MEMORANDUM OPINION FINDING ACCOUNT IS NOT TENANCY BY THE ENTIRETIES
KAREN S. JENNEMANN, Bankruptcy Judge.
On remand the District Court asks me to make a factual finding whether a joint E*TRADE account ("E*TRADE Account" or "Account") owned by Keith Yerian, the Debtor, and his non-filing spouse, Sun Pak, is tenancy by the entireties property ("TBE") and exempt from the Plaintiff Chapter 7 Trustee's claims. The Court finds the E*TRADE Account is not TBE property, and the Trustee is entitled to a $128,000 judgment in his favor due to a fraudulent transfer.
Debtor filed a Chapter 7 bankruptcy case in 2015.1 A few months later, the Chapter 7 Trustee objected to the Debtor's claimed exemptions2 and initiated this adversary proceeding.3 The trial occurred in 20164 and focused on three main issues: (1) whether a $256,000 transfer from the joint E*TRADE Account to Ms. Pak's solely owned account was a fraudulent transfer; (2) whether the Debtor's retirement account lost its exempt status due to prohibited transactions; and (3) whether the Debtor was entitled to a discharge under § 727 of the Bankruptcy Code.5
At the oral ruling, the Court denied the Debtor's discharge, found the Debtor's retirement account lost its exempt status, and held the Trustee was entitled to a $128,000 judgment against Ms. Pak for fraudulently transferring the monies from the joint E*TRADE Account to her solely owned account.6 Ms. Pak timely appealed.7
The District Court vacated the final judgment and, in its remand, asked the Bankruptcy Court for additional factual findings on whether the E*TRADE Account was TBE property prohibited from creditor claims.8 In the earlier oral ruling, I had held the Debtor and his wife owned the E*TRADE Account as Joint Tenants with Right of Survivorship ("JTWROS"). The District Court understandably now asks for clarification why the Defendants' alternative argument that the Account was TBE does not prevent turnover of the Debtor's share of the E*TRADE Account to the Chapter 7 Trustee.9 The District Court concluded additional factual findings were necessary to evaluate whether the Account was TBE.10
As directed in the District Court Order,11 I reopened the evidence, held a second trial, and closely listened to the parties' oral arguments.12 With this framework in mind, I took the remand issue of whether the E*TRADE Account is exempt from turnover because it was TBE property under advisement, and I now will analyze the evidence and testimony from the first and second trials.
Debtor and Ms. Pak were married in Ohio on May 17, 2008.13 Over the course of almost two years,14 Ms. Pak's mother made wire transfers15 to Ms. Pak and the Debtor.16 Most of this money was used to fund the E*TRADE Account.17 Ms. Pak testified that some of the money was a loan from her family,18 some of the money was meant as a wedding gift,19 and perhaps some of the money was given to provide financial help to the couple.20
The E*TRADE Account was opened as an investment account on October 24, 2008.21 Ownership was established as a JTWROS between the Debtor and Ms. Pak.22 No signature card for the account exists because it is an online investment account, but the Trustee and the Defendants both submitted the account opening documents that describe the account and confirms ownership was JTWROS.23 During the second trial, the Court admitted a declaration of a records custodian from E*TRADE who stated:24
[E*TRADE] diligently and thoroughly searched its database for the account information requested. The above listed account [for Keith A. Yerian and Sun Y. Pak, Joint Tenants with Rights of Survivorship] was opened on October 24, 2008[,] and was titled as a Joint with Rights of Survivorship account. From the account opening date, October 24, 2008[,] through present day, E*TRADE did not offer the option of a Tenancy by the Entirety account.25
After the initial funding and Debtor's frequent trades, the E*TRADE Account substantially increased in value.26 Ms. Pak testified she made all the decisions about the trades, but the Debtor manually made the trades.27 Debtor's son testified that the Debtor was an experienced stock trader.28 Ms. Pak testified the E*TRADE Account was her first experience trading stocks.29 The value of the E*TRADE Account increased substantially in a little under four years.30 Ms. Pak testified repeatedly and specifically the money in the E*TRADE Account was not the Debtor's money.31 Debtor also testified repeatedly the money in the E*TRADE Account was not his money.32 Yet, from the day the Account was opened, ownership was JTWROS.
In March 2012, when the Debtor's former wife, Debbie Yerian, was pursuing claims against the Debtor, a $256,000 transfer was made from the E*TRADE Account to Ms. Pak's solely owned account (the "Transfer").33 This is the alleged fraudulent transfer. Ms. Pak used the money transferred from the E*TRADE Account to purchase a house in Florida, to fix up the house after it was purchased, and for living expenses.34 The Transfer occurred while litigation was pending between the Debtor, Ms. Pak, and the Debtor's ex-wife.35
Trustee asserted36 and proved at trial the Transfer was actually fraudulent under Sections 726.105(1)(a) of the Florida Statutes ("FUFTA").37 However, "[u]nder both the fraudulent transfer provisions of the Bankruptcy Code and the Florida Uniform Fraudulent Transfer Act ("FUFTA"), a transfer of property exempt from creditors may not be the subject of an action to avoid a fraudulent transfer. . . . FUFTA excludes property held as a tenancy by the entireties from treatment as a recoverable asset if the TBE property is subject to process by a creditor holding a claim against only one spouse."38 "[W]hen property is held as a tenancy by the entireties, only the creditors of both the husband and wife, jointly, may attach the tenancy by the entireties property; the property is not divisible on behalf of one spouse alone, and therefore it cannot be reached to satisfy the obligation of only one spouse."39 This makes sense because a creditor should not be able to unwind a transfer if the creditor could not have reached the exempt property before the alleged fraudulent transfer.
The issue here is whether the Debtor and his wife have a valid argument that the Account really was owned TBE and not as JTWROS. TBE, as defined by Florida law, is a unique form of property ownership only married couples may enjoy.40 In Florida, both real and personal property can be owned TBE.41 Six unities must exist simultaneously for property to be owned as TBE in Florida: (1) unity of possession (joint ownership and control); (2) unity of interest (the interests must be identical); (3) unity of title (the interest must have originated in the same instrument); (4) unity of time (the interests must have commenced simultaneously); (5) survivorship; and (6) unity of marriage (the parties must be married when the property became titled in their joint names).42
The District Court Order recognized the insulation of TBE property from certain creditor claims but opined the same protection is not extended to other joint tenancies, like JTWROS.43 Marriage is the "single variance" that distinguishes TBE and JTWROS.44 The Florida Supreme Court announced a presumption in favor of TBE for married couples that jointly own property (the "Beal Bank Presumption").45 The Beal Bank Presumption that marital personal property is TBE arises when all six unities are present.46 Joint accounts between a husband and wife usually meet the six unities.47 Courts must then determine whether there was an express disclaimer by the couple not to own the property TBE.48
Typically, a party contending marital property is held in another form of ownership carries the burden of proof by a preponderance of evidence to establish TBE was notcreated.49 If the Beal Bank Presumption applies, the Trustee would then carry the burden to show that the property is not TBE.50 The Trustee could show, for example, that the couple fraudulently created the TBE property.51 However, under the legal interpretation and instructions in the District Court Order, when an institution does not offer TBE as a form of ownership or expressly precludes TBE ownership, the Beal Bank Presumption would not apply and the burden would shift to the Debtor to prove he intended to own the property TBE by a preponderance of the evidence.52 The District Court Order directed this Court "to examine the circumstances surrounding the opening of the E*TRADE Account, specifically whether: (1) E*TRADE allowed TBE ownership; and, if so, (2) the couple expressly disclaimed it."53 Following the explicit directive of the District Court Order,54 the Court finds that the Beal Bank Presumption does not arise here: E*TRADE did not offer TBE as a form of property ownership for the Account. Because no presumption arises that the Account is TBE, the burden shifts to the Defendants to prove by a preponderance of the evidence that the E*TRADE Account was TBE property. The Court finds the Defendants have not carried their burden.
Ms. Pak and the Debtor testified over and over that the money in the Account belonged solely to Ms. Pak. There is not a scintilla of testimony that the Debtor and Ms. Pak intended to own the E*TRADE Account TBE. There are a few seconds of argument in the Debtor's closing statement that mentions the E*TRADE Account is "either . . . [TBE] with all the unities, or under section 541(d), it's not property of the estate because the Debtor holds, as of the commencement of the case, only legal title and no equitable interest. . . . And so, it's either a [TBE] account under [Beal] Bank or it's not property of the bankruptcy estate under Section 541(d)."55 A single question by Debtor's counsel to the Debtor mentions TBE: "When that account was set up, did you have any option to your knowledge to elect that account as [TBE]?" Debtor answered: "No."56 Nothing in the record establishes any intent by the Debtor or Ms. Pak to own the Account TBE.
There is another wrinkle in the intent analysis because the Debtor and Ms. Pak opened the E*TRADE Account in 2008, when they lived in Ohio. At the second trial, the Trustee highlighted this fact. Ohio does not now recognize TBE as a form of property ownership and did not then recognize TBE in 2008 when the E*TRADE Account was opened.57 In Florida, exemptions are determined under Florida state law with some exceptions.58 However, because the Debtor and Ms. Pak opened the E*TRADE Account in Ohio, a state that does not recognize TBE as a form of property ownership, the Court questions whether it was even possible for them to intend to establish the account TBE when it was opened.59
The E*TRADE Account is JTWROS. The account was established as JTWROS. Debtor controlled the E*TRADE Account. The Court found the Debtor and Ms. Pak's testimony incredible that Ms. Pak made all of the decisions about the E*TRADE Account. Debtor is an experienced stock trader. Ms. Pak had no experience trading stocks. The parties owned the E*TRADE Account together. Yet they are not entitled to any presumption that the Account was owned as TBE. E*TRADE did not allow TBE ownership. And Ohio does not and did not recognize TBE ownership when the Account was opened. The Defendants cannot carry their burden to show the Account is TBE after testifying repeatedly the money only belonged to Ms. Pak and Ms. Pak made every decision about the Account. Because the E*TRADE Account is not insulated TBE property, the Trustee may reach the account.
The Court again finds that the Transfer is fraudulent under Fla. Stat. § 726.105(1)(a). These badges of fraud are present: Ms. Pak is an insider of the Debtor as his wife and the Transfer was made to an account solely owned by her; the Debtor controlled, operated, and managed the E*TRADE Account prior to the Transfer and grew its value substantially; the monies from the E*TRADE Account were used to purchase a home in Florida that the Debtor and Ms. Pak lived in together; and the Transfer was made to divest any ownership interest the Debtor may have in the monies or disguise the monies to frustrate the litigation between the Debtor, the Debtor's ex-wife, and Ms. Pak. These badges of fraud and the totality of the circumstances surrounding the Transfer lead the Court to conclude the Transfer was actually fraudulent. The Trustee is entitled to a $128,000 judgment in his favor under Fla. Stat. § 726.105(1)(a). A separate judgment shall enter simultaneously with this Memorandum Opinion.
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Richard Webber is directed to serve a copy of this order on interested parties who do not receive service by CM/ECF and file a proof of service within three days of entry of the order.