Plaintiffs are becoming more creative in the claims they bring against fiduciaries.  So, too, are the fiduciaries when they get sued.   In two opinions in Berlinger v. Wells Fargo Bank, N.A., here and here (links via Justia), a federal court in Florida dismissed some claims brought against a corporate trustee while allowing some of the corporate trustee’s claims against its individual co-trustee to go forward.

Wells Fargo and Bruce D. Berlinger were co-trustees of the Rosa B. Schweiker Trust and all of its related trusts.  Stacey Sue Berlinger, Brian Bruce Berlinger, and Heather Anne Berlinger, beneficiaries of the trusts, sued the corporate trustee – but not Bruce D. Berlinger, who is the plaintiffs’ father – for breach of trust, breach of fiduciary duty, and civil theft.  They also brought a claim for injunctive relief. 

The corporate trustee then filed a third party complaint against Bruce D. Berlinger, its co-trustee of the trusts, alleging claims of contribution and unjust enrichment.  It also brought an unjust enrichment claim against the plaintiffs’ mother, Sue Casselberry.

Court Dismisses Civil Theft Claim Against Trustee

The corporate trustee successfully convinced the federal court to dismiss the civil theft count (and the claim for injunctive relief) against it.

Florida’s civil theft statute requires a plaintiff to allege that the defendant (1) knowingly, (2) obtained or used, or endeavored to obtain or use, plaintiffs’ property with (3) “felonious intent” (4) either temporarily or permanently to (a) deprive plaintiffs of their right to or a benefit from the property or (b) appropriate the property to defendant’s own use or to the use of any person not entitled to the property.  The plaintiffs here alleged that the corporate trustee “failed and refused to transfer, and therefore did not return, the Plaintiff’s property, having possessed the felonious intent to steal and commit theft by permanently or temporarily depriving the Plaintiffs of their immediate right to and benefit from the property, or through the appropriating of the Plaintiffs property for the Defendant’s own use in violation of Florida Statute § 812.014(1) and (2).”  The plaintiffs, however, failed to allege sufficient facts to support the conclusory allegation that the corporate trustee possessed “felonious intent.”  Therefore, the civil theft claim was dismissed without prejudice and with leave to amend.  In other words, the plaintiffs needed to allege specific facts that, if true, would demonstrate felonious intent.

The corporate trustee also contended that the civil theft claim should be dismissed because (1) the plaintiffs did not have standing to assert a claim for civil theft; (2) Florida’s civil theft statute is trumped by Florida’s trust code; (3) plaintiffs’ allegations regarding damages from the purported theft were insufficient; and (4) plaintiffs’ civil theft claim was barred by the economic loss rule.  Thus, if the plaintiffs amend their complaint against the corporate trustee to add the missing allegations regarding felonious intent, expect to see these 4 issues raised again.

Court Allows Contribution and Unjust Enrichment Claims to Go Forward

Berlinger, however, did not have similar success with his attempt to dismiss the contribution and unjust enrichment claims against him.

While the court had not yet decided whether Pennsylvania or Florida law would apply to this action, under either Florida or Pennsylvania law, a co-trustee is entitled to contribution from the other co-trustee only if both co-trustees are liable to the beneficiaries.  The corporate trustee alleged that Berlinger requested that the corporate trustee invest $2 million in the marital home, requested that the corporate trustee fund certain capital improvements, and requested that the corporate trustee approve regular disbursements of funds.  The corporate trustee also alleged that Berlinger had joint responsibility for investment decisions.  Additionally, the corporate trustee alleged that it will pay more than its fair share of a common liability, Berlinger should pay part of the liability that would be borne by the corporate trustee, the corporate trustee would suffer damages in an amount equal to the excess share of common liability paid by the corporate trustee, and Berlinger should contribute to payment of any amounts deemed owed to the plaintiffs.  In doing so, the corporate trustee set forth a plausible claim for contribution.  The court also summarily found that the corporate trustee set forth a plausible claim for unjust enrichment.