Alliant Tax Credit 31, Inc. v. M. Vincent Murphy, III

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[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT
________________________

No. 15-14634
________________________

D.C. Docket No. 1:11-cv-00832-RWS

ALLIANT TAX CREDIT 31, INC,
a Florida corporation,
ALLIANT TAX CREDIT FUND XXVII, LTD.,
a Florida limited partnership,
ALLIANT TAX CREDIT TAX CREDIT XXVII, INC,
a Florida corporation,
ALLIANT TAX CREDIT XI, INC.,
a Florida corporation,
ALLIANT TAX CREDIT XI, LTD.,
a Florida limited partnership,

Plaintiffs - Counter Defendants – Appellees -
Cross Appellants,

versus

M. VINCENT MURPHY, III,
MULTIFAMILY HOUSING DEVELOPERS, L.L.C.,
a Georgia limited liability company,
COMMUNITY MANAGEMENT SERVICES, INC.,
a Georgia corporation,
GAZEBO PARK APARTMENTS OF ACWORTH, LLC,
a Georgia limited liability company,
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Defendants - Appellants - Cross Appellees,

MARILYN MURPHY,

Defendant - Counter Claimant - Appellant -
Cross Appellee.

________________________

Appeals from the United States District Court
for the Northern District of Georgia
________________________

(May 15, 2019)

Before TJOFLAT and WILLIAM PRYOR, Circuit Judges, and MURPHY, *
District Judge.

TJOFLAT, Circuit Judge:

This fraudulent-transfer case, like many such cases, is a suit about a suit. In

the first suit, Plaintiffs obtained a judgment in federal district court in Kentucky for

breach of a partnership contract. But when Plaintiffs tried to collect, they

discovered that the once-wealthy Defendant was figuratively penniless. The

surprised Plaintiffs surmised that Defendant had colluded with his former wife to

fraudulently transfer his assets to her (or to entities under her control) as part of

their divorce settlement. So Plaintiffs sued—again—this time in federal district

court in Georgia—to recover their judgment under Georgia’s fraudulent-transfer

*
Honorable Stephen J. Murphy, III, United States District Court for the Eastern District
of Michigan, sitting by designation.

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statute. Agreeing with Plaintiffs that fraudulent transfers had occurred, a jury

returned a verdict in their favor. The District Court entered judgment accordingly,

and this appeal and cross-appeal followed.

The run-up to this suit began when Plaintiffs, five entities that we

collectively refer to as “Alliant,” 1 lent Defendant M. Vincent Murphy, III

investment capital to build low-income housing units that were never completed.

So Alliant sued him and other guarantors of the debt in federal court in the Eastern

District of Kentucky for breach of their partnership contract. Alliant was joined in

that suit by Alliant Tax Credit Fund 31-A, Ltd. (“Alliant 31-A”), which also lent

investment capital to Vincent. 2 Alliant and Alliant 31-A prevailed, and the District

Court for the Eastern District of Kentucky entered a judgment (the “Kentucky

judgment”) in their favor for $8,946,643. Vincent appealed, and the Court of

1
The full names are Alliant Tax Credit 31, L.L.C. (“Alliant 31”), Alliant Tax Credit Fund
XXVII, Ltd. (“Alliant XXVII, Ltd.”), Alliant Tax Credit Fund XXVII, L.L.C. (“Alliant XXVII,
L.L.C.”), Alliant Tax Credit XI, L.L.C. (“Alliant XI, L.L.C.”), and Alliant Tax Credit XI, Ltd.
(“Alliant XI, Ltd.”).
2
Alliant 31-A was dismissed by the District Court for the Northern District of Georgia
because its presence would have destroyed subject-matter jurisdiction. For this reason (and
others that will become clear), we treat Alliant 31-A separately.

3
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Appeals for the Sixth Circuit affirmed. Alliant Tax Credit Fund 31-A, Ltd. v.

Murphy, 494 F. App’x 561, 563 (6th Cir. 2012).

But the fraudulent activity that gave rise to this suit began before the

Kentucky judgment was entered.

Vincent and his wife, Marilyn Murphy, had earlier divorced in the Superior

Court of Fulton County, Georgia. The divorce decree incorporated a settlement

agreement between them. As part of the agreement, Marilyn received from

Vincent several millions of dollars in cash and commercial paper, stock shares, a

mountain cabin, household furnishings, and an apartment complex. These assets

are the basis for the fraudulent-transfer action here. When Alliant sought to collect

on the Kentucky judgment, it found that Vincent was judgment proof. So it sued

Vincent for a second time.

Alliant (but not Alliant 31-A) brought this action against Vincent, Marilyn,

Multifamily Housing Developers, L.L.C. (“Multifamily Housing”), and

Community Management Services, Inc. (“CMS”), 3 in the District Court for the

Northern District of Georgia under the Uniform Fraudulent Transfers Act (the

“UFTA”), O.C.G.A. §§ 18-2-70 to 80 (2010), amended by the Uniform Voidable

3
Alliant alleged that Multifamily Housing and CMS, both of which Marilyn controlled,
were also fraudulent transferees of some of Vincent’s assets.

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Transactions Act (the “UVTA”), O.C.G.A. §§ 18-2-70 to 85 (2015).4 The UFTA,

a quintessential fraudulent-transfer statute, allows creditors to void certain asset

transfers made by a debtor with the purpose of immunizing itself from collection.

See O.C.G.A. § 18-2-77 (2010). Alliant claimed that the Murphys’ divorce

settlement and Vincent’s asset transfers to Defendants were ruses to evade

Vincent’s creditors and thus sought to void those transfers. The case proceeded to

trial, and a jury returned an itemized verdict for Alliant after having found that

twenty-three transfers from Vincent to Defendants were fraudulent. The jury also

found that the Murphys were subject to punitive damages but that only Vincent had

acted with the “specific intent to cause harm.” It awarded $1,000,000 in punitive

damages against him and $100,000 in punitive damages against Marilyn.

After the jury returned its verdict, the District Court for the Northern District

of Georgia entered a final judgment (the “Georgia judgment”) for Alliant. Before

describing what the judgment provided, we pause momentarily to note the

remedies available under the UFTA.

4
Georgia’s General Assembly amended the UFTA in 2015. See Uniform Voidable
Transactions Act, 2015 Ga. Laws 1019 (codified at O.C.G.A. §§ 18-2-70 to 85 (2018)). As part
of the amendment, the General Assembly changed the name of the statute. Some of the
amendments are consequential to issues we must decide on appeal. But the parties agree—and
we follow their lead—the UFTA is the version of the law we must apply. We discuss the
UVTA—note the “V” in place of the “F”—at various points throughout this opinion; we make
clear when we reference that currently enacted version of the statute.

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The UFTA provides creditors with both equitable and legal remedies. The

creditor may obtain, as an equitable remedy, “[a]voidance of the transfer . . . to the

extent necessary to satisfy the creditor’s claim.” See id. § 18-2-77(a)(1). Or it may

obtain, as a legal remedy, “judgment [against the transferee] for the value of the

asset transferred . . . or the amount necessary to satisfy the creditor’s claim,

whichever is less.” See id. § 18-2-78(b).

Alliant did not seek avoidance of any of the transfers made. Nor realistically

could it: Most of Vincent’s transfers were in the form of cash that has since been

turned into proceeds that are likely untraceable. Rather, it sought a money

judgment for the value of the assets transferred. Said differently, it sought the

legal remedy available under the UFTA.

The Georgia judgment, which purported to implement the jury’s verdict,

provided that Alliant would receive the sum of $10,137,285.84, which consisted of

the amount of the Kentucky judgment ($8,946,643), interest on that judgment

($90,642.84), and the punitive-damages awards against Vincent and Marilyn

($1,000,000 and $100,000, respectively). The District Court for the Northern

District of Georgia also issued a writ of execution that directed the U.S. Marshal to

seize Defendants’ assets to satisfy the judgment. 5

5
In ordering the U.S. Marshal to seize the items identified in the judgment, the District
Court appeared to be entering an in rem judgment, as if Alliant had brought suit against the
fraudulently conveyed assets or their proceeds themselves. The Court should have entered an in

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Following the entry of the Georgia judgment, Marilyn satisfied the judgment

in full, and Alliant moved to alter or amend the judgment, see Fed. R. Civ. P. 60, to

allow prejudgment interest under Georgia law. The District Court for the Northern

District of Georgia denied this motion, reasoning that (1) Alliant’s UFTA claim

was unliquidated—that is, not reduced to a fixed sum—until the Georgia judgment

was entered and (2) under Georgia law, entitlement to prejudgment interest for

unliquidated claims requires compliance with the Unliquidated Damages Interest

Act, O.C.G.A. § 51-12-14 (2018), whose procedures Alliant had not followed.

Defendants appealed the judgment entered pursuant to the verdict, and Alliant

cross-appealed the order denying prejudgment interest.

This appeal and cross-appeal require us to decide numerous discrete issues.

We first take up justiciability problems in Part II. We then turn to the merits,

addressing Defendants’ arguments on appeal in Parts III through V and Alliant’s

arguments on cross-appeal in Part VI. We conclude in Part VII.

II.

personam judgment against Vincent and Marilyn individually and issued writs of execution
against their assets or writs of garnishment against their accounts. This error does not matter for
our purposes, however, because the parties treated the judgment as though it were entered in
personam.

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We begin by addressing two jurisdictional bars to the District Court’s power

to entertain this suit: mootness and subject-matter jurisdiction.6 We then address

non-jurisdictional bars. Defendants challenge the Court’s decision not to abstain

from exercising its jurisdiction on three prudential grounds. First, that even if the

parties are diverse of citizenship, this case falls within the domestic-relations

exception to diversity jurisdiction. Second, that by entertaining this suit, the Court

violated the Rooker-Feldman doctrine. 7 And third, that Alliant is collaterally

estopped from attacking the transfers as fraudulent.

The first question, given Marilyn’s full satisfaction of the Georgia judgment:

Are this appeal and cross-appeal moot? After oral argument, we asked the parties

to brief this question and having reviewed their responses, we are satisfied that the

case remains a case or controversy within the meaning of Article III. See U.S.

Const. art. III, § 2, cl. 1.

“What matters [for mootness] is whether the parties’ actions objectively

manifest an intent to abandon the issues on appeal.” RES-GA Cobblestone, LLC v.

Blake Constr. & Dev., LLC, 718 F.3d 1308, 1315 (11th Cir. 2013). So payment

6
Unless otherwise stated, our use of “District Court” from this point forward refers to the
Court below—the District Court for the Northern District of Georgia.
7
Rooker v. Fid. Tr. Co., 263 U.S. 413, 44 S. Ct. 149 (1923), and D.C. Court of Appeals v.
Feldman, 460 U.S. 462, 103 S. Ct. 1303 (1983).

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moots an appeal “only if the parties mutually intended a final settlement of all the

claims in dispute and a termination of the litigation.” McGowan v. King, Inc., 616

F.2d 745, 747 (5th Cir. 1980) (per curiam). 8

This case continues to breathe life. In Alvarez Perez v. Sanford-Orlando

Kennel Club, Inc., 518 F.3d 1302 (11th Cir. 2008), we applied the Supreme

Court’s decision in United States v. Hougham, 364 U.S. 310, 81 S. Ct. 13 (1960),

and held that an appeal and cross-appeal situated much like the ones before us

today were not moot. There, the plaintiff’s counsel signed satisfaction-of-

judgment documents that were subsequently filed in the district court, but the

plaintiff did not expressly reserve his right to appeal. 518 F.3d at 1305. But there,

as here, the parties “continued to pursue their appeals.” Id. at 1307. There, as

here, the parties “filed supplemental letter briefs addressing the merits.” Id. And

there, as here, a party “inform[ed] us of a change in status involving one of the

defendants.” Id. In other words, “[i]nstead of filing a motion to dismiss the appeal

as soon as a satisfaction was filed in the district court, both parties continued to

litigate the case in this Court as though nothing had changed.” Id. at 1308.

In fact, Marilyn merely did the effective equivalent of posting a supersedeas

bond—an act that by itself does not moot a case. See Fed. R. Civ. P. 62(b).

8
In Bonner v. City of Prichard, 661 F.2d 1206 (11th Cir. 1981) (en banc), this Court
adopted as binding precedent all decisions of the former Fifth Circuit handed down prior to
October 1, 1981.

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When a judgment is appealed, both the winning and losing parties face risk

in the period between the time judgment is entered and the time it is affirmed or

reversed. The winning party seeks immediate satisfaction of the judgment because

assets available at the time judgment is entered might disappear by the time it is

affirmed. And the losing party seeks delayed satisfaction of judgment for a

parallel reason: Assets available at the time judgment is entered might disappear by

the time it is reversed. A supersedeas bond insures both parties against these

respective risks. It permits a judgment debtor to “avoid the risk of satisfying the

judgment only to find that restitution is impossible after reversal on appeal” and

“secures the prevailing party against any loss sustained as a result of being forced

to forgo execution on a judgment during the course of an ineffectual appeal.”

Poplar Grove Planting & Ref. Co. v. Bache Halsey Stuart, Inc., 600 F.2d 1189,

1191 (5th Cir. 1979).

But posting a supersedeas bond does not moot an appeal. See Dale M. ex

rel. Alice M. v. Bd. of Educ. of Bradley-Bourbonnais High Sch. Dist. No. 307, 237

F.3d 813, 815 (7th Cir. 2001) (Posner, J.) (“A judgment creditor who pays the

judgment pending appeal instead of posting a supersedeas bond (which would

automatically stay collection) is entitled to the return of its money if the decision is

reversed, and so the payment does not moot the appeal unless the appellant has

relinquished his right to seek repayment if he wins.” (citation omitted)).

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Marilyn’s choice to pay the judgment does not render this case moot any

more than would her decision to post a supersedeas bond; she simply waived the

protection a bond would provide. Cf. 11 Charles Alan Wright et al., Federal

Practice and Procedure § 2905, at 724−25 (3d ed. 2012) (“[A] person who cannot

furnish a supersedeas bond does not lose the right to appeal, although he does

assume the risk of getting his money back again if the judgment is reversed.”).

In short, the “objective manifestations of both parties clearly indicate that

they intended to pursue their positions in the appeal and cross-appeal.” Alvarez

Perez, 518 F.3d at 1308. We turn now to subject-matter jurisdiction.

Defendants maintain that the District Court lacked jurisdiction to entertain

the dispute because the parties were not diverse of citizenship.

The District Court’s subject-matter jurisdiction has continued to present

difficulties in this case. Defendants appealed the Georgia judgment, and two

months later, this Court sua sponte asked the parties to address subject-matter

jurisdiction because diversity jurisdiction was not evident from the pleadings. In

response, Alliant moved to amend its complaint to simply allege the citizenships of

all relevant entities. Defendants, in turn, moved to remand the case to the District

Court for a factual determination of subject-matter jurisdiction in the first instance.

After reviewing the parties’ responses and motions, we remanded the case to the

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District Court so that it might “fully resolve the question of the court’s subject-

matter jurisdiction over this action.” Alliant Tax Credit Fund 31-A, Ltd. v.

Murphy, No. 15-14634-GG, slip op. at 1 (11th Cir. Apr. 10, 2017) (per curiam).

On remand, Alliant filed a memorandum on Plaintiffs’ citizenships.

Plaintiffs are a mixture of limited-liability companies and limited partnerships. 9

Some of Plaintiffs’ members and partners are natural persons, but some are other

limited-liability companies, other partnerships, corporations, banks, and trusts.

Alliant traced these entities’ citizenships, too. It included with its memorandum to

the District Court affidavits, declarations, and authenticated documents.

Defendants responded that Alliant’s submissions were insufficient to confirm that

all relevant entities were accounted for, as well as to confirm those entities’

citizenships. The Court observed that though Alliant had initially claimed that the

sole citizenship of all five Plaintiffs was Florida, Alliant conceded in its

memorandum that Plaintiffs were also citizens of California, Delaware, the District

of Columbia, Illinois, Nebraska, New York, Ohio, and Texas. So the Court

required further documentary evidence of citizenship. For natural persons, it asked

for drivers licenses; for corporations, it asked for annual reports and articles of

incorporation or governance documents; for limited partnerships and limited-

9
Alliant 31, L.L.C., Alliant XXVII, L.L.C., and Alliant XI, L.L.C. are limited-liability
companies. Alliant XXVII, Ltd. and Alliant XI, Ltd. are limited partnerships.

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liability companies, it asked for agreements; for banks, it asked for articles of

association; and for trusts, it asked for organizational documents.

After this jurisdictional discovery was complete, the District Court set out its

findings as to the parties’ citizenships:

Plaintiffs

• Alliant 31 was a citizen of Florida, California, and Illinois.

• Alliant XXVII, Ltd. was a citizen of Florida, California, Illinois, and the
District of Columbia.

• Alliant XXVII, L.L.C. was a citizen of Florida, California, and Illinois.

• Alliant XI, L.L.C. was a citizen of Florida, California, and Illinois.

• Alliant XI, Ltd. was a citizen of Florida, California, Illinois, Delaware,
New York, Texas, Nevada, and Ohio.

Defendants

• Vincent was a citizen of Georgia.

• CMS was a citizen of Georgia.

• Multifamily Housing was a citizen of Georgia.

• Marilyn was a citizen of Georgia.

As such, it concluded that Alliant had established subject-matter jurisdiction by a

preponderance of the evidence.

Defendants, still unsatisfied that diversity jurisdiction was present, moved

this Court for leave to file supplemental briefing on the District Court’s factual

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findings, its failure to sustain evidentiary objections, its admission into evidence of

unreliable documents, and its failure to allow adversarial discovery. We granted

Defendants’ motion, Alliant Tax Credit Fund 31-A, Ltd. v. Murphy, No. 15-14634-

GG, slip op. at 2 (11th Cir. Nov. 9, 2017) (single-judge order), and now address

these jurisdictional issues.

First, Defendants argue that the record contains insufficient evidence to

support the District Court’s findings on the citizenships of two inter vivos trusts,

whose names we have redacted.10 They contend that the trusts’ citizenships derive

from their beneficiaries and that Alliant has not fully accounted for those

beneficiaries.

Whether subject-matter jurisdiction exists presents a mixed question of law

and fact. We review de novo a district court’s legal conclusions. Calderon v.

Baker Concrete Constr., Inc., 771 F.3d 807, 810 (11th Cir. 2014). But we review

for clear error “any factual determinations necessary to establish jurisdiction,”

Dudley v. Eli Lilly & Co., 778 F.3d 909, 911 (11th Cir. 2014), including “findings

regarding domicile,” McCormick v. Aderholt, 293 F.3d 1254, 1257 (11th Cir.

2002) (per curiam). The party invoking federal jurisdiction “must prove, by a

10
These trusts are members of a limited-liability company that is a member of another
limited-liability company that is a partner of a limited partnership that in turn is a member or
partner of each of the five Plaintiffs in this case.

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preponderance of the evidence, facts supporting the exercise of jurisdiction.”

Caron v. NCL (Bahamas), Ltd., 910 F.3d 1359, 1363–64 (11th Cir. 2018).

A “traditional trust” holds the citizenship of its trustee, not of its

beneficiaries. See Americold Realty Tr. v. Conagra Foods, Inc., 136 S. Ct. 1012,

1016 (2016); see also Raymond Loubier Irrevocable Tr. v. Loubier, 858 F.3d 719,

730 (2d Cir. 2017) (“[F]or . . . traditional trusts, it is the citizenship of the trustees

holding the legal right to sue on behalf of the trusts, not that of beneficiaries, that is

relevant to jurisdiction.”). A “traditional trust . . . generally describes a fiduciary

relationship regarding property where the trust cannot sue and be sued as an entity

under state law.” Wang ex rel. Wong v. New Mighty U.S. Tr., 843 F.3d 487, 495

(D.C. Cir. 2016). So whether a trust is “traditional” requires us to refer to the “law

of the state where the trust is formed.” Id.; see also, e.g., id. (holding that under

District of Columbia law, a trust lacked separate “juridical person status” and thus

could not “sue and be sued as an entity”); Loubier, 858 F.3d at 731 (holding that

under Florida law, a trust was not a “distinct juridical entit[y]” and thus was

“incapable of being haled into court except through [its] trustee[]”).

The two trusts here were formed in Wisconsin, and under Wisconsin law, a

trust is represented in litigation through its trustee. See Wis. Stat. § 701.0106

(stating that the trust code incorporates the “common law of trusts”). Because the

code does not confer “juridical person status” on a trust itself, see New Mighty U.S.

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Tr., 843 F.3d at 495, the trusts are traditional trusts whose citizenships are those of

their trustees. The trustee of both trusts is a natural person who is domiciled in

Florida. As such, she is a Florida citizen. See McCormick, 293 F.3d at 1257.

In short, Alliant has proven diversity jurisdiction by a preponderance of the

evidence because if the trustee is diverse of Defendants, the trusts themselves are

too.

Second, Defendants argue that the District Court erred by admitting the

sworn affidavits of three persons who held leadership positions with various

members or partners of the five Plaintiffs. We review a district court’s admission

of evidence for abuse of discretion. Williams v. Mast Biosurgery USA, Inc., 644

F.3d 1312, 1316 (11th Cir. 2011).

Defendants argue that the affidavits lack foundation, see Fed. R. Evid. 602,

because the affiants failed to state that only they could change the memberships of

their respective entities. But the relevant question for foundation purposes is

whether the affiants had “personal knowledge” of the matter sworn to. See id.

Each person laid a foundation for his respective affidavit by stating his position

with the relevant entity and that he had access to that entity’s records. As leaders,

rather than as minor functionaries, they were well within their wheelhouses to

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swear to the entities’ compositions. Defendants’ argument goes to the weight of

the evidence, not to its admissibility.

In short, the District Court was well within its discretion to admit the

affidavits.

Third, Defendants challenge the operating agreements for Alliant XXVII,

L.L.C. and Alliant XI, L.L.C. on which one affiant relies. They point to missing or

wholly redacted pages and font inconsistencies among the pages. As such, they

argue that the documents were inadmissible because they could not be

authenticated, see Fed. R. Evid. 901, and because they were hearsay that did not

comport with the business-records exception, see Fed. R. Evid. 803(6).

We need not reach these issues because even in a record devoid of this

evidence, the District Court’s factual findings on these entities’ citizenships was

not clearly erroneous. For both entities, Alliant submitted the later-issued

certificates of conversion from corporations to limited-liability companies. Those

documents indicate that both Alliant XXVII, L.L.C. and Alliant XI, L.L.C. have

only one member and one general partner. So Defendants’ theory that other

entities lurk in those entities’ structures is unfounded.

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Fourth, Defendants argue that the District Court should have permitted them

to obtain through additional jurisdictional discovery (1) the documentary evidence

that Alliant filed in Alliant Tax Credit Fund XVI, Ltd. v. Thomasville Community

Housing, LLC, 713 F. App’x 821 (11th Cir. 2017) (per curiam), 11 and (2) a copy of

the partnership agreement between Alliant 31 and Alliant 31-A. 12 We review a

district court’s denial of jurisdictional discovery for abuse of discretion.

Culverhouse v. Paulson & Co., 813 F.3d 991, 993 (11th Cir. 2016).

Defendants’ underlying grievance is that Alliant cannot be trusted because it

has misrepresented its citizenship in other litigation, including litigation in this

circuit. And because one district judge in this circuit required certain documents of

Alliant, the District Judge in this (unrelated) case should have too.

To be sure, parties have a “‘qualified right to jurisdictional discovery,’

meaning that a district court abuses its discretion if it completely denies a party

jurisdictional discovery.” Am. Civil Liberties Union of Fla., Inc. v. City of

11
Alliant XI, L.L.C., a Plaintiff here, was also a party to that case.
12
We deal with this second request later. Defendants argue that the record contains
insufficient evidence that Alliant 31 meets the amount-in-controversy requirement. See 28
U.S.C. § 1332(a) (requiring that a controversy “exceed[] the sum or value of $75,000, exclusive
of interest and costs”). Alliant 31 and Alliant 31-A were awarded $1,478,489 via the Kentucky
judgment. Defendants claim that each has partial ownership in that amount and that Alliant 31
has not proven that its own interest is at least $75,000. We explain later on, however, that
Alliant 31 was entitled to sue for the full amount because it was a joint−judgment creditor. See
infra p. 25. As such, the amount-in-controversy requirement is met.

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Sarasota, 859 F.3d 1337, 1341 (11th Cir. 2017) (citations omitted) (quoting Eaton

v. Dorchester Dev., Inc., 692 F.2d 727, 729 n.7 (11th Cir. 1982)).

The District Court here did not abuse its discretion. It did not “completely

deny” Defendants jurisdictional discovery. To the contrary, it ordered Alliant to

produce additional documentary evidence after we remanded the case. Moreover,

just because one judge permitted a discovery request does not mean another judge

was obligated to do so. Defendants overlook a basic principle of appellate review:

Two district judges can reach two different determinations of what discovery to

permit, and under abuse-of-discretion review, we are required to affirm both

decisions unless one judge has “made a clear error of judgment” or “applied the

wrong legal standard.” See Josendis v. Wall to Wall Residence Repairs, Inc., 662

F.3d 1292, 1307 (11th Cir. 2011) (quoting Guideone Elite Ins. Co. v. Old Cutler

Presbyterian Church, Inc., 420 F.3d 1317, 1325 (11th Cir. 2005)); see also id. at

1306−07 (“Discretion means the district court has a ‘range of choice, and that its

decision will not be disturbed as long as it stays within that range and is not

influenced by any mistake of law.’” (quoting Betty K Agencies, Ltd. v. M/V

Monada, 432 F.3d 1333, 1337 (11th Cir. 2005))). In other words, one district

judge is not required to follow his brethren in lockstep on discovery matters, just as

he is not required to follow him in lockstep on any other decision. See United

States v. Cerceda, 172 F.3d 806, 812 n.6 (11th Cir. 1999) (en banc) (per curiam)

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(“The opinion of a district court carries no precedential weight, even within the

same district.”). So we do not evaluate this Judge’s decision in light of another’s

decision.

In short, nothing about the District Court’s finding of subject-matter

jurisdiction, procedurally or substantively, permits reversal. The Court’s

factfinding was not clearly erroneous. Its evidentiary conclusions were not legally

incorrect. And its decision not to entertain additional discovery was not an abuse

of discretion.

That’s it for the jurisdictional wrinkles, but Defendants offer three other

reasons for why the District Court should have evaded the merits.

Defendants maintain that the District Court was required to abstain under the

domestic-relations exception to diversity jurisdiction. We review for abuse of a

discretion a district court’s abstention decision under the domestic-relations

exception. Stone v. Wall, 135 F.3d 1438, 1441 (11th Cir. 1998) (per curiam),

certified question answered, 734 So. 2d 1038 (Fla. 1999). 13

“The federal judiciary has traditionally abstained from deciding cases

concerning domestic relations.” Ingram v. Hayes, 866 F.2d 368, 369 (11th Cir.

13
Though Stone involved a decision to abstain, we see no reason to differently review a
decision not to abstain.

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1988) (per curiam). The doctrine imposes two limits on our power. First, we may

not “issue divorce, alimony, and child custody decrees.” Stone, 135 F.3d at 1440

(quoting Ankenbrandt v. Richards, 504 U.S. 689, 703, 112 S. Ct. 2206, 2215

(1992)). Second, “even when subject-matter jurisdiction might be proper,” we

abstain from exercising jurisdiction when “sufficient grounds” exist. Id.

Here, the District Court did not issue a divorce, alimony, or child-custody

decree. And Defendants do not cite—and our research does not reveal—a single

case when this Court has held that abstention was appropriate when a party to the

federal-court proceeding was not a party to the state-court proceeding. Cf., e.g., id.

at 1441 (“The exception enunciated in Ingram is to be read narrowly and does

not—at least, ordinarily—include third parties in its scope.”). In Stone, for

example, we held that abstention was inappropriate when a father and his daughter

sued the father’s ex-sister- and ex-mother-in-law for tortious interference of his

custodial rights. Id. Those defendants were not parties to the state-court

proceeding and “had no legal claim of custody whatsoever.” Id. Alliant was not a

party to the divorce proceedings in the Georgia Superior Court and like the Stone

plaintiffs, did nothing more than “charge[] Defendants with a tort.” See id. at

1440.

In short, the District Court did not abuse its discretion in exercising diversity

jurisdiction. Cf. Kirby v. Mellenger, 830 F.2d 176, 179 (11th Cir. 1987) (per

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curiam) (“The less a case is a ‘core’ domestic relations case, e.g., one for a divorce

or a simple child custody dispute, the less discretion the district court has to refuse

to exercise its jurisdiction.”).

Defendants argue that Alliant is collaterally estopped from proving that

Marilyn did not give “reasonably equivalent value” for the transfers, which is an

element of a UFTA claim. See O.C.G.A. § 18-2-74(a)(2) (2010). In adjudicating

the Murphys’ divorce, the Georgia Superior Court was required to ensure that the

distribution of property between them was “equitable.” See Payson v. Payson, 552

S.E.2d 839, 841 (Ga. 2001); see also O.C.G.A. § 19-5-13 (2018). Defendants

insist that Alliant cannot now challenge the transfers as fraudulent under the UFTA

because the Superior Court already decided that issue in their favor.

Under the full-faith-and-credit statute, see 28 U.S.C. § 1738, a district court

must afford “preclusive effect to a state court judgment to the same extent as

would courts of the state in which the judgment was entered.” Graham v. R.J.

Reynolds Tobacco Co., 857 F.3d 1169, 1181 (11th Cir. 2017) (en banc) (quoting

Kahn v. Smith Barney Shearson Inc., 115 F.3d 930, 933 (11th Cir. 1997)), cert.

denied, 138 S. Ct. 646 (2018). So we look to the preclusive effect that Georgia law

would give the divorce decree. Under Georgia law, issue preclusion, or collateral

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estoppel by another name, requires “identity of the parties or their privies.”

Waldroup v. Greene Cty. Hosp. Auth., 463 S.E.2d 5, 7 (Ga. 1995) (per curiam).

Nothing about the divorce decree precludes Alliant from challenging the

adequacy of value that Marilyn gave for the transfers because it was not a party to

the divorce proceeding. And neither Vincent nor Marilyn represented Alliant’s

interests when they fraudulently transferred assets between themselves to

immunize Vincent from collection. Cf. Smith v. Wood, 154 S.E.2d 646, 649–50

(Ga. Ct. App. 1967) (“Privity connotes those who are in law so connected with a

party to the judgment as to have such an identity of interest that the party to the

judgment represented the same legal right . . . .” (emphasis added) (quoting Hixson

v. Kansas City, 239 S.W.2d 341, 344 (Mo. 1951) (en banc))).

Defendants relatedly argue that the District Court was required to abstain

because Alliant’s suit is a collateral attack on a provision of the divorce decree—

namely the Georgia Superior Court’s determination that the distribution of

property was fair to the parties. Defendants’ argument, though unartfully

articulated, is that the Rooker-Feldman doctrine applies. Rooker-Feldman bars a

“party losing in state court . . . from seeking what in substance would be appellate

review of the state judgment in a United States district court, based on the losing

party’s claim that the state judgment itself violates the loser’s federal rights.”

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Johnson v. De Grandy, 512 U.S. 997, 1005–06, 114 S. Ct. 2647, 2654 (1994). But

Alliant was not a party to the divorce proceeding, so Rooker-Feldman has no

application here. See id. at 1006, 114 S. Ct. at 2654 (holding that Rooker-Feldman

was inapplicable when a party in federal court was “not a party in the state court”

because it was in “no position” to seek review of the state court’s judgment and

thus “[did] not directly attack[] it in [the federal] proceeding”). 14

Having found that the District Court was permitted to entertain this suit, we

now turn to the first merits question: whether the Court awarded one Plaintiff,

Alliant 31, relief to which it was not entitled.

III.

Defendants argue that $1,478,489 of the Georgia judgment against it was

improper because Alliant 31 was not allowed to collect any of that amount without

joining Alliant 31-A as a co-plaintiff. As explained, Alliant 31-A was dismissed

earlier in the litigation. See supra note 2. By way of background, the Kentucky

judgment was for $8,946,643 overall. As part of that overall total, however, the

District Court for the Eastern District of Kentucky awarded relief to Alliant 31 and

14
Furthermore, it is unclear whether Rooker-Feldman even applies to a privy. See Lance
v. Dennis, 546 U.S. 459, 466 n.2, 126 S. Ct. 1198, 1202 n.2 (2006) (per curiam) (“[W]e need not
address whether there are any circumstances, however limited, in which Rooker–Feldman may
be applied against a party not named in an earlier state proceeding—e.g., where an estate takes a
de facto appeal in a district court of an earlier state decision involving the decedent.”). We do
not reach this question because as we already explained, Alliant was not a privy to the divorce
proceedings. See supra pp. 22−23.

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Alliant 31-A in an amount of $1,478,489. Defendants argue that Alliant 31 (1) was

permitted to prosecute a UFTA claim for its share of the $1,478,489 only and (2)

because it failed to establish that share, it was entitled to collect none of it. To

assess this argument, we describe the property interests that Alliant 31 had in the

Kentucky judgment that it could enforce in this UFTA action.

To determine the meaning of a judgment, we apply “[o]rdinary principles of

construction.” Gurley v. Lindsley, 459 F.2d 268, 275 (5th Cir.), mandate

withdrawn, 466 F.2d 498 (5th Cir. 1972) (per curiam).

The Kentucky judgment, on its face, states that “[j]udgment is hereby

entered in favor of Plaintiffs, Alliant Tax Credit Fund 31-A, Ltd. . . . and Alliant

Tax Credit 31, Inc.” Alliant Tax Credit Fund 31-A, Ltd. v. Nicholasville Cmty.

Hous., LLC, No. 5:07-cv-00388-KKC-REW, slip op. at 1 (E.D. Ky. Aug. 31, 2010)

(order amending judgment), ECF No. 204. Through this judgment, Alliant 31 and

Alliant 31-A became joint−judgment creditors because the legal right to enforce

the judgment was entered in each of their favors. As a joint creditor, Alliant 31

had a claim to the full $1,478,489 because a joint creditor “is entitled, along with

another creditor, to demand payment from a debtor.” Joint Creditor, Black’s Law

Dictionary 375 (7th ed. 1999). The District Court committed no error when it

awarded Alliant this amount. Though Alliant 31-A might have a claim to part of

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the $1,478,489, and though it might have a contribution action against Alliant 31,

nothing prevented Alliant 31 from suing for the full amount.

We turn now to the burden of proof under the UFTA.

IV.

Defendants argue that the District Court erroneously instructed the jury on

the burden of proof, stating that the correct burden under the UFTA is clear-and-

convincing evidence, not a preponderance of the evidence.15 We disagree that a

UFTA claim is subject to this heightened burden of proof.

First, preponderance of the evidence is the default standard in civil

proceedings. O.C.G.A. § 24-14-3 (2018). Tellingly, Georgia law expressly carves

out two civil actions that are subject to the clear-and-convincing standard, neither

of which are actions under the UFTA. Id. (first citing id. § 51-1-29.5 (medical

malpractice claims arising out of emergency care); then citing id. § 51-12-5.1

(punitive-damages claims)). Because Georgia’s General Assembly subjected two

specific causes of action to the clear-and-convincing standard, we decline to infer

that claims under the UFTA are also exempted from the preponderance-of-

evidence default. Cf. Estate of Cummings v. Davenport, 906 F.3d 934, 942 (11th

15
Georgia’s General Assembly amended the UFTA in 2015 and changed the statute’s
name to the UVTA. In so doing, it specifically provided that preponderance is the burden of
proof. O.C.G.A. § 18-2-74(d) (2018); see also id. § 18-2-75(d). The parties agree we must
apply the UFTA, however, which lacks this enunciation.

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Cir. 2018) (“The expression of one thing implies the exclusion of others.”

(alteration omitted) (quoting Antonin Scalia & Bryan A. Garner, Reading Law:

The Interpretation of Legal Texts § 10, at 107 (2012))), petition for cert. filed, No.

18-1191 (U.S. Mar. 13, 2019).

Second, the UVTA merely clarifies what had always been the law under the

UFTA. Cf. Piamba Cortes v. Am. Airlines, Inc., 177 F.3d 1272, 1283 (11th Cir.

1999) (“[A]n amendment containing new language may be intended ‘to clarify

existing law . . . .’” (quoting United States v. Sepulveda, 115 F.3d 882, 885 n.5

(11th Cir. 1997))). The official commentary to the Uniform Law Commission’s

Voidable Transactions Act, which Georgia’s UVTA was modeled on, explains that

the UVTA “rejects [states] that have imposed an extraordinary [evidentiary]

standard, typically ‘clear and convincing evidence.’” 16 Unif. Voidable

Transactions Act § 4 cmt. n.10 (Unif. Law Comm’n 2014). Defendants give us no

reason to believe that Georgia was one such state. Indeed, they point to no

decision applying Georgia law that has ever imposed a higher burden of proof in a

fraudulent-transfer action.

In short, the District Court correctly instructed the jury on the burden of

proof. With that issue decided, we turn to the punitive-damages awards.

16
Georgia courts look to this commentary when interpreting Georgia’s fraudulent-
transfer law. Bishop v. Patton, 706 S.E.2d 634, 640 (Ga. 2011).

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Defendants argue that the punitive-damages awards were improper because

punitive damages may be awarded only in addition to compensatory damages,

which were not awarded here. Marilyn argues alternatively that even if punitive

damages were proper, the District Court erred by forcing her to pay the award

against Vincent from her kitty.

In addition to recovering the value of its claim, a fraudulent-transfer creditor

can also recover compensatory damages—that is, damages that result from the

fraudulent transfer itself. Defendants submit that Alliant could not recover

punitive damages because it was awarded no compensatory damages. Neither the

punitive-damages statute, the caselaw, nor the policy that underpins punitive

damages supports their argument.

Alliant invoked the District Court’s diversity jurisdiction, which requires us

to apply Georgia substantive law. Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78, 58

S. Ct. 817, 822 (1938). In determining the contents of Georgia law, decisions of

the Supreme Court of Georgia and the Georgia Court of Appeals control. See

Bravo v. United States, 577 F.3d 1324, 1325 (11th Cir. 2009) (per curiam)

(“[F]ederal courts are bound by decisions of a state’s intermediate appellate courts

unless there is persuasive evidence that the highest state court would rule

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otherwise.” (quoting King v. Order of United Commercial Travelers of Am., 333

U.S. 153, 158, 68 S. Ct. 488, 491 (1948))).

The punitive-damages statute articulates two restrictions on punitive

damages, neither of which is violated by the awards here. A court may award

punitive damages “only in such tort actions in which it is proven by clear and

convincing evidence that the defendant’s actions showed . . . fraud.” O.C.G.A.

§ 51-12-5.1(b) (2018). As relevant here, moreover, an award of punitive damages

may not exceed $250,000 unless the defendant “acted, or failed to act, with the

specific intent to cause harm.” Id. §§ 51-12-5.1(f), (g). Check and check: The jury

found fraud by clear-and-convincing evidence. And it found that Vincent had

acted with specific intent to cause harm. Because the jury did not find that Marilyn

had acted with specific intent to cause harm, the punitive damages against her were

properly capped at the statutory maximum of $250,000.

The Georgia Court of Appeals has repeatedly stated, moreover, that punitive

damages are available in fraudulent-transfer actions without once stating that

compensatory damages are a prerequisite to recovering them. See Interfinancial

Midtown, Inc. v. Choate Constr. Co., 806 S.E.2d 255, 264 (Ga. Ct. App. 2017)

(“Georgia law allowing the recovery of general and punitive damages for

fraudulent conveyances survived the enactment of Georgia’s UFTA.”); Stinchcomb

v. Wright, 628 S.E.2d 211, 215 (Ga. Ct. App. 2006) (“Punitive damages may be

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awarded upon a finding of conversion or fraudulent conveyance.”); Cavin v.

Brown, 538 S.E.2d 802, 806 (Ga. Ct. App. 2000) (“[P]unitive damages are

available in fraudulent conveyance actions . . . .”).

Stinchcomb in particular negates Defendants’ theory that compensatory

damages are a prerequisite for punitive damages. The defendant there argued that

an award of attorneys’ fees and punitive damages was improper because the jury

had awarded only specific performance, not compensatory damages. 628 S.E.2d at

215. The court rejected that argument, holding, “Since the [plaintiffs] proved their

claims of fraudulent conveyance and were awarded specific performance, the trial

court’s award of attorney fees and punitive damages was proper.” Id. at 215–16.

Vincent and Marilyn state that the award of specific performance distinguishes that

case from this case. As an initial matter, that assertion is factually incorrect

because the District Court ordered Marilyn to turn over the fraudulently transferred

assets or their proceeds. But even if the Court had invoked the legal remedy under

the UFTA, as it should have, Stinchcomb would still control. Whether a court

orders turnover of the assets or enters a money judgment for their value hinges

only on whether the assets or their proceeds are traceable. If they are, turnover is

appropriate; if they aren’t, a money judgment should be entered. Either way, the

need to deter the transfer is the same. We explain this idea more below.

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One policy of punitive damages is deterrence. 1 Dan B. Dobbs, Dobbs Law

of Remedies § 3.11(3), at 475−76 (2d ed. 1993). Without punitive damages,

nothing other than costs would deter a debtor from attempting to fraudulently

transfer his assets. If he gets caught, so be it: The cost would simply be what was

owed in the first place. See, e.g., SE Prop. Holdings, LLC v. Judkins, No. 1:17-

CV-00413-TM-B, 2019 WL 177981, at *10 (S.D. Ala. Jan. 11, 2019) (“Without an

award of punitive damages or attorneys’ fees, there would be no deterrence to a

debtor weighing whether to make a fraudulent transfer. This is because the debtor

would only lose the same asset he would have lost if he had not made a fraudulent

transfer.”); Kekona v. Bornemann, 349 P.3d 361, 372 (Haw. 2015) (“[A]t worst the

fraudulent debtor is forced to pay what he or she already owed. Without the

possibility of significant punitive damages, it would be difficult to deter this

conduct.”). It thus makes sense that the UFTA would permit recovery for punitive

damages. See Dobbs, supra, § 3.11(10), at 516 (“[T]he need for punishment or

deterrence may be increased by reason of the very fact that the defendant will have

no liability for compensatory damages.”).

In short, the absence of compensatory damages did not preclude the award

of punitive damages.

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Marilyn’s alternative argument—that she should not be responsible for

paying Vincent’s punitive-damages award—is meritorious.

Under the UFTA, a creditor may obtain “judgment [against the transferee]

for the value of the asset transferred . . . or the amount necessary to satisfy the

creditor’s claim, whichever is less.” O.C.G.A. § 18-2-78(b) (2010). After the jury

returned its verdict, the District Court should have entered two judgments—one

against Marilyn (the transferee) and one against Vincent (the transferor):

• A money judgment against Marilyn for $9,137,285.84 (the amount of the
claim, plus her $100,000 in punitive damages).

• A money judgment against Vincent for $1,000,000 (the amount of his
punitive damages).

The Court erred when it required Marilyn to pay Vincent’s money judgment—

awarded for his wrongdoings, mind you—out of her pocket. But Alliant

complicates what seems to be a straightforward result.

Alliant asserts that its “claim” within the meaning of § 18-2-78(b) includes

the $100,000 in punitive damages awarded against Vincent. Said differently, the

District Court should have entered a single money judgment against Marilyn, the

entirety of which she would be personally responsible for. We are unsurprised that

Alliant brings us not one case from any jurisdiction where a court has interpreted a

fraudulent-transfer “claim” to include damages awarded for the transfer itself. We

undertake our own analysis, however, and for two reasons, we cannot agree with

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Alliant’s assertion. First, a fraudulent-transfer action is derivative of some other

right to relief. Alliant’s approach would collapse into one the action and the claim

that gave rise to that action. And second, the UVTA, which Georgia’s General

Assembly replaced the UFTA with in 2015, confirms that “claim” excludes relief

awarded for the fraudulent transfer itself. We discuss both reasons in turn.

First, a fraudulent-transfer action is predicated on a claim that already exists.

See Dobbs, supra, § 2.8(1), at 191−92. Alliant incurred a claim to the amount of

the Kentucky judgment. Alliant then brought this UFTA action to recover the

value of that claim. In the process, Alliant incurred a new, second claim against

Vincent when the Georgia jury awarded Alliant punitive damages for Vincent’s

fraud. This second claim is extrinsic to the claim on which the UFTA action was

predicated.

Second, the UVTA confirms that “claim” under the UFTA cannot

encompass relief for the fraudulent transfer itself. Cf. Piamba Cortes, 177 F.3d at

1283 (“[A]n amendment containing new language may be intended ‘to clarify

existing law.’” (quoting Sepulveda, 115 F.3d at 885 n.5)). In replacing the UFTA

with the UVTA, Georgia’s General Assembly amended the definition of claim to

include the following italicized language: “‘Claim,’ except for claim for relief,

means a right to payment . . . .” O.C.G.A. § 18-2-71(3) (2018) (emphasis added).

The UVTA thus distinguishes “claim” and “claim for relief.” Whereas the “claim

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for relief” is the UFTA action itself, “claim” is the predicate on which that action is

based. As described below, this change merely clarified what had already been the

law under the UFTA.

Georgia’s General Assembly inserted into the UVTA two new subsections

on burden-of-proof and choice-of-law rules that govern a fraudulent-transfer

action. These subsections are the only places where “claim for relief” appears in

the UVTA. They provide that

• a UVTA plaintiff “has the burden of proving the elements of the claim
for relief by a preponderance of the evidence” and that

• “[a] cause of action in the nature of a claim for relief under [the UVTA]
is governed by the law of the jurisdiction in which the debtor is located
when the transfer is made or the obligation is incurred.”

Id. §§ 18-2-74(d), -80(b) (emphasis added). But inserting these two subsections

would risk confusion under Alliant’s reading of “claim”: Do the burden-of-proof

and choice-of-law rules apply to the UFTA action, the predicate claim, or both?

Recognizing this risk, the General Assembly amended the definition of “claim” to

make explicit what had long been implicit: The “claim for relief” and the “claim”

are two separate things. Cf. Scalia & Garner, supra, § 40, at 257 (stating that the

“presumption that a change in language produces a change in meaning” does not

apply when codifications “revise the wording of the prior statute to provide for

consistency of expression”).

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In short, because Alliant’s claim did not include the punitive damages

awarded against Vincent, the Georgia judgment is reversed to the extent it allowed

Alliant to recover those damages from Marilyn. We now turn to Alliant’s cross-

appeal.

VI.

Alliant cross-appeals the District Court’s denial of prejudgment interest

under Georgia law from the date the Kentucky judgment was entered to the date

the Georgia judgment was entered.

Recall that the District Court awarded Alliant post-judgment interest. Under

federal law, the Kentucky judgment accrued interest from the moment that

judgment was entered until it was paid. See 28 U.S.C. § 1961. By the time the

Georgia judgment incorporated the Kentucky judgment, the post-judgment interest

on the latter had accrued to $90,642.89. No one disputes that Alliant is entitled to

that amount. But Alliant wants prejudgment interest, too. The parties agree that

Alliant’s entitlement to prejudgment interest hinges on Alliant’s UFTA claim

being “liquidated” under Georgia law. We explain below that the claim was not

liquidated as to Marilyn—from whom recovery must be had—so the Court was

correct to deny Alliant prejudgment interest.

Absent “affirmative countervailing federal interests,” the availability and

amount of prejudgment interest is governed by state law. AIG Baker Sterling

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Heights, LLC v. Am. Multi-Cinema, Inc., 508 F.3d 995, 1001–02 (11th Cir. 2007)

(quoting Esfeld v. Costa Crociere, S.P.A., 289 F.3d 1300, 1307 (11th Cir. 2002)).

Under Georgia law, “[a]ll liquidated demands, where by agreement or otherwise

the sum to be paid is fixed or certain, bear interest from the time the party shall

become liable and bound to pay them; if payable on demand, they shall bear

interest from the time of the demand.” O.C.G.A. § 7-4-15 (2018). “[T]he sole

prerequisite for an award of prejudgment interest on a liquidated claim is that a

demand be made before the entry of final judgment, so that the opposing party has

an opportunity to contest an award of interest.” Gwinnett County v. Old Peachtree

Partners, LLC, 764 S.E.2d 193, 200 (Ga. Ct. App. 2014).

The only point in dispute is whether Alliant’s claim to the amount of the

Kentucky judgment was liquidated.

A sum is liquidated when it is “fixed or certain based on . . . operation of

law.” Those Certain Underwriters at Lloyds London v. DTI Logistics, Inc., 686

S.E.2d 333, 339 (Ga. Ct. App. 2009). The full amount of the Kentucky judgment,

$8,946,643, was fixed by law as to Vincent on the date the District Court for the

Eastern District of Kentucky entered judgment for that amount against him. But

Marilyn is a different story. The conduct for which Marilyn is liable is receipt of

the transferred assets when she (1) did not act in good faith and (2) did not give

reasonably equivalent value for them. See O.C.G.A. § 18-2-78(a) (2010). Because

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the jury was required to determine the values of each of those assets, the amount

for which she is personally liable did not become liquidated until the District Court

entered the Georgia judgment.

In short, Alliant is not entitled to any prejudgment interest under Georgia

law because its claim for $8,946,643 was not previously liquidated as to Marilyn.

VII.

For these reasons, the District Court’s judgment is AFFIRMED in part and

REVERSED in part. We REMAND for further proceedings not inconsistent with

this opinion.

SO ORDERED.