Party claiming fraud is not precluded from establishing unlawful transfers where injunction was denied.
Timothy and Jennifer Nottingham sought to enforce a judgment against Dennis and Cyndia Pearson. The Nottinghams obtained the judgment in litigation arising out of the purchase of Pearsons' home. They learned that Dennis Pearson was about to receive a $200,000.00 payment on a judgment he had obtained against a third-party and sought an injunction to prevent the Pearsons from transfering the money. The court in Pearson's third-party case denied the Nottinghams' request for an injunction.Nottinghams then filed a separate action, alleging that the Pearsons had committed fraud in transferring the proceeds of the other case beyond his creditors' reach (primarily to his wife, whom the Nottinghams had released from the prior judgment). Incredibly, the trial judge dismissed this claim, at Pearson's request, holding that the Nottinghams were bound by the outcome of the injunctions request. The Court of Appeals summarily and unanimously over-turned this decision and reinstated the claim, noting that the Nottinghams' fraud claims could not be denied based on a ruling that was handed down before the allegedly fraudulent transactions even occurred.