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RES GA English Colony v. English Colony LLC, 2013 WL 12247806 (N.D.Ga., 2013).

Opinion 2013 Georgia Unknown_Interest Site.Opinion2013RESGAEnglishColonyUnknownInterestChargingOrder

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♦ The court addressed three motions: (1) defendants’ renewed request under Federal Rule of Civil Procedure 56(d) for more time to oppose the plaintiff’s summary-judgment motion, (2) the plaintiff’s motion for summary judgment on a fraudulent transfer claim, and (3) the plaintiff’s motion for a charging order to aid collection of an earlier money judgment. The court denied the Rule 56(d) motion because the defendants’ affidavit did not meet Rule 56(d)’s specific requirements (the mere incarceration/unavailability of defendant Peretz was not enough), and the record showed defendants had already effectively admitted key facts by failing to timely respond to requests for admission and by not properly contesting the plaintiff’s statement of undisputed facts. On the merits, the court granted summary judgment to the plaintiff on Count III, finding that Peretz’s transfers of multiple real properties to various LLC “transferees” constituted fraudulent transfers under O.C.G.A. §§ 18‑2‑74 and 18‑2‑75, and ordered relief including avoidance/cancellation of the deeds, attachment and injunctive relief, and directed the plaintiff to submit a proposed final judgment consistent with the order. Finally, the court deferred ruling on the charging-order motion because the plaintiff had not provided current evidence of Peretz’s present ownership interests in the targeted entities; it allowed 60 days of discovery under Rule 69(a)(2) and permitted later supplementation and renewed consideration. ♦





RES GA English Colony v. English Colony LLC, 2013 WL 12247806 (N.D.Ga., 2013).

United States District Court, N.D. Georgia, Atlanta Division.

RES GA ENGLISH COLONY, Plaintiff

v.

ENGLISH COLONY LLC, et al., Defendants.

CIVIL ACTION NO. 1:12-CV-1124-RLV

Signed 01/10/2013

Attorneys and Law Firms

Frank William Deborde, Lisa McVicker Wolgast, Simon Robert Malko, Morris Manning & Martin, LLP, James Zachary Zimmerman, Kevin L. Ward, Andrea Lynn Pawlak, Schulten Ward Turner & Weiss LLP, Jill Allison Deutchman, Deutchman Law, LLC, Atlanta, GA, for Plaintiff.

James David Key, Law Office of James David Key, Marietta, GA, Tamara D. McKeown, Aaronson Schantz, P.A., Miami, FL, for Defendants.

ORDER

ROBERT L. VINING, JR., Senior United States District Judge

PAGE_1

This matter comes before the court on the plaintiff's motion for summary judgment [Doc. No. 62], the defendants' renewed and amended motion filed pursuant to Rule 56(d) of the Federal Rules of Civil Procedure to defer, or deny, or to allow the defendants additional time to give affidavits or declarations to challenge the plaintiff's motion for summary judgment [Doc. No. 79], and the plaintiff's motion for an order charging the limited liability interests of Eli Peretz and for the production of securities for levy and injunction [Doc. No. 77].fn1

fn1. In an order dated October 25, 2012, this court denied the defendants' previously filed Rule 56(d) motion. In denying that motion, the court noted that the defendants did not provide the court with an affidavit in support of their previously-filed Rule 56 (d) motion. While the defendants attached an affidavit in support of their current Rule 56(d) motion, the court concludes that their current motion is deficient for the reasons contained in the body of this order.

I. The Defendants' Rule 56(d) Motion

In an affidavit in support of the defendants' renewed and amended motion filed pursuant to Rule 56(d) of the Federal Rules of Civil Procedure to defer, or deny, or to allow the defendants additional time to give affidavits or declarations to challenge the plaintiff's motion for summary judgment, the defendants' attorney alleges that he is currently unable to respond to the plaintiff's motion for summary judgment because one of the defendants, i.e., defendant Peretz, is unavailable due to his incarceration. In its response dated November 20, 2012, the plaintiff argues that neither the defendants' motion nor the affidavit of the defendants' counsel satisfies the requirements of Rule 56(d). This court agrees with the plaintiff.

Rule 56(d) of the Federal Rules of Civil Procedure states that an affidavit in support of a motion to defer, deny, or allow additional time must state with particularity what facts the moving party seeks to discover and how those facts will create a genuine issue of material fact precluding summary judgment. In reviewing the defendants' motion, the court concludes that the defendants' current motion and affidavit in support of the motion does not comply with the strict requirements of Rule 56(d) of the Federal Rules of Civil Procedure. As this court stated in its October 25, 2012 order, Rule 56(d) requires the moving party to file an affidavit which sets forth with particularity the facts the moving party expects to discover and how those facts would create a genuine issue of material fact precluding summary judgment. In the defendants' current motion and supporting affidavit, the defendants and their counsel focus exclusively on how they have been unable to respond to the plaintiff's motion for summary judgment because of the incarceration of defendant Peretz. However, the unavailability or incarceration of a party standing alone does not justify extending, denying, or allowing the defendants additional time to respond to the plaintiff's motion for summary judgment. Instead, Rule 56(d) contains precise requirements that the defendants did not satisfy in their current motion.2 Therefore, the court DENIES the defendants' renewed and amended motion for additional time pursuant to Federal Rule of Civil Procedure 56(d) [Doc. No. 79].

fn2. Additionally, the court notes that the defendants already admitted all of the essential elements of the plaintiff's claims because the defendants failed to timely respond to the plaintiff's request for admissions. Moreover, the defendants have not moved to withdraw their admissions after being alerted to the fact that they had admitted numerous facts by the filing of the plaintiff's motion for summary judgment. Furthermore, there is absolutely no evidence in the record that counsel for defendant Peretz acted diligently in this case to obtain discovery necessary to oppose the plaintiff's motion for summary judgment. Finally, as the plaintiff stated, defendant Peretz has had an extended time to file a response to the plaintiff's motion for summary judgment and failed to do so in a timely manner.

II. The Plaintiff's Motion for Summary Judgment [Doc. No. 62]

PAGE_2

In Count III of its second amended complaint, the plaintiff asserts that certain transfers of real property by defendant Peretz to defendants 7605 Winters Chapel Rd, LLC, 5305 Oaks Landing Ct, LLC, 5542 Button Gwinnett Place, LLC, 1437 Silver Lake Dr., LLC, 4097 Clay Dr., LLC, 4096 Clay Dr., LLC, 4043 Clay Dr., LLC, 3604 Parkmont Ct, LLC, 205 Cheltenham Walk, LLC, and 295 Norcross St., LLC (collectively, the “transferees”) constitute fraudulent transfers under O.C.G.A. §§ 18-2-74 and 18-2-75. In their answer, the defendants admitted that on or about August 31, 2009, defendant Peretz transferred the real property described below to the transferees.

  • To 7605 Winters Chapel Rd, LLC via Limited Warranty Deed (“LWD 1”), all of Peretz's interest in land lying in Land Lot 312 of the 6th District of Gwinnett County, Georgia being shown as 5,263 acres on plat of survey by J. Paul Bates, dates June 18, 1968, recorded in Plat Book Q, Page 139-B, Gwinnett County, Georgia Records (“Property A”).
  • To 5305 Oaks Landing Ct, LLC, via Limited Warranty Deed (“LWD. 2”) all of Peretz's interest in land lying in Land Lot 308 of the 7th District, Gwinnett County, Georgia, being Lot 17, Block A, Oaks Landing Subdivision, Unit One (the “Property B”).
  • To 1437 Silver Lake Dr, LLC, via Limited Warranty Deed (“LWD 3”), all of Peretz's interest in land lying in Land Lot 188 of the 6th District, Gwinnett County, Georgia, and being Lot 49, Block C, Robin Hill Subdivision, Unit Three, also known as 1437 Silver Lake Drive (“Property C”).
  • To 5542 Button Gwinnett Place, LLC, via Limited Warranty Deed (“LWD 4”), all of Peretz's interest in land lying in Land Lot 189 of the 6th District, Gwinnett, Georgia, and being Lot 18, Block B, Walton Woods Phase Unit Three, Marcelle Heights Subdivision, known as 5542 Button Gwinnett Place, Gwinnett County, Georgia (“Property D”).
  • To 4097 Clay Dr., LLC, via Limited Warranty Deed (“LWD 5”), all of Peretz's interest in land lying in Land Lot 335 of the 18th District of DeKalb County, Georgia, being Lot 32, Block B, Unit 2, Guilford Village Subdivision, known as 4097 Clay Drive, Doraville, DeKalb County, Georgia 30360 (“Property E”).
  • To 4096 Clay Dr., LLC, via Limited Warranty Deed (“LWD 6”), all of Peretz's interest in land lying in Land Lot 335 of the 18th District of DeKalb County, Georgia, being Lot 32, Block C, Subdivision of Unit Two Guilford Village, as more particularly described in LWD 6 (“Property F”).
  • To 4043 Clay Dr, LLC, via Limited Warranty Deed (“LWD 7”), all of Peretz's interest in land lying in Land Lot 335 of the 18th District of DeKalb County, Georgia, being Lot 24, Block B, Guilford Village Subdivision (“Property G”).
  • To 3604 Parkmont Ct, LLC, via Limited Warranty Deed (“LWD 8”), all of Peretz's interest in land lying in Land Lot 304 of the 6th District of Gwinnett County, Georgia, being Lot 40, Block A, Unit Three, Dunwoody Manor at Peachtree Corners, known as 3604 Parkmont Court, Gwinnett County, Georgia (“Property H”).
  • To 205 Cheltenham Walk, LLC, via Limited Warranty Deed (“LWD 9”), all of Peretz's interest in land lying in Land Lots 686 and 755 of the 2nd District, 2nd Section, Fulton County, Georgia, being Lot 3, Pod C, Crooked Creek, Unit Two (“Property I”).
  • To 295 Norcross St, LLC, via Limited Warranty Deed (“LWD 10”, together with LWD 1 through 9, the “Deeds”), all of Peretz's interest in land lying in Land Lot 451 of the 1st District, 2nd Section of Fulton County, Georgia, being known as 295 Norcross Street (“Property J,” together with Properties A through I, the “Properties”).

On July 9, 2012, the plaintiff served Peretz with requests for admission. Additionally, the plaintiff served the transferees with requests for admission. While the defendants' deadline to respond to the requests was August 11, 2012, the defendants failed to serve any response to the requests.

PAGE_3

Because the defendants failed to object to the plaintiff's requests for admissions, the following facts are deemed admitted pursuant to Rule 36(a) (3) of the Federal Rules of Civil Procedure:

  • True and correct copies of the Deeds are attached to the Complaint as Exhibits 9 through 18.
  • Omni National Bank's right to payment (and subsequently RES-GA's right to payment) under the Guaranty executed by Peretz arose before the Transfers were made.
  • The Transferees are “insiders” of Peretz within the meaning of O.C.G.A. § 18-2-71 (7) (A).
  • Peretz remained in possession and/or control of the properties after the Transfers.
  • The Transfers were made with actual intent to hinder, delay, or defraud one or more creditors of Peretz.
  • The consideration received by Peretz in exchange for the Transfers was not reasonably equivalent to the value of his interest in the Properties.
  • At the time of the Transfers, Peretz was insolvent or became insolvent as a result of the Transfers.
  • At the time of the Transfers, Peretz was engaged or was about to engage in a business or a transaction for which his remaining assets were unreasonably small in relation to the business or transaction,
  • At the time of the Transfers, Peretz intended to incur, or believed or reasonably should have believed that he would incur, debts beyond his ability to pay as they became due.

Given the defendants' admissions, the plaintiff is entitled to summary judgment on its fraudulent transfer claims under O.C.G.A. §§ 18-2-74(a) and 18-2-75(a) against the defendants named in Count III of the Amended Complaint dated April 2, 2012.

Under O.C.G.A. § 18-2-74:

A transfer made or obligation incurred by a debtor is fraudulent as to a creditor, whether the creditor's claim arose before or after the transfer was made or obligation was incurred, if the debtor made the transfer or incurred the obligation:
(1)With the actual intent to hinder, delay, or defraud any creditor of the debtor; or
(2) Without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor:
(A) Was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction; or
(B) Intended to incur, or believed or reasonably should have believed that he or she would incur, debts beyond his or her ability to pay as they became due.

Under O.C.G.A. § 18-2-75(a):

A transfer made or obligation incurred by a debtor is fraudulent as to a creditor whose claim arose before the transfer was made or the obligation was incurred if the debtor made the transfer or incurred the obligation without receiving a reasonably equivalent value in exchange for the transfer or obligation and the debtor was insolvent at that time or the debtor became insolvent as a result of the transfer or obligation.

In a pleading dated September 24, 2012, defendant Peretz argues that there was no fraudulent conveyance under O.C.G.A. § 18-2-74 (a) (2) (B) since reasonable value was exchanged. Moreover, defendant Peretz argues that there was no fraudulent transfer under O.C.G.A. § 18-2-74 (a) (2) (B) since there was no evidence of his intent to incur, or believed or reasonably should have believed that he would incur, debts beyond his ability to pay as they became due.

PAGE_4

However, as the plaintiff correctly notes in its September 27, 2012 reply brief, defendant Peretz already admitted all of the essential elements of the plaintiff's claims by his failure to timely respond to the plaintiff's request for admissions. While defendant Peretz and his attorney may seek to create questions of facts by their self-serving statements contained in their pleadings, it is firmly established that self-serving statements in a brief cannot defeat a well-supported motion for summary judgment. Moreover, defendant Peretz failed to file a response to the plaintiff's statement of undisputed facts as required by Local Rule 56.1(B)(2). Based on these facts, defendant Peretz cannot refute the plaintiff's well-supported motion for summary judgment.

Because the transfers constitute fraudulent transfers under O.C.G.A. §§ 18-2-74 and 18-2-75, the plaintiff is entitled to the following relief pursuant to O.C.G.A. § 18-2-77:(1) avoidance of the Transfers and cancellation of the deeds executed by Peretz transferring the Properties to the Transferees with legal title to the Properties remaining with Peretz, (2) attachment against the Properties in favor of the plaintiff pursuant to O.C.G.A. § 18-3-1 et seq.; (3) an injunction against further disposition by Peretz of the Properties or other property or interests held by him; and (4) for ten writs of execution in favor of the plaintiff with respect to the judgment entered by this court on August 20, 2012. Within 10 days of the docketing of this order, the court DIRECTS the plaintiff to file a proposed final judgment that comports with the dictates of this order.

III. Plaintiff's Motion for Charging Order [Doc. No. 77]

In its motion for a charging order, the plaintiff states that this court entered a final order and judgment against English Colony, LLC, Horizon Investment and Development, LLC, Peretz, Haim Mayan and Erad Mayan on August 20, 2012, in the amount of $1,958,786.64 based on Counts I and II. The plaintiff states that it believes that defendant Peretz will take action to thwart the plaintiff's collection of this court's judgment. According to the plaintiff, defendant Peretz possesses an ownership interest in a number of corporations and limited liability companies. In order to prevent defendant Peretz from dispersing his assets, the plaintiff asks this court to issue a charging order against defendant Peretz and other judgment debtors pursuant to Federal Rule of Civil Procedure Rule 69(a).

In response, defendant Peretz argues that the plaintiff's motion is deficient. Specifically, defendant Peretz argues that the plaintiff has not submitted evidence that defendant Peretz now has an interest in the entities that the plaintiff seeks to have a charging order entered against pursuant to O.C.G.A. § 14-11-504. Furthermore, defendant Peretz argues that this court cannot issue a charging order against third parties, which have never been parties to this action.

While the court notes that the relief that the plaintiff seeks is available in federal court pursuant to Rule 69 of the Federal Rules of Civil Procedure against defendant Peretz, the court concludes that the plaintiff has not properly supported its motion for a charging order and production of securities with evidence demonstrating defendant Peretz's current ownership interest in the various entities that the plaintiff seeks to have this court issue a charging order against. Before this court can enter charging orders against the numerous entities sought by the plaintiff, the court concludes that limited discovery into defendant Peretz's current ownership interest in the various entities that the plaintiff seeks a charging order entered against is absolutely necessary. In reaching this conclusion, the court notes that the plaintiff has not demonstrated that defendant Peretz, who is currently incarcerated, still retains an ownership in the various entities that the plaintiff asks this court to issue a charging order against. Instead of recent evidence of defendant Peretz's ownership interest in the various entities, the plaintiff has submitted a Financial Statement from 2008, which may not accurately reflect defendant Peretz's current ownership interest in the various entities. To allow the plaintiff an opportunity to obtain discovery in aid of execution of the August 20, 2012 judgment, the court will allow the plaintiff to engage in discovery as outlined in Rule 69(a)(2) for sixty days from the date of the docketing of this order to obtain current information regarding defendant Peretz's ownership interest in the entities which the plaintiff seeks for this court to issue a charging order against. Thereafter, the plaintiff will be allowed to supplement its November 1, 2012 motion after it obtains evidence that defendant Peretz possesses an ownership interest in each of the entities that it seeks to have this court enter a charging order against. After discovery and supplemental briefing is completed, the court will revisit the plaintiff's motion for a charging order.

IV. Conclusion

PAGE_5

For the reasons set forth above, the court DENIES the defendants' renewed and amended motion filed pursuant to Rule 56(d) of the Federal Rules of Civil Procedure to defer, or deny, or to allow the defendants additional time to give affidavits or declarations to challenge the plaintiff's motion for summary judgment [Doc. No. 79]; GRANTS the plaintiff's motion for summary judgment with regard to the fraudulent transfer claim contained in Count III of the Amended Complaint [Doc. No. 62]; and DEFERS ruling upon the plaintiff's motion for an order charging the limited liability interests of defendant Peretz and for the production of securities for levy and injunction [Doc. No. 77]. As set forth above, the court DIRECTS the plaintiff to file a proposed final judgment dealing with Count III of the Amended Complaint. Finally, the court will revisit the plaintiff's motion for an order charging on the limited liability interests of defendant Peretz and for the production of securities for levy and injunction after the discovery and supplemental briefing outlined in the body of this order is completed.

SO ORDERED, this 10th day of January, 2013.