Dgg Development Corp. v. Estate of Capponi

• Decision Date: 20 June 2008
• Docket Number: No. 5D07-2676.,5D07-2676.
• Citation: 983 So.2d 1232
• Parties: DGG DEVELOPMENT CORPORATION, Appellant, v. ESTATE OF Italo Dante CAPPONI, et al., Appellee.
• Court: Florida District Court of Appeals

983 So.2d 1232

DGG DEVELOPMENT CORPORATION, Appellant, v. ESTATE OF Italo Dante CAPPONI, et al., Appellee.

No. 5D07-2676.

District Court of Appeal of Florida, Fifth District.

June 20, 2008.

Robert R. Seymour, of Savage Krim Law Firm, Ocala, and J. Warren Bullard, of J. Warren Bullard, P.A., Ocala, for Appellant.

Raymond A. Biernacki, Jr., of Biernacki & Biernacki, Orange City, for Appellee.

ORFINGER, J.

The issue that we must resolve in this appeal is whether a deed, executed by the secretary/treasurer of a corporation in the presence of two witnesses, but without the corporate seal or an authorizing resolution from the board of directors, is effective to convey title to real property to a good faith purchaser for value. We hold that such a deed does not convey title to corporate property and reverse the final judgment quieting title.

In 1991, DGG Development Corporation, a Florida corporation, acquired two parcels of real property in Marion County, Florida. Shortly thereafter, DGG was administratively dissolved by the Florida Secretary of State for failing to file its annual report. Ten years later, Italo Capponi, one of DGG's directors and its secretary and treasurer, executed a deed in DGG's name as its "officer/administrator," purporting to convey one of the parcels of DGG's real property to himself and his wife. The corporate seal was not affixed to the deed, but it was executed in the presence of two witnesses and a notary public. In March 2004, DGG's two other shareholders/officers/directors learned of Mr. Capponi's 2001 conveyance of corporate property, and instructed the corporation's attorney to reinstate the corporation. Reinstatement was accomplished in September 2004. Approximately three weeks later, Mr. and Mrs. Capponi conveyed the property to Susan T. Aicher and Lisa L. Coker (collectively, "the Grantees") for $150,000.

In July 2005, DGG filed a quiet title action against Mr. Capponi's estate,¹ Mrs. Capponi and the Grantees. In its complaint, DGG maintained that the deed purporting to convey title from DGG to the Capponis was invalid. Consequently, DGG argued that the Capponis' deed to the Grantees was also invalid. The Grantees answered, asserting that the deed in question was valid, and if not valid, that they were bona fide purchasers entitled to take title free of any claims by DGG. The Grantees counterclaimed, seeking to quiet title in themselves.

Under Florida law, corporations may convey real property in accordance with the requirements of either section 689.01, Florida Statutes (2004),² section 692.01, Florida Statutes (2004), or section 692.02, Florida Statutes (2004).³ Section 689.01 requires any conveyance of real property to be signed in the presence of two subscribing witnesses by a person or persons authorized to sign on behalf of the corporation, but does not require a seal. Section 692.01 provides that a corporation may convey any interest in real property by a document sealed with the common or corporate seal, and signed in its name by its president, vice-president, or chief executive officer. A document executed in this manner need not be witnessed. See Real Property Complex Transactions § 9.7 (Fla. Bar CLE 4th ed. 2006).

If a deed is executed by the corporation's president, vice-president or chief executive officer in compliance with section 692.01, no corporate resolution from the board of directors is required to evidence the authority of the person executing the document. Such authority is granted by statute. If the person executing the deed does not hold one of these offices, an authorizing resolution must be obtained and should be recorded. Similarly, if a deed is executed in compliance with section 689.01 but is signed by someone other than the president, vice-president or chief executive officer, an authorizing resolution from the board of directors must be obtained. See id. (citing Attorneys' Title Ins. Fund, Title Note 11.05.03 (2004)); see also Real Property Sales Transactions, § 6.43 (Fla. Bar CLE 4th ed. 2004); Standards 4.3-4.3-1, Uniform Title Standards (Real Property Probate and Trust Law Section of The Fla. Bar). Because the deed purporting to convey the subject property from DGG to the Capponis was executed by Mr. Capponi as DGG's "officer/administrator," it was ineffective on its face to convey title, as it was not executed in compliance with either of the conveyancing statutes.

While conceding that the deed from DGG to the Capponis did not comply with section 692.01, the Grantees argue that section 607.1405, Florida Statutes (2001), validates the deed that Mr. Capponi executed to himself and his wife, as the corporation was dissolved at the time. We disagree. Section 607.1405 provides that a corporation continues its corporate existence after dissolution and has the power to transfer title to its property and do other acts necessary to wind up and liquidate the business. We construe the statute to mean that a conveyance of a dissolved corporation's real property may be made in the same manner as required before dissolution in order to convey title. We do not accept the Grantees'...