Corya v. Sanders

Corya v. Sanders, 155 So.3d 1279 (Fla. 4th DCA 2014), 2014 WL 5617045

This case centered around three trust accounting issues: (1) whether the affirmative defense of statutory laches limited the years a beneficiary was entitled to an annual accounting from certain trusts, (2) the interpretation of statutory provisions deciding the starting date for the annual accountings and (3) the interpretation of case law deciding the starting date for the annual accountings.

The case deals with four irrevocable trusts which were in effect for decades before one of their beneficiaries filed a lawsuit against the trustees.  Before the lawsuit was filed, the trustees had never prepared accountings for any of the trusts.

The trustees attempted to argue that there was no duty to account annually prior to July 1, 2007, when F.S. 736.0813 was passed.  The Court found that the prior statute, F.S. 737.303 also created a duty to account for an irrevocable trust, based on the language which read, "A beneficiary is entitled to a statement of the accounts of the trust annually...," and the fact that the current definition of "qualified beneficiaries" is virtually the same as the definition of "beneficiary" and "vested beneficiary" under the prior laws.  Thus, the Court held that there was a statutory duty to provide a beneficiary of an irrevocable trust with accountings before July 1, 2007.

The Court then addressed whether the affirmative defense of statutory laches limited the years the beneficiary was entitled to an annual accounting from the trusts, and held that statutory laches under F.S. 95.11(6) limits the right to an accounting, where no accounting has been done, to no more than four years before filing an action for an accounting against the trustee of an irrevocable trust.  The Court disagreed with the beneficiary's position that laches did not apply because he did not have actual knowledge that he was entitled to accountings.  It held that knowledge of the law is not an element to be proven to establish entitlement to an accounting by a trustee, and his lack of knowledge of the law had nothing to do with his knowledge that the accountings were not being given to him.  

Lastly, the Court considered how far back the trustees should be required to account.  The trial court had found that the accountings should go all the way back to when the trustees became accountable.  The Court disagreed both because of the defense of statutory laches, discussed above, and because F.S. 736.08135 does not require accountings prior to January 1, 2003.  The Court did not agree that F.S. 736.08135(1), which states that trust accountings should go back to the "date on which the trustee became accountable" expressed a legislative intent that if an accounting had never been done, a trustee's first accounting should go back to the date the trustee assumed his fiduciary duties.  

The Court also noted that the Mesler v. Holly decision, cited by the trial court, is not authority for requiring a trustee to render an accounting for trusts from the date they assumed their duties as trustee.  

Comments

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