PBCBA BAR BULLETINS MAY 2020 BULLETIN - Page 18

PROBATE CORNER Third Party Liability For Breach Of Trust (continued) DAVID M. GARTEN In Kent v. Kent, 431 So. 2d 279 (Fla. 5th DCA 1983), the trust beneficiaries sued the trustee and the buyer of trust property for civil conspiracy. The beneficiaries alleged that the property was a major asset of the trusts and that it had been transferred by the trustee to the buyer for less than fair consideration. They further alleged that the trustee and buyer conspired to deplete the trust assets and to convert those assets to themselves, and that the trustee leased and sold trust assets to the buyer for consideration which they both knew was inadequate in a scheme to defraud the beneficiaries. The appellate court found that these allegations, if proven, would constitute conduct amounting to a civil wrong. In Blatt v. Green, Rose, Hahn & Piotrkowski, 456 So. 2d 949 (Fla. 3rd DCA 1984), the residuary beneficiaries of the testator/ husband’s estate entered into an agreement with the testator's surviving spouse pursuant to which the beneficiaries assigned to the surviving spouse a certain percent of the residual estate in return for the surviving spouse’s relinquishment of any claims against the estate. The surviving spouse subsequently died and the personal representative of her estate (“PR”) brought an action alleging in part that the attorney for the beneficiaries conspired with the beneficiaries/personal representatives of the estate to deprive the surviving spouse of the agreed upon percentage of the residuary estate. The PR further alleged that the attorney obtained court orders and took other various steps to have the assets of the estate distributed without regard to the agreement, and that the residuary beneficiaries distributed all of the assets of the estate to themselves without regard to the previously entered agreement. The trial dismissed the complaint. The appellate court reversed and found that the complaint stated a cause of action for a civil conspiracy based upon an alleged violation of their fiduciary duty imposed by §733.815, F.S., i.e., private contracts among interested persons. Under the allegations of the complaint, such an agreement was executed and therefore, the beneficiaries/personal representatives had a duty imposed by statute to abide by the terms of the agreement. The beneficiaries and attorney allegedly breached their duty in bad faith when they ignored the agreement and improperly had all the assets distributed to themselves. The court held that if these allegations are ultimately proved, the personal representatives would be liable to the PR for the damages or loss which resulted from the breach of this fiduciary duty. for the acts of the others, as well as for his own acts. The theory of the early common law was that there was a mutual agency of each to act for the others, which made all liable for the tortious acts of anyone. In Smyrna Developers, Inc. v. Bornstein, 177 So.2d 16 (Fla. 2d DCA 1965), the plaintiff stated a cause of action for civil conspiracy where the complaint alleged that the defendants, attorneys who had been retained by plaintiff corporation and who were informed of the corporation's land development plans, conspired together and used this knowledge to deprive the corporation of the property and obtain it for themselves. By virtue of this relationship, the tortfeasor becomes liable for the actions of those with whom he acted in concert such that there is a joint enterprise, and a mutual agency, so that the act of one is the act of all, and liability for all that is done is visited upon each. See W. Keeton, Prosser & Keeton on Torts § 52, at 346 (5th ed. 1984)). C. Restatement (Second) of Torts §§875 & 876 (Acting In Concert) Joint and several liability among multiple tortfeasors exists when the tortfeasors, acting in concert or through independent acts, produce a single injury. This principle is set forth in the Restatement (Second) of Torts §§875 & 876 which provide as follows: § 875. Contributing Tortfeasors-General Rule. “Each of two or more persons whose tortious conduct is a legal cause of a single and indivisible harm to the injured party is subject to liability to the injured party for the entire harm.” § 876. Persons Acting in Concert. “For harm resulting to a third person from the tortious conduct of another, one is subject to liability if he (a) does a tortious act in concert with the other or pursuant to a common design with him, or (b) knows that the other's conduct constitutes a breach of duty and gives substantial assistance or encouragement to the other so to conduct himself, or (c) gives substantial assistance to the other in accomplishing a tortious result and his own conduct, separately considered, constitutes a breach of duty to the third person.” In Acadia Partners, L.P. v. Tompkins, 759 So. 2d 732 (Fla. 5th DCA 2000), plaintiff, after winning a breach of contract judgment against a corporation, sought to pierce the corporate veil and impose liability upon corporate directors, together with the corporation's accountant and counsel, for fraudulently inducing plaintiff to loan money to the corporation. In its complaint, plaintiff alleged that the accountant and the attorney in their capacity as board members had made misrepresentations and conspired to devise a plan to fraudulently induce plaintiff to loan funds to the corporation so that the chairman and vice-chairman of the board of directors and the CEO of the corporation could use the funds for their personal use. The court held that these allegations set forth a viable basis for joint and several liability under the terms described in Restatement (Second) of Torts §876. See also Conley v. Boyle Drug Company, 477 So. 2d 600 (Fla. 4th DCA 1985); Roos v. Morrison, 913 So. 2d 59 (Fla. 1st DCA 2005). D. Aiding & Abetting A cause of action for aiding and abetting a breach of fiduciary duty requires a plaintiff to establish: 1) a fiduciary duty on the part of a primary wrongdoer; 2) a breach of that fiduciary duty; 3) knowledge of the breach by the alleged aider and abettor; and 4) the aider and abettor's substantial assistance Comment on Clause (a) reads: a. Parties or encouragement of the wrongdoing. See are acting in concert when they act Fonseca v. Taverna Imps., Inc., 212 So. 3d in accordance with an agreement to 431 (Fla. 3rd DCA 2017). cooperate in a particular line of conduct or to accomplish a particular result. The Refer to the following cases for stating a agreement need not be expressed in words cause of action for aiding and abetting a and may be implied and understood to fraud: Perlman v. Wells Fargo Bank, N.A. , exist from the conduct itself. Whenever 2014 U.S. App. LEXIS 8497 (11th Cir. 5/6/14) two or more persons commit tortious acts and ZP No. 54 Ltd. P’ship v. Fid. & Deposit in concert, each becomes subject to liability Co. of Md., 917 So. 2d 368, 372 (Fla. 5th DCA 2005). PALMBEACHBAR.ORG 18