Mark A. Saccullo v. United States

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[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 17-14546
________________________
D.C. Docket No. 8:16-cv-00410-CEH-TBM
MARK A. SACCULLO,
as Successor Trustee of the Anthony L.
Saccullo Irrevocable Trust for the benefit
of Mark A. Saccullo,
Plaintiff-Counter Defendant-Appellant,
DOROTHY A. SACCULLO,
Counter Defendant-Appellant,
TAX COLLECTOR OF CHARLOTTE
COUNTY, FLORIDA,
Counter Defendant,
versus
UNITED STATES OF AMERICA,
Defendant-Counter Claimant-Appellee.
________________________
Appeal from the United States District Court
for the Middle District of Florida
________________________
(January 11, 2019)
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Before MARCUS, NEWSOM, and ANDERSON, Circuit Judges.
NEWSOM, Circuit Judge:
One relic of the English legal tradition holds that, as a general matter, the
sovereign (here, the United States) is not bound by statutes of limitation or subject
to laches. The question before us is how this vestigial rule—nullum tempus
occurrit regi, or, as the parties here call it, the “Summerlin” principle, after United
States v. Summerlin, 310 U.S. 414, 416 (1940)—interacts with a Florida law
designed to correct technical flaws in property-conveyance deeds.
At issue in this case is whether Fla. Stat. § 95.231, which operates to cure
certain defective deeds after the passage of five years, applies to a parcel on which
the United States has asserted a federal estate-tax lien. Here’s the (very) short
story: In 1998, the appellant’s aging father executed a deed conveying property to
a trust created for the appellant’s benefit—but unfortunately, failed to procure a
second witness, as Florida law requires. Following the appellant’s father’s death in
2005, the United States assessed an estate tax on the property—which it said
remained in the estate despite the attempted conveyance—and, when the tax
remained unpaid, imposed a series of liens. The question here is whether
Summerlin forestalls enforcement of § 95.231’s five-year-cure provision to defeat
the United States’ estate-tax claim. We hold that it does not. Section 95.231 cured
the deed in question, thereby effectuating the intended conveyance and transferring
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the property out of the father’s estate, well before the United States’ claim could
have vested. The Florida statute, therefore, didn’t cut off a preexisting claim in a
way that might offend Summerlin; rather, it simply—and validly—prevented that
claim from coming into being in the first place.
I
A
Mark Saccullo has lived on the property at issue here, the site of his
childhood home, since 1991. In 1998, Mark’s father Anthony, who owned what
we’ll call “the Property” in fee simple, executed a deed that purported to convey it
to the “Anthony L. Saccullo Irrevocable Trust for the benefit of Mark A.
Saccullo.” For the most part, the deed conformed to the necessary formalities, and
it was properly notarized and recorded in December 1998. There was just one
glitch: the deed bore the signature of only one witness, not the two required by Fla.
Stat. § 689.01. That failure effectively negated the conveyance—at least for the
time being, but more on that later—and despite the deed, Anthony retained title to
the Property.
When Anthony died in December 2005, Mark became the trustee of his
father’s irrevocable trust. Mark filed an estate-tax return and—mistakenly it now
seems—included the Property among the estate’s assets. In 2007, the IRS assessed
an estate tax of almost $1.4 million, apparently under the impression that the estate
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still owned the Property. Shortly thereafter, Mark, acting in his capacity as trustee,
conveyed the Property via quitclaim deed to himself and his wife.
Because the estate-tax liability remained delinquent, the government filed
two tax-lien notices with Charlotte County, Florida—one against the estate in
2012, and another against the Property in 2015. The IRS later administratively
seized the Property and unsuccessfully sought to sell it, as the estate-tax liability
increased to $1.6 million.
B
After the administrative seizure, Mark filed a quiet-title action in the United
States District Court for the Middle District of Florida, contending that the liens
didn’t cover the Property because it was (in fact) not part of his father’s estate
when he died.1 The government counterclaimed, seeking to foreclose on its liens.
The government subsequently moved for summary judgment on its
counterclaim arguing, as relevant here, that the Property remained in Anthony’s
estate, and was thus “subject to [the government’s] tax lien” because, as explained
above, “the 1998 deed was not properly witnessed.” 2 In opposing the
1
Federal question jurisdiction arises under 28 U.S.C. § 2410, which provides that district courts
may hear quiet-title actions concerning property on which the United States has a lien.
2
The government also argued that the deed was void because it failed to properly identify a
grantee. The district court rejected that argument, and the government does not repeat it here.
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government’s motion, Mark relied on Fla. Stat. § 95.231, which, in relevant part,
states that
[f]ive years after the recording of an instrument required to be
executed in accordance with s. 689.01 . . . from which it appears that
the person owning the property attempted to convey [the property],
. . . the instrument . . . shall be held to have its purported effect to
convey [the property] . . . as if there had been no lack of . . . witness or
witnesses . . . in the absence of fraud, adverse possession, or pending
litigation.
Fla. Stat. § 95.231(1). By dint of that provision, Mark said, “the deed would have
had any defects cured . . . by operation of law” in December 2003, five years after
the deed’s initial recording.
The district court granted the government’s summary-judgment motion,
holding that despite § 95.231(1) the Property remained in the estate and that the
IRS could therefore foreclose on its liens. First, the court concluded that
§ 95.231(1) did not create good title in the trust because the deed’s missing second
witness was not among the technical defects that the statute operates to cure.
Second, and in any event, the court held that § 95.231(1) is essentially a statute of
limitations, which, under Summerlin, does not bind the United States.
Accordingly, the district court ordered foreclosure and sale of the Property and
required Mark to vacate within 30 days.
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This appeal followed.3 Although we initially denied Mark’s motion to stay
the order of sale pending our review, we later granted his renewed stay motion and
directed the parties to submit supplemental briefing on the question whether Fla.
Stat. § 95.231 “is an ordinary statute of limitations that should be subject to the
rule set forth in United States v. Summerlin, 310 U.S. 414 (1940).”
II
Before diving too deeply into Summerlin, we need to establish a state-law
baseline: As a matter of Florida property law, who owned what, and when? To
answer that question, we look first to the text of § 95.231. Again, in relevant part,
that statute provides that, absent exceptions that don’t apply here, “[f]ive years
after the recording of an instrument required to be executed in accordance with s.
689.01 . . . from which it appears that the person owning the property attempted to
convey [the property], . . . the instrument . . . shall be held to have its purported
effect to convey [the property] . . . as if there had been no lack of . . . witness or
witnesses.” Fla. Stat. § 95.231(1). The statute goes on, in a separate section, to
state that “no person shall assert any claim to the property against the claimants
under the deed or will or their successors in title” after 20 years. Id. § 95.231(2).
3
Because this appeal comes to us on summary judgment, we review the district court’s decision
de novo. United States v. Spoor Tr. Of Louise Paxton Gallagher Revocable Tr., 838 F.3d 1197,
1201 (11th Cir. 2016).
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Section 95.231’s second clause—which cuts off claims after 20 years—
plainly falls within Summerlin’s ambit, as it is “clearly a limitations statute.” Earp
& Shriver, Inc. v. Earp, 466 So. 2d 1225, 1227 (Fla. 2d Dist. Ct. App. 1985). But
this case isn’t about the second clause—we are, after all, just now passing the 20-
year mark following the 1998 deed’s initial recording. Rather, this case turns on
the statute’s first clause, which, when read in conjunction with the second, makes
clear that § 95.231 “is not a traditional statute of limitation but is a curative act
with a limitation provision.” Holland v. Hattaway, 438 So. 2d 456, 461 (Fla. 5th
Dist. Ct. App. 1983). The question we must answer is whether Summerlin
nonetheless applies.
A
First, a threshold issue: Setting aside the United States’ involvement—and
for the moment, Summerlin—is the witness-related defect here the kind of
technicality that § 95.231(1) operates to rectify? The district court held that it
isn’t. The court reasoned that the statute “cannot be used to create title where none
existed” and that the absence of the prescribed number of witnesses rendered the
deed statutorily incurable.
That is incorrect, as both parties agree. In its brief to us, the government
concedes that “the absence of a required witness signature” did not “invalidate[]
the 1998 deed beyond the reach of [the] statute.” Section 95.231(1) expressly
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states that after the requisite five-year period a recorded deed “shall be held to have
its purported effect” despite the “lack of . . . witness or witnesses.” Thus, at least
in the ordinary case, a missing witness is precisely the kind of defect that the
statute was designed to cure.
B
The parties’ agreement ends there. They diverge over § 95.231(1)’s
operation—in particular when, and how, the statute cures defective deeds. The
dispute here turns on § 95.231(1)’s statement that an otherwise-defective deed
“shall be held to have its purported effect” five years after it is recorded—and, in
particular, how to understand the phrase “shall be held.” Fla. Stat. § 95.231(1).
Mark contends that the statute’s curative properties are automatic and self-
executing—and, therefore, that the once-defective 1998 deed was rendered “valid
by operation of state law in 2003,” five years after the deed was originally
recorded. The government, in contrast, asserts that under § 95.231(1)’s language a
valid cure requires some form of formal adjudication—either judicial or
administrative—before marketable title transfers. As the government put the
matter at oral argument, the term “‘held’ requires a holding.” Oral Argument at
13:23.
Both readings are plausible. It’s true, as the government asserts, that the
“shall be held” language could be understood to supply a rule of decision for an
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adjudicative proceeding, such that the phrase indeed “requires a holding.”
According to one dictionary definition, for instance, “hold” means “to decide in a
judicial ruling,” as in “the court held that the man was sane.” Webster’s Third New
International Dictionary 1078 (2002). But the word “held” is not only, or even
principally, court jargon. “[S]hall be held” could just as sensibly be construed to
mean something like “shall be considered”—to take just one fairly prominent
example, “We hold these truths to be self-evident . . . .” And indeed, the same
dictionary that supplies a court-related definition also—and in fact beforehand—
defines “hold” to mean “consider, regard, think, judge”—as in “held by many to be
the greatest contemporary tennis player.” Id. See also, e.g., Oxford English
Dictionary Online, http://www.oed.com (Dec. 28, 2018) (in relevant part, defining
“hold” to mean, first, “[t]o accept and entertain as true [or] to believe” or “[t]o
think, consider, esteem, regard as,” and, alternatively, to mean “[o]f a judge or
court: [t]o state as an authoritative opinion [or] to law down as a point of law [or]
decide”).
Happily, it’s not up to us to pick and choose between these competing
constructions of § 95.231(1). We are bound by the Florida courts’ interpretation of
Florida law, see, e.g., Bradshaw v. Richey, 546 U.S. 74, 76 (2005), and although
the Florida Supreme Court hasn’t squarely addressed the specific question before
us, the clear weight of Florida authority favors the held-as-“considered” reading.
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Earp & Shriver v. Earp, for instance, involved an appeal from a judgment
“declaring void a deed for”—as here—“lack of subscribing witnesses.” 466 So. 2d
at 1226. The Second DCA reversed, holding—without qualification or intimation
that anything further was required—that “[a]fter the requisite passage of time, the
statute cured the deficiency in subscribing witnesses.” Id. at 1227. Glanville v.
Glanville, 856 So. 2d 1045 (Fla. 5th Dist. Ct. App. 2003), is to the same effect.
There, when a grantor sought to invalidate a deed on the ground that it was not
properly witnessed and acknowledged, the grantee raised § 95.231(1) as an
affirmative defense. Citing Earp with approval, the Fifth DCA held that “the
statute bar[red] the claim” because the suit “was filed more than five years after the
deed was recorded.” Id. at 1047. Taken together, these cases show that, after five
years, the statute not only shields a once-defective deed from judicial attack, but
also—of its own force—affirmatively mends it back to health.
We hold, then, that Mark didn’t have to go to court to enforce § 95.231(1)’s
curative provision. Instead, the deed was “held”—as in considered—“to have its
purported effect” by operation of law in December 2003, five years after it was
initially recorded.
III
So where does that leave us vis-à-vis Summerlin? Under Summerlin,
“[w]hen the United States becomes entitled to a claim, acting in its governmental
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capacity and asserts its claim in that right, it cannot be deemed to have abdicated
its governmental authority so as to become subject to a state statute putting a time
limit upon enforcement.” Summerlin, 310 U.S. at 417. Put slightly differently,
when a statute of limitations “invalidate[s a] claim of the United States, so that it
cannot be enforced at all,” the time bar—as against the government, anyway—is
unenforceable. Id. In the sections that follow, we first review the doctrine and
underlying policy of the Summerlin rule, and then determine whether the rule
applies in this case.
A
As noted at the outset, the so-called Summerlin rule dates to well before the
Summerlin decision itself. Riding circuit in an early case, Justice Joseph Story
invoked the rule and, for support, cited English cases and commentaries stretching
back to the 1200s. See United States v. Hoar, 26 F. Cas. 329, 330 (C.C.D. Mass.
1821). The “centuries”-old nullum tempus principle, he observed, sprang from the
concern that the “king is always busied for the public good, and, therefore, has not
leisure to assert his right within the times limited to subjects.” Id. So too in the
young Republic, Story continued, there was a “great public policy of preserving
the public rights, revenues, and property from injury and loss, by the negligence of
public officers.” Id. The Supreme Court later agreed, acknowledging that nullum
tempus survived the Revolution and the founding and inured to the United States as
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an “incident[] of . . . sovereignty.” United States v. Thompson, 98 U.S. 486, 489
(1878).
Over time, courts have made clear that nullum tempus provides a hedge
against, well, bad government. In particular, the rule is founded on the concern
that the public suffers when the government sleeps on its rights. See United States
v. Delgado, 321 F.3d 1338, 1349 (11th Cir. 2003) (“This principle protects public
rights vested in the government for the benefit of all from the inadvertence of the
agents upon which the government must necessarily rely.”) (quotations omitted).
Thus, whereas individual citizens can be penalized for inattentiveness in enforcing
their rights, the United States cannot be. See, e.g., Guaranty Trust Co. of N.Y. v.
United States, 304 U.S. 126, 132 (1938) (“Regardless of the form of government
and independently of the royal prerogative once thought sufficient to justify it, the
rule is supportable now because its benefit and advantage extend to every citizen,
including the defendant, whose plea of laches or limitation it precludes.”).
Importantly here, the Summerlin principle has its limits. In Guaranty Trust,
for example, the Supreme Court held that the nullum tempus rule is inapplicable
where the United States has not “acquired a right free of a pre-existing infirmity.”
304 U.S. at 142 (citing United States v. Buford, 28 U.S. 12, 29 (1830)). There, for
instance, because the relevant limitations period had expired before the United
States acquired the claim it sought to enforce, nullum tempus did not apply. See
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id.; see also United States v. California, 507 U.S. 746, 757–58 (1993) (applying
similar logic in a subrogation claim and holding that “Summerlin is clearly
distinguishable”). As the Ninth Circuit nicely summarized matters in Bresson v.
Commissioner, “[t]aken together, Summerlin and Guaranty Trust suggest two
countervailing principles.” 213 F.3d 1173, 1176 (9th Cir. 2000). “On the one
hand,” the court explained, “if the United States comes into possession of a valid
claim, that claim cannot be ‘cut off’ later by a state statute of limitations.” Id. But
“[o]n the other hand, if a claim already has become infirm (for example, when a
limitations period expires) by the time the United States acquires the purported
right, the rule of Summerlin will not operate to revive the claim.” Id. In short, the
Summerlin principle can’t create rights that do not otherwise exist.
B
What, then, of this case? Does Summerlin forestall the operation of
§ 95.231(1) or not? Because, following Florida’s lead, we have held that the
statute is self-executing, the question admits of an easy answer. We hold that
Summerlin is inapplicable here because, by operation of § 95.231(1), the Property
dropped out of the estate in December 2003, five years after the deed was
originally recorded—and, importantly, roughly two years before Anthony died,
and thus before any claim asserted by the United States could have accrued.
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As already explained, the Summerlin principle applies only “[w]hen the
United States becomes entitled to a claim.” Summerlin, 310 U.S. at 417. If a valid
claim never materializes—or, as in Guaranty Trust, comes with a “pre-existing
infirmity”—then Summerlin doesn’t come into play. 304 U.S. at 142. Just so here.
The United States’ claim to Anthony’s estate accrued, at the earliest, when he died
in December 2005. But by operation of § 95.231(1), Mark had acquired good title
to the Property two years earlier, in December 2003—five years after the defective
deed was recorded. Accordingly, we do not have here “a situation in which a valid
cause of action had accrued to the United States only to perish later through the
passage of time.” Bresson, 213 F.3d at 1178. Rather, § 95.231(1) prevented the
Property from becoming part of the United States’ “claim” in the first place.
Not only is this case not within the letter of the Summerlin rule, it is not
within its spirit, either. This isn’t a situation in which the United States missed out
on a claim because some government employee was asleep at the switch and
negligently let a clock run out. Because Mark’s father didn’t die until 2005, no
amount of diligence on the part of the IRS could have made it possible for the
government to acquire a valid estate-tax claim before the deed was statutorily
cured in 2003. As in Guaranty Trust, “the circumstances of the present case admit
of no appeal” to Summerlin’s policy underpinnings, because “[t]here has been no
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neglect or delay by the United States or its agents, and it has lost no rights by any
lapse of time.” 304 U.S. at 141.
IV
In sum, we hold that Fla. Stat. § 95.231(1) cured the deed by operation of
law in December 2003, that the Property was at that point validly transferred to the
trust, and that Summerlin is inapplicable here because by the time the United States
asserted its tax lien the Property no longer remained in the estate. We therefore
reverse the district court’s entry of summary judgment on the United States’
foreclosure claim as to the Property and remand for further proceedings consistent
with this opinion.
REVERSED AND REMANDED.
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