Zavradinos v. Jtrb, Inc.

• Decision Date: 18 July 2008
• Docket Number: COA No. 268570.,Docket No. 135137.
• Citation: 482 Mich. 858,753 N.W.2d 60
• Parties: Dimitrios ZAVRADINOS, Plaintiff-Appellant, v. JTRB, INC., JTR II, L.L.C., RTI, Inc., Little Daddy's of Bloomfield Hills, Michigan, L.L.C., Richard Rogow, Athanasios Peristeris, and Darren McCarty, Defendants, and Robert Probert, Defendant-Appellee, and Liza Danielle Probert, Intervening Party-Appellee.
• Court: Michigan Supreme Court

753 N.W.2d 60

482 Mich. 858

Dimitrios ZAVRADINOS, Plaintiff-Appellant, v. JTRB, INC., JTR II, L.L.C., RTI, Inc., Little Daddy's of Bloomfield Hills, Michigan, L.L.C., Richard Rogow, Athanasios Peristeris, and Darren McCarty, Defendants, and Robert Probert, Defendant-Appellee, and Liza Danielle Probert, Intervening Party-Appellee.

Docket No. 135137.

COA No. 268570.

Supreme Court of Michigan.

July 18, 2008.

On May 7, 2008, the Court heard oral argument on the application for leave to appeal the August 23, 2007 judgment of the Court of Appeals. On order of the Court, the application is again considered, and it is DENIED, because we are not persuaded that the questions presented should be reviewed by this Court.

MARILYN J. KELLY, J., concurs and states as follows:

I concur with the order denying leave to appeal in this case. The Court of Appeals correctly concluded that plaintiff failed to overcome the presumption that the Proberts hold the securities accounts at issue as tenants by the entirety.

Plaintiff Dimitrios Zavradinos obtained a judgment of $170,000 against defendant Robert Probert. He sought to garnish two of Robert's securities accounts to satisfy the judgment. Robert's wife, Liza Probert, intervened. Liza sought to defeat the garnishment. She argued that she and Robert hold the accounts as tenants by the entirety. Thus, plaintiff cannot garnish the accounts because his judgment is solely against Robert.

Plaintiff offered into evidence internal documents titled Application Detail Reports. These reports categorize the accounts at issue as "JRS." Following the Proberts' names on the reports is the designation "JTWROS." Both abbreviations stand for the phrase "joint tenants with right of survivorship."

Michigan has adopted a statutory presumption that certain types of personal property owned by spouses are held in tenancies by the entirety.¹ Such property is exempt from execution under a judgment entered against only one of the spouses.² The question presented in this case is whether the statutory presumption applies to the property in question.

In DeYoung v. Mesler, judgment creditors of the defendant-husband sought to reach a debenture issued to the defendant and his wife.³ This Court rejected the creditors' claim.⁴ It construed MCL 557.151 to mean that spouses hold a debenture by the entirety unless an intent to do otherwise is affirmatively expressed.⁵ In reaching that holding, the Court relied on Hoyt v. Winstanley.⁶

In Hoyt, this Court held that use of the phrase "as joint tenants" coupled with the phrase "husband and wife" in a conveyance does not create a joint tenancy rather than an entireties estate.⁷ This is because an estate by the entirety is a form of joint tenancy and the terms are sometimes used interchangeably.⁸

The Hoyt Court's reference to spousal language⁹ does not imply that, when spousal language is absent, use of the phrase "as joint tenants" suffices to create an estate in joint tenancy. To the contrary, the Court referenced spousal language simply because the conveyance at issue there used spousal language.¹⁰ Its analysis centered on the phrase "joint tenants," not on the spousal language.

Additionally, Michigan caselaw long predating Hoyt holds that it is not necessary for a conveyance to use spousal language for courts to presume the existence of a tenancy by the entirety. In 1890, in the case of Dowling v. Salliotte, the plaintiff argued that a deed that failed to identify the grantees as husband and wife created a tenancy in common, not a joint tenancy.¹¹ The plaintiff relied on How. Stat. § 5560,¹² which created a presumption in favor of tenancies in common. This Court rejected the plaintiff's argument, citing How. Stat. § 5561.¹³ Section 5561 created an exception to the presumption of a tenancy in common when the devise or grant was made to a husband and wife.¹⁴

The Dowling Court reasoned that the exception did not apply to "all grants or devises of land made to persons who are described in the conveyance as husband and wife."¹⁵ Rather, the Legislature intended that the exception apply when the estate holders were in fact married.¹⁶ "To say that the existence or non-existence of this fact must depend upon the recitals in a conveyance would be to substitute form for substance."¹⁷

The Dowling Court's reasoning applies equally here. The statutory presumption in favor of tenancies by the entirety applies when the conveyance is "made payable to persons who are husband and wife...."¹⁸ It does not apply to conveyances describing the grantees as husband and wife. Thus, as stated by this Court nearly 118 years ago, if "the estate of both was created at the same time in one instrument, and they were at the time in fact husband and wife, their interest in the land was an entirety...."¹⁹ It is the fact of marriage, not the recitation of marriage, that matters when applying the presumption that an entireties estate exists.²⁰

The DeYoung Court hypothesized that the only way to overcome the presumption in favor of tenancies by the entirety is to "use the words `not as tenants by the entirety' when such is the intent of the conveyance."²¹ This is certainly a clear way to overcome the presumption.

Justice Markman suggests that the presumption was overcome in this case by the indication in the Application Detail Reports that the Proberts hold the accounts as joint tenants with the right of survivorship. He implies that the use of the express "right of survivorship" language is what distinguishes this case from Hoyt and DeYoung. He relies on the fact that Michigan recognizes both standard joint tenancies and joint tenancies with the full rights of survivorship.²² He notes that the latter is a joint life estate with dual contingent remainders and is created by the use of express words of survivorship in the granting instrument.²³

The granting instruments at issue in Hoyt and DeYoung did not reference the right of survivorship. But more importantly, standard joint tenancies and joint tenancies with the full rights of survivorship both entail the right of survivorship. The primary distinction between the two is that the latter may not be converted to a tenancy in common.²⁴ Tenants by the entirety enjoy the same right of survivorship as joint tenants.²⁵ A tenancy by the entirety is simply a joint tenancy "plus the unity of the marital relation."²⁶ Standard joint tenancies, joint tenancies with full rights of survivorship, and tenancies by the entirety are all forms of joint tenancy.²⁷ Thus, for the same reason that the designation "as joint tenants" was insufficient to create a standard joint tenancy in Hoyt, the designation "JTWROS" is insufficient to create a joint tenancy here.²⁸

In support of his position, Justice Markman describes an account application form containing a place where the Proberts could have expressed their desire to hold their investment as tenants by the entirety. That form pertains solely to an account of the Proberts that has no funds. Thus, it is not at issue. Janet Kemp, a Salomon Smith Barney employee testified that she, not the Proberts, filled out the form on the basis of an oral interview with them. Kemp did not testify that the Proberts directed her to designate the investment as owned by joint tenants with rights of survivorship instead of as tenants by the entirety. Nor was there any testimony from the Proberts in this regard. Thus, there is nothing to show that the Proberts specifically chose to hold as joint tenants instead of as tenants by the entirety. Kemp also testified that the Proberts did not sign the application.²⁹

Under the circumstances, I agree with the COA that

for plaintiff to prevail, we would have to conclude that a form that may or may not have been signed by the account holders that selects a joint tenancy rather than a tenancy by the entirety for a different account at the same financial institution meets the statutory standard of expressly providing for a form of ownership other than as tenants by the entirety. We cannot make that leap of logic. The possible expression of an intent for one account simply does not expressly provide an intent for a different account.³⁰

Entireties ownership of property is a modified form of joint tenancy. In reliance on Hoyt and DeYoung, the designations "JTWROS" and "JRS" are insufficient to overcome the statutory presumption in favor of a tenancy by the entirety. The Court of Appeals properly applied longstanding Michigan caselaw in reaching its decision. A reversal of the Court of Appeals judgment would upset significant reliance interests. Accordingly, I concur in the denial of leave to appeal.

CAVANAGH, J., dissents and states as follows:

I would reverse the Court of Appeals and reinstate the trial court's holding because the defendants' actions evidenced the requisite intent to rebut the presumption in favor of tenancies by the entirety. Hence, defendants' accounts were not protected by MCL 600.6023a.

CORRIGAN, J., dissents and states as follows:

I dissent from the order denying leave to appeal. I would reverse the judgment of the Court of Appeals, reinstate the trial court's ruling that the Proberts held the brokerage accounts as joint tenants with rights of survivorship, and remand the case to the Court of Appeals for consideration of what portion of the accounts are subject to garnishment. I interpret DeYoung v. Mesler, 373 Mich. 499, 130 N.W.2d 38 (1964), to mean that the words "as joint tenants" do not rebut the presumption in favor of a tenancy by the entirety when the conveyance includes language indicating that the title holders are married (spousal language). Here, the accounts state that the Proberts hold the accounts as "JTWROS" (joint tenants with rights of survivorship). Because the accounts do not include spousal language indicating that the Proberts hold the accounts "as husband and wife," they hold the accounts as joint tenants with rights of survivorship. The...