Wheeler Bros., Inc. v. Jones et al

Filing 109

MEMORANDUM OPINION AND ORDER: 1) The 62 Motion for Partial Summary Judgment is GRANTED and judgment is entered in favor of Wheeler Bros., Inc. and against Robert L. Jones, Jr. and Advanced Fleet Services, LLC pursuant to the Parts Agreement and Per sonal Guaranty in the amount of $794,530.13 plus interest at the rate of five percent per month and attorneys' fees to be determined at the conclusion of the case; 2) The 66 Motion for Summary Judgment of Less Than All Dfts is DENIED; 3) The 67 Motion for Summary Judgment filed by Dft Virginia Jones is GRANTED and Judgment is entered in favor of Virginia Jones and against Wheeler Bros. to the extent that insurance premiums are exempt under Alabama law as compensation to Robert Jones, Jr.. The motion is DENIED in all other respects. Signed by Honorable Judge Paul G. Byron on 3/4/2016. (Attachments: # 1 Civil Appeals Checklist) (wcl, )

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
NORTHERN DIVISION

WHEELER BROS. INC.,
Plaintiff,
v.

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ROBERT L. JONES, JR., et al.,
Defendants.

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)
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Civil Action No. 2:14cv1258-PGB
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(wo)
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)

MEMORANDUM OPINION AND ORDER
I. INTRODUCTION
This case is before the court on a Motion for Partial Summary Judgment (Doc. #62), filed
by the Plaintiff, Wheeler Bros., Inc. (“Wheeler Bros.”); a Motion for Summary Judgment of Less
Than All Defendants (Doc. #66) filed by Defendants Robert L. Jones, III (“Laslie Jones”);
Jonathan Caton Jones (“Caton Jones”); Kyle Breece Jones (“Kyle Jones”); Lavenia A. Jones
(“Ann Jones”); Robert L. Jones, Sr. (“Bobby Jones”); A&B Developments, LLC; Jones
Brothers Enterprises, LLC (“JBE”); and Best Buy Automotive & Tire, LLC (“Best Buy”); and a
separate Motion for Summary Judgment (Doc. #67) filed by Defendant Virginia Jones. 1
The Plaintiff filed a Complaint in this case bringing claims for breach of contract against
Advanced Fleet Services (“AFS”) (Count I), unjust enrichment against AFS (Count II), breach of
contract against Robert Jones, Jr. (Count III), fraudulent conveyance of assets from AFS to
Robert Jones, Jr. (Count IV), fraudulent conveyance of assets to Best Buy, Ann Jones, and
Bobby Jones (Count V), fraudulent conveyance of assets to A&B Developments and Ann Jones

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No Motion for Summary Judgment has been filed on behalf of Roberts L. Jones, Jr.; Advanced
Fleet Services, LLC; A&B Properties, LLC; or Pirates Tow, LLC.

(Count VI), fraudulent conveyance of assets to A&B Developments and Ann Jones (Count VII),
fraudulent conveyance of assets to Best Buy, Bobby Jones, and Ann Jones (Count VIII),
fraudulent conveyance of assets to Laslie Jones and JBE (Count IX), fraudulent conveyance of
assets to Caton Jones and Pirates Tow, LLC (“Pirates Tow”) (Count X), fraudulent conveyance
of assets from JBE to Best Buy (Count XI), fraudulent conveyance of assets from Pirates Tow to
Best Buy (Count XII), fraudulent conveyance of assets from Robert Jones, Jr. and/or AFS
Services to A&B Properties (Count XIII), fraudulent conveyance of assets from A&B Properties
to Best Buy (Count XIV), fraudulent conveyance of assets from Robert Jones and/or Advanced
Fleet Services to Virginia Jones (Count XV), fraudulent conveyance of assets from Robert Jones,
Jr. and/or AFS to Ann Jones (Count XVI), fraudulent conveyance of assets from Robert Jones,
Jr. and/or AFS to Bobby Jones (Count XVII), fraudulent conveyance of assets from Robert
Jones, Jr. and/or AFS to Laslie Jones (Count XVIII), fraudulent conveyance of assets from
Robert Jones, Jr. and/or AFS to Kyle Jones (Count XIX), fraudulent conveyance of assets from
Robert Jones, Jr. and/or AFS to Caton Jones (Count XX), fraudulent conveyance of assets from
JBE to Virginia Jones (Count XXI), fraudulent conveyance of assets from JBE to Bobby Jones
(Count XXII), fraudulent conveyance of assets from JBE to Ann Jones (Count XXIII), fraudulent
conveyance of assets from JBE to Laslie Jones (Count XXIV), fraudulent conveyance of assets
from JBE to Kyle Jones (Count XXV), fraudulent conveyance of assets from JBE to Caton Jones
(Count XXVI), fraudulent conveyance of assets from Pirates Tow to Virginia Jones (Count
XXVII), fraudulent conveyance of assets from Pirates Tow to Bobby Jones (Count XXVIII),
fraudulent conveyance of assets from Pirates Tow to Ann Jones (Count XXIX), fraudulent
conveyance of assets from Pirates Tow to Laslie Jones (Count XXX), fraudulent conveyance of

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assets from Pirates Tow to Kyle Jones (Count XXXI), fraudulent conveyance of assets from
Pirates Tow to Caton Jones (Count XXXII), fraudulent conveyance of assets to A&B
Developments (Count XXXIII), fraudulent conveyance of assets from A&B Properties to Bobby
Jones (Count XXXIV), fraudulent conveyance of assets from A&B Properties to Ann Jones
(Count XXXV), fraudulent conveyance of assets from A&B Properties to Laslie Jones (Count
XXXVI), fraudulent conveyance of assets from A&B Developments to Bobby Jones (Count
XXXVII), fraudulent conveyance of assets from A&B Developments to Ann Jones (Count
XXXVIII), fraudulent conveyance of assets from A&B Developments to Laslie Jones (Count
XXXIX), fraudulent conveyance of assets from A&B Developments to Caton Jones (XL),
fraudulent conveyance of assets from A&B Developments to Virginia Jones (Count XLI),
fraudulent conveyance of assets from A&B Developments to Best Buy (Count XLII), fraudulent
conveyance of assets from Laslie Jones to Ann Jones, Bobby Jones, and/or Best Buy (Count
XLIII), fraudulent conveyance of assets from AFS (Count XLIV), and piercing the corporate veil
and/or alter ego theory against AFS, JBE, Pirates Tow, A&B Properties, A&B Developments,
and Best Buy (Count XLV).
It appears to the court that the parties are completely diverse and the requisite amount is
in controversy for the court to exercise diversity subject matter jurisdiction.
For the reasons to be discussed, the Motion for Partial Summary Judgment is due to be
GRANTED, the Motion for Summary Judgment of Less Than All Defendants is due to be
DENIED, and the Motion for Summary Judgment filed by Defendant Virginia Jones is due to be
GRANTED in part and DENIED in part.
II. SUMMARY JUDGMENT STANDARD
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Summary judgment is proper "if there is no genuine issue as to any material fact and . . .
the moving party is entitled to a judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S.
317, 322 (1986).
The party asking for summary judgment "always bears the initial responsibility of
informing the district court of the basis for its motion,@ relying on submissions Awhich it believes
demonstrate the absence of a genuine issue of material fact." Id. at 323. Once the moving party
has met its burden, the nonmoving party must Ago beyond the pleadings@ and show that there is a
genuine issue for trial. Id. at 324.
Both the party Aasserting that a fact cannot be,@ and a party asserting that a fact is
genuinely disputed, must support their assertions by Aciting to particular parts of materials in the
record,@ or by Ashowing that the materials cited do not establish the absence or presence of a
genuine dispute, or that an adverse party cannot produce admissible evidence to support the
fact.@ Fed. R. Civ. P. 56 (c)(1)(A),(B). Acceptable materials under Rule 56(c)(1)(A) include
Adepositions, documents, electronically stored information, affidavits or declarations, stipulations
(including those made for purposes of the motion only), admissions, interrogatory answers, or
other materials.@
To avoid summary judgment, the nonmoving party "must do more than show that there is
some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 586 (1986). On the other hand, the evidence of the nonmovant must be
believed and all justifiable inferences must be drawn in its favor. See Anderson v. Liberty Lobby,
477 U.S. 242, 255 (1986).
After the nonmoving party has responded to the motion for summary judgment, the court
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shall grant summary judgment if the movant shows that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a).
III. FACTS
The submissions of the parties establish the following facts, construed in a light most
favorable to the non-movant:
The Plaintiff, Wheeler Bros., is a Pennsylvania corporation which designs, manufactures,
and distributes motor vehicle parts.
AFS serviced vehicles for the United States Postal Service (“USPS”) and also purchased
motor vehicle parts from Wheeler Bros. for resale to the USPS. AFS operated service centers in
multiple locations including Houston, Texas.
Defendant Robert Jones, Jr. was the one-hundred percent owner of AFS.

JBE is a

successor LLC to AFS, and was formed in 2011.
Laslie Jones is the son of Robert Jones, Jr. and is listed as the one-hundred percent owner
of JBE. Kyle Jones is the wife of Laslie Jones.
Pirates Tow is also a successor to AFS and was formed in 2012. Caton Jones is also a
son of Robert Jones, Jr. Caton Jones is listed as the one-hundred percent owner of Pirates Tow.
A&B Properties is an LLC which held real property and was formed in 2002. Bobby
Jones and Robert Jones, Jr. own A&B Properties. Bobby Jones and Ann Jones are the parents
of Robert Jones, Jr. Bobby Jones and Ann Jones own A&B Development, LLC which was
formed in 1996.
Best Buy is owned by Bobby Jones and Ann Jones and operates out of the property
formerly owned by A&B Properties. It was formed in 2010.

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In October of 2010, Robert Jones, Jr. signed a Parts Sale Agreement as President of AFS
with Wheeler Bros. In December of 2010, Robert Jones, Jr. signed a personal guaranty as
security for the extension of credit by Wheeler Bros. to AFS. Wheeler Bros. provided parts to
AFS in 2011 and 2012. Wheeler Bros. would provide parts on credit to AFS and AFS would
mark up and sell those parts to the USPS when AFS repaired USPS vehicles. AFS began falling
behind on payments to Wheeler Bros. in 2011 and had increasing debt in 2012.
Wheeler Bros. presents evidence that Robert Jones, Jr. was insolvent as of January 1,
2010.
In August of 2012, Wheeler Bros. filed a Confession of Judgment against Robert Jones,
Jr. in Pennsylvania.
In August of 2012, Robert Jones, Jr. and his wife Virginia Jones filed for personal
bankruptcy in the United States Bankruptcy Court of the Middle District of Alabama. In
February of 2013, Wheeler Bros. filed an adversary proceeding against Robert Jones, Jr. and his
wife Virginia Jones. Wheeler Bros. filed a request for default judgment against Robert Jones,
Jr. and Virginia Jones which was entered on August 4, 2014. The bankruptcy court declared
that Robert Jones, Jr.’s debt to Wheeler Bros. was non-dischargeable.
Pirates Tow and JBE were formed after the bankruptcy petition. JBE and Pirates Tow
operate from the same location as the now-defunct AFS. Pirates Tow and JBE provided
services to AFS’s previous customers. In September of 2013, Laslie Jones went to work at
another company and Robert Jones, Jr. ran JBE.
In September of 2014, Wheeler Bros. transferred judgment in the Pennsylvania case to
Montgomery County, Alabama and Elmore County, Alabama.

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Wheeler Bros. takes the position that Robert Jones, Jr. and AFS have fraudulently
transferred $2.5 million in assets to various family members of Robert Jones, Jr. for no
consideration in an attempt to defraud creditors, including Wheeler Bros. In support of their
case, Wheeler Bros. provides an Expert Report of Wessel & Company, Certified Public
Accountants & Business Consultants (Doc. #72-47). The Defendants have taken the position
that the transfers identified by Wheeler Bros. did not violate the Alabama Uniform Fraudulent
Transfers Act, or were within a statutory exception.
IV. DISCUSSION
A. Partial Motion for Summary Judgment by Wheeler Bros.
Wheeler Bros. Motion for Partial Summary Judgment seeks judgment against Robert
Jones, Jr. and AFS. Wheeler Bros. points out that in Robert Jones, Jr.’s responses to Wheeler
Bros. Requests for Admissions, Robert Jones, Jr. admitted that AFS entered into the parts
agreement with Wheeler Bros. and Robert Jones, Jr. admitted that he entered into the Personal
Guaranty of AFS’s obligations. Robert Jones, Jr. admits that AFS purchased and received but
did not pay for $794,530.13, worth of products from Wheeler Bros. (Doc. #65-2). Wheeler
Bros., therefore, moves for entry of partial summary judgment pursuant to the Parts Agreement
and Personal Guaranty in the amount of $794,530.13 plus interest at the rate of five-percent per
month from the date it was incurred to the date of payment together with attorneys’ fees incurred
in collecting the debt in an amount to be determined by the court at the conclusion of the case.
In response, Robert Jones, Jr. argues that the Partial Motion for Summary Judgment is
due to be denied because Wheeler Bros. has already received a judgment against Robert Jones,
Jr. in Pennsylvania and the judgment has been domesticated in the Circuit Court of Montgomery,

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Alabama. Robert Jones, Jr. argues, therefore, that summary judgment is due to be denied, and
Wheeler Bros.’s claim against him is likely to be dismissed on the basis of res judicata. No
response is offered as to the Partial Motion for Summary Judgment as to the claim against AFS.
Wheeler Bros. points out in reply that Robert Jones, Jr. filed an Answer in Montgomery
County Circuit Court which challenges the confession of judgment in the Pennsylvania court and
asks that it be set aside. Wheeler Bros. argues, therefore, that the judgment is not final and that
no other defense has been raised, so summary judgment should be granted in favor of Wheeler
Bros. and against Robert Jones, Jr. and AFS.
Upon consideration of the answers to Request for Admissions, and the evidence that the
judgment entered in Pennsylvania and domesticated in Alabama is not a final judgment, the court
concludes that summary judgment is due to be granted in favor of Wheeler Bros. as to Robert
Jones, Jr. and AFS. See Greene v. Jefferson Cty. Comm'n, 13 So. 3d 901, 911 (Ala. 2008)
(noting the point at which judgment became final for res judicata purposes). Judgment will be
entered in favor of Wheeler Bros. and against Jones and AFS pursuant to the Parts Agreement
and Personal Guaranty in the amount of $794,530.13 plus interest at the rate of five percent per
month and attorneys’ fees to be determined at the conclusion of the case.
B. Defendants’ Motions for Summary Judgment
Wheeler Bros. has brought multiple claims against the moving Defendants in this case on
the theory that Robert Jones, Jr. and his family transferred the lucrative portions of AFS to other
companies owned by Robert Jones, Jr.’s family members and then filed for personal bankruptcy.
Wheeler Bros. argues that Robert Jones, Jr. had amassed more than $5 million in debt, with
$785,000.00 owing to Wheeler Bros., and Pirates Tow was created in the name of Caton Jones to

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take over AFS’s service center in Houston, Texas; JBE was created in the name of Laslie Jones
to take over the manufacturing of parts to be resold to the USPS; and Best Buy was set up in the
name of Robert Jones, Jr.’s parents to service postal vehicles and conduct retail vehicle repair
operations that AFS previously had conducted.
Defendants A&B Developments, Best Buy, JBE, Caton Jones, Kyle Jones, Ann Jones,
Laslie Jones, and Bobby Jones together, and Defendant Virginia Jones separately, have filed
Motions for Summary Judgment as to claims brought against them. The court will first address
the multi-defendant motion and then Virginia Jones’s motion.
1.

Motion for Summary Judgment by A&B Developments, Best Buy, JBE, Caton
Jones, Kyle Jones, Ann Jones, Laslie Jones, and Bobby Jones

The moving Defendants argue that they are entitled to judgment for claims brought
pursuant to the Alabama Uniform Fraudulent Transfer Act (“AUFTA”). The AUFTA provides
that a “transfer made by a debtor is fraudulent as to a creditor, whether the creditor's claim arose
before or after the transfer was made, if the debtor made the transfer with actual intent to hinder,
delay, or defraud any creditor of the debtor.” Ala. Code §8-9A-4. Intent may be determined
using several factors, including whether
(1) The transfer was to an insider;
(2) The debtor retained possession or control of the property transferred after the transfer;
(3) The transfer was disclosed or concealed;
(4) Before the transfer was made the debtor had been sued or threatened with suit;
(5) The transfer was of substantially all the debtor's assets;
(6) The debtor absconded;
(7) The debtor removed or concealed assets;
(8) The value of the consideration received by the debtor was reasonably equivalent to
the value of the asset transferred;
(9) The debtor was insolvent or became insolvent shortly after the transfer was made;
(10) The transfer occurred shortly before or shortly after a substantial debt was incurred;
and
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(11) The debtor transferred the essential assets of the business to a lienor who transferred
the assets to an insider of the debtor.
Ala. Code §8-9A-4(b). See also In re XYZ Options, Inc., 154 F.3d 1262, 1272 (11th Cir. 1998).
Also under Ala. Code §8-9A-5:
(a) A transfer made by a debtor is fraudulent as to a creditor whose claim arose before the
transfer was made if the debtor made the transfer without receiving a reasonably
equivalent value in exchange for the transfer and the debtor was insolvent at that time or
the debtor became insolvent as a result of the transfer.
(b) A transfer made by a debtor is fraudulent as to a creditor whose claim arose before the
transfer was made if the transfer was made to an insider for an antecedent debt and the
debtor was insolvent at that time and the insider had reasonable cause to believe that the
debtor was insolvent.
There are also statutory defenses, including a good faith transferee provision which
provides that a transfer is not voidable against a person who took in good faith and for a
reasonably equivalent value or against any subsequent transferee or obligee who took in good
faith. Ala. Code §8-9A-8(a). “A subsequent transferee who was a party to the fraud does not
take in good faith.” Comment 1, Ala. Code 8-9A-8(a).

Also under the statute,

Notwithstanding voidability of a transfer under this chapter, a good-faith transferee is
entitled, to the extent of the value given the debtor for the transfer or to another person as
a consequence of the debtor's making such transfer, to
(1) A lien on or a right to retain any interest in the asset transferred; or
(2) A reduction in the amount of the liability on the judgment.

Ala. Code §8-9A-8(d). “Good faith transferee” is not defined in the Alabama statute.
Borrowing from Georgia law, the bankruptcy court in the Middle District of Alabama has
defined a “good faith transferee” as a person who through objective consideration lacks not just
actual knowledge of fraud, but also a lack of knowledge of circumstances requiring further
investigation. In re Dorsey, No. 09-11157-WRS, 10-1006-WRS, 2011 WL 4914841, at *3
(Bankr. M.D. Ala. October 17, 2011). The court also noted that proving applicability of Ala.
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Code §8-9A-8(d) requires proof that the person is a good-faith transferee and gave value as a
consequence of the transfer. Id. at *2-3. In other words, the defense requires two showings:
lack of inquiry notice and that the transferee gave value.
The Defendants have taken the position that transfers identified by Wheeler Bros. in this
case were made for value under the Horton v. Alexander, 977 So.2d 462 (Ala. 2007) decision.
The Horton decision concluded that the statutory phrase “or to another person as a consequence
of the debtor’s making such transfer,” refers to value given by a good-faith transferee to any
other person, without qualification or exception, as a consequence of the debtor’s transfer. 977
So.2d at 469.
While they do not expressly concede any aspects of their motion, in their Reply to
Wheeler Bros.’s response in opposition to their motion, the Defendants advance additional
arguments only with respect to the good-faith transferee defenses of Kyle Jones, Caton Jones,
and Bobby Jones. The court begins with arguments by those individual Defendants.
a. Kyle Jones
As noted earlier, Kyle Jones is the wife of Laslie Jones. Wheeler Bros. has provided an
Expert Witness Report which contains schedules identifying $8,000 transferred to Kyle Jones
from AFS which the expert identifies as fraudulent. (Doc. #72-47 at p. 13-4).
Kyle Jones argues that she is entitled to judgment because no transfer was made to her
within the meaning of Ala. Code §8-9A-5. Kyle Jones states that she provided labor to JBE for
website design, branding, and marketing in 2011 and 2012, and so returned reasonably
equivalent value to JBE for any transfer. Kyle Jones also argues that even if there was a transfer
made to her within the meaning of the statute, and even assuming that ASF or Robert Jones, Jr.

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made those transfers to Kyle Jones with the intent to hinder, delay, or defraud, Kyle Jones is a
good-faith transferee because she received money which was reasonably equivalent to the labor
she performed. She points to her deposition testimony that she worked forty hours a week for
JBE doing website design and other tasks. (Doc. #66-2 at p.14-16). She also cites to answers
to interrogatories in which Kyle Jones refers to her tax returns to establish her income from JBE.
(Doc. #66-3 at p.3).
Wheeler Bros., in responding to the Motion for Summary Judgment, has presented
evidence that Kyle Jones received funds from AFS even though she admitted that she did not
work for AFS. In her Answers to Interrogatories, Kyle Jones states that her employers from
2009 to the present include Jackson Thornton Tech, JBE, PC Income Tax, the Publicis
Touchpoint. (Doc. #72-43 at pages 36-7). As previously noted, to substantiate her having
received income for work for JBE, in the Answer to Interrogatories, Kyle Jones refers to her tax
returns. (Doc. #72-43 at p. 41). Wheeler Bros. responds, however, that a question of fact has
been created as to whether Kyle Jones received payment from AFS for work for services
provided to JBE because she has provided no pay records or pay stubs and failed to report any
income from JBE on her tax returns. (Doc. #72-45 at p.40-47).
The court has reviewed the tax return evidence provided. Within the joint tax return for
Laslie Joes and Kyle Jones, there is an Income Worksheet which lists income from Advanced
Fleet Services, Grooms Engines, and P.C. Income Tax, Inc. (Doc. #72-45 at p.39). There are
attached W-2 forms from AFS and Grooms Engines-Parts-Machining, Inc. for Laslie Jones and a
W-2 form from P.C. Income Tax, Inc. for Kyle Jones (Doc. #72-45 at p.41-2). There is no W-2
form from JBE or AFS for Kyle Jones.

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While in their reply brief the Defendants continue to maintain that Kyle Jones received
the money from AFS as payment for services to JBE, they do not respond to the evidentiary
argument based on Kyle Jones’s tax returns made by Wheeler Bros. The court must conclude
that there is a question of fact as to whether Kyle Jones received money from ASF as payment
for services to JBE.
As set out above, value provided for services is relevant for two inquiries. First, under
Ala. Code §8-9A-5(a), a transfer is fraudulent if it is made without the debtor receiving a
reasonably equivalent value for the transfer. There are questions of fact as to the purpose of
transfers from ASF to Kyle Jones, and no evidence that Kyle Jones was working for ASF, so
there is evidence, for purposes of Ala. Code §8-9A-4, 5, that ASF and Robert Jones, Jr. made
transfers without receiving a reasonable equivalent value in exchange.
Second, under the defense in Ala. Code §8-9A-8(a), a transfer is not voidable against a
person who took in good faith for reasonably equivalent value. See also In re Dorsey, 2011 WL
4914841, at *2-3. It is this defense to which the holding in Horton applies so that value given
by a good-faith transferee to any other person as a consequence of the debtor’s transfer satisfies
the requirement of the exception. 977 So.2d at 469.
Kyle Jones contends for the first time in her reply brief that summary judgment can be
granted to the Defendants on the claim against Kyle Jones because Wheeler Bros. has failed to
point to evidence as to her intent. Kyle Jones states that the Plaintiff, Wheeler Bros., has failed
to present any material evidence that Kyle Jones had any knowledge of or could have discovered
any fraudulent purpose in the transfer to her, citing In re Christou, No. 06-68251-MHM, 0668376-MHM, 2010 WL 4008167 (Bankr. N.D. Ga. Sept. 24, 2010).

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In anticipation of that

argument, Wheeler Bros. pointed to evidence to show that Kyle Jones knew that her rent was
being paid by the business to support the argument that she had knowledge of circumstances
regarding further investigation. (Doc. #72-24 at p.4). 2
Due to questions of fact as to whether Kyle Jones received a transfer from AFS for
services provided to JBE, the court must conclude that she has not established entitlement to
good faith transferee defense as a matter of law. The defense, as to which Kyle Jones has the
burden of proof, requires a showing that the good-faith transferee gave value as a consequence of
the transfer. In re Dorsey, 2011 WL 4914841, at *3. There are question of fact on that point.
Accordingly, the Motion for Summary Judgment by Kyle Jones is due to be DENIED.
b. Caton Jones
As noted, Caton Jones is a son of Robert, Jones, Jr. Wheeler Bros. has provided an
Expert Witness Report which contains schedules identifying sums transferred to Caton Jones
from Pirates Tow and from AFS which Wheeler Bros. argues were fraudulent transfers.
Caton Jones states that he does not dispute his receipt of these sums, but argues that he is
entitled to summary judgment because he provided labor for services for Pirates Tow and for
entities owned or operated by his family, such as Best Buy, JBE, and AFS, in exchange for these
transfers. Caton Jones argues that for purposes of Ala. Code §8-9A-5(a), he is entitled to
summary judgment because Wheeler Bros. cannot show that the transfer was made without
reasonably equivalent value because he provided labor for which he was compensated. Caton
Jones also argues that even assuming there is evidence that AFS or Robert Jones, Jr. transferred

2 At various points, the Defendants refer to evidence by Plaintiff’s exhibit number and at other points they refer to
appendix numbers, which are included in a range of documents with a single document number. The court has
attempted to locate these exhibits and cite to the document and page number as reflected in the CMECF system.

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assets to Caton with the intent to hinder, delay, or defraud Wheeler Bros., he is entitled to the
defense in Ala. Code §8-9A-4(a), because the transfers were received with an equivalent
exchange of value for the transfers because Caton Jones provided labor such as driving wreckers
and performance maintenance tasks on the equipment of Pirates Tow and other entities.
As evidentiary support, Caton Jones points to testimony in his deposition that he believes
he was paid around $600 while he was working at Pirates Tow and that he was paid every week,
or sometimes every other week. (Doc. #72-25 at p.22:1-10). Caton Jones also stated in his
deposition that he was working for his father, but not in a set position, but rather just helping in
areas in which help was needed. (Doc. #66-4 at p. 15). In his Answers to Interrogatories,
Caton Jones states that he was paid $750 a week working for AFS and for JBE. (Doc. #66-5).
He further states that all income from working for Pirates Tow is reflected on his tax returns.
(Doc. #66-5 at p.6).
Wheeler Bros. responds that the expert report which identifies fraudulent transfers does
not include the $750.00 a week salary that Caton Jones was being paid by Pirates Tow. Instead,
transfers of $13,473.56, $404.43, and $3,733.59 which were made to Caton Jones at the same
time that he was receiving his weekly salary are the transfers identified as being fraudulent.
Wheeler Bros. provides evidence from its experts’ report which states that in their report, they
included only payments in excess of Caton Jones’s payroll which were not reported on his tax
returns. (Doc. #72-28 at p.1).

They state that there are transfers in addition to salary and which

are not disclosed on Caton Jones’s income tax, that no evidence has been provided of the hours
worked, and that the amount paid in excess of payroll, $48,000, is in excess of a reasonable
equivalent value for the tire changing services Caton Jones says he performed. (Doc. #72-28 at

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p.2).
Viewing the evidence in a light most favorable to the non-movant, the court concludes
that there is a question of fact which precludes summary judgment on the issue of whether the
transfers to Caton Jones were received with an equivalent exchange of value for purposes of
liability and for the good-faith transferee defense.
In his reply brief, Caton Jones also argues for the first time that there is no evidence that
he had any knowledge of any fraudulent purpose or could have discovered any fraudulent
purpose through diligent inquiry. Caton Jones states that Wheeler Bros. merely assumes from
the facts that Caton Jones’s father organized a company in Caton Jones’s name that he should
have knowledge of a fraudulent purpose or transfer.
Wheeler Bros. has argued, among other things, that Caton Jones was on inquiry notice
because he knew or should have known of Robert Jones, Jr.’s insolvency and the insolvency of
AFS because before Pirates Tow began to operate the service center in Houston Texas that had
previously been operated by AFS, Robert Jones, Jr. had declared bankruptcy.
There are issues of fact regarding Caton Jones knowledge but even without evidence of
intent, questions of fact as to the value exchanged for transfers to Caton Jones are sufficient to
establish liability and preclude the transferee defense for purposes of the Defendants’ Motion.
The court concludes, therefore, that summary judgment is due to be denied as to the claims
against Caton Jones.

c.

Laslie Jones and JBE

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Laslie Jones has made different arguments in support of summary judgment depending
on the transfer of assets in question. With respect to transfers of inventory and equipment to
JBE, Laslie Jones argues that no transfer was made to him individually. With respect to
transfers of cash to him personally, Laslie Jones also contends that he is entitled to judgment on
the ground that even assuming that the record evidence reflects that AFS, Robert Jones, Jr., or
any entity controlled by Robert Jones, Jr. transferred an asset to Laslie with the actual intent to
hinder, delay, or defaud, he returned reasonably equivalent value in exchange for said transfer.
1.

Transfers to JBE

With respect to transfers of equipment and inventory, Laslie Jones states that Wheeler
Bros.’s Expert Witness Report reflects that AFS transferred equipment and inventory to JBE, but
not to Laslie Jones individually. Specifically with regard to equipment valued at $120,000.00,
Laslie Jones states that the transfer was to JBE, not Laslie Jones, and that AFS borrowed money
using this equipment as collateral to secure the loan. Laslie Jones argues that a transfer of
$259,429.20 and another transfer of $11,925.00 were transfers to JBE, and so were not transfers
to Laslie Jones, did not benefit him individually, and cannot be voided. Laslie Jones argues that
if the court were to consider these transfers to Laslie Jones individually, the court would be
ignoring the corporate form of JBE. Laslie Jones finally argues that although Wheeler Bros. has
stated through its Expert Witness Report that certain transfers benefitted Laslie Jones
individually, Wheeler Bros. has failed to show how Laslie Jones individually can be divested of
an assert transferred to an entity in which he holds an interest.
Wheeler Bros. states that JBE was an alter ego of Laslie Jones prior to September 2013
so that the corporate form of JBE should be ignored and the assets transferred to JBE should be

17

considered transfers to Laslie Jones.
To impose liability on a defendant for acts of a corporation on the ground that the
corporation was an instrumentality or alter ego of the defendant, a plaintiff must show (1) the
party has complete control and dominion over the subservient corporation’s finances, so that the
subservient corporation has no separate existence, (2) the control must have been misused by the
dominant party, (3) the misuse must be the proximate cause of the harm. Messick v. Mooring,
514 So. 2d 892 (Ala. 1987).
Wheeler Bros. states that the first element of Messick is undisputedly satisfied as
evidenced by Laslie Jones’ statement in the Defendant’s own brief that Laslie Jones had
complete control and domain of JBE’s finances, policies, and practices. (Doc. #66 at p.21).
514 So. 2d at 895 (stating “it is essential that complete control and domination be proven.”).
Wheeler Bros. points to Laslie Jones’s deposition testimony in which he states that there were no
corporate meeting minutes, no written resolutions, or corporate books other than financial
records. (Doc. #72-45 at p.23-4). Wheeler Bros. states that Laslie Jones used JBE to pay for
his personal expenses including house rent, a Tahoe payment, a Mercedes payment, and
cellphones and insurance, which was a misuse of the business and satisfies the second
requirement. Wheeler Bros. provides evidence of an email which states that the Jones
companies will pay for Laslie Jones’s call phones, vehicle payments, and house lease payments.
(Doc. #72-12). Wheeler Bros. argues that the third Messick requirement is satisfied because it
and other creditors of AFS were harmed by transfers to Laslie Jones.
The court finds support for Wheeler Bros.’s application of Messick in this case in a
decision within this circuit. See In re World Vision Entm’t, Inc., 275 B.R. 641, 659 (Bank. M.D.

18

Fla. 2002). The analysis of In re World Vision Entertainment, Inc., applies a standard similar to
that used in Alabama. See Dorsey v. DePaola, No. 2:11cv1026-MEF, 2012 WL 1957713, at
**2 (M.D. Ala. May 31, 2012). In that case, a bankruptcy debtor transferred assets in the form
of commission payments to corporations. The bankruptcy trustee sought to void those transfers
and to hold an individual defendant personally liable by piercing the corporate veil of those
corporations. The court reasoned that proof of control and dominion by the individual
defendant over the corporations which received the transfers, evidence that the principals could
not identify separate officers and directors of the corporations, and evidence that the individual
defendant used the corporations to conduct his personal business, and participation in the
debtor’s fraudulent enterprise allowed the trustee to pierce the corporate veil. Id. at 663.
In light of these cases, and Wheeler Bros.’s evidence to support piercing the corporate
veil, the court concludes that the Laslie Jones’s legal argument that assets transferred to JBE
cannot be considered assets of Laslie Jones is unavailing, and the Motion for Summary Judgment
as to the transfer of assets and inventory to JBE is due to be DENIED. See Perry v. Household
Retail Servs., Inc., 953 F. Supp. 1378, 1382 (M.D. Ala. 1996) (stating “given evidence of these
factors and the numerous factual disputes concerning this area, the court finds that the
determination of whether the corporate veil should be pierced is an issue for the trier of fact at
trial, where the trier of fact can make choices as to credibility and weight of the evidence.”).

2. Transfer to Laslie Jones Directly
The other transfer by AFS to Laslie Jones at issue in the Motion for Summary Judgment
is a transfer of cash from AFS to Laslie Jones. Laslie Jones acknowledges that AFS transferred

19

$40,000 in cash as payroll to Laslie Jones, but he states that the alleged transfer is not fraudulent
and voidable because he is the sole member of JBE and conducted the daily operations of JBE
until September 2013, so he provided an equivalent exchange of value. Laslie Jones states that
although JBE is the direct beneficiary of those services, and not AFS or Robert Jones, Jr., that is
immaterial under the Alabama Fraudulent Transfers Act under Horton. Finally, in his Reply
brief, Laslie Jones argues that Wheeler Bros. has failed to set forth any substantial or material
evidence to establish that Laslie Jones had knowledge of any fraudulent purpose or could have
discovered any such purpose through diligent inquiry.
Wheeler Bros. responds that Laslie Jones’s claim that he provided services in return for
the $40,000.00 in salary is contrary to his Answers to Interrogatories in which he stated that he
ended work for AFS and began to work for JBE in September 2011. The Answers to
Interrogatories state that Laslie Jones worked for AFS from May 2010 to September 2011 and
from JBE from September 2011 to September 2013. (Doc. #66-7 at p.4).
For purposes of liability under the AUFTA, Ala. Code §8-9A-5(a), a question of fact has
been raised as to whether value was given the debtor for the transfer of cash to Laslie Jones.
Wheeler Bros. has presented evidence to meet its burden to show, under Ala. Code §8-9A-5(a),
that no equivalent value was received by the debtor for the transfer to Laslie Jones, because
Laslie Jones was paid by AFS, and there is at least a question of fact as to whether labor was
provided to AFS.
As to the good-faith transferee defense, Wheeler Bros. argues that the Horton rationale
does not apply because Laslie Jones is not a good faith transferee and knew or should have
known that Robert Jones, Jr. and AFS were insolvent when the transfers were made.

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Under the defense in Ala. Code §8-9A-8(a), a transfer is not voidable against a person
who took in good faith for reasonably equivalent value. See also In re Dorsey, 2011 WL
4914841, at *2-3 (noting that the defense in Ala. Code §8-9A-8(d) requires proof that the goodfaith transferee gave value as a consequence of the transfer).
Laslie Jones’s explanation is that AFS paid him for work that he performed for entities
other than the debtor. Laslie Jones bears the burden of proving his defense. Wheeler Bros.
takes the position that Laslie Jones has not established that transfers were made for reasonably
equivalent value because he has provided no evidentiary support for his claim that the services
he provided the new company, JBE, were worth $40,000. Laslie Jones has presented no
evidence on this point. These questions of fact are sufficient to preclude summary judgment as
to transfers of cash by AFS to Laslie Jones.
A “good faith transferee” is a person who through objective consideration lacks not just
actual knowledge of fraud, but also a lack of knowledge of circumstances requiring further
investigation. In re Dorsey, 2011 WL 4914841, at *3.
Laslie Jones states that the mere fact that he was the son of Robert L. Jones, Jr. and was
employed by various family companies does not mean that he had knowledge or should have had
knowledge of any fraudulent purpose or transfer.
Wheeler Bros. states that its experts determined that JBE had no inventory on hand on
December 31, 2011, but began selling parts. (Doc. #72-47 at p.11). AFS in its Answers to
Interrogatories denied that it had any involvement with JBE. (Doc. #72-2 at p.44). The Expert
Report also states that JBE took over the former AFS facility.
Wheeler Bros. also provides an email exchange sent to Laslie Jones in which an

21

individual named John McGovren from Jasper Engines in which McGovern sought confirmation
that he should just set up “everything we bought from AFS to buy from Jones Bros.” (Doc.
#72-5 at p.13). Laslie Jones insists that he conducted the daily operations of JBE. (Doc. #75 at
p.6).
There is evidence that Laslie Jones was aware that JBE had taken over inventory of AFS
and was selling it and that AFS had ceased doing business. Cf. In re Pearlman, 440 B.R. 569,
577 (Bankr. M.D. Fla. 2010) aff'd, 478 B.R. 448 (M.D. Fla. 2012) (applying bankruptcy law and
finding that a transferee can be put on inquiry notice by “information regarding the borrower's
financial difficulty.”). The court concludes, therefore, in addition to a failure of proof as to the
value of the transfers of cash, viewing the evidence in a light most favorable to the non-movant
that there are sufficient questions of fact as to knowledge to preclude summary judgment as to
Laslie Jones on his defense.
3. Transfers by JBE, A&B Developments, LLC and Best Buy
Automotive and Tire, LLC
In Count XLV, the Plaintiff brings a claim for piercing the corporate veil and/or alter ego
theory against AFS, JBE, Pirates Tow, A&B Properties, A&B Developments, and Best Buy
Automotive and Tire, LLC (“Best Buy”). The Defendants have moved for summary judgment
as to Count XLV as to JBE, A&B Developments, and Best Buy. The count includes a theory
that the corporate forms of these entities should be disregarded because the corporations were
operated fraudulently, fraudulent in their conception, operated as an alter ego of Robert Jones, Jr.
and/or operated as an alter ego of one another. (Doc. #1 at p.115).
JBE, A&B Developments, and Best Buy contend that Wheeler Bros. has not and cannot
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at this time present any evidence to establish the necessary elements of piercing the corporate
veil. They state that the membership interest in Best Buy is held at 50% by Bobby Jones and
50% by Ann Jones, and that it is controlled and managed by Bobby Jones. They argue that
there is no evidence that Robert Jones, Jr. had complete control and dominion over Best Buy’s
finances such that it had no separate existence. Similarly, they argue that the membership
interest in A&B is 1% by Bobby Jones and 9% by Ann Jones, and JBE’s membership interest is
held at 100% by Laslie Jones, so there can be no showing that those entities are alter egos for
Robert Jones, Jr.
Wheeler Bros. states that the Defendants in moving for summary judgment only on a
theory that the companies were alter egos of Robert Jones, Jr. have ignored the theory pled in the
Complaint that AFS, JBE, Pirates Tow, A&B Properties, A&B Developments, and Best Buy
failed to follow corporate formalities and were operated as an instrumentality or alter egos of one
another. (Doc. #1 at ¶558). Wheeler Bros. also points out that the Complaint alleges that the
corporate formalities should not be observed because the companies operated fraudulently or
were fraudulent in their conception and set up as a mere subterfuge. (Doc. #1 at ¶558).
Wheeler Bros. presents evidence to support these theories, including Findings 12-20 of their
Expert Report, to show that AFS and other entities co-mingled funds and did not observe
corporate formalities.
The Defendants do not address these arguments in their Reply brief.
The question of piercing the corporate veil is “a question of fact ... to be determined on a
case by case basis.” Hill v. Fairfield Nursing & Rehab. Ctr., LLC, 134 So. 3d 396, 411 (Ala.
2013) (quoting Messick v. Moring, 514 So.2d 892, 893 (Ala.1987)). Alabama courts have stated

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that courts should not “allow a corporate entity to successfully masquerade through [its corporate
affiliates] so as to defeat the payment of its just obligations.” Id. (citation omitted). Because the
Defendants have not moved for summary judgment as to all of Wheeler Bros.’s theories of
piercing the corporate veil, and Wheeler Bros. has presented evidence to support its theories, the
court cannot conclude that summary judgment can be granted the Defendants on the issue of
piercing the corporate veil.
An additional issue is presented by the Motion for Summary Judgment because the
Defendants have argued that judgment is due to be entered as to Count XLV, and also as to all
claims based upon allegedly fraudulent transfers from JBE prior to September, 2013; from Best
Buy; and from A&B Properties, 3 because Robert Jones, Jr. is the debtor in this case, not those
companies. In other words, even if the corporate veil of, for example, Best Buy, were pierced, it
would not be an alter ego of Robert Jones, Jr., so transfers by Best Buy would not be voidable
transfers of the debtor under the AUFTA. The Defendants argue that the AUFTA does not
apply to claims against third-party transferors, citing S.J. Holding Co., Inc. v. Kadco, Inc., 874
So. 2d 1036, 1040 (Ala. 2003).
There is case law which stands for the proposition that an AUFTA claim lies against
transfers by a debtor, not by a third-party. Id. There is, however, other authority regarding
transfers which are subsequent to a fraudulent transfer by the debtor. For instance, in Cotton
Energy Corp. v. Smith, 718 So. 2d 1142, 1144 (Ala. Civ. App. 1998), in a case transferred to it
by the Alabama Supreme Court, the Alabama Court of Civil Appeals reversed the decision of the

3 The Defendants identify such claims as being included in Count XI, Count II, Count XIV,
Count XXI, Count XXIII, Count XXIV, Count XXV, Counts XXVI, Count XXVII, Count
XXXVIII, Count XXXIX, Count XL, Count XLI, and Count XLII. (Doc. #66 at p.22).
24

lower court to deny a creditor’s claim against a grantee of a fraudulent transfer. The court
explained that if property is in the hands of a fraudulent grantee, the grantee occupies the
position of a trustee and is accountable to creditors. 718 So. 2d 112, 1145.
Wheeler Bros. points to Ala. Code §8-9A-8(b), which provides that a creditor may
recover judgment for the value of an asset transferred against “(1) the first transferee of the asset
of the person for whose benefit the transfer was made; or (2) any subsequent transferee other
than a good faith transferee who took for value or from any subsequent transferee.” Wheeler
Bros. argues with respect to JBE , for example, that JBE was not a good faith transferee from
AFS and Robert Jones, Jr. and, therefore, all transfers from JBE to Jones’ family members and
the companies they owned are subsequent transfers subject to Wheeler Bros.’s claim as a
creditor.
Wheeler Bros. has not cited, and the court has not found, Alabama cases applying Ala.
Code §8-9A-8(b) to similar facts. There are, however, decisions of other courts interpreting
substantially similar statutory provisions. In Eastern Savings Bank v. Bucci, No. 08-MA-23,
2008 WL 5124559 (Ohio Ct. App. Dec. 4, 2008), the court applied a provision which stated that
a judgment by a creditor may be entered against the first transferee of the asset or the person who
whose benefit the transfer was made and any subsequent transferee other than a good faith
transferee who took for value or from a subsequent transferee. Id. at *11. The court noted that
it is the debtor’s fraud which is at issue, not any other person’s intent.

Id. The court explained

that a first transferee of a transfer from the debtor has a defense that they took in good faith and
for a reasonably equivalent value. Id. at *12. The court reasoned that the requirements for a first
transferee must be satisfied before a “subsequent transferee” can take advantage of a defense.

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Id. (stating that the statute placing requirements on a predecessor transferee and then using the
phrase “subsequent transferee” means that there “must have been a predecessor transferee who
met the statutory requirements.”). Therefore, the first subsequent transferee must have been a
transferee of a person who took in good faith and for a reasonably equivalent value. Id. The
court further reasoned that the statute provides a defense to a “subsequent good faith transferee
who took for value or from any subsequent transferee.” Id. at *13. In the Eastern Savings
Bank, the claimed first transferee gave nothing in return for the transfer, and there were questions
of the transferee taking in good faith, so that the subsequent transferee defense was not available.
Id. at *13.
This court is persuaded by the Eastern Savings Bank analysis and finds it applicable to
the Alabama statutory provision relied on by Wheeler Bros. The court concludes that the
Defendants’ legal argument that piercing the corporate veil does not allow for relief for Wheeler
Bros.’s because the subsequent transfers were made by companies and people other than the
debtor is unavailing. Instead, there are questions of fact as to whether transfers made after the
initial transfer by the debtor were in good faith and for reasonable value which will have to be
decided by the jury.
d. Best Buy, Robert L. Jones, Sr., and Lavenia A. Jones Sale of Real Property at 3835
Atlanta Highway
A&B Properties, owned by Robert L. Jones, Jr. and Bobby Jones, sold a parcel of
property at 3835 Atlanta Highway to Best Buy. Wheeler Bros. brings a claim of fraudulent
transfer as to this transaction, stating that the sale was for less than the fair market value and that
the beneficiary of the transfer is Ann Jones. Wheeler Bros. presents evidence of a Settlement

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Statement signed by Robert Jones, Jr. and Ann Jones for Best Buy and Robert Jones, Sr. and
Robert Jones, Jr. for A&B Properties, LLC with a settlement date of March 29, 2012. (Doc. #7246 at p.42). Wheeler Bros. argues that this transaction occurred only five months before Robert
Jones, Jr. filed for personal bankruptcy in August of 2012.
The Defendants state that the transfer to Best Buy occurred in either May 2011 or March
2012. The Defendants state that Best Buy began making payment on the property in May 2011
because Robert Jones, Jr. was delinquent on payments and that Best Buy took out a new loan in
its name to pay-off the loan that was in the name of A&B Properties in March 2012. Wheeler
Bros. presents evidence that the payments by Best Buy before March 2012 were treated as rent
payments, not mortgage payments (Doc. #72-48 at p.129). The difference between the dates has
significance according to the Defendants because they argue that even assuming there was a
transfer of an asset, if the transfer occurred in May of 2011, A&B Properties had no equity in the
property, and if the transfer occurred in March of 2012, the value would be reduced to the
amount for which the property was appraised before the improvements by Best Buy.
Considering the evidence in a light most favorable to the non-movant, the court
concludes that Wheeler Bros.’s evidence indicating that payments before March 2012 were rent,
and evidence of the Settlement Statement, there is evidence to support that the transfer occurred
in March 2012.
The Defendants also move for summary judgment on the ground that the transfer of the
property is not a transfer of an asset under the AUFTA because the piece of property was fully
encumbered by a valid lien, citing In re Vista Bell, Inc., No. 11-00149-MAM, No. 12-00060MAM (S.D. Ala. Aug. 9, 2013) (stating “[i]f a piece of property is fully encumbered by a ‘valid

27

lien,’ then it is not an asset under the UFTA.”). The Defendants acknowledge that the loan
agreement in March of 2012 was for $315,500.00, and that the property had been appraised at
$690,000.00 on March 1, 2012, but find significant that the appraisal included improvements to
the property made by Best Buy.
Wheeler Bros. argues in response that the improvements made to the property became
part of the real property, citing Milford v. Tennessee River Pulp and Paper Co., 355 So. 2d 687
(Ala. 1978). Wheeler Bros. also states that the Defendants concealed the $690,000 appraisal
from it and Wheeler Bros. only obtained it by subpoenaing the lending bank, even though Bobby
Jones said that he was aware of the appraisal and paid for it. Wheeler Bros. argues that the
$690,000.00 appraisal performed shortly before the transfer was an appraisal of real estate
owned by A&B Properties and the only consideration received for the transfer to Best Buy was
$315,000.00. Wheeler Bros. states that a fraudulent transfer of Robert Jones, Jr.’s one-half
interest in A&B Properties in the amount of one-half of the difference between $690,000.00 and
the $315,000 consideration paid for the property, or $189,534.00, should be voided. These
arguments are not responded to in the Defendants’ Reply brief.
There are questions of fact created by loan documents and the $690,000 appraisal which
would allow for finder of fact to conclude that an asset was transferred within the meaning of the
AUFTA. The court concludes, therefore, that summary judgment is due to be DENIED as to
this claim.
2. Virginia Jones
Wheeler Bros.’s expert report states that Virginia Jones received $18,645.49 in fraudulent
transfers. Wheeler Bros.’s expert has identified as fraudulent transfers to Virginia Jones in three

28

categories: transfers from Pirates Tow, transfers by JBE as payments to Honda Finance, and by
JBE as payments to BlueCross and BlueShield.
Virginia Jones filed a separate Motion for Summary Judgment. She argues that she is
entitled to judgment because she is a homemaker and housewife and was not and is not involved
with any of the Defendant businesses. She states that she is completely reliant on her husband,
Robert L. Jones, Jr., and she has not received property or other assets from anyone other than her
husband. She specifically moves for summary judgment as to these transfers: $6,242.75 in
payments to Honda Finance and transfers of $12,402.74 which were premium payments to Blue
Cross and BlueShield for her health insurance coverage.
According to Virginia Jones, the transfers to Honda Finance were for a 2012 Acura
automobile which she says was owned by her son Caton Jones. She cites to her deposition
testimony in which she states that she has been driving a Mercedes which is owned by her fatherin-law. (Doc. #67-3 at p.20: 4-10). She says, therefore, that she did not receive a benefit of that
allegedly fraudulent transfer.
According to the Expert Report, Schedule 9, payments were made to Honda Finance by
Pirates Tow in 2013, and then were made by JBE in 2014 and 2015. (Doc. #72-47). Wheeler
Bros. states that Virginia Jones does not move for summary judgment as to the transfers from
Pirates Tow. With respect to the transfers from JBE, Wheeler Bros. argues that it can make out
a prima facie case that JBE was an alter ego of Robert Jones, Jr. when he was the owner of JBE
in 2014. Wheeler Bros. points to Caton Jones’s deposition testimony that his vehicles were
motorcycles, a pick-up truck, and tow truck (Doc. #72-45 at p.46: 4-10). Caton Jones does not
mention a 2012 Acura in this testimony.

29

Although given the opportunity to do so (Doc. #69), Virginia Jones did not file a Reply
brief in support of her motion. There are questions of fact as to whether Caton Jones used the
Acura, and no other evidence has been provided by Virginia Jones to dispute that the transfers
benefitted Virginia Jones. Because JBE was owned by Robert Jones, Jr. in 2014, there are
questions of fact as to whether JBE was an alter ego of Robert Jones, Jr. at the time of the
transfers. The court concludes, therefore, that questions of fact preclude summary judgment as
to the transfers to Honda Finance.
Virginia Jones also moves for summary judgment as to transfers of $12,402.74 which
were premium payments to BlueCross and BlueShield for her health insurance coverage. She
argues that the transfers were made by JBE, not a debtor, and that the transfers cannot be a
fraudulent transfer because insurance premiums paid as salary do not qualify as an asset under
the AUFTA. She provides the Affidavit of Robert Jones, Jr. in which he states that he was
employed with JBE and that his salary includes the payment of his wife’s health insurance. (Doc.
#67-4). Virginia Jones cites to Ala. Code §6-10-7 for the proposition that 75% of wages and
compensation are exempted from levy.
Wheeler Bros. argues that these transfers are not protected under Alabama law because
they are transfers to Robert Jones, Jr. for the benefit of Virginia Jones and are not payment of
wages to Virginia Jones. Wheeler Bros. argues that JBE was just an alter ego for Robert Jones,
Jr., so the transfers are a transfer by the debtor to himself, benefitting Virginia Jones, and,
therefore, cannot be consider exempt wages. Wheeler Bros. argues that transfers to Virginia
Jones were not made in exchange for any services provided to JBE.
The definition of “asset” under Ala. Code §8-9A-1 states that it is property of the debtor

30

but does not include property to the extent that it is exempt under non-bankruptcy law. Ala. Code
§8-9A-1(2); see also Flirt v. Kirkpatrick, 278 Ala. 61, 64, 175 So. 2d 755, 758 (1965) (stating
that “[a] sale or other disposition of property which is by law exempt from payment of debts
cannot be impeached by creditors as fraudulent, since creditors cannot be deemed concerned
with property not subject to their demands.”).

Ala. Code §6-10-7 is an exemption. The plain

language of the AUFTA says that a transfer has to be of an asset, and an asset does not include
property exempt under nonbankruptcy law. There is apparently no dispute that money was
spent on insurance premiums by JBE for Virginia Jones’ benefit. Virginia Jones has provided
affidavit evidence that the money was spent as compensation to Robert Jones, Jr. and there is no
evidence which contradicts that evidence. 4 If the money is not an asset, then it does not fall
within the AUFTA, and so the court does not engage in the for value or good-faith analysis of
the statute.
Summary judgment is, therefore, due to be GRANTED as to Virginia Jones to the extent
that insurance premiums are exempt under Alabama law as compensation to Robert Jones, Jr.

V. CONCLUSION
For the reasons discussed,
1.

The Motion for Partial Summary Judgment (Doc. #62) is GRANTED and judgment
is entered in favor of Wheeler Bros., Inc. and against Robert L. Jones, Jr. and

No Defendant has invoked Ala. Code §6-10-7 in the separately-filed Motion for Summary
Judgment of Less Than All Defendants; however, as noted, there are questions of fact precluding
summary judgment on the issue of whether money was paid as compensation for services to
various other Defendants.
4

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Advanced Fleet Services, LLC pursuant to the Parts Agreement and Personal
Guaranty in the amount of $794,530.13 plus interest at the rate of five percent per
month and attorneys’ fees to be determined at the conclusion of the case.
2. The Motion for Summary Judgment of Less Than All Defendants (Doc. #66) is
DENIED.
3. The Motion for Summary Judgment (Doc. #67) filed by Defendant Virginia Jones is
GRANTED and Judgment is entered in favor of Virginia Jones and against Wheeler
Bros. to the extent that insurance premiums are exempt under Alabama law as
compensation to Robert Jones, Jr. The motion is DENIED in all other respects.
DONE AND ORDERED in Orlando, Florida on March 4, 2016.

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