Court Opinion

ID: 4168958
Source: CourtListenerOpinion
Date Created: 2017-05-17 15:10:47.919719+00
Date Added: 2024-06-11T13:24:33.993346
License: Public Domain

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
                     MOTION AND, IF FILED, DETERMINED

                                            IN THE DISTRICT COURT OF APPEAL

                                            OF FLORIDA

                                            SECOND DISTRICT

JILL KELLY; JEFF FALKENTHAL; and            )
JUDY L. MORS-KOTRBA, as successor           )
trustee,                                    )
                                            )
             Appellants,                    )
                                            )
v.                                          )      Case No. 2D16-2011
                                            )
DONNA LINDENAU,                             )
                                            )
             Appellee.                      )
                                            )

Opinion filed May 17, 2017.

Appeal from the Circuit Court for Manatee
County; Gilbert Smith, Judge.

Barry F. Spivey of Spivey & Fallon, P.A.,
Sarasota, for Appellants Jill Kelly and
Jeff Falkenthal.

Scott H. Carter of Dunlap & Moran, P.A.,
Sarasota, for Appellant Judy L.
Mors-Kotrba.

David A. Wallace, Morgan R. Bentley,
and Amanda R. Kison of Bentley &
Bruning, P.A., Sarasota, for Appellee.

MORRIS, Judge.
              The appellants, Jill Kelly (Jill), Jeff Falkenthal (Jeff), and Judy L. Mors-

Kotrba (Judy), as successor trustee, appeal a final judgment reforming a trust and

requiring Judy to transfer title to real property to a trust beneficiary, the appellee, Donna

Lindenau. Below, Judy petitioned for a declaratory judgment in her capacity as

successor trustee of a trust created by the decedent, Ralph Falkenthal (Ralph).1 Judy

alleged that two amendments to the trust were not signed by two witnesses as required

by Florida law. Lindenau then filed a counterclaim seeking reformation of the trust in

relation to the second amendment. Following a bench trial, the trial court denied the

petition for a declaratory judgment, granted Lindenau's counterclaim, and ordered Judy

to transfer the subject real property to Lindenau. Because we conclude that the

amendments to the trust were not validly executed and, as a result, that reformation of

the trust could not occur, we reverse the final judgment.2

              I. BACKGROUND

              Ralph created his revocable trust in December 2006 while he still resided

in Illinois. The trust was validly executed pursuant to Illinois law. The trust provided

that upon his death, the trust assets would be distributed to his wife. In the event that

she predeceased him, they would be evenly distributed to his three children, Jill, Jeff,

and Judy. Ralph's wife predeceased him, and Ralph subsequently moved to Florida.

              In 2009, Ralph met Lindenau. In 2010, Ralph purchased a house located

in Bradenton, and he resided there with Lindenau. Subsequently, Ralph executed a first

              1
                Because one of the appellants has the same last name as the decedent,
we will refer to the appellants and the decedent by their first names to avoid confusion.
              2
               While the parties are primarily concerned with the second amendment,
the final judgment denied the petition for declaratory judgment, which had addressed
both amendments.

                                            -2-
amendment to the trust on October 25, 2012, the testamentary aspects of which are

irrelevant to this appeal.3 On December 18, 2014, Ralph executed a second

amendment that modified the trust to provide for a specific devise to Jeff of a Sarasota

residence. The second amendment also provided for a specific devise of the Bradenton

residence to Lindenau. No other changes were made to the remaining trust residue. At

the time of execution of both the first and second amendments, Ralph resided in

Florida. Yet, both amendments were prepared by Ralph's Illinois attorney, and the

parties have not disputed Lindenau's assertion that the amendments were prepared in

accordance with Illinois law. Even though the amendments were executed in the

presence of two witnesses, they were only signed by one of the witnesses.4

              Ralph died on February 7, 2015, whereupon the trust became irrevocable.

Judy, in her capacity as successor trustee, then filed a petition for declaratory judgment

to determine the validity of the first and second amendments. Lindenau filed her

counterclaim, which she later amended, seeking a reformation of the trust in relation to

the second amendment. Lindenau argued that the error in failing to have two witnesses

sign the second amendment was a mistake of law. In the alternative, Lindenau argued

for the imposition of a constructive trust in her favor regarding the Bradenton house.

              3
                  The first amendment did not involve a devise to Lindenau.
              4
               We note that Illinois law requires that wills be signed by the testator (or an
authorized signer) and "attested in the presence of the testator by 2 or more credible
witnesses." 755 Ill. Comp. Stat. Ann. 5/4-3(a) (West 2012-2014). At least one Illinois
court holds that the "attesting" requirement means that each of the two witnesses must
also sign the will. In re Estate of Lum, 699 N.E.2d 1049, 1050-51 (Ill. App. Ct. 1998).
The parties have not explained whether trust documents must conform to will
requirements in Illinois. However, because the parties have not disputed Lindenau's
assertion that the amendments were validly executed under Illinois law and because
that issue does not control this case, we need not resolve that issue.

                                             -3-
               Jill and Jeff filed a motion for summary judgment, arguing that the

amendments were invalid because they were not executed in accordance with Florida

law. They also argued that reformation was not appropriate because Lindenau was not

seeking to reform trust provisions already contained within the trust but was instead

seeking to validate the otherwise invalid amendment. The trial court denied the motion

for summary judgment. The case proceeded to a bench trial with the trial court

ultimately granting Lindenau's reformation request pursuant to section 736.0415, Florida

Statutes (2016), and ordering Judy, as successor trustee, to transfer the Bradenton

house to Lindenau within ten days of the final judgment. This appeal followed, and the

trial court granted a stay of the transfer of the Bradenton house pending the outcome of

this appeal.

               II. ANALYSIS

               There is no dispute that Ralph's intent was to leave the Bradenton house

to Lindenau. There is also no dispute that the second amendment was only signed by

one of the witnesses. Rather, the dispute focuses on whether an improperly executed

trust amendment can be validated through reformation pursuant to section 736.0415.

The trial court concluded that section 736.0415 permitted reformation in this case

because Lindenau met her burden of proving that "the accomplishment of the settlor's

intent was affected by a mistake in law." Because the trial court's conclusion rests on a

question of law, we review the final judgment de novo. See Gessa v. Manor Care of

Fla., Inc., 86 So. 3d 484, 491 (Fla. 2011); Megiel-Rollo v. Megiel, 162 So. 3d 1088,

1094 (Fla. 2d DCA 2015).

                                            -4-
              In Florida, the testamentary aspects of a revocable trust5 are invalid

unless the trust document is executed by the settlor of the trust with the same

formalities as are required for the execution of a will. § 736.0403(2)(b), Fla. Stat.

(2014).6 In turn, the portion of the Florida Probate Code that addresses the execution of

wills requires that wills must be signed in the presence of two attesting witnesses and

that those attesting witnesses must themselves sign the will in the presence of the

testator and of each other. § 732.502(1)(b)-(c), Fla. Stat. (2014). Consequently, a

trust—or an amendment thereto—must be signed by the settlor in the presence of two

attesting witnesses and those witnesses must also sign the trust or any amendments in

the presence of the settlor and of each other. These requirements are strictly

construed. Cf. Allen v. Dalk, 826 So. 2d 245, 247 (Fla. 2002) (explaining that strict

compliance with statutory requirements for execution of a will is mandated in order to

create a valid will and recognizing that absent the requisite formalities, a will "will not be

admitted to probate").

              The Florida Supreme Court has affirmed a circuit court's refusal to admit a

will to probate where one of the two witnesses refused to sign it. Crawford v. Watkins,

75 So. 2d 194, 195, 197-98 (Fla. 1954). The court in Crawford explained that the

signature of an attesting witness serves "as testimony of the fact that all legal steps

necessary to make the will a legal instrument have been taken by the testator." Id. at

              5
               Section 736.0403(2)(b) defines "testamentary aspects" to mean trust
provisions "that dispose of the trust property on or after the death of the settlor other
than to the settlor's estate."
              6
               We cite to the 2014 version of the statute since the attempt to execute
the second amendment occurred on December 18, 2014. Although the attempt to
execute the first amendment occurred in 2012, the 2012 version of the statute is
substantively the same.

                                             -5-
197-98 (emphasis added). Thus, where a testator, or a settlor in the case of a trust,

fails to strictly comply with the statutory requirements for valid execution of the relevant

document, the document remains invalid and unenforceable. Id.; see also Aldrich v.

Basile, 136 So. 3d 530, 533 (Fla. 2014) (explaining that codicil that was only signed by

one witness "was not an enforceable testamentary instrument under the Florida Probate

Code"); Allen, 826 So. 2d at 248 (expressly refusing to impose a constructive trust over

estate assets—despite the testator's clear intent as stated within the will—where the

testator failed to sign the will, a "major requirement for a validly executed will").

              Lindenau concedes that the second amendment was invalid under Florida

law, but she argues that the failure to obtain the second witness's signature was a

mistake of law affecting the accomplishment of Ralph's intent and that the appropriate

remedy is reformation. We disagree. Although Lindenau asks this court to distinguish

Allen, Crawford, and Aldrich on the basis that they either predated the enactment of

section 736.0415 or failed to address it, we are not persuaded that any distinction is

dispositive in this case due to the language of the statute itself.

              Section 736.0415 provides in relevant part that the terms of a trust can be

reformed "to conform . . . to the settlor's intent if it is proved by clear and convincing

evidence that both the accomplishment of the settlor's intent and the terms of the trust

were affected by a mistake of fact or law, whether in expression or inducement." Aside

from the issue of the settlor's intent, the statute thus focuses on the terms of the trust,

not the execution of it. See also Megiel-Rollo, 162 So. 3d at 1094 (quoting Morey v.

Everbank, 93 So. 3d 482, 489 (Fla. 1st DCA 2012), for the proposition that reformation

is used to correct a "mistake in the form of expression or articulation" such as where a

                                             -6-
trust includes a term that "misstates the donor's intention[,] fails to include a term that

was intended to be included[,] or includes a term that was not intended to be

included"). Indeed, in discussing Florida's liberal policy regarding reformation, this

court has acknowledged that the remedy is used "to cause the instrument to reflect the

true agreement of the parties when the terms of the agreement have not been clearly

expressed in the instrument because of [a] mutual mistake or inadvertence." Id. at

1097 (emphasis added) (quoting Tri-Cty. Prod. Distrs., Inc. v. Ne. Prod. Credit Ass'n,

160 So. 2d 46, 49 (Fla. 1st DCA 1963)). But here, the terms of the second amendment

are clear that Ralph intended to leave the Bradenton house to Lindenau. Thus there

were no terms of the trust that needed reformation. Rather, Lindenau sought

reformation to remedy an error in the execution of the second amendment. But by the

statute's terms, reformation is only available to remedy mistakes that affect "both the

accomplishment of the settlor's intent and the terms of the trust." § 736.0415.

              We reject Lindenau's argument that Megiel-Rollo can be read to mean that

reformation is available even where a trust was invalidly executed. In that case,

although the circuit court ruled that no valid trust had ever been created, that finding

was predicated on the fact that the attorney who drafted the trust failed to prepare a

Schedule of Beneficial Interests that was expressly referenced in the trust document.
162 So. 3d at 1092. In turn, the circuit court found that the trust was void ab initio

because it failed to name any beneficiaries. Id. at 1094. However, on appeal, we

concluded that reformation was available because the attorney committed a drafting

error by failing to prepare and incorporate the Schedule of Beneficial Interests into the

trust, which expressly referenced the Schedule. Id. at 1097. Thus we construed the

                                             -7-
error as one affecting the settlor's intent and the terms of the trust, not the execution of

it. Indeed, the opinion makes clear that the settlor "executed the Trust with the requisite

formalities for the execution of a will." Id. at 1091. Consequently, Megiel-Rollo does not

mandate an affirmance here.

              As an alternative basis for affirmance, Lindenau asks this court to apply

the "tipsy coachman" doctrine7 and to hold that a constructive trust should be imposed

on the Bradenton house. She acknowledges that the circuit court never ruled on this

issue below due to its finding that reformation was appropriate, but she contends that a

constructive trust is a valid remedial option here because the parties all agree that

Ralph intended to leave the Bradenton house to her. In making this argument,

Lindenau relies on In re Estate of Tolin, 622 So. 2d 988, 990-91 (Fla. 1993), wherein the

Florida Supreme Court held that a constructive trust should be imposed where the

testator failed to validly revoke a codicil to a will, but where it was clear that his intention

had been to revoke the codicil and that that intention was frustrated by his mistake in

destroying a copy rather than the original.

              We decline to hold that a constructive trust should be imposed in this

case. We acknowledge that the court in Tolin used the constructive trust remedy to

work around the invalid revocation of a codicil because the testator's intent was clear

and because a third party would otherwise benefit from the testator's mistake at the

expense of the intended beneficiary. Further, we are mindful of the facts that, as in

Tolin, Ralph's intent is clear in this case and a reversal of the final judgment will result in

              7
                 Dade Cty. Sch. Bd. v. Radio Station WQBA, 731 So. 2d 638, 644 (Fla.
1999) (explaining that even where "a trial court's ruling is based on improper reasoning,
the ruling will be upheld if there is any theory or principle of law in the record which
would support the ruling").

                                              -8-
a benefit to Ralph's estate (i.e., to Jill, Jeff, and Judy) at the expense of Lindenau.

However, there was no dispute in Tolin about the validity of the original will or codicil.

And in Allen, the court expressly distinguished Tolin and declined to extend it beyond its

facts. Allen, 826 So. 2d at 248. Instead, the court in Allen refused to impose a

constructive trust because the testator had failed to comply with a "major requirement

for a validly executed will" (i.e., the testator's signing of it) and thus "[a]n order imposing

a constructive trust under these facts would only serve to validate an invalid will." Id.

              Read in conjunction, Tolin and Allen make it clear that while the imposition

of a constructive trust might be appropriate where a will (and thus a trust) has been

validly executed, that remedy is not appropriate where there is an error in the execution

of the document. We conclude that that distinction should be extended to cases such

as this one where an amendment to a trust was not validly executed. Because there

was no valid, enforceable amendment, the imposition of a constructive trust on the

Bradenton house "would only serve to validate an invalid" amendment. Allen, 826 So.
2d at 248. Accordingly, we hold that the trial court erred by denying the petition for

declaratory judgment, by applying section 736.0415 to reform the second amendment,

and by requiring the transfer of the Bradenton house to Lindenau. Our reversal makes

it unnecessary to decide a second issue raised solely by Judy in her capacity as

successor trustee.8

              Reversed and remanded.

LUCAS and BADALAMENTI, JJ., Concur.

              8
               Judy argued that the requirement in the final judgment for her to transfer
the Bradenton house to Lindenau within ten days exceeded the scope of relief sought
by Lindenau in her amended counterclaim and improperly required Judy to distribute
trust property while the action was still pending.

                                             -9-