Court Opinion

ID: 4550098
Source: CourtListenerOpinion
Date Created: 2020-07-22 15:02:45.900936+00
Date Added: 2024-06-11T13:03:14.141879
License: Public Domain

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                              FOURTH DISTRICT

            UOWEIT, LLC, a Florida limited liability company,
                              Appellant,

                                     v.

             THOMAS W. FLEMING, ROBIN FLEMING, and
               CARLTON FIELDS JORDEN BURT, P.A.,
                           Appellees.

                               No. 4D19-270

                              [July 22, 2020]

  Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm
Beach County; G. Joseph Curley, Jr., Judge; L.T. Case Nos.
502011CA003242XXXXMB and 502018CA008513XXXXMB.

   Daniel A. Bushell of Bushell Law, P.A., Fort Lauderdale, for appellant.

   Dean A. Morande and Michael K. Winston of Carlton Fields, P.A., West
Palm Beach, for appellee Robin Fleming.

KUNTZ, J.

    A creditor, Uoweit, LLC, holds a judgment against debtor Thomas
Fleming.    To collect on the judgment, it filed a post-judgment
“supplemental complaint” to set aside purported fraudulent transfers of
real property.      The circuit court found that “the statute of
limitations/statute of repose had expired” and dismissed the complaint
with prejudice. We affirm.

                               Background

   According to the supplemental complaint, the debtor defaulted on
mortgage payments for real property. When he defaulted, Steelers Trust
2010-1 sued him to foreclose a mortgage on 50 acres of farmland. Steelers
Trust 2010-1 then assigned its interests to Steelers REO VII, LLC.

   Two years later, the circuit court entered an agreed final judgment of
foreclosure against the debtor. The final judgment ordered the 50 acres to
be sold at a foreclosure sale and retained jurisdiction to enter a deficiency
judgment. Steelers REO purchased the 50 acres at the foreclosure sale
and later sold it to Lornco Farms, LLC. Steelers REO also sold Lornco
Farms its right to seek a deficiency judgment.

  Lornco Farms obtained a deficiency judgment against the debtor for
$587,451.72. But Lornco Farms later assigned the deficiency judgment to
Uoweit.

   Years before the entry of the foreclosure judgment, as part of the
debtor’s divorce from his now-former wife Robin Fleming, he deeded his
interest in a separate, adjacent 350-acre parcel of real property to his
former wife. The supplemental complaint alleged that, despite the divorce,
the couple continued to cohabitate, and the debtor continued to control,
manage, and operate the property.

   Over seven years after the debtor deeded the 350-acre parcel to his
former wife and over one year after the creditor acquired the deficiency
judgment in the foreclosure action, the creditor filed a supplemental
complaint against the debtor’s former wife as an impleaded third-party
defendant. The creditor sought to: set aside allegedly fraudulent transfers
from the debtor to his former wife, impose a constructive trust over assets
transferred to the former wife, and obtain money damages.

    The former wife moved to dismiss the supplemental complaint. In her
motion to dismiss, she argued that the right to challenge the transfer of
real property to her in the divorce expired two years before the creditor
filed the supplemental complaint.

    The circuit court found that “the statute of limitations/statute of repose
ha[d] expired.” The court cited National Auto Service Centers, Inc. v. F/R
550, LLC, 192 So. 3d 498 (Fla. 2d DCA 2016), and found that “[t]he statute
of repose or more aptly described, the ‘one year savings clause’ under the
Uniform Fraudulent Transfer Act was triggered by the sale which occurred
in April 2017.” Because the creditor did not bring the claims within a one-
year period, the court found the claims were barred and dismissed the
complaint.

                                  Analysis

   The creditor argues that section 726.110, Florida Statutes (2018), is
inapplicable to proceedings supplementary under section 56.29, Florida
Statutes (2018). We disagree and affirm.

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   Proceedings supplementary are post-judgment proceedings conducted
within the original proceeding. The process “allow[s] for a judgment
creditor ‘to ferret out what assets the judgment debtor may have or what
property of his others may be holding for him, or may have received from
him to defeat the collection of the lien or claim, that might be subject to
the execution.’” Longo v. Associated Limousine Servs., Inc., 236 So. 3d
1115, 1118 (Fla. 4th DCA 2018) (quoting Young v. McKenzie, 46 So. 2d
184, 185 (Fla. 1950)).

   Section 56.29 governs a proceeding supplementary, but the statute
“does not regulate this procedure in detail, . . . and its application in the
real world can become messy.” Nat’l Auto Serv. Ctrs., Inc., 192 So. 3d at
502.

   Historically, a judgment creditor could start proceedings
supplementary for the life of the judgment. See Biel Reo, LLC v. Barefoot
Cottages Dev. Co., LLC, 156 So. 3d 506, 510 (Fla. 1st DCA 2014). Courts
characterize proceedings under section 56.29 as “post-judgment
proceedings that permit a creditor to effectuate a judgment lien already
existing[,] . . . not independent causes of action,” and a section to which
outside statutes of limitation or repose do not apply. Zureikat v. Shaibani,
944 So. 2d 1019, 1022–23 (Fla. 5th DCA 2006); see also Young, 46 So. 2d
at 185–86; Ferre v. City Nat’l Bank of Miami, 548 So. 2d 701, 703 (Fla. 3d
DCA 1989).

    But claims brought under chapter 726, the Uniform Fraudulent
Transfer Act (“UFTA”), have a shorter statutory period before the claims
are extinguished.     Section 726.110, Florida Statutes (2018), titled
“[e]xtinguishment of cause of action,” provides a specific limitation period:

      A cause of action with respect to a fraudulent transfer or
      obligation under ss. 726.101-726.112 is extinguished unless
      action is brought:

      (1) Under s. 726.105(1)(a), within 4 years after the transfer
      was made or the obligation was incurred or, if later, within 1
      year after the transfer or obligation was or could reasonably
      have been discovered by the claimant;

      (2) Under s. 726.105(1)(b) or s. 726.106(1), within 4 years after
      the transfer was made or the obligation was incurred; or

      (3) Under s. 726.106(2), within 1 year after the transfer was
      made or the obligation was incurred.

                                     3
§ 726.110(1)–(3), Fla. Stat. This statute extinguishes claims under the
UFTA long before a claim in a proceeding supplementary is extinguished.

   In this case, the issue is whether that shorter period applies to the
creditor’s claims.

   As noted, historically a judgment creditor could bring claims in a
proceeding supplementary for the life of the judgment. Biel Reo, LLC
adheres to that history. There, the First District held that the statute of
limitation in the UFTA did not apply to proceedings under section 56.29.
Biel Reo, LLC, 156 So. 3d at 507–08. The court held that applying the
statute of limitation to those claims “[did] not comport with the text of §
56.29, or with the cases construing it.” Id. at 510.

   The First District pointed out that the statute “expressly addresse[d]
when a creditor is entitled to avail itself of the statute’s processes: ‘When
any person or entity holds an unsatisfied judgment or judgment lien
obtained under chapter 55 . . . .’” Id. (emphasis removed). Further, the
court declined to apply the UFTA’s statute of limitation “because § 56.29’s
contrary scheme and precedent broadly establish the availability of
proceedings supplementary for the life of the judgment, when a valid,
unsatisfied execution exists.” Id. at 511. So, the court in Biel Reo, LLC
barred the application of a statute of limitation to claims of proceedings
supplementary.

    But the court in Biel Reo, LLC interpreted the 2012 version of the
statute, and the legislature has since amended it. 1 In 2014, “for the first
time, the Florida legislature specifically incorporated ‘the provisions of
chapter 726 and applicable rules of civil procedure’ in connection with
‘claims concerning the judgment debtor’s assets brought under chapter
726.’” In re British Am. Ins. Co. Ltd., 607 B.R. 753, 760 (Bankr. S.D. Fla.
2019) (quoting § 56.29(5), Fla. Stat. (2014)). The 2014 amendment added
the following italicized language:

      (5) The court may order any property of the judgment debtor,
      not exempt from execution, in the hands of any person, or any
      property, debt, or other obligation due to the judgment debtor,
      to be applied toward the satisfaction of the judgment debt.
      The court may entertain claims concerning the judgment

1The court acknowledged the 2014 statutory amendments in multiple footnotes
but stated the parties did not argue the amendments applied to the case. Biel
Reo, LLC, 156 So. 3d at 509 nn.2–3.

                                     4
      debtor’s assets brought under chapter 726 and enter any order
      or judgment, including a money judgment against any initial or
      subsequent transferee, in connection therewith, irrespective of
      whether the transferee has retained the property. Claims
      under chapter 726 are subject to the provisions of chapter 726
      and applicable rules of civil procedure.

Ch. 2014–182, § 17, Laws of Fla. (emphasis added) (amending § 56.29(5),
Fla. Stat.).

   The legislature again amended the statute in 2016. See ch. 2016–33,
§ 18, Laws of Fla. The 2016 amendment, which also renumbered certain
subsections, states:

      (9) The court may entertain claims concerning the judgment
      debtor’s assets brought under chapter 726 and enter any
      order or judgment, including a money judgment against any
      initial or subsequent transferee, in connection therewith,
      irrespective of whether the transferee has retained the
      property. Claims under chapter 726 brought under this
      section shall be initiated by a supplemental complaint and
      served as provided by the rules of civil procedure, and the
      claims under the supplemental complaint are subject to chapter
      726 and the rules of civil procedure. The clerk of the court shall
      docket a supplemental proceeding under the same case
      number assigned to the original complaint filed by the
      judgment creditor or the case number assigned to a judgment
      domesticated pursuant to s. 55.01, shall assign a separate
      supplemental proceeding number, and shall assign such
      supplemental proceeding to the same division and judge
      assigned to the main case or domesticated judgment.

Ch. 2016–33, § 18, Laws of Fla. (emphasis added) (adding and
renumbering § 56.29(9), Fla. Stat.).

   The statute is clear. As amended in 2014 and 2016, the statute now
specifically permits claims under chapter 726 in a proceeding
supplementary. But those claims are subject to chapter 726 and the rules
of civil procedure. See Fla. Wellness & Rehab. v. Allstate Fire & Cas. Ins.
Co., 201 So. 3d 169, 172 (Fla. 3d DCA 2016) (“[T]he phrase ‘subject to’ is
very commonly used to signal subordination.” (quoting Allstate Fire & Cas.
Ins. v. Stand-Up MRI of Tallahassee, P.A., 188 So. 3d 1, 4 (Fla. 1st DCA
2015))); St. Augustine Pools, Inc. v. James M. Barker, Inc., 687 So. 2d 957,
958 (Fla. 5th DCA 1997) (defining “subject to” as “liable, subordinate,

                                      5
subservient, inferior, obedient to; governed or affected by; provided that;
provided; answerable” (quoting Black’s Law Dictionary 1425 (6th. ed.
1990))).

    In other words, chapter 726 governs the timeliness of a UFTA claim
brought under section 56.29(9). The circuit court therefore correctly
applied chapter 726 and the limitation period found in that chapter when
it dismissed the creditor’s claims.

                               Conclusion

   The circuit court’s dismissal of the supplemental complaint is affirmed.

   Affirmed.

WARNER and KLINGENSMITH, JJ., concur.

                           *         *        *

   Not final until disposition of timely filed motion for rehearing.

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