FOURTH D I VI SI ON

M cFA DDEN, C. J.

, DOYLE, P. J. and C OOM ER, JJ.

N O T IC E : M otions for r e c ons i de r a tion m us t be ph y sic a l ly r e ce iv ed i n our c le r k ’s offic e w ithin te n da y s of the da te of de c is ion to be de e m ed tim e ly file d.

http://w w w .ga a ppe a l s .us /r ule s

M ar ch 13, 2020



# I n th e Co u r t o f

A p p eals o f

G eo r g ia

A1 9 A1 70 2

. LYLE et al

. v

. FULCRUM LOAN HOLDINGS, LLC et
al

.

D O Y LE , Pres i d i n g J u d g e.

Pl ai n t i ffs W ay n e Ly l e an d Ch arl es Cary (“ t h e pl ai nt i ffs ”) fi l ed th e i n st an t cas e

ag ai n s t d efen d an t s Li b ert y Cap it al

, LLC; Ham p t o n I sla nd, L L C ( “ H I ” ) ; F ulc r

um Lo an

Ho l di n g s , LLC; an d Ro n al d S. Lev en t h al (co l l ect i v el y , “ t h e d efen d an t s ”), see ki n g t h e

fo l l o w i n g rel i ef: (1 ) t o s et as i d e a 2 0 1 3 co ns en t ju d g m en t ap pro v i ng t h e t ran s fer o f

as s et s b y L i b ert y an d HI t o Fu l cru m , al leg i ng th at t h e l aws u i t was co l l u s i ve,

frau du l en t

, an d in ten d ed t o sh el t er t h e as s et s fro m a sep arat e ju d g m en t l at er o b t ai n ed

b y t h e p l ai n t i f

f s ag ai n s t Li b ert y ; (2 ) frau d u len t / v o i dab l e t ran s fer; (3 ) co n s t ru ct i v e

t ru s t / at t ach m en t ; (4 ) p i erci ng t h e co rp o rat e v ei l ; an d (5 ) b ad fai t h

. Th e d efen d an t sm o ved t o d i s m i s s th e cas e on m u l t i p l e g ro u nd s , an d t h e t ri al co urt g ran t ed t h e m o t i o n.

Fo r t h e reas o n s t h at fo ll o w, we rev ers e.

Th e t ri al co u rt g ran t ed t h e d efen d an ts ’ m o t i o n t o d i s m i s s t h e c o m p l ai n t fo r

fai l u re t o s tat e a cl ai m

u n der OCGA § 9 -1 1 -1 2 (b ) (6 ). 1 Su ch a m o t i o n

s h o u l d n o t b e s u st ai ned u n l e s s (1 ) t h e al l eg at i o n s o f t h e co m p l ai n t

d i s cl o s e wi t h cert ai n t y t h at t h e cl ai m an t wo u ld n o t be en t i t l ed to rel i ef

u n d er an y s t at e o f pro v ab l e fact s as sert ed i n s u p p o rt t h ereo f; an d (2 ) th e

m o v an t es tab l i s h es th at t h e cl ai m an t co u l d n ot po s s i b l y in t ro d u ce

ev i d en ce wi t h i n t h e fram ewo rk o f t h e co m pl ai n t s u ffi ci en t t o warran t a

g ran t o f t h e rel i ef s o u g ht

. In d eci d in g a m ot i o n t o d i s m is s , al l p l ead i n g s

are t o b e co n st ru ed m o s t fav o rab l y t o t h e p art y

wh o fi l ed t h em , an d al l

d o u b t s reg ard i n g su ch p l ead i n g s m u s t be res o l v ed in t h e fi l i n g p art y ’ s

fav o r. 2

1 Becau se t h e p l ai n ti ffs ’ b r i ef o p p o s i n g t he m o ti o n t o d i s m i s s ex h i b i t ed

m at eri al s o u t s i d e t h e p l ead i n g s , an d t h e tri al co u rt ’ s o rd er reci t es t h at i t “ co n s i d er[ed ]

t h e s u b m i s s i o n s o f t h e p art ies an d arg um en ts o f co u n sel an d p art y p ro se,” we m u s t
d et erm i n e wh et h er t h e m o ti o n was co n v ert ed t o on e fo r s um m ary ju d g m en t

. See

Th o mp so n v. Avi o n Sys tems

, 2 8 4 Ga. 1 5

, 1 6 -1 7 (6 6 3 SE2 d 23 6 ) (2 0 0 8 ). W e co n cl u d e

t h at i t was n o t

. Th e ord er, wh i ch ci t es on l y t o t h e p l a i n t i ffs ’ co m p l ai n t

, t ak en as a wh o l e, refl ect s t hat t he t ri al co u rt d i d n o t co n s i d er t h o se ex h i b it s

.

2 (Ci t at i on an d p u n ct u at i o n o m i t t ed .) Au s t i n v. C l a r k

, 2 9 4 Ga. 77 3

, 7 7 4 -7 7 5 (7 5 5 SE2 d 7 9 6 ) (2 0 1 4 ).

2In ot h er wo rd s , “ [t ] hi s [C] o u rt rev i ews a t ri al co u rt ’ s ru l i ng o n a m o t io n t o d i s m i s s d e

n o v o , v i ewi n g as t ru e al l wel l -p l ead ed m at eri al al l eg at i o n s i n t he co m p lai n t .” 3

So co n s t ru ed

, t h e al l eg at i o n s i n t h e co m pl ai n t s tat ed t hat t h e p l ai nt i ffs are

j u d g m en t cred i t o rs o f Li b ert y

. Befo re t h e p l ai n t i ffs o b t ai n ed t h ei r j u d gm en t

, Li b er ty ’ s

s o l e o wn er, Lev en t h al

, t o o k s t ep s t o t ran s fer Li b ert y ’ s as s et s away fro m t h at en t i t y

an d i n t o Fu l cru m , an o t h er en t i t y t h at h e own ed an d co nt ro l l ed

. Lev en t h al di d s o wi th

t h e p u rp o s e o f d efeat i n g Li b ert y ’ s cred i t o rs , i ncl u d i n g t h e p l ai n t i ffs

.

To t h at en d

, Lev en t h al h ad L i b er t y f i l e a co m p l ai nt i n th e Su peri o r Co u rt o f

Fu l t o n Co u n t y ag ai n st HI, an ot h er en t i t y t h a t h e o wn ed an d co n t ro ll ed

. Lev en t h al

v eri fi ed t h a t co m

p l ai n t

, w h ich co n t ai n ed m at eri al al l eg at i o ns th at were u nt ru e, an d

co n ceal ed t h e fact t h at h e own ed an d co n t ro l l ed bo t h t h e pl ai n t i ff an d d efen d an t

en t i t i es

. Am o n g o t h er t h i ng s , Li b ert y ’ s co m p l ai n t al l eg ed t h a t HI w as i n d efau lt o n

n o t es i n fav o r of Li b ert y , w as l i k el y t o refu s e t o p ay ren t s t o Li b ert y , an d was l i k el y

t o was t e Li b ert y ’ s co l l at eral o n t h e n o tes

, real p ro p ert y in wh i ch Li b ert y h ad a s ecu red

i n t eres t

.

3 Vi l l a So n o ma a t Per i met er S u mmi t Co n d

o

. A s s n

. v. Co mmer ci a l In d u s

. Bl d g. Own er s Al l i a n ce , 3 49 Ga. Ap p . 6 6 6

, 6 6 7 (1 ) (8 2 4 SE2 d 7 3 8 ) (2 0 1 9 ).

3Li b ert y co nv i n ced t he Fu l t o n Co u n t y co u rt to ap p o in t a recei v er, wh i ch

Lev en t hal o r h is rep res en t at i v es s el ec t ed an d en g ag ed

. Lev en t h al o r h i s

rep res en t at i v es al s o s erv ed as t h e recei v er’ s s ol e s o urce of i nfo rm at i o n an d p ro v i d ed

t h e recei ver wi t h u n t ru e i n fo rm at i o n ab o u t HI’ s al l eg ed defau l t an d l ik el y was t i n g o f

Li b ert y ’ s co l l at eral

. To s at i s fy HI’ s d eb t t o Li b ert y , th e recei v e r a u t h o ri zed a

fo recl o s ure an d s al e o f t h e co l l at eral

, wh i ch w as s o l d t o Fu l cru m fo r $ 5 0 ,0 0 0

, a

“ fract i on o f i t s wo rt h” an d an am o u n t s i g n i fi can t ly les s t h an t he am o u n t Li b ert y o wed

t o t h e p l ai n t iffs p urs u an t to t h ei r ju d g m en t ag ai n st Li bert y

. Li b ert y an d HI o b t ai n ed

a co n sen t ju d g m en t fro m

t h e Fu l t o n Co un t y

co urt ap p ro v in g t h i s t ran sfer.

Th e p l ai n t i ffs fi l ed t h e i n s t an t cas e ag ai ns t Li b ert y , HI, Fu lcru m , an d

Lev en t hal

, s eek i n g t h e fo l l o wi n g rel i ef: set t in g as i de t h e co n sen t ju d g m en t ;

frau du l en t /v o i d ab l e t ran s fer; co n s t ru ct i v e t ru s t / at t ach m en t ; p i erci ng t he co rp o rat e

v ei l ; an d b ad fai t h

. T h e d efen dan t s m o v ed t o di s m i s s th e co m p l ai n t i n i t s en t i ret y o n

m u lt i p l e g ro un d s , i n cl u d i n g t h at i t was u nt i m el y an d fai l ed t o s t at e a cl ai m , an d t h e

t ri al co u rt g ran t ed t h e m o t i on . Th i s ap p eal fo l l o wed

.

1

. Ch a l l en g e t o t h e co ns en t j u d gmen t

. Th e p lai n t i ffs al l eg e t h at t h e t ri al co u rt

erred b y d i s m i s s i n g t h ei r ch al l en g e t o t h e p ri o r co n s en t ju d gm en t . W e ag ree.

4Th e pl ai n ti ffs s o u g h t t o set as i d e t h e p ri or co n sen t ju d g m en t u n d er OCGA § 9

-

1 1 -6 0 an d t o at t ack t h e ju d g m en t as t h e res u l t o f t h e d efen d an t s ’ frau d an d co l l u s i o n

u n d er OCGA § 9-1 2 -1 7

. Th ei r ch a l l e n g e u n d er OCGA § 9 -1 1 -6 0 i s wi t h ou t m eri t

.

Th ey can n o t p ro ceed u nd er OCGA § 9 -1 1 -6 0 (a) b ecau s e t h ei r ch al l en g e t o t h e

ju d g m en t

, as t h ey h av e al leg ed i t i n t h ei r co m p l ai n t

, was n o t a d efect t h at wo u l d h av e

“ ap p ear[ed ] o n t h e face o f t he reco rd or p lead i ng s .” 4 Th e y c a n n o t p ro ceed u n d er

OCGA § 9 -1 1 -6 0 (b ) b ecau s e t h at s u b d i v i s i o n co ncern s o n ly m ot i o n s fo r n ew t ri al o r

t o s et as i d e, no t co m

p l ai n t s as s ert in g t h e c h a l l e n g e as a cau s e o f act i o n

. “ A t h i rd

p ers o n n o t a part y t o t h e reco rd can n o t g o i n t o a co u rt an d m o v e t o s et as i d e a

ju d g m en t wh i ch i s n o t ag ai ns t h i m ” u n d er t hi s Co d e s ect i o n

. 5

Th u s , wh il e t he tri al co u rt p ro p erl y an al y zed t h e m o t i o n un d er OCGA § 9 -1 1

-

6 0

, i t erred b y d i sm i s s i ng t h e p l a i n t i ffs ’ ch al l en ge t o t h e co n s en t j u d gm en t u n d er

OCGA § 9 -1 2 -1 7

, wh i c h p e r m i t s “ [c] red i t ors or bo n a fi d e p urch as ers [t o ] at t ack a

ju d g m en t

. . . fo r frau d o r co l l u s i o n , wh en ev er an d wh erev er it i n t erfer e s w i t h t h ei r

4 (Ci t at i o n o m i tt e d

. ) L a wi n g v. Er wi n , 2 5 1 Ga. 1 34

, 1 3 5 (3 0 3 SE2 d 4 4 4 ) (1 9 8 3).

5 (Ci t at i o n s an d p u n ct u at i o n o m i t t ed .) Peek v. So u t h er n Gu a r. In s. Co

. , 1 4 2 Ga. Ap p

. 67 1

, 6 7 2 (1 ) (2 3 6 SE2 d 7 6 7 ) (1 9 7 7 ), rev ’ d on o t h er g ro u n ds

, P eek v. S o u t h er n Gu a r . In c. Co

. , 2 4 0 Ga. 4 9 8

, 4 9 9 -5 0 0 (1 ) (2 4 1 SE2 d 2 1 0 ) (1 9 7 8 ).

5r i gh t s , ei th er at l aw o r i n eq u i t y .” 6 W e fi n d m eri t l es s t h e defen d an t s ’ arg u m en t t h a t

t h e pro ced ur e s in OCGA § 9-1 1 -6 0 o f th e Ci v i l Pract i ce A ct s up ers ed ed t h o s e in

OCGA § 9 -1 2 -1 7

. Al t h o u gh OCGA § 9 -1 1-6 0 (a) p ro v i d es t h at “ [i ] n al l

. . . i n s t an ces

[o t h er t h an wh en a ju d g m en t is v oi d o n i ts face]

, ju d g m e n t s s h al l b e s u b ject t o an

at t ack o n l y by a d i rect p ro ceed i n g b r o u gh t fo r t h at p u rp o s e i n o n e o f t h e m et h od s

6 W e n o t e t h at i n t h ei r co m p l ai n t

, t h e p l ai n t iffs s o u g h t t o s et as i d e t h e co n s en t ju d g m en t b as ed s o l el y o n OCGA § 9 -1 1 -6 0

, wi t h o u t ci t at i o n t o OCGA § 9 -1 2 -1 7, a fact t h at co m

p l i cat ed t h e t ri al co u rt ’ s an al y si s wh en d eci d i n g t h e m o t i on t o d i s m i s s

. Th e p l ai n t i ffs d i d

, h o wev er, as s ert OCGA § 9 -1 2 -1 7 i n res p o n s e t o t h e m o t i o n to
d i s m i s s

. An d m o re i m

p o rt an t ly

, t h ey al leg e i n t h e co m p l ai n t t h at Lev en t hal

, Li b ert y ,

a n d HI em

p l o y ed “ frau d

, d ecep t i o n , an d co l l u s i on ” t o co n v i n ce t he Fu l t o n co u n t y

co u rt t o ex e c u t e t h e co n s en t ju d g m en t

, an d t hey li s t t en “ d i rect an d fal s e

rep res en t at i o ns m ad e b y

Lev en t h al u n d er o at h ” i n p l ead i n gs t o t h at co urt

.

[T] h e G eo rg ia Ci v i l Pract i ce A c t req u ires o n l y n ot i ce p l ead i n g an d

,

u n d er t h e Act

, p lead in gs are t o b e co n s t ru ed li beral l y an d reas o n ab l y t o ach i ev e s u b s t an t i al ju s t i ce co n s is t en t wi t h t h e s tat u t o ry req u irem en t s o f

t h e Act

. T h u s , a m o ti on t o d i s m is s fo r fai l u re t o s t at e a cl ai m s ho u l d n o t
b e g ran t ed u n l es s t h e al l eg at i o ns o f t he co m pl ai n t di s cl o s e wi th cert ai n t y

t h at t h e cl ai m an t wo u l d n o t b e en ti t led t o rel i ef un d er an y s t at e o f

p ro v ab l e fact s as s ert ed i n s u p p o rt t h ereo f. Pu t an ot h er way , i f, wi th i n th e fram ewo rk o f t h e co m

p l a i n t

, ev i den ce m ay b e i n t ro d u ced wh i ch wi l l

s u s t ai n a g ran t o f rel i ef t o t h e p l ai n t i ff, t h e co m pl ai n t i s s u ffi ci en t

.

(Pu n ct u at i on o m i t t ed

. ) Ca mp b el l v. Ai l i o n , 3 3 8 Ga. Ap p

. 3 8 2

, 3 8 4 -3 8 5 (7 9 0 SE2 d 6 8 ) (2 0 1 6). Here, b ecau s e t h e al l eg at i o n s o f t he co m p l ai n t g av e t h e d efen d an t s fai r n o t i ce

t h at t he p l ai n t i ffs s o u g h t t o s et as i d e t h e co n s en t ju d g m e n t b a s e d o n frau d an d

co l l u s i o n , th ei r fai l u re to s p eci fi cal l y ci t e OCGA § 9 -1 2 -1 7 i s no t fat al t o t h ei r cl ai m

. See i d

.

6p ro v id ed i n [OCGA § 9 -1 1 -6 0 ] ,” Geo rg i a co u rt s hav e reco g n i zed OCGA § 9 -1 2 -1 7

as a “ s t at u t o ry ex cep ti o n ” t o t h i s p ro v i s i o n

. 7 An d wh en ou r Gen eral A s s em b l y ch o s e

t o re-co d i fy OCGA § 9-1 2-1 7 i n 19 8 3

, i t d i d s o i n l i g h t o f b ot h t h e s et -as i d e

p ro ced ures o f w h a t i s n o w co d i fi ed as OCGA § 9 -1 1 -6 0 an d th e G eo rg i a d eci s i on s

reco g n izi n g t h e s tat u t o ry ex cep t i o n t o t h o s e p ro ced u res

. Th e Gen er a l A s s em b l y i s

p res u m ed t o h av e h ad fu l l k n o wl ed g e o f th i s in t erp ret at i o n wh en i t re-co d i fi ed OCGA

§ 9 -1 2-1 7

. 8

“ At t h i s t i m e, i t can n ot be s ai d t h at t h e al l eg at i o n s o f t h e co m p lai n t d i s cl o s e

wi t h cert ai n t y t h a t [t h e p l ai n t i ffs ] wo ul d n o t be en t it l ed t o [t he] rel i ef [d es cri b ed in

OCGA § 9 -1 2 -1 7 ] u n der a n y st at e o f p ro v ab l e fac t s a s sert ed i n su p p o rt .” 9 To t h e

co n trary

, t h e p l ai n t i ffs al l eg ed t h at t h e defen d an t s wo rk ed t o g et h e r t o m i sl ead b o th

7 See Wa s d e n v

. R u s co In d u s

. , 2 3 3 Ga. 4 3 9

, 4 44 (2 ) (2 1 1 SE2 d 7 3 3) (1 9 7 5 ) ( i n cl u d i n g p red eces s or t o OCGA § 9 -1 2 -1 7 as on e o f t h e “ s t at u t o ry ex cep ti o n s ” t o

p ro ced ures o f p red eces s o r t o OCGA § 9 -1 1 -6 0 ), o verru l ed i n p art o n an o t h er g ro u n d

b y M u rp h y v. Mu r p h y , 2 6 3 Ga. 2 8 0

, 2 8 3 (4 3 0 SE2 d 7 49 ) (1 9 9 3 ); Al b i tu s v. Fa r mer s & Mer ch a n t

s Ba n k

, 1 5 9 Ga. Ap p . 4 0 6 , 4 0 9 (2 ) (2 8 3 SE2 d 6 3 2 ) (1 9 8 1) (s am e).

8 See g en eral l y Fi rs t Na t. Ba n k o f At la n t a v. S i n kl er , 17 0 Ga. Ap p

. 6 6 8, 6 7 0 (1 ) (3 1 7 SE2 d 8 9 7 ) (1 9 8 4 ) (“ i t i s wel l s et t led in t h i s ju ri s d i ct i o n th at al l st at u t es are

p res u m ed t o b e en act ed b y t he l eg i s l at u re wi th fu l l k n owl ed g e of th e ex i s t i n g

co n di t i o n o f t h e l aw an d wi t h referen ce t o i t ”) (ci t at i o n s an d p u n ct u at io n o m i t t ed ).

9 (Em p h as i s i n o ri g i n al .) Au s t in , 2 9 4 Ga. 7 7 5

.

7t h e Fu l t o n Co u n t y co u rt an d th e recei v er ap p o i n t ed b y t hat co u rt i n o rd er t o o b t ai n a

t ran s fer o f real p ro p ert y (i n wh i ch Li b ert y p o s s es s ed a secu red i n t eres t ) t o Fu l cru m

at a fract i o n of i t s v al ue s o t hat t h o se as s et s co u l d n ot b e us ed t o s at i s fy Li b ert y ’ s

o b l i g at i o ns t o i t s cred it o rs

. W h et h er t h e p l ai n t i ffs u l t i m at el y wi l l b e ab l e t o p ro v e

t h ei r al leg at i o n s i s n o t rel ev an t at t h i s s tag e i n t h e p ro ceed i n g s. An y “ fact u al ev i d en ce

[o n t hat p o i n t ] w h i ch m ay o r m ay n o t b e d ev el o p ed d u ri n g d i s c o v e r y

. . . can b e

co n si d ered o n a s u b s e q u en t m o t i o n fo r s u m m ary ju d g m en t.” 1 0 Th erefo re, t h e t ri al

co u rt erred i n d i s m is s i n g th i s cl ai m

.

2

. Cl a i m f

o r f r a ud u l en t t r a n s

f er

. T h e p l ai n t i f

f s al s o arg u e t h at t h e t ri al co u rt

erred b y d i s m i s s i n g t h ei r cl ai m

fo r frau d u l en t t ran s fer. W e ag ree.

Th e p l ai n t i ffs seek t o v o i d t h e t ran sfer o f as s et s t o Fu l cru m p u rs uan t to OCGA

§ 1 8 -2 -7 0 et

. s eq

. Th e vers i o n o f t h at s t at u t e i n effect at t h e t i m e o f t h e 2 0 1 3 t ran s fer

p erm i t s a cred i t o r t o b ri n g an act i o n fo r rel i ef ag ai n s t a frau du l en t t ran s fer, OCGA §

1 8 -2 -7 7 (a) (2 0 1 3 ), an d i t p ro vi d es , am on g o th er t h i ng s , t h at “ [a] t ran s fer m ad e

. . .

b y a d eb t o r i s frau d u l en t as t o a cred i t o r, wh et h er t h e cred i t o r’ s cl ai m aro s e b efo re o r

aft er th e t ran s fer w as m ad e or t h e o b l i gat i o n was i n cu rred

, i f t h e d eb t o r m ad e t h e

1 0 Id

.

8t ran s fer o r in cu rred t h e o b li gat i o n

. . . [w] i t h act u al in t en t t o h i n der, d el ay , o r d efrau d

an y cred i t o r o f t h e d eb t o r[.] ” 1 1

As w e co n cl u d ed wi t h reg ard to t h e p l ai n t i ffs ’ ch al l en g e t o t h e co n s en t

ju d g m en t

, “ [a] t t h is t i m e, i t can n o t b e s ai d t h at t h e al l eg at i o n s o f t h e co m p l ai nt

d i s cl os e wi t h cert ai n t y t hat [t h e p l ai n t i ffs ] wo ul d n o t b e en t i t l ed t o [t h e] rel i ef

[p ro v i d ed fo r in OCGA § 1 8-2 -7 0 et s eq

. (2 0 1 3 )] u n d er a n y s t at e o f p r o v ab l e fact s

as s ert ed i n s u pp o rt

. ” 1 2 T h e co m p l ai n t al l eg ed t hat t he p l ai n ti f f s are cred i t o rs wi th

c l a i m s ag ai n st Li b ert y

. 1 3 An d t h e co m pl ai n t al l eg ed t h at

, wi t h i n t en t to d efrau d i t s

c r e d i t o rs , Li b ert y to o k s t ep s t o h av e th e real p ro p ert y in wh i ch i t h el d s ec u r i t y

i n t eres t s t ran s ferred t o F u l cru m t h ro u g h t h e b an k ru p t cy s al e. Th e st at u t e b ro ad l y

d efi n es “ t ran s fers ” t o i n cl u d e “ ev ery m o d e, d i rect o r i n d i rect

, ab s ol u t e o r co n d i t i o n al

,

1 1 OCGA § 1 8 -2 -7 4 (a) (1 ) (2 0 13 ).

1 2 (Em p has is i n o ri g i n al .) Au s t i n , 2 9 4 Ga. at 7 75

.

1 3 See OCGA § 1 8 -2 -7 1 (3 ) (2 01 3 ) (d efi n i ng “ cl ai m ” t o b e “ a ri g h t t o p ay m en t

, wh et h er o r n o t t h e ri g h t i s red u ced t o ju d g m en t

, l i q u id at ed

, u n l i q u i d at ed

, fi x ed

,

co n t i n gen t

, m at ured

, u n m at u red

, d i s p u t ed

, u n d i s pu t ed

, l eg al

, eq ui t ab l e, s ecu red

, o r

u n s ecu red ”); OCGA § 1 8 -2 -7 1 (4 ) (2 0 1 3 ) ( d efi n in g “ cred i t o r” t o be “ a p ers o n wh o h as a cl ai m ”).

9v o l u n t ary o r i n v ol u n t ary , o f d i s p o s i n g of o r p art i ng wi t h an as set o r an i n t eres t i n an

as s et

. . . .” 1 4

Gi v en t h e b read t h o f t h es e d efi n i t i o n s , we are n o t p ers u ad ed b y th e d efen d an t s ’

arg u m en t t h at th e p l ai n t i ffs l ack s t an d i n g b ecau s e t h e fo recl o s u re s al e d i d n o t t ran s fer

as s et s o f t h ei r d eb t o r , Li bert y

. W e are al s o u n p ers uad ed b y t h ei r arg u m en t t h at

Li b ert y ’ s s ecu ri t y i nt eres t i n t h e real pro p ert y , as d es c r i b ed i n th e co m p l ai nt

al l eg at i o n s , i s ex cl u d ed fro m th e s t at ut e’ s d efi n i ti o n o f “ as s et

. ” 1 5 It i s s im p l y t o o s o o n

i n th i s cas e t o co n cl u de, as a m at t er o f l aw, t h at t h e p l ai n t i ffs can n ot p res en t ev i d en ce

s at i s fy i ng t h es e s t at u t o ry el em en t s

. Fi n al l y , we fi n d m eri t l es s t h e d efen d an t s ’

a r g u m en t th at t he s t at u t e o f l im i t at i o n h as ex p i red o n th i s cl ai m

. Th e co m p l a i n t

al l eg es t h e frau d u l en t t ran s fer t o b e t h e b an k ru p t cy s al e t o Fu l cru m , wh i ch occu rred

o n O ct o b e r 1

, 2 0 1 3

. 1 6 Th e p l ai n t i ffs fi l ed t h ei r co m p l ai n t o n Sep t em

b er 22

, 2 0 1 7,

wi t h i n t h e fo ur-y ear l i m i t at i o n p eri o d s et fo rt h i n OCGA § 1 8-2 -7 9 (1 ) (2 0 1 3 ).

1 4 OCGA § 1 8 -2 -7 1 (1 2) (2 0 1 3 ).

1 5 S e e OCGA § 1 8 -2 -7 1 (2 ) (2 0 1 3 ) (“ ‘ As s et ’ m ean s p ro p ert y of a d eb t o r, b ut

t h e t erm d o es n o t i n cl u d e: (A) Pro p ert y t o th e ex t en t it i s en cu m b ered b y a v al i d l i en ; (B) Pro p ert y to t he ex t en t it i s g en eral l y ex em p t u n der no n b an k ru p tcy l aw; o r (C) An

i n t eres t i n p ro p ert y h el d i n t en an cy b y t h e en t i ret i es t o t he ex ten t i t i s n o t s u b ject t o

p ro ces s b y

a cred i t o r h o ld i n g a cl ai m ag ai n st o n l y

o n e t en an t .”).

1 6 See OCGA § 18 -2 -7 6 (1 ) (A) (2 0 1 3 ) (s t at i n g wh en t ran s fer i s m ad e).

10Acco rd i ng l y , th e t ri al co u rt erred b y d i s m i s s i n g th e pl a i n t i ffs ’ cl ai m fo r

frau du l en t t ran s fer.

4

. Cl a i m f o r co ns t ru ct i ve t r u s t. Th e p l ai n t i ffs fu rt h er co n t en d t h at t h e t ri al co u rt

erred b y d i s m i s s i n g t h ei r cl ai m

fo r a co n s t ru ct i v e t ru st

. Ag ai n, we ag ree.

Th e p l ai n t i ffs al l eg e t h at p u rs uan t t o O CGA § 5 3 -1 2-1 3 2

, t h ey h av e a

co n st ru ct i v e t ru s t o n t h e as s et s t ran s ferred t o Fu l cru m

. Th at Co d e s ect io n p r o v i d es

t h at “ [a] co n s t ru ct i v e t ru s t i s i m p l i ed wh en ev er th e ci rcu m s t a n c e s are s u ch t h at t h e

p ers o n h o l d i ng leg al ti t l e t o p ro p ert y , ei t h er fro m frau d o r o t h erwi s e, can n ot en jo y t h e

b en efi ci al in t eres t i n t h e p ro p ert y wi t h ou t v i o l at i n g s o m e es t ab li s h e d p r i n ci p l e o f

eq u it y .” 1 7 It ari s es “ by eq u i ty wi t h res p ect t o p ro p ert y acq u i red b y frau d

, o r al t h o u g h

acq u ired wi t h o u t frau d wh ere i t i s ag ai n st eq u it y t h at t h e p ro p ert y s h o ul d b e ret ai n ed

b y t h e o ne w h o h o l d s i t .” 1 8 It i s t ru e “ t h at a cl ai m fo r t h e i m p o s i t i o n o f a co n s t ru ct i v e

t ru s t i s n o t an i n dep en d en t cau s e o f act i o n

. In t h i s cas e, h o wev er, [t h e pl ai n t i ffs ] h av e

s u ffi c i e n t l y a l l eg ed a su p p o rt in g cau s e o f act i on [, t h e frau d d i s cu s sed ab o v e] .” 1 9

1 7 OCGA § 5 3 -1 2 -1 3 2 (a).

1 8 A et n a Li

f e In s

. Co

. v. W

eekes

, 24 1 G a

. 1 6 9

, 1 7 2 (1 ) (2 44 SE2 d 4 6 ) (1 9 7 8 ) (co n s t ru i n g p red eces s o r s tat u t e).

1 9 Mo r ri s o n v. Mo r r i so n , 2 8 4 Ga. 1 1 2 , 1 13 (1 ) (6 6 3 SE2 d 7 14 ) (2 0 0 8 ).

11Becau s e ev i d en c e co u l d s h o w wi t h i n t h e fram ewo rk o f t he co m pl ai n t t h at wo u ld

p erm i t t h e im

p os i ti on o f a co n s t ru ct i v e t ru st o v er as s et s t ran s ferred t o Fu l cru m , t h e

t ri al co u rt erred b y

d is m i ss in g t h i s cl ai m

.

5

. Cl ai m f

or p i er c i n g t h e co r

p o r a t e vei l. T h e t ri al co u rt al s o erred by

d i s m i s s i n g t he p l ai nt i ffs ’ cl ai m t h at t h e co rp o rat e v ei l bet ween Lev en t hal an d t h e

d efen d an t en t i t i es was p ierced

.

“ Un d er t h e a l t er eg o d o ct ri n e i n Geo rg i a, t h e co rp orat e en t i ty m ay b e

d i s reg ard ed fo r l i ab i l it y p u rp o ses wh en i t is s h o wn t h at t h e co rp o rat e fo rm h as b een

ab u sed .” 2 0 In t h ei r co m

pl ai n t

, t h e p l ai n t i ffs al l eg ed fact s t h at

, t ak en as t ru e, s h o w t h at

Lev en t hal ab u s ed t he co rp o rat e fo rm o f t h e d efen d an t en ti t i e s : t h a t h e d i s reg ard ed

co rp o rat e fo rm al i t i es ; i nt erm i n g l ed co rp orat e an d p ers o n al fu n d s, s t aff, an d p ro p ert y ;

u n d ercap i t al i zed t he en t i ti es t o av o i d cred it o rs; use d c or p o rat e fu n ds t o p ay i n d i v i d u al

o b l i g at i o ns ; an d s i p h o n e d o ff co rp o rat e fu n d s fo r h i m s el f, h i s fam i l y , an d o t h er

en t i t i es h e co n t ro l s . W h i l e t h e d efen d an ts

are co rrect t h at to t h e ex t en t [t h e p l ai n ti ffs ] s e e k to reach t h e as s et s o f

[t he d efen d an t en t i ti es ] fo r an y ju d g m en t deb t pers o n al ly i n c u rred b y
[Lev en t h al ] u n d er th e t heo ry o f o u ts i der rev ers e v ei l -p i erci n g , s u ch a

2 0 Ba i l l ie Lu mb er Co

. v. Th o mp s o n , 2 7 9 Ga

. 2 8 8

, 2 8 9 (1 ) (6 12 SE2 d 2 9 6 ) (2 0 0 5).

12cl ai m i s fo recl o sed b y Geo rg i a l aw

. Ho wev er, co n s t ru ed i n t he l i g h t

m o s t fav o rab l e t o [t h e p l ai n t i ffs ] w it h al l do u b t s res o l v ed i n t h ei r fav o r,
[t hei r] co m

pl ai n t s t at e[s ] a cl ai m fo r h o l di n g [Lev en t h al ] li ab le fo r an y ju d g m en t d eb t i n cu rred b y [t h e d efen d an t en t i t ies ] u n d er a v ei l-p i erci n g

t h eo ry [.] 2 1

Th u s , t h e t ri al co u rt erred b y d is m i s s i n g t h i s cl ai m

.

6

. Ba d f ai th

. Fi n al ly

, t h e tri al co u rt erred b y d i s m i ss i n g t h e p l ai n t i ffs ’ cl ai m fo r

at t o rn ey fees an d ex p en s es u n der OCGA § 1 3 -6 -1 1

.

In s u p p o rt o f t h i s cl ai m , th e p l ai n t i ffs al l eg ed t hat t h e d efen d an ts h av e act ed in

b ad fai t h

, b een s t u b b o rn l y l i t i g i o u s , an d cau sed u n n e c e s s ary t ro u b l e an d ex p en s e.

Th es e al l eg at io n s are s u ffi ci en t t o s t at e a cl ai m u n d er OCGA § 13 -6 -1 1

. 2 2

Acco rd in g ly , t h e t ri al co u rt erred b y d i s m i s s i n g t h i s cl ai m

.

Ju d g men t r ever sed . McFa d

d en , C. J., a n d

Co o mer , J., co n cu r

.

2 1 (Ci t at io n s o m i t t ed .) See TMX Fi n a n ce, LLC v. Go ld s mi t h

, 3 5 2 Ga. Ap p

. 1 9 0,

2 1 1 (6 ) (8 3 3 SE2 d 3 17 ) (2 0 1 9 ).

2 2 See S i a va g e v. Ga nd

y , 3 5 0 Ga. Ap p . 5 6 2

, 5 6 7 (3 ) (8 2 9 SE2 d 7 8 7 ) (2 0 1 9).

13