MARK WALLACE v. YANELIN TORRES-RODRIGUEZ ( 2022 )

Third District Court of Appeal
State of Florida
Opinion filed May 11, 2022.
Not final until disposition of timely filed motion for rehearing.
________________
No. 3D21-244
Lower Tribunal No. 16-2767
________________
Mark Wallace,
Appellant/Cross-Appellee,
vs.
Yanelin Torres-Rodriguez,
Appellee/Cross-Appellant.
An Appeal from the Circuit Court for Miami-Dade County, Milton
Hirsch, Judge.
Stack Fernandez & Harris, P.A., and Brian J. Stack, for
appellant/cross-appellee.
Rasco Klock Perez & Nieto, P.L., and Juan Carlos Antorcha, for
appellee/cross-appellant.
Before FERNANDEZ, C.J., and EMAS, and BOKOR, JJ.
FERNANDEZ, C.J.
Appellant/third-party plaintiff/cross-appellee Mark Wallace (“Mark”)1
appeals the trial court’s Final Judgment entered in accordance with the trial
court’s October 29, 2020 Findings of Facts and Conclusions of Law and the
trial court’s December 8, 2020 Supplemental Findings of Fact and
Conclusions of Law. In addition, appellee/third-party defendant/cross-
appellant Yanelin Torres Rodriguez (“Yanelin”) cross-appeals the Final
Judgment. With regard to Mark’s direct appeal, we reverse the trial court’s
Final Judgment in part because the trial court erred in allowing Yanelin to
keep three out of the seven tenancy by the entirety properties in question as
an equitable setoff. Concerning the issues on Yanelin’s cross-appeal, we
affirm the trial court’s Final Judgment. Yanelin’s contention that the trial court
erred in imposing a constructive trust on the tenancy by the entirety assets
not awarded to her by the court fails for the same reason that Mark’s
contention on direct appeal prevails: under the facts of this case, a
constructive trust is the proper remedy to recover tenancy by the entireties
assets wrongfully transferred by Milton Wallace (“Milton”) during his marriage
to his wife, Patricia Wallace (“Patricia”), without Patricia’s consent.
1
As some of the principal parties have the same last name, we refer to them
by their first name to avoid confusion.
2
FACTS AND PROCEDURAL HISTORY
In 2010, Milton was diagnosed with a degenerative neurological
condition that diminishes memory and mental capacity. His wife, Patricia,
advised their estate planning attorney that Milton and Patricia wanted to
make estate planning arrangements to protect their marital assets, worth
millions of dollars, considering their age and Milton’s degenerative disease.
Patricia was worried that Milton would deteriorate and that his judgment and
capacity to handle their financial affairs would be affected. Patricia also told
their estate planning attorney that she was worried that Milton might be
unduly influenced by third persons to convey their marital assets.
Considering this, the parties had their attorney draft, and they signed, the
“Milton and Patricia Wallace Irrevocable Trust Agreement” (“Irrevocable
Trust”) on February 7, 2011. Section 2 of the Irrevocable Trust states:
We intend to enter into a marital agreement after the execution
of this trust agreement. Our marital agreement will provide that
upon the death of the first one of us to die, all assets of any nature
(including our residence) owned by us as tenants by the entirety
or as joint tenants with right of survivorship, wherever located,
will be conveyed by the survivor of us to the trustee of the trust
created by this trust agreement. We are executing this
agreement to set forth the terms of the trust upon which those
jointly owned assets will be held when conveyed by the survivor
of us to the Trustee.
Mark, Milton and Patricia’s eldest son, is the current trustee of his parents’
Irrevocable Trust.
3
Afterwards, on June 2, 2011, their attorney drafted, and they signed,
the “Marital Agreement to Fund Joint Trust” (“Marital Agreement”). Section 2
of the Marital Agreement stated that the surviving spouse was required to
convey all the Wallaces’s joint marital assets into the Irrevocable Trust within
sixty days of the spouse’s death. Section 3 of the Marital Agreement
prohibited either spouse from transferring joint marital assets while they were
alive without the “direct and personal joinder” of the other spouse. Except for
Milton’s Individual Retirement Account, all the parties’ marital assets were
owned as tenants by the entireties. In addition, Section 1 of the Marital
Agreement stated:
to allow the successor trustees and beneficiaries under the Trust
Agreement to be able to bring whatever legal proceedings may
be necessary to require the survivor of us to convey all of our
jointly owned assets to the then serving trustee or trustees under
the Trust Agreement, and to rescind any transfers of assets that
might be made by the survivor of us contrary to the requirements
of this Marital Agreement.
Furthermore, section 5 of the Marital Agreement authorized Mark, his brother
Hardy Wallace, and his sister Rebecca Spinale, among others, to take “all
actions to rescind transfers in violation of the provisions of the Marital
Agreement” and to pursue all “actions for damages, attorney’s fees, and
costs.”
4
On May 3, 2016, Patricia died. Mark is the sole personal representative
of his mother’s probate estate.2 A few days after Patricia’s death, Milton told
Mark that while he was married to Patricia, Milton had a girlfriend, Yanelin,
for approximately fourteen years before Patricia’s death. Milton told Mark
that Milton paid Yanelin for sex. Milton also admitted to Mark that Milton
transferred $1 million in cash from Milton and Patricia’s joint marital assets
to Yanelin on July 15, 2012 and transferred $1 million in cash to Yanelin from
joint marital assets on January 15, 2015. The cash transfers were
documented in two United States Gift Tax Returns prepared by Milton’s
accountant and filed by Milton with the Internal Revenue Service. Milton
admitted he gave Yanelin the $2 million in cash referenced in the U.S. Gift
Tax Returns. Yanelin admitted receiving the money. Prior to his mother’s
death, Mark had no knowledge that his father had given away his parents’
joint marital assets to Yanelin.
Approximately three months after Patricia’s death, Mark sued Yanelin
to recover the $2 million in joint marital assets that Milton transferred to
Yanelin. In addition, Mark alleged that Milton gave away to Yanelin
approximately $5 million dollars of marital property owned by Milton and
2
Mark is also co-guardian of Milton, who was placed under plenary
guardianship by the probate court on January 21, 2021 due to his
deteriorating neurological condition.
5
Patricia without Patricia’s consent and in contravention of Milton and
Patricia’s Marital Agreement and Irrevocable Trust that the parties had
executed in 2011. Mark claimed the transfers to Yanelin violated Patricia’s
ownership rights as a tenant by the entireties of the assets. Mark amended
his complaint in March 2017 and asserted four counts: Count I for
constructive fraud; Count II for avoidance of fraudulent transfers to Yanelin
under section 726, Florida Statute (2016); Count III for aiding and abetting
breach of fiduciary duty and aiding and abetting fraudulent transfers; and
Count IV for imposition of a constructive trust. All the claims against Yanelin
were brought by Mark on behalf of the Irrevocable Trust.
Thereafter, Yanelin was deposed on August 10, 2016. When asked
about the two $1 million cash transfers made by Milton to her, she invoked
her Fifth Amendment privilege against self-incrimination. Yanelin did not
answer any questions about her relationship with Milton, or questions about
any transfers to her from Milton of the Wallace’s joint marital assets. Later,
on September 19, 2019, Yanelin was deposed again. This time, she testified
that she received more cash, stocks, and real property from Milton before
Patricia died, all of which were tenancy by the entireties marital assets.
A bench trial before the court was held on September 15 and 16, 2020.
Milton and Yanelin’s testimony and the evidence submitted at trial
6
demonstrated that Milton used tenancy by the entireties assets to purchase
three condominiums in Yanelin’s name and stocks worth millions which were
placed in Fidelity and Merrill Lynch brokerage accounts in Yanelin’s name.
Tenancy by the entirety assets used by Milton to either give to Yanelin or
purchase property or stocks for Yanelin included the following:
1. A $105,000 Condominium – Yanelin admitted at trial that Milton
bought her a condominium in 2010 for $105,000 (Unit 801, located
at 1690 S.W. 27th Avenue in Miami). The condominium is
unencumbered by a mortgage.
2. $2.0 million in Cash - Milton testified that he gave Yanelin $1
million in cash in 2012 and another $1 million in cash in 2015. The
cash gifts were documented on Milton’s U.S. Gift Tax returns filed
with the Internal Revenue Service. Although she denied at trial
receiving $2 million in cash, Yanelin signed an affidavit attached to
her summary judgment motion filed in 2017 attesting that “Milton
Wallace gifted me with $1 million in 2012 and another million dollars
in 2015.” She further admitted that she reviewed the U.S. Gift Tax
Returns.
3. Stocks Worth $1.2 million on Deposit at Fidelity – Yanelin
testified that in 2013 Milton wrote checks in excess of $1.2 million
to purchase shares of stock in 21 different public companies to be
held in Yanelin’s name. Initially, the stocks were held by Yanelin in
certificate form. Later, Yanelin deposited the stock certificates into
a Fidelity Investments securities account, account no. xxxx-480165
opened by her in Coral Gables, Florida. After the Fidelity account
was opened, Milton purchased additional shares of stock which
were deposited into the Fidelity account. By August 2013, the
Fidelity account held $1.25 million in corporate stock and cash, all
acquired using the Wallaces’s marital assets. At the time of trial, the
Fidelity account held $1.174 million in corporate stock and in cash.
Yanelin testified that “I said before that all of the stocks were
purchased using [Milton’s] money.”
7
4. 2,000 Shares of Exxon Mobil Stock – Yanelin admitted at trial that
Milton purchased for her 2,000 shares of Exxon Mobil stock, which
she held in certificate form, which she keeps at her home.
5. A $220,000 Condominium – Yanelin testified at trial that in
December 2013, Milton gave her a cashier’s check for $120,000,
which was deposited into Yanelin’s Bank of America checking
account. She admitted she used the $120,000, together with an
additional $100,000 provided by Milton that was in the Fidelity
account, to purchase a second condominium for $220,000 (Unit
308, located at 1690 S.W. 27th Avenue in Miami.). The
condominium is unencumbered by a mortgage.
6. Merrill Lynch Securities Account – In September 2014, Yanelin
opened a second investment securities account at Merrill Lynch in
Coral Gables, Florida and transferred over some of the stocks from
her Fidelity Investments account.
7. $975,000 in Cash and a $510,000 Condominium - In September
2015, Yanelin testified that Milton gave her a cashier’s check in the
amount of $975,000. Yanelin used a portion of the $975,000
cashier’s check to purchase a third condominium (Unit 14A, located
at 1607 Ponce de Leon Boulevard in Coral Gables; purchase price
$510,000). The condominium is unencumbered by a mortgage.
Yanelin testified that the balance of the $975,000 was used by her
to purchase additional corporate securities that were deposited into
the Merrill Lynch account. At the time of trial, the Merrill Lynch
account held $896,745 in corporate stock and cash.
8. $14,000 in Cash – Yanelin testified that Milton gave her a check for
$14,000 in 2016 to commemorate the birth of her daughter. Milton
was not the father of the child. The check was deposited into
Yanelin’s Chase bank account, where it remained as of trial.
In addition, Yanelin admitted in her deposition testimony which was
introduced at trial that she did not pay anything to Milton or give him any
consideration for the transfer of these marital assets to Yanelin. She testified
8
the transfers were all gifts to her. Mark testified at trial that Milton never told
Patricia about the affair with Yanelin and about the transfers of marital assets
that Milton made to Yanelin. The trial court permitted Milton’s testimony from
a March 29, 2017 deposition to be introduced at trial, over Mark’s hearsay
objections, where Milton testified that Patricia orally consented to the two $1
million gifts he made to Yanelin, but Patricia never signed U.S. Gift Tax
Returns. However, Milton conceded that Patricia “did not directly and
personally” join with him in making any transfers of the marital assets to
Yanelin, as was required under the Marital Agreement. Milton testified he
gave Yanelin money because she was poor.
After the bench trial concluded, the trial court entered its first order,
“Findings of Fact and Conclusions of Law,” dated October 29, 2020. In this
order, the trial court found that all the assets accessed by Milton to make
transfers to Yanelin came from the Wallaces’s joint marital assets that were
owned by Milton and Patricia as tenants by the entireties. The trial court
stated, “[I]t is conceded that virtually all of Milton and Patricia’s very
considerable estate (except his Individual Retirement Account, . . .) was held
in tenancy by the entireties.” The trial court further acknowledged that Milton
and Patricia’s Marital Agreement also indicated that they held most almost
all of their marital property as tenants by the entirety. The trial court noted
9
that in addition to the prohibition against transfer contained in the Marital
Agreement, under Florida law, Milton did not have the right to transfer
tenancy by the entirety assets to Yanelin without Patricia’s knowledge and
consent. The trial court also found that Milton conceded at trial that Patricia
did not directly and personally join with him in making any transfers of joint
marital assets to Yanelin.
Moreover, the trial court did not accept Yanelin’s position that Patricia
was aware that Milton was having an extramarital affair with her and that
Patricia consented to Milton’s transfer of millions of dollars of their marital
assets to Yanelin. The trial court found this explanation “dubious on its face”
and “inherently suspect.” Although the trial court permitted Milton to testify at
trial—over Mark’s hearsay objections—that he transferred marital assets
with his wife’s “consent,” the trial court found “that his assertions were also
self-serving and inherently hard to believe.” The trial court found that under
Lowry v. Florida National Bank of Jacksonville, 42 So. 2d 368 (Fla. 1949);
Murray v. Sullivan, 376 So. 2d 886 (Fla. 1st DCA 1979); and Sharps v.
Sharps, 214 So. 2d 492 (Fla. 3d DCA 1968), where a married couple owns
property in the form of tenancy by the entireties and where one spouse
alienated a substantial share of that property, a prima facie case of unjust
10
enrichment against the recipient of the property is made out. The court wrote
in its order:
The burden is on the recipient of the property to establish the
consent of the other spouse. . . . [T]he case at bar does not
involve a “grande” from Starbucks. It involves millions of dollars
given by a married man to his mistress. Here consent is not
reasonably implied but must be proved. Because Yanelin cannot
carry the burden to prove that those millions of dollars were given
with Patricia’s consent, Yanelin was unjustly enriched and equity
will impose a remedy in the form of a constructive trust.
***
To recap: Over the course of a decade and a half, Milton Wallace
gave millions of dollars in money and property to Ms. Torres-
Rodriguez, with whom he was carrying on a romantic liaison. The
money and property was held in tenancy by the entireties by
Milton and his late wife Patricia. Without Patricia’s consent to
these gifts, which consent I found that Ms. Torres-Rodriguez had
not established by clear and convincing evidence, Milton had no
legal right to give them and Ms. Torres-Rodriguez no legal right
to receive and retain them.
***
Milton Wallace’s transfer of funds and assets to Yanelin Torres-
Rodriguez was wrongful, and he knew it. Yanelin Torres-
Rodriguez’s receipt and retention of those funds and assets was
wrongful, whether or not she knew it. Ms. Torres-Rodriguez has
been unjustly enriched.
Accordingly, the court found that under count IV, Mark had made a showing
for imposition of a constructive trust because Yanelin was unjustly enriched
11
by Milton’s transfers. The court denied relief under counts I, II and III of
Mark’s third-party complaint. 3
Although the parties had rested their case, the trial court ordered a
supplemental evidentiary hearing to determine whether any of the assets
purchased by Milton could be retained by Yanelin because of a “change of
position” or by virtue of the passage of time as contemplated by Section 65
of the Restatement (Third) of Restitution and Unjust Enrichment. The trial
court directed the parties to present “evidence and argument” as to the
following issues: 1) Which, if any, assets presently in Yanelin’s hands were
given to her by Milton or can be traced directly to gifts from Milton; 2) whether
Yanelin could prove change of position as a consequence of Milton’s gifts,
such that a constructive trust as to a particular gift or gifts would be
inequitable; and 3) whether the passage of a substantial period of time since
the receipt of any gift would render the imposition of a constructive trust
inequitable as to that gift. Also in its order, the trial court enjoined Yanelin
from transferring any of the real estate or stocks attributable to the gifts and
transfers of tenancy by the entireties property made to her by Milton.
3
Mark is not appealing the trial court’s ruling regarding count I for
constructive fraud, nor count III for aiding and abetting breach of fiduciary
duty/aiding and abetting fraudulent transfers.
12
The court then conducted a supplemental hearing on November 19,
2020 to answer the three questions it posed in its October 29, 2020 order.
Regarding the tracing of the marital assets into Yanelin’s possession, Mark
filed a chart titled “Transfers of Wallace Joint Marital Assets Traced in
Rodriguez’s Possession,” with citations to the trial transcript. As accurately
demonstrated in the chart, all the joint marital assets discussed at trial that
were in Yanelin’s possession were directly traced to Milton Wallace.
After the hearing, in its December 8, 2020 order, the trial court found
that Yanelin’s position had changed by her inaction. The court stated:
[Milton] made clear to [Yanelin] that he wished to provide for her,
to make her financially secure and even comfortable. In
exchange, she provided him her time, her companionship, and
her intimate affection. She did not go to college and study for a
career. She did not get a job and build up pension benefits and
social security credits. She became Milton Wallace’s paramour.
The court then concluded:
[Yanelin’s] position is changed, very much changed, from what
it was. In reliance on Milton Wallace’s support, and his assurance
of continued support, she refrained from finding whatever
employment she would otherwise have been obliged to find. Her
employment opportunities may have been meager; but whatever
they were, they are likely unavailable to her in her present
circumstances. Her position has changed.
Accordingly, the trial court found that Yanelin’s change of position resulted
from the inaction she took in never developing earned income. The trial court
13
thus allowed Yanelin to keep three out of the seven contested marital assets.
The court divided the marital assets as follows:
-2000 shares of Exxon Mobile stock – Mark
-$14,000 give to Yanelin to mark the birth of her son in 2016 –
Mark
-Condominium at 1607 Ponce de Leon, Apt. 14A (purchased with
$975,000 cashier’s check) that has been Yanelin’s principal
place of residence for last five years – Yanelin
-Condominium at 1690 S.W. 27th Avenue, Apt. 801 held as
investment property – Yanelin
-Fidelity Investments Acct. No. xxx-480165 corporate stock –
Yanelin
-Condominium at 1690 S.W. 27th Avenue, Apt. 308 held as
investment property – Mark
-Merrill Lynch Acct No. 47A96 stock brokerage account – Mark
Yanelin has not disgorged these assets yet. Thereafter, the trial court
entered its Final Judgment on December 8, 2021, in accordance with 1) the
October 29, 2020 Findings of Facts and Conclusions of Law, as well as 2)
the December 8, 2020 Supplemental Findings of Fact and Conclusions of
Law. Mark then appealed on behalf of the Irrevocable Trust, and Yanelin
cross-appealed the trial court’s Final Judgment.
14
DISCUSSION
Direct Appeal
On appeal, Mark contends that 1) the trial court erred in allowing
Yanelin to keep more than $1.7 million of the fraudulently transferred marital
assets, and 2) Mark proved the fraudulent transfer claim as a matter of law.
Yanelin answers that 1) the trial court did not err in allowing her to keep more
than $1.7 million of the assets but erred in not allowing her to keep all the
assets, and 2) there was no evidence of fraudulent transfer. We agree with
Mark on his first point on appeal but disagree with him on his second point.
The trial court correctly imposed a constructive trust against all the assets in
Yanelin’s possession that were purchased with the Wallaces’s tenancy by
the entireties property and transferred to Yanelin. However, under the
circumstances, the trial court erred in applying the equitable principle of
detrimental reliance or change of position when it permitted Yanelin to retain
three of the seven marital assets because it found that Yanelin had been
induced by Milton into not working or not getting an education. 4
We do not disturb factual findings of the trial court supported by
competent substantial evidence. As this court explained, “[w]hen a cause is
4
We do not address the second issue on appeal brought by Mark (whether
Mark proved the fraudulent transfer claim), as the constructive trust issue is
dispositive on this appeal.
15
tried without a jury, the trial judge’s findings of fact are clothed with a
presumption of correctness on appeal, and these findings will not be
disturbed unless the appellant can demonstrate that they are clearly
erroneous.” Universal Bevs. Holdings, Inc. v. Merkin, 902 So. 2d 288, 290
(Fla. 3d DCA 2005); see also Duncanson v. Serv. First, Inc., 157 So. 2d 696,
699 (Fla. 3d DCA 1963) (“We are duty bound not to disturb the findings of
fact of a trial judge in a case heard without a jury where such findings are
based upon conflicting competent evidence.”). However, the trial court’s
application of law is subject to de novo review. S. Baptist Hosp. of Fla., Inc.
v. Welker, 908 So. 2d 317, 318-19 (Fla. 2005) (explaining that questions of
law are subject to de novo review).
“It is well settled in Florida that an estate by the entireties is vested in
the husband and wife as one person, and neither spouse can sell, forfeit, or
encumber any part of the estate without the consent of the other, nor can
one spouse alone lease it or contract for its disposition without such
consent.” Douglass v. Jones, 422 So. 2d 352, 354-55 (Fla. 5th DCA 1982).
Thus, in its order, the trial court correctly relied on Sitomer v. Orlan, 660 So.
2d 1111, 1113 (Fla. 4th DCA 1995), which held that “neither spouse may
sever or forfeit any part of the [marital] estate without the assent of the other,
so as to defeat the right of the survivor.” Id. at 1113. The Fourth District Court
16
of Appeal in Sitomer held that “the nonseverability doctrine preserves the
entireties status of funds even after one spouse renames an account or
transfers money from it without the consent of the other.” Id. at 1114. The
correct remedy here was exactly as the trial court did, which was to impose
a constructive trust because it is imposed as “an equitable remedy in a
situation where there is a wrongful taking of the property of another.” Abele
v. Sawyer, 750 So. 2d 70, 74 (Fla. 4th DCA 1999). In addition, the trial court
may impose a constructive trust against a recipient of funds who has not
engaged in any type of wrongful conduct. Browning v. Browning, 784 So. 2d
1145, 1148 (Fla. 2d DCA 2001).
At trial, Yanelin’s position was that Patricia consented to Milton’s
transfer of tenancy by the entireties assets. However, the trial court did not
accept her argument and did not believe the evidence presented on the issue
of Patricia’s consent, finding “the whole story inherently suspect.” In Florida,
when a spouse or the legal representative of a spouse challenges a transfer
of tenancy by the entireties property by the other spouse, the transferee has
the burden of proving that the transfer does not adversely affect the interest
of the other spouse and that the transfer was done with “the full knowledge,
assent and acquiescence of such other spouse.” Both spouses consented to
the transfer and that neither spouse was adversely affected by the transfer.
17
Murray, 376 So. 2d at 889. Moreover, the transferee has the burden of
proving these two factors by clear and convincing evidence. Id. The court
found that Yanelin did not carry her burden of proof in establishing that
Patricia consented to the transfers.
The trial court held that Milton had no legal right to make the transfers
of joint marital assets when he did, that Yanelin had no legal right to receive
them and keep them, and that they both knew what they each were doing
was wrong, under Florida law and under the Marital Agreement/Irrevocable
Trust. The trial court correctly relied, in part, on this court’s opinion in Brown
v. Hanger, 368 So. 2d 63, 64 (Fla. 3d DCA 1979), where this court affirmed
the trial court’s imposition of a constructive trust in favor of the wife where
the husband sold tenancy by the entireties assets and used the cash
gifts/payments to his secretary/friend during the marriage, without the wife’s
consent. However, after making the initial determination in the first order that
the properties were all tenancy by the entirety properties and thus Milton had
no right to transfer them or Yanelin to keep them, the trial court concluded in
its December 8, 2020 Supplemental Order that Yanelin’s position was
changed by her inaction when she “refrained from finding whatever
employment she would otherwise have been obliged to find.” Mark is correct
that the trial court incorrectly applied the equitable principle articulated in
18
Section 65 of the Restatement (Third) of Restitution and Unjust Enrichment,
when it allowed Yanelin to keep three out of the seven subject assets that
she was not entitled to under the law.
First, as a prudential matter, change of position is an affirmative
defense that must be raised. See Section 65, Restatement (Third) of
Restitution and Unjust Enrichment, comment “a”. Yanelin did not plead a
change of position defense, thus, she waived it. Goldberger v. Regency
Highland Condo. Ass’n, Inc., 452 So. 2d 583, 585 (Fla. 4th DCA 1984).
Similarly, Mark is correct that the trial court erred in allowing Yanelin to be
recalled as a witness to testify about her detrimental reliance or change of
position, a defense she did not plead. Arky, Freed, Stearns, Watson, Greer,
Weaver & Harris, P.A. v. Bowmar Instrument Corp., 537 So. 2d 561, 563
(Fla. 1988).
Next, even if we were to consider the equitable defenses on their
merits, they would not lead to the result reached by the trial court. Section
65, “Change of Position,” states: “If receipt of a benefit has led a recipient
without notice to change position in such manner that an obligation to make
restitution of the original benefit would be inequitable to the recipient, the
recipient’s liability in restitution is to that extent reduced.” (Emphasis added).
Here, Yanelin was not “without notice.” Yanelin knew she was receiving
19
marital property, as the record reflects that she kept inquiring whether Milton
had filed the U.S. Gift Tax Return documents with the IRS, but she never
determined if Patricia had consented to the transfer of Patricia’s assets.
Comment “f” to Section 65 of the Restatement (Third) of Restitution and
Unjust Enrichment, “Notice,” states: “Section 65 incorporates the familiar rule
that the defense of change of position is not available to one who acts with
notice of the facts underlying the eventual restitution claim. . . .” Thus,
Yanelin cannot now claim that by not pursuing a job or going to school, she
changed her position because she was on notice that she was receiving
marital property that belonged to Patricia.
Accordingly, the trial court erred when it allowed Yanelin to keep the
$105,000 condominium located at 1690 SW 27th Avenue, Unit 801, in Miami;
all of the stock and cash in the Fidelity Investments account, and the
$510,000 condominium located at 1607 Ponce de Leon Boulevard, Unit 14A,
in Coral Gables.
CROSS-APPEAL
In her cross-appeal, Yanelin contends that imposing a constructive
trust was error because Mark did not prove by clear and convincing evidence
each element for imposition of a constructive trust. This Court reviews a trial
20
court’s ruling on unjust enrichment under the competent, substantial
evidence standard of review. Cole Taylor Bank v. Shannon, 772 So. 2d 546,
552 (Fla. 1st DCA 2000); Flatirons Bank v. Alan W. Steinberg Ltd. P’ship,
233 So. 3d 1207, 1212 (Fla. 3d DCA 2017). As previously explained, a
constructive trust was the appropriate remedy for a claim of unjust
enrichment, Saporta v. Saporta, 766 So.2d 379, 381-82 (Fla. 3d DCA 2000),
and clear and convincing evidence supported the trial court’s imposition of
such. Abreu v. Amaro, 534 So. 2d 771, 772 (Fla 3d DCA 1988) (“The person
seeking to impose a constructive trust must prove those factors giving rise
to a trust by clear and convincing evidence.”). “A constructive trust may be
imposed against a recipient of funds who has not engaged in the wrongful
conduct that justifies the imposition of the trust.” Joseph v. Chanin, 940 So.
2d 483, 487 (Fla. 4th DCA 2006) (citing Browning, 784 So. 2d at 1148).
CONCLUSION
Under the facts of this case, a constructive trust is the proper remedy
to recover tenancy by the entireties assets wrongfully transferred by Milton
to Yanelin during his marriage to Patricia, without Patricia’s consent.
Accordingly, on Mark’s direct appeal, we reverse that portion of the Final
Judgment that finds support in the trial court’s December 8, 2020
21
Supplemental Findings of Fact and Conclusion of Law order allowing Yanelin
to keep (1) the $105,000 condominium located at 1690 SW 27th Avenue,
Unit 801, in Miami-Dade County; (2) all of the stock and cash in the Fidelity
Investments account, and (3) the $510,000 condominium located at 1607
Ponce de Leon Boulevard, Unit 14A, in Coral Gables. These three marital
assets, along with the other four assets awarded to Mark by the trial court in
the October 29, 2020 Findings of Fact and Conclusions of Law order, are to
be disgorged by Yanelin to Mark so that they can be placed into the
Irrevocable Trust. Regarding Yanelin’s cross-appeal, the remainder of the
Final Judgment that finds support in the trial court’s October 29, 2020 order
imposing a constructive trust against the other assets conveyed to Yanelin
is affirmed. Accordingly, we affirm in part and reverse in part the December
16, 2021 Final Judgment. We remand for the trial court to amend the Final
Judgment consistent with this opinion.
Affirmed in part; reversed in part and remanded.
22