          Case: 18-13143   Date Filed: 11/13/2019   Page: 1 of 10



                                                     [DO NOT PUBLISH]

           IN THE UNITED STATES COURT OF APPEALS

                   FOR THE ELEVENTH CIRCUIT
                     ________________________

                            No. 18-13143
                      ________________________

                D.C. Docket No. 8:09-cv-01850-JSM-CPT


KEARNEY CONSTRUCTION COMPANY, LLC,

                                                        Plaintiff - Third Party
                                              Defendant – Counter Defendant,
versus

TRAVELERS CASUALTY AND SURETY
COMPANY OF AMERICA,

                                                      Defendant - Third Party
                                      Plaintiff - Counter Claimant - Appellee,

BING CHARLES W. KEARNEY,
                                                  Interested party-Defendant-
                                                        Third Part Defendant-
                                                Counter Defendant-Appellant,

TONYA NUHFER KEARNEY,
CLAYTON KEARNEY, et al.,
                                               Interested Parties – Appellants.
               Case: 18-13143        Date Filed: 11/13/2019       Page: 2 of 10


                               ________________________

                     Appeals from the United States District Court
                          for the Middle District of Florida
                            ________________________
                                (November 13, 2019)

Before JILL PRYOR, GRANT, and ANDERSON, Circuit Judges.

PER CURIAM:

       This appeal arose out of a complicated set of facts, and is only the most

recent of several appeals by one or more of the Appellants. However, the

appellants present for our decision on appeal only two discrete issues, 1 both of

which are readily resolved.

       We have had the benefit of oral argument, and have carefully reviewed the

several opinions of the Magistrate Judge and district court below, as well as the

briefs of the parties and relevant parts of the record. Because we write only for the

benefit of the parties, who are already familiar with the facts, we mention only

such facts as are necessary to understand our reasoning.2 We address the two

issues in turn.

                                               A.


1
       Appellant’s jurisdictional challenge is rejected as wholly without merit.
2
       The two most significant rulings below were made by the Magistrate Judge in Docket
711 and Docket 865, both of which were adopted by the district court. Unless otherwise stated,
when we refer to a ruling of the district court, we mean one of those rulings of the Magistrate
Judge.
                                                  2
                Case: 18-13143       Date Filed: 11/13/2019       Page: 3 of 10


       The first issue is presented by Appellant Bing Charles W. Kearney, Jr.

(hereinafter referred to as “Bing Kearney”). The issue involves Bing Kearney’s

IRA Account No. -1122 at US AmeriBank (now known as Valley National Bank),

and his pledge of collateral as security for the line of credit he obtained from

Moose Investments of Tampa LLC 3 (hereinafter referred to as “Moose

Investments”) pursuant to his March 1, 2012 Security Agreement with Moose

Investments. The issue is purely factual: did that pledge of collateral include his

IRA Account No. -1122.4 In this summary judgment posture, the issue then is

whether Bing Kearney adduced sufficient evidence to create a genuine issue of

material fact to support his argument that the collateral pledged did not include his

IRA Account No. -1122.

       We begin with the plain language of the Security Agreement. The collateral

conveyed as security stated as follows:

       Grant of Security Interest.       As security for any and all
       Indebtedness (as defined below), the Pledgor hereby irrevocably and
       unconditionally grants a security interest in the collateral described in
       the following properties[:] all assets and rights of the Pledgor,

3
       Moose Investments was owned by Bing Kearney’s son, Clayton. The opinion of this
Court in Appeal No. 17-11368 noted that Bing Kearney exercised considerable control over
Moose Investments.
4
        With one minor exception addressed below, Bing Kearney does not challenge the district
court’s holding that, if, as a matter of fact, Bing Kearney did pledge the IRA account, the legal
consequence was that the IRA account was not exempt under Fla. Stat. §222.21(2)(a). We
address the one exception below in footnote 7, concluding that Bing Kearney’s argument in that
regard is totally without merit.

                                                3
                Case: 18-13143       Date Filed: 11/13/2019       Page: 4 of 10


        wherever located, whether now owned or hereafter acquired or
        arising, and all proceeds and products thereof, all goods (including
        inventory, equipment and any accessories thereto), instruments
        (including promissory notes)[,] documents, accounts, chattel paper,
        deposit accounts, letters of credit, rights, securities and all other
        investment property, supporting obligation[s], any contract or contract
        rights or rights to the payment of money, insurance claims, and
        proceeds, and general intangibles (the “Collateral”).

We agree with the district court that the above language constitutes an

unambiguous pledge of “all assets and rights of the Pledgor,” including his IRA

Account No. -1122. See Magistrate Judge’s Report and Recommendation, Docket

865, at 26 (“[T]he language of the Security Agreement is clear, unambiguous, and

without exception.”).

        The only evidence Bing Kearney adduces to support his argument that he

did not intend to include his IRA account as part of the collateral is his own

affidavit and that of James Reed, the manager of Moose Investments. Both

affidavits asserted that neither Bing Kearney nor Moose Investments intended that

the IRA Account No. -1122 would be included as part of the collateral. However,

the district court 5 struck Reed’s affidavit as a sham because it was inconsistent

with his prior sworn testimony earlier in the same litigation. 6 Although the district

5
        See Magistrate Judge Report and Recommendation, Docket 865 at 23 n.11 and related
text.
6
        That earlier sworn statement was in support of the effort by Moose Investments to
establish that it had a superior lien on the garnished funds (including the IRA account) by virtue
of Bing Kearney’s Security Agreement and its UCC-1 perfection thereof prior to Travelers’ writ
of garnishment. That position of course assumed that Bing Kearney owned the IRA account and
                                                   4
               Case: 18-13143       Date Filed: 11/13/2019       Page: 5 of 10


court did not actually strike Bing Kearney’s similar affidavit, the district court

rejected its assertion with respect to the intent of the parties because the affidavit

was self-serving, conclusory, and contradicted by other evidence in the record. See

Magistrate Judge Report and Recommendation, Docket 865 at 24-25. The district

court noted that Bing Kearney’s affidavit was inconsistent with the earlier affidavit

of Reed, discussed above, and also inconsistent with Bing Kearney’s own earlier

court filings in support of Moose Investments’ claim to a superior lien to the

garnished funds. Id. at 26.

       In light of the unambiguous language of the Security Agreement, and the

circumstances described above, we agree with the district court that “no genuine

issue of material fact exists as to whether the ‘IRA’ funds currently found in

Account -1122 were encompassed and pledged by virtue of Mr. [Bing] Kearney’s

Security Agreement with Moose [Investments].” Id. at 29.

       Bing Kearney also argues 7 on appeal that there was no pledge of the IRA

account because it was not delivered to Moose Investments, which never possessed



granted a security interest in it.
7
        The one non-factual argument, see footnote 4, Bing Kearney makes with respect to this
IRA issue is as follows. He argues that, even if we hold that the IRA account was pledged, he
nevertheless is protected by Fla. Stat. §§222.21(2)(a)1 and 2 because it has never been
determined that his IRA does not qualify as exempt from taxation. In other words, Bing Kearney
argues that the “unless” clauses of §§222.21(2)(a)1 and 2 save his exemption. Sections
222.21(2)(a)1 and 2 provide that when an IRA plan has been preapproved or determined to be
exempt by the Internal Revenue Service, then, if the plan is maintained in accordance with its
governing instrument, it is exempt from creditors’ claims, unless the plan has subsequently been
                                                 5
               Case: 18-13143       Date Filed: 11/13/2019      Page: 6 of 10


or controlled the account. Thus, he argues that the security interest was not

perfected. However, the crucial issue is whether the IRA account was used as

security for a loan, not whether the security interest was perfected. It is well

established that an unperfected security interest is nevertheless enforceable as

between the parties. See Fla. Stat. § 679.2031(2).

       For the foregoing reasons, we conclude that the district court properly held

that Bing Kearney’s IRA Account No. -1122 was in fact pledged as security for his

loan, and therefore was not exempt under § 222.21. 8 We turn now to the only

other issue presented to us on appeal.

                                              B.

       The second issue in this appeal is presented to us by the Interested Parties.

The Interested Parties argue on appeal that the six joint accounts at




determined not to be exempt from taxation. We readily reject this argument as wholly without
merit. Section 222.21(2)(a)1 applies only if the Internal Revenue Service has “pre-approved” an
IRA as exempt from taxation, and there is no evidence of any such “pre-approval” of Bing
Kearney’s IRA. Similarly, §222.21(2)(a)2 applies only if the Internal Revenue Service has
“determined” that an IRA is exempt from taxation, and there is no evidence of any such
“determination” with respect to Bing Kearney’s IRA. See In re Yerian, 927 F.3d 1223, 1229
(11th Cir. 2019). The burden of proving such “pre-approval” or “determination” was on Bing
Kearney. See Kane v. Stewart Tilghman Fox & Bianchi, P.A., 197 So.3d 137, 141 (Fla. 4th
DCA 2016) (“[T]he party seeking an exemption from garnishment has the burden of proving
entitlement to the exemption.”).
8
       Bing Kearney’s other arguments with respect to his IRA account are rejected without
need for further discussion.

                                               6
                Case: 18-13143       Date Filed: 11/13/2019       Page: 7 of 10


USAmeriBank—Accounts Nos. -0056, -3695, -0129, -0302, -0020, and -7939—

are subject to garnishment as property of Bing Kearney only to the extent of Bing’s

actual ownership of the several joint accounts, and that Florida law provides a

presumption, in the absence of evidence to the contrary, that the ownership of a

joint account is pro rata in proportion to the number of names on the joint account.

We conclude that this “proportionate share” argument has not been preserved for

appeal by the Interested Parties. They did not make this argument in their motion

to dissolve the writ of garnishment or in their motion for summary judgment.

Rather, they argued to the magistrate judge that Bing Kearney owned no part at all

of the joint accounts, but rather that he was a mere “convenient signor” of the

several joint accounts. 9 After the Magistrate Judge rejected those arguments,

Magistrate Judge R&R, Doc. 711, the Interested Parties again failed to make the

“proportionate share” argument in their objections to the Magistrate Judge’s

Report and Recommendation. The Interested Parties made their “proportionate

share” argument for the first time in their Motions for Release of Funds, Docket


9
        The Interested Parties also argued that Travelers’ judgment lien and writ of garnishment
on all of the garnished funds was an inferior lien, inferior to a superior lien held by Moose
Investments pursuant to its UCC-1 and security interest as granted by Bing Kearney. They also
argued that Travelers’ judgment lien and writ of garnishment was an inferior lien, inferior to a
superior lien held by FTBB as assignee of the judgment obtained against Bing Kearney by
Regions Bank and its previously served garnishment lien on all of the garnished funds. Of
course, both such arguments necessarily assume that Bing Kearney owned the entirety of all of
the garnished funds, an argument inconsistent with the Interested Parties’ belated “proportionate
share” argument.

                                                7
               Case: 18-13143        Date Filed: 11/13/2019       Page: 8 of 10


852-55, which were filed only after the district court adopted the Magistrate

Judge’s R&R. In other words, the Interested Parties raised their “proportionate

share” argument for the first time after the district court had finally rejected their

arguments to date. The district court denied the Interested Parties’ belated

“proportionate share” argument without discussion. The Interested Parties repeat

their “proportionate share” argument on appeal as their only challenge to the

judgment of the district court.

       We conclude that the Interested Parties have not preserved for appeal their

belated “proportionate share” argument because they did not raise this argument in

accordance with Florida garnishment procedures. Fla. Stat. § 77.07(2) requires any

party with an interest in a garnished property to make its specific objections to the

writ of garnishment known within 20 days of the writ’s execution through a motion

to dissolve the writ. The motion must state which allegations in the plaintiff’s

motion for a writ of garnishment are untrue. “On such motion this issue shall be

tried, and if the allegation in plaintiff’s motion which is denied is not proved to be

true, the garnishment shall be dissolved.” Id. (emphasis added). Thus, the statute

provides that the issues considered in the trial shall be those raised in the motion to

dissolve. 10 If a party fails to raise an issue in its motion to dissolve, it loses the


10
        Florida law requires that garnishment procedures are strictly construed. See Zivitz v.
Zivitz, 16 So.3d 841, 847 (Fla. 2d DCA 2009) (Florida garnishment procedures require “strict
adherence to the provisions of the statute”); Akerman Senterfitt & Eidson, P.A. v. Value
                                                 8
               Case: 18-13143        Date Filed: 11/13/2019      Page: 9 of 10


opportunity to try that issue. The issues raised in the motion to dissolve define the

scope of both pre-trial discovery and the issues litigated before the factfinder. In

essence, the garnishment persists unless the challenges to its factual underpinnings

that are specified in the motion to dissolve have merit.

       Here, the Interested Parties did not raise the argument they now present on

appeal—that Florida law presumes that parties to a joint account each own a pro

rata share of the account, in the absence of evidence to the contrary—until after

they filed their motions to dissolve under Fla. Stat. § 77.07(2). Travelers sought

discovery on, and actually litigated, the issue that the Interested Parties initially

raised in their motions—whether Bing Kearney had any interest at all in the

garnished accounts. Under Florida’s garnishment procedures, nothing more was,

or should have been, required of them.11

                                               C.

       For the foregoing reasons, 12 the judgment of the district court is




Seafood, Inc., 121 So.3d 83, 86 (Fla. 3d DCA 2013) (“It is fundamental that garnishment statutes
must be strictly construed.”).
11
        Although we need not, and do not, address the merits of the Interested Parties’ belated
“proportionate share” argument, we note that there is considerable evidence in the record that
Bing Kearney owned or controlled at least the major portion of the amounts at issue. See
Magistrate Judge’s Report and Recommendation, Docket 711, at 24-29 (describing evidence to
that effect, including earlier testimony of Bing Kearney and others, as well as other evidence of
his control).
12
        Other arguments of Bing Kearney or the Interested Parties are rejected without need for
further discussion.
                                              9
    Case: 18-13143   Date Filed: 11/13/2019   Page: 10 of 10


AFFIRMED.




                              10
