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                                                         [DO NOT PUBLISH]



             IN THE UNITED STATES COURT OF APPEALS

                     FOR THE ELEVENTH CIRCUIT
                       ________________________

                             No. 18-15059
                         Non-Argument Calendar
                       ________________________

                  D.C. Docket No. 1:17-cv-00413-TFM-B



SE PROPERTY HOLDINGS, LLC,

                                                           Plaintiff-Appellee,

                                   versus



RUSSELL G. JUDKINS and HIGHWAY 59, LLC,

                                                       Defendants-Appellants.

                       ________________________

                Appeal from the United States District Court
                   for the Southern District of Alabama
                       ________________________

                              (July 27, 2020)

Before WILSON, BRANCH, and HULL, Circuit Judges.

PER CURIAM:
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      Faced with a struggling construction business and past-due payments on

millions of dollars of personal loans, Russell G. Judkins (“Judkins”) transferred

various assets to himself and his wife, Linda Judkins (“Mrs. Judkins”), as “tenants

by the entirety,” or, alternatively, to Florida limited liability companies that

Judkins and Mrs. Judkins owned (in whole or in part) as tenants by the entirety. In

effect, these transfers made property that was previously reachable by Judkins’s

creditors now unreachable. Soon after making these transfers, Judkins defaulted

on his bank loans—totaling between $15 and $18 million—that he had either

borrowed himself or personally guaranteed.

      SE Property Holdings (“SEPH”), one of Judkins’s creditors, attacked

Judkins’s transfer of his 50 percent interest in real property to Highway 59, LLC

(“Highway 59”) as fraudulent in violation of the Alabama Uniform Fraudulent

Transfer Act (“AUFTA”). Ala. Code. § 8-9A-4(a). The district court found

Judkins and Highway 59 violated AUFTA, ordered Highway 59 to transfer the real

property to SEPH within 30 days, and entered a punitive damages award of

$300,000 against both defendants. Judkins and Highway 59 appealed. On appeal,

they assert the punitive damage award is unjustified and excessive.

      We disagree. The district court did not abuse its discretion in finding that

Judkins and Highway 59’s wrongful conduct justified the punitive damages award.




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Nor is the punitive damages award unconstitutionally excessive. Accordingly, we

affirm.

                                         I.

      Rewind to 2006, when the housing market was booming. Back then,

Judkins was one of three members of Coastal Construction, LLC (“Coastal), a

residential real estate development company that crumbled during the 2008

recession. Coastal operated like this: Coastal would take out loans from Vision

Bank—SEPH’s predecessor—and other banks to finance its construction of new

beach houses in the Gulf Coast region. Coastal would then sell the new beach

house, repay the loans, and distribute the profit among its three members—

Judkins, Hans Van Aller, III, and Robert Harris (the “Members”). On some of

those loans, the Members signed guaranties that made them jointly and severally

liable for the loans. On other loans, the individual Members were the principal

borrowers. All told, Judkins guaranteed or borrowed between $15 and $18 million

in loans. The loans from Vision Bank alone totaled over five million dollars.

      This arrangement worked fine until the 2008 recession hit and Coastal could

not sell its beach houses. Consequently, Coastal could no longer pay its loans, and

the Members were forced to pay personally the interest payments. By fall 2008,

Coastal began to default on its loans. Between September 2008 and June 2010,




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various lenders, such as Vision, RBC Bank, Pen Air Federal Credit Union, and

Trustmark sued Coastal and its guarantors, including Judkins.

      Around June 25, 2008 (after Coastal had begun to default on the loans, but

before the banks sued), Judkins met with a Florida attorney, David Hightower.

According to SEPH and the district court’s findings, the purpose of this meeting

was to develop a scheme to shield the entirety of Judkins’s assets from his

creditors. Judkins maintains that he met with Hightower because his father-in-

law’s terminal illness prompted him to develop an estate plan. But everyone

agrees on the results of this meeting: beginning on July 28, 2008 Judkins identified

his unencumbered and non-exempt assets (which creditors could reach) and—with

Hightower’s assistance—transferred those assets either to himself and his wife as

tenants by the entirety, or to limited liability companies that Judkins and his wife

owned in whole or in part. Tenancy by the entirety is a form of ownership

available to married couples under Florida law whereby the property is

unreachable by creditors of only one spouse. By the end of August 2008, Judkins

did not own any unencumbered, non-exempt property in his own name. In effect,

Judkins was legally insolvent but still held substantial assets with his wife.

      At issue here is the transfer of Judkins’s fifty percent interest in real property

off Highway 59 in Gulf Shores, Alabama. Since June 1993, Judkins and his

business partner, Gary Sluder (“Sluder”), each owned one-half interest in the


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property as tenants in common. They leased this property to Gene’s Floor

Covering II, Inc.—Sluder and Judkins’s flooring business. Judkins controlled all

aspects of the business and Sluder was a silent partner. On July 28, 2008,

Hightower organized Highway 59, LLC, of which Judkins and Mrs. Judkins owned

fifty percent as tenants by the entirety and Sluder and his wife owned fifty percent

as tenants by the entirety. Judkins and Sluder then transferred both couples’

interests in the real property to the newly formed LLC. After the transfer, Judkins

continued to use the property for his flooring business. At trial, a real estate

appraiser testified that the value of the real property was $795,000.00. Judkins did

not offer any evidence to rebut this appraisal.

       SEPH sued Judkins and Highway 59 in the United States District Court for

the Southern District of Alabama. After two days of trial, the district court issued a

judgment in favor of SEPH. 1 The court held that Judkins transferred his interest in

the real subject property with the actual intent to hinder, delay or defraud his



       1
         SEPH only seeks to set aside the Highway 59 transfer, but the other transfers deserve
notice. The district court found:

       Similar to the Hwy 59 transfer, Judkins transferred his shares of Gene’s Floor
       Covering II, Inc., to GFC Holdings, LLC, another Florida company that was
       formed by Hightower on July 28, 2008. Judkins and Mrs. Judkins owned one
       hundred percent (100%) of GFC Holdings, LLC, as tenants by the entirety. With
       Hightower’s assistance, Judkins, also, transferred his and his wife’s real property
       directly to themselves as tenants by the entirety. Hightower, also, drafted a
       mortgage agreement pursuant to which Judkins and his wife as tenants by the
       entirety secured a purported loan to Judkins.

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creditor, SEPH. The district court then turned to the proper remedy under

Alabama law. First, in accordance with Alabama’s fraudulent transfer statute, the

district court ordered Highway 59 to transfer the property at issue to SEPH. It

further found punitive damages were appropriate because Judkins and Highway 59

“consciously or deliberately engaged in fraud, wantonness, and malice with regard

to SEPH.” After weighing the factors for determining a reasonable punitive

damages award, as laid out by the United States Supreme Court in BMW North

America, Inc. v. Gore, 

, 574 (1996) and the Alabama Supreme Court

in Green Oil v. Hornsby, 

, 223 (Ala. 1989),2 the district court issued

a punitive damages award of $300,000 against Judkins and Highway 59, jointly

and severally.

                                               II.

       Judkins and Highway 59 appeal both the propriety of a punitive damages

award, as well as the amount of the award. “After a bench trial, we review a

district court’s decision to award or deny punitive damages for abuse of

discretion.” Winn-Dixie Stores, Inc. v. Dolgencorp, LLC, 

, 1035




       2
         In Green Oil v. Hornsby, the Alabama Supreme Court adopted the factors that Justice
Houston set forth in his concurrence in Aetna Life Ins. Co. v. Lavoie, 

, 1062
(Ala. 1987) (Houston, J., concurring specially)). The parties and district court refer to these
factors as the “Lavoie factors.”


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(11th Cir. 2014). 3 We review the district court’s application of Alabama’s

standards for punitive damages for clear error. See Johansen v. Combustion Eng'g,

Inc., 

, 1334 (11th Cir. 1999) (reviewing district court’s

determination of reprehensibility, which required an interpretation of state law, for

clear error). Whether a punitive damages award is unconstitutionally excessive is

subject to de novo review. Cooper Industries, Inc. v. Leatherman Tool Group,

Inc., 

, 443 (2001).

                                               III.

       Judkins and Highways 59’s appeal centers on the district court’s award of

punitive damages. In addition to ordering Highway 59 to transfer the property at

issue to SEPH, the district court imposed a punitive damages award against

Judkins and Highway 59 pursuant to the AUFTA, which states:

       A transfer made by a debtor is fraudulent as to a creditor, whether the
       creditor’s claim arose before or after the transfer was made, if the
       debtor made the transfer with actual intent to hinder, delay, or defraud
       any creditor of the debtor.

Ala. Code § 8-9A-4(a). To determine actual intent, the statute provides eleven

factors courts may consider (the “AUFTA factors”), including but not limited to,



       3
          Appellants assert that we should review the decision to award punitive damages de
novo. That standard does not apply here. Instead, it applies when we review the “denial . . . [of
a] motion for judgment as a matter of law on the issue of punitive damages” in the context of a
district court’s review of a jury’s punitive damages award. See Goldsmith v. Bagby Elevator
Company, Inc., 

, 1275 (11th Cir. 2008); Myers v. Central Florida Investments,
Inc., 

, 1211 (11th Cir. 2010) (reviewing jury award of punitive damages de novo).
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whether the transfer was disclosed or concealed. 4 See

trial court finds the

debtor made a fraudulent transfer, it has wide discretion in issuing a remedy: it

may avoid the transfer, issue an attachment against the asset, and, “subject to the

applicable principles of equity and in accordance with applicable rules of civil

procedure . . . [grant] [a]ny other relief the circumstances may require.” Ala. Code

§ 8-9A-7(a). 5 And Alabama law allows punitive damages: the Alabama punitive

damages statute provides, “[p]unitive damages may not be awarded in any civil

action . . . other than a tort action where it is proven by clear and convincing




       4
           Section 8-9A-4(b) provides:

       (b) In determining actual intent under subsection (a), consideration may be given, among
       other factors, to whether:

                (1) The transfer was to an insider; (2) The debtor retained possession or
                control of the property transferred after the transfer; (3) The transfer was
                disclosed or concealed; (4) Before the transfer was made the debtor had
                been sued or threatened with suit; (5) The transfer was of substantially all
                the debtor's assets; (6) The debtor absconded; (7) The debtor removed or
                concealed assets; (8) The value of the consideration received by the debtor
                was reasonably equivalent to the value of the asset transferred; (9) The
                debtor was insolvent or became insolvent shortly after the transfer was
                made; (10) The transfer occurred shortly before or shortly after a
                substantial debt was incurred; and (11) The debtor transferred the essential
                assets of the business to a lienor who transferred the assets to an insider of
                the debtor.

Ala. Code § 8-9A-4(b).
       5
          Further, “[i]f a creditor has obtained a judgment on a claim against the debtor, the
creditor, if the court so orders, may levy execution on the asset transferred or its proceeds.” Ala.
Code § 8-9A-7(b).
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evidence that the defendant consciously or deliberately engaged in oppression,

fraud, wantonness, or malice with regard to the plaintiff. Ala. Code. § 6-11-10.

       In determining the amount of a punitive damages award, the district court

followed the Supreme Court’s guidance in BMW North America, Inc., v. Gore, 

, 574 (1996). The factors the Supreme Court advised the courts to

consider in Gore include:

       (1) The degree of reprehensibility of the defendant’s misconduct;
       (2) The disparity between the actual or potential harm suffered by
       the plaintiff and the punitive damages award; and
       (3) The difference between the punitive damages awarded by the
       jury and the civil penalties authorized or imposed in comparable
       cases.

The Alabama Supreme Court has laid out several additional

considerations, including whether the defendant engaged in “any concealment, or

‘cover-up,’” and “the financial position of the defendant.” Green Oil v. Hornsby,

, 223 (Ala. 1989).6



       6
         The Alabama Supreme Court’s opinion in Green Oil recommends that trial courts
consider the following seven factors in setting the amount of punitive damages:

       (1) Punitive damages should bear a reasonable relationship to the harm that is
       likely to occur from the defendant's conduct as well as to the harm that actually
       has occurred. If the actual or likely harm is slight, the damages should be
       relatively small. If grievous, the damages should be much greater.
       (2) The degree of reprehensibility of the defendant's conduct should be
       considered. The duration of this conduct, the degree of the defendant's awareness
       of any hazard which his conduct has caused or is likely to cause, and any
       concealment or “cover-up” of that hazard, and the existence and frequency of
       similar past conduct should all be relevant in determining this degree of
       reprehensibility.
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       A. The Punitive Damages Award Against Judkins

       Judkins and Highway 59 raise two objections to the imposition of the

punitive damages award against Judkins: that a punitive damages award is not

available in this case and, even if it is available, the punitive damages award is

grossly excessive. We take each in turn.

               1. Whether an Award of Punitive Damages is Available

       Judkins argues that he should not be held liable for punitive damages under

the AUFTA because the district court erred in finding that the one of the AUFTA

factors—whether the transfer was disclosed or concealed—was met. See Ala.

Code. § 8-9A-4(b)(3). 7 Judkins claims, contrary to the district court’s findings,

that he disclosed the transfer of real property to Highway 59.8 Had Judkins


       (3) If the wrongful conduct was profitable to the defendant, the punitive damages
       should remove the profit and should be in excess of the profit, so that the
       defendant recognizes a loss.
       (4) The financial position of the defendant would be relevant.
       (5) All the costs of litigation should be included, so as to encourage plaintiffs to
       bring wrongdoers to trial.
       (6) If criminal sanctions have been imposed on the defendant for his conduct, this
       should be taken into account in mitigation of the punitive damages award.
       (7) If there have been other civil actions against the same defendant, based on the
       same conduct, this should be taken into account in mitigation of the punitive
       damages 

.
       7
         On appeal, Judkins does not challenge the district court’s findings that an additional
seven of the eleven AUFTA factors were also met.
       8
         Judkins relies on the AUFTA and cases applying that statute to argue that his conduct
was not reprehensible. That argument conflates the statutory inquiry to determine whether the
transferor may be liable for fraudulent transfer and the reasonableness of the amount of punitive
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disclosed the transfer to his creditor, we might be inclined to agree with him. But

he did not. Judkins and Sluder recorded the deed transferring the property to

Highway 59 in the Office of the Judge of Probate for Baldwin County, Alabama.

Judkins claims that recording is enough to put his creditors on constructive notice

of the transfer. 9 But all Judkins and Sluder accomplished by recording the deed

was ensure that the title to the property was protected under Alabama law. Ala.

Code § 35-4-50; Ala. Code § 35-4-62. By Judkins’s logic, any time someone

conveys real property in Alabama and records the deed—no matter the underlying

fraud—a creditor cannot attack that transfer because the creditor is “on notice.”



damages award based on the Supreme Court’s decision in 

. AUFTA puts
forward eleven factors, including whether the transfer was disclosed or concealed, for courts to
employ to determine the actual intent of the transferor. Ala. Code § 8-9a-4(b). Together, these
considerations are referred to as the “badges of fraud.” In Gore, the Supreme Court instructed
courts to consider the “degree of reprehensibility” of the defendants’ conduct. While the
inquiries may overlap, a court is not required to find the defendant concealed his conduct in
order to award punitive damages.
       9
           Ala. Code 1975 § 35-4-90(a) provides that:

       All conveyances of real property, deeds, mortgages, deeds of trust, or instruments
       in the nature of mortgages to secure any debts are inoperative and void as to
       purchasers for a valuable consideration, mortgagees, and judgment creditors
       without notice, unless the same have been recorded before the accrual of the right
       of such purchasers, mortgagees, or judgment creditors.

In the context of property ownership disputes, the Alabama Supreme Court held that
although “the purpose of our recording laws is to provide a means to protect and give
notice of conveyances,” the statute does not mandate recording of all conveyances.
Deutsche Bank Nat'l Tr. Co. as trustee of any specific residential mortgage-backed
security (RMBS) at issue v. Walker Cty., No. 1160926, 

, at *8 (Ala.
June 28, 2019). See Smith v. Arrow Transp. Co., 

, 1006 (Ala. 1990) (“A
deed that is unrecorded is good between the grantor and grantee, but is void against bona
fide purchasers for value, mortgagees, and judgment creditors without notice.”)
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Such a result would kneecap fraudulent transfer statutes like the one the State of

Alabama has enacted. And Judkins cites no case, in Alabama or any other

jurisdiction, where a district court declined to award damages—punitive or

otherwise—because the defendant had recorded the fraudulent transfer. Absent

any Alabama statutes or case law instructing courts to apply the ill-fitting doctrine

of constructive notice to the punitive damages analysis, we decline to rely on it

here.

        More to the point, the evidence supports the district court’s finding that

Judkins affirmatively omitted evidence of the transfer in the personal financial

statement he submitted to Vision Bank. That statement contains no mention of

Highway 59, LLC. Judkins claims that this failure was merely an “honest mistake”

and a “cursory glance” at the financial statement reveals a change in his property

interest because it shows that his interest in “personal property” with a market

value of $300,000 in 2007 was replaced with his interest in “Judkins Sluder LLC”

with a market value of $300,000 in 2008. The district court did not accept his

explanation. Instead, it found that the third AUFTA factor was present because

        [T]he transfer was not disclosed to Vision Bank. Judkins’ Personal
        Financial Statement, which was provided to Vision Bank a few
        months after he transfer, did not list Hwy 59 as an asset, and Judkins
        admitted he misidentified the asset on this Personal Financial
        Statement. Further, the Personal Financial Statement did not inform
        Vision Bank Judkins made personal assets exempt when he
        transferred them to tenant by the entirety ownership, which is the type


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       of change in financial condition of which Judkins agreed to notify
       Vision Bank.

The testimony and exhibits at trial support the district court’s finding that Judkins

concealed the transfer. Therefore, the district court did not abuse its discretion in

finding that Judkins was liable under the AUFTA, and therefore punitive damages

were available.

               2. Whether the Punitive Damages Award is Excessive

       Judkins also claims the punitive damages award of $300,000 is grossly

excessive. This Court has held that “punitive damages must bear a ‘reasonable

relationship’ to actual damages.” Johansen v. Combustion Eng’g., Inc., 

, 1336 (11th Cir. 1999); see also 

(“The second and

perhaps most commonly cited indicium of an unreasonable or excessive punitive

damages award is its ratio to the actual harm inflicted on the plaintiff.”). Absent an

award of compensatory damages, Judkins asserts, punitive damages bear no

relationship to actual damages and are therefore unconstitutionally excessive.

       But the district court did not just enter a punitive damages award against

Judkins and Highway 59: it also elected to remedy the harm against SEPH by

ordering Highway 59 transfer the property to SEPH by quitclaim deed. 10 The

transfer determines the equation we use to analyze an appropriate ratio.


       10
           Ala. Code § 8-9A-8(b) provides this remedy for a fraudulent transfer :“to the extent a
transfer is voidable in an action by a creditor under Section 8-9A-7(a)(1), the creditor may
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       Consistent with Gore, our case law does not impose a requirement that the

punitive damages bear a relationship to compensatory damages specifically.

Instead, we consider “the ratio between the actual or potential harm suffered by the

plaintiff and the punitive damages award.” McGinnis v. American Home Mortgage

Servicing, Inc., 

, 1288 (11th Cir. 2018); see also TXO Production

Corp. v. Alliance Resources Corp., 509 U.S. 443,460 (1993) (noting the ratio looks

to “the harm that is likely to occur from the defendant’s conduct as well as to the

harm that actually occurred.”) The appropriate ratio, therefore, is not based on a

comparison of compensatory damages to the punitive damages award, but on harm

likely to occur or that has actually occurred. Suppose Highway 59 had sold the

property at issue and the district court elected to award SEPH compensatory

damages in the amount of the value of the property, which in this case was

$795,000. In that case, according to their argument, Defendants would not have

any objection to the reasonableness of the $300,000 punitive damages award. But

in effect, there is no difference between those awards: either transferring the

property or awarding compensatory damages serves to make SEPH whole. Thus,

nothing requires the district court remedy SEPH’s harm in the form of

compensatory damages in order to award punitive damages.



recover . . . judgment for conveyance of the asset transferred. The judgment may be entered
against . . . [t]he first transferee of the asset or the person for whose benefit the transfer was
made.” Ala. Code. § 8-9A-8(a)(1).
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        Moreover, the ratio between the harm (i.e., the value of the asset transferred)

and the punitive damages award is less than 1:1. The evidence at trial indicated

that the value of the Highway 59 property was $795,000, and Judkins transferred

his 50 percent interest in that property (approximately $397,500) to the LLC. The

$300,000 damages award is less than half the value of the property and less than

Judkins’ interest in that property. We have upheld ratios much higher than 1:1.

See, e.g. McGinnis v. American Home Mortgage Servicing, Inc., 

,

1290 (11th Cir. 2018) (ratio of 5.9:1); Bogle v. McClure, 

, 1362

(11th Cir. 2003) (ratio of 3.8:1). Having considered the various factors as laid out

by the Supreme Court of the United States and the Supreme Court of the State of

Alabama, we hold the district court did not err in entering an award of $300,000 in

punitive damages against Judkins.

   B. The Punitive Damages Award Against Highway 59

        Judkins and Highway 59 also object to the propriety and amount of the

punitive damages award as against Highway 59. Again, we take each argument in

turn.

              1. Whether an Award of Punitive Damages is Available

        Judkins and Highway 59 first claim that punitive damages against Highway

59 are inappropriate. Pursuant to the AUFTA, a transfer is fraudulent, only if the

transfer was made “with actual intent to . . . defraud any creditor.” Ala. Code § 8-


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9A-4(a). Because the limited liability company did not exist at the time Judkins

and his attorney formulated the scheme to transfer his assets, Judkins argues that

Highway 59 did not intentionally participate in the transfer.

      This argument ignores reality in favor of artificial, legal distinctions. True,

Highway 59 is a separate “legal entity,” but it is also “an artificial person, and can

only act through its agents.” Townsend Ford., Inc., 

, 363 (Ala.

1995) (citing Warwick Development Co. v. GV Corp., 

, 1276 (Ala.

1985) (holding that the intent of a company’s employees can be attributed to the

company). The evidence shows that Judkins—Highway 59’s agent—created and

controlled Highway 59 “for the purpose of fraudulently transferring assets.”

Because Judkins acted with fraudulent intent, so did Highway 59. Moreover,

whether Highway 59 existed when Judkins first concocted the scheme is irrelevant,

because his fraudulent transfer would not have been possible unless there was

someone, or something, to accept it. As the district court found, Highway 59 “was

an instrument of, and participant in, fraud since its inception” and “shared Judkins’

intent.” In its findings, the district court noted that “Judkins and Hwy 59

effectuated the subject transfer with the intentional and deliberate purpose of

injuring Judkins’ creditor, SEPH,” and “Judkins and Highway 59 acted with the

deliberate and actual intent to defraud.” Our review of the entire record, including

the trial transcripts, confirms those findings are not clearly erroneous.


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Accordingly, the district court did not abuse its discretion in awarding punitive

damages against Highway 59.

      Judkins and Highway 59 also claim that the district court should not have

issued punitive damages against Highway 59 because it did not find that Sluder

(who owned half of Highway 59 prior to the fraudulent transfer as a tenant in

common) acted in bad faith. Accordingly, they contend that the district court

failed to consider “[t]he financial position of the defendant,” contrary to the

Alabama Supreme Court’s guidance and that entering a judgment against Sluder’s

interest in Highway 59 is inequitable. 

.

      Although the parties dispute whether Sluder acted in bad faith, the district

court was not required to make that determination in order to issue the punitive

damages award against the entity. For one, Sluder’s intent is irrelevant in

determining whether an entity acted fraudulently: the Alabama Supreme Court has

held that “a culpable intent by any of the corporate agents involved in a transaction

amounts to corporate fraud, regardless of the facts that other corporate agents . . .

had no such fraudulent intent.” Townsend Ford 

. Sluder’s

alleged good faith has no effect on the fraudulent acts of Highway 59, and

therefore the district court was correct in not limiting the punitive damages award

to Judkins’s interest in the company. Further, the district court did consider

Highway 59’s finances, albeit briefly. The district court stated that Highway 59’s


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financial condition was not a “significant” consideration because it is “an

instrument of fraud that would not exist except for Judkins’ and Hwy 59’s fraud.”

The district court addressed Highway 59’s financial condition, but found other

considerations outweighed it. That determination does not constitute clear error.

             2. Whether the Amount of the Punitive Damages Award is Excessive

       Finally, Judkins and Highway 59 object that “the same issue of

proportionality discussed in relation to Judkins would make an award of $300,000

against Highway 59 so excessive as to violate due process.” For the same reasons

the $300,000 award was not grossly excessive as to Judkins, it passes

constitutional muster for Highway 59. The district court did not abuse its

discretion here either. See supra pp. 11–13.

      We therefore AFFIRM the district court’s award of punitive damages

against Judkins and Highway 59.




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