Tramel v. Stewart

Citation697 So.2d 821
Decision Date19 June 1997
Docket NumberNo. 89032,89032
Parties22 Fla. L. Weekly S351 Thomas S. TRAMEL, III, as Sheriff of Columbia County, Petitioner, v. Charles STEWART, Jr., and Beverly J. Stewart, Respondents.
CourtUnited States State Supreme Court of Florida

Homestead protection guaranteed by State Constitution should not be used to shield fraud or reprehensible conduct. West's F.S.A. Const. Art. 10, § 4.

Rod Bowdoin and Teresa Byrd Morgan of Darby, Peele, Bowdoin & Payne, Lake City, for petitioner.

Stephen N. Bernstein of the Law Office of Stephen N. Bernstein, P.A., Gainesville, for respondents.

Robert A. Butterworth, Attorney General and Jacqueline H. Dowd, Asst. Atty. Gen., Orlando, for amicus curiae State of Florida.

Robert S. Griscti of Turner & Griscti, P.A., Gainesville, for amicus curiae Florida Ass'n of Criminal Defense Lawyers.

Arthur I. Jacobs, Fernandina Beach, for amicus curiae Florida Prosecuting Attys. Ass'n.

Harold M. Robbins, Jr., Executive Director, Tallahassee, for amicus curiae Florida Police Chiefs Ass'n.

PER CURIAM.

We have for review Stewart v. Tramel, 695 So.2d 729 (Fla. 1st DCA 1996), in which the district court certified the following question to be of great public importance:

WHETHER ARTICLE X, SECTION 4, FLA. CONST., PROHIBITS CIVIL FORFEITURE OF HOMESTEAD PROPERTY PURSUANT TO SECTIONS 932.701-.702, FLA.STAT., WHEN THE PROCEEDS OF ILLEGAL ACTIVITY ARE INVESTED IN OR USED TO PURCHASE THE PROPERTY?

Stewart, at 731. 1 We have jurisdiction. Art. V, § 3(b)(4), Fla. Const. For the reasons we express in this opinion, we answer the certified question in the affirmative and approve the district court's decision, which reversed the trial court's judgment that the Stewart's homestead property was forfeitable.

Through the use of a confidential informant, police discovered that the Stewarts were selling marijuana. Police thereafter arrested the Stewarts and procured a search warrant for their property. This search revealed drugs and drug-related paraphernalia in the Stewart's house 2 and a sophisticated marijuana-growing operation in a barn adjacent to the house. 3

Based on these findings, forfeiture proceedings were initiated against the Stewarts' real and personal property which was either used as an instrumentality or acquired by proceeds obtained as a result of a violation of the Florida Contraband Forfeiture Act (Forfeiture Act). 4 See §§ 932.701-.707, Fla.Stat. (1993). Throughout the proceedings, the Stewarts claimed that the real property, which was purchased in 1985, was homestead property and was not properly forfeitable. Specifically, at trial the Stewarts argued that under this Court's opinion in Butterworth v. Caggiano, 605 So.2d 56 (Fla.1992), homestead property is protected against forfeiture except in the circumstances enumerated in article X, section 4 of the Florida Constitution. The trial court agreed that the property was homestead at the time of seizure. However, the trial court found that footnote 5 of Caggiano narrowed the scope of the decision to cases in which the homestead was used as an instrumentality of criminal activity and did not address cases in which the homestead was acquired, built, or improved with illicit proceeds. At the close of the evidence, the jury was instructed consistent with this ruling. 5 The jury ultimately determined that numerous items of personal property were forfeitable and that one hundred percent of the Stewarts' real property 6 was acquired, built, or improved upon with money or proceeds obtained in violation of the Forfeiture Act. A final judgment was entered forfeiting all of this property, including the homestead.

On appeal, the First District reversed the trial court's ruling on the homestead forfeiture issue, holding that since it was conceded for purposes of appeal that the real property in question was homestead, Caggiano precluded the forfeiture of the property. Stewart. The district court concluded that for two reasons footnote 5 did not require a different result. First, the district court concluded that this case did not fall within any of the exceptions announced in the footnote. Id. at 730-31. Second, the district court found a distinction between this case and the cases cited in the footnote in which equitable liens were imposed on the property on behalf of the person or entity against whom the fraud was perpetrated. Id. Additionally, the district court found no significant distinction in terms of public policy between cases involving the use of homestead property and those involving proceeds derived from criminal activity. Id. The district court then certified the foregoing question. Id.

Resolution of this question requires us to construe the homestead guarantee of the Florida Constitution and the Forfeiture Act. Article X, section 4 of the Florida Constitution provides in relevant part:

(a) There shall be exempt from forced sale under process of any court, and no judgment, decree, or execution shall be a lien thereon, except for the payment of taxes and assessments thereon, obligations contracted for the purchase, improvement or repair thereof, or obligations contracted for house, field, or other labor performed on the realty, the following property owned by a natural person:

(1) a homestead....

The Forfeiture Act did not contain a provision for the forfeiture of real property until October 1, 1989. § 932.701, Fla.Stat. (1987). Of relevance here, section 932.701(2)(f), Florida Statutes (1989), was amended effective October 1, 1989, see ch. 89-148, §§ 1-4, Laws of Fla., to include the following definition of "contraband article" in the Forfeiture Act:

(f) Any real property or any interest in real property which has been or is being employed as an instrumentality in the commission of, or in aiding or abetting in the commission of, any felony, or which is acquired by proceeds obtained as a result of a violation of the Florida Contraband Forfeiture Act.

(Emphasis added.) 7 Further, the amendments made it unlawful to acquire real property by the use of proceeds obtained in violation of the Forfeiture Act, § 932.702, Fla.Stat. (1989), and any such real property was subject to forfeiture. § 932.703, Fla.Stat. (1989).

While we have not addressed the forfeiture of homestead property under the Forfeiture Act, we have held that article X, section 4 of the Florida Constitution prohibits civil or criminal forfeiture of homestead property used in the course of racketeering activity in violation of Florida's Racketeer Influenced and Corrupt Act (Florida RICO Act). See Caggiano. In Caggiano, the State sought forfeiture of the defendant's house based upon a finding that the defendant used the house in violation of the Florida RICO Act. 8 We noted that Florida courts have consistently held that the homestead exemption in article X, section 4, must be liberally construed. Caggiano, 605 So.2d at 58. We then determined that the plain language of the constitutional provision included protection from forced sales. Id. at 60. We reasoned that since the three exceptions enumerated in this provision 9 did not include forfeiture or an exception for criminal activity, forfeiture of the homestead under the circumstances of the case was not proper. Id.

In Caggiano we addressed a similar contention to the one made by the sheriff here that because this Court has imposed equitable liens on homesteads in cases involving fraud or reprehensible conduct, this Court should not allow the homestead protection to shield property where there is a pattern of criminal activity involved. In rejecting this argument, we stated:

All of the cases cited by the State where a court has actually imposed a lien on the homestead in question, however, are either factually or legally inapposite. Virtually all of the relevant cases involve situations that fell within one of the three stated exceptions to the homestead provision. Most of the cases involve equitable liens that were imposed where proceeds from fraud or reprehensible conduct were used to invest in, purchase, or improve the homestead. See, e.g., Jones v. Carpenter, 90 Fla. 407, 415, 106 So. 127, 130 (1925); La Mar [v. Lechlider], 135 Fla. 703, 711, 185 So. 833, 836 [Fla. 1939]....

The factual situations involved in the cited cases are not present here. It is undisputed that no illicit proceeds were used to purchase, acquire, or improve Caggiano's property.

Caggiano, 605 So.2d at 60-61 n. 5. In its analysis, the district court read this part of our decision to limit equitable liens based upon "fraud or reprehensible conduct" to instances in which funds were acquired from a specific person or entity and an equitable lien imposed on the property on behalf of the person or entity against whom the fraud was perpetrated. Stewart, 695 So.2d at 730-31.

Although this Court has permitted equitable liens to be imposed beyond the literal language of the constitutional homestead guarantee, see Palm Beach Sav. & Loan Ass'n v. Fishbein, 619 So.2d 267, 270 (Fla.1993), we agree with the district court's determination that the State does not have a right to the forfeiture of a homestead on the basis of an equitable lien under the circumstances of this case. Stewart, 695 So.2d at 730-31 Based upon article X, section 4 of the Florida Constitution, we do not find that a forfeiture of a homestead can currently be predicated on the Forfeiture Act.

As noted above, the homestead guarantee in the constitution must be liberally construed. Caggiano. It therefore follows that before the Forfeiture Act can provide a basis for the forfeiture of homestead property, a liberal construction of the homestead guarantee in the Constitution must permit a forfeiture for a violation of the Forfeiture Act. We discussed the due process requirements of the Forfeiture Act in Department of Law Enforcement v. Real Property, 588 So.2d 957 (Fla.1991), and we recognized the reason that forfeiture of homes requires special considerations:

Property rights are among the...

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