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RREF SNV-FL SSL, LLC v. Shamrock Storage, LLC

Florida Court of Appeals, First District

June 28, 2018

RREF SNV-FL SSL, LLC, Appellant,
v.
Shamrock Storage, LLC, Richard McAlpin, Little Sabine Investment Group, Inc., and Jerri M. McAlpin, Appellees.

         Not final until disposition of any timely and authorized motion under Fla. R. App. P. 9.330 or 9.331.

          On appeal from the Circuit Court for Escambia County. J. Scott Duncan, Judge.

          Michael Anthony Shaw and Stephen P. Drobny of Jones Walker LLP, Miami, for Appellant.

          Robert O. Beasley and Phillip A. Pugh of Litvak, Beasley, Wilson & Ball, LLP, Pensacola, for Appellees.

          PER CURIAM.

         RREF SNV-FL SSL, LLC, appeals an order denying its motion to avoid a fraudulent transfer brought pursuant to section 56.29, Florida Statutes (2013). We affirm.

         I. Background

         This case comes to us for a second time. See RREF SNV-FL SSL, LLC v. Shamrock Storage, LLC, 178 So.3d 90 (Fla. 1st DCA 2015). We detailed the parties' dispute and the procedural background in our earlier decision, id. at 90-91, so we offer only the abridged version here: Richard McAlpin owned a company that owned a Travelodge motel, and he owned a second company (appellee Shamrock Storage) that operated storage units. Shamrock Storage got a bank loan that McAlpin personally guaranteed, and the company defaulted. A few months before the loan was set to mature, McAlpin gave his wife his motel-company stock, then receiving nothing in return. Id. Ultimately the bank got a judgment against McAlpin on the Shamrock loan, and it assigned that judgment to RREF SNV-FL SSL, LLC (RREF, for short), the appellant here.

         RREF sought to avoid McAlpin's transfer of the stock. RREF contended this was a fraudulent transfer, and that the motel-company stock should be available to help satisfy its judgment against McAlpin. RREF alleged that the transfer was fraudulent both because there was an actual intent to defraud, and separately because there was constructive fraud. The trial court denied relief, concluding that it was "not satisfied that the transfer of Mr. McAlpin's [stock] was made to hinder creditors." Id. (quoting order).

         RREF appealed, and we reversed. Id. We concluded that the trial court wrongly placed the burden of proof on RREF. Id. at 91. We explained that it was the appellees' burden to demonstrate the transfer was not fraudulent. Id. ("In situations like this one, the presumption in § 56.29(6) is that a spousal transfer should be voided unless the defendant can prove that it did not make the transfer to delay, hinder, or defraud creditors. . . ."); see also § 56.29(6)(a), Fla. Stat. (2013);[*] Morton v. Cord Realty, Inc., 677 So.2d 1322, 1324 (Fla. 4th DCA 1996) (noting that § 56.29 "shifts the burden to the defendant in proceedings supplementary to prove that a transfer made within one year before service of process is not fraudulent as to creditors").

         On remand, and based on this court's earlier decision, the parties agreed the appellees had the burden to disprove both constructive and actual fraud. The court conducted another hearing on the matter, but for whatever reason, the parties agreed neither side would present additional evidence. So the court-now with a different presiding judge-looked at the same record it already had. After hearing argument, the court entered an order again denying RREF's request. This time, the court found that the appellees proved McAlpin's stock transfer was not fraudulent. Once again, RREF appeals.

         II. Analysis

         Under section 726.106, a debtor's transfer is fraudulent as to a creditor if (a) the creditor's claim arose before the transfer, (b) the debtor was insolvent at the time of the transfer or became insolvent because of the transfer, and (c) the debtor made the transfer without receiving reasonably equivalent value in exchange for the transfer. § 726.106(1), Fla. Stat. (2013). On remand, the parties agreed that the appellees needed to disprove at least one of these three elements.

         A. Whether RREF's claim arose ...


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