Probate, trust, guardianship and inheritance litigation
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Florida Homestead Property Not Beyond the Reach Of Creditors When Acquired With Funds Obtained Through Fraud

By:  Jeffrey Skatoff, Esq.

In Renda v. Price, a July 27, 2022 opinion, the Florida Fourth District Court of Appeal determined that a homestead property was not beyond the reach of creditors and allowed the foreclosure of an equitable lien on the property because the property was acquired with funds obtained through fraud.

The Facts of Renda v. Price

In 2016, Joseph Price was in injured in a motor vehicle accident involving an employee of Reliable Towing and Storage, Inc.  Price sued for damages.  A judgment of $10,000,0000 was entered in Price’s favor.

Giuseppe Renda owned and managed Reliable.  He died and his surviving spouse Rose Renda became the personal representative of his estate.  Reliable held two life insurance policies on Mr. Renda – one valued at $450,000 from AIG and one valued at $70,000 from Northwestern Mutual. During the Price lawsuit, Reliable, through the actions of Mr. Renda, changed the beneficiary of the Northwestern policy to Mrs. Renda.  Reliable attempted to change the beneficiary of the AIG policy to Mrs. Renda, but the transfer forms were not properly signed.  Reliable also transferred possession and ownership of four commercial real properties to four single purpose limited liability companies, Reliable Land Holdings I through IV.

After Mr. Renda died in early 2018, the Northwestern insurance policy paid out $70,780.45 directly to Mrs. Renda. The AIG insurance policy paid out $453,620.06 to Reliable. Mrs. Renda transferred the AIG policy payment to her personal bank account. Reliable, under the direction of Mrs. Renda, sold all its assets to a third party and received two payments of $59,793.53 and $12,000.00. Mrs. Renda then used the monies from the two insurance policies along with the larger check from the sale of Reliable’s assets to purchase a new home that became her homestead property.

Price initiated proceedings to collect on his judgment against Reliable.

After evidentiary hearings, the trial court entered final judgment voiding the sale of the four commercial properties, ordering the sheriff to seize and auction those properties, and imposing an equitable lien of $550,000.00 on the Renda homestead based on Havoco of America Ltd. v. Hill, 790 So. 2d 1018 (Fla. 2001). In so ordering:

[T]he trial court found that Mrs. Renda’s conduct met the “badges of fraud” as enumerated by chapter 726 and that the transfer of funds from the Debtor to her “was made with the intent to defraud creditors,” citing General Electric Co. v. Churly International, LLC, 118 So. 3d 325, 327 (Fla. 3d DCA 2013). The trial court also found the badges of fraud applied to Mrs. Renda because she was “[a]t all times material hereto . . . an insider, owner, spouse of the owner and/or officer of the judgment debtor and these related impleaded entities.” However, the trial court would not permit foreclosure on the equitable lien while the home was Mrs. Renda’s homestead.

On appeal, Price argued that Florida law permits the foreclosure of an equitable lien, even on homestead property, under circumstances where such fraud was involved.  Mrs. Renda argued that an equitable lien could not be imposed on her homestead because homestead properties are exempt from fraudulent transfer claims.

What Is Homestead In Florida?

To learn about Florida homestead property and constitutional protections, read the Complete Guide to Florida Homestead.

Florida Homestead Protection Cannot Be Used To Further a Fraud

Although homestead property in Florida is generally free from the reach of creditors, homestead property acquired with funds generated by fraud or fraudulent activity is not so protected:

Under Havoco, equitable principles reach beyond the literal language of the three homestead exceptions outlined in Article X, section 4 of the Florida Constitution “only where funds obtained through fraud or egregious conduct were used to invest in, purchase, or improve the homestead.” 790 So. 2d at 1028. It is well-settled under Florida law that homestead protections “cannot be employed as a shield and defense after fraudulently imposing on others.” Jones v. Carpenter, 106 So. 127, 130 (Fla. 1925). As a result, “[a]n equitable lien may be foreclosed against homestead property purchased with funds obtained by fraud.” Sweeteners Plus, Inc. v. Glob. Supply Source, Inc., No. 6:11-cv-1799-Orl-28DAB, 2013 WL 6890857, at *8 (M.D. Fla. Dec. 31, 2013) (citing Babbit Elecs. v. Dynascan Corp., 915 F. Supp. 335, 338 (S.D. Fla. 1995)). Our court has also allowed foreclosure on equitable liens imposed on a homestead to prevent unjust enrichment. See Flinn v. Doty, 214 So. 3d 683, 684 (Fla. 4th DCA 2017) (citing Palm Beach Sav. & Loan Ass’n, F.S.A. v. Fishbein, 619 So. 2d 267, 270 (Fla. 1993)) (finding the trial court did not err in foreclosing on the equitable lien of $206,000.00 because it was imposed to prevent unjust enrichment). “[C]ourts have recognized an exception to the homestead protection when the property was acquired with funds generated by fraudulent activity, and a constructive trust or equitable lien is necessary to prevent unjust enrichment.” Sweeteners Plus, 2013 WL 6890857, at *8.

A Lienholder Can Foreclose On an Equitable Lien On Florida Homestead Property If Fraud Exists

Here, the trial court erred when it refused to allow Price to foreclose on the equitable lien on Mrs. Renda’s homestead:

Although the trial court made the decision to prevent foreclosure of the lien based on Havoco, that case does not prohibit foreclosure in these circumstances, even on a homestead property, where such property was purchased with funds obtained by fraud. To disallow Price’s foreclosure on the homestead purchased with funds obtained by fraud would, in essence, unjustly enrich Mrs. Renda. See Flinn, 214 So. 3d at 684; Fishbein, 619 So. 2d at 270. This concept is not new. Federal courts in both the Middle and Southern Districts of Florida have also specifically held that when a homestead property is purchased with funds obtained by fraud, as the trial court found that Mrs. Renda’s homestead was, then foreclosure on that homestead is allowed. See Sweeteners Plus, 2013 WL 6890857, at *8; Babbit Elecs., 915 F. Supp. at 338.

The appellate court reversed the trial court’s order disallowing foreclosure on the equitable lien on the homestead property.


Jeffrey Skatoff is a Florida probate attorney.  To have Mr. Skatoff review your case free of charge, please go to his website.

Probate attorney Jeffrey Skatoff handles probate, trust, guardianship and inheritance litigation.

Jeffrey H. Skatoff, Esq.

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