MAY IT PLEASE THE COURT. I AM APPEARING ON BEHALF OF HAVOCO OF AMERICA, NACM OF FLORIDA, NACL GULF COAST UNIT OF FLORIDA. MR. DANIEL HAS GRACIOUSLY CONCEDED FIVE MINUTES OF HIS TIME FOR MY BRIEF POLICY STATEMENT. I HOPE I WILL TAKE LESS THAN FIVE MINUTES. WE ARE HERE BEFORE YOU, BECAUSE THE ELEVENTH CIRCUIT QUITE RIGHTLY DETERMINED THAT THERE IS A QUESTION PENDING IN THE ELEVENTH CIRCUIT, WHICH ONLY YOU CAN ANSWER, AND THE WORDING OF THAT QUESTION IS CRITICALLY IMPORTANT TO THE ISSUE BEFORE YOU TODAY. DOES ARTICLE 10 SECTION 4 OF THE FLORIDA CONSTITUTION EXEMPT THE FLORIDA HOMESTEAD, WHERE THE DEBT OR, ONE, ACQUIRED THE HOMESTEAD WITH NONEXEMPT PROPERTY. THAT IS TO SAY PROPERTY OR ASSETS WHICH WOULD NOT HAVE BEEN PROTECTED FROM LEVY, WITH THE SPECIFIC INTENT OF HINDERING, DELING, OR FRAUDING CREDITORS, IN VIOLATION OF CERTAIN FLORIDA STATUTES. IT IS IMPORTANT TO NOTE THAT THE COURT, THE ELEVENTH CIRCUIT, HAS BUILT, INTO THE QUESTION, THE BASIC FACTUAL PARAMETER ON WHICH THIS ISSUE TURNS. WE HAVE A DEBTOR WHO HAS TAKEN ASSETS WHICH WOULD OTHERWISE BE AVAILABLE TO PAY HIS CREDITOR, AND, WITH THE SPECIFIC FRAUDULENT INTENT, OF SEQUESTERING THOSE ASSETS AND PROTECTING THEM FROM THE RIGHTS OF HIS CREDITORS, INVESTED THEM IN FLORIDA FLORIDA HOMESTEAD.

IN TERMS OF THIS QUESTION, IS IT -- DO THE FUNDS COME, 1 ON 0 PERCENT, FROM THAT -- 100 PERCENT FROM THAT SOURCE? 50 PERCENT? 10 PERCENT? 5 PERCENT? WHAT PERCENT?

I DON'T THINK THAT IS NECESSARILY -- IT COULD BE MIXED.

WOULD IT BE THE SAME IF IT WAS ONE PERCENT AS IF IT WERE 100 PERCENT?

CORRECT. BUT THE HOMESTEAD PROTECTION WOULD BE APPLIED TO ANY HOMESTEAD WHICH WOULD HAVE BEEN ACQUIRED WITH NONEXEMPT FUNDS FRAUDULENTLY TURNED INTO HOMESTEAD. WE HAVE AN EXAMPLE, FROM ONE OF THE FOURTH DCA CASES, WHERE THE COURT ACTUALLY FOUND THAT THERE HAD BEEN A MANIPULATION OF THE HOMESTEAD EXEMPTION AND HAD SAID, ALL RIGHT, YOU -- THE ENTIRE AMOUNT THAT WAS TRANSFERRED INTO THE HOMESTEAD CANNOT BE LEVIED, BUT YOU, THE HOMEOWNER, THE DEBT OR, WERE ON THE HOOK FOR $900,000, AS A MORTGAGE OF YOUR HOMESTEAD, WHICH GOT PAID OFF WITH THESE NONEXEMPT FUNDS. WE ARE GOING TO LEAVE THAT $900,000 EXEMPTION, BUT THE ADDITIONAL $300,000 WILL BE AN ASSESSABLE LEVY AGAINST THE PROPERTY.

YOU ARE AGREE THAUING ARE MAKING A POLICY ARGUMENT.

PURE POLICY.

THE FLORIDA CONSTITUTION EXPRESSLY PROHIBITS US FROM ENGAGING IN THIS POLICY ARGUMENT, THEN WE, AS A COURT, ARE POWERLESS, BECAUSE THIS DOESN'T CONFLICT WITH ANY PROVISION IN THE UNITED STATES CONSTITUTION, DOES IT?

NO, YOUR HONOR. THIS IS NOT AN ISSUE IN WHICH THE FEDERAL COURT OR THE FEDERAL CONSTITUTION CAN IMPEDE STATE RIGHTS, AND THAT, I THINK, IS GOING TO BE THE TURNING POINT OF THIS QUESTION, BECAUSE, CLEARLY, IN ANY CONSTITUTIONAL CONSTRUCTION, YOU ARE BOUND BY THE PLAIN LANGUAGE OF THE CONSTITUTION, AND THE FIRST THING YOU ARE GOING TO HEAR, FROM RESPECTIVE, OPPOSING COUNSEL, IS THAT THERE IS NO EXPRESS FRAUD EXCEPTION IN THE FLORIDA CONSTITUTION. NOW, WE ALL UNDERSTAND THAT THE PLAIN LANGUAGE CONTROLS, EXCEPT WHERE THE PLAIN LANGUAGE LEADS TO AN ABSURD RESULT, AND I SUBMIT TO THIS COURT THAT THERE IS NO RESULT MORE ABSURD THAN SAYING IT THAT THE FLORIDA CONSTITUTIONAL PROTECTION FOR HOMESTEAD WAS CREATED TO GIVE THE WEALTHY AND THE DEVIOUS A MECHANISM BY WHICH THEY CAN AVOID THEIR OBLIGATIONS, THROUGH FRAUD ON THE CREDITORS.

BUT ISN'T YOUR ARGUMENT DIMINISHED BY THE FACT THAT THIS COURT SPECIFICALLY BROUGHT, TO THE ATTENTION OF THE LEGISLATURE, THE FACT THAT THIS WAS CREATING A PROBLEM, AND PEOPLE WERE COMING TO FLORIDA AND USING IT TO -- FOR FRAUDULENT PURPOSES, AND THE LEGISLATURE DECIDED NOT TO DO ANYTHING ABOUT IT.

BUT WE ARE VERY FORTUNATE THAT THE LEGISLATURE DOESN'T CONTROL THE CONSTITUTION. THE CONSTITUTION IS THE WILL OF THE PEOPLE. IT IS THE RESERVATION OF THE RIGHTS OF THE PEOPLE. AND YOU, AS THE THIRD --

THERE IS A CONSTITUTIONAL REVISION COMMITTEE IN THE LEGISLATURE, BUT THE REVISION COMMISSION REFUSED TO ACT UPON IT.

AND IT REFUSED TO ACT, BUT THAT IS NEITHER PRECEDENT NOR POLICY. WHAT WE HAVE IS A SITUATION WHERE THE CONSTITUTION OF THE STATE OF FLORIDA CREATED AN EXEMPTION FOR THE PURPOSE OF ATTRACTING PEOPLE TO THE STATE OF FLORIDA TO SETTLE AND TO BE ECONOMICALLY RESPONSIBLE. THIS COURT RECOGNIZED THAT PURPOSE IN 1882. THIS COURT HAS NEVER SHEARED AWAY FROM THE REQUIREMENT OF OPPOSING LIMITS ON HOMESTEAD EXEMPTION, WHERE JUSTICE SO REQUIRED, AND LET ME JUST POINT OUT IN 1912, IN MILTON VERSUS MILTON, THIS COURT SAID THERE IS NO EVIDENCE OF BAD FAITH IN ASSERTING THIS HOMESTEAD, SO WE ARE GOING TO LET IT STAND. IMPLICATION IS CLEAR. BAD FAITH HOMESTEAD, NO PROTECTION.

WE HAVE DEALT WITH SOME PRETTY EXTREME CIRCUMSTANCES, HAVE WE NOT? YOU ARE POSTURING THIS AS BEING THE MOST EXTREME, BUT WE HAVE SAID THAT SOMEBODY CAN GO OUT AND ILLEGALLY OBTAIN MONEY, 100% OF IT, AND THEN PUT IT IN A HOMESTEAD, AND, STILL, HAVE THE HOMESTEAD PROTECTION AND, SO, IT SEEMS TO ME THAT IS A MUCH MORE EXTREME POSITION THAN -- IN TERMS OF PROTECTING ILL GOTTEN GAINS OR UNLAWFUL FUNDS, THAN THE SITUATION YOU ARE TALKING ABOUT HERE, OR AT LEAST IT IS ABOUT AT THAT LEVEL, WHICH SHOWS, YOU KNOW, HOW THIS COURT HAS TRIED TO BE DISCIPLINED IN MAINTAINING THE LITERAL APPLICATION OF THE HOMESTEAD. HELP ME WITH DISTINGUISHING THOSE TWO SITUATIONS, BECAUSE I --

I QUIT RESPECTFULLY DISAGREE THAT THESE ARE ANALOGOUS SITUATIONS. I AM ASSUMING YOU ARE TALKING ABOUT BUTTERWORTH VERSUS CACCIANO. WE HAVE A STATUTE THAT SAYS YOU KNOW WHAT THE PENALTY FOR BEING A BAD GUY IS. WE CAN TAKE AWAY ANY PROPERTY YOU USE TO BE A BAD GUY. THAT IS THE PENALTY. THAT IS VERY SEPARATE FROM SAYING YOU CAN STEAL MONEY FROM YOUR EMPLOYER, USE THAT MONEY TO BUY YOURSELF A HOMESTEAD, AND THE EMPLOYER, WHEN HE DISCOVERS WHAT YOU HAVE DONE, CAN'T GET THAT MONEY BACK. AND DO YOU KNOW WHAT THIS COURT SAID IN THOSE FACTS? OH, YES HE CAN. YOU CAN LEVY AGAINST THAT HOMESTEAD. THAT IS JONES V CARPENTER.

BE CAREFUL OF YOUR TIME.

YES. I AM SORRY. I WOULD LIKE TO URGE THIS COURT TO LOOK AT THE PRECEDENT IN WHICH IT HAS LOOKED AT HOMESTEAD, SAID WE ARE GOING TO ENFORCE IT WHERE THE PRINCIPLES FOR WHICH IT WAS ESTABLISHED ARE SERVED, BUT WE ARE ONLY GOING TO LET IT BE USED TO GIVE A DEBTOR A FRESH START. WE ARE NOT GOING TO LET IT BE MANIPULATED AND ENGINEERED TO LET A DEBTOR GET A HEAD START. I URGE YOU TO ANSWER THE QUESTION OF THE ELEVENTH CIRCUIT IN THE NEGATIVE.

MAY IT PLEASE THE COURT. MY NAME IS NIXON DANIEL. I REPRESENT HAVOCO. LET ME REPRESENT THE ISSUE OF CONSTITUTIONAL INTERPRETATION, A CRITICAL ISSUE IN THIS CASE, BECAUSE I THINK THAT IS GOING TO BE WHAT THIS CASE MAY, VERY WELL, TURN ON. IF YOU GO BACK TO CASES THAT THIS COURT HAS DECIDED IN THE LAST 15 OR 20 YEARS, THAT WE SCYTHE IN OUR BRIEF, THE FLORIDA -- CITE IN OUR BRIEF, THE FLORIDA SOCIETY OF OPHTHALMOLOGY, THIS COURT SAID WE REFER TO TWO PRINCIPLES OF CONSTITUTIONAL ADJUDICATION, TO BE DISTINGUISHED FROM STATUTORY ADJUDICATION FORM THE FIRST IS CONSTITUTIONS RECEIVE A BROADER AND MORE LIBERAL CONSTRUCTION THAN STATUTES. SECONDLY, CONSTITUTIONAL PROVISIONS SHOULD NOT BE CON TRUD, SO AS TO DEFEAT THEIR UNDERLYING OBJECTIVES. THE -- CONSTRUED, SO AS TO DEFEAT THEIR UNDERLYING OBJECTIVES. THE INTERPRETATION IS VERY DIFFERENT FROM A STATUTE THAN THE CONSTITUTION. CONSTITUTION REFLECTS FLEXIBLE INTERPRETATION BY LEGISLATIVELY-ENACTED STATUTES. CONSEQUENTLY COURTS ARE FAR LESS CIRCUMSCRIBE IN CONSTRUING THE AREA OF CONSTITUTIONAL INTERPRETATION THAN IN THE REALM OF STATUTORY CONSTRUCTION. IN THE PLANT CASE, CITED IN OUR BRIEF, THE COURT, THIS COURT, SAID SIMILAR THINGS ABOUT CONSTITUTIONAL CONSTRUCTION. IT SAID, IN CONSTRUING THIS SECTION OF THE CONSTITUTION, IT IS OUR DUTY TO DISCERN AND EFFECTUATE THE INTENT AND OBJECTIVE OF THE PEOPLE. I WOULD RESPECTFULLY URGE THAT THE CONSTITUTIONAL REVISION COMMISSION'S FAILURE TO DO WITH THIS ISSUE IS NOT A STATEMENT OF THE INTENT AND THE OBJECTIVE OF THE PEOPLE. THE COURT WENT ON TO SAY THE SPIRIT OF THE CONSTITUTION IS AS OBLIGATORY AS THE WRITTEN WORD.

BUT IS THE WRITTEN WORD CLEAR, THEN THERE IS A PRINCIPLE THAT WE CAN NOT VARY FROM THE WRITTEN WORD? I MEAN, IS THAT NET BAN FISHING THING AND IS SOMEONE SAID TUNA WASN'T INTENDED AND SALMON WAS. WE COULD SAY PEOPLE MUST HAVE INTENDED ONLY TO GET THAT KIND OF FISH, SO WE ARE GOING TO --

YOUR HONOR, I THINK THAT THIS COURT HAS CLEARLY SAID, AND WE CAN GO BACK TO MILTON, CITED BY MS. TOWN. WE CAN TALK ABOUT THE JETTON CASE, WHICH IS A DECISION OF THIS COURT IN 1914. WE CAN TALK ABOUT PASCO, WHICH WAS IN 1917. IN EVERYONE OF THOSE CASES WHERE THERE WAS NO SPECIFIC EXCEPTION LANGUAGE THAT FIT THE FACTS OF THE CASE, NEVERTHELESS THIS COURT SAID HOMESTEAD CANNOT BE USED AS AN INSTRUMENT OF FRAUD.

HASN'T THAT CREATED A PROBLEM? WE HAVE GOT BANKRUPTCY COURTS GOING DIFFERENT WAYS. BECAUSE OF THIS COURT TRYING TO REACH, QUOTE, A GOOD RESULT. SO THAT THE HOMESTEAD PROVISION COULD NOT BE USED FOR FRAUDULENT PURPOSES, ALTHOUGH RECOGNIZING, IN THE SAME BREATH, THAT THERE IS NO PROHIBITION, SO WE HAVE TRIED TO COBBLE SOMETHING TOGETHER, AND IT LOOKS, TO ME, LIKE WE HAVE CREATED A PROBLEM WITH THE BANKRUPTCY COURTS. SOME GOING ONE WAY AND SOME GOING THE OTHER WAY ON THE LIEN THEORY.

WELL, --

MAYBE WE BETTER GET BACK TO THE HOME BASE AND SAY THIS IS WHAT THE CONSTITUTION SAYS, AND WE HAVE NO JURISDICTION TO GO INTO THESE VARIOUS TYPES OF INTERPRETATIONS, TO GET PAST THAT, THIS EQUITABLE SUBJUGATION AND THESE OTHER THEORIES THAT WE HAVE TRIED TO USE, TO KEEP FROM USING IT FOR BAD PURPOSES.

THE CONSTITUTION INTERPRETATION RULES THAT I HAVE DESCRIBED TO YOU ARE RULES THAT HAVE NOT BEEN APPLIED SIMPLY IN THE HOME STEAD CONTEXT. THEY HAVE BEEN APPLIED IN VARIOUS CONTEXT, CITED IN OUR BRIEF, TO INTERPRET THE CONSTITUTION, AND THE CONFUSION, I THINK, HAS COME, WHERE BANKRUPTCY COURTS HAVE TRIED TO TAKE THE CACCIANO-TRAMMELL RATIONALE, THE CIVIL FORFEITURE RATIONALE AND APPLY IT TO THE LAWS OF HOMESTEAD. THE LAW IS VERY CLEAR AND HAS BEEN CLEAR FOR YEARS THAT FORFEITURES ARE LOOKED UPON WITH DISFAVOR IN THE LAW. THEY ARE TO BE A VOIDED. THE STATUTE IS VERY CLEAR THAT FORFEITURE IS FOR THE PURPOSE OF TAKING ASSETS USED IN CRIMINAL ENDEAVORS OUT OF THE REALM OF THOSE CRIMINAL ENDEAVORS. THAT IS VERY DIFFERENT FROM THE PROTECTION OF HOMESTEAD. THE COURTS IN FLORIDA, FOR INSTANCE, HAVE ROUTINELY HELD THAT ONE WHO OZAL MONEY TO A SPOUSE OR ONE WHO OWES CHILD SUPPORT CANNOT PUT ALL OF HIS ASSETS INTO A HOUSE AND THEN SAY I AM NOT GOING TO PAY MY ALIMONY AND CHILD SUPPORT, YET THAT IS NOT A SPECIFIC EXCEPTION IN THE CONSTITUTION.

BUT ISN'T WHAT JUSTICE SHAW IS SAYING OR SUGGESTING IS THAT, PERHAPS, WE HAVE ALREADY STARTED DOWN A SLIPPERY SLOPE IN THAT REGARD, AND THAT IT IS GOING TO BE VERY, VERY DIFFICULT, NOW, TO START DRAWING LINES, WHEN YOU START TALKING ABOUT A FRAUD OF CREDITORS, EXCEPTION OR SOMETHING. WE ARE GOING TO HAVE CASES WHERE PEOPLE MAY HAVE CONSIDERABLE WEALTH AND THEY SAY, WELL, WHAT STATE ARE WE GOING TO GO TO, TO BUILD OUR MANSION, SO THAT IT WILL BE -- WE CAN PROTECT OUR ASSET? WE KNOW WE ARE SUBSTANTIALLY IN DEBT, AND THAT WE ARE IN THE RED, REALLY, BUT LET'S TAKE OUR CASH ASSETS AND LET'S PICK A STATE, AND, WELL, FLORIDA IS A -- OBVIOUSLY FLORIDA HAS THIS REPUTATION, AND SO LET'S GO TO FLORIDA, AND THEN, LATER, THEY ARE QUESTIONED, WELL, WHY DID YOU BUY THIS HUGE ESTATE IN FLORIDA? WELL, I BOUGHT THAT HUGE ESTATE IN FLORIDA, BECAUSE OF THE CONSTITUTIONAL PROVISION THERE. WELL, DIDN'T YOU KNOW YOU WERE IN THE RED THEN? AS FAR AS YOUR ASSETS AND YOUR LIABILITIES, AND, YES, I DID. WELL, IN OTHER WORDS, YOU DID IT SO THAT YOU WOULDN'T HAVE TO PAY YOUR DEBTS.

TO DEFRAUD YOUR CREDITORS.

WELL, IN A WAY, NOW, IT SEEMS TO ME THAT THE STRONG ARGUMENT CAN BE MADE THAT IT IS GOING TO BE VERY DIFFICULT TO STOP AT SOME BRIGHT-LINE, AND YOU ARE JUST GOING TO CONTINUE TO ERODE, THEN, THIS PROTECTION, WHICH, ON A POLICY LEVEL, HAS BEEN HEAVILY CRITICIZED. CERTAINLY I HAVE BEEN ON THE OTHER SIDE IN SOME OF THIS COURT'S OPINIONS.

WELL, YOUR HONOR, I WOULD RESPECTFULLY URGE THAT THIS COURT COULD STATE A RULE, AND AS MS. TOWNS SUGGESTS, ANSWER THE CERTIFIED QUESTION NEGATIVELY AND SAY THAT, IF THERE IS A FACTUAL FINDING OF THE SPECIFIC INTENT TO DEFRAUD CREDITORS IN THE PURCHASE OF A HOMESTEAD, THEN, THAT IS NOT PROTECTED BY THE CONSTITUTION OF THE STATE OF FLORIDA. NOW, THAT BECOMES A FACTUAL FINDING FOR A TRIER OF FACT TO MAKE. THAT IS A RULE THAT IS NOT DIFFERENT FROM WHAT THE RULE HAS BEEN IN THIS STATE FOR YEARS. AGAIN, JONES VERSUS CARPENTER. THE BREAD COMPANY CASE THAT WAS CITED TO YOU A MINUTE AGO. PRESIDENT OF THE COMPANY STEALS MONEY FROM THE COMPANY. BUILDS UP A BIG EQUITY IN HIS HOUSE, AND WHEN THE COMPANY SAYS I WANT MY MONEY BACK, HE SAYS HOMESTEAD EXEMPTION. THIS COURT SAID NO. YOU SPECIFICALLY HAVE DEFRAUDED YOUR CREDITORS. WE ARE NOT GOING TO ALLOW THAT TO HAPPEN. WE ARE NOT GOING TO ALLOW THAT TO HAPPEN IN THE CHILD SUPPORT ARENA. WE ARE NOT GOING TO ALLOW IT TO HAPPEN IN THE ALIMONY ARENA. WHAT YOU CAN ARTICULATE IS A STANDARD, IN FLORIDA, THAT SAYS WE WILL NOT PERMIT HOMESTEAD EXEMPTION TO BE USED AS AN INSTRUMENT OF FRAUD, WHERE NONEXEMPT ASSETS ARE CONVERTED TO THE EXEMPT ASSET OF HOMESTEAD, FOR THE PURPOSE OF HINDERING AND DEFRAUDING CREDITORS. FOR THAT PURPOSE.

YOU ARE IN YOUR REBUTTAL TIME.

THANK YOU, YOUR HONOR.

MAY IT PLEASE THE COURT. MY NAME IS LOUIS ROSENBLUM FROM PENSACOLA, AND I REPRESENT THE APPELLEE, ELMER HILL. ONE THING I WANT TO REPRESENT, AND I KNOW IT IS A MATTER OF RECORD. I KNOW WE HAVE A VERY BROAD QUESTION FOR THE COURT NOT ONLY WITH SIGNIFICANCE STATEWIDE IMPORTANCE, NOT ONLY IN BANKRUPTCY APPLICATIONS BUT IN OTHER APPLICATIONS. BUT THERE HAS BEEN NO FINDING IN THIS CASE THAT MY CLIENT PURCHASED HIS HOMESTEAD IN DESTIN, WITH THE INTENT TO DEFRAUD CREDITORS. I KNOW THE BANKRUPTCY JUDGE PLACED SOME LIMITATIONS ON HAVOCO AND WHAT EVIDENCE THEY WERE ALLOWED TO PRESENT ON THAT ISSUE.

DO WE HAVE TO GET INTO THAT TO ANSWER THE QUESTION?

I THINK YOU CAN ANSWER THE QUESTION. I JUST DON'T WANT THE RECORD TO COME OUT THAT MR. HILL HAS BEEN GUILTY OF ANY NEFARIOUS CONDUCT, AND IN FACT, ONE THING THAT I THINK IS IMPORTANT TO THE ULTIMATE OUTCOME OF THE CASE, THERE WAS A SPECIFIC FINDING, FROM THE BANKRUPTCY JUDGE, THAT MR. HILL DID NOT USE ANY FUNDS FROM ILL-GOTTEN GAINS ON, TO PURCHASE THIS HOMESTEAD. THAT IT WAS USED WITH CLEAN MONEY, IF YOU WILL.

DID THE ELEVENTH CIRCUIT ADDRESS THOSE ISSUES?

I THINK THOSE FACTS MAY BE IN THE OPINION, AND WHAT THEY WILL DO WITH IT ON REMAND, I THINK, REMAINS TO BE SEEN, BUT I JUST WANTED TO MAKE THE RECORD CLEAR. I AM, YOU KNOW, FULLY PREPARED TO ADDRESS THE --

IF YOU ARE GOING TO WIN ON THE FACTS, THEN --

WE HOPE SO.

IT DOESN'T MATTER.

LET'S DO ADDRESS THE QUESTION, IF WE COULD. AND THAT IS MR. DANIELS. RESPOND TO WHY ISN'T IT A NARROWING OF THIS WHOLE FRAMEWORK, WHEN YOU PUT INTO THE MIX A SPECIFIC INTENT OF HINDERING, DELING OR DEFRAUDING CREDITORS -- DELAYING OR FRAUDING CREDITORS.

MS. TOWN WAS CERTAINLY CORRECT. MY FIRST RESPONSE IS THAT WE HAVE TO ADDRESS SPECIFIC LANGUAGE OF THE CONSTITUTIONAL PROVISION. THERE IS NO EXCEPTION MADE FOR THAT. HOWEVER UNPALATABLE IT MAY BE IN A GIVEN CASE, WE ARE CERTAINLY AWARE OF AND CONCERNED ABOUT THE REPUTATION THAT OUR STATE HAS GAINED AS A HAVEN FOR DEBTORS, BUT NONETHELESS, THIS IS THE CONSTITUTION WE HAVE. IT IS VERY CLEAR, IN ITS LANGUAGE, NOTWITHSTANDING ALL THESE MAX IMS OF CONSTRUCTION, THAT HAVE THAT HAVOCO CITES, THERE IS -- THAT -- THAT HAVOCO CITES, THERE IS NO ROOM FOR MISINTERPRETATION. THERE IS THE INTENT TO DEFRAUD CREDITORS.

WHERE DOES THE MONEY THAT HAVOCO REPRESENTS, IS THAT IN THE CONSTITUTION?

THAT I CAN NOT OFFER FOR.

LET GO BACK TO THIS. THIS COURT HAS SAID THAT THAT IS NOT HOMESTEAD EXEMPT?

WELL, I AM NOT TOTALLY FAMILIAR WITH THAT PARTICULAR CASE, TO BE FRANK. I HAVE HEARD THAT ARGUMENT MADE, AND I DON'T EVEN REMEMBER THOSE CASES EVEN BEING ADDRESSED IN THE BRIEF, FRANKLY. I KNOW MR. DANIEL, PROBABLY, HAS THEM AND WILL CITE IT TO YOU, BUT I AM JUST FRANKLY NOT FAMILIAR WITH THAT CASE. I DO KNOW THIS, THAT I TRIED TO DETERMINE WHERE THIS LANGUAGE CAME FROM THAT THE COURT MOSTLY IN THE OLD CASES, THE COURT CITED THE PROPOSITION THAT THE HOMESTEAD EXEMPTION COULD NOT BE USED AS AN INSTRUMENT OF FRAUD. AND APPARENTLY IT HAS ITS ROOTS IN A CASE CITED BY AMICA. DRUCKER VERSUS ROSENSTEIN, BACK TO 1982. THAT WAS A CASE WHERE A GENTLEMAN DECIDED, WHO WAS IN FINANCIAL TROUBLE, TO USE WHATEVER MONEY HE HAD THAT WOULD BE AVAILABLE TO PAY CREDITORS, TO BUY A VACANT LOT IN PENSACOLA, AND THIS COURT SAID -- AND THEN HE CLAIMED IT AS EXEMPT, SAYING I PLAN TO BUILD MY HOMESTEAD. WELL, THE HOLDING OF THE COURT WAS THAT A VACANT LOT COULD NOT BE A HOMESTEAD, AND IN THAT CASE, THE COURT SAID, WELL, YOU CANNOT USE A HOMESTEAD EXEMPTION AS AN INSTRUMENT OF FRAUD.

LET'S MOVE FORWARD A LITTLE BIT. ARE YOU FAMILIAR WITH FISHBANG?

YES, SIR.

ALL RIGHT. HAVEN'T WE MOVED FROM THE LITERAL WORDING OF THE CONSTITUTION THERE, IN THAT CASE? HAVEN'T WE, ALREADY, TAKEN THAT STEP DOWN THAT SLIPPERY SLOPE?

IN FISHBEIN, THE CREDITOR STOOD IN THE SHOES OF A PARTY WHO WOULD HAVE FIT ONE OF THE EXCEPTIONS TO THE HOMESTEAD EXEMPTION. IN PARTICULAR, THE DEBT OR IN THAT CASE, AS I RECALL, BORROWED A HUGE SUM OF MONEY, FRAUDULENTLY SIGNED OR FORGED HIS WIFE'S NAME TO THE MORTGAGE, BUT HE USED THAT MONEY, IN PART, TO PAY OFF EXISTING MORTGAGES ON THE HOMESTEAD THAT THE WIFE DID SIGN, SO WHAT THE COURT, THIS COURT, HELD IS THAT THE BANK STOOD IN THE SHOES OF THE PREVIOUS MORTGAGE GEESE, SO IN EFFECT -- MORTGAGEES, SO IN EFFECT THAT CASE RECOGNIZED ONE OF THE EXCEPTIONS TO THE HOMESTEAD EXEMPTION, AND THAT IS A MORTGAGE, A PURCHASE MONEY MORTGAGE, SO TO ME, THAT IS NOT A REAL STRETCH OF THE INTERPRETATION. IT DOESN'T CARVE AN EXCEPTION. IT JUST APPLIES AN EXISTING EXCEPTION.

HAVE WE RULED ON THE ISSUE AS TO WHETHER -- SAY, AGAIN, SOMEBODY HAD ROBBED A BANK YESTERDAY IN PENNSYLVANIA, AND, TODAY, IN FLORIDA, PUT ALL OF THAT MONEY INTO A HOUSE. HAS THERE BEEN A CASE THAT DEALS WITH THE FACT THAT, WHETHER OR NOT THE HOMESTEAD EXEMPTION WOULD SHIELD THAT MONEY THAT WAS -- WHETHER IT WAS INTENT TO DEFRAUD, BECAUSE ESSENTIALLY THAT IS WHAT THEY ARE SAYING. YOU HAD A $1.7 MILLION JUDGMENT AND INSTEAD OF PAYING OFF HIS CREDITORS, HE MOVED ALL THAT MONEY DOWN TO FLORIDA AND PUT IT IN HIS HOUSE, OR DO YOU SEE THAT AS A DIFFERENT SITUATION?

THAT IS A EXAMPLE, WHEN I WAS PREPARING MY ARGUMENT, I SAID, WELL, THAT MIGHT BE AN EXAMPLE WHERE WE WOULD APPLY AN EQUITABLE LIEN, BUT IF YOU READ TRAMMELL, WHICH IS THE CASE AFTER FISH BEEN, IN THAT CASE THAT -- FISH BEEN, THAT IS A CASE, THE -- FISHBEIN THAT, IS A CASE WHERE THE HOMESTEAD WAS ACQUIRED WITH DRUG MONEY, AND THAT IS PRETTY CLOSE TO THE BANK ROBBERY CASE, FRANKLY.

YOU DON'T BUY THE DISTINCTION IN TALKING ABOUT FORFEITURE AND INTERPRETING THE FORFEITURE STATUTE, THAT THAT IS DIFFERENT?

WELL, I UNDERSTAND THAT IT IS DIFFERENT, BUT MY POINT WOULD BE THAT, IF YOU CAN MAINTAIN THE EXEMPTION, AS JUSTICE ANSTEAD SAID, IF YOU CAN MAINTAIN THE EXEMPTION, AFTER YOU HAVE PURCHASED THE HOMESTEAD WITH DRUG MONEY, THEN SURELY YOU SHOULD MAYBE OBTAIN THE EXEMPTION --

HASN'T THAT CONCEPT OF WHERE SOMEBODY STOLE FROM THEIR EMPLOYER AND PUT THAT MONEY INTO HOME SAID, WE HAVE SAID, EMPLOYER, YOU -- INTO HOMESTEAD, WE HAVE SAID, EMPLOYER, YOU CAN'T TAKE A VACANT LOT AND BUILD A HOUSE OUT OF STOLEN MONEY, HAVEN'T WE, ALREADY, ANSWERED THAT AND SAID, IF THE PERSON THAT IS ENTITLED TO THE MONEY CAN TRACE IT TO WHAT YOU DID AFTER YOU STOLE IT FROM HIM, THEN HE DOES GET THE MONEY BACK. HAVEN'T WE DECIDED THAT?

YOU HAVE. BUT IF I MAY, THAT WAS ADDRESSED IN THE BUTTERWORTH VERSUS CACCIANO CASE, AND IN THAT COURT, THIS COURT SAID, IN ITS OPINION, THAT MOST OF THOSE CASES, EQUITABLE LIENS ARE IMPOSED WHERE PROCEEDS OF FRAUD OR IRREPUTABLE CONDUCT WERE RAISED IN PURCHASING THE HOMESTEAD. THAT IS ONE ARGUMENT THAT THERE HAS BEEN A SPECIFIC FINDING IN OUR CASE THAT MR. HILL DID NOT USE ILLICIT PROCEEDS TO OBTAIN HIS HOMESTEAD.

BUT YOU ANSWERED THE QUESTION ABOUT THE BANK ROBBERY. YOU SAID, NO, AND SO WE HAVE ANSWERED THE QUESTION OF THE BANK ROBBERY. HAVE WE NOT? IF THE BANK CAN FIND THE MONEY IN THE HOUSE, DOWN HERE, IN FLORIDA, THEY GET THE HOUSE, DON'T THEY? UNDER OUR CASE?

I BELIEVE THAT THERE -- IF THERE IS A PLACE FOR AN EQUITABLE LIEN, THE BANK ROBBERY EXAMPLE WOULD BE THE RIGHT APPLICATION FOR THAT. BUT IN THAT CASE, YOU KNOW --.

WHY WOULDN'T DEFRAUDING SOMEONE NOT BE? IF THE THE BANK ROBBER WOULD GIVE GROUNDS FOR RELIEF, WHY WOULD FRAUD AND DECEIT NOT BE?

I SUPPOSE IT IS A MATTER OF DEGREE. NOW, A STRICT READING OF THE CONSTITUTION WOULD NOT ALLOW, IN MY OPINION, EVEN THE EQUITABLE LIEN THAT YOU GRANTED IN THE FISHBEIN CASE, AND THE OLDER CASES, SUCH AS --

OR IT WOULD NOT BE ALLOWED FOR THE BANK ROBBER.

IT WOULD NOT BE ALLOWED FOR THE BANK ROBBER. ALL I AM SAYING, IF THERE IS A PLACE FOR EQUITABLE LIEN, THE BANK ROBBERY EXAMPLE WOULD BE THE RIGHT PLACE, BUT WHERE DO YOU DRAW THE LINE?

DO WE, IN THE INTERPRETATION OF THE CONSTITUTION, USE THE ABSURD RESULT ANALYSIS?

WELL, I THINK, IF YOU HAVE TO INTERPRET THE PROVISION, ALL OF THE MAX IMS OF CONSTRUCTION -- MAXIMS OF CONSTRUCTION ARE AVAILABLE TO THE COURT, BUT IT IS OUR POSITION THAT THE HOMESTEAD EXEMPTION IS CLEARLY WORDED, AND THERE IS NO ROOM FOR CONSTRUCTION OR RESORT TO ANY MAXIMS OF CONSTRUCTION, THAT IT IS VERY CLEAR THERE IS ONLY THREE EXCEPTIONS. THIS IS NOT ONE OF THEM. CASE CLOSED.

WOULD UNJUST ENRICHMENT, HAVEN'T WE RECOGNIZED THAT AS AN EXCEPTION?

I AM NOT FAMILIAR WITH THAT. NO, SIR. THAT I -- NOT THAT I AM AWARE OF. I AM NOT FAMILIAR WITH AN UNJUST ENRICHMENT.

SOME OF THE CASES SPEAK OF UNJUST ENRICHMENT?

I THINK YOU COULD MAKE THAT ARGUMENT ANY TIME ANY OF THE OLDER CASES, WITH THE BRED COMPANY, AND THEN THERE WAS THE -- WITH THE BREAD COMPANY, AND THEN THERE WAS THE LADY WHO TOOK CARE OF THE YOUNG MAN, WITH EXPECTATION THAT HE WOULD TAKE CARE OF HER FOR THE REST OF HER LIFE. I GUESS IT WOULD BE, ARGUABLY, UNJUST ENRICHMENT. I DON'T KNOW IF YOU USE THOSE WORDS. I DON'T KNOW IF OLD LAW IS NOT NECESSARILY BAD LAW, BUT I WOULD RESPECTFULLY SUGGEST THAT THOSE OLDER CASES NEED TO BE REEXAMINED, IN LIGHT OF THE MORE RECENT PRONOUNCE PRESIDENTS IN THE CACCIANO AND TRAMMELL CASES. THEY SEEM RELATIVELY BENIGN, WHEN HE YOU COMPARE IT TO THE -- WHEN YOU COMPARE IT TO THE CONDUCT IN THE TRAMMELL CASE, WHERE THE HOMESTEAD WAS PURCHASED WITH DRUG MONEY.

IS IT YOUR POSITION -- EXCUSE ME. JUSTICE SHAW.

DO YOU RECOGNIZE WHAT -- DO YOU THINK THAT THIS COURT -- DO YOU AGREE THAT THIS COURT HAS STRAYED AWAY FROM THE LITERAL READING OF THE CONSTITUTION ON HOMESTEAD?

IN ISOLATED INSTANCES, I WOULD CERTAINLY HAVE TO AGREE THAT.

DO YOU ATTRIBUTE THAT TO WHAT? WHERE WE HAVE DEPARTED FROM THE LITERAL?

WELL, FOR EXAMPLE, IN THE FISHBEIN CASE, WHICH, I THINK, IS THE ONLY RECENT DEPARTURE -- I AM NOT SAYING THERE IS ANYTHING WRONG WITH THE DRUGER CASE FROM 18912, BUT -- WITH THE DRUGER CASE FROM 1892, BUT IN FISHBEIN, THAT CASE WAS VERY DISTINGUISHABLE, BECAUSE THE CREDITOR IN THAT CASE FIT WITHIN ONE OF THE THREE EXCEPTIONS OR AT LEAST STOOD IN THE SHOES OF A PARTY WHO FIT IN ONE OF THOSE EXCEPTIONS, AND I THINK THAT IS A DISTINGUISHING FACTOR. TO ME, THIS IS A MATTER, IN ALL DUE RESPECT, THAT IS UP TO THE CITIZENS OF THE STATE OF FLORIDA. IF THEY WANT TO AMEND THE CONSTITUTION, WHETHER IT IS THROUGH THE CONSTITUTIONAL REVISION COMMISSION OR THROUGH THE LEGISLATURE OR BY PETITION INITIATIVE, THEY ARE GOING TO HAVE TO DO IT, BUT THEY MAY, AND I AM SPEAKING IN THE ABSTRACT HERE, BUT THEY MAY HAVE DECIDED THAT IT IS NOT A GOOD -- IS NOT REAL PALATABLE TO HAVE THESE SITUATIONS ARE A RISE IN FLORIDA, WHERE FLORIDA, WHERE WEALTHY PEOPLE COME IN AND PLOW A LOT OF MONEY INTO A HOMESTEAD, BUT THE HOMESTEAD EXEMPTION IS SO IMPORTANT THAT, PERHAPS, FLORIDIANS, WILLING TO TAKE THAT, TO ACCEPT THE BAD PART, AS WELL AS THE GOOD, FOR THE PURPOSE OF PROTECTING THE HOMESTEAD. AND THE CONSTITUTIONAL REVISION COMMISSION, I KNOW IT IS A POLITICAL BODY, BUT WE HAVE CITED, IN OUR BRIEF, THEY HAD A PROPOSAL, PROPOSAL NUMBER 7 ON, WHICH WAS A SPECIFIC -- NUMBER 70, WHICH WAS A SPECIFIC EXCEPTION TO THE HOMESTEAD EXEMPTION FOR DEBTORS WHO PURCHASED THEIR HOMESTEAD, WITH THE INTENT TO DEFRAUD CREDITORS, AND IT WAS VOTED DOWN BY A SUBSTANTIAL VOTE, SO IT IS SIGNALING TO ME THAT, PERHAPS, THE PEOPLE OF THE STATE OF FLORIDA ARE SATISFIED WITH THE STATUS QUO, EVEN IF IT MEANS THAT A FEW WEALTHY DEBTORS COME INTO THE STATE AND PROTECT THEIR ASSETS THAT WAY.

DO YOU ENVISION THE SLIPPERY SLOPE PROBLEM THAT IS THAT CREDITORS, IN EVERY CASE, WILL TRY TO SHOW INTENT TO DEFRAUD OR NOT EVERY CASE, BUT THAT IT WILL OPEN A GREATER NET THAN JUST -- YOU POINTED OUT THIS -- THE FACTS IN YOUR CASE HAVE NOT YET BEEN ESTABLISHED, BUT AS THEY ARE ALLEGED, THEY STOUND PRETTY EGREGIOUS -- THEY SOUND PRETTY EGREGIOUS, SO SHOULD THAT BE A SOUND FOR THIS COURT, OR IN OUR CASE SHOULD WE JUST STOP WHERE IT SHOULDN'T SOMEBODY.

I THINK IN YOUR CASE THAT IS CORRECT. THE HOMESTEAD EXEMPTION APPLIES TO EVERYBODY, RICH AND POOR. IT, ALSO, APPLIES TO PERSONAL PROPERTY, UP TO $1,000. HYPOTHETICALLY, NOT SURE MANY CREDITORS WOULD WANT TO GO TO EXPENSE, BUT THEY COULD CHALLENGE THE EXEMPTION ON A CAR, IF THEY WANTED TO, AND SAY, HEY, YOU BOUGHT THAT NEWCOMER VET, KNOWING THAT YOU WERE IN FINANCIAL TROUBLE, AND WE WANT IT. I MEAN ARC THAT IS POSSIBLE. WE COULD HAVE A LOT MORE LITIGATION. IF YOU OPEN THIS UP. AND THEN WHAT DO YOU DO WITH THE -- WHAT DO YOU DO WITH THE $2 MILLION MENTION IN -- MANSION IN PALM BEACH AND, PERHAPS, ONLY $20,000 OF IT WAS THE PRODUCT OF ILL-GOTTEN GAINS, AND THEN WE HAVE A LOT MORE LITIGATION, SO I WOULD RESPECTFULLY SUBMIT THAT THE CONSTITUTION IS WRITTEN AND HAS BEEN ON THE BOOKS FOR, OF COURSE, WELL OVER 100 YEARS, WITHOUT SIGNIFICANT CHANGE. THERE ARE THREE EXCEPTIONS THAT WE HAVE RECOGNIZED, AND THIS IS NOT ONE OF THEM, AND UNTIL THE VOTERS OF THIS STATE CHANGE THE LAW, I WOULD RESPECTFULLY SUBMIT THAT IT MUST STAND JUST WAY IT IS.

JUSTICE QUINCE, DID YOU HAVE A QUESTION?

NO.

THANK YOU VERY MUCH. MS. DANIELS.

COUNSEL, LET ME ASK YOU THIS. IN EACH ONE OF THE CASES WHERE WE HAVE DEPARTED FROM THE LANGUAGE OF THE CONSTITUTION, WE HAVE GONE TO GREAT LECTURES TO TRY TO -- GREAT LENGTHS TO TRY TO FIT IT INTO ONE OF THOSE THREE EXCEPTIONS. DO YOU AGREE WITH THAT?

NO, SIR, I DON'T, AND LET ME CITE, TO YOU, THE CASE THAT YOU REFERRED TO A MINUTE AGO.

LET ME FINISH MY QUESTION THEN.

OKAY.

DO YOU THINK THAT WE HAVE EVER GONE TO THE POINT THAT WE HAVE SAID, IN EFFECT, THAT FRAUD IS A FORCED EXCEPTION, RATHER? HAVE WE REACHED -- HAVE WE GONE THAT FAR?

THIS COURT HAS REPEATEDLY SAID, BACK TO 1912, THAT THE HOMESTEAD EXEMPTION CANNOT BE USED AS AN INSTRUMENT OF FRAUD, AND I WOULD, IN FACT, IN 1993, IN THE FISHBEIN CASE, THE COURT, THIS COURT, QUOTED, WITH APPROVAL, FROM JOINS VERSUS CARPENTER, AND HERE IS WHAT IT SAID. IN REJECTING THE DEFENSE THAT THE LIEN CAME NOT BE IMPOSED ON -- COULD NOT BE IMPOSED ON A HOMESTEAD, THIS COURT HAS REPEATEDLY HELD THAT ORGANIC AND STATUTORY EXEMPTIONS RELATING TO HOMESTEAD SHOULD BE CONSTRUED IN THE INTEREST OF THE FAMILY HOME, THEY SHOULD NOT BE APPLIED, SO AS TO MAKE THEM AN INSTRUMENT OF FRAUD OR AGAINST CREDITORS. THAT IS IN 1993, THIS COURT, ON JONES. TO ANSWER YOUR VERY QUESTION, IN THAT CASE, THE FISHBEIN CASE, THIS COURT SAID, QUOTING AT PAGE 270, "THUS IT IS APPARENT THAT, WHERE EQUITY DEMANDS IT, THIS COURT HAS NOT HESITATED TO PERMIT EQUITABLE LIENS TO BE IMPOSED ON HOMESTEADS BEYOND THE LITERAL LANGUAGE OF ARTICLE IV SECTION 4. IN THOSE CASES THE EQUITABLE LIENS WERE IMPOSED TO PREVENT UNJUST ENRICHMENT." YOU WON'T FIND UNJUST ENRICHMENT AS AN EXCEPTION TO THE CONSTITUTION, BUT YOU WILL FIND LANGUAGE, SEVEN YEARS AGO, FROM THIS COURT THAT, SAYS, NUMBER ONE, WE DON'T HESS TAD -- HESITATE TO PERMIT EQUITABLE LIENS, WHERE PERMITTED. YOU ASKED -- THE COURT ASKED --

IN ANSWER TO THE CERTIFIED QUESTION, BACK TO WHAT I ASKED MS. TOWNS, TO BEGIN WITH, AND THE CONCERN THAT I HAD IN TRAMMELL, WAS, WHEN YOU ARE SAYING "ACQUIRED HOMESTEAD USING NONEXEMPT FUNDS", IS THAT 100 PERCENT NONEXEMPT FUNDS? 50 PERCENT NONEXEMPT FUNDS?

IT IS USING NONEXEMPT FUNDS, PERIOD.

SO $1, IN A $2 MILLION HOME, WOULD VOID THE HOMESTEAD EXEMPTION?

YES, SIR, BUT THE EQUITABLE LIEN LANGUAGE SUGGESTS, IN THOSE CASES, THAT IT IS ONLY TO THE EXTENT OF THE NONEXEMPT FUNDS THAT THE EQUITABLE LIEN ATTACHES. NOW, I DON'T WANT TO SUGGEST, BY THAT, THAT THIS BECOMES A TRACING ISSUE. WE HAVE -- AND I AGREE WITH MR. ROSENBLUM THAT NO ONE HAS MADE A DETERMINATION, YET, AS TO WHETHER MR. HILL DEFRAUDED CREDITORS. WE WOULD LIKE TO HAVE THAT OPPORTUNITY, AND --

WHAT CONCERNS ME IS WHETHER -- WHAT WE ARE DOING WOULD BE TO GET INTO A MYRIAD OF FACTUAL ISSUES.

YOUR HONOR, WE LITIGATE FACTUAL ISSUES ALL THE TIME, AND THE ISSUE IS ARE WE GOING TO ALLOW PEOPLE TO USE THE HOMESTEAD EXEMPTION AS AN INSTRUMENT OF FRAUD, WHETHER IT IS A DOLLAR OR WHETHER IT IS A MILLION DOLLARS. IS IT GOING TO BE ALLOWED AS AN INSTRUMENT OF FRAUD? THAT IS THE ISSUE. I DO WANT TO POINT OUT, BECAUSE I MADE THE COMMENT ABOUT THE ALIMONY AND CHILD SUPPORT CASES, THEY ARE REFERRED TO IN THE BANK LOOMY CASE, AT PAGE 889. THOSE ARE NOT DECISIONS OF THIS COURT, BUT THEY ARE THE DECISIONS OF THE DISTRICT COURTS OF THIS STATE, THEY ARE CITED, THERE, AT PAGE 889, FOUR DIFFERENT DISTRICT COURT OPINIONS FROM FOUR DIFFERENT DISTRICTS, ON THE ALIMONY, CHILD SUPPORT ISSUE. I WOULD SUGGEST TO YOU THAT, IF THERE IS A BRIGHT-LINE TEST, ARTICULATED BY THIS COURT, THAT ONLY THE SPECIFIC EXCEPTIONS THAT ARE IN THE CONSTITUTION ARE APPLICABLE. THERE ARE GOING TO BE PEOPLE THAT WILL COME TO FLORIDA, TO AVOID ALIMONY AND HOMESTEAD -- ALIMONY AND CHILD SUPPORT RIGHT NOW, UNDER THOSE CASES, I THINK THEY KNOW NOT TO COME ON THAT ISSUE. BUT THERE ARE CASES WHERE THIS COURT HAS SAID WE ARE NOT GOING TO PERMIT FRAUD, WHETHER IT IS AGAINST CHILDREN OR WHETHER IT IS AGAINST YOUR SPOUSE OR WHETHER YOU ROB THE COMPANY THAT YOU WORKED FOR, AND WE HAVE TALKED ABOUT ROBBING BANKS. THIS COURT HAS, ALREADY, DEALT WITH JONES VERSUS CARPENTER.

I THINK YOUR TIME HAS EXPIRED. THANK YOU VERY MUCH. APPRECIATE COUNSEL'S HELP. WE WILL BE IN REHE SAYS FOR -- IN RECESS FOR 15 MINUTES.