In re Smith
| Decision Date | 30 June 1982 |
| Docket Number | Bankruptcy No. 81-555-BK-J-GP,Adv. No. 81-258. |
| Citation | 21 BR 345 |
| Parties | In re Georgia Mae SMITH, a/k/a Georgia Mae Green, Debtor. Georgia Mae SMITH, Plaintiff, v. AMERICAN CONSUMER FINANCE CORPORATION, a Florida corporation, and Joan Thompson, Defendants. |
| Court | U.S. Bankruptcy Court — Middle District of Florida |
Sarah H. Bohr, Jacksonville, Fla., for plaintiff.
John H. Skinner, Jacksonville, Fla., for defendant.
The homestead of plaintiff GEORGIA MAE SMITH was sold on June 5, 1981, at a Sheriff's Sale to defendant JOAN THOMPSON pursuant to a Writ of Execution issued by defendant AMERICAN CONSUMER FINANCE CORPORATION (hereinafter AMERICAN CONSUMER). Plaintiff subsequently filed a Voluntary Petition under Chapter 7 of the Bankruptcy Code on July 31, 1981. She then filed this adversarial complaint in the bankruptcy proceeding against AMERICAN CONSUMER, JOAN THOMPSON and JAX-AM, INC., pursuant to § 522(h) of the Bankruptcy Code, 11 U.S.C. § 522(h)1 and §§ 222.08 and 86.011, Fla.Stat. (1981)2 seeking to avoid the transfer of her exempt real property and to set aside the levy and sale.
Defendant AMERICAN CONSUMER failed to respond to the complaint and a default was entered against it by this Court on October 5, 1981. Upon stipulation of the parties, defendant JAX-AM, INC. was dismissed as a party on January 13, 1982.
The remaining two parties, plaintiff and defendant JOAN THOMPSON (hereinafter defendant), filed cross-motions for summary judgment, supporting memoranda of law and responses to the other parties' respective motions. Oral argument was held on January 13, 1982, and plaintiff and defendant thereafter filed a Statement of Stipulated Facts.
The pertinent facts of this case, as stipulated to by the parties, are as follows:
1. Plaintiff purchased the home in dispute on January 11, 1972, for the sum of $11,687.12.
2. Plaintiff's original mortgage was dated March 14, 1969, in the amount of $11,050.00 with interest at the rate of 7½% and was for a term of 30 years.
3. The approximate value of the property at the time of the filing of the bankruptcy petition herein on July 31, 1981, was $19,100.00 as assessed by the Property Appraiser's Office of Duval County, Florida.
4. The approximate balance owed on the mortgage on the property to Tucker Brothers, Inc., at the time of the filing of the bankruptcy petition herein was $9,000.00.
5. On March 4, 1977, defendant AMERICAN CONSUMER obtained a Final Judgment against plaintiff and her husband, Eugene Smith, in the amount of $880.93 in the County Court, in and for Duval County, Florida. See American Consumer Finance Corp. v. Eugene Smith and Georgia Smith, Case No. 76-14865-SP, as recorded in volume 4340, page 159, of the Official Records of Duval County, Florida.
6. A certified copy of this Final Judgment was recorded in the Duval County Official Records on February 27, 1981, and appears at volume 5289, page 494, of the Official Records of Duval County, Florida.
7. On February 27, 1981, and at all times subsequent thereto, plaintiff has been separated from her husband, is supported by Aid to Families with Dependent Children, and resides with her minor child, Eugene Green.
8. On February 27, 1981, and at all times subsequent thereto, plaintiff and her child have lived in the house located at 2617 Olustee Street, Jacksonville, Florida, and legally described as follows:
Lot 11, Block 70, Grand Park, according to plat thereof recorded in Plat Book 2, pages 59 and 60 of the Current Public Records of Duval County, Florida.
9. On or about February 13, 1981, defendant AMERICAN CONSUMER instructed the Sheriff of Duval County to levy and sell the real property owned by the plaintiff.
10. On June 5, 1981, the Sheriff of Duval County offered plaintiff's home for sale pursuant to the levy previously executed by defendant AMERICAN CONSUMER.
11. At this Sheriff's sale defendant was the highest bidder and during the week of June 15, 1981, the Sheriff conveyed plaintiff's property to defendant.
12. Defendant paid $1,212.77 for plaintiff's home and is the sole owner of said property at present.
13. Defendant paid the monthly mortgage payments to Tucker Brothers from July 31, 1981 until April 9, 1982, totalling $952.31, and paid the homeowner's insurance premium to State Farm Insurance on July 31, 1981, in the amount of $78.00.
Plaintiff has claimed her homestead real property to be exempt property on Schedule B-4 of her bankruptcy petition filed herein. This exemption is claimed pursuant to Article X, § 4(a)(1) of the Florida Constitution.3 Defendant argues that the plaintiff is prevented from claiming her homestead as exempt because she never filed an affidavit of exemption pursuant to § 222.02, Fla.Stat.4, prior to the levy of her property by defendant AMERICAN CONSUMER. The Court concludes that plaintiff is entitled to exempt her homestead in this bankruptcy proceeding because § 222.02, Fla.Stat. does not provide the exclusive remedy for assertion of constitutional real property exemption rights under Florida law and because her failure to comply with said statute does not deprive her of the Florida homestead exemptions.
The Florida Supreme Court has long recognized that the homestead exemption provisions of the constitution are operative notwithstanding the failure to resort to the statutory method of defining and placing on record the description of the property. See, Baker v. State, 17 Fla. 406 (Fla.1879); Albritton v. Scott, 73 Fla. 856, 74 So. 975 (Fla.1917); Fidelity & Casualty Co. of New York v. Magwood, 107 Fla. 208, 145 So. 67 (Fla.1932). This policy was first enunciated by the Florida Supreme Court in Baker v. State, supra, where it held that the constitutional homestead exemption applied to heirs notwithstanding the fact that the deceased head of family had failed to comply with the statutory method of defining and placing on record the description of the property he intended to claim as his homestead. Cf. Hutchinson Shoe Co. v. Turner, 100 Fla. 1120, 130 So. 623, 624 (Fla.1930).
The Florida Supreme Court subsequently held in 1917 in Albritton v. State, supra:
When a homestead to which the exemption from forced sale is sold in violation of the exemption rights conferred by the Constitution, such sale is void. A mere failure to resist the sale is not a waiver of the exemption rights (emphasis supplied).
Id. 74 So. at 975. This decision was followed by the Second District Court of Appeals of Florida in White v. Posick, 150 So.2d 263 (Fla.2d DCA 1963). In White, property was levied on and sold at a public auction. This property was never claimed to be exempt until ejectment proceedings were subsequently brought. The Court, relying on Albritton v. Scott, supra, held that the defendant had not waived his defense of homestead by failing to assert it earlier.
The Florida Supreme Court reiterated its position that homestead rights cannot be waived in Fidelity & Casualty Co. of New York v. Magwood, supra. In Fidelity & Casualty, the Florida Court allowed a homestead claim to be asserted despite the fact that it was never raised in a prior proceeding involving the same parties resulting in an order to sell the property to satisfy a judgment:
It is true that the appellee here could have interposed his claim of homestead exemption in that suit but having failed to interpose it there, he is not precluded from exercising his constitutional right to contest his ouster from homestead. Where a homestead has been acquired it can be waived only by abandonment or by alienation in the manner provided by law (emphasis supplied).
In support of her position that plaintiff has waived her right to claim her homestead as exempt, defendant cites the recent case decided by the Florida Supreme Court, Johns v. May, 402 So.2d 1166 (Fla.1981). Johns involved a constitutional challenge to the time limits specified in § 222.06(1), Fla. Stat. (1979)5, for assertion of the personal property homestead exemption, Art. X, § 4(a)(2), Fla.Const. In upholding the requirement of filing an affidavit within ten (10) days from the date of levy, the Court held that the statute does not violate due process of law or equal protection guarantees because it bears a reasonable relationship to a permissible legislative objective, the establishment of procedure whereby an individual will be afforded an opportunity to assert a right to a personal property exemption while at the same time providing an orderly mechanism for the holding of a Sheriff's Sale.
The Court agrees with plaintiff's arguments that the Johns case is distinguishable from the case at bar. Johns involved personal property exemption rights while this case concerns real property homestead rights. A separate procedural statute was enacted to cover the assertion of real property homestead claims, § 222.02, Fla.Stat., and the cases construing this provision control.
Another significant point of difference is that § 222.06, Fla.Stat. (1979) was amended by the Florida legislature in 1979. The issue in Johns was whether the amendment adding the time limits for assertion of exemption rights was valid. The real property exemption implementation statute, on the other hand, has only been amended once since its enactment in 1869, and that was to expand its coverage to include protection of mobile homes. See ch. 1715, § 2, 1869 Fla. Laws 20 and ch. 77-299, § 3 (1977). In addition, since § 222.02, Fla.Stat. was first enacted, the Florida Supreme Court has ruled on numerous occasions that this provision is not the exclusive method of asserting real property exemption rights and that these rights cannot be waived even though the statute is not followed. See, Baker v. State, supra, Albritton v. State, supra, and Fidelity & Casualty Co. of New York v. Magwood, su...
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