All entries for January 2016

Palm Beach family battle results in erosion of an arcane procedural loophole in trust litigation

A Palm Beach County man who was a beneficiary under an amended trust established by his father challenged the trust’s validity and faced potential dismissal of his suit for failure to return money given to him by the trustee, his father’s surviving wife.  Gossett v. Gossett, 182 So. 3d 694, 695 (Fla. 4th DCA 2015). 

This case illustrates a principle of law dating back in this country to a New Hampshire case from 1833 which imported the law from English ecclesiastical court rulings.  The principle is referred to as the “renunciation rule,” which holds generally that a recipient of a benefit through a trust must “do equity” by returning the benefit and renouncing that recipient’s interest before he or she can be permitted by a court to challenge the validity of the trust (i.e., a person cannot keep and enjoy the benefits of a trust that he or she seeks to invalidate). 

In Gossett, the son received the benefits originally while in financial duress and was unable to return them prior to initiating the case to overturn the amended trust (actually, the fourth and fifth amended versions).  However, he argued—and the court agreed—that, since he was entitled to that amount (or more) under the versions of the trust he believed were valid, he did not have to return the funds. 

In reaching its decision, the Fourth DCA reasoned that the son’s situation in Gossett was similar to that of a self-settled trust, whereby the interest in the money that was not being ‘renounced’ derived not from the trust itself, but from the settlor’s ownership of the assets and the fact that he was the sole beneficiary (a commonly invalidated trust arrangement).  Potentially strained logic aside, the court found that, regardless of which version of the amended trust was upheld (everyone agreed that at least some version was valid), the son was entitled to the money and, therefore, should not have to return the funds.  This finding represented a potential departure from over two hundred years of precedent on this issue. 

As the Gossett case illustrates, trusts and estate planning can be convoluted and confusing to those without the training and experience to navigate the process.  Inconsistency and lack of clarity can cause strife that potentially rips families apart after a loved one passes.  It is crucial to get sound advice from a trusted counselor who can help establish a clear and enforceable estate plan.  Talk to our trusted estate planning attorneys at Icard Merrill today to find out more.

Homeowner forced to enjoy his one foot wide dock

A homeowner was told by the Circuit Court for the Sixth Judicial Circuit (presiding over an appeal via writ of certiorari from a decision by the City of Treasure Island, Florida, Planning and Zoning Board) that his “hardship” resulting from the purchase of a property that would have allowed construction of only a one foot wide dock was the type of hardship brought on oneself and that the court would not grant a variance based on self-inflicted hardship.  Schmidt v. City of Treasure Island, Fla., Planning and Zoning Board, 23 Fla. L. Weekly Supp. 507a. 

Though the planning and zoning board had granted a variance allowing the homeowner to construct a wider—and, presumably, normally sized—dock, the Sixth Judicial Circuit reversed, finding that a neighbor had standing to challenge the award of the variance and that the homeowner had purchased property with knowledge at the time he closed on the property that only a limited swath of property was available to him for the construction of his dock.  Therefore, the court reasoned, any hardship was brought on by the purchaser of the property and no variance was permitted without a showing that “extreme hardship” would result in an enforcement of the setback without the granted variance.

As the homeowner enjoys the water view from his extra-slim dock, he may wonder if talking to an experienced land use and zoning and planning attorney could have helped him avoid this situation.  If you have questions about buying a property, obtaining a variance, or building a dock (of any size), talk to one of the decorated and recognized attorneys that practice land use and zoning and planning law in Sarasota, Manatee, and Charlotte Counties today.  

Can a homeowners association be first in lien priority over a purchase money mortgage?

A recent decision by the Fourth DCA raises the question of whether an association can add a new lien against a homeowner for unpaid assessments and actually take priority over the lender’s mortgage on that property.  In U.S. Bank Nat. Ass'n v. Grant, the appellate court found that, though the association’s declaration had been filed prior to the lender’s mortgage, a later added lien for unpaid assessments could not take priority over the bank’s mortgage because the declarations failed to state that a later lien would be superior to purchase money liens or that the later liens would related back to the date of recording of the declaration.  180 So. 3d 1092, 1093 (Fla. 4th DCA 2015). 

The Fourth DCA cited in the opinion Florida’s Supreme Court in Holly Lake Ass'n v. Fed. Nat. Mortg. Ass'n, wherein the Court distinguished declaration language such as that in Grant from another case wherein “the language in the declaration of restrictions put all parties on notice that an ongoing, automatic lien had been created at the time that the property was purchased, and that this lien would continue each month until the owner paid the monthly assessment fee.” 660 So. 2d 266, 268 (Fla. 1995). 

Based on this decision and the line of cases finding similarly, smart homeowner’s associations could try to incorporate a lien right ‘shoehorn’ for sliding later-filed liens for unpaid assessments in ahead of even purchase money or other mortgage interest rights. 

If you have questions about your association’s lien rights and whether the findings in these cases may be applicable to your declaration, contact our knowledgeable attorneys who practice in association law.   Icard Merrill represents clients in a number of homeowner and condo owner association lien matters and disputes.  Put one of our attorneys to work for you today.

Screenshots emerging on the evidentiary scene

Much to the chagrin (and likely confusion) of more--ahem--‘veteran’ attorneys, the screenshot is starting to make its way into courtrooms across the country.  A “screenshot” is a photograph taken on a smartphone, tablet, or other device that captures an image of whatever document, photo, or application is being shown on the device at the time.  From a classical evidentiary standpoint, it can be a proverbial quagmire of issues; forcing a court to potentially wade through layers of hearsay and evidence custody and custodianship.

One recent case decided by the Fourth DCA illustrates how this byproduct of our technical present is being used in courtrooms—potentially resulting in a loosening of evidentiary standards.  Calvo v. U.S. Bank Nat. Ass'n, 181 So. 3d 562, 563 (Fla. 4th DCA 2015).  In Calvo, the record custodian for U.S. Bank testified using screenshots captured, presumably, from bank records.  It is unclear from the opinion what additional foundation was required, if any, in testifying about the content of the screenshots and how they were created (though this case involved a mortgage foreclosure action—which has, at times, presented a lax evidentiary environment). 

Unfortunately for U.S. Bank, the screenshots apparently did not provide as much detail as the appellate court required in order to establish standing at the time the complaint was filed and the case was remanded, reversing the bank’s foreclosure win and requiring the trial court to hand the bank an involuntary dismissal defeat (and likely costing the bank attorneys’ fees and costs, to boot).  

As electronic data, devices, and their use continues to expand and replace paper documents in our daily lives, these types of issues will likely become more prevalent in court battles, as well.  An attorney with experience in electronic discovery and in dealing with electronic evidence could save your case—and your money.  Contact the litigation team at Icard Merrill for help managing your electronic evidence. 

Erosion of the non-resident cost deposit trap

The non-resident cost deposit has long been a tool used by local litigators to harass and annoy out of state plaintiffs and their counsel.  The requirement pursuant to Florida Statutes § 57.011 forcing an out of state plaintiff to deposit $100 with the clerk when instituting an action to cover potential future costs for a prevailing defendant seems to achieve little other than to give persnickety—or, perhaps vexatious—litigants a handy procedural tool for getting a case dismissed on somewhat more arcane procedural grounds.   The bond is substantially less than the amount of costs normally incurred in defending an action, so it provides little of the protection which presumably was in the legislature’s mind when enacting the law. 

Continuing a trend away from this type of ‘form above substance’ procedural trickery, the Second DCA recently decided to turn the tables on a crafty defendant seeking dismissal of a mortgage foreclosure case on the basis of failure to timely pay a non-resident cost bond by the out of state plaintiff bank.  Dyck-O’Neal, Inc. v. Duffy, 40 Fla. L. Weekly D2660a (Fla. 2nd DCA 2015).  In this case, the Second DCA observed that, though the plaintiff had failed to either post the bond within twenty days following notice of the requirement or more than one month before a hearing on defendant’s motion to dismiss the complaint, the defendant had failed to show any prejudice, which meant the case should not have been dismissed.

As the appellate court noted, the trial court has discretion to consider the facts of the case and the coercive—but not punitive—nature of § 57.011 in securing the crucial sum of $100 from a carpetbagger plaintiff.  Thus, compliant (albeit tardy) plaintiffs can avoid a tricky procedural pitfall which could cost them attorneys’ fees on top of costs. 

As always, procedural traps abound for the unwary litigants.  Contact mortgage and real estate litigators that are experienced in dealing with these issues (and a host of others) for help navigating your legal issue. 

Second DCA adopts position contrary to that of Federal court on Hague Service

Recently, the Second DCA ruled that service of process of persons outside the United States pursuant to the Hague Convention may be made by mail.  Portalp Intern. SAS v. Zuloaga, 40 Fla. L. Weekly D2791 (Fla. 2d DCA Dec. 18, 2015), reh'g denied (Mar. 3, 2016).  

In cases brought in a number of Federal district courts—including those in the Northern District of Florida, as well as potentially* the Southern District and Middle District of Florida—achieving service of process on foreign defendants can be a very time consuming and expensive process, taking weeks or months and costing hundreds or thousands of dollars and often involve subjecting your attempts to serve defendants to the discretion of local jurisdictions in the foreign country to determine whether it would permit service on the defendant.  As the Second DCA notes in quoting the defendant, it is a “rather involved procedure.”

Rather, the Second DCA has--like the majority of U.S. court of appeals circuits—has now construed the Hague Convention** to allow service of initial process in a lawsuit on a defendant by mail.***  This ruling streamlines the process of serving international defendants immensely and still achieves the purpose of requiring service of process—to make the defendant aware that a lawsuit has been brought against him or her.

If you have questions about serving a foreign defendant, or may have to sue a foreign person or entity, contact one of Icard Merrill’s experienced litigation attorneys in Sarasota, Bradenton/Lakewood Ranch, Punta Gorda, or Fort Myers for advice.

* As the Second DCA noted in Portalp, there appears to be a conflict even among cases decided in the Middle and Southern Districts themselves.  See, Intelsat Corp. v. Multivision TV LLC, 736 F. Supp. 2d 1334 (S.D. Fla. 2010); Arco Elecs. Control Ltd. v. Core Int'l, 794 F. Supp. 1144 (S.D. Fla. 1992); Wasden v. Yamaha Motor Co., Ltd., 131 F.R.D. 206 (M.D. Fla. 1990); and In re MAK Petroleum, Inc., 424 B.R. 912 (Bankr. M.D. Fla. 2010); but see, Geopolymer Sinkhole Specialist, Inc. v. Uretek Worldwide Oy, No. 8:15-cv-1690-T-36JSS, 2015 WL 4757937 (M.D. Fla. Aug. 12, 2015); TracFone Wireless, Inc. v. Unlimited PCS Inc., 279 F.R.D. 626 (S.D. Fla. 2012); Julien v. Williams, No. 8:10-cv-2358-T-24 TBM, 2010 WL 5174535 (M.D. Fla. Dec. 15, 2010); and Conax Fla. Corp. v. Astrium Ltd., 499 F. Supp. 2d 1287 (M.D. Fla. 2007).

** An international treaty between 71 signatory countries, which is actually titled “Convention of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters.”

*** Although, interestingly, the Second DCA did note that the appellant defendant did not raise on appeal the issue of whether the Florida Rules of Civil Procedure would conflict with the Hague Convention in that the Florida Rule 1.070(i) and its requirement that a defendant consent to service by mail in order to result in effective service.

Be careful dismissing your action, even after you win

A recent court decision in Palm Beach County, Florida in the 15th Judicial Circuit awarded attorneys’ fees to a tenant who vacated the landlord’s property after the landlord filed an action for eviction and damages. Kornheisl v. Scuderi, et al., 23 Fla. L. Weekly Supp. 614c.    The landlord, having obtained possession without entry of a judgment when the tenant filed a so-called “Notice of Mootness,” stating that the property was being abandoned by the tenant.  Appearing to have prevailed on the issue of possession by concession of the tenant, the landlord dismissed the eviction count voluntarily.  The court later awarded attorneys’ fees and costs to the tenant on the eviction count*, stating that the tenant never entered into a settlement agreement with the landlord with respect to attorneys’ fees and that the landlord therefore dismissed the eviction count “at their peril.” 

This case illustrates some of the potential pitfalls that face landlords and other litigants that proceed on their own behalf without the advice of an attorney.  A brief consultation with an experienced litigation attorney could prevent backfires like the one the landlord faced in this case.


*Attorneys’ fees and costs were also awarded on the damages count, however this resulted from a dismissal by the court for lack of prosecution by the Landlord.