JBK Associates, Inc., f/k/a Coastal Insulation, Inc. v. Sill Bros., Inc., Patrick T. Sill, Stephen D. Sill, Lisa D. Sill and Barbara H. Sill
160 So. 3d 94
Fla. Dist. Ct. App.2015Background
- JBK obtained a $740,487.22 final judgment against Patrick Sill and others in 2010 and later served garnishment writs on Sill’s Wells Fargo Advisors accounts to collect.
- Sill sold the marital homestead in October 2013 as part of a divorce; his share of the sale proceeds was $458,696.67.
- Sill deposited his proceeds into a Wells Fargo account labeled “FL Homestead Account,” keeping the funds separate and later splitting them into a cash subaccount and two securities subaccounts holding mutual funds and unit investment trusts.
- As of Feb 28, 2014 the account held about $322,559.53 in securities and $139,274.66 in cash; Sill did not commingle these proceeds with other funds.
- The trial court dissolved the garnishment writ, subject to JBK’s ability to reassert interests if Sill failed to reinvest within the Orange Brevard “reasonable time” standard.
- JBK appealed, arguing that investing homestead sale proceeds in mutual funds and unit investment trusts forfeited homestead exemption protection.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether purchase of mutual funds and unit investment trusts with homestead sale proceeds destroys homestead exemption | Investment in securities is inconsistent with homestead purpose and thus forfeits exemption | Securities were a temporary, non-commingled holding intended to preserve proceeds for reinvestment in a home within a reasonable time | Court held investment in mutual funds/UITs did not destroy homestead protection because funds were non‑speculative, kept separate, and served the temporary function of preserving proceeds for reinvestment |
| Whether proceeds must be held in cash to remain exempt | Proceeds invested in securities are not equivalent to cash and therefore not exempt | Non-cash forms can serve the same temporary function as cash if they are held to acquire a new homestead | Court reaffirmed that non-cash proceeds can be exempt if they serve as a temporary form of homestead and are held for reinvestment |
| Whether commingling occurred | JBK implied the account reflected general assets or commingling | Sill kept proceeds in an account labeled for homestead and did not commingle with other funds | Court accepted trial court finding that funds were kept separate and apart |
| Whether speculative trading would void exemption | (Argued generally that investments can be speculative and defeat exemption) | Sill argued his investments were not speculative and therefore consistent with homestead purposes | Court noted speculative, high‑frequency trading could void exemption but found no evidence here of speculative activity and preserved exemption |
Key Cases Cited
- Orange Brevard Plumbing & Heating Co. v. La Croix, 137 So. 2d 201 (Fla. 1962) (establishes that proceeds of a voluntary homestead sale are exempt if vendor intends in good faith to reinvest in another homestead within a reasonable time and funds are kept separate)
- Sun First Nat’l Bank of Orlando v. Gieger, 402 So. 2d 428 (Fla. 5th DCA 1981) (non‑cash sale proceeds can be exempt if they function as a temporary form of homestead to be reinvested)
- Shawzin v. Donald J. Sasser, P.A., 658 So. 2d 1148 (Fla. 4th DCA 1995) (proceeds not reinvested in a new homestead are not exempt)
- Rossano v. Britesmile, Inc., 919 So. 2d 551 (Fla. 3d DCA 2005) (same principle that uninvested proceeds lose exemption)
- Myers v. Lehrer, 671 So. 2d 864 (Fla. 4th DCA 1996) (describing homestead purpose as protecting the family and shelter)
- Collins v. Collins, 7 So. 2d 443 (Fla. 1942) (historical statement of homestead purpose as refuge from misfortune)
- In re White, 389 B.R. 693 (B.A.P. 9th Cir. 2008) (noting that highly speculative, frequent trading with homestead proceeds can be inconsistent with homestead protection)