Court Opinion

ID: 4536797
Source: CourtListenerOpinion
Date Created: 2020-05-27 15:02:48.018382+00
Date Added: 2024-06-11T09:24:58.163718
License: Public Domain

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                              FOURTH DISTRICT

                        JACK N. SCHLOSSBERG,
                              Appellant,

                                     v.

    ESTATE OF SADIE KAPOROVSKY, MATTHEW HIRSCHHORN,
   as Personal Representative of the Estate of Sadie Kaporovsky, and
                         CANDY WISOTSKY,
                              Appellees.

                              No. 4D19-2053

                              [May 27, 2020]

   Appeal from the Circuit Court for the Seventeenth Judicial Circuit,
Broward County; Charles M. Greene, Judge; L.T. Case No. PRC 09-4197.

    Michele A. Cavallaro of Fidelity National Law Group, Fort Lauderdale,
for appellant.

   Christopher Q. Wintter of Wintter Law, Fort Lauderdale, for appellees.

WARNER, J.

   Appellant, Jack Schlossberg, challenges a final judgment declaring that
he owned only a one-half interest in a condominium, the other half being
owned by appellee, Estate of Sadie Kaporovsky. The court found that the
deed conveying the property from the Sadie Kaporovsky revocable trust to
Sadie Kaporovsky for life, with remainder to her daughter, Candy
Wisotsky, was invalid. Wisotsky sold the property to Schlossberg after
Sadie’s death. Because Sadie, the settlor of the trust, signed the deed of
conveyance both individually and as trustee, and her co-trustee joined in
the deed, we hold that the deed was valid to convey the interest in the
property. We therefore reverse.

   We state the facts relevant to the legal issue in this appeal, recognizing
that there are several claims between other parties as to undue influence,
which do not impact this case.

   Sadie owned a condominium in Palm Beach County. In 2000, she
executed a deed which conveyed ownership of the unit to herself and her
daughter Wisotsky, as joint tenants with right of survivorship. Several
years later, in 2004, Sadie established the “Sadie Kaporovsky Intervivos
Trust Agreement,” a revocable trust. The trust appointed Sadie and
Wisotsky as co-trustees. An amendment to the trust required that all acts
and powers exercised by the trustees be performed by both trustees. (This
provision was removed by a subsequent amendment but then later
reinstated.)

   The trust contained several provisions regarding the disposition of
principal and the right to revoke the trust. It allowed the trustees to apply
principal of the trust for the settlor’s use, care, support and general
maintenance, including any and all assets of the trust estate. It authorized
the settlor to revoke the trust in whole or in part, by instrument delivered
in writing to the trustee. With respect to the trustees’ powers, the trust
provided that the trustees had the power to sell or convey any property of
the trust in their discretion, as well as to do all acts or exercise any rights
or privileges as could be done by the absolute owner of the property,
subject to the trustees’ fiduciary obligations.

   After the trust was created, Sadie executed a deed conveying her
interest in the condo unit from Sadie, “a single woman Grantor” to Sadie
as Trustee of the Trust “Grantee.” The purpose of the 2004 deed,
according to the attorney who prepared it for Sadie, was to eliminate
Wisotsky’s right of survivorship by breaking the joint tenancy. Thus, at
that point Wisotsky and the Trust each owned an undivided interest in the
condo.

   The dispute at issue here arose out of a 2005 deed transferring the
condo unit from the Trust to Sadie, with a life estate to Sadie and the
remainder to Wisotsky. The 2005 deed conveys the condo unit as follows:

      This Quit-Claim Deed, Executed this 16th day of September,
      A.D. 2005 by SADIE KAPOROVSKY, a single woman and
      CANDY WISOTSKY, a single woman, individually and as
      Trustees of the SADIE KAPOROVSKY INTERVIVOS TRUST
      AGREEMENT dated April 29, 2004 first party, to SADIE
      KAPOROVSKY, a life estate, with the remainder to CANDY
      WISOTSKY . . . . second party.

The 2005 deed is signed by Sadie and Wisotsky, both individually and as
trustees.

  Sadie died in February 2009. Based upon the remainder interest,
Wisotsky then held title to the entire condo. Wisotsky sold the condo unit

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to Schlossberg in July. During the probate of Sadie’s estate, Wisotsky
brought an adversary proceeding against Sadie’s son, Hirschhorn, in his
position as personal representative. In response, Hirschhorn filed a
counterclaim against Wisotsky and a third-party action against
Schlossberg, claiming that the 2005 deed of the remainder interest to
Wisotsky was void, because the trustees were only permitted by the trust
to distribute/transfer Trust property to the settlor or for the benefit of the
settlor. Hirschhorn claimed the transfer of the remainder interest to
Wisotsky was not for the benefit of the settlor. By conveying the remainder
interest, Hirschhorn claimed Wisotsky improperly gifted trust property to
herself in violation of the terms of the Trust. Therefore, he contended that
when Wisotsky sold the condo unit to Schlossberg, she only conveyed her
one-half interest (from the deed in 2000), and the Estate owned the other
half.    Schlossberg answered and asserted the following affirmative
defenses that are relevant here on appeal: (1) that Sadie as settlor had the
power to execute the deed; and (2) that Schlossberg was a bona fide
purchaser for value and title passed to Schlossberg because of his status
as such.

   Motions for summary judgment were filed on Hirschhorn’s second
amended counterclaim by Hirschhorn, Wisotsky, and Schlossberg. The
court granted summary judgment to Hirschhorn and determined that the
2005 deed gifting to Wisotsky the remainder interest in the condo unit was
beyond the trustees’ powers granted by the trust instrument, because it
was not for the settlor’s benefit. The trustees had no authority to gift the
remainder interest to Wisotsky, who also acted with a conflict of interest
in conveying the remainder interest to herself. Thus, the court reasoned
that the deed was void as a matter of law, which left the half interest in
the condo unit in the trust.

   Schlossberg filed a motion for rehearing, claiming that the 2005 deed
was an implicit revocation of the trust as to the condo unit. The court
denied the motion, finding that the deed did not constitute a revocation
instrument on its face. “[Sadie] never acquired individual ownership
absent revocation, and she could not transfer legal title to the trust’s one-
half remainder interest in her individual capacity.” The court held the quit
claim deed was void ab initio. As the judgment was final as to Schlossberg,
he appeals.

   Summary judgment is proper if there is no genuine issue of material
fact, and if the moving party is entitled to a judgment as a matter of law.
Volusia Cty. v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126, 130 (Fla.
2000). The standard of review from an appeal of a final judgment based
on an order granting summary judgment is de novo. Id. Review of the

                                      3
terms of a trust agreement and its proper interpretation is a question of
law subject to de novo review. Burgess v. Prince, 25 So. 3d 705, 706 (Fla.
2d DCA 2010). In this case, the parties stipulated to the evidence, and no
factual disputes existed. See Aberdeen at Ormond Beach, L.P., 760 So. 2d
at 130.

   As recognized by the Florida Supreme Court,

      A revocable trust is a unique type of transfer . . . . Since [the
      settlor] is the sole beneficiary of the trust during [the
      settlor’s] lifetime, [the settlor] has the absolute right to call
      the trust to an end and distribute the trust property in any
      way [the settlor] wishes.

Fla. Nat’l Bank of Palm Beach County v. Genova, 460 So. 2d 895, 897 (Fla.
1985). See also Siegel v. Novak, 920 So. 2d 89, 95 (Fla. 4th DCA 2006)
(“The central characteristic of a revocable trust is that the settlor ‘has the
right to recall or end the trust at any time, and thereby regain absolute
ownership of the trust property.’”)

   The 2005 deed, executed by the settlor individually, as well as by both
trustees of the trust, is valid in accordance with the trust provisions for
two reasons. First, the trust allowed the settlor to revoke the trust in whole
or in part by a written instrument delivered to the trustees. Second, the
trust authorized the trustees to apply any part of the trust assets to the
settlor’s use.

   Sadie’s trust provided that the trust could be revoked, in whole or in
part, by an instrument in writing delivered to the trustees. It did not
describe the form of that instrument. “Ordinarily a power to revoke the
trust will be interpreted as including a power to revoke the trust in part by
withdrawing a part of the trust property from the trust.” Restatement
(Second) of Trusts § 330 (1959). The deed, withdrawing the condo from
the trust, was a written instrument executed by both co-trustees and the
settlor. It had the effect of removing the condo from the trust. Therefore,
the settlor revoked the trust in part as to the condominium.

   The parties agree that the trustees could convey the condo to the
settlor. The trustees did so through the 2005 deed. This would also have
been considered the application of the trust assets for the settlor’s use,
which the trustees are specifically authorized to do through conveyance of
property. Thus, the co-trustees could have conveyed the property to the
settlor, which would have removed the condo from the trust. Then the

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settlor could have conveyed the property free of trust to herself for life with
remainder to Wisotsky.

    We liken this case to Countrywide Funding Corp. v. Palmer, 589 So. 2d
994 (Fla. 2d DCA 1991). The question in that case was whether a joint
tenancy with right of survivorship could be terminated by a deed from one
joint tenant to himself. The deeded property had been owned by a mother
and son with right of survivorship. Through a quit claim deed the property
was conveyed to the son individually, but it was shown that the mother’s
signature was forged. Therefore, only the son conveyed to himself. Based
upon existing Florida law, the trial court found that, to be effectual, the
son had to convey the property first to a strawman who could then convey
the property back to the son; otherwise, the quit claim did not terminate
the joint tenancy with right of survivorship.

   On appeal, the court disagreed that conveyance to the strawman was
necessary:

      We recognize, as did the trial court, that a joint tenant under
      a joint tenancy with right of survivorship is entitled to
      terminate the joint tenancy by the conveyance of his interest
      to a third party. See 20 Am. Jur. 2d Cotenancy and Joint
      Ownership § 16 [p. 109] (1965). However, Ratinska v. Estate
      of Denesuk, 447 So. 2d 241 (Fla. 2d DCA 1983), held that
      although, in the creation by a person of a joint tenancy with
      right of survivorship in that person and another, the use of a
      strawman to whom to first convey that person’s interest before
      the time of the conveyance creating the joint tenancy is “an
      acceptable method of obtaining the desired result,” that “does
      not make it the only available or even the most desirable
      method.” 447 So. 2d at 243. As Ratinska added, “We see no
      point in requiring that property be conveyed twice when
      a single conveyance is just as effective and has the virtues
      of economy and efficiency.” Id. Although Ratinska was
      concerned with the creation of a joint tenancy, we see no
      reason why the rationale of that case would not also apply to
      the termination of a joint tenancy.

      Thus, we conclude that a joint tenancy with right of
      survivorship can be, and was in this case, terminated and a
      tenancy in common created by a conveyance by one joint
      tenant of his interest to himself.

Id. at 995-96. (Emphasis added.)

                                      5
   Applying the principle of Countrywide Funding to this case, the trustees
had the authority to convey the property to the settlor within the terms of
the trust, either as a principal distribution for her use or as a partial
revocation of the trust. Then the settlor, individually could have conveyed
the property to herself for a life estate, remainder to her daughter.
Therefore, when the quitclaim deed was executed by both trustees and by
the settlor individually, the deed accomplished with a single conveyance
the same requirements as two separate conveyances. We see no need to
demand two separate conveyances.

    Hirschhorn argues that the trustees had no power to gift the remainder
interest in the condo unit to Wisotsky. However, when the one transaction
is considered the combination of two transactions, it is apparent that the
trustees did not gift the remainder interest, Sadie did.

   The trial court cited to Aronson v. Aronson, 930 So. 2d 766 (Fla. 3d DCA
2006), to hold that Sadie could not transfer title to herself in her individual
capacity, but Aronson is distinguishable. In Aronson, the settlor of a trust
was both a life beneficiary and a trustee of the revocable trust he created.
He conveyed property to himself as trustee. Later in the year, the settlor
conveyed that property in his individual capacity as “a married man” to
his second wife by quit claim deed. The deed was not executed by him as
trustee. The court determined that “[o]nce the settlor held the property as
trustee, for the benefit of the beneficiaries of the trust, he no longer
possessed the power to convey the property in his individual capacity.” Id.
at 767. The difference, of course, between Aronson and this case, is that
Sadie conveyed the condo both individually and as trustee, and both
trustees executed the conveyance. The 2005 deed removed the property
from the trust, because it was properly executed by both trustees. The
deed conveyed the property from Sadie to herself, with a life estate, and
then with the remainder to her daughter, because it was properly executed
in her individual capacity.

   That the 2005 deed consolidated the two transfers is no reason to
invalidate the settlor’s right to control her property, consistent with the
terms of her revocable trust. Given the unique nature of the revocable
trust and the settlor’s right to control the disposition of her own property,
the trial court erred in declaring the deed invalid. Therefore, Wisotsky’s
conveyance of the entire property to Schlossberg was also valid.

   Even though we find the deed to be valid, we address Schlossberg’s
additional claim that he was a bona fide purchaser for value. That defense
should have been available to Schlossberg even if the trustees did not have

                                      6
the authority to convey pursuant to the terms of this unrecorded revocable
trust. “Where all the essential legal requisites of a deed are present, it
conveys legal title.” McCoy v. Love, 382 So. 2d 647, 649 (Fla. 1979).
Generally, void deeds are limited to forged deeds or deeds that violate the
constitutional protection of homestead. See, e.g., Zurstrassen v. Stonier,
786 So. 2d 65, 68 (Fla. 4th DCA 2001) (holding that a forged deed is void
and “thus creates no legal title nor affords protection to those claiming
under it.”); Chapman v. Chapman, 526 So. 2d 131, 134 (Fla. 3d DCA 1988)
(holding that deed executed by a husband to convey homestead property
to his second wife was void ab initio because it violated the Florida
Constitution). The 2005 deed complied with all the legal requirements to
convey legal title.

    The trial court based its finding that the deed was void on Brigham v.
Brigham, 11 So. 3d 374 (Fla. 3d DCA 2009). In Brigham, a complicated
trust case, a trustee improperly transferred trust property to himself
individually and then sold it to a third party. The court held that the
transfer to himself without court approval was prohibited by section
737.403(2), “[t]hus, unless there was prior approval by the court
authorizing the transfer that Dana made as Trustee, the transfer is void.”
Id. at 382. We find it significant that the court held that the transfer was
void, rather than finding that the deed was void, because of the relief
granted. The court ordered the trustee to refund to the trust the proceeds
of the sale to the third party. Had the deed from the trustee to himself
individually been void, then the property should have been recovered by
the trust, not merely the proceeds. Thus, Brigham does not offer support
to declare the deed itself void as to third party bona fide purchasers.
Because we have found that the conveyance of the condo in this case did
not violate the terms of the trust, the determination of Schlossberg’s status
as a bona fide purchaser need not be made.

   For the foregoing reasons, we reverse the final judgment of the trial
court which determined that Wisotsky owned only an undivided one-half
interest in the condominium when she sold it to Schlossberg and that the
Estate of Kaporovsky continues to own an undivided half of the
condominium. On remand, we direct that the trial court enter a judgment
declaring that Schlossberg is the rightful owner of the entire
condominium. Our rulings in no way decide any issues with respect to
the remaining claims between the Estate and Wisotsky.

DAMOORGIAN and KUNTZ, JJ., concur.

                            *        *         *

                                     7
Not final until disposition of timely filed motion for rehearing.

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