Tardif v. McCuan et al

Filing 24

OPINION AND ORDER reversing and vacating the Bankruptcy Court's May 13, 2016 Order, and the proceedings are remanded for further proceedings consistent with this Opinion and Order. The Clerk shall enter judgment accordingly, transmit a copy of this Opinion and Order to the Clerk of the Bankruptcy Court, and close the file. Signed by Judge John E. Steele on 3/29/2017. (RKR)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
IN RE:

WILLIAM P. MCCUAN

ROBERT E. TARDIF, as chapter
7 Trustee for the Bankruptcy
Estate of William P. McCuan,
Appellant,
v.

Case No: 2:16-cv-386-FtM-29

JILL
MCCUAN,
WILLIAM
P.
MCCUAN, as Co-Trustee of the
McCuan Irrevocable Trust,
IRA SUGAR, as Co-Trustee of
the
McCuan
Irrevocable
Trust,
K&M
DEVELOPMENT
CORPORATION,
INC.,
MDG
COMPANIES OF NAPLES, INC.,
MDG CAPITAL PARTNERS REALTY,
INC., MDG CAPITAL PARTNERS
FINANCIAL
CENTRE,
INC.,
LAKEFRONT NORTH INVESTORS,
LP, and MCCUAN IRREVOCABLE
TRUST,
Appellees.
OPINION AND ORDER
This matter comes before the Court on the appeal of the
Bankruptcy Court's May 13, 2016 Order Granting Motion to Dismiss
[ ] With Prejudice (Doc. #1, pp. 5-6.)

1

1

Appellant Robert E.

The Court will refer to the District Court docket as “Doc.”,
the Bankruptcy case docket as “Bankr. Doc.”, and the Adversary
Proceeding docket as “Adv. Doc.”.
Copies of the relevant
documents were designated and transmitted by the Bankruptcy Court,
or are otherwise available through PACER and judicially noticed.

Tardif, Jr., the Chapter 7 Trustee for the Bankruptcy Estate of
William P. McCuan (the Trustee or appellant) filed an Initial Brief
(Doc.

#13).

Appellees

Jill

McCuan

(Mrs.

McCuan),

McCuan

Irrevocable Trust, William P. McCuan (Debtor), as co-trustee of
the McCuan Irrevocable Trust, Ira Sugar, as co-trustee of the
McCuan Irrevocable Trust, K&M Development Corporation (K&M), MDG
Companies of Naples, Inc., MDG Capital Partners Realty, Inc., MDG
Capital

Partners

Financial

Center,

Inc.

(collectively

MDG),

Lakefront North Investors, LP (Lakefront) (collectively appellees
or appellee-defendants) filed an Answer Brief (Doc. #20).

On

December 23, 2016, the Trustee filed a Reply Brief (Doc. #23).
For the reasons set forth below, the Bankruptcy Court's May
13, 2016 Order Granting Motion to Dismiss [ ] With Prejudice (Doc.
#1,

pp.

5-6)

is

reversed,

and

the

case

is

remanded

to

the

Bankruptcy Court for further proceedings consistent with this
Opinion and Order.
I.

Relevant Bankruptcy Court Proceedings

On January 29, 2014, William P. McCuan (Debtor) filed a
Voluntary Petition under Chapter 7 of the Bankruptcy Code.
#4-6, Bankr. Doc. #1.)

(Doc.

Robert E. Tradiff was appointed the Chapter

7 Trustee for the bankruptcy estate.
On January 29, 2016, the Trustee filed a Complaint to Avoid
and Recover Fraudulent Transfers and for Related Relief (Doc. #411) (the Complaint) against appellee-defendants in an adversary

- 2 -

proceeding in the Bankruptcy Court.
sought

to

avoid

and

recover

The twelve-count Complaint

numerous

allegedly

fraudulent

transfers made by Debtor which were asserted to be either “actualintent fraudulent transfers” (Counts I, III, V, VII, IX, XI) or
“constructive fraudulent transfers” (Counts II, IV, VI, VIII, X,
XII).

The counts were brought pursuant to the Bankruptcy Code,

11 U.S.C. §§ 554, 550, and the Florida Uniform Fraudulent Transfer
Act (FUFTA).

The Complaint alleged the following:

Debtor filed his Chapter 7 petition on January 29, 2014 (the
Petition Date).

(Doc. #4-11, ¶ 2.)

Debtor’s non-filing spouse.

Jill McCuan (Mrs. McCuan) is

(Id., ¶ 4.)

In October 2008, Debtor defaulted on substantial obligations
he owed to Regions Bank (id., ¶ 17), which were ultimately reduced
to judgments exceeding $14.1 million by mid-2011 (id., ¶ 18).
Shortly before defaulting in late 2008, Debtor engaged in a series
of

transactions

intended

to

hinder

and

delay

Regions

Bank’s

anticipated collection efforts, including moving his substantial
asserts out of his individual name and into purportedly joint
ownership with his wife (id., ¶ 19).
Prior to the Petition Date, Debtor individually owned an
investment account at Brown Investment Advisory and Trust Company
ending in number ***601-1 (the Brown Account), which had assets in
excess of $1 million.

(Id., ¶ 20.)

In September 2008, one month

before defaulting on the Regions Bank debt, “Mrs. McCuan’s name

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was added to the Brown Account for no consideration.”
21.)

(Id., ¶

The Complaint alleges that this was “a transparent effort

by the Debtor to hinder and delay Region’s collection efforts by
converting his non-exempt asserts in the Brown Account into exempt
tenancy by the entirety (TBE) assets jointly owned by the McCuans.”
(Id., ¶ 21.)

The Complaint further asserts “[a]s to the Brown

Account, however, any assertion of TBE ownership would fail as a
matter of law because the addition of Mrs. McCuan to an account
already owned by the Debtor did not have the unity of time and/or
other unities required to establish TBE ownership.”

(Id., ¶ 21.)

After adding Mrs. McCuan’s name to the Brown Account, Debtor
began transferring

substantial

non-exempt

[from

the

Trustee’s

perspective] assets from the Brown Account to other accounts.
(Id., ¶ 22.)

The Complaint specifically alleges the following

such transfers were fraudulent:

(1) on or about August 17, 2010,

Debtor transferred over $500,000 from the Brown Account into an
account in the names of Debtor and Mrs. McCuan (id., ¶ 23); (2) on
or about September 3, 2010, Debtor transferred assets in excess of
$1 million from the Brown Account to a Suntrust account held in
the names of Debtor and Mrs. McCuan (id., ¶ 24); (3) on or about
September 26, 2011, Debtor transferred $100,000 from the Suntrust
Account to the McCuan Irrevocable Trust (id., ¶ 25); (4) on January
13, 2012, Debtor transferred $100,000 from the Suntrust Account to
an account held by K&M Development Corporation, Inc. (id., ¶ 26);

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and (5) on January 27, 2012, Debtor transferred $91,575 in cash
and assets worth over $650,000 from the Suntrust Account to an
account held by the McCuan Irrevocable Trust (id., ¶ 27).
various

counts

of

the

Complaint

seek

to

avoid

the

The

specific

transfers and recover the value of the transfers for the bankruptcy
estate,

asserting

that

the

transfers

consisted

of

non-exempt

property even though they came from the Brown Account because the
Brown Account was never TBE property.
The Complaint also alleges fraudulent activity in connection
with Debtor’s line of credit at Suntrust Bank.

The Complaint

alleges that in the four years prior to the Petition Date, five
separate transfers totaling $628,000 were made from Debtor’s line
of credit to K&M, MDG, MDG Capital Partners, or Lakefront (id., ¶
28).

Additionally,

on

or

about

May

18,

2011,

Debtor

used

$1,922,489 from the Suntrust account, consisting of proceeds of
the Brown Account, to pay down the line of credit (id., ¶ 29).
The effect of this was to funnel the $628,000 from the line of
credit to entities owned or controlled by Debtor, and then pay
down the line of credit with non-exempt Brown Account assets.
The Complaint seeks to recover the funds Debtor drawn from

(Id.)

the LOC and disbursed to defendants, but does not seek recovery of
any funds that repaid the line of credit.
On March 2, 2016, appellee-defendants filed their Motion to
Dismiss [ ] (Doc. #4-12) arguing, as relevant to this appeal, that

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(1) the claims are barred by the statute of limitations because
the transfers all fall outside the 4 year period; and (2) the
claims against MDG Companies of Naples, Inc., MDG Capital Partners
Realty, Inc., MDG Capital Partners Financial Centre, Inc. and
Lakefront North Investors, LP fail because there were no transfers
of assets or interests in an asset since a line of credit is not
an asset. 2
On April 28, 2016, after briefing was closed, the Bankruptcy
Judge announced her decision granting the motion to dismiss and
dismissing the Complaint with prejudice.

The Bankruptcy Court

made the following findings relevant to this appeal:

(1) The

Trustee was seeking to avoid allegedly fraudulent transfers of
funds

from

the

Brown

Account

(Doc.

#4-20,

p.

5);

(2)

“[i]n

September 2008, the Brown Account was retitled from Debtor’s
individual name to Debtor and his wife as tenants by the entirety”
(id., p. 6); (3) The Trustee alleges that 2010 and 2012 transfers
from the Brown Account to other parties controlled by Debtor and
to repay a line of credit with SunTrust Bank are avoidable as
fraudulent transfers (id.); (4) Debtor filed his Chapter 7 petition
on January 29, 2014, and therefore the four-year look-back period

2

The other issues are: (3) a lack of personal jurisdiction
over K&M Development Corporation or Lakefront North Investors, LP;
and (4) the cause of action was barred by res judicata and the
doctrine of claims splitting.

- 6 -

for avoidance of fraudulent transfers under Chapter 726, Florida
Statutes, relates to transfers which took place after January 29,
2010 (id.); (5) there is another pending adversary proceeding (Adv.
No.

14-402)

which

was

removed

from

state

court

seeking

supplementary proceedings under Florida Statute § 56.29 in which
the Trustee joined as a party plaintiff (id.); and (6) under §
56.29 the Court may avoid certain transfers made within one year
prior to a defendant being served with process, which in this case
was transfers by Debtor after April 13, 2008 (id.).
The Bankruptcy Court recognized that the linchpin of the
Trustee’s efforts to avoid the transfers was paragraph 21 of the
Complaint.

The Bankruptcy Court read a portion of paragraph 21

into the record:

“As to the Brown Account, however, any assertion

of TBE ownership would fail as a matter of law because the addition
of Mrs. McCuan to an account already owned by the Debtor did not
have the unity of time and/or other unities required to establish
TBE ownership.”

(Doc. #4-20, p. 7.)

stated:

“However,

judicial

declaration

the

Trustee’s

that

the

The Bankruptcy Court then

complaint

Brown

account

does

not

was

September 2008, owned by Debtor and his wife as TBE.”

not,

seek

a

after

(Doc. #4-

20, pp. 7-8.)
The Bankruptcy Court continued, stating that “[i]f the Brown
account was owned as TBE in 2008, then the 2010 and 2012 transfers
from the exempt account are not avoidable as fraudulent transfers.”

- 7 -

(Id., p. 8.)

The Bankruptcy Court also stated that the Florida

Supreme Court decision in Sneed v. Davis, 135 Fla. 271, 184 So.
865 (Fla. 1938), had held that a debtor “cannot commit fraud on
his creditors by disposing of exempt property that the creditor
had no legal right to look to for satisfaction of its claim.”
(Doc. #4-20, p. 8 (citing Sneed, 135 Fla. at 276)).
The Bankruptcy Court stated that it accepted as true the
Trustee’s allegations that Mrs. McCuan was added to the Brown
Account

in

September

2008.

The

Bankruptcy

Court

also

took

judicial notice of the allegation in the Amended Interpleader
Complaint (Adv. No. 9:14-ap-402-FMD, Doc. #4-8, ¶ 17), in which
“the Trustee alleges that on or about September 8, 2008, Debtor
transferred the subject Brown account from his sole name to tenants
by the entirety with his wife, Jill McCuan.”

(Doc. #4-20, p. 8.)

The Bankruptcy Court found, contrary to the argument of the
Trustee and a case from the Southern District of Florida, 3 that it
was generally accepted in the Middle District of Florida that the
addition of a spouse to an existing account satisfies the six
unities for TBE ownership 4.

The Bankruptcy Court found that while

3

The Trustee cited In re Aranda, No. 08-26059-BKC-PGH, 2011
WL 87237, at *1 (Bankr. S.D. Fla. Jan. 10, 2011).
4

The Bankruptcy Judge cited In re Kossow, 325 B.R. 478
(Bankr. S.D. Fla. 2005); In re Caliri, 347 B.R. 788 (Bankr. M.D.
Fla. 2006); In re Mathews, 360 B.R. 732 (Bankr. M.D. Fla. 2007),
rev’d, 382 B.R. 526 (M.D. Fla. 2007); In re Stephenson, No. 6:11BK-18901-ABB, 2012 WL 4896725 (Bankr. M.D. Fla. Oct. 4, 2012).

- 8 -

the 2010 and 2012 transfers alleged in the Complaint did fall
within the statute of limitations for a Chapter 726 action, the
claims were wholly dependent on finding that the September 2008
transfer from Debtor to himself and his wife as TBE was either a
fraudulent transfer or ineffective to create the TBE ownership.
(Id., p. 10.)

The Bankruptcy Court found that the Complaint sought

neither the avoidance of the September, 2008 transfer, nor a
judicial determination on the issue of TBE ownership.

(Id.)

The

Bankruptcy Court held, as a matter of law, that the September 2008
transfer of the Brown Account from Debtor to himself and his wife
as TBE was outside the four year reach-back period of Chapter 726 5
[and therefore could not be challenged], and that the account was
owned as TBE as of September 2008.

As a result, the Bankruptcy

Court found that the Trustee could not state plausible fraudulent
transfer

claims,

and

dismissed

the

complaint

with

prejudice

without leave to re-plead.
As to the line of credit issue, the Bankruptcy Court noted
that the Trustee’s allegation was that the funds used to repay the
line of credit originated from the Brown Account, and that “[i]n
theory” a debtor’s use of a line of credit to make transfers to

5

A cause of action regarding a fraudulent transfer is
extinguished unless brought within 4 years after the transfer was
made, or if later, within 1 year after the transfer was or could
reasonably have been discovered. Fla. Stat. § 726.110.

- 9 -

third parties followed by a repayment of the balance with nonexempt
assets could result in a fraudulent transfer scheme.
20, p. 12.)

(Doc. #4-

However, based on its determination that the Brown

Account was TBE exempt property, the Bankruptcy Court found that
no transfer of nonexempt funds were used to repay the line of
credit.

Therefore the motion to dismiss was granted on this issue

as well.
Based on these findings, an Order Granting Motion to Dismiss
[

]

With

Prejudice

(Doc.

#4-2)

was

filed

on

May

dismissing the case in its entirety with prejudice.
not directed or entered.

16,

2016,

Judgment was

The Trustee filed a timely Notice of

Appeal.
II.

Standard of Review

The United States District Court functions as an appellate
court in reviewing decisions of the United States Bankruptcy Court.
28 U.S.C. § 158(a); In re Failla, 838 F.3d 1170, 1174 (11th Cir.
2016).

The legal conclusions of the bankruptcy court are reviewed

de novo, while findings of fact are reviewed for clear error.

In

re Globe Mfg. Corp., 567 F.3d 1291, 1296 (11th Cir. 2009).
This appeal arises from the resolution of a motion to dismiss,
and Fed. R. Civ. P. 12(b) applies in adversary proceedings.
R. Bankr. P. 7012(b).

Fed.

The pertinent legal principles under Rule

12 are well established.

In deciding a Rule 12(b)(6) motion to

dismiss,

accept

the

Court

must

all

- 10 -

factual

allegations

in

a

complaint as true and take them in the light most favorable to
plaintiff.

Erickson v. Pardus, 551 U.S. 89 (2007).

To survive

dismissal, the factual allegations must be “plausible” and “must
be enough to raise a right to relief above the speculative level.”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).

See also

Edwards v. Prime Inc., 602 F.3d 1276, 1291 (11th Cir. 2010).
“A district court’s discretion to dismiss a complaint without
leave to amend is severely restricted by Fed. R. Civ. P. 15(a),
which directs that leave to amend shall be freely given when
justice so requires.”

Bryant v. Dupree, 252 F.3d 1161, 1163 (11th

Cir. 2001) (citations omitted).

“In the absence of any apparent

or declared reason — such as undue delay, bad faith or dilatory
motive

on

the

part

of

the

movant,

repeated

failure

to

cure

deficiencies by amendments previously allowed, undue prejudice to
the

opposing

party

by

virtue

of

allowance

of

the

amendment,

futility of amendment, etc. — the leave [to amend] sought should,
as the rules require, be freely given.”

Foman v. Davis, 371 U.S.

178, 182 (1962).
III. Issues on Appeal
A. Ownership Status of Brown Account
The Court finds that the Bankruptcy Court erred in concluding,
in a motion to dismiss decision, that the Brown Account became TBE
property

when

Mrs.

McCuan’s

name

existing account in September 2008.

- 11 -

was

added

to

her

husband’s

The existence of TBE status

simply cannot properly be determined at the motion to dismiss stage
given the factual allegations in the Complaint, and the lack of
any other properly considered record evidence which would support
such a determination.
The nature of a bankrupt’s interest in property is determined
by state law.

Butner v. United States, 440 U.S. 48, 55 (1979).

It is undisputed that Florida law governs the determination of the
ownership status of the Brown Account.
A transfer of property that is exempt from creditors may not
be the subject of an action to avoid a fraudulent transfer under
either the fraudulent transfer provisions of the Bankruptcy Code
or the Florida Uniform Fraudulent Transfer Act (“FUFTA”).

In re

Anderson, 561 B.R. 230, 240-41 (Bankr. M.D. Fla. 2016).

Under

Florida law, property that is absolutely exempt cannot be reached
by creditors, even if disposed of with a purpose to hinder, delay,
or to defraud, because the creditors never had the right to look
at such property in the first place.
271, 276-77 (Fla. 1938).

Sneed v. Davis, 135 Fla.

“[W]hen property is held as a tenancy

by the entireties, only the creditors of both the husband and wife,
jointly, may attach the tenancy by the entireties property; the
property is not divisible on behalf of one spouse alone, and
therefore it cannot be reached to satisfy the obligation of only
one spouse.”

Beal Bank, SSB v. Almand & Assocs., 780 So. 2d 45,

53 (Fla. 2001).

Additionally, property owned as tenancy by the

- 12 -

entireties by a bankruptcy debtor and a non-debtor is not part of
the bankruptcy estate and cannot be reached by creditors, provided
the property meets all requirements as a tenancy by the entireties
under applicable state law.

In re Musolino, 391 F.3d 1295, 1296

(11th Cir. 2004) (Chapter 13); In re Hill, 197 F.3d 1135, 1139
(11th Cir. 1999) (Chapter 7).
In Florida, a married couple is entitled to own property
jointly as tenancy by the entireties (TBE), as tenants in common,
or as joint tenants with a right of survivorship.
So. 2d at 52-53.

Beal Bank, 780

In Florida, a tenancy by the entireties property

“possesses six characteristics: (1) unity of possession (joint
ownership and control); (2) unity of interest (the interests in
the account must be identical); (3) unity of title (the interests
must have originated in the same instrument); (4) unity of time
(the

interests

must

have

commenced

simultaneously);

(5)

survivorship; and (6) unity of marriage (the parties must be
married at the time the property became titled in their joint
names).”

Beal Bank, 780 So. 2d at 52 (citations omitted).

also In re Musolino, 391 F.3d at 1298.

See

“Should one of these

unities never have existed or be destroyed, there is no entireties
estate.”

United States v. One Single Family Residence With Out

Buildings Located at 15621 S.W. 209th Ave., Miami, Fla., 894 F.2d
1511, 1514 (11th Cir. 1990).

- 13 -

When property is held jointly by a husband and wife, it is
presumed

to

be

held

as

a

tenancy

by

the

entirety

unless

specifically delineated otherwise, “as long as the account is
established by husband and wife in accordance with the unities of
possession,

interest,

survivorship.”

title,

and

time

Beal Bank, 780 So. 2d at 58.

and

with

right

of

In such a situation,

a party contending marital property is held in another form of
ownership must prove by a preponderance of evidence that a tenancy
by the entireties was not created.

Id. at 58-59.

The Bankruptcy Court was correct that the plausibility of the
Trustee’s fraudulent transfer claims is dependent upon the Brown
Account not being TBE property in and after September 2008.

If

the Brown Account was owned as TBE as of that date, it was exempt
property which was beyond the reach of Debtor’s creditors and not
a part of the bankruptcy estate, and thus there could be no
fraudulent transfers of that property.
The Bankruptcy Court was also correct that the September 2008
transfer of ownership in the Brown Account from Debtor to Debtor
and his wife could not be challenged by the Trustee because more
than

four

years

had

passed.

challenging that transfer.

The

Trustee,

however,

was

not

The Complaint did not assert the

September 2008 transfer was fraudulent, but rather the Trustee
asserted that the transfer did not create TBE property.

- 14 -

The Bankruptcy Court held, as a matter of law and contrary to
the allegations in the Complaint, that the September 2008 transfer
converted the Brown Account into TBE property.

Finding that no

other allegations could change this conclusion, the Bankruptcy
Court declined to allow the complaint to be amended and dismissed
it with prejudice.

The Court finds that both components of this

decision were erroneous.
The Bankruptcy Court stated that “[i]n September 2008, the
Brown Account was retitled from Debtor’s individual name to Debtor
and his wife as tenants by the entirety.”

(Doc. #4-20, p. 6.)

If

this was a finding of fact, the Bankruptcy Court violated the rule
that required the facts of a Complaint to be viewed in the light
most favorable to plaintiff.

The Complaint specifically alleged

that Mrs. McCuan was added to the Brown Account on a date after
the

account

was

consideration.

opened

in

her

husband’s

name,

and

for

no

The Complaint further alleged that the Brown

Account did not become TBE property because all of the six unities
were

not

present.

Nothing

in

these

allegations

support

the

Bankruptcy Court’s contrary finding that the Brown Account was TBE
property.
The Bankruptcy Court took judicial notice of the allegation
in the Amended Interpleader Complaint (Adv. No. 14-402) in which
the Trustee alleged that on or about September 8, 2008, Debtor
transferred the Brown Account from his sole name to tenants by the

- 15 -

entirety with his wife.

(Doc. #4-20, p. 8.)

The Bankruptcy

Court could take judicial notice of court documents such as the
Amended Interpleader Complaint for the fact that it had been filed,
but not for the truthfulness of its contents.

Lozman v. City of

Riviera Beach, Fla., 713 F.3d 1066, 1076 n.9 (11th Cir. 2013); In
re Steeley, 243 B.R. 421, 427 (Bankr. N.D. Ala. 1999) (“And while
this Court may not infer the truth of all of the facts in the
documents contained in those records, the Court may take judicial
notice of those records, and may take judicial notice of the
documents in the debtor’s file.” (citations omitted)).
If the statement that “in September 2008, the Brown Account
was retitled from Debtor’s individual name to Debtor and his wife
as tenants by the entirety” was intended as a legal conclusion, it
is not supported by the applicable law.

Further, assuming it is

possible to convert a husband’s solely-owned property into TBE
property, the record properly before the Bankruptcy Court does not
establish that such a conversion took place.
Florida law suggests that a transfer such as the one alleged
in this Complaint does not convert property into TBE property.
The Florida Supreme Court in Beal Bank 6 declined to overturn the
lower court’s unanimous decision that a bank account “lacked the
unities of time and title and thus [was] not held as tenancy by

6

780 So. 2d at 52 n.6 & 62.

- 16 -

the entirety” when a husband opened the account alone, and later
added his wife as co-owner.

Beal Bank, SSB v. Almand and Assocs.,

710 So. 2d 608, 616 (Fla. 5th DCA 1998) (Harris, J., concurring in
part and dissenting in part), overruled on other grounds by 780
So. 2d 45 (Fla. 2001).
approach.

Some Bankruptcy Courts have followed this

In re Aranda, 08-26059-BKC-PGH, 2011 WL 87237, at *3

(Bankr. S.D. Fla. Jan. 10, 2011) (where Debtor opened a singleparty account, subsequent addition of spouse as co-owner was not
sufficient to create a tenancy by the entirety); Smart v. City of
Miami Beach, Fla., 51 F. Supp. 3d 1299, 1303 (S.D. Fla. 2014)
(same).
The Bankruptcy Court’s reference in this case to the general
practice in the Middle District of Florida is not convincing in
the motion to dismiss context.

The best that can be said is that

some bankruptcy judges in the Middle District of Florida have held,
after

an

evidentiary

hearing

or

on

summary

judgment,

that

a

property interest acquired prior to marriage can be converted to
an interest held as tenants by the entireties through an assignment
executed subsequent to the marriage.

The effect of the dismissal

with prejudice in this case was to determine that a property
interest owned by one spouse will always be converted to an
interest held as tenants by the entireties by the addition of the
other spouse.

This is clearly not the law, since property can be

held by a married couple in other ways.

- 17 -

Even when a presumption

of ownership by entireties exists, it is a rebuttable presumption.
E.g., In re Kossow, 325 B.R. 478, 488 (Bankr. S.D. Fla. 2005) (the
presumption of a TBE may be rebutted through extrinsic evidence,
such as a signature card or a prenuptial agreement).
After a de novo review, the Court finds that a dismissal,
with or without prejudice, was erroneous.
B. Line of Credit Issue
“A party seeking to avoid a transfer as fraudulent must prove
by a preponderance that any properties allegedly transferred were
‘assets’

of

a

transferor.

Exempt

assets

do

not

constitute

transferrable ‘assets’ under § 726, because a transfer of such
assets does not prejudice a transferor’s creditors, who could not
have obtained satisfaction from such assets before any transfer.”
In re Lankry, 263 B.R. 638, 644 (Bankr. M.D. Fla. 2001).

The line

of credit issue was resolved by the Bankruptcy Court based upon
its erroneous holding that the Brown Account was TBE property.
That holding must be reversed and remanded to the Bankruptcy Court
for reconsideration.
C. Other Issues
Appellees argue that even if the Court concludes the dismissal
with prejudice was incorrect, the Bankruptcy Court can be affirmed
for two other reasons.

First, appellees argue that a Florida

statute of repose bars the fraudulent transfer claims (an issue

- 18 -

which was not raised in the Bankruptcy Court) 7.

Second, appellees

argue that the fraudulent transfer claims violated the doctrine
against claim-splitting (an issue on which the Bankruptcy Court
ruled against appellees).
As the undersigned has stated previously, a reviewing court
can affirm the Bankruptcy Court on any legal ground, regardless of
whether it was relied upon by that court.

In re Weeks Landing,

LLC, 439 B.R. 897, 914 (M.D. Fla. 2010).

This “tipsy coachmen”

doctrine, however, “does not permit a reviewing court to reverse
on an unpreserved and unargued basis.”
J & B Motel Corp., 4D16-0174,

City of Riviera Beach v.

So. 3d

, 2017 WL 1018521, at

*2 (Fla. 4th DCA Mar. 15, 2017) (quoting Advanced Chiropractic &
Rehab. Ctr. Corp. v. United Auto. Ins. Co., 103 So. 3d 866, 869
(Fla. 4th DCA 2012)).

As to the second ground, the Court agrees

with the decision of the Bankruptcy Court.
Accordingly, it is hereby
ORDERED AND ADJUDGED:
1. The

Bankruptcy

Court's

May

13,

2016

Order

Granting

Motion to Dismiss [ ] With Prejudice (Doc. #1, pp. 5-6),

7

The Eleventh Circuit “has repeatedly held
raised in the” lower court, “raised for the first
will not be considered by this court.” Access
Airlines Co., 385 F.3d 1324, 1331 (11th Cir.
omitted). The Court finds no exception applies
first ground.

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that an issue not
time in an appeal
Now, Inc. v. Sw.
2004) (citations
to consider this

incorporating the oral findings made on April 28, 2016, is
reversed and vacated, and the proceedings are remanded for
further proceedings consistent with this Opinion and Order.
2. The Clerk shall enter judgment accordingly, transmit a copy
of this Opinion and Order to the Clerk of the Bankruptcy
Court, and close the file.
DONE and ORDERED at Fort Myers, Florida, this
of March, 2017.

Copies:
Hon. Caryl E. Delano
Clerk, Bankr. Ct.
Counsel of Record

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29th

day