A Kentucky couple transferred land assessed at $210,000 to their own company for just $1 after a debt dispute; an October 23 appeals court upheld an order allowing the property to be sold to satisfy a $177,668 judgment
A property transfer for just $1 has failed to shield a Kentucky couple’s land from a creditor seeking to recover an unpaid debt. In an October 23, 2026, opinion, the Kentucky Court of Appeals upheld an order allowing property assessed at approximately $210,000 to be sold to satisfy a judgment of $177,667.88, plus applicable costs and attorney fees. According to the court’s opinion available on Justia, the dispute involved Kimberly A Goodman, David W Hill and their company, Woodsmoke Acres LLC. The ruling followed earlier proceedings that voided the transfer, allowing the credit union to pursue the property despite the change in ownership.
How a loan dispute led to a property transfer
The dispute began when Members 1st Federal Credit Union filed a complaint against Goodman and Hill in Lewis Circuit Court on July 24, 2024, alleging that they had defaulted on their financial obligations. According to the appellate opinion, the credit union initially claimed $170,073.48 in principal, $32,857.73 in interest and $2,445.26 in late charges. The loan had been secured by a mortgage on property in Pennsylvania. The credit union subsequently acquired the Pennsylvania property through a short sale to reduce its financial loss. Following that transaction, the outstanding debt was reduced to $177,667.88.Goodman and Hill later relocated to Kentucky and purchased property at 3597 Chalk Ridge Road in Vanceburg, Lewis County. They subsequently transferred the property to Woodsmoke Acres LLC, a limited liability company Goodman had formed in May 2023. The transfer was made for $1, although the property was assessed at approximately $210,000 for property tax purposes.The credit union alleged that the transfer was intended to hinder its ability to collect the outstanding debt. It sought to have the transfer set aside or, alternatively, obtain a lien against the property.
Court voided the transfer and entered judgment
On May 19, 2025, the Lewis Circuit Court granted summary judgment in favour of Members 1st Federal Credit Union against Goodman and Hill for $177,667.88, plus costs and attorney fees. The court also voided the transfer of the property to Woodsmoke Acres. A separate default judgment entered on June 6, 2025, voided the company’s interest in the property. Goodman and Hill appealed the underlying judgment and attempted to prevent enforcement by submitting a supersedeas bond, which can suspend enforcement while an appeal is pending. However, the circuit court rejected their proposed $30,000 bond as insufficient.With enforcement not suspended, the credit union pursued a further order allowing the Vanceburg property to be sold to recover the outstanding amount. On September 8, 2025, the circuit court ruled that the credit union’s judgment liens were valid and superior to other asserted interests in the property. It directed the Master Commissioner to sell the property and apply the proceeds towards the judgment.The couple challenged the order, arguing, among other things, that the bond had been improperly rejected and that enforcement should not have proceeded while their earlier appeal was pending.
Why the appeals court upheld the sale order
In its October 23 opinion, the Kentucky Court of Appeals found no basis to reverse the lower court’s decision. The panel noted that it had already upheld the underlying judgment against Goodman and Hill in a separate appeal on May 1, 2026. That decision also affirmed the order setting aside the transfer to Woodsmoke Acres.The court concluded that the couple’s arguments about suspending enforcement during the earlier appeal no longer provided a basis for relief. It also addressed arguments concerning Woodsmoke Acres, explaining that the limited liability company was a separate legal entity and that Goodman and Hill could not simply assert claims belonging to the company because they were its members.The judges further noted that the couple’s appellate brief did not comply with certain procedural requirements, including providing citations to the record and identifying whether their arguments had been preserved for review. Although the couple represented themselves, they were still required to follow appellate rules. The court therefore considered their arguments under the limited standard for palpable error, which requires an obvious error resulting in manifest injustice. It found no such error and affirmed the September 8, 2025, order permitting the sale.
Property can be sold to satisfy the debt
The ruling allows the credit union to proceed with enforcement against the Vanceburg property despite its attempted transfer to the couple’s company. The decision illustrates how transferring property to a related business does not necessarily prevent a creditor from pursuing an asset when a court has set aside the transfer and established the creditor’s superior rights.The appeals court was not reconsidering the original debt from scratch. Instead, it examined whether the order allowing the property sale should stand. Having found no reversible error, the court affirmed the lower court’s order.
