Res-Ga Hightower, LLC v. Nasser Vossough Golshani

FOURTH DIVISION
BARNES, P. J.,
ANDREWS, P. J., and MCMILLIAN, J.
NOTICE: Motions for reconsideration must be
physically received in our clerk’s office within ten
days of the date of decision to be deemed timely filed.
http://www.gaappeals.us/rules
October 16, 2015
In the Court of Appeals of Georgia
A15A0987. RES-GA HIGHTOWER, LLC v. NASSER
VOSSOUGH GOLSHANI.
MCMILLIAN, Judge.
This appeal presents a single legal issue: Under OCGA § 44-12-24 and the
Georgia Supreme Court’s decision in Security Feed & Seed Company of Thomasville,
Inc. v. NeSmith, 213 Ga. 783 (102 SE2d 37) (1958), does an assignee to a debt have
standing to assert a claim that the debtor fraudulently conveyed property in violation
of the Georgia Uniform Fraudulent Transfers Act, OCGA § 18-2-70 et seq. (the
“UFTA”)?1
1
We will refer to the operative provisions of the UFTA as they existed at the
time the complaint was filed, while noting that the UFTA has since been amended in
2015 and is now called the Uniform Voidable Transactions Act (“UVTA”). See Ga.
L. 2015, p. 996, § 4A-1 (effective July 1, 2015).
The facts are largely undisputed.2 On or about October 25, 2006, Rockdale
Investment Partners, LLC borrowed funds from Omni National Bank (the “Bank”),
which was evidenced by a promissory note (the “Note”). Appellee Nasser Golshani
personally guaranteed the Note. Two years later, Rockdale Investment Partners and
Golshani defaulted on their obligations to the Bank.
Some months later, the Bank was closed by the Georgia Department of
Banking, and the Federal Deposit Insurance Corporation (“FDIC”) was appointed as
the receiver for the Bank. Effective February 9, 2010, the FDIC, as receiver for the
Bank, assigned all of its rights, title, and interest in the Rockdale Investment Partners
and Golshani debt to Multibank 2009-1 RES-ADC Venture, LLC (“Mutibank”).
Later, on August 31, 2010, Multibank assigned its rights, title, and interest in the
Rockdale and Golshani debt to Appellant RES-GA Hightower, LLC (“RES-GA”). On
March 29, 2013, RES-GA obtained a judgment against Golshani in the amount of the
Note.
In the meantime, on April 20, 2009, which was after Golshani had defaulted
on the Note but before there was a judgment entered against him, Golshani conveyed
2
“This Court reviews the grant of summary judgment de novo, viewing the
evidence in the light most favorable to the nonmovant.” Godwin v. Mizpah Farms,
LLLP, 330 Ga. App. 31, 31 (766 SE2d 497) (2014).
2
two parcels of real property to Simin Khani3 by quitclaim deed and another property
to his daughter, Samira Golshani,4 also by quitclaim deed. A few months later, these
properties were conveyed again – this time to Golshani’s mother.
RES-GA filed a lawsuit in Fulton County Superior Court against Golshani,
Simin Khani, Golshani’s daughter, and Golshani’s mother, asserting that the property
transfers were done to defraud Golshani’s creditors and seeking to set aside the
conveyances under the UFTA. After Golshani’s daughter submitted an affidavit
averring that she had not been in contact with her father or grandmother in several
years, that she was unaware of the property deeded to her, and that her signature on
the quitclaim deed to her grandmother was forged, Golshani’s daughter was
dismissed from the lawsuit.
3
Khani was apparently engaged to Golshani at the time and according to
Golshani, the conveyances were done in connection with the Islamic tradition of
“mahar” or “mahr,” a dowry paid by the groom to the bride at the time of marriage.
See Lindsey E. Blenkhorn, Islamic Marriage Contracts in American Courts:
Interpreting Mahr Agreements as Prenuptials and Their Effect on Muslim Women,
76 S. CAL. L. REV. 189, 198-200 (2002).
4
In verified responses to interrogatories, Golshani stated that he was engaged
to Samira Golshani from late 2006 through 2008 and that he conveyed the property
to her also in accordance with the tradition of mahar. However, Samira Golshani has
denied under oath that she has ever been engaged to Golshani, who is her father.
3
Golshani moved for summary judgment, asserting among other things, that
RES-GA, as the second assignee of the Bank, had no standing to assert a fraudulent
transfer claim against Golshani because a fraudulent transfer claim cannot be
assigned under Georgia law. The trial court granted summary judgment to Golshani,
and this appeal followed.
1. In related enumerations of error, RES-GA asserts that (1) under the UFTA,
a creditor who obtained debt through an assignment has standing to assert a
fraudulent transfer claim; (2) NeSmith no longer controls after the enactment of the
UFTA; (3) a fraudulent transfer claim is a property right and OCGA § 44-14-24 does
not bar assignment of property claims; and (4) denying standing to an assignee
contravenes the public policy of this State in favor of creditors’ rights to satisfy valid
claims.
(a) Under the UFTA, a creditor can seek to set aside transfers of property by
the debtor, “if the debtor made the transfer or incurred the obligation: (1) With actual
intent to hinder, delay, or defraud any creditor of the debtor.” OCGA § 18-2-74 (a)
(1) (2014). In determining intent, consideration is given to an open-ended set of
factors listed in OCGA § 18-2-74 (b) (1), which are also commonly called the
“badges of fraud.” See Target Corp. v. Amerson, 326 Ga. App. 734, 737 (1) (755
4
SE2d 333) (2014). A “creditor” is broadly defined as “a person who has a claim,” a
“debtor” means a “person who is liable on a claim,” and a “claim” is “a right to
payment, whether or not the right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured, or unsecured.” OCGA § 18-2-71 (3) , (4) & (6). Accordingly, under the plain
terms of the UFTA, an assignee to debt ordinarily would qualify as a “creditor” who
has a “claim,” but nothing in the UFTA specifically addresses assignments of such
claims.
In Georgia, a separate statute delineates certain claims that are not assignable:
Except for those situations governed by Code Sections 11-2-210 and 11-
9-406, a right of action is assignable if it involves, directly or indirectly,
a right of property. A right of action for personal torts, for legal
malpractice, or for injuries arising from fraud to the assignor may not be
assigned.
OCGA § 44-12-24. Here, the issue is whether a claim under the UFTA to set aside a
property transfer as defrauding creditors is a “right of action . . . arising from fraud”
such that it is not assignable. Id. In deciding this question, the trial court properly
relied on NeSmith, in which our Supreme Court, after citing and quoting a prior
version of this non-assignment statute, held:
5
where, as here, the purchaser or assignee of accounts receivable brings
an action to recover on an open account owing by the defendant debtor
to the assignor and assigned to the plaintiff, and in the same action seeks
equitable relief to set aside an alleged fraudulent deed to hinder, delay,
and defraud his creditors, made by the debtor to his wife prior to the date
on which the accounts receivable were assigned to the plaintiff, and also
a subsequent loan deed made by the wife to counsel of the defendant to
secure an indebtedness due by her to them, the trial judge did not err in
sustaining the general demurrer of the defendants to so much of the
petition as sought such equitable relief. . . .
213 Ga. at 784 (1). Thus, it seems clear that prior to the enactment of the UFTA,5 an
assignee of debt was precluded from setting aside a deed in equity even if it was
claimed that the property was conveyed to hinder and defraud creditors.
5
NeSmith was issued in 1958, and the UFTA was first enacted in 2002. See Ga.
L. 2002, p. 141, § 3. Previously, fraudulent transfers were governed by the Code of
1933, § 28-201, which provided in pertinent part, that
The following acts by debtors shall be fraudulent in law against
creditors and others, and as to them null and void, viz: . . . (2) Every
conveyance of real or personal estate, by writing or otherwise, and every
bond, suit, judgment and execution, or contract of any description, had
or made with intention to delay or defraud creditors, and such intention
known to the party taking.
This provision was first codified in the Act of 1818, and was in effect at the time that
NeSmith was issued although not specifically cited in NeSmith.
6
The question then becomes whether NeSmith has been superseded by the
UFTA, and we find that the plain language of the UFTA supplies the answer. Former
OCGA § 18-2-80 (a)6 provided:
Unless displaced by the provisions of this article, the principles of law
and equity, including the law merchant and the law relating to principal
and agent, estoppel, laches, fraud, misrepresentation, duress, coercion,
mistake, insolvency, or other validating or invalidating cause,
supplement its provisions.
Based on our review of the UFTA, we do not find any clear indication in its language
that displaces NeSmith’s construction of the non-assignment statute, which fraud
provisions have not been amended in any material way. See Couch v. Red Roof Inns,
Inc., 291 Ga. 359, 364 (729 SE2d 378) (2012) (“The actual canon of statutory
construction is ‘that statutes in derogation of the common law must be limited strictly
to the meaning of the language employed, and not extended beyond the plain and
explicit terms of the statute.’”) (citation and punctuation omitted). Thus, we are
constrained to hold that under NeSmith, an assignee of debt is precluded from
6
This section was re-codified at OCGA § 18-2-82 in connection with the 2015
amendments. See Ga. L. 2015, p. 996, § 4A-1.
7
pursuing a fraudulent transfer claim even though the assignee meets the definitions
of a “creditor” with a “claim” under the UFTA.7
RES-GA attempts to distinguish NeSmith on the grounds that RES-GA has a
judgment against Golshani whereas the assignee in NeSmith did not. See First State
Bank of Northwest Arkansas v. McClelland Qualified Personal Residence Trust, No.
5:14-CV-130 (MTT), 2014 WL 6801803 (II) (B) (1) (M.D. Ga. 2014) (NeSmith did
not preclude claim by creditor that had been assigned the FDIC’s interest in loans and
the related judgment against defendants).8 But NeSmith did not turn on whether the
assignee had obtained a judgment; instead, the Court, in explaining its reasoning,
relied on the non-assignment statute and Marshall v. Means, 12 Ga. 61 (1852) for the
proposition that “‘[a] bare right to file a bill (in equity) or maintain a suit is not
7
Although RES-GA asserts that denying standing to an assignee undermines
the public policy of this State in favor of creditors’ rights, “[w]hen we consider the
meaning of a statute, we look first to the text of the statute, and if the text is clear and
unambiguous, we look no further, attributing to the statute its plain meaning.”
(Citation and punctuation omitted.) Carter v. Progressive Mountain Ins., 295 Ga.
487, 489-490 (761 SE2d 261) (2014). To the extent such public policy exists, it
cannot contravene the plain meaning of the text of the statute.
8
As a state appellate court, we are not bound by the decisions of the federal
district courts. See Gresham v. Harris, 329 Ga. App. 465, 467 (765 SE2d 400)
(2014). To the contrary and as a general matter, this Court adopts such federal
decisions only when they are not in conflict with our own legal precedent. See Russell
v. Parkford Mgmt. Co., 235 Ga. App. 81, 82 (2) (508 SE2d 454) (1998).
8
assignable.’” NeSmith, 213 Ga. at 784 (1). Thus, the key inquiry for the Court
appeared to be the equitable nature of the claim and its basis in fraud, rather than the
source of the creditor’s rights vis-à-vis the debtor, and we do not find it material that
RES-GA, as an assignee, subsequently obtained a judgment against Golshani.
(b) Our conclusion is further supported by the 2015 amendments to the UFTA.
The term “creditor” is now defined as “a person who has a claim, regardless of when
the person acquired the claim, together with any successors or assigns.” OCGA 18-
2-71 (4) (additional language italicized). And an additional section (c) was added to
OCGA § 18-2-74 in the 2015 amendment, providing that “[i]f a creditor is a successor
or assignee, a right of action under subsection (a) of this Code section is
automatically assigned to such successor or assignee.” We note that these additions
were not circulated by the Uniform Law Commission in their 2014 version of the
Uniform Voidable Transactions Act and thus appear to be specific to Georgia.9 And
the General Assembly has made it clear that the amendments only apply to transfers
9
The Uniform Voidable Transactions Act, as amended in 2014 by the Uniform
L a w C o m m i s s i o n , c a n b e f o u n d a t
http://www.uniformlaws.org/shared/docs/Fraudulent%20Transfer/2014_AUVTA_
Final%20Act.pdf.
9
made or obligations incurred on or after July 1, 2015 and only to a right of action
accruing after July 1, 2015. See Ga. L. 2015, p. 1029, § 7-1 (d).
“The General Assembly is conclusively presumed to know the law which they
seek to amend, revise, repeal, or modify . . . and the construction of such law by our
courts of last resort.” Jacobs v. State, 200 Ga. 440, 444 (37 SE2d 187) (1946). See
also Peachtree-Cain Co. v. McBee, 254 Ga. 91, 93 (327 SE2d 188) (1985). And “we
must presume that the legislative addition of language to the statute was intended to
make some change in the existing law.” Wausau Ins. Co. v. McLeroy, 266 Ga. 794,
796 (2) (471 SE2d 504) (1996). Given NeSmith and the addition of previously
nonexistent language in the statute, we must presume that the 2015 amendments were
intended to change the law, and since the amendments specifically allowed assignees
and successors to debt to pursue fraudulent transfer claims, it follows that under the
previous version of the UFTA, such assignments were not allowed. See Board of
Assessors of Jefferson County v. McCoy Grain Exchange, Inc., 234 Ga. App. 98, 100
(505 SE2d 832) (1998) (prior law had different meaning because additional language
in statute intended to change meaning).
RES-GA asserts that the 2015 amendments simply clarified the existing law
and urges us to apply the principle of statutory construction that
10
[i]n construing the meaning of ambiguous language in a Code section,
we must look, where possible, to the original act; the language of the
section should be construed as intending to state the previously existing
law and not to change it unless such a purpose clearly manifests itself.
Aldrich v. City of Lumber City, 273 Ga. 461, 464 (542 SE2d 102) (2001). However,
we do not find the language in the 2015 amendments to be ambiguous. Moreover, the
UFTA was silent on the issue of whether fraudulent transfer claims were assignable
and the law under NeSmith was that such claims were not assignable; thus, the
entirely new language added in 2015 cannot be considered a “clarification” of the
existing law. Nor does it appear from the language of the amendments that the
General Assembly intended that they have retroactive effect as they are to apply to
transactions and claims arising after July 1, 2015. Accordingly, we find no error in
the trial court’s grant of summary judgment to Golshani on this basis.
2. RES-GA also asserts that the federal Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 authorizes assignment of fraudulent transfer
claims and preempts OCGA § 44-12-24. However, RES-GA failed to raise this issue
in the trial court. “[A]bsent special circumstances, an appellate court need not
consider arguments raised for the first time on appeal.” Pfeiffer v. Ga. Dept. of
Transp., 275 Ga. 827, 829 (573 SE2d 389 (2002). These special circumstances
11
include “a jurisdictional challenge, a claim of sovereign immunity, a serious issue of
public policy, a change in the law, or an error that works manifest injustice.” (Citation
and punctuation omitted.) Id. at 829, n. 10. Despite RES-GA’s arguments that it
would be unfair to preclude them from pursuing a fraudulent transfer claim against
Golshani, we find no special circumstances to warrant considering this argument and
conclude that RES-GA has waived this new argument for the purpose of appeal.
Judgment affirmed. Andrews, P. J., and Barnes, P. J., concur.
12