Court Opinion

ID: 4201198
Source: CourtListenerOpinion
Date Created: 2017-09-05 17:08:59.097966+00
Date Added: 2024-06-11T07:46:58.981350
License: Public Domain

IN THE DISTRICT COURT OF APPEAL
                                        FIRST DISTRICT, STATE OF FLORIDA

SUSAN S. KENNEDY,                       NOT FINAL UNTIL TIME EXPIRES TO
                                        FILE MOTION FOR REHEARING AND
      Appellant,                        DISPOSITION THEREOF IF FILED

v.                                      CASE NO. 1D16-4708

RES-GA LAKE SHADOW, LLC,
LAKE SHADOW LIMITED,
LLC, AND WILLIAM G.
KENNEDY,

      Appellees.

_____________________________/

Opinion filed September 5, 2017.

An appeal from the Circuit Court for Walton County.
Thomas R. Santurri, Judge.

Robert E. McGill, III, of Robert E. McGill, III, P.A., Destin, for Appellant.

Kyle S. Bauman and Jeffrey L. Burns of Anchors Smith Grimsley, Fort Walton
Beach, for Appellee RES-GA Lake Shadow, LLC.

No appearance for Appellees Lake Shadow Limited, LLC, and William G. Kennedy.

     ON APPELLEE’S MOTION FOR REHEARING AND CLARIFICATION

      We grant in part Appellee RES-GA Lake Shadow, LLC’s Motion for

Rehearing and Clarification, withdraw our previous opinion issued on June 23, 2017,

and substitute the following opinion in its place.
PER CURIAM.

      Susan S. Kennedy appeals an order denying her motion to vacate a writ of

execution and sheriff’s deed issued on her Panhandle condominium. RES-GA Lake

Shadow, LLC (RES-GA), brought proceedings supplementary to execution related

to a money judgment against Ms. Kennedy’s former husband. Without impleading

Ms. Kennedy into the case, RES-GA received a writ of execution and sheriff’s deed

giving it a one-half interest in a condominium that Ms. Kennedy had previously been

awarded in the divorce. We reverse for due process-related reasons.

                                         I.

      In February 2014, RES-GA received a $5 million judgment in Georgia against

William G. Kennedy. At the time, Mr. Kennedy was married to the Appellant Ms.

Kennedy, but they divorced in Alabama seven months later in September 2014.

RES-GA moved to domesticate its Georgia judgment against Mr. Kennedy in

Florida. And it also instituted supplementary execution proceedings directed at Mr.

Kennedy’s interests in Florida, including a Sandestin condominium that he had

previously owned with his wife Ms. Kennedy as tenants by the entirety. In the

divorce, however, the final decree awarded Ms. Kennedy the condo as part of its

wider distribution of ten real property interests that the Kennedys had owned.

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       In January 2015, after a hearing in the supplementary execution proceedings,

the trial court approved RES-GA’s request to consider Mr. Kennedy as part owner

of the Sandestin condo. RES-GA’s argument pointed to the Kennedys’ final divorce

decree as the basis for claiming that Mr. Kennedy still possessed a one-half interest

in the property as tenants in common with Ms. Kennedy. The court agreed with RES-

GA, converted the property to a tenancy in common, and permitted RES-GA to levy

on Mr. Kennedy’s apparent one-half interest in the condo. In April 2015, the court

issued a writ of execution and authorized a sheriff’s deed sale that ultimately

conveyed RES-GA a right, title, and interest in the condo. Through all of this, Ms.

Kennedy wasn’t made a party to the supplementary execution proceedings or

provided notice of it, even though the divorce awarded her the condo and she

possessed a substantial interest in the property.

       One month after the sheriff’s deed sale, Ms. Kennedy intervened to set aside

the writ of execution and vacate the deed. She appealed after the court denied her

request for relief.

                                           II.

       Ms. Kennedy argues on appeal that she should have been notified and

impleaded into the supplementary execution proceeding before the trial court issued

the writ of execution and sheriff’s deed affecting the title to her condo. She is correct.

Supplementary execution proceedings are designed to be “equitable in nature.” Biel

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Reo, LLC v. Barefoot Cottages Dev. Co., LLC, 156 So. 3d 506, 508 (Fla. 1st DCA

2014) (citing Ferguson v. State Exch. Bank, 264 So. 2d 867, 868 (Fla. 1st DCA

1972)). After a party initiates proceedings supplementary, a creditor may pursue

assets held by the debtor, assets of the debtor held by another, or assets that have

been fraudulently transferred to another. See § 56.29, Fla. Stat. But the rights of any

third party interest-holders must be accounted for by impleading them into the

proceeding and allowing them to defend their interests. Biel Reo, 156 So. 3d at 509.

“It is well-settled that a party holding a claim adverse to both plaintiff and defendant

must be brought into supplementary execution proceedings as a third-party

defendant and given a full and fair opportunity to be heard before any adverse order

may be entered.” Sanchez v. Century Everglades, LLC, 946 So. 2d 563, 565 (Fla. 3d

DCA 2006) (citing Ryan’s Furniture Exchange, Inc. v. McNair, 162 So. 483, 487

(Fla. 1935)).

      No rights of such third parties should be adjudged to be affected,
      impaired, or finally cut off by any order of court made in such
      proceedings supplementary to execution, unless such third parties have
      been first fully impleaded and brought into the case as actual parties to
      the proceeding, and, as such, given an opportunity to fully and fairly
      present their claims as parties entitled to a full and fair hearing after the
      making up of defini[te] issues to be tried, and not as mere spectators or
      bystanders in the cause.

State v. Viney, 163 So. 57, 60 (Fla. 1935) (emphasis in original).

      In this case, RES-GA submitted the Kennedys’ Alabama divorce judgment

for the trial court’s review in the supplementary execution proceeding in support of
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its argument that the Kennedys owned the condo as tenants in common. See

§ 689.15, Fla. Stat. Foreign judgments like these are typically entitled to full faith

and credit. See Farley v. Farley, 790 So. 2d 574, 575 (Fla. 4th DCA 2001). In RES-

GA’s view, the statute rendered the Kennedys tenants in common with respect to the

condo after their divorce, with Mr. Kennedy’s half-interest subject to its levy. But

what RES-GA’s argument missed were explicit terms within that same divorce

decree awarding Mr. Kennedy’s interest in the condo fully to Ms. Kennedy: “The

Wife shall be awarded the following real properties, subject to any outstanding

mortgages: [the Sandestin Condo], Destin, FL. . . . The parties shall execute all

documents necessary to carry out the terms of the Agreement. . . . This Agreement

shall become effective upon the date of execution hereof as evidenced by the parties’

signatures heron.” Because Ms. Kennedy was awarded the condo in the September

2014 divorce decree, the trial court’s 2015 orders in the supplementary execution

proceeding should not have impaired her ownership interest without first bringing

her into the case as a third-party defendant with a full and fair opportunity to be

heard.

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                                         III.

      For these reasons, we REVERSE and REMAND with directions to vacate the

writ of execution and the sheriff’s deed as to the Sandestin condo, and for additional

proceedings consistent with this opinion.

WETHERELL, OSTERHAUS, and M.K. THOMAS, JJ., CONCUR.

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