Jeff Moyer v. Connie Rogers

NOT RECOMMENDED FOR PUBLICATION
File Name: 26b0003n.06
BANKRUPTCY APPELLATE PANEL
OF THE SIXTH CIRCUIT
IN RE: WEDGEWOOD PROPERTIES, LLC,
Debtor.
JEFF A. MOYER, Trustee,
Plaintiff-Appellant,
v.
CONNIE ROGERS; WILLIAM STEPHEN,
Defendants-Appellees.
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No. 24-8007
Appeal from the United States Bankruptcy Court
for the Western District of Michigan at Grand Rapids.
Nos. 18-bk-4808; 20-ap-80139—James W. Boyd, Bankruptcy Judge.
Argued: May 22, 2025
Decided and Filed: April 22, 2026
Before: BAUKNIGHT, Chief Bankruptcy Appellate Panel Judge;
GUSTAFSON and MASHBURN, Bankruptcy Appellate Panel Judges.
_________________
COUNSEL
ARGUED: Matthew T. Nelson, WARNER NORCROSS + JUDD LLP, Grand Rapids, Michigan,
for Appellant. Scott F. Smith, SMITH LAW GROUP PLLC, Farmington Hills, Michigan, for
Appellees. ON BRIEF: Matthew T. Nelson, Charles R. Quigg, WARNER NORCROSS + JUDD
LLP, Grand Rapids, Michigan, Andrew J. Gerdes, CAPITAL BANKRUPTCY, Lansing,
Michigan, for Appellant. Scott F. Smith, SMITH LAW GROUP PLLC, Farmington Hills,
Michigan, for Appellees.
GUSTAFSON, J., delivered the opinion of the panel in which BAUKNIGHT, C.J., and
MASHBURN, J., concurred. GUSTAFSON, J. (pp. 27–29), also delivered a separate concurring
opinion.
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No. 24-8007 Moyer v. Rogers, et al. Page 2
_________________
OPINION
_________________
JOHN P. GUSTAFSON, Bankruptcy Appellate Panel Judge. This appeal arises from an
adversary proceeding brought by the chapter 7 Trustee, Jeff A. Moyer (“Trustee” or “Appellant”)
against Defendant-investors Connie Rogers (“Rogers”) and William Stephen (“Stephen”)
following the collapse of Wedgewood Properties, LLC (“Wedgewood”), a Nevada company
managed by now-deceased attorney Shawn Weera (“Weera”). Between 2013 and 2016, Rogers
and Stephen invested a total of $635,000 in Wedgewood. They initiated a state court proceeding
against Weera and Wedgewood, asserting claims of conversion and violation of securities laws,
and later settled the action for $900,000. In partial satisfaction of the settlement agreement, Rogers
and Stephen recovered $550,000, which was later found to have come from: 1) real property sales
and 2) monies invested in Wedgewood by other creditors. The Bankruptcy Court found1 that
Wedgewood was continuously insolvent, commingled funds, and operated with characteristics of
a Ponzi scheme. The Court found that Rogers and Stephen had received fraudulent transfers;
however, the court also found they had established their good faith affirmative defense to
avoidance of most of those transfers. Further, the Bankruptcy Court found that service was
sufficient to perfect the Defendants’ garnishment 93 days before the bankruptcy filing, taking the
transfer of money through garnishment outside the preference period. Because the Bankruptcy
Court’s factual finding of good faith is not clearly erroneous, and the garnishment holding is
supported by existing case law, the Bankruptcy Court’s judgment is AFFIRMED.
1In re Wedgewood Props., LLC, 661 B.R. 578 (Bankr. W.D. Mich. 2024).

No. 24-8007 Moyer v. Rogers, et al. Page 3
ISSUES ON APPEAL
1. Did the Bankruptcy Court err when it found that Appellees accepted
Wedgewood’s actual fraudulent transfers in good faith for purposes of their
affirmative defense under Section 548(c) of the Bankruptcy Code?
2. Did the bankruptcy court err when it held that Michigan’s court rule
regarding dismissal of improperly served complaints meant that the
garnishment was deemed to have been served outside the preference period?
JURISDICTION AND STANDARD OF REVIEW
The Bankruptcy Appellate Panel of the Sixth Circuit has jurisdiction to decide this appeal.
The United States District Court for the Western District of Michigan has authorized appeals to
the Panel. Pursuant to 28 U.S.C. § 158(a)(1), a final order of the bankruptcy court may be appealed
as of right. “Orders in bankruptcy cases qualify as ‘final’ when they definitively dispose of discrete
disputes within the overarching bankruptcy case.” Ritzen Grp., Inc. v. Jackson Masonry, LLC,
589 U.S. 35, 37, 140 S. Ct. 582, 586 (2020) (citing Bullard v. Blue Hills Bank, 575 U.S. 496, 501,
135 S. Ct. 1686, 1691 (2015)). Orders that “fully dispose of the adversary proceeding” are final.
Church Joint Venture, L.P. v. Bedwell (In re Blasingame), 598 B.R. 864, 868 (B.A.P. 6th Cir.
2019) (citing Geberegeorgis v. Gammarino (In re Geberegeorgis), 310 B.R. 61, 63 (B.A.P. 6th
Cir. 2004) (“[A]n order that concludes a particular adversarial matter within the larger case should
be deemed final and reviewable in a bankruptcy setting.” (citations omitted))).
The specific types of relief determined in this case are also recognized as creating final
orders. First, orders that fully dispose of fraudulent transfer claims are final. See Suhar v. Bruno
(In re Neal), 478 B.R. 261, 265 (B.A.P. 6th Cir. 2012) (citing Lyon v. Eiseman (In re Forbes), 372
B.R. 321, 325 (B.A.P. 6th Cir. 2007) (“A bankruptcy court order which sets aside a fraudulent
conveyance pursuant to 11 U.S.C. § 548(a) is a final order for purposes of appeal.”), rev’d on other
grounds, 541 F. App’x 609 (6th Cir. 2013).
Second, orders that fully dispose of a preference claim under 11 U.S.C. § 547(b)(4) are
final. See Belfance v. Buonpane (In re Omega Door Co., Inc.), 399 B.R. 295, 298 (B.A.P. 6th Cir.
2009) (“The judgment of the bankruptcy court holding that the note payments . . . constituted
avoidable preferential transfers under 11 U.S.C. § 547(b) is a final order.”); see also Corzin v.

No. 24-8007 Moyer v. Rogers, et al. Page 4
Decker, Vonau, Sybert & Lackey, Co., L.P.A. (In re Simms Constr. Servs. Co., Inc.), 311 B.R. 479,
481 (B.A.P. 6th Cir. 2004) (“The judgment of the bankruptcy court holding that the payment . . .
constituted an avoidable preferential transfer under § 547(b) is a final order.”).
The Panel “reviews conclusions of law de novo and factual determinations . . . under a
clearly erroneous standard.” Kraus Anderson Cap., Inc. v. Bradley (In re Bradley), 507 B.R. 192,
196 (B.A.P. 6th Cir. 2014) (citing Van Aken v. Van Aken (In re Van Aken), 320 B.R. 620, 622
(B.A.P. 6th Cir. 2005)); see also Miller v. Wylie (In re Wylie), No. 24-1321, 2024 WL 4553297,
at *2 (6th Cir. Oct. 23, 2024) (“We review the bankruptcy court’s legal conclusions de novo, []
and its factual findings—such as a finding of intent—for clear error, Barclays/Am. Bus. Credit,
Inc. v. Adams (In re Adams), 31 F.3d 389, 393 (6th Cir. 1994).”). “A finding of fact is clearly
erroneous ‘when although there is evidence to support it, the reviewing court, on the entire
evidence, is left with the definite and firm conviction that a mistake has been committed.’” In re
Wylie, 2024 WL 4553297 at *2 (citing United States v. Mathews (In re Mathews), 209 B.R. 218,
219 (B.A.P. 6th Cir. 1997) (quoting Anderson v. City of Bessemer City, 470 U.S. 564, 573, 105
S. Ct. 1504, 1511 (1985))). Echoing the Supreme Court’s holding in Anderson, the Sixth Circuit
explained the contours of the clearly erroneous standard:
This standard does not entitle the reviewing court to reverse a factual finding simply
because it is convinced that it would have decided the case differently. Anderson,
470 U.S. at 573, 105 S. Ct. 1504. If the district court’s account of the evidence is
plausible in light of the entire record, this court may not reverse that accounting,
even if convinced that, had it been sitting as trier of fact, it would have weighed the
evidence differently. Id. at 574–75, 105 S. Ct. 1504. Where there are two
permissible views of the evidence, the factfinder’s choice between them cannot be
deemed clearly erroneous. Id. at 574, 105 S. Ct. 1504. “This is so even when the
district court’s findings do not rest on credibility determinations, but are based
instead on physical or documentary evidence or inferences from other facts.” Id.
Harlamert v. World Finer Foods, Inc., 489 F.3d 767, 771 (6th Cir. 2007).
Finally, the Panel reviews a federal court’s application of state law de novo. Whitlock v.
FSL Mgmt., LLC, 843 F.3d 1084, 1088 (6th Cir. 2016) (citing Matilla v. S. Ky. Rural Elec. Co-op.
Corp., 240 F. App’x 35, 38 (6th Cir. 2007)). When a state’s highest court has not addressed an
issue of state law, federal courts are to “predict how the [state’s highest] court would rule by
looking to all the available data.” Antioch Co. Litig. Tr. v. Morgan, 644 F. App’x 579, 582 (6th

No. 24-8007 Moyer v. Rogers, et al. Page 5
Cir., 2016) (quoting Allstate Ins. Co. v. Thrifty Rent-A-Car Sys., Inc., 249 F.3d 450, 454 (6th Cir.
2001)).2 “Relevant data include decisions of the state appellate courts, and those decisions should
not be disregarded unless we are presented with persuasive data that the Michigan Supreme Court
would decide otherwise.” Allstate Ins. Co., 249 F.3d at 454 (citation omitted).
FACTS
The Bankruptcy Court held a three-day trial and received testimony from four witnesses.
Various exhibits were also admitted into evidence. Most of the underlying facts do not appear to
be in dispute. Instead, it is the inferences and conclusions that are to be drawn from those facts
that are the subject of this appeal.
Debtor was a Nevada company founded in 2002 and managed by Weera. Initially, it was
claimed to be focused on commercial real estate but shifted to currency trading by 2008. Weera,
an attorney, also provided legal and financial elder services to clients, including Rogers and
Stephen.
At the time of trial in 2024, Rogers was in her early eighties. She had a high school
education and worked as an executive assistant until her retirement in 2004. The Bankruptcy Court
found Rogers’ memory to be sharp and her testimony credible. Stephen also had a high school
education. He worked as a draftsman in the auto industry prior to his retirement. At the time of
trial, Stephen was ninety-one years old. The Bankruptcy Court found him to be honest and
intelligent but noted that his memory was failing and he had cognitive difficulties. The Court
greatly discounted Stephen’s testimony and accorded it almost no weight.
In February 2013, at the suggestion of Weera, Stephen invested $50,000 in Wedgewood.
About two years later, the Michigan Department of Licensing and Regulatory Affairs (“LARA”)
issued a cease-and-desist order against Weera and Wedgewood, and in March 2016, the terms of
a settlement were incorporated into an Amended Administrative Consent Order (“Consent
Order”). The LARA Consent Order prohibited Wedgewood from accepting investments from new
investors for a sixteen-month period. However, Wedgewood was permitted to continue to receive
2No party requested that the Panel certify any question(s) regarding state law to the Michigan Supreme Court.

No. 24-8007 Moyer v. Rogers, et al. Page 6
investments from current investors. In addition, LARA required that Wedgewood make a
rescission offer to all investors, allowing them to either continue with their investment in
Wedgewood or be repaid all accrued interest and principal.
In March 2016, Stephen invested an additional $100,000 in Wedgewood. In April 2016,
Stephen invested an additional $330,000, and Rogers made her only investment of $155,000.
Weera led Rogers and Stephen to believe that the sale of certain annuities and their
Wedgewood investments would not create any tax liabilities. Rogers and Stephen began to
become concerned regarding their investments after receiving a Form 1099 reflecting
approximately $400,000 in taxable income in January 2017. They hired a tax specialist who told
them they would owe about $30,000 in taxes. The tax specialist also stated that Weera had known
the full extent of the tax liability from the beginning. Rogers and Stephens were told they “needed
a specialist” and it was suggested that they contact an attorney. (Opinion Regarding Avoidance
and Recovery of Fraudulent Transfers (“Op.”) at 14, Adv. P. 20-80139-jwb, ECF No. 150.)
By April of 2017 Rogers had “lost faith” in Weera, believing he had misrepresented the
tax consequence of the Wedgewood investment. (Id.) At this time, Rogers and Stephen retained
an attorney, David Foster (“Foster”). He filed a complaint in Wayne County Circuit Court,
asserting various claims, including statutory conversion and securities law violations, focusing on
Weera’s alleged misrepresentations and misuse of investment funds. During discovery, Foster
found that Weera withdrew the $585,000 invested by Rogers and Stephen and transferred those
funds to offshore accounts. Bank records disclosed during discovery also showed several transfers
made to other individuals after Stephen’s original investment of $50,000.
Foster amended the complaint in December 2017, detailing additional factual allegations
regarding the funds’ disposition and suggesting misuse and possible Ponzi scheme characteristics,
particularly with regard to the initial $50,000 investment made by Stephen. Foster testified in his
deposition that the Ponzi scheme allegation was not substantiated due to challenging discovery
issues and the settlement occurring soon after the filing of the amended complaint. He admitted
to using the term “Ponzi scheme” for its impact, despite not believing Wedgewood was in fact a
Ponzi scheme. He claimed to have used the allegations as a litigation strategy due to opposing

No. 24-8007 Moyer v. Rogers, et al. Page 7
counsel’s lack of expertise in securities law. In February 2018, Foster filed a motion for summary
disposition addressing statutory conversion, securities fraud, fraudulent misrepresentation, and
legal malpractice claims. The litigation was referred to case evaluation, resulting in a $2 million
case evaluation award, which prompted settlement discussions.
In April 2018, Defendants entered into a settlement with Weera and Wedgewood for
$900,000, structured as a $550,000 downpayment and a $350,000 promissory note. The
downpayment was made with three cashier’s checks totaling $550,000, which were deposited into
Foster’s trust account and then distributed to Rogers and Stephen. According to the Trustee’s
C.P.A., Wedgewood was insolvent at the time these transfers were made, and $450,000 of the
downpayment came from the sale of Weera’s real property, referred to as the Caledonia farm
property, while $100,000 came from other investors. However, Defendants averred (based on
their belief that the funds were from Weera’s overseas transfers) that they were unaware of
Wedgewood’s insolvency.
Post-settlement, the first $10,000 installment on the promissory note was made in May
2018 to Foster. Foster then transferred $8,425.26 to Rogers and Stephen. Following Weera’s
death in June 2018, there was a default on the monthly payments, and in July 2018, a consent
judgment was entered for $350,000, less payments previously made.
Foster garnished Wedgewood’s bank account, resulting in $98,063.15 being debited, part
of which was retained by Foster for legal fees with the remainder distributed to Rogers and
Stephen. Neither party appears to have raised or discussed the issue of Rogers’ and Stephen’s
knowledge regarding the garnishment except for the Bankruptcy Court, which briefly addressed
the matter in a footnote that stated:
The court questions whether the $98,063.15 transfer, which was made involuntarily
pursuant to the writ of garnishment after Weera’s death, should be included as a
transfer made with actual intent to defraud. The Trustee has consistently argued
that it should. The Defendants have not refuted this assertion and have not sought
to distinguish this transfer based on its involuntary nature or its timing. For this
reason, the court accepts the Trustee’s argument that the transfer for [sic] funds
pursuant to the garnishment was also made with actual intent to defraud.
(Id. at 42, n.32.)

No. 24-8007 Moyer v. Rogers, et al. Page 8
The timing and sufficiency of service of the writ of garnishment was at issue. Foster
personally served the garnishment at a Chemical Bank branch on August 14, 2018. He served
Shalitha Bennett, an Assistant Branch Manager, who represented to him that she was authorized
to accept service.
At trial, David Schmid (“Schmid”), a bank representative,3 testified that the bank’s
procedures contemplated that service of a garnishment could be done by “walk-in” at a specific
branch. (Id. at 26.) He also stated that an Assistant Branch Manager, such as Bennett, would have
had authority to accept service. Schmid confirmed that the bank’s internal records showed that
Bennett was personally served with the garnishment on August 14, 2018. Upon receipt of the writ,
Schmid explained that the bank’s procedures would have required Bennett to promptly send an
electronic copy of the writ to the levy and garnishment department for processing and that the hard
copy would have been forwarded via courier or inter-office delivery. According to bank records,
the garnishment department noted that it received the garnishment on August 17th. The
Bankruptcy Court found that “the evidence clearly establishes that the personal service resulted in
the bank being informed of the garnishment.” (Id. at 63.)
On November 15, 2018, a chapter 7 petition was filed for Wedgewood, and Appellant was
appointed as the chapter 7 trustee. Rogers and Stephen filed a claim for $203,294, based on the
state court Consent Judgment. The Trustee initiated the adversary proceeding on November 6,
2020.
The Trustee estimated the unsecured claims in the chapter 7 case at a minimum of $5.46
million. As of August 2023, the estate had $322,000 in its account and potential judgments totaling
approximately $674,000, leading to a maximum possible distribution of about $996,000 to
creditors, or 18% of claims. The Trustee compared this to the amount Rogers and Stephen received
from the prepetition garnishment and asserted that they received more through the garnishment
than they would have as unsecured creditors.
3The Bankruptcy Court explained in a footnote why Schmid, an employee of Huntington National Bank, was
qualified to testify as to Chemical Bank’s garnishment procedures. (Op. at 25–26, n.18.) Schmid testified that
Huntington National Bank had acquired Chemical Bank in 2020, and that Chemical Bank’s procedures for accepting
service of garnishment in 2018 were the same as Huntington National Bank’s current procedures. (Id.)

No. 24-8007 Moyer v. Rogers, et al. Page 9
The complaint sought to avoid the transfers made to Rogers, Stephen, and Foster under the
state court settlement agreement and garnishment as actual fraudulent transfers under
§ 548(a)(1)(A) of the Bankruptcy Code and § 544(b) and the Michigan Uniform Voidable
Transactions Act (“UVTA”).4 The complaint also sought to avoid as a preference the transfer of
$98,063.15 through the garnishment of Wedgewood’s account at Chemical Bank.
The Trustee’s C.P.A. prepared an expert report and an electronic spreadsheet summarizing
her findings based on her review of bankruptcy and probate case filings, bank statements, and
business records. The Trustee’s expert witness identified five instances when new investor funds
were used to repay prior investors, concluding that Wedgewood operated as a Ponzi scheme. Her
report documented instances of fund diversion and commingling between May 2014 and June
2018, with twelve examples of transfers from Wedgewood’s accounts to personal and business
accounts and seven instances of using non-Wedgewood accounts to fund Wedgewood obligations.
Transfers to individual investors of between $5,000 and $50,000 were made during 2013, 2014,
and 2015. The Trustee’s C.P.A. concluded that Wedgewood was continuously insolvent from
May 1, 2012, through November 15, 2018, with assets estimated at $1,133,952.03 and liabilities
at $3,650,262.52 as of May 1, 2012, resulting in an insolvency of $2,516,310.49, and continued
insolvency between $2.3 million and $6.8 million during the prepetition period.
DISCUSSION
1. Did the Trial Court err in finding that Appellees accepted Wedgewood’s
actually fraudulent transfers in good faith for purposes of their affirmative
defense under Section 548(c) of the Bankruptcy Code?
The Bankruptcy Court found, and neither party disputes, that Debtor’s transfers to
Defendants were actually fraudulent under § 548(a)(1) and were presumptively voidable.
4The Bankruptcy Court’s Opinion states that the UVTA has virtually identical requirements to those under
§ 548(a)(1)(B). The Trustee has not cited any case law or developed any argument based upon the Michigan UVTA.
Accordingly, any arguments for reversal based on that Michigan state law have been waived. See Citizens Coal
Council v. U.S. E.P.A., 447 F.3d 879, 905 (6th Cir. 2005) (“The general rule of appellate procedure is that issues not
presented in an appellant’s initial merits brief are waived.”); Dean v. Lane (In re Lane), 604 B.R. 23, 26 (B.A.P. 6th
Cir. 2019) (quoting In re Blasingame, 598 B.R. at 874) (“[I]t is well-established that issues adverted to in a perfunctory
manner, unaccompanied by some effort at developed argumentation, are deemed waived.”).

No. 24-8007 Moyer v. Rogers, et al. Page 10
The Bankruptcy Court held, on Foster’s prior motion for summary judgment, that Foster,
as counsel for Rogers and Stephen, was a “mere conduit” for the payments at issue and not the
initial transferee. (Op. at 64, n.47 (citing Order Granting in Part and Denying in Part Defendant
David Foster’s Motion for Summary Judgment, Adv. P. 20-80139-jwb, ECF No. 47)); see
generally Bonded Fin. Servs., Inc. v. European Am. Bank, 838 F.2d 890 (7th Cir. 1988) (looking
at the “entity for whose benefit” the initial transfer was made). The parties do not dispute that
conclusion in this appeal. (Appellant’s Br. at 26, Case No. 24-8007, ECF No. 18 (recognizing
application of § 548(c) to “‘[a]n initial transferee’ like Rogers and Stephen”); Appellee’s Br. at 9,
Case No. 24-8007, ECF No. 25 (“There is no dispute that . . . Rogers-Stephen were innocent initial
transferees.”).) Thus, the affirmative defense under § 548(c) applies in this case, and not the
provisions of § 550(b)(1), because Rogers and Stephen were “initial transferees” and not
“immediate or mediate transferees.” See 11 U.S.C. § 550(a)(2), (b); Meoli v. Huntington Nat’l
Bank, 848 F.3d 716, 729–30 (6th Cir. 2017) (stating the two standards).
Under § 548(c), “[a]n initial transferee is not liable for the transferred property if the
transferee: (i) took the property ‘in good faith’; and (ii) ‘gave value to the debtor in exchange for
such transfer.’” Meoli, 848 F.3d at 729 (quoting 11 U.S.C. § 548(c)). Accordingly, the Bankruptcy
Court conducted a good faith defense analysis under § 548(c), focusing on whether Defendants
acted in good faith and gave value in exchange for the transfers.
There is no statutory definition of “good faith” in the Bankruptcy Code. The Sixth Circuit
acknowledged that “courts have ‘struggled’ to define good faith in this context.” Id. at 734 (citing
First Indep. Cap. Corp. v. Merrill Lynch Bus. Fin. Servs. Inc. (In re First Indep. Cap. Corp.), 181
F. App’x 524, 528 (6th Cir. 2006)). In Meoli, the Sixth Circuit approved the test for good faith
articulated and applied by the bankruptcy court, finding it “not erroneous.” Id. at 734. That “test”
was stated in the form of a question: did the transferee “ever reach the point where it could no
longer legitimately cling to its belief” that it was receiving transfers in good faith. Id.5
5A subsequent related case, Huntington National Bank v. AIG Specialty Insurance Co., No. 23-3039, 2024
WL 374571 at *11 (6th Cir. Feb. 1, 2024), stated: “Good faith is an affirmative defense, and its formulation—‘whether
Huntington legitimately continued to believe that Teleservices’s transfers to Cyberco’s account were merely
Cyberco’s receivables that Teleservices had collected’—is not tantamount to an intent to injure, malice, ill will, or
other similar culpability.”

No. 24-8007 Moyer v. Rogers, et al. Page 11
In determining whether Rogers’ and Stephen’s good faith had ended, the Bankruptcy Court
adopted the “hybrid” test of a transferee’s good faith. (Op. at 46 (citing Bash v. Textron Fin. Corp.,
524 B.R. 745, 759 (N.D. Ohio 2015); Tabor v. Kelly (In re Davis), Bankr. No. 05-15794-GWE,
Adv. No. 07-05181-L, 2011 WL 5429095, at *24 (Bankr. W.D. Tenn. 2011)).) This hybrid test
“looks at the subjective intent of the transferee in light of objective factors, such as his knowledge
of the presence of ‘badges of fraud’ or ‘red flags’ that should have put him on inquiry notice.” (Id.
(citing In re Davis, 2011 WL 5429095, at *24–25).)
Meoli’s test for good faith would appear to apply with equal force to individual defendants,
considering what the defendants knew and at what point they could not “legitimately cling to
[their] belief” that they were acting in good faith. 848 F.3d at 723. Furthermore, Appellant does
not dispute that the Bankruptcy Court articulated the correct standard. (Appellant’s Br. at 30 (“The
bankruptcy court’s articulation of the good-faith standard was therefore correct as far as it goes.”).)
Instead, the Appellant asserts that “the bankruptcy court did not apply the standard when analyzing
the legal significance of the largely, if not entirely, undisputed facts in this case.” (Id.)
Appellant argues that the Bankruptcy Court “functionally applied a different test: one that
required the Trustee to prove that Rogers, Stephen, or Foster actually knew that Wedgewood was
a Ponzi scheme.” (Appellant’s Br. at 21.) In contrast, Appellant appears to argue that the presence
and knowledge of any red flags places a person on inquiry notice and is sufficient to defeat good
faith. However, the idea that bare inquiry notice is sufficient to defeat good faith was rejected by
the Sixth Circuit in Meoli, where good faith was found to continue even after the financially
sophisticated defendant grew suspicious enough to conduct an investigation.
The facts in the Meoli case demonstrate that the presence of red flags, even those sufficient
to lead a person to investigate are not, in and of themselves, enough to defeat good faith. In that
case, the bankruptcy court noted numerous red flags that preceded the point at which it determined
that the defendant could no longer claim good faith, and that aspect of its decision was affirmed
by the Sixth Circuit. In Meoli, Cyberco was a deposit and loan customer of the defendant bank.
848 F.3d at 720. Cyberco’s chairman, Watson, represented that it purchased equipment from
Teleservices, which was later proven to be a “paper company” created by Watson to perpetuate
fraud. Id. One year into the bank’s relationship with Cyberco, in September 2003, a $2.3 million

No. 24-8007 Moyer v. Rogers, et al. Page 12
Teleservices check deposited by Cyberco bounced, and a bank employee, White, determined not
to process the check. Id. at 720–21. One month later, bank employees met with Watson. Id. at
721. At that meeting, Watson made representations about Teleservices that conflicted with earlier
information that had been provided by Watson and recorded in bank records. Had the bank
employees been aware of the prior representation, it would have presented a “smoking gun.” Id.
White was still suspicious about the Cyberco account and “suspected foul play” based on
Cyberco’s refusal to use a lockbox, which would allow the bank to monitor Cyberco’s revenues.
Id. White continued to investigate the account. Id.
In January 2004, the bank asked Cyberco to find a new bank. Some employees stated they
did not understand Cyberco’s complex business, but others “clearly worried that Cyberco might
not pay back its debt.” Id. White’s superior, Kalb, wrote at the time: “‘the ‘red flags’ continue,’
and that there was in ‘recent times . . . the heightened risk of financial misinformation (as well as
fraud),’ and that he hoped [the bank] would not ‘lose money’ in the process of ending its
relationship with Cyberco.” Id. By April 2004, Kalb was even more certain there was foul play
based on several factors. Id. Around that time, “White found proof of Cyberco’s foul play,” in
the form of information that refuted representations that Watson had made about Cyberco’s
reasons for not using a lockbox and that its purported customers were in fact competitors. Id. at
721–22. At that point, Kalb and White alerted the bank’s security department. Id. at 722.
Meanwhile, Kalb suggested to Watson that the bank contact Cyberco’s customers to verify that
they were in fact customers, and Watson resisted. Id. The bankruptcy court, as affirmed by the
Sixth Circuit, found that up to this point, the bank had received loan repayment transfers in good
faith. Id. at 723.
It was not until April 30, 2004, long after the bounced check, when the bank’s security
department “discovered that Watson was a convicted fraudster,” that the bank was found to have
lost its ability to assert good faith. Id. The security department failed to communicate this
information to Kalb, who was overseeing the bank’s relationship with Cyberco. Id. The
bankruptcy court found that had Kalb been provided that information, he “would have acted
differently than to continue to receive the transfers from Teleservices in good faith.” Id.

No. 24-8007 Moyer v. Rogers, et al. Page 13
The Sixth Circuit found no error in the bankruptcy court’s finding that, despite numerous
“red flags” and the bank’s determination that its security department should investigate Cyberco,
the actual tipping point for loss of good faith did not occur until the investigation turned up
Watson’s fraudulent past at the end of April 2004. Id. at 730–31. Based on the Meoli case, the
Appellant is misguided in arguing for an approach that effectively terminates good faith at the first
sign of a red flag.
Likewise, we find no error in the Bankruptcy Court’s finding that Rogers and Stephen
received the settlement transfers in good faith despite their limited awareness of some red flags.
The Bankruptcy Court’s factual determinations are reviewed under a clearly erroneous
standard. The Meoli decision makes it clear that where, as in the present case, the transferees
(Rogers and Stephen) established that their initial dealings with Weera and Wedgewood were in
good faith and without notice, that “good faith” continues until the initial transferees obtained
some definite piece of information demonstrating that the transferees “could no longer legitimately
cling to [their] belief” that they were no longer acting in good faith. Id. at 734. Payments received
thereafter would be avoidable. See id. at 730 (approving recovery of all payments made after good
faith had ended).
The trial court found “that Rogers acted in good faith. She was not complicit in Weera’s
fraud and was not aware of any red flags when she made her investment. When red flags came up
after her investment in Wedgewood, they pointed to Weera’s ineptitude and lack of follow-
through, but not to a broader fraudulent scheme.” (Op. at 49.) Moreover, the Bankruptcy Court
held: “The case for good faith is even stronger for Stephen, whose lack of direct communication
with Weera and general inability to understand or recall the financial transactions at issue makes
it nearly impossible to charge him with knowledge of fraud or potential red flags.” (Id. at 50.)
Rogers and Stephen were elderly individuals with little financial or legal experience. There
is no evidence that they should have known or understood the potential legal implications of what
little knowledge they had. Their limited knowledge of red flags and the concept of inquiry notice
do not compel the conclusion that Rogers and Stephen did not act in good faith. In Meoli and

No. 24-8007 Moyer v. Rogers, et al. Page 14
cases cited therein, sophisticated business entities with knowledge of red flags were still found to
have acted in good faith.
The Bankruptcy Court made factual findings that Rogers and Stephen acted in good faith.
(Op. at 46–50.) Appellant has failed to show that these factual findings are “clearly erroneous”;
therefore, there is no reversible error in these findings of good faith.
The remaining issue relating to good faith is Appellant’s contention that the Bankruptcy
Court’s findings related to Foster constitute reversible error. The Bankruptcy Court reviewed
Michigan law regarding the imputation of knowledge to an attorney’s client:
Under Michigan law, it is generally held that “where a client is represented by an
attorney, knowledge acquired by the attorney while acting within the scope of his
authority is by fiction of law the knowledge of the client.” Katz v. Kowalsky, 296
Mich. 164, 170, 295 N.W. 600, 603 (1941); see also Restatement (Third) of
Agency, § 5.03 (2006).
(Op. at 50–51.)
The specific factual issue is captured by the Bankruptcy Court’s assertion: “Whatever
Attorney Foster may have suspected about Wedgewood’s operations, there is no evidence that he
knew it was a Ponzi scheme. Under the circumstances, there is no actual knowledge of the scheme
that can be imputed to the Defendants to undermine the court’s previous determination that they
accepted the transfers from Wedgewood in good faith.” (Id. at 54.)
Foster’s testimony was presented in the form of deposition testimony. The clearly
erroneous standard applies with equal force to a trial court’s findings made based upon transcripts
or deposition testimony. Guerrero v. United States, 383 F.3d 409, 414–16 (6th Cir. 2004); see also
McFarland v. T.E. Mercer Trucking Co., 781 F.2d 1146, 1148 (5th Cir. 1986) (discussing the then-
recent amendment to Federal Rule of Civil Procedure 52(a) and stating: “The findings of fact by
the trial court based on deposition evidence are entitled to the same [clearly erroneous] standard
of review that they would receive if based on oral, in-court testimony.”); accord Anderson, 470
U.S. at 574 (holding that the clearly erroneous standard applies “even when the district court’s

No. 24-8007 Moyer v. Rogers, et al. Page 15
findings do not rest on credibility determinations, but are based instead on physical or documentary
evidence or inferences from other facts”).6
The Trustee lists all of the facts, statements and pleadings that would support a finding of
inquiry notice on the part of Foster that, in turn, should be—in his view—attributed to Rogers and
Stephen. (See Appellant’s Br. at 32–41.)
Notably, most of the information known to Foster that suggested the potential of a Ponzi
scheme was related to the first $50,000 invested by Stephen in February 2013. There is far less
evidence regarding the later, larger investments made by Stephen in March 2016, and the
investments by Stephen and Rogers in April 2016. In presenting his case, it appears that the
Trustee chose to argue that all of the investments were avoidable rather than separating the original
$50,000 investment, for which there was more evidence that it was used as part of a Ponzi scheme.7
The Bankruptcy Court considered the case as it was presented and did not separately consider each
individual investment.
Foster had enough facts to lead him to include a Ponzi scheme claim in the amended
complaint he filed, and he sought additional discovery on that issue. Nevertheless, the Bankruptcy
Court considered and credited Foster’s assertion that he only threw in the Ponzi scheme claim as
a litigation tactic and that his primary concern was that Weera had stolen Rogers’ and Stephen’s
money and transferred it overseas.
In considering whether Foster’s limited knowledge was sufficient to tip the scale to a loss
of good faith, the Bankruptcy Court also considered what it actually took for persons or entities
with more information to discover Weera and Wedgewood’s fraud.
6Although it does not appear to affect the standard of review, it should be noted that the Bankruptcy Court
also took live testimony on the same set of facts and reviewed the deposition of Foster in the light of that live testimony.
7As the Supreme Court has recently emphasized, courts should decide issues under the “party presentation
principle.” See United States v. Sineneng-Smith, 590 U.S. 371, 376, 140 S. Ct. 1575, 1579 (2020) (“In our adversarial
system of adjudication, we follow the principle of party presentation. As this Court stated in Greenlaw v. United
States, 554 U.S. 237, 128 S. Ct. 2559, 171 L.Ed.2d 399 (2008), ‘in both civil and criminal cases, in the first instance
and on appeal . . . , we rely on the parties to frame the issues for decision and assign to courts the role of neutral arbiter
of matters the parties present.’ Id. at 243, 128 S. Ct. 2559.”); Clark v. Sweeney, 607 U.S. 7, 9, 146 S. Ct. 410, 412
(2025) (citing Sineneng-Smith).

No. 24-8007 Moyer v. Rogers, et al. Page 16
First, the Bankruptcy Court cited the facts associated with the involvement of LARA and
the actions it took against Weera and Wedgewood.8 This state agency issued a cease-and-desist
order against Weera and Wedgewood in March 2016 but did not put them out of business or
prosecute them criminally for their actions in soliciting investments. Clearly, LARA had facts that
would cause an investigation—similar to the “inquiry notice” the Trustee asserts was sufficient to
end Foster’s good faith. Presumably, LARA, as a state regulatory agency, has some sophistication
in the investment area it regulates. Yet, it does not appear that LARA discovered sufficient
evidence to treat Weera and Wedgewood as operators of a Ponzi scheme. The investments were
found to be improper, but it is doubtful that the relatively mild penalties that Weera and
Wedgewood received would have been the response if LARA had uncovered a Ponzi scheme.
Second, the Bankruptcy Court had the opportunity to consider testimony from the Trustee’s
expert, who did uncover the Ponzi scheme and documented it. In hearing that testimony, the
Bankruptcy Court had information about what efforts it actually took to bring to light proof of the
fraudulent scheme that LARA had failed to uncover.
Thus, the Bankruptcy Court was able to view the deposition testimony of Foster in the
context of, and in comparison with, a governmental licensing and regulatory agency that did not
discover the Ponzi scheme and a forensic accountant who did.
The Bankruptcy Court found that “[w]hatever Attorney Foster may have suspected about
Wedgewood’s operations, there is no evidence that he knew it was a Ponzi scheme.” (Op. at 54.)
Although the Bankruptcy Court used language suggestive of a requirement of actual knowledge,
that is not consistent with the Bankruptcy Court’s review or treatment of the evidence. Nor is the
finding clearly erroneous in light of the comparison of Foster’s knowledge with that of the bank
in Meoli.
Moreover, the structure of the Opinion deserves attention. The sequencing of the
analysis—starting with Rogers and Foster’s intertwined awareness and moving to the independent
good faith analysis of Foster—suggests that the red flags and inquiry notice issues were
8Notably, this investigation was after the original $50,000 investment by Stephen discussed above.

No. 24-8007 Moyer v. Rogers, et al. Page 17
methodically considered by the Bankruptcy Court. While we might question whether we would
have made the same decision, we do not find that the decision finding good faith is “clear error”
requiring reversal.
The Appellant’s arguments are primarily based upon case law from other jurisdictions that
take a different approach to the good faith requirement in § 548(c). Those cases generally either
apply an “objective” test or a more judicial, rules-based approach to determining good faith. In
contrast, the Meoli decision adopts the “hybrid” and “holistic” side of the ongoing legal debate on
good faith. Thus, Appellant’s argument fails because courts in the Sixth Circuit are bound by
Sixth Circuit binding precedent, not precedent from other circuits. See Baynes v. Cleland, 799 F.3d
600, 616–17 (6th Cir. 2015) (citing cases for the proposition that only an en banc court may
overrule a circuit precedent, absent an intervening Supreme Court decision); see also In re
Miedzianowski, 735 F.3d 383, 384 (6th Cir. 2013) (rejecting the argument that a “circuit split” is
to be considered where the Sixth Circuit has, itself, ruled on the issue: “Where our circuit has
answered the question, the district court is bound by our published authority.”). In keeping with
those precedents, we see our role as applying Meoli, not attempting to distinguish it.
The Trustee emphasizes the negative impact that allowing the good faith defense for
Rogers and Stephen has on other creditors in the underlying chapter 7 case, i.e., that giving priority
to two creditors disadvantages similarly situated creditors who are equally blameless. This
situation is not an unfamiliar one to bankruptcy judges, who regularly deal with priority issues that
have the same dynamic. Yes, other parties will receive less because Stephen and Rogers received
more. But that is inherent in the statutory exception to recovery set forth in § 548(c), and thus,
criticism of that disparity is properly addressed to the legislature. The court cannot simply ignore
the statute on equitable grounds because of the consequences that are inherent in the Bankruptcy
Code provision. Cf., Law v. Siegel, 571 U.S. 415, 427, 134 S. Ct. 1188, 1198 (2014) (“[I]t is not
for the courts to alter the balance struck by the statute.”).
Accordingly, the Panel finds that the Bankruptcy Court did not err in finding that Appellees
accepted Wedgewood’s actual fraudulent transfers in good faith for purposes of their affirmative
defense under § 548(c) of the Bankruptcy Code.

No. 24-8007 Moyer v. Rogers, et al. Page 18
2. Did the Bankruptcy Court err when it held that Michigan’s court rule
regarding dismissal of improperly served complaints meant that the
garnishment was deemed to have been served outside the preference period?
“Under 11 U.S.C. § 547(b), a bankruptcy ‘trustee may . . . avoid’ preferential transfers—
‘transfer[s] of an interest of the debtor in property’ that satisfy the five requirements listed in
§ 547(b).” Hooker v. Wanigas Credit Union, 835 F. App’x 110, 111 (6th Cir. 2021) (citing 11
U.S.C. § 547(b)). Here, the sole issue on appeal is whether the transfer occurred during the 90-
day preference period for purposes of § 547(b)(4).
Federal law controls “[w]hat constitutes a transfer and when it is complete.” Barnhill v.
Johnson, 503 U.S. 393, 397, 112 S. Ct. 1386, 1389 (1992). The term “transfer” is defined in the
Bankruptcy Code and, for purposes of the issues before the Panel, includes “the creation of a lien.”
11 U.S.C. § 101(54)(A). A transfer is generally deemed to have been made “at the time such
transfer is perfected.” 11 U.S.C. § 547(e)(2)(B). Perfection occurs “when a creditor on a simple
contract cannot acquire a judicial lien that is superior to the interest of the transferee.” Id.
§ 547(e)(1)(B); see also Fidelity Fin. Servs., Inc. v. Fink, 522 U.S. 211, 216, 118 S. Ct. 651, 652
(1998) (“[A] transfer is “perfected” only when the secured party has done all the acts required to
perfect its interest. . . .”). “A more precise definition of ‘perfection’ is left to state law.” Battery
One-Stop, Ltd. v. Atari Corp. (In re Battery One-Stop, Ltd.), 36 F.3d 493, 495 (6th Cir. 1994).
From a broader federal perspective, the majority rule among the circuit courts, including
this circuit, has been that when a bank account is garnished, a transfer occurs “upon service of the
garnishment order and notice on the garnishee bank.” Id. at 498 (holding that a transfer of
garnished funds under Ohio law is perfected upon service of the garnishment order because that
action “binds” the funds and, after that time, no other creditor can acquire a superior lien in the
funds); Phillips v. MBank Waco, N.A. (In re Latham), 823 F.2d 108, 110 (5th Cir. 1987)
(interpreting Texas law); Walutes v. Baltimore Rigging Co., 390 F.2d 350 (4th Cir. 1968)
(interpreting Maryland law as it applied to Section 60 of the Bankruptcy Act).9 The questions in
9But see Freedom Grp., Inc. v. Lapham-Hickey Steel Corp. (In re Freedom Grp., Inc.), 50 F.3d 408, 412 (7th
Cir. 1995) (adopting the minority approach that transfer occurs not upon service and notice of a garnishment but
instead upon later entry of a “final order of attachment” that directs payment of the funds to the creditor).

No. 24-8007 Moyer v. Rogers, et al. Page 19
this case are 1) was “service” of the garnishment order effected when the manner of service was
not strictly compliant with the requirements set forth in the Michigan Court Rules and 2) when did
such service occur?
“Michigan follows the general rule that a garnishment lien attaches upon service of the
writ.” Mich. Tractor & Mach. Co. v. Elsey, 216 Mich. App. 94, 97, 549 N.W.2d 27, 29 (1996)
(quoting Mary v. Lewis, 399 Mich. 401, 411, 249 N.W.2d 102 (1976)); see also Bleau v. First of
Am. Bank-Cent. (In re Arnold), 132 B.R. 13, 14–15 (Bankr. E.D. Mich. 1991) (“[A] post-judgment
lien is perfected when the writ is served,” and the first perfected would have priority.); In re
Collier, No. 22-30274-JDA, 2022 WL 2357087, at *2 (Bankr. E.D. Mich. June 29, 2022) (holding
that a perfected lien arose from tax refund garnishment “[a]t the time the writ was served”); In re
Piccard, No. 18-22427-DOB, 2021 WL 1134793, at *5 (Bankr. E.D. Mich. Mar. 24, 2021) (“A
garnishment is perfected when the notice is served.”).
The facts underlying the transfer are not in dispute. Instead, this issue turns on an
interpretation of Michigan law—the interaction of Michigan’s garnishment statutes and the
requirements of the Michigan Court Rules—to determine when the transfer occurred for
preference purposes under § 547(b).10 See Barnhill, 503 U.S. at 398 (“In the absence of any
controlling federal law, ‘property’ and ‘interests in property’ are creatures of state law.”); Butner
v. United States, 440 U.S. 48, 55, 99 S. Ct. 914, 918 (1979) (“Property interests are created and
defined by state law. Unless some federal interest requires a different result, there is no reason
why such interests should be analyzed differently simply because an interested party is involved
10When a periodic garnishment (typically a wage garnishment) has been filed outside the preference period,
but wages are taken by the creditor as they are earned (during the preference period), the majority of recent court
decisions have rejected the conclusion that service of the wage garnishment outside of the preference period defeats
the preference claim. See, e.g., Weinman v. Alt. Revenue Sys., Inc. (In re Stevens), 552 B.R. 773, 777 (Bankr. D. Colo.
2016) (relying on Local Loan Co. v. Hunt, 292 U.S. 234, 243, 54 S. Ct. 695, 698 (1934) (“The earning power of an
individual is the power to create property; but it is not translated into property within the meaning of the Bankruptcy
Act until it has brought earnings into existence.”)); In re Johnson, 239 B.R. 416, 417–18 (Bankr. M.D. Ala. 1999)
(rejecting the “continuing lien” theory of wage garnishments because a debtor “acquired rights in the property
transferred on the day he became entitled to his wages” (citation omitted)). These cases concerning continuing wage
garnishments are not persuasive because they focus on the fact that the property being transferred (i.e., wages) did not
exist at the time the original garnishment was filed. See 11 U.S.C. § 547(e)(3) (“For the purposes of this section, a
transfer is not made until the debtor has acquired rights in the property transferred.”). That is not the case here because
all the garnished funds were in the Chemical Bank account at the time the garnishment was served.

No. 24-8007 Moyer v. Rogers, et al. Page 20
in a bankruptcy proceeding.”).11 The proper interpretation of Michigan law, and the application
of that law to the undisputed facts, is subject to de novo review. Liable v. Lanter, 91 F.4th 438,
442 (6th Cir. 2024) (citing Dolan v. United States, 514 F.3d 587, 593 (6th Cir. 2008)).
In deciding an issue of state law that has not been directly addressed by the state’s supreme
court, the Panel must predict “how that court would rule if it were faced with the issue.” See United
States v. Simpson, 520 F.3d 531, 535 (6th Cir. 2008); Kingsley Assoc., Inc. v. Moll PlastiCrafters,
Inc., 65 F.3d 498, 507 (6th Cir. 1995) (“Since the Michigan Supreme Court has not addressed this
issue, however, we must predict how it would resolve the issue from ‘all relevant data.’”).
Relevant data includes the state’s appellate court decisions, as well as “the state’s supreme court
dicta, restatements of law, law review commentaries, and the majority rule among other states.”
Garden City Osteopathic Hosp. v. HBE Corp., 55 F.3d 1126, 1130 (6th Cir. 1995)); Drown v.
Perfect (In re Giaimo), 440 B.R. 761, 769 (B.A.P. 6th Cir. 2010).
Michigan Court Rule (“MCR”) 3.101(F)(1) states that garnishments should be served: “in
the manner provided for service of a summons and complaint in MCR 2.105.” MCR 2.105(D)
addresses service on a corporation:
(D) Private Corporations, Domestic and Foreign. Service of process on a domestic
or foreign corporation may be made by
(1) serving a summons and a copy of the complaint on an officer
or the resident agent;
(2) serving a summons and a copy of the complaint on a director,
trustee, or person in charge of an office or business
establishment of the corporation and sending a summons and a
copy of the complaint by registered mail, addressed to the
principal office of the corporation;
MCR 2.105(D).
11A separate legal framework, dealing with the specific issue of deficient service of a garnishment followed
by waiver, has gained some support in the bankruptcy courts. Some courts have held that although proper service
creates a valid judicial lien sufficient as a transfer for preference purposes, when service is not proper, no transfer
occurs until the party to be served waives an objection to improper service. See e.g., Albert v. Chesapeake Bank &
Tr. Co. (In re Linton Props., LLC), 410 B.R. 1, 15–18 (Bankr. D.D.C. 2009) (interpreting Maryland Law); Pa. Cap.
Bank v. Glosser (In re Allen), 228 B.R. 115, 128–29 (Bankr. W.D. Pa. 1998) (interpreting Kentucky and Pennsylvania
law). To the extent these cases rely on state law, Michigan law does not appear to support the “waiver” approach.

No. 24-8007 Moyer v. Rogers, et al. Page 21
Here, Foster testified that he hand-delivered the writ of garnishment to Shalitha Bennett at
a Chemical Bank branch on August 14, 2018. (Op. at 63.) This was confirmed by the bank’s own
records. Ms. Bennett was the branch manager, not an officer or resident agent of the Bank.
Accordingly, subsection (2) of MCR 2.105(D) applies to service. Foster, however, did not take
the second step required by that subsection and send a copy of the writ of garnishment to Chemical
Bank’s principal office via registered mail.12 This act was never performed, but Appellant does
not argue that service never occurred. He argues service was effective on August 17, rather than
August 14.
It is undisputed that Foster did not strictly comply with the service statute. Based on that
circumstance, the Bankruptcy Court examined at what point the service became effective. The
Bankruptcy Court considered the additional facts that “Chemical Bank’s garnishee disclosure,
prepared on August 21, 2018, states that the bank received the writ on August 17, which is the date
that the bank’s garnishment department received the writ.” However, a bank representative
testified that according to bank policy, the writ should have been considered received as of August
14 when the bank’s internal records showed that the branch manager received the writ, not the date
that the garnishment made its way to the garnishment department.
Because Michigan Court Rules applicable to the service of a summons and complaint apply
to the method of serving a garnishment, the Bankruptcy Court applied another Michigan Court
Rule addressing the effect of imperfect service. MCR 2.105(K)(3) provides: “An action shall not
be dismissed for improper service of process unless the service failed to inform the defendant of
the action within the time provided in these rules for service.” No party has asserted that the
service by Foster failed “to inform defendant of the action within the time provided in these rules
for service.” The Bankruptcy Court expressly found that the defect of failing to follow up on the
personal service “by sending a copy of the writ by registered mail to the bank’s principal office
12 No party has raised an issue of constitutional due process. See Mullane v. Cent. Hanover Bank & Tr. Co.,
339 U.S. 306, 314, 70 S. Ct. 652, 657 (1950) (“An elementary and fundamental requirement of due process in any
proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise
interested parties of the pendency of the action and afford them an opportunity to present their objections.”). Service
here provided actual notice and appears to have been calculated to do so. The issue before the Panel is the narrower
question of the effect of non-compliance with the service requirements of the Michigan Court Rules on the question
of when the “transfer” occurred for preference purposes.

No. 24-8007 Moyer v. Rogers, et al. Page 22
. . . does not render the personal service ineffective because the evidence clearly establishes that
the personal service resulted in the bank being informed of the garnishment.” (Op. at 63 (emphasis
added).) The Bankruptcy Court essentially applied an actual notice standard, which was not
erroneous based on a review of additional Michigan case law and the garnishment statutes
themselves.13
In Michigan, there are two types of garnishments: periodic and non-periodic. Michigan
statutes (“MCLA”) treat periodic and non-periodic garnishments differently in terms of the effect
of insufficient service. MCLA § 600.4011 applies to garnishments generally, and § 600.4012
applies only to periodic garnishments.
The periodic garnishment statute (which would apply to wage garnishments) provides: “A
garnishment of periodic payments or a notice of failure is not valid or enforceable unless the
garnishment is served on the garnishee in accordance with the Michigan court rules.” MCLA
§ 600.4012(4).14 It further provides that on timely motion of the garnishee after entry of a default
judgment, the court shall set aside the default judgment if, among other reasons, the garnishment
“was not properly served or sent as required by this section.” MCLA § 600.4012(10)(b)(ii).
However, there are no corresponding statutory provisions mandating strictly compliant service for
non-periodic garnishments.
While the failure to strictly comply with the requirements of MCR 2.105(D) would appear
to be fatal when a creditor seeks to enforce a periodic garnishment, there is support in the Michigan
13Appellant cites to Sutton v. Mountain High Investments, LLC, No. 21-1346, 2022 WL 1090926, at *2 (6th
Cir. Mar. 1, 2022), which held that improper service under MCR 2.105(D) did not trigger the start of the 30-day
removal period. (Appellant’s Br. at 44–45.) Appellant argues that Sutton stands for the proposition that MCR
2.105(K)(3) precludes dismissal for improper service of process but does not make the improper service immediately
effective. (Id.) But the Panel does not find this to be persuasive in light of more specific cases addressing the
sufficiency of actual notice for service of non-periodic garnishments. Moreover, Appellant admits: “if Chemical Bank
had moved to dismiss the garnishment proceeding on the basis of improper service, it probably would have lost; after
all, it received notice.” (Id. at 45.)
14 “Actual notice” of a periodic garnishment was held not to be sufficient in Ally Financial, Inc. v. Ellis, No.
332408, 2017 WL 4654556, at *4 (Mich. Ct. App. Oct. 17, 2017), where the garnishment was not properly served.
The court noted that MCLA § 600.4012(10)(b)(ii) “expressly provides that the court shall set aside the default
judgment if the garnishment, notice of failure, request for entry of a default, or request for default judgment was not
properly served or sent[,and it] does not provide any exception in the case of the garnishee having actual notice of the
garnishment.” Id.

No. 24-8007 Moyer v. Rogers, et al. Page 23
case law for finding non-compliant service to be sufficient when—as here—the creditor sought a
non-periodic garnishment and the garnishee had actual notice.
Most notably, in a case involving a bankruptcy case filed under the Bankruptcy Act, the
Michigan Supreme Court stated:
Michigan follows the general rule that a garnishment lien attaches upon service of
the writ. Kyte v. MacIvor, 266 Mich. 258, 253 N.W. 289 (1934); Rickman v.
Rickman, 180 Mich. 224, 146 N.W. 609 (1914). In the case of a prejudgment
garnishment, the entry of a judgment in favor of the plaintiff perfects the lien
acquired upon service by removing its inchoate status and establishing the exact
amount of the debt owed by the principal defendant and, thus, the amount for which
the garnishee may be held liable. Should the plaintiff fail to obtain a judgment, the
lien would be discharged.
Mary, 399 Mich. at 411, 249 N.W.2d at 106. This suggests that under Michigan law, a lien arises
upon service of the garnishment, even if it is subject to later defeasance.
Further, in McKnight v. General Retirement System of City of Detroit, Nos. 290261 &
293215, 2010 WL 4628654, at *7 (Mich. Ct. App. Nov. 16, 2010), the court determined that a
non-periodic writ of garnishment had been properly served, but went on to say in dicta:
The rules governing service of process “are intended to satisfy the due
process requirement that a defendant be informed of the pendency of an action by
the best means available, by methods reasonably calculated to give a defendant
actual notice of the proceeding and an opportunity to be heard and to present
objections or defenses.” Even if [the plaintiff] did not properly effectuate service
in accordance with the court rule, such a failure is not construed to be fatal, as “[a]n
action shall not be dismissed for improper service of process unless the service
failed to inform the defendant of the action within the time provided in these rules
for service.” [MCR 2.105(J)(3) (now numbered 2.105(K)(3)).] The record
adequately demonstrates that Chase Bank had notice of the garnishment action
having contacted the Retirement System within three days of receipt of the writ.
Any technical defect that may have existed in the manner of service cannot be
equated to a complete failure of service and would not justify the setting aside of
the default judgment on that basis.
Id. (citation modified).
In a similar federal court decision, Laborers Pension Trust Fund Detroit & Vicinity v. H &
H Constructors, Inc., No. 05-CV-71995, 2007 WL 1880720, at *4–5 (E.D. Mich. June 29, 2007),

No. 24-8007 Moyer v. Rogers, et al. Page 24
the garnishee for a non-periodic writ argued that the plaintiff had not technically complied with
MCR 2.105(G)(5) for service on a school district. The District Court held that when actual notice
was achieved, technical noncompliance with the service rules was not a basis to set aside the
subsequent default and default judgment, even though improper service of the writ was one of the
grounds raised. The Laborers Pension court explained:
HVS maintains that the garnishment was improperly served, pointing out
that the receipt indicates that the writ was sent via certified mail and was signed for
by . . . a receptionist at HVS. HVS further argues that the file does not indicate that
the writ was addressed to HVS’s president, secretary, or treasurer.
Plaintiffs respond that HVS was aware of their claims even before the
instigation of the instant lawsuit, through Notices of Supplying Labor. . . . Plaintiff
argues that HVS admits in its brief that it received actual notice of the lawsuit.
Plaintiff points out that . . . HVS’s accounting coordinator[] penned a letter, as part
of HVS’s tardy garnishment disclosure, that acknowledged the reception of the writ
of garnishment.
Under Michigan law, “[i]f the improper manner of service satisfies due
process by giving sufficient notice of the claim, dismissal is not warranted. Thus,
if defendant ha[s] timely and actual notice of the action, service [i]s sufficient.”
Eckerson v. Mich. Dep’t of Transp., No. 174747, 1996 WL 33349436, *2 (Mich.
Ct. App. Oct. 11, 1996) (applying this principle to MCR 2.105(G)); see Ibrahiem
v. City of Flint, No. 06-10940, 2006 WL 3759920, *2 (E.D. Mich. Dec. 20, 2006)
(holding that where the city acknowledged that its agent received the summons and
complaint, the city has been provided “actual notice of the suit”).
Here, HVS admits that it received the garnishment writ. Furthermore, HVS
submits a letter written by its accounting coordinator acknowledging the reception
of the writ of garnishment and its referral to HVS’s attorney. Furthermore, MCR
2.105(G) provides that service to a school district can include individuals with
“substantially the same duties [as president, secretary, and treasurer] . . .
irrespective of title.” Given this evidence, Plaintiffs have shown that HVS received
actual notice of the writ of garnishment. See MCR 2.105(J)(3) (“An action shall not
be dismissed for improper service of process unless the service failed to inform the
defendant of the action within the time provided in these rules for service.”).
Therefore, the Court does not accept Defendant’s argument that it did not
receive actual notice of the garnishment.
Id. (citation modified). Both McKnight and Laborers Pension relied in part on MCR 2.105(K)(3),
previously numbered MCR 2.105(J)(3).

No. 24-8007 Moyer v. Rogers, et al. Page 25
After the commencement of this appeal, the Michigan Supreme Court decided Hairston v.
LKU, ___ Mich. ___, ___ N.W.3d ___, No. 166473, 2025 WL 1014229, at *1 (Mich. Apr. 4,
2025), which interpreted the statute at issue here (MCLA § 600.4011 governing non-periodic
garnishments) and MCR 3.101, which “defines the assets that can be obtained through a
garnishment proceeding.” As noted above, MCR 3.101(F)(1) requires that service be “in the
manner provided for service of a summons and complaint in MCR 2.105.” In Hairston, the
Michigan Supreme Court stated:
Thus, although MCL 600.4011(2) “provides the authority for the circuit
court to exercise garnishment jurisdiction, the court must do so within the
parameters established in the Michigan Court Rules.” Royal York of Plymouth
Ass’n v Coldwell Banker Schweitzer Real Estate Servs., 201 Mich App 301, 305,
506 N.W.2d 279 (1993).
Hairston, 2025 WL 1014229, at *4. The Hairston court further stated that “[g]arnishment statutes
are to be strictly construed.” Id. at *6 (citing Krakowsky v. Margolis, 255 Mich. 3, 5, 237 N.W.
28, 28 (Mich. 1931)).
The Michigan Supreme Court’s holding that courts are required to strictly construe both
the garnishment statutes and the Michigan Court Rules does not expressly address the question
this Panel must resolve. Although MCR 2.105(D) states how service is to be made on a
corporation, which was not fully accomplished, MCR 2.105(K)(3) uses mandatory language when
it directs that “[a]n action shall not be dismissed for improper service of process unless the service
failed to inform the defendant of the action within the time provided in these rules for service.”
Although MCLA § 600.4012(4) and MCR 2.105(D) might lead to a different result for a
periodic garnishment, strict construction of MCLA § 600.4011 with MCR 2.105(D) and (K)(3)
lead the Panel to conclude that the Bankruptcy Court properly analyzed the Michigan statutory
and rule framework to conclude that service of the non-periodic writ of garnishment on Chemical
Bank was sufficient to provide the bank actual knowledge of the writ, precluding the bank from
seeking to invalidate the writ based on improper service. See MCR 2.105(K)(3). Thus, because
“Michigan follows the general rule that a garnishment lien attaches upon service of the writ,”
Mary, 399 Mich. at 411, 249 N.W.2d at 106, Foster’s service of the garnishment “on the person in
charge of an office or business establishment of the corporation” created a “lien” for purposes of

No. 24-8007 Moyer v. Rogers, et al. Page 26
§ 101(54)(A) and thus a “transfer” for preference purposes. That is, Rogers and Stephen acquired
an interest that could not be primed by a subsequent intervening creditor because under the MCR,
the garnishment lien was perfected outside the preference period (i.e., the writ had been served
and could not be invalidated for improper service). MCR 2.105(K)(3). Accordingly, the service
of the writ was sufficient to provide actual notice, putting Rogers and Stephen in a better position
than similarly situated unsecured creditors. This improvement in their position, as creditors, is a
key part of § 547(b)’s “test” to determine whether a transfer is preferential. See 11 U.S.C.
§ 547(b)(5). Because the writ was for a non-periodic garnishment pursuant to MCLA § 600.4011
and service was sufficient to give actual knowledge to the garnishee under MCR 2.105(D) and
(K)(3) on a date prior to the preference period, the subsequent receipt of garnished funds within
the preference period did not meet the statutory requirements of an avoidable preferential transfer.
Accordingly, based on Sixth Circuit precedent in In re Battery One-Stop and Michigan
statutes, court rules, and case law, the Panel will affirm the Bankruptcy Court’s ruling that the
transfer made pursuant to the garnishment of Wedgewood’s bank account was outside the
preference period.
CONCLUSION
The Bankruptcy Court’s finding that Appellees received the transfers at issue in good faith
for purposes of their affirmative defense under § 548(c) is not clearly erroneous and is
AFFIRMED.
The Bankruptcy Court’s holding that the garnishment of the Wedgewood bank account
was outside the preference period and not avoidable is AFFIRMED.

No. 24-8007 Moyer v. Rogers, et al. Page 27
_________________
OPINION
_________________
GUSTAFSON, Bankruptcy Appellate Panel Judge. I write separately to respectfully
suggest that the distinction between the criteria used to determine good faith under Sections 548(c)
and 550(b)(1) is not fixedly partitioned into separate categories of analysis. In my view, “good
faith” is the larger category, and the additional language in § 550(b)(1) that a subsequent transferee
must also take “without knowledge of the voidability of the transfer” may be “surplusage” or
merely illustrative, rather than a wholly separate standard. See 5 Collier on Bankruptcy ¶ 550.03[3]
(16th ed. 2026); Picard v. Citibank, N.A. (In re Bernard L. Madoff Inv. Sec. LLC), 12 F.4th 171,
188–92, 199 (2d Cir. 2021) (agreeing with Collier that the same standard applies for § 548(c) and
§ 550(b)(1)); see also Peter Spero, Fraudulent Transfers, Prebankruptcy Planning and Exemptions
§ 4:16 (2025). Thus, the application of an “inquiry notice” standard to the good faith requirements
under § 548(c) and § 550(b)(1) would also appear to be, at least, closely related.
In the Sixth Circuit, the case law addressing the continuity between § 548(c) and
§ 550(b)(1) is, admittedly, somewhat less clear. In Teleservices,1 the bankruptcy court’s lengthy
discussion concluded that § 550(b)(1)’s additional “without knowledge” element is essentially
redundant, offering no substantive distinction from good faith under § 548(c). Teleservices, 444
B.R. at 831–35. In addressing the bankruptcy court’s holding, the Meoli court stated: “The
bankruptcy court cited legislative history to conclude, as other courts have, that the without-
knowledge-of-voidability requirement is the same as the good-faith requirement.” Meoli v.
Huntington Nat’l Bank, 848 F.3d 716, 734 (6th Cir. 2017). While acknowledging the Teleservices
holding, “as other courts have,” Meoli does not appear to explicitly adopt the Teleservices analysis
that the test for good faith is the same under both statutes. Id. Nor does Meoli reject or criticize
the Teleservices analysis on this point.
1Meoli v. Huntington Nat’l Bank (In re Teleservices Grp., Inc.), 444 B.R. 767 (Bankr. W.D. Mich. 2011),
aff’d in part, 848 F.3d 716 (6th Cir. 2017).

No. 24-8007 Moyer v. Rogers, et al. Page 28
In addressing the present case, the unanimous Panel decision limits its focus to § 548(c)
and the portions of Meoli decided under § 548(c). While I view those arguments as sufficient, I
think that Meoli’s holdings under § 550(b)(1), and the two appellate cases2 decided under
§ 550(b)(1) that form the foundation for the Meoli decision, are relevant to the issues presented
here. Because I hold this view, there are two points that I would add to those discussed in the
Panel’s decision.
First, while the Bankruptcy Court undertook Meoli’s “holistic analysis,”3 the decision did
not cite or discuss the specific questions relating to inquiry notice that Meoli “encouraged” courts
to use: “What a reasonable person would be alerted to depends not just on whether there was
inquiry notice, but also on what investigative avenues existed, whether a reasonable person would
have undertaken those avenues given the situation, and what findings the reasonable investigations
would have yielded. Taken together, Nordic Village and First Independence encourage these
inquiries.” Meoli, 848 F.3d at 733. I do not believe this guidance should be confined solely to
§ 550(b)(1) cases.4
The questions Meoli encouraged were not cited or systematically addressed by the
Bankruptcy Court. Instead, the decision cited to pre-Meoli cases which articulated a somewhat
different standard.5 Directly addressing the specific inquiries encouraged by Meoli would have
been, in my view, the better practice and helpful in appellate review. However, the specific
findings in the Bankruptcy Court’s decision and its holistic review of the facts support affirmance.
2IRS v. Nordic Village, Inc. (In re Nordic Village, Inc.), 915 F.2d 1049 (6th Cir. 1990), rev’d on other
grounds, United States v. Nordic Village, Inc., 503 U.S. 30, 112 S. Ct. 1011 (1992); First Independence Capital Corp.
v. Merrill Lynch Bus. Fin. Servs. Inc. (In re First Independence Capital Corp.), 181 F. App’x 524 (6th Cir. 2006).
3As Meoli states: “Taken together, Nordic Village and First Independence invite a holistic factual
determination of whether a reasonable person, given the available information, would have been alerted to a transfer’s
voidability.” Meoli, 848 F.3d at 733. This holistic approach is applicable to inquiry notice under both § 550(b)(1) and
§ 548(c).
4The decision in Wedgewood also quotes from Jobin v. McKay (In re M & L Business Machine Co.), 84 F.3d
1330, 1338 (10th Cir. 1996), stating: “Under this standard, a recipient will lack good faith ‘if the circumstances would
place a reasonable person on inquiry of a debtor’s fraudulent purpose, and a diligent inquiry would have discovered
the fraudulent purpose’ for making the transfer.” (Op. at 44.) In my view, the specific questions suggested by Meoli
serve to elucidate what a “diligent inquiry” would be in the specific circumstances faced by the defendants.
5The Bankruptcy Court cited Bash v. Textron Financial Corp., 524 B.R. 745, 759 (N.D. Ohio 2015), and
Tabor v. Kelly (In re Davis), 2011 WL 5429095 (Bankr. W.D. Tenn. 2011), both of which pre-date Meoli.

No. 24-8007 Moyer v. Rogers, et al. Page 29
Nevertheless, in my view, an “encouraged” set of inquiries, stated in a published Sixth Circuit
decision, should be addressed in some manner in future cases that deal with these issues.
Second, it is my position that the two Sixth Circuit decisions that Meoli relied upon provide
further support for affirmance of the Bankruptcy Court’s decision, even though they are cases
decided under § 550(b)(1). See Nordic Village, 915 F.2d at 1056; First Independence, 181 F.
App’x at 526. The holdings of these two cases, to the extent endorsed by Meoli, reflect additional
examples where good faith defenses were discussed in the context of defendants who were
sophisticated parties6 and had been made aware of “red flags.” Notably, good faith was found in
First Independence even in the face of Michigan state law that created a “duty of inquiry” on the
bank defendant. 181 F. App’x at 528. Further, there was “a range of legitimate scenarios” in First
Independence, which Meoli held was sufficient to distinguish it from Nordic Village. Meoli, 848
F.3d at 733–34. The Wedgewood decision reviewed the potential “scenarios” asserted by the
parties and found legitimacy in Appellee’s position. I would affirm on these additional grounds.
6As noted in the full Panel’s decision, Defendants Rogers and Stephen were not sophisticated parties.