In re Alan L. Goldenber

• Decision Date: 17 July 2000
• Docket Number: No. 99-10411,99-10411
• Citation: 218 F.3d 1264
• Parties: (11th Cir. 2000) IN RE:ALAN L. GOLDENBERG,Debtor. SHIRLEY SAWCZAK, Plaintiff-Appellee, Cross-Appellant, v. ALAN L. GOLDENBERG, Defendant-Appellant, Cross-Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1264

218 F.3d 1264 (11th Cir. 2000)

IN RE:ALAN L. GOLDENBERG,Debtor.

SHIRLEY SAWCZAK, Plaintiff-Appellee, Cross-Appellant, v. ALAN L. GOLDENBERG, Defendant-Appellant, Cross-Appellee.

No. 99-10411.

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT.

July 17, 2000.

Appeals from the United States District Court for the Southern District of Florida D. C. Docket No. 97-06203-CV-WDF

Before ANDERSON, Chief Judge, CARNES and RONEY, Circuit Judges.

ANDERSON, Chief Judge:

In April of 1992, Dr. Alan Goldenberg performed gall bladder surgery on Shirley Sawczak. Sawczak subsequently filed suit against Goldenberg in Broward County, Florida, alleging that during the course of the surgery, Goldenberg completely transected her common bile duct, causing her life-long injuries. Goldenberg was not carrying malpractice insurance. Goldenberg filed a petition under Chapter 7 of the Bankruptcy Code on May 1, 1996, the same day the jury was to start deliberations in the medical malpractice suit. Later that day, Sawczak filed an emergency motion for relief from the bankruptcy automatic stay so that the malpractice trial could be completed. The bankruptcy court granted her motion, and the jury returned a verdict in favor of Sawczak and against Goldenberg in the amount of $4,000,629.

On May 31, 1996, Goldenberg filed bankruptcy schedules listing assets totaling $3,791,119, of which he claimed $3,751,678 as exempt. The assets Goldenberg claimed as exempt included seven annuity contracts, with an aggregate value, according to Goldenberg's bankruptcy schedules, of $355,894. The annuities are single premium deferred annuities; to obtain them, Goldenberg paid a single premium which accumulates interest until the maturity date. All of the annuities provide for a commencement or maturity date at which time certain sums become payable to the annuitant or his survivors under various settlement options. In addition, they all contain a provision for "surrender" of the contract in exchange for a specified lump sum payment, defined as either the "surrender value" or "net surrender value." The surrender provisions can apparently be invoked up until the corresponding maturity dates. According to Sawczak, no maturity date for any of the seven contracts has yet arrived.¹ Goldenberg is both the owner and annuitant of each annuity policy. Goldenberg also claimed as exempt $2,546,319 in individual retirement accounts ("IRAs").

Sawczak filed objections to Goldenberg's claimed exemptions, including objections to his claims of exemption of the annuity contracts and of the IRAs.

I. The Annuity Contracts

Sawczak objected to Goldenberg's claim of exempt status with respect to the annuities, "to the extent of the surrender value of each." She argued to the bankruptcy court that the cash surrender values of the annuity contracts were not exempt under Fla. Stat. Ann. § 222.14 (West 1998).² Applying Florida law,³ the United States Bankruptcy Court for the Southern District of Florida concluded that:

Neither the title of [§ 222.14] nor its text distinguishes the proceeds received from a surrender of the annuity contract from the proceeds received after the contract is annuitized. . . . [T]he Court does not accept Sawczak's suggestion that the legislature intended to treat the surrender value of an annuity contract differently than that of a life insurance policy.

Accordingly, the bankruptcy court overruled Sawczak's objection and upheld Goldenberg's exemption.

Sawczak appealed the bankruptcy court's order to the United States District Court for the Southern District of Florida. The district court concluded that:

Dr. Goldenberg did not have annuity contracts until the funds in the annuity account reached maturity. He had, instead, option contracts to buy annuities at a future date which options could be revoked by him at anytime prior to the maturity dates. . . . When the judgment was entered the funds on deposit were not protected "proceeds of annuity contracts" as described by statute.

Thus, the district court concluded that there was no exemption as to the $355,894 held in the "annuity contracts" and that that money was reachable by process to partially satisfy Sawczak's judgment.

Dr. Goldenberg appeals to this Court arguing that the contracts at issue are in fact annuity contracts exempt under § 222.14 and that the cash surrender values of the annuities are included in the § 222.14 exemption. Sawczak, in turn, makes two alternative arguments to this Court: 1) that Goldenberg did not have "annuity contracts" when he filed for bankruptcy, but only options to buy annuities at future dates which are not exempt under § 222.14, and 2) that § 222.14 exempts only the proceeds of annuity contracts, which does not include cash surrender value. The parties have not cited nor have we uncovered any controlling Florida case directly addressing this important issue of Florida law. Consequently, we seek the assistance of the Supreme Court of Florida in resolving this issue.

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