EMM CREDIT, LLC v. ALEXANDER REMINGTON
343 Ga. App. 710
| Ga. Ct. App. | 2017Background
- In 1996 Remington purchased an industrial building in Gwinnett County and transferred it to American National Holding Corporation (ANHC); Remington later guaranteed or pledged debt related to the purchase and ANHC leased the building to MEC.
- Remington pleaded guilty in 2002 to federal mail and wire fraud for embezzling from NCom (formerly NewCom) and NCom obtained a $2,533,000 judgment against Remington, MEC, and Cara Guri in California in 2006.
- NCom sued in Georgia in 2003 seeking (among other relief) a declaratory judgment that Remington was the “true owner” of ANHC and that the 1996 transfer was fraudulent; NCom’s California judgment was later assigned to EMM Credit, LLC, which prosecuted the Georgia case.
- At trial a jury found (1) Remington was the true owner of ANHC, (2) Remington fraudulently transferred the Gwinnett property to ANHC, and (3) the suit was timely; the trial court nevertheless granted defendants’ renewed motion for directed verdict / JNOV on some claims.
- The trial court held (a) that nonparties Gino and Tony Zahari were indispensable and their absence barred EMM’s declaratory relief, and (b) that the fraudulent-transfer claim was unassignable to EMM; the Court of Appeals affirmed in part and reversed in part.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether failure to join Gino and Tony made them indispensable under OCGA § 9-11-19 and required dismissal of the declaratory-ownership claim | Nonjoinder was not fatal; evidence at trial supported Remington as the true owner and existing parties presented evidence covering the nonparties’ interests | Gino and Tony were owners of ANHC and thus indispensable; their absence prevented full relief | Reversed: nonjoinder did not make them indispensable because existing parties adequately protected their interests and evidence supported the jury verdict that Remington was the true owner |
| Whether some evidence supported the jury’s declaratory-ownership verdict such that directed verdict/JNOV was improper | Evidence (closing docs, participants at closing, suspicious recreated records, testimony) sufficed to support jury’s finding that Remington was true owner | No stock certificates issued to Remington meant no ownership evidence | Reversed: there was at least some evidence for the jury; court cannot grant directed verdict/JNOV where evidence conflicts |
| Whether EMM (assignee of NCom’s California judgment) may pursue a Georgia fraudulent-transfer claim based on a transfer that predated the assignment | Assignment of the judgment gave EMM the same rights as original judgment-holder; fraudulent-transfer claims should be assignable here | Precedent bars assignees of debts/judgments from pursuing fraudulent-transfer claims that arose before assignment (i.e., claim is unassignable) | Affirmed: under Georgia precedent (Ne Smith line extended by Golshani and successors), an assignee in EMM’s position lacks standing to pursue the pre-assignment fraudulent-transfer claim |
| Evidentiary exclusion of Allstate witness binder and addendum | The binder and unaltered addendum would prove the addendum wasn’t altered and support EMM’s ownership theory | Defendants objected to admission; trial court excluded the evidence | Not addressed on appeal (court declined to reach this issue because it resolved ownership joinder error in EMM’s favor) |
Key Cases Cited
- Vol Repairs II Inc. v. Knighten, 322 Ga. App. 416 (discussing directed verdict/JNOV standard and viewing evidence in favor of jury)
- Halta v. Bailey, 219 Ga. App. 178 (nonjoinder of claimed shareholders not fatal where evidence supports adjudication)
- Stendahl v. Cobb County, 284 Ga. 525 (existing party may protect nonparty’s interests so nonparty is not indispensable)
- Kueffer Crane & Hoist Svc., Inc. v. Passarella, 247 Ga. App. 327 (ownership can exist without issuance of stock certificates)
- Rental Equip. Group, LLC v. MACI, LLC, 263 Ga. App. 155 (directed verdict/JNOV improper when any evidence supports verdict)
- Teklewold v. Taylor, 271 Ga. App. 664 (jury may disbelieve substantial countervailing evidence)
- RES-GA Hightower, LLC v. Golshani, 334 Ga. App. 176 (assignee of debt lacks standing under UFTA to pursue pre-assignment fraudulent-transfer claim)
- Merrill Ranch Properties, LLC v. Austell, 336 Ga. App. 722 (followed Golshani; assignee of loan lacks standing to challenge prior transfers)
- Callaway Blue Springs, LLLP v. West Basin Capital, LLC, 341 Ga. App. 535 (extended Golshani to assignees of judgments)