equivalent value under [section] 428.044.1[.]" The judgment is based expressly on findings that the purchase was made both in good faith and for a reasonably equivalent value. The lack of detailed findings specific to the circuit court's ultimate finding that there was an exchange of reasonably equivalent value does not move the needle. Determining reasonably equivalent value is a question of fact. Higgins v. Ferrari, 474 S.W.3d 630, 640 (Mo. App. 2015). 3CM did not request findings of fact pursuant to Rule 73.01(c). The circuit court did not misapply the law by not making detailed, specific factual findings supporting the ultimate finding there was reasonably equivalent value. 3CM also claims section 428.039.2 requires judgment for the creditor and against the transferee for the net proceeds of the fraudulent transfer even if the transferee took the property in good faith and for reasonably equivalent value under section 428.044.1. This claim fails at the outset because section 428.039.2 does not require the circuit court to provide a remedy for the creditor against the transferee in every case. Section 428.039.2

5

provides "[i]f a creditor has obtained a judgment on a claim against the debtor, the creditor, if the court so orders, may levy execution on the asset transferred or its proceeds." (Emphasis added). Section 428.039.2 expressly conditions the creditor's recovery on the circuit court's discretionary decision to levy execution on the asset transferred or its proceeds. 2 The circuit court did not misapply the law by entering judgment in favor of Richard and Susan. The Judgment Is Not Against The Weight Of The Evidence 3CM claims the circuit court's finding that Richard paid reasonably equivalent value for the Property is against the weight of the evidence. 3CM argues the circuit court's finding that Richard purchased the Property for reasonably equivalent value is based on irreconcilable findings that the Property had a fair market value of $194,000, but the net sale price was only $92,246. 3 3CM asserts "there was no evidence presented that would support a finding" that the sale price was for reasonably equivalent value. 4

By claiming the judgment is against the weight of the evidence, 3CM concedes the judgment is supported by substantial evidence. Weeks v. City of St. Louis, No. SC

2 The circuit court's discretion in awarding a creditor a remedy against a transferee is also reflected in section 428.039.1, which lists several other potential remedies "a creditor, subject to the limitations in section 428.044, may obtain[.]" (Emphasis added). 3 3CM's assertion the net proceeds were $92,246 is based on the $125,900 sale price less credits totaling $10,298.62 and a $23,355.38 gift of equity. The circuit court's judgment indicates the net proceeds were $95,246 ($125,900 - $7,298.62 - $23,355.38 = $95,246). 4 The UFTA does not define "reasonably equivalent value." 3CM asserts reasonably equivalent value means the sale price must be equivalent to the contemporaneous fair market value of the Property. The resolution of 3CM's fact-based against-the-weight-of- the-evidence claim does not require this Court to interpret the meaning of "reasonably equivalent value." As explained below, even if 3CM's interpretation is correct, it failed to show the circuit court's judgment is against the weight of the evidence.

6

101018, 2025 WL 3088365, at *2 (Mo. Nov. 4, 2025). "To preserve the circuit court's role as the finder of fact," an appellate court "gives the circuit court's factual findings the approximate effect of a jury verdict, especially when weighing and credibility are involved." Id. (quotation omitted). Therefore, an appellate court "defers on credibility determinations when reviewing an against-the-weight-of-the-evidence challenge because the circuit court is in a better position to weigh the contested and conflicting evidence in the context of the whole case." Id. (quotation and bracket omitted). "When the evidence poses two reasonable but different conclusions, appellate courts must defer to the circuit court's assessment of that evidence." Id. (quotation omitted). "A judgment will be reversed as against the weight of the evidence only if the circuit court could not have reasonably found, from the record at trial, the existence of a fact that is necessary to sustain the judgment." Id. (quotation omitted). To make this showing, 3CM must: (1) identify a challenged factual proposition necessary to sustain the judgment; (2) identify all of the favorable evidence in the record supporting the challenged factual proposition; (3) identify the evidence in the record contrary to that proposition, resolving all evidentiary conflicts in accordance with the circuit court's implicit and explicit credibility determinations; and, (4) demonstrate the favorable evidence, and the reasonable inferences therefrom, is so lacking in probative value that it fails to induce belief in that proposition when considered in the context of the entire record. Id. at 3. Missouri appellate courts "rarely" reverse a judgment on grounds it is against the weight of the evidence. Id. at 2.

7

3CM identifies the contested factual proposition (step one) as the circuit court's finding of reasonably equivalent value. The remaining analysis is incomplete. 3CM does not identify all of the facts in the record supporting the judgment as required by step two of the Weeks analysis. Instead, 3CM asserts "there was no evidence" of reasonably equivalent value and focuses on comparing the Property's $194,000 fair market value to the net sale proceeds Michael received when the sale closed. Contrary to 3CM's assertion, there is other evidence of value in the record. Although the closing documents show the sale price was $125,900, Richard testified he and Michael agreed on a sale price of $185,000. Richard also testified the closing documents for the sale of the Property were prepared by a mortgage company and did not include all consideration for the sale. After confirming the net sale proceeds reflected in the closing documents, Richard testified there was additional consideration, including a $30,000 cashier's check and his interest in the Warren County farmland he stood to inherit from his father's trust. By not identifying all the favorable evidence in the record, 3CM necessarily fails to demonstrate why, in the context of the entire record, the favorable evidence is so lacking in probative value that the circuit court not have reasonably found there was an exchange of reasonably equivalent value (step four). 3CM's failure to utilize the necessary framework strips its argument "of any analytical value or persuasiveness." Id. at 6 (quotation omitted). 5

5 In its reply brief, 3CM mistakenly shifts the burden to Richard and Susan by asserting, "Respondents have failed to show that the [j]udgment was not against the weight of the

8 3CM also argues Richard's testimony is inconsistent with the closing documents for the sale of the Property. This argument fails because it does not resolve evidentiary conflicts in accordance with the circuit court's implicit credibility determinations. Id. at 5. The circuit court made no finding Richard was not credible, and the judgment in favor of Richard and Susan implies the court credited Richard's testimony. See Rule 73.01(c) (providing "[a]ll fact issues upon which no specific findings are made shall be considered as having been found in accordance with the result reached"). 3CM's argument distills to a request for this Court to make impermissible credibility determinations contrary those implicit in the judgment. 3CM has not shown the judgment is against the weight of the evidence. Conclusion The judgment is affirmed. _____________________________________ ZEL M. FISCHER, JUDGE John P . Torbitzky, Chief Judge and Cory L. Atkins, Special Judge concur. evidence." As the appellant, 3CM bears the burden of showing the judgment is against the weight of the evidence.