Florida Court Places Burden Of Proof On Wrong Party To Prove Deed Invalid

In Drapp v. McDaniel, Florida’s Second District Court of Appeal considered an action to declare deeds invalid on the grounds of undue influence and lack of capacity, and quickly reversed the trial court for placing the burden of proof on the wrong party.

The Facts Of Drapp v. McDaniel

Edward McDaniel failed to pay the county property taxes on two of the properties that he owned.  Tanya Drapp (McDaniel’s daughter) learned of the delinquent taxes.  Drapp, allegedly pursuant to McDaniel’s request and with the financial assistance of Michael Streiff, paid the back taxes.  Drapp alleged that McDaniel agreed to repay Streiff, and to use the two properties as security.  Several deeds were executed.

The first deed was a quit-claim deed executed by McDaniel which deeded two properties to Drapp (the “McDaniel-Drapp Deed”).

The second deed was executed by Drapp as attorney-in-fact for McDaniel, and deeded one of the properties to Streiff.

The third deed was also executed by Drapp as attorney-in-fact, and deeded the second property to Streiff and Drapp.

Although Drapp had previously held a power of attorney for McDaniel, the power of attorney had been revoked prior to the execution of the second and third deeds.

Drapp and Streiff executed deeds quit-claiming both properties to South Florida Lending Corporation.

McDaniel then brought an action against Drapp and Streiff seeking to invalidate all three deeds. At trial, the single request was declaratory relief as to whether any of the contested deeds were valid. McDaniel alleged that he had no recollection of executing the McDaniel-Drapp deed. He alleged that he was heavily medicated, and that he was under duress and undue influence from Drapp.

The Florida trial court entered final judgment in favor of McDaniel and invalidated all three deeds.

Who Has the Burden Of Proof To Invalidate a Deed Under Florida Law?

It is the burden of the party seeking to invalidate the deed to prove that the deed is invalid under Florida law.

Challenging a Deed On Capacity Grounds

The mental capacity of a grantor is presumed once the existence of the deed is established.

Therefore, it is the burden of the party seeking to invalidate the deed to prove that the grantor lacked capacity at the time the deed was executed. In this case, the challenger was the grantor, and he had the burden of showing that he lacked capacity to execute the deed.  Capacity challenges most often happen after death.  Putting on evidence of your own lack of capacity is awkward, but required in this case to successfully have a deed declared invalid under Florida law.

Challenging a Deed On Undue Influence Grounds

A plaintiff who contests a deed conveyance on the ground of undue influence bears the burden of proof throughout the proceedings.  A deed may only be set aside on the grounds of undue influence if the party contesting the deed shows the will of the grantor was overcome depriving the grantor of free agency.

Here, the trial court found that Drapp and Streiff “failed to present any credible explanation or reason why McDaniel would voluntarily and knowingly transfer his interest in the properties.”  Thus, the trial court placed the burden of proof on Drapp and Streiff.  However, as the party challenging the deed, McDaniel bore the burden of proof, not Drapp and Streiff.

Insufficient Evidence To Establish Incapacity Or Undue Influence Under Florida Law

The appellate court went on to state that notwithstanding the trial courts error in assigning the burden of proof, the evidence was insufficient to establish incapacity or undue influence. The trial court found that:

  • McDaniel testified truthfully and credibly but was “mistaken” in his testimony that he did not sign the McDaniel-Drapp deed;
  • McDaniel “did not know the nature of the document he was being told to sign by [Ms.] Drapp” and signed the deed “at the direction of [Ms.] Drapp, who knew, or should have known, that Mr. McDaniel did not know what he was signing”; and
  • McDaniel was gravely ill, having been diagnosed with lymphoma, at the time he signed the deed.

 

The appellate court stated that while competent substantial evidence supports the court’s findings that McDaniel was suffering from the physical effects of lymphoma and its treatment and that Mr. McDaniel signed the McDaniel-Drapp deed, the remaining findings are unsupported.

Notably, there was no evidence that McDaniel’s illness affected his mental capacity or that he was otherwise mentally incapable at the time he signed the deed. Under Florida law, just because someone is sick or infirm does not mean that they lack capacity.  The trial court also seemed to disregard the testimony of the notary who testified that McDaniel did not seem to be impaired in any form.

Regarding undue influence, the appellate court also took issue with the trial court’s determination.  The trial court made no findings of fact with regard to the alleged undue influence, and the evidence did not support that McDaniel was under duress or coercion or artful or fraudulent contrivances to such degree that there was a destruction of his free agency and willpower. To the contrary, Drapp’s explanation for her involvement in McDaniel’s affairs was reasonable considering McDaniel’s own testimony and his physical health.  Therefore, the findings of the trial court that the deed was executed by McDaniel by mistake and through undue influence or fraud were simply unsupported.

The Florida appellate court reversed the final judgment insofar as the trial court erred in declaring the McDaniel-Drapp deed void. On remand, the trial court was instructed to order immediate reinstatement of the McDaniel-Drapp deed, and the subsequent deeds from Drapp and Streiff to South Florida Lending Corporation. No error was found in declaring the other two deeds invalid under Florida law.

 

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