Georgia Code, Volume 16, 2012 Supplement

2012·12.3 MB·English

by  State of Georgia

OFFICIAL CODE OF GEORGIA
ANNOTATED
2012 Supplement
Including Acts ofthe 2012 Regular Session ofthe General Assembly
Prepared by
The Code Revision Commission
The Office ofLegislative Counsel
and
The Editorial Staff ofLexisNexis®
Published Under Authority ofthe State of Georgia
Volume
16
2010 Edition
Title 18. Debtor and Creditor
Title 19. Domestic Relations
IncludingAnnotations to the Georgia Reports
and the GeorgiaAppeals Reports
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ISBN 978-0-327-11074-3 (set)
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5013629
(Pub.41805)
THIS SUPPLEMENT CONTAINS
Statutes:
All laws specifically codified by the General Assembly ofthe State of
Georgia through the 2012 Regular Session ofthe General Assembly.
Annotations of Judicial Decisions:
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March 30, 2012. These annotations will appear in the following tradi-
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Annotations ofAttorney General Opinions:
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ofGeorgia, Georgia Laws, the Constitution ofGeorgia, and the Consti-
tution of the United States by the Attorney General of the State of
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OtherAnnotations:
References to:
Emory Bankruptcy Developments Journal.
Emory International Law Review.
Emory Law Journal.
Georgia Journal of International and Comparative Law.
Georgia Law Review.
Georgia State University Law Review.
Mercer Law Review.
Georgia State Bar Journal.
Georgia Journal of Intellectual Property Law.
American Jurisprudence, Second Edition.
American Jurisprudence, Pleading and Practice.
American Jurisprudence, Proof ofFacts.
American Jurisprudence, Trials.
Corpus Juris Secundum.
Uniform Laws Annotated.
American Law Reports, First through Sixth Series.
American Law Reports, Federal.
Tables:
In Volume 41, a Table Eleven-A comparing provisions of the 1976
Constitution ofGeorgia to the 1983 Constitution ofGeorgia and a Table
Eleven-B comparing provisions ofthe 1983 Constitution of Georgia to
the 1976 Constitution of Georgia.
An updated version of Table Fifteen which reflects legislation
through the 2012 Regular Session ofthe General Assembly.
iii
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IV
TITLE 18
DEBTOR AND CREDITOR
Chap.
4. Garnishment Proceedings, 18-4-1 through 18-4-135.
CHAPTER
2
DEBTOR AND CREDITOR RELATIONS
ARTICLE 4
UNIFORM FRAUDULENT TRANSFERS
18-2-70. Short title.
—
Law reviews. For annual survey of
law on business associations, see 62 Mer-
cer L. Rev. 41 (2010).
JUDICIAL DECISIONS
Moti—on for summary judgment de- legal relationships between debtor and
nied. Summaryjudgment motion filed the entities on behalfofwhich debtorhad
by an insurer in response to a Chapter 7 paid the premiums and the presence of
trustee's complaint charging that certain such issues foreclosed summary judg-
premiums paid to the insurer by a debtor ment. Coleman v. ZurichAm. Ins. Co. (In
were fraudulent conveyances that were re Darrow Auto. Group, Inc.), No.
recoverable under 11 U.S.C.S. § 548 09-11228, 2011 Bankr. LEXIS 5253
and/or under Georgia's Uniform Fraudu- (Bankr. S.D. Ga. Mar. 29, 2011).
lent Transfers Act, O.C.G.A. § 18-2-70 et Cited in Bishop v. Patton, 288 Ga. 600,
seq., was denied because case presented 706 S.E.2d 634 (2011).
significant factual issues concerning the
18-2-71. Definitions.
JUDICIAL DECISIONS
—
Transfer. Definitionofa"transfer"is 706 S.E.2d 634, overruled on other
broad enough to encompass a co-owner's grounds by SRB Inv. Servs., LLLP v.
withdrawal of funds from a joint bank Branch Banking & Trust Co., 289 Ga. 1,
account. Bishop v. Patton, 288 Ga. 600, 709 S.E.2d 267 (2011).
2012 Supp.
18-2-74 DEBTORAND CREDITOR 18-2-74
18-2-74. Fraudulent transfer; determination of actual intent.
JUDICIAL DECISIONS
Badges of fraud identif—ied by fed- could seek their avoidance was legally
eral court applicable. O.C.G.A. flawed. Under the state statutes, a trans-
§ 18-2-74 permits the trustee to avoid a fer for less than reasonably equivalent
transfer made with the actual intent to value was constructively fraudulent as to
hinder, delay or defraud any creditor of creditors whose claims arose after the
the debtor. Subsection (b) states that, in transferswhenthe debtorwas engaged or
determiningactualintent, the courtcould was about to engage in a business or
consider a specified list offactors among transaction for which the remaining as-
other factors, which track the badges of sets of the debtor were unreasonably
fraud identified by the United States small in relation to the business or trans-
Court ofAppeals forthe Eleventh Circuit. action. Watson v. Powell (In re Atlantis
Scarver v. M. Abuhab Participacoes S.A. Plastics, Inc.), No. 10-06349, 2011 Bankr.
(In re Moskowitz), No. 10-6650-WLH, LEXIS 1147 (Bankr. N.D. Ga. Mar. 31,
2011 Bankr. LEXIS4800(Bankr. N.D. Ga. 2011) (Unpublished).
Nov. 28, 2011). No fraudulent transfer shown.
Pleading requirements. Chapter 7 trustee was not entitled to
Chapter 7 trustee's allegations were the recovery ofproperty from the debtor's
sufficient to survive a creditor's motion to property under 11 U.S.C. § 544. Under
dismiss the trustee's complaint seekingto the fraudulent transfer elements of
avoidandrecovertransferspursuantto 11 O.C.G.A. § 18-2-74, the debtor received
U.S.C. §§ 544(b)(1) and 550 when the reasonably equivalent value in exchange
trustee alleged sufficient facts to suggest for the privilege ofliving in the property
that, pursuant to O.C.G.A. § 18-2-74(b), without the payment of rent, taxes, or
the creditorreceived avoidable fraudulent insurance and in exchange for enjoying
transfers from the debtor. The trustee the benefit of property improvements.
allegedthatallofthetransfersweremade Pettigrew v. Rollins (In re Rollins), No.
withinfouryearsofthepetitiondate, that 09-6054, 2011 Bankr. LEXIS 3742 (Bankr.
the transfers were from the debtors'bank N.D. Ga. Sept. 29, 2011).
account, and that several badges offraud Transf—er before a crime was com-
indicatedthe debtors'actualintenttohin- mitted. Although the transfer of a
der, delay, or defraud including the fact housewas accompaniedbysomebadgesof
thatthetransfersoccurredwhenthedebt- fraud, the trial court abused the court's
ors were insolvent, the creditor was an discretion in enjoining further disposition
insider of the debtors at the time of the ofthe house, pending adjudication ofthe
transfers, andthecreditorkneworshould merits ofwrongful death and fraudulent
have known that the debtors were in- transfer claims, since the transferor gave
volved in an unlawful scheme to defraud the house to the transferor's three minor
investors. Gordon v. Graybeal (In re CM grandchildren in Florida three months
Vaughn, LLC), No. 10-06105-MGD, 2010 before the transferor murdered the dece-
Bankr. LEXIS2547(Bankr. N.D. Ga.June dent. Bishop v. Patton, 288 Ga. 600, 706
21, 2010). S.E.2d634, overruledonothergroundsby
Court rejected transferees' argument SRB Inv. Servs., LLLPv. Branch Banking
that a Chapter 7 trustee could not plausi- & Trust Co., 289 Ga. 1, 709 S.E.2d 267
bly assert the existence ofa creditor with (2011).
an allowed claim that gave the creditor Fraudulent transfe—r by individual
standing under 11 U.S.C. § 544(b)(1) to accused of murder. Court did not
assert a constructively fraudulent trans- abuse the court's discretioninenteringan
fer claim under O.C.G.A. § 18-2-74 and interlocutory injunction barring further
Del. CodeAnn. tit. 6, § 1304 because the dispositionoftheproceedsfromjointbank
assertion that only an unsecured creditor accounts pending final disposition of
with a claim arisingpriorto the transfers fraudulent transfer and wrongful death
2012 Supp.
18-2-74 DEBTORAND CREDITOR RELATIONS 18-2-74
lawsuits because badges of fraud indi- tions and obstruction ofthe creditor's ef-
cated an actual intent to hinder, delay, or forts to discover the details; vague asser-
defraud a decedent's estate and heirs ofa tions ofharm supported by no citation to
full recovery. The transferor's adult child evidence in the record are insufficient to
came up from Florida to withdraw the sustain a defense oflaches, and there is a
fundsfromjointbank accounts in Georgia balance between a plaintiff's knowing
three days after the transferor was ar- that a cause of action exists and that
rested for the murder of the decedent. interim injunctive relief may be needed
Bishop v. Patton, 288 Ga. 600, 706 S.E.2d and sitting on the plaintiff's rights to the
634, overruled on other jgrounds by SRB prejudice of the defendant. SRB Inv.
Inv. Servs., LLLP v. Branch Banking & Servs., LLLP v. Branch Banking & Trust
Trust Co., 289 Ga. 1, 709 S.E.2d 267 Co., 289 Ga. 1, 709 S.E.2d 267 (2011).
(2011). — Trial court did not abuse the court's
Motion to dismiss denied. Court discretion in entering an interlocutory in-
could not say that a potential contract junction to preserve the status quo pend-
claimwouldbeimpermissiblyintertwined ing adjudication ofthe merits ofthe cred-
with plaintiffs' Uniform Fraudulent itor's action against the debtors alleging
Transfer Act (UFTA) claim. Although breach of contract and fraudulent trans-
plaintiffs were ultimately seeking to en- fers in violation of the Georgia Uniform
force rights granted by the indenture, Fraudulent Transfers Act (UFTA),
their UFTA claim depended on facts and O.C.G.A. § 18-2-70 et seq., because fore-
circumstances outside of any contractual closing on collateral ofuncertain remain-
rights or obligations provided by the in- ingvalue,goingthroughconfirmationpro-
denture Akanthos Capital Mgmt., LLC v. ceedings, and suing the insolvent debtors
CompuCredit Holdings Corp., No. to reclaim the deficiency and then having
l:10-cv-844-TCB, 2011 U.S. Dist. LEXIS to recover the fraudulently transferred
28568 (N.D. Ga. Mar. 15, 2011). assets to collect on the ensuingjudgment
Discovery of—attorney-client com- was not an adequate remedy at law since
munications. Judgment creditor it was not nearly as practical and as
could inquire into attorney-client commu- efficient to the ends of justice and its
nications only as the communications prompt administration as the remedy in
were related to the planning or execution equity enjoining further transfers tempo-
ofthe transition from the limited liability rarily so that the creditor could collect a
company (LLC) to the other entities. The final judgment; when a money judgment
creditor could not inquire into communi- is likely to be uncollectible because a
cations made after these transactions debtor has fraudulently moved the debt-
were carried out, even ifthose communi- or's assets in an attempt to dissipate or
cations concernthe possible legal implica- concealtheassetsfromacreditor, Georgia
tions ofthe transactions. Tindall v. H & S law, both before and under the Georgia
Homes, LLC, No. 5:10-cv-044(CAR), 2011 UFTA, gives the creditor the right to seek
U.S. Dist. LEXIS 2299 (M.D. Ga. Jan. 10, interlocutory reliefby freezing the assets
2011). — where the assets are. SRB Inv. Servs.,
Interlocutory injunction proper. LLLPv. Branch Banking&Trust Co., 289
Trial court did not abuse the court's dis- Ga. 1, 709 S.E.2d 267 (2011).
cretion in entering an interlocutory in- Trial court did not abuse the court's
junction to preserve the status quo pend- discretion in entering an interlocutory in-
ing adjudication of the merits of the junction to preserve the status quo pend-
creditor's action againstthe debtors alleg- ing adjudication ofthe merits ofthe cred-
ing breach of contract and fraudulent itor's action against the debtors alleging
transfers because the debtors presented breach of contract and fraudulent trans-
no evidence of harm from the creditor's fers in violation of the Georgia Uniform
delay in amending the creditor's com- Fraudulent Transfers Act (UFTA),
plaint to seek an interlocutoryinjunction, O.C.G.A. § 18-2-70 et seq., because at
and the delay resulted primarily from the least seven statutory badges of fraud
debtors' concealment of the debtors' ac- listedintheUFTA, O.C.G.A. § 18-2-74(b),
2012 Supp.
18-2-74 DEBTORAND CREDITOR 18-2-75
were implicated, and the creditor also genuine dispute regarding whether the
presented evidence as a non-statutory investor took the transfers in good faith,
badge of fraud of the debtors' pattern of or gave reasonably equivalent value in
maintainingjust enough funds in certain exchange for the transfers; although a
accounts to satisfy the debtors' financial significant portion of the uncertainty in
covenants at the end ofeach quarter and the evidence arose from the fact that the
then transferring the funds away shortly investor refused to respond to the trust-
thereafter; under the UFTA, O.C.G.A. ee'srequestsfordiscovery,thetrusteehad
§ 18-22-77(a)(3)(A), the trial court was done nothing more than highlight the in-
authorized to enter an interlocutory in- vestor'suseofU.S. Const., amend.V. Kerr
junctionagainstfurtherdispositionbythe vB.aHnakrr.t(ILnErXeICShri3s4t3o2u),(NBoa.nk0r8.-6N42.0D,.20G1a.0
debtororatransferee,orboth, oftheasset
tSerravnss.f,erLrLedLPorv.ofBortahnecrhprBoapnerktiyn.gS&RBTrIunsvt. SaenpOct.e.Co.2fG3.a,At2.r0a1§n0s)f.1e8r-2m-7a4d,eawliltohwosutthreeceavioviidn-g
Co., 289 Ga. 1, 709 S.E.2d 267 (2011). reasonably equivalent value when the
Summaryjudgment improper. debtor was either engaged or about to
Bankruptcy court denied a Chapter 7 engage in a business or transaction for
trustee's motion for summary judgment which the remaining assets ofthe debtor
on the trustee's claim that transfers that wereunreasonablysmallinrelationtothe
were made by a mortgage company to an business or transaction, or the debtor in-
investor were avoidable under 11 U.S.C. tended to incur or believed or reasonably
§ 544 and the Georgia Uniform Fraudu- shouldhave believedthathe orshewould
lent Transfer Act, O.C.G.A. § 18-2-74 et incur debts beyond his or her ability to
seq., because a person who owned the payasthedebtsbecamedue. Scarverv. M.
company used the company to operate a Abuhab Participacoes S.A. (In re
Ponzischeme. Thetrusteehadtheburden Moskowitz), No. 10-6650-WLH, 2011
of showing that there was no genuine Bankr. LEXIS 4800 (Bankr. N.D. Ga. Nov.
issue of material fact, and there was a 28, 2011).
18-2-75. Transfer or obligation fraudulent if incurred without
receiving reasonably equivalent value.
JUDICIAL DECISIONS
Disputeo—verlawfirm'sfeespayable whether the services constituted reason-
by debtor. In a complaint seeking to ably equivalent value. Davis v.
recover pre-petition transfers made by a McDermott Will & Emery LLP (In re
Chapter 11 debtor to a law firm, the law Tom's Foods, Inc.), No. 07-4012, 2010
firm's motion for summaryjudgment was Bankr. LEXIS 3720 (Bankr. M.D. Ga. Oct.
denied as there was a genuine dispute of 20, 2010).
material fact regarding whether the Obligation and pay—ments thereon
debtor failed to receive reasonably equiv- evaluatedseparately. Inafraudulent
alent value for the transfers as required conveyance action, the need to evaluate a
by either 11 U.S.C. § 548(a)(l)(B)(I) or debt separately from the payments
O.C.G.A. § 18-2-75(a). The law firm con- thereonwas evidencedby 11 U.S.C. § 548
tended that the firm's invoices demon- and O.C.G.A. § 18-2-75(a), which permit-
stratedthatthe firm provided substantial ted the obligation and the payments to be
legalservicestothedebtorinexchangefor avoided separately or together. Watts v.
the payments the firm received, while the Peachtree Tech. Partners, LLC (In re Pal-
debtor'sresponsibleofficercontendedthat isades at West Paces Imaging Ctr., LLC),
the descriptions of work in the invoices No. 11-5183, 2011 Bankr. LEXIS 3576
were too vague and cursory to evaluate (Bankr. N.D. Ga. Sept. 13, 2011).
2012 Supp.
18-2-77 DEBTORAND CREDITOR RELATIONS 18-2-79
18-2-77. Relief for creditor against fraudulent transfer or obli-
gation.
JUDICIAL DECISIONS
—
Transfer prior to death. Although ing breach of contract and fraudulent
the transfer ofa house was accompanied transfers in violation ofthe Georgia Uni-
by some badges of fraud, the trial court form Fraudulent- Transfers Act (UFTA),
abused the court's discretion in enjoining O.C.G.A. § 18-2-70 et seq., because at
further disposition ofthe house, pending least seven statutory badges of fraud
adjudication of the merits of wrongful listedintheUFTA, O.C.G.A. § 18-2-74(b),
death and fraudulent transfer claims were implicated, and the creditor also
since the transferor gave the house to the presented evidence as a non-statutory
transferor's three minor grandchildren in badge of fraud of the debtors' pattern of
Florida three months before the maintainingjust enough funds in certain
transferormurderedthe decedent. Bishop accounts to satisfy the debtors' financial
v. Patton, 288 Ga. 600, 706 S.E.2d 634, covenants at the end ofeach quarter and
overruled on other grounds by SRB Inv. then transferring the funds away shortly
Servs., LLLP v. Branch Banking & Trust thereafter; under the UFTA, O.C.G.A.
Co., 289 Ga. 1, 709 S.E.2d 267 (2011). — § 18-22-77(a)(3)(A), the trial court was
Interlocutory injunction proper. authorized to enter an interlocutory in-
Trial court did not abuse the court's dis- junctionagainstfurtherdispositionbythe
cretion in entering an interlocutory in- debtororatransferee,orboth, oftheasset
junction to preserve the status quo pend- transferred or ofother property. SRB Inv.
ing adjudication of the merits of the Servs., LLLP v. Branch Banking & Trust
creditor's action againstthe debtors alleg- Co., 289 Ga. 1, 709 S.E.2d 267 (2011).
18-2-78. Conditions for voidability of transfer or obligation;
judgment.
JUDICIAL DECISIONS
Summaryjudgment improper. previously brokered mortgages for the
Creditorfailedto showgoodfaithunder creditor, the facts that the creditor in-
O.C.G.A. § 18-2-78 in receiving fraudu- vested substantial funds, received no
lent transfers from a bankruptcy debtor promissory notes, and was paid no inter-
asreturnsonthecreditor'sinvestmentsin est were sufficient to indicate that the
the debtor's Ponzi scheme, and thus the creditor should have been suspicious of
creditor was not entitled to summary the nature of the transactions. In re
judgment; the creditor was an educated Christou v. Cressaty Metals, Inc., No.
and sophisticated businessman and, de- 08-6402, 2010Bankr. LEXIS 3430 (Bankr.
spitethecreditor'sassertionthatthecred- N.D. Ga. Sept. 23, 2010).
itorhadnoreasontodoubtthedebtorwho
18-2-79. Time for commencement of action.
JUDICIAL DECISIONS
Limitations on actions. § 544becausethedebtorfiledthedebtor's
Chapter7trusteewasnotbarredbythe petition before the state statute oflimita-
statute of limitations under O.C.G.A. tions expired, butwas barred from pursu-
§ 18-2-79 or under 11 U.S.C. § 546 from ing avoidance under 11 U.S.C. § 548 of
pursuingacauseofactionunder 11U.S.C. any transfer occurring prior to two years
2012 Supp.
18-2-79 DEBTORAND CREDITOR T.18, C.4
before the petition was filed. Watts v. Cited in Bishopv. Patton, 288 Ga. 600,
Peachtree Tech. Partners, LLC (In re Pal- 706 S.E.2d 634 (2011).
isades at West Paces Imaging Ctr., LLC),
No. 11-5183, 2011 Bankr. LEXIS 3576
(Bankr. N.D. Ga. Sept. 13, 2011).
18-2-80, Principles of law and equity remain applicable; appli-
cation of state and federal law.
JUDICIAL DECISIONS
Cited in Bishop v. Patton, 288 Ga. 600,
706 S.E.2d 634 (2011).
CHAPTER
4
GARNISHMENT PROCEEDINGS
Article 1 Article 4
General Provisions Postjudgment Garnishment
Proceedings Generally
Sec.
18-4-1. Definitions; practice andproce- Sec.
dure generally. 18-4-62. Contents and service of sum-
18-4-3. Amendment of affidavits, mons ofgarnishment; require-
bonds, garnishee answer, or ments as to filing ofanswer to
summons.
pleadings.
18-4-66. Forms for postjudgment gar-
18-4-8. Definitions; entity as gar-
nishment.
nishee; execution and filing by
certain officers or employees of Article 5
an entity.
Answer by Garnishee and
Article 2 Subsequent Proceedings
Property and Persons Subject to 18-4-80. Effectofrelease ofsummons of
Garnishment garnishment on garnishee.
18-4-81. Effect of defendant's traverse
18-4-20. Property subject to garnish- on garnishee; filing ofbond by
ment generally; claim amount defendant; entry of judgment
and defendant's social security on bond.
number on summons; informa- 18-4-82. Contents ofgarnishee answer.
tion to be contained on sum- 18-4-83. Service ofanswer ofgarnishee
mons of garnishment upon fi- on plaintiffor attorney.
nancial institution. 18-4-84. Delivery to court of property
18-4-21. Garnishment ofsalaries ofoffi- admitted to be subject to gar-
cials and employees of state nishment; property in safety
and its subdivisions; exemp- deposit box.
tion; summons. 18-4-85. Traverse of answe—r of gar-
18-4-23. Serviceofsummonsofgarnish- nishee by plaintiff Time pe-
ment controlled by Civil Prac- riod; discharge for failure to
ticeAct. traverse.
2012 Supp.