Court Opinion

ID: 7361155
Source: CourtListenerOpinion
Date Created: 2022-07-27 15:02:09.782814+00
Date Added: 2024-06-11T16:20:36.064300
License: Public Domain

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                              FOURTH DISTRICT

ROSE RENDA, individually, and as Personal Representative of the Estate
   of GUISEPPE RENDA and as Trustee of THE GUISEPPE RENDA
   TRUST, RELIABLE LAND HOLDINGS I, LLC, RELIABLE LAND
   HOLDINGS II, LLC, RELIABLE LAND HOLDINGS III, LLC, and
              RELIABLE LAND HOLDINGS IV, LLC,
                   Appellants/cross-appellees,

                                      v.

                            JOSEPH PRICE,
                         Appellee/cross-appellant.

                               No. 4D21-534

                              [July 27, 2022]

   Appeal and cross-appeal from the Circuit Court for the Nineteenth
Judicial Circuit, St. Lucie County; Barbara W. Bronis, Judge; L.T. Case
No. 562017CA000595.

  Rick Kozell of Law Office of Rick Kozell, Stuart, for appellants/cross-
appellees.

   Andrew A. Harris and Grace Mackey Streicher of Harris Appeals, P.A.,
Palm Beach Gardens, and Alfred R. Bell, Jr., of Steiner, Greene & Feiner,
Port St. Lucie, for appellee/cross-appellant.

KLINGENSMITH, C.J.

    Appellant Rose Renda, in her individual and representative capacities,
appeals the trial court’s final judgment ordering an equitable lien against
her homestead in favor of appellee Joseph Price and ordering the seizure
and sale of certain commercial properties. Price also cross-appeals the
trial court rulings preventing his foreclosure of the equitable lien on Mrs.
Renda’s homestead and sustaining Mrs. Renda’s attorney-client privilege
objections. We affirm on all issues raised in both the main appeal and
cross-appeal without comment except for one: on Price’s cross appeal, we
reverse the trial court’s finding that Price could not foreclose his equitable
lien and remand for further proceedings.
    In 2016, Price was injured in a motor vehicle accident involving an
employee of Reliable Towing and Storage, Inc. (“the Debtor”). Price sued
for damages, and because the Debtor did not respond to the lawsuit, the
trial court entered default judgment against it. Following the default, the
trial court conducted a jury trial on damages, resulting in a judgment of
$10,000,000.00 in Price’s favor.

   Giuseppe Renda, Mrs. Renda’s late husband, owned and managed the
Debtor. The Debtor held two life insurance policies on Mr. Renda, one
valued at $450,000.00 from AIG and one valued at $70,000.00 from
Northwestern Mutual. During the pendency of the Price lawsuit, the
Debtor, through the actions of Mr. Renda, changed the beneficiary of the
Northwestern insurance policy to Mrs. Renda. The Debtor also attempted
to change the beneficiary of the AIG insurance policy to Mrs. Renda;
however, the transfer forms were not properly signed.

    During the pendency of the proceedings below, the Debtor also
transferred possession and ownership of four parcels of commercial real
property to four single-purpose limited liability companies: Reliable Land
Holdings I through IV. Mrs. Renda later claimed that even though she was
listed as the trustee for all four land entities, she had no prior knowledge
or understanding of these transfers because her “husband was the one
who took care of that.”

   Following Mr. Renda’s death in early 2018, the Northwestern insurance
policy paid out $70,780.45 directly to Mrs. Renda. The AIG insurance
policy paid out $453,620.06 to Reliable Towing and Transportation, Inc.,
a company now owned and operated by Mrs. Renda, which she testified
was the same company as the Debtor. Mrs. Renda transferred the AIG
policy payment to her personal bank account. The Debtor, under the
direction of Mrs. Renda, sold all its assets to a third party and received
two payments of $59,793.53 and $12,000.00. Mrs. Renda then used the
monies from the two insurance policies along with the larger check from
the sale of the Debtor’s assets to purchase a new home that became her
homestead property.

   After obtaining his judgment against the Debtor, Price moved to
commence proceedings supplementary pursuant to section 56.29, Florida
Statutes (2018), to collect on it. Price attached a complaint for fraudulent
transfer to one of his motions that also outlined his claim for equitable and
other relief pursuant to the Fraudulent Uniform Transfer Act (“FUTA”)
under both chapter 726 and section 56.29. Even though Price claimed he
was only “seeking to void the transfer of certain parcels of real estate and
certain funds” directly traceable to Mrs. Renda’s purchase of the

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homestead property, the trial court pointed out that because Price initiated
the proceedings under section 56.29 and not chapter 726, it could not
enter a money judgment. The trial court granted Price’s motions and
issued seventeen notices to appear to assets that Price sought to seize,
including Mrs. Renda’s homestead property, the four parcels of sold
commercial properties, and to Mrs. Renda as the trustee of her late
husband’s trust and as the personal representative of his Estate.

    After evidentiary hearings, the trial court entered final judgment
voiding the sale of the four commercial properties, ordering the sheriff to
seize and auction those properties, and imposing an equitable lien of
$550,000.00 on the Renda homestead based on Havoco of America Ltd. v.
Hill, 790 So. 2d 1018 (Fla. 2001). In so ordering, the trial court found that
Mrs. Renda’s conduct met the “badges of fraud” as enumerated by chapter
726 and that the transfer of funds from the Debtor to her “was made with
the intent to defraud creditors,” citing General Electric Co. v. Churly
International, LLC, 118 So. 3d 325, 327 (Fla. 3d DCA 2013). The trial court
also found the badges of fraud applied to Mrs. Renda because she was “[a]t
all times material hereto . . . an insider, owner, spouse of the owner and/or
officer of the judgment debtor and these related impleaded entities.”
However, the trial court would not permit foreclosure on the equitable lien
while the home was Mrs. Renda’s homestead.

   On his cross-appeal, Price argues Florida law permits the foreclosure
of an equitable lien, even on a homestead property, in certain
circumstances such as those presented here. Mrs. Renda counters that
an equitable lien could not be imposed on her homestead because
homestead properties are exempt from fraudulent transfer claims. On this
point, we agree with Price.

   “We use the de novo standard to review a question of law arising from
undisputed facts.” CTX Mortg. Co., LLC v. Advantage Builders of Am., Inc.,
47 So. 3d 844, 846 (Fla. 2d DCA 2010) (citing Kirton v. Fields, 997 So. 2d
349, 352 (Fla. 2008)). Under Havoco, equitable principles reach beyond
the literal language of the three homestead exceptions outlined in Article
X, section 4 of the Florida Constitution “only where funds obtained
through fraud or egregious conduct were used to invest in, purchase, or
improve the homestead.” 790 So. 2d at 1028. It is well-settled under
Florida law that homestead protections “cannot be employed as a shield
and defense after fraudulently imposing on others.” Jones v. Carpenter,
106 So. 127, 130 (Fla. 1925). As a result, “[a]n equitable lien may be
foreclosed against homestead property purchased with funds obtained by
fraud.” Sweeteners Plus, Inc. v. Glob. Supply Source, Inc., No. 6:11-cv-

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1799-Orl-28DAB, 2013 WL 6890857, at *8 (M.D. Fla. Dec. 31, 2013) (citing
Babbit Elecs. v. Dynascan Corp., 915 F. Supp. 335, 338 (S.D. Fla. 1995)).

    Our court has also allowed foreclosure on equitable liens imposed on a
homestead to prevent unjust enrichment. See Flinn v. Doty, 214 So. 3d
683, 684 (Fla. 4th DCA 2017) (citing Palm Beach Sav. & Loan Ass’n, F.S.A.
v. Fishbein, 619 So. 2d 267, 270 (Fla. 1993)) (finding the trial court did not
err in foreclosing on the equitable lien of $206,000.00 because it was
imposed to prevent unjust enrichment). “[C]ourts have recognized an
exception to the homestead protection when the property was acquired
with funds generated by fraudulent activity, and a constructive trust or
equitable lien is necessary to prevent unjust enrichment.” Sweeteners
Plus, 2013 WL 6890857, at *8.

   Here, the trial court erred in refusing to allow Price to foreclose on the
equitable lien on Mrs. Renda’s homestead. Although the trial court made
the decision to prevent foreclosure of the lien based on Havoco, that case
does not prohibit foreclosure in these circumstances, even on a homestead
property, where such property was purchased with funds obtained by
fraud. To disallow Price’s foreclosure on the homestead purchased with
funds obtained by fraud would, in essence, unjustly enrich Mrs. Renda.
See Flinn, 214 So. 3d at 684; Fishbein, 619 So. 2d at 270.

    This concept is not new. Federal courts in both the Middle and
Southern Districts of Florida have also specifically held that when a
homestead property is purchased with funds obtained by fraud, as the
trial court found that Mrs. Renda’s homestead was, then foreclosure on
that homestead is allowed. See Sweeteners Plus, 2013 WL 6890857, at *8;
Babbit Elecs., 915 F. Supp. at 338.

   Therefore, we reverse the court’s order disallowing foreclosure on the
equitable lien against Mrs. Renda’s homestead property and remand for
further proceedings. We affirm on all other issues raised in the appeal and
cross-appeal.

   Affirmed in part, reversed in part, and remand for further proceedings.

CIKLIN and CONNER, JJ., concur.

                            *         *         *

   Not final until disposition of timely filed motion for rehearing.

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