from the Superior Court in Maricopa County No. CV2012-092926
The Honorable Margaret Benny, Judge Pro Tempore
Shumway PLC, Mesa By Joel E. Sannes Counsel for
& Baker, Phoenix By Thomas M. Baker Counsel for
Defendant/Judgment Debtor/Appellant and Intervenor/Appellant
Lawrence F. Winthrop delivered the opinion of the Court, in
which Presiding Judge Jennifer M. Perkins and Judge Jon W.
In this garnishment proceeding, the judgment debtor requested
a jury trial on the validity of an assignment to funds that
the judgment creditor claimed was a fraudulent transfer. We
hold that, under these circumstances, there is no right to a
jury trial in garnishment proceedings with respect to whether
an assignment would constitute a fraudulent transfer.
Judgment debtor Gary Soucy and intervenor XYZED, LLC appeal
from the denial of Soucy's objection to the application
for writ of garnishment, the denial of their motion for new
trial, and the garnishment judgment in favor of judgment
creditor Dan Carey. For the following reasons, we affirm.
AND PROCEDURAL HISTORY
In February 2016, Gary Soucy stipulated to judgment against
him and in favor of Dan Carey for $175, 000 (the
"Judgment"). Carey recorded the Judgment two days
after it was signed and filed.
In September 2016, Soucy, in a separate matter and
represented by attorney James Mack, entered a settlement
agreement with an estate ("Garnishee"), requiring
the estate to pay Soucy $50, 000 on or before October 7,
2016, and another $50, 000 on or before January 7, 2017 (the
On October 7, 2016, Mack received the first Settlement
payment in his firm's trust account. Mack and Soucy met
at Mack's bank later that day; from the $50, 000, Mack
paid his firm $25, 320.07, representing unpaid attorneys'
fees due and owing from Soucy, and wrote Soucy a check for
the remaining $24, 679.93. Soucy cashed the check before
leaving the bank.
On October 18, 2016, Carey served a writ of garnishment on
Mack in an attempt to collect the Judgment. Mack answered
that he was not indebted to or otherwise in possession of
monies belonging to Soucy.
At some point in October 2016, Soucy, Mack, and XYZED, whose
sole member is Mack, executed an agreement in which Soucy
assigned the second $50, 000 Settlement payment to XYZED (the
"Assignment") and XYZED loaned Soucy $40,
The purported purpose of the Assignment was for Soucy to use
the $40, 000 to take advantage of a time-sensitive business
opportunity to purchase goods for resale. In addition to
assigning the second Settlement payment, Soucy also agreed to
remit $3, 800 to XYZED upon the resale of the purchased
goods. The $40, 000 loan was made up of two separate wire
transfers: (1) $15, 000 wire transferred from the Mack law
firm operating account to Lighthouse Ventures,
on September 21, 2016 (prior to the Assignment) and (2) $25,
000 wire transferred from the Mack law firm operating account
to Lighthouse Ventures, LLC on October 18, 2016. Mack later
provided counsel for Garnishee with a copy of the Assignment.
On December 23, 2016, Carey served a writ of garnishment on
Garnishee. Garnishee answered that it was in possession of
$50, 000 due and owing to Soucy (the second Settlement
payment) and noted that Mack had provided an agreement
purporting to assign the $50, 000 debt to XYZED. Soucy
objected and requested a hearing, alleging Garnishee's
answer was incorrect. Soucy included a jury trial demand in
his request for hearing.
Mack initially represented Soucy in the garnishment
proceeding, but the superior court found that Mack's
representation of Soucy was a conflict of interest, and
ordered Soucy to retain new counsel or proceed pro
per. XYZED, also represented by Mack, moved to intervene
in the garnishment proceeding. Soucy and XYZED then obtained
the same counsel, and the court set a hearing. The court was
provided with conflict waivers and, after denying the request
for a jury trial, proceeded with the hearing.
In the garnishment proceeding, the superior court determined:
(1) the Assignment of the $50, 000 from Soucy to XYZED was a
fraudulent transfer; (2) XYZED did not take the transfer in
good faith; and (3) the transfer was not for reasonably
equivalent value. The court denied Soucy's and
XYZED's objections to the writ of garnishment and entered
judgment for $50, 000 in favor of judgment creditor Carey
Soucy and XYZED moved for a new trial, contending they were
erroneously denied their timely request and right to a jury
trial, and the superior court's finding of a fraudulent
transfer was contrary to law. See Ariz. R. Civ. P.
59(a)(1)(A). The court denied the motion, finding that it was
authorized by statute to determine and set aside a fraudulent
transfer in a garnishment hearing without a jury, and
sufficient evidence supported the finding that the transfer
between Soucy and XYZED was a fraudulent conveyance.
Soucy and XYZED timely appealed. We have jurisdiction
pursuant to Arizona Revised Statutes ("A.R.S.")