White v. Llewellyn, 857 S.E.2d 388

In 2013 Ann Llewellyn struck White, causing serious injuries; White sued Ann and Brad in 2015 for negligence/premises liability.
The Llewellyns divorced (finalized Dec. 30, 2015); their property settlement awarded Brad the residence; Brad was dismissed from White’s suit on Jan. 28, 2016.
On Nov. 9, 2016 Ann executed a deed of gift transferring fee simple title of the residence to Brad; Ann and children continued to occupy the home rent-free.
White filed a fraudulent-conveyance suit (Mar. 30, 2018) alleging several badges of fraud (family transfer, lack of consideration, retention of possession, insolvency) and sought to void the 2016 transfer.
At the 2019 bench trial the circuit court found White had established a presumption of fraudulent conveyance (badges proved), but shifted only the burden of production to the Llewellyns; the court found the Llewellyns’ testimony credible, dismissed White’s complaint, and denied fees.
White appealed; the Supreme Court of Virginia held that once badges of fraud create the presumption, both the burden of production and the burden of persuasion shift to the party defending the conveyance.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Does proof of badges of fraud (a presumption of fraudulent conveyance) shift the burden of persuasion or only the burden of production?	White: the Morgan theory applies — presumption shifts both production and persuasion; defendants must prove bona fides by strong and clear evidence.	Brad: the Thayer theory applies — presumption only shifts burden of production; plaintiff retains burden of persuasion.	Held: Virginia adopts the Morgan theory for fraudulent conveyance presumptions; both burdens shift and defendants must prove bona fides by strong and clear evidence.
Did the circuit court’s allocation of burdens and resulting dismissal/denial of fees require reversal?	White: circuit court erred in leaving burden of persuasion with her; judgment and fees were improperly denied.	Brad: circuit court correctly required only rebuttal/equipoise and properly dismissed.	Held: Trial court erred in applying the wrong burden/standard; case reversed and remanded for further proceedings consistent with the correct burden and proof standard.

La Bella Donna Skin Care, Inc. v. Belle Femme Enters., LLC, 294 Va. 243 (2017) (recognizing badges-of-fraud presumption in fraudulent-conveyance cases)
Parson v. Miller, 296 Va. 509 (2018) (discussing competing Thayer and Morgan theories for presumptions)
Hickman v. Trout, 83 Va. 478 (1887) (requiring strong and clear evidence to rebut multiple badges of fraud)
Hutcheson v. Savings Bank of Richmond, 129 Va. 281 (1921) (holding defendants must establish bona fides after prima facie case)
Fox Rest Assocs., L.P. v. Little, 282 Va. 277 (2011) (discussing badges of fraud and burden shifting)
First Nat’l Bank of Bluefield v. Pressley, 176 Va. 25 (1940) (imposing burden on defendants to establish bona fides by clear and convincing evidence)
Fowlkes v. Tucker, 164 Va. 507 (1935) (discussing presumption favoring creditors and grantee’s burden)
SunTrust Bank v. PS Business Parks, L.P., 292 Va. 644 (2016) (definition and explanation of burden of persuasion)