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Federal Deposit Insurance Corp. v. Amos

United States District Court, M.D. Georgia, Columbus Division

July 28, 2017

FEDERAL DEPOSIT INSURANCE CORPORATION, as receiver for GULFSOUTH PRIVATE BANK, Plaintiff,
v.
WILLIAM L. AMOS, JENIFER C. AMOS, WLA INVESTMENTS, INC., INNOVATION TREND SETTERS OF AMERICA, LLC, and AFLAC, INC. as sponsor of the Aflac Incorporated Market Director Deferred Compensation Plan, Defendants.

          ORDER

          CLAY D. LAND CHIEF U.S. DISTRICT COURT JUDGE

         The Federal Deposit Insurance Corporation (“FDIC”) holds several unsatisfied Florida judgments against William Amos. After registering the judgments in this Court, see case nos. 4:16-MC-3, 4:16-MC-4, 4:16-MC-5, the FDIC filed the present action, 4:16-CV-284, to collect on the judgments and to set aside transfers that Amos made to his wife and the subordination of a lien on real property controlled by Amos. The FDIC also filed a garnishment action, 4:16-MC-4, in this Court to collect on the judgments. [1]

         The FDIC filed a motion for summary judgment regarding three transfers by Amos to his wife and the subordination of the lien, claiming that those transactions should be voided as a matter of law pursuant to Georgia's Uniform Voidable Transactions Act (“GUVTA”), O.C.G.A. § 18-2-70 et seq. (ECF No. 51). The FDIC also moves to modify the Consent Order that the Court previously entered that granted the FDIC's motion for a preliminary injunction (ECF No. 50).

         The FDIC also filed a motion for summary judgment in the garnishment action arguing that it is entitled to garnish credits that Amos's employer, Aflac, Inc., has made to Amos's account in the Aflac Incorporated Market Director Deferred Compensation Plan (“the Plan”)(ECF No. 10).

         For the reasons explained in the remainder of this Order, the FDIC's motion for summary judgment in 4:16-CV-284 seeking to void certain transactions under GUVTA (ECF No. 51) is denied. The Court defers ruling on the FDIC's motion to modify the Consent Order in 4:16-CV-284 (ECF No. 50) and defers ruling on the FDIC's motion for summary judgment in the garnishment action, 4:16-MC-4 (ECF No. 10).

         Summary Judgment Motion in 4:16-CV-284 to Void Transactions

A. Transfer of Amos & Co.

         The FDIC seeks to void the transfer by Amos of his ownership in William L. Amos & Company (“Amos & Co.”) to his wife. It argues that the transfer is voidable under GUVTA because the transfer was made without receiving a “reasonably equivalent value” in exchange for the transfer and that Amos was insolvent at the time of the transfer. Pretermitting whether Amos was insolvent at the time of the transaction, the Court finds that genuine factual disputes exist as to whether Amos received “reasonably equivalent value” for the transfer, thus precluding summary judgment. Viewing the evidence in the light most favorable to Amos, as required at this stage of the proceedings, a reasonable juror could conclude that this transfer conferred an indirect economic benefit on Amos. Amos claims that as a result of the transfer he was able to remain employed at Aflac, where he earns a significant salary and other benefits. The FDIC offers evidence of Amos & Co's assets to support its contention that the benefit he derived from employment with Aflac was not “reasonably equivalent” to the value of Amos & Co. But it is unclear if Amos & Co. had any liabilities. Amos describes signing checks for Amos & Co.'s expenses at the time of the transfer. See, e.g., Amos Dep. 30:7-9. And Amos & Co. certainly has ongoing expenses and liabilities today. See Pl.'s Mot. to Modify Consent Order 2, ECF No. 50 (objecting to these expenses). With only evidence of Amos & Co.'s assets, the Court cannot find that the value of Amos's Aflac employment was not reasonably equivalent to the value of Amos & Co. at the time of this transaction as a matter of law. That is an issue for the jury to decide.

         Rather than offering clear evidence of Amos & Co.'s 2014 value, the FDIC argues that this transfer is voidable because Amos did not receive the value of his employment at Aflac at the same time that he transferred Amos & Co. to his wife. But in determining whether a transaction is voidable, the Georgia Court of Appeals has declined to take a “narrow, piecemeal view [that] ignores the essential nature of the transaction.” See Truelove v. Buckley, 733 S.E.2d 499, 502-03 (Ga.Ct.App. 2012) (reversing the trial court's grant of summary judgment because the evidence showed that the transfer of the property was “at essentially the same time” as the defendant paid for the property and therefore was not an antecedent debt under O.C.G.A. § 18-2-75(b)). Moreover, some courts have held that a future economic benefit may constitute “value” under similar circumstances. See In re PSN USA, Inc., 615 F. App'x 925, 930 (11th Cir. 2015) (per curiam) (recognizing that some circuits have held that “[t]he mere opportunity to receive an economic benefit in the future constitutes ‘value' under the [Bankruptcy]Code.” (quoting In re Fruehauf Trailer Corp., 444 F.3d 203, 212 (3d Cir. 2006))).

         Here, Amos transferred Amos & Co. in August 2014 and became a W-2 employee at Aflac the following month. Amos represents that he made the transfer in anticipation of his W-2 employment. Thus, viewing the facts in the light most favorable to Amos, a reasonable juror could conclude that the essential nature of the transaction was Amos giving up ownership of Amos & Co. for W-2 employment. The Court also observes that it is difficult to conclude that Amos's financial condition is worse due to the transfer, particularly in light of his Aflac salary and the uncertain value of Amos & Co. For all of these reasons, the FDIC fails to show that the transfer of Amos & Co. is voidable as a matter of law.

         B. Cash Transfers

         The FDIC also seeks to void two cash transfers from Amos to his wife's individual bank account. The Court finds that genuine factual disputes exist regarding this claim, thus precluding summary judgment. One of the transfers was from an account that Amos and his wife held jointly. Therefore, a factual dispute exists as to whether this transfer would be deemed a transfer of assets from Amos to his wife. It is undisputed that the account was originally a joint account. And Amos states that he and his wife instructed the bank to take her name off of the account and transfer the funds from the joint account to her personal account at the same time. See Amos Decl. ¶ 3. Thus, a reasonable juror could conclude that the transfer was a division of their mutual funds and not a transfer of Amos's assets to his wife.[2]

         Additionally, genuine factual disputes exist as to whether Amos received reasonably equivalent value for transferring at least some of the funds in question. Amos contends that he received reasonably equivalent value for both cash transfers because his wife used the money to pay their mutual household expenses. Under GUVTA, “[V]alue does not include an unperformed promise made otherwise than in the ordinary course of the promisor's business to furnish support to the debtor or another person.” O.C.G.A. § 18-2-73(a). But several courts have found that the regular payment of mutual household expenses does not fall under this exclusion. See In re Fisher, 296 F. App'x 494, 501 (6th Cir. 2008) (distinguishing the regular payment of household expenses from a promise to provide for the debtor in the future); United States v. Goforth, 465 F.3d 730, 735-36 (6th Cir. 2006) (holding that the payment of regular household expenses is reasonably equivalent value and noting that this holding is consistent with the “greater weight of authority”); see also Post-Confirmation Comm. for Small Loans, Inc., 2016 WL 1316767, at *6-7 (interpreting 11 U.S.C. § 550). But see Carneal v. Leighton, 237 F.Supp.2d 104, 110 (D. Me. 2002) (relying on a case holding that a son's promise to provide for his mother did not confer reasonably equivalent value on his father to hold that the defendant's wife's payments for household expenses and the support of their children was not reasonably equivalent value under Maine law).

         Evidence exists in the present record that the transferred funds were used primarily for mutual household expenses. See J. Amos Feb. 2017 Dep. 17:1-16; see also Amos Decl. ΒΆ 4. Thus, a reasonable juror could conclude that Amos transferred at least some of the funds to his wife as part of the ordinary course of their marriage to pay their mutual living expenses. The Court declines at this time to find as a matter ...


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