Res-Ga Hightower, LLC v. Golshani

• Decision Date: 16 October 2015
• Docket Number: No. A15A0987.,A15A0987.
• Citation: 778 S.E.2d 805,334 Ga.App. 176
• Parties: RES–GA HIGHTOWER, LLC, v. Nasser Vossough GOLSHANI.
• Court: Georgia Court of Appeals

334 Ga.App. 176

778 S.E.2d 805

RES–GA HIGHTOWER, LLC,

v.Nasser Vossough GOLSHANI.

No. A15A0987.

Court of Appeals of Georgia, Fourth Division.

Oct. 16, 2015.

David Scott Klein, Frank William Deborde, Bradley Andrews Hutchins, Lisa McVicker Wolgast, Atlanta, for Appellant.

John A. Christy, Michelle Roback Kraynak, Atlanta, for Appellee.

Opinion

McMILLIAN, Judge.

This appeal presents a single legal issue: Under OCGA § 44–12–24and the Georgia Supreme Court's decision in Security Feed & Seed Company of Thomasville, Inc. v. Ne Smith,213 Ga. 783, 102 S.E.2d 37 (1958), does an assignee to a debt have standing to assert a claim that the debtor fraudulently conveyed property in violation of the Georgia Uniform Fraudulent Transfers Act, OCGA § 18–2–70 et seq.(the “UFTA”)?¹

The facts are largely undisputed.²On or about October 25, 2006, Rockdale Investment Partners, LLC borrowed funds from Omni National Bank (the “Bank”), which was evidenced by a promissory note (the “ Note”). Appellee Nasser Golshani personally guaranteed the Note. Two years later, Rockdale Investment Partners and Golshani defaulted on their obligations to the Bank.

Some months later, the Bank was closed by the Georgia Department of Banking, and the Federal Deposit Insurance Corporation (“FDIC”) was appointed as the receiver for the Bank. Effective February 9, 2010, the FDIC, as receiver for the Bank, assigned all of its rights, title, and interest in the Rockdale Investment Partners and Golshani debt to Multibank 2009–1 RES–ADC Venture, LLC (“Mutibank”). Later, on August 31, 2010, Multibank assigned its rights, title, and interest in the Rockdale and Golshani debt to Appellant RES–GA Hightower, LLC (“RES–GA”). On March 29, 2013, RES–GA obtained a judgment against Golshani in the amount of the Note.

In the meantime, on April 20, 2009, which was after Golshani had defaulted on the Note but before there was a judgment entered against him, Golshani conveyed two parcels of real property to Simin Khani³by quitclaim deed and another property to his daughter, Samira Golshani,⁴also by quitclaim deed. A few months later, these properties were conveyed again—this time to Golshani's mother.

RES–GA filed a lawsuit in Fulton County Superior Court against Golshani, Simin Khani, Golshani's daughter, and Golshani's mother, asserting that the property transfers were done to defraud Golshani's creditors and seeking to set aside the conveyances under the UFTA. After Golshani's daughter submitted an affidavit averring that she had not been in contact with her father or grandmother in several years, that she was unaware of the property deeded to her, and that her signature on the quitclaim deed to her grandmother was forged, Golshani's daughter was dismissed from the lawsuit.

Golshani moved for summary judgment, asserting among other things, that RES–GA, as the second assignee of the Bank, had no standing to assert a fraudulent transfer claim against Golshani because a fraudulent transfer claim cannot be assigned under Georgia law. The trial court granted summary judgment to Golshani, and this appeal followed.

1. In related enumerations of error, RES–GA asserts that (1) under the UFTA, a creditor who obtained debt through an assignment has standing to assert a fraudulent transfer claim; (2) Ne Smithno longer controls after the enactment of the UFTA; (3) a fraudulent transfer claim is a property right and OCGA § 44–14–24 does not bar assignment of property claims; and (4) denying standing to an assignee contravenes the public policy of this State in favor of creditors' rights to satisfy valid claims.

(a) Under the UFTA, a creditor can seek to set aside transfers of property by the debtor, “if the debtor made the transfer or incurred the obligation: (1) With actual intent to hinder, delay, or defraud any creditor of the debtor.” OCGA § 18–2–74(a)(1)(2014). In determining intent, consideration is given to an open-ended set of factors listed in OCGA § 18–2–74(b)(1), which are also commonly called the “badges of fraud.” See Target Corp. v. Amerson,326 Ga.App. 734, 737(1), 755 S.E.2d 333 (2014). A “creditor” is broadly defined as “a person who has a claim,” a “debtor” means a “person who is liable on a claim,” and a “claim” is “a right to payment, whether or not the right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured.” OCGA § 18–2–71(3), (4)& (6). Accordingly, under the plain terms of the UFTA, an assignee to debt ordinarily would qualify as a “creditor” who has a “claim,” but nothing in the UFTA specifically addresses assignments of such claims.

In Georgia, a separate statute delineates certain claims that are not assignable:

Except for those situations governed by Code Sections 11–2–210and 11–9–406, a right of action is assignable if it involves, directly or indirectly, a right of property. A right of action for personal torts, for legal malpractice, or for injuries arising from fraud to the assignor may not be assigned.

OCGA § 44–12–24. Here, the issue is whether a claim under the UFTA to set aside a property transfer as defrauding creditors is a “right of action ... arising from fraud” such that it is not assignable. Id. In deciding this question, the trial court properly relied on Ne Smith,in which our Supreme Court, after citing and quoting a prior version of this non-assignment statute, held:

where, as here, the purchaser or assignee of accounts receivable brings an action to recover on an open account owing by the defendant debtor to the assignor and assigned to the plaintiff, and in the same action seeks equitable relief to set aside an alleged fraudulent deed to hinder, delay, and defraud his creditors, made by the debtor to his wife prior to the date on which the accounts receivable were assigned to the plaintiff, and also a subsequent loan deed made by the wife to counsel of the defendant to secure an indebtedness due by her to them, the trial judge did not err in sustaining the general demurrer of the defendants to so much of the petition as sought such equitable relief....

213 Ga. at 784(1), 102 S.E.2d 37. Thus, it seems clear that prior to the enactment of the UFTA,⁵an assignee of debt was precluded from setting aside a deed in equity even if it was claimed that the property was conveyed to hinder and defraud creditors.

The question then becomes whether Ne Smithhas been superseded by the UFTA, and we find that the plain language of the UFTA supplies the answer. Former OCGA § 18–2–80(a)⁶provided:

Unless displaced by the provisions of this article, the principles of law and equity, including the law merchant and the law relating to principal and agent, estoppel, laches, fraud, misrepresentation, duress, coercion, mistake, insolvency, or other validating or invalidating cause, supplement its provisions.

Based on our review of the UFTA, we do not find any clear indication in its language that displaces Ne Smith'sconstruction of the non-assignment statute, which fraud provisions have not been amended in any material way. See Couch v. Red Roof Inns, Inc.,291 Ga. 359, 364, 729 S.E.2d 378 (2012)( “The actual canon of statutory construction is ‘that statutes in derogation of the common law must be limited strictly to the meaning of the language employed, and not extended beyond the plain and explicit terms of the statute.’ ”) (citation and punctuation omitted). Thus, we are constrained to hold that under Ne Smith,an assignee of debt is precluded from pursuing a fraudulent transfer claim even though the assignee meets the definitions of a “creditor” with a “claim” under the UFTA.⁷

RES–GA attempts to distinguish Ne Smithon the grounds that RES–GA has a judgment against Golshani whereas the assignee in Ne Smithdid not. See First State Bank of Northwest Arkansas v. McClelland Qualified Personal Residence Trust,No. 5:14–CV–130 (MTT), 2014 WL 6801803(II)(B)(1) (M.D.Ga.2014) (Ne Smithdid not preclude claim by creditor that had been assigned the FDIC's interest in loans and the related judgment against defendants).⁸But Ne Smithdid not turn on whether the assignee had obtained a judgment; instead, the Court, in explaining its reasoning, relied on the non-assignment statute and Marshall v. Means,12 Ga. 61 (1852)for the proposition that “ ‘[a] bare right to file a bill (in equity) or maintain a suit is not assignable.’ ” Ne Smith,213 Ga. at 784(1), 102 S.E.2d 37. Thus, the key inquiry for the Court appeared to be the equitable nature of the claim and its basis in fraud, rather than the source of the creditor's rights vis-à-vis the debtor, and we do not find it material that RES–GA, as an assignee, subsequently obtained a judgment against Golshani.

(b) Our conclusion is further supported by the 2015 amendments to the UFTA. The term “creditor” is now defined as “a person who has a claim, regardless of when the person acquired the claim, together with any successors or assigns.” OCGA 18–2–71(4)(additional language italicized). And an additional section (c) was added to OCGA § 18–2–74in the 2015 amendment, providing that “[i]f a creditor is a successor or assignee, a right of action under subsection (a) of this Code section is automatically assigned to such successor or assignee.” We note that these additions were not circulated by the Uniform Law Commission in their 2014 version of the Uniform Voidable Transactions Act and thus appear to be specific to Georgia.⁹And the General Assembly has made it clear that the amendments only apply to transfers made or obligations incurred on or after July 1, 2015 and only to a right of action accruing after July 1, 2015. See Ga. L. 2015, p. 1029, § 7–1(d).

“The General Assembly is conclusively presumed to know the law which they seek to amend, revise, repeal, or modify ... and the construction of such law by our courts of last resort.” Jacobs v. State,200 Ga. 440, 444, 37 S.E.2d 187 (1946). See also Peachtree–Cain Co. v. McBee,254 Ga. 91, 93, 327 S.E.2d 188 (1985). And...