The United States Court of Appeals for the Eleventh Circuit recently reversed a lower court and held that a Florida statute cured an improperly-witnessed deed and prevented the IRS from foreclosing on the property. See Saccullo v. United States of Am., 2019 WL 168217 (11th Cir. Jan. 11, 2019). In 1998, the owner of a property executed a deed conveying the property to a trust for the benefit of his son. However, the deed was only witnessed by one individual, not the two required by Fla. Stat. § 689.01. The father died in 2005, and the IRS assessed an estate tax of $1.4 million. In 2015, it filed a tax lien against the property claiming that it was part of the father’s estate. The son then filed this action, claiming that the lien could not cover the property because the property was not owned by his father at the time of his death in 2005. The government responded that the 1998 deed was not properly witnessed and therefore ineffective. The government moved for summary judgment and the District Court granted the motion.
On appeal, the Court reversed. Under Fla. Stat. § 95.231, a deed that does not meet the requirements of Fla. Stat. § 689.01 is nonetheless considered valid five years after its recording. The government argued that this statute does not apply automatically and required “some form of formal adjudication” before it cured a deed and that, even if it did apply automatically, it would be a statute of limitations that does not bind the United States under Supreme Court precedent. See United States v. Summerlin, 310 U.S. 414 (1940) (“It is well settled that the United States is not bound by state statutes of limitation or subject to the defense of laches in enforcing its rights.”). The Court rejected these claims. First, “although the Florida Supreme Court hasn’t squarely addressed the specific question before us, the clear weight of Florida authority favors” the interpretation that Fla. Stat. § 95.231 applies automatically five years after a deed is recorded and does not require any adjudication. Second, the Court found that Summerlin does not apply here. Fla. Stat. § 95.231 cured the deed in question in 2003, five years after it was recorded and two years before the father died. At that point, the property was validly transferred from the father to the trust. Thus, there was no statute of limitations issue because the United States’ claim against the estate never accrued. At the time of his death, he no longer owned the property. “In short, the Summerlin principle can’t create rights that do not otherwise exist.” Accordingly, the Court reversed the District Court and found Fla. Stat. § 95.231 cured the deed in question.