Chepstow Limited v. Marshall B. Hunt

                                                                   [PUBLISH]


             IN THE UNITED STATES COURT OF APPEALS

                     FOR THE ELEVENTH CIRCUIT
                                                                FILED
                       ________________________ U.S. COURT OF APPEALS
                                                         ELEVENTH CIRCUIT
                                                           August 19, 2004
                               No. 03-14051
                                                          THOMAS K. KAHN
                         ________________________             CLERK

                    D. C. Docket No. 02-03188-CV-CC-1

CHEPSTOW LIMITED,


                                                            Plaintiff-Appellant,

                                   versus

MARSHALL B. HUNT,
MARTHA HUNT, et al.,


                                                         Defendants-Appellees.


                         ________________________

                 Appeal from the United States District Court
                    for the Northern District of Georgia
                      _________________________

                             (August 19, 2004)

Before ANDERSON, CARNES and MARCUS, Circuit Judges.

CARNES, Circuit Judge:
      Chepstow Ltd. filed a lawsuit in the district court alleging that Marshall B.

Hunt had fraudulently transferred millions of dollars of his assets in order to avoid

payment on a prior judgment held by Chepstow against him. The complaint

alleged that Hunt, with some assistance from a Georgia company of which he was

CEO, transferred a large portion of his assets to his wife, children, and a friend –

all of whom are also defendants in the case – in violation of Georgia’s fraudulent

transfer statutes, Ga. Code Ann. § 18-2-22 (repealed July 1, 2002) and the Uniform

Fraudulent Transfer Act, § 18-2-70, et seq. (effective July 1, 2002). The district

court granted the defendants’ motions to dismiss for failure to state a claim and

entered final judgment against Chepstow. This is Chepstow’s appeal.

                                           I.

      In a previous action filed in February 2001, Chepstow’s predecessor in

interest, Tapir Ltd., brought a breach of contract action in the district court against

Hunt in order to collect on a past-due promissory note. During the pendency of

that action – sometime between February 2001 and May 2002 – Chepstow

acquired all of Tapir’s rights in the action and was substituted as the plaintiff. In

May 2002, the district court granted summary judgment in favor of Chepstow, and

entered final judgment along with a writ of execution against Hunt in the amount

of $9,281,131.02. Hunt did not appeal. Despite Chepstow’s best efforts at



                                            2
collection, its judgment against him remains unsatisfied in an amount exceeding $8

million.

      In November 2002, Chepstow filed a complaint alleging that Hunt, with the

knowledge and assistance of the other named defendants, engaged in numerous

fraudulent transfers of his assets in order to defeat Chepstow’s efforts to collect its

judgment. Count 1 of the complaint alleged that Hunt had transferred assets to his

wife, Martha Hunt; to his children, Marshall Blair Hunt, Jr., Calvin Hunt, Hastings

Hunt, Paul Hunt, and Mary Hunt; to a Georgia limited partnership of which Hunt

and his wife are general partners, Hunt Family Investments, L.L.L.P. (HFI); and to

Hunt’s business associate and friend William E. Peterson, all in violation of Ga.

Code Ann. § 18-2-22 and the UFTA. Count 1 also alleged that Horizon Medical

Products, Inc. (Horizon), a public company of which Hunt is CEO and in which he

owned more than 20% of all outstanding shares, aided and abetted Hunt in making

some of the fraudulent transfers. In Count 2 of the complaint, Chepstow alleged

that Hunt, Martha, HFI, Peterson, and Horizon conspired to defraud Chepstow and

to hinder and delay Chepstow’s collection of its outstanding judgment against Hunt

through the transfers.

      The complaint specifically alleged that Hunt fraudulently transferred the

following property: (1) all of his right, title, and interest in his home valued at $3.5



                                           3
million to his wife, Martha; (2) hundreds of thousands of dollars in assets to

Martha and his children; (3) 225,000 shares of his stock in Horizon to HFI; and, (4)

assets in a bank account jointly held by both Hunt and Peterson to an account held

solely by Peterson.

      The defendants filed motions to dismiss for failure to state a claim on which

relief could be granted. They asserted that Chepstow’s complaint failed to state a

claim under Ga. Code Ann. § 18-2-22, because that code section had been

repealed without reservation by the Uniform Fraudulent Transfer Act (UFTA), Ga.

Code Ann. § 18-2-70, et seq. The defendants further asserted that Chepstow’s

complaint failed to state a claim based on the UFTA because the complaint did not

allege any fraudulent transfers occurring after the July 1, 2002 effective date of the

UFTA.

      The district court issued an order dismissing Count 1 of the complaint on the

ground that the enactment of the UFTA without a savings clause preserving § 18-

2-22 not only repealed that provision insofar as future events were concerned, but

also cut off all pending claims brought under it. The district court ruled in the

alternative that even if § 18-2-22 were not repealed by the UFTA, Chepstow had

failed to state a claim against Horizon in Count 1. The court reasoned that because

Horizon was neither a debtor nor a transferee, it was not subject to liability under



                                           4
an aider and abettor theory for claims brought pursuant to § 18-2-22, because that

statute explicitly imposes liability only on debtors and transferees. The district

court also dismissed Chepstow’s conspiracy claims in Count 2 based on its belief

that the underlying Count 1 claims alleging fraudulent conveyance failed. Having

thrown out both counts against all of the defendants, the district court entered final

judgment dismissing Chepstow’s complaint.

                                          II.

      We review de novo the district court’s order granting the defendants’

motions to dismiss pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim

upon which relief can be granted. Harper v. Blockbuster Entm’t Corp., 139 F.3d

1385, 1387 (11th Cir. 1998). In doing so, we accept as true the factual allegations

in the plaintiff’s complaint and construe the facts in the light most favorable to the

plaintiff as the non-moving party. Spain v. Brown & Williamson Tobacco Corp.,

363 F.3d 1183, 1186 (11th Cir. 2004). A motion to dismiss may be granted only

when the defendant demonstrates “beyond doubt that the plaintiff can prove no set

of facts in support of his claim which would entitle him to relief.” Harper, 139

F.3d at 1387 (internal quotation and citation omitted). We review questions of

statutory interpretation de novo. United States v. DBB, Inc., 180 F.3d 1277, 1281

(11th Cir. 1999).



                                           5
      This case requires us to examine issues concerning the substantive law of

Georgia. “In rendering a decision based on state substantive law, [we] must decide

the case the way it appears the state’s highest court would. Where the state’s

highest court has not spoken to an issue, [we] must adhere to the decisions of the

state’s intermediate appellate courts absent some persuasive indication that the

state’s highest court would decide the issue otherwise.” Ernie Haire Ford, Inc. v.

Ford Motor Co., 260 F.3d 1285, 1290 (11th Cir. 2001) (internal quotation marks

and citation omitted).

                                        III.

      We first address the question of whether the repeal of Ga. Code Ann. § 18-2-

22, which was effected through the enactment of the UFTA, retroactively

extinguished all pending claims under § 18-2-22. The district court thought so, but

we think not.

       The Uniform Fraudulent Transfer Act (UFTA), 2002 Ga. Laws 141, § 3, as

codified at §§ 18-2-70 to 18-2-80, became part of the Georgia code when the

Governor signed it into law on April 4, 2002. It became effective on July 1, 2002.

The UFTA repealed and replaced some of the existing Georgia fraudulent transfer

provisions that had been in effect before its enactment. Importantly for this case,

the UFTA repealed former § 18-2-22, which defined the conveyances by creditors



                                          6
that are per se fraudulent. However, the UFTA left intact § 18-2-20, which

provides that the rights of creditors are favored in the courts, and § 18-2-21, which

provides creditors with the right to attack judgments or conveyances which

interfere with their rights.

       The district court reasoned that since the UFTA repealed § 18-2-22 and

contained no savings clause explicitly preserving causes of action that had already

arisen under the now-repealed provision, it extinguished them one and all. As

authority, the district court cited Fulton Bag & Cotton Mills v. Williams, 95 S.E.2d

848 (Ga. 1956) and Gold v. Pioneer Fund, Inc., 132 S.E.2d 144 (Ga. 1963). The

court cited both of those decisions for the proposition that “the repeal of a statute

without reservation takes away all remedies given by it and even defeats all actions

and proceedings pending under it at the time of its repeal, and this is especially so

where the statute repealed is one creating a cause of action.” Gold, 132 S.E.2d at

148.




                                           7
       The district court was correct about the UFTA repealing § 18-2-22.1

However, we do not agree with the district court that the repeal extinguished

causes of action that had arisen under the repealed section but had not yet made it

to final judgment. That is a question of state law, and there is a strong line of

Georgia precedent establishing that the state constitution forbids the result the

district court reached.

                                               A.

       Article I, Section 1, paragraph X of the Georgia Constitution provides that

“[n]o bill of attainder, ex post facto law, retroactive law, or laws impairing the

obligation of contract or making irrevocable grant of special privileges or

immunities shall be passed.” That provision was construed and applied in

Dennington v. Mayor of Town of Roberta, 61 S.E. 20 (Ga. 1908).

       In Dennington, a statute enacted in 1900 required the town council of

Roberta to levy a tax for the purpose of supporting the public schools, including

teacher salaries, when the school board recommended that such a tax be levied. Id.


       1
          The UFTA, 2002 Ga. Laws 141, § 2, states that § 18-2-22, “is amended . . . by striking
Code Section[] 18-2-22, relating to conveyances by debtors deemed fraudulent, . . . and inserting
in lieu thereof the following: ‘18-2-22. [striking through all of the language in former § 18-2-22]
Reserved.’” New language used in the UFTA, which is now codified in §§ 18-2-75 & 18-2-76,
replaces that previously found in § 18-2-22. Also, the preamble to the UFTA included among
the purposes of the Act: “to remove certain duplicate or redundant provisions relating to
conveyances by debtors deemed fraudulent,” and to “repeal conflicting laws.” And § 4 of the
UFTA states that “[a]ll laws and parts of laws in conflict with this Act are repealed.”

                                                 8
at 21-22. The town council failed to levy the necessary ad valorem tax for the

school year beginning in 1904 and ending in the summer of 1905. Id. at 21. As a

result of that failure, a teacher employed by Roberta’s board of school

commissioners was not paid for his services because insufficient funds were

available to do so. Id. In 1905, the Georgia General Assembly repealed the statute

authorizing the tax levy, and the repealer act did not contain a savings clause. Id.

at 21.

         In a lawsuit filed by the teacher who had not been paid for his services

during the 1904-05 school year, the Georgia Supreme Court held that the repeal of

the taxing statute could not constitutionally be given retroactive effect to defeat the

vested contractual right of the teacher. Id. at 23. In order to avoid an

unconstitutional result, the Court construed the repealer legislation to apply

prospectively only. Id. at 22. The absence of a savings clause was not a problem

for the Court because the general rule is that repeal of a statute has no retroactive

effect. Id. at 21. As the Court explained:

         There is a general statute in force in this state (Pol. Code 1895, § 6)
         which declares that “laws prescribe only for the future; they cannot
         impair the obligation of contracts nor generally have a retrospective
         operation,” and we might well treat this Code section as the equivalent
         of a saving clause that a repealing act shall not be given a
         retrospective operation, so as to destroy vested rights or impair the
         obligation of contracts.



                                             9
Id. at 21. In other words, there was a general savings clause in the Georgia code

that was applicable to all enactments, which made it unnecessary for the General

Assembly to include a separate savings clause in every piece of legislation. That

free standing savings clause is still standing and still has the same effect. See Ga.

Code Ann. § 1-3-5 (2004) (containing materially identical terms to Pol. Code 1895,

§ 6).

        The Dennington decision has a big impact on the present case for two

reasons. First, it establishes that where a right has vested through the occurrence of

events giving rise to a claim under a statute, the Georgia Constitution forbids the

legislature from snuffing out that right through the retroactive application of a

repealer provision. Second, it establishes that a separate savings clause is not

necessary in these circumstances, because of the presumption expressed in a

Georgia statute of general application that a retroactive effect is not intended where

vested rights are concerned.

        Both of these points were reconfirmed in Bank of Norman Park v. Colquitt

County, 150 S.E. 841 (Ga. 1929). Colquitt County deposited $11,000 in a bank at

a time when a Georgia statute gave a county’s deposits precedence for repayment

over other depositors in the event the bank became insolvent. Id. at 842.

Subsequent to the deposit, the statute was repealed with no indication of whether



                                          10
the repeal was to have retroactive effect. Id. The bank then failed. Id. In a

lawsuit by the county to establish priority for its claim, the Georgia Supreme Court

held that the county had a vested right under the old statute, the repeal of which

should not be given retroactive effect:

       The settled rule for the construction of statutes, is not to give them a
       retrospective operation, unless the language so imperatively requires.
       Furthermore, a repealing act will not be given a retroactive operation,
       so as to divest previously acquired rights, or to impair the obligation
       of a contract lawfully made by virtue of and pending the existence of
       the law repealed. Paragraph 2 of section 3 of article 1 of the
       Constitution of this state declares that “no . . . retroactive law . . . shall
       be passed.” 2

Id. (internal citation and some internal quotation omitted).

       In the more recent case of Enger v. Erwin, 267 S.E.2d 25 (Ga. 1980), Enger

brought suit for alienation of affections pursuant to a Georgia statute. Id. at 25

(citing Ga. Code Ann. § 105-1203). While his suit was pending, the General

Assembly enacted the Family and Domestic Relations Law, 1979 Ga. Laws 466,

which entirely superseded the statute upon which Enger’s claim was based. Id.

Not only that, but the new act abolished the cause of action for alienation of

affections, and the act explicitly provided that the abolition would apply to any

future proceedings in any pending cases. Id. Relying on that provision of the new



       2
       The current version of this provision, which is materially identical to that cited in
Norman Park, is found at Article I, Section 1, paragraph X, of the Georgia Constitution.

                                                11
act, the defendant moved to dismiss the complaint. Id. The trial court found that

retrospective application of the new statute to cut off claims brought pursuant to

the previous statute was unconstitutional, and it denied the motion to dismiss. Id.

The defendant filed an interlocutory appeal to the Georgia Supreme Court. Id.

      The Georgia Supreme Court in Enger cited the general rule that “[l]aws

usually may not have retrospective application.” Id. (citing Ga. Code Ann.

§ 102-104 (1980), which is currently codified at Ga. Code Ann. § 1-3-5 (2004)).

The Court held that when events giving rise to a substantive claim occur prior to

the repeal of the statute upon which the claim is based, the plaintiff has a vested

right. Id. at 26. The Court also held, as it had in the Dennington and Bank of

Norman Park cases, that vested rights under a statute cannot be constitutionally

extinguished through the retroactive application of a repealing statute:

      A constitutional act of the legislature has been found to be the
      equivalent of a contract and the rights created thereby may not be
      impaired by subsequent legislation. Although legislation which
      involves mere procedural or evidentiary changes may operate
      retrospectively, legislation which affects substantive rights may
      operate prospectively only.

Id. (internal citation omitted). Consistent with those principles, the Enger court

held that Enger’s “right to bring an action for alienation of affections was a

substantive right which had vested at the time of the repeal of this cause of action

by the General Assembly. Therefore, the portion of the [statute] which made the

                                          12
repeal of the cause of action for alienation of affections retrospective as to pending

actions [was] unconstitutional.” Id. at 26; see also Brown v. Hauser, 292 S.E.2d 1,

2 (Ga. 1982) (holding, also in the context of an alienation of affections claim, that a

cause of action accrues, and therefore becomes a vested right, not when a suit is

filed but when the events occur that give rise to the cause of action (citing Enger,

267 S.E.2d at 25)).

      Another case close to point is Mullins v. First General Insurance Company,

322 S.E.2d 265 (Ga. 1984). There was a Georgia statute authorizing the filing of

Personal Injury Protection (PIP) claims in excess of the stated amount of PIP

coverage in an automobile insurance policy if the insurer had failed to inform the

insured of the statutory right to accept or waive that coverage. Id. at 266. The

Georgia General Assembly subsequently enacted a repealing statute which

eliminated claims for PIP coverage in excess of the stated amount of policies

regardless of the insurer’s failure to inform. Id. The repealer explicitly stated that

it applied to claims based on insurance policies in effect on the date of the repeal

(and therefore to failures to inform that had occurred prior to the repeal). Id.

Citing Enger, the Georgia Supreme Court held that notwithstanding its explicit

terms, the repealing statute could not constitutionally be applied retroactively to

defeat a claim for the additional PIP benefits if the claim was based upon facts that



                                          13
had occurred prior to the effective date of the repealing statute, even where the

claim was brought after that effective date. Id. at 266-67.

      From Dennington to Bank of Norman Park to Enger to Mullins, Georgia law

is clear. Repealer legislation is not to be construed to impinge upon vested

substantive rights, and no savings clause is necessary to put into effect the strong

presumption that repeals are not intended to affect those rights. Where the

General Assembly makes clear its intent to interfere with the vindication of a

vested right, that intent will not be given effect, because the Georgia Constitution

forbids it. We do not believe that the General Assembly made clear that it intended

the repeal of the prior statutes defining creditor rights to apply retroactively, but

even if it had expressed that intent, the result would be the same. Under Georgia

law, if a right is substantive and it is vested, it cannot be extinguished.

      The district court in this case attempted to distinguish the Enger and Braun

decisions on the basis that they and any others involving common law causes of

action are different. The court cited no decisions to support that theory of

distinction, nor did it explicate a rationale for it. Most likely, what the court had in

mind is this: When a statute that codifies a common law cause of action is

repealed, the general rule in some states is that the cause of action continues to

exist as it had under the common law in place before the codification. See 82



                                           14
C.J.S. Statutes § 375 (2004) (“A common-law right which is embodied in statutory

terms exists as an enforceable right exclusive of any statute declaratory of it, and

such a right therefore is not abrogated by repeal of the statute.” (citing Jessen v.

State, 290 N.W.2d 685 (Wis. 1980))). Because the present case involves a

statutory right, it is different, or so the reasoning would go.

      The problems with that reasoning are several and insurmountable. First, the

interests that weigh against the retroactive repeal of statutory rights are just as

heavy as those that weigh against retroactive repeal of common law rights.

Second, there is no hint of support in the Georgia Supreme Court decisions for any

theory that vested statutory rights are entitled to less protection under the Georgia

Constitution than vested common law rights. Third, Mullins involved a vested

statutory right, not a common law right, so that decision stands foursquare against

any notion that statutory rights are different from common law ones for these

purposes.

      As we said earlier, the question Georgia law poses is whether Chepstow’s

rights under Ga. Code Ann. § 18-2-22 and the UFTA, § 18-2-70, et seq., were

vested and substantive. The answer is yes. They were vested rights, because the

alleged actions of the defendants occurred prior to the July 1, 2002 effective date

of the UFTA and its repealer provision. They were also substantive rights, because



                                           15
“[s]ubstantive law is that law which creates rights, duties, and obligations.” Polito

v. Holland, 365 S.E.2d 273, 274 (Ga. 1988). Section 18-2-21 provided (and still

does) that “[c]reditors may attack as fraudulent a judgment, conveyance, or any

other arrangement interfering with their rights, either at law or in equity.” Section

18-2-22, before it was repealed by the UFTA, defined the conveyances that were

considered fraudulent under Georgia law. That section, when read along with

§ 18-2-21, gave a creditor a substantive right to overturn a conveyance included in

that provision’s definition of fraudulent conveyance.3 Because Chepstow’s rights

under § 18-2-22 were both substantive and vested, under Georgia law they could

not be extinguished by retroactively applicable legislation.

                                              B.

       The two decisions the district court cited to support its ruling on this issue –

Fulton Bag and Gold – do not support it.

       Fulton Bag involved the General Assembly’s repeal of a statute allowing the

deduction of federal income taxes for purposes of calculating state income taxes.

95 S.E.2d at 850. The repealing statute, which was enacted on December 18, 1953,

provided that it was to be applied to all tax years ending on or after February 15,

1952. Id. The issue was whether that retroactive application violated the Georgia


       3
         The defendants concede that the UFTA provisions that parallel those of § 18-2-22
confer substantive rights. Logically, it follows that those of § 18-2-22 did as well.

                                              16
Constitution by impinging on vested substantive rights. Id. at 851. The Georgia

Supreme Court held that it did not, because a taxpayer has no vested right in tax

exemptions which are mere statutory privileges granted as a matter of legislative

grace. Id. This is the core of the holding in that case:

      A person has no vested right in statutory privileges or exemptions. . . .
      An exemption which exists by statute may be reduced or withdrawn
      by statute; . . . Exemption is but a statutory or constitutional shield,
      which being removed, the exposure to process is the same as if it had
      never been interposed; . . . . [A]llowances and deductions of Federal
      income taxes paid is not a right, but a privilege accorded to the
      taxpayer as a matter of legislative grace.

Id. (citations and quotation omitted).

      The holding of Fulton Bag that there is no vested right, which is to say no

right that cannot be retroactively repealed, in a statutory exemption on state income

taxes is a well-established one in Georgia law. See, e.g., Gen. Motors Acceptance

Corp. v. Jackson, 542 S.E.2d 538, 541 (Ga. Ct. App. 2000) (“Whether and to what

extent deductions to a taxation plan are allowed is a matter of legislative grace . . .

.”); Seaboard Coast Line R.R. Co. v. Blackmon, 199 S.E.2d 581, 583 (Ga. Ct. App.

1973) (“[W]here a provision as a matter of grace confers a benefit then there must

be strict construction against the taxpayer.”); Brosnan v. Undercofler, 140 S.E.2d

517, 518-19 (Ga. Ct. App. 1965) (“Deductions . . . on which an income tax is

imposed, are allowed as a matter of legislative grace and are authorized only where



                                           17
there is a clear statutory provision for them.” (internal quotation and citation

omitted)); Oxford v. Chance, 121 S.E.2d 825, 829 (Ga. Ct. App. 1961) (“[T]he

allowance of a deduction or exemption in computing state income tax is a privilege

granted by legislative grace.”).

      The present case is different from Fulton Bag and those other cases

involving tax deductions, because the creation of tax deductions is an exercise of

legislative grace under which no substantive rights may vest. This case involves

the substantive rights of creditors under § 18-2-22, and substantive rights can vest

and give rise to state constitutional rights against retroactive repeal. Thus, this case

is like the Dennington, Bank of Norman Park, Enger, and Mullins cases, and it is

controlled by those Georgia Supreme Court decisions. See, e.g., Spengler v.

Employers Commercial Union Ins. Co., 206 S.E.2d 693, 698 (Ga. Ct. App. 1974)

(distinguishing Fulton Bag on the basis that it involved non-vesting rights, and

holding that the statute in Spengler, because it involved a vested right, could not

constitutionally be applied retroactively to cut off vested rights).

      The second decision relied upon by the district court is the Georgia Court of

Appeals decision in Gold. There the appellate court rejected the plaintiff’s

argument that the defendant’s consent to constructive service of process under a

repealed procedural statute provided a basis for personal jurisdiction. Gold, 132



                                           18
S.E.2d at 148. It was an easy decision to make, because the statute under which

the plaintiff claimed the right had been repealed long before his cause of action had

arisen. Id. That is obviously different from the situation we have here where the

events giving rise to Chepstow’s claim occurred before § 18-2-22 was repealed.

      Gold can also be distinguished on an additional ground. Georgia statutes

addressing procedural and remedial rights may be retroactively applied. See, e.g.,

Polito, 365 S.E.2d at 273 (“[W]here a statute governs only procedure of the courts,

including the rules of evidence, it is to be given retroactive effect absent an

expressed contrary intention.”); Allrid v. Emory Univ., 285 S.E.2d 521, 524 (Ga.

1982) (“The legislature can constitutionally provide for the retrospective

application of a remedial statute provided a time be fixed subsequent to the passage

of the statute which allows citizens affected by it a reasonable time to protect their

rights.” (quotation and citation omitted)). The Gold case falls within that exception

because it involved purely procedural rights.

      Because Chepstow’s rights under § 18-2-22 were substantive in nature and

vested prior to the repeal of that provision, unlike the rights at issue in Fulton Bag

and Gold, Chepstow’s rights fall under no recognized exception to Georgia’s

constitutional prohibition against the retroactive elimination by statute of vested

substantive rights.



                                           19
                                          C.

      In a recent case, Miller v. Lomax, 596 S.E.2d 232, 238 & n.1 (Ga. Ct. App.

2004), the Georgia Court of Appeals indicated that pre-UFTA transfers could be

challenged under the UFTA itself. Neither party had suggested that approach in

the Miller case, id., and the opinion offers little by way of explanation for it. The

only reasoning given by the Georgia Court of Appeals for its statement that the

UFTA applies, and § 18-2-22 does not, to events occurring before the effective

date of the UFTA, id. at 238, is contained in a two-sentence-footnote, which says:

             In their briefs in the superior court, Lee Miller and the other
      plaintiffs specifically rely on [Ga. Code Ann.] §§ 18-2-21 and 18-2-
      22, but [Ga. Code Ann.] § 18-2-22, entitled, “Conveyances by debtors
      deemed fraudulent,” was repealed effective July 1, 2002. “[I]t is the
      general rule that the appellate court shall apply the law as it exists at
      the time of its judgment, absent impairment of vested rights under the
      previous law.” Id. (quoting Pine Pointe Housing, L.P. v. Lowndes
      County Bd. of Tax Assessors, 561 S.E.2d 860, 865 (Ga. Ct. App.
      2002)).

Id. at 238 n.1. Unless there is a decision by the state supreme court on point, we

follow decisions by the intermediate appellate court of the state except where there

is strong indication that the state supreme court would decide the matter

differently. See Ernie Haire Ford, Inc., 260 F.3d at 1290.

      We asked for the views of the parties in this case on the Miller court’s

statement about the UFTA’s substantive provisions applying to this case, and this



                                          20
is one matter about which they agree.4 They collectively urge that we not follow

that statement in Miller, which they characterize as dictum because the result

would have been the same in that case regardless of whether pre-UFTA law or the

UFTA’s substantive provisions themselves applied.5 The parties are united behind

the position that Miller does not mandate the application of the UFTA’s new

substantive provisions to the events in this case, all of which occurred prior to the

UFTA’s effective date. Their reasoning is the same at one level: Miller’s

suggested retroactive application of the UFTA’s substantive provisions conflicts

with prior Georgia Supreme Court precedent.

       The parties’ reasoning about the non-application of the UFTA does differ in

the particulars. The defendants argue that applying the UFTA to this case would

conflict with Georgia Supreme Court precedent, because the UFTA creates rights,

duties, and obligations after the fact. The defendants are not bothered by the



       4
         It would be more accurate to say that all of the parties in this case who have taken a
position on Miller agree about it. Horizon, a defendant who is in the case only on an aiding and
abetting theory, takes no position on Miller.
       5
         The defendants’ position that the Miller statement about the UFTA applying is dictum
is inconsistent with their position that § 18-2-22 was retroactively repealed by the UFTA. About
the statement in Miller, they say: “This issue could have been determined without reference to
whether the New Act applied or whether the former statute applied, because transfers made with
such intent would have been voidable under either statute.” Their concession that the pre-UFTA
fraudulent transfers in Miller were still voidable under § 18-2-22 contradicts their position that
the UFTA repealed § 18-2-22.


                                                21
prospect of pre-existing rights, duties, and obligations being abrogated by new

legislation; indeed, the heart of their position is that the UFTA did just that. It is

only the creation of new rights, duties, and obligations that offends them. By

contrast, the plaintiff argues that applying the UFTA to this case would conflict

with Georgia Supreme Court precedent because it would impair substantive rights

that had vested in their favor before the statute was enacted. We agree with the

parties’ common position that the dictum from Miller does not control the decision

of this case.6

                                             D.

       For these reasons, we conclude as a matter of Georgia law that the UFTA

did not retroactively repeal Ga. Code Ann. § 18-2-22, nor otherwise affect any

claims based upon that statutory provision, where the underlying events occurred

before the July 1, 2002 effective date of the UFTA. The district court erred in

holding to the contrary and dismissing Chepstow’s claims on that ground.

       That leaves the aiding and abetting issue and the conspiracy issues.




       6
         Because we conclude that the Miller footnote is not binding, we need not and do not
reach the question of whether we would have reached the same result applying the UFTA as we
did applying §§ 18-2-21 and 18-2-22.

                                             22
                                          IV.

      Count 1 of Chepstow’s complaint alleged that defendant Horizon violated

§ 18-2-22 by aiding and abetting Hunt in fraudulently transferring assets to the

transferee defendants. There was no allegation that Horizon itself received any of

those assets – that it was a “taking party,” or transferee.

      The district court, in its order granting the motion to dismiss, noted that it

agreed with Horizon’s alternative argument that even if § 18-2-22 had not been

retroactively repealed, Chepstow had failed to state a claim against Horizon for

fraudulent conveyance, because “[Horizon] is neither the debtor nor the transferee

(taking party) of the alleged fraudulent conveyance.” In reaching that conclusion

the district court relied on Kesler v. Veal, 362 S.E.2d 214 (Ga. 1987). In the

Kesler case, however, the plaintiff-creditor did not allege bad faith, intent to fraud,

or conspiracy on the part of the defendant transferee. The holding was that under

those circumstances the transferee defendant was not liable for damages based on

the fact of the conveyance alone, but instead was liable only for injunctive

remedies – he could be forced to return the transferred property. Id. at 214-215.

The Kesler opinion does not help decide the present case, because it says nothing

about whether a non-transferee such as Horizon can be subjected to actual or




                                           23
punitive damages for knowingly aiding and abetting a debtor to carry out a

fraudulent transfer, which is what Chepstow’s complaint alleges.

      While conceding that § 18-2-22 mentions only fraudulent transfers by

“debtors,” Chepstow asserts that the Georgia courts have recognized that

transferees are proper defendants under the statute. With that assertion, we agree.

However, Chepstow takes the assertion one step further by contending that non-

transferee aiders and abettors are liable, too. He bases that contention on a

statement in Time Warner Entm’t Co., L.P. v. Six Flags Over Ga., LLC, 537

S.E.2d 397, 407 (Ga. Ct. App. 2000) (internal quotation omitted), cert. granted and

judgment vacated on other grounds, 534 U.S. 801, 122 S. Ct. 24 (2001), opinion

reinstated in relevant part, 563 S.E.2d 178 (Ga. Ct. App. 2002), cert. denied, 538

U.S. 977, 123 S. Ct. 1783 (2003), that the Georgia courts have “explicitly

acknowledged an aiding and abetting cause of action in torts involving . . .

fraudulent conveyances.”

      That language from the Time Warner opinion is not controlling here. First,

that case involved a claim of aiding and abetting in the breach of a fiduciary duty,

not aiding and abetting in a fraudulent transfer, see id. at 402 n.2, which means that

anything said in the opinion about fraudulent transfers is dicta. Second, the Time

Warner court was quoting our opinion in Munford v. Valuation Research Corp., 98



                                          24
F.3d 604, 613 (11th Cir. 1996), also a breach of fiduciary duty case, in which we

were paraphrasing a party’s argument from its brief. That brief cited the Georgia

Supreme Court case of People’s Loan Co. v. Allen, 34 S.E.2d 811 (Ga. 1945),

which, as we discuss in the next part of this opinion, established liability for

fraudulent transfer based on civil conspiracy; the Allen case did not have to do

with liability for aiding and abetting.

      Chepstow urges us to conclude, notwithstanding the absence of any basis in

the language of § 18-2-22, that a third party who aids and abets a debtor in carrying

out a fraudulent transfer is liable for it even though it is neither a debtor nor a

transferee. We decline to do so. “The cardinal rule of statutory construction is to

ascertain the legislative intent and purpose in enacting the law and to construe the

statute to effectuate that intent,” Ferguson v. Ferguson, 485 S.E.2d 475, 476 (Ga.

1997), but when statutory language “is plain and unequivocal, judicial construction

is not only unnecessary but is forbidden.” City of Jesup v. Bennett, 176 S.E.2d 81,

83 (Ga. 1970).

      On the face of the statute, there is no ambiguity with respect to whether

§§ 18-2-20, 18-2-21 and 18-2-22, taken together, create an independent cause of

action for aiding and abetting liability, because there is nothing in the language of

those provisions to indicate that they do. Instead, § 18-2-22 designates certain



                                            25
transfers of assets by debtors to taking parties (transferees) as per se fraudulent

under Georgia law. More specifically, that statute states in relevant part that: “The

following acts by debtors shall be fraudulent in law against creditors . . . and as to

them shall be null and void: . . . (2) Every conveyance of real or personal estate . . .

made with intention to delay or defraud creditors, where such intention is known to

the taking party . . . .” Ga. Code Ann. § 18-2-22 (emphasis added). Section 18-2-

20 does say that “[t]he rights of creditors shall be favored by the courts; and every

remedy and facility shall be afforded them to detect, defeat, and annul any effort to

defraud them of their just rights.” Ga. Code Ann. § 18-2-20. However, § 18-2-22

makes no mention of parties other than debtors and “taking parties” (transferees)

being liable, and there is no Georgia decision that construes it to provide a claim

against aiders and abettors who do not themselves receive the transferred assets.

We will not put into § 18-2-22 a provision that the Georgia General Assembly left

out of it and the Georgia courts have not read into it.7

       7
          In Freeman v. First Union National Bank, 865 So. 2d 1272 (Fla. 2004), the Florida
Supreme Court responded to a certified question from another panel of this Court which asked:
“Under Florida law, is there a cause of action for aiding and abetting a fraudulent transfer when
the alleged aider-abettor is not a transferee?” Id. at 1273 n.1. Its answer is consistent with the
conclusion we reach about Georgia law. The Florida Supreme Court informed us that aider and
abettor claims may not be brought under the Florida Uniform Fraudulent Transfer Act (FUFTA),
Fla. Stat. §§ 726.101, et seq., against parties who are neither debtors nor transferees. The Court
reasoned that because the FUFTA does not refer to parties other than debtors and transferees, to
allow claims to be brought against other parties would “expand the FUFTA beyond its facial
application and in a manner that is outside the purpose and plain language of the statute.”
Freeman, 865 So. 2d at 1277. The court concluded “that FUFTA was not intended to serve as a

                                                26
       For these reasons, we conclude that the district court did not err in

dismissing Chepstow’s claim against Horizon based upon aiding and abetting

liability as a non-transferee. We will affirm that part of the district court’s order

dismissing Chepstow’s claim against Horizon based upon that theory of liability.

However, as we discuss in the next part of this opinion, Horizon may still be liable

to Chepstow as a participant in the alleged conspiracy to assist Hunt in fraudulently

transferring assets to the transferee defendants.

                                               V.

       The district court dismissed Chepstow’s conspiracy claim solely because it

concluded that Chepstow’s underlying claims alleging fraudulent conveyance

failed. See Dyer v. Honea, 557 S.E.2d 20, 25 (Ga. Ct. App. 2001) (“The cause of

action for civil conspiracy lies not in the conspiracy itself, but in the underlying

tort committed against the plaintiff and the resulting damage.”). Because we

already have concluded that Chepstow stated a valid claim pursuant to § 18-2-22

against Hunt and the transferee defendants, it follows that the district court erred in

dismissing Chepstow’s conspiracy claim against those defendants based on the

Dyer decision. We will reverse that portion of the district court’s judgment


vehicle by which a creditor may bring a suit against a non-transferee party . . . for monetary
damages arising from the non-transferee party’s alleged aiding-abetting of a fraudulent money
transfer.” Id. Of course, the Florida Supreme Court was applying Florida law instead of
Georgia law, but its reasoning is persuasive.

                                               27
dismissing those claims and remand for further consideration. However, that

conclusion about the conspiracy claims against Hunt and the transferee defendants

does not resolve the additional question of whether a conspiracy claim may lie

against Horizon, which was neither a debtor nor a transferee.

       Unlike Chepstow’s claims against Horizon pursuant to § 18-2-22 based on

aiding and abetting liability, its allegation that Horizon took part in a conspiracy to

violate Chepstow’s rights under § 18-2-22 does state a claim under Georgia law.

In Peoples Loan Company v. Allen, the Georgia Supreme Court recognized that a

claim alleging a conspiracy to aid and abet a debtor to forestall the collection of

judgments pursuant to the fraudulent transfer statute then in effect, Ga. Code § 28-

201(2) (1945), stated a valid claim against the co-conspirators.8 34 S.E.2d at 824

(The 1945 version of § 28-201(2) as cited in Allen is materially identical to the

version of § 18-2-22(2) in effect prior to its repeal by the UFTA on July 1, 2002).

Instead of basing liability on the defendants’ status as transferees, the Allen Court

based it on their status as co-conspirators who had assisted the debtor in defrauding

the creditor. Id.



       8
         Although the Georgia Supreme Court in Allen used the words “aid and abet” in the
opinion, it was referring not to an independent claim based on aider and abettor liability, but
rather was referring to a claim based on “a conspiracy . . . to aid and abet [the debtor] to forestall
the [creditor] in the collection of the two judgments . . ., and accordingly any act done by one of
the conspirators [is] chargeable to all of them.” 34 S.E.2d at 824 (emphasis added).

                                                  28
      Similarly, in Miller, 596 S.E.2d at 242, the Georgia Court of Appeals

reversed a grant of summary judgment on a civil conspiracy claim where the

defendant transferee had participated “in a scheme to effect fraudulent transfers” in

violation of the UFTA. Although the Miller court was applying the UFTA rather

than § 18-2-22, the applicable civil conspiracy liability principles are the same. Id.

As the same court explained in Mustaqeem-Graydon v. SunTrust Bank, 573 S.E.2d

455 (Ga. Ct. App. 2002), “[a] conspiracy is a combination of two or more persons

to accomplish an unlawful end or to accomplish a lawful end by unlawful means,”

id. at 461, and in order “[t]o recover damages for a civil conspiracy claim, a

plaintiff must show that two or more persons, acting in concert, engaged in conduct

that constitutes a tort.” Id. (internal citation and quotation omitted).

      In Allen, 34 S.E.2d at 824 (applying Ga. Code § 28-201(2)), and Miller, 596

S.E.2d at 242 (applying the UFTA), the wrong that underlay the civil conspiracy

claim was a violation of Georgia’s fraudulent transfer statute. Neither the Allen

nor the Miller opinion places any importance on the defendants’ status as debtors

or transferees, but instead emphasizes their conspiring together to assist in the

fraudulent transfer. We therefore conclude that Georgia law permits claims against

non-transferee defendants, such as Horizon, where the allegations are, as here, that

they conspired with the debtor to defraud the creditor by hindering its collections



                                           29
of an outstanding debt in violation of § 18-2-22. We therefore will reverse the

district court’s judgment dismissing Chepstow’s civil conspiracy claim against

Horizon.

                                       VI.

      The district court’s judgment insofar as it dismissed Chepstow’s fraudulent

transfer claims against Hunt and the transferee defendants is REVERSED. The

judgment is also REVERSED insofar it dismissed Chepstow’s claims against the

defendants based upon a conspiracy theory. The judgment is AFFIRMED to the

extent that it dismissed Chepstow’s claim against Horizon on an aider and abettor

theory. The case is REMANDED for further proceedings consistent with this

opinion.




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