Estate Planning

Florida Statutes Section 732.507 Inapplicable Following Divorce When the Will was Executed Prior to Marriage

In the 2d DCA, at least

Here’s the Story

Here’s the story, of a man named Priever, who, in 2005, executed a will devising real property in Florida to a woman named Gordon. This marked the beginning of a fact pattern which culminated in a 2018 opinion1
Gordon v. Fishman, 253 So. 3d 1218 (Fla. 2d DCA 2018).
out of the Florida Second District Court of Appeal. Priever and Gordon were unmarried at the time the will was executed. The will provided that, if Gordon died before Priever (spoiler alert, he does), then the real property would be devised to Gordon’s two children. Then, two years after the will was executed, Gordon and Priever marry one another. But, as all good things come to an end, the two divorced from one another about 5 to 6 years later. Two years later, Priever passed away (told you). At the time of his death, Gordon was alive, and Priever had no children and no spouse. He did, however, have a father.

Enter Fishman

Robert Fishman, as guardian of Priever’s father, petitioned for administration of Priever’s estate as an intestate (without a will) estate, apparently unaware of the existence of the 2005 will. Fishman was appointed as personal representative of the estate. Following that, Gordon (the person named in the will as the beneficiary of the real property) filed the original 2005 will with the probate court.

Notwithstanding the fact that the will named Gordon as the beneficiary to receive the real property, Fishman asserted that the will should be construed as if Gordon had predeceased Priever. Fishman’s position was based on Florida Statutes § 732.507(2), which reads:

Any provision of a will executed by a married person that affects the spouse of that person shall become void upon the divorce of that person or upon the dissolution or annulment of the marriage. After the dissolution, divorce, or annulment, the will shall be administered and construed as if the former spouse had died at the time of the dissolution, divorce, or annulment of the marriage, unless the will or the dissolution or divorce judgment expressly provides otherwise.

Following Fishman’s urging, the trial court would have deemed Gordon to have predeceased Priever, the practical effect of which would leave her two children as inheriting the home. Gordon objected to this, arguing that section 732.507(2) did not apply because she was not married to Priever when he executed the will. The trial court rejected Gordon’s argument, finding,

that as a matter of law, [the statute] provides that upon the dissolution of their marriage, the will is to be construed as if the former spouse, Silvia Gordon, had died and she is not entitled to any share of the estate.”

Accordingly, the trial court ruled in Fishman’s favor, finding that Gordon was not entitled to take under Priever’s will. Gordon appealed.

Something Seems Fishy

On appeal to the Second District Court of Appeal, Gordon argued that the trial court erred in applying Florida Statutes § 732.507(2) as, by its own plain language, applies only when a “married person” executes a will. Here, Priever was not married when he executed his will in 2005.

Fishman, on the other hand, urged the 2d DCA to ignore the plain and ordinary meaning of the statute, and to look to the legislative intent behind the statute. That, regardless of the fact that Priever was not married when he executed the will, the statute should operate to protect Priever from his “inattention to estate planning details,” and prevent Gordon from taking under the will.

The 2d DCA sided with Gordon, stating:

Reading the statute as urged by Mr. Fishman would extend the reach of section 732.507(2) beyond its express language. We would have to ignore the term “married” and interpret section 732.507(2) to revoke provisions of a will “executed by a person” or provisions “executed by a person before or after marriage.” To construe the statute in a way that would extend or modify its express terms would be an inappropriate abrogation of legislative power.

It’s possible that nobody will ever know Priever’s true intention as to Gordon’s status as a beneficiary following their divorce. With that said, even if the 2d DCA’s decision was exactly what Priever had in mind (a doubtful proposition), the time and money spent by all parties involved getting to this point are wasted resources. Had Priever executed a new will or even just a codicil addressing these matters after he and Gordon divorced, this litigation likely could have been avoided.

Therefore, this case is an excellent reminder of why it is critical to review your estate planning documents with your attorney every few years, or after the occurrence of significant life events such as marriage, divorce, birth of a child, retirement, inter-state relocation, or major career change, etc., to ensure that your estate plan documents match your intentions.

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1.
Gordon v. Fishman, 253 So. 3d 1218 (Fla. 2d DCA 2018).
Bankruptcy

As of November 1, 2018, Chapter 7 Bankruptcy Means Test Median Family Income Levels Have Risen in Florida

As of November 1, 2018, the median family income levels utilized by the United States Trustee Program have changed. Florida’s figures have risen, which, generally, will benefit individuals who are in need of debt relief. The median income information is used by the bankruptcy court and the various players therein when determining whether or not an individual qualifies for chapter 7 bankruptcy relief (as opposed to relief under another chapter, such as chapter 13).

This data comes from the United States Census Bureau and is updated regularly based upon the Consumer Price Index for All Urban Consumers. Note that being either above or below the applicable median income figure for your household size can be a good indicator of whether or not you should file a chapter 7 bankruptcy case, though it is far from the only factor to be considered. Your entire situation should be reviewed by an experienced bankruptcy attorney for such a determination.

Debtor-creditor

Short selling your home? Here’s a tip: start the process well in advance of a scheduled foreclosure sale

A September, 2018 opinion1Ocean Bank v. Gato, 2018 WL 4761845, ___ So.3d ___ (Fla. 3d DCA 2018). from Florida’s Third District Court of Appeals provides guidance on what is not a “lawful, cognizable basis” for cancelling, rescheduling, or continuing a judicial foreclosure sale date, in the absence of an agreement from the plaintiff (lender). In the case below, thirteen days before a foreclosure sale2This was the second foreclosure sale to be scheduled, with the first having been canceled due to the homeowner filing bankruptcy. The bankruptcy case was dismissed not long after it was filed, resulting in the foreclosure sale being reset. was set to occur, the plaintiff/homeowner filed an “emergency” motion to cancel the foreclosure sale, citing as the basis a contemplated short sale, and attaching a short sale contract dated twelve dates prior to the “emergency” motion.

At the hearing on the homeowner’s motion to cancel, the plaintiff/bank explicitly objected, stating, “The bank has declined the short sale which would leave us tens of thousands of dollars short. We have filed our objection in writing and the law says that under those circumstances the motion to cancel the sale should not be granted.” The court’s response? “So what I’m going to do is give it a 90-day resale date with no further continuances.”

The bank appealed this decision to the Third DCA. The appeals court, in citing to Florida Statutes § 45.031(1)(a)3Florida Statutes § 45.031(1)(a) states that “the court shall direct the clerk to sell the property at public sale on a specified day that shall be not less than 20 days or more than 35 days after the date thereof.” The statute continues, “[a] sale may be held more than 35 days after the date of final judgment or order if the plaintiff or plaintiff’s attorney consents to such time.” (Emphasis added)., said that the court’s rescheduling of the sale was improper as the homeowner’s basis for wanting the sale canceled was not a “lawful, cognizable basis,” in light of the bank’s objection. However, in an odd twist that only an attorney could find interesting, the appeals court, in its enlightened wisdom, affirmed the lower court’s ruling, despite the ruling being wrong, because reversing the decision may have resulted in further delay to the bank’s foreclosure sale.

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1. Ocean Bank v. Gato, 2018 WL 4761845, ___ So.3d ___ (Fla. 3d DCA 2018).
2. This was the second foreclosure sale to be scheduled, with the first having been canceled due to the homeowner filing bankruptcy. The bankruptcy case was dismissed not long after it was filed, resulting in the foreclosure sale being reset.
3. Florida Statutes § 45.031(1)(a) states that “the court shall direct the clerk to sell the property at public sale on a specified day that shall be not less than 20 days or more than 35 days after the date thereof.” The statute continues, “[a] sale may be held more than 35 days after the date of final judgment or order if the plaintiff or plaintiff’s attorney consents to such time.” (Emphasis added).
Corporations

A corporation by any other name…

“A rose lender by any other a slightly different name would smell as sweet still be able to foreclose.”

Shakespeare 4th DCA (more or less)

Florida’s 4th District Court of Appeals has held that the omission of the word “corporation” from a corporation’s name as it appears on various mortgage loan documents, did not render the loan invalid as a matter of law.

The September 20, 2018 appellate decision1Avant Capital, LLC v. Gomez, 2018 WL 4519981, ___ So.3d ___ (Fla. 4th DCA 2018) (not final until the time for rehearing has expired). was rendered upon a foreclosure plaintiff’s appeal from a trial court’s order granting summary judgment in favor of the homeowner. The foreclosure plaintiff alleged that it was the holder of the note and mortgage that were in default, entitling it to foreclose. The plaintiff was not the original lender, having received an assignment of the loan from another party, as is common in the industry. The issue here was that the the promissory note, the mortgage, and also the allonge that assigned the loan out from the initial lender, all omitted the word “corporation” from the initial lender’s name. The homeowner defended the foreclosure, claiming that this omission meant that the lender as shown on the documentation was a nonexistent entity and, thus, the promissory note and mortgage were void, and the endorsement from the (alleged to be) nonexistent entity was a nullity. The trial court agreed, granting summary judgment in favor of the homeowner.

The 4th DCA reversed the trial court’s ruling, and the DCA did not have to go far to find support for its reasoning. Florida Statutes § 694.12 states that all mortgages “made and received bona fide and upon good consideration […] in which the name of said corporation shall be incorrectly set out in such [mortgage] by omitting a word from the corporate name, or by adding a word thereto, or by misspelling any part of the name of said corporation, and the identify of said corporation shall plainly appear from the contents of said instrument, or otherwise, such [mortgage], shall be taken and deemed valid and effectual as though the name of said corporation were correctly set out in said [mortgage], and the same shall, notwithstanding such irregularity or defect, be deemed and taken as properly executed.” Despite the unambiguous plain language of the statute, the 4th DCA also cited to a 1998 concurring opinion2Presley v. Ponce Plaza Assocs., 723 So. 2d 328, 330 (Fla. 3d DCA 1998) (Cope, J., specially concurring). out of the 3rd DCA, which stated, “slight departures from the name used by the corporation, such as the omission of a part of its name or the inclusion of additional words, generally will not affect the validity of contracts or other business transactions as long as the identity of the corporation can be reasonably established from the evidence.”

Note that the practical result of this is not an automatic win for the plaintiff, meaning that the foreclosure will now proceed and the plaintiff will still have the burden of proof on its claims. Perhaps the homeowner has other defenses to the claims, perhaps not. However, the issue of whether or not the initial lender was a nonexistent entity has been determined.

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1. Avant Capital, LLC v. Gomez, 2018 WL 4519981, ___ So.3d ___ (Fla. 4th DCA 2018) (not final until the time for rehearing has expired).
2. Presley v. Ponce Plaza Assocs., 723 So. 2d 328, 330 (Fla. 3d DCA 1998) (Cope, J., specially concurring).
Litigation

No contract, no fees, no, really

We’re all familiar with the notion that one can’t have something both ways, a notion that has been idiomized in a number of ways over the years:

  1. “What’s good for the goose is good for the gander.”
  2. “You can’t have your cake and eat it, too.”
  3. “What goes around, comes around.”
  4. “Because the homeowner prevailed on an argument that the bank failed to prove entitlement to enforce the note and mortgage, the homeowner cannot now seek to take advantage of the fee provisions of the note and mortgage.”

Wait, say what? You’re not familiar with that fourth one? Well, you’re forgiven because it’s fairly recent, originating from a 2018 case1Torres v. Bank of New York for Certificate Holders CWABS, Inc. Asset Backed Certificates Series 2006-26, No. 4D17-1625, 2018 WL 4026038 (Fla. 4th DCA 2018). decided by Florida’s Fourth District Court of Appeals. In the referenced case, the 4th DCA had to decide whether a homeowner who successfully defended a foreclosure action was entitled to recover from the foreclosing bank his defense attorney’s fees and costs. At trial, the homeowner was successful in opposing the foreclosing lender’s attempt to introduce the promissory note into evidence. No note, no foreclosure, right? Well, sure, said the trial court, and the homeowner won the case. To the victor go the spoils, apparently, so the homeowner then sought to recover from the bank his attorney’s fees and costs, as well. When his request was denied, he appealed.

The American Rule

In America, our court systems follow the “American Rule,” requiring that all litigants in court pay for their own attorney’s fees and costs. The exception to this rule is that parties may recover fees and costs from the other side if a statute, rule, or contractual provision provide for such. The homeowner claimed entitlement to his fees and costs based upon the provision in the note and mortgage providing for same.

Goose, meet Gander

The 4th DCA said that this doesn’t fly; the homeowner could not recover his attorney’s fees and costs under the contract, when the contract never made it into evidence, because (recall) that the homeowner opposed its admittance.

Not a goose egg, however

Despite this, the 4th DCA did, however, hold that the homeowner was entitled to recover his costs; not because of the contractual provision, but because of a rule and a statute, specifically, Fla. R. Civ. P. 1.420(d)2Costs in any action dismissed under this rule shall be assessed and judgment for costs entered in that action, once the action is concluded as to the party seeking taxation of costs.” and Florida Statutes, § 57.041(1)3”The party recovering judgment shall recover all his or her legal costs and charges which shall be included in the judgment ….”.

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1. Torres v. Bank of New York for Certificate Holders CWABS, Inc. Asset Backed Certificates Series 2006-26, No. 4D17-1625, 2018 WL 4026038 (Fla. 4th DCA 2018).
2. Costs in any action dismissed under this rule shall be assessed and judgment for costs entered in that action, once the action is concluded as to the party seeking taxation of costs.”
3. ”The party recovering judgment shall recover all his or her legal costs and charges which shall be included in the judgment ….”
Eviction

Commercial Landlords in Florida: Self Help is Not Allowed, Even if Lease Says So

If you are a commercial landlord in Florida, your written commercial lease agreement likely contains a provision stating something to the effect that, if your tenant is in default and has not timely cured such default, then you may terminate the tenancy, and be entitled to immediate possession of the premises. In enforcing such a provision, a landlord might, as an example, change the locks on the building, thereby depriving the tenant of access to the property. Such a remedy is sometimes referred to as a “self help” remedy.

While some states in our great nation may allow for such self help remedies, Florida is not one of them. As a 2016 case1Palm Beach Fla. Hotel v. Nantucket Enterprises, Inc., 211 So. 3d 42 (Fla. 4th DCA 2016). from Florida’s Fourth District Court of Appeals illustrates, engaging in self help may expose a landlord to liability for a wrongful eviction claim filed by the tenant. In the referenced case, the facts played out much like the scenario outlined above; the lease contained a provision2The lease provision read: “[I]f and whenever any Event of Default by Tenant shall occur, Landlord may after the continued Tenant default after the expiration of the time to cure … at its option and without further written notice to Tenant, in addition to all other remedies given hereunder or by law or equity, do any one or more of the following: (i) terminate the Lease, in which event Tenant shall immediately surrender possession of the Leased Premises to Landlord; (ii) enter upon and take possession of the Leased Premises and expel or remove Tenant and any other occupant therefrom with or without having terminated the lease…. Landlord shall not be deemed to have violated any right of Tenant and shall not be deemed to be guilty of trespass, conversion or any other criminal or civil action as a result of such action.” allowing for the landlord’s unilateral termination, the tenant defaulted under the agreement, and the landlord chained and locked the doors to the building. Adding insult to injury, several days after the chains and locks were put in place, the landlord had police escort the tenant’s employees from the building. Affirmed on appeal was a judgment against the landlord in the amount of $8.8 million for wrongfully evicting the tenant. In its analysis, the appellate court cited Florida Statutes, § 83.20, stating that the “only” conditions entitling a landlord to obtain possession of its leased premises are: 1) by court order granting a landlord possession; 2) when the tenant surrenders the premises to the landlord; or 3) when the tenant abandons the leasehold. As none of those situations occurred, “Landlord was not entitled to use self-help even though it was authorized by the terms of the parties’ lease.” Therefore, when faced with a tenant’s default, the wise landlord’s first call would be placed not to a locksmith, but to a Florida attorney, to follow the judicial eviction procedures outlined in the Florida nonresidential landlord and tenant act.

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1. Palm Beach Fla. Hotel v. Nantucket Enterprises, Inc., 211 So. 3d 42 (Fla. 4th DCA 2016).
2. The lease provision read: “[I]f and whenever any Event of Default by Tenant shall occur, Landlord may after the continued Tenant default after the expiration of the time to cure … at its option and without further written notice to Tenant, in addition to all other remedies given hereunder or by law or equity, do any one or more of the following: (i) terminate the Lease, in which event Tenant shall immediately surrender possession of the Leased Premises to Landlord; (ii) enter upon and take possession of the Leased Premises and expel or remove Tenant and any other occupant therefrom with or without having terminated the lease…. Landlord shall not be deemed to have violated any right of Tenant and shall not be deemed to be guilty of trespass, conversion or any other criminal or civil action as a result of such action.”