Henry Lee Co. v. Tolz, 98-4186

• Decision Date: 15 October 1998
• Docket Number: No. 98-4186,98-4186
• Citation: 157 F.3d 1290
• Parties: 36 UCC Rep.Serv.2d 1191, 12 Fla. L. Weekly Fed. C 168 HENRY LEE COMPANY, Plaintiff-Appellant, v. Marika TOLZ, Trustee, Defendant-Appellee. Non-Argument Calendar.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1290

157 F.3d 1290

36 UCC Rep.Serv.2d 1191, 12 Fla. L. Weekly Fed. C 168

HENRY LEE COMPANY, Plaintiff-Appellant, v. Marika TOLZ, Trustee, Defendant-Appellee.

No. 98-4186

Non-Argument Calendar.

United States Court of Appeals Eleventh Circuit.

Oct. 15, 1998.

Robert Anthony DuChemin, Orlando, FL, for Plaintiff-Appellant.

Robert Charbonneau, Ft. Lauderdale, FL, for Defendant-Appellee.

Appeal from the United States District Court for the Southern District of Florida.

Before BLACK and HULL, Circuit Judges, and GODBOLD, Senior Circuit Judge.

PER CURIAM:

Defendant Henry Lee Company appeals from a judgment in the district court granting summary judgment in favor of the plaintiff, Marika Tolz in her capacity as bankruptcy trustee for the debtor, Le Dome of the Four Seasons.

Tolz brought suit against Henry Lee to recover funds held by the Union Bank of Florida pursuant to a writ of garnishment obtained by Henry Lee. The writ of garnishment was obtained within 90 days of the debtor's filing a voluntary petition for bankruptcy under Chapter 7. Because the writ was obtained within the 90-day presumptive period of insolvency, the trustee claimed a priority interest in the funds. Henry Lee responded by asserting that it had an enforceable judicial lien which gave it a secured interest in the funds because it obtained a partial final judgment and writ of execution against Le Dome that it docketed with the sheriff prior to the 90-day presumptive insolvency period. Henry Lee maintained that this lien gave it priority because under Florida law a judgment creditor obtains priority by delivering the writ of execution to the sheriff for the county where the property is located. Both the bankruptcy court and, on appeal, the district court held that Tolz was entitled to recover the funds because under the Florida Uniform Commercial Code a trustee in bankruptcy, as a hypothetical lien holder, takes priority over those holding an unperfected security interest in the assets of the debtor. Those courts found Henry Lee's interest to be unperfected because under the UCC a security interest in money can only be perfected by possession.

On appeal to this court Henry Lee asserts that the UCC perfection rules do not apply to the lien he obtained on Le Dome's property because under Fla. Stat. ch. 679.104, certain transactions are explicitly excluded from the UCC's perfection requirements. Excluded from these rules are "rights represented by a judgment." Fla. Stat. ch. 679.104(8) (1997). Henry Lee contends that because it obtained a judgment against Le Dome for the amount owed, its lien on the funds was a right represented by a judgment that was not subject to the UCC's perfection rules.

Henry Lee misconstrues the meaning of this exception. According to the Florida cases applying this exception, as well as commentators and other courts that have interpreted the identical exception in other jurisdictions, the exception is intended to exclude the assignment of rights obtained in a judgment from the requirements of the UCC because such rights are generally intangible and do not fit within the scheme of the UCC. See Sun Bank, N.A. v. Parkland Design & Dev. Corp., 466 So.2d 1089, 1091 (Fla.Dist.Ct.App.1985) (rejecting application of exception to situation where a garnishment claim originated as a judgment and noting that the nature of the intangible determines the applicability of the exclusion); In re Hryniewicz, 222 B.R. 14, 16 (Bankr.D.Conn.1998) ("Under ...