FEDERAL DEPOSIT INSURANCE CORPORATION v. AMOS et al
Filing
74
ORDER deferring ruling on (10) Motion for Summary Judgment in case 4:16-mc-00004-CDL; deferring ruling on (50) Motion modify consent order; denying (51) Motion for Summary Judgment in case 4:16-cv-00284-CDL Ordered by US DISTRICT JUDGE CLAY D LAND on 7/28/2017 (glg)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
COLUMBUS DIVISION
FEDERAL DEPOSIT INSURANCE
CORPORATION, as receiver for
GULFSOUTH PRIVATE BANK,
*
*
Plaintiff,
*
vs.
*
WILLIAM L. AMOS, JENIFER C.
AMOS, WLA INVESTMENTS, INC.,
INNOVATION TREND SETTERS OF
AMERICA, LLC, and AFLAC, INC.,
as sponsor of the Aflac
Incorporated Market Director
Deferred Compensation Plan,
*
Defendants.
CASE NOS. 4:16-CV-284,
4:16-MC-4
*
*
*
*
O R D E R
The Federal Deposit Insurance Corporation (“FDIC”) holds
several
unsatisfied
Florida
judgments
against
William
Amos.
After registering the judgments in this Court, see case nos.
4:16-MC-3,
4:16-MC-4,
4:16-MC-5,
action, 4:16-CV-284, to
the
FDIC
filed
the
present
collect on the judgments and to
set
aside transfers that Amos made to his wife and the subordination
of a lien on real property controlled by Amos.
The FDIC also
filed a garnishment action, 4:16-MC-4, in this Court to collect
on the judgments.1
1
Today’s Order addresses motions in both actions. William Amos is a
Defendant in both cases. His wife, Jenifer Amos, and WLA Investments,
The
FDIC
filed
a
motion
for
summary
judgment
regarding
three transfers by Amos to his wife and the subordination of the
lien, claiming that those transactions should be voided as a
matter
of
law
pursuant
to
Georgia’s
Uniform
Voidable
Transactions Act (“GUVTA”), O.C.G.A. § 18-2-70 et seq. (ECF No.
51).
The FDIC also moves to modify the Consent Order that the
Court previously entered that granted the FDIC’s motion for a
preliminary injunction (ECF No. 50).
The FDIC also filed a motion for summary judgment in the
garnishment
action
arguing
that
it
is
entitled
to
garnish
credits that Amos’s employer, Aflac, Inc., has made to Amos’s
account
in
the
Aflac
Incorporated
Market
Director
Deferred
Compensation Plan (“the Plan”)(ECF No. 10).
For the reasons explained in the remainder of this Order,
the FDIC’s motion for summary judgment in 4:16-CV-284 seeking to
void certain transactions under GUVTA (ECF No. 51) is denied.
The
Court
defers
ruling
on
the
FDIC’s
motion
to
modify
the
Consent Order in 4:16-CV-284 (ECF No. 50) and defers ruling on
the
FDIC’s
motion
for
summary
judgment
in
the
garnishment
action, 4:16-MC-4 (ECF No. 10).
Inc. are Defendants in 4:16-CV-284.
Innovation Trend
America, LLC and Aflac, Inc. are Defendants in 4:16-MC-4.
2
Setters
of
I.
Summary Judgment Motion in 4:16-CV-284 to Void Transactions
A.
Transfer of Amos & Co.
The
FDIC
seeks
to
void
the
transfer
by
Amos
of
his
ownership in William L. Amos & Company (“Amos & Co.”) to his
wife.
It
argues
that
the
transfer
is
voidable
under
GUVTA
because the transfer was made without receiving a “reasonably
equivalent value” in exchange for the transfer and that Amos was
insolvent at the time of the transfer.
Pretermitting whether
Amos was insolvent at the time of the transaction, the Court
finds that genuine factual disputes exist as to whether Amos
received “reasonably equivalent value” for the transfer, thus
precluding summary judgment.
most
favorable
proceedings,
to
a
Amos,
Viewing the evidence in the light
as
reasonable
required
juror
at
could
this
stage
conclude
of
the
that
this
transfer conferred an indirect economic benefit on Amos.
Amos
claims that as a result of the transfer he was able to remain
employed at Aflac, where he earns a significant salary and other
benefits.
support
The FDIC offers evidence of Amos & Co’s assets to
its
contention
that
the
benefit
he
derived
from
employment with Aflac was not “reasonably equivalent” to the
value of Amos & Co.
liabilities.
But it is unclear if Amos & Co. had any
Amos describes signing checks for Amos & Co.’s
expenses at the time of the transfer.
See, e.g., Amos Dep.
30:7-9.
ongoing
And
Amos
&
Co.
certainly
3
has
expenses
and
liabilities today.
See Pl.’s Mot. to Modify Consent Order 2,
ECF No. 50 (objecting to these expenses).
With only evidence of
Amos & Co.’s assets, the Court cannot find that the value of
Amos’s Aflac employment was not reasonably equivalent to the
value of Amos & Co. at the time of this transaction as a matter
of law.
That is an issue for the jury to decide.
Rather than offering clear evidence of Amos & Co.’s 2014
value, the FDIC argues that this transfer is voidable because
Amos did not receive the value of his employment at Aflac at the
same time that he transferred Amos & Co. to his wife.
But in
determining whether a transaction is voidable, the Georgia Court
of Appeals has declined to take a “narrow, piecemeal view [that]
ignores the essential nature of the transaction.”
v.
Buckley,
733
S.E.2d
499,
502-03
(Ga.
See Truelove
Ct.
App.
2012)
(reversing the trial court’s grant of summary judgment because
the evidence showed that the transfer of the property was “at
essentially
the
same
time”
as
the
defendant
paid
for
the
property and therefore was not an antecedent debt under O.C.G.A.
§ 18-2-75(b)).
economic
Moreover, some courts have held that a future
benefit
circumstances.
may
constitute
“value”
under
similar
See In re PSN USA, Inc., 615 F. App’x 925, 930
(11th Cir. 2015) (per curiam) (recognizing that some circuits
have held that “[t]he mere opportunity to receive an economic
benefit in the future constitutes ‘value’ under the [Bankruptcy]
4
Code.” (quoting In re Fruehauf Trailer Corp., 444 F.3d 203, 212
(3d Cir. 2006))).
Here, Amos transferred Amos & Co. in August 2014 and became
a W-2 employee at Aflac the following month.
Amos represents
that he made the transfer in anticipation of his W-2 employment.
Thus, viewing the facts in the light most favorable to Amos, a
reasonable juror could conclude that the essential nature of the
transaction was Amos giving up ownership of Amos & Co. for W-2
employment.
The Court also observes that it is difficult to
conclude that Amos’s financial condition is worse due to the
transfer, particularly
in light of his Aflac salary
uncertain value of Amos & Co.
and the
For all of these reasons, the
FDIC fails to show that the transfer of Amos & Co. is voidable
as a matter of law.
B.
Cash Transfers
The FDIC also seeks to void two cash transfers from Amos to
his
wife’s
genuine
individual
factual
bank
disputes
exist
precluding summary judgment.
account
that
Amos
and
his
account.
The
regarding
Court
this
finds
that
claim,
thus
One of the transfers was from an
wife
held
jointly.
Therefore,
a
factual dispute exists as to whether this transfer would be
deemed a transfer of assets from Amos to his wife.
It is
undisputed that the account was originally a joint account.
And
Amos states that he and his wife instructed the bank to take her
5
name off of the account and transfer the funds from the joint
account to her personal account at the same time.
Decl. ¶ 3.
See Amos
Thus, a reasonable juror could conclude that the
transfer was a division of their mutual funds and not a transfer
of Amos’s assets to his wife.2
Additionally, genuine factual disputes exist as to whether
Amos received reasonably equivalent value for transferring at
least some of the funds in question.
received
reasonably
equivalent
value
Amos contends that he
for
both
cash
transfers
because his wife used the money to pay their mutual household
expenses.
promise
Under GUVTA, “[V]alue does not include an unperformed
made
otherwise
than
in
the
ordinary
course
of
the
promisor's business to furnish support to the debtor or another
person.”
O.C.G.A. § 18-2-73(a).
But several courts have found
that the regular payment of mutual household expenses does not
fall under this exclusion.
501
(6th
Cir.
2008)
See In re Fisher, 296 F. App’x 494,
(distinguishing
the
regular
payment
of
household expenses from a promise to provide for the debtor in
2
The FDIC offers evidence that most of the funds in the joint account
were likely contributed by Amos. See Amos Dep. 133:14-24 (testifying
that his salary is the family’s primary income).
And under Georgia
law, the funds in “[a] joint account belong[] . . . to the parties in
proportion to the net contributions by each to the sums on deposit,
unless there is clear and convincing evidence of a different intent.”
O.C.G.A. § 7-1-812; see also Lamb v. Thalimer Enter., Inc., 386 S.E.2d
912, 914 (Ga. Ct. App. 1989) (holding that O.C.G.A. § 7-1-812 should
be applied to determine how much of the funds in a joint account are
subject to garnishment). But the FDIC fails to point to any specific
calculations regarding the sources of the funds in the joint account.
6
the future); United States v. Goforth, 465 F.3d 730, 735-36 (6th
Cir.
2006)
(holding
that
the
payment
of
regular
household
expenses is reasonably equivalent value and noting that this
holding is consistent with the “greater weight of authority”);
see also Post-Confirmation Comm. for Small Loans, Inc., 2016 WL
1316767,
at
*6-7
(interpreting
11
U.S.C.
§ 550).
But
see
Carneal v. Leighton, 237 F. Supp. 2d 104, 110 (D. Me. 2002)
(relying on a case holding that a son’s promise to provide for
his mother did not confer reasonably equivalent value on his
father
to
hold
that
the
defendant’s
wife’s
payments
for
household expenses and the support of their children was not
reasonably equivalent value under Maine law).
Evidence exists in the present record that the transferred
funds were used primarily for mutual household expenses.
Amos Feb. 2017 Dep. 17:1-16; see also Amos Decl. ¶ 4.
See J.
Thus, a
reasonable juror could conclude that Amos transferred at least
some of the funds to his wife as part of the ordinary course of
their marriage to pay their mutual living expenses.
The Court
declines at this time to find as a matter of law that Amos did
not
receive
circumstances.
reasonably
equivalent
value
under
these
See Goforth, 465 F.3d at 736.
The FDIC argues that not all of the transferred funds were
used
to
pay
mutual
household
expenses.
But
it
fails
to
establish as a matter of law the amount of funds that were not
7
used
to
pay
mutual
household
expenses.
It
has
presented
evidence that a substantial portion of the funds were used to
make a down payment on a house.
But there are factual disputes
as to whether all of the money used to purchase the house was
transferred from Amos to his wife.
See J. Amos Feb. 2017 Dep.
18:2-18 (stating that she could not indicate whether all of the
funds came from transferred funds).
point
to
evidence
regarding
the
The FDIC also failed to
Amoses’
usual
household
expenses, how all of the transferred funds were specifically
spent,
and/or
how
the
challenged
transfers
ordinary transfers between the Amoses.
differed
from
Without any evidence
regarding how much of the transferred funds went to pay ordinary
household expenses, the Court cannot find that any particular
amount of the transferred funds is voidable as a matter of law.
Based on the current record, summary judgment is not appropriate
on the FDIC’s claim to void the cash transfers.
C.
Lien Subordination
Amos is involved in several entities that own investment
properties.
One of those entities borrowed money from a bank to
fund one of the properties.
As part of that transaction, the
bank obtained a mortgage lien on the property to secure the
loan.
Subsequently,
Investments, Inc.”
Note,
ECF
No.
that
mortgage
was
transferred
to
“WLA
Assignment of Mortgage and Endorsement of
51-17
at
3.
It
8
is
undisputed
that
“WLA
Investments, Inc.” is not a legal entity.
the
assignment
of
the
mortgage
should
Amos contends that
have
been
to
Investments, LLC, which is owned by Amos and his wife.
Dep. 153:1-3, 162:3-5.
See id. at
Amos claims that the balance on the mortgage was
zero when WLA Investments acquired it.
In
Amos
It is unclear if there is, or ever was,
any money owed to WLA Investments on this mortgage.
160:15-161:5.
WLA
September
2016,
an
entity
Id.
owned
by
Amos’s
wife
but
controlled by Amos granted CB&T a lien against the investment
property that was the subject of WLA Investments’ lien to secure
a debt owed to CB&T by another Amos entity.
Id. at 163:5-16.
As
listed
part
of
this
transaction,
an
entity
as
“WLA
Investments, LLC, a/k/a WLA Investments, Inc.” subordinated its
mortgage on the property to the CB&T lien.
167:12.
Id. at 166:16-
It is unclear if WLA Investments received anything in
exchange for the subordination.
Id. at 167:9-12.
The FDIC maintains that this lien subordination must be
voided as a matter of law.
The Court finds that genuine factual
disputes exist to preclude summary judgment.
The FDIC’s claim
to void the lien subordination is premised on its contention
that WLA Investments, Inc. is not a legal entity and is simply
the alter ego of Amos.
But Amos points to evidence that WLA
Investments, Inc. is a misnomer for “WLA Investments, LLC,” an
entity owned by Amos and his wife.
9
See Amos Dep.
166:16-
167:12.
Thus, the present record does not support a finding
that WLA Investments, Inc. is Amos’s alter-ego as a matter of
law.
Additionally, even if WLA Investments is Amos’s alter ego,
the present record does not support the conclusion that as a
matter
of
law
WLA
Investments
did
not
receive
equivalent value for subordinating its mortgage.
reasonably
The FDIC does
not offer evidence regarding the value of the mortgage in 2016.
And Amos testified that the balance owed on the mortgage was
zero when WLA Investments acquired it.
161:5.
See Amos Dep. 160:15-
It is unclear why WLA Investments would bother acquiring
a worthless mortgage and subordinating a worthless lien to CB&T.
But with no indication of how much the mortgage is worth, the
Court
has
no
way
to
determine
if
WLA
Investments
reasonably equivalent value for subordinating it.
received
Thus, the
Court cannot find based on the present record that the lien
subordination is voidable as a matter of law.
II.
Motion to Modify the Consent Order in 4:16-CV-284
On October
27, 2016, the Court entered a Consent Order
regarding the FDIC’s motion for a preliminary injunction in this
case.
Consent
See Consent Order Granting Prelim. Inj., ECF No. 17.
Order
enjoins
Amos,
Jenifer
Amos,
WLA
The
Investments,
Paladin, and Amos & Co. from dissipating assets other than as
permitted in the Order.
The FDIC asks the Court to modify the
10
Consent Order in two ways: (1) prescribe a budget for Amos &
Co.; and (2) order that funds that the FDIC garnished in state
court be deposited in this Court’s registry.
Regarding Amos & Co.’s budget, the Consent Order enjoins
Amos & Co. from dissipating or spending any of its assets “other
than
to
pay
accordance
ordinary
with
the
business
budget
expenses
attached
Consent Order Granting Prelim. Inj. 4.
of
Amos
hereto
as
&
Co.
Exhibit
in
C.”
The Amos & Co. budget
lists three categories of permitted expenses—car payments, life
insurance
payments,
and
taxes.
See
Consent
Order
Granting
Prelim. Inj. Ex. C, Amos & Co. Budget, ECF No. 17 at 14.
But it
does not provide an amount of money that Amos & Co. may spend on
each category.
Apparently, the parties anticipated working out
the amount after the Consent Order was entered and failed to do
so.
See id. (“Reasonable and necessary details regarding the
foregoing
monthly
expenses
to
be
provided
to
Plaintiff
by
Defendants by close of business October 28, 2016.”).
Since the entry of the Consent Order, the FDIC has received
monthly reports of Amos & Co.’s expenses.
In support of its
motion to modify, the FDIC argues that Amos & Co.’s expenses
currently exceed its commission income.
It thus concludes that
Amos & Co.’s assets will soon be depleted, irreparably harming
the FDIC’s ability to collect its judgments against Amos.
11
Based on the present record, it is not entirely clear that
the FDIC’s concerns are well founded.
It appears that Amos &
Co. has assets in addition to the monthly premium income.
But
the Court is not prepared today to make a definitive decision on
this issue.
The parties will have an opportunity to be heard on
this motion at the pretrial conference.
The Court is also skeptical about whether it has authority
to
direct
that
garnishment
should
action
present
pretrial
the
garnished
be
the
conference
funds
transferred
Court
to
to
with
legal
support
this
held
this
in
a
state
Court.
authority
Court’s
court
The
prior
FDIC
to
jurisdiction
the
to
enter such an order and exercise control of those funds.
III. Motion for Summary Judgment in 4:16-MC-4
The FDIC filed a garnishment action against Aflac as the
sponsor of Amos’s Aflac Incorporated Market Director Deferred
Compensation Plan (“the Plan”).
Aflac has taken the position
that the funds credited to Amos’s Plan account are not subject
to garnishment.
See Aflac’s Answer, ECF No. 8.
The FDIC filed
a motion for summary judgment, arguing that it is entitled to
garnish the credit to Amos’s Plan account now (ECF No. 10).
As part of his employment with Aflac, Amos is enrolled in
the
Plan.
“[T]he
nonqualified
designated
Plan
deferred
employees
is
intended
compensation
who
are
within
12
to
plan
a
be
an
unfunded,
covering
select
group
certain
of
key
management or highly compensated employees.”
Amos Decl. Ex. 1,
First Am. to the Aflac Incorporated Market Director Deferred
Compensation Plan ¶ 4, ECF No. 16-1 at 4 (“Plan Am.”).
The Plan
allows Amos to elect to defer receiving part of his compensation
until
a
designated
date
or
upon
his
separation
from
Aflac.
Aflac Incorporated Market Director Deferred Compensation Plan
¶ 5.2, ECF No. 10-3 at 27 (“Plan”); Plan Am. ¶¶ 8-10.
also makes contributions to the Plan.
Aflac
Quarterly Statement, ECF
No. 10-3 at 45.
The Plan is unfunded, meaning that the money credited to
Amos’s account is purely a bookkeeping record.
Plan ¶ 3.1(b).
Aflac maintains a Rabbi Trust with money that it will use to pay
out
accounts
if
participating
employees
entitled to funds in their accounts.
leave
Aflac
or
are
The Plan states, “The
right of a Participant or his Beneficiary to receive payments
under
the
Plan
transferred,
may
pledged,
not
be
anticipated,
encumbered,
attached
alienated,
or
sold,
garnished
by
creditors of such Participant or Beneficiary, except [in certain
circumstances not applicable here].”
Plan ¶ 10.7.
Defendants argue that the Plan account is not subject to
garnishment because: (1) the funds are not yet owed to Amos; and
(2) the
Plan
garnishment.
explicitly
provides
that
it
is
not
subject
to
The Court must first determine whether Georgia law
13
provides
for
garnishment
of
the
funds
credited
to
the
Plan
account before these funds are owed to Amos.
Generally, “[a]ll obligations owed by the garnishee to the
defendant” and “[a]ll money or other property of the defendant
in
the
possession
or
control
of
the
garnishee”
garnishment period are subject to garnishment.
4(a) & (b).
during
the
O.C.G.A. § 18-4-
Under a plain reading of this text,
a strong
argument exists that the funds in Amos’s Plan account are not
subject to garnishment at this time because Aflac did not owe
Amos the funds or hold the funds specifically for Amos during
the garnishment period.
Such a conclusion is consistent with
Georgia’s general rule that:
The rights of a garnishing creditor rise no higher
than those of the defendant [debtor]. What one cannot
recover himself cannot be recovered by garnishment
against him. . . . The creditor may stand in his
debtor's shoes by means of garnishment, but he gains
no additional privileges.
First Nat. Bank of Atlanta v. Sinkler, 317 S.E.2d 897, 900 (Ga.
Ct. App. 1984) (quoting Summer v. Allison, 193 S.E.2d 177, 184
(Ga. Ct. App. 1972)).
The FDIC does not contend that Amos is currently owed any
payment from the Plan account.
Nevertheless, the FDIC argues
that the express exclusion of deferred compensation plans from
an exemption in the Georgia garnishment statute indicates that
the
funds
in
the
Plan
account
14
are
subject
to
garnishment,
regardless of whether the funds are presently owed to Amos.
O.C.G.A. § 18-4-6 provides:
Funds or benefits from an individual retirement
account or from a pension or retirement program shall
be exempt from the process of garnishment until paid
or otherwise distributed to a member of such program
or beneficiary thereof.
Funds in an unfunded plan maintained by an employer
primarily for the purpose of providing deferred
compensation for a select group of management or
highly compensated employees shall not be exempt from
the process of garnishment.
O.C.G.A.
§
18-4-6(a)(2)
distinction
between
&
(3).
The
retirement
FDIC
reasons
benefits
and
that
the
deferred
compensation plans would be meaningless if the Court does not
allow garnishment of the funds in Amos’s Plan account before the
funds are owed to Amos.
The FDIC’s argument does not consider the following.
exemption
provides
that
garnishment
“until
defendant.
O.C.G.A.
means
a
that
retirement
paid
or
otherwise
§ 18-4-6(a)(2)
creditor
benefits
cannot
are
distributed”
(emphasis
garnish
exempt
to
added).
retirement
The
from
the
This
benefits
directly from a defendant’s employer, even if the funds are owed
to
the
defendant—the
funds
must
literally
pass
through
defendant’s hands before they are subject to garnishment.
the
See
Davis v. Davis, 288 S.E.2d 748, 749 (Ga. Ct. App. 1982) (“‘Paid
or
otherwise
transferred’
in
[the
former
version
of
this
provision] means exactly what it says; if the legislature had
15
intended the statute to mean ‘payable’ or ‘transferable,’ it
would have used those words.”).
The statute excludes funds in a
deferred compensation plan from this exemption, meaning that if
and when the funds in Amos’s Plan account are owed to Amos, the
FDIC may garnish these funds directly from Aflac.
As noted
above, the FDIC makes no argument that the funds are owed to
Amos at this time.
Thus, a strong argument exists that the
FDIC is not entitled to summary judgment on this issue.
Because a decision on this issue may have ramifications
beyond this specific garnishment action, the Court finds that
oral
argument
issues
a
final
on
this
motion
ruling.
is
necessary
Accordingly,
the
before
parties
the
Court
should
be
prepared to address this motion at the pretrial conference.
CONCLUSION
As
summary
explained
in
today’s
Order,
judgment
in
4:16-CV-284
the
seeking
FDIC’s
to
motion
void
for
certain
transactions as a matter of law under GUVTA (ECF No. 51) is
denied.
The Court defers ruling on the FDIC’s motion to modify
the Consent Order in 4:16-CV-284 (ECF No. 50) and defers ruling
on the FDIC’s motion for summary judgment in the garnishment
action, 4:16-MC-4 (ECF No. 10).
IT IS SO ORDERED, this 28th day of July, 2017.
S/Clay D. Land
CLAY D. LAND
CHIEF U.S. DISTRICT COURT JUDGE
16
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