4D04-3900-Epstein v. Epstein

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State: Florida

Court: Florida Fourth District Court

Docket No: 4D04-3900

Case Date: 12/21/2005

Preview:DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT July Term 2005 HARRY M. EPSTEIN, Appellant, v. JUDY A. EPSTEIN, Appellee. No. 4D04-3900 [December 21, 2005] GROSS, J. Harry Epstein timely appeals an order entered after a final judgment of dissolution which denied his requests for either the imposition of an equitable lien on his former wife's residence or a set-off against his periodic alimony payments. We affirm the order, holding that application of the clean hands doctrine supported the trial court's award of a final judgment for damages instead of equitable relief. The Epsteins' final judgment of dissolution decreed that the wife would receive 60% of the net equity, and the husband would receive 40%. In addition, the judgment awarded the wife periodic permanent alimony of $5,000 a month. After the divorce, the former wife filed a petition for relief in bankruptcy court. A creditor filed a complaint to deny her discharge in bankruptcy. The creditor held a judgment against both the husband and wife for $840,000. While the bankruptcy proceeding was pending, the former wife arranged to sell the marital residence. Before the closing, the creditor served a garnishment writ upon the closing agent, seeking to reach the former husband's share of the proceeds.

The former husband and former wife concocted an agreement1 that would keep the former husband's proceeds out of the hands of the creditor and ultimately funnel the money back to the former husband. Under this plan, the husband would disclaim any interest in the money realized from the sale of the home and the wife would take the entire proceeds from the sale of the marital home and purchase a new residence. She agreed to repay the husband his share of the net equity at a rate of $2,000 a month. In furtherance of their plan, the former husband sent a letter to the escrow agent stating: I am making no claim on monies from the sale of 3949 N.W. 52nd Street Boca Raton, Florida. It is my understanding that I lost my homestead rights to this house in the divorce proceedings, and any proceeds through Judy's bankruptcy. The escrow agent followed these instructions and paid the wife all of the proceeds from the sale of the marital residence, which she reinvested in a new home. Later, the wife was denied her discharge in bankruptcy. The wife made three $2,000 payments to the husband. After she stopped making payments, the husband sent some angry e-mails seeking repayment of his $150,000 share of the proceeds. He stopped making alimony payments. The wife moved to hold the husband in contempt and the husband moved to enforce the final judgment and to impose an equitable lien. After an evidentiary hearing, the trial judge entered an order 1) denying the husband's request for the imposition of an equitable lien on the wife's new residence, 2) entering a money judgment against the wife for $129,513.41, 3) finding the husband $18,500 in arrears on his alimony payments and requiring payment within 30 days of the evidentiary hearing, 4) issuing an income deduction order of $5,000 a month for alimony, and 5) refusing to set off the wife's debt against the husband's alimony payments. On appeal, the husband challenges the trial court's refusal to impose an equitable lien against his former wife's new home or to set off her debt against his alimony obligation.
1We view the evidence in the light most favorable to the wife, who prevailed at trial on those issues which the husband challenges on appeal.

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Both a set-off and an equitable lien are equitable remedies. In Chappell v. Chappell, 253 So. 2d 281, 283 (Fla. 4th DCA 1971), we identified the equitable nature of a set-off: A court of equity, or a court possessing equitable jurisdiction, has inherent power, as a part of its general jurisdiction, to allow or compel a set-off. * * * As sometimes stated, the right of set-off is an equitable right or a creature of equity, and is founded on equitable principles. * * * Set-off in equity is not a matter of right, but Rests largely in the discretion of the court as defined by well-recognized equitable principles of universal application. (quoting 80 C.J.S. Set-off and Counterclaim

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