Branch Banking and Trust Company v. Hamilton Greens, LLC, 9:11-cv-80507

Background

BB&T obtained a final money judgment against Richard Bellinger for breach of contract and later initiated proceedings supplementary under Fla. Stat. §56.29 and Fed. R. Civ. P. 69(a) to reach assets that might satisfy that judgment.
In 2011 Bellinger established an irrevocable Cook Islands trust; in Feb. 2012 he transferred ≈$1.63M to the trust. BB&T was a creditor at that time.
Beginning May 8, 2013 (shortly after an adverse summary-judgment ruling and before/after entry of final judgment), Bellinger caused the trustee to direct monthly discretionary distributions to his girlfriend/employee Maureen Donnelly, who deposited them into a Florida Wells Fargo account and used them largely to pay Bellinger’s living expenses; total ≈$305,000 through Jan. 7, 2015.
BB&T sued in proceedings supplementary seeking to avoid transfers as fraudulent (both the 2012 funding of the Cook Islands trust and the 2013–2015 distributions to Donnelly), to apply proceeds to its judgment, attorneys’ fees, and injunctive relief.
The court found (1) the 2011 creation and 2012 funding of the Cook Islands trust were not fraudulent transfers (creditor did not meet its burden after considering badges of fraud and Bellinger’s credible, legitimate reasons), and (2) the 2013–2015 payments from the trust to Donnelly (as Bellinger’s proxy) were fraudulent transfers under Fla. Stat. §726.105 (both actual and constructive fraud).
Relief ordered: Donnelly must turn over remaining trust distributions in her possession received May 2013–Jan 2015; Bellinger must pay BB&T’s reasonable costs and attorneys’ fees incurred in seeking that relief; injunction entered preventing Donnelly from receiving future trust distributions as Bellinger’s proxy for his sole benefit. All other relief requested by BB&T was denied.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the 2011 creation and 2012 funding of the Cook Islands trust were fraudulent transfers	BB&T: funding was a fraudulent conveyance to place assets beyond creditors and sought avoidance/recovery of ≈$1.7M	Bellinger: trust had legitimate estate/planning purposes; he lacked intent to defraud; he retained limited control; Donnelly had no role	Not fraudulent — credible legitimate purposes and rebuttal of badges of fraud; BB&T not entitled to relief against trust funding
Whether the 2013–2015 trust distributions to Donnelly were fraudulent transfers	BB&T: distributions were effectively Bellinger’s (he used Donnelly as a proxy) and thus were transfers to defeat creditors; seeks turnover/applicability to judgment	Bellinger/Donnelly: trust corpus belonged to trustee; distributions not Bellinger’s assets; Donnelly acted in good faith and provided value (paid Bellinger’s expenses) or was a mere conduit	Fraudulent — both actual and constructive fraud proven; distributions were property of Bellinger when received by his proxy; burden shifts and defendants’ defenses fail
Whether BB&T may recover judgment directly against the judgment debtor for the amount of the fraudulent transfers	BB&T: seeks additional judgment (≈$305,000) against Bellinger (and broader relief)	Defendants: fraudulent-conveyance remedy is recovery from transferee, not a second judgment against debtor; ancillary jurisdiction limits	Denied — fraudulent-conveyance law does not authorize a duplicative money judgment against debtor; remedy is recovery from transferee/proceeds
Whether Donnelly (transferee) is liable for the transferred distributions and what relief is proper	BB&T: requests Donnelly pay over amounts received and seeks judgment/attorneys’ fees	Donnelly: acted in good faith, provided equivalent value (paid Bellinger’s expenses), mere conduit, and lacked involvement in trust funding	Partially granted — ancillary jurisdiction permits recovery from transferee of proceeds; Donnelly must turn over remaining funds she still possesses; no money judgment for full ≈$305,000 given her lack of profit, good-faith indicators, and equitable considerations; injunction limited to preventing proxy receipts

Key Cases Cited

S.E.C. v. Solow, 682 F. Supp. 2d 1312 (S.D. Fla. 2010) (discussed in distinguishing cases where defendant divested assets anticipating judgment)
Wiand v. Lee, 753 F.3d 1194 (11th Cir. 2014) (property is reachable by creditor when it constitutes property of the debtor that could have been applied to payment of debt)
Yusem v. S. Fla. Water Mgmt. Dist., 770 So. 2d 746 (Fla. 4th DCA 2000) (fraudulent conveyance action is a creditor’s remedy to recover assets from the transferee, not to obtain another judgment against the debtor)
National Maritime Services, Inc. v. Straub, 776 F.3d 783 (11th Cir. 2015) (ancillary jurisdiction supports supplementary proceedings to disgorge fraudulently transferred assets held by third parties)
Peacock v. Thomas, 516 U.S. 349 (U.S. 1996) (limits on ancillary jurisdiction: it does not extend to a new lawsuit imposing liability on a third party)