2d DCA: If I withdraw funds from a joint checking account to buy myself a $58K Rolex and $19K diamond ring, who owns this stuff when I die?
Connell v. Connell, --- So.3d ----, 2012 WL 3101842 (Fla. 2d DCA August 01, 2012)
Joint bank accounts and other forms of joint property get litigated all the time in contested probate proceedings, which means they end up as recurring topics on this blog [see here, here, here, here]. This time around the issue was who owned a $58,350 men's Rolex watch and $19,386 men's diamond ring the decedent purchased with funds from a joint checking account shortly before his death.
The decedent at the heart of this case was a 95 year old retired jeweler who enjoyed wearing expensive jewelry. In August 2009 while shopping with his wife (a woman 26 years his junior he married eleven months prior to his death) the decedent purchased a $58,350 men's Rolex watch. In February 2010 he purchased a $19,386 men's diamond ring. On both occasions the decedent used funds from a checking account titled jointly with his wife. According to the 2d DCA:
The decedent wore the watch and ring every day. Before he went to bed he took them off and put them in a pocket of one of his suits. In the two weeks before his death, the decedent was hospitalized twice. Before going to the hospital, he gave the watch and ring to Fana to put away, and she put them in her purse.
Decedent died in March 2010. Decedent's son/personal representative (PR) asked surviving spouse to return the watch and ring. Wife said no; PR sued.
So who gets the watch and ring?
Decedent and surviving spouse had signed an Antenuptial Agreement, which contained the following joint-property clause:
“Upon the death of one party during the continuation of the marriage and prior to any divorce, dissolution or separation of the parties, the survivor shall succeed to the entire interest of the deceased party in all other jointly-owned property.”
However, according to the Antenuptial Agreement, any property the decedent owned individually at death was all his, to dispose of as he pleased.
Bottom line, wife gets the watch and ring if they're joint property; son/PR gets them if they weren't. Seems simple right? It's not.
2d DCA Speaks:
The first question that needs to get answered is whether the watch and ring were purchased with joint funds. Answer: NO. Here's why:
It is undisputed that the joint checking account was a joint tenancy with a right of survivorship, not a tenancy by the entireties. When a joint account holder withdraws funds from a bank account that is held as a joint tenancy with the right of survivorship, it “terminates the ‘joint tenancy nature of the [funds] and severs the right of survivorship as to the funds withdrawn.’” Wexler v. Rich, 80 So.3d 1097, 1100 (Fla. 4th DCA 2012) (quoting Sitomer v. Orlan ex rel. Sitomer, 660 So.2d 1111, 1114 (Fla. 4th DCA 1995) (alteration in Sitomer)). When a joint tenant conveys an interest to a stranger, it “destroys the unities of possession and title.” Sitomer, 660 So.2d at 1114. We also note that Fana consented to the withdrawal of the funds for the jewelry purchases, so the decedent was not liable to her for her share of the joint account. See Nationsbank, N.A. v. Coastal Utils., Inc., 814 So.2d 1227, 1230 (Fla. 4th DCA 2002) (stating that “the withdrawing joint tenant is liable to the joint owner for that person's share of the withdrawn funds”). Thus, once the funds were withdrawn from the Connells' joint checking account, the funds lost their joint character.
OK, so if the watch and ring weren't purchased with joint funds, were they owned jointly? Because items of personal property, such as watches and rings, don't have documentation of title, you're left litigating whether the facts and circumstances indicate the couple intended joint vs. separate ownership. According to the 2d DCA, the facts weighed in favor of separate ownership. End result: PR gets the watch and ring.
The trial court's determination that the decedent did not make a gift of the watch and ring to Fana is not at issue on appeal. The trial court made a factual determination in the original order to the effect that the decedent's delivery of the watch and ring to Fana prior to his hospitalization was not made with the intention of gifting the property to her, but rather it was a temporary delivery for the purpose of safekeeping while he was in the hospital. The trial court did not change this ruling on rehearing.
* * * * *
Moreover, the fact that the decedent purchased the watch and ring with funds from the joint checking account (and a small contribution of cash from Fana) while they were shopping together does not make the watch and ring the joint property of the Connells. Rather, it is for whom the watch and ring were purchased rather than how they were purchased that is important. . . . Fana seems to equate the term “acquired jointly” with her being “involved” in the purchases that were made when they were together at the jewelry stores. However, the circumstances reveal that she was merely assisting the decedent buy a watch and ring for himself, not that they intended to jointly own the jewelry.
A joint tenancy has the characteristic of survivorship and to create a joint tenancy four unities must be present: the unities of possession, interest, title, and time. Beal Bank, SSB v. Almand & Assocs., 780 So.2d 45, 53 (Fla.2001). The unity of possession is joint ownership and control. Id. at 52. Here, the unity of possession was not present in either the watch or the ring. The watch and ring were intended for the decedent's exclusive use. The decedent had been in the jewelry business, and he enjoyed expensive jewelry. He had the possession and use of the watch and ring. In fact, the trial court even made the oral finding on rehearing that the items were “personal to the decedent.”
Furthermore, the watch and ring were jewelry items designed for a man. Fana never wore or used the watch and ring. And she referred to the items as “his” jewelry. When the decedent was not wearing the watch and ring, he put them in the pocket of one of his suits. Fana only took possession to store them for safekeeping before the decedent went to the hospital. The trial court found in its original order that if the decedent had returned from the hospital, “he would have again resumed using both the ring and watch.” In the original order the trial court also determined that the circumstances indicated the decedent's “intention, consistent with his actions, to use these items of jewelry for his personal benefit.”
The circumstances here failed to show the unity of possession as to Fana with respect to the watch and ring. Therefore, the watch and ring were the separate property of the decedent.
The law governing joint property cases is tricky and litigating them can be a fact-intensive undertaking (think depositions, subpoenas, production requests, interrogatories, etc.) Translation: these cases are rarely viable from a purely economic perspective (then again, litigants are rarely logical purists, see here). Even if the law and facts are a "slam dunk" in your favor, these cases are inherently uncertain and expensive to litigate. Consider the basic facts of this case: lawsuit was first filed in 2010, trial took place in 2011 (PR lost), appeal decided in 2012 (PR wins). In other words, two years after his father's death (and after having to overcome a trial-court loss by again rolling the dice on an appeal), PR finally gets the watch and ring back. Hope it was worth it.