2020 Georgia Code
Title 18 - Debtor and Creditor
Chapter 2 - Debtor and Creditor Relations
Article 4 - Uniform Voidable Transactions Act
§ 18-2-70. Short Title
This article, which was formerly known and cited as the "Uniform Fraudulent Transfers Act," shall be known and may be cited as the "Uniform Voidable Transactions Act."
(Code 1981, §18-2-70, enacted by Ga. L. 2002, p. 141, § 3; Ga. L. 2015, p. 996, § 4A-1/SB 65.)Law reviews.
- For survey article on cases in the areas of corporate, securities, partnership, and banking law for the period from June 1, 2002 through May 31, 2003, see 55 Mercer L. Rev. 55 (2003). For annual survey of law on business associations, see 62 Mercer L. Rev. 41 (2010). For annual survey on real property, see 69 Mercer L. Rev. 251 (2017). For article, "Self-Settled Asset Protection Trusts in Georgia," see 23 Ga. St. B.J. 17 (Feb. 2018). For annual survey on business associations, see 70 Mercer L. Rev. 19 (2018). For annual survey on real property law, see 70 Mercer L. Rev. 209 (2018).
Claims under former O.C.G.A.
§ 18-2-22 not extinguished. - O.C.G.A. § 18-2-22 was repealed on July 1, 2002, when Georgia enacted the Uniform Fraudulent Transfers Act (now Uniform Voidable Transactions Act), O.C.G.A. § 18-2-70 et seq., but this repeal does not extinguish causes of action that arose under former O.C.G.A. § 18-2-22 before that date. Gerschick v. Pounds, 281 Ga. App. 531, 636 S.E.2d 663 (2006), cert. denied, No. S07C0191, 2007 Ga. LEXIS 95 (Ga. 2007).
Conveyance at issue took place in September 2001 and needed to be construed under former O.C.G.A. § 18-2-22 (repealed) even though the statute was repealed when the legislature adopted the Uniform Fraudulent Transfer Act (now Uniform Voidable Transactions Act), O.C.G.A. § 18-2-70 et seq. Flatau v. Smith (In re Smith), Bankr. (Bankr. M.D. Ga. Oct. 30, 2007).Defendant did not have to be indebted to plaintiff.
- Read and considered as a whole, a jury charge was an accurate statement of the law and was authorized by the evidence in an action in which the jury was instructed that it was not necessary for a defendant to be indebted to a plaintiff at the time of a transfer for former O.C.G.A. § 18-2-22 to apply and there was evidence that an attorney made a conveyance with actual intent to defraud a future creditor, a client; moreover, the trial court fully and completely charged the law on fraudulent conveyances, including former O.C.G.A. § 18-2-22(2). Gerschick v. Pounds, 281 Ga. App. 531, 636 S.E.2d 663 (2006), cert. denied, No. S07C0191, 2007 Ga. LEXIS 95 (Ga. 2007).Aiding and abetting.
- Although Georgia courts had not yet had an opportunity to address the issue of whether there was a cause of action for aiding and abetting a fraudulent transfer when the alleged aider-abetter was not a debtor or a transferee, the instant court concluded that Georgia courts were not likely to recognize such an action; the Uniform Fraudulent Transfer Act (UFTA) (now Uniform Voidable Transactions Act), O.C.G.A. § 18-2-70 et seq., did not refer to parties other than debtors, creditors, and transferees, and further there was no language in UFTA that suggested the creation of a distinct cause of action for aiding and abetting claims against non-transferees. Hays v. Paul, Hastings, Janofsky & Walker LLP, F. Supp. 2d (N.D. Ga. Sept. 14, 2006).No-action clause.
- Claims by noteholders under the Uniform Fraudulent Transfers Act (now Uniform Voidable Transactions Act), O.C.G.A. § 18-2-70 et seq., against a corporation and the corporate directors and officers should have been dismissed by the district court because a no-action clause in trust indentures that governed the notes barred the noteholders' claims since the noteholders did not fall within any exception to the rule that no-action clauses barred fraudulent conveyance claims; the appellate court had jurisdiction to grant permission to appeal to all appellants because both prongs of 28 U.S.C. § 1292(b) had been satisfied, which was that the district court had stated the required language in the court's order and the appellants had then filed an application for interlocutory appeal within ten days of that statement. Akanthos Capital Mgmt., LLC v. CompuCredit Holdings Corp., 677 F.3d 1286 (11th Cir. 2012).Motion for summary judgment denied.
- Summary judgment motion filed by an insurer in response to a Chapter 7 trustee's complaint charging that certain premiums paid to the insurer by a debtor were fraudulent conveyances that were recoverable under 11 U.S.C. § 548 and/or under Georgia's Uniform Fraudulent Transfers Act (now Uniform Voidable Transactions Act), O.C.G.A. § 18-2-70 et seq., was denied because the case presented significant factual issues concerning the legal relationships between the debtor and the entities on behalf of which the debtor had paid the premiums and the presence of such issues foreclosed summary judgment. Coleman v. Zurich Am. Ins. Co. (In re Darrow Auto. Group, Inc.), Bankr. (Bankr. S.D. Ga. Mar. 29, 2011).
Trial court erred by denying an insurance company's motion for summary judgment on a claim that the company engaged in a conspiracy which violated the Uniform Fraudulent Transfers Act (now Uniform Voidable Transactions Act), O.C.G.A. § 18-2-70 et seq., by a conspiracy to settle a bad faith/negligence claim possessed by an estate for less than the claim's true value because the insurer was found not to have engaged in fraudulent conduct. Baker v. Huff, 323 Ga. App. 357, 747 S.E.2d 1 (2013).Motion for directed verdict properly denied.
- Attorney and a wife's motion for a directed verdict was properly denied as a party bringing a fraudulent conveyance action under former O.C.G.A. § 18-2-22 did not have to be a creditor; the circumstances and the timing of the transfer showed the attorney's intent to defraud as a quitclaim deed from the attorney to the wife was "rush recorded" two days after the attorney received a draft order for the underlying judgment, no valuable consideration was given for the transfer, and the attorney was an expert in estate planning, including the protection of assets from the claims of creditors. Gerschick v. Pounds, 281 Ga. App. 531, 636 S.E.2d 663 (2006), cert. denied, No. S07C0191, 2007 Ga. LEXIS 95 (Ga. 2007).Case improperly dismissed for failure to state a claim.
- Trial court erred in granting the defendants' motion to dismiss for failure to state a claim because it was too soon in the case to conclude, as a matter of law, that the plaintiffs could not present evidence satisfying the statutory elements of O.C.G.A. § 18-2-70 et. seq., seeking to void the transfer of assets. Lyle v. Fulcrum Loan Holdings, 354 Ga. App. 742, 841 S.E.2d 182 (2020).Transfer to avoid bankruptcy ramifications.
- Under former O.C.G.A. § 18-2-22 (repealed), a wife's motion to dismiss a claim brought by a Chapter 7 trustee to avoid a transfer made to her by a debtor husband was denied because the trustee, through the complaint and use of a quitclaim deed, provided a factual basis sufficient to state a claim including some evidence that the transfer was made for no consideration, that the transfer was voluntary, and that the wife knew of the debtor's insolvency at the time the transfer was made. Flatau v. Smith (In re Smith), Bankr. (Bankr. M.D. Ga. Oct. 30, 2007).Fraudulent transfer not predicate act under RICO.
- Trial court erred by failing to dismiss the plaintiff's claim for theft as a predicate offense under the Georgia RICO statute, O.C.G.A. § 16-14-1 et seq., because a fraudulent transfer was not an enumerated predicate offense under the Georgia RICO statute, but instead, a civil tort governed by the Uniform Voidable Transactions Act, O.C.G.A. § 18-2-70. Z-Space, Inc. v. Dantanna's CNN Center, LLC, 349 Ga. App. 248, 825 S.E.2d 628 (2019).Transfer was not fraudulent.
- When a corporation paid a dividend to a shareholder pursuant to a shareholders agreement after designating itself an S corporation, it was not a fraudulent transfer because it was not error to find that the transfer was made in exchange for reasonably equivalent value since the shareholders agreement provided the corporation with valuable benefits by virtue of its S-corporation election. Crumpton v. McGarrity (In re Northlake Foods, Inc.), F.3d (11th Cir. Apr. 16, 2013)(Unpublished).No fraud shown by developer.
- In an action brought by the purchasers of a lot seeking to cancel the developer's security deed based upon alleged fraud, the trial court properly granted summary judgment to the developer as, even if the developer knew of the sale of the lot to the purchasers, such sale did not estop the developer from the developer's claim against the lot pursuant to the developer's security deed; however, the trial court did err by denying the equitable subrogation claim asserted by the purchasers' lender since exercising subrogation did not prejudice the developer in any manner. Byers v. McGuire Props., 285 Ga. 530, 679 S.E.2d 1 (2009), overruled on other grounds by SRM Group, Inc. v. Travelers Prop. Cas. Co. of Am., 308 Ga. 404, 841 S.E.2d 729 (2020).Judgment creditor could not set aside fraudulent transfer that occurred prior to assignment of loan.
- Because of the anti-assignment statute, O.C.G.A. § 44-12-24, a judgment creditor did not have standing under the Uniform Fraudulent Transfers Act (UFTA), O.C.G.A. § 18-2-70 et seq., to contest transfers by the debtor that occurred prior to assignment of the debtor's loan to the creditor. Merrill Ranch Props., LLC v. Austell, 336 Ga. App. 722, 784 S.E.2d 125 (2016).No asset of debtor involved.
- Judgment voiding a transfer of property as fraudulent under the Uniform Fraudulent Transfers Act (UFTA) (now Uniform Voidable Transactions Act), O.C.G.A. § 18-2-70 et seq., was reversed because, despite not being recorded, the 2002 security deed executed in favor of a former sister-in-law, pledging the property as collateral for a promissory note, gave the former sister-in-law, as one of the defendant's creditors, priority over the plaintiff's judgment, such that the property could not be characterized as the defendant's asset under the UFTA. Wallin v. Wallin, 341 Ga. App. 440, 800 S.E.2d 617 (2017).No property transfer involved.
- Trial court correctly granted summary judgment in favor of the defendants as to the plaintiff's fraud counts pursuant to the Uniform Fraudulent Transfers Act (UFTA), O.C.G.A. § 18-2-70 et seq., because the UFTA explicitly requires a transfer of an asset, which is defined as certain forms of property and neither defending entity owned property in that classic sense, thus, the UFTA was not the appropriate vehicle for the plaintiff's recovery. Dan J. Sheehan Co. v. Fairlawn on Jones Condo. Ass'n, Inc., 334 Ga. App. 595, 780 S.E.2d 35 (2015), cert. denied, No. S16C0473, 2016 Ga. LEXIS 217 (Ga. 2016).Fraudulent conveyance claim not stated.
- Administrator failed to state a claim under the Georgia Uniform Fraudulent Transfer Act, now Uniform Voidable Transactions Act, O.C.G.A. § 18-2-70 et seq., against group three when the administrator alleged that defendant one held title to the property when the suit was filed, and claimed that the administrator was entitled to recover the property from defendant one and to set aside the lien to defendant two; the administrator acknowledged that defendants three, four, and five denied any knowledge of the administrator's lien on the property when they purchased the property, and that therefore no one disclosed the lien to the closing attorney or defendants three, four, and five, despite certain parties' knowledge and affirmative duty to disclose the existence of the writ as constituting a lien on the property. Huggins v. Powell, 315 Ga. App. 599, 726 S.E.2d 730 (2012).Choice of law.
- In a fraudulent conveyance action transferred from the Northern District of Texas, Georgia's former fraudulent conveyance law, former O.C.G.A. § 18-2-22, which was in force at the time the actions in question occurred, was the applicable state law under Texas choice of law principles because Georgia had the most significant relationship to the issues raised in the lawsuit. MC Asset Recovery v. Southern Co., F. Supp. 2d (N.D. Ga. Apr. 1, 2008).Damages.
- Georgia law allowing the recovery of general and punitive damages for fraudulent conveyances survived the enactment of Georgia's Uniform Fraudulent Transfers Act, O.C.G.A. § 18-2-70 et seq. Interfinancial Midtown, Inc. v. Choate Constr. Co., 343 Ga. App. 793, 806 S.E.2d 255 (2017).
Cited in Bishop v. Patton, 288 Ga. 600, 706 S.E.2d 634 (2011).
Am. Jur. 2d.
- 37A Am. Jur. 2d, Fraudulent Conveyances and Transfers, § 2.