Opinion ID: 1667023
Heading Depth: 2
Heading Rank: 3

Heading: Was There Evidence of a Fraudulent Transfer as Alleged in Count III?

Text: George sought equitable relief and damages in Count III based on Antoinette's attempted satisfaction of a mortgage entered into in connection with a debt owed Sterling by the Davises, thereby work[ing] a transfer of the mortgage from Sterling to Antoinette. George alleged that that transfer rendered Sterling insolvent. George relies on a Partial Satisfaction and Release that Sam and Antoinette executed on behalf of Sterling. The document refers to the Davises' mortgage and reads, in pertinent part: The intent of this partial release is to delete any interest that [Sterling] may have/or could have had and the intent is to satisfy any claim that [Sterling] had. A copy of the assignment of all assets of [Sterling], ... is attached hereto to confirm the right to delete and remove [Sterling] and to satisfy any claim. The balance due on this mortgage as of October 8, 1999 is $33,009.71. In consideration of said payment, the undersigned hereby releases the above described property from the lien of said instrument, but it is expressly understood and agreed that this release in no wise, and to no extent whatsoever, affect[s] the lien of said instrument as to the remainder of the property described in or secured by said instrument or subject to said lien. Antoinette contends that George failed to establish that there was a transfer of the mortgage. We agree for two reasons. First, the Partial Satisfaction and Release deals only with an interest Sterling may have/or could have had in the Davis mortgage. However, there is no evidence indicating that Sterling in fact ever had an interest in the mortgage. Section 8-9A-1, Ala.Code 1975, a part of the Alabama Uniform Fraudulent Transfer Act, § 8-9A-1 et seq., Ala.Code 1975 (the AUFTA), defines transfer as [e]very mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with an asset or an interest in an asset, and includes payment of money, release, lease, and creation of a lien or other encumbrance. No evidence establishes that the interest in the mortgage was an asset of Sterling. Second, under the AUFTA only transfers by a debtor are condemned. See § 8-9A-4(a) (A transfer made by a debtor is fraudulent as to a creditor, whether the creditor's claim arose before or after the transfer was made, if the debtor made the transfer with actual intent to hinder, delay, or defraud any creditor of the debtor. (emphasis added)). A debtor is defined as [a] person who is liable on a claim. § 8-9-1(6). In Folmar & Associates LLP v. Holberg, 776 So.2d 112, 117 (Ala.2000), addressing the AUFTA, we held, [t]he plain language of the statute makes it applicable only to transfers `made by a debtor.' Because Antoinette was not a debtor, the AUFTA does not apply to her. The trial court's summary judgment as to Count III is due to be affirmed. We need not address the additional defenses raised by Antoinette based upon the statute of limitations and the doctrine of res judicata.