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Appeal from Equitable Lien on Defendant's Condominium

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By FindLaw Staff on June 04, 2010 2:42 PM

Crawford v. Silette, No. 09-40641, involved defendant's appeal from the district court's order granting a receiver's petition imposing an equitable lien on defendant's condominium and ordering defendant to transfer it to the receiver.  The Fifth Circuit affirmed, holding that 1) federal law created subject matter jurisdiction for federal receivers, under 28 U.S.C. section 754; 2) in Florida, an equitable lien can be imposed on a homestead where an innocent party used fraudulently obtained funds to invest in the homestead; and 3) defendant was no worse off from the imposition of the equitable lien than she was as a mortgagor.

As the court wrote:  "Wendy Silette retired her Florida condominium's mortgage with $328,000 given her by George Hudgins. Unbeknownst to Silette, Hudgins obtained this money by defrauding investors through a Ponzi scheme. A court-appointed receiver in Hudgins's case petitioned the court to take control of Silette's condominium in order to sell it and redistribute the funds to Hudgins's victims. The district court granted the petition, imposed an equitable lien, and ordered Silette to transfer the condominium to the receiver. Silette appeals, arguing that the Florida Constitution's homestead exemption prevented the court from imposing an equitable lien and that the transfer order was improper. We affirm."

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