Rosenberg v. U.S. Bank

• Decision Date: 03 May 2023
• Docket Number: 3D21-1065
• Parties: Sara Rosenberg, etc., et al., Appellants, v. U.S. Bank, N. A., Appellee.
• Court: Florida District Court of Appeals

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Sara Rosenberg, etc., et al., Appellants, v. U.S. Bank, N. A., Appellee.

No. 3D21-1065

Florida Court of Appeals, Third District

May 3, 2023

Not final until disposition of timely filed motion for rehearing.

An Appeal from the Circuit Court for Miami-Dade County, Michael A. Hanzman, Judge Lower Tribunal No. 18-1348

Genovese Joblove & Battista, P. A., and W. Barry Blum Burns, P.A., and Thomas A. Burns (Tampa), for appellants.

Shutts & Bowen LLP, and Jason B. Gonzalez, John W. Bustard Patrick G. Brugger, and Peter H. Levitt, for appellee.

Before LOGUE, SCALES, and HENDON, JJ.

LOGUE J.

Sara Rosenberg files this appeal in her capacities as Trustee of the Douglas Rosenberg 2004 Trust and personal representative of the estate of Not final until disposition of timely filed motion for rehearing her husband, Maury Rosenberg. She challenges the trial court's amended summary final judgment awarding U.S. Bank, N.A. a money judgment against the Trust in proceedings supplementary based on Mr. Rosenberg's fraudulent transfer of his asset, a money judgment, to the Trust. Finding no error, we affirm.

BACKGROUND

This appeal involves the Bank's long and winding efforts to collect debts owed by Maury Rosenberg and Rosenberg's resilient resistance. At the heart of this dispute are three judgments - two obtained by the Bank against Rosenberg and one obtained by Rosenberg against the Bank. As one federal district court wryly observed, this "litigation has resembled a tennis match, bouncing back and forth between various forums in multiple jurisdictions." U.S. Bank, Nat'l Ass'n v. Rosenberg, No. 12-723, 2015 WL 13620423, at *1 (E.D. Pa. Sept. 3, 2015). According to another court, this and related matters have generated over forty-seven separate written decisions across various levels of the federal courts, not counting the litigation in two separate states' courts. In re Nat'l Med. Imaging, LLC, No. AP 14-250, 2023 WL 2246725, at *7 n.17 (Bankr. E.D. Pa. Feb. 27, 2023). At this point, even a basic statement of the facts is far from basic.

The Bank obtained judgments in 2015 and 2016 from a federal district court in Pennsylvania against Maury Rosenberg after he defaulted on a 2003 personal guarantee of loans to his company. See U.S. Bank, Nat'l Ass'n v. Rosenberg, No. 12-723, 2015 WL 13620423, at *10; U.S. Bank, Nat'l Ass'n v. Rosenberg, 581 B.R. 424, 427 (E.D. Pa. 2018), aff'd, 741 Fed.Appx. 887 (3d Cir. 2018). Before obtaining these judgments, the Bank unsuccessfully attempted to force Rosenberg and his company into involuntary bankruptcy. As a result, Rosenberg won a judgment in 2013 for damages and attorney's fees against the Bank. Rosenberg v. DVI Receivables XIV, LLC, 818 F.3d 1283, 1286 (11th Cir. 2016). The Bank then moved the court that had entered its 2015 and 2016 judgments to set off the parties' judgments. In a decision that reinvigorated already overheated litigation, the court declined. U.S. Bank, Nat'l Ass'n v. Rosenberg, 581 B.R. at 430.

Meanwhile, on the day after he obtained the 2013 Judgment, Rosenberg transferred the judgment to the Trust, which he created to benefit his son. Because setoff was denied, the Bank paid Rosenberg's 2013 Judgment and attempted to execute on its 2015 and 2016 judgments. It domesticated its judgments in Florida, where Rosenberg lived. Unable to uncover Rosenberg's assets, the Bank filed the underlying proceedings supplementary. The Bank asserted that Rosenberg's transfer of the 2013 Judgment to the Trust was a fraudulent transfer to an insider intended to delay, hinder, or defraud creditors under subsections 56.29(3) and (6) of the Florida Statutes. The trial court agreed and entered summary judgment for the Bank, which we now review.

In its final summary judgment, the trial court determined that the Bank established a prima facie case of fraud, which Rosenberg and the Trust failed to rebut as required by subsection 56.29(3)(a). Its order states:

The transfer was to an insider, the Trust; the transfer was made after Rosenberg had been sued by U.S. Bank; the transfer was of substantially all of Rosenberg's assets; Rosenberg was insolvent or became insolvent shortly after the transfer was made; and Rosenberg retained possession or control of the transferred asset, the 2013 Rosenberg Judgment, as well as the transferee, the Trust (and its assets).

Regarding Rosenberg's control of the transferred asset, the trial court indicated that the record revealed no dispute of fact concerning the following:

[T]he Trust owns the apartment (located at the Four Seasons in downtown Miami) where Rosenberg has lived since 2004 or 2005; pays all of the expenses for the apartment as well as Rosenberg's other living expenses (meals, etc.) since at least 2010; and owns the vehicle (currently a Land Rover) that Rosenberg and his wife, Sara, use whenever needed. Rosenberg then clearly continued to enjoy use of the Trust's assets, including the fruits of the 2013 Rosenberg Judgment, after transfer.

In addition, Rosenberg, through counsel, has admitted in open court that, even though he was not a named trustee or beneficiary, he nevertheless controlled the Trust, that no one else could make any decisions for the Trust, and that he could put money in and take money out of the Trust as he wanted. Douglas Rosenberg, the grantor of the Trust and Rosenberg's son, confirmed this fact, having testified at the deposition in May 2012 that his father, Maury Rosenberg, controls the Trust's cash.

It further ruled that the Bank was entitled to a money judgment in the amount of the 2013 Judgment transferred to the Trust.

ANALYSIS

On appeal, Appellant argues that the trial court's entry of judgment in these circumstances violated Florida law governing proceedings supplementary and federal bankruptcy law governing setoffs. We address each argument in turn.

I. Florida's Proceedings Supplementary to Execution.

A. Introduction.

Appellant contends the trial court erred when it set aside the transfer of Rosenberg's 2013 Judgment to the Trust as fraudulent and entered a money judgment. This was error, Appellant maintains, because the fraudulent transfer provision in subsection 56.29(3) of the Florida Statutes (1) has a four-year statute of limitations different from the life-of-the-judgment limit that applies to other proceedings supplementary; (2) does not allow for a money judgment as a remedy for a fraudulent transfer; and (3) does not apply to the fraudulent transfer of funds. We reject these arguments as contrary to the plain text of section 56.29.

B. Subsection 56.29(3)'s statute of limitations extends for the life of the judgment.

Appellant first argues that the trial court erred in entering a judgment because the statute of limitations had run. Rosenberg transferred his 2013 Judgment to the Trust on March 15, 2013. The Bank commenced proceedings supplementary to set aside the transfer as fraudulent under subsection 56.29(3) in April 2018. Appellant argues that the filing of proceedings supplementary was untimely because a claim of a fraudulent transfer under subsection 56.29(3) is governed by the four-year statute of limitations contained in the Uniform Fraudulent Transfer Act, Chapter 726, Florida Statutes, not the life-of-the-judgment limitations that applies to other proceedings supplementary.

In support, Appellant cites to McGregor v. Fowler White Burnett, P.A., 332 So.3d 481 (Fla. 4th DCA 2021). In McGregor, a judgment creditor attempted to use proceedings supplementary to void a debtor's transfer of funds to a trust account where the moneys were ultimately spent to benefit the debtor. Id. The Fourth District held that the fraudulent transfer remedy under subsection 56.29(3) did not extend for the life of the judgment but only for four years as applied to actions under the Uniform Fraudulent Transfer Act, Chapter 726, Florida Statutes. Id. at 488-90.

At the outset, the Fourth District acknowledged that "[u]nder the pre-2014 version of section 56.29, a judgment creditor could bring fraudulent transfer claims in proceedings supplementary for the life of the judgment, notwithstanding [Chapter 726's] much shorter limitations period." Id. at 489. Indeed, that fraudulent transfer claims under proceedings supplementary could traditionally be brought for the life of the judgment is beyond dispute. Biel Reo, LLC v. Barefoot Cottages Dev. Co., LLC, 156 So.3d 506, 507-08, 511 (Fla. 1st DCA 2014). See also Uoweit, LLC v. Fleming, 300 So.3d 1201, 1203 (Fla. 4th DCA 2020) ("Historically, a judgment creditor could start proceedings supplementary for the life of the judgment."); Fla. R. Civ. P. 1.550(a) ("Executions on judgments shall issue during the life of the judgment [E]xecution or other final process may be issued on special order of the court at any time after judgment."); § 56.021, Fla. Stat. ("When issued, an execution is valid and effective during the life of the judgment, order, or decree on which it is issued.").

The Fourth District noted, however, that "[i]n 2014, for the first time, the Florida legislature specifically incorporated the provisions of chapter 726 and applicable rules of civil procedure in connection with claims concerning the judgment debtor's assets brought under chapter 726." McGregor, 332 So.3d at 489. In this manner, the Fourth District concluded, subsection 56.29(3) lost its longer statute of limitations and became subject to Chapter 726's shorter statute of limitations. Id.

Any other interpretation, the Fourth District reasoned, would "lead to an absurd result whereby section 56.29 would simultaneously provide for one cause of action for money judgments for fraudulent transfers subject to [Chapter 726's] statute of repose (under 56.29(9)) and an identical cause of...