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There’s trouble brewing over a bank account and vacant lot “Widow” claims she owned jointly as a “tenancy by the entireties” or “TBE” property with her now deceased husband. The call with Widow’s family lawyer went well, so you agree to meet with her to discuss the case. You won’t have a prayer of properly evaluating this case if you don’t know the dramatically different evidentiary rules applying to TBE cases involving personal property vs. real property. The most important decision any probate litigator makes happens long before the first pleading is filed: it’s deciding when to say NO and when to say YES to a new case.

Fortunately for you and your prospective client, the 4th DCA recently published two opinions in separate cases explaining in plain English the very different evidentiary rules controlling TBE cases involving personal property vs. real property. This is your road map for successfully evaluating TBE cases.

Case Study No. 1: Joint Bank Account (Personal Property)

Wexler v. Rich, — So.3d —-, 2012 WL 555482 (Fla. 4th DCA February 22, 2012)

In Beal Bank, SSB v. Almand and Assocs., 780 So.2d 45 (Fla.2001), the Florida supreme court receded from its prior law that created no presumption of a tenancy by the entireties when a husband and wife opened a joint bank account. The court held that unless the signature card on the account expressed a contrary intent, an account opened by a husband and wife creates a presumption that the account is held by the entireties, assuming that the other unities of time, title, and possession are present. “The presumption we adopt is a presumption affecting the burden of proof pursuant to section 90.304, Florida Statutes (2000), thus shifting the burden to the creditor to prove by a preponderance of evidence that a tenancy by the entireties was not created.” Beal Bank, 780 So.2d at 58–59. The court’s holding in Beal was later codified in a 2008 amendment to F.S. 655.79(1), providing that “[a]ny deposit or account made in the name of two persons who are husband and wife shall be considered a tenancy by the entirety unless otherwise specified in writing.”

So here’s the question, what does a bank account opening form have to say to qualify as having “specified in writing” that a husband and wife joint account is NOT a TBE account? Answer: if the form had an option for TBE ownership and a separate option for “joint account,” and the married couple checks the joint account box, even if they didn’t have the foggiest idea of what they were doing legally, that’s enough. They’ve “specified in writing” that they did not want their joint account to be deemed a TBE account. Here’s how the 4th DCA made this point in the linked-to case above.

This case demonstrates [one] type of express disclaimer contemplated by Beal Bank. Bank United provided the Riches with account agreements containing the option of a tenancy by the entireties, but that option was not selected. Rather, the agreements established joint tenancies with right of survivorship. The Riches signed the agreements after having had a chance to review them. Freedom of contract “includes freedom to make a bad bargain.” Posner v. Posner, 257 So.2d 530, 535 (Fla.1972). Florida adheres to the principle that a “party has a duty to learn and know the contents of a proposed contract before he signs” it. Mfrs.’ Leasing, Ltd. v. Fla. Dev. & Attractions, Inc., 330 So.2d 171, 172 (Fla. 4th DCA 1976). Therefore, “[o]ne who signs a contract is presumed to know its contents.” Addison v. Carballosa, 48 So.3d 951, 954 (Fla. 3d DCA 2010). When the Riches signed the account agreements, they “expressly select[ed]” a form of account ownership other than a tenancy by the entireties, within the parameters set by the Supreme Court in Beal Bank.

The trial judge found no express disclaimer of tenancies by the entireties primarily because the bank employee did not discuss or explain the account ownership options with the Riches. As it applies to the mechanics of the bank-customer relationship in the opening of accounts, Beal Bank does not require a bank to explain the legal ramifications of the various account options. Only a handful of attorneys in Florida are able to describe the differences between a tenancy by the entireties bank account and a joint account with right of survivorship. The bank’s obligation is to clearly provide customers with the option of a tenancy by the entireties account, not to assist them in making a considered choice. To paraphrase the old proverb, a bank’s duty under Beal Bank is to lead the horse to water, not to make him drink it.

The parties have not argued the application of section 655.79(1), Florida Statutes (2009), apparently believing it is inapplicable because an amendment to it did not become effective until October 1, 2008. This 2008 amendment provides that “[a]ny deposit or account made in the name of two persons who are husband and wife shall be considered a tenancy by the entirety unless otherwise specified in writing.” Ch. 2008–75, § 8, Laws of Fla. (2008). We note that if the statute were to apply here, the signed account agreements containing the option of a tenancy by the entireties and designating the accounts as “Multiple–Party Account[s] with Right of Survivorship” would satisfy the statutory requirement that an alternative form of account ownership be “specified in writing.”

Lesson learned?

TBE cases involving joint bank accounts will turn on the boilerplate text of the account opening form, regardless of what the parties were actually thinking when they checked the box and signed at the bottom. If you’re thinking about taking one of these cases on, step 1 is to review the account opening form.

Case Study No. 2: Joint Deed (Real Estate)

Bridgeview Bank Group v. Callaghan, — So.3d —-, 2012 WL 1020044 (Fla. 4th DCA March 28, 2012)

What’s interesting about joint real estate cases is that it all boils down to the deed. If the deed doesn’t mention some form of ownership other than TBE, then the real property is deemed to be owned as TBE, and that presumption is NOT rebuttable by evidence of contrary intent. The only way to get around this TBE presumption for deeds is if you can prove it’s the product of fraud. Proving fraud is orders of magnitude more difficult than the evidence-shifting rule applicable to joint bank accounts. In other words, once the presumption of TBE ownership is triggered by the deed . . . your case is probably over. Here’s how the 4th DCA articulated this point in the linked-to case above.

Beal recognized the rule with respect to real property, stating “[w]here real property is acquired specifically in the name of a husband and wife, it is considered to be a ‘rule of construction that a tenancy by the entireties is created, although fraud may be proven.’” 780 So.2d at 54 (quoting First Nat. Bank of Leesburg v. Hector Supply Co., 254 So.2d 777, 780 (Fla.1971)). Beal also cited with approval to In re Suggs’ Estate, 405 So.2d 1360, 1361 (Fla. 5th DCA 1981), that “‘[a] conveyance to spouses as husband and wife creates an estate by the entirety in the absence of express language showing a contrary intent.’” 780 So.2d at 54 (emphasis supplied).

Based upon the foregoing, the conveyance to Daniel and Milea created a tenancy by the entireties, and no express language in the deed showed a contrary intent. Therefore an estate by the entireties is presumed. That presumption is not rebuttable, according to [Losey v. Losey, 221 So.2d 417 (Fla.1969)], although it could be set aside if fraud were proven. Bridgeview did not even attempt to prove fraud in this case with respect to the creation of the tenancy by the entirety in 2004.

Beal does not change this result. First and foremost, Beal did not overrule Losey, and the supreme court does not intentionally overrule itself sub silentio. Puryear v. State, 810 So.2d 901, 905 (Fla.2002). Second, Beal involved personal property in the form of bank accounts. . . . . [In Beal] the court established a rebuttable presumption for bank accounts, involving the burden of proof, not the rule of construction established in Losey for real property.

Applying a rule of construction for real property instead of a burden-shifting presumption can be explained by the real property transaction itself. The use of a rebuttable presumption applied to the title to real property would cause significant problems with titles, which are recorded and serve as notice to the world of the ownership of property. Which title insurer could feel secure in insuring property having a conveyance to a husband and wife in the chain of title, if that title could be rebutted by evidence extrinsic to the deed itself? The integrity of the title to real property could be called into question when titles could be overturned in litigation by rebuttable presumptions.

Lesson learned?

In a TBE case involving real estate, it’s all about the deed. If it names husband and wife, the TBE presumption is irrevocably triggered in the absence of fraud (which is never easy to prove). When one of these cases comes your way, you won’t know enough to figure out the fraud question until you’ve dug into the facts, but by simply knowing what question to ask (“is there fraud?”), you’ve won half the battle. What you don’t want to do is find yourself on the losing end of one of these cases because you didn’t even know fraud was an issue, which is apparently what happened to the creditor in the linked-to case above. As noted by the 4th DCA, “Bridgeview did not even attempt to prove fraud in this case.” Oops!