State v. O'Connor
| Citation | 155 So.3d 479 |
| Decision Date | 20 January 2015 |
| Docket Number | No. 1D13–5743.,1D13–5743. |
| Parties | STATE of Florida DEPARTMENT OF FINANCIAL SERVICES, Appellant, v. Lisa O'CONNOR, f/k/a Lisa Zane, Appellee. |
| Court | Court of Appeal of Florida (US) |
Paul C. Stadler, Jr., Assistant General Counsel, Tallahassee, for Appellant.
Michael Farrar, Miami, for Appellee.
Unclaimed property and an unpaid judgment collide in this marital dissolution case. At issue is whether a judgment for unpaid child support and marital proceeds can form the basis for obtaining ownership of funds held as unclaimed property by the State.
The marriage of Lisa O'Connor and Nabeel Zane was dissolved on October 17, 1996. Nearly seven years later, the trial court entered a post-dissolution final judgment dated August 28, 2003, ordering Zane to pay O'Connor $2,050.80 per month in child support, half of the proceeds from the sale of the marital home ($67,939.63), and half of the proceeds from the sale of a Disney timeshare ($8,124.00). After seven more years passed, the trial court certified on October 14, 2010, that Zane had failed to pay court-ordered support payments into the depository, resulting in an arrearage balance of $177,860.40. Within a few months, O'Connor filed a judgment lien against Zane in this amount.
On February 11, 2011, O'Connor filed a motion for declaration that she was entitled to the approximately $32,430.79 of funds held in several accounts by the Bureau of Unclaimed Property of the Department of Financial Services (“Department”) with Zane listed as the owner; Zane, we are told, has fled the country to the Middle East. The Department intervened and moved to dismiss, contending that the circuit court lacked jurisdiction because O'Connor had not exhausted administrative remedies available to her to seek funds under the Department's control. The court granted the Department's motion and this Court affirmed with a written opinion. O'Connor v. Zane, 79 So.3d 105 (Fla. 1st DCA 2012) [O'Connor I ]. In its concluding paragraph, the Court noted that:
[I]f Ms. O'Connor files a claim under section 717.124, the department must determine whether it is in possession of unclaimed property belonging to Mr. Zane, and if the property consists of cash, it must state the amount. Ms. O'Connor may then obtain legal process or pursue judicial remedies, if necessary, to execute her judgment against the property.
79 So.3d at 106. Armed with this Court's opinion, O'Connor immediately filed an amended judgment lien against Zane, and a writ of execution was delivered to the Leon County Sheriff, who was instructed to find Zane and seize his assets.
A year later, on May 28, 2013, O'Connor filed a claim with the Department seeking Zane's unclaimed property pursuant to section 717.124, Florida Statutes. In response, the Department issued a “Notice of Intent” finding that only Zane—not O'Connor—was entitled to the unclaimed property. On June 26, 2013, the Department issued a Final Order denying O'Connor's claim.
Having exhausted administrative remedies, O'Connor filed a writ of garnishment under section 77.049 for Zane's unclaimed funds, which the Department moved to dismiss and dissolve on sovereign immunity grounds. After a hearing on the motion, the trial court entered an order denying it. The ruling was based on its statements at the hearing that: O'Connor I was persuasive, even if dicta, as to O'Connor's legal rights; section 61.12, Florida Statutes, waived sovereign immunity for purposes of garnishing the unclaimedproperty; a one-time transfer of the unclaimed property did not add much work for the State compared with ongoing garnishments; unclaimed funds were much like bank accounts that can be transferred; and public policy favored the result reached. This appeal followed.
The central focus of this appeal is whether sovereign immunity bars O'Connor from reaching the unclaimed funds at issue. The Department contends that neither the garnishment statute, section 61.12, nor the unclaimed property statute, section 717.124, clearly and unequivocally waive sovereign immunity for the purposes of allowing judgment creditors to reach such funds. O'Connor counters that the purpose of section 717.124 is to return unclaimed property to its owner. Accordingly, she asserts that her equitable and legal claim of ownership over the funds arising from the judgment lien and writ of execution entitles her to the unclaimed funds of her former spouse. She argues that sovereign immunity is not implicated because the State is merely a custodian of the property in the unclaimed funds accounts, not the title holder or owner of the accounts. Alternatively, even if sovereign immunity were implicated, section 61.12 waives sovereign immunity for her garnishment of the accounts. Finally, O'Connor argues that the Department's position violates the law of the case, set forth in O'Connor I.
In reply, the Department again emphasizes that no clear and unequivocal waiver of sovereign immunity has been shown, arguing that the trial court erred in finding that section 61.12 does so. Allowing the garnishment statute to waive sovereign immunity for purposes other than wages, it asserts, would disrupt administrative processes by subjecting the Department to judgment creditors seeking funds in unclaimed property accounts. As to O'Connor I, it is not law of the case because the statements that O'Connor and the trial court rely upon are dicta.
The disposition of unclaimed property is the subject of Chapter 717, Florida Statutes. Section 717.1201(1) states that once unclaimed property is paid to or delivered to the Department, the A person attempting to claim such property must turn to section 717.124, which provides: “Any person, excluding another state, claiming an interest in any property paid or delivered to the department under this chapter may file with the department a claim....” Further, section 717.101(18) defines “owner” for purposes of unclaimed property as, among other things, “a person having a legal or equitable interest in property subject to this chapter....”
In O'Connor I, this Court held that O'Connor had not exhausted her administrative remedies because she did not file a claim with the Department pursuant to Chapter 717. Affirming dismissal for that reason, this Court noted:
79 So.3d at 106. The Department has since determined that the unclaimed property belonged to Zane, not O'Connor. As a result, the Department denied O'Connor's claim to the funds. O'Connor then sought “judicial remedies ... to execute her judgment against the property,” id., which the Department resisted below and continues to resist in this appeal, claiming sovereign immunity.
The primary purpose of Chapter 717, however, is to return unclaimed property to its owners. Because Zane reneged on his legal obligations to pay O'Connor, and has failed to claim property held in the custody of the State, he forfeited his ownership interest. The trial court's order below functions as a determination that the Department, as custodian, is relieved of its obligation to hold the funds for Zane.1 Further, the trial court's orders throughout the post-dissolution period establish that O'Connor's rights trump Zane's ownership interest in the unclaimed accounts. These orders have given O'Connor “legal or equitable interest in the property” under section 717.101(18). Under these circumstances, where the State is acting in a custodial capacity, sovereign immunity does not bar her from claiming and obtaining legal ownership of what she is due. Consistent with O'Connor I and the post-dissolution orders throughout O'Connor's plight, her claim to the unclaimed funds is now final and complete.
The Department rightly points out that sovereign immunity must be clearly and unequivocally waived. The Department's theory, however, assumes this is a classic garnishment action in which a judgment creditor seeks to garnish sums, such as wages or salaries, earned by judgment debtors, which are paid by state entities. But this case is different in kind from previous sovereign immunity-garnishment cases2 because the state entity here is a custodian of the judgment debtor's (unclaimed) property; it is not indebted in some way to Zane, the judgment debtor, for salaries or other funds it may owe him. O'Connor does not seek State funds yet to be tendered to Zane as a salary; rather, she seeks Zane's unclaimed property that the State is holding for “safekeeping” per section 717.1201(1). The trial judge correctly recognized that the funds sought are akin to bank accounts, and that the writ of garnishment here is a one-time transaction for Zane's accounts themselves, rather than an ongoing garnishment of wages or salary.
In this regard, Chapter 717 is a detailed mechanism for citizens to make claims to property held by the Department, property that is not the State's. See § 717.1201(1). The ownership dispute here is not O'Conner versus the Department—a case in which...
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Yergin v. Georgopolos, 3D16–2192
...or pursue judicial remedies, if necessary, to execute her judgment against the property."); State Dep't of Fin. Servs. v. O'Connor , 155 So.3d 479, 481 (Fla. 1st DCA 2015) (O'Connor II ) ("In O'Connor I , this Court held that O'Connor had not exhausted her administrative remedies because sh......