Key Equipment Finance, Inc. v. George D. Overend
665 F. App'x 801
| 11th Cir. | 2016Background
- KeyBank sued George Overend (and his wife as trustee of a revocable trust) for breach of a personal guarantee, attorney’s fees, and fraudulent conveyance after Overend transferred a one-half undivided interest in his home to his wife as trustee while business obligations and a bankruptcy petition were pending.
- District court granted partial summary judgment to KeyBank on liability and bifurcated the trial: bench trial for contract damages and jury trial on whether the home transfer was a fraudulent conveyance under Georgia law/UFTA.
- Jury found the transfer fraudulent under the UFTA theory of actual intent to hinder, delay, or defraud, after the court instructed on UFTA’s intent factors and additionally read Georgia Code § 19-3-10 language shifting the burden to spouses to show the transaction was fair.
- The jury asked which party bore the burden of proof; the court reiterated both that KeyBank must prove its claims by a preponderance and that, when a creditor attacks a husband-to-wife conveyance, the burden is on the spouses to show the transaction was free from fraud.
- Overend appealed arguing (inter alia) the burden-shifting instruction misstated Georgia law / conflicted with the UFTA and that the district court therefore impermissibly shifted the burden to him. The Eleventh Circuit affirmed.
Issues
| Issue | Plaintiff's Argument (KeyBank) | Defendant's Argument (Overend) | Held |
|---|---|---|---|
| Whether the district court’s jury instruction improperly placed burden on defendant by citing O.C.G.A. § 19-3-10 (spousal burden to show fairness) alongside UFTA instructions | KeyBank argued the instruction correctly stated Georgia law applicable to spousal transfers and the plaintiff still bore the overall burden to prove the claim by a preponderance | Overend argued UFTA displaced § 19-3-10 (implicit repeal) and that the UFTA’s framework places burden on plaintiff and treats insider status as only one factor, so burden-shifting was incorrect | Court affirmed: § 19-3-10 was not impliedly repealed; the specific spousal-burden statute can be reconciled with UFTA and applies to spousal transfers |
| Whether Overend preserved the precise implicit-repeal argument for appeal | KeyBank contended appropriate preservation occurred | Overend had limited objections in district court and raised the most developed implicit-repeal argument mainly on appeal/reply | Court noted preservation doubts but ruled on the merits anyway, finding the argument unavailing |
| Whether the UFTA is comprehensive such that it displaces prior Georgia common-law/equitable principles (reconciliation issue) | KeyBank: UFTA supplements existing principles per statutory language and does not occupy the field | Overend: UFTA’s general scheme makes older statutes like § 19-3-10 inconsistent and thus implicitly repealed | Court held UFTA expressly allows supplementing principles of law and equity; no clear contradiction, so no implied repeal |
| Whether the challenged transfer (to a revocable trust) falls within § 19-3-10’s husband-to-wife context | KeyBank: a revocable trust controlled by spouse is functionally a spouse recipient under § 19-3-10 | Overend: transfer was to a trust, not directly to wife, so § 19-3-10 shouldn’t apply | Court agreed with district court that a freely revocable trust controlled by wife is within § 19-3-10’s scope |
Key Cases Cited
- Gowski v. Peake, 683 F.3d 1299 (11th Cir. 2012) (standard of review for jury instructions)
- Bateman v. Mnemonics, Inc., 79 F.3d 1532 (11th Cir. 1996) (reversal for jury instruction error only when substantial and ineradicable doubt exists)
- Bonner v. Smith, 247 Ga. App. 419 (Ga. Ct. App. 2000) (burden on spouses to show transaction was free from fraud)
- Chatham Cty. v. Hussey, 267 Ga. 895 (Ga. 1997) (repeals by implication are disfavored; test for implied repeal)
- Rutter v. Rutter, 294 Ga. 1 (Ga. 2013) (analysis of when statutes cannot reasonably stand together)
- State v. Nankervis, 295 Ga. 406 (Ga. 2014) (specific statute prevails over general absent contrary intent)
- RES-GA Hightower, LLC v. Golshani, 334 Ga. App. 176 (Ga. Ct. App. 2015) (UFTA does not automatically displace prior law; 2015 amendments change scope of UFTA)
- Merrill Ranch Props., LLC v. Austell, 336 Ga. App. 722 (Ga. Ct. App. 2016) (treatment of UFTA amendments confirms prior limitations)