Title: JBK Assocs., Inc. v. Sill Bros., Inc.

State: florida

Issuer: Florida Supreme Court

Document:

Supreme Court of Florida 
 
 
____________ 
 
No. SC15-977 
____________ 
 
JBK ASSOCIATES, INC., etc., 
Petitioner, 
 
vs. 
 
SILL BROS., INC., et al., 
Respondents. 
 
[April 28, 2016] 
 
QUINCE, J. 
 
This case is before the Court for review of the decision of the Fourth District 
Court of Appeal in JBK Assocs., Inc. v. Sill Bros., Inc., 160 So. 3d 94 (Fla. 4th 
DCA 2015).  Because the district court expressly construed a provision of the 
Florida Constitution, this Court has jurisdiction to review the decision.  See art. V, 
§ 3(b)(3), Fla. Const.  For the reasons that follow, we approve the Fourth District’s 
decision and reaffirm our decision in Orange Brevard Plumbing & Heating Co. v. 
La Croix, 137 So. 2d 201 (Fla. 1962). 
 
 
 
 
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FACTS 
In 2010, JBK Associates, Inc. (JBK) obtained a final judgment against 
Patrick Sill—and others not relevant to this proceeding—in the amount of 
$740,487.22.  JBK Assocs., 160 So. 3d at 95.  In 2014, JBK served garnishment 
writs on Wells Fargo Advisors, LLC in an attempt to collect on the judgment from 
Sill’s Wells Fargo account.  Id.  “Sill moved to dissolve the writ, asserting that the 
funds [in that account] were entitled to homestead protection.”  Id.  The hearing on 
the motion revealed the following facts: 
[O]n October 28, 2013, Sill and his wife sold their marital home due 
to their divorce.  Sill’s portion of the sale proceeds was $458,696.67.  
Sill . . . deposited [the funds] into a Wells Fargo account entitled “FL 
Homestead Account.”  The account was then split into three 
subaccounts.  As of February 28, 2014, the cash account contained 
$139,274.66 and two securities accounts contained mutual funds and 
unit investment trusts valued at $297,422.64 and $25,136.89 
respectively, for a total of $322,559.53. 
 
Id. at 95-96.  Recognizing this Court’s requirement from Orange Brevard that a 
debtor manifest an intent to reinvest homestead sale proceeds in another homestead 
within a reasonable time, the trial court granted Sill’s motion without prejudice to 
JBK reasserting its interest in the funds if Sill did not meet that standard.  JBK 
Assocs., 160 So. 3d at 96. 
JBK appealed to the Fourth District, arguing that “Sill lost the homestead 
protection of the proceeds from the sale of the marital home because he purchased 
securities with a portion of the money.”  Id. at 96.  However, the district court 
 
 
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rejected JBK’s argument, finding that the “investment in securities was not so 
inconsistent with the purposes of homestead” for the funds to lose their protected 
status.  Id.  The Fourth District noted that “Sill did not comingle the proceeds with 
other funds.”  Id. at 95.  The court stated, “There was no evidence that the 
securities in Sill’s account were particularly risky and the funds were kept 
‘separate and apart’ from Sill’s other funds.”  Id. at 97 (quoting Orange Brevard, 
137 So. 2d at 206).  The district court also noted that “[t]his case does not involve 
the speculative put and call option trading of up to 302 transactions per month that 
led a bankruptcy panel to conclude that such use of the proceeds was inconsistent 
with the purposes of Arizona’s homestead exemption.”  Id. (citing In re White, 389 
B.R. 693, 697, 704 (9th Cir. BAP 2008)).  The Fourth District affirmed the trial 
court’s granting of Sill’s motion to dissolve the garnishment writ, and JBK 
appealed to this Court. 
ANALYSIS 
In Florida, a person’s homestead is “exempt from forced sale under process 
of any court, and no judgment, decree or execution shall be a lien thereon,” except 
for certain debts: “the payment of taxes and assessments thereon, obligations 
contracted for the purchase, improvement or repair thereof, or obligations 
contracted for house, field or other labor performed on the realty.”  Art. X, § 4, Fla. 
Const.  This provision is to be liberally construed in favor of protecting the 
 
 
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homestead.  Orange Brevard, 137 So. 2d at 203-04.  In addition, the “burden is on 
the objecting party to make a strong showing that the claimant is not entitled to the 
claimed exemption.”  In re Binko, 258 B.R. 515, 517 (Bankr. S.D. Fla. 2001) 
(quoting In re Harrison, 236 B.R. 784, 786 (Bankr. M.D. Fla. 1999)). 
Florida’s homestead exemption has been interpreted to provide protection 
not only for the physical homestead property, but also for both the cash and non-
cash proceeds from a voluntary sale of the homestead as well.  Orange Brevard, 
137 So. 2d at 206; Sun First Nat’l Bank of Orlando v. Gieger, 402 So. 2d 428, 432 
(Fla. 5th DCA 1981).  However, the following requirements must be met for sale 
proceeds to maintain the same protection from creditors as the original homestead: 
(1) there must be a good faith intention, prior to and at the time of the 
sale, to reinvest the proceeds in another homestead within a 
reasonable time; (2) the funds must not be commingled with other 
monies; (3) the proceeds must be kept separate and apart and held for 
the sole purpose of acquiring another home. 
 
In re Binko, 258 B.R. at 517 (citing Orange Brevard, 137 So. 2d at 206).  Further, 
this Court has explained that “only so much of the proceeds of the sale as are 
intended to be reinvested in another homestead may be exempt under this holding.  
Any surplus over and above that amount shall be treated as general assets of the 
debtor.”  Orange Brevard, 137 So. 2d at 206.  Lastly, the “proceeds of the sale are 
not exempt if they are not reinvested in another homestead in a reasonable time or 
if they are held for the general purposes” of the debtor.  Id.  Because this issue 
 
 
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presents a pure question of law, the standard of review is de novo.  See Zingale v. 
Powell, 885 So. 2d 277, 280 (Fla. 2004) (“Although we take into consideration the 
district court’s analysis on the issue, constitutional interpretation, like statutory 
interpretation, is performed de novo.”). 
We do not find that Sill has violated the requirements of Orange Brevard.  In 
the instant case, Sill placed the exempt sale proceeds into a brokerage account and 
authorized Wells Fargo to use some of the funds to make investments in a variety 
of mutual funds and stocks.  In today’s economic climate, in which traditional bank 
accounts do not garner any significant amount of interest earnings, we do not 
believe placing the proceeds from the sale of a homestead in the type of safe 
investment account at issue here demonstrates an intent so different from 
reinvestment in a new homestead within a reasonable time as to violate Orange 
Brevard. 
Here, Sill placed the proceeds from the sale of the prior homestead in a 
separate account that was designated as his “homestead account.”  He thus 
manifested his intent pursuant to Orange Brevard to reinvest the sale proceeds into 
a new homestead.  Moreover, he, in fact, used the money to purchase a new 
homestead within a reasonable period of time.  Any decision contrary to the one 
we make here would require judgment debtors to place homestead sale proceeds in 
non-interest-earning mediums only—perhaps an escrow account or even a jar 
 
 
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under one’s bed—and we decline to read Florida’s homestead exemption provision 
so narrowly, especially given the liberal construction this area of Florida law 
typically enjoys.  For those reasons, we approve the Fourth District’s decision that 
Sill’s actions in this case have not eliminated his homestead protection.  We also 
reaffirm our decision in Orange Brevard Plumbing & Heating Co. v. La Croix, 137 
So. 2d 201 (Fla. 1962). 
It is so ordered. 
LABARGA, C.J., and PARIENTE, LEWIS, and PERRY, JJ., concur. 
CANADY and POLSTON, JJ., concur in result. 
 
NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION, AND 
IF FILED, DETERMINED. 
 
Application for Review of the Decision of the District Court of Appeal – 
Constitutional Construction  
 
 
Fourth District - Case No. 4D14-3049 
 
 
(Palm Beach County) 
 
Adam Jay Hodkin and Robert Nathan Pate of Padula Hodkin, PLLC, Boca Raton, 
Florida, 
 
 
for Petitioner 
 
Leslie Scott Osborne and Tarek Kirk Kiem of Rappaport Osborne Rappaport & 
Kiem, PL, Boca Raton, Florida, 
 
 
for Respondent Patrick T. Sill