THOMAS B. McCOUN, III, Magistrate Judge.
THIS CAUSE is before the Court on referral for a Report and Recommendation on several summary judgment motions relating to a writ of garnishment directed to USAmeriBank:
A hearing was conducted on February 17, 2016.
A brief review of the pertinent procedural history in this action is useful. On October 27, 2011, the district court granted an agreed motion for entry of final judgment in favor of Travelers and against Bing Charles W. Kearney ("Kearney" or "Bing Kearney") and others in the amount of $3,750,000.00. (Doc. 243). The Clerk entered Judgment the following day. (Doc. 244).
On July 23, 2015, this Court granted Travelers' ex-parte motion for a writ of garnishment directed to USAmeriBank, and the Clerk issued the Writ of Garnishment (hereinafter, "the Writ") the next day.
USAmeriBank identified the following accounts:
Id.
Pertinent to this case, USAmeriBank advised that each of these accounts, with the exception of the -1122 account, was held on its general ledger account pursuant to the writ of garnishment previously served by Regions Bank on May 17, 2013.
USAmeriBank identified those "who may have an interest in the accounts" as Bing Charles W. Kearney, Jr.; Tonya Nuhfer-Kearney; Charles Wesley Kearney III; Clayton Whitman Kearney; and Bryan G. Kearney. Id. at ¶ 8.
On August 17, 2015, Kearney timely filed a Claim of Exemption and Request for Hearing, asserting exemption from garnishment under the "head of family wages" exemption and "other exemptions as provided by law." (Doc. 583).
Three motions to dissolve the Writ were filed — one by FTBB, LLC ("FTBB") and Moose Investments of Tampa, LLC ("Moose")
This Court scheduled an evidentiary hearing for October 14, 2015, on Kearney's Claim of Exemption, as well as the three motions to dissolve the Writ. (See Docs. 590, 612). Upon request of the parties, the October 14, 2015, evidentiary hearing was continued in lieu of the filing of motions for summary judgment relating to the Writ. (Doc. 621). And, on October 21, 2015, Kearney filed an Amended Claim of Exemption and Request for Hearing. (Doc. 623). The Amended Claim of Exemption was identical to the original claim, except that it included a claim for "retirement or profit-sharing benefits or pension money." Thereafter, Travelers filed a motion to strike the Amended Claim of Exemption (Doc. 626), which this Court denied (Doc. 680).
The procedural history of Regions Bank v. G3 Tampa, LLC, et al., Case No. 8:09-cv-1841-T-17MAP (herein, "the Regions case") also provides necessary context to this dispute.
In September 2009, Regions Bank ("Regions") initiated suit against G3 Tampa, LLC, Kearney, and others. In September 2012, after non-jury trial, judgment was entered in favor of Regions and against Kearney in the amount $3,407,620.35. (Regions case, Doc. 177).
Regions thereafter pursued collection on the judgment. On May 17, 2013, the Clerk issued a writ of garnishment directed to USAmeriBank. (Id., Doc. 202, "the Regions writ"). USAmeriBank answered the Regions writ stating that it was indebted to Kearney in the amount of $700,022.29.
In short, on March 7, 2015, district judge Elizabeth A. Kovachevich entered an Order rejecting the magistrate judge's Report and Recommendation that Kearney's motion to dissolve be granted. By Judge Kovachevich's analysis, Kearney and his wife did not hold the -0056 account as TBE but rather as a joint tenancy with right of survivorship and thus the account was not exempt from garnishment on that basis. (Id., Doc. 464). The court did not reach the disputed issues on the remaining five accounts, which records showed were held as joint tenancies with rights of survivorship. Id.
On May 1, 2015, Regions, Kearney, Tonya Kearney (his wife), and Charles Wesley Kearney, III (his son), Clayton Whitman Kearney (his son), and Bryan G. Kearney (his brother) filed a Stipulation to Grant Regions Bank's Motion for Final Summary Judgment in Garnishment agreeing to all relief requested and to entry of a final judgment in garnishment. (Id., Doc. 538). On May 4, 2015, Regions and FTBB filed a joint motion to substitute FTBB as party-plaintiff and to amend case caption based on Regions' sale and assignment of the Regions judgment to FTBB. (Id., Doc. 545). The motion to substitute FTBB as plaintiff was granted the following day. (Id., Doc. 549). On May 25, 2015, FTBB filed its motion for final summary judgment in garnishment relying on the prior Stipulation to Regions' motion for summary judgment in garnishment.
In light of Travelers' litigation herein, further ruling on the USAmeriBank garnishment in the Regions case has been stayed.
In accordance with Federal Rule of Civil Procedure 56, summary judgment is appropriate when the movant can show that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law. Fennell v. Gilstrap, 559 F.3d 1212, 1216 (11th Cir. 2009) (citing Welding Servs., Inc. v. Forman, 509 F.3d 1351, 1356 (11th Cir. 2007)). Which facts are material depends on the substantive law applicable to the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The moving party bears the burden of showing that no genuine issue of material fact exists. Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991).
Evidence is reviewed in the light most favorable to the non-moving party. Fennell at 1216 (citing Welding Servs., Inc. at 1356). A moving party discharges its burden on a motion for summary judgment by showing or pointing out to the court that there is an absence of evidence to support the non-moving party's case. Denney v. City of Albany, 247 F.3d 1172, 1181 (11th Cir. 2001) (citation omitted).
When a moving party has discharged its burden, the non-moving party must then designate specific facts (by its own affidavits, depositions, answers to interrogatories, or admissions on file) that demonstrate there is a genuine issue for trial. Porter v. Ray, 461 F.3d 1315, 1320-1321 (11th Cir. 2006) (citation omitted). The party opposing a motion for summary judgment must rely on more than conclusory statements or allegations unsupported by facts. Evers v. Gen. Motors Corp., 770 F.2d 984, 986 (11th Cir. 1985) ("conclusory allegations without specific supporting facts have no probative value."). "If a party fails to properly support an assertion of fact or fails to properly address another party's assertion of fact . . . the court may grant summary judgment if the motion and supporting materials . . . show that the movant is entitled to it." Fed. R. Civ. P. 56(e).
Travelers has filed two motions for summary judgment in relation to the Writ, along with numerous submissions in support thereof. (Docs. 628 and 643).
By its first motion (Doc. 628), Travelers "seeks final summary judgment overruling the exemptions claimed by Kearney, denying the motions to dissolve filed by the Kearneys, and ruling as a matter of law that Kearney's accounts at USAmeriBank are non-exempt and subject to Travelers' garnishment." (Doc. 628 at 2). In brief, Travelers argues that Kearney's claimed exemptions are without merit because: (1) the head of family wages exemption does not apply to any of the accounts because the funds are not wages or have lost their wages exemption because they were commingled; (2) the TBE exemption is inapplicable to the -0056 account, as that matter has already been adjudicated by Judge Kovachevich in the Regions case; (3) the joint accounts are not exempt because they are joint accounts with rights of survivorship and Kearney has control over these funds; (4) the Kearneys have previously stipulated to garnishment in the Regions case effectively waiving their rights to claim exemption; and (5) the "IRA account" is solely owned by Kearney and he waived his right to claim exemption on this account. (See Doc. 628).
By its second motion (Doc. 643), Travelers seeks summary judgment as to the claims raised by FTBB and Moose. Travelers asserts that any claim of priority asserted by FTBB by virtue of Regions' prior writ fails because: (1) that writ of garnishment automatically dissolved by operation of law; (2) Regions released the claims it had as to Kearney prior to its assignment to FTBB, leaving FTBB with no claim to the accounts; (3) FTBB's interest in the Regions writ is void due to its fraudulent and collusive purchase of the Regions judgment;
Bing Kearney has filed a motion for summary judgment (Doc. 645), arguing that his TBE and retirement funds exemptions should be upheld. In particular, he asserts that the -0056 account is held with his wife Tonya, by TBE, notwithstanding the contrary ruling by Judge Kovachevich. By his argument, Judge Kovachevich's Order is not binding on this court because the doctrine of collateral estoppel does not apply. Further, he disputes Travelers' assertion that he is estopped from claiming any exemptions to the joint accounts because he stipulated to Regions' motion for entry of final summary judgment in the Regions case. By his argument, the stipulation was part of a global mediated settlement agreement and involves no admission that the funds were subject to garnishment. With regard Account — 1122, he argues that such is traditional IRA account subject to exemption under Fla. Stat. § 222.21(2).
Similarly, several of Kearney's family members, Tonya Kearney, Charles Wesley Kearney, III, Clayton Whitman Kearney, and Bryan G. Kearney (collectively the "Interested Parties"), have moved for summary judgment. (Doc. 634). They claim that the accounts ending in -3695, -0129, -0302, -0020, and -7939 are not owned by Bing Kearney, and therefore, are not subject to garnishment by Travelers. Their motion is supported by an affidavit from Kearney attesting that he is neither the legal nor equitable owner of these accounts and that he is "only and always been a `convenient signer' on these accounts for the convenience and benefit of the Interested Parties." (Doc. 634-1). They too dispute Travelers' assertion that they waived any claim of exemption to the joint accounts by stipulating to summary judgment on the writ in the Regions case.
Finally, FTBB moves for partial summary judgment as to Travelers' Writ, "as that writ applies to [Kearneys' TBE account] with his wife, Tonya Kearney, . . . and as that writ applies to [Kearney's] traditional individual retirement account, account ending in -1122." (Doc. 644 at 2). FTBB urges that "[i]n the event the Court determines that the USAmeriBank account funds are not exempt from garnishment, then [FTBB] asserts a priority claim to the funds." (Doc. 644 at 5).
Suffice it to say that each of the motions is responded to and opposed essentially for reasons asserted by Travelers, Kearney, the Interested Parties, and/or FTBB in their respective motions.
The motions to dissolve the writs (Docs. 595, 596, 597) and the responses thereto (Docs. 603, 604, 605) raise two additional issues that are addressed in this Report and Recommendation. Each of the motions asserts that Moose has priority over Travelers' Writ because of a UCC-1 filing by Moose in August 2012 and that FTBB has priority to the funds by virtue of the first-in-time garnishment in the Regions case.
At the outset, certain of the issues raised by the motions are not resolved on this Report and Recommendation. First and foremost, Travelers' claims of fraud and collusion regarding FTBB's April 2015 purchase of the Regions judgment and FTBB's claim of priority based thereon are not addressed herein. These claims are left for further consideration either at the final hearing on the proceedings supplementary or on the cross-motions for summary judgment filed in those proceedings.
Nor do I resolve the claims as to Account -1122, identified by USAmeriBank as a "traditional IRA account." The issue of whether this account qualifies as an exempt IRA account and any issue related to priority to this account are not reached in this Report and Recommendation. Discovery remains ongoing as to Account -1122, and ruling on the motions for summary judgment should be denied without prejudice with the right to re-file following reasonable discovery.
On the other hand, I do find that the Court can resolve certain issues related to the Kearneys:
(A) Kearney's claim of TBE exemption and collateral estoppel;
(B) Travelers' claim that the Kearneys have waived and/or are judicially estopped from arguing the accounts are not subject to garnishment;
(C) Kearney's claim of head of family exemption; and
(D) the Kearneys' claims that the joint accounts are not subject to garnishment.
Additionally, I find that certain limited priority issues and issues raised by the motions to dissolve can also be resolved:
(E) Moose's claim to priority based on its UCC-1;
(F) FTBB's standing to bring a motion to dissolve on these motions;
(G) whether the Regions writ, now assumed by FTBB, dissolved by operation of law; and
(H) the legal effect of Regions' release of Kearney and its assignment of judgment to FTBB.
Each of these issues is addressed in turn below.
As outlined above, one of Kearney's claimed exemptions was on the basis of tenancy by the entireties. Travelers argues that TBE exemption on the funds in the -0056 account has already been decided by Judge Kovachevich in the Regions case by her Order dated March 7, 2015 (see Doc. 628-4 at 35) and collateral estoppel bars Kearney from relitigating the issue.
In response, Kearney denies that he is collaterally estopped from again asserting the TBE exemption because there was no judgment entered in the Regions case. Kearney maintains that a critical element for the application of collateral estoppel is that the prior determination of the issue must have been a critical and necessary part of the judgment, i.e., a judgment must have been entered. In the Regions case, no final judgment was entered on the TBE issue; thus, Kearney argues collateral estoppel cannot apply.
As an initial matter, although Kearney broadly claimed a TBE exemption in response to the Writ, such exemption can only apply to the -0056 account as a matter of law.
As for the issue of collateral estoppel, the Court applies federal law in this case. Tampa Bay Water v. HDR Eng'g, Inc., 731 F.3d 1171, 1179 (11th Cir. 2013) ("This Court has unambiguously held, `federal preclusion principles apply to prior federal decisions, whether previously decided in diversity or federal question jurisdiction.'") (quoting CSX Transp., Inc. v. Bhd. of Maint. of Way Emps., 327 F.3d 1309, 1316 (11th Cir. 2003); see also Precision Air Parts, Inc. v. Avco Corp., 736 F.2d 1499, 1503 (11th Cir. 1984) ("When a federal court sitting in diversity examines the collateral estoppel or res judicata effect of a prior federal judgment, based either on diversity or a federal question, it must apply federal common law.").
"Res judicata comes in two forms: claim preclusion (traditional `res judicata') and issue preclusion (also known as `collateral estoppel')." Cmty. State Bank v. Strong, 651 F.3d 1241, 1263 (11th Cir. 2011). Issue preclusion or collateral estoppel forecloses the relitigation of issues that have been previously litigated and decided. CSX Transp., Inc. v. Bhd. of Maint. of Way Emps., 327 F.3d 1309, 1316 (11th Cir. 2003); see also Matter of McWhorter, 887 F.2d 1564, 1566 (11th Cir. 1989) (citing Kaspar Wire Works, Inc. v. Leco Engineering & Machine, Inc., 575 F.2d 530, 535-36 (5th Cir. 1978)) ("Collateral estoppel precludes a party from relitigating an issue of ultimate fact that has already been decided in a prior adjudication").
As a general matter, "[a] party asking the court to apply estoppel must establish that (1) the issue at stake is identical to the one involved in the earlier proceeding; (2) the issue was actually litigated in the earlier proceeding; (3) the determination of the issue . . . must have been a critical and necessary part of the earlier judgment; and (4) the party against whom collateral estoppel is asserted must have had a full and fair opportunity to litigate the issue." Tampa Bay Water v. HDR Eng'g, Inc., 731 F.3d 1171, 1180 (11th Cir. 2013) (internal citation and quotation marks omitted). "The party seeking to invoke collateral estoppel bears the burden of proving that the necessary elements have been satisfied." Matter of McWhorter, 887 F.2d at 1566 (citing Matter of Merrill, 594 F.2d 1064, 1067 (5th Cir. 1979). Ultimately, the decision whether to apply collateral estoppel involves equitable considerations and is subject to the court's discretion. See id.
Here, Kearney claims that because Judge Kovachevich's March 7 Order was not final as no judgment was entered, Travelers may not invoke collateral estoppel. While Kearney is correct that traditional res judicata requires a final judgment, "[i]t is widely recognized that the finality requirement is less stringent for issue preclusion than for claim preclusion." Christo v. Padgett, 223 F.3d 1324, 1339 (11th Cir. 2000); see also In re Bayshore Ford Trucks Sales, Inc., 471 F.3d 1233, 1253 (11th Cir. 2006). "[F]or purposes of issue preclusion . . . final judgment includes any prior adjudication of an issue in another action that is determined to be sufficiently firm to be accorded conclusive effect." Christo at 1339 n.47 (quoting Restatement (Second) Judgments § 13).
In Christo, the Eleventh Circuit found that the district court sufficiently indicated that its finding was final because it "considered a wide range of evidence from all concerned parties and wrote a substantial order in which it explained its findings," explicitly "put the parties on notice that the order could have preclusive effect," and "considered those findings final." 223 F.3d at 1339. In contrast, in Bayshore, the Court found, "Unlike Christo, no signals of finality were sent to the parties. . . . [The order] made no indication of either the finality or the preclusive effect of its ruling." 471 F.3d at 1254.
Here, Judge Kovachevich's Order gives sufficient indicia of finality. Judge Kovachevich concluded:
(Doc. 628-4 at 35-36).
By a fair reading of this Order, the judge considered a wide range of evidence and wrote a lengthy order in which she explained her findings and conclusions. There is no indication that Judge Kovachevich intended her ruling on the -0056 account as something less than a final decision as to the merits of Kearney's claimed TBE exemption. Stated otherwise, the substantive issues relating to the -0056 account and the claimed TBE exemption were fully and finally resolved. Neither Kearney nor his wife Tonya moved for reconsideration of the Order. While Judge Kovachevich did explicitly reserve entry of final judgment because of remaining disputed issues as to the other accounts held by USAmeriBank, this Order is fairly read as the court's final ruling on matter of the TBE exemption.
Thus, I find sufficient finality in the Order to conclude that Kearney as well as the Interested Parties are collaterally estopped from relitigating the TBE exemption in these proceedings. Traveler's motion (Doc. 628) should be
On the other hand, Travelers' argument that the Kearneys have admitted the subject funds are subject to garnishment and that they are judicially estopped from asserting otherwise is unpersuasive. As noted above, Travelers contends that the Kearneys have admitted the subject accounts are not exempt by entering into a stipulation in the Regions case that Regions' motion for summary judgment in garnishment be granted. Accordingly, it argues that Kearney and the Interested Parties are judicially estopped from claiming in this proceeding that the subject accounts are exempt. (See Doc. 628-6).
Kearney and the Interested Parties acknowledge that they signed a Stipulation to grant Regions Bank's Motion for Final Summary Judgment in Garnishment and a Stipulated Motion for Final Summary Judgment in Garnishment (see Docs. 664 at 9 and 634 at 7-8), but all contend that this was done as part of the global settlement agreement between the Kearneys and Regions and is not a waiver of their rights to assert ownership in the instant case. By their arguments, they are not judicially estopped from asserting a contrary position in this litigation.
"Judicial estoppel is an equitable doctrine invoked at a court's discretion, designed to protect the integrity of the judicial process." See New Hampshire v. Maine, 532 U.S. 742, 749-50 (2001). The Eleventh Circuit explained:
Transamerica Leasing, Inc. v. Inst. of London Underwriters, 430 F.3d 1326, 1335 (11th Cir. 2005) (citing New Hampshire, 532 U.S. at 750-51).
Because this is a diversity case, the application of the doctrine of judicial estoppel is governed by state law. Original Appalachian Artworks, Inc. v. S. Diamond Associates, Inc., 44 F.3d 925, 930 (11th Cir. 1995).
The Florida Supreme Court has explained: "Judicial estoppel is an equitable doctrine that is used to prevent litigants from taking totally inconsistent positions in separate judicial, including quasi-judicial, proceedings. The doctrine prevents parties from making a mockery of justice by inconsistent pleadings and playing fast and loose with the courts." Blumberg v. USAA Cas. Ins. Co., 790 So.2d 1061, 1066 (Fla. 2001) (internal quotations and citations omitted). Significantly, Florida courts (and the majority of courts in general) all appear to agree that judicial estoppel does not apply to prior claims resolved by settlement. Brown & Brown, Inc. v. Sch. Bd. of Hamilton Cty., 97 So.3d 918, 920-21 (Fla. Dist. Ct. App. 2012) (collecting cases) ("Where, as in the instant case, the prior claim was resolved by settlement, we believe the alleged prior inconsistent position cannot be viewed as having been successfully asserted").
Here, the record reflects that on May 1, 2015, Regions Bank, Bing Kearney, Tonya Kearney, Charles W. Kearney III, Clayton Kearney, and Bryan Kearney filed a Stipulation to Grant Regions Bank's Motion for Final Summary Judgment in Garnishment. (Doc. 634-5). Therein, the parties stipulated to "all relief requested by [Regions] in the Summary Judgment Motion, and agree[d] that a final summary judgment in garnishment [as to the USAmeriBank accounts] shall be entered in favor of Plaintiff." (Id. at § 7). These same parties filed a Stipulated Motion for Final Summary Judgment in Garnishment. (Doc. 634-6). As noted, no final judgment in garnishment was entered, and FTBB's superseding Motion for Summary Judgment in Garnishment remains pending in the Regions case.
As asserted by the Kearneys — and uncontroverted by Travelers — the Stipulation was entered into as part of the global settlement agreement between Regions, Kearney, and his wife. By its plain terms, the Stipulation does not contain any express admission by Kearney or the Interested Parties that the subject accounts were subject to garnishment or that any signer expressly waived his or her claims.
Moreover, as set forth above, judicial estoppel does not apply to such a settlement and should not be applied here to effect a waiver of Kearney's claims of exemption or the joint account claims of the Interested Parties. Travelers' motion (Doc. 628), insofar as it seeks a ruling that Kearney and the Interested Parties have admitted the subject accounts are subject to garnishment and as a consequence they are estopped from asserting a contrary position in this litigation, should be
As for the head of family exemption claimed by Kearney, Travelers' motion for summary judgment is well-taken. Kearney broadly claimed a head of family exemption under the Writ. (Docs. 583, 623). Travelers asserts that the head of family exemption is inapplicable to each of the subject accounts because the funds deposited therein are not wages or earnings of Kearney and, in any event, the deposits are more than six months old. (Doc. 628 at 14-17). Kearney, nor any of the Interested Parties, has addressed the matter in their responses or their cross-motions.
Florida Statute § 222.11(1)(c) defines the "head of family" as "any natural person who is providing more than one-half of the support for a child or other dependent." If a head of family earns less than $750 per week, the disposable earnings are exempt from attachment or garnishment; if a head of family earns more than $750 per week, the earnings may not be attached or garnished unless the person has agreed otherwise in writing. Fla. Stat. § 222.11(2)(a), (b). The statute further provides that "Earnings that are exempt under subsection (2) and are credited or deposited in any financial institution are exempt from attachment or garnishment for 6 months after the earnings are received by the financial institution if the funds can be traced and properly identified as earnings." Fla. Stat. § 222.11(3) (emphasis added). "A debtor claiming the head of family exemption has the burden of proving entitlement to this statutory exemption." Ulisano v. Ulisano, 154 So.3d 507, 508 (Fla. Dist. Ct. App. 2015), reh'g denied (Jan. 23, 2015).
Here, Kearney has entirely failed to meet his burden that the head of family exemption applies to any of the subject accounts. As Travelers points out, as for the -0056 account, the affidavit from Kearney and his wife filed in the Regions case attests that the account was funded from two sources: a tax refund and a distribution from Star 103, Inc. — not from wages. (See Doc. 628-8). This is not controverted on Kearney's response, any other response, or any cross-motion.
Nor does Kearney make any showing that any of the other accounts were funded by his wages. (See Doc. 664). Indeed, Kearney has filed an affidavit in support of the Interested Parties' motion stating that he has no interest in the joint accounts (apart from the -0056 account). Quite simply, in this case, Kearney has disclaimed any interest in the -3695, -0129, -0302, -0020, -and -7939 accounts and, moreover, he has failed to demonstrate by any competent evidence that the head of family exemption applies to any of the subject accounts. As such, Travelers' motion (Doc. 628) should be
As to the -3695, -0129, -0302, -0020, -7939 accounts, it appears undisputed that each is held as a joint tenancy with rights of survivorship.
The Interested Parties assert that the accounts are not owned by Bing Kearney and therefore are not subject to garnishment by Travelers. (Doc. 634 at 6). In support, they proffer the Affidavit of Bing Kearney disavowing ownership of the accounts. In this Affidavit, Kearney states:
(Doc. 634-1 at 2).
Travelers argues Kearney's Affidavit should be set aside as a sham. It points out in its response that Kearney's self-serving Affidavit is contradicted, at least in part, by an affidavit he filed in the Regions case, in which he asserted that accounts -3695 and -0129 were his personal checking and savings accounts, respectively. Travelers proffers evidence from the Regions case, including an affidavit and testimony by Kearney that the -3695 and -0129 accounts were personal accounts used by he and his wife. Moreover, it also proffers records and testimony to show that Kearney used the -3695, -0129, and the -0302 accounts for his own benefit. (See Doc. 628 at 7-9; 628-8; 628-10 at 180-82; 628-13; see also Docs. 656 at 5-6, 656-3, 656-4). Because Kearney's Affidavit in this case directly contradicts the Regions affidavit and he offers no explanation for the direct contradiction, Travelers argues it should be set aside as a sham.
In any event, Travelers claims that the record evidence shows that Kearney is more than a "convenient signer" on these accounts. It cites Kearney's testimony in the Regions case where he admitted writing a $500,000.00 check drawn on the -0302 account to the U.S. Department of Treasury for a tax obligation and testimony that he transferred $20,000.00 from the -0129 account into the -0302 account. (Doc. 656-4). Apart from Kearney's Affidavit now disavowing any interest in the accounts, the Kearneys do not respond to Travelers' proffered evidence. Nor have the Interested Parties proffered any evidence to show their individual ownership of any identifiable portion of the subject accounts which might be exempt from garnishment. Thus, Travelers contends that the whole of the funds in these joint accounts are subject to the Writ.
"[F]or garnishment purposes, funds on deposit in a financial institution are presumed to belong to the person or entity named on the account." Thomas J. Konrad & Associates, Inc. v. McCoy, 705 So.2d 948, 949 (Fla. Dist. Ct. App. 1998) (citing Ginsberg v. Goldstein, 404 So.2d 1098, 1099 (Fla. Dist. Ct. App. 1981) (noting that "[f]or the purposes of garnishment a bank deposit prima facie belongs to the person in whose name it stands."); see also Fla. Stat. § 655.78(1) ("Unless otherwise expressly provided in a contract, agreement, or signature card executed in connection with the opening or maintenance of an account, including a certificate of deposit, a deposit account in the names of two or more persons may be paid to, or on the order of, either or any of such persons"). Unlike tenancy by the entireties, "[i]n a joint tenancy with right of survivorship, each tenant owns a separate share of the property and, for purposes of alienation, each share is presumed to be equal. Thus, `a creditor of one of the joint tenants may attach the joint tenant's portion of the property to recover that joint tenant's individual debt.'" United States v. Dorman, 603 Fed. App'x 844, 846 (11th Cir. 2015) (quoting Beal Bank, 780 So. 2d at 53.
First, with regard to accounts -3695 and -0129, the Court agrees that Kearney's Affidavit is wholly inconsistent with the prior evidence and testimony in the Regions case. In that case, Kearney swore in his affidavit that the -3695 account is he and his wife's personal checking account and that the -0129 account is their personal savings account. (Doc. 628-8 at 3). Tonya Kearney similarly swore that the -3695 account is their personal checking account and the -0129 is their personal savings account. (Id. at 13). The Kearneys further averred that these two accounts were intended to be held TBE. Id.
With regard to accounts -0302 and -0129, by Travelers' proffer, uncontradicted evidence from the Regions case reveals Kearney had control over these accounts such that he wrote a $500,000.00 check drawn on the -0302 account to the U.S. Department of Treasury for a tax obligation and that he transferred $20,000.00 from the -0129 account into the -0302 account. (Doc. 656-4).
The Court cannot reconcile Kearney's conflicting testimony and affidavits with the affidavit filed in this case. Kearney has wholly failed to explain the inconsistencies. Thus, the Court will disregard Kearney's Affidavit filed herein as a sham. None of the Kearneys has proffered any other credible evidence to refute Travelers' assertions that Kearney has control and ownership of the joint accounts, including the -7939 account.
As such, Travelers' motion for summary judgment (Doc. 628) should be
Moose has moved to dissolve the Writ (Doc. 595), asserting that it filed a UCC-1 Security Financing Statement with the Florida Secured Registry Transaction Registry on August 6, 2012 (Doc. 595-1). By virtue of this UCC-1, which was filed prior to the Writ at issue, Moose claims a superior security position and priority over Travelers with respect to the Writ. Citing Florida Statute § 679.302(1) (sic)
In its response to this motion to dissolve, as such pertains to Moose, Travelers claims that Moose's interest, if any, is unperfected and inferior to Travelers' interest. (Doc. 604). By its motion for summary judgment (again as such pertains to Moose), Travelers reiterates its argument that Moose's UCC-1 is unperfected and thus any claim it may have is inferior to that of Travelers. (Doc. 643 at 22-25). Moose did not file any response in opposition to Travelers' motion for summary judgment, nor did any other party respond to the arguments relating to Moose.
At the hearing on February 17, 2016, counsel for Moose conceded the issue and abandoned the claim that the UCC-1 gave Moose priority to the USAmeriBank subject accounts. Moreover, Moose has presented no evidence to this Court that it ever took control of the deposit accounts and thereby perfected its lien. Nor has Moose presented any evidence that the deposit accounts at issue represent identifiable proceeds of the collateral, under section 679.3151(3) or (4).
In sum, because Moose presents no evidence to the Court that it holds a perfected lien as against these deposit accounts and given its abandonment of this claim, Travelers' Motion for Summary Judgment (Doc. 643) should be
Travelers argues that, pursuant to Florida Statute § 77.07, only the "[t]he defendant and any other person having an ownership interest in the property, as disclosed by the garnishee's answer" may file a motion to dissolve. (Doc. 604 at 6-8). Since neither Moose nor FTBB were disclosed in USAmeriBank's answer, Travelers argues they lack standing under the statute and their motion to dissolve (Doc. 595) should be denied. Moreover, since neither FTBB nor Moose were disclosed in USAmeriBank's answer, Travelers did not serve them with the required notice under section 77.055, thus triggering any right to move for dissolution. Id.
With respect to garnishment, the Florida Statutes provides two methods to assert ownership to garnished property. First, section 77.07 provides:
Fla. Stat. § 77.07(2).
Section 77.16 provides:
Fla. Stat. § 77.16(1); see also Merriman Investments, LLC v. Ujowundu, 123 So.3d 1191, 1193 (Fla. Dist. Ct. App. 2013) ("Depending on the circumstance, the request to dissolve may be made in either of two ways: (1) on motion of the debtor challenging the truth of the allegations in the creditor's petition for the writ, see § 77.07, Fla. Stat. (2001); or (2) on an affidavit of a third party claiming the garnished property belongs to the third party and not the debtor. See § 77.16, Fla. Stat. (2001)").
Here, FTBB and Moose filed a joint unverified motion to dissolve the Writ, "pursuant to Florida Statute 77.02(2)." (Doc. 595). The following day, Moose filed an affidavit "pursuant to Florida Statute 77.16." (Doc. 598).
In Sosa v. Leggett & Platt, Inc., 969 So.2d 540, 541 (Fla. Dist. Ct. App. 2007), the Second District Court of Appeal stated: "Though he incorrectly filed the motion pursuant to section 77.07(2), Florida Statutes, it is clear from the substance of the motion that Sosa was attempting to assert a claim under section 77.16, Florida Statutes. . . . We therefore reverse the trial court's decision and remand with directions to hold an evidentiary hearing as to ownership of the funds held in the Wachovia account." Importantly, in Sosa, the motion to dissolve was verified; thus, the court construed it as an affidavit under section 77.16.
In this case, FTBB was neither named in USAmeriBank's Answer, nor did it file a verified motion to dissolve nor any affidavit that can be construed to satisfy the requirements of section 77.16. As this Court has previously pointed out, Florida law prescribes that the garnishment statutes are to be strictly construed. See, e.g., Gigliotti Contracting North, Inc. v. Traffic Control Products of N. Fla., Inc., 788 So.2d 1013, 1016 (Fla. Dist. Ct. App. 2001); Williams v. Espirito Santo Bank of Fla., 656 So.2d 212, 213 (Fla. Dist. Ct. App. 1995). As such, the Court is obliged to find that FTBB failed to comply with the requirements of the statute. Travelers has challenged the sufficiency of FTBB's filings and FTBB has failed to respond to same. As a result, the Court finds that FTBB has failed to properly present a claim to the funds at issue here and FTBB's Motion to Dissolve (Doc. 595) should also be
In its motion for summary judgment (Doc. 643), Travelers argues that the writ issued in the Regions case automatically dissolved by operation of law and, accordingly, FTBB's claim to priority because it has assumed Regions' position is without merit. In support, Travelers argues that, pursuant to the Florida garnishment statutes, a plaintiff must file a dismissal or motion for final judgment within six months after filing the writ of garnishment or the writ automatically dissolves. Fla. Stat. § 77.05(5). The Regions writ was re-served to cure a notice defect on March 10, 2015. Thus, Travelers claims that the Regions writ dissolved by operation of law six months after re-service — on September 10, 2015. This is so because FTBB withdrew its Motion for Final Judgment on the writ, and the Regions Court found that the motion was administratively terminated by the Clerk. Moreover, any argument that the Regions court's stay of the proceedings saves the writ fails because the stay lapsed on August 23, 2015, and was not reinstated until September 21, 2015. By its argument, the Regions writ automatically dissolved in that interim period. (Doc. 643 at 12). And, because the Regions writ dissolved, it claims FTBB cannot assert priority by virtue of its purchase of the Regions judgment and position. (Doc. 643 at 11-13).
Essentially for the reasons set out in FTBB's response (Doc. 663 at 2-6), I find that Travelers' argument that the Regions writ dissolved by operation of law on September 10, 2015, misconstrues the record in the Regions case and is without merit.
Florida Statute § 77.05(5), provides in pertinent part:
Fla. Stat. § 77.05(5).
Travelers' recitation of the course of proceedings in the Regions case to support its argument is inaccurate. Travelers fails to acknowledge that the referenced order by Judge Kovachevich actually implicitly recognized that a docketing error had occurred. The Order, dated June 24, 2015, states, in relevant part:
(Regions case, Doc. 576 at 2-3) (emphasis in original).
Indeed, following entry of Judge Kovachevich's Order, FTBB's Motion for Final Judgment in Garnishment (Regions case, Doc. 561) was reopened by the Clerk of Court. The CM-ECF docket entry (reviewable only by the Court) states: "(Court only) * * * Reopen Document
Further, in the same Order, Judge Kovachevich stayed those proceedings for a period of sixty days in light of the initiation of proceedings supplementary in the instant matter. (Id., Doc. 576 at 3). The stay was thereafter extended "to February 22, 2016, or until a final resolution of proceedings supplementary in [the instant case], whichever occurs first." (Id., Doc. 583). The stay in the Regions case has not been lifted as of the date of this writing and FTBB's motion remains pending.
Thus, a timely motion for final judgment remains pending in the Regions case and, by the plain language of Florida Statute § 77.05(5) this is all that is required to prevent a writ from automatically dissolving. As a result, Travelers' argument that the Regions writ dissolved by operation of law on September 10, 2015, fails, and its Motion for Summary Judgment (Doc. 643) should be
By its next argument, Travelers claims that Regions released its claims against Kearney before executing the sale and assignment of its judgment to FTBB. (Doc. 643 at 14-16). Travelers asserts that the Mediation Settlement Agreement (Doc. 643-12) between Kearney and Regions Bank, dated April 22, 2015, with an effective date of April 21, 2015, was expressly intended to resolve specified litigation including "any and all ancillary matters commenced within the [cases] or involving the same underlying nuclei of operative facts and legal issues." It included broad release language generally releasing Kearney "of and from any and all claims. . . ." The subsequent Confidential Judgment Purchase and Sale Agreement (Doc. 643-8) and the Assignment of Judgment (Doc. 643-9) executed on April 22 and 23, 2015, contained no effective date or retroactive application provision. As such, by Travelers argument, Regions released its claims against Kearney before it executed the sale and purchase agreement and the assignment to FTBB. Consequently, "the assignment of collection rights as to Kearney has no effect because a claim cannot be assigned after it has been released." (Doc. 643 at 14-16). Travelers urges that the documents should not be construed together as contemporaneous agreements because such requires that the documents be executed
FTBB contends that Travelers' argument is without merit. It notes that the Mediation Settlement Agreement was part of a "global settlement" that included execution of the Confidential Purchase and Sale Agreement and the Assignment of Judgment. Although the documents were dated one to two days apart, the agreements were entered into contemporaneously with the intent of the parties that they would be interpreted and applied together to achieve the parties' desired outcome. It urges that Travelers is inappropriately attempting to parse the agreements to achieve an absurd result that is inconsistent with the clear intent of the parties. In any event, FTBB argues that disputed questions of fact regarding the interpretation of the agreement preclude entry of summary judgment. (Doc. 663 at 6-9).
It is a fundamental proposition of contract law that agreements are to be construed in accordance with the intentions of the parties. See, e.g., Brown v. Beckwith, 60 Fla. 310, 312, 53 So. 542, 542 (1910) ("In construing a contract the leading object is to ascertain and effectuate the intention of the parties."); Bal Harbour Shops, Inc. v. Greenleaf & Crosby Co., 274 So.2d 13, 15 (Fla. Dist. Ct. App. 1973) ("It is a cardinal rule in the construction of contracts that the intention of the parties thereto is to govern.").
"Courts must `construe contracts in such a way as to give reasonable meaning to all provisions,' rather than leaving part of the contract useless." Publix Super Mkts., Inc. v. Wilder Corp. of Del., 876 So.2d 652, 654 (Fla. Dist. Ct. App. 2004) (quoting Hardwick Props., Inc. v. Newbern, 711 So.2d 35, 40 (Fla. Dist. Ct. App. 1998)). "When interpreting a contract, a court should ascribe terms their plain meaning and attempt to place itself as close as possible to the position occupied by the parties at the time the contract was executed, keeping in mind the goal to be accomplished by the agreement." Conway v. Conway, 111 So.3d 925, 927 (Fla. Dist. Ct. App. 2013) (citing Delissio v. Delissio, 821 So.2d 350, 353 (Fla. Dist. Ct. App. 2002)). And, "a court must construe a contract in a manner that accords with reason and probability; and avoid an absurd construction." Kipp v. Kipp, 844 So.2d 691, 693 (Fla. Dist. Ct. App. 2003).
Moreover, the intent of the parties may be determined by looking at interrelated documents. See Murphy v. Chitty, 739 So.2d 697 (Fla. Dist. Ct. App. 1999). As the Florida Supreme Court has noted: "It is a generally accepted rule of contract law that, where a writing expressly refers to and sufficiently describes another document, that other document, or so much of it as is referred to, is to be interpreted as part of the writing." OBS Co. v. Pace Const. Corp., 558 So.2d 404, 406 (Fla. 1990) (citations omitted).
Here, I initially observe that Travelers asks this Court to interpret and construe an agreement entered into between Kearney, his wife, and Regions to resolve five pending suits by Regions against the Kearneys — suits in which Travelers is not a party and in which it played no role in the negotiations or settlement. In practical effect, it asks for a judicial declaration that, as a matter of law, the Mediation Settlement Agreement between the Kearneys and Regions was separate and apart from the other agreements and that it did not contemplate nor intend to give effect to the Confidential Purchase and Sale Agreement and/or the Assignment of Judgment. While Travelers proffers the Mediation Settlement Agreement, as well as the Confidential Purchase and Sale Agreement and Assignment of Judgment on this motion, Travelers is not rightly in a position to know or argue the intent of the parties. Rather, Travelers rests its argument on the blanket assertion that the agreements should only be construed together if they were executed contemporaneously by the same parties. I do not read the law to be so absolute.
Rather, upon consideration, I find the documents reflect a contemporaneous agreement requiring the agreements be construed as one. For example, paragraph 7 of the Mediation Settlement Agreement, entitled "Bank's Release of Kearney Released Parties," begins: "Except with respect to obligations arising under or memorialized by this Mediation Agreement. . . . [Regions generally releases Kearney. . . .]" (Doc. 663-2). Although Travelers attempts to frame the release language as exceptionally broad and without representation or exception, this is simply not borne out by a plain reading of this release provision.
Moreover, the Mediation Settlement Agreement goes on to specifically reference the agreement for sale and assignment to FTBB (referred to therein as the Confidential Judgment Purchase and Sale Agreement), and provides that the Kearneys' representations are a "material inducement" to the settlement and Regions' willingness to enter into the Confidential Judgment Purchase and Sale Agreement. (Doc. 663-2 at 5). While the effective date of the Confidential Judgment Purchase and Sale Agreement was left blank, the signatures are dated April 22 and 23, 2015, and the agreement states that "the consummation of the sale and purchase pursuant to this Agreement . . . shall occur on or before April 21, 2015" (Doc. 643-8 at 3) — the same day as the effective date of the Mediation Settlement Agreement. Thus, the documents make express reference to one another, and it appears uncontroverted by any competent evidence that the parties intended the documents to be construed together. There is simply no evidence proffered to the contrary.
On this conclusion, Travelers' motion (Doc. 643) seeking a ruling as a matter of law that Regions released all claims against Kearney before it transferred by sale and assignment its judgment to FTBB should be
Accordingly, as set forth above, it is
Given the findings and recommendations above, the Court further
If there remain issues as to the USAmeriBank garnishment after resolution of the proceedings supplementary, the Court will schedule the matter for a final hearing on subsequent and separate notice.
Id. at 2.
Section 222.21(2), Florida Statutes, provides for an exemption from creditors' claims of funds and accounts maintained `in accordance with a plan or governing instrument that has been determined by the Internal Revenue Service to be exempt from taxation' under Section 408 (among other provisions) of the Internal Revenue Code. Fla. Stat. § 222.21(2)(a).
Kearney's claim is supported by two affidavits and may well have merit. However, in light of the late addition of this claim of exemption by Kearney, the Court has permitted Travelers time to conduct reasonable discovery on whether the account qualifies as a true IRA account.
(internal citations omitted).
Similarly, in support of their motion to dissolve the Writ, the affidavits signed by Tonya Kearney, Bryan G. Kearney, and Charles Wesley Kearney, III, do not specifically identify their ownership interest in the accounts; rather, they each broadly state:
(Docs. 597-1, 597-2, 597-3).
Beal Bank, 780 So. 2d at 53.
FTBB also seeks a ruling as a matter of law that its purchase of the Regions' judgment was neither collusive nor fraudulent. As set forth above, a ruling on that issue is left for determination after a hearing in the proceedings supplementary or on motions for summary judgment pending in that proceeding.
