LENIN E. RIVAS
v.
SHIU M. TSANG, GENEVIEVE L. TSANG, CESAR A. SUAREZ-RIVERA, AMELIA TORRES, ET AL.

Fla. 5th DCA | 2020-04-24
No. 19-0965
Edwards, J., Orfinger, J., Grosshans, J., Schreiber, J.
Florida District Court of Appeal, Fifth District (2020)

AI-generated. These summaries, headnotes, and key points are machine-generated and may contain errors or omissions. Always verify against the full opinion text below. Not legal advice.

Holding

A property owner who had actual knowledge of a fraudulent transfer but failed to take action to record notice of his claim for more than a year is barred by laches and equitable estoppel from recovering the property from a subsequent bona fide purchaser for value without notice.

Headnotes

[1] When two seemingly innocent parties must suffer a loss caused by a third party's misdeed, the party who could have prevented the misdeed is deemed the least innocent and…

[2] A property owner who has actual knowledge of a fraudulent transfer but fails to notify authorities, record a lis pendens, or otherwise place notice in the public record f…

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Key Quotes

“where one of two seemingly innocent parties must suffer a loss caused by the misdeed of a third party, 'the least innocent should suffer, and the least innocent is the one who could have prevented the misdeed.'”

Establishes the foundational equitable principle governing the court's decision between two innocent parties harmed by a third party's fraud.

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Facts & Procedural History

Rivas allowed his cousin Suarez to manage his rental property. In 2011, Suarez allegedly created a forged power of attorney and sold the property to i…

The full statement of facts, procedural history, and disposition for this case are member content.

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Topics
Bona Fide Purchaser For Value Without Notice Fraudulent Transfer Conversion

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Opinion of the Court
Grosshans

IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA

FIFTH DISTRICT

NOT FINAL UNTIL TIME EXPIRES TO

FILE MOTION FOR REHEARING AND

DISPOSITION THEREOF IF FILED

LENIN E. RIVAS,

Appellant,

v. Case No. 5D19-965

SHIU M. TSANG, GENEVIEVE L.

TSANG, CESAR A. SUAREZ-RIVERA, AMELIA TORRES, ET AL.,

Appellees.

________________________________/

Opinion filed April 24, 2020

Appeal from the Circuit Court for Osceola County, Margaret H. Schreiber, Judge.

Jesus Irizarry, of Irizarry Mendez PL, Orlando, for Appellant.

Nancy E. Brandt, of Bogin, Munns & Munns, P.A., Orlando, for Appellee, Genevieve L. Tsang. No Appearance for other Appellees.

EDWARDS, J.

This case exemplifies the equitable principle that where one of two seemingly innocent parties must suffer a loss caused by the misdeed of a third party, “the least innocent should suffer, and the least innocent is the one who could have prevented the misdeed.” Countrywide Funding Corp. v. Palmer, 589 So. 2d 994, 996 (Fla. 2d DCA

4 was not until 2017, after the sale to Appellee and after filing suit, that Appellant finally reported Suarez’s alleged fraud to police and had his attorney file a lis pendens. Appellant’s failure to act meant that when Appellee took title to the property, she lacked notice, either constructive or actual, of any alleged irregularities in the chain of title. As a “bona fide purchaser without notice of any alleged irregularities in the public record chain of title, . . . [Appellee] is protected from claims outside that chain of title.” Hardemon v. United Cos. Lending Corp., 746 So. 2d 1231, 1232 (Fla. 3d DCA 1999); see also Nunes v. Allstate Inv. Props., Inc., 69 So. 3d 988, 991 (Fla. 4th DCA 2011) (finding that the appellee “was an innocent, bona fide purchaser of . . . real property for value” and that he “was the very person the public record was there to protect and the person to whom the [appellant] owed a duty”); § 695.01(1), Fla. Stat. (2014) (“No conveyance, transfer, or mortgage of real property . . . shall be good and effectual in law or equity against creditors or subsequent purchasers for a valuable consideration and without notice, unless the same be recorded according to law . . . .”). Having carefully considered all of Appellant’s arguments, we affirm the final summary judgment entered in favor of Appellee.

AFFIRMED.

ORFINGER and GROSSHANS, JJ., concur.

Footnotes
2 1991). We affirm the trial court’s order granting summary judgment in favor of Appellee, Genevieve L. Tsang. Beginning in 2011, Appellant, Lenin Rivas, allowed his cousin, Cesar A. Suarez- Rivera, to manage Appellant’s rental home. Also in 2011, Suarez allegedly created a fraudulent and forged power of attorney, which he used to sell Appellant’s property to innocent purchasers, the Paganis, in December 2012. Appellant was alerted to the sale in February 2013 when the lender on the rental property stopped debiting his account for the monthly mortgage payments. The lender told Appellant his mortgage was satisfied when his property was sold. In February 2013, Appellant confirmed both the fact of the sale to the Paganis and Suarez’s use of the allegedly forged power of attorney to accomplish the sale. After Appellant confronted him, Suarez allegedly admitted what he had done and gave Appellant access to the closing documents. Initially, Appellant did nothing beyond speaking with Suarez. He did not notify the police, did not seek to set aside the sale to the Paganis, and did not notify the Paganis of this state of affairs. Appellant did hire an attorney in February 2014, but he did not cause a lis pendens or lawsuit of any kind to be filed then. Unaware that there was anything to be concerned about, in April 2014, the Paganis sold the property to Appellee, who qualifies in every sense of the word as a bona fide purchaser for value without knowledge of any misdeed. Appellant filed suit against Appellee seeking a declaration of their respective rights to the home in question sometime in 2015. Appellant also named Suarez and a purported accomplice of Suarez as defendants in the same suit, but sought monetary relief as to those two defendants.
3 Both parties moved for summary judgment. The undisputed facts before the trial court were as laid out above. Appellant had more than a year of actual knowledge of the allegedly fraudulent transfer that Suarez had accomplished, but took no action to put anything in the public record. Accordingly, the trial court found that as between Appellee and Appellant, Appellant was the least innocent party and his conduct or failure to act contributed to the losses. It has long been the law in Florida that “[i]f one man knowingly, though he does it passively by looking on, suffers another to purchase and expend money on land under an erroneous opinion of title, without making known his claim, he shall not afterwards be permitted to exercise his legal right against such person.” Coram v. Palmer, 58 So. 721, 722 (Fla. 1912) (citing Hagan v. Ellis, 22 So. 727, 729 (Fla. 1897)); accord Unity Banking & Saving Co. v. Bettman, 217 U.S. 127, 135 (1910) (finding that while “the general rule” is that “[a]s against the true owner, a right of property cannot be acquired by means of a forged written instrument relating to such property,” an exception to this general rule arises “where the owner by laches, or by culpable, gross negligence, or by remaining silent when he should speak, has induced another, proceeding with reasonable caution, to act with reference to the property, in the belief that the instrument was genuine, or would be so recognized by the owner” (emphasis added)). Put another way, “if one remains silent when it is his duty to speak, he will not be permitted to speak when in justice he should remain silent.” United Serv. Corp. v. Vi-An Constr. Corp., 77 So. 2d 800, 803–04 (Fla. 1955). Although Appellant had retained counsel prior to the conveyance of the property by the Paganis to Appellee, he still took no action to protect his claim to the property. It

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