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Holsombeck v. USAmeriBank

Alabama Court of Civil Appeals

March 16, 2018

Ellen Holsombeck
USAmeriBank f/k/a Aliant Bank

         Appeal from Jefferson Circuit Court (CV-15-901202)

          THOMAS, JUDGE.

         Ellen Holsombeck ("the wife") appeals from a judgment of the Jefferson Circuit Court in favor of USAmeriBank f/k/a Aliant Bank ("the bank"). The bank sued Stan Holsombeck ("the husband"), the wife, and Holsombeck Builders, Inc. ("HB"), claiming that the husband and the wife transferred certain property to the wife in 2013, pursuant to a divorce settlement agreement, to prevent the bank from collecting damages. See § 8-9A-1 et seq., Ala. Code 1975, the Alabama Fraudulent Transfer Act ("the AFTA"); American Nat'l Red Cross v. ASD Specialty Healthcare, Inc., 888 So.2d 464, 465 (Ala. 2003)("The purpose of the [AFTA] is to prohibit the fraudulent transfer of property by a debtor 'who intends to defraud creditors by placing assets beyond their reach.' Thompson Props. v. Birmingham Hide & Tallow Co., 839 So.2d 629, 632 (Ala. 2002).").

         The record indicates the following. The husband and the wife were married in 1982. In September 2011 HB executed six separate notes for business loans that were secured by mortgages. The husband was the guarantor of the six notes, and the marital residence was listed as security. In October 2013 the wife sued the husband for a divorce, and they filed a divorce settlement agreement in the circuit court. In November 2013 the circuit court entered a judgment divorcing the husband and the wife and dividing the marital property pursuant to the terms of the divorce settlement agreement, which the circuit court incorporated into the divorce judgment. Despite the fact that the husband had listed the marital residence as security for the six notes, the divorce judgment provided, among other things, that the wife retained the $250, 000 marital residence and that the husband was responsible for paying the remaining $18, 000 mortgage debt associated with the marital residence.

         After negotiating agreements with the bank to extend the deadlines for repayment of the six notes until December 2014, HB and the husband defaulted on the six notes, and the bank sued HB and the husband, seeking damages for breach of contract. The bank filed an amended complaint, adding the wife as a defendant and alleging an additional count of fraudulent transfer of the marital residence. Thereafter, the bank filed a motion for a partial summary judgment regarding all claims except its claim of fraudulent transfer. The circuit court entered a partial summary judgment in favor of the bank and conducted a trial on the remaining fraudulent-transfer claim.

         The circuit court entered a judgment in favor of the bank on April 18, 2017, as clarified on June 16, 2017, concluding that the marital residence and $75, 000 from the husband's and the wife's joint savings account[1] had been fraudulently transferred and were subject to the bank's enforcement rights as a judgment creditor. The wife filed a postjudgment motion, which the circuit court denied. The wife filed a timely notice of appeal to the Alabama Supreme Court. The appeal was transferred to this court by the supreme court, pursuant to § 12-2-7(6), Ala. Code 1975.

         The wife argues that the circuit court improperly concluded that she "fraudulently transferred property and misapplied "the law upon its own 'finding of fact.'"

"'Where ore tenus evidence is presented to the trial court, a presumption of correctness exists as to the court's findings on issues of fact; its judgment based on these findings of fact will not be disturbed unless it is clearly erroneous, without supporting evidence, manifestly unjust, or against the great weight of the evidence.' Odom v. Hull, 658 So.2d 442, 444 (Ala. 1995)."

Hope Developers, Inc. v. Vandiver, 665 So.2d 910, 913 (Ala. 1995).

         At the beginning of the trial, the bank's attorney said:

"[T]he single motion in this case is whether or not [the husband] fraudulently transferred his interest in the [marital residence] to [the wife]. [The husband] owed the bank about $650, 000. He was unable to pay the bill. It was not going good so he transfers his interest in his property to his wife pursuant to the divorce decree. He's never even moved out of the house."

         The husband's and HB's attorney said:

"We allege it's not fraudulent transfer. We allege that at the time of the divorce [the husband] was still paying on that debt. He had debt before he got a divorce. He had debt after he got a divorce. He was in a business that could have turned around the next week and we wouldn't even be sitting here. It's not a matter of transferring for fraudulent reasons. It was transferring ... because she wanted a divorce and if we had gone to a court of equity and had a judge decide, the judge would have done basically what these two adults did and that's ... an equitable division of the property."

         The wife testified that she decided to pursue a divorce from the husband after 31 years of marriage when she and the husband began to disagree regarding their finances. Specifically, she testified that the husband negotiated loans for HB without her knowledge, that the husband could not pay HB's bills after his business partner stole money from HB, and that the husband used funds from their joint savings account for HB's expenses against her express wishes. The wife testified that in 2010 she withdrew $100, 000 from their Aliant Bank joint savings account without informing the husband and that she deposited the entire amount in their Regions Bank joint savings account, and, she testified: "I think $75, 000 was put back in Aliant ...

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