Fraudulent Transfers; § 8-9a-1 ET Seq., Ala. Code 1975 - RES-GA Lake Shadow, LLC v. Kennedy
Cunningham Bounds LLC
RES-GA Lake Shadow, LLC v. Kennedy, [Ms. 2160110, Jan. 6, 2017] __ So.3d __ (Ala. Civ. App. 2017). The Court of Civil Appeals reverses a Montgomery Circuit Court judgment dismissing three claims alleging property transferred from a husband to a wife pursuant to a divorce settlement agreement were for fraudulent transfers made to prevent collection of a debt owed by the husband. The court distinguishes Aliant Bank v. Davis, 198 So.3d 508 (Ala. Civ. App. 2015) (Ms. *8-11) in response to husband's contention that the Alabama Fraudulent Transfers Act, § 8-9A-1 et seq., Ala. Code 1975, did not apply to marital assets transferred pursuant to divorce property settlements. Citing Canty v. Otto, 304 Conn. 546, 41 A.3d 280 (2012), the court holds "There is no prohibition on a creditor's ability to seek relief under the Alabama Fraudulent Transfers Act based on an allegation that an agreement to transfer marital assets in a divorce action was made with the intention of hindering, delaying, or defrauding a creditor of a spouse." Ms. *12. Because the creditor's allegations, if true, would entitle it to relief under the Fraudulent Transfers Act, the Montgomery Circuit Court improperly dismissed those claims.