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ONB Ridge Villa One, LLC v. Snider

United States District Court, N.D. Ohio

August 26, 2019

ONB RIDGE VILLA ONE, LLC, Judgment Creditor,
v.
DAVID B. SNIDER, Judgment Debtor, and ROBIN SNIDER, et al., Third-Party Claimants.

          OPINION & ORDER [RESOLVING DOC. 123]

          JAMES S. GWIN UNITED STATES DISTRICT JUDGE

         Judgment Creditor, ONB Ridge Villa One, LLC (“ONB”), seeks garnishment of certain assets formerly in the possession of Judgment Debtor, David Snider. Claimants, [1] the spouse and children of Snider, argue that Snider lawfully transferred or disclaimed any interests in the disputed assets, making Claimants the lawful owners. In response, Creditor ONB claims the transfers were fraudulent and that the property remains subject to garnishment.

         With this opinion, the Court decides whether Snider's earlier assignments of Snider's interest in various assets and whether Snider's disclaimer of interests in certain trusts, stops ONB's efforts to garnish that property and trusts.

         In February 2013, Judgment Creditor ONB sued Snider, alleging fraud and conversion of money. Plaintiff ONB contended it had entered a contract to have Snider's company construct an expensive home in the Virgin Islands and that Snider's company and Snider broke the construction contract and misappropriated ONB construction payments.[2]

         In March 2014, the parties settled the lawsuit with Snider agreeing to pay $750, 000 to Judgment Creditor ONB.[3] In August 2015, after Snider's failure to satisfy his debt to ONB, this Court granted ONB's motion to enforce the Settlement Agreement.[4] The Court entered a judgment against Snider in the amount of $700, 000.[5] That judgment remained uncollected.

         On March 12, 2019, this Court issued a Notice of Garnishment to the Trustees of various trusts associated with Snider.[6]

         The Garnishees responded that Snider earlier assigned some of the property and Snider earlier disclaimed his interest in various trusts.[7]

         Third-Party Claimants seek dismissal of the garnishment proceedings and attorneys' fees and costs in respect to the present complaint.

         For the following reasons, the Court GRANTS IN PART and DENIES IN PART Third-Party Claimants' request to vacate the garnishment order and DENIES Third-Party Claimants'

         Discussion

         A. Trust Disclaimer

         The Court previously garnished several trusts belonging to Judgment Debtor Snider.[8] The Snider Children Claimants allege that Snider earlier disclaimed any interest in these Trusts and that the Children Claimants now own Snider's former interests in the Trusts. The Children thus argue that ONB cannot collect from the Trusts proceeds.

         The Court largely agrees.

         “A disclaimer . . . is final and binding upon all persons.”[9] “[N]o creditor of a disclaimant may avoid a disclaimer.”[10]

         Judgment Creditor argues that the Trusts may still be garnished, because Snider's disclaimers were fraudulent transfers. However, Creditor ONB's argument runs into the explicit Ohio Rev. Code § 5815.36(N)(2) language that states that “[a] disclaimer is not considered a transfer or conveyance.”

         In support of its argument that a disclaimer can be avoided, ONB relies on a 2013 Ohio Court of Appeals case. But that 2013 case used precedent that pre-dates the enactment of § 5815.36(N)(2).[11]

         The Court sees no reason to ignore the explicit language of the statute. Under Ohio law, a disclaimer is not a transfer or a conveyance and therefore ...


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