GEORGE STEPHENS, APPELLANT,
v.
KIES OIL COMPANY, INC., A FLORIDA CORPORATION, AND JOEL C. STEPHENS, JR., APPELLEES
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Stephens appealed a summary judgment in favor of creditor Kies Oil Company, which sought to recover for goods sold and delivered to Stephens's service station. The court reversed, holding that while classical badges of fraud were present, evidence of Stephens's legitimate business motivation created a factual dispute about intent to defraud that precluded summary judgment.
Summary judgment was improper because although the badges of fraud created a rebuttable presumption that the sale was void, Stephens's evidence regarding his motivation for the subsequent sale—his nephew's inability to generate earnings and the nephew's request to find another purchaser—created a factual dispute regarding Stephens's intent to defraud that must be resolved by the trier of fact.
[1] The presence of badges of fraud creates a prima facie case and raises a rebuttable presumption that a sale is void.
[2] The intent to defraud creditors is a vital element to be established under Florida's fraudulent conveyance statute.
Previewing 2 of 5 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“Summary judgment is available in fraud cases only in extraordinary circumstances.”
Establishes the high bar for summary judgment in fraud cases and the principle that factual disputes regarding intent are typically for the trier of fact.
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Join FLexlaw to unlock all legal intelligenceKies Oil Company sued Stephens to recover payment for goods sold and delivered to an automotive service center allegedly owned by Stephens. Stephens c…
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NESBITT, Judge.
Appellant, Stephens, seeks reversal of a summary final judgment in favor of appel-lee, Kies.
Kies, an oil distributor, commenced an action against Stephens seeking recovery for goods sold and delivered to Stephens as owner of an automotive service center. Stephens filed an answer containing a general denial.
After discovery was taken, the only viable issue remaining was whether Stephens owned the station in question. Ste-ions contended that he made an oral agreement to transfer ownership to his nephew under which the nephew was to assume all outstanding obligations. Kies filed a motion for summary judgment relying upon depositions and other proof before the court to show that the alleged sale constituted a fraud upon Kies because the classical badges of fraud which would void a sale were present. § 726.01, Fla.Stat. (1979). These included: (a) sale to a relative; (b) sale while Stephens was indebted to Kies; (c) no consideration passed between Stephens and his nephew in the alleged sale; and (d) Stephens retained ostensible possession of the premises as evidenced by his later bona fide sale to a third party. These badges of fraud create a pri-ma facie case and raise a rebuttable presumption that the sale was void. Money v. Powell, 139 So. 2d 702 (Fla.2d DCA 1962); Tornwall v. Carter, 106 So. 2d 96 (Fla.2d DCA 1958).
The badges of fraud demonstrated by Kies, standing alone, unrebutted and uncontradicted would entitle Kies to a directed verdict. Gyorok v. Davis, 183 So. 2d 701 (Fla.3d DCA 1966). It is the intent to defraud one’s creditors which is a vital element to be established under Section 726.01, supra. Jackson v. Citizens’ Bank & Trust Co., 53 Fla. 265, 44 So. 516 (1907).
In the present case, there was evidence presented of Stephens’ motivation for selling the business. He attempted to justify the subsequent sale to a third party with allegations of: (1) his nephew’s inability to generate sufficient earnings from the business to make the installment payments; and (2) his nephew’s request for him to return to find another purchaser so as to salvage what he could from the business. These factors tend to rebut and contradict the presumption, raised by the badges of fraud demonstrated by Kies, that the sale was void and create an issue to be resolved by the trier of fact.
Summary judgment is available in fraud cases only in extraordinary circumstances. Automobile Sales, Inc. v. Federated Mutual Implements and Hardware Insurance Company, 256 So. 2d 386 (Fla.3d DCA 1972). Because of this question as to Stephens’ intent to defraud Kies, the pre sumption against the existence of fraud has not been conclusively met and entry of summary judgment was premature. McCrary v. Bobenhausen, 366 So. 2d 77 (Fla. 1st DCA 1977).
The summary final judgment is reversed and remanded for further proceedings.
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Rosen v. David H. Zoberg, Law Offs. of David H. Zoberg, P.A., 680 So. 2d 1050 (Fla. 3d DCA 1996)…es not present that unique situation which would permit entry of a summary judgment. Automobile Sales, Inc. v. Federated Mut. Implement & Hardware Ins. Co., 256 So. 2d 386, 386 (Fla. 3d DCA 1972) (citations omitted); Stephens v. Kies Oil Co., Inc., 386 So. 2d 1289 (Fla. 3d DCA 1980). Additionally, we hold that the trial court abused its discretion in denying Ro-sen’s motions to stay Rosen II. The record demonstrates that resolution of Rosen I is dispositive of Rosen II. If Rosen does not prevail in Rosen I,…
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Nationsbank, N.A. v. Coastal Utils., Inc., 814 So. 2d 1227 (Fla. 4th DCA 2002)…ration, (e) debtor retained use and enjoyment of asset, and (f) concealment of the transfer. The existence of badges of fraud create a prima facie case and raise a rebut-table presumption that the transaction is void. Stephens v. Kies Oil Co., Inc., 386 So. 2d 1289, 1290 (Fla. 3d DCA 1980). [*1231] However, in fraud cases, summary judgment is available only in extraordinary circumstances. Id Here, remaining issues of fact remain as to the extent of Iacobel-li’s interest in the funds and as to the application o…
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Gen. Elec. Co. & Gen. Elec. Cap. Corp. v. Chuly Int'l, LLC, 118 So. 3d 325 (Fla. 3d DCA 2013)…2001). Those “badges of fraud” are set forth in section 726.105, Florida Statutes (2013).3 “The existence of badges of fraud creates a prima facie case and raise a rebuttable presumption that the transaction is void.” Stephens v. Kies Oil Co., Inc., 386 So. 2d 1289, 1290 (Fla. 3d DCA 1980). Consideration may also be given to factors other than those listed. See In re Miller, 188 B.R. 302, 305-06 (Bankr.M.D.Fla.1995). Courts may take into account the circumstances surrounding the conveyance. Kirk v. Edinger, 38…
Previewing 3 of 8 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Jackson v. The Citizens Bank & Tr. Co., 53 Fla. 265 (Fla. 1907)
- Auto. Sales, Inc. v. Federated Mut. Implement & Hardware Ins. Co., 256 So. 2d 386 (Fla. 3d DCA 1972)
- Money v. Coy C. Powell and Kathleen Powell, 139 So. 2d 702 (Fla. 2d DCA 1962)
- Weir Brown v. Bush Aviation Enters. & Fla. Indus. Comm'n, 106 So. 2d 96 (Fla. 2d DCA 1958)
- McCRARY v. August L. Bobenhausen, 366 So. 2d 77 (Fla. 1st DCA 1978)
- Eugenia A. Gyorok v. Davis, 183 So. 2d 701 (Fla. 3d DCA 1966)