Sides et al v. Macon County Greyhound Park, Inc.
MEMORANDUM OPINION AND ORDERDENYING 257 MOTION for Reconsideration, as further set out in order. Signed by Chief Judge William Keith Watkins on 3/7/17. (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 Plaintiffs’ motion for reconsideration. (Doc. # 257.)
Upon consideration of the motion, the court concludes that the motion is due to be
denied for lack of jurisdiction or, alternatively, for failure to assert a cognizable or
meritorious ground for relief.
FACTS 1 AND PROCEDURAL HISTORY
Plaintiffs are a class of former employees of Defendant Macon County
Greyhound Park. On October 22, 2010, Plaintiffs filed a complaint pursuant to the
Worker’s Adjustment and Retraining (“WARN”) Act, 29 U.S.C. § 2101, et seq.,
after a series of “mass layoffs” or “plant closings” at Defendant’s electronic
gaming facility, Victoryland, in 2010.
The facts set forth here are gleaned from the record as it currently stands and do not
represent the court’s ultimate factual findings.
On September 27, 2012, Defendant executed a promissory note in the
amount of $1,091,849.88, the total amount of several loans issued prior to that date
from Patricia McGregor2 to Defendant. (Doc. # 177-1.) Also on September 27,
2012, Defendant executed a mortgage and assignment of rents and leases as to
certain real property (“the timber parcel”), securing not only the promissory note,
but also any future indebtedness for loans from Patricia McGregor. (Doc. # 1771.) On February 5, 2013, Patricia McGregor’s mortgage was recorded in the
probate office in Macon County, Alabama.
(Doc. # 177-1 at 5.)
McGregor made several subsequent loans to Defendant, the last of which was
made on April 14, 2014. (Doc. # 177-1 at 3.)
On July 22, 2014, final judgment in this case was entered against Defendant
and in favor of Plaintiffs in the amount of $2,734,851.63, to include Plaintiffs’
monetary judgment, attorneys’ fees, costs, and interest. (Doc. #168). In the fall of
2014, Lower Tallapoosa Timber was hired to cut some timber on the timber parcel.
On October 23, 2014, Plaintiffs filed with the Clerk of the Court a verified
application for writ of garnishment (Doc. # 169) seeking to have garnished from
Lower Tallapoosa Timber any debt or effects owed to or possessed from
Defendant. On October 27, 2014, the writ of garnishment (Doc. # 170) was issued
Patricia McGregor is the wife of Defendant’s primary shareholder, Milton McGregor.
by the Clerk, and it was served on Lower Tallapoosa Timber on November 5,
2015. (Doc. # 173,)
On October 30, 2014, Plaintiffs recorded the judgment in this case in the
probate office in Macon County, Alabama. (Doc. # 177-1 at 36.)
On November 12, 2014, Lower Tallapoosa Timber filed its answer (Doc. #
175) to the writ of garnishment, disclosing that it had in its possession non-exempt
property belonging to Defendant consisting of “timber stumpage” of unspecified
On November 12, 2014, Plaintiffs filed a “motion to file under seal.” (Doc. #
174.) Attached to the motion to file under seal were (1) a motion to join Patricia
McGregor as a party defendant and motion for writ of execution of “asset(s)
fraudulently conveyed,” and (2) a verified application for writ of execution on
certain property in Defendant’s possession. (Doc. # 174-1; Doc. # 174-2.) On the
face of the November 12, 2014 filing, the verified application for writ of execution
did not appear to be related to the motion to add Patricia McGregor as a party
defendant and for writ of execution on allegedly fraudulently conveyed assets.3
In the verified application for writ of execution, Plaintiffs sought a writ of execution on
(1) a number vehicles that were in Defendant’s “possession,” and (2) certain real property to
which Defendant allegedly held title. The list of vehicles Plaintiffs provided did not state
whether the vehicle titles were held in Defendant’s name, but the list reveals that the titles to the
vast majority of them were issued between November 22, 1985 and September 27, 2010, prior to
the filing of this lawsuit. Thus, the list does not reasonably appear to be a list of vehicles that
were titled over to Patricia McGregor to avoid a judgment in this suit. The document describing
the real property subject to execution was apparently an attachment to a deed that was recorded
The motion to add Patricia McGregor alleged that Defendant fraudulently
transferred “personal and real property” to Patricia McGregor. Plaintiffs provided
no details about the date or substance of the allegedly fraudulent transfers, and
Plaintiffs gave no information identifying the personal and real property so
transferred. The certificate of service for Plaintiffs’ November 12, 2014 filing
stated only that it was served on Defendant’s counsel of record.
contains no indication that it was served on Patricia McGregor.
On November 13, 2014, Patricia McGregor filed a complaint for declaratory
judgment in the Circuit Court of Macon County, Alabama. (Doc. # 177-1 at 41.)
She sought a declaration that her mortgage on the timber parcel is a valid,
enforceable lien and that, under Alabama law, her mortgage primes the judgment
obtained by Plaintiffs in this action because the certificate of judgment was not
filed by Plaintiffs in Macon County until October 30, 2014.
On November 18, 2014, Defendant filed a motion to quash or, in the
alternative, to stay the writ of garnishment issued to Lower Tallapoosa Timber.
(Doc. # 177.) Patricia McGregor argued that the timber stumpage was harvested
on May 13, 2008. A copy of the deed to the real property was not included as an attachment.
Nothing in the November 12, 2014 filing connected that real property to Patricia McGregor.
However, as Macon County Greyhound Park’s November 18, 2016 filing subsequently revealed,
the real property that was the subject of the application for writ of execution happened to be the
same timber parcel that was mortgaged to Patricia McGregor in September 2012 and that Lower
Tallapoosa Timber had been hired to harvest. (Compare Doc. # 177-1 at 33-34 (property
description) with Doc. # 174-6 (property description)).
from the timber parcel and that she, not Plaintiffs, was entitled to the proceeds 4 of
the timber stumpage because her mortgage primes the judgment in this case. (Doc.
On November 20, 2014, Plaintiffs filed an amended motion to join Patricia
McGregor as party defendant. (Doc. # 183.) In the amended motion, Plaintiffs
sought to have Patricia McGregor added as a party defendant in this action for the
purpose of obtaining a declaration from this court that the mortgage was
fraudulently conveyed to Patricia McGregor to avoid the judgment in this case in
violation of the Alabama Fraudulent Transfer Act, Ala. Code 1975 § 8-9A-1, et
seq. Plaintiffs further sought “a writ of execution on the asset(s) of [Defendant],
free and clear of any claims of Patricia McGregor.” (Doc. # 183 at 7.) The
amended motion did not seek to have set aside any other transfers of specific real
or personal property to Patricia McGregor.
On September 2, 2015, the United States Magistrate Judge issued a Report
and Recommendation that the court should stay issuance of execution on the
timber stumpage pending the outcome of the state court case. On September 30,
2015, the court entered an order adopting the recommendation and finding
Plaintiffs had failed to invoke the court’s ancillary jurisdiction over its request to
have the fraudulent transfer set aside. (Doc. # 256.) This conclusion was based on
The value of the timber stumpage proceeds is not reflected in the record.
the fact that AUFTA, Ala. Code 1975 § 8-9A-7, requires the filing of “an action”
to establish the fraudulent transfer. (See discussion, Doc. # 256.)
On October 8, 2015, Plaintiffs filed a motion to reconsider, (Doc. # 257),
arguing that, under Ala. Code § 8-9A-7(b), a court may join a third party and set
aside a transfer as fraudulent. Ala. Code § 8-9A-7(b) provides:
If a creditor has obtained a judgment on a claim against the debtor, the
creditor, if the court so orders, may levy execution on the asset
transferred or its proceeds.
Ala. Code § 8-9A-7(b).
On October 26, 2015, Plaintiffs filed a notice of appeal from the September
2, 2015 Order, depriving this court of jurisdiction over the motion to reconsider.
No opinion has been issued by the Eleventh Circuit Court of Appeals in the
interim. The motion to reconsider will be denied for lack of jurisdiction, or,
alternatively, for failure to seek relief on a ground contemplated by Rule 60 of the
Federal Rules of Civil Procedure.
The Federal Rules of Civil Procedure do not provide for “motions for
reconsideration.” However, Rule 60(b) provides for relief from “a final judgment,
order, or proceeding” on the following grounds:
(1) mistake, inadvertence, surprise, or excusable neglect;
(2) newly discovered evidence that, with reasonable diligence, could
not have been discovered in time to move for a new trial under Rule
(3) fraud (whether previously called intrinsic or extrinsic),
misrepresentation, or misconduct by an opposing party;
(4) the judgment is void;
(5) the judgment has been satisfied, released or discharged; it is based
on an earlier judgment that has been reversed or vacated; or applying
it prospectively is no longer equitable; or
(6) any other reason that justifies relief.
Fed. R. Civ. P. 60(b).
Subsection 60(b)(6)’s allowance of reconsideration for “any other reason
that justifies relief” is an extraordinary remedy that may invoked only upon a
showing of “exceptional circumstances” not covered under subsections 60(b)(1)(5). United States v. Real Prop. & Residence Located at Route 1, Box 111,
Firetower Rd., 920 F.2d 788, 791 (11th Cir. 1991); Griffin v. Swim-Tech Corp.,
722 F.2d 677, 680 (11th Cir. 1984). Rule 60(b)(6) generally does not apply to
factual or legal arguments that were or could have been raised in the first instance.
See Rossi v. Troy State Univ., 330 F. Supp. 2d 1240, 1249 (M.D. Ala. 2002), aff’d,
64 F. App’x 743 (11th Cir. 2003).
Plaintiffs’ motion for reconsideration does not fall under any of the
provisions of Rule 60(b).
Plaintiffs make no attempt to show “exceptional
circumstances,” and the motion merely raises two legal arguments that were or
could have been raised in the first instance.
First, Plaintiffs argue that C-Staff, Inc. v. Liberty Mutual Insurance Co., 571
S.E. 2d 383 (Ga. 2002), and Reyes-Fuentes v. Shannon Produce Farm, Inc., No.
6:08-CV-59, 2012 WL 3562399, at *6 (S.D. Ga. Aug. 13, 2012) – cases mentioned
in the Report and Recommendation of the Magistrate Judge (Doc. # 241 at 6-9) –
This argument could have and should have been raised in
In fact, in their objections, Plaintiffs relied on Reyes-
Fuentes, (Doc. # 253 at 17), and the court addressed that argument in the order
adopting the Recommendation. (Doc. # 256 at 3-5.) In any event, the court finds
no merit in Plaintiffs’ argument that the court misconstrued or misapplied C-Staff
Second, Plaintiffs raise a new legal argument that was available to them
prior to entry of the order adopting the Recommendation; namely, Plaintiffs
contend that a June 21, 2005 Order in McLane Foodservice, Inc. v. Wolverine
Pizza, LLC, No. 3:03-CV-0412-G Doc. # 87, 205 U.S. District LEXIS 12110 (N.D.
Tex. June 21, 2005), holds that, under a Texas statute similar to the Alabama
statute at issue here, a party may, in conjunction with a postjudgment attempt to
levy execution on a fraudulently transferred asset, join a nonparty and move for an
order setting aside a fraudulent transfer.
Contrary to Plaintiffs’ argument,
however, the validity of joining a nonparty to set aside a fraudulent transfer was
not raised or decided in the McLane Foodservice opinion, nor did the judgment
creditors in that case attempt to join non-parties by motion for that purpose.
McLane Foodservice is inapposite.
McLane Foodservice was decided by a federal district court in 2005. A later
Texas appellate court case, Kennedy v. Hudnall, 249 S.W.3d 520, 525-26 & nn.
12-13 (Tex. App. 2008),5 touches on the relevant issues, and, to the extent that
Kennedy contains affirmative holdings on those issues, Kennedy is not inconsistent
with this court’s conclusions in the order adopting the Recommendation. See
Provau v. State Farm Mut. Auto. Ins. Co., 772 F.2d 817, 820 (11th Cir. 1985)
(“[W]here, as in the instant case, the state supreme court has not addressed the
issue, a federal court applying state law is bound to adhere to decisions of the
state’s intermediate appellate courts absent some persuasive indication that the
state’s highest court would decide the issue otherwise.” (citations and internal
quotation marks omitted)).
Specifically, in Kennedy, the Texas Court of Appeals held that “since no
action for relief was filed independently of the original suit in which the money
judgment was granted,” an attempt to levy execution on a fraudulently transferred
The parties did not bring Kennedy to the attention of the court. The court discovered the
case on its own in the process of evaluating the merits of Plaintiffs’ argument regarding the state
of Texas law.
asset was not “an action for relief against a [fraudulent] transfer or obligation”
under Tex. Bus. & Com. Code Ann. § 24.008(a).6 Kennedy, 249 S.W.3d at 525.
Rather, the matter was “an order incident to execution and levy under” Tex. Bus. &
Com. Code Ann. § 24.008(b). The court observed that “a judgment creditor may
seek execution against an allegedly fraudulent transfer under subsection (b)
without filing a separate suit or first having the question of fraud determined” and
that, “although we see nothing in Section 24.008(b) which authorizes a court to
make a determination whether a fraudulent transfer has taken place, we take no
position at this point whether a court acting solely under subsection (b) without a
separate suit would have the ability to actually or impliedly avoid the [allegedly
fraudulent] conveyance.” Kennedy, 249 S.W.3d at 525 nn. 12-13. Thus, contrary
to Plaintiffs’ representations, Texas law is not settled with respect to whether under
Tex. Bus. & Com. Code Ann. § 24.008(b), 7 a judgment creditor may seek to join a
nonparty and have the fraudulent transfer set aside in a postjudgment proceeding
seeking to levy execution on a fraudulently transferred asset. At most, Kennedy
Tex. Bus. & Com. Code Ann. § 24.008(a) is worded similarly to Ala. Code 1975 § 89A-7(a). Tex. Bus. & Com. Code Ann. § 24.008(b) is worded similarly to Ala. Code 1975 § 89A-7(b).
The Kennedy court made clear that § 24.008(a) “does not allow for” litigation of
fraudulent transfer in the original suit for damages because § 24.008(a) “requires a separate
lawsuit for that purpose.” Kennedy v. Hudnall, 249 S.W.3d at 522. To the extent that Plaintiffs
may argue that they may litigate the fraudulent transfer issue in this action under the comparable
provisions of Ala. Code 1975 § 8-9A-7(a), Kennedy contradicts that argument.
telegraphs doubts that fraudulent transfers can be set aside by joining nonparties in
supplementary proceedings solely under subsection (b) – doubts which, if
anything, undermine Plaintiffs’ arguments.
To say that the law is confusing on this point is understatement of the
highest order. Note, for instance, the contradictions in American Jurisprudence’s
treatment of the topic: 37 Am. Jur. 2d Fraudulent Conveyances and Transfers §
117 (“[S]upplementary relief in aid of execution cannot be utilized to adjudicate
the title of property alleged to have been fraudulently conveyed since only property
the title to which is clearly in the judgment debtor is subject to the terms of the
rules governing such supplementary relief.”); 37 Am. Jur. 2d Fraudulent
Conveyances and Transfers § 120 (“In most jurisdictions, a judgment creditor may
disregard a fraudulent conveyance; levy upon the property conveyed, whether
personal or real, as though the conveyance did not exist; and cause it to be sold
under execution without bringing direct suit to set aside the conveyance, leaving
the issue of fraudulent transfer for later determination. This is the rule under the
Uniform Fraudulent Transfer Act and under the Uniform Fraudulent Conveyance
Act.” (footnotes omitted)).
The first section, § 117, disclaims the use of
supplementary proceedings to adjudicate the title to property. The second section,
§ 120, says the problem (of the creditor not having sure title to the property) can be
resolved by ignoring the allegedly fraudulent transfer and proceeding to execution
sale of another person’s property interest, leaving the issue of fraudulent transfer
for later determination. Which is it? And how so?
The fault lies in the language of subsection (b): “If a creditor has obtained a
judgment on a claim against the debtor, the creditor, if the court so orders, may
levy execution on the asset transferred or its proceeds.” Ala. Code § 8-9A-7(b)
(emphasis added). No competent court would “so order” as to the asset without
due process notice to the owner of record and a trial, and state legislatures and
uniform act writers would know that if they ever practiced law for a day – unless,
of course, the “court” referenced in subsection (b) is the court in the action for
relief under AUFTA (i.e. a new proceeding with the requisite due process) to
establish the fraudulent transfer and recover ownership in the debtor/transforor. See
Ala. Code § 8-9A-7(a) (providing remedies available to creditors in “an action for
relief against a transfer under this chapter”). 8 What has been tried by the court is
the claim of the creditor against the debtor – not the title to any real or personal
property the debtor has, or had, that may satisfy the claim. In one careless phrase,
The notes to the Uniform Fraudulent Transfer Act hint at historical precedent under a
previous uniform statute for a procedure by which the judgment creditor may obtain judgment
and a writ of execution returned unsatisfied before proceeding in equity to set aside the transfer.
Alternatively, the creditor might treat the conveyance as a nullity and levy attachment in spite of
it; in such cases, the creditor often found it necessary to indemnify the sheriff for the risk of
erroneous seizure. See Uniform Fraudulent Transfer Act § 7 cmts. 5-6, and cases cited therein.
Even if those procedures are still available under Ala. Code § 8-9A-7(b), neither of them
involves the addition of the third party transferee to the original action via a postjudgment
motion to establish the fraudulent transfer, as Plaintiffs seek to do here.
the uniform statute, adopted by Alabama without, apparently, a thought, flips the
law of in rem property on its centuries-old head. There can be no greater property
right in English common law than the requirement that private property may not be
seized by the government or anyone else without due process of law. In this very
context, that means notice, a claim compliant with the rules of civil procedure and
common law, adequate time to conduct discovery, prepare a defense, and engage in
motion practice, and a trial, with attendant rights to appeal – in short, a separate
action for the current owner of the property to defend that ownership against
claims of fraud. One flippant phrase in subsection (b) cannot undo those ancient
property rights. 9
In any event, the court lacks jurisdiction to rule on the motion because
Plaintiffs’ motion does not fall under any of the provisions of Rule 60.
Alternatively, if Plaintiffs’ motion for reconsideration could be construed as a
“motion for relief from a court order” within the meaning of Rule 60 or a “motion
for relief” within the meaning of Rule 62.1 of the Federal Rules of Civil
Adding to the confusion is the former difference in proceedings at law, as here
(obtaining a money judgment), and equity (the traditional vehicle to resolve property title issues).
The distinction between law and equity have technically been abolished in Alabama law. See
Ala. Rule Civ. P. 2 (“There shall be one form of action known as the ‘civil action.’”); Poston v.
Gaddis, 335 So. 2d 165, 167 (Ala. Civ. App. 1976) (“With the adoption of the Alabama Rules of
Civil Procedure, the common law forms of actions at law and in equity were abolished. Actions
and defenses of a legal and equitable nature may now be joined and intermingled in the one form
of ‘Civil Action.’”). Nevertheless ancient cases establish procedures that apply to levy and
execution despite modern uniform acts.
Procedure,10 the motion is due to be denied on grounds that it raises substantively
meritless arguments that were or should have been raised prior to entry of the
Order adopting the Recommendation. See Doe ex rel. Doe v. Bush, 261 F.3d 1037,
1064 (11th Cir. 2001) (noting that, “as a general rule, the filing of a notice of
appeal divests the district court of jurisdiction over those aspects of the case that
are the subject of the appeal”); Fed. R. Civ. P. 60(b) (listing grounds for relief from
a court order); Fed. R. App. P. 4(a)(4) (listing Rule 60 motions among six motions
that, if filed within the relevant time limit, suspend the effect of a notice of appeal
filed before or after the motion is filed until disposition of the last such motion).
Accordingly, it is ORDERED that Plaintiffs’ motion for reconsideration
(Doc. # 257) is DENIED.
DONE this 7th day of March, 2017.
/s/ W. Keith Watkins
CHIEF UNITED STATES DISTRICT JUDGE
Rule 62.1 provides that a court “may” defer consideration of, deny, or indicate a
willingness to grant a “motion for relief . . . that the court lacks authority to grant because of an
appeal that has been docketed and is pending.”
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