IN THE SUPREME COURT IN AND FOR THE STATE OF FLORIDA

Transcription

1 IN THE SUPREME COURT IN AND FOR THE STATE OF FLORIDA CASE NO.: FOURTH DISTRICT COURT OF APPEAL CASE NO.: 4D Trial Court No.: GA XXPP IH (Palm Beach County) IN RE THE GUARDIANSHIP OF LILLIAN G. WILDE / RAYMOND A. BEANE, as Personal Representative of the Estate of Lillian G. Wilde, Petitioner, v. SUNTRUST BANKS, INC., Respondent. / PETITIONER S JURISDICTIONAL BRIEF PANKAUSKI LAW FIRM P.L.L.C. John J. Pankauski, Esquire Florida Bar No John@pankauskilawfirm.com Allison R. Sabocik, Esquire Florida Bar No Allison@pankauskilawfirm.com 120 South Olive Avenue, Suite 701 West Palm Beach, FL Phone: (561) Fax: (561)

2 TABLE OF CONTENTS PAGE Table of Citations ii I. Statement of the Case and Facts 1 II. Summary of Argument 1 III. Jurisdictional Statement 3 IV. Argument A. Power to make gifts: Beane conflicts with the Fifth District s decision in James v. James, 843 So. 2d 304, 308 (Fla. 5 th DCA 2003), as well as decisions of the Second and Third Districts. 3 B. Beane conflicts with the Totten trust doctrine and other District Courts decisions which hold a withdrawal from a Totten trust is a revocation. 4 V. Conclusion 6 VI. Certificate of Service 7 VII. Certificate of Compliance 8

3 TABLE OF CITATIONS PAGE Case Law Beane v. Suntrust Banks, 2010 WL (Fla. 4 th DCA 2010) passim Bloom v. Weiser, 348 So. 2d 651 (Fla. 3d DCA 1977) 4 Estate of Bell, 573 So. 2d 57 (Fla. 1 st DCA 1990) 3 Hall v. Cosby, 258 So. 2d 897 (Ala.1972) 4 In re Bearinger s Estate, 336 Pa. 253, 9A.2d 342 (1939) 6 In Re Guardianship of Medley, 573 So. 2d 892 (Fla. 2d DCA 1990) 5 In re Totten, 179 N.Y. 112, 71 N.E. 748, 70 L.R.A. 711 (NY 1904) 4 James v. James, 843 So. 2d 304 (Fla. 5 th DCA 2003) 3 Klaw v. Kramer, 56 Misc.2d 173, 288 N.Y.S.2d 322 (N.Y.Sup.Ct. 1968) 6 Murray v. Brooklyn Sav. Bank, 9 N.Y. S.2d 227, 232, 234 (NY 1939) 4 Litsey v. First Federal Savings & Loan Ass n of Tampa, 243 So. 2d 239 (Fla. 2d DCA 1971) 5 Ryder v. Sheldon, 69 A.D.2d 768, 415 N.Y.S.2d 35 (App. 1979) 6 Seymour v. Seymour, 85 So. 2d 726 (Fla. 1956) 2, 4 Siegel v. Novak, 920 So. 2d 89 (Fla. 4 th DCA 2006) 5 Turner v. Rand, 417 So. 2d 303 (Fla. 3d DCA 1982) 5 Vargas v. Vargas, 659 So. 2d 1164 (Fla. 3d DCA 1995) 5, 6

4 Vaughn v. Batchelder, 633 So. 2d 526 (Fla. 2d DCA 1994) 4 Statute Section , Florida Statutes 1, 6 Rules of Procedure Fla. R. App. P Florida Constitution Art. V, 3(b)(3), Fla. Const. 3 Secondary Authority 2A C.J.S. AGENCY 223 (1972) 4

5 STATEMENT OF THE CASE AND FACTS Petitioner Raymond Beane, Personal Representative of the Estate of Lillian G. Wilde, seeks review of the Fourth District Court of Appeal s November 10, 2010 decision (rehearing denied December 16, 2010). This case involves a personal representative s appeal of a dismissed complaint against Suntrust Bank. According to the complaint, Suntrust permitted the withdrawal of funds from a Totten trust by an attorney-in-fact pursuant to a durable power of attorney. Petitioner contended below that the language of the durable power of attorney did not expressly authorize the withdrawal of funds, and therefore Suntrust was not authorized to disburse. This proceeding concerns Florida s durable power of attorney statute, Section , Florida Statutes, the Totten trust doctrine, and whether a withdrawal from a Totten trust by an attorney-in-fact is permissible. In Beane, the Fourth District held that an attorney-in-fact enjoys the power to withdraw 100% of funds in a Totten trust, despite the absence of express authority to do so in the durable power of attorney instrument. SUMMARY OF ARGUMENT The Fourth District Court of Appeal s decision in Beane rests on at least two holdings which expressly and directly conflict with decisions of this Court, and the Second, Third and Fifth District Courts of Appeal.

6 First, on page 3, lines 10-12, the Fourth District s opinion states [b]ecause the owner of the Totten Trust retained the unfettered ability to withdraw any or all of the funds, the attorney-in-fact retained the same authority as a result of the power of attorney. This holding conflicts with other Districts holdings that an attorney-in-fact cannot make gifts of the principal's property to others unless expressly authorized in the durable power of attorney. Second, on page 3, lines 28-30, of the Fourth District s opinion, the court held that merely withdrawing money from the Totten trust does not, as a matter of law, change the disposition effective at the principal s death. This holding conflicts with this Court s holding in Seymour v. Seymour, 85 So. 2d 726 (Fla. 1956) as well as decisions of the Second, Third and Fourth District Courts of Appeal. This Court should exercise its jurisdiction because (1) Totten trusts and durable powers-of-attorney are both extremely common estate planning devices, especially for elderly individuals who are unrepresented by counsel; and (2) the Beane decision improvidently creates a particular danger of abuse or fraud by attorneys-in-fact at the expense of the rights of account-holders and their intended beneficiaries. Unfortunately, fraud, conversion, and mis-use of authority by fiduciaries are all too common in Florida. A durable power-of-attorney is intended to be an estate planning device, not a tool for self-dealing by fiduciaries.

7 JURISDICTIONAL STATEMENT This Court has discretionary review to review a decision of a district court of appeal which expressly and directly conflicts with a decision of another district court of appeal concerning the same point of law. See Fla. R. App. P (a)(2)(A)(iv); art. V, 3(b)(3), Fla. Const. ARGUMENT A. Power to make gifts: Beane conflicts with the Fifth District s decision in James v. James, 843 So. 2d 304, 308 (Fla. 5 th DCA 2003), as well as decisions of the Second and Third Districts. In Beane, the attorney-in-fact, Ms. Lorenzo, transferred $150,000 from the principal s Totten trust to another account in the name of Orson Lorenzo (not the principal/owner, Lillian G. Wilde). In James v. James, 843 So. 2d 304, 308 (Fla. 5 th DCA 2003), the Fifth District held that In general, an agent cannot make gifts of his principal s property to himself or others unless it is expressly authorized in the power. (citing In re Estate of Bell, 573 So. 2d 57, 58 (Fla. 1 st DCA 1990)). The Fourth District s holding in Beane ( Because the owner of the Totten Trust retained the unfettered ability to withdraw any or all of the funds, the attorney-in-fact retained the same authority as a result of the power of attorney. ) conflicts with James, which limits the authority of an attorney-in-fact from making gifts to third parties.

8 Other districts also conflict with Beane. See Vaughn v. Batchelder, 633 So. 2d 526, 528 (Fla. 2d DCA 1994) ( Since the power of attorney here did not include the power to make gifts, and Batchelder gave gifts to himself by creating the joint tenancy status, Batchelder exceeded the power given him by the power of attorney. ); Bloom v. Weiser, 348 So. 2d 651, 653 (Fla. 3d DCA 1977): We are of the view that for a power of attorney to authorize a conveyance of real estate, the authority of the agent to do so must be plainly stated. See 2A C.J.S. AGENCY 223 (1972) and Hall v. Cosby, 258 So.2d 897 (Ala.1972). Reviewing the power of attorney granted Winters, we find the instrument contains no specific grant of power authorizing him to convey real estate. Therefore, the July 18 deed executed by Winters and purporting to convey Weinberg s one-half interest in the subject condominium to Miriam Bloom is void. B. Beane conflicts with the Totten trust doctrine and other District Courts decisions which hold a withdrawal from a Totten trust is a revocation. Beane did not hold that the $150,000 transfer of funds from the principal s Totten trust by the attorney-in-fact was a revocation, but rather that it merely changes the amounts within the Totten trust Beane conflicts with Seymour v. Seymour, 85 So. 2d 726 (Fla. 1956) which accepted the well-known, common-law doctrine of Totten trusts, which was set forth in the law of the state of New York. In re Totten, 179 N.Y. 112, 71 N.E. 748, 752, 70 L.R.A. 711 (NY 1904). At the time of Seymour, it was settled law in New York that withdrawal from a Totten trust was a revocation. Murray v. Brooklyn Sav. Bank, 9 N.Y. S.2d 227, 232, 234 (NY 1939). In other words, in 1956, Florida

9 adopted New York law, which remains unchanged. The Beane decision ignores this. See also Litsey v. First Federal Savings & Loan Ass n of Tampa, 243 So. 2d 239, 242 (Fla. 2d DCA 1971) ( Under the Totten trust doctrine, revocation includes disaffirmance and revocation may be accomplished by some decisive act or declaration of disaffirmance. ) Because the Totten trust doctrine states that a revocation of a Totten trust occurs when there is a withdrawal of funds, Beane conflicts with District Courts which hold that a withdrawal from a Totten trust is a revocation. Vargas v. Vargas, 659 So. 2d 1164, 1166 (Fla. 3d DCA 1995); In Re Guardianship of Medley, 573 So. 2d 892, 907 (Fla. 2d DCA 1990); Siegel v. Novak, 920 So. 2d 89, 95 (Fla. 4 th DCA 2006). The Vargas court explained that there were no formalities for revocation of a Totten trust, but that any decisive act or declaration of disaffirmance during the owner s lifetime would suffice. The Third District reviewed an instance wherein the account-holder revoked Totten trusts by providing a letter to a bank and turning over various passbooks for such accounts, and the court determined that was a sufficient act of disaffirmance to revoke the Totten trust in favor of the account holder s granddaughters. Id. at In looking to other decisions in Florida and nationwide, the Vargas court explained various circumstances wherein a Totten trust could be revoked, such as: delivery of a document to an attorney expressly revoking a Totten trust (Turner v. Rand, 417 So. 2d 303 (Fla. 3d DCA 1982)),

10 withdrawal of funds in trust (Ryder v. Sheldon, 69 A.D.2d 768, 415 N.Y.S.2d 35 (App. 1979)), assignment of the passbooks for a Totten trust to a lender as security for a note (Klaw v. Kramer, 56 Misc.2d 173, 288 N.Y.S.2d 322, 323 (N.Y.Sup.Ct. 1968)), and an account holder s letter directing a Totten trust beneficiary to utilize the funds to pay debts and funeral expenses (In re Bearinger s Estate, 336 Pa. 253, 9A.2d 342 (1939)). Vargas, 659 So. 2d at CONCLUSION An attorney-in-fact does not retain the same authority that an owner of a Totten trust retains. Districts which are in conflict with Beane hold that an attorney-in-fact s authority is limited, particularly when withdrawing the principal s money, absent express or specific language. A Totten trust is revoked by any decisive act of disaffirmance, particularly the outright withdrawal of 100% of the funds therein. Yet Beane has now expressly held otherwise. By declining to subject such revocations to the strict requirements of Section , Florida Statutes, the Fourth District has left a substantial portion of Florida s population, and their actual intended heirs and beneficiaries, vulnerable to embezzlement and theft by attorneys-in-fact. It is for these reasons that Petitioner respectfully submits that this Court has jurisdiction and should exercise that jurisdiction to correct the errors below.

11 CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished via U.S. Mail to: Carolyn B. Brombacher, Esquire, May Meacham & Davell PA, 1 Financial Plaza # 2602, Ft. Lauderdale, FL 33394; Adam S. Gumson, Esquire, Jupiter Creek Professional Center, 1102 W. Indiantown Rd. # 7, Jupiter, FL 33458, this 19th day of January, PANKAUSKI LAW FIRM P.L.L.C. 120 South Olive Avenue, Suite 701 West Palm Beach, FL Phone: (561) Fax: (561) By: John J. Pankauski, Esquire Florida Bar No.: john@pankauskilawfirm.com Allison R. Sabocik, Esquire Florida Bar No.: allison@pankauskilawfirm.com

12 CERTIFICATE OF COMPLIANCE I HEREBY CERTIFY that the foregoing has been prepared in Times New Roman 14-point font, and therefore complies with the font requirements as set forth in Rule 9.210(a)(2) of the Florida Rules of Appellate Procedure. PANKAUSKI LAW FIRM P.L.L.C. By: John J. Pankauski, Esquire Florida Bar No Allison R. Sabocik, Esquire Florida Bar No