Frenkel v. Klein et al

Middle District of Florida, flmd-8:2016-cv-00482

ORDER: The Court directs further briefing. Plaintiff and Defendants shall file supplemental briefs, not to exceed 10 pages, by November 15, 2018. Signed by Judge Virginia M. Hernandez Covington on 11/2/2018. (DLB)

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PageID 3477 UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION ALLA PASTERNACK, Executrix of the Estate of Leon Frenkel, Plaintiff, v. Case No. 8:16-cv-482-T-33CPT BRUCE K. KLEIN, individually, and in all other employee, owner, member, corporate and agent capacities as regards his various business entities, and OZEAN PARTNERS, LLC, Defendants. / ORDER The Court directs further briefing from the parties. Plaintiff and Defendants shall file supplemental briefs, not to exceed 10 pages, by November 15, 2018. First, the Court requires briefing on the applicability of Havoco of America, Ltd. v. Hill, 790 So. 2d 1018 (Fla. 2001), to the facts of this case. Under Havoco, "[t]he transfer of nonexempt assets into an exempt homestead with the intent to hinder, delay, or defraud creditors is not one of the three exceptions to the homestead exemption." Id. at 1028. Here, the transfer of the Longboat Key property from 1 PageID 3478 Elise Gieger to Ozean Partners was not a transfer of a nonexempt asset into an exempt homestead. However, if Klein subsequently established the Longboat Key property as his homestead after August 4, 2017, but before the July 24, 2017 Pennsylvania judgment was recorded in Florida, then the property may still be exempt from forced sale. Therefore, the parties' briefs should address whether a debtor may fraudulently transfer a nonexempt asset in violation of Florida's Uniform Fraudulent Transfer Act, then subsequently convert that asset into his homestead after the FUFTA suit has been initiated. Second, the Court requires briefing on the remedies available for the alleged violations of FUFTA. Under FUFTA, a money judgment may be entered if the transfer was voidable, even if it was not actually avoided. For example, the Eleventh Circuit affirmed a money judgment against a transferee who fraudulently conveyed funds into a tenancy by the entireties account, even after the transferee later used those funds to purchase an exempt homestead. Dowling v. Davis, 295 F. App'x 322, 323 (11th Cir. 2008). In this case, if the Longboat Key property is now Klein's homestead, but was not his homestead at the time of the transfer from Gieger to Ozean Partners, 2 PageID 3479 then the challenged transaction could be avoidable under FUFTA. Therefore, the parties' briefs should address whether the Court may award Pasternack money damages if the transfer from Gieger to Ozean Partners is held to have violated FUFTA, even though the Second Amended Complaint only requests attachment and levy of Klein's interest in the Longboat Key property. Accordingly, it is now ORDERED, ADJUDGED, and DECREED: The Court directs further briefing. Plaintiff and Defendants shall file supplemental briefs, not to exceed 10 pages, by November 15, 2018. DONE and ORDERED in Tampa, Florida, this 2nd day of November, 2018. 3