WALLIN Et Al. v. WALLIN
341 Ga. App. 440
| Ga. Ct. App. | 2017Background
- In 2009 Cassie Wallin sued Eugene ("Gene") Wallin and her then-husband Jeremy for breach of an oral agreement and quantum meruit after Gene refused to deed real property at 317 Deer Head Cove Road to her; a jury later awarded Cassie $276,000 on quantum meruit and judgment was entered in May 2011.
- Gene had earlier (2002) executed a promissory note to Linda (his brother’s ex-wife) for $150,000 and a contemporaneous but unrecorded security deed granting Linda a lien on the subject property as collateral for that note.
- On the same day the trial court entered judgment for Cassie (May 12, 2011), Gene executed a second security deed to Linda (this one was recorded eight days later); Gene testified he did so to give Linda priority over Cassie.
- Cassie obtained a writ of fieri facias on May 25, 2011 and, after unsuccessful collection efforts, sued to void the 2011 recorded security deed as a fraudulent transfer under the UFTA.
- After a bench trial the trial court found the 2011 conveyance fraudulent and voided it; Gene, Linda, and Jeremy appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the May 12, 2011 security deed was a fraudulent transfer under the UFTA (OCGA § 18-2-70 et seq.) | Cassie: deed was executed shortly after judgment with intent to hinder her collection; badges of fraud support voiding. | Gene/Linda: either the transfer was not fraudulent or, alternatively, Linda’s prior 2002 unrecorded security deed already gave her priority over Cassie. | Reversed: 2011 deed not voidable under UFTA because the property was encumbered by Linda’s valid prior security deed and thus was not an "asset" of Gene for UFTA purposes. |
Key Cases Cited
- SRB Inv. Servs., LLLP v. Branch Banking & Trust Co., 289 Ga. 1 (application of UFTA badges of fraud)
- BFP v. Resolution Trust Corp., 511 U.S. 531 (origin and use of "badges of fraud" in fraudulent conveyance law)
- Wells Fargo Bank, N.A. v. Twenty Six Props., LLC, 325 Ga. App. 662 (judgment levy attaches only to property owned by judgment debtor)
- In the Matter of Clifford, 566 F.2d 1023 (unrecorded security deed has priority over subsequent judgment lien under Georgia law)
- Donovan v. Simmons, 96 Ga. 340 (historical rule that unrecorded conveyance transfers title as between parties and prevents subsequent judgment from becoming a lien on the property)