Opinion ID: 1057998
Heading Depth: 2
Heading Rank: 2

Heading: Voluntary Conveyance

Text: We now consider Fox Rest's argument that the circuit court erred in granting the defendants' motion to strike regarding its voluntary conveyance claim. Fox Rest asserts that the circuit court erred by failing to address whether Mr. Little was insolvent when he made the alleged voluntary conveyances or whether he became insolvent upon making the conveyances. According to Fox Rest, the evidence proved that Mr. Little was insolvent when all of the challenged transfers were made. For this reason, Fox Rest asserts that the circuit court erred in granting the defendants' motion to strike. Code § 55-81, addressing voluntary conveyance, states: Every gift, conveyance, assignment, transfer or charge which is not upon consideration deemed valuable in law, or which is upon consideration of marriage, by an insolvent transferor, or by a transferor who is thereby rendered insolvent, shall be void as to creditors whose debts shall have been contracted at the time it was made, but shall not, on that account merely, be void as to creditors whose debts shall have been contracted or as to purchasers who shall have purchased after it was made. Even though it is decreed to be void as to a prior creditor, because voluntary or upon consideration of marriage, it shall not, for that cause, be decreed to be void as to subsequent creditors or purchasers. Unlike Code § 55-80, § 55-81 does not require a finding that the transferor acted with fraudulent intent. In re: Porter, 37 B.R. at 65. Rather, it provides that if a transferor is insolvent at the time a transfer is made, without valuable consideration, then the transfer shall be voidable by prior creditors. Id. The circuit court's ruling did not address whether Mr. Little was insolvent when the conveyances were made or whether the conveyances were made for valuable consideration. Aside from the court's statement that it looked at the standard[] under Code § 55-81, the court did not discuss the elements of voluntary conveyance at all. Instead, the court focused its ruling on Fox Rest's fraudulent conveyance claim. Considering the evidence presented in the light most favorable to Fox Rest, it established a prima facie case for Fox Rest's voluntary conveyance claim. As previously stated, McDonald opined that Mr. Little was insolvent from February 2003 through September 2006. All of the challenged transfers occurred during that period of time. McDonald described the method that he used in analyzing Mr. Little's solvency. When the defendants cross-examined McDonald regarding his method, he admitted that if he had credited Mr. Little with ownership of assets Mr. Little owned with Mrs. Little as tenants by the entirety, he would have concluded that Mr. Little was solvent in 2003. But McDonald did not state whether the transfersapproximately $1.7 million would have rendered Mr. Little insolvent if he had credited Mr. Little with the assets held as tenants by the entirety. Viewing this evidence in the light most favorable to Fox Rest, we cannot conclude as a matter of law that Mr. Little was solvent when the transfers were made. The circuit court thus erred in granting the defendants' motion to strike Fox Rest's voluntary conveyance claim.