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Wells Fargo Equipment Finance, Inc. v. Bacjet, LLC

Florida Court of Appeals, Fourth District

June 21, 2017

WELLS FARGO EQUIPMENT FINANCE, INC., Appellant,
v.
BACJET, LLC, a Florida limited liability company, BERNARD A. CARBALLO, CARBALLO VENTURES, LTD., a Florida limited partnership, BERNARD A. CARBALLO, as Trustee for the BERNARD A. CARBALLO LIVING TRUST, CARBALLO FAMILY LTD., a Florida limited partnership, ACP JET CHARTERS, INC., a Florida corporation, and CARBALLO AVIATION, LLC, a Florida limited liability company and PRIME BANK OF OKLAHOMA, Appellees.

         Not final until disposition of timely filed motion for rehearing.

         Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm Beach County; Donald W. Hafele, Judge; L.T. Case No. 2012CA020828XXXXMB.

          Joseph H. Lang, Jr., and Donald R. Kirk of Carlton Fields Jorden Burt, P.A., Tampa, for appellant.

          Mark A. Levy and Brent V. Trapana of Brinkley Morgan, Fort Lauderdale for appellee, Prime Bank of Oklahoma.

          May, J.

         Whether Florida can exercise personal jurisdiction over an Oklahoma lender, whose subject loan is secured by homestead property in Florida is the question we must decide. A creditor of the Florida resident argues the trial court erred in determining that Florida did not have personal jurisdiction over the Oklahoma lender. We agree and reverse.

         The creditor, Wells Fargo Equipment Finance, obtained a $7, 200, 000 judgment against an individual ("debtor") in a dispute arising in Florida. The debtor lives in, and claims homestead on, his Florida home. The judgment was recorded in August 2014, in Florida.

         After domesticating its judgment in Oklahoma, the creditor served a post-judgment garnishment summons on the lender in connection with debtor's accounts at the lender. The lender is an Oklahoma corporation with its principal place of business in Edmond, Oklahoma. It is not in the business of making loans to residents of states other than Oklahoma.

         In its answer, the lender indicated that the debtor is also indebted to the lender, and the debt is evidenced by a promissory note and security agreement dated June 7, 2013. The lender holds a "first security interest against" the accounts and stock certificates of the debtor.

         When attempting to collect on the judgment against the debtor, the creditor learned that the lender loaned three million dollars to the debtor, who is a significant investor in lender's corporation, and secured the loan with collateral valued at six million dollars. The collateral includes liens against several of the debtor's deposit accounts, his stock in the lender's Bank Group, and his unencumbered homestead property located in Jupiter, Florida. The Florida property serves as the primary security to provide collateral protection; but, according to the lender's chief lending officer, the stocks and deposit accounts were included as main sources of repayment.

         The lender held the liens as a result of a loan it made to the debtor in June 2013, one year before the creditor obtained its judgment. The lender was aware of the dispute concerning a multi-million dollar jet between the creditor and debtor when it issued the loan, but it did not know the magnitude of the dispute or that a legal action had been filed. The lender also knew the debtor was in default on a multi-million dollar loan with a second creditor, First Fidelity Bank.

         After discovering the loan history, the creditor initiated proceedings supplementary by filing a complaint against the lender, alleging fraudulent transfers of certain stock certificates and bank accounts, and that the lender encumbered nearly all of the debtor's unencumbered property in exchange for a loan of half the value of the security interest transferred, with the intent to defraud creditors. The creditor asserted the trial court had personal jurisdiction over the lender under section 48.193, Florida Statutes (2014), and the lender conducted business in Florida by making loans against the debtor's real property located here.

         The lender moved to dismiss the original complaint. At the hearing on the motion, creditor's counsel explained that the mortgage facilitated the lender's willingness to loan money to the debtor. Without the mortgage, the creditor would be able to seize the debtor's bank stock and would not have a fraudulent transfer action against the lender. The court responded that the creditor needed to amend its complaint to make it more apparent that the Florida property collateralizing the loan formed a substantial nexus to Florida.

         The judge opined that, in his view, pleading in this vein would "pass muster" for personal jurisdiction. In its amended complaint, the creditor alleged jurisdiction was proper under sections 48.193(1)(a)1. and 3., Florida Statutes, by carrying on business in ...


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