Sides et al v. Macon County Greyhound Park, Inc.
MEMORANDUM OPINION AND ORDER ADOPTING 241 REPORT AND RECOMMENDATION of the Magistrate Judge; further ORDERING (1) plfs' 174 -1 Motion to Join Patricia McGregor is DENIED; (2) plfs' 183 AMENDED MOTION to Join Patricia McGregor as Party Defendant is DENIED; (3) def's 186 MOTION to Stay Motion to Join Patricia McGregor is DENIED as moot; (4) def's 177 motion to quash or, in the alternative, to stay writ of Garnishment is DENIED as to the motion to quash, and GRANTED as to the motion to stay, pending further order of this court; (5) plfs' 174 -2 verified application for writ of execution is STAYED pending further order of this court; (6) [253 Objections to the 241 recommendation of the Magistrate Judge not addressed herein are OVERRULED. Signed by Chief Judge William Keith Watkins on 9/30/15. (Attachments: # 1 civil appeals checklist)(djy, )
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
JUDY WEEKES-WALKER, et al.,
MACON COUNTY GREYHOUND
CASE NO. 3:10-CV-895-WKW
MEMORANDUM OPINION AND ORDER
Before the court is the Recommendation of the Magistrate Judge (Doc. # 241) to
which Plaintiffs have objected (Doc. # 253). Based upon an independent and de novo
review, see 28 U.S.C. § 636(b), the Recommendation will be adopted except as modified by
the following additional observations.
Plaintiffs have failed procedurally to invoke the court’s ancillary jurisdiction in
enforcing the judgment. The Alabama Uniform Fraudulent Transfer Act (“AUFTA”), Ala.
Code 1975 § 8-9A-1 et seq., requires “an action” – a new proceeding – to establish the
fraudulent transfer. One does not make a transfer fraudulent by just saying so; a party cannot
speak a fact into existence. A party must prove the existence of the fact, particularly one
alleged to be fraudulent, see Fed. R. Civ. P. 9, in an action. Mangina v. Bush, 237 So. 2d
479, 481 (Ala. 1970) (“Fraud is never presumed and when relied upon must be distinctly
alleged and proven, . . . and he who seeks relief on ground of fraud has the burden of proof.”
(citations omitted)). Section 8-9A-7, upon which Plaintiffs lean for so much comfort, begins
with the phrase: “In an action for relief against a transfer under this chapter . . . .” (emphasis
added).1 The object of the proceeding is to make that which appears to be valid (in this case,
encumbrances on property), invalid; in other words, to void a facially valid transaction.
Hence, § 8-9A-8 establishes: “[T]o the extent a transfer is voidable in an action by a creditor
under section 8-9A-7(a)(1), the creditor may recover judgment for the value of the asset
transferred, . . . or judgment for conveyance of the asset transferred.” (emphasis added).
Causes of action mostly come with statutes of limitation, and so does this one. Section
8-9A-9 says: “A claim for relief with respect to a fraudulent transfer under this chapter is
extinguished unless action is brought . . . .” (emphasis added) within a time certain.
Moreover, the court notes that AUFTA is a uniform statute, and it specifically
provides that it “shall be applied and construed to effectuate its general purpose to make
uniform the law with respect to the subject of this chapter among states enacting it.” Ala.
Code § 8-9A-11 (1975). As the Magistrate Judge observed (Doc. # 241 at 9 n.4), by statute,
Florida law provides for a person holding an unsatisfied judgment or judgment lien to
institute supplementary proceedings to challenge a fraudulent transfer. See Nat'l Mar. Servs.,
Inc. v. Straub, 776 F.3d 783, 785 (11th Cir. 2015) (recognizing that, by filing a
supplementary proceeding challenging a fraudulent transfer pursuant to Fla. Stat.
By the way, “the court” referenced in § 8-9A-7 is the court in the new action, not
necessarily the court which entered the judgment in the first place. It happens in this case to be,
potentially, the same court. Unfortunately for Plaintiffs, that potential is not realized here.
§ 56.29(6)(b), the plaintiff “initiated a supplementary proceeding . . . in ‘accord[ance] with
the procedure of the state where the court is located.’” (quoting Fed. R. Civ. P. 69(a)).
Florida law differs from Alabama’s in this regard. Fla. Stat. § 56.29(1) (“When any
person or entity holds an unsatisfied judgment or judgment lien obtained under chapter 55,
the judgment holder or judgment lienholder may file a motion and an affidavit so stating . . .
and thereupon the judgment holder or judgment lienholder is entitled to these proceedings
supplementary to execution.”). Cf. Ala. Code § 8-9A-7(a)(1) (providing for remedies in “an
action for relief against a transfer under this chapter”); cf. also Ala. Code § 6-6-180 (“When
an execution for money from any court has been issued against a defendant and is not
satisfied, the plaintiff, or the person for whose benefit such execution is sued out, may file
a complaint . . . .”).
Georgia’s Uniform Fraudulent Transfer Act is similar to AUFTA in that it refers to
the filing of “an action for relief.” See Ga. Code Ann. § 18-2-77(a) (“In an action for relief
against a transfer or obligation under this article, a creditor. . . may obtain” certain relief);
Ala. Code § 8-9A-7 (same). Thus, the court finds persuasive the reasoning of Reyes-Fuentes
v. Shannon Produce Farm, Inc., in finding that “Georgia law does not statutorily provide for
supplementary proceedings in which motions and complaints challenging fraudulent
conveyances may be raised. The proper procedure appears to be the filing of a new
complaint seeking the avoidance of the fraudulent conveyance along with other remedies.”
No. 6:08-CV-59, 2012 WL 3562399, at *6 (S.D. Ga. Aug. 13, 2012).
Accordingly, and for the reasons stated in the Recommendation, there is no doubt that
AUFTA requires the filing of a new action, a lawsuit alleging a cause of action under
AUFTA. The salient question then is whether Plaintiffs brought an action under AUFTA
here. See Fed. R. Civ. P. 8(e) (“Pleadings must be construed so as to do justice.”); see also
Reyes-Fuentes, 2012 WL 3562399, at *5-6 (directing the clerk to open a new case for the
adjudication of a third-party complaint challenging a fraudulent transfer). In this case, the
answer is “no.” Under both federal and Alabama procedural law, actions are commenced
by filing a complaint. Fed. R. Civ. P. 3; Ala. R. Civ. P. 3(a). Complaints are generally,
almost universally, accompanied by some form of service vehicle, typically a summons, Fed.
R. Civ. P. 4, inviting a new defendant to the contest. Cf. Latham v. Phillips, 590 So. 2d 217,
218 (Ala. 1991) (“The filing of a complaint, standing alone, does not commence an action
for statute of limitations purposes. Rather, the filing must be made with the intention of
serving process upon the opposing party or parties.”). The complaint tells the defendant
what is at issue, and the summons invites the new defendant to join issue, i.e., contest the
claims of the plaintiff. Actions are not commenced by motions, particularly motions missing
“a short and plain statement of the grounds for the court’s jurisdiction” or “a short and plain
statement of the claim showing that the pleader is entitled to relief” or “a demand for the
relief sought, which may include relief in the alternative or different types of relief,” Fed. R.
Civ. P., all of which were missing in the initial motions filed by Plaintiffs on November 12,
2014 (Doc. # 174). Nor was there a request for service of process on the new defendant or
a proposed summons for that purpose. The motions were not styled as a “complaint” or
“amended complaint”; there was no request for leave to file a new complaint, Fed. R. Civ.
P. 15; and there was no specific claim for relief. Therefore, the filings of Plaintiffs on
November 12, 2014, in this case did not commence a new action.
The proposed new defendant in this case, Patricia McGregor, filed an action the next
day in the Circuit Court of Macon County, Alabama, seeking a declaratory judgment that her
liens on the property prime the judgment lien of Plaintiffs arising out of this case. That
action is the first in time litigating the priority-of-lien issues. Seven days after the state court
action was filed by Ms. McGregor, Plaintiffs filed an “Amended Motion to Join Patricia
McGregor as Party Defendant” (Doc. # 183) in this case. This effort was somewhat better
– it laid out jurisdictional grounds and a request for relief – but it was still a motion; it made
no reference to a summons or service of process; and Rule 15 leave of court to file an
amended complaint was not requested (or granted). This effort also fell short of invoking
the ancillary jurisdiction of this court. Hence, there continues to be no new “action” filed
here insofar as an AUFTA action.
Colorado River abstention analysis fundamentally requires two “actions” involving
the same facts and issues, one in state court and one in federal court. Jackson-Platts v. Gen.
Elec. Capital Corp., 727 F.3d 1127, 1140 (11th Cir. 2013) (“In Colorado River Water
Conservation District v. United States, [424 U.S. 800 (1976),] the Supreme Court held that
a federal court could abstain from a case if (1) a parallel lawsuit was proceeding in state
court, and (2) judicial-administration reasons so demanded abstention.”). Here, there is
presently no AUFTA action, so Colorado River analysis is inapplicable to any purported
AUFTA claims. Thus, there is no AUFTA action pending here from which the court may
abstain even if it were inclined to do so.
This leaves pending in the state courts the matter of the primacy of various liens.
Those issues directly implicate the pending Writ of Garnishment and Writ of Execution in
this court. For the reasons stated in the Recommendation, those writs will be stayed pending
a ruling in state court and a subsequent ruling of this court.
With those additional thoughts, it is ORDERED that the Recommendation is
ADOPTED. Further, it is ORDERED:
Plaintiffs’ Motion to Join Patricia McGregor (Doc. # 174-1) is DENIED.
Plaintiffs’ Amended Motion to Join Patricia McGregor as Party Defendant
(Doc. # 183) is DENIED.
Defendant’s Motion to Stay Motion to Join Patricia McGregor (Doc # 186) is
DENIED as moot.
Defendant’s Motion to Quash or, in the Alternative, to Stay Writ of
Garnishment (Doc. # 177) is DENIED as to the motion to quash, and GRANTED as to the
motion to stay, pending further order of this court.
Plaintiffs’ Verified Application for Writ of Execution (Doc. # 174-2) is
STAYED pending further order of this court.
Objections to the Recommendation of the Magistrate Judge (Doc. # 241) not
addressed herein are OVERRULED.
DONE this 30th day of September, 2015.
/s/ W. Keith Watkins
CHIEF UNITED STATES DISTRICT JUDGE
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