## In the



# U n ited S ta tes Co urt o f Ap p ea ls

F o rth eS e v e n th C ir cu it
N o. 08

- 1315 I N RE : F RANKG ALLO, D ebto r-A pp ellee

. A PPE AL OF : G I LL I AN A . E M ERY

A pp eal from the United S t ates Di strictC our t fo r the C entral D istricto f Illino is. No . 2:0 7-cv-02 18 2-MPM-DGB

—Mi ch ael P . M cC us key, Chief Ju dge

.
A RGUED A PRIL 7, 2009

— D ECI DE D J UL Y 20, 2009

Befo re P OSNER, R IPPLE a nd W OO D , C ircu it Judges . R IPPLE, Cir cu i tJudg e . Fr ank Gal l o i ni ti ate d a bank ruptcy p ro c eedi ng i n the U ni ted S tat es Bankruptcy Cour t for th e Cen tr alDi st r i cto fI l l i no i s unde r 1 1 U. S
. C. § 1 30 1 ets eq . H is for m er w ife, G illia n E m er y, filed a p ro of of c laim2 N o. 08

- 1315

This t ort is als o referre d to as “disparagem ent ofti tl e. ” P a lm 1 D evs . , Inc. v. R i dgdi l l & Sons, Inc. , No. 2: 08 -cv-32 2- Ft M

- DN F, 2 0 0 9 W L 51 3 0 2 7, at*4 (M .D . F la . F eb . 27, 20 0 9 ). w i th the bank ruptcy cour t forsl ander o fti tl e. See 11 1 U
. S. C. § 5 5 3
. M r . Ga l l o l a t e r fi l e d a mot i o n un der 1 1 U
. S. C. § 5 42(b), se eking an or der r equi ring M s. Em er y t o pay the bank ruptcy tr ustee the am ount that s he o w ed unde r a n I l l i no i s m ar riage di ss o l ut i o n j udg m en t. The ban krup tcy cou rt ente red an ord er d en ying M s. E m ery’s proo fo fcl ai m and dir ecting herto pay $125 ,06 2.97 to the b a nk r up t c y t r us t e e ; the di s t r i c tc o ur tl a t e r a ffi r med

. F o r the r ea so ns s etf o r thi n thi s o pi ni o n, we affi r m the j ud gm ent o fthe dist ri ct c ourt
.
I B AC KGR OUND A. I n 2 0 0 2 , F r a nkGa l l o a nd Gi l l i a n Eme ry i ni t i a t e d a divo rce pro ceedi ng i n the C i rcui t Cour t o fthe Si xth Ju d icia l C irc u it, C h am p aig n C ou n ty , Il lin ois (“Illin ois ci rcui t c o ur t ” )
. Du r i ng thi s t i me, M r . Ga l l o a l s o ha d a ba nk r upt cyacti o n pe ndi ngunde r Cha pte r 1 3 o fthe Bankruptcy Code, 11 U
. S. C. § 1 301 et seq. On J uly27, 2004, the I l l i noi s ci rcui t co urt e n ter ed a di sso l uti on o rder a wa r di ngMs. Emer y pro pe r t y o n S a nib e l I s l a nd , F l o r i da ( “the SanibelPro pe rt y”)
. The o rderspeci fi ed that M s. Em er y w as t o re cei ve the pr oper ty “fre e a nd cl ear ofany i nter est[ ofM r. Gal l o]
. ” R. 3, E x. 7 at 11. The part i esN o. 08

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Spe c i fi c al l y, the c our tor der ed Ms. Em ery to pay the ban k- 2 ru pt c y t ru s t ee : ( 1) $2 7, 08 7. 50 f or di s s i pat ed ar twork; (2) $4 3,388 .15 for the b ala nc e d u e o n a lo an ; (3) ap p ro xim ately $41, 144 f or obligati ons ow ed t o the Int ernal R even u e S er vice; ( 4) $7, 39 3. 32 i n m ar i t al c re di tc ar d debt; an d ( 5) $6 , 05 0 f or the value ofa boat re tai ned b y M s. Em ery. The ban krup tc y court granted rel ie ffrom the autom ati c s tay i n the bank ruptcy pro c ee di ng t o a l l ow t he I l l i noi s circu it cour tt o e nt erj udgm en t r eg ard ing th e d istribu tion of m arita l assets and liab ilities. Th e ban kr up t c y pr oc e e di ng w a s l a t e r di s m i s s e d v ol un t a r i l y by M r. G all o j ust prior t o the fil ing ofhis pres ent ba nkrup tc y pet i t i on. U nd er Fl orida la w , the act s ofM r. G all o’ s att orney are 3 im p u te d to M r. G a llo

. S ee Tra y lor v . S tate, 596 So. 2d 957, 979 (Fla. 199 2) ( K og an , J. , con cu rrin g in p art , d i ss e ntin g in p art) (“Flo rid a law , for exa m p le, ha s lo n g b e en settled tha t the ac ts ofanat t or ne y a re i m put ed to the c l i en ts o c om pl et el y thatthe a t t o r n e y l e g a l l y i s th e a l t e r e g o o fth e c l i e n te x c e p ti n e x t r e me ci rc u m sta n ce s . . . .”); S ta te v . D a n iels , 826 So. 2d 1045, 1047 ( Fla. Dis t
. Ct
. App. 20 02 ) ( c i t i ng Traylor concurrenc e)
. The bank ruptcy (co n tin u ed ...) stipu lated that, at t h e tim e of th e I ll inois ci rcu it court’s or d er, the SanibelPro pertyhad a v al ue o f$3 10, 000. R. 3, Ex
. 7 at 3. T h e c ou rtfurtherdi re cted M s. Em er y t o pay the b ankr up tcy tr ustee a tot alo f$1 25, 062. 97. 2 M r. Gal l o tr an sferr ed hi s inter esti n the Sanibel Pr o per tyt o M s. Em ery, but M s. Em ery f ai l ed to make a ny pay m e n t s t o th e b a n k r u p t c y t r u s t e e a s r e q u i r e d b y the I l l i noi s ci rcui t co urt’ s diss oluti on o rder

. Consequentl y, o n No v e mbe r 29, 2 0 0 4 , Mr
. Ga l l o ’ s a t t o r ne y fi l e d a l i s pendens not i ce a gainst the S anibelPro perty
. 34 N o. 08

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(
. . . c on t i nu e d) 3 c ou r tthe r e f ore f ou nd tha t, a l tho ug h M r . Ga l l o di d n oth a ve know le dg e that hi s atto rn ey w as fil ing a l is pend ens noti ce, the re wa s n o evi denc e thatthe at t or ne y a c t ed o ut s i de the s c o p e o f hi s im p lie d au th o ri ty
. In re F ra n k G allo, No. 0 5

- 9 2 345 (B a n k r. C .D . Ill. A u g . 29 , 20 0 7 ). M s. Em er y e nter ed i nto ne go ti ati ons w i th a proper ty devel oper, A dam M enkus. She cl ai m s that he offer ed h er $7 10 , 00 0 to p ur ch as e th e S an ibe l Pr o per ty, b uttha t th e sa l e fel l thr o ug h whe n the pa rtie s di sc o ve r ed th e l i s pende n s fi l ed by M r. Gal l o. On Febr uary23 , 20 05, M s. Em er y r ecei ve d a $350, 000 l oan, se cured bya m o r tg ag e o n the S an ibe lPr o per ty ; s he us ed th e proce eds to w ar d the purchase o fa hom e worth $70 5, 000. On June 2 9, 20 05, M s. Em er y obtained a def aul t j ud gm ent fro m the C ircuitCourto fthe Tw enti eth J ud i ci al C ircuit f or Lee Cou nt y, Flori d a (“Fl orida circu it court”), qui et i ngt i tl e to the S an ibe l Pr o per ty an d di sc ha r g i ng th e l i s p e n d en s. O n Sep te m b er 16 , 200 5, M s. E m er y s old the S anibelPro pertyf or$4 90, 000.

B. O n Ju n e 3 0, 20 05 , M r. G allo filed th e p re se n t a c tio n, a secon d Ch ap ter 13 ban krup tcy p r o c eed ing. A m aj or part of the fund i ng o fM r. Gal l o’ s Chapter13 pl an r el i ed upon M s. E m er y’s p ay m en t o f th e fu n d s t h at th e Illino is ci rcui t co urt had or dered herto pay M r. Gal l o. I n thi s pro ceedi ng, M s. Em er y fi l ed a pr oo fo fcl ai m f or sla n d er o f t itle u n d er Flor id a la w . See 11 U. S
. C. § 5 53
. TheN o. 08

- 1315 5 basi s forthi s cl ai m was the l i s pendens not i ce fi l ed by M r. G all o ; M s. Em ery c l ai m ed th atthe fi l i ngo fthe l i s pendens not ice re sul ted i n herl osing the o pp or tuni ty to sel l herpro pertyto M enkus. M r. G al l o sought an o rder that w oul d dir ect M s. Em er y t o pay the am ount that sh e ow ed the est ate u n d e r t he I ll inois ci rcu it court’s d iss olu tio n j u d gm en t. See 11 U
. S. C . § 542(b). M s. E m ery at tempte d t o r edu ce the a m o unts he o wed b y the am ount of dam age she susta i ned fr om the al l ege d sl andero ft i t l e . In i t s s ub s e qu e ntr ul i ng, the b a nk r up tcy cour t denie d M s. Em er y’ s proo f of cl ai m an d grante d the turnove r or der requ est ed by M r. Gal l o. The di str i ct cou rt affirm ed the ba nk rup tcy cou rt’s order. M s. E m ery filed th is t im ely ap p ea l.

II DI S C US S I ON W e review f actu al find in g s of th e ban krup tcy cou rt f orcl earer ro r and rev i ew co ncl usi ons ofl aw de nov o. In re B onnett, 895 F.2d 115 5, 1157( 7th Cir. 1989). The ul ti m at e i ss ue tha t we mustde ci de i s whethe r the b an kr u p tc y c ou rtan d t h e d i s tr ictco u rtw er e c or re c t in hol ding that M s. Em er y’ s obl i gat i on to pay the Chapter 13 tru stee u nd er the term s of th e I ll inois ci rcu it court or der s houl d not be o ff set b y the al l owance ofherpro of ofcla im f orsl ander o fti tl e a gainst M r. Gal l o. To r eso l ve thi s co ntenti on, we m ust a d d re ss two i ssues r ai sed by M s. Em er y: ( 1) wh ethershe has a val i d cl ai m f orsl ander of t i t l e a n d (2) w h et h er th e b an kr u p tc y c ou rterr ed in6 N o. 08

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M s. E m ery claim s that th ese tw o d ecision s b ind this cou rt. 4 H oweve r, the I l l i noi s c i rc ui tc our tdi d notaddr es s whatthe statu s of the Sa nib el Pr op erty w ou ld b e if M s. E m ery f a i led to com ply w ith the diss oluti on order. The F lo ri da circ uit court d ecision d oe s no t ha v e p reclu sive effect o n t h is cou rt b eca u se it w a s a d efa u lt ju d g m en t. SeeM eye r v. R igdon , 36 F. 3d 1375, 13 79 ( 7th C ir. 19 94 ) (notin g t h a t “a d efau lt j u d g m en t is norm all y not given precl usi ve effectund er the c oll ater al es topp el doctri ne because no is sue has b een ac tuall y li ti gated”) ( c i t at i on and quot at i on m ar ks om i t t ed)

. The s e c as es do n ot ad d ress the issu e b efore u s, w hich is w he the r M r. G allo com m itt ed the t or tofs l and er of title atthe t i m e hi s at t or ne y fi l ed the lis pen d en s. A s w e sha ll de m on strate in the text th at fo l l ow s, the f ac tthatM s . Em er y ha d clear titl e befor e the fi l i ng o fthe l i s pe nden s an d aft erthe Flo ri da ci rc ui tc our t ’ s qui et
- t i t l e ac t i on is not anal yti cal ly r el evant to our res oluti on of thati ss ue. o r de r i ng the t urno v e r de s pi t e he r a l l e g e d i nab i l i t y to pay th e amoun t i n que st i o n.

A. M s. Em er y s ubm i ts that M r. Gal l o com m i tte d sl ander o ft i tl e byi m pr o per l y fi l i ngthe l i s pen d en s no ti ce . The noti ce w as f al se, she cl ai m s, bec ause M r. Gal l o does not have a co gni zabl e cl ai m to the S anibelPro pertybas ed on th e m o ne y j udg m en t f r o m the I l l i no i s ci r cui t co ur t. S he obs er ves that the c ourtawarded her the S anibelPro perty “fre e a nd cl earo fa n y i nter est[ ofM r. Gal l o] ” a nd that the F l or i da ci rcui t co urt quie ted ti tl e. R. 3, Ex. 7 at 11. 4 M s. Em e r y c o nt e nd s tha tMr
. Ga l l o di d n o te s t ab l i s h that he act ed i n go od f ai th i n fi l i ng the l i s p en d en s no ti ce because he pr ese nt ed n o evi dence r ega rdi ng hi s m oti veN o. 08

- 1315 7

The parties do notdi s put e thatFl or i da l aw gove rn s 5 Ms
. E me r y ’ s s l a n d e r o ft i t l e c l a i m. f ordoi ng so and beca use he l acke d a bo na fi de cl ai m to th e S an ibe l Pr o per ty
. S pec i fi ca l l y, M s. Em ery mai ntains thatM r. G allo fi l ed the l i s pendens witho ut l ega l j us ti fi ca ti o n b ec au se , a t th e ti m e o f fi l i ng, the r e was no o ng o i ngl i ti g at i o n r eg ar di ngthe S an ibe l Pr o per ty
. S he furtherco ntends thatshe s u ffer ed dam age s be cause M enkus woul d have pai d her $710 , 000 f orthe Sanibel Pro pertyi fi t had notbee n subj ect to a l i s pendens. W e m ust decid e w hetherM r. Gal l o com m i tte d sl ander ofti tl e when he fi l ed a l i s pendens ag ai nst the S anibel Pro perty
. To e stabl i sh a cl ai m for s l ander o r dispar age m en t o ft i tl e u nd erF l o r i da l aw, a pa r tymusts ho w the 5 f ol l owing: (1) A fals eh oo d (2 ) h a s b ee n p u b lish ed , or co m m u n ica te d to a th i r d per so n ( 3) when th e d efen dant-publ i sherkno w s or re aso nabl y s houl d know that i t w i l l li kel y res ultin induci ng other s not t o deal with the pl ai nti ffand ( 4) i n f act, th e falsehood does pl ay a m ate ri al and s ubstanti al part i n i nd uci ng othe rs notto d eal w ith th e plaintiff; and ( 5) spec ialda m ages are proxi m ate l y caused as a r esul t o fthe pu bl i shed f al seho o d. P alm D evs . , I nc. v. R idgdill & Sons, I nc. , N o. 2: 08- cv- 322- FtM -D N F, 20 09 W L 51302 7, at* 4 ( M
. D. Fl a. Feb. 27, 20 09) ( quoti ng M cAllis te r v. B re akers Sevil le A ss ’n , 981 So
. 2d 56 6, 57 3 ( Fl a. Dis t. Ct. A pp . 20 08) )
. I fM s. E m er y e st ab lish es th es e e lem en ts , th e b u r d en w ou ld8 N o. 08

- 1315 sh ift t o M r. G allo t o rais e a n affirm at ive d efe n se of p riv ileg e, su c h a s g o o d fait h

. Se eRe s i de nt i al Cm tys . of Am
. v. E sc ondido Cm ty. Ass’ n , 645 S o. 2d 14 9, 15 0 ( Fl a. Dis t. Ct. App. 1 99 4)
. I fM r . Ga l l o , i n tur n, m ee ts hi s bur den, the burden the n wo ul d s hi ftb a c kt o Ms. Eme r y t o p r o ve ac tu al m alic e. Seeid

. W hetherM r. G al l o acte d i n goo d fa i th is a qu es tio n of fac t. Se eAl l i ngto n To w ers Condo. N
. v. A l l i n g t o n To w e rs N. , 4 1 5 S o . 2 d 1 1 8 , 1 1 9 ( F l a . Di s t
. Ct
. App
. 1982 ). W e f i r st m u st co n sid er w h et h er th e lis p en d en s c on st itutes a f al seho od. The S up re m e Cour t o fFl or i da h as sai d that “ [ t] he purpose o fa noti ce o flis p endens i s t o al er tc r e d i t o r s , p r o s p e c t i v e p u r c h a s e r s a n d o th e r s t o t he f act that the ti tl e to a parti cul ar pie ce of re alp ro perty i s invol ved i n l i ti gat i on. ” S & T B uild ers v. G l o be P rop s. , 944 S o . 2 d 3 0 2 , 3 0 3 n . 1 ( F l a . 2 0 0 6 ) ( c i t a t i o n a nd quo t a ti on m ar ks om itt ed ); see also Fl a. St at
. § 4 8. 23 ( 20 08 )
. Li s pen den s “p ro tect [ s] the pla i nti fffro m i nter veni ng l i ens that coul d i m pai r any pr oper ty ri ghts claim ed and al so f ro m possibl e e xti ngui shm ent o fthe pla i nti ff’ s unrecor ded e qu i t ab l e l i en. ” Chiu s ol o v. Ke nne dy, 61 4 S o. 2d 49 1, 49 2 ( Fl a. 19 93)
. I t i s pro per w here “the pro ponent ca n est ablish a fair n ex u s b et w ee n th e a p p ar en t l e g a l o r eq u ita b le ow n er sh ip of th e p ro p er ty an d th e d isp u te em b od ied in the l aw sui t. ” Id. M s. Em er y m ai ntai ns thatthe l i s pendens not i ce was fals e b ec au se M r. G allo d id n o t h av e a n eq u ita b le i nt er es t i n the S an ibe l Pr o per ty
. The t r an sfero fthe Sanibel Pro perty, as w el l as the paym ent to th e b ankr u p t c y t r u s t e e , b o th w e r e g o v e r n e d b y th e s a meN o. 08

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A n out- of

- st ate court doe s not have in rem j uris dicti on ov er 6 p ro p erty in F lorid a, altho u g h i t m ay p lace a con stru ctiv e tru st o n s u ch p ro p er ty
. H i rchert v. H i rchert F am i ly Trust, 988 So. 2d 63, 65 ( Fla. D is t. Ct. A pp . 2008)
. Because “[ t] he im posit io n o f an equi t abl e l i eni s c ons i der ed a n i n rem act ion, ” an Il lin o is c o urt (co n tin u ed ...) d issolution ord er. A t the tim e the I ll inois c ircuit cou rt enter ed thi s o rder , it n ote d that the al l oca ti on o fm ar i tal pr o per t y wa s “ u n e q u a l ” a n d f a v o r e d Ms
. E me r y, b ut note d that “ the inequity o fthe distributi on” w oul d be “s om ew h at of f se t” by th e p ay m en ts M s. E m er y w ou ld mak e t o the b a nk r up t c y t r us t e e t o fun d Mr

. Ga l l o ’ s Ch a pter13 Pl an o fReor gani zati on in th e then- pend i ng ba nkruptcy, R. 3, Ex
. 7 at 14; the paym ent to th e trust ee w as ne cess ary to m ake th e d istribu tion of asset s m ore equi tabl e. Th e m on ey that M s. Em er y o w ed M r. Gal l o, th e r e f o r e , wa s v e r y c l e a r l y r e l a t e d t o th e a wa r d o fthe SanibelPro perty
. By N ove m ber20 04 , M r. Gal l o had c om p lied w ith th e o rd er by tra n sfe rri n g h is in te re st in th e S a n ib e l Prop erty to M s. E m ery; how ever, M s. E m ery ha d no t s a t i s fi e d he r r e s po ns ib i l i t i e s un de r the o rder because she had fa i l ed to pay the b ankr up tcy tr ustee $1 25 , 06 2. 97
. M r . Ga l l o ha s ane qui tabl e i nt er es t i n the S an ibe l Pr o per tya nd c o ul d ha ve s o ug hta l i en on it in a F l o r ida stat e co ur t as a r emedy f o r M s. Em ery ’ s no ncom pli ance with the diss ol uti on j ud gm en t. Se eWol k v. Le ak, 70 S o. 2d 49 8, 50 1 (F l a . 1 95 4) (a ffirm in g c irc u it cour t’ s deci si on t o p lace an equi tabl e l i en o n the f or m er husba n d ’s p ro pertywh er e the f or m erhusband owed ali m ony and child su p p ort un d er an O hio d ivorce d ecree). 610 N o. 08

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(
. . . c on t i nu e d) 6 wou l d n oth a ve a utho r i t y t o pl a c e a n equit abl e l i e n onF l or i da pro per t y. In reSco tt, 3 4 7B .R . 91 7, 91 9 (B a n k r. M .D . F la . 20 0 6 ). H oweve r, th e I l l i noi s c i rc ui tc our tc oul d re ndera j udgm en t affecting ind irectly the Sa nib el Pr op erty b eca u se it h ad jurisdi c t i on ove r both the par t i es t o the di s s ol ut i on and the p ro p er ty se tt le m en t a ct io n in Ill in o is, s e e Ia nna z z o v. St a ns o n, 927 S o . 2 d 10 0 5 , 10 0 7(F la . D ist . C t. A p p . 20 0 6 ). S ee al so F a ll v . E a st in , 215 U.S. 1, 8 (1 9 09) ( “A court ofequity, having authority to ac t upon the person , m ay i ndi re c t l y a c tupon re al e s t at e i n a nother s ta te, thr oug h the ins tr um ental ity ofthi s authority ov er th e p er so n .”). M s. Em ery a l so s ubmi ts tha t M r . Ga l l o fi l ed th e l i s pe nd e ns a t a t i me whe n the S a nib e l Pr o pe r t y was not the s ubj ect ofl i ti gat i on. S he m ai ntai ns that, under F l o r i d a l a w, a l i s p e n d e n s ma y n o tb e f i l e d i n s u c h c i r c u mst an c es . Th e b an kr u p t c y c ou rtto ok th e v iew th at “it was a l to g ethe r po ss ibl e th atl i ti g at i o n c o ul d ha ve e nsu ed ” in th e Illino is c irc u it c ou r t, a n d th at M r. G allo co ul d ha ve s o ug htt o r es cind the trans fero ft i tl e o fthe Sa n ibe l Pr op er ty
. In re G allo , N o. 05 -92 34 5 (B an kr . N .D . I ll. A ug . 29, 2007 ). A s we have note d, the p u rp ose o fl i s pendens i s t o al er t o ther s t o t h e f act that the t i tl e t o a pi ece ofr eal proper ty i s the subj ect ofl i tiga tio n . See S & T B uild ers , 944 So
. 2d at30 3 n. 1. Furtherm or e, Fl or i da St atute § 4 8. 23( 1) ( a) ( 2008 ) st ate s: N o a c tio n in a n y of t h e s ta te or f ed er al c ou rt s in th is sta te oper ate s a s a l i s p endens on any rea l or perso nal proper ty i nvol ved ther ei n orto be affected ther ebyN o. 08

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This s ub se ct ion has been am en ded , effect ive J uly 1, 2009. It 7 n o w re a d s: (1)( a) A n a ction in an y of the state o r fed era l co u rts in this st ate o p er a tes as a l is pend ens on any real or pers onal p ro p erty inv olv ed ther ein o r to b e affected ther eb y on ly if a n ot i c e o fl i s pe nd e ns i s rec orded i n the o ffi c i a l r e c or ds ofthe county w here the prop erty is locate d and s uch notic e has no te xpi re d purs uan tt o su b sect i on ( 2) or be enwithdr a wn o r di s c ha r ge d. F la . St a t. § 48 .23 (W es t Ju ly 1, 2 0 0 9 ). u n til a n ot ice of th e c om m en c em en t o f th e a c t i on is record ed i n th e office ofthe clerk of th e circuit c o u rt ofthe county w here t h e pr oper ty i s, wh i ch noti ce co nt ains the na m es o fthe pa r ti es , th e ti m e o fi ns ti tu
tio n of th e a c tio n , t h e n am e o f th e c ou rtin w h ich it i s pending, a descri pti on o fthe proper ty in volv ed or to be a ffecte d, and a st ate m ent o fth e r el i efso ught as to the pr oper ty. 7 W e d o n otbe liev e t h at th is lan gu ag e a llow s fo r a lis p en d en s n ot i c e t o b e filed ba se d on th e m er e p os sib ility of fut u re li t i ga tio n . Seegene rally51 A m . J ur. 2d Lis Pendens § 5 0 (ob se rvi ng tha t in so m e s tat es, “a not i ce o f l i s p e n d e n s fi l e d b e f o r e th e c o mme n c e me n t o ft he ac t i o n is a n u llity ”). M or eo ve r, th er e a re ap p ar en tly substa ntial const ra i nts under Fl or i da l aw as to wh en pr o per tyc anbe c o ns i der ed su ffi ci en tly r el at ed to the u n d e r lying l iti gation to be the p rop er su bj ect ofa l i s pendens not i ce. I t a pp ear s t o be e stabl i shed that a l i s pen den s no ti ce c anb e issued t o g i ve no ti ce o fthe12 N o. 08

- 1315 pen den cyo fa n a ct i o n f o r di ssolut i o n o fa mar r i ag e an d e q u ita b le d ivis ion of p ro p er ty
. S e e S e l ig m a n v . N. A m. M or tgageCo. , 781 So. 2d 11 59, 11 63 ( Fl a. Dis t. Ct. A pp . 20 01) ( hol ding that w i fe’ s no ti ce o fl i s pendens o n m ar i tal proper ty w as proper l y fi l ed and gave the w i fe pr i or i ty o v e r a sub se q u e n t l y fi l e d mo r t g a g e )
. I ti s l e s s c l e a r, h o weve r, thata l i s pend ens i s the pro per devi ce fora spouse to g ive noti ce t o thi rd part i es ofi ntent to enf or ce a n equi ty paym ent a gainst o therm ar i talpro pertyawarded w ith cle ar tit le t o th e o th er sp ou se . S e e Br own v . Brown , 73 2 So . 2d 11 69 , 117 1 (F la. D ist . C t. A p p . 199 9 ) ( “A n d w h ile th e appe l l an t f ai l ed to m ak e th e ful l equi ty p aym en t speci fi ed i n the agr eem ent, a l i s pe nde ns does not per ta i n upo n a pay m en t whi chi s m er ely r el at ed to b ut whi c h do e s no t a ffe c t the a l i e nab i l i t y o f the s ubj ect prop er ty
. ”)
. T he r ul e ar ti cul at ed i n Br own se em s t o a p p ly when th e act i o n s ee k s to e nf o r ce a f o r ei g n j udg m en t aga i nst pr oper ty i n Fl or i da. S ee To rt u v. To rt u , 43 0 S o. 2d 531, 53 2 ( Fl a. Dis t. Ct. A pp . 19 83) ( “[ A ] c om p l ai nt wh i ch w i l l n o t s up po r t a c l a i m a g a i ns t the s pe c i fi c pr o pe r t y at i ssue cannot p ro vi de a b asi s forty i ng i t up by fi l i ng o f no t ice of l i s pe nde ns . ”) ( ci tat i ons and quotati on m ar ks om itted ). H ow ev er , eve n if w e a ss u m e t h at th e n ot ice of lis pend ens was filed i n er ro r, thatco ncl usi on does not es ta b lish s l a n d er of tit le. See A lling to n To w ers , 41 5 S o. 2d at 119. S l ander o fti tl e i s s ubj ect to an affi rm ati ve defe nse of g oo d fait h

. Id. M r. Gal l o ass er ted such a defense w hen he c l ai m ed th athe had a c r edibl e equi tabl e r i g hti n the Sa n ibelPro perty, a ri ght he was att em pti ng to enf or ce i n the I l l i noi s ci rcui t co urt and subj ect to satisfacti onN o. 08

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I n c om m en t i ng o n the s c ope ofthe pr i vi l eg e c re at ed by a g ood 8 f aith defe nse to a sl and er of titl e ac ti on, one Flori da court relied up on Pro sser’ s L aw of To rts: A riv al claim an t to the p ro p erty d ispa rag ed , in h is cap acity a s s u c h, i s r e c o g n i z e d a s p r i v i l e g e d t o a s s e r ta b o n a fi de c l ai m by a ny a ppro pri at e m ea ns ofpubl i c at i on . . . [
. ] The privil ege is unif orm ly hel d, how ever, to be a quali fie d on e, a nd i ti s de fe a t e d i fthe def en da nt ’ s m ot i ve i s s ho wn t o be s ol el y a des i re t o do har m , or i fi ti s f ound thathe di d not hon es t l y be l i eve hi s s t at em en t s t o be t ru e, or thatthe pu blic ati on of the st atem ent w as exc es si ve . A few cas es have gon e fur the r and h ave s ai d that he m us tha ve re as ona bl e g rounds f orbe l i e vi ng h i s di s pa r a gi ng wor ds t o be the tru th; b u t the b etter view , w hich is no w m or e g en era lly acce p ted , is that a g en u ine b elief i n th eir tru th is suffi cien t, how ever unf ound ed or unreasonable itm ay be. Al l i ng t o n To we r s Co nd o . N. v . Al l i ng t o n To we r s N. , 415 So. 2d 118, 119- 20 (F la. D is t. Ct. Ap p. 1982) ( quoting W
. Pross er, Law o f T o rt s, § 1 2 8 (4t h ed . 19 7 1 )) (alt er a tio n in o ri g in a l). th ro u gh a lien on th e Sa n ibe l P ro p er ty
. Cf. Re s i de nt i al C o mmu n i t i e s o

f A m. , 64 5 S o. 2d at15 0 ( hol ding that appell ee did notact w ith actual m al i ce b ecause , al though i tdi d n o th a v e a utho r i t y t o u ni l a te r a l l y e na c ta n a men dm ent t o a c ondom i ni um decl ar ati on, i t had a goo d fa i th be l i efthati t ac te d pe r m i ss ibl y )
. The r e i s, mor eo ve r, no evi dence thathe a cted with actualm alic e when he fi l ed the no ti ce. W e be l i eve thatt he bank ruptcy cour t was

8 o n s o l i d g r o und, a fte r h ear i ngthe wi tn es se s an d ev a luating the evid en ce, to d eterm ine th at M r. Ga ll o’s g o o d f ai thha d b ee n e st ab l i sh ed an d tha t th er e w as no showing ofm al i ce o n hi s par t.14 N o. 08

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A t trial, M s. E m ery testified tha t th ere w as a w ritten con tract, 9 al thoughathe r depos i t i on s he ha d t es t i fi ed thats he di d not rem em b er a w ritten con tract. A t trial she testified a s f ollo w s: BY MR. B ADD LE Y: Q
. A nd you do n’ t rem em ber ther e bein g a contract with M r. M en ke s , do yo u? A
. I rem em b er ac tu ally ther e w as a co ntr act, bu t I cou ld n’t find it. Q. Okay, wel l , I ’ m goi ng t o re ad f ro m page 34 , be gi nni ng on li ne 25

— li ne 23. “D id yo u sign a con tract? A
. W e didn’ t us e re al es tat e agents
. ” An d the n I s a i d,

“ M y qu es tio n is w h et h er h e si g n ed a c o n tr a ct,” An d y ou a ns we r e d: (co n tin u ed ...) T he ban krup tcy cou rt also con c lud ed that M s. E m ery ha s not carried he r bu rd en of estab li sh ing, by a p rep ond erance o fthe evi dence, thatsh e has s uffer ed dam age s fro m th e s ta te m en t in th e lis p en d en s n o t i c e . On th is re cor d, w e bel i eve that the bankr up tcy cour t’ s dete rm i nati o n mustb e su st aine d. M s. Em ery c l ai m s th at M en k us offe re d h er $7 10 ,00 0 fo r th e sale of he r h om e, b u t th atth is opportunity was l ostbec ause ofM r. Gal l o’s f al se sta tem en t th atthe S an ibe l Pr o per tywas s ubj ec t to o ng oin g l i ti g at i o n. As the b an k r upt cyc o ur t no te d, ho wev er, s he has no t be en a b le t o produce a w ri tte n contr act w i th re spect to that tran sacti on. Fur ther m or e, the evi dence 9N o. 08

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(
. . . c on t i nu e d) 9

“ I d o n ’t re m em b er a c o n tr a ct .” Did I r ea d thatc or re c t l y? A
. Y ou rem em

— ye s , you re ad i tc or re c t l y. Tr. ofH eari ng on D ebtor’ s M oti on f or Turnov er at32. i n the re cor d sugges ts stro n gly thatany such offer w ou ld h ave be en f ar i n ex cess of th e Sanibel Pro p e r t y’s val ue. M s. Em er y so ld i t in Se ptem ber20 05 f or$4 90, 000. T he record show s tha t, in Febru ary of th at year, M s. E m ery had secur ed a m or tgage of$3 50, 000 on the S anibel Pr op erty d esp ite the li s p en d en s notice. Th e d istri ct cou rt aptl y c hara cter i zed M s. Em er y’ s proo f o fdam age s a s “u nc onv inc in g,” an d w e agree w ith th e d istri ct cou rt’s con clusion that the d ecision of th e ban krup tcy cou rt mus tb e s us t a i ne d. W e a l so see n o basi s forawardi ng at torneys’ fees to M s . Eme r y f o r h e r a c t i o n t o qui e tt i tl e i n the F l o r i da cour ts. Si nce s he has not est abl i shed a pr i m a f aci e ca se for sla n d er of tit le in th is b an kr u p tc y a c tio n, sh e c er ta in ly c an n otes ta b lish a rig h t t o a tt or n ey s’ fe es o n th e b as is of t h is liti g at ion . N or d o w e b elie ve th at th e d efa u lt j ud gm ent t o quie t t i tle i n the Fl or i da ci rcui t co urt can be dee m ed a b asi s for h erse eking at torneys’ fees her e. She has o ffer ed no pro ofthatthe Flori da cour t a w ar ded thos e fees . M or eov er, herdam age s w ou l d be l i m i ted to th e amoun t o fa s ur ety b o nd a nd the r ec o r d c o nt ains no evi dence ofthe exi ste nce o fsuch a bond o r i ts am ount. See S & T

B uild ers, 94 4 S o. 2d at30 5-0 6.16 N o. 08

- 1315 B. M s. Em er y a l so subm i ts that the b ankr up tcy cour t e rr ed i n g r antingM r . Ga l l o ’ s m o ti o n f o r tur no ve r b ec au se the co ur t f ai l ed to e st ab l i shth at sh e was abl e to make the p ay m en t . M s. E m er y m ain ta in s t h at sh e h as n o t an gib le fu n d s a va ilab le a n d th at th e re al e st at e s h e o w n s in Fl or i da i s e xem pt from cr edi tor s under the F l or i da hom est ea d e xe m pti o n. T he ban krup tcy court prop erly gran ted M r . G all o’s m ot ion for t u rn ov er . I t i s u n d isp u te d th at th e Illino is circuit cou rt’s dissolution ju d g m e nt i s a vali d final order. See 11 U
. S. C. § 5 42(b) ( “an e nti ty that owes a debt that i s p r o p er ty of th e e st at e a n d th at is m at u re d , pa ya b le on dem and, orpayab l e on or der, shal l pay such debt t o, o r on the o rder o f, t he trustee ”)
. M or eov er, M s. Em er y has f ai l ed to e st ab l i shtha t th e ba nk r upt cyc o ur t ha d a ny o bl i gation to e ns ur e he r abi l i tyt o pa y the j udg m en t bef o r e g r a nt i ngthe turno v e r mo t i o n. I fthe b a nk r up tcy c o u r tl a t e r a t t e mp t s t o h o l d Ms
. E me r y i n c i v i l c o nt e mpt f orf ai l i ng t o com plywith i ts or der, then M s. Em er y c an pu t for th ev i dence thatshe att em pted to com plywith the o rder, but l acke d the fi nanci alr eso urces to do s o. See A m . F l e tch er M o rtga ge C o . v. B a ss , 68 8 F
. 2d 513, 51 7 ( 7th Ci r . 1 98 2) ( “T he di st r i ctc o ur t m ayfi nd a de fen dan t i n ci vi l co nt empt i f he ha s no t be en r ea so na bly di l i g en t and energe tic i n att em pti ng to acc om pli sh wh at w as ord ered

. ”) ( citation an d qu otation m arks om itted ). M s. Em er y’ s a tte m pt t o rai se the ho m est ead exem pti on i s prem atur e. A t thi s ti m e, the bankr up tcy cour t ha s n ot at t e mpt e d t o pl a c e a l i e n o n M s . Eme r y ’ s ho m e o r toN o. 08

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S ee O ra n g e B re v a rd P lu m b in g & Hea tin g C o . v . L a C ro ix , 13 7 S o. 10 2d 2 01 , 20 4 ( Fl a. 19 62 ) ( not i ng thatthe Fl or i da Con s t i t ut i on hom es t ea d ex em pt i on’ s “d es i gn a nd pur pos e i s t o be ne fi tthe d eb tor b y secu ring to him his ho m estead b ey on d all liab ility fro m f o r c ed sa le u n d er p ro ce ss o f an y co u rt ” ); R os sa no v. Bri t es m i l e, Inc. , 919 So. 2 d 5 5 1 , 552 ( Fla. D is t. Ct. Ap p. 2005) ( “ [ T] he pr oc ee ds o fa vo l un t a r y s a l e o fa h ome s t e a d t o be exem p t fro m th e claim s of cred itors just as th e ho m estead itself is ex em pt i f, and on ly if, the vend or show s, by a prepond erance o f the evidence an abi ding go od f aith int enti on prior t o and at the t i m e o fthe sal e o fthe h ome s t e a d t o r e i nv e s tthe pr oc e e ds ther eofi n a n o ther hom es tead w ithin a r eas onab le ti m e. ”) (ci ta tio n s a n d q u o ta tio n m a r k s o m itt ed ). Bu ts eePal m Beac h S a v . & L o a n A ss ’n v . F ish b ein , 6 1 9 S o. 2 d 2 6 7, 2 7 0 ( Fl a . 1993) ( noti n g t h a t the hom es tead ex em ption s hould not be applie d w h er e t h e h o m eo w n er ac te d fra u d u le n tly ). SeeWi s. C ent
. , Lt d. v. Shannon , 539 F. 3d 751, 759 ( 7th Cir. 2008) 11 ( ob s e r vi ng tha t ripe ne s s “ i s pr e di c a t e d o n the c e nt r a l pe r c e ption
. . . t h a t cou rts sho u ld no t ren d er d ecision s ab sent a genuine need to r es olve a real dispute” and furthe r noti ng that “[c]ases are unr ip e w he n th e p arties p oin t on ly to hy p oth etical, sp ecu lativ e, or illuso ry d ispu tes as o p p osed to actu al, con crete c onfl i c t s ”) ( c i t at i ons an d quo t at i on m ar ks om i t t ed) ( al t er at i ons in o ri g in a l). force h e r t o se llher hom e to satisfy th e turn over ord er. 10 C on se q u en tly , w h et h er th e h o m e s te ad ex em p tio n is a pp l i c ab l e t o M s. E m er y i s a n i s s ue tha ti s n o ty e tr i pe f o r r e v i e w. 1118 N o. 08

- 1315 Conclusi on Forthe f or ego i ng r eas ons, the j ud gm ent o ft h e d i str i ct c o ur ti s a ffi r med

. A FFI RMED

7- 20- 09