Beruflich Dokumente
Kultur Dokumente
Plaintiff,
v.
Defendant.
/
and through its undersigned counsel, pursuant to Fed. R. Civ. P. 69 and Fla. Stat. § 56.29
(2007) and respectfully moves this Court for the conduct of Proceedings Supplementary
and for the entry of an Order impleading Defendants Frank A. Amelung and Eugenia M.
Amelung, Trustees under the Amelung Family Revocable Trust dated December 14,
2005.
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1. Alesco Financial, Inc. is the judgment creditor named under and is the
current holder of a judgment entered in this cause on March 29, 2007, against the
judgment debtors Frank A. Amelung and Eugenia M. Amelung in the principal amount of
$13,060,614.63 (hereinafter the “Judgment”). Alesco Financial, Inc. is the holder of the
not currently the subject of an appeal or of a motion for reconsideration which would stay
the Judgment.
Debtors Frank A. Amelung and Eugenia M. Amelung were issued by the Clerk of the
Court.
Support of Judgment Creditor Alesco Financial, Inc.’s first Motion for Proceedings
A. Amelung are the acting co-trustees of the Amelung Family Revocable Trust dated
recorded at Book 1791, Page 611 of the Official Public Records of Monroe County,
2
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7. On April 10, 2007, the judgment debtors Frank A. Amelung1 and Eugenia
Florida, a Warranty Deed nominally dated December 14, 2005 (Exhibit C), whereby the
judgment debtors purported to transfer the Property to Frank A. Amelung and Eugenia
M. Amelung, Trustees under the Amelung Family Revocable Trust dated December 14,
2005.
this matter and is obligated to pay its attorneys a reasonable attorneys fee for their
services herein.
COUNT I
(Fraudulent Transfer)
§ 726.105 (2007) (i) as having been made with the actual intent to hinder, delay or
and/or (ii) as having been made without Frank A. Amelung and Eugenia M. Amelung
1
The referenced Warranty Deed identifies Frank A. Amelung as a “Grantor”. It is not
clear how Frank A. Amelung obtained an interest in the Property as Eugenia M. Amelung
is the sole named Grantee under the April 4, 2002, Trustee’s Deed.
3
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having received reasonably equivalent value at a time when Frank A. Amelung and
transaction for which the remaining assets of Frank A. Amelung and Eugenia M.
intended to incur or believed or reasonably should have believed that they would incur,
Alesco as having been made after the Judgment was entered and was made without Frank
A. Amelung and Eugenia M. Amelung having received reasonably equivalent value for
the transfer at a time when Frank A. Amelung and Eugenia M. Amelung either were
Alesco relief to allow Alesco to proceed against the Property held in the Trust in partial
13. Alesco has and will continue to suffer irreparable harm as a consequence
of the judgment debtors Frank A. Amelung and Eugenia M. Amelung fraudulent transfers
of assets such that injunction relief is appropriate in the context of this action.
COUNT II
(Revocable Trust)
15. As a matter of law, any assets titled in the name of the Trust are subject to
the claims of the creditors of Frank A. Amelung and Eugenia M. Amelung to the extent
4
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that those assets were transferred to the trust by Frank A. Amelung and/or Eugenia M.
right, whether independently, jointly or with the consent of a third party, to demand that
determining the interest of the Judgment Debtors Frank A. Amelung and Eugenia M.
Amelung in assets held in the Trust and for purposes of causing the Property and any
other assets held in the Trust in which the Judgment Debtors Frank A. Amelung and
MEMORANDUM OF LAW
Fed. R. Civ. P. 69(a) directs the application of state procedure for enforcement of
a judgment including, but not limited to, the resort to proceedings supplementary
authorized under state law. That Rule provides in pertinent part as follows:
“Under Fed. R. Civ. P. 69, state law concerning supplementary proceedings to enforce a
judgment will govern to the extent that it is not preempted by federal law.” See General
5
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Trading Inc. v. Yale Materials Handling Corp., 119 F.3d 1485 at n. 22 (11th Cir. 1997),
citing Allied Indus. Int’l, Inc. v. AGFA-GENVAERT, Inc., 688 F. Supp. 1516, 1517
Fla. Stat. § 56.29 (2007), the Florida proceedings supplementary statute, provides,
6
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prerequisites for supplementary proceedings are (1) an unsatisfied writ of execution, and
(2) an affidavit averring that the writ is valid and unsatisfied along with a list of persons
of execution by order to show cause.” General Trading Incorporated, id.; see also Fla.
Stat. § 56.29 (2007). It is not a jurisdictional prerequisite for the initiating of proceedings
supplementary that a writ of execution be returned unsatisfied. See Bleidt v. Lobato, 664
follow through with the enforcement of its judgment, so that there would be no necessity
for an independent suit to reach property which legally should be applied to the
(S.D. Fla. 1931). “Proceedings supplementary are equitable in nature and should be
liberally construed… They enable speedy and direct proceedings in the same court in
which the judgment was recovered to better afford to a judgment creditor the most
complete relief possible in satisfying the judgment.” Zureikat v. Shaibani, 944 So. 2d
1019, 1023 (Fla. 5th DCA 2006). In conducting proceedings supplementary, “the court
has the authority and in fact a duty to implead third parties.” Allied Industries
International, Inc. v. AGFA-GEVAERT, Inc., 688 F. Supp. 1516, 1518 (S.D. Fla. 1988);
see also Florida Guaranteed Securities, Inc. v. McAllister, 47 F.2d 762 (S.D. Fla. 1931)
property which had been fraudulently transferred); Zureikat, 944 So. 2d 1019 (approving
7
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the use of supplementary proceedings for purposes of impressing an equitable lien on the
In the context of this case, the impleading of Frank A. Amelung and Eugenia M.
Family Trust dated December 14, 2005, is warranted for purposes of compelling Frank
A. Amelung and Eugenia M. Amelung, Trustees of the Amelung Revocable Family Trust
dated December 14, 2005 to reconvey the Property to Eugenia M. Amelung, individually,
and/or for purposes of allowing Alesco to cause the interest of Frank A. Amelung and/or
Eugenia M. Amelung in the Trust to be determined and subjected to the reach of the
Alesco’s Judgment.
C. Fraudulent Transfer
Fraudulent Transfer Act (hereinafter the “FFTA”). See generally In re: Crawford, 172
B.R. 365 (Bkrtcy. M.D. Fla. 1994) (amendment of a trust to make the trust irrevocable
held a transfer for purposes of the FFTA). Whether a given transfer is defined as
fraudulent for purposes of FFTA depends upon the circumstances attending that transfer.
Moreover, the nature of the proof required to establish a transfer as fraudulent depends,
in part, on whether the judgment creditor was a “present” creditor or a “future” creditor
of the Judgment debtor. Compare Fla. Stat. § 726.105(2007) (applicable to “present” and
of this Motion and the FFTA, Alesco respectfully submits that Alesco was a “present”
creditor of the Judgment Debtors Frank A. Amelung and Eugenia M. Amelung at the
8
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For purposes of the FFTA, a transfer of real estate is made “when the transfer is
so far perfected that a good faith purchaser of the asset from the debtor against whom
applicable law permits the transfer to be perfected cannot acquire an interest in the asset
that is superior to the interest of the transferee.” Fla. Stat. § 726.107(1)(a). In the context
of this case, the transfer of the Property was made on April 10, 2007, when the Warranty
Deed nominally executed as of December 14, 2005, was recorded in the official public
records of Monroe County, Florida. See Warranty Deed (Exhibit A); see also In re:
Mizrahi, 179 B.R. 322 (Bankr. M.D. Fla. 1995) (noting that under the FFTA, the date of
purposes of the FFTA the “transfer” was made twelve days after the Judgment was
issued against the Judgment Debtors. As such, Alesco was a “present” creditor at the
time the transfer of the Marathon, Florida property was made from Frank and Eugenia
Amelung to the Trust. Accordingly, the transfer of the Property to the Trust is avoidable
as to Alesco pursuant to the provisions of either Fla. Stat. §§ 726.105 or 726.106 (2007).
For purposes of Fla. Stat. § 726.105(1)(a), so-called badges of fraud are referred
to for purposes of establishing the actual intent to defraud by the judgment debtor. See In
re: McCarn’s Allstate Finance, Inc., 326 B.R. 843 (Bankr. M.D. Fla. 2005). For this
purpose, Fla. Stat. § 726.105(2) contains a non-exhaustive list of badges of fraud which
“While a single badge of fraud may only create a suspicious circumstance and
may not constitute the requisite fraud to set aside a conveyance, several of them when
considered together may afford a basis to infer fraud.” General Trading Inc., 119 F.3d at
9
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1498, citing, Johnson v. Dowell, 592 So. 2d 1194 (Fla. 2d DCA 1992) see also In re:
Mizrahi, 179 B.R. 322, 329 (Bankr. M.D. Fla. 1995). “[C]ourts take into account the
particular facts surrounding the conveyance, and avoid determining in a vacuum the
presence or absence of a debtor’s actual intent to hinder or delay a creditor.” Id., citing
Kirk v. Edinger, 380 So. 2d 1336. “The existence of badges of fraud create a prima facie
case and raises a rebuttable presumption that the transaction is void.” Nationsbank, N.A.
v. Coastal Utilities, 814 So. 2d 1228 (Fla. 4th DCA 2002); In re: PSI Industries, Inc., 306
B.R. 377 (Bkrtcy S.D. Fla. 2003) (“[W]hile a single badge of fraud may create only a
suspicious circumstance, several of them together may afford a basis to infer fraud.”).
Alesco respectfully submits that the facts attendant to the transfer of the Property
to the Trust compel a conclusion that the transfers were fraudulent and were entered into
with actual intent to hinder, delay and defraud the creditors of Frank A. Amelung and
Eugenia M. Amelung for the following reasons, each of which are among the badges of
revocable self-settled trust in which the Judgment Debtors Frank A. Amelung and
Eugenia M. Amelung are the trustees. See December 14, 2005, Warranty Deed
(Exhibit C)2. Accordingly, the transfer was made to an “insider” for purposes of
Chapter 726 of the Florida Statutes and Fla. Stat. § 726.105(2)(a). See In re:
Mizrahi, 179 B.R. at 329 (holding that the transfer to a revocable family trust was
a transfer to an “insider” for purposes of the FFTA); see also, Fla. Stat.
2
Alesco is not presently in possession of a copy of the Trust Agreement.
10
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trust entails the retention of control over the trust assets within the meaning of
the transferor to revoke the trust and receive the return of the property contributed
to the trust or to otherwise change the beneficial enjoyment of that property. See
Property was not disclosed to Alesco at the time of the transfer. The Judgment
Debtors were well aware of Alesco’s claim at the time of the transfer as the
Judgment Debtors had, prior to the date of such transfer, (i) arbitration pro-
ceedings initiated against them, (ii) an arbitration award entered against them,
appearance, and (iv) ultimately had the Judgment entered against them. The
Florida Official Public Records. See generally In re: Crawford, 172 B.R. 365
· The Relative Timing of the Transfer [Fla. Stat. § 726.105(2)(d) and (j)]. The
transfer of the Property occurred after the Frank A. Amelung and Eugenia M.
11
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Amelung had been sued on their personal guaranties by Alesco and after a
substantial judgment had been entered against them for purposes of Fla. Stat.
bears noting yet again that the transfer of the Property to the Trust occurred a
the deed itself reflects that the conveyance was made for no or nominal
consideration and, therefore, the transfer was not made for reasonably equivalent
value for purposes of Fla. Stat. § 726.105(2)(h). This is borne out by the stated
Deed as well as the fact that the Clerk of Court’s notation on the Deed reflects the
payment of documentary stamp tax in the total amount of only seventy cents
consideration as having been paid at the time of the transfer. See Fla. Stat.
consideration paid for the transfer of real property); see also Fla. Admin. Code
§ 12B-4.012 (2007).
For each of the foregoing reasons, Alesco respectfully submits that the transfer of
the Property to the Trust was made with the actual intent to hinder, delay or defraud the
Judgment Debtor Frank A. Amelung and Eugenia M. Amelung’s creditors within the
meaning of Fla. Stat. § 726.105(1)(a) and, as such, such transfer represents a fraudulent
ii. Transfer for Less than Reasonably Equivalent Value at a Time when
the Judgment Debtor was Engaged or was About to Engage in a
12
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Under Fla. Stat. § 726.105(1)(b) a transfer made for less than reasonably equiva-
lent value may be avoided by a present or future creditor if such transfer was made for
less than reasonably equivalent value at a time when the debtors Frank A. Amelung and
for which the remaining assets of the debtors Frank A. Amelung and Eugenia M.
While Alesco maintains its position that the subject transfer of the Property to the
Trust took place on April 10, 2007, when the December 14, 2005, Warranty Deed was
recorded in the Monroe County, Florida Official Public Records, Alesco notes that even
if the transfer is deemed to have occurred on December 14, 2005, when the Warranty
Deed was purportedly executed, the transfer of the Property to the Trust at that time,
made for less than adequate consideration, would itself be avoidable pursuant to Fla. Stat.
§ 726.105(1)(b). That transfer took place a mere six months after the personal guarantee
executed by the Judgment Debtors Frank Amelung and Eugenia Amelung in favor of
Moreover, as affirmatively appears from the Complaint filed by the North Carolina
Attorney General against the Judgment Debtor Frank A. Amelung (Composite Exhibit
D) at that time the Judgment Debtor Frank Amelung was an active participant in a
business venture in which the Judgment Debtor Frank A. Amelung and his co-venturers
defrauded third parties out of tens of millions of dollars in transactions in which the
Judgment Debtor Frank A. Amelung and his co-venturers personally guaranteed those
13
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debts to third parties. See North Carolina Attorney General Complaint (Composite
Exhibit D).
will affirmatively establish that the transfer of the Property to the Trust was made at a
time when the Judgment Debtor Frank A. Amelung’s remaining assets were
unreasonably small in relation to the business and transactions then being conducted by
iii. Transfers for Less than Reasonably Equivalent Value while the
Judgment Debtor was Insolvent (Fla. Stat. § 726.106(1))
Under Fla. Stat. § 726.106(1), a transfer made for less than reasonably equivalent
value may be avoided by a creditor whose claim arose prior to the date of the transfer if
the debtor was insolvent at the time of the transfer. See Fla. Stat. § 726.106(1). “Under
section 726.106, a transfer is fraudulent, without regard to intent, when two elements are
met: (1) there is a transfer without consideration, and (2) the debtor either was insolvent
at the time or was made insolvent as a result of the transaction.” Nationsbank, N.A. v.
Coastal Utilities, 814 So. 2d 1227, 1231 at n. 1 (Fla. 4th DCA 2002). The judgment was
entered on March 29, 2007. See March 29, 2007 Judgment (Docket No. 21). The Deed
was not recorded until April 10, 2007 and, therefore, the transfer of the Property to the
Trust occurred on that date for purposes of the FFTA. See In re: Mizrahi, 179 B.R. 322
(Bankr. M.D. Fla. 1995) (noting that under the FFTA, the date of a transfer of real
property is determined by the date of recordation); see also Sasha & Sasha, Inc. v.
Stardust Marine, 741 So. 2d 558, 559 (Fla. 4th DCA 1999) (Where a deed was not
recorded, “the statute . . . merely postpones the date of the transfer to immediately prior
14
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Alesco submits, upon information and belief, that the evidence in the proceedings
supplementary will show that the transfer of the Property to the Trust was not made for
reasonably equivalent value. The Monroe County Property Appraiser lists the assessed
value of the Property for ad valorem tax purposes as $799,438.00. See Monroe County
Florida Property Appraiser Property Information Card (Exhibit E). By contrast the face
of the December 14, 2005 Warranty Deed itself reflects that the transfer was made for no
or nominal consideration. These facts affirmatively establish that the Property was trans-
Finally, Alesco believes, upon information and belief, that the evidence in the
proceedings supplementary will show that Eugenia M. Amelung and Frank A. Amelung
were insolvent at the time of the transfer. As evidenced by the certain pleadings filed in
the State of North Carolina Superior Court, Frank A. Amelung is a party to a receivership
proceeding and may have participated in conduct for which Frank A. Amelung may have
liability for tens of millions of dollars both by virtue of personal guarantees executed by
Judgment Debtor Frank A. Amelung’s fraudulent conduct. See Complaint and Order
filed in State of North Carolina v. Peerless Real Estate Services, Inc., North Carolina
D. Revocable Trust
interests of Frank A. Amelung and/or Eugenia M. Amelung in the Trust are also
March 29, 2007, Judgment in accordance with the Florida law on trusts. “A strong public
15
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policy exists to prevent any person from placing his property in what amounts to a
revocable trust for his own benefit which would be exempt from the claims of his
creditors…. Therefore, if a settlor creates a trust for his own benefit and inserts a spend-
thrift clause, it is void as far as then existing or future creditors are concerned. The
existing or future creditors can reach the beneficiary’s interests under the trust.” In re:
Cattafi, 237 B.R. 853 (Bkrtcy. M.D. Fla. 1999) (applying Florida law); see also Bogert,
Trusts and Trustees, Rev. 2d ed. s 223 (“If a settlor creates a trust for his own benefit and
inserts a spendthrift clause, it is void as far as to then existing or future creditors are
concerned, and they can reach his interest under the trust.”)3.
3
The above principles were recently codified in Fla. Stat. § 736.0505 (2007), a
provision which is part of the new Florida Trust Code which is scheduled to take effect
on July 1, 2007, which provides in pertinent part as follows:
This provision will be given effect to Trusts existing as of that date and which will
govern all judicial proceedings concerning trusts commenced on or after such date as
well as all judicial proceedings concerning trusts which were commenced prior to such
date unless the court finds that application of the provision in question would
substantially interfere with the conduct of such judicial proceedings or would
substantially prejudice the rights of a party thereto. Fla. Stat. § 736.1303(1)(a) – (c).
16
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Despite Eugenia M.. Amelung and Frank A. Amelung having conveyed their
respective interests in the Property to the Trust, that transfer will not immunize the
Property from the reach of Alesco’s judgment. For example, in In re: Brown, 303 F. 3d
1261 (11th Cir. 2002), the Court, applying Florida law, held in the context of a self-settled
irrevocable charitable remainder unitrust containing a spendthrift clause that the income
interest of the settlor/debtor subject to the reach of the settlor/debtor’s creditors. In re:
Brown, 303 F.3d at 1271; see also Matter of Witlin, 640 F.2d 661 (5th Cir. 1981), citing
Bogert, Trusts and Trustees, 2d ed. s 223, pp. 438, 439; In re: Cattafi, 237 B.R. 853, 856
(Bkrtcy. M.D. Fla. 1999) (“Public policy prevents Debtor from placing his property in a
revocable trust for his own benefit, thereby shielding the property from the claims of his
creditors. The Trust is void as to Debtor’s existing and future creditors, and such
creditors can reach his interest under the Trust.”); Fehlhaber v. Fehlhaber, 850 F.2d 1453
(11th Cir. 1988) (applying Florida law and permitting the garnishment of a revocable
trust); compare Mason v. Mason, 798 So. 2d 895 (Fla. 5th DCA 2001) (finding a spend-
thrift provision enforceable to prevent a creditor from reaching the discretionary interest
of the debtor/trustee in a trust established for the benefit of the debtor/trustee by a third
party). “[W]hen a person creates a discretionary trust for his own benefit, … ‘his
creditors can reach the maximum amount which the trustee under the terms of the trust
could pay to him or apply for his benefit, even though the trustee in the exercise of his
discretion wishes to pay nothing to the beneficiary or to his creditors, and even though
the beneficiary could not compel the trustee to pay him anything.” Lawrence v. Chapter
7 Trustee, 251 B.R. 630, 642 (S.D. Fla. 2000). This is true regardless of the solvency or
17
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insolvency of the debtor/settlor at the time the trust was established and the property was
Amelung and Frank A. Amelung, as Trustees of the Amelung Family Revocable Trust
dated December 14, 2005, is subject to the reach of Alesco’s judgment and, therefore,
Alesco may compel the transfer of the Property back to Eugenia M. Amelung and Frank
A. Amelung and the subsequent levy and execution of Alesco’s judgment on the Property
E. Injunctive Relief
preventing the judgment debtor from making further transfers of the asset which is the
subject of the fraudulent transfer action, or of other assets, in accordance with the
applicable principles of equity and the applicable rules of civil procedure. See Fla. Stat.
§ 726.108(1)(c)1. (2007). Alesco Financial Inc. respectfully submits that the circum-
stances are such, given the history of the Judgment Debtors having made fraudulent
transfers of their assets, as to warrant the issuance of permanent injunction to prevent the
judgment debtors Frank A. Amelung and Eugenia Amelung, or either of them, from
making any further transfers or other dispositions of any of their assets for purposes of
18
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their respective capacities as trustees of the Amelung Revocable Family Trust dated
the Amelung Revocable Family Trust dated December 14, 2005, make an appearance and
show cause why the Property and other Trust assets (if any) should not be applied to the
partial satisfaction of the Judgment debt within 20 days after the date of service;
C. Declaring that the judgment lien of Alesco Financial Inc. which was
recorded on April 17, 2007, in the Official Public Records of Monroe County, Florida
D. Declaring that the interest of the Amelung Revocable Family Trust dated
December 14, 2005, in the Property (and any other property for which a fraudulent
Amelung was made to the Trust) to levy and execution on Alesco’s March 29, 2007,
Trustees of Amelung Revocable Family Trust to reconvey title to the Property to Eugenia
Trustees of the Amelung Family Revocable Trust dated December 14, 2005, enjoining
the making of any further transfers or dispositions of any property, or any interest therein,
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F. Awarding Alesco Financial Inc. its costs and attorneys fees incurred in the
Amelung, Trustees of the Amelung Revocable Family Trust dated December 14, 2005;
and
G. Granting to Alesco Financial Inc. such other and further relief as this
/s Eric L. Hearn
Eric L. Hearn
Florida Bar No. 0094269
501 W. Bay Street
Jacksonville, Florida 32202
(904) 356-1306; (904) 354-0194 (facsimile)
CERTIFICATE OF SERVICE
I certify that on June 29, 2007, I electronically filed the foregoing Motion for
Proceedings Supplementary and for Interpleader with the Clerk of the Court by using the
CM/ECF filing system, which will send a notice of electronic filing to the following
counsel of record:
John Barber MacDonald
Akerman Senterfitt
50 N. Laura St., Suite 2500
Jacksonville, FL 32202
/s Eric L. Hearn
Eric L. Hearn, Attorney
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INDEX OF EXHIBITS
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