Article courtesy of Jeff Dutson of King & Spalding
As a matter of first impression, the Alabama Supreme Court held that the elapsing of a decade following entry of judgment and judgment creditor’s failure to revive the judgment rendered the fraudulent-conveyance claim moot.
623 Partners, LLC v. Bowers, 2021 WL 4129413 (Ala. 2021)
In an earlier action, 623 Partners, LLC (the “Judgment Creditor”) obtained a default judgment against Bart Bowers (the “Defendant”). The Judgment Creditor, however, never collected on that judgment. About nine years after obtaining the judgment, the Judgment Creditor filed a case with the Circuit Court for Baldwin County (the “Trial Court”) alleging that the Defendant along with members of his family had orchestrated the fraudulent conveyance of a property that should be used to pay the judgment. While this case was pending, the judgment in the earlier action reached the ten-year mark, meaning the judgment was presumed satisfied. Specifically, under § 6-9-191, Ala. Code 1975, a judgment over ten years old “must be presumed satisfied, and the burden of proving it not satisfied is upon the plaintiff.” The Trial Court found that the Judgment Creditor did not meet this burden. Accordingly, the Trial Court entered summary judgment in favor of the Defendant finding that, since the judgment could not be enforced, the claims were moot. The Judgment Creditor appealed.
The Alabama Supreme Court (the “Supreme Court”) noted that the case presented a question of first impression—whether a creditor may maintain claims under the Alabama Uniform Fraudulent Transfer Act, § 8-9A-1 et seq., Ala. Code 1975, when the debt has been reduced to a judgment and that judgment is presumed satisfied. The Supreme Court held that, while there was a live action when initially filed, once the ten-year mark hit, there was no longer a debt to remedy. Justice Sellers, dissenting, contended that “[u]nder Alabama’s statutory framework, a judgment cannot be revived more than 20 years after the date of its entry; thus, only after 20 years is a judgment that has not been revived conclusively deemed satisfied. See § 6-9-190, Ala. Code 1975 (“A judgment cannot be revived after the lapse of 20 years from its entry.”).” Accordingly, Justice Sellers would have reversed the Trial Court’s grant of summary judgment.
