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Schanck v. Gayhart

Florida Court of Appeals, First District

April 30, 2018

John G. Schanck, Appellant,
v.
William M. Gayhart and Debra L. Buchanan, as Co-Personal Representatives of the Estate of Myong-He Gayhart, Appellees.

         Not final until disposition of any timely and authorized motion under Fla. R. App. P. 9.330 or 9.331.

          On appeal from the Circuit Court for Duval County. Hugh A. Carithers, Judge.

          Stephanie A. Sussman of Bledsoe, Jacobson, Schmidt, Wright & Sussman, Jacksonville; Gideon I. Alper and Jonathan B. Alper of Alper Law, PLLC, Oviedo, for Appellant.

          Paul J. Battista, William Barry Blum and Heather L. Harmon of Genovese Joblove & Battista, P.A., Miami, for Appellees.

          B.L. Thomas, C.J.

         Appellant argues that the trial court exceeded its authority and improperly exercised jurisdiction over assets located outside of Florida. The court ordered Appellant to cancel, reissue, and turn over to his former wife's estate stock and membership certificates in Stellar Recovery, Inc., and DataSignals, LLC, Florida business entities owned solely by Appellant. Because we conclude the trial court was within its legal and equitable authority to aid the Estate in executing a monetary judgment against Appellant, we affirm.

         I. Background

         In 2015, the marriage between Appellant and his late wife Myong-He Gayhart was dissolved by Consent Final Judgment. Gayhart waived alimony and claims to her share of certain assets, including any interest in Stellar Recovery, Inc., in exchange for an equalizing payment of $2.5 million, to be paid by Appellant in monthly installments. Thus, Appellant was able to retain 100% interest in Stellar.

         As Gayhart was terminally ill, the settlement agreement specifically provided that the payments would survive her death and could be enforced by her estate. But following Gayhart's death, Appellant failed to make payments to the Estate. A judgment for $207, 862.64, covering five consecutive missed payments, was entered December 20, 2016. Appellant paid this judgment on February 9, 2017, but by that time had failed to make payments due in January and February 2017, and a second judgment for $74, 475.81 was entered on February 27, 2017.

         At his deposition in February 2017, Appellant testified that he did not know where the stock certificates were located. The Estate then filed a motion seeking a court order to aid in executing the judgment against Appellant. The motion requested that the court order Appellant to turn over the stock and membership certificates in Stellar Recovery, Inc. and DataSignals, LLC, and that if the certificates had been lost or were unable to be located, to order Appellant to reissue the certificates and turn them over to the Estate.

         Appellant did not appear at the hearing on the Estate's motion, but the parties stipulated to his affidavit his testimony. Appellant asserted that in December 2016 or January 2017, the Stellar and DataSignals certificates had been transported to his new wife's residence in Canada. Although this change in location occurred only weeks before Appellant's deposition, where he testified that he did not know where the certificates were located, he provided no explanation for his change in testimony. Appellant's counsel stated that she had only recently learned the certificates were in Canada and that the location was "a surprise to all of us."

         Appellant's counsel conceded that the law permitted a creditor to take a debtor's interests in a single-member LLC or a corporation fully owned by the debtor, but contended that, because the certificates were located outside Florida, the court lacked jurisdiction. Appellant further argued that because the certificates were in a foreign jurisdiction, the Estate was required to seek relief in the foreign jurisdiction. The Estate argued that, while the court did not have in rem jurisdiction over the certificates, it had in personam jurisdiction over Appellant and could order him to take action with respect to the certificates. The Estate relied on section 678.1121(5), Florida Statutes, which broadly authorizes the court to give aid to a creditor to reach a certificated security interest.

         The court, concluding that the certificates "could not be located, " and disagreeing with Appellant that a "loophole in the law" required the Estate to pursue the certificates in other jurisdictions, ordered Appellant to cancel the existing stock and membership certificates in Stellar and DataSignals, reissue them in his name, and deliver them to counsel for the Estate. In his motion for rehearing and reconsideration, Appellant argued that Stellar and DataSignals were necessary parties to effectuate the court's order and that there was insufficient evidence ...


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