Corya v. Sanders

• Decision Date: 11 February 2015
• Docket Number: Nos. 4D12–3067,4D12–3926.,s. 4D12–3067
• Parties: Doris Rich CORYA, as Trustee of the Sanders Trust, Doris Rich Corya and Paul J. Rich Sanders as Trustee of the Eleanor M. Rich Trust, Doris Rich Corya as Trustee of the John P. Corya Irrevocable Trust, and Doris Rich Corya as Trustee of the John P. Corya Revocable Trust, Appellants, v. Roy SANDERS, Appellee.
• Court: Florida District Court of Appeals

155 So.3d 1279

Doris Rich CORYA, as Trustee of the Sanders Trust, Doris Rich Corya and Paul J. Rich Sanders as Trustee of the Eleanor M. Rich Trust, Doris Rich Corya as Trustee of the John P. Corya Irrevocable Trust, and Doris Rich Corya as Trustee of the John P. Corya Revocable Trust, Appellants
v.
Roy SANDERS, Appellee.

Nos. 4D12–3067
4D12–3926.

District Court of Appeal of Florida, Fourth District.

Feb. 11, 2015.

155 So.3d 1281

Marjorie Gadarian Graham of Marjorie Gadarian Graham, P.A., Palm Beach Gardens, for appellants.

Susan B. Yoffee of Haile, Shaw & Pfaffenberger, P.A., North Palm Beach, for appellee.

ON MOTION FOR REHEARING

CONNER, J.

We deny the Appellant's motion for rehearing, withdraw our opinion dated November 5, 2014, and issue the following in its place:¹

In this case, ongoing disputes as to four family trusts make a second appearance before us. In the first appeal, we reversed the trial court's summary judgment granting trust accountings for all four trusts. Corya v. Sanders, 76 So.3d 31 (Fla. 4th DCA 2011). We concluded the trial court erred in granting summary judgment in part because appellee Sanders did not sufficiently negate the defenses of laches, waiver, and estoppel. Id. at 34. As to two of the trusts, we also concluded that the record did not establish, for purposes of summary judgment, that the contesting beneficiary was entitled to accountings prior to 2007. Id. Upon remand, a nonjury trial was conducted.

In this appeal, appellants, Doris Corya and Paul J. Rich Sanders (collectively, “Corya”),² as trustees, raise several arguments of trial court error. Roy Sanders (“Sanders”), the appellee and contesting beneficiary, is Doris's son and Paul's brother. We agree with Corya that the trial court erred by (1) determining that the affirmative defense of statutory laches did not limit the years to which Sanders is entitled to an annual accounting for each trust; (2) incorrectly interpreting statutory provisions in deciding the starting date for each accounting; and (3) incorrectly applying case law in deciding the starting date for each accounting. For those reasons, we reverse and remand for further proceedings. Because we reverse on significant issues affecting entitlement to attorney's fees, we also reverse and remand the trial court rulings on attorney's fees for further consideration.

Factual Background and Trial Court Proceedings

The disputes revolve around four irrevocable family trusts. The trusts will be

155 So.3d 1282

referred to separately as “the Sanders Trust,” “the Rich Trust,” “the John Corya Revocable Trust” (which later became irrevocable) and “the John Corya Irrevocable Trust.”

The Sanders Trust was created in 1953 by Eleanor Rich. Eleanor was Doris's mother and Sanders's grandmother. The trust directs that Doris is to receive ninety-four percent of the net income during her lifetime, and each of Doris's three children is to receive two percent of the net income. Upon Doris's death, the principal of the trust is to be distributed in equal shares to Doris's three children. Doris has been the sole trustee from inception of the trust.

The Rich Trust is a testamentary trust created upon the death of Eleanor in 1974. The trust provides that during Doris's lifetime, the net income is to be distributed to her, and the principal can be invaded for her benefit. The principal of the trust can also be invaded for the benefit of her three children. Upon Doris's death, the remaining principal is to be divided into shares for each of her three children, and the trust for each child is to continue until the child has attained the age of thirty.³ From inception, Doris has been a co-trustee of the Rich Trust.

Doris married John Corya. In 1993, John created two trusts, one revocable, the other irrevocable. As to both, John and Doris were the initial co-trustees, and upon John's death, Doris has been the sole trustee.

The John Corya Revocable Trust began with John as the sole beneficiary during his life. Upon his death in 1996, the trust continued as an irrevocable trust for the benefit of Doris, her three children, and two grandchildren. During Doris's lifetime, the net income is to be distributed to her, and the principal can be invaded for her benefit. Under certain circumstances, the principal of the trust can also be invaded for the benefit of each of her three children. Upon Doris's death, the remaining principal is to be divided between her three children and two grandchildren.

The John Corya Irrevocable Trust provides that the income is payable solely to John while he is alive and then solely to Doris while she is alive. The Irrevocable Trust allows for invasion of the principal for the benefit of John and Doris, and upon the death of both, the remaining principal is to be distributed to Doris's three children and two grandchildren.

Only the two John Corya trusts contain provisions regarding the trustee's duty to account to the beneficiaries.

As summarized in the first appeal:

Roy [Sanders] 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[, laches,] 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

155 So.3d 1283

fees, which she was not permitted to use trust funds to pay.

Corya, 76 So.3d at 33. After the nonjury trial on remand, as to all four trusts, the trial court ordered Corya to prepare accountings from the date she assumed duties as trustee, which was the inception of each trust. In so ruling, the trial court determined that Corya's affirmative defense of statutory laches did not apply. The trial court also apparently interpreted statutory provisions and case law to determine the starting date for each accounting. In addition, the trial court awarded Sanders attorney's fees, both for trial and the prior appeal. The trial court again ordered that Corya was not permitted to use trust funds to pay Sanders's attorney's fees, thus making her personally liable for the fees. Lastly, the trial court required Corya to reimburse the trusts for trust funds used to pay her attorney's fees.

Legal Analysis

After a nonjury trial, review of trial court decisions based on legal questions are reviewed de novo and those based on findings of fact from disputed evidence are reviewed for competent, substantial evidence. Acoustic Innovations, Inc. v. Schafer, 976 So.2d 1139, 1143 (Fla. 4th DCA 2008) ; In re Estate of Sterile, 902 So.2d 915, 922 (Fla. 2d DCA 2005).

In order to explain the errors of the trial court, it is appropriate to first discuss the statutory duty imposed on trustees of irrevocable trusts to account to the beneficiaries, next discuss the application of statutory laches to the duty to account, and conclude by discussing the errors of the trial court in determining the starting dates for the accountings.

The Statutory Duty to Account Applicable to this Case

As described above, all four trusts are irrevocable and have been in effect for decades before suit was filed. It is undisputed that before suit was filed, Corya had not prepared accountings for any of the trusts. At trial and on appeal, Corya agreed she was required to provide annual accountings to the beneficiaries as of July 1, 2007, the effective date of section 736.0813(1)(d), Florida Statutes (2007), which provides:

Duty to inform and account. —The trustee shall keep the qualified beneficiaries of the trust reasonably informed of the trust and its administration.

(1) The trustee's duty to inform and account includes, but is not limited to, the following:

....

(d) A trustee of an irrevocable trust shall provide a trust accounting, as set forth in s. 736.08135, to each qualified beneficiary annually and on termination of the trust or on change of the trustee.

Corya disputed that she had a duty to give accountings to Sanders for the years preceding 2007, contending there was no statutory duty to provide accountings for the prior years.

Prior to July 1, 2007, the statute controlling the duty of a trustee of an irrevocable trust to account to beneficiaries was section 737.303, Florida Statutes (2006), repealed the same year that section 736.0813 was passed. Comparing section 736.0813 with section 737.303, it is obvious that the duty of a trustee to account for an irrevocable trust from 1974 (the year in...