1995 WL 17061323 (11th Cir.)
For opinion see 95 F.3d 1028

Briefs and Other Related Documents

United States Court of Appeals,Eleventh Circuit.

In re: Edward W. ENGLANDER, andPhyllis S. ENGLANDER, Appellants.

No. 94-2823.

February 9, 1995.

Bankruptcy Appeal Middle District of Florida

Initial Brief of Appellants

Robert Augustus Harper, Law Firm, P.A., 300 West Park Avenue, Post Office Box 10132, Tallahassee, Florida 32302-2132, (904) 224-5900/fax (904) 224-9800, FL Bar No. 127600, GA Bar No. 328360, Counsel for Appellants.

*iv B. STATEMENT REGARDING ORAL ARGUMENT
Oral argument is requested. The issues of law are of first impression and are particularly compelling. The issue relates to bankruptcy treatment of a Florida constitutional homestead which land area exceeds the constitutionally defined municipal lot area. Oral argument would help explain the position of Appellant, and, respectfully, would assist the Court.

*v C. TABLE OF CONTENTS AND CITATIONS

1. TABLE OF CONTENTS

A. CERTIFICATE OF INTERESTED PERSONS AND CORPORATE DISCLOSURE STATEMENT ... i

B. STATEMENT REGARDING ORAL ARGUMENT ... iv

C. TABLE OF CONTENTS AND CITATIONS ... v

1. TABLE OF CONTENTS ... v

2. TABLE OF CITATIONS ... vii

a. CASES ... vii

b. STATUTES ... ix

c. OTHER ... x

D. STATEMENT REGARDING ADOPTION OF BRIEFS OF OTHER PARTIES ... 1

E. STATEMENT OF SUBJECT MAITER AND APPELLATE JURISDICTION ... 2

1. Basis for subject matter jurisdiction in district court and citation(s) to applicable statutory provisions ... 2

2. Basis for jurisdiction in the Court of Appeals with citation(s) to applicable statutory provisions and relevant filing dates: ... 2

a. Final Order. ... 2

b. Other Jurisdictional Basis. ... 2

F. STATEMENT OF THE ISSUES ... 3

G. STATEMENT OF THE CASE ... 4

*vi 1. Course of the Proceedings and Dispositions Below ... 4

2. Statement of the Facts ... 6

3. Standard of Review ... 9

H. SUMMARY OF ARGUMENT ... 10

I. ARGUMENT AND CITATIONS ... 11

1. Under law, the Bankruptcy Court cannot order a sale of Florida homestead property with an accompanying apportionment of the proceeds even when the property exceeds the area limitation permitted under the constitutional homestead exemption provision and cannot be practically or legally divided ... 11

a. An analysis of the final judgment below ... 11

b. The provisions of Florida law ... 15

c. Case authority supports the position that the entire property is entitled to homestead exemption status ... 17

2. The findings of fact below are insufficient to sustain the relief granted and are, therefore, "clearly erroneous" as a matter of law ... 21

3. The order below was an unlawful exercise of "federal equity power," because under Florida law, the homestead did not fall into the bankruptcy estate; therefore, the bankruptcy court was without jurisdiction over the homestead property ... 22

J. CONCLUSION ... 26

K. CERTIFICATE OF SERVICE ... 28

*vii 2. TABLE OF CITATIONS

a. CASES

Butner v. United States, 440 U.S. 48, 99 S.Ct. 914, 59 L.Ed.2d 136 (1979) ... 22

Butterworth v. Caggiano, 605 So. 2d 56 (Fla. 1992) ... 23, 24

* Graziadei v. Graziadei, 32 F.3d 1408 (9th Cir. 1994) ... 12, 25

Hancock Advertising, Inc. v. Department of Transp., 549 So. 2d 1086 (Fla. 3d DCA 1989) (citation omitted), review denied, 558 So. 2d 17 (Fla. 1990) ... 24

* Hill v. First National Bank of Marianna, 79 Fla. 391, 84 So. 190 (Fla. 1920) ... 16, 19

Hillsborough Investment Co., v. Wilcox, 152, Fla. 889, 13 So. 2d 448 (Fla. 1943) ... 13, 21

In re Anderson, 132 B.R. 657 (Bankr. M.D. Fla. 1991) ... 21

In re Barker, 168 B.R. 773 (Bankr. M.D. Fla. 1994) ... 15, 17, 23

In re Browne, 462 F.2d 129 (9th Cir. 1972) ... 24

In re Cerreta, 116 B.R. 402 (Bankr. D. Vt. 1990) ... 19, 22

In re Coplan, 156 B.R. 88 (Bankr. M.D. Fla. 1993) ... 26

In re Davidson, 164 B.R. 782, 787 (Bankr. S.D. Fla. 1994) ... 17, 21

In re Dudenay, 159 B.R. 1003 (Bankr. S.D. Fla. 1993) ... 18

In re Elliott, 79 B.R. 944 (Bankr. M.D. Fla. 1987) ... 11

In re Fietz, 852 F.2d 455 (9th Cir. 1988) ... 24

In re General Coffee Corporation, 758 F. 2d 1406 (11th Cir. 1985) ... 2

In re Girard, 98 B.R. 685 (Bankr. D. Vt. 1989) ... 21

In re Hayes, 119 B.R. 86 (Bankr. E.D. Va. 1990) ... 17

*viii * In re Hill, 163 B.R. 598 (Bankr. N.D. Fla. 1994) ... 17, 18, 21

* In re Kuver, 70 B.R. 190 (Bankr. S.D. Fla. 1986) ... 17

In re Livingston, 804 F.2d 1219 (11th Cir. 1986) ... 24

In re Lloyd, 37 F.3d 271 (7th Cir. 1994) ... 22

In re Markareiviez, 130 B.R. 620 (Bankr. S.D. Fla. 1991) ... 19

In re McAtee, 154 B.R. 346 (Bankr. N.D. Fla. 1993) ... 17, 23

In re Meola, 158 B.R. 881, 882 (Bankr. S.D. Fla. 1993) ... 18

In re Persky, 134 B.R. 81 (Bankr. E.D. N.Y. 1991) ... 6, 18

In re Primack, 89 B.R. 954 (Bankr. S.D. Fla. 1988) ... 26

In re Rightmeyer, 156 B.R. (Bankr. M.D. Fla. 1993) ... 21

In re Snape, 166 B.R. 184 (Bankr. M.D. Fla. 1994) ... 21

In re Spain, 831 F.2d 236 (11th Cir. 1987) ... 24

In re SPM Mfg. Corp, 984 F.2d 1305, 1311 (1st Cir. 1993) ... 22

In re Sublett, 895 F.2d 1381 (11th Cir. 1990) ... 9, 22

In re Thomas, 883 F.2d 991 (11th CIr. 1989) ... 9

In re Turner, 724 F.2d 338 (2d Cir. 1983) ... 25

In re Wickstrom, 113 B.R. 339 (Bankr. W.D. Mich. 1990) ... 24

In re Wierschem, 152 B.R. 345 (Bankr. M.D. Fla. 1993) ... 19

In the Matter of Chicago, Milwaukee, St. Paul and Pacific R.R. Co., 791 F.2d 524, 528 (7th Cir. 1986) ... 22

Jones v. Carpenter, 90 Fla. 407, 106 So. 127 (Fla. 1925) ... 12, 16, 26

*ix Libby v. Beverly, 263 F. 63 (5th Cir. 1920) ... 22

McMichael v. Grady, 34 Fla. 219, 15 So. 765 (Fla. 1894) ... 25

Moxely v. Wickes Corp., 356 So. 2d 785 (Fla. 1978) ... 13

Norwest Bank Worthington v. Ahlers, 485 U.S. 197, 206; 108 S.Ct. 963, 968-69; 99 L.Ed.2d 169 (1988) ... 22

O'Brien v. Heggen, 705 F.2d 1001 (8th Cir. 1993) ... 14

Owen v. Owen, 961 F.2d 170 (11th Cir. 1992) ... 13, 15, 21

Palm Beach Savings & Leon Association v. Fishbein, 619 So. 2d 267 (Fla. 1993) ... 12

Pettengill v. United States, 205 F.Supp. 10, 62-2 U.S. Tax Cas. (CCH) 10 A.F.T.R.2d (P-H) (1962) ... 19

Public Health Trust of Dade County v. Lopez, 531 So. 2d 946 (Fla. 1988) ... 23

Smith v. Guckenheimer, 42 Fla. 1, 27 So. 900 (Fla. 1900) ... 15

Title Insurance Co. of Minnesota v. Agora Leases, Inc., 320 N.W.2d 884 (Minn. 1982) ... 18

Tullis v. Tullis, 360 So. 2d 375 (Fla. 1977) ... 13

Wegner v. Grunewaldt, 821 F.2d 1317 (8th Cir. 1987) ... 9

Westcott v. Westcott, 487 So. 2d 1099 (Fla. 5th DCA 1986) ... 13, 14, 16

Wrenn v. American Cast Iron Co., 40 F.3d 1162 (11th Cir. 1994) ... 19

b. STATUTES

11 U.S.C. ¤ 105 ... 22

11 U.S.C. ¤ 105(a) ... 22

11 U.S.C. ¤ 363(h) ... 24

11 U.S.C. ¤ 522 ... 11, 16

*x 11 U.S.C. ¤ 522(b) ... 16

11 U.S.C. ¤ 522(d) ... 16

28 U.S.C. ¤ 158(d) ... 2

28 U.S.C. ¤ 1291 ... 2

28 U.S.C. ¤ 1334 ... 2

28 U.S.C. ¤ 1334(b) ... 24

28 U.S.C. ¤ 1961 ... 8

28 U.S.C.A. ¤ 158(a), (c) ... 9

Fla. Stat. ¤ 55.10 ... 19

Fla. Stat. ¤ 222.08 ... 12

Fla. Stat. ¤ 222.20 ... 16

c. OTHER

Bankr. Rule 7052 ... 9

Bankr. Rule 8013 ... 9

Constitution of the State of Florida, Article X, ¤4 ... 6, 12, 15, 23

Fed. R. App. P. 4(a) ... 2

Fed. R. Civ. P. 52 ... 9

Webster's Third New Int'l Dictionary 706 (1986) ... 24
*1 D. STATEMENT REGARDING ADOPTION OF BRIEFS OF OTHER PARTIES
All debtor parties in interest are represented in this brief.
*2 E. STATEMENT OF SUBJECT MATTER AND APPELLATE JURISDICTION
1. Basis for subject matter jurisdiction in district court and citation(s) to applicable statutory provisions.
The district court exercised its jurisdiction pursuant to 28 U.S.C. ¤ 1334, Bankruptcy Cases and Proceedings. Final action by the district court occurred on 09 June 1994 by virtue of its order, "Appeal from the United States Bankruptcy Court for the Middle District of Florida, Orlando Division," Case No. 93-59-CIV-ORL-19 per United States District Court Judge Patricia C. Fawsett. See In re General Coffee Corporation, 758 F. 2d 1406 (11th Cir. 1985).
2. Basis for jurisdiction in the Court of Appeals with citation(s) to applicable statutory provisions and relevant filing dates:
Jurisdiction vests in the Court of Appeals for the Eleventh Circuit pursuant to 28 U:S.C. ¤ 158(d), as the case is a direct appeal from a final order of the United States District Court, Middle District of Florida, Orlando Division, in its appellate review of the Bankruptcy Court, Middle District of Florida [which order (RE 184; R6-214) was timely appealed (R6-217)] to the district court.
a. Final Order.
The final order being "Appeal from the United States Bankruptcy Court for the Middle District of Florida, Orlando Division" was rendered on 09 June 1994. (RE 142; R8-261).
b. Other Jurisdictional Basis.
The Notice of Appeal was filed on 27 June 1994 (RE 22B; R1-16), and was timely under Rule 4(a), Federal Rules of Appellate Procedure.
*3 F. STATEMENT OF THE ISSUES
As stated by the district court: The issue on appeal is whether, under law, the Bankruptcy Court can order a sale of homestead property with an accompanying apportionment of the proceeds when the property exceeds the area limitation permitted under the homestead exemption provision and cannot be practically or legally divided. (RE 142; R8-261-2).

*4 G. STATEMENT OF THE CASE [FN1]

    FN1. The below facts and issues of laws involved are not in dispute. The following statement is extracted from the order of United States District Court Judge Patricia Fawsett of 09 June 1994. (RE 14-ff; R8-261).



1. Course of the Proceedings and Dispositions Below
Two Orders of the United States Bankruptcy Court for the Middle District of Florida, Orlando Division, concerning an objection to Appellants' claim of homestead exemption in bankruptcy were appealed to the United States District Court. Debtors/Appellants appealed from a September 8, 1992 Order Granting Partial Summary Judgment ("Summary Judgment Order") [FN2] denying Appellants' claim of homestead exemption entered by Bankruptcy Court Judge Henry H. Dickinson and a December 4, 1992 Order on Allocation Issues Related to the Objection to the Claimed Homestead Exemption ("Allocation Order") [FN3] entered by Bankruptcy Court Judge J. Wendell Roberts. The Bankruptcy Court disallowed Appellants' claim of homestead exemption on their residence located in Winter Park, Florida, because the lot size exceeded the permissible area limits for a homestead exemption within a municipality. Under the applicable zoning and building regulations, the Winter Park property could not be practically or legally subdivided. Therefore, the Bankruptcy Court ordered a sale of the property and allocation of *5 the proceeds between the debtors and creditors according to a formula determined by the Bankruptcy Court.

    FN2. Subsequent Orders of the Bankruptcy Court and the parties' briefs referred to the date of the Order Granting Partial Summary Judgment (RE 161; R5-163) from which Appellants appealed as September 10, 1992. It appears from the record that the actual date of the Order was September 8, 1992; however, the filing date was September 10, 1992. For consistency purposes, the date of the order was treated as September 10, 1992.



    FN3. RE 184; R6-214.



Appellants on appeal to the district court contended that a forced sale of the homestead property and the substitution of a portion of the sale proceeds in lieu of an actual residence was contrary to the plain language of the Florida Constitution homestead exemption provision.
The issue considered by the district court on appeal was "whether, under the law, the Bankruptcy Court can order a sale of 'would be' homestead property" with an accompanying apportionment of the proceeds when the property exceeds the area limitation permitted under the homestead exemption provision and cannot be practically or legally divided." (RE 142; R8-261). Were the Bankruptcy Court's Order directing a sale of Appellants' property affirmed, Appellants would contest the Allocation Order contesting the following issues: (1) the right of Appellants to retain the property by paying to the estate an amount nominally greater than the estate would receive on a net basis from a sale to a third party, without the limitations imposed by the Bankruptcy Court; (2) the appropriate date for determining the value of the subject property for purposes of allocating proceeds; (3) the allocation of the costs of the sale of the subject property; and (4) the payment and calculation of interest to be paid by Appellants to the estate on the estate's share of the property or proceeds.
*6 2. Statement of the Facts
Appellants, Edward Englander and Phyllis S. Englander, filed a Chapter 7 petition for bankruptcy on September 27, 1990. Mr. and Mrs. Englander claimed their home at 440 Henkel Circle in Winter Park, Florida, as exempt property under the Florida homestead exemption. The residence is located on lake front property on a tract of land measuring 1.05 acres (the "Property"). There is no dispute among the parties that under applicable zoning and building regulations, the Winter Park Property cannot be subdivided. The Florida Constitution limits a homestead exemption within a municipality to .5 acres. Article X, ¤4.
On November 30, 1990, the trustee joined by creditors [FN4] First Union National Bank of Florida and Transamerica Commercial Finance Corporation (collectively "Objectors/Appellees"), filed formal objections to various exemptions claimed by Mr. and Mrs. Englander including the homestead exemption. In its First Preliminary Pretrial Order in Objections to Claims of Exemptions Contested Matter (R2-56), the bankruptcy judge bifurcated the objections to the claims of exemptions into two separate issues for purposes of discovery, pretrial, and trial proceedings. The first issue involved the objections to Appellants' claim of homestead for their Winter Park Property, and the second issue involved all other claims of exemptions and objections. This appeal concerns only the first issue objections to Appellants' claim of homestead exemption.

    FN4. Although no specific finding was made by the district court or by the Bankruptcy Court, the creditors were admittedly joint creditors (RE 23). Cf. In re Persky, 134 B.R. 81 (Bankr. E.D. N.Y. 1991).



*7 After two amendments to the schedule B-4, Appellants clarified the legal description of the property they claimed as homestead exemption within the tract of land containing their residence. Attached to the Bankruptcy Court's Summary Judgment Order (RE 161; R5-163) at Exhibit A is the configuration of the .5 acres in which Appellants claimed an exemption and the .55 acres non-exempt portion of the Winter Park Property. The non-exempt property had no access to roads, utilities or lake frontage and is completely surrounded by the .5 acres of land in which Appellants claim an exemption.
Appellants objected to the Bankruptcy Court's finding that their designation of exempt and non-exempt property was done in bad faith. The district court found on review of the record on appeal that the finding was not germane to the Bankruptcy Court's ruling and "is not an issue this Court needs to address on appeal." (RE 145, fn.3).
The Bankruptcy Court considered the trustees'/creditors' objections to Appellants' claim of homestead exemption on cross-motions for summary judgment. On September 10, 1992, the Bankruptcy Court entered its Order Granting Partial Summary Judgment holding that the entire Winter Park Property should be sold and reserving ruling on the appropriate allocation of the proceeds from such sale to Appellants and the Bankruptcy Estate.
Pursuant to the Bankruptcy Court's Order, the parties filed a pretrial stipulation and briefs on the allocation and other issues related to a prospective sale of the Property. On November 19, 1992, Appellants filed their Notice of Third Amendment to Schedule B-4 Correcting Legal Description of Real Property Claimed Exempt as Homestead. After hearing oral argument on the allocation and other issues related to a sale of the Property, the Bankruptcy *8 Court entered its Order on Allocation Issues Related to the Objection to the Claimed Homestead Exemption on December 4, 1992 (RE 184; R6-214).
The Bankruptcy Court denied Appellants' third amendment to their schedule of homestead exemption and ordered that (1) the allocation of the proceeds and the method of the sale of the Property shall be as described in the Order; (2) the petition date is the determinative date for valuing the Property; (3) Appellants are responsible for property taxes and the Estate is liable to Appellants for its allocable share of the post-petition date taxes; (4) Appellants are liable to the Estate for interest on the Estate's portion of the sale proceeds from the petition date at the rate specified in 28 U.S.C. ¤ 1961 in effect on the applicable dates; and (5) an appraisal of the Property could be obtained at the time of the Bankruptcy Court's Order.
Together, the Summary Judgment Order (RE 161; R5-163) and the Allocation Order (RE 184; R6-214) constitute the final order of the Bankruptcy Court on the homestead exemption issues from which Appellants appealed to the district court. On 22 March 1993, [FN5] the district court denied Appellants' Motion for Stay Pending Appeal of Order Direction Appraisals, holding that an appraisal of the Property could be obtained prior to the exhaustion of all appeals. On 09 June 1994, the district court, Judge Patricia Fawsett, rendered its order which affirmed the Bankruptcy Court on the homestead exemption issue (RE 14; R8-261). This appeal ensued.

    FN5. The district court's order referred to the same document but referenced the date as 03 May 1993. (RE 146).



*9 3. Standard of Review
The standard of review in the Court of Appeals with regard to determinations of law, whether made by the bankruptcy court or by the district court, is de novo. With regard to the bankruptcy court's factual determinations, "clearly erroneous" review applies. See In re Thomas, 883 F.2d 991, 994 (11th Cir. 1989); Bankr. Rule 7052 (incorporating Fed. R. Civ. P. 52); Bankr. Rule 8013. The district court in a bankruptcy appeal, like the Court of Appeals, functions as an appellate court in reviewing the bankruptcy court's decision. See 28 U.S.C.A. ¤ 158(a), (c). Neither the district court nor the Court of Appeals is authorized to make independent factual findings; that is the function of the bankruptcy court. See Bankr. Rules 7052, 8013; Wegner v. Grunewaldt, 821 F.2d 1317, 1320 (8th Cir. 1987). "If the bankruptcy court's factual findings are silent or ambiguous as to an outcome determinative factual question, the district court...must remand the case to the bankruptcy court for the necessary factual determination." Wegner, supra, 821 F.2d at 1320. Moreover, "[a]s the second court of review," the Court of Appeals' review of the district court's decision is entirely de novo. See In re Sublett, 895 F.2d 1381 (11th Cir. 1990).
*10 H. SUMMARY OF ARGUMENT
The order of the district court below did not give due consideration to the use and enjoyment interest of the Florida constitutional homestead exemption. The district court in its exercise of federal equity jurisdiction, elevated the claims of general creditors to the level of co-owners, tenants by the entirety. The legal analysis is not supported by Florida law. Because the Court is bound to follow the law of the state in matters of exemptions, the case must be reversed and remanded with directions to give due deference to the possessory interest concept of Florida law.
Further the district court made no findings of fact (and no conclusions of law) that the Englanders engaged in any type of fraudulent conversion, fraudulent planning, or any other fraudulent conduct. The predicate to the exercise of federal equity jurisdiction was absent. The district court made no finding of fact (and no conclusion of law) that the Englanders were, or would be, unjustly enriched by extending the homestead exemption to the entire lot area of 1.05 acres. The district court failed to make several factual findings necessary for adequate de novo review.
The exercise of federal equity jurisdiction in this case exceeded lawful authority. A compelling line of cases holds that the constitutional homestead exemption in Florida does not fall into the bankruptcy estate. Therefore, the order apportioning the Englander homestead was in excess of jurisdiction.
*11 I. ARGUMENT AND CITATIONS
1. Under law, the Bankruptcy Court cannot order a sale of Florida homestead
property with an accompanying apportionment of the proceeds even when the
property exceeds the area limitation permitted under the constitutional
homestead exemption provision and cannot be practically or legally divided.
The bankruptcy judge, and the district court on appeal, in effect, disallowed the Englanders' claim of homestead exemption as a marital residence. The order below sustained the objection of the trustee to the homestead exemption claim holding that because the lot area was 1.05 acres and the Constitution of the State of Florida exempts only .5 acres, the Englanders were entitled to no homestead exemption protection and that creditors may effect a judicial sale of the home to satisfy claims. Under the Constitution of the State of Florida debtors are entitled to claim a homestead exemption. The issue before the Court should be to what extent under 11 U.S.C. ¤ 522 may the state constitutional exemption be denied. In re Elliott, 79 B.R. 944, 946 (Bankr. M.D. Fla. 1987).
a. An analysis of the final judgment below.
The district court noted there are no cases factually on point, but the Florida cases applying equitable principles to the homestead exemption allegedly supported the Bankruptcy Court's Order directing a sale of Appellants' Property and providing Appellants an exemption in a portion of the sale proceeds. (RE 147; R8-261-7). The district court went on to address whether a forced sale under the instant circumstances with the granting of an exemption in the *12 sale proceeds comports with the policy of the Florida homestead exemption and is consistent with existing case law. (RE 148; R8-261- 8). [FN6]

    FN6. The district court failed to consider that Bankruptcy courts have held that a debtor may claim no exemption in the proceeds of the sale of the homestead. The Ninth Circuit has gone further. See Graziadei v. Graziadei, 32 F.3d 1408 (9th Cir. 1994) and discussion following, pp. 21- 24.



The district court cited Palm Beach Savings & Leon Association v. Fishbein, 619 So. 2d 267 (Fla. 1993) as authority for its exercise of equity jurisdiction in the area of homestead exemption (RE 150; R8-261-10). Florida Statutes, Section 222.08, have long given "circuit courts equity jurisdiction to order and decree the setting apart of homesteads and of exemptions of personal property from forced sales." But the Supreme Court of Florida has been careful to note 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 X, Section 4." Fishbein, supra, 619 So. 2d 270. The court noted that "equitable liens were imposed to prevent unjust enrichment." [FN7] Neither the district court, nor the bankruptcy court, made any findings of fact or conclusions of law that he Englanders were in any manner unjustly enriched. In fact, had *13 such an inquiry been indulged, the inescapable conclusion would have been to the contrary as the record reflects several million dollars of creditor claims were satisfied by the debtors.

    FN7. The equitable lien differs essentially from a common-law lien; the latter being the mere right to retain possession of some chattel until a debt or demand due the person thus retaining it is satisfied; possession being such a necessary element that if it is voluntarily surrendered by the creditor the lien is at once extinguished, while in the former or equitable lien possession remains with the debtor or person who holds in proprietary interest. Jones v. Carpenter, 90 Fla. 407, 106 So. 127, 129 (Fla. 1925).



Next the district court relied on two domestic relations cases involving co-owners in tenancy by entirety. Tullis v. Tullis, 360 So. 2d 375 (Fla. 1977) and Westcott v. Westcott, 487 So. 2d 1099 (Fla. 15th DCA) review denied 494 So. 2d 1154 (Fla. 1986) to reach the conclusion that partition and forced sale was the appropriate remedy (RE 150; R8-261-10). Tullis holds that "partition and forced sale is necessary to protect the beneficial enjoyment of the owners in common to the extent of their interests in the property," (emphasis added). Tullis, supra, 360 So. 2d at 377. The "homestead provision was never intended to preclude forced sale following a suit for partition by an owner in common." Id. The order below elevates general creditors [FN8] to the status of a co-owner, and is therefore contrary to Florida law. [FN9] "The purpose of the homestead exemption provision is to protect the family home from forced sale for the debts of the owner and head of the family." Id. See also *14Moxely v. Wickes Corp., 356 So. 2d 785 (Fla. 1978) (tenancy by entireties property can acquire homestead status for purpose of exemption from taxation and from forced sale.)

    FN8. The order below contains no findings of whether the creditors are judgment creditors or not. Owen v. Owen, 961 F.2d 170 (11th Cir. 1992). The order below contains no finding that the creditors' claims were recorded liens. See Hillsborough Investment Co., v. Wilcox, 152 Fla. 889, 13 So. 2d 448 (Fla. 1943).



    FN9. A point of law which was not lost in the district court: "The Court 

    is concerned about affirming in the abstract a black letter rule of law which states a trustee and debtor become co-owners of homestead property when the constitutional area limitation is exceeded. (RE 157; R8-261-17).



Similarly, Westcott v. Westcott, 487 So. 2d 1099 (Fla. 5th DCA 1986) was perceived by the district court to provide authority for owners to force partition and sale, id., at 1100, but Westcott clearly restates the long standing principle of Florida law, "The purpose of the homestead provision is our state constitution is to protect the family home from forced sale from the debts of the owner and head of the family." Certainly, Westcott holds partition and forced sale of a homestead are remedies under Florida law. But neither Westcott, nor any other Florida case, extends that right beyond one of the owners in cotenancy of that property.
Finally, the district court relied on O'Brien v. Heggen, 705 F.2d 1001 (8th Cir. 1993). (RE 151; R8-261-11). In O'Brien, the extent of the homestead exemption under Minnesota law was the question before the court of appeals. The district court had affirmed an order of the bankruptcy court apportioning, as exempt and non-exempt, the proceeds of the sale of real property on which debtor O'Brien's residence was located. O'Brien appealed, contending that the bankruptcy court (1) erroneously determined the nonexempt portion of his property to be worth $72,880, (2) failed to permit a mortgage covering both exempt and non-exempt portions to be satisfied first from the non-exempt portion, and (3) deprived him of a right to make a post-sale hypothetical selection.
On appeal, O'Brien does not seek to avoid the sale but instead argues that the non-exempt portion of his hypothetical selection is virtually worthless, thus entitling him to keep the proceeds of the sale, less a nominal amount of $1,000 attributable to the non-exempt portion.
O'Brien v. Heggen, supra, 705 F.2d at 1003. The Englanders do seek to avoid the sale.
*15 The district court below concluded that the O'Brien case presented facts similar to the instant appeal in that the debtor's homestead exceeded the statutory area limitation and subdivision of the debtor's homestead property was not feasible practically or legally. The solution in O'Brien of apportioning the sale proceeds as exempt and non-exempt "allows an appropriate recognition of debtor's homestead exemption and yet affords creditors some satisfaction of their rightful claims." Id. at 1004. (RE 152; R8-261-12).
b. The provisions of Florida law.
Article X, Section 4 of the Constitution of the State of Florida provides:
Section 4. Homestead exemptions.
(a) There shall be exempt from forced sale under process of any court, and no judgment, decree or execution shall be a lien thereon, except for the payment of taxes and assessments thereon, obligations contracted for the purchase, improvement or repair thereof, or obligations contracted for house, field or other labor performed on the realty, the following property owned by a natural person:
(1) a homestead...if located within a municipality, the extent of one-half acre of contiguous land, upon which the exemption shall be limited to the residence of the owner of his family;
The exemption applies to the land and the improvements thereon, without regard to value. Smith v. Guckenheimer, 42 Fla. 1, 27 So. 900, 905 (Fla. 1900). In re Barker, 168 B.R. 773, 775 (Bankr. M.D. Fla. 1994). Accord Owen v. Owen, 500 U.S. 305, 111 S.Ct. 1833, 114 L.Ed.2d 350 (1991).
The homestead right is not limited to a mere holding of the legal title to the exempt property "from forced sale"; it contemplates and includes the beneficial, peaceful, and uninterrupted use and enjoyment of such property. Such right is superior to the claims of creditors. The policy of the law conferring it is to preserve the home for the family even at the sacrifice of just demands and to protect the family from destitution and want. (emphasis added).
*16 Hill v. First National Bank of Marianna, 79 Fla. 391, 84 So. 190, 192 (Fla. 1920). See also Westcott v. Westcott, 487 So. 2d 1099, 1100 (Fla. 5th DCA 1986).
11 U.S.C. ¤ 522 permits the debtor to elect between state exemptions or the federal exemptions set forth at 11 U.S.C. ¤ 522(d). But Florida is among the majority of states which has chosen to "opt out" of the federal exemption scheme and limits its residents to the exemptions allowable under Florida law. [FN10]

    FN10. Fla. Stat. ¤ 222.20 provides: 


    Nonavailability of federal bankruptcy exemptions.--In accordance with the provision of ¤ 522(b) of the Bankruptcy Code of 1978 (11 U.S.C. ¤ 522(b)), residents of this state shall not be entitled to the federal exemptions provided in ¤ 522(d) of the Bankruptcy Code of 1978 (11 U.S.C. ¤ 522(d)). Nothing herein shall affect the exemptions given the residents of this state by the State Constitution and the Florida Statutes.



A homestead in Florida is for the benefit of the family, where the family can be sheltered and live beyond the reach of financial reverses. It is one of the issues of our republican government designed to encourage freeholders, those citizens who are the prop and mainstay of all free government. It is designed to keep sacred and inviolate the home for the family regardless of the amount of the indebtedness or the number of creditors of the head of the family. It cannot be alienated except as the law directs and when the parties are sui juris and dealing at arm's length; it is notice to the world of all these facts and more. But the homestead exemption cannot be employed as a shield and defense after fraudulently imposing on others. Jones v. Carpenter, 90 Fla. 407, 106 So. 127, 130 (Fla. 1925).
*17 c. Case authority supports the position that the entire property is entitled to homestead exemption status.
The Bankruptcy code does not permit an exemption, otherwise valid under state law to be disallowed. In re Barker, 168 B.R. 773 (Bankr. M.D. Fla. 1994) citing In re Davidson, 164 B.R. 782, 787 (Bankr. S.D. Fla. 1994); In re Hayes, 119 B.R. 86 (Bankr. E.D. Va. 1990). The holding below has ignored the purpose of the homestead exemption, to provide some protection for the family and a fresh start for honest debtors who have suffered financial disaster. The purpose of the Florida homestead is to provide a residence, not merely the ability to obtain a new residence. In conducting a divisibility-severability analysis the court, In re Kuver, 70 B.R. 190 (Bankr. S.D. Fla. 1986) allowed a homestead exemption to be extended to an adjacent duplex apartment next to the debtor's apartment. The court held that to disallow the extension of the homestead would be a form of discrimination. To disallow a full homestead exemption claim to the Englanders is to discriminate against those Florida home owners who, merely because of zoning regulation and deed restrictions own and possess homesteads on lot areas which exceed .5 acres, a common development in Florida. Cf. In re McAtee, 154 B.R. 346, 349 (Bankr. N.D. Fla. 1993) [court refused to adopt a homestead exemption interpretation which would deny the protection of the forced sale homestead exemption to potentially thousands of homeowners merely because their residences were situated on public lands under long term leases].
In re Hill, 163 B.R. 598 (Bankr. N.D. Fla. 1994), the bankruptcy judge allowed the inclusion of a vacant lot in the claimed homestead exemption. Id., at fn. 6. The judge noted that debtor Hill had purchased a vacant lot adjacent to his Destin home with his wife and had *18 claimed the lot as exempt as tenancy by the entirety property. The creditor did not object to the debtor's characterization of the adjacent lot as tenancy by the entirety property, nor did it object on the basis that the size of the combined lots exceeded the constitutional limits for real property under the state's homestead provisions. Albeit, Hill involved a filing petitioner debtor and his non-filing spouse, but if the analysis of the court below were correct and were applied to Hill, the creditor could have forced partition and sale of the homestead. The Englander holding therefore necessarily bears on the rights of creditors when only one spouse files for bankruptcy. A forced sale in such a situation would be an unconstitutional taking. In re Persky, 434 B.R. 81 (Bankr. E.D. N.Y. 1991).
"Exemptions, therefore, necessarily deprive creditors of assets which would otherwise be available to satisfy their claims." Hill, supra, 163 B.R. 601. But Florida has the public policy of protecting the homestead exemption, and homestead statutes have always enjoyed particularly liberal construction in Florida. In part, for that reason Florida has been known as a "debtor's haven." While great care should be taken to prevent homestead laws from becoming instruments of fraud, an imposition on creditors, or a means to escape honest debts, provisions of homestead laws are to be carried out in the liberal beneficent spirit in which they were enacted. In re Meola, 158 B.R. 881, 882 (Bankr. S.D. Fla. 1993). [FN11] Therefore, the homestead exemption should have been extended to the full 1.05 acres. In re Dudenay, 159 B.R. 1003 (Bankr. S.D. Fla. 1993) allowed the debtor to declare two contiguous lots as a homestead despite *19 zoning descriptions. In re Markareiviez, 130 B.R. 620 (Bankr. S.D. Fla. 1991) treated the entire property as homestead when there was single family zoning and no possibility of legally severing the property. Even In re Wierschem, 152 B.R. 345 (Bankr. M.D. Fla. 1993) did not go as far as the court below. The Wierschem court sustained the objection to four rental adjacent contiguous apartments, but overruled the objection to the debtor's residential apartment.

    FN11. Which raises the issue which has never been addressed by a Florida court, may a homestead exemption be extended to a municipal lot which 

    exceeds .5 acres. Cf. Title Insurance Co. of Minnesota v. Agora Leases, Inc., 320 N.W.2d 884 (Minn. 1982).



The logic adopted below operates to defeat entirely the whole purpose of the Florida exemption law by subjecting exempt property to the payment of the debts of the owners, and deprives the owners of a right secured by organic law. So far as the creditors are concerned, it amounts to the same thing as permitting the creditors to proceed directly against the homestead and gives the creditors all the benefits of a forced sale of the debtor's exempt homestead property. Hill v. First National Bank of Marianna, 79 Fla. 391, 84 So. 190, 193 (Fla. 1920). The procedure below "would permit [creditors] to do indirectly what they are enjoined from doing directly, and thereby defeat the beneficial purpose of the law." Id.
The tenancy by entirety may ultimately be reached by a patient judgment creditor. A final judgment issued in a civil action constitutes a lien on any real property owned by a judgment debtor if recorded. Fla. Stat. ¤ 55.10. There is nothing in Florida statutory or case law that prevents a judgment creditor of a tenancy by the entirety from filing the judgment against property owned by the judgment debtor. Such a judgment lien is not void. But it may not be levied upon. See Pettengill v. United States, 205 F.Supp. 10, 62-2 U.S. Tax Cas. (CCH), paragraph 9667, 10 A.F.T.R.2d (P-H), paragraph 5514 (1962); See In re Cerreta, 116 B.R. 402 (Bankr. D. Vermont 1990); See also Wrenn v. American Cast Iron Co., 40 F.3d 1162 (11th Cir. 1994), fn. 5. The district court should have recognized the possessory interest of *20 Florida tenancy by the entirety law, and given that possessory interest the priority which Florida law recognizes.
*21 2. The findings of fact below are insufficient to sustain the relief
granted and are, therefore, "clearly erroneous" as a matter of law.
Neither the district court nor the bankruptcy court made specific findings necessary and critical to the final determinations of the issues. Firstly, the order made no finding that the creditors were judgment creditors, or not. Hillsborough Investment Co. v. Wilcox, 152 Fla. 889, 13 So. 2d 448 (Fla. 1943). The order made no finding that any of the creditors had reduced their claims to a recorded judgment lien. Owen v. Owen, 961 F.2d 170 (11th Cir. 1992). The order appealed from made no findings of unjust enrichment. The order below made no findings of fraudulent conduct by the debtors which would trigger the federal equity powers of the bankruptcy code. In re Hill, 163 B.R. 598 (Bankr. N.D. Fla. 1994). The order below made no finding of fraudulent bankruptcy planning, a finding necessary for federal bankruptcy equity jurisdiction. In re Snape, 166 B.R. 184 (Bankr. M.D. Fla. 1994). The order below made no finding of fraudulent conversion which would justify forfeiture of the debtors' constitutional exemption. In re Rightmeyer, 156 B.R. 690 (Bankr. M.D. Fla. 1993). The court made no finding of "abuse of an exemption" which would then encompass federal equity considerations. In re Davidson, 164 B.R. 782, 787 (Bankr. S.D. Fla. 1994). The order appealed from made no finding of the date from which the tenancy by entireties was fixed. In re Anderson, 132 B.R. 657 (Bankr. M.D. Fla. 1991). The order below made no finding of fact of the date of fixing of the creditor claims. In re Girard, 98 B.R. 685 (Bankr. D. Vt. 1989). The Court of Appeals is denied the opportunity de novo review and Appellants are denied their right of adequate appellate review.
*22 3. The order below was an unlawful exercise of "federal equity power,"
because under Florida law, the homestead did not fall into the bankruptcy
estate; therefore, the bankruptcy court was without jurisdiction over the
homestead property.
The filing of a bankruptcy case cannot increase a creditor's rights. In re Cerreta, supra, 116 B.R. 406, citing Butner v. United States, 440 U.S. 48, 99 S.Ct. 914, 59 L.Ed.2d 136 (1979). The bankruptcy court must follow the jurisprudence of the state in which it is administering upon the matter of exemptions. Libby v. Beverly, 263 F. 63 (5th Cir. 1920). Whatever equitable powers remain in bankruptcy courts must and can only be exercised within the confines of the bankruptcy code. In re Sublett, 895 F.2d 1381, 1385 (11th Cir. 1990) citing Norwest Bank Worthington v. Ahlers, 485 U.S. 197, 206; 108 S.Ct. 963, 968-69; 99 L.Ed.2d 169 (1988).
The bankruptcy court's equitable powers, found in 11 U.S.C. ¤ 105, enable the court "to issue any order, process, or judgment that is necessary or appropriate to carry out provisions" of the Code. 11 U.S.C. ¤ 105(a). These powers may be exercised only "within the confines of the Bankruptcy Code." Norwest Bank Worthington v. Ahlers, 485 U.S. 197, 108 S.Ct. 963, 99 L.Ed.2d 169 (1988). The bankruptcy court does not have "free-floating discretion," to create rights outside the Code, In the Matter of Chicago, Milwaukee, St. Paul and Pacific R.R. Co., 791 F.2d 524, 528 (7th Cir. 1986), but the court may exercise its equitable powers in a manner consistent with the Code. In re SPM Mfg. Corp, 984 F.2d 1305, 1311 (1st Cir. 1993). Rather than ordering the Englanders off their homestead, the bankruptcy court could have authorized the trustee to seek a zoning variance or zoning change, after recognizing the homestead exemption. In re Lloyd, 37 F.3d 271 (7th Cir. 1994). The balance of the real estate, .55 acres *23 after recognition of the Englanders' homestead exemption, would be still large enough, independently, to qualify as a Florida homestead.
It is well-settled Florida law, that the courts shall liberally construe the homestead exemption in favor of the party claiming the exemption and in furtherance of the exemption's purpose. Butterworth v. Caggiano, 605 So. 2d 56 (Fla. 1992), and cases cited. "As a matter of public policy, the purpose of the homestead exemption is to promote the stability and welfare of the state by securing to the householder a home, so that the homeowner and his or her heirs may live beyond the reach of financial misfortune and the demands of creditors who have given credit under such law." Public Health Trust of Dade County v. Lopez, 531 So. 2d 946, 948 (Fla. 1988); In re McAtee, 154 B.R. 346, 347-8, (Bankr. N.D. Fla. 1993).
Article X, Section 4 of the Constitution of the State of Florida provides, in pertinent part: "[t]here shall be exempt from forced sale under process of any court, and no judgment, decree or execution shall be a lien thereon,...the following property owned by a natural person: (1) a homestead..." ["of unlimited value" *24In re Barker, 168 B.R. 773, 775 (Bankr. M.D. Fla. 1994)]. [FN12] which he may lawfully possess, by lease or otherwise, and claiming such house...as his homestead, shall be entitled to the exemption of such house...from levy and sale aforesaid."

    FN12. Because the constitution and statutes do not define the term "dwelling house," the term "must be given its ordinary and commonly accepted meaning as it is used in the particular statutory context." Hancock Advertising, Inc. v. Department of Transp., 549 So. 2d 1086, 1088 (Fla. 3d DCA 1989) (citation omitted), review denied, 558 So. 2d 17 (Fla. 1990); see Butterworth v. Caggiano,, 605 So. 2d 56, 58-59 (Fla. 1992). Dwelling house is defined as "a house or sometimes part of a house 

    that is occupied as a residence...." Webster's Third New Int'l Dictionary 706 (1986).



"[U]nder Florida law it has been held that entireties property does not become part of the bankruptcy estate." In re Wickstrom, 113 B.R. 339 (Bankr. W.D. Mich. 1990), fn. 14. The court below was, therefore, without authority to authorize the trustee to cause a sale of the Englanders' interest pursuant to section 363(h) of the Bankruptcy Code. In re Spain, 831 F.2d 236, 237-8 (11th Cir. 1987), citing In re Livingston, 804 F.2d 1219 (11th Cir. 1986).
The Ninth Circuit has similarly held that a bankruptcy court has no jurisdiction over exempt homestead and such property "cannot be administered by the bankruptcy court." In re Browne, 462 F.2d 129, 132 (9th Cir. 1972). 28 U.S.C. ¤ 1334(b). This analysis is based on the conclusion that a bankruptcy court has jurisdiction over matters that could "conceivably. have any effect" on the estate. See In re Fietz, 852 F.2d 455, 457 (9th Cir. 1988) [applying 28 U.S.C. ¤ 1334(b)]. An action relating to homestead property could not conceivably have an effect on the estate because such property is exempt from the estate. Accordingly, the *25 bankruptcy court lacks jurisdiction over such property. Graziadei v. Graziadei, 32 F.3d 1408 (9th Cir. 1994). See also In re Turner, 724 F.2d 338, 341 (2d Cir. 1983) (Friendly, J.).
As stated in McMichael v. Grady, 34 Fla. 219, 15 So. 765, 768 (Fla. 1894):
The Constitution of the State of Florida does not contemplate that the right to the exemption that it gives shall be adjudicated and passed upon, as an issue in any proceeding instituted to enforce a debt, or to put a debt into the form of a judgment, but shields the property it exempts "from forced sale under the process of any court." (emphasis added).
When a forced sale is attempted, then, no matter when it may be, the party clothed with the constitutional right of homestead exemption "can call upon the proper courts to apply the shield that the constitution guarantees to him." Id. The court of appeals is requested to reverse and remand with directions.
*26 J. CONCLUSION
There are holdings by both Florida and federal courts subjecting homesteads to creditors' claims, but no clear and principled statement of these holdings can be distilled from the cases. [FN13] The factual issue presented is the lot area of the debtors' property exceeds the constitutionally exempted area. The Florida Constitution exempts .5 acres; the Property is 1.05 acres. Clearly had the Englanders impermissably converted non-exempt assets into exempt property, their homestead, otherwise exempted, would be subject to qualification. In re Coplan, 156 B.R. 88,90 (Bankr. M.D. Fla. 1993). Similarly, were funds from a nonexempt source expended on the homestead which the Englanders sought to exempt, qualification of the homestead exemption would been imposed. Jones v. Carpenter, 90 Fla. 407, 106 So. 127, 130 (Fla. 1925) (imposing an equitable lien on homestead in favor of creditor). However, the cases relied on by the bankruptcy court and the district court below do not, and have never, raised creditors' rights to the level of a co-owner.

    FN13. "After practicing 40 years with these holdings, I humbly suggest that when the conduct of the debtor so offends the sensibility of a court that it cannot accept the exemption, that court presumes an exception to the constitutional provision that is completely contrary to its plain language. Because the factual permutations are infinite and the sensibility levels of courts nearly so, I do not see the emergence of a definitive rule anytime soon." In re Primack, 89 B.R. 954, 961 (Bankr. S.D. Fla. 1988), fn. 5, (Britton, C.J.).



The case should be reversed and remanded with directions. On remand the district court should examine, and give effect to, the possessory concept of Florida's constitutional homestead *27 exemption. Upon due consideration of the organic law of Florida, the homestead exemption should be extended to the entire 1.05 acres.

In re: Edward W. ENGLANDER, and Phyllis S. ENGLANDER, Appellants.