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EVIDENCE - FRAUDULENT TRANSFER - WOOD V. HAYES

Wood v. Hayes, [Ms. 1100750, Sept. 7, 2012] __ So. 3d __ (Ala. 2012). Fourteen-year-old Karrie Hayes was burned severely when Jason Earl Pruitt, at the direction of Stevie Woods, set fire to the house where she resided with her mother. Hayes made claims against Stevie Woods and his children Darren and Joni. The claim against the father was set for a separate trial, and a jury returned a verdict of $5 million. The claims of Hayes against Darren and Joni were based on fraudulent transfers to them from their father. They objected to evidence of the horrific nature of Karrie Hayes's burns as not being relevant to the issues in the fraudulent-transfer action. The circuit court overruled those objections, and the jury returned verdicts against Darren and Joni. The Supreme Court reverses, holding that the evidence of her injuries was "prejudicial evidence that has no probative value." The elements of the fraudulent transfer claim were that Hayes was a creditor of Stevie Woods, Stevie Woods transferred assets without receiving reasonable value, and Woods believed he would incur debts beyond his ability to pay. Hayes argued in opposition to the appeal that the evidence of her injuries was necessary to prove that she was a creditor of Woods. However, the $5 million judgment established that she was a creditor, so the evidence was not relevant to that element. She also argued that her injuries showed that, at the time he made the transfers, he believed he would incur debts beyond his ability to pay. However, there was no evidence that in those early days after the fire, Woods knew anything about the extent of her injuries. The Supreme Court notes that the circuit court properly ordered separate trials so the evidence of the injuries that was necessary to prove Hayes's damages would not be presented in the fraudulent-transfer action, but then erroneously allowed much of that evidence in at the second trial.

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