ONE HARBOR FINANCIAL LTD. v. Hynes Prop.

• Decision Date: 15 October 2004
• Docket Number: No. 5D03-3629.,5D03-3629.
• Citation: 884 So.2d 1039
• Parties: ONE HARBOR FINANCIAL LIMITED COMPANY, Appellant, v. HYNES PROPERTIES, LLC, Appellee.
• Court: Florida District Court of Appeals

884 So.2d 1039

ONE HARBOR FINANCIAL LIMITED COMPANY, Appellant, v. HYNES PROPERTIES, LLC, Appellee.

No. 5D03-3629.

District Court of Appeal of Florida, Fifth District.

October 15, 2004.

David G. Larkin and Jesse L. Kabaservice of Fallace & Larkin, L.C., Melbourne, for Appellant.

Alfred A. Lasorte, Jr., of Shutts & Bowen LLP, West Palm Beach, for Appellee.

PETERSON, J.

One Harbor Financial Limited Company, ("One Harbor"), appeals a final judgment quieting title to property owned by Hynes Properties, LLC, ("Hynes").

One Harbor and Hynes own title to adjoining parcels of land and deraign title from the same remote grantor, Paul M. Hoffenberg. Hoffenberg had acquired the two parcels by separate deeds in which his name appeared as grantee followed by the words "as trustee" or "trustee."

At some time prior to August 19, 1986, Hoffenberg constructed a 75,000 square foot building on the parcel now owned by One Harbor. In an attempt to meet the then-existing zoning regulations which required thirteen additional parking spaces to that available on the parcel, on August 19, 1986, Hoffenberg "individually and as trustee," executed an easement agreement, ("Agreement"), that purported to convey a perpetual, non-exclusive easement for thirteen parking spaces along with a twenty-foot strip of land to be used for ingress and egress, from the adjacent New Haven Avenue to those parking spaces upon the property now owned by Hynes in favor of the property now owned by One Harbor. In the Agreement, Hoffenberg was identified as both the grantor and grantee. Two days later, on August 21, 1986, Hoffenberg "individually and as trustee" conveyed the parcel now owned by Hynes to Curtis Hendrix without making any reference to the easement.¹ The Agreement was duly recorded on August 29, 1986² and use of the easement began on or about August 21, 1986, and has continued ever since.

Through subsequent conveyances, Hynes acquired title to the parcel purported to be encumbered by the easement. Aware of the easement, Hynes purchased the property on the advice of counsel that the underlying Agreement was invalid and the easement unenforceable. Hynes then filed a quiet title action seeking to eliminate the easement from its title so that it could construct a building that would encroach upon the area described in the Agreement. The complaint alleged that the Agreement was invalid because title to the dominant estate (currently owned by One Harbor), and the servient estate (currently owned by Hynes) were held by the same person (Hoffenberg) at the time of the creation of the easement, rendering the Agreement void under Florida law.

One Harbor's answer admitted that Hoffenberg owned both properties "individually and as trustee" at the time the Agreement was executed, but asserted that the easement was valid because the grantee and grantor did not maintain the same indicia of title and ownership as to both properties. Additionally, One Harbor argued that even if the Agreement was deemed invalid as drafted, an easement over Hynes' property existed as the result of an implied reservation from a pre-existing use. Because all predecessors in interest to Hynes and One Harbor acknowledged the existence of the easement over Hynes' property, One Harbor further asserted that Hynes is equitably estopped from denying the validity of the easement because Hynes purchased the parcel with full knowledge of the Agreement regarding the easement and was aware that One Harbor claimed an interest in Hynes' property. One Harbor also counterclaimed seeking to quiet title to the easement and alleging that as a result of Hoffenberg's pre-existing use, One Harbor acquired an easement by implied reservation and that as a result of continued use by One Harbor and its predecessors in interest, One Harbor acquired an easement by prescription.

The trial court specifically found that Hoffenberg took title to each parcel "individually and as trustee," that no trust or beneficiary was identified in any conveyance of either parcel, and that there was no evidence that a trust relating to either parcel was ever recorded. The trial court applied the provisions of section 687.07, Florida Statutes (1959), and concluded, inter alia, that Hoffenberg was the fee simple "individual" owner of each parcel at the time that the Agreement was executed.³ The trial court also found that at the time the Agreement was recorded Hoffenberg owned both parcels of land.⁴ Because the Agreement purported to convey an easement from Hoffenberg, as both grantor and grantee, the trial court held that Hoffenberg's attempt to create an easement over his own property was void ab initio. The trial court further held that One Harbor neither proved the establishment of an easement by prescription nor an implied easement because the equitable arguments raised were not supported by the facts, the record or the law. We agree with the trial court's findings.

APPLICATION OF SECTION 687.07, FLORIDA STATUTES

In reaching its decision, the trial court applied section 689.07, Florida Statutes (1959).⁵ Section 689.07 provides:

(1) Every deed or conveyance of real estate heretofore or hereafter made or executed in which the words "trustee" or "as trustee" are added to the name of the grantee, and in which no beneficiaries are named, the nature and purposes of the trust, if any, are not set forth, and the trust is not identified by title or date, shall grant and is hereby declared to have granted a fee simple estate with full power and authority in and to the grantee in such deed to sell, convey, and grant both the legal and beneficial interest in the real estate conveyed, unless a contrary intention shall appear in the deed or conveyance; provided, that there shall not appear of record at the time of recording of such deed or conveyance, a declaration of trust by the grantee so described declaring the purposes of such trust, if any, declaring that the real estate is held other than for the benefit of the grantee.

The purpose of section 689.07 is to protect persons who rely upon the public land records to ascertain title to real property when a beneficiary's interest is not disclosed in the grantor/grantee index by either the deed transferring title or a recorded declaration of trust. In re Schiavone, 209 B.R. 751 (Bkrtcy.S.D.Fla.1997). The statute prevents "secret trusts" that impede the exchange of marketable title by vesting both the legal and beneficial interest in the trustee, unless a contrary intention appears in the deed or conveyance, or a declaration of trust is recorded. The statute also permits any person to record a declaration of trust before or after the recordation of the deed.⁶

Because the deeds used in the initial conveyance of the parcel to Hoffenberg did not identify either trust, name the trust beneficiaries or state the nature or purpose of either trust, and because a declaration of trust was never recorded under section 689.07, the trial court was correct in finding that Hoffenberg owned each parcel in fee simple absolute. See, e.g., Zosman v. Schiffer, 697 So.2d 1018 (Fla. 3d DCA 1997) (recognizing language referring to the owners as trustees did not change the nature of the transaction); Terry v. Zaffran, 483 So.2d 526 (Fla. 5th DCA 1986) (holding that without a declaration of trust being recorded or any beneficiary specifically named, the words "as trustee" in an instrument of conveyance do not encumber or effect a grantee's individual ownership of real estate); Glusman v. Warren, 413 So.2d 857 (Fla. 4th DCA 1982) (holding that where grantee was named as trustee without identification of the beneficiaries or the nature and purposes of the trust and no trust agreement of record was identified, the grantee received fee simple title).

AGREEMENT VOID AB INITIO

Under Hensel v. Aurilio, 417 So.2d 1035 (Fla. 4th DCA 1982), Hoffenberg never had the legal ability to grant an easement over his own property. In Hensel, the appellant acquired title to lots A, B, C and D. Appellant later sold lots B, C and D to appellee. Thereafter, the parties entered into a written contract which provided that lot B was to be repurchased by appellant. As originally drawn, that contract provided for an easement to be retained by appellee over a portion of lot B. At appellant's insistence, that provision was deleted prior to execution of the contract. However, on the day of the closing, appellee secretly prepared an easement subjecting lot B to an easement in favor of lot D, and subsequently recorded the deed. The court held that appellee could not, while owner of both the dominant estate (lot D) and servient estate (lot B), carve out an easement by grant to himself. No other reported Florida case has specifically addressed the issue of whether one who owns adjoining, unencumbered parcels in the same right, may create an easement over one parcel in favor of the other, but several other state and federal courts have disapproved of such action. See, e.g., Mattos v. Seaton, 839 A.2d 553 (R.I.2004) (holding no easement can be created over a section of land in favor of another adjoining parcel when one owner owns both properties); Mikels v. Rager, 232 Cal.App.3d 334, 284 Cal. Rpt. 87 (Cal.App. 4 Dist.1991) (holding one cannot grant an easement to oneself; one can only reserve such interest in land granted to another); Hayes v. Moreau, 104 N.H. 124, 180 A.2d 438 (1962) (recognizing that while all of the tract was in common ownership of a single owner, no easement could arise in favor of one lot in tract over another lot); Hidalgo County Water Control and Imp. Dist. No. 16 v. Hippchen, 233 F.2d 712 (C.A.5 Tex.1956) (recognizing that for an easement to exist the dominant and servient estates must be held by different owners); Marshall v. Callahan, 241 Mo.App. 336, 229 S.W.2d 730 (1950) (recognizing that to acquire an easement there must be a dominant and a servient estate and they must not be lodged in the same person)...