Welch v. Graham

623 So. 2d 1027, 1993 Ala. LEXIS 401, 1993 WL 126506
CourtSupreme Court of Alabama
DecidedApril 23, 1993
Docket1911486
StatusPublished
Cited by1 cases

This text of 623 So. 2d 1027 (Welch v. Graham) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Welch v. Graham, 623 So. 2d 1027, 1993 Ala. LEXIS 401, 1993 WL 126506 (Ala. 1993).

Opinions

MADDOX, Justice.

This is a fraudulent conveyance ease. Fred Graham conveyed jointly owned real estate to his wife, Geneva Graham. Robert and Dorothy Welch, who later became judgment creditors of Fred Graham, sued to set aside the conveyance on the grounds that it had been made to defraud them as creditors. The trial court entered a summary judgment for the defendants. We affirm.

The facts are essentially undisputed. In 1966, Fred Graham and his first wife, Dorothy Graham, purchased a house for $19,185, located on Conger Road in Anniston, Alabama. The Grahams financed the purchase by a loan from Anniston Federal Savings and Loan Association, giving the lender a mortgage on the property to secure the payment of their note. The payments on their note were $110 per month. Fred and Dorothy Graham were divorced in June 1968. The divorce judgment gave Dorothy Graham exclusive use and occupancy of the house on Conger Road for the benefit of herself and the child of the marriage. This use and occupancy was to continue until 1978, when the child reached the age of 19. Fred Graham was ordered to make payments on the house during that period. He and Dorothy Graham remained co-owners of the property.

In the fall of 1968, Fred Graham married Geneva Graham. Subsequently, they purchased a house located on McArthur Drive in Anniston. On March 21, 1978, Fred and Geneva Graham jointly purchased, for $20,-368.16, the Conger Road property by bidding at a court-ordered sale. This court-ordered sale of the Conger Road property resulted from a dispute between Fred Graham and Dorothy Graham.

In 1978, when Fred and Geneva Graham purchased the house on Conger Road, they received an insurance check, which was made payable to them jointly, to compensate them, as owners, for damage done to the house by Dorothy Graham before she moved out. At approximately this time, the couple sold their house on McArthur Drive. Both the insurance proceeds and the money received from the sale of the house on McArthur Drive were used to pay the note to Anniston Federal Savings and Loan and to repair the house on Conger Road. In addition, according to the Grahams, from the time of their marriage in 1968 until 1978, when they jointly purchased the house on Conger Road, Geneva Graham had made the monthly payments of $110 to Anniston Federal Savings and Loan on the note secured by the mortgage that had been executed by Fred and Dorothy Graham.

On October 16, 1985, an altercation took place between Fred Graham and Robert Welch. As a result, in 1987, Robert and Dorothy Welch sued Fred Graham, claiming an assault by Fred Graham and claiming damages for injuries allegedly inflicted on Robert Welch. A jury awarded $300,000 to Robert and Dorothy Welch, and the court entered a judgment against Fred Graham in that amount.

On October 18, 1985, two days after the altercation that resulted in the assault action, Fred Graham conveyed to his wife Geneva his one-half interest in the Conger Road property. According to the Grahams, before this conveyance was made Geneva had given Fred $1,500 to pay an attorney to represent him in criminal proceedings resulting from the altercation with Robert Welch and had further agreed to give an additional $8,500 to cover the balance of the attorney fee. Fred said he agreed to convey his interest in the Conger Road property in consideration of the monies Geneva had previously paid between [1029]*10291968 and 1978 on the mortgage and the monies she gave him to pay his legal fees. The money that was used to pay the majority of the legal fees came from the proceeds of a certificate of deposit owned by Geneva that had been purchased with money she had earned and saved while working over the years.

The trial court entered a summary judgment in favor of Fred and Geneva Graham. Robert and Dorothy Welch appeal.

Rule 66, A.R.Civ.P., sets forth a two-tiered standard for entering a summary judgment. The rule requires the trial court to determine (1) that there is no genuine issue of material fact, and (2) that the moving party is entitled to a judgment as a matter of law. The burdens placed on the moving party by this rule have often been discussed by this Court:

“ ‘The burden is on one moving for summary judgment to demonstrate that no genuine issue of material fact is left for consideration by the jury. The burden does not shift to the opposing party to establish a genuine issue of material fact until the moving party has made a prima facie showing that there is no such issue of material fact. Woodham v. Nationwide Life Ins. Co., 349 So.2d 1110 (Ala.1977); Shades Ridge Holding Co. v. Cobbs, Allen & Hall Mortg. Co., 390 So.2d 601 (Ala.1980); Fulton v. Advertiser Co., 388 So.2d 533 (Ala.1980).’”

Berner v. Caldwell, 543 So.2d 686, 688 (Ala.1989) (quoting Schoen v. Gulledge, 481 So.2d 1094 (Ala.1985)).

The standard of review applicable to a summary judgment is the same as the standard for granting the motion; that is, we must determine whether there was a genuine issue of material fact and, if not, whether the Grahams were entitled to a judgment as a matter of law. Our review is further subject to the caveat that this Court must review the record in a light most favorable to the Welches and resolve all reasonable doubts against the Grahams.1 Wilson v. Brown, 496 So.2d 756, 758 (Ala.1986); Harrell v. Reynolds Metals Co., 495 So.2d 1381 (Ala.1986). See also Hanners v. Balfour Guthrie, Inc., 564 So.2d 412 (Ala.1990).

The basic law on fraudulent conveyances is expressed in § 8-9-6, Ala.Code 1975:

“All conveyances or assignments in writing, or otherwise, of any estate or interest in real or personal property ... made with intent to hinder, delay or defraud creditors, purchasers or other persons of their lawful actions, damages, forfeitures, debts or demands ... are void.”

Thus, as the Court stated in Roddam v. Martin, 285 Ala. 619, 623, 235 So.2d 654, 657 (1970), under the statute the concurrence of three elements is required before a conveyance can be declared fraudulent: (1) that the creditor was defrauded; (2) that the debtor intended to defraud; and (3) that the conveyance was of property out of which the creditor could have realized his or her claim or some portion of it. Concurrence of the three elements is not enough to set aside the conveyance when there is a valuable consideration given for the transfer. In J.C. Jacobs Banking Co. v. Campbell, 406 So.2d 834, 843 (Ala.1981), the court stated:

“Further proof, however, is required before a conveyance found to be fraudulent is due to be set aside.
“Where it appears the transfer in question was made for a valuable consideration, a plaintiff seeking to invoke the protection of Code 1975, § 8-9-6, must show the mutual fraudulent intent of the parties to the transaction. Proof of the grantor’s intent alone is insufficient to cause the conveyance to be set aside.”

(Emphasis in original.)

The Welches concede that there is no direct evidence of intent to defraud them on [1030]*1030the part of the Grahams and that their claim of fraud is based on the circumstantial evidence arising from the timing of the conveyance. In Smith v. Wilder, 270 Ala. 637, 650, 120 So.2d 871, 883 (1960), overruled on other grounds, J.C. Jacobs Banking Co. v. Campbell,

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In Re Speir
190 B.R. 657 (N.D. Alabama, 1995)

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Bluebook (online)
623 So. 2d 1027, 1993 Ala. LEXIS 401, 1993 WL 126506, Counsel Stack Legal Research, https://law.counselstack.com/opinion/welch-v-graham-ala-1993.