FORT LAUDERDALE BUSINESS LITIGATION: JURY TRIAL RIGHT IN FLORIDA LAW FRAUDULENT TRANSFER CLAIMS

The Uniform Fraudulent Transfer Act, Chapter 26, Florida Statutes, sets forth remedies for a plaintiff to recover transfers determined to be fraudulent, as that term is defined by statute. Section 726.108(1)(c)(3), Florida Statutes, states that a movant may, in addition to remedies specifically enumerated, be entitled to pay “[a]ny other relief the circumstances may require.” Courts have considered disputes over whether parties are entitled to a jury trial as to an alleged fraudulent conveyance. Florida appellate case law indicates that the right to a jury trial depends on whether the relief sought is a “remedy at law,” such as monetary damages, or instead is an “equitable remedy,” such as setting aside a conveyance of land. Peter Mavrick is a Fort Lauderdale business litigation attorney, and represents clients in business litigation in Miami, Boca Raton, and Palm Beach. The Mavrick Law Firm represents businesses and their owners in breach of contract litigation and related claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment law, and other legal disputes in federal and state courts and in arbitration. Florida’s Fourth District Court of Appeal in 381651 Alberta, Ltd. v. 279298 Alberta Ltd., 675 So.2d 1385 (Fla. 4th DCA 1996), decided whether the parties were entitled to a jury trial under Florida’s Uniform Fraudulent Transfer Act, Section 726.108, to set aside a conveyance of land. Alberta explained in pertinent part: “We acknowledge the law that, if possible, questions regarding the right to a jury trial should be resolved in favor of jury trial … The right to jury trial, however, applies to legal and not equitable causes of action … Florida courts have held that an action to set aside a conveyance of real property is cognizable in equity … Conversely, an action seeking a money judgment is traditionally one at law. The issue in the instant case becomes, then, whether 27 Alberta’s action to set aside the conveyances is one at law or equity given the fact that 27 Alberta seeks also that the proceeds from the sale of the property be applied to satisfy the money judgment.” Alberta decided that there is no right to a jury trial because the litigation over setting aside a conveyance of land was an equitable remedy. Subsequently, in Myers, M.D. v. Brook, 708 So.2d 607 (Fla. 5th DCA 1998), Florida’s Fifth District Court of Appeal explained that, “[w]hile not deciding the issue,” a jury trial “was probably appropriate” in business litigation over a fraudulent transfer “because the transfer to be set aside was a cash payment, and section 726.109(2)(a), Florida Statutes .. permits a money judgment to be entered against the first transferee of the fraudulent conveyed assets.” Myers, M.D. cited in support, precedent from the United States Supreme Court in Granfinanciera, S.A. v. Norberg, 492 U.S. 33 (1989). The Supreme Court in Granfinanciera explained that if an action for fraudulent transfer is cash, history supports the right to a jury trial. More recently, in Hansard Construction Corporation v. Rite Aid of Florida, Inc., 783 So.2d 307 (Fla. 4th DCA 2001), Florida’s Fourth District Court of Appeal squarely decided whether the parties have a right to a jury trial over an alleged fraudulent transfer where money damages are at issue. Hansard Construction held that a party has a right to a jury trial where the remedy sought is recovery of money damages under Florida’s Uniform Fraudulent Transfer Act. Hansard Construction explained that “a plaintiff may recovery money damages against the transferor under the so-called catchall provision, section 726.108(1)(c)(3), of the Uniform Fraudulent Transfer Act … As such, we find that appellants sought a traditional legal remedy under section 727.108 and were entitled to a jury trial. Accordingly, the trial court did not err in submitting this claim to the jury.”

Peter Mavrick is a Fort Lauderdale business litigation lawyer, and represents clients in Miami, Boca Raton, and Palm Beach. This article does not serve as a substitute for legal advice tailored to a particular situation.