IN THE SUPREME COURT STATE OF FLORIDA CASE NO. Lower Court Case No.: 4D02-2639 LAURI F. PARKER, individually and as the natural guardian of CASSIE DANIELE PARKER, Petitioner, v. STEVEN J. SHULLMAN, as Personal Representative of the ESTATE OF BARBARA KATZ SILBERMAN, as Trustee of the PAUL SILBERMAN MARITAL TRUST, and as Trustee of the BARBARA KATZ SILBERMAN TRUST, Respondent. On Petition For Review From The District Court of Appeal, Fourth District BRIEF IN SUPPORT OF JURISDICTION SHUTTS & BOWEN LLP William Jay Palmer, Esq. Florida Bar No. 175255 Stephen T. Maher Florida Bar No. 200859 201 South Biscayne Boulevard 1500 Miami Center Miami, Florida 33131 Telephone: (305) 358-6300 Telefax: (305) 381-9982
Counsel for Petitioner Lauri Parker
TABLE OF CONTENTS Page TABLE OF CONTENTS...i TABLE OF AUTHORITIES... ii INTRODUCTION... 1 STATEMENT OF THE CASE AND FACTS... 1 ARGUMENT... 3 THE DECISION OF THE FOURTH DISTRICT COURT OF APPEAL BELOW EXPRESSLY AND DIRECTLY CONFLICTS WITH Van Dusen v. Southeast First National Bank, 478 So.2d 82 (Fla. 3d DCA 1985).... 3 CONCLUSION... 9 CERTIFICATE OF SERVICE... 10 CERTIFICATE OF TYPE SIZE... 10 APPENDIX OPINION BELOW... A-1 ORDER DENYING REHEARING... A-2 i
TABLE OF AUTHORITIES CASES: Page Ansin v. Thurston, 101 So.2d 808 (Fla. 1958)... 3 Bush v. Palermo Realty, Inc. 443 So. 2d 104 (Fla. 4 th DCA 1983)... 8 Cadwalader v. Beasley, 728 So. 2d 253 (Fla.4 th DCA 1998)... 8 Central States, Southeast & Southwest Areas Pension Fund v. Central Transport, Inc., 472 U.S. 559 (1985)... 6 Ford Motor Co. v. Kikis, 401 So. 2d 1341 (Fla. 1981)... 3 Malkus v. Gaines, 434 So. 2d 957 (Fla. 3d DCA 1983)... 8 Meinhard v. Salmon, 249 N.Y. 458, 164 N.E. 545 (1928)... 5, 6, 8 Mystan Marine, Inc. v. Harrington, 339 So. 2d 200 (Fla. 1976)... 3 Pegram v. Herdrich, 530 U.S. 211 (2000)... 6 Searcy v. Schiller, 629 So. 2d 947 (Fla. 4 th DCA 1993)... 8 Van Dusen v. Southeast First National Bank 478 So. 2d 82 (Fla. 3d DCA 1985)... 3,4,5,8 ii
CASES: Wainright v. Taylor, 476 So. 2d 669 (Fla. 1985)... 3 Young v. Field, 548 So. 2d 784 (Fla. 4 th DCA 1989)... 8 STATUTES AND RULES: Article V, Section 3(b)(3) of the Florida Constitution...1 Florida Rule of Appellate Procedure 9.030(a)(2)(A)(iv)...1 2A A. Scott & W. Fratcher, Trusts 170, 311 (4th ed.1987)... 6 G. Bogert & G. Bogert, Law of Trusts and Trustees 543 (rev. 2d ed. 1980)... 6 OTHER AUTHORITIES: Merrium-Webster Unabridged Dictionary (2002)... 6 iii
INTRODUCTION This brief is filed in support of a petition for discretionary review of the decision of the Fourth District Court of Appeal in Parker v. Shullman, District Court of Appeal Case No. 4D02-2639 (April 16, 2000) (Appendix A-1). Review is sought by Lauri Parker, the plaintiff/appellant below, pursuant to Article V, Section 3(b)(3) of the Florida Constitution and Florida Rule of Appellate Procedure 9.030(a)(2)(A)(iv). STATEMENT OF THE CASE AND FACTS Petitioner, Lauri F. Parker, appears individually and as natural guardian of her minor child, Cassie Parker. They are the ultimate beneficiaries of the Estate of Barbara Katz Silberman, the Barbara Katz Silberman Trust, and the Paul Silberman Marital Trust. Respondent Steven Shullman is the personal representative of the estate and trustee of both trusts. (Appendix A-1.) Petitioner petitioned to remove Respondent as personal representative and trustee. After a nine day trial during which 18 witnesses were called and one hundred and twenty three documents were introduced, the trial court refused to remove Respondent as personal representative and trustee. (Appendix A-1.) The Fourth District opinion sets out the portion of the trial court's order that it believed best summarized its reasoning. That portion includes the following: 1
The decision before the court has to be whether the accumulation of 'vindictive' decisions, or questionable decisions, or indecision or deliberately made decisions made by Steven Shullman as either personal representative or trustee adds up to sufficient evidence for this court to remove him as the trustee of the trusts and as the personal representative. (Appendix A-1.) The trial court found that the accumulated conduct did not rise to the level necessary to overrule the wishes of the grantor/testator because she "simply did not trust [Petitioner] to make intelligent financial decisions," she "implicitly trusted" [Respondent], and "she was obviously of sound mind when she made the decision to put [Respondent] completely in control." (Appendix A-1.) On appeal, the Fourth District Court of Appeal affirmed, agreeing that the accumulations of conduct found by the trial court did not "rise to the level necessary to override" the decedent's decision to appoint Respondent. The Fourth District stated it "also views some of the actions taken by [Respondent] to be somewhat questionable and vindictive...," but it found no abuse of discretion in denying the petition. On May 14, 2003, the Fourth District Court of Appeal denied Petitioner's motion for rehearing and motion for clarification. (Appendix A-2.) Petitioner timely filed a Notice to Invoke Discretionary Jurisdiction on June 10, 2003. 2
ARGUMENT THE DECISION OF THE FOURTH DISTRICT COURT OF APPEAL BELOW EXPRESSLY AND DIRECTLY CONFLICTS WITH Van Dusen v. Southeast First National Bank, 478 So.2d 82 (Fla. 3d DCA 1985). This Court has jurisdiction to hear this appeal pursuant to Article V, Section 3(b)(3) of the Florida Constitution and Florida Rule of Appellate Procedure 9.030(a)(2)(A)(iv) because of an express and direct conflict of decisions. It is not necessary that the conflict of decisions be expressly identified in the District Court opinion. Ford Motor Co. v. Kikis, 401 So. 2d 1341 (Fla. 1981). This Court s concern in cases of conflict jurisdiction is the precedential effect of those decisions which are incorrect and in conflict with decisions reflecting the correct rule of law. Mystan Marine, Inc. v. Harrington, 339 So. 2d 200 (Fla. 1976); Ansin v. Thurston, 101 So.2d 808 (Fla. 1958). Wainright v. Taylor, 476 So. 2d 669, 670 (Fla. 1985)(emphasis added). This could be called The Case of the Vindictive Trustee. Vindictive is defined in the Merrium-Webster Unabridged Dictionary (2002) as disposed to seek revenge and secondarily as intended to cause anguish or hurt. One would think that a "vindictive trustee" is an oxymoron. But that is not how the Fourth District saw it. 3
The Fourth District affirmed a trial court judgment that found that an accumulation of vindictive decisions, or questionable decisions, or indecision by the trustee and personal representative was not sufficient evidence for this court to remove [Respondent] as trustee of the trusts and as personal representative. (Appendix A-1.) On appeal, the Fourth District conceded that the trustee had repeatedly been vindictive toward the beneficiary. ("This court also views some of the actions taken by [Respondent] to be somewhat questionable and vindictive. ) but did not find those facts required removal of the trustee. Repeated vindictive action against a beneficiary is a serious violation of the trustee s duty of loyalty to the beneficiary. Using the dictionary definition of vindictive, repeated vindictive action means that the trustee has repeatedly been disposed to seek revenge on the beneficiary and has repeatedly intended to cause the beneficiary anguish or hurt. By holding that repeated vindictive action by a trustee against a beneficiary does not require removal, the Fourth District has created a new, lower standard of trustee behavior that expressly and directly conflicts with the standard of trustee behavior announced in Van Dusen v. Southeast First National Bank, 478 So. 2d 82, 92 (Fla. 3d DCA 1985). In Van Dusen, the Third District held that [a] personal representative is held to the standards of a trustee. [citations omitted.] The duty of 4
loyalty owed by trustees is of the highest order. Van Dusen v. Southeast First National Bank, 478 So. 2d 82, 92 (Fla. 3d DCA 1985). The Third District then adopted Justice Cardozo s classic standard of trustee behavior first set out in Meinhard v. Salmon, 249 N.Y. 458, 464, 164 N.E. 545, 546 (1928): Many forms of conduct permissible in a workaday world for those acting at arm s length are forbidden to those bound by fiduciary ties. A trustee is held to something stricter than the morals of the marketplace. Not honesty alone, but the punctilio of an honor the most sensitive is the standard of behavior. A trustee can meet the Third District s punctilio of honor the most sensitive standard of behavior only if he or she observes every detail of honorable conduct with the highest degree of sensitivity for the beneficiary. Repeated vindictive action by a trustee cannot meet this standard. Removal is the mechanism through which the trustee standard of behavior is enforced. The Fourth District s decision not to remove a repeatedly vindictive trustee establishes a new, lower standard of trustee behavior below the standard set by Van Dusen. There is no question that Van Dusen states the correct rule of law. It is in line with the common law of this nation, as explicated by the United States Supreme Court: Thus, the common law (understood as including what were once the distinct rules of equity) charges fiduciaries with a duty of loyalty to guarantee beneficiaries interests: 'The most fundamental duty owed by the trustee to the beneficiaries of the trust is the duty of loyalty. It is the duty of a trustee to administer the trust solely in the interest of the 5
beneficiaries.' 2A A. Scott & W. Fratcher, Trusts 170, 311 (4th ed.1987) (hereinafter Scott); see also G. Bogert & G. Bogert, Law of Trusts and Trustees 543 (rev. 2d ed. 1980) ('Perhaps the most fundamental duty of a trustee is that he must display throughout the administration of the trust complete loyalty to the interests of the beneficiary and must exclude all selfish interest and all consideration of the interests of third persons'); Central States, supra, at 570 571[Central States, Southeast & Southwest Areas Pension Fund v. Central Transport, Inc., 472 U.S. 559 (1985)]; Meinhard v. Salmon, 249 N. Y. 458, 464, 164 N. E. 545, 546 (1928) (Cardozo, J.) ('Many forms of conduct permissible in a workaday world for those acting at arm s length, are forbidden to those bound by fiduciary ties. A trustee is held to something stricter than the morals of the market place. Not honesty alone, but the punctilio of an honor the most sensitive, is then the standard of behavior'.) Pegram v. Herdrich, 530 U.S. 211, 224 (2000) (applying the common law when interpreting ERISA). According to the common law, the most fundamental duty of a trustee is to display complete loyalty to the interests of the beneficiary and exclude all selfish interest. The repeatedly vindictive trustee, by definition, falls below this standard of behavior. Because he or she is vengeful and spiteful toward the beneficiary, words that are synonyms for vindictive in the Merrium-Webster Unabridged Dictionary (2002), the vindictive trustee is selfish and lacks complete loyalty. A trustee who acts with vengeance and spite towards the beneficiary falls below the standard of trustee behavior established by the Third District, the common law as expressed by the United 6
States Supreme Court, and the wisdom of Justice Cardozo reflected in his classic explanation of the trustee standard of behavior. A standard of behavior is only meaningful if it is enforced. A decision that allows a trustee to remain in place after finding repeated vindictive action toward a beneficiary is in express and direct conflict with one that rejects the morals of the marketplace, requires a duty of loyalty of the highest order, and insists on the punctilio of honor the most sensitive in dealings between a trustee and beneficiary. The Fourth District s new, lower standard of trustee behavior is in conflict with the Third District's higher traditional standard. This Court should take jurisdiction and resolve the conflict. This Court is the ultimate guardian of the standard of trustee behavior in this state. It should recognize, as Justice Cardozo did, the importance of uncompromising rigidity in the maintenance of this standard of behavior: As to this [standard] there has developed a tradition that is unbending and inveterate. Uncompromising rigidity has been the attitude of courts of equity when petitioned to undermine the rule of undivided loyalty by the disintegrating erosion of particular exceptions. [citation omitted.] Only thus has the level of conduct for fiduciaries been kept at a level higher than that trodden by the crowd. It will not consciously be lowered by any judgment of this court. 7
Van Dusen v. Southeast First National Bank, 478 So.2d 82, 92 (Fla. 3d DCA 1985)(quoting Meinhard v. Salmon, 249 N.Y. 458, 464, 164 N.E. 545, 546 (1928). The instant case is important to more than those who are denominated as trustees. The trustee standard of behavior is applicable to many others in the state. Florida courts have applied Cardozo s classic standard of trustee behavior to brokers, Young v. Field, 548 So. 2d 784 (Fla. 4 th DCA 1989); Bush v. Palermo Realty, Inc. 443 So. 2d 104 (Fla. 4 th DCA 1983), partners, Cadwalader v. Beasley, 728 So. 2d 253 (Fla.4 th DCA 1998), lawyers, Searcy v. Schiller, 629 So. 2d 947 (Fla. 4 th DCA 1993), and joint ventures, Malkus v. Gaines, 434 So. 2d 957 (Fla. 3d DCA 1983). The Fourth District has lowered the standard of behavior for trustees, personal representatives, brokers, partners, lawyers and joint venturers from "the punctilio of honor the most sensitive" to "the morals of the marketplace" where one can expect to sometimes bear the brunt of vindictive action. The Case of the Vindictive Trustee should not be allowed to stand. 8
CONCLUSION Petitioner, Lauri Parker, respectfully submits that the decision of the Fourth District decision below expressly and directly conflicts with a decision of the Third District. Moreover, only this Court can ensure the uniformity of a fiduciary's duty of loyalty and that such duty is of the highest order. Petitioner respectfully requests that this Court exercise its jurisdiction to review the erroneous and conflicting decision of the Fourth District Court of Appeal. Respectfully submitted, SHUTTS & BOWEN LLP Attorneys for Appellant 201 South Biscayne Boulevard 1500 Miami Center Miami, Florida 33131 Telephone: (305) 358-6300 Telefax: (305) 381-9982 By: William Jay Palmer, Esq. Fla. Bar No. 175255 Stephen T. Maher, Esq. Fla. Bar No. 200859 9
CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing Brief of Petitioner Lauri Parker on Jurisdiction was mailed this day of June, 2003 to Peter J. Forman, Esq., Co-Counsel for Appellee, Tescher Gutter Chaves Josepher Rubin Ruffin & Forman, P.A., 2101 Corporate Boulevard, Suite 107, Boca Raton, Florida 33431-7343, and H. Steven Vogel, Esq., Co- Counsel for Appellee, Wilson, Elser, Moskowitz, Edelman & Dicker LLP, 3800 Bank of America Tower, 100 S. E. Second Street, Miami, FL 33131. CERTIFICATE OF TYPE SIZE In accordance with Florida Rule of Appellate Procedure 9.210(a)(2), this Petition has been prepared using Times New Roman 14 point font. MIADOCS 601227.2 MGA 10