Speedway Motorsports, Inc. v. Pinnacle Bank
315 Ga. App. 320
| Ga. Ct. App. | 2012Background
- Between 2006 and 2010, David R. Blihovde, Jr. allegedly defrauded Speedway Motorsports, Inc. and Speedway Motorsports International of over $0.5 million; Speedway discovered the fraud after his death in October 2010 and sued several defendants.
- Speedway alleged Blihovde diverted fraud proceeds through Oasis Trading Group, LLC, which he managed, by submitting fraudulent invoices for consulting services and misappropriating advances.
- In September 2008, Blihovde purchased a Gwinnett County residence for about $1.5 million, financed by a $1.2 million Pinnacle Bank loan; he gave a security interest to the Bank and used fraud proceeds to pay for mortgage insurance and improvements.
- After foreclosure by Pinnacle Bank in February 2011, Speedway asserted unjust enrichment, fraudulent transfers, constructive trust, equitable lien, and declaratory relief to reach the residence and related assets and sought attorney fees.
- Speedway alleged transfers to Deborah Blihovde and Wenona Blihovde (deposits and title transfers in motor vehicles) were made with actual intent to hinder, defraud, or delay creditors and sought a constructive trust and equitable lien on those funds and assets.
- The trial court dismissed several claims against Pinnacle Bank and alternative defendants; Speedway appeals the dismissals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether dismissal of UFTA/constructive trust/equitable lien/declaratory relief against Pinnacle Bank was proper | Speedway contends Bank’s involvement with proceeds and security interests supports claims. | Bank argues bona fide purchaser/good faith protections and lack of duties negate claims. | Partial reversal; UFTA/constructive trust/equitable lien/declaratory relief against Bank viable; unjust enrichment claim affirmed. |
| Whether life-insurance proceeds are recoverable by Speedway under OCGA 33-25-11(a) | Speedway is a creditor; statute does not bar its claim. | OCGA 33-25-11(a) precludes claims by creditors against insured's policy proceeds. | Claim against life-insurance proceeds dismissed; statute precludes Speedway’s claims. |
| Whether alleged fraudulent transfers to Deborah and Wenona and related constructive trust/equitable lien claims were properly dismissed | Deposits to banks and vehicle titling constitute fraudulent transfers; constructive trust/equitable lien should be imposed. | Affirmative defenses could defeat claims; failure to plead around defenses warrants dismissal. | Court erred in dismissing; claims may proceed; reverse as to fraudulent transfers, constructive trust, equitable lien, and related attorney-fee claims. |
Key Cases Cited
- Bennett v. Rosborough, 155 Ga. 265 (1923) (predecessor life-insurance proceeds rule for creditors)
- Brock v. Yale Mortgage Corp., 287 Ga. 849 (2010) (bona fide purchaser protection for land; defense defenses)
- Murrey v. Specialty Underwriters, 233 Ga. 804 (1975) (affirmative defenses may be disposed on motion when facts are admitted or undisputed)
- Northeast Atlanta Bonding Co. v. State, 308 Ga.App. 573 (2011) (statutory interpretation and creditor concepts)
- Hood v. Smoak, 271 Ga. 86 (1999) (constructive trust principle in fraud contexts)