Sun First Nat. Bank of Orlando v. Gieger
| Decision Date | 10 June 1981 |
| Docket Number | No. 80-1067,80-1067 |
| Citation | 402 So.2d 428 |
| Parties | SUN FIRST NATIONAL BANK OF ORLANDO, a National Banking Association, Appellant, v. W. L. GIEGER, a/k/a Wilfred L. Gieger, and Henrietta W. Gieger, his wife, Appellees. |
| Court | Florida District Court of Appeals |
Patrick T. Christiansen of Akerman, Senterfitt, Eidson, Orlando, for appellant.
Ronald L. Sims of Hoffman, Hendry, Stoner, Sims & Sawicki, Orlando, for appellee W. L. Gieger.
Robert F. Evans, Jr., Orlando, for appellee Henrietta W. Gieger.
This is an appeal from an order dissolving a writ of garnishment obtained by the appellant, Sun First National Bank of Orlando, issued against J. Nolan Carter and wife as debtors of the judgment debtor appellees, W. L. and Henrietta W. Gieger. The bank had obtained a judgment in the amount of $24,193.17 against the Giegers, and then on March 27, 1980, initiated garnishment proceedings to collect it from the Carters as garnishees. In his answer to the writ, Carter admitted currently owing the Giegers $570.58 due as the first payment on a $47,000 note and mortgage executed to the Giegers on February 21, 1980, for the purchase of the latters' homestead. The note was amortized over a ten-year period.
In addition to the note and mortgage, the Carters paid the Giegers $16,000 cash as a deposit on the sale. Prior to the sale of the homestead, the Giegers had separated; the cash deposit was divided and Mr. Gieger assigned his interest in the note and mortgage to Mrs. Gieger, who intended to use the payments in the purchase of a new home for herself and two minor children.
The Giegers moved to dissolve the writ on the basis that the mortgage payments were intended by the Giegers to be used for the purchase of a new homestead, to be purchased for $59,000 and, therefore, said mortgage payments were exempt from levy of execution by the Florida Constitution. 1
The trial court held an evidentiary hearing and, as a result thereof, entered the following order dissolving the writ of garnishment, and it is this order which we review on this appeal:
THIS CAUSE came on to be heard before the Court on the 27th of May, 1980, upon the Motion to Dissolve Garnishment filed by the Defendant, W. L. Gieger, May 2nd, 1980. The Court finds that this case is controlled by Orange Brevard Plumbing & Hearing (sic) Co. v. Lacroix, 137 So.2d 201 (Fla. 1962). The testimony of the parties in this case before the Court indicates that from the sale of their property on Timberlane which was covered by the homestead exemption was sold and $16,000.00 from that sale was put up for a new home costing approximately $59,000.00. The bank has sought to garnish as not being homestead the Nolan Carter mortgage of $21,500.00 which was to be paid over a ten (10) year period on the basis that only cash could be considered. That is, the note and mortgage lost their character as land and because of the time period could not be considered as being applied towards the new homestead. The Orange Brevard case indicates that it is the good faith intention prior to and at the time of the sale of the property covered by the homestead exemption to reinvest the proceeds in another homestead within a reasonable time. Only so much of the proceeds as are intended to be put in another homestead may be exempt and any surplus should go to the general assets of the debtor. The homestead law is liberally construed to allow the homestead exemption for debtors. Since more than the $21,500.00 coming from Nolan Carter will be required to be used toward the securing of the replacement homestead, they should not be penalized because instead of getting all cash at the time of sale of the covered homestead on Timberlane, they received in part a note and mortgage to be applied over a period of time for the replacement homestead. When the Orange Brevard Court indicated the investment had to be within a reasonable time they were considering the time between the sale of the exempt homestead and the purchase of the replacement homestead. Therefore, it is;
CONSIDERED, ORDERED and ADJUDGED that the Bank's garnishment shall be and the same is hereby dissolved.
DONE and ORDERED in Chambers at Orlando, Orange County, Florida this 18th day of August, 1980.
We agree with the trial court that this case is controlled by the 1962 opinion of the Florida Supreme Court in the Orange Brevard case cited above. In that case, the seller of the homestead was a judgment debtor. At the time of purchase, the buyer withheld $6,000 from the purchase price pending a determination of whether the judgment was a lien on the property involved. A judgment creditor garnished the $6,000 cash while it was in the hands of the buyer's attorney. The sellers of the homestead then filed a motion to dissolve the writ of garnishment on the ground that the $6,000 was exempt from forced levy as the proceeds from the sale of homestead property. The Orange Brevard court held that the proceeds of a voluntary sale of a homestead were exempt from the claims of creditors, just as the homestead itself was exempt:
(I)f, and only if, the vendor shows, by a preponderance of the evidence an abiding good faith intention prior to and at the time of the sale of the homestead to reinvest the proceeds thereof in another homestead within a reasonable time. Moreover, only so much of the proceeds of the sale as are intended to be reinvested in another homestead may be exempt under this holding. Any surplus over and above that amount should be treated as general assets of the debtor. We further hold that in order to satisfy the requirements of the exemption the funds must not be comingled with other monies of the vendor but must be kept separate and apart and held for the sole purpose of acquiring another home. The proceeds of the sale are not exempt if they are not reinvested in another homestead in a reasonable time or if they are held for the general purposes of the vendor. (Emphasis in the original).
Sun Bank argues that when the exempt homestead property changes its form, it loses it exemption, citing Holmes v. Blazer Financial Services, Inc., 369 So.2d 987 (Fla. 4th DCA 1979), and Hertz v. Fisher, 339 So.2d 1148 (Fla. 3d DCA 1976). These cases are inapposite, because they deal with the scope of the statutory exemption of wages due granted under section 222.11, Florida Statutes (1979). The Orange Brevard case clearly stands for the proposition that homestead property can...
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