BIEL REO, LLC v. Barefoot Cottages Development etc.
156 So. 3d 506
| Fla. Dist. Ct. App. | 2014Background
- Biel Reo, assignee of a $4.5 million judgment obtained by a bank against guarantors Curtis Gwin and H. Ray Shoults, initiated proceedings supplementary under Fla. Stat. § 56.29 to satisfy the judgment.
- After the development company defaulted in 2008, Gwin and Shoults transferred millions into irrevocable family trusts that named their wives as trustees and the spouses as co-tenants by the entirety beneficiaries.
- Biel Reo impleaded the trustees (the wives) under § 56.29(5) and (6), alleging transfers to the family trusts were fraudulent or otherwise subject to execution.
- The trial court granted summary judgment for the trustees, holding Biel Reo’s Family Trust claims were time-barred under the Uniform Fraudulent Transfer Act (UFTA) and laches.
- The First District reversed in part: it held proceedings supplementary under § 56.29 may be initiated for the life of the judgment and that the UFTA’s shorter limitations period does not bar § 56.29(6) proceedings; it affirmed the trial court on the separate issue that the trusts were not self-settled reachable under § 56.29(5).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 56.29 proceedings challenging transfers under subsection (6) are time-barred by UFTA limitations | Biel Reo: § 56.29 proceedings are available for the life of the judgment once affidavit/prerequisites are met | Trustees: § 56.29(6) borrows UFTA substantive law so UFTA’s shorter statute of limitations applies | Held: § 56.29 proceedings are governed by the life of the judgment; UFTA limitations do not bar § 56.29(6) proceedings |
| Whether the affidavit/prerequisites for § 56.29 were insufficient to entitle Biel Reo to proceedings supplementary | Biel Reo: met statutory prerequisites (motion and affidavit listing judgment and impleaded parties) | Trustees: procedural/timeliness defects and laches prevent relief | Held: Once prerequisites met, creditor is entitled to proceedings; court cannot deny on statute-of-limitations grounds tied to UFTA |
| Whether transfers into the Family Trusts were reachable as self-settled trusts under § 56.29(5) | Biel Reo: trusts are reachable/self-settled or otherwise subject to execution | Trustees: trusts are irrevocable and not self-settled; interests are co-tenancy by entireties, exempt from execution | Held: Affirmed for trustees — trusts not self-settled/reachable under § 56.29(5) |
| Whether laches bars proceedings supplementary after several years post-judgment | Biel Reo: laches should not defeat statutory remedy during life of judgment | Trustees: delay and prejudice warrant dismissal by laches | Held: Laches did not bar § 56.29(6) proceedings; timeliness tied to life of judgment |
Key Cases Cited
- Young v. McKenzie, 46 So.2d 184 (Fla. 1950) (proceedings supplementary tied to life of judgment and permit examination and recovery of fraudulent transfers)
- Zureikat v. Shaibani, 944 So.2d 1019 (Fla. 5th DCA 2006) (affirming availability of § 56.29 during life of judgment despite passage of years)
- Ferre v. City Nat’l Bank of Miami, 548 So.2d 701 (Fla. 3d DCA 1989) (rejecting laches and statute-of-limitations defenses to proceedings supplementary challenging family transfers)
- Viney v. State, 163 So. 57 (Fla. 1935) (proceedings supplementary may reach property in hands of third parties but third parties must be impleaded)
- Amsouth Bank of Fla. v. Hepner, 647 So.2d 907 (Fla. 1st DCA 1994) (entireties tenancy interest not subject to execution)