EQUITABLE LIEN ON HOMESTEAD NOT JUSTIFIED UNDER FLORIDA LAW WHERE FUNDS NOT FRAUDULENTLY OBTAINED.
Chauncey v. Dzikowski (In re Chauncey), 454 F.3d 1292 (11th Cir. 2006)
Appellant debtor filed for bankruptcy protection, claiming a homestead exemption in her home pursuant to Fla. Const. art. 10, § 4(a)(1) and Fla. Stat. § 222.01 (2003). The bankruptcy court imposed an equitable lien on the property benefitting appellee trustee and denied the discharge pursuant to 11 U.S.C.S. § 727(a)(2)(A) and (3). The United States District Court for the Southern District of Florida affirmed the bankruptcy court's decision. The 11th Circuit Court of Appeals reversed, finding that the imposition of an equitable lien was not justified under Florida law because the debtor did not fraudulently obtain the funds which were transferred to the homestead property. The Debtor obtained the funds by instituting a personal injury action, not through any wrongdoing.