The issue of foreclosing on equitable liens on homesteads to prevent unjust enrichment takes center stage in a case of siblings battling over their dead parents’ real estate.

The question before the Fourth District Court of Appeal: Did the trial court err in imposing and foreclosing on two liens totaling $390,000 against property claimed as a homestead, which are typically protected from forced sales?

Short answer: Yes and no.

The case involves liens on property belonging to defendant Gail Flinn, embroiled in a fight with siblings who alleged she wrongly benefitted from their incapacitated parents.

Flinn obtained quit claim deeds to several properties from her father, Robert. After her mother died, the court declared her father legally incapacitated. Flinn’s sister, who was the father’s legal guardian, filed suit alleging the sibling exercised undue influence over their parents to gain control of the real estate.

The guardian claimed the father lacked capacity to transfer the property. She moved to recover $185,000 for proceeds from the sale of part of the holdings and sought to impose an equitable lien on Flinn’s home to recoup $206,000 used to pay off that mortgage. Flinn answered but did not claim the property as a homestead. The trial court agreed with the plaintiff on the father’s lack of capacity to execute the deeds, foreclosed on the liens, entered a final judgment for $421,428 including interest and set a foreclosure sale.

Flinn’s challenge argued her homestead was exempt from forced sale under Florida’s Constitution, but the appellate panel relied on Florida Supreme precedent to conclude otherwise. It cited Palm Beach Savings & Loan Ass’n v. Fishbein, a 1993 case in which the high court reversed a Fourth DCA ruling preventing an equitable lien in a case where an ex-husband had forged his former spouse’s signature on documents for a $930,000 debt used to pay three mortgages and property taxes on the marital home. The Fourth DCA would not have granted an equitable lien to the lender in that case after the wife obtained title to the house, but the state Supreme Court “has not hesitated to permit equitable liens to be imposed on homesteads.”

“Of course Mrs. Fishbein should not be made to suffer because the bank was not more careful in ensuring that her signature on the mortgage was genuine,” the high court ruled. “On the other hand, Mrs. Fishbein is not entitled to a $930,000 windfall. The homestead exemption is intended to be a shield, not a sword.”

That Florida Supreme Court order was bad news for Flinn.

“While appellant contends that there still must be a showing of egregious conduct on her part, Fishbein clearly rejects such a finding,” Fourth DCA Martha Warner wrote in a unanimous March 8 decision with Judges Robert Gross and Melanie May. “Unjust enrichment is sufficient in these circumstances to permit an equitable lien against a homestead.”

The appellate panel disagreed with the trial court, though, on imposing a lien on to recover the $185,000 Flinn gained from the sale of her parents’ property. While it affirmed the $206,000 lien for money Flinn used to pay off her mortgage, it found the money sought from the second lien had no connection to the targeted property Flinn claimed as her homestead.

The Fourth DCA reversed the final judgment’s enforcement of the $185,000 lien and remanded for the court to revise the judgment.

Jennifer S. Carroll of the Law Offices of Jennifer S. Carroll in Palm Beach Gardens represented Flinn.

Amy D. Shield and Roger Levine of Shield & Levine in Boca Raton, and Jason L. Odom of Gould Cooksey Fennell in Vero Beach represented Kevin Doty, personal representative of Robert Flinn’s estate.

The issue of foreclosing on equitable liens on homesteads to prevent unjust enrichment takes center stage in a case of siblings battling over their dead parents’ real estate.

The question before the Fourth District Court of Appeal: Did the trial court err in imposing and foreclosing on two liens totaling $390,000 against property claimed as a homestead, which are typically protected from forced sales?

Short answer: Yes and no.

The case involves liens on property belonging to defendant Gail Flinn, embroiled in a fight with siblings who alleged she wrongly benefitted from their incapacitated parents.

Flinn obtained quit claim deeds to several properties from her father, Robert. After her mother died, the court declared her father legally incapacitated. Flinn’s sister, who was the father’s legal guardian, filed suit alleging the sibling exercised undue influence over their parents to gain control of the real estate.

The guardian claimed the father lacked capacity to transfer the property. She moved to recover $185,000 for proceeds from the sale of part of the holdings and sought to impose an equitable lien on Flinn’s home to recoup $206,000 used to pay off that mortgage. Flinn answered but did not claim the property as a homestead. The trial court agreed with the plaintiff on the father’s lack of capacity to execute the deeds, foreclosed on the liens, entered a final judgment for $421,428 including interest and set a foreclosure sale.

Flinn’s challenge argued her homestead was exempt from forced sale under Florida’s Constitution, but the appellate panel relied on Florida Supreme precedent to conclude otherwise. It cited Palm Beach Savings & Loan Ass’n v. Fishbein, a 1993 case in which the high court reversed a Fourth DCA ruling preventing an equitable lien in a case where an ex-husband had forged his former spouse’s signature on documents for a $930,000 debt used to pay three mortgages and property taxes on the marital home. The Fourth DCA would not have granted an equitable lien to the lender in that case after the wife obtained title to the house, but the state Supreme Court “has not hesitated to permit equitable liens to be imposed on homesteads.”

“Of course Mrs. Fishbein should not be made to suffer because the bank was not more careful in ensuring that her signature on the mortgage was genuine,” the high court ruled. “On the other hand, Mrs. Fishbein is not entitled to a $930,000 windfall. The homestead exemption is intended to be a shield, not a sword.”

That Florida Supreme Court order was bad news for Flinn.

“While appellant contends that there still must be a showing of egregious conduct on her part, Fishbein clearly rejects such a finding,” Fourth DCA Martha Warner wrote in a unanimous March 8 decision with Judges Robert Gross and Melanie May. “Unjust enrichment is sufficient in these circumstances to permit an equitable lien against a homestead.”

The appellate panel disagreed with the trial court, though, on imposing a lien on to recover the $185,000 Flinn gained from the sale of her parents’ property. While it affirmed the $206,000 lien for money Flinn used to pay off her mortgage, it found the money sought from the second lien had no connection to the targeted property Flinn claimed as her homestead.

The Fourth DCA reversed the final judgment’s enforcement of the $185,000 lien and remanded for the court to revise the judgment.

Jennifer S. Carroll of the Law Offices of Jennifer S. Carroll in Palm Beach Gardens represented Flinn.

Amy D. Shield and Roger Levine of Shield & Levine in Boca Raton, and Jason L. Odom of Gould Cooksey Fennell in Vero Beach represented Kevin Doty, personal representative of Robert Flinn’s estate.