Schanck v. Gayhart

When William Schanck (defendant) and his wife Myong-He Gayhart divorced, she agreed to waive alimony and claims to her share in the couple’s business in exchange for $2.5 million paid in monthly installments so that Schanck could keep 100 percent of the business. Because Myong-He was terminally ill, the settlement agreement specified that the payments would survive her death and be enforceable by her estate. But once Myong- He died, Schanck stopped making payments. Co-personal representatives William Gayhart and Debra Buchanan on behalf of Myong-He’s estate (plaintiff) sued and obtained a judgment against Schanck for $74,476. The representatives filed a motion requesting a court order to aid in executing the judgment after Schanck claimed in his deposition not to know where his stock certificates were. The motion asked the court to order Schanck to either turn over his stock and membership certificates or, if they were lost, reissue the certificates and give them to the estate. At the hearing, Schanck testified that his certificates had somehow been transported to his new wife’s home in Canada weeks before his deposition without explaining why he changed his story. Schanck’s lawyer said the location of the certificates was a surprise and argued the court lacked jurisdiction over certificates outside Florida. The court ordered Schanck to cancel the existing certificates, reissue them, and turn the new certificates over to the estate. Schanck appealed, arguing that even if the certificates were within the court’s jurisdiction, the Uniform Commercial Code (UCC) did not expressly authorize ordering their cancellation and reissuance, or that the company alone could cancel and reissue certificates and had to be made a party to the case.