Court Opinion

ID: 4363427
Source: CourtListenerOpinion
Date Created: 2019-01-31 15:01:53.14925+00
Date Added: 2024-06-11T13:30:10.331747
License: Public Domain

NOTICE: NOT FOR OFFICIAL PUBLICATION.
 UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
                 AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

                                    IN THE
             ARIZONA COURT OF APPEALS
                                DIVISION ONE

             MOIRBIA SCOTTSDALE, LLC, Plaintiff/Appellee,

                                        v.

            JEANEEN BONNETT, et al., Defendants/Appellants.

                             No. 1 CA-CV 18-0055
                               FILED 1-31-2019

           Appeal from the Superior Court in Maricopa County
                          No. CV2014-051238
                          No. CV2015-051261
                              (Consolidated)
               The Honorable John R. Hannah, Jr., Judge

      AFFIRMED IN PART; VACATED IN PART; REMANDED

                                   COUNSEL

Sacks Tierney PA, Scottsdale
By Randy Nussbaum, Philip R. Rudd
Counsel for Plaintiff/Appellee

Tiffany & Bosco, PA, Phoenix
By Lance R. Broberg, Amy D. Sells
Counsel for Defendants/Appellants
                        MOIRBIA v. BONNETT, et al.
                           Decision of the Court

                     MEMORANDUM DECISION

Presiding Judge Diane M. Johnsen delivered the decision of the Court, in
which Judge Michael J. Brown and Judge Jennifer M. Perkins joined.

J O H N S E N, Judge:

¶1            Jeaneen Bonnett and 100% Natural Gourmet, Inc., dba
Madison Group Consultants ("Madison") appeal a judgment entered
against them for fraudulent transfer. For the following reasons, we affirm
in part, vacate in part and remand to the superior court.

                FACTS AND PROCEDURAL HISTORY

¶2            On October 3, 2012, Moirbia Scottsdale, LLC ("Moirbia") was
assigned a judgment entered against Steven Goumas, Irish Restaurant and
Pub Company, LLC ("Pub Company"), and My Goodness, Inc. (collectively,
the "Judgment Debtors") in the principal amount of $2,042,878, plus
interest. This appeal stems from Moirbia's attempts to collect the judgment
against Madison and Bonnett, who is Madison's president and director.

¶3          Goumas has been insolvent since 2010. He was the sole
member and manager of Pub Company. Pub Company was the manager,
but not a member, of Perfect Pint Holding Company, LLC ("Perfect Pint").
Pub Company's management interest in Perfect Pint, however, entitled it to
receive 50% of the distributions from Perfect Pint (the "Management
Interest").

¶4            Perfect Pint was the sole member of Irish Pub-Tempe, LLC
("Tempe Pub"), which owned and operated a restaurant known as "Rula
Bula the Tempe Irish Pub." The other 50% of Perfect Pint's distributions
went to its various members, one of whom was Goumas, who held a 4.09%
membership interest at one point. As the manager and sole member of Pub
Company, Goumas also received funds Perfect Pint distributed to Pub
Company via the Management Interest.

¶5            In October 2011, Perfect Pint sold its membership interest in
Tempe Pub to Boer Hospitality, LLC ("Boer") for $720,000. In the deal, Boer
paid $360,000 cash and gave a promissory note for $360,000 (the "Boer
Note"). Bonnett had loaned Boer the cash down payment, which Perfect
Pint distributed to its members. In satisfaction of Pub Company's right to

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                       MOIRBIA v. BONNETT, et al.
                          Decision of the Court

50% of Perfect Pint's distributions under the Management Interest, Pub
Company acquired the Boer Note.

¶6            In August 2012, Goumas and Pub Company assigned Pub
Company's Management Interest in Perfect Pint to Bonnett and Madison.
Under the assignment, Bonnett and Madison received all of Pub Company's
economic rights flowing from Perfect Pint, including the right to receive
payments made on the Boer Note. At the time, the Management Interest
constituted substantially all of Pub Company and Goumas's assets.

¶7            Thereafter, pursuant to the Management Interest, Madison
received payments on the Boer Note totaling $50,333.21 and distributions
of $61,054 from Perfect Pint. Separately, Goumas also assigned to Bonnett
various checks (totaling $90,608.81) payable to him or entities he controlled.

¶8             This case began when Moirbia sued Bonnett, Madison, Perfect
Pint, and the Judgment Debtors, alleging fraudulent transfer under Arizona
Revised Statutes ("A.R.S.") section 44-1004 (2019).1

¶9            After a bench trial, the superior court entered lengthy
findings of fact, including:

          a. The Boer Note had a value of $358,572 when the
             Management Interest was transferred to Bonnett and
             Madison, and that Bonnett and Madison became
             entitled to receive payment under the Boer Note at the
             time of the transfer.

          b. Pursuant to the assignment, Madison received
             distributions from Perfect Pint in the amount of
             $61,054.

          c. Goumas transferred a total of $153,609 to Bonnett by
             assigning checks payable to him or entities he
             controlled to Bonnett or Madison. Of those funds,
             $90,608.81 was transferred within the applicable four-
             year statute of limitations of Moirbia's complaint.

1      Absent material revision after the relevant date, we cite the current
version of a statute or rule.

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                       MOIRBIA v. BONNETT, et al.
                          Decision of the Court

          d. Goumas, Pub Company and My Goodness were
             insolvent or became insolvent shortly after the
             transfers were made.

          e. These transfers, along with others by Goumas,
             constituted substantially all of Goumas, Pub Company
             and My Goodness's assets.

          f. Bonnett and Madison did not receive the transfers in
             good faith.

¶10            The court concluded that Bonnett and Madison were the
recipients of fraudulent transfers made by the Judgment Debtors after the
entry of the judgment against Goumas and that the transfers were made
with the "actual intent to hinder, delay, or defraud . . . Moirbia." The court
entered judgment against Bonnett and Madison, and in favor of Moirbia,
for $510,235 plus prejudgment interest of $127,732.22, post-judgment
interest, and $17,493.68 in taxable costs. The $510,235 principal amount was
the sum of (1) $90,609 in checks Goumas transferred directly to Bonnett
after September 9, 2009; (2) $61,054 in distributions from Perfect Pint to
Madison; and (3) $358,572, representing the value of the Boer Note.

¶11           Bonnett and Madison moved for a new trial, disputing joint
and several liability. They argued the $90,609 in checks were assigned only
to Bonnett, that the $61,054 in distributions were made from Perfect Pint to
Madison only, and that Bonnett was not a transferee of the $358,572 Boer
Note. In response, Moirbia conceded that Bonnett was the sole transferee
of the $90,609 in assigned checks.

¶12           The superior court denied the motion, and Bonnett and
Madison timely appealed. We have jurisdiction under Article 6, Section 9,
of the Arizona Constitution, and A.R.S. §§ 12-120.21(A)(1) (2019) and
-2101(A)(1) (2019).

                               DISCUSSION

¶13            We defer to the superior court's factual findings after a bench
trial "unless clearly erroneous, giving due regard to the opportunity of the
court to judge the credibility of witnesses." Castro v. Ballesteros-Suarez, 222
Ariz. 48, 51, ¶ 11 (App. 2009) (quotation omitted). We do not weigh the
evidence or determine witnesses' credibility; instead, "our duty begins and
ends with inquiring whether the trial court had before it evidence
reasonably supporting its action viewed in the light most favorable to
sustaining the findings." Imperial Litho/Graphics v. M.J. Enters., 152 Ariz. 68,

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                       MOIRBIA v. BONNETT, et al.
                          Decision of the Court

72 (App. 1986). We review issues of law, however, de novo. Castro, 222 Ariz.
at 52, ¶ 12.

¶14            Additionally, we review a superior court's denial of a motion
for new trial for an abuse of discretion. Styles v. Ceranski, 185 Ariz. 448, 450
(App. 1996). We will reverse an order denying a new trial "only if it reflects
a manifest abuse of discretion given the record and circumstances of the
case." Id.

A.     Perfect Pint's Distributions to Bonnett and Madison.

¶15           Bonnett and Madison contend the distributions they received
from Perfect Pint – the $61,054 in distributions and the $358,572 Boer Note
– are not fraudulent transfers because Perfect Pint is not a debtor under the
stipulated judgment, as required by the fraudulent transfer statute, A.R.S.
§ 44-1004(A).

¶16           Under § 44-1004(A)(1), a "transfer made or obligation
incurred by a debtor is fraudulent as to a creditor . . . if the debtor made the
transfer or incurred the obligation . . . [w]ith actual intent to hinder, delay
or defraud any creditor of the debtor." On appeal, Bonnett and Madison do
not dispute that the transfers were made with the intent to hinder, delay or
defraud Moirbia. They argue only that the transfer could not be fraudulent
because Perfect Pint was not a debtor.

¶17             A "transfer" is defined as "every mode, direct or indirect,
absolute or conditional, voluntary or involuntary, of disposing of or parting
with an asset or an interest in an asset." A.R.S. § 44-1001(9) (2019). This
broad definition of a "transfer" includes any transaction in which a property
interest is relinquished. State ex rel. Indus. Comm'n v. Wright, 202 Ariz. 255,
257, ¶ 8 (App. 2002).

¶18           Bonnett and Madison's receipt of the Boer Note and the
$61,054 in distributions stems from the assignment to them of the
Management Interest in Perfect Pint. The holder of the Management
Interest was entitled to receive 50% of Perfect Pint's distributions and,
pursuant to that right, acquired the Boer Note as its share of the proceeds
of the sale of Tempe Pub to Boer. Without the Management Interest
assignment, Bonnett and Madison would not have received the Boer Note
or the $61,054 in distributions.

¶19         The Management Interest was a valuable asset that Goumas
and Pub Company divested when they assigned it to Bonnett and Madison.
The assignment of the Management Interest was a fraudulent transfer and

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                       MOIRBIA v. BONNETT, et al.
                          Decision of the Court

the distributions resulting from that fraudulent transfer rightfully belong to
Moirbia.

B.     The Value of the Boer Note.

¶20           The superior court found the Boer Note was valued at
$358,572 at the time of the transfer. Bonnett and Madison argue the value
of the Boer Note should be reduced to $50,333.21, the amount actually
distributed under the Boer Note. The court's valuation of the Boer Note of
$358,572 at the time of the fraudulent transfer, however, has support in the
record and is not clearly erroneous. Castro, 222 Ariz. at 51-52, ¶ 11.

¶21            Under A.R.S. § 44-1008(B) and (C) (2019), Moirbia can recover
the value of the asset fraudulently transferred, and the resulting "judgment
must be for an amount equal to the value of the asset at the time of the
transfer." There is ample evidence to support the court's finding that the
value of the Boer Note at the time of the transfer was $358,572. Perfect Pint's
2012 Schedule K-1 valued the Boer Note at $358,572. Additionally, Goumas
testified that he anticipated the Boer Note would be repaid in full, and the
debtor testified he anticipated paying back the note. Thus, the court did not
err.

C.     Apportionment of Liability for the Transfers.

¶22           Bonnett and Madison further argue the $61,054 in
distributions and Boer Note were transferred to Madison, not Bonnett, and,
therefore, Bonnett should not be held liable jointly and severally for those
distributions. The superior court found that the Management Interest was
transferred to Bonnett and Madison. The court also found that pursuant to
the transfer of the Management Interest, Bonnett and Madison received the
economic rights associated with that interest, and determined that the
$61,054 in distributions were made pursuant to the Management Interest.

¶23           The evidence supports the superior court's findings. The
Management Interest was transferred from Goumas and Pub Company to
both Bonnett and Madison. In other words, because both Bonnett and
Madison were transferees of the Management Interest, both are liable for
the value of the assets acquired as a result of the fraudulent transfer. The
court therefore did not err in holding Bonnett and Madison, the assignees
of the Management Interest, liable for the resulting damages.

¶24           Finally, Bonnett and Madison contend that the judgment
must be amended to reflect that Bonnett is solely liable for the $90,609 in
distributions made to her. Moirbia conceded that Bonnett was the sole

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                      MOIRBIA v. BONNETT, et al.
                         Decision of the Court

transferee of the $90,609 in assigned checks and does not dispute that the
judgment should be amended to reflect Bonnett as solely liable for those
transfers. Thus, we vacate the judgment and remand to the superior court
to enter an amended judgment recognizing that Bonnett is solely liable for
the $90,609 in fraudulently transferred checks from Goumas and his related
entities.

                              CONCLUSION

¶25          For the foregoing reasons, we affirm the judgment in part and
remand the matter to the superior court so that it may amend the judgment
to apportion $90,609 of the damages solely to Bonnett.

                     AMY M. WOOD • Clerk of the Court
                     FILED: AA

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