Berlinger et al v. Wells Fargo, N.A. as Successor to Wachovia Bank, N.A.

Filing 571

OPINION AND ORDER The Court finds that plaintiffs have failed to establish by a preponderance of the evidence that Wells Fargo, N.A. breached any of its fiduciary duties to plaintiffs in connection with the investment of funds from the Rosa Trust in the Banyan Property. Judgment will therefore be entered in favor of defendant Wells Fargo, N.A. and against plaintiffs Stacey Sue Berlinger, Brian Bruce Berlinger, and Heather Anne Berlinger as to the remaining portions of Counts I and II. Judg ment shall enter in favor of defendant Wells Fargo, N.A. and against plaintiffs Stacey Sue Berlinger, Brian Bruce Berlinger, and Heather Anne Berlinger as to those portions of Counts I and II upon which summary judgement was granted in the prior Opin ion and Order (Doc. # 492 ) and as to Count III pursuant to the dismissal in the prior Opinion and Order (Doc. # 220 ). The Clerk of Court's is directed to terminate all remaining deadlines and close the file. Signed by Judge John E. Steele on 2/25/2016. (SLU)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
STACEY SUE BERLINGER, aka
Stacey Berlinger O’Connor,
BRIAN BRUCE BERLINGER, and
HEATHER ANNE BERLINGER, as
Beneficiaries to the Rosa B.
Schweiker Trust and all of
its related trusts,
Plaintiffs,
v.

Case No: 2:11-cv-459-FtM-29CM

WELLS
FARGO,
N.A.
AS
SUCCESSOR TO WACHOVIA BANK,
N.A., as Corporate Trustee
to the Rosa B. Schweiker
Trust,
and
all
of
its
related trusts,
Defendant/Third
Party Plaintiff
v.
BRUCE D. BERLINGER and SUE
CASSELBERRY,
Third Party Defendants.
OPINION AND ORDER
This matter came before the Court on February 2 through 5,
2016, for a bench trial of the remaining portions of plaintiffs’
Second Amended Complaint.
Rodgers,

Charles

Kelly,

The Court heard testimony from John A.
David

Andruczyk,

Linda

J.

LaVay

(by

deposition), Clyde C. Quinby, Richard J. Kemp, Keith Tiesta, and

William C. Reis.

The Court also received a number of exhibits

from both sides, and heard arguments from counsel.
The litigation involves three family trusts: the Rosa B.
Schweiker Family Trust, the Frederick W. Berlinger Family Trust,
and the Rose S. Berlinger Family Trust (collectively the Berlinger
Trusts), each discussed in greater detail below. Plaintiffs Stacey
Sue Berlinger (Stacey), Brian Bruce Berlinger (Brian), and Heather
Anne

Berlinger

(Heather)

(collectively

plaintiffs)

are

the

children of Bruce D. Berlinger (Bruce) and Sue Casselberry (Sue).
Wachovia Bank, N.A. (Wachovia Bank) acted as the corporate cotrustee for the Berlinger Trusts in 2007, 2008, 2009, and part of
2010.

On March 20, 2010, Wachovia Bank merged with and into Wells

Fargo, N.A. (Wells Fargo), and Wells Fargo served as corporate cotrustee for the three Berlinger Trusts for the remaining part of
2010 until March, 2011.
the

Court

will

refer

For purposes of this Opinion and Order,
to

Wachovia

Bank

and

Wells

Fargo

interchangeably.
In

their

Second

Amended

Complaint

(Doc.

#93)

plaintiffs

assert they are present beneficiaries of the Berlinger Trusts, and
assert claims of breach of trust (Count I), breach of fiduciary
duty (Count II), and civil theft (Count III) against Wells Fargo
as the former corporate trustee of the Berlinger Trusts.

More

specifically, plaintiffs assert in Counts I and II that Wachovia
Bank violated its duties as corporate trustee in three areas:

2

(1)

making distributions of principal and/or income to Bruce from the
Berlinger Trusts which were used by Bruce to pay his alimony
obligations to Sue; (2) authorizing the Rosa Trust to purchase a
one-third interest in certain residential property for $2 million
as

a

trust

investment

improvements

to

the

and

paying

property;

and

about
(3)

$250,000
failing

for
to

capital

diversify

Berlinger Trust assets and abusing its discretion in its investment
decision-making as to Berlinger Trusts assets.
The Court dismissed Count III in a previous Order (Doc. #220)
for lack of standing and failure to state a claim.

The Court

granted summary judgment in favor of Wells Fargo as to the first
and third aspect of Counts I and II (Doc. #492), and this non-jury
trial was held as to the second aspect of the Second Amended
Complaint.
The Court makes the findings of facts and conclusions of law
set forth below.
I.
Various family trusts for four generations of the Berlinger
family,

going

back

to

1961,

provide

remaining issues in this case.

the

background

for

the

The relevant family tree looks

something like this:

3

Rosa B. Schweiker

Rose S. Berlinger

Frederick Berlinger

Bruce Berlinger

Stacey

Sue Casselberry

Brian

Heather

The relevant family trusts are described below.

The remaining

issues to be decided involve conduct relating solely to the Rosa
B.

Schweiker

Will

and

Resulting

Trust

(the

Rosa

Trust).

Specifically, the issues before the Court are whether Wells Fargo
breached the Florida prudent investor rule when it allowed the
Rosa Trust to invest $2 million in the Banyan Property in return
for a one-third ownership interest, and/or when it allowed the
Rosa Trust to pay approximately $290,000 for capital improvements
to the Banyan Property.
A.

Rosa B. Schweiker Will And Resulting Trust
On February 2, 1961, Rosa B. Schweiker (Rosa) signed a will,

Defendant’s Exhibit 48, Plaintiffs’ Exhibit 1, which provided that
all her tangible personality other than currency be given to her

4

daughter, Rose S. Berlinger, and provided a token cash amount to
another individual.

(Id. at §§ 1-2.)

The residue of Rosa’s estate

was to be given to her trustees, in trust (the Rosa Trust).
at § 3.)

(Id.

During Rose’s life, the corporate trustee was to pay the

Trust income “to such of my daughter [Rose] and her issue as my
corporate trustee selects and in such proportion as it determines
without being required to maintain equality among them . . . .”
(Id.)

The provision continued that “my corporate trustee shall

bear in mind, in allocating income from time to time among my
daughter and her issues, that my daughter is the primary object of
my bounty and that it is my intention that it shall not be charged
with an abuse of its discretion should it pay all of the income to
my daughter.”

(Id.)

The Rosa Trust further provided that upon Rose’s death the
corporate trustee was to pay the principal of the trust as Rose
directed by express reference in her will.

If there was no such

express provision in Rose’s will, the trustee was to hold all
principal in trust in accordance with certain instructions: During
the life of Bruce Berlinger (Rosa’s grandson and Rose’s son), the
trustee was to pay income from the principal “to such of my
grandson and his issue as my corporate trustee selects and in such
proportion as it determines without being required to maintain
equality among my grandson and his issue, . . . .”

(Id.)

The

provision continued, stating that “my corporate trustee shall bear

5

in mind, in allocating income from time to time among my grandson
and his issues, that after the death of my daughter my grandson
will be the primary object of my bounty and that it is my intention
that it shall not be charged with an abuse of its discretion should
it pay all of the income to my grandson.”

(Id.)

Among other powers, the Rosa Trust allowed the corporate
trustee to invade the principal:

“To apply for the benefit of a

beneficiary,

my

in

such

manner

as

corporate

fiduciary

deems

appropriate, as much of the principal, the income of which it has
authority to pay to the beneficiary or to the income of which the
beneficiary is entitled, as, without considering the beneficiary’s
individual property, it determines is required for his comfortable
maintenance . . . .”

(Id. at § 6(f).)

During Rose’s lifetime

this invasion of principal was restricted as follows:

“[T]he

principal shall not be invaded for the benefit of a beneficiary
other than my daughter unless my daughter is incapable in my
corporate fiduciary’s judgment of managing her own affairs and
then only for the purpose of enabling such other beneficiary to
meet an emergency, such as illness, for the meeting of which funds
of his own of a substantial nature are not reasonably available.”
(Id.)
death:

The invasion of principal was also restricted after Rose’s
“My corporate trustee shall be similarly guided as to

invasion of principal after the death of my daughter and during
the life of my grandson should a question then arise as to invasion

6

of principal for the benefit of a beneficiary other than my
grandson.”

(Id.)

As to investments, the Rosa Trust provided that the Trustee
had the additional power “to retain any property and to purchase
such

real

or

personal

property

as

they

select

without

being

confined to investments legal for trustees and without being under
any obligation to diversify investments, to minimize risk, or to
produce income . . . .”
The

Rosa

Trust

(Id. at § 6(a).)
further

directed

“[t]hat

interests

of

beneficiaries shall not be subject to anticipation or to voluntary
or involuntary alienation, and the protection afforded by this
paragraph shall be effective both as to principal and income until
actual payment to the beneficiary.”

(Id. at § 4.)

Further, the

discretions conferred relating to the allocation of income among
beneficiaries, allocations of receipts and disbursements between
principal and income, and invasion of principal “shall not be
exercised by an individual fiduciary who can derive direct or
indict benefit from such exercise.”
B.

(Id. at § 6.)

Frederick W. Berlinger Deed of Trust
Frederick W. Berlinger (Frederick) was the husband of Rose

Berlinger and the father of Bruce Berlinger.

In December, 1988,

Frederick transferred certain property to a corporate trustee and
himself

as

provisions

trustees
which

to

created

hold

in

three

7

trust

trusts

according
(the

to

certain

Frederick

Trust).

Plaintiffs’ Exhibit 2; Defendant’s Exhibit 2.
Trust

was

created

for

the

benefit

of

First, a Lifetime

Frederick

essentially under the complete control of Frederick.
I.)

which

was

(Id. at §

Second, a Family Trust was to be created after Frederick’s

death, when the corporate trustee was to set aside $1 million in
a separate trust.

(Id. at § II.)

Under this Family Trust, if

Frederick’s wife Rose survived Frederick, the separate trust was
for the primary benefit of Rose.

(Id. at § II.A.)

The Family

Trust provided that after the deaths of both Rose and Frederick,
“[a]s much of the net income and the principal as my trustee, in
my trustee’s sole discretion, may from time to time think desirable
shall be distributed to such one or more of my descendants in such
amounts or proportions as my trustee may from time to time think
appropriate . . . .”

(Id. at § II.B.1.)

The trustee was not

required to treat the beneficiaries equally or proportionally with
regard to income distributions from the trust.

(Id. at § II.B.)

Third, after Frederick’s death a Marital Deduction Trust was
to be created from the balance of the principal.

(Id. at § III.)

If Rose survived Frederick, the net income from this Marital
Deduction Trust was to be paid to her in installments, along with
as much principal as the trustee determined was desirable for
Rose’s “health, support or maintenance.”

(Id. at § III.A.)

After

Rose’s death, the principal was to be used to pay any increase in
death taxes or administration expenses in Rose’s estate caused by

8

an inclusion of a portion of the Marital Deduction Trust.

(Id.)

The balance of the principal would be paid to one or more of
Frederick’s descendants on terms Rose appointed by a will, or in
the absence of such a valid will provision, was to be held by the
trustee subject to certain instructions.

(Id. at § III.B.)

C. Rose S. Berlinger Revocable Deed of Trust
On October 17, 1991, Rose S. Berlinger established a Revocable
Deed

of

Trust,

which

was

restated

on

September

19,

2002,

subsequently amended, and finally restated in its entirety on
October 18, 2002.

Plaintiffs’ Exhibit 3; Defendant’s Exhibit 1.

The Deed of Trust created a Living Trust in which the income was
distributed

to

Rose

during

her

lifetime.

Upon

Rose’s

death

(October 28, 2002 1), the trustee was to pay the expenses of the
last illness, funeral expenses, Rose’s debts, and death taxes from
the trust principal.

The balance of the trust estate was to be

held by the trustee as the Rose S. Berlinger Family Trust (the
Rose Trust).

This trust provided a lifetime benefit of $200 per

week to one of Rose’s employees.

The balance of the net income

was to be distributed to Bruce, his children and his more remote
descendants, in equal or unequal proportions, at such times as the
trustee deems to be in the best interest of such beneficiaries
after considering their needs, other income, resources, means of

1

Defendant’s Exhibit 49, p. WF/BER 01743, ¶ E.

9

support and any other pertinent circumstances and factors.

The

trustee was to distribute so much or all of the principal to Bruce
if it was necessary for his support or health in his accustomed
manner of living after considering his other income and resources.
Under

no

circumstances

was

there

to

be

any

distribution

of

principal to Bruce for any purpose other than his health or support
in his accustomed manner of living.
any

distribution

of

principal

exclusively by the trustee.

The determination of whether

should

occur

was

to

be

made

Additionally, the trustee could

distribute so much or all of the principal to or for the benefit
of Bruce’s children as the trustee in its sole and absolute
discretion deemed appropriate for the support, health, education,
and general welfare, in equal or unequal amounts after considering
their needs, other income, resources, means of support and any
other pertinent circumstances and factors.
II.
On

September

23,

1978,

Rosa’s

grandson

Bruce

married Sue C. Casselberry in Orlando, Florida.
Exhibit 51, ¶ 1.1; Defendant’s Exhibit 79.

Berlinger

Defendant’s

Three children were

born of this marriage, those being plaintiffs Stacey, Brian, and
Heather Berlinger.

Defendant’s Exhibit 51, ¶ 2.1.

During their marriage, Bruce and Sue became the owners of
residential property located on Banyan Blvd., Naples, Florida.
While the street address has changed over time, the property

10

consists of two and one-half lots on a small lake in the Coquina
Sands neighborhood.

This is an older, up-scale neighborhood in

which older homes are often sold simply to be torn down and
replaced with a larger residence.

Lot 69 and the western half of

lot 70 are approximately 35,000 square feet and have a two-story,
5 bedroom house with 4,950 square foot of gross living space
(“square feet under air”).
front lot

of

Lot 68 is an adjoining vacant lake-

approximately

20,100

square

feet.

The

Court’s

references to the “Banyan Property” includes all of these lots,
the house, and the appurtenances.
A. Divorce Proceedings
Sue and Bruce began divorce proceedings in Collier County
Circuit Court in December, 2003.

Defendant’s Exhibit 79, ¶4. The

Banyan Property was owned by Bruce and Sue as tenants by the
entireties, and was part of the marital assets involved in the
divorce proceedings.
After more than three years in divorce proceedings, the
parties began to resolve their property disputes.

A special

magistrate conducted an evidentiary hearing on August 20, 2007,
regarding a variety of disputed personal property, and issued a
Report, Recommendation, and Proposed Order on September 6, 2007.
Defendant’s Exhibit 49.

Mediation ultimately resulted in an

additional Marital Settlement Agreement, discussed below,

11

and

both

were

incorporated

proceedings.

into

a

final

judgment

in

the

divorce

Defendants Exhibit 51.

B. Appraisals of Banyan Property
As part of the ongoing mediation process, on September 11,
2007, Bruce's divorce attorneys retained the services of licensed
real estate appraiser and broker Clyde C. Quinby (Mr. Quinby).
Plaintiffs’ Exhibit 260.

Mr. Quinby was tasked with preparing

separate appraisals for (1) the lot and a-half with the house, and
(2) the adjoining lot.

Id.

After about six hours work, Mr. Quinby determined on September
11, 2007, that the total fair market value of the Banyan Property
was $6,675,000.

Mr. Quinby prepared a written appraisal dated

September 13, 2007, stating the fair market value of the vacant
lot was $1.74 million based upon the sales comparison approach.
Defendant’s Exhibit 47.

Mr. Quinby prepared a written appraisal

dated September 14, 2007, stating the fair market value of the
lots with the house was $4,935,000 based upon the sales comparison
approach.
Bruce’s

Defendants’ Exhibit 46.

divorce

attorneys

as

the

Both appraisals identified
client,

and

noted

that

the

intended purpose was “[t]o assist the client with arriving at a
conclusion of fair market value for the possible dissolution of
marriage purposes.” Id. Boilerplate provisions intended to shield
Mr. Quinby from liability to others provided that no one other
than the client could rely upon the appraisals.

12

Id.

Other than

knowing the appraisals were for use in the divorce proceedings,
Mr. Quinby had no information regarding the divorce proceeding
itself, how the appraisals would be used in the divorce proceeding,
or the contents of any potential settlement.
C. Bruce’s Initial Discussions With Wachovia Bank
In furtherance of the mediation process, Bruce engaged in
conversations

with

Wachovia

Bank

trust

officials

possible funding of any settlement agreement.

concerning

In about September,

2007, Bruce had discussions with Sheryl Mackey (Ms. Mackey), a
Managing Director at Wachovia Bank, regarding access to Berlinger
Trust assets.

Ms. Mackey in turn discussed the matter with David

Andruczyk (Mr. Andruczyk), a Trust Real Estate Advisor at Wachovia
Bank.
On September 11, 2007, Mr. Andruczyk conducted an exterior
“drive by” inspection of the Banyan Property to ensure that the
trust

asset

actually

Defendant’s Exhibit 10.

existed.

Plaintiffs’

Exhibit

104;

Back on August 21, 2007, Mr. Andruczyk

had informed Bruce that he would be making his annual inspection
of the Trust properties on September 11, 2007, and asked Bruce to
meet him there.

Defendant’s Exhibit 29.

Bruce was at the inspection.

Mr. Andruczyk believes

Mr. Andruczyk’s “Inspection For

Residential Properties” report noted that the value of the Banyan
Property is $6,675,000.
Exhibit 10.

Plaintiffs’ Exhibit 104; Defendant’s

While Mr. Andruczyk could not remember the source of

13

this valuation, it is clear to the Court that the value was based
upon Mr. Quinby’s two appraisals.
conducted,

although

a

No interior examination was

notation

scheduled for Sept. 2008.”

stated

Id.

“interior

inspection

On September 14, 2007, Mr.

Andruczyk and Ms. LaVay had discussions with Bruce and others
concerning access to assets in the Berlinger Trusts. Defendant’s
Exhibit 38.

Conversations among Wachovia Bank officials, and

between Wachovia Bank officials and Bruce and his representatives,
continued after the execution of a marital settlement agreement,
discussed below.
D. The Marital Settlement Agreement (MSA)
Bruce and Sue each signed a Marital Settlement Agreement (the
MSA) on September 15, 2007, Defendant’s Exhibit 49.
intended

to

resolve

all

issues

between

the

The MSA was

couple,

and

was

irrevocable. (Id., ¶¶ 1.3, 1.5, 1.6, 1.7.) The parties recognized
that the MSA was reached at a mediation conference and agreed to
be bound by its terms.
acknowledged

“that

(Id., ¶ 10.1.)

the

settlement

Each of the parties further
terms

reflected

in

this

Agreement represent a compromise and negotiated settlement.”

(Id.

¶ 12.7.)
The financial components of the MSA provided Sue with alimony
(Id. ¶¶ 3.1 – 3.7), a property settlement (Id. ¶¶ 4.1 – 4.9), and
an equalizer payment (Id. ¶¶ 4.5.)

14

Sue was provided permanent

alimony of $16,000 per month, which terminated upon the death of
either Bruce or Sue or the remarriage of Sue (Id. ¶¶ 3.2-3.4.)
The property settlement provided in relevant part that the
agreed-upon

distribution

of

marital

property

was

“fair

and

equitable between them” and was “in full and complete satisfaction
of all marital rights in and to the marital property.”
4.1.)

(Id. ¶

Under the property settlement, Bruce would take all right,

title and interest in the Banyan Property (Id. ¶¶ 4.2.1, 4.2.2);
all stock in a certain company (Id. ¶ 4.2.3); certain cash, funds
on deposit, and stock, bonds, mutual funds and securities (Id.
¶¶4.2.4, 4.2.5, 4.2.6); an IRA (Id. ¶ 4.2.7); a certain Note
receivable (Id. ¶ 4.2.8); certain personal property (Id. ¶¶ 4.2.9,
4.6); motor vehicles in his name (Id. ¶ 4.2.10); a federal tax
passive activity loss carryover (Id. ¶ 4.2.11); and credit card or
other debt in his name (Id. ¶ 4.2.12).

Under the property

settlement, Sue would take all right, title and interest in certain
cash and funds on deposit (Id. ¶¶4.3.1, 4.3.2, 4.2.6); an IRA (Id.
¶ 4.3.3); a certain motor vehicle (Id. ¶ 4.3.4); a certain Mortgage
and Note receivable (Id. ¶4.3.5); all of her accounts or debts at
or

with

Northern

Trust

Bank

(Id.

¶

4.3.6);

certain

personal

property (Id. ¶¶ 4.3.7, 4.6); and credit card or other debt in her
name (Id. ¶ 4.3.8).
Also included in the property settlement was an Equitable
Distribution Payment.

(Id. ¶ 4.5).

15

“In order to accomplish an

equitable distribution of the marital assets,” Bruce was required
to pay Sue a lump sum of $2 million in three scheduled payments:
(1) $300,000 within thirty days (i.e., October 15, 2007); (2) $1.4
million within 60 days (i.e., November 15, 2007) and (3) $300,000
upon Sue’s completion of certain conditions relating to vacating
the

Banyan

Property 2

obligations.

and

the

(Id. ¶ 4.5a-c.)

payment

of

certain

financial

Bruce and Sue further agreed that

Sue would transfer title to the Banyan Property by quit claim deed
to Bruce as sole owner in fee simple absolute no later than the
day before closing of any loan Bruce required to make either the
first $300,000 payment or the $1.4 million payment.

(Id. ¶ 4.8.)

The MSA provided that “[t]his [Equitable Distribution] payment is
intended to be a tax-free interspousal transfer related to the
cessation of marriage to effect a division of marital property
under Internal Revenue Code section 1041 and comparable provisions
of state law.”

(Id. ¶ 4.5.1.)

The parties represented to the state court that the settlement
agreement

was

fair

and

Defendant’s Exhibit 79.

was

signed

freely

and

voluntarily.

The MSA was incorporated into a final

judgment of divorce filed in the Collier County Circuit Court on
November 21, 2007.

Defendant’s Exhibit 51.

2

Sue was entitled to exclusive use of the Banyan Property
until December 1, 2007. (Id. ¶ 4.8g.)

16

E. Bruce’s Funding of Marital Settlement Agreement
Having executed the mediated MSA on September 15, 2007, Bruce
was obligated to meet the financial obligations to Sue in a
relatively short time frame.

Wachovia Bank officials continued

preliminary discussions of Bruce’s initial proposal for funding of
his obligations under the MSA.
In a September 19, 2007 1:35 p.m. email, Mr. Andruczyk advised
Ms. LaVay and three other Wachovia Bank officials that he had given
much thought to his conversation with Ms. LaVay on September 14
about the Berlinger divorce settlement.

Plaintiffs’ Exhibit 124E;

Defendant’s Exhibit 38.

Mr. Andruczyk stated that it was his

understanding

wanted

that

Bruce

the

Trust

to

purchase

a

1/2

interest of his jointly held home from his soon-to-be ex-wife for
$2 million; and that the Trust would then hold the home in trust
until there was an upswing in the real estate market, at which
point the home would be sold.

Id.

Ms. LaVay had stated the Trust

would hold a 1/3 interest in the house, which was currently valued
at $6 million, prompting three “questions and concerns” by Mr.
Andruczyk: (1) Shouldn’t the Trust be a 1/2 owner of the Banyan
Property, not a 1/3 owner, regardless of the current market value?
(2) Would the charitable remainder beneficiaries someday question

17

the purchase if there is no profit to be gained? 3 And (3) Since
Bruce intended to live in the Banyan Property, would the Trust
move forward with the sale of the condominiums or lease them until
the market improves?

Id.

Ms. LaVay’s email responses of September 20, 2007, chastised
Mr. Andruczyk for sending his email before Wachovia Bank had made
a final decision, advised that the Trust would “NOT” be purchasing
the wife’s interest in the property, and stated that she (Ms.
LaVay) had simply been presenting all of the options at the
mediation.

Plaintiffs’ Exhibit 124E; Defendant’s Exhibit 38.

Ms.

Mackey and Keith Tiesta, the Vice President and Senior Real Estate
Advisor at Wachovia Bank, agreed that the legal department needed
to be involved in the decision making process, Id., which was done.
As Wachovia Bank was mulling over funding options, Bruce
retained attorney Charles Kelly and his law firm (Kelly, Passidomo,
& Alba, LLP) to assist in obtaining the funding.
examined

the

various

Berlinger

Trusts

with

an

Mr. Kelly
eye

toward

determining which were accessible for possible funding of Bruce’s
MSA obligations.

Mr. Kelly considered three possible scenarios:

(1) a discretionary distribution to Bruce from one of the Berlinger

3In

fact,
beneficiaries.

the

Rosa

Trust

18

had

not

charitable

remainder

Trusts; (2) or a loan from the Trusts; or (3) a transaction with
one of the Berlinger Trusts.
In an October 9, 2007, letter to Ms. LaVay, Mr. Kelly wrote
that he had recently began representing Bruce individually in his
dual capacities as co-trustee and beneficiary of the Berlinger
Trusts. Plaintiffs’ Exhibit 94; Defendant’s Exhibit 22. Mr. Kelly
stated that in light of the recent divorce settlement Bruce needed
$2.1 million to satisfy the “equalizer” payment required by the
MSA.

Id.

Mr. Kelly suggested that the Rose Trust may be the best

source for Bruce to obtain the needed funds, but alternatively
suggested

a

loan

of

$2.1

million

from

the

Rose

combination of the Rose Trust and the Rosa Trust.
Mr.
proposals,

Kelly
which

had

conversations

were

ultimately

with

Ms.

rejected

Trust

a

Id.

LaVay
by

or

about

Wachovia

his
Bank.

Wachovia Bank instead suggested a transaction in which the Rosa
Trust purchase an interest in the Banyan Property for $2 million.
In an October 28, 2007, letter to Ms. LaVay, Mr. Kelly wrote that
Bruce, “considering the lack of alternatives,” would like to
proceed with the option suggested by Wachovia Bank of a purchase
of a $2 million interest in Bruce’s residence. Plaintiffs’ Exhibit
94;

Defendant’s

Exhibit

22.

Bruce

requested

the

right

to

repurchase the $2 million share at a price which would result in
a 7% rate of return for the trusts.

19

Id.

Wachovia Bank obtain a title insurance commitment for the
Banyan Property.

Effective October 29, 2007, Attorneys’ Title

Insurance Fund, Inc. issued a $2 million title Commitment on the
Banyan Property to Wachovia Bank and Bruce as co-trustees of the
Rosa Trust.

Plaintiffs’ Exhibit 99; Defendant’s Exhibit 8.

The

Commitment was subject to certain requirements found in Schedule
B-1.

Id.
In a November 2, 2007 11:34 a.m. email, Mr. Andruczyk told

Ms. La Vay that it appeared from his conversation with Mr. Tieste
that Wachovia Bank would accept partial ownership of the Banyan
Property.

Plaintiffs’ Exhibit 116; Defendant’s Exhibit 14.

Andruczy requested copies of certain needed documents.

Id.

Mr.
The

documents, including an appraisal for the lots with the house on
the Banyan Property were sent to Mr. Andruczyk on Novenber 5, 2007.
Defendant’s Exhibit 39.
In

a

November

2,

introduced

himself

to

2007

12:50

Kathleen

p.m.

email,

Passidomo,

Mr.

one

of

Andruczyk
Bruce’s

attorneys, as the Trust Real Estate Officer assigned to assist
Linda LaVay with the acceptance and acquisition of the Banyon
Property for the benefit of Bruce.
Defendant’s Exhibit 13.

Plaintiffs’ Exhibit 115;

Mr. Andruczyk stated that it was his

understanding that the trustees of the Rosa Trust would purchase
a 1/3 share of the ownership from Sue, resulting in the new
ownership being 1/3 owned by the Rosa Trust and 2/3 owned by Bruce.

20

Id.

Mr. Andruczyk appeared to believe (incorrectly) that the

initial plan was to pay Sue directly for her interest in the Banyan
Property.

Id.

On November 5, 2007, Mr. Andruczyk sent emails discussing the
percentage ownership the Rosa Trust would receive for its $2
million investment.

Mr. Andruczyk initially relied upon just the

appraisal for the lots with the house, but ultimately discovered
he had not considered the appraisal for the vacant lot, which was
a component of the Banyan Property.

Defendant’s Exhibits 12, 39.

Mr. Andruczyk was given the second appraisal, and recalculated the
fair value of the Banyan Property.

Defendant’s Exhibit 41.

In a November 8, 2007 email, Mr. Andruczyk noted that given
the appraised value of the home of $6,675.000 and the $750,000
outstanding mortgage owed by Bruce, the $2 million to be taken
from the Rosa Trust would purchase a 34% share of the Banyan
Property.
40.

Plaintiffs’ Exhibits 89, 108; Defendant’s Exhibits 4,

He also noted that as fiduciary Wachovia Bank would require

a title insurance policy.

Defendant’s Exhibit 12.

Wachovia Bank

determined that the transaction paperwork should reflect a 1/3
interest to the Rosa Trust.
Exhibit

41.

On

November

Plaintiffs’ Exhibit 113; Defendant’s
14,

2007,

the

appropriate

internal

Wachovia Bank committee approved the acquisition of the one-third
interest in the Banyan Property with the understanding that the

21

Rosa Trust would share profits when the Banyan Property was sold.
Defendant’s Exhibit 43. 4
On November 14, 2007, just prior to the closing, there were
emails

suggesting

appraisal

of

the

that
Banyan

Defendant’s Exhibit 64.

the

insurance

Property.

company

wanted

Plaintiffs’

another

Exhibit

112;

Bruce implored Wachovia Bank to explain

to the insurance company that he had had two recent appraisals
done and was not interested in paying for a third one.

Id.

Wachovia Bank did not order a new appraisal, and it appears the
insurance company agreed to accept the existing appraisals.
The

closing

transactions

Plaintiffs’ Exhibits 98B, 98C.

were

on

November

15,

2007.

Sue and Bruce conveyed their

undivided entireties interest in the Banyan Property to Bruce
pursuant to the terms of the MSA by Warranty Deed.
Exhibit 124A.

Plaintiffs’

In exchange for $2 million, Bruce conveyed an

undivided 1/3 interest in the Banyan Property by Warranty Deed
dated November 9, 2007 (which had been held in escrow), to the
Rosa Trust.
54.

Plaintiffs’ Exhibit 123A; Defendant’s Exhibits 44,

The $2 million was transferred to Bruce from principal in the

Rosa Trust. Defendant’s Exhibit 44. Bruce approved a Disbursement
Authorization, Defendant’s Exhibit 7, authorizing his attorneys

4

Mr. Andruczyk make an error when he typed this form, writing
that the Rosa Trust was buying the interest from Sue, when the
Rosa Trust was actually buying the interest from Bruce.

22

Kelly, Passidomo & Alba, LLP, to release the total net sales
proceeds of $1,959,257.46, with $1.4 million to be disbursed to
Sue, $302,757.97 to be disbursed to Wachovia Bank to repay the
loan Bruce had obtained to make his first $300,000 payment to Sue,
and $256,499.49 to Bruce.

On November 16, 2007, the law firm of

Kelly Passidomo Alba & Cassner, LLP wired $1.4 million to Sue from
the Orion Bank.

Defendant’s Exhibit 81.

Effective November 21, 2007, the Attorneys’ Title Insurance
Fund, Inc. issued a title insurance policy in the amount of $2
million to the Rosa Trust on the Banyan Property.
Exhibit 94.

Defendant’s

Bruce and Sue’s Warranty Deed to Bruce was recorded

in the Collier County Public Records on November 21, 2007, at 12:08
p.m.

Plaintiffs’ Exhibit 124A.

Bruce’s Warranty Deed to the Rosa

Trust was thereafter recorded in the Collier County Public Records
on the same date at 12:08 p.m.

Defendant’s Exhibit 54.

Once Wachovia Bank received the title insurance and the
recorded deeds, it “booked” the asset, although the purchase of
the 1/3 interest in the Banyan Property was initially mis-booked
on the Wachovia account for the Rosa Trust by the Trust Real Estate
support

team.

Defendant’s

The

Exhibit

December,
36,

2007

booked

Wachovia

the

asset

Trust
at

Statement,

$666,666.67,

mistakenly booking 1/3 of the $2 million instead of the full $2
million for the 1/3 interest.

Id. page 11. On January 30, 2008,

a Trust Associate of Ms. LaVay advised Mr. Andruczyk that the value

23

of the Banyan Property had not been properly booked in at $2
million, and asked Mr. Andruczyk to adjust the records to reflect
the full value of the home.

Defendant’s Exhibit 4.

After the

matter was researched, the Wachovia Trust Statement for February,
2008, and thereafter reflected the corrected market value of $2
million.

Defendant’s Exhibit 3, p. 11; Defendant’s Exhibit 4;

Defendant’s Exhibit 5.
On January 11, 2008, Bruce made a formal request to Wachovia
Bank that it consider all of his family’s trust together when
making distribution of income directly to Bruce.
Exhibit 72; Defendant’s Exhibit 65.

He continued:

Plaintiffs’
“In so doing,

please have income, when possible, unfairly distributed to me and
for my sole benefit.”

Id.

Bruce further stated that this was a

blanket request which may be altered or modified in the future,
but that with current pressures it would helpful for the realignment to take place.
F.

Id.

Capital Improvements to Banyan Property
After the closing, Bruce and Cabral Construction Inc. (Cabral

Construction) entered into a $250,000 contract to make capital
improvements on the Banyan Property.

Cabral Construction had

previously performed on a prior contract for construction work on
two condominiums owned by the Rose S. Berlinger Trust. Plaintiffs’
Exhibits 177A, 177B; Defendant’s Exhibits 30, 31.

24

Wachovia Bank first heard of the construction at the Banyan
Property in December, 2007.
Exhibit 55.

Plaintiffs’ Exhibit 137; Defendant’s

Bruce informed Wachovia Bank on December 21, 2007,

that he was getting the Banyan Property “‘designer ready’ for
sale.”

Defendant’s Exhibit 56.

This prompted discussion at

Wachovia Bank as to whether the Rosa Trust would be reimbursed for
the cost of the improvements if the home was sold. Id. Ultimately,
Wachovia Bank entered into a contract with Cabral Construction for
the $250,000 improvements.

Plaintiffs’ Exhibit 124C.

Cabral

Construction sent its invoices for the capital improvement work to
Mr. Andrucxyk at Wachovia Bank, who caused them to be paid directly
to Cabral Construction from the Rosa Trust.
105,

120,

135,

176,

180D;

Defendant’s

Plaintiffs’ Exhibit

Exhibits

11,

57,

69.

Wachovia Bank paid a total of seven draws from the Rosa Trust,
Plaintiffs’ Exhibits 139X, 31C, 31E, 31F, 140D, which totaled
$286,632.00.
Exhibit Number

Draw Number Amount of Draw

Plaintiffs’ 139X

1

$37,032.00

Plaintiffs’ 31C

2

$58,481.00

Plaintiffs’ 31C

3

$52,470.00

Plaintiffs’ 31E

4

$53,011.00

Plaintiffs’ 31E

5

$29,515.00

Plaintiffs’ 31F

6

$20,009.00

25

Plaintiffs’ 140D, 180D

7

$36,114.00

Total

$286,632.00

Cabral Construction provided the co-trustees of the Rosa
Trust with an undated Notice To Owner, Plaintiffs’ Exhibit 133;
Defendant’s Exhibit 21, noting that its work on the Banyan Property
was complete.
Bank

on

The final draw request was received by Wachovia

September

8,

2008.

Defendant’s

Exhibit

19.

Bruce

ultimately confirmed to Wachovia Bank that the work was completed
and Wachovia Bank could go ahead and pay the final bill.

Id.

Bruce agreed that two-thirds of the costs would be credited back
to the Rosa Trust when the Banyan Property sold.

Plaintiffs’

Exhibit 124C
III.
The Florida Trust Code provides that “[u]pon acceptance of a
trusteeship, the trustee shall administer the trust in good faith,
in accordance with its terms and purposes and the interests of the
beneficiaries, and in accordance with this code.”
736.0801.

Fla. Stat. §

“[A] violation by a trustee of a duty the trustee owes

to a beneficiary is a breach of trust.”

Fla. Stat. § 736.1001(1).

The elements of a claim for breach of trust or fiduciary duty under
Florida law are: “(1) the existence of a fiduciary duty; (2) the
breach of that duty; and (3) damage proximately caused by that

26

breach.”

Treco Int'l S.A. v. Kromka, 706 F. Supp. 2d 1283, 1288

(S.D. Fla. 2010).

See also Gracey v. Eaker, 837 So. 2d 348, 353

(Fla. 2002) (“[t]he elements of a claim for breach of fiduciary
duty are: the existence of a fiduciary duty, and the breach of
that duty such that it is the proximate cause of the plaintiff's
damages.”).

Thus, to the extent they are based on the same

conduct, plaintiffs' Count I claim for breach of fiduciary duty is
redundant of the Count II claim for breach of trust.
The specific obligations of a trustee are found in the trust
documents.

“From the trust, the trustee derives the rule of his

conduct, the extent and limit of his authority, the measure of his
obligation.”

Jones v. First Nat'l Bank, 226 So. 2d 834, 835 (Fla.

4th DCA 1969); see also Fla. Stat. § 737.401.

“[T]he trustee can

properly exercise such powers and only such powers as (a) are
conferred upon him in specific words by the terms of the trust, or
(b) are necessary or appropriate to carry out the purposes of the
trust

and

are

not

forbidden

by

the

terms

of

the

trust.”

Restatement (Second) of Trusts § 186 (1959); see also id. § 164;
In re Celotex Corp., 487 F.3d 1320, 1328 (11th Cir. 2007).

To

determine the extent of a trustee’s authority as defined by the
trust instruments, the court independently interprets the terms of
the trust documents.

See Firestone Tire & Rubber Co. v. Bruch,

489 U.S. 101, 112 (1989) (“As they do with contractual provisions,

27

courts construe terms in trust agreements without deferring to
either party's interpretation.”).
Under Florida law, “[a] trustee shall administer the trust as
a

prudent

person

would,

by

considering

the

purposes,

terms,

distribution requirements, and other circumstances of the trust.
In satisfying this standard, the trustee shall exercise reasonable
care, skill and caution.

Fla. Stat. § 736.0804.

As a fiduciary,

a trustee:
has a duty to invest and manage investment
assets as a prudent investor would considering
the
purposes,
terms,
distribution
requirements, and other circumstances of the
trust. This standard requires the exercise of
reasonable care and caution and is to be
applied to investments not in isolation, but
in the context of the investment portfolio as
a whole and as a part of an overall investment
strategy that should incorporate risk and
return objectives reasonably suitable to the
trust, guardianship, or probate estate. If the
fiduciary has special skills, or is named
fiduciary on the basis of representations of
special skills or expertise, the fiduciary is
under a duty to use those skills.
Fla.

Stat.

§

518.11(1)(a).

Additionally,

“[t]he

fiduciary's

investment decisions and actions are to be judged in terms of the
fiduciary's reasonable business judgment regarding the anticipated
effect on the investment portfolio as a whole under the facts and
circumstances prevailing at the time of the decision or action.
The prudent investor rule is a test of conduct and not of resulting
performance.”

§ 518.11(1)(b).

28

“A trustee has wide discretion in the exercise of his power
and a court will not interfere unless he abuses his discretion.”
State of Del. ex rel. Gebelein v. Belin, 456 So. 2d 1237, 1241
(Fla. 1st DCA 1984).

“A trustee who acts in reasonable reliance

on the terms of the trust as expressed in the trust instrument is
not liable to a beneficiary for a breach of trust to the extent
the breach resulted from the reliance.”

Fla. Stat. § 736.1009.

IV.
A. Preliminary Matters
(1)

Undisclosed Opinion of John A. Rodgers

Wells Fargo raised objections to opinions from plaintiffs’
expert, John A. Rodgers, which were not contained in his written
reports.

Specifically, Wells Fargo objects to testimony that he

disregarded the appraisals obtained by Bruce’s divorce attorneys
because the appraisals violated “Regulation 9,” and moved to strike
that portion of his opinions.
strike.

The Court will deny the motion to

Plaintiffs’ Rule 26 Amended Expert Rebuttal Report,

Plaintiffs’

Exhibit

28

for

identification

only,

states

the

substance of his testimony, although it makes no reference to a
“Regulation 9”.

Neither the record nor the Court has any idea

what “Regulation 9” is, and Mr. Rodgers was unable to provide any
citation for such a regulation.

However, since that part of his

trial testimony is unsupported, the Court gives it no weight.

29

(2) Rule 52(c) Motion
At the conclusion of plaintiffs’ case, Wells Fargo moved for
a judgment on partial findings in its favor under Federal Rules of
Civil Procedure 52(c). The Court declined to render judgment until
the

close

of

the

evidence,

as

permitted

by

Rule

52(c),

and

therefore the Court’s findings of facts and conclusions of law are
made pursuant to Fed. R. Civ. P. 52(a).
(3)

Plaintiffs’ Standing To Sue

In its Rule 52(c) motion, however, Wells Fargo argued for the
first time that plaintiffs had not established constitutional
standing to bring the claims.

The issue of standing, however late

in being raised, is a jurisdictional issue which must be addressed.
The constitutional standing principles are well established
by the Supreme Court:
Article III of the Constitution limits the
jurisdiction of federal courts to “Cases” and
“Controversies.” U.S. Const., Art. III, § 2.
The doctrine of standing gives meaning to
these constitutional limits by identifying
those
disputes
which
are
appropriately
resolved through the judicial process.
The
law of Article III standing, which is built on
separation-of-powers principles, serves to
prevent the judicial process from being used
to usurp the powers of the political branches.
To establish Article III standing, a plaintiff
must show (1) an injury in fact, (2) a
sufficient causal connection between the
injury and the conduct complained of, and (3)
a likelihood that the injury will be redressed
by a favorable decision.

30

Susan B. Anthony List v. Driehaus, 134 S. Ct. 2334, 2341 (2014)
(internal citations and punctuation omitted.)

Thus, plaintiff

“must have suffered or be imminently threatened with a concrete
and particularized ‘injury in fact’ that is fairly traceable to
the challenged action of the defendant and likely to be redressed
by a favorable judicial decision.” Lexmark Intern., Inc. v. Static
Control Components, Inc., 134 S. Ct. 1377, 1386 (2014).

As to the

first prong,
[a]n injury must be concrete, particularized,
and actual or imminent; fairly traceable to
the challenged action; and redressable by a
favorable ruling.
Although imminence is
concededly a somewhat elastic concept, it
cannot be stretched beyond its purpose, which
is to ensure that the alleged injury is not
too speculative for Article III purposes—that
the injury is certainly impending. Thus, we
have repeatedly reiterated that threatened
injury
must
be
certainly
impending
to
constitute
injury
in
fact,
and
that
allegations of possible future injury are not
sufficient.
Clapper v. Amnesty Intern. USA, 133 S. Ct. 1138, 1147 (2013)
(internal citations and punctuation omitted.)
Plaintiffs are beneficiaries under the Rosa Trust, but not
all

beneficiaries

beneficiary,

are

and

created

equal.

plaintiffs,

while

Bruce

is

eligible

the

primary

to

receive

distributions from the trust, may or may not receive any money
from the Rosa Trust.

During Bruce’s life, the Trustee is to pay

income from the principal “to such of my grandson [Bruce] and his

31

issue as my corporate trustee selects and in such proportion as it
determines without being required to maintain equality among my
grandson and his issue, . . . .”

(Plaintiffs’ Exhibit 1, § 3.)

The provision continued, stating that “my corporate trustee shall
bear in mind, in allocating income from time to time among my
grandson and his issues, that after the death of my daughter my
grandson will be the primary object of my bounty and that it is my
intention that it shall not be charged with an abuse of its
discretion should it pay all of the income to my grandson.”

(Id.)

Additionally, the Rosa Trust allowed the corporate trustee to
invade the principal:

“To apply for the benefit of a beneficiary,

in such manner as my corporate fiduciary deems appropriate, as
much of the principal, the income of which it has authority to pay
to the beneficiary or to the income of which the beneficiary is
entitled, as, without considering the beneficiary’s individual
property,

it

determines

maintenance . . . .”

is

required

(Id. at § 6(f).)

was restricted after Rose’s death:

for

his

comfortable

The invasion of principal

“My corporate trustee shall be

similarly guided as to invasion of principal after the death of my
daughter and during the life of my grandson should a question then
arise as to invasion of principal for the benefit of a beneficiary
other than my grandson.”

(Id.)

While Bruce is the primary

beneficiary, and has the ability to direct its income and the power
to appoint the principal at his death, if he does not do so the

32

trust will terminate and be paid to his descendants.

Plaintiffs’

Exhibit 4B page 2.
After closing arguments, counsel for Wells Fargo responded to
a question from the Court by stating that she believed none of the
plaintiffs

had

received

distributions

from

the

Rosa

Trust.

Plaintiffs have filed a Notice of Supplemental Authority (Doc.
#566)

asserting

that

Plaintiffs’

Exhibit

4B

establishes

that

plaintiffs have received distributions from “all” the trusts,
presumably including the Rosa Trust.
in opposition.

(Doc. #570.)

Wells Fargo filed a response

The exhibit, however, does not

support plaintiffs’ position.
The exhibit does indeed state “[w]e are also distributing
funds

to

your

beneficiaries.”

children

from

Plaintiffs’

these

trusts,

Exhibit

4B,

as
¶

they

2.

are

The

also

letter

continues, however, by noting that each of the three children has
his or her own trust, and that “[a]lthough your children are
beneficiaries of other family trusts, it is solely from these
trusts that we make distributions to your children.”

Id. page 2.

Additionally, the Court has examined each of the Wachovia Trust
Statements in the record, Plaintiffs’ Exhibits 31B, 31C, 31D, 31E,
31F, 31H, 31I, 31J, 139V, 139W, 139X, 140D; Defendant’s Exhibits
3, 36, 44, 45, 83, 84, 85, and none of these account statements
reflect distributions to any plaintiff.

By contrast, the one

account statement for the Rose Trust shows distributions to all

33

plaintiffs.

Defendant’s Exhibit 20.

As of January, 2008, Bruce

had directed that all Berlinger Trust distributions be made to
him.

Plaintiffs’

Exhibit

72;

Defendant’s

Exhibit

65.

Thus

plaintiffs had an interest in the Rosa Trust and were eligible to
receive distributions, but were contingent beneficiaries to whom
no distributions have yet been made.
While federal law governs the determination of Article III
standing, Florida law may be instructive.

Generally Florida law

recognizes that “a trust beneficiary also may sue a trustee for
breach of trust”.
DCA 1993).

Weiss v. Courshon, 618 So. 2d 255, 257 (Fla. 3d

In a variety of circumstances Florida cases have found

that a trust beneficiary with only a contingent interest has
standing

to

sue

the

trustee

for

mismanagement

resulting in diminution of the trust assets.

of

the

trust

Rickard v. McKesson,

774 So. 2d 838 (Fla. 4th DCA 2000); Richardson v. Richardson, 524
So. 2d 1126 (Fla. 5th DCA 1988); Brogdon v. Guardianship of
Brogdon, 553 So. 2d 299 (Fla. 1st DCA 1989); Smith v. Bank of
Clearwater, 479 So.2d 755 (Fla. 2d DCA 1985).
The

Court

standing.

concludes

that

plaintiffs

have

Article

III

They have an interest in the Rosa Trust as named

beneficiaries who may be entitled to a distribution and will suffer
injury if the Rosa Trust is mismanaged or its assets improperly
diminished.

34

B. Acquisition of Interest in Banyan Property
Plaintiffs assert that the investment of $2 million from the
Rosa Trust in the Banyan Property was not a prudent decision by
the corporate Trustee and therefore violated the Florida Prudent
Investor Rule.

The Court finds that the evidence establishes the

contrary.
The Second Amended Complaint asserts that the Trustee did not
act prudently because it paid $2 million for the Banyan Property
when it had a fair market value of less than $700,000.
¶¶ 23, 25, 26.)

(Doc. #93,

There was no evidence at trial which would support

the proposition that the Banyan Property was worth less than
$700,000 at the time of the $2 million investment by the Rosa
Trust.

While Wachovia Bank make a clerical error in booking the

Banyan Property on the Rosa Trust account statement, that error
was corrected without harm to anyone.

Other than this clerical

error, there was no evidence which would support that valuation of
the Banyan Property.

Even plaintiffs’ expert assumed, incorrectly

as it turns out, that the fair market value was $4 million.

The

Court finds that plaintiffs have not established by any credible
evidence that the Trustee’s investment decision was imprudent
because the value of the Banyan Property was less than $700,000.
At trial plaintiffs argued that the Trustee’s investment
decision was imprudent because it paid $2 million from the Rosa

35

Trust for a one-third interest in the Banyan Property when it
should have received a one-half interest in the Banyan Property. 5
This proposition depends on the value of the Banyan Property being
$4 million, instead of the $6 million Wachovia Bank relied upon.
The only person with any expertise in the valuation of real
estate – Mr. Quinby – testified the Banyan Property had a fair
market value of over $6 million.

The Court found his testimony

credible and his methodology reliable.
Plaintiffs’ theory depends upon the testimony of its expert,
Mr. Rodgers.

Mr. Rodgers is not qualified to appraise the value

of real property, and did not do so in this case.

Mr. Rodgers

simply disregarded the appraisals by Mr. Quinby (for reasons the
Court finds not to be reasonable or justified), and instead relied
upon a simple but flawed approach.

Mr. Rodgers testified that

because Sue agreed to convey her undivided half interest in the
Banyan Property to Bruce for $2 million as part of the MSA, the
fair market value of the whole property must be $4 million.

In

light of that, Mr. Rodgers opined, the Trustee should have obtained
a 50% interest in the Banyan Property, not a 33% interest.
The record is clear that the $2 million agreed amount was
never intended to reflect 50% of the fair market value of the

5

The Court overrules defendant’s objections that this theory
of the case was not fairly presented in the Second Amended
Complaint.

36

Banyan Property, and that it was clearly not arrived at between
willing and able parties in an arms-length transaction.

The $2

million payment was the amount needed as a matter of equity to
“equalize” the result of the agreed-upon distribution of other
marital assets.

The amount would rise or fall based on the

division of the other assets, not based upon an attempt to place
a fair market value on the property.
The Court finds that plaintiffs have not established that
Wells Fargo breached the Florida prudent investor rule, or any of
its fiduciary duties, when it invested $2 million from the Rosa
Trust in the Banyan Property.
D. Capital Improvements
Plaintiffs also assert that Wells Fargo acted imprudently
when

it

used

principal

from

the

Rosa

Trust

to

make

capital

improvements to the Banyan Property. Under the facts of this case,
the Court finds otherwise.
The Second Amended Complaint asserts that on or before January
2008, Wachovia Bank authorized the payment from principal in the
amount of $167,615 for the purpose of making capital improvements
to Banyan Property.

(Doc. #93, ¶ 23.)

According to plaintiffs’

such action constituted a distribution of principal instead of
income in violation of the terms of the Trust.

(Id.)

The record shows that initially it was Bruce who entered into
a contract with Cabral Construction to make capital improvements

37

on the Banyan Property.
Exhibit 55.

Plaintiffs’ Exhibit 137; Defendant’s

Wachovia Bank first heard of the construction at the

Banyan Property in December, 2007 after Bruce had already made the
agreement. Plaintiffs’ Exhibit 137; Defendant’s Exhibit 55. Bruce
informed Wachovia Bank on December 21, 2007, that he was getting
the Banyan Property “‘designer ready’ for sale.”

Defendant’s

Exhibit 56.
Ultimately, Wachovia Bank entered into a contract with Cabral
Construction for the $250,000 improvements.
124C.

The

purpose

of

the

improvements

property’s overall sales value.

(Id.)

Plaintiffs’ Exhibit
was

to

increase

the

Wachovia Bank discussed

whether the Rosa Trust would be reimbursed for the cost of the
improvements if the home was sold and Bruce agreed that two-thirds
of the costs would be credited back to the Rosa Trust when the
Banyan Property sold.

(Id.); Plaintiffs’ Exhibit 137.

The total

cost of the improvements paid by Wachovia Bank from the Rosa Trust
to Cabral Construction was $286,632.00.

Plaintiffs’ Exhibits

139X, 31C, 31E, 31F, 140D.
The Court agrees with the testimony of defendant’s expert
William C. Reis.

Under the facts and circumstances of this case,

the use of the funds from the Rosa Trust for capital improvements
to the Banyan Property was reasonable in light of the investment
made in the property, the need for the improvements, and the
agreement that the Rosa Trust would receive its fair share upon

38

sale of the Banyan Property.

The Court finds that plaintiffs have

not established that Wells Fargo breached the Florida prudent
investor rule, or any of its fiduciary duties, when it invested
funds from the Rosa Trust for capital improvements in the Banyan
Property.
Accordingly, it is now
ORDERED:
1.

The Court finds that plaintiffs have failed to establish

by a preponderance of the evidence that Wells Fargo, N.A. breached
any of its fiduciary duties to plaintiffs in connection with the
investment of funds from the Rosa Trust in the Banyan Property.
Judgment will therefore be entered in favor of defendant Wells
Fargo, N.A. and against plaintiffs Stacey Sue Berlinger, Brian
Bruce Berlinger, and Heather Anne Berlinger as to the remaining
portions of Counts I and II.
2.

Judgment shall enter in favor of defendant Wells Fargo,

N.A. and against plaintiffs Stacey Sue Berlinger, Brian Bruce
Berlinger, and Heather Anne Berlinger as to those portions of
Counts I and II upon which summary judgement was granted in the
prior Opinion and Order (Doc. #492) and as to Count III pursuant
to the dismissal in the prior Opinion and Order (Doc. #220).

39

3.

The

Clerk

of

Court’s

is

directed

to

terminate

all

remaining deadlines and close the file.
DONE AND ORDERED at Fort Myers, Florida, this
February, 2016.

Copies: Counsel of record

40

25th

day of