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First Citizens Bank and Trust Co., Inc. v. Blue Ox, LLC

Court of Appeals of South Carolina

January 31, 2018

First Citizens Bank and Trust Company, Inc., Respondent/Appellant,
Blue Ox, LLC, and J. Chris Lindgren, Defendants, Of whom J. Chris Lindgren is the Appellant/Respondent.

          Heard October 3, 2017

         Appeal From Beaufort County Marvin H. Dukes, III, Master-in-Equity

          Keating L. Simons, III, of Simons & Dean, of Charleston, for Appellant/Respondent.

          Joey Randell Floyd, and Robert Crum Osborne, III, of Bruner Powell Wall & Mullins, LLC, of Columbia, for Respondent/Appellant.

          KONDUROS, J.

         In this cross-appeal, J. Chris Lindgren appeals the Master-inEquity's ruling permitting First Citizens Bank and Trust Company, Inc. (the Bank) to attach postjudgment contributions made to his Individual Retirement Account (IRA) to satisfy the Bank's judgment against him. The Bank appeals the portion of the Master's order finding postjudgment contributions Lindgren made to his 401(k) retirement plan were exempt from execution. We affirm in part and reverse in part.


         J. Chris Lindgren is the sole member of Blue Ox, LLC. Lindgren signed confessions of judgment in 2013, individually and on behalf of Blue Ox, totaling approximately $113, 000 after Blue Ox defaulted on loan payments owed to the Bank. Blue Ox is now defunct, and Lindgren failed to pay the judgment. The Bank instituted supplemental proceedings against Lindgren, which are the subject of this appeal. The Bank argued postjudgment contributions made by Lindgren to his IRA, 401(k) plan, and a College Savings Plan were fraudulent transfers and therefore not subject to the protection typically afforded IRAs and 401(k) accounts under section 15-41-30(A)(13) and (14) of the South Carolina Code (2005), commonly referred to as the Homestead Exemption Act.

         Lindgren submitted the chart below at the supplemental proceedings to show his pattern and practice of contributing to his retirement accounts. Lindgren testified he changed from a traditional IRA to a Roth IRA in 2014. He also explained he did not contribute to his IRA or 410(k) plan in 2010 and 2011 respectively because of a downturn in the economy and his earnings at that time.




Roth IRA


$26, 550

$5, 000


$20, 850

$5, 000


$29, 200

$6, 000


$19, 975

$6, 000


$4, 463




$6, 000


$20, 450

$6, 000


$23, 000

$6, 500


$1, 917

$6, 500

          Lindgren testified to being a member or the sole member in numerous limited liability companies (LLCs) doing various types of business but primarily involved in real estate. He also testified to contributing money postjudgment to a 529 College Savings Plan for his daughter's college tuition.

         With regard to Lindgren's postjudgment IRA contributions, the Master agreed with the Bank that the issue should be analyzed within the framework established by cases considering the Statute of Elizabeth, section 27-23-10(A) of the South Carolina Code (2007). As a result, the Bank did not have to demonstrate Lindgren intended to defraud creditors because the postjudgment contributions were made without consideration and he failed to retain sufficient assets to pay his debt. However, the Master went on to address Lindgren's intent and concluded the transfers were made to defraud, hinder, or delay creditors because Lindgren knew he owed the judgments and made the contributions into accounts generally exempt from execution by creditors.[1]

         With regard to Lindgren's postjudgment 401(k) contributions, the Master's order stated "Lindgren has submitted an Affidavit in an effort to show/establish a 'pattern' of contribution to his retirement account for a number of years. Having carefully reviewed and considered Lindgren's Affidavit, this [c]ourt finds that the voluntary postjudgment transfer to the 401(k) are not subject to execution by [the] Bank." The order later found "With regards to the 401(k), I find that the statute, [section15-41-30(A)(14) of the South Carolina Code], precludes execution of the 401(k) plan."

         This cross-appeal followed.


         "Determining the proper interpretation of a statute is a question of law, and this [c]ourt reviews questions of law de novo." Town of Summerville v. City of N. Charleston, 378 S.C. 107, 110, 662 S.E.2d 40, 41 (2008). "Our scope of review for a case heard by a Master permits us to determine facts in accordance with our own view of the preponderance of the evidence." King v. James, 388 S.C. 16, 24, 694 S.E.2d 35, 39 (Ct. App. 2010). Furthermore, fraudulent conduct generally requires proof by clear and convincing evidence. See Ardis v. Cox, 314 S.C. 512, 515, 431 S.E.2d 267, 269 (Ct. App. 1993) ("Fraud is not presumed, but must be shown by clear, cogent, and convincing evidence."); Gordon v. Lancaster, 419 S.C. 48, 59, 795 S.E.2d 857, 863 ...

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