SHARON ROSSANO, APPELLANT,
v.
BRITESMILE, INC., APPELLEE
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A debtor sought to protect proceeds from the sale of her homestead from garnishment by a judgment creditor, claiming the funds would be reinvested in a new homestead. The court reversed the trial court's order garnishing the entire amount, holding that under Florida law, homestead sale proceeds are exempt from creditors only to the extent actually reinvested in a new homestead in good faith and within a reasonable time.
Proceeds from a voluntary sale of a homestead are exempt from creditor claims only if the debtor demonstrates by preponderance of the evidence a good faith intention to reinvest the proceeds in another homestead within a reasonable time, and only to the extent actually reinvested. The trial court erred in garnishing the entire amount without awaiting the new home closing to determine what portion was actually used for the new residence.
[1] Homestead exemption applies to the proceeds of a voluntary sale of a homestead if the vendor demonstrates, by a preponderance of the evidence, an abiding good faith inten…
[2] Only the portion of homestead sale proceeds intended for reinvestment in a new homestead is exempt from creditors' claims; any surplus is treated as general assets.
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Join FLexlaw to unlock all legal intelligence“the proceeds of a voluntary sale of a homestead to be exempt from the claims of creditors just as the homestead itself is exempt if, and only if, the vendor shows, by a preponderance of the evidence an abiding good faith intention prior to and at the time of the sale of the homestead to reinvest the proceeds thereof in another homestead within a reasonable time”
Establishes the core test for homestead exemption of sale proceeds
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Join FLexlaw to unlock all legal intelligenceOn August 12, 2004, BriteSmilejudgment against Rossano for $108,247.15. In December 2004, while Rossano was planning to sell her homestead and purchas…
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SCHWARTZ, Senior Judge.
On August 12, 2004, the appellee secured a $108,247.15 judgment against the appellant. Later that year, while taking her deposition in aid of execution, the creditor learned that she planned to sell her homestead and to purchase a less expensive residence instead.
On December 30, the appellee served a writ of garnishment on a closing agent who held an account reaching the total of $187,551.87, the proceeds of the sale of her first home.1 Because, on November 24, she had entered into a contract for the purchase of a new home for $308,000, Ms. Rossano claimed an exemption pursuant to Orange Brevard Plumbing & Heating Co. v. La Croix, 137 So. 2d 201 (Fla.1962), on the ground that her previous homestead exemption applied to the escrowed funds. Notwithstanding, after a hearing, the court awarded a garnishment judgment for the full amount of the judgment plus costs.
We reverse on the holding that, in light of the evidence concerning the judgment-debtor’s clear intention to devote all or part of the proceeds received from the sale of her previous home into a new homestead so as to qualify for continued exemption under La Croix, it was error for the trial court to require garnishment of the entire amount claimed. Instead, the court should await the closing on the new home and then order payment to the appellee judgment-creditor only of that amount, if any, which was not used in good faith for the new residence. As is said in La Croix:
[T]he proceeds of a voluntary sale of a homestead to be exempt from the claims of creditors just as the homestead itself is exempt if, and only if, the vendor shows, by a preponderance of the evidence an abiding good faith intention prior to and at the time of the sale of the homestead to reinvest the proceeds thereof in another homestead within a reasonable time.
Moreover, only so much of the proceeds of the sale as are intended to be reinvested in another homestead may be exempt under this holding. Any surplus over and above that amount should be treated as general assets of the debtor.... The proceeds of the sale are not exempt if they are not reinvested in another homestead in a reasonable time or if they are held for the general purposes of the vendor. La Croix, 137 So. 2d at 206; see also Suntrust Bank/Miami, N.A. v. Papadopolous, 740 So. 2d 594 (Fla. 3d DCA 1999); Shawzin v. Donald J. Sasser, P.A., 658 So. 2d 1148 (Fla. 4th DCA 1995), review denied, 669 So. 2d 252 (Fla.1996); Sun First Nat’l Bank of Orlando v. Gieger, 402 So. 2d 428 (Fla. 5th DCA 1981).
Reversed.
. The home sold for a gross amount of $597,000 less the payoff of a $386,624.21 mortgage.
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Citator
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JBK Assocs., Inc. v. Sill Bros., Inc., 160 So. 3d 94 (Fla. 4th DCA 2015)…ed as part of the sale price of a homestead). Proceeds of a sale not invested in a new homestead are not entitled to homestead protection. See Shawzin v. Donald J. Sasser, P.A., 658 So. 2d 1148, 1151 (Fla. 4th DCA 1995); Rossano v. Britesmile, Inc., 919 So. 2d 551, 552 (Fla. 3d DCA 2005). The purpose of homestead is to “protect the family, to ‘provide it a refuge from the stresses and strains of misfortune.’ ” Myers v. Lehrer, 671 So. 2d 864, 866 (Fla. 4th DCA 1996) (quoting Collins v. Collins, 150 Fla. 374,…
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Rina Kerzner v. Kerzner, 77 So. 3d 214 (Fla. 3d DCA 2011)…old, and the funds will be protected so long as they are not commingled and are held for the sole purpose of acquiring another home within a reasonable period of time. McKean v. Warburton, 919 So. 2d 341, 344 (Fla.2005); Rossano v. Britesmile, Inc., 919 So. 2d 551 (Fla. 3d DCA 2005). Stuart contended (and the trial court found) that the escrowed funds were protected by Florida’s homestead laws because at all times he intended that the funds from the sale would be used to acquire a new homestead property. Rin…
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Ruth P. LAW v. Benjamin F. LAW, 163 So. 3d 553 (Fla. 3d DCA 2015)…d the court below to segregate the proceeds until the court could determine whether the proceeds were either exempt from use to satisfy the Rad-hert Firm’s fee demand or not otherwise subject to use for that purpose. See Rossano v. Britesmile, Inc., 919 So. 2d 551, 552 (Fla. 3d DCA 2005) (“[T]he proceeds of a voluntary sale of a homestead to be exempt from the claims of creditors just as the homestead itself is exempt if, and only if, the vendor shows, by a preponderance of the evidence an abiding good faith…
Previewing 3 of 4 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Orange Brevard Plumbing & Heating Co. v. LA Croix, 137 So. 2d 201 (Fla. 1962)
- Shawzin v. Donald J. Sasser, P.A., 658 So. 2d 1148 (Fla. 4th DCA 1995)
- Hancock v. State, 402 So. 2d 428 (Fla. 5th DCA 1981)
- SUN First Nat'l Bank OF Orlando v. Gieger, 402 So. 2d 428 (Fla. 5th DCA 1981)
- Suntrust Bank/Miami, N.A. v. Athanasius A. Papadopolous, 740 So. 2d 594 (Fla. 3d DCA 1999)