Shim v. Buechel Case Analysis

In Shim v. Buechel, 339 So. 3d 315 (Fla. 2022), the Florida Supreme Court held unanimously that Florida Statutes § 56.29(6) authorizes trial courts to order debtors to act on assets located outside Florida.

The order runs against the debtor personally and reaches only nonexempt property he has the power to act on. The Court set the outer limit itself: that power “extends no further than the trial court’s personal jurisdiction” over the debtor. The decision disapproved Sargeant v. Al-Saleh, 137 So. 3d 432 (Fla. 4th DCA 2014), which had barred turnover orders for property abroad, to the extent it held otherwise.

Facts of Shim v. Buechel

Cellumed Co., Ltd., a company in which Young Bock Shim held stock, bought a medical device manufacturer named Endotec from the Buechel-Pappas Trust. Under the product license agreement that came with the purchase, Cellumed produced and sold Endotec’s devices and owed the trust a percentage of its sales revenue on them. Shim and Cellumed sued over the agreement, and Frederick Buechel and Cynthia Pappas prevailed at trial and took a judgment for damages against them.

During proceedings supplementary, the creditors discovered that Shim had sold his Cellumed stock to a third party. Roughly $4 million of the proceeds sat in a safe at his house in South Korea. The money was a negotiable instrument drawn on funds deposited in a Korean bank.

The creditors filed a motion to compel Shim to turn over the $4 million. They argued that the trial court could issue the order under § 56.29(6) because it had in personam jurisdiction over Shim. The trial court denied the motion, reasoning that Florida courts lack in rem or quasi in rem jurisdiction over foreign property.

How the DCA Conflict Developed

The Fifth District Court of Appeal reversed the trial court in Buechel v. Shim, 340 So. 3d 507 (Fla. 5th DCA 2021). It held that § 56.29(6) plainly authorizes a trial court to order a debtor to act on assets located outside Florida’s territorial jurisdiction, as long as the court has personal jurisdiction over the debtor.

The Fifth District certified direct conflict with the Fourth District’s 2014 decision in Sargeant v. Al-Saleh. In Sargeant, a creditor holding a $28.8 million judgment asked the trial court to order the debtors to turn over stock certificates evincing their ownership interest in several foreign entities. The debtors argued that the assets behind those certificates sat in the Bahamas, the Netherlands, Jordan, the Isle of Man, and the Dominican Republic.

The Fourth District held that the trial court lacked authority to compel turnover because Florida courts have no jurisdiction over foreign property. The Sargeant court based its analysis on policy concerns rather than the statutory text, warning that turnover orders for foreign assets would undermine the domestication of foreign judgment statutes.

The Fifth District rejected that reasoning directly, writing that any public policy considerations raised by the statute “are for the legislative branch, not a court.” The Florida Supreme Court accepted the certified conflict.

The Florida Supreme Court’s Holding

The Florida Supreme Court approved the Fifth District’s holding and disapproved Sargeant to the extent it held otherwise. The opinion was unanimous. Justice Labarga authored the decision, with Chief Justice Canady and Justices Polston, Lawson, Muñiz, Couriel, and Grosshans concurring.

The Court’s reasoning was grounded in the statutory text. Section 56.29(6) lets a court apply any property of the judgment debtor, other than property exempt from execution, toward the judgment debt, and enter any order needed to subject that property to execution. The Court found the language unambiguous, and a Florida court does not reach policy considerations when a statute’s meaning is clear.

A court applying § 56.29(6) to foreign property is not applying Florida law abroad. A court that has personal jurisdiction over a defendant can require him to do anything beyond its territory that it could have required him to do inside it. The decree is “made effectual through the coercion of the defendant” and does not operate on the property or its title. The Court added that its decision does not speak to judgment debtors a trial court has no personal jurisdiction over.

How In Personam Jurisdiction Lets a Florida Court Reach Foreign Assets

The distinction between in personam and in rem jurisdiction is what makes the Shim holding work. A Florida court cannot directly seize a bank account in South Korea or cancel a stock certificate in the Bahamas. It has no authority over foreign property as property.

What a Florida court can do is order the debtor to act. If the debtor keeps a $4 million negotiable instrument in a safe, the court orders him to hand it over. Stock in a foreign entity draws the same kind of order, directing the debtor to endorse and transfer it. Either way the court directs a person it has jurisdiction over, and the order never has to reach the asset where it sits.

Enforcement comes through contempt. Florida Statutes § 56.29(7) makes any person who fails to obey an order issued in proceedings supplementary subject to contempt. The sanctions are imposed on the debtor and can run as far as a writ of bodily attachment directing the sheriff to bring him before the court. The Shim Court traced this power through U.S. Supreme Court decisions going back to the 1870s. A court may decree the conveyance of land in a foreign country and enforce the decree by process against the defendant.

The Case Sequence: Sargeant Through Shim

The Shim decision is the last of four decisions that set how far judgment collection in Florida reaches against assets held abroad. Three came from Florida courts and one from a federal court applying Florida law, and all four belong to the same line of Florida judgment collection decisions.

In Sargeant v. Al-Saleh (Fla. 4th DCA 2014), the Fourth District reversed a turnover order covering stock certificates for a debtor’s interests in foreign entities. The opinion treated this as a jurisdictional limitation: courts lack in rem jurisdiction over foreign property and therefore cannot order its delivery.

In Wells Fargo Bank v. Barber (M.D. Fla. 2015), Sabrina Barber, a Florida resident, had moved money into a single-member Nevis LLC she formed. The court found Sargeant inapplicable: an LLC membership interest is intangible personal property, and such an interest is located wherever its owner is. Because Barber lived in Florida, Florida law governed the creditors’ remedies, and the banks had stated a claim to foreclose the interest under Florida’s LLC statute.

After Barber, practitioners developed a workaround: issue physical membership certificates and store them offshore, converting the interest into tangible property located outside Florida’s reach. In Schanck v. Gayhart (Fla. 1st DCA 2018), the First District closed that route. It affirmed an order requiring a debtor to cancel certificates that had been moved to Canada and to reissue them. Section 678.1121(5) lets a court aid a creditor by any means allowed at law or in equity where the property cannot readily be reached by other legal process.

The Florida Supreme Court decided the conflict in Shim, holding that § 56.29(6) lets a trial court order a debtor it has personal jurisdiction over to act on nonexempt property wherever that property sits. Whether the property is a certificate, an uncertificated interest, or cash in a safe makes no difference; the question is whether the debtor can perform the act the court orders.

Does Shim Reach Assets Held in an Offshore Trust?

The Shim holding reaches trust assets only as far as the settlor’s own power to bring them back. A court can order a debtor to hand over an instrument, endorse a stock certificate, or wire funds out of a foreign bank account, because each act is within the debtor’s control. Contempt coerces performance, so it does nothing against a debtor who cannot perform the act at all.

Funding an offshore trust with an independent foreign trustee removes that power. The settlor transfers legal ownership, and title to the trust’s assets sits with the trustee. That trustee sits in a jurisdiction such as the Cook Islands, where no U.S. judgment is enforceable of its own force and a creditor who wants the assets must start a new case there under Cook Islands law.

A Florida court can still order the settlor to repatriate trust assets. If the trustee genuinely refuses the request, the settlor has no legal power to force the transfer and can raise an impossibility defense to contempt. A settlor who raises it must show categorically and in detail why compliance cannot occur, and courts treat that burden as particularly high in asset protection trust cases. The defense is also unavailable to a settlor who created his own inability to comply.

With an offshore trust in place, the contested question is the settlor’s ability to obey the order. Nonexempt property the settlor can still command is reachable. Property held by a genuinely independent trustee is beyond the settlor’s command, and stays there only if the trust was properly drafted and funded and the settlor kept no power to revoke it or direct distributions.

What Shim Means for Asset Protection Planning

After Shim v. Buechel, moving an asset abroad does not by itself put it beyond a Florida court’s reach. Shim kept a $4 million negotiable instrument at his house in South Korea and stayed subject to Florida jurisdiction the whole time. The foreign location of the money changed nothing, because Shim controlled it.

Location by itself protects nothing. A bank account in the Cayman Islands, stock in a foreign corporation, or cash in a safe overseas is within reach when the debtor personally controls it. The property must also be nonexempt, and the Florida court must have personal jurisdiction over the debtor. Florida asset protection case law leaves a judgment debtor no protection based on where property sits, and Barber, Schanck, and Shim each rejected a different version of the argument that foreign placement puts an asset out of reach.

Transferring control to an independent third party outside the court’s jurisdiction is what changes the analysis. Funding an irrevocable offshore trust moves legal ownership from the settlor to a foreign trustee. A court’s in personam power over the settlor does not extend to the trustee. In a jurisdiction like the Cook Islands, the court’s orders carry no force against the trustee at all.