Varela v. Bernachea
917 So.2d 295 (2005)
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Rule of Law:
When one person funds a joint bank account, a gift to the other joint tenant is presumed, and this presumption can only be rebutted by clear and convincing evidence that the donor lacked donative intent at the time of the transaction.
Facts:
- Cristina Varela and Carlos Bernachea began a romantic relationship in late 2000.
- In late 2001, at Bernachea's request, Varela stopped working and moved into his Florida condominium, where he supported her financially.
- On January 4, 2002, Bernachea, a retired attorney, added Varela as a joint tenant with a right of survivorship to his Merrill Lynch CMA account, which he solely funded.
- Varela received a Visa check card for the account and used it freely with no restrictions placed on her access by Bernachea or the bank.
- On October 18, 2002, Bernachea suffered a heart attack.
- While Bernachea was hospitalized, his daughters barred Varela from seeing him and from the condominium they shared.
- On October 25, 2002, Varela wrote a check for $280,000 from the joint CMA account and deposited it into a new personal account in her own name.
Procedural Posture:
- Carlos Bernachea sued Cristina Varela and Merrill Lynch in the Florida Circuit Court (trial court) to determine the ownership of the funds in the CMA account.
- After a bench trial, the Circuit Court entered a Final Judgment in favor of Bernachea, finding he was the sole owner of the account because he lacked donative intent.
- Cristina Varela, as the appellant, appealed the trial court's Final Judgment to the District Court of Appeal of Florida, Third District.
- Carlos Bernachea is the appellee in the appeal.
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Issue:
Does a person who funds a joint bank account rebut the legal presumption of a gift by later claiming he misunderstood the account's legal significance and only intended for the other joint tenant to have 'restricted' access via a check card?
Opinions:
Majority - Per Curiam
No. Bernachea failed to rebut the legal presumption of a gift because he did not present clear and convincing evidence of a lack of donative intent. The court reasoned that the legal presumption of a gift arises when one party funds a joint account. The only evidence offered to rebut this presumption was Bernachea's own 'dubious' testimony that he, a former attorney, misunderstood the legal significance of a joint tenancy, which was directly contradicted by the credible testimony of his banker who explained the account terms to him in Spanish. Furthermore, the court found no 'principled distinction' between giving access via a paper check versus a check card; providing unfettered access to funds via a check card does not constitute 'restricted' access and is strong evidence supporting donative intent, not refuting it.
Analysis:
This decision reinforces the high evidentiary standard of 'clear and convincing evidence' required to rebut the presumption of donative intent in joint tenancy bank account cases. The court's analysis modernizes the understanding of financial instruments by treating access via a check card as legally equivalent to access via a traditional checkbook, reflecting contemporary banking realities. This precedent makes it significantly more difficult for a donor to later rescind a gift of funds in a joint account by simply claiming a misunderstanding of the terms, especially if the donor is a sophisticated party.
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