Lead Opinion
This is an appeal from a partial final judgment in proceedings supplementary in favor of appellees, F/R 550, LLC and F/R 3329, LLC (collectively F/R), based on efforts by F/R to collect on a judgment it obtained against appellant, National Auto Service Centers, Inc. (National Auto Service).
FUFTA provides that a claim based on such allegations “is extinguished” unless brought “within 4 years after the transfer was made ... or, if later, within 1 year after the transfer ... was or could reasonably have been discovered.” § 726.110(1). This case presents two issues of first impression in our state courts concerning this statutory provision: (1) whether the one-year savings clause is triggered by a creditor’s discovery of the transfer or, instead, by the creditor’s discovery of the facts showing the transfer to have been fraudu
I.
A.
In September 2005, F/R entered into two thirty-year leases with National Auto Service. National Auto Service owned automobile repair businesses, and it operated two such businesses on the two properties that it leásed from F/R. In September 2007, National Auto Service sold those two businesses, along with a third business operated at a different location, in three separate transactions to three different buyers. Each buyer gave National Auto Service a promissory note for a portion of the purchase price for the business it was buying. Roughly two months after the sales, on November 14, 2007, National Auto Service assigned the three promissory notes it received to National Auto Properties, its parent company, which was owned by appellant, Leonard Levin.,
By November 2008, neither National Auto Service nor the buyers of its former car repair businesses were making rent payments to F/R as required by the leases. As a result, F/R sued National Auto Service for breach of contract. It prevailed and secured a final summary judgment against National Auto Service for $2,100,578.64 on October 26, 2010. F/R then began discovery in aid of execution.
On December 8, 2010, F/R served National Auto Service with a set of document production requests that sought, among other things, all of National Auto Service’s accounting books and records. National Auto Service objected, and no documents were produced. On January 30, 2012, F/R took Mr. Levin’s deposition. He testified that National Auto Service assigned the promissory notes to National Auto Properties to satisfy debts owed by National Auto Service to National Auto Properties. F/R states that this is the first time it learned of the assignments.
During the deposition, F/R orally requested accounting documents concerning the assignments and corresponding debts, and it confirmed that request in a followup letter in early February 2012; National Auto Service did not produce the records. Ten months later, on October 1, 2012, F/R filed a motion to compel asserting that" National Auto Service was required to produce the accounting documents in response to F/R’s December 2010 requests for production. That motion was granted, and the documents were produced on January 8, 2013. Those documents did not reflect the debts owed to National Auto Service by National Auto Properties about which Mr. Levin testified аt his deposition. According to F/R, the documents established that Mr. Levin testified falsely about' the reasons for the assignment and, for the first time, showed that the assignments were intended to hinder, delay, or defraud creditors.
B.
On March 8, 2013, F/R filed motions for proceedings supplementary to execution and to implead National Auto Properties and Mr. Levin pursuant to section 56.29, Florida Statutes (2013), on the theory that
A word about procedure is necessary to understand the issues presented to us. Proceedings supplementary under section. 56.29 are ancillary, postjudgment proceedings conducted ,in the same action in which the judgment was obtained. See Fundamental Long Term Care Holdings, LLC v. Jackson-Platts,
Section 56.29 does hot regulate this procedure in detail, however, and its application in the real'world can become messy. The statute does not réquire that the judgment creditor file a pleading stating the factual and legal basis for the proceedings supplementary or identifying the relief it seeks. § 56.29(1); Jackson-Platts,
The record of the proceedings in the trial court and briefs here, however, make it clear that the claim F/R presented to the trial court was a substantive cause of action under FUFTA.
The trial court heard this claim without a jury. The Levin Parties moved for an involuntary dismissal arguing that F/R’s claim was extinguished under section 726.110(1) because it was not brought within four years of the assignments or one year of the date the assignments were discovered. They argued that the assignments were made on November 14, 2007, more than five years before the March 8, 2013, commencement-of the supplemental proceedings, and were discovered by F/R no later than Mr. Levin’s January 30,2012, deposition, more than thirteen months before the proceedings were commenced. F/R concedes that the claim was not brought within four years of the assignments but responded that the one-year savings clause was not triggered until January 8, 2013, when it claimed it first discovered the “fraudulent nature” of the transfers, by which it. meant the facts showing that the assignments were made with actual intent to hinder, delay, or defraud creditors. F/R further asserted that the Levin Parties were equitably estopped from asserting section 726.110(1) as a bar to its claim because of the alleged false testimony regarding the reasons for the assignment and the delay in producing accounting documents.
In a written order, denying the Levin Parties’ motion for involuntary dismissal, the trial court agreed with F/R that the one-year savings clause in section 726.110(1) was not triggered until F/R discovered or should have discovered the fraudulent nature of the assignments. It did not reach F/R’s alternative argument that the Levin Parties were equitably es-topped from asserting the protections of section 726.110(1), The trial court thereafter entered a partial final judgment finding that the assignments were made with actual intent to hinder, delay, or defraud creditors and declared those transfers void under FUFTA. This timely appeal followed.
II.
We first address whether the one-year savings clause in section 726.110(1) is triggered by discovery of the transfer or by discovery of the facts showing that transfer to have beеn fraudulent. If the latter, the parties agree that the action is timely; if the former, they agree it is not. There is no precedent on the question from Florida’s state courts, and'courts interpreting the Uniform Act in other jurisdictions have reached differing results. Compare Schmidt v. HSC, Inc.,
A.
FUFTA allows a creditor to unwind a transfer of the debtor’s property to a third party — and thus to use the property to satisfy its claims against the debtor — when the act deems the transfer “fraudulent” as to creditors. See generally §§ 726.105-.108. The act identifies three categories of such transfers:’ (1) transfers made “[w]ith actual intent to hinder, delay, or defraud” creditors, § 726.105(l)(a); (2) certain types of transfers for which the debtor does not receive “reasonably equivalent value” in exchange for the . asset transferrеd, §§ 726.105(l)(b), .106(1); and (3) transfers to an insider of the debtor for an antecedent debt when the debtor is insolvent and the insider has reasonable cause to know that, § 726.106(2). When a transfer falls into one of these categories, FUFTA affords the creditor an array of remedies against the debtor and the third-party transferee, including the avoidance of the transfer, attachment against the asset transferred, injunctive relief, appointment of a receiver, and in the case of a judgment creditor, execution upon the transferred properties. § 726.109.
Section 726.110 provides fixed times in which claims based on these three categories of fraudulent transfers must be brought or are lost. The statute is titled “Extinguishment of cause of'action” and provides as follows:
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(l)(a) [actual fraudulent transfers], 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(l)(b) or s. 726.106(1) [transfers made without reasonably equivalent value], within 4 years after the transfer was made or the obligation was incurred; or
(3) Under s. 726.106(2) [transfers to insiders for antecedent debt], within 1 year after’ the transfer was made or the obligation was incurred.
§ 726.110. Causes of action for actual fraudulent transfers are the only actions under FUFTA that have the benefit of a one-year savings clause based on the date “the transfer ... was or reasonably could have been discovered.” ■§ 726.110(1). We conclude that the plain language of that clause requires that the one-year period begin on the date the transfer was or could reasonably have been discovered, not on the date that the fraudulent nature of the transfer was or could have been discovered.
The interpretation of a statute begins “with the plain meaning of the aсtual language” the statute employs. Diamond Aircraft Indus., Inc. v. Horowitch,
Because the statute unambiguously defines the оperative event as the discovery of the disposition of the asset, the statute cannot mean, that the one-year period runs from the claimant’s discovery of facts showing that the disposition of the asset may have been fraudulent as to creditors. To make the existing statutory term “transfer” carry that meaning, we would in effect have to delete it and replace it with a phrase like “fraudulent nature of the transfer” or “facts constituting the cause of action.” It is not within our authority, however, to rewrite an unambiguous statute. See Hayes v. State,
B.
In interpreting the savings clause as running from the discovery of the fraudulent nature of the transfer instead of the transfer itself, the trial court relied, as F/R dbes on appeal, on the Hawaii Supreme Court’s decision in Schmidt and the Washington Supreme Court’s decision in Frei-tag. Those cases interpreted state statutes identical to section 726.110(1). Taken together, they identify two core reasons for holding that the savings clause is triggered by discovery of the fraudulent nature of the transfer: (1) because the introductory clause of section 726.110 refers to “[a] cause of action with respect to a fraudulent transfer,” the term “transfer” in subsection (1) must refer to facts showing that the transfer was fraudulent; and (2) because the purpose of the Uniform Act is to prevent fraud and provide- a remedy to creditors, the savings clause should be interpreted to begin only when the claimant discovers or should have discovered that the transfer was in fact fraudulent. See Schmidt,
As to the first rationale, the argument is that because the introductory clause of section 726.110 states that “[a] cause of action with respect to a fraudulent transfer ... is extinguished unless” timely commenced, the term “transfer” in the savings clause refers to the ‘fraudulent transfer” described in the introductory clause. For that reason, the logic goes, the term “transfer” in section 726.110(1) must incorporate the facts that made the transfer fraudulent. See' Schmidt,
We believe that conclusion does not follow from the stated premise. To be sure, the term “transfer” in the savings clause relates to the same disposition of an asset
.This conclusion is confirmed by the fact that had the legislature intended the one-year period to begin with the discovery of the facts underlying a fraudulent transfer claim, it could have said so.
Furthermore, interpreting the term “transfer” in the savings clause to mean “the facts showing that the transfer was fraudulent” would cause that term to mean different things in the same statute. The presumption is that when the legislature uses the same term multiple times in the same statute, that term carries the same meaning each time it is used. See Rollins,
As to the second rationale, the argument is that the savings clause should be interpreted favorably to the claimant because the purpose of FUFTA is to deter fraud and provide a remedy to creditors. This appeal to the legislature’s assumed purpose as an aid -to statutory construction is irrelevant, however, because the text of section 726.110(1) is unambiguous. .When statutory text is unambiguous, “courts will not look behind the statute’s plain language for legislative intent or resort to rules of statutory construction to ascertain intent.” Borden v. East-European Ins. Co.,
In Freitag, the court supported its claim about remedial purpose with the observation that both the common law and the statutory predecessor to the Uniform Act — the Uniform Fraudulent Conveyance Act — tied the timeliness of claims founded on fraud to the discovery of the facts constituting the fraud.
The decision in Schmidt took the remedial-purpose argument a step farther and reasoned that interpreting the savings clause in accord with its plain language is so inconsistent with that purpose that it leads to absurd results and thus justifies departing from the clear text of the savings clause.
Because the unambiguous text of section 726.110(1) provides that the one-year period begins on the date the claimant discovers or reasonably could have discovered the transfer that is the subject of its cause of action, F/R’s cause of action in this case — which was brought more than one year after it discovered that National Auto Service had assigned its promissory notes to National Auto Properties — was untimely. The trial court’s conclusion to the contrary reached beyond the plain language of the statute and, as a result, was in error.
III.
F/R asserts that if we determine that its claim was untimely, as we have, we should remand for the trial court to determine whether the Levin Parties’ alleged concеalment of the fraudulent nature of the assignments of the notes renders them equitably estopped from asserting the protections of 726.110(1). It relies on In re Hill,
A.
We turn first to thе categorization of section 726.110(1) as either a statute of limitations or a statute of repose. A statute of limitations is, in essence, a limitation on the availability of a remedy; it “set[s] a time limit within which an action must be filed as measured from the accrual of the cause of action, after which time obtaining relief is barred.” Hess v. Philip Morris USA, Inc.,
Consistent with their function, statutes of repose are understood to set “an outer limit beyond which [claims] may not be instituted.” Hess,
On its face, section 726.110 is a repose statute, not a limitations statute. The introductory clause of the statute provides that “[a] cause of action with respect to a fraudulent transfer ... is extinguished unless action is brought” within the time periods provided in subsections (1) through (3). § 726.110 (emphasis added). The unambiguous text thus performs the exact function that distinguishes a statute of reрose from a .statute of limitations; ,it extinguishes the cause of action rather than merely barring the remedy. For this reason, a number of courts in other jurisdictions interpreting various state codifications of the Uniform Act .have held that the statute is one of repose. See, e.g., MSKP Oak Grove, LLC v. Venuto, No. 10-6465(JBS/JS),
Notwithstanding this statutory text, the bankruptcy court in Hill II held that the one-year savings clause of section 726.110(1) rendered that subsection a statute of limitations.
In our view, Hill IPs conclusion that the savings clause creates a statute of limitations incorrectly reads that clause in isolation from the balance of section 726.110(1). See Jones v. ETS of New Orleans, Inc.,
It is significant that the text and structure of section 726.110(1) contrasts markedly with the text of statutory sections in which the legislature has created separate provisions governing both limitations and repose. For example, the statute applicable to securities violations under chapter 517, contained in section 95.11 titled “Limitations other than for the recovery of real property,” provides that all “actions ... shall be commenced” within two years “with the period running from the time the facts giving rise to the cause of action were discovered or should have been discovered with the exercise of due diligence, but not more than 5 years from the date such violation occurred.” § 95.11(4)(e). There, the two-year period is expressed in the language and structure of a statute of limitations (action “shall be commenced” within two years of discovery) and the five-year period is expressed in the language and structure of repose (“but not more than five years”). See, e.g., Puchner v. Bache Halsey Stuart, Inc.,
Unlike these statutes, section 726.110(1) does not provide for separate periods of limitations and repose. It extinguishes all causes of action as to which suit is not commenced within four years of the transfer and provides a carve-out for a limited class of claims brought later. Section 726.110(1) is a statute of repose in its entirety.
B.
Having concluded that section 726.110(1) is a statute of repose, we must consider whether it is nonetheless subject to F/R’s assertion of equitable estoppel based on its allegation that Mr. Levin concealed the fraudulent nature of the transfer, thereby delaying its commencement of suit. Based on the long-standing recognition that statutes of repose create an absolute bar to untimely actions and the specific language of section 726.110(1), we hold that it is not subject to an assertion of equitable estop-pel.
As its name implies, equitable es-toppel embraces the notion that a party should not be permitted to profit by asserting rights against another when that party’s own inequitable conduct has lulled the other into action or inaction detrimental to its position. See Fla. Dep’t of Health & Rehab. Servs. v. S.A.P.,
Although we are aware of no Florida case deciding whether a statute of repose fоrecloses resort to the doctrine of equitable estoppel as a defense against suit, existing cases suggest this result. In S.A.P., for example, the court held that the state can be equitably estopped from asserting section 768.28(13), Florida Statutes (1993), which sets a period of four years from the accrual of a caúse of action to commence suit against it, as a defense to an untimely claim.
Moreover, the text of section 726.110(1) does not contemplate that equitable doctrines may supply an exception to the absolute bar of the statute. On the contrary, the statute establishes a four-year period after which a cause of action is extinguished and contemplates only one circumstance in which that bar may be avoided based on an assertion of concealment or delayed discovery, namely when suit is commenced outside the four-year period but within one year of when the transfer was or should have been discovered. That the statute provides this single discovery-based exception and does not provide any others is a textual indication that equitable estoppel рrinciples, which would effectively create a second discovery-based exception when- a plaintiff is delayed in learning of the fraudulent nature of the transaction by the defendants’ misrepresentation, are not to apply. See State v. Hearns,
IV.
In sum, the one-year period created by the savings clause in section 726.110(1) begins on the date the transfer is discovered or could reasonably have been discovered, not on the date the fraudulent nature of the transfer was or could' reasonably have been discovered. Further, section 726.110(1) is a statute of repose that cannot be avoided by a plaintiffs contention that a defendant is equitably estopped from asserting' it as a defense. Because F/R’s action was not brought within four years of the assignments of the promissory notes by National Auto Service to National Auto Properties, -its claims under FUFTA are barred by section 726.110(1).
For these reasons; we reverse the judgment on appeal,' It is-clear that no further proceedings are necessary with respect to National Auto Properties and the Levin Parties, and we' therefore remand with instructions to enter judgment in their favor. Because National Auto Service is the judgment debtor and transferor, rather than a third party holding a transferred asset, it is not clear' from the record or the contentions of the parties whether our disposition precludes further proceedings or relief against it. As to it, we therefore remand for such further proceedings as are consistent with this opinion.
Reversed and.remanded with instructions.
Notes
. The opinion is being released simultaneously with an opinion disposing of companion case 2D 14-4064. The two orders on appeal in these cases are part of the same trial court proceeding and were titled partial final judgments by the trial court. The parties have not raised and we do not address whether this is the most appropriate description of these orders.
. Although National Auto Service is a listed appellant within this proceeding, the issues on appeal specifically relate to the other parties to which Nátional Auto Service effectuated the transfers of assets. As a result, the substance of this opinion is directéd toward those parties.
. We refer to National Auto Properties, Mr. Levin, his wife, and the two limited liability companies collectively as the Levin Parties.
. Section 56,29 was recently amended by Senate Bill 1042 in a way that may avoid this problem. The bill was approved by Governor Scott on March 9-, 2016, and will take effect - on July 1, 2016, Section 56.29(9) will now provide, that in supplemental proceedings "[t]he court may entertain claims ,,, under chapter 726 [FUFTA]_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.”
.One issue that might be relevant but was not raised is whether the specific provisions of FUFTA or the more genéral provision of section 56.29 supply the applicable rule concerning when a judgmеnt creditor, vmay use proceedings supplementary to avoid a fraudulent transfer. Recently, in Biel Reo, LLC v. Barefoot Cottages Development Co.,
. We note that at least one legislature implementing the Uniform Act has done that. The Arizona analog to section 726.110 explicitly ties the running of the one-year period to the discovery of the fraudulent nature of the transfer instead of the transfer itself. See Ariz.Rev.Stat. Ann,'§ .44-1009(1) (2015) (providing that a.fraudulent transfer action .is extinguished unless brought within four years of the transfer or "within one year after the fraudulent nature of the transfer ... was or ... could have been discovered by the claimant.”).
. F/R asserts that the trial court’s holding that the one-year savings clause period begins with the discovery of the fraudulent nature of the transfer is supported by the delayed discovery rule, under which the statute of limitations for certain causes of action does not begin to run until the plaintiff knows or iñ the exercise of due diligence should know of the
. In addition to relying on its perception of FUFTA’s general purpose, the trial court reasoned that its holding was supported by section 726.112, which provides, in relevant part,
. Certain Florida 'decisions have called section 726.110 a statute of limitations. See, e.g., Desak v. Vanlandingham,
Concurrence Opinion
Concurring.
I concur in the majority opinion, including all subparts, but not without some trepidation. In my opinion, there is a.real need to balance the remedial purpose of FUFTA, which favors granting a judgment' creditor broad relief from fraud, against the judgment debtor’s and' society’s interest in finality. As it stands, the legislature has chosen language, which we are powerless to amend, that limits FUF-TA’s savings clause to one year from, the discovery of the transfer and- not from the discovery of the fraud regardless of the reason for the delay in the discovery of the fraud. I can envision circumstances in which the judgment debtor, having already actively engaged in fraud, continues his or her' fraudulent ways so as to hide any evidence that a given' transfer was, in fact, fraudulent Until after the one-year savings period has expired.' While' that does not appear to be the case here, in my view, the better policy would be to permit the trial court to' extend the judgment creditor’s collection rights if the creditor could establish an ongoing course of fraud or delay. This would eliminate the statutory encouragement to a judgment debtor engaged in fraud to delay discovery of that fraud' until one year after disclosure of the transfer. Thus, while I reluctantly agree, I urge the legislature to consider broadening FUF-TA’s savings clause to run from the discovery of the fraud, which in my view is more consistent with its remedial purpose.