Court Opinion

ID: 4124845
Source: CourtListenerOpinion
Date Created: 2017-02-09 20:06:25.725424+00
Date Added: 2024-06-11T07:46:19.181486
License: Public Domain

THIRD DIVISION
                           MILLER, P. J.,
                   MCFADDEN, P. J., and MCMILLIAN, J.

                   NOTICE: Motions for reconsideration must be
                   physically received in our clerk’s office within ten
                   days of the date of decision to be deemed timely filed.
                               http://www.gaappeals.us/rules

                                                                   February 9, 2017

In the Court of Appeals of Georgia
 A16A1595. BROCK et al. v. RES-GA SCL, LLC.
 A16A1596. BARBEE v. RES-GA SCL, LLC.
 A17A0168. RES-GA SCL, LLC v. BROCK et al.

      MCMILLIAN, Judge.

      The dispositive issue in these related appeals is whether the trial court

exceeded its authority by setting aside and re-entering orders dismissing plaintiff

RES-GA SCL, LLC’s (“RES-GA”) fraudulent transfer claims against defendants

Shelley A. Brock (“S. Brock”), The 2007 Brock Family Trust, AOBAtlanta, LLC, and

Zeb Barbee (hereinafter collectively “defendants”),1 which started the clock running

anew and provided RES-GA with another opportunity to timely appeal the dismissal

      1
        Other defendants were also named in the original fraudulent conveyance
complaint, but the parties listed above are those named in the notices of appeal filed
in Case Nos. A16A1595 and A16A1596.
orders. As more fully set forth below, we now reverse in Case Nos. A16A1595 and

A16A1596 and dismiss in Case No. A17A0168.

      The following facts are pertinent to our analysis. In July 2014, RES-GA

obtained a judgment in excess of $18,000,000 against, inter alios, Thomas Brock (“T.

Brock”) under the terms of a personal guaranty of a commercial loan that had been

assigned to RES-GA.2 In February 2015, RES-GA filed a complaint against T. Brock

and others, including the defendants named herein,3 seeking to set aside certain

transactions as fraudulent conveyances under the Georgia Uniform Fraudulent

Transfers Act, OCGA § 18-2-70.4 The fraudulent transfer defendants filed motions

to dismiss, asserting among other things that RES-GA lacked standing to challenge

those allegedly fraudulent transfers that were made before it was assigned an interest

      2
        A more complete version of the circumstances surrounding the loan is set out
in RES-GA SCL, LLC v. Stonecrest Land, LLC, 333 Ga. App. 289 (776 SE2d 489)
(2015), in which we affirmed the judgment against T. Brock and the borrower.
      3
        The defendants in the fraudulent transfer case, including those not parties on
appeal, will be collectively referred to as “fraudulent transfer defendants.”
      4
        We will refer to the operative provisions of the UFTA as they existed at the
time the complaint was filed, while noting that the UFTA was amended effective July
1, 2015 and is now called the Uniform Voidable Transactions Act (“UVTA”). See Ga.
L. 2015, p. 996, § 4A-1.

                                          2
in the loan or debt,5 and on the basis that RES-GA had failed to obtain the necessary

certificate of authority to transact business in Georgia. See OCGA §§ 14-11-702 &

14-11-711.

      On July 16, 2015, the trial court entered an order dismissing the fraudulent-

conveyance claims for transfers that occurred before RES-GA was assigned an

interest in the debt on October 18, 2010. The trial court also found that RES-GA was

barred from seeking to set aside a post-assignment transfer that occurred on April 6,

2011, because it had not yet obtained a certificate of authority to transact business in

Georgia, but deferred dismissing any such claim for 30 days to give RES-GA an

opportunity to provide the court with documentation that it was certified to transact

business in Georgia. RES-GA sought a certificate of immediate review from the July

16 order, but the trial court denied RES-GA’s request on July 27, 2015. However,

RES-GA also filed a notice of direct appeal from the trial court’s July 16 order on

July 24, 2015.

      5
         In Georgia fraud claims generally are not assignable, and this Court has held
that an assignee of a debt is precluded from pursuing a fraudulent transfer claim under
the pre-2015 version of the UFTA. See RES-GA Hightower, LLC v. Golshani, 334
Ga. App. 176, 180 (1) (a) (778 SE2d 805) (2015). However, as further noted in
Golshani, under the 2015 amendments, assignees and successors to debt may pursue
fraudulent transfer claims under the amended UFTA, now referred to as the UVTA.
Id. at 180-81 (1) (b).

                                           3
      RES-GA did not provide the necessary proof of its authority to transact

business in Georgia, and on August 31, 2015 and September 1, 2015, the trial court

entered a series of orders dismissing with prejudice the remaining fraudulent transfer

claims, which constituted a final disposition in the case.6 Significantly, RES-GA did

not file a notice of appeal from any of the final dismissal orders, and on October 5,

2015, defendants, inter alios, filed a motion to dismiss the July 24 notice of appeal

on the basis that the order being appealed was not final and the trial court had denied

RES-GA’s request for a certificate of immediate review. On December 23, 2015, the

trial court dismissed the July 24, 2015 notice of appeal as premature. However, at the

same time, the trial court also sua sponte entered a separate order setting aside the

final dismissal orders and reentering those orders as of that date.

      On January 20, 2016, defendants S. Brock, The 2007 Brock Family Trust, and

AOBAtlanta, LLC filed a notice and corrected notice of appeal from the portion of

the December 23, 2015 order setting aside and reentering the final dismissal orders,

and that appeal was docketed in this Court as Case No. A16A1595; appellee Zeb

Barbee filed a separate notice of appeal from the December 23, 2015 order, and that

appeal has been docketed in this Court as Case No. A16A1596. On December 28,

      6
          These orders will be collectively referred to as the “final dismissal orders.”

                                            4
2015, RES-GA filed a notice of appeal challenging the substantive rulings of the trial

court on the issues of the assignability of the fraudulent transfer claims and the need

for a certificate of authority as a prerequisite to pursuing its fraudulent transfer claim,

and that appeal has been docketed in this Court as Case No. A17A0168.7

                            Case Nos. A16A1595, A16A1596

       1. Defendants8 argue that the trial court lacked the authority sua sponte to set

aside and reenter the final dismissal orders after the expiration of the term of court in

which they were entered. On the other hand, RES-GA asserts that the filing of the

July 24, 2015 notice of appeal acted as a supersedeas, and the dismissal orders

entered while that notice was pending were without legal effect, a nullity and void,

and thus could be set aside by the trial court at any time.

       Generally speaking, in civil actions a trial court, upon the filing of a notice of

appeal, loses jurisdiction to modify or enforce a judgment which is the subject of the

appeal during the period of supersedeas, and only those matters which are

       7
        RES-GA filed its notice of appeal to the Supreme Court of Georgia, but that
Court transferred the appeal to us; that appeal has been docketed to the December
2017 term of court.
       8
      “Defendants” as used here refers only to those fraudulent transfer defendants
who have filed notices of appeal from the trial court’s order.

                                            5
independent of and distinct from the judgment on appeal remain within the

jurisdiction of the trial court. OCGA § 5-6-46; Davis v. Harpagon Co., 281 Ga. 250

(8) (637 SE2d 1) (2006). Thus, an order about the same subject matter after the trial

court has lost jurisdiction to the appellate court is void and without effect and can be

set aside at any time. See OCGA § 9-12-16 (“The judgment of a court having no

jurisdiction of the person or the subject matter or which is void for any other cause

is a mere nullity and may be so held in any court when it becomes material to the

interest of the parties to consider it.”); see also James v. Intown Ventures, LLC, 290
Ga. 813, 816 (2) (725 SE2d 213) (2012) (“[U]nder Georgia law, a judgment alleged

to be void for lack of personal or subject matter jurisdiction may be attacked in any

court, by any person, at any time. OCGA § 9-11-60 (a) and (f)”).

      However, as defendants contend, the final dismissal orders in this case are not

void. As our Supreme Court recently explained, a notice of appeal does not act as a

supersedeas when a party attempts to appeal an interlocutory order but fails to follow

the requirements for obtaining interlocutory review set out in OCGA § 5-6-34 (b),

which includes obtaining a certificate of immediate review from the trial court and

an order from the appellate court granting the appeal. Islamkhan v. Khan, 299 Ga.
548, 550-51 (2) (787 SE2d 731) (2016). And, as the Court in Islamkhan went on to

                                           6
explain, because a notice of appeal filed from an interlocutory order without first

complying with the requirements for obtaining interlocutory review is without legal

effect, no action need be taken to prevent supersedeas from attaching, such as

dismissing the notice of appeal, and the filing of the notice does not divest the trial

court of jurisdiction, even to modify or enforce the order that is the subject of the

ineffective appeal. Id. at 551-52 & n.7. Here, there is no question that the July 16,

2015 order was interlocutory and the attempted faulty appeal from that order was thus

ineffective to convey jurisdiction to this Court. Accordingly, the trial court’s orders

entered on August 31, 2015 and September 1, 2015, were not void and did exactly

what they purported to do, which was act as final orders dismissing all of RES-GA’s

remaining claims. E.g., Levingston v. Crable, 203 Ga. App. 16, 18 (416 SE2d 131)

(1992). (“A judgment is final when it disposes of the entire controversy, leaving

nothing for the trial court to do in the case.”).

      The question then is whether the trial court had the authority to set aside and

reissue these valid orders more than two terms after they were entered. “[T]he general

rule [is] that a ‘court cannot set aside or alter its final judgment after the expiration

of the term at which it was entered, unless [a] proceeding for that purpose was begun

during the term.’ Young Constr. v. Old Hickory House # 3, 210 Ga. App. 559, 561-62

                                            7
(2) (b) (436 SE2d 581) (1993).” Rudd v. Paden, 279 Ga. App. 141, 144-45 (3) (630

SE2d 648) (2006). Here, the final dismissal orders were entered in the July term of

court, and were not set aside until two terms later, in the November term of court. See

OCGA § 15-6-3 (3) (Fulton Superior Courts has six terms, beginning the first

Monday in January, March, May, July, September, and November). Accordingly, the

trial court had the authority to vacate the final dismissal orders only if a proceeding

seeking to set aside the orders was instituted during the term in which they were

entered. RES-GA argues that its response to the appellants’ motion to dismiss the

appeal should be considered such a proceeding because in that response RES-GA

contended that if the appeal was not valid, the orders should be reentered. But RES-

GA at all times maintained that the orders were void, that the trial court was divested

of jurisdiction to enter the orders even if RES-GA’s attempt to appeal was ineffective,

and has never contended that the orders were valid but should be set aside for some

other reason. Nor has RES-GA ever filed a motion to set aside, vacate, or reenter the

orders, and RES-GA’s response to the motion to dismiss appeal did not constitute a

proceeding to set aside the valid dismissal orders. Indeed, the trial court’s December

23, 2015 order setting aside those orders recites that RES-GA had not made a formal

motion to set aside, and that the court was acting sua sponte.

                                          8
      Because the trial court had no authority to set aside and reenter the August 31,

2015 and September 1, 2015 dismissal orders outside the term in which they were

entered, the subsequent December 23, 2015 reentered orders are null and void, and

the August 31, 2015 and September 1, 2015 final dismissal orders must be reinstated.

Tanaka v. Pecqueur, 268 Ga. App. 380, 381-82 (1) (601 SE2d 830) (2004); see also

the Levin Co. v. Walker 289 Ga. App. 299 (656 SE2d 588) (2008).

                                Case No. A17A0168.

      2. RES-GA did not attempt to appeal the August 31, 2015 and September 1,

2015 final dismissal orders, and any appeal from those orders is now time barred. See

OCGA § 5-6-38 (a) (“A notice of appeal shall be filed within 30 days after entry of

the appealable decision or judgment complained of . . .”). And although RES-GA did

file a notice of appeal from the December 23, 2015 reentered dismissal orders, those

orders were void, and any appeal from that order was ineffective. See Bryan v. Brown

Childs Realty Company, Inc., 236 Ga. App. 739, 742 (2) (513 SE2d 271) (1999).

Thus, we are without jurisdiction to entertain the appeal in Case No. A17A0168, and

it is accordingly dismissed.

      Judgments reversed in Case Nos. A16A1595 and A16A1596. Appeal dismissed

in Case No. A17A0168. Miller, P. J., and McFadden, P. J., concur.

                                          9