FEDERAL DEPOSIT INSURANCE CORPORATION v. AMOS et al
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
FEDERAL DEPOSIT INSURANCE
CORPORATION, as receiver for
GULFSOUTH PRIVATE BANK,
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,
CASE NOS. 4:16-CV-284,
O R D E R
The Federal Deposit Insurance Corporation (“FDIC”) holds
After registering the judgments in this Court, see case nos.
action, 4:16-CV-284, to
collect on the judgments and to
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
Today’s Order addresses motions in both actions. William Amos is a
Defendant in both cases. His wife, Jenifer Amos, and WLA Investments,
three transfers by Amos to his wife and the subordination of the
lien, claiming that those transactions should be voided as a
Transactions Act (“GUVTA”), O.C.G.A. § 18-2-70 et seq. (ECF No.
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
credits that Amos’s employer, Aflac, Inc., has made to Amos’s
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.
Consent Order in 4:16-CV-284 (ECF No. 50) and defers ruling on
action, 4:16-MC-4 (ECF No. 10).
Inc. are Defendants in 4:16-CV-284.
America, LLC and Aflac, Inc. are Defendants in 4:16-MC-4.
Summary Judgment Motion in 4:16-CV-284 to Void Transactions
Transfer of Amos & Co.
ownership in William L. Amos & Company (“Amos & Co.”) to his
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.
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.
Viewing the evidence in the light
transfer conferred an indirect economic benefit on 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
The FDIC offers evidence of Amos & Co’s assets to
employment with Aflac was not “reasonably equivalent” to the
value of Amos & Co.
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.
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
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.
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.”
(reversing the trial court’s grant of summary judgment because
the evidence showed that the transfer of the property was “at
property and therefore was not an antecedent debt under O.C.G.A.
Moreover, some courts have held that a future
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]
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.
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
The Court also observes that it is difficult to
conclude that Amos’s financial condition is worse due to the
in light of his Aflac salary
uncertain value of Amos & Co.
For all of these reasons, the
FDIC fails to show that the transfer of Amos & Co. is voidable
as a matter of law.
The FDIC also seeks to void two cash transfers from Amos to
precluding summary judgment.
One of the transfers was from an
factual dispute exists as to whether this transfer would be
deemed a transfer of assets from Amos to his wife.
undisputed that the account was originally a joint account.
Amos states that he and his wife instructed the bank to take her
name off of the account and transfer the funds from the joint
account to her personal account at the same time.
Decl. ¶ 3.
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.
Amos contends that he
because his wife used the money to pay their mutual household
Under GUVTA, “[V]alue does not include an unperformed
promisor's business to furnish support to the debtor or another
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.
See In re Fisher, 296 F. App’x 494,
household expenses from a promise to provide for the debtor in
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.
the future); United States v. Goforth, 465 F.3d 730, 735-36 (6th
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
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
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.
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.
declines at this time to find as a matter of law that Amos did
See Goforth, 465 F.3d at 736.
The FDIC argues that not all of the transferred funds were
establish as a matter of law the amount of funds that were not
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).
The FDIC also failed to
expenses, how all of the transferred funds were specifically
ordinary transfers between the Amoses.
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.
Amos is involved in several entities that own investment
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
Assignment of Mortgage and Endorsement of
Investments, Inc.” is not a legal entity.
Amos contends that
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.
It is unclear if there is, or ever was,
any money owed to WLA Investments on this mortgage.
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.
Investments, LLC, a/k/a WLA Investments, Inc.” subordinated its
mortgage on the property to the CB&T lien.
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.
See Amos Dep.
Thus, the present record does not support a finding
that WLA Investments, Inc. is Amos’s alter-ego as a matter of
Additionally, even if WLA Investments is Amos’s alter ego,
the present record does not support the conclusion that as a
equivalent value for subordinating its mortgage.
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.
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
reasonably equivalent value for subordinating it.
Court cannot find based on the present record that the lien
subordination is voidable as a matter of law.
Motion to Modify the Consent Order in 4:16-CV-284
27, 2016, the Court entered a Consent Order
regarding the FDIC’s motion for a preliminary injunction in this
See Consent Order Granting Prelim. Inj., ECF No. 17.
Paladin, and Amos & Co. from dissipating assets other than as
permitted in the Order.
The FDIC asks the Court to modify the
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
Consent Order Granting Prelim. Inj. 4.
The Amos & Co. budget
lists three categories of permitted expenses—car payments, life
Prelim. Inj. Ex. C, Amos & Co. Budget, ECF No. 17 at 14.
does not provide an amount of money that Amos & Co. may spend on
Apparently, the parties anticipated working out
the amount after the Consent Order was entered and failed to do
See id. (“Reasonable and necessary details regarding the
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.
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.
the Court is not prepared today to make a definitive decision on
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
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
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
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.”).
allows Amos to elect to defer receiving part of his compensation
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.
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
entitled to funds in their accounts.
The Plan states, “The
right of a Participant or his Beneficiary to receive payments
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
The Court must first determine whether Georgia law
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
garnishment period are subject to garnishment.
4(a) & (b).
O.C.G.A. § 18-4-
Under a plain reading of this text,
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
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.
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.
directly from a defendant’s employer, even if the funds are owed
defendant’s hands before they are subject to garnishment.
Davis v. Davis, 288 S.E.2d 748, 749 (Ga. Ct. App. 1982) (“‘Paid
provision] means exactly what it says; if the legislature had
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.
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
prepared to address this motion at the pretrial conference.
transactions as a matter of law under GUVTA (ECF No. 51) is
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
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?