                    United States Court of Appeals
                           FOR THE EIGHTH CIRCUIT
                                   ___________

                                   No. 04-2009
                                   ___________

Louis Imperato,                         *
                                        *
            Plaintiff - Appellant,      *
                                        *
      v.                                *
                                        *
Benjamin C. McMinn,                     *
                                        * Appeal from the United States
            Defendant - Appellee,       * District Court for the Eastern
                                        * District of Arkansas.
W.C. McMinn Co., Inc., Susan Samples *
Wallace, Larry C. Wallace, Principal    *
Residential Mortgage, Inc., Regions      *
Bank, Inc.,                             *
                                        *
            Defendants.                 *
                                   ___________

                           Submitted: January 13, 2005
                               Filed: May 9, 2005 (Corrected 5/12/05)
                                 ___________

Before MELLOY, SMITH, and COLLOTON, Circuit Judges.
                           ___________

MELLOY, Circuit Judge.

      Louis Imperato appeals the decision of the United States District Court for the
Eastern District of Arkansas granting a motion to dismiss brought by Benjamin C.
McMinn. Imperato argues that the district court erred when it found that his claim
was time barred. Imperato believes that his claim may be time barred if brought
under the Arkansas Fraudulent Transfers Act, but as a claim stemming from an
enforcement of a judgment with a remedy of a resulting trust, his claim should be
allowed to proceed. We agree and reverse the decision of the district court and
remand for further proceedings.

                                          I.

      On or about August 25, 1995, Larry C. Wallace’s girlfriend, and current wife,
Susan Samples Wallace (“Samples”), entered into an agreement to purchase a house
and real estate (the “Property”) in Benton, Arkansas from a third party. Samples
never closed the deal to purchase the Property. Instead, she assigned her interest in
the Property to Benjamin C. McMinn. On or about September 18, 1995, Samples
signed a lease agreement with Benjamin C. McMinn for the Property that required
Samples to pay rent of $3,000 a month.

      On October 2, 1995, Wallace transferred $155,694.87 to McMinn. Later,
during the same day, McMinn issued checks from his account to himself and
Samples. The amount given to Samples was $75,000. Four days later, McMinn
purchased the Property. McMinn became the record title holder of the Property.
From that time until the present, Wallace and Samples have lived at the house on the
Property under the terms of the lease between McMinn and Samples.

      During this same time period, Wallace owed Imperato a substantial sum of
money. On January 22, 2001, Imperato received a judgment against Wallace for
$251,344.75 in the United States District Court for the Eastern District of Arkansas.
Imperato recorded his judgment on February 2, 2001.

    On February 13, 2003, Imperato filed suit in the district court against Wallace,
McMinn (the record title holder), and all other parties that claimed an interest in the

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Property to foreclose upon Wallace’s interest in the Property. McMinn moved to
dismiss Imperato’s complaint on the basis that it was time barred by the three-year
statute of limitations applicable for causes of action under the Arkansas Fraudulent
Transfers Act. Ark. Code Ann. § 4-59-201 et seq.

       Imperato amended his complaint to make clear that his cause of action was not
based upon the Arkansas Fraudulent Transfers Act. Instead, Imperato alleged that
Wallace was the true and equitable owner of the Property despite McMinn being the
record title holder. Imperato alleged that the transactions described above created a
resulting trust for the benefit of Wallace, and that Imperato could enforce his
judgment against Wallace by foreclosing on the Property.

      On March 25, 2004, the District Court ruled that Imperato’s complaint was
time barred under the statute of limitations of the Arkansas Fraudulent Transfers Act.
Imperato appeals.

                                           II.

       This court reviews a dismissal of a complaint de novo. Gardner v. First Am.
Title Ins. Co., 294 F.3d 991, 993 (8th Cir. 2002). We affirm a district court’s
dismissal “only if, accepting all allegations as true, it appears the plaintiff can prove
no set of facts that would entitle him [or her] to relief.” Stahl v. United States Dept.
of Agric., 327 F.3d 697, 700 (8th Cir. 2003).

     Imperato argues that the transactions between Wallace, Samples, and McMinn
formed a resulting trust.1 A “[resulting trust] is presumed to arise in favor of one who

      1
        While Imperato has termed the transaction between Wallace, Samples, and
McMinn as a resulting trust, it may be more accurate to refer to it as a “constructive
trust.” As the Restatement of Trusts notes, when “the purchaser of property takes title
in the name of another for the purpose of defrauding creditors,” the property, “is

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pays or secures the purchase price for land at the time of the transaction when the
deed is taken in the name of another.” Henslee v. Kennedy, 555 S.W.2d 937, 939
(Ark. 1977). When the financier of the transaction has all of the beneficial and
equitable interest in the property, and the transferee only has bare, legal title, there is
a resulting trust. First Nat’l Bank of Roland v. Rush, 785 S.W.2d 474, 478 (Ark. Ct.
App. 1990).

        Taking the facts as alleged by Imperato to be true, the elements of a resulting
trust appear to be present. Wallace provided the down payment for the house, when
he gave McMinn $155,000 and McMinn kept over $80,000 of that amount. Samples,
who at the time was Wallace’s girlfriend, received $75,000 with which to pay rent.
It is also alleged that the rent payments were far in excess of the fair market value and
that the rent payments are disguised payments of mortgage, taxes, and insurance. No
other explanation for the payments has been offered. Facially the allegations in the
complaint are sufficient to argue a resulting trust had been formed.

     The key issue, then, is whether a claim brought by Imperato is time barred.
Under Arkansas law, judgments can be collected within ten years. Ark. Code Ann.

subject to constructive trust for the creditors of the purchaser.” Restatement of Trusts
§ 9, comment g. Similarly, the Arkansas Supreme Court adopted the view that
“where the legal title has been parted with and is beyond the scope of legal process,
a constructive trust is said to arise in favor of judgment creditors with respect to the
property of debtors, which has been transferred with the intent to defraud the creditors
of their rights.” Doster v. Manistee Nat’l Bank, 55 S.W. 137, 142 (Ark. 1900); see
also Edwards v. Edwards, 843 S.W.2d 846, 849 (Ark. 1992). The failure to
distinguish between a constructive and resulting trust is not unusual. The confusion
between constructive and resulting trusts is common among courts and practitioners.
See Valente v. Fleet Nat’l Bank, 360 F.3d 256, 262 n.4 (1st Cir. 2004). Arkansas,
specifically, has used the term “resulting trust” to describe cases where fraud has
allegedly been committed against creditors. See Rush, 785 S.W.2d at 478. We use
the term “resulting trust” as has been argued by the parties and used in some Arkansas
courts in this case even though “constructive trust” may be more appropriate.

                                           -4-
§ 16-56-114 (2005). Further, judgment liens last for a period of ten years. Ark. Code
Ann. § 16-65-117(d) (2005). Imperato argues that he therefore has ten years to
enforce his judgment against Wallace and that his claim is not time barred by the
Arkansas Fraudulent Transfers Act. However, the ten-year limit does not necessarily
apply to his suit against McMinn because McMinn was not a party to the 2001
judgment.

       Creditors, like Imperato are allowed to “step into the shoes” of debtors in a
resulting trust situation to exercise the rights of the beneficiaries. See, e.g., Ransome
v. Watson’s Administrator, 134 S.E. 707, 709 (Va. 1926). In this case, Imperato can
attempt to exercise the rights of Wallace against McMinn to collect the judgment
Imperato has against Wallace. Imperato’s claim against McMinn is no greater than
any claim Wallace may have against McMinn. Imperato is also subject to any
defense McMinn would have against Wallace, the alleged beneficiary of the resulting
trust. If Wallace’s claim as a beneficiary is barred by the statute of limitations, then
Imperato, having stepped into the shoes of Wallace, is likewise barred. We need to
look, therefore, to the issue of whether the statute of limitations bars Wallace’s claim
against McMinn.

       McMinn argues that the resulting trust should be limited by a statute of
limitations of three years for contracts not in writing. See Bd. of Educ. of Ouachita
County. v. Morgan, 34 S.W. 2d 1063, 1065 (Ark. 1931) overruled on other grounds
by Hartwick v. Thorne, 780 S.W.2d 531 (Ark. 1989). In Morgan, the court applied
a three-year limit to a resulting trust, and McMinn believes that time limitation should
apply in the present matter as well.

       Even if McMinn is correct, the relevant three-year statute of limitations would
not have run in the present matter. Under a resulting trust theory, the statute of
limitations only begins to run from the date of a repudiation by the resulting trustee
or from the time a contrary intent is brought to the attention of the beneficiaries. See

                                          -5-
Harbour v. Harbour, 181 S.W.2d 805, 810 (Ark. 1944) (noting that the statute of
limitations does not run in favor of the trustee); see also Grand Lodge of Iowa v.
Osceola Lodge No. 18, 178 N.W.2d 362, 366 (Iowa 1970). In this case, McMinn,
under a resulting trust theory, is the trustee and Wallace and Samples are the
beneficiaries. There is nothing in the record to indicate that before the filing of this
complaint, Wallace and Samples had repudiated the resulting trust or had been
notified of a repudiation by McMinn. As a result, Imperato is permitted to attempt
to exercise Wallace’s rights under a resulting trust theory without having his claim
time barred.

       The implication of the tolling of the statute of limitations is not that Imperato
can bring a suit against McMinn at any time. Rather, since he is only acting “in the
shoes” of Wallace as against McMinn, he can only do so within the ten-year time
frame enforcing the judgment against Wallace. As Imperato has done so in this case,
the statute of limitations does not bar his claim against McMinn.

                                          III.

      Accordingly, the judgment of the district court is reversed and remanded for
further proceedings. Because the decision of the district court is reversed, and
Imperato’s appeal was not frivolous, McMinn’s motion seeking sanctions is denied.
                      ______________________________




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