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Date: 09-26-2019
Case Style:
JORGE ALFONSO FERNANDEZ vs ROMENA MARRERO
Case Number: 16-2931
Judge: Norma S. Lindsey
Court: Third District Court of Appeal State of Florida
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Fernandez and Romena Marrero (“Marrero”) began dating in January of 2013.
They moved in together in June 2013. Thereafter, in December 2013, the parties
moved into a house (“the property”) that they ultimately purchased. The parties
were permitted to move in prior to the closing because Fernandez knew the owner.
During this time, Fernandez made several repairs and improvements to the property,
including, but not limited to, lawn care and the replacement of a fence. The closing
took place on March 25, 2014. Fernandez paid the down payment and closing costs.
The parties purchased and titled the property as joint tenants with rights of survivorship. Since the closing, Fernandez has paid all the mortgage payments without
contribution from Marrero. After the closing, Fernandez incurred expenses to repair
2 An Agreed Order on Plaintiff’s Motion for Rehearing was filed in this Court on September 6, 2017. While we recognize that the Order purports to amend the Final Judgment, for present purposes, and as reflected in this opinion, the substance of the same does not change or affect the disposition of this case.
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the property, to reduce the principal balance of the mortgage, and to pay for taxes
and insurance. The parties ended their relationship on or about March 10, 2015—
less than one year after the closing. Marrero moved out shortly thereafter and filed
the underlying action. In her one count complaint, Marrero sought partition of the
property.
While Fernandez conceded that Marrero was entitled to partition, Fernandez
argued that he should receive credit for the down payment and closing costs, as well
as expenses that he incurred before and after the closing. In support of his claim,
Fernandez contends that he only purchased the property with Marrero as joint
tenants with rights of survivorship because his credit score was not high enough for
him to qualify for a loan on his own. In furtherance of this theory, Fernandez
testified that Marrero had agreed to sign over her interest in the property after the
first year of ownership. Thereafter, it was his intention to refinance the loan on his
own. Fernandez further testified that the only reason he chose to title the home as a
joint tenancy with rights of survivorship was because he did not want the property
to escheat to the state upon his death. In his view, the purchase of the property was
a business transaction and not a product of his relationship with Marrero.
Marrero, on the other hand, testified that they purchased the property because
they had plans to start a family and that Fernandez never asked her to sign any kind
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of contract or promissory note that would support his position that the purchase of
the property was merely a business transaction.
Nidia Lopez (“Lopez”), the title/closing agent, also testified at the trial.
Lopez testified that, prior to the closing, she explained to Fernandez that he and
Marrero could take title as joint tenants with right of survivorship or as tenants in
common. She further explained the differences between the two tenancies, as well
as the implications of taking title as joint tenants with rights of survivorship.
Specifically, she explained that upon Fernandez’s death, his half would
automatically go to the other joint tenant—in this case, Marrero. By contrast, she
explained that if they acquired the property as tenants in common, Fernandez’s heirs
would inherit his half upon his death. Lopez testified that, following her
explanation, Fernandez elected to take title as joint tenants with a right of
survivorship.
After a day-long bench trial the trial court made its findings, focusing on the
following three categories: (1) down payment and closing costs; (2) pre-closing
expenses; and (3) post-closing expenses. The trial court concluded that Fernandez
was not entitled to any credits for the down payment and closing costs. The trial
court also declined to award Fernandez a credit/reimbursement for pre-closing
expenditures. However, following O’Donnell v. Marks, 823 So. 2d 197, 199 (Fla. 4th DCA 2002), the trial court ordered Marrero to reimburse Fernandez for his post
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closing expenditures. Lastly, the trial court ordered that the property be sold by way
of a private sale. This timely appeal followed. II. STANDARD OF REVIEW We review a trial court’s factual findings for competent substantial evidence. Griffin Indus., LLC v. Dixie Southland Corp., 162 So. 3d 1062, 1066-67 (Fla. 4th
DCA 2015). III. ANALYSIS
As indicated above, the expenses claimed by Fernandez fall into three
categories. The amounts at issue are contested, and the record is somewhat unclear
as to what was sought with respect to each category and what was actually awarded.
For the reasons that follow, we affirm the trial court’s findings as to the down
payment/closing costs, the pre-closing expenses, and the post-closing expenses.
In a partition proceeding, there must be an accounting to determine whether
each co-tenant has paid his or her proportionate share of the expenses of the property, and to adjust the co-tenants’ accounts accordingly. Santos v. Santos, 773 So. 2d 568,
570 (Fla. 3d DCA 2000) (citing Biondo v. Powers, 743 So. 2d 161, 164 (Fla. 4th
DCA 1999)); Kail v. Supernant, No. 8:15-cv-2719-T-27TGW, 2017 U.S. Dist.
LEXIS 105043 (M.D. Fla. July 7, 2017) (“After the right to partition by sale is
established, a two-step analysis is undertaken to: (1) determine each owner's
percentage of ownership, and (2) calculate the proportionate share owed to each
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owner from the proceeds of a partition for reimbursable investments.”)(citing
Biondo, 743 So. 2d at 163-64); O’Donnell, 823 So. 2d at 199 (same).
As to the first step, the trial court found that Marrero and Fernandez each hold
an “undivided one half (1/2) interest in [the Property] in fee simple.” In other words,
each party owns an undivided 50% interest in the property. As to the second step,
Florida courts have held that co-tenants have a mutual obligation to pay charges
upon the co-owned property, including mortgage payments, insurance, taxes, and
necessary repairs. The equity of one party should not be increased by the expenditures of the other. Biondo, 743 So. 2d at 164 (citing Singer v. Singer, 342
So. 2d 861 (Fla. 1st DCA 1977); Waskin v. Waskin, 346 So. 2d 1060 (Fla. 3d DCA
1977)). For this reason, “a cotenant paying [the] obligations of the property is
entitled to a credit from the proceeds of the sale for the other cotenant’s proportionate
share of those expenses.” Id. (citing Goolsby v. Wiley, 547 So. 2d 227 (Fla. 4th DCA
1989); Gerver v. Stein, 490 So. 2d 1331 (Fla. 3d DCA 1986)). A. Down Payment/Closing Costs In determining that Fernandez is not entitled to a credit for the down payment
and closing costs, the trial court relied on O’Donnell, 823 So. 2d at 198. In
O’Donnell, the Court found that “[w]here a transfer of property is made to one
person and the purchase price is paid by another a resulting trust arises in favor of
the person by whom the purchase price is paid.” Id. (citing Restatement (Second) of
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Trusts § 440 (Am. Law Ins. 1959)). “However, ‘[a] resulting trust does not arise
where a transfer of property is made to one person and the purchase price is paid by
another, if the person by whom the purchase price is paid manifests an intention that no resulting trust should arise.’” Id. (citing Restatement (Second) of Trusts § 441).
Comment e to section 440 of the Restatement (Second) of Trusts states, in part:
The fact that the payor takes title to property in the name of himself and another jointly is an indication of an intention of the payor to make a beneficial gift of an undivided interest in the property to the other person; and in the absence of evidence of a different intention of the payor, the other person does not hold his interest upon a resulting trust for the payor. This is true whether the transfer was made to the payor and the other person as joint tenants or tenants in common.
(Emphasis added).
In O’Donnell, the appellee purchased a property in Jupiter, Florida using his
own individual funds. 823 So. 2d at 198. However, the property was then deeded
to the appellant and appellee as joint tenants with rights of survivorship. Id. Under
those facts, the trial court found that the parties each held an undivided one-half
interest in fee simple. Id. On appeal, the Fourth District held that the warranty deed,
by which the parties took title as joint tenants with rights of survivorship, was
consistent with the presumption of a gift from the appellee to the appellant from the
language of the deed. Id. at 199.
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Here, as in O’Donnell, an unmarried couple took title to the property as joint
tenants with rights of survivorship, and the down payment and closing costs were
paid only by one party. Further, there is competent substantial evidence in the record
to establish that the parties had been in a relationship for years and that they had
discussed moving into the house to start a family and get married. Moreover,
nothing in the record suggests that the purchase of the property was a business
transaction or a loan. Accordingly, the instant facts likewise create the presumption of a gift from Fernandez to Marrero. See id. The testimony of Lopez, referenced above, supports this presumption, as does the testimony of Marrero that the home was purchased because they were in love and had plans to start a family together. B. Pre-Closing Expenses Fernandez’s contention that he expected to be reimbursed for the pre-closing
expenses is likewise uncorroborated, and was rebutted by Marrero’s testimony as
follows:
Attorney Fernandez: Did Mr. Fernandez ever ask you to execute an agreement or a promissory note for 50 percent of the funds that he spent?
Ms. Marrero: No.
Attorney Fernandez: To close on the property or to improve it before or afterwards?
Ms. Marrero: No, he didn’t.
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Attorney Fernandez: Did you have any agreement with him in which you were to buy the house, then sell it, and upon the sale of the house from the sales proceeds, he would be reimbursed of [sic] expenses that he paid at closing and to improve or repair the house; did you have any such agreement?
Ms. Marrero: No.
For this reason, among others, we find that the trial court was correct in
determining that Fernandez was not entitled to a credit for the maintenance and/or
improvements done prior to closing. As stated above, the record is unclear as to
what exactly was sought and awarded with respect to each category. This is
especially true for the pre-closing expenditures. The trial court’s order provides only
that “by taking title as [joint tenants with right of survivorship, Marrero] took title
to the Property without any debt to [Fernandez] for funds [that Fernandez] had spent
to improve the Property prior to closing . . . .” (Emphasis added).
This conclusion is consistent with existing case law and common sense. In
other words, why would one be responsible for the upkeep of a home that one does
not own? Before the closing, the parties were merely tenants of the property’s
owner with no legal responsibility for its maintenance expenses. The fact that
Fernandez moved in prior to the closing and decided, on his own—as a tenant—to
make repairs and improvements does not render Marrero legally responsible for
payment of the same. In essence, any improvements made prior to the closing
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belonged to the prior owner. For these reasons, we affirm as to the trial court’s
findings on the expenditures incurred prior to the closing. C. Post-Closing Expenses Fernandez also contends that he is entitled to a credit, totaling 50%, of his
post-closing expenditures. The trial court agreed and found that Fernandez was
entitled to certain credits for half of the post-closing expenses related to “repairs and
improvements to the Property,” “taxes and insurance,” and “[the reduction] of the principal balance of the mortgage.” We find no error. See O’Donnell, 823 So. 2d at 199 (“The next step requires the court to determine the reimbursable expenses
incurred after closing and calculate each party’s proportionate share using each
party’s percentage of ownership, i.e., fifty percent for each party.” (emphasis
added)).
Lastly, we do not reach the question of whether Fernandez is entitled to a right
of first refusal. The record indicates that there was no stipulation as to this issue.
Here, the trial court ordered that “[t]he property must be sold at a private sale to a
third party not related to either the Plaintiff or the Defendant.” The parties concede
in their briefs that this was error, and at oral argument the parties stated on the record
that they agreed that Fernandez had a right of first refusal to purchase the property.
However, this matter was not raised below; thus, the trial court was never given the
opportunity to correct or address the same. Based on the language in the order, and
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the agreement of the parties, on remand the parties may request that the court correct
its order and permit Fernandez to exercise a right of first refusal to purchase the
property.
Outcome: Affirmed and remanded for further proceedings consistent with this opinion.
Plaintiff's Experts:
Defendant's Experts:
Comments: