Centrust Sav. Bank v. Barnett Banks Trust Co.

Citations: 483 So. 2d 867; 11 Fla. L. Weekly 527Docket: 85-515, 85-521

Court: District Court of Appeal of Florida; February 26, 1986; Florida; State Appellate Court

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

Wade Clifford Goodlett served as a court-appointed guardian for his son, Milton Wesley Goodlett, and withdrew $100,000 from guardianship funds to open a certificate of deposit savings account in his capacity as trustee for his son. Shortly after, he took a $50,000 loan from the appellant savings and loan association using the trust account as collateral. The guardianship court later substituted the appellee bank as the successor guardian and approved the assignment of the trust account from Goodlett to the bank. The bank then sought a judicial declaration that the savings and loan association was aware that the pledged funds were trust assets, rendering the pledge void. The trial court ruled in favor of the bank, leading to the savings and loan association's appeal.

The court affirmed the trial court's decision, stating that the trustee's pledge of trust funds for personal debt constituted a breach of trust. It emphasized the right of the beneficiary to protect their equitable interest from third-party interference. The ruling highlighted that for a third party to be implicated in a breach of trust, they must have knowledge or notice of the breach. The court noted that the nature of the trust account should have alerted the savings and loan association to the possibility that the funds were not solely the trustee's property, thus preventing them from applying the funds against the trustee's personal debts. The decision referenced relevant case law, reinforcing that the identification of the account as a trust account was sufficient notice of the potential involvement of third-party interests.

In the case of Home Federal Savings and Loan Association of Hollywood v. Emile, the appellant, a savings and loan association, contended that $100,000 drawn from a guardianship account to fund a savings trust account did not indicate it was guardianship money. The court emphasized that anyone who knowingly assists a trustee in breaching their fiduciary duty may be held liable. The definition of fiduciary encompasses not only guardians but also trustees and corporate officers. The trial court established that the funds were indeed guardianship funds, but this finding was unnecessary as the appellee bank, as the assignee of the trust's beneficiary, had a rightful claim to the trust funds.

The appellant was obligated not to accept the funds for a personal loan, as it only needed to recognize them as trust funds, not specifically guardianship funds. The documentation presented by the appellant was sufficient to demonstrate the trust nature of the funds and the personal nature of the $50,000 loan. The court found that the appellant's records provided actual notice of the trust funds' status and confirmed wrongful use of these funds.

The appellant further argued that under Florida law, a totten trust can be revoked at will, implying the funds were personal to the trustee and could be pledged for a personal loan. The court rejected these arguments, noting they effectively acknowledged the trust nature of the funds while attempting to evade legal repercussions. The appellant's claims should have been raised as affirmative defenses, which they failed to do, thus the appellee bank was not required to address these unpleaded assertions to secure summary judgment. Additionally, the court clarified that the loan was made to the trustee in his individual capacity, not as a trustee. The ruling affirmed the summary judgment in favor of the appellee bank, rendering the related issues in a consolidated appeal moot.