Kenny Allen Roach v. Randall Wayne Roach, Jr.

• Court: Court of Appeals of Georgia
• Decided: June 11, 2014
• Docket: A14A0281
• Status: Published

Opinion

SECOND DIVISION ANDREWS, P. J., MCFADDEN and RAY, JJ.

NOTICE: Motions for reconsideration must be physically received in our clerk’s office within ten days of the date of decision to be deemed timely filed. http://www.gaappeals.us/rules/

June 11, 2014

In the Court of Appeals of Georgia A14A0281. ROACH v. ROACH.

ANDREWS, Presiding Judge.

Appellee Randall Wayne Roach commenced an action in the trial court against

his son, Appellant Kenny Allen Roach, for reformation of a deed transferring property

to Appellant. Following a jury verdict finding that the disputed property was subject

to a resulting trust, the trial court entered a judgment in Appellee’s favor and ordered

Appellant to convey the property to Appellee and his attorney, as tenants in common.

Appellant now appeals, arguing that the trial court should have granted his motion for

directed verdict on equitable grounds because the resulting trust found by the jury

arose out of an attempt to defraud creditors. Appellant also argues that the trial court

erred in awarding an interest in the property to Appellee’s attorney. We conclude that

Appellant was entitled to a directed verdict and therefore reverse. On appeal from the denial of a motion for a directed verdict, we construe the

evidence in the light most favorable to the party opposing the motion, and the

standard of review is whether there is any evidence to support the jury’s verdict.

Monitronics Intl. v. Veasley, 323 Ga. App. 126, 130 (1) (746 SE2d 793) (2013).

Appellee’s petition alleged that in 1996, Appellee contracted to purchase a

4.83-acre tract of land in Long County from Billy and Leigh Brock but when the

purchase price was fully paid in June 2009, Appellee “had some legal pending matters

and potential liens and did not desire to have the property transferred of record to his

name.” According to the petition, Appellant agreed to hold the property in trust for

Appellee, and the Brocks conveyed the property to Appellant on August 3, 2009. The

petition alleged that although Appellant has no equitable ownership in the property,

he refused to convey it to Appellee.

Appellant testified at trial that Appellee told him “quite a few times” that he

would give Appellant the property. Appellant stated that he worked for Appellee, who

owned a carnival business, and that the property was supposed to be part of his

payment. Appellee, however, denied that he promised to give the property to

Appellant. Appellee testified that he put the property in Appellant’s name because “I

was afraid I’d get it tied up in some legal problem I had with the liens . . . on me.”

2 Appellee stated that he thought Appellant was the only one he could trust to hold the

property and transfer it to him after the legal issues were resolved. Appellee testified

that Appellant agreed to the arrangement but that when he asked Appellant to

quitclaim the property to him in May 2010 after he “got everything straightened out,”

Appellant refused. On cross-examination, Appellant’s counsel asked Appellee: “And

you don’t deny, in your pleadings and now, that your whole intention was to make

sure that somebody that you owed money to didn’t come after the property when it

was paid off?” Appellee responded that he did not deny this intention. Appellee later

testified that the liens motivating the transfer to Appellant were in the amount of

$60,000 each and that he subsequently resolved them for lesser amounts.

The trial court denied Appellant’s motion for directed verdict. The case was

submitted to the jury, and it returned a verdict finding that a resulting trust was

created and that the property should be conveyed to Appellee.

1. Appellant argues that the trial court erred in denying his motion for directed

verdict because the doctrine of unclean hands forecloses any relief to Appellee on his

petition. We agree.

“It is well established . . . that equity is not available to one who lacks clean

hands as to the relief being sought.” Williams v. Williams, 255 Ga. 264, 265 (336

3 SE2d 244) (1985); OCGA § 23-1-10 (“He who would have equity must do equity and

must give effect to all equitable rights of the other party respecting the subject matter

of the action.”). Appellant testified at trial that Appellee intended to give him the

property. Appellee, on the other hand, asserted that he reached an understanding with

Appellant that the property would be placed in Appellant’s name to keep it from

getting “tied up in some legal problem I had with the liens . . . on me” and that

Appellant would convey it to Appellee when those issues were resolved. Appellee

admitted that his “whole intention” in having the property transferred to Appellant

was to shield it from creditors. If the parties reached the agreement Appellee

described, then “this is simply a case where two persons [plotted] to hinder, delay,

and defeat a creditor of one of them, with the result that one of the wrong-doers

himself falls a victim to the wiles of the other.” (Citation and punctuation omitted.)

Senter v. Furman, 245 Ga. 483, 484 (265 SE2d 784) (1980). In such cases, “no relief

can be afforded the victimized wrong-doer,” and “the parties are to be left as they

stand.” Id.; see also Langan v. Langan, 224 Ga. 399, 402 (2) (162 SE2d 405) (1968)

(“An executed contract . . . made for the purpose of delaying or defrauding a creditor,

is binding upon the maker, and he is estopped from impeaching it.”) (citations and

punctuation omitted).

4 Whether a deed is made with the intent to delay or defraud creditors is

ordinarily an issue of fact for the jury, see Goodman v. Lewis, 247 Ga. 605, 606 (1)

(277 SE2d 908) (1981), but in this case there was no material dispute in the evidence

with respect to Appellant’s intent. If the transfer was not intended as a gift, it was,

according to Appellee’s repeated admissions, made for the purpose of frustrating his

creditors. As such, the trial court erred in denying Appellant’s motion for directed

verdict. See Williams, supra, 255 Ga. at 265 (defendant was entitled to directed

verdict in ex-husband’s action to compel conveyance of property when he freely

admitted that property was placed in defendant’s name to avoid alimony claim against

it by his second wife); Senter v. Furman, 245 Ga. at 484 (trial court did not err in

granting summary judgment in dentist’s action to impose a constructive trust when

the evidence established that he transferred property with intent to avoid liability

exposure on malpractice claim). Appellee’s testimony that he ultimately resolved the

debts that were outstanding at the time the property was conveyed to Appellant does

not alter our conclusion, “as the critical inquiry is [Appellee’s] intent at the time of

transfer.” Carden v. Carden, 253 Ga. 546, 547 (2) (322 SE2d 226) (1984) (trial court

erred in denying wife’s motion for judgment notwithstanding verdict on the issue of

whether she held property in resulting trust for her husband); OCGA § 18-2-74 (a) (1)

5 (transfer is fraudulent as to a creditor if made “[w]ith actual intent to hinder, delay,

or defraud any creditor of the debtor.”).1

2. Given our conclusion in Division 1, we need not address Appellant’s

argument that the trial court erred in entering a judgment requiring Appellant to

convey the property to Appellee and his attorney as tenants in common.

Judgment reversed. McFadden and Ray, JJ., concur.

1 We note also that in his argument opposing Appellant’s motion for directed verdict, Appellee’s counsel indicated that the transfer to Appellant was intended to improve Appellee’s bargaining position, stating that if the property were in Appellee’s name “[i]t might weaken his resolving these problems.”