BEAR v. UNDERHILL (2024)

ORDER

Plaintiff David Bear has filed a motion for proceedings supplementary, asking the Court to issue notices to appear, to implead third parties, and for leave to file a supplemental complaint. Doc. 246. Defendant Douglas Underhill does not concede “the facts stated in Bear's Motion are accurate” or that “the relief ․ sought in the proceedings supplementary ․ should be granted,” but agrees proceedings supplementary are “the correct procedural tool to bring the necessary parties before the Court” to resolve Bear's claims. Doc. 248. Upon consideration, and after holding a status conference regarding the motion on October 21, 2024, the Court will GRANT the motion to the extent set forth herein.

I. Background

Bear obtained a judgment against Underhill in this litigation, which has remained unsatisfied. To collect on the judgment, Bear seeks to commence proceedings supplementary under Florida law and implead into this action Underhill's wife, Wendy Underhill, and his children, Bret Underhill and Avery Underhill (hereinafter referred to as the “Underhill Family Members”). Bear contends that Underhill fraudulently transferred his personal property to the Underhill Family Members to keep the property from being levied upon in satisfaction of the judgment. The property at issue includes a motorhome, a tractor, a vehicle, and several watercrafts.

II. Proceedings Supplementary

Federal Rule of Civil Procedure 69 states proceedings supplementary to and in aid of judgment or execution must comply with the procedure of the state where the court is located. Fed. R. Civ. P. 69(a)(1). In Florida, Fla. Stat. § 56.29 “governs proceedings supplementary, which allow for a judgment creditor ‘to ferret out what assets the judgment debtor may have or what property of his others may be holding for him, or may have received from him to defeat the collection of the lien or claim, that might be subject to the execution.’ ” Longo v. Associated Limousine Servs., Inc., 236 So. 3d 1115, 1118 (Fla. 4th DCA 2018) (quoting Young v. McKenzie, 46 So. 2d 184, 185 (Fla. 1950)). Proceedings supplementary provide a “summary equitable remedy” for the judgment creditor to recover properties in the hands of a third party without having to initiate a separate action. See Goldhoff v. Saunders, 2024 WL 1468803, at *2-5 (M.D. Fla. Feb. 22, 2024) (citing Estate of Jackson v. Ventas Realty, Ltd. P'ship, 812 F. Supp. 2d 1306, 1310 (M.D. Fla. 2011)); see also Walton v. St. Paul Fire & Marine Ins. Co., 2018 WL 5098965, at *3 (S.D. Fla. Aug. 10, 2018), report and recommendation adopted in part, 2018 WL 5098833 (S.D. Fla. Sept. 4, 2018) (citing Regent Bank v. Woodcox, 636 So. 2d 885, 886 (Fla. 4th DCA 1994)) (proceedings supplementary provide a “speedy and direct proceeding in the same court in which the judgment was recovered”).

“To initiate proceedings supplementary, section 56.29(1) ‘requires that the judgment creditor have an unsatisfied judgment and file an affidavit averring that the judgment is valid and outstanding.’ ” Longo, 236 So. 3d at 1119 (quoting Fundamental Long Term Care Holdings, LLC v. Estate of Jackson ex rel. Jackson-Platts, 110 So. 3d 6, 8 (Fla. 2d DCA 2012)). Once those requirements are satisfied, the judgment creditor is entitled to proceedings supplementary. See id. (“When a judgment creditor holds an unsatisfied judgment and files a motion and affidavit in compliance with section 56.29(1), ‘the judgment creditor is entitled to these proceedings supplementary to execution.’ ”) (quoting Fla. Stat. § 56.29(1)); Biloxi Casino Corp. v. Wolf, 900 So. 2d 734 (Fla. 4th DCA 2005) (“Upon a showing of the statutory prerequisites, the court has no discretion to deny the motion.”).

After proceedings supplementary have commenced, a judgment creditor may implead third parties into the action whom the judgment creditor believes are in possession of non-exempt property that could be used to satisfy the judgment. Section 56.29(2) sets forth the process for impleading such third parties and requires the judgment creditor to submit a motion or affidavit which describes the property in the hands of the third party. Once the motion or affidavit is submitted, the court “shall issue a Notice to Appear,” which “shall direct such person to file an affidavit ․ stating why the property ․ should not be applied to satisfy the judgment.” Fla. Stat. § 56.29(2).

Section 56.29 goes on further to state in subsection (3)(a) that if the property at issue was transferred by the judgment debtor to a relative “within 1 year before service of process on the judgment debtor in the original proceeding,” then “the judgment debtor has the burden of proof to establish that such transfer ․ was not made to delay, hinder, or defraud creditors.” Fla. Stat. § 56.29(3)(a). Under subsection (3)(b) the court “shall” order any “gift, transfer, assignment or other conveyance of personal property” “made or contrived by the judgment debtor to delay, hinder, or defraud creditors” “void and direct the sheriff to take the property to satisfy the execution.” Id. at § 56.29(3)(b). Thus, § 56.29(3) applies to transfers of property that constitute “actual fraud” and if those transfers were “within 1 year before service of process” in the original proceeding and to a family member, then the statute places the burden on the judgment debtor to prove that the transfer was not fraudulent. See SE Property Holdings, LLC v. McElheney, 2021 WL 9181838, at *5 (N.D. Fla. Mar. 8, 2021) (viewing subsection (3)(a) as shifting the burden of proof for certain transfers rather than as setting forth the elements of a claim), reconsideration denied, 2022 WL 1738002 (M.D. Fla. Mar. 15, 2022).

In addition to proceeding under subsection (3), a judgment creditor may also recover fraudulently transferred property under subsection (9). That section provides the “court may entertain claims concerning the judgment debtor's assets brought under Chapter 726 ¹ and enter any order or judgment, including a money judgment against any initial or subsequent transferee, in connection therewith, irrespective of whether the transferee has retained the property.” Fla. Stat. § 56.29(9). A claim brought under subsection (9) “shall be initiated by a supplemental complaint” and shall be subject to Chapter 726 and the rules of civil procedure. Id.

III. Discussion

Here, the Court finds that Bear has satisfied the requirements of § 56.29(1). Bear's motion for proceedings supplementary and his accompanying affidavit indicate: (1) this Court, under this case number, entered a judgment in his favor and against Douglas Underhill for $130,425.50, and the clerk taxed costs against Underhill in the amount of $5,167.50; (2) the unsatisfied amount of the judgment was, as of September 25, 2024, $139,718, which includes accrued interest; and (3) the execution is valid and outstanding. Doc. 246 & 246-1. Because Bear's motion and affidavit satisfy Fla. Stat. § 56.29(1)'s prerequisites, the Court must grant Bear's motion as it relates to commencing proceedings supplementary. See Longo, 236 So. 3d at 1119.

While it is clear that a judgment creditor who satisfies the requirements of 56.29(1) is entitled to proceedings supplementary, that is where the clarity ends. As more than one district court—including a court in this District—has noted, “§ 56.29 itself is not a model of clarity” and there is a “dearth of authority” in this area. McElheney, 2021 WL 9181838, at *3 (citing Saadi v. Maroun, 2022 WL 1737954, at *2 (M.D. Fla. Mar. 2, 2022)). Specifically, as discussed with the parties during the status conference, it is not entirely clear whether Bear can, or needs to, proceed under § 56.29(3) and § 56.29(9) on the same claims.

Bear asks the Court to both issue notices to appear under § 56.29(2) and for permission to file a supplemental complaint under § 56.29(9). Proceedings pursuant to notices to appear and supplemental complaints share some similarities. See W.P. Prods., Inc. v. Tramontina U.S.A., Inc., 2021 WL 1907029, at *2 n.4 (S.D. Fla. May 12, 2021) (noting the notice to appear and supplemental complaint mechanisms “involve similar procedures (i.e., the ability to respond, conduct discovery, file dispositive motions, and participate in a trial if the matter is not disposed of earlier)”). For example, courts determining whether transfers were made with actual fraudulent intent under either § 56.29 or § 726.105 look to the same badges of fraud. See In re McCuan, 603 B.R. 829, 843 (Bankr. M.D. Fla. 2019) (“Generally, the same factors determine whether a transfer was made with intent to hinder, delay, or defraud creditors under § 56.29 and § 726.105[.]”).

But the proceedings also have significant differences.² See Rosenberg v. U.S. Bank, 360 So.3d 795, 800 (Fla. 3d DCA 2023) (“the Legislature clearly maintained the fraudulent transfer remedy under subsection 56.29(3) as separate and distinct from the fraudulent transfer remedy under Chapter 726”). First, creditors always have the burden of proof in proceedings under Chapter 726, while, as stated above, under Fla. Stat. § 56.29(3)(a), the judgment debtor or transferee has the burden. See In re British Am. Ins. Co. Ltd., 607 B.R. 753, 757 (Bankr. S.D. Fla. 2019) (under § 56.29(3)(a), when “a judgment debtor transferred assets to a spouse, relative, or other person on confidential terms within 1 year before service of process in the original action,” “[i]t is presumed that transfers to such persons were intended to delay, hinder, or defraud creditors, and the judgment debtor has the burden of proving that they were not”); Rosenberg, 360 So. 3d at 800 (“Subsection 56.29(3) also shifts the burden of proof regarding transfers to the responding party in a manner that has no counterpart in Chapter 726.”).

Second, the remedy under § 56.29(3) only applies to personal property, while the remedies in Chapter 726 extend to real property. See Rosenberg, 360 So. 3d at 804 (“Subsection 56.29(3) refers to ‘personal property’ subject to execution and levy. The term ‘personal property’ is most often understood as the opposite of ‘real property.’ ”) (citation omitted); Saadi v. Maroun, 2022 WL 1050333, at *3 (M.D. Fla. Mar. 15, 2022) (noting the remedy in § 56.29(3) is limited to recovering personal property and does not extend to real property).

Third, while claims under § 56.29(3) are limited to “actual” fraudulent transfers, claims brought under Chapter 726 may include both actual fraud as well as constructive fraud.³ See McElheney, 2021 WL 9181838, at *5 (citing In re British Am. Ins. Co. Ltd., 607 B.R. at 759) (“[a] claim under subsection (3)(b) is an intentional fraud claim rather than a constructive fraud claim”); In re Character Corner, Inc., 2007 WL 4707459, at *3 (Bankr. M.D. Fla. July 30, 2007) (“Florida Statutes Sections 726.105(1)(a) and (1)(b) provide for the avoidance of transfers made or obligations incurred by a debtor arising from actual or constructive fraud.”).

Fourth, individuals served with a notice to appear may have a right to a jury trial under certain circumstances that may not be available under Chapter 726. See Jackson-Platts v. Gen. Elec. Cap. Corp., 727 F.3d 1127, 1138-39 (11th Cir. 2013) (noting that under § 56.29, a court may conclude a transfer was fraudulent in an expedited proceeding, which does not require a jury trial, and after that proceeding, the court may order the sheriff to seize the third party's property, which then triggers certain safeguards, including that the third party can stop the sheriff from taking the property by filing an affidavit and bond, and by doing so “the third party guarantees its right to a jury trial ‘to try the right of the property’ ”)⁴ ; Kearney Constr. Co. LLC v. Travelers Cas. & Sur. Co. of Am., 2020 WL 68011863, at *5 (M.D. Fla. Nov. 19, 2020) (“unlike chapter 56, chapter 726 itself contains no statutorily-prescribed right to a jury trial” and “courts interpreting [chapter 726's] provisions have generally found that no right to a jury trial exists where the remedies are equitable, rather than legal, in nature”).

Fifth, claims under § 56.29 and Chapter 726 are subject to different statutes of limitations.⁵ See McElheney, 2021 WL 9181838, at *2 (“Plaintiff's UFTA claims, which were—and must—be brought through § 56.29(9), were always subject [to] the UFTA's four-year statute of repose. Claims under § 56.29(3), on the other hand, ‘may be pursued at any time during the viability of the judgment, no matter how long ago the transfer occurred.’ ”) (citation omitted).

Adding to the quagmire, the caselaw is muddled when it comes to the question of whether a judgment creditor can simultaneously pursue the same relief based on the same theories of fraud through both a notice to appear under § 56.29(3) and a supplemental complaint under Chapter 726. Because of the differences in procedure, obligations, and burdens (discussed above), proceeding in tandem on the same actual fraud claims with notices to appear and a supplemental complaint could lead to inconsistent results. Thus, as one court noted, “[u]nder section 56.29, a judgment creditor has two procedural avenues available to it. It can either seek the issuance of a Notice to Appear under section 56.29(2), or it can initiate a fraudulent transfer action under section 56.29(9).” Kearney, 2020 WL 68011863, at *2 (emphasis added). The filing of a supplemental complaint may, therefore, “ ‘supersede[ ] and replace[ ]’ the Notices to Appear.” See Onemata Corp. v. Rahman, 2024 WL 4068653, at *3 (S.D. Fla. Aug. 28, 2024), report and recommendation adopted, 2024 WL 4056794 (S.D. Fla. Sept. 5, 2024) (denying third parties' motion to dismiss notices to appear as moot based on the filing of a supplemental complaint and noting the third parties “concede that the Supplemental Complaint ‘supersedes and replaces’ the Notices to Appear”).

Indeed, in most cases where proceedings supplementary have been commenced, the judgment debtor proceeds with either a notice to appear under § 56.29(2) or a supplemental complaint under § 56.29(9), unless the judgment debtor was pursuing a claim that falls outside of § 56.29(3). See Kearney, 2020 WL 68011863, at *3 (“Travelers elected to proceed under section 56.29(9) by filing a supplemental complaint, rather than under section 56.29(2) via a court-issued Notice to Appear”); see also, Peter Coppola Beauty, LLC v. Casaro Labs, Ltd., 2018 WL 4203686, at *2 (S.D. Fla. Aug. 31, 2018) (holding that if the judgment creditor seeks to hold a third party liable for the entire amount of the judgment by way of fraudulent transfer, alter ego, mere continuation, or successor liability legal theory, creditor must file a supplemental complaint under 56.29(9)); Goldhoff, 2024 WL 1468803, at *3-4 (issuing notices to appear as well as granting motion to file supplemental complaint to recover real property).

Moreover, not only may it not make sense procedurally for a judgment creditor to proceed under both procedural avenues, but it is also unclear whether claims under § 56.29(3) can be alleged in a supplemental complaint. For example, in Saadi, the court granted leave for the judgment creditor to file a supplemental complaint and also issued a notice to appear involving the same § 56.29(3) claims. However, in doing so, the court noted: “[T]he parties do not address whether Florida law permits a judgment creditor such as Saadi to simultaneously bring fraudulent transfer claims in a proceedings supplementary under both Florida Statute § 56.29(3)(b) via a notice to appear and under Florida Statute 56.29(9) pursuant to FUFTA via the filing of a supplemental complaint. ․ Because Saadi included his fraudulent transfer claim under § 56.29(3)(b) in his operative interpleader complaint (and both interpleader complaints before that) and no action was taken on the notice to appear after the claim was included in the interpleader complaints, the Court does not address the issue further.” Saadi, 2022 WL 1737954, at *5 n.9.

In a case arising from this District, however, Chief Judge Walker appeared to suggest that a claim under § 56.29(3) cannot be brought in a supplemental complaint. In McElheney, the court specifically addressed whether a judgment creditor could amend its supplemental complaint to include claims under § 56.29(3) and concluded it could not. The court found, instead, that “Plaintiff must use the notice to appear procedure described in § 56.29(2).”⁶ McElheney, 2021 WL 9181838, at *10. In reaching this conclusion, the court noted that in 2016, the legislature overhauled § 56.29 to include a notice to appear mechanism and provided specific guidance on the procedure for impleading third parties which had not existed in prior versions. Additionally, the court noted that under Federal Rule of Civil Procedure 69, the procedure the court employs “must accord” with Florida's rules. Id.

Here, Bear indicates he is seeking relief through the notices to appear under § 56.29(3) and (6). Doc. 246 at 13. The proposed notices to appear are based on Fla. R. Civ. P. Form 1.914(b). The Court finds the proposed notices satisfy Fla. Stat. § 56.29(2), as they describe with reasonable particularity the property that may be available to satisfy the judgment, advise the recipients of their ability to present defenses, indicate discovery is available, and state there is a right to a jury trial. Thus, the Court will issue the notices to appear to the Underhill Family Members.

In addition, Bear seeks leave to file a supplemental complaint. Bear's proposed supplemental complaint contains four counts. Doc. 246-5. Count 1 is an actual fraud claim under Fla. Stat. § 56.29(3). Counts 2 through 4 are claims under Chapter 726—Count 2 is an actual fraud claim under Fla. Stat. § 726.105(1)(a), Count 3 is a constructive fraud claim under § 726.105(1)(b), and Count 4 is a constructive fraud claim under Fla. Stat. § 726.106(1). The supplemental complaint relates to the same conveyances of property identified in the notices to appear and includes the same allegations of actual fraud. Additionally, the supplemental complaint contains allegations of constructive fraud related to the same properties identified in the notices to appear.

In light of the McElheney decision, the Court finds that a § 56.29(3) actual fraud claim cannot be raised in a supplemental complaint. Moreover, it seems unnecessary for Bear to pursue an actual fraud claim under Fla. Stat. § 726.105(1)(a) through a supplemental complaint, while simultaneously pursuing an actual fraud claim under Fla. Stat. § 56.29(3) through a notice to appear.

Thus, it appears to the Court that Bear has three options. First, he can pursue his actual fraud claims under § 56.29(3) through the notices to appear and forgo his constructive fraud claims under Chapter 726. Second, he can pursue his actual fraud claims under § 56.29(3) through the notices to appear and submit a new supplemental complaint to the Court that contains only the constructive fraud claims.⁷ Third, he can elect not to pursue relief under § 56.29(3) and refrain from serving the notices to appear that will be issued by the Court and, instead, submit a new supplemental complaint containing claims under Chapter 726 for actual and constructive fraud. In other words, if Bear takes this path, he will need to submit a new supplemental complaint that omits Count I.

Accordingly, it is ORDERED:

1. Bear's motion for proceedings supplementary, to implead third parties, and for leave to file a supplemental complaint, Doc. 246, is GRANTED to the extent set forth herein.

2. Proceedings supplementary are hereby commenced pursuant to Fed. R. Civ. P. 69 and Fla. Stat. § 56.29.

3. Wendy Kinton Underhill, Bret Cameron Underhill, and Avery Underhill are impleaded in this action.

4. The Court will issue the proposed notices to appear filed by Bear (Doc. 246-4). If Bear wants to proceed with his actual fraud claims under § 56.29(3), he shall, within fourteen (14) days of the date of this Order, serve the notices to appear attached to this Order, a copy of this Order, and a copy of the motion for proceedings supplementary on the impleaded defendants in accordance with applicable rules of procedure.

5. Bear shall file with the Court proof of service when each of the impleaded defendants is served with a notice to appear, the motion, and this Order.

6. If, in addition to the notices to appear, Bear wishes to proceed on theories of constructive fraud under §§ 726.105(1)(b) and 726.106(1), he may, within fourteen (14) days, file a motion for leave to file a new supplemental complaint which omits reference to § 56.29(3) and § 726.105(1)(a) actual fraud claims.⁸

7. If, however, Bear does not wish to pursue § 56.29(3) claims through the notices to appear, he shall, within fourteen (14) days, file a motion for leave to file a new supplemental complaint which contains actual and constructive fraud claims under Chapter 726. In the event Bear elects to pursue relief only under Chapter 726 through a supplemental complaint, he shall not serve the notices to appear.

8. Once all of the impleaded defendants have responded to the notices to appear as provided for in § 56.29, and/or responded to the supplemental complaint ⁹ as provided for in the rules of civil procedure, the Court will schedule a status conference to discuss the parties' discovery needs, including Bear's request for discovery under § 56.30.

DONE AND ORDERED this 24th day of October, 2024.

Attachment A

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF FLORIDA

PENSACOLA DIVISION

DAVID BEAR, Plaintiff,

vs.

ESCAMBIA COUNTY BOARD OF COUNTY COMMISSIONERS; and DOUGLAS UNDERHILL, Defendants.

CASE NUMBER: 3:19cv4424-MCR-HTC

NOTICE TO APPEAR

To: Wendy Kinton Underhill

YOU ARE NOTIFIED that, pursuant to section 56.29, Florida Statutes, proceedings supplementary to satisfy a judgment by application of the following: (1) 2017 PHAE Motorhome, VIN 4UZACGCY3HCJN9963, Title Number 128430863; (2) Kubota L250 HST KBUL6DHRCN8AC9866 4WD HST Tractor WFoldable ROP: Kubota LA526 A3198 Front Loader w/ Grill GuardQC; Land Pride PFL1242 1918585 *42” Pallet Forks; (3) 2005 Ford Excursion, TAG: 6173YU; (4) 2010 Seadoo Jet Boat, TAG: FL0860RF; (5) 2021 Yamaha Super Jet, TAG: FL1515SW; and (6) 2011 Karavan Boat Trailer, TAG: PZVA17 (collectively the “Assets”) in Escambia County, Florida have been initiated against you by David Bear. You are required to serve an affidavit by November 19, 2024, stating that the “Assets,” described herein, belong to you. The affidavit must include any fact or legal defense opposing the application of the “Assets,” described herein, toward the satisfaction of the judgment on J.J. Talbott, Esq., 900 E Moreno St, Pensacola, FL, 32503. You must file the original affidavit with the clerk of this court either before service on the judgment creditor or immediately thereafter. Legal defenses need not be filed under oath but must be served contemporaneously with the affidavit.

If any of your property has been levied on and you choose to oppose the application of the property to be applied toward the satisfaction of the judgment, then you must furnish a bond with surety to be approved by the officer in favor of the judgment creditor. The amount of the bond must be double the value of the goods claimed as the value is fixed by the officer and conditioned to deliver the property on demand of the officer if it is adjudged to be the property of the judgment debtor and to pay the judgment creditor all damages found against you if it appears that the claim was interposed for the purpose of delay.

YOU HAVE A RIGHT TO A TRIAL BY JURY TO DETERMINE THE RIGHT TO THE PROPERTY, DEBT OR OTHER OBLIGATION DUE TO THE JUDGMENT DEBTOR. YOU ARE ENTITLED TO DISCOVERY UNDER THE FLORIDA RULES OF CIVIL PROCEDURE. IF THE COURT OR JURY DETERMINES THAT THE PROPERTY, DEBT, OR OTHER OBLIGATION BELONGS TO THE JUDGMENT DEBTOR AND IS SUBJECT TO APPLICATION TOWARD THE SATISFACTION OF ITS JUDGMENT, THEN YOU MAY BE ORDERED TO PAY DAMAGES TO THE JUDGMENT CREDITOR, SURRENDER THE PROPERTY OR OTHER OBLIGATION TO THE JUDGMENT CREDITOR.

Date: October 24, 2024

/s/ HOPE THAI CANNON

HOPE THAI CANNON

UNITED STATES MAGISTRATE JUDGE

Attachment B

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF FLORIDA

PENSACOLA DIVISION

DAVID BEAR, Plaintiff,

vs.

ESCAMBIA COUNTY BOARD OF COUNTY COMMISSIONERS; and DOUGLAS UNDERHILL, Defendants.

CASE NUMBER: 3:19cv4424-MCR-HTC

NOTICE TO APPEAR

To: Bret Cameron Underhill

YOU ARE NOTIFIED that, pursuant to section 56.29, Florida Statutes, proceedings supplementary to satisfy a judgment by application of the following: (1) 2002 Georgie Boy Cruisemaster RV, VIN:1FCNF53A220A08487, TAG: 2477VC; (2) 2018 Freedom Enclosed Trailer, VIN: PWR00052E819, TAG: IZ04UE (collectively the “Assets”) in Escambia County, Florida have been initiated against you by David Bear. You are required to serve an affidavit by November 19, 2024, stating that the “Assets,” described herein, belong to you. The affidavit must include any fact or legal defense opposing the application of the “Assets,” described herein, toward the satisfaction of the judgment on J.J. Talbott, Esq., 900 E Moreno St, Pensacola, FL, 32503. You must file the original affidavit with the clerk of this court either before service on the judgment creditor or immediately thereafter. Legal defenses need not be filed under oath but must be served contemporaneously with the affidavit.

If any of your property has been levied on and you choose to oppose the application of the property to be applied toward the satisfaction of the judgment, then you must furnish a bond with surety to be approved by the officer in favor of the judgment creditor. The amount of the bond must be double the value of the goods claimed as the value is fixed by the officer and conditioned to deliver the property on demand of the officer if it is adjudged to be the property of the judgment debtor and to pay the judgment creditor all damages found against you if it appears that the claim was interposed for the purpose of delay.

YOU HAVE A RIGHT TO A TRIAL BY JURY TO DETERMINE THE RIGHT TO THE PROPERTY, DEBT OR OTHER OBLIGATION DUE TO THE JUDGMENT DEBTOR. YOU ARE ENTITLED TO DISCOVERY UNDER THE FLORIDA RULES OF CIVIL PROCEDURE. IF THE COURT OR JURY DETERMINES THAT THE PROPERTY, DEBT, OR OTHER OBLIGATION BELONGS TO THE JUDGMENT DEBTOR AND IS SUBJECT TO APPLICATION TOWARD THE SATISFACTION OF ITS JUDGMENT, THEN YOU MAY BE ORDERED TO PAY DAMAGES TO THE JUDGMENT CREDITOR, SURRENDER THE PROPERTY OR OTHER OBLIGATION TO THE JUDGMENT CREDITOR.

Date: October 24, 2024

/s/ HOPE THAI CANNON

HOPE THAI CANNON

UNITED STATES MAGISTRATE JUDGE

Attachment C

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF FLORIDA

PENSACOLA DIVISION

DAVID BEAR, Plaintiff,

vs.

ESCAMBIA COUNTY BOARD ESCAMBIA COUNTY BOARD OF COUNTY COMMISSIONERS; and DOUGLAS UNDERHILL, Defendants.

CASE NUMBER: 3:19cv4424-MCR-HTC

NOTICE TO APPEAR

To: Avery Underhill

YOU ARE NOTIFIED that, pursuant to section 56.29, Florida Statutes, proceedings supplementary to satisfy a judgment by application of the following: (1) 2018 Seadoo Spark, TAG: FL2512RP; (2) 2016 Seadoo Spark, TAG: FL6752RC (collectively the “Assets”) in Escambia County, Florida have been initiated against you by David Bear. You are required to serve an affidavit by November 19, 2024, stating that the “Assets,” described herein, belong to you. The affidavit must include any fact or legal defense opposing the application of the “Assets,” described herein, toward the satisfaction of the judgment on J.J. Talbott, Esq., 900 E Moreno St, Pensacola, FL, 32503. You must file the original affidavit with the clerk of this court either before service on the judgment creditor or immediately thereafter. Legal defenses need not be filed under oath but must be served contemporaneously with the affidavit.

If any of your property has been levied on and you choose to oppose the application of the property to be applied toward the satisfaction of the judgment, then you must furnish a bond with surety to be approved by the officer in favor of the judgment creditor. The amount of the bond must be double the value of the goods claimed as the value is fixed by the officer and conditioned to deliver the property on demand of the officer if it is adjudged to be the property of the judgment debtor and to pay the judgment creditor all damages found against you if it appears that the claim was interposed for the purpose of delay.

YOU HAVE A RIGHT TO A TRIAL BY JURY TO DETERMINE THE RIGHT TO THE PROPERTY, DEBT OR OTHER OBLIGATION DUE TO THE JUDGMENT DEBTOR. YOU ARE ENTITLED TO DISCOVERY UNDER THE FLORIDA RULES OF CIVIL PROCEDURE. IF THE COURT OR JURY DETERMINES THAT THE PROPERTY, DEBT, OR OTHER OBLIGATION BELONGS TO THE JUDGMENT DEBTOR AND IS SUBJECT TO APPLICATION TOWARD THE SATISFACTION OF ITS JUDGMENT, THEN YOU MAY BE ORDERED TO PAY DAMAGES TO THE JUDGMENT CREDITOR, SURRENDER THE PROPERTY OR OTHER OBLIGATION TO THE JUDGMENT CREDITOR.

Date: October 24, 2024

/s/ HOPE THAI CANNON

HOPE THAI CANNON

UNITED STATES MAGISTRATE JUDGE

FOOTNOTES

1.   Chapter 726 is known as the Uniform Fraudulent Transfer Act.

2.   In addition to the more substantive differences discussed below, there are also different procedures associated with each remedy. For example, an individual generally has less time to respond to a notice to appear than a supplemental complaint, and the response comes in the form of an affidavit rather than an answer. Also, a notice to appear contains significantly less detail than a supplemental complaint.

3.   Fla. Stat. § 726.105(b) defines constructive fraud as follows: Without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor:1. Was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction; or2. Intended to incur, or believed or reasonably should have believed that he or she would incur, debts beyond his or her ability to pay as they became due.

4.   Although this case was decided prior to the 2016 amendments to § 56.29, the substance of the provisions referred to by the court, while renumbered, were not altered by the amendments.

5.   There also appears to be varying views of whether a court can enter a monetary judgment against the impleaded parties for a claim under § 56.29(3) or whether such a judgment can only be obtained via a supplemental complaint. Compare In re British Am. Ins. Co. Ltd., 607 B.R. at 759 (dismissing notices to appear in favor of supplemental complaint because judgment creditor sought money judgment) with Rosenberg, 360 So. 3d at 802 (rejecting argument that money judgment is not available as a remedy for a fraudulent transfer under section 56.29(3) because subsection (6) “expressly authorizes money judgments as remedies”). Subsection (6)(a) provides that the court “may order any property of the judgment debtor not exempt from execution ․ in the hands of or under the control of any person subject to the Notice to Appear, to be levied upon and applied toward the satisfaction of the judgment debt” and authorizes the court to “enter any orders, judgments or writs required to carry out the purpose of this section ․ including entry of money judgments ․.” Fla. Stat. § 56.29(6)(a).

6.   The Court notes that in McElheney, the judgment creditor was barred from bringing a claim for actual fraud under § 56.29(9) and Chapter 726 because of the applicable statute of repose.

7.   During the status conference, the Court discussed with counsel that it might make the most sense for Bear to proceed initially with just the notices to appear. If that is the route Bear chooses, he will not be prejudiced in seeking leave later to file a supplemental complaint.

8.   If Bear disagrees with the Court's observations, he may, in the motion, argue why he should be allowed to bring a § 56.29(3) claim in the supplemental complaint or why he should be allowed to pursue a Fla. Stat. § 726.105(1)(a) actual fraud claim in a supplemental complaint while simultaneously pursuing a § 56.29(3) actual fraud claim via a notice to appear.

9.   Assuming Bear files a motion for leave to file a new supplemental complaint in accordance with paragraph 6 or paragraph 7, and the Court grants the motion, the Court will specify how long Bear has to serve the supplemental complaint, and how long the impleaded defendants will have to respond.

HOPE THAI CANNON, UNITED STATES MAGISTRATE JUDGE