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Corya v. Sanders

District Court of Appeal of Florida, Fourth District.

Jan 10, 2012

Judgment

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Appellate Opinion Summary: Corya v. Sanders (District Court of Appeal of Florida, Fourth District), Nos. 4D09–4096 & 4D10–61 (2012-01-10)

Factual and Procedural Background

Roy Sanders is a beneficiary of several family-created trusts. His mother, Doris (Doris Corya, also referenced as Doris Sanders), has served as trustee of multiple trusts for many years. The opinion concerns four trusts central to the dispute:

The Eleanor Rich trust, created by Eleanor Rich's will that established trusts for her children, including Doris. The trust provided life income to Doris with power to invade principal for her benefit and directed remaining principal on Doris's death to Doris's children, including Roy.
A Sanders trust (created in New York in 1953 of municipal bonds), which Roy claimed benefited him; a copy of that trust is not in the record although Doris testified in deposition about its existence and claimed to have given a copy to Roy's attorneys.
Two trusts created by John Corya in 1993: a revocable trust and an irrevocable trust. Both provided income to Doris for life and contained provisions addressing accountings, including language allowing the trustee to keep accounts available for inspection and to "may deliver copies to the beneficiaries eligible within the period covered thereby to receive benefits from the trust which is the subject of said account."

Procedurally, Roy filed a second amended complaint seeking to compel annual accountings for the four trusts. Doris answered, denied material allegations, and asserted affirmative defenses including statute of limitations and defenses described as waiver and estoppel (and allegations sufficient to constitute laches). Roy moved for summary judgment. The trial court granted summary judgment, ordered Doris to provide accountings for all trusts, and awarded attorney's fees while prohibiting use of trust funds to pay those fees. Doris appealed. During the pendency of the appeal—after this court denied a motion for stay—Doris filed various accountings that Roy contended were incomplete; the appellate court concluded the case was not moot and proceeded to decide the appeal.

Legal Issues Presented

Whether the trial court erred by granting summary judgment compelling Doris (trustee) to provide accountings when genuine issues of material fact existed and the moving party failed to negate the trustee's affirmative defenses.
Whether New York law should have governed the Eleanor Rich Trust and the Sanders trust instead of Florida law, and whether Doris waived reliance on New York law by failing to raise it in the trial court.
Whether Roy, as the moving party, conclusively established entitlement to accountings for the Corya trusts given the trusts' provisions leaving delivery of accountings to trustee discretion and whether Florida statutory changes affect the availability of annual accountings for periods before the statute's effective date.

Arguments of the Parties

Appellant's (Doris Corya) Arguments

Doris argued that New York law should govern the Eleanor Rich Trust because it contains a specific governing-law provision requiring construction under New York law. She also argued that the Sanders trust (created in New York) should be governed by New York law, and that application of Florida law to require annual accountings was therefore erroneous.
Generally, Doris asserted affirmative defenses in her answer including statute of limitations, waiver, estoppel, and factual allegations sufficient to constitute laches, which she contended barred or limited Roy's claims for accountings.

Appellee's (Roy Sanders) Arguments

Roy maintained that Doris waived any reliance on New York law by failing to raise or argue it in the trial court and by relying on Florida law in her pleadings and rehearing motion; therefore the trial court properly applied Florida law.
Roy argued that the absence of the Sanders trust instrument in the record did not prevent a summary-judgment determination that accountings were required because Doris had not disputed the trust's existence and Roy's status as a beneficiary; accordingly she had a duty to provide accountings.
Roy moved for summary judgment asserting Doris had a duty to provide periodic written accountings for the trusts and sought attorney's fees; the trial court granted summary judgment and awarded fees (a ruling reversed on appeal as discussed below).

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So.2d 126 (Fla. 2000)	Standard of review for summary judgment is de novo.	Cited to state that appellate review of summary judgment is de novo and to frame the standard applied on appeal.
Weinstein Design Group, Inc. v. Fielder, 884 So.2d 990 (Fla. 4th DCA 2004)	When reviewing summary judgment, examine the record in the light most favorable to the non-moving party.	Used to emphasize that the record must be viewed favorably to Doris (the non-moving party) when considering whether genuine issues of material fact exist.
Albelo v. S. Bell, 682 So.2d 1126 (Fla. 4th DCA 1996)	Burden is on the moving party to show the complete absence of any genuine issue of material fact.	Quoted to support the proposition that Roy, as moving party, bore the burden to conclusively show no genuine issue of material fact.
Fini v. Glascoe, 936 So.2d 52 (Fla. 4th DCA 2006)	Authority cited in connection with summary judgment review (context: standard of review).	Included among authorities describing de novo review of summary judgment determinations.
Patten v. Winderman, 965 So.2d 1222 (Fla. 4th DCA 2007)	An order compelling an accounting is reviewed de novo.	Cited to establish that the appellate court reviews orders compelling accountings without deference to the trial court's factual findings.
Marine Envtl. Partners, Inc. v. Johnson, 863 So.2d 423 (Fla. 4th DCA 2003)	Failure to raise an argument in the trial court can constitute waiver of that argument on appeal.	Applied to conclude Doris waived reliance on New York law by not asserting it below.
Mesa Air Group, Inc. v. Delta Air Lines, Inc., 573 F.3d 1124 (11th Cir. 2009) (n.7)	Support for the principle that failure to raise an argument at the trial level can constitute waiver on appeal.	Cited as further support for the waiver conclusion regarding New York law.
Frost v. Regions Bank, 15 So.3d 905 (Fla. 4th DCA 2009)	Before a plaintiff is entitled to summary judgment, the plaintiff must either factually refute alleged affirmative defenses or establish they are legally insufficient.	Quoted and applied to conclude Roy failed to negate Doris's affirmative defenses and thus was not entitled to summary judgment.
Knight Energy Servs., Inc. v. Amoco Oil Co., 660 So.2d 786 (Fla. 4th DCA 1995)	Quoted authority on the burden to refute affirmative defenses at summary judgment.	Used as supporting authority (via quotation in Frost) to require the moving party to disprove affirmative defenses before obtaining summary judgment.

Court's Reasoning and Analysis

The court's analysis proceeded in several discrete steps, relying on standard summary-judgment principles and statutory context where relevant:

Standard of review: The court reiterated that summary judgment is reviewed de novo and that the record must be viewed in the light most favorable to the non-moving party. The mover bears the burden to show the absence of any genuine issue of material fact.
Choice of law for the Eleanor Rich and Sanders trusts: Doris contended New York law governed these trusts (the Eleanor Rich trust expressly provided for New York law; the Sanders trust was created in New York). The appellate court concluded Doris waived reliance on New York law by failing to raise it in the trial court and by relying on Florida law in her pleadings and rehearing motion. The court relied on precedent that failure to raise an argument below constitutes waiver.
Sufficiency of the record for the Sanders trust: Although the Sanders trust instrument was not in the record, Doris did not dispute the trust's existence or Roy's beneficiary status. The appellate court explained that, absent a dispute about existence or beneficiary status, summary judgment for an accounting was not precluded by the absence of the instrument in the record—however, Doris nonetheless waived reliance on New York law that might have altered the analysis.
The Corya trusts and statutory context: The Corya revocable and irrevocable trusts contained provisions giving the trustee discretion to deliver accountings only to "beneficiaries eligible within the period covered thereby to receive benefits." The court observed that Florida statutory law (section 736.0813(1)(d), as overridden by section 736.0105(2)(s) beginning in 2006) establishes a requirement for annual accountings that can override contrary trust provisions, but that enactment post-dated some periods at issue. Thus, for periods prior to the 2006 statute, Roy needed to show he was an eligible beneficiary for those periods to be entitled to accountings; Roy had not conclusively done so in the summary-judgment record.
Affirmative defenses: Doris pleaded multiple affirmative defenses including statute of limitations, waiver, estoppel and allegations sufficient to constitute laches. The court emphasized that Roy, as the moving party, was required to negate these affirmative defenses or show they were legally insufficient. Citing Frost (and underlying authority), the court concluded Roy did not negate the affirmative defenses and therefore was not entitled to summary judgment.
Outcome as to attorney's fees: Because the court reversed the grant of summary judgment, it also reversed the award of attorney's fees so that fee issues could be reconsidered in light of the reversal.

Holding and Implications

Holding:

THE COURT REVERSED the trial court's final summary-judgment order compelling accountings and also reversed the award of attorney's fees.

Implications and consequences:

The appellate court concluded that genuine issues of material fact existed and that the moving party (Roy) failed to negate the trustee's (Doris's) affirmative defenses, rendering summary judgment improper.
Because the summary judgment is reversed, the trial court's order requiring Doris to provide accountings and its award of attorney's fees are vacated for further proceedings consistent with the appellate decision.
The appellate court's opinion also determined that Doris waived reliance on New York law by not asserting it in the trial court; that waiver analysis may constrain future choice-of-law arguments on remand unless facts or procedural posture change.
No new binding precedent altering general summary-judgment standards was announced; the court applied established standards governing summary judgment, burden to negate affirmative defenses, waiver of arguments not raised below, and statutory interpretation regarding accountings and the effect of the 2006 statutory amendment.

Disposition note: POLEN and CONNER, JJ., concurred. The opinion reversed the summary judgment and remanded for further proceedings; the award of attorney's fees was likewise reversed for further consideration.

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WARNER

Marjorie Gadarian Graham of Marjorie Gadarian Graham, P.A., Palm Beach Gardens, for appellants. Gary A. Woodfield and Susan B. Yoffee of Haile, Shaw & Pfaffenberger, P.A., North Palm Beach, for appellee Roy Sanders.

WARNER, J.

Appellant challenges a final summary judgment in which the trial court ordered appellant to file accountings for various trusts of which appellant was trustee. Because there are disputed issues of material fact as well as the fact that the appellee, as moving party, failed to negate appellant's affirmative defenses, we reverse.

Appellee, Roy Sanders, is a beneficiary of several trusts that were established by family members, including his grandparents and his stepfather. His mother, Doris Corya, has been trustee of all of the trusts for many years.

The first trust involved in this suit was created by Eleanor Rich, the mother of Doris Corya. Rich executed a will that created trusts for each of her children (Doris and Arthur). The Eleanor Rich trust came into existence in 1974 when Eleanor died. Eleanor's daughter, Doris Sanders (now Corya), was the trust's beneficiary as well as its co-trustee. The trust provided income for life to Doris, with the ability to invade principal for her benefit. Upon her death, the remaining principal was to be divided into equal shares for the children of Doris, including her son Roy.

Doris's first husband was Sanders. Her second husband was Corya.

While not mentioned specifically in the complaint, Roy also claimed to be a beneficiary of the Sanders trust. No copy of that trust is in the record. In a deposition, Doris admitted that her mother set up a trust of municipal bonds for her and then to her children. The trust was created in New York in 1953. She claimed to have given a copy of the trust to Roy's attorneys.

Doris Sanders married John Corya in 1969. The third and fourth trusts involved in this appeal were created by John Corya in 1993. John Corya, a Florida resident, created a revocable trust and an irrevocable trust. John was the beneficiary of the revocable trust during his lifetime. Upon his death all trust income was to be paid to Doris Corya. The trustee had authority to invade principal for the benefit of Doris or for the support, health, and education of the beneficiaries who were the children of Doris and step-children of John Corya. However, after a step-child had attained his or her education, the trustee was not to consider disbursements for their benefit unless there was ample principal for the support of Doris or the other children. After Doris's death the remaining trust property was divided between Doris Sanders's children (John Corya's step-children), Roy Sanders, Rich Sanders, and Eleanor Sanders Drury. The irrevocable trust required the trustee to pay income to Doris for life and permitted the trustee, in the trustee's sole discretion, to invade principal for the support, education, and maintenance of a beneficiary. Both the Corya Revocable Trust and Irrevocable Trust contained provisions which permitted Doris to deliver copies of the trust accounting to the beneficiaries. Specifically, it stated:

Accountings by Trustee. The trustee shall prepare an account for each taxable year of each trust, and whenever a Trustee ceases to serve, an account shall be prepared from the time of the last prior account through the end of the period of service. The Trustee shall keep each account available for inspection by and

may

deliver copies to the beneficiaries eligible within the period covered thereby to receive benefits from the trust which is the subject of said account. (emphasis supplied)

Roy filed a second amended complaint seeking to compel an annual accounting of the four trusts. Doris answered, denying most material allegations and alleging various affirmative defenses, including statute of limitations, and an allegation of waiver and estoppel alleging that the trusts have been in existence thirty years, and by his conduct Roy should be estopped from demanding any accounting prior to 2008. After some discovery, Roy moved for summary judgment. The trial court granted the motion finding that Doris had the duty to provide Roy with periodic written accountings on all the trusts, which she failed to do. The court ordered her to provide accountings for all trusts and granted Roy's motion for attorney's fees, which she was not permitted to use trust funds to pay. She appeals. During the pendency of the appeal, and because this court denied a motion for stay, Doris filed various accountings, although Roy objected that they were incomplete. Therefore, we do not deem the issue to be moot. Moreover, our resolution may affect the award of attorney's fees.

Our decision in this case is controlled by the standard of review of a summary judgment:

The standard of review of an order granting summary judgment is de novo. Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So.2d 126, 130 (Fla.2000). When reviewing a ruling on summary judgment, an appellate court must examine the record in the light most favorable to the non-moving party. Weinstein Design Group, Inc. v. Fielder, 884 So.2d 990, 997 (Fla. 4th DCA 2004). Summary judgment cannot be granted unless the pleadings, depositions, answers to interrogatories, and admissions on file together with affidavits, if any, conclusively show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. Fla. R. Civ. P. 1.510(c). “[T]he burden is upon the party moving for summary judgment to show conclusively the complete absence of any genuine issue of material fact.” Albelo v. S. Bell, 682 So.2d 1126, 1129 (Fla. 4th DCA 1996). Fini v. Glascoe, 936 So.2d 52, 54 (Fla. 4th DCA 2006). In addition, a trial court's decision compelling an accounting is reviewed de novo. Patten v. Winderman, 965 So.2d 1222, 1224 (Fla. 4th DCA 2007).

Doris first argues that the court erred in failing to apply New York law to the Eleanor Rich Trust and the Sanders Trust. The Eleanor Rich Trust has a specific provision requiring that the trust be governed and construed under the laws of New York. While the Sanders trust is not in the record, it was established in New York, and Doris argues it should be governed by New York law. Therefore, she contends that the court erred in applying Florida law to require annual accountings to Roy.

Roy asserts that Doris waived the right to rely on New York law, because she did not raise it in the trial court and provided no New York law contrary to Florida law. In her answer and affirmative defenses, she relied on Florida law. While she did not file any response or affidavits in opposition to the motion for summary judgment, and no transcript of the hearing has been provided, in her motion for rehearing of the order granting summary judgment she also relied on Florida law. We agree that she has waived reliance on New York law by failing to argue it to the trial court. See Marine Envtl. Partners, Inc. v. Johnson, 863 So.2d 423, 426 (Fla. 4th DCA 2003); see also Mesa Air Group, Inc. v. Delta Air Lines, Inc., 573 F.3d 1124, 1130 n. 7 (11th Cir.2009). Moreover, the fact that the Sanders trust is not in the record does not prevent summary judgment for an accounting, because Doris did not dispute the fact that the trust was in existence, and Roy was a beneficiary. That was sufficient to require accountings, and Doris should have filed something in opposition to the motion in order to raise any defenses arising from the trust instrument itself.

As to the two Corya trusts, each had a provision which left to the discretion of the trustee the distribution of an accounting to “beneficiaries eligible within the period covered thereby to receive benefits from the trust which is the subject of said account.” Roy did not conclusively show that he was a beneficiary eligible to receive distributions from the trust. Although the requirement of an annual accounting in section 736.0813(1)(d), Florida Statutes, now overrides a trust provision to the contrary, see section 736.0105(2)(s), Florida Statutes, that provision of the statute was enacted in 2006. Thus, for those periods prior to its enactment, Roy would still be required to show his eligibility as a beneficiary. See also § 736.0813(5), Fla. Stat.

Doris raised several affirmative defenses to the claims for accounting, including estoppel and waiver, as well as statute of limitations defenses. While she did not use the word “laches” in her defenses, the affirmative defenses pled allegations sufficient to constitute laches. Roy did not negate any of the allegations of the affirmative defenses. “ ‘Before a plaintiff is entitled to a summary judgment of foreclosure, the plaintiff must either factually refute the alleged affirmative defenses or establish that they are legally insufficient to defeat summary judgment.’ ” Frost v. Regions Bank, 15 So.3d 905, 906 (Fla. 4th DCA 2009) (quoting Knight Energy Servs., Inc. v. Amoco Oil Co., 660 So.2d 786, 788 (Fla. 4th DCA 1995)). We conclude that the court erred in granting summary judgment where Roy did not negate the affirmative defenses raised.

Finally, because we have reversed the order granting summary judgment, we also reverse the award of attorney's fees for further consideration. POLEN and CONNER, JJ., concur. -------- Notes: