Bain et al v. McIntosh et al

Filing 154

ORDER denying as moot 121 motion to amend/correct; granting 131 Motion for summary judgment. Signed by Judge Roy B. Dalton, Jr. on 7/24/2014. (VMF)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
DOROTHY B. WALTHER; and
HOWARD WALTHER,
Plaintiffs,
v.

Case No. 6:13-cv-472-Orl-37GJK

STEVEN KANE, ESQ.; and KANE &
KOLTUN,
Defendants.
ORDER
This cause is before the Court on the following:
1.

Plaintiffs’ Amended Motion to Strike David Brennan Esq., as an Expert
Witness and Incorporated Memorandum of Law (Doc. 121), filed
March 6, 2014;

2.

Defendants’ Memorandum of Law in Opposition to Plaintiffs’ Amended
Motion to Strike David Brennan as Defendants’ Expert (Doc. 125), filed
March 18, 2014;

3.

Defendants’ Motion for Summary Judgment and Memorandum of
Supporting Legal Authority (Doc. 131), filed April 30, 2014;

4.

Plaintiffs’ Response in Opposition to Defendants’ Motion for Summary
Judgment and Supporting Memorandum of Law (Doc. 151), filed
June 23, 2014; and

5.

Defendants’ Reply to Plaintiffs’ Response in Opposition to Defendants’
Motion for Summary Judgment (Doc. 153), filed July 7, 2014.

BACKGROUND
Plaintiff Dorothy B. Walther is the income beneficiary of the James Walther
Revocable Life Insurance Trust (the “Trust”). (Doc. 145, ¶ 12.) Plaintiff Howard Walther,
her son, is a contingent remainderman beneficiary of the Trust. (Id. ¶ 13.) Another of
Dorothy Walther’s sons, Patrick Walther (the “Trustee”), has been the sole trustee of the
Trust since 1994. (Id. ¶ 14; Doc. 133-1, p. 22.)
After a family dispute started in October 2009 resulting in threats of suit against
the Trustee, the Trustee retained the services of Defendant Steven Kane, Esq. (“Kane”),
and paid him with funds from the Trust to conduct overdue accountings. (See Doc. 145,
¶ 21; Doc. 134-1, pp. 79–81, 106–07, 117–18; see also Doc. 133-7, pp. 11–13 (describing
the Trustee’s initial engagement of Kane), p. 53 (stating that preparation of trust
accountings began in November 2009), p. 79 (stating that Kane represented the Trustee
in the fall of 2009), pp. 174–75 (describing payment of fees from funds of the Trust).)
Kane never met the Plaintiffs (Doc. 133-7, pp. 146, 166); 1 he considered the Trustee to
be his client (id. at 164–65); and the Trustee considered Kane to be his lawyer
(Doc. 134-1, pp. 82–83; Doc. 133-3, p. 226). Plaintiffs engaged their own attorneys in
Florida to represent their interests with respect to the Trust. (Doc. 133-1, pp. 15, 20, 24–
25, 38, 44; Doc. 133-7, pp. 15, 166; Doc. 133-3, p. 226.)
Beginning in December 2009, Plaintiffs brought multiple suits in state court against
the Trustee (Doc. 133-1, pp. 33–35, 47–48; Doc. 134-1, p. 73), including an action in 2010

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Howard Walther testified that in August 2010, he spoke to Kane on the phone
and exchanged e-mails concerning Mr. Walther’s requests for access to Trust records.
(Doc. 133-1, pp. 40–42.) Howard Walther further testified that he did not ask for or receive
legal advice from Kane. (Id. at 44.)

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to remove the Trustee and require that he make income payments to Dorothy Walther
from the Trust (the “State Court Action”). (Doc. 145, ¶¶ 15–16, 23.) Defendants
represented the Trustee in the State Court Action (Doc. 133-7, pp. 77–78, 84, 122, 130–
31, 169), and the state court approved payment of the Trustee’s attorney fees from the
Trust. (Doc. 133-1, p. 66; Doc. 16-7.) Despite the litigation, Plaintiffs contend that the
Trustee “continues to disregard the fiduciary duties he owes the [T]rust and . . . Dorothy
B. Walther.” (Doc. 145, ¶¶ 31–33; see also Doc. 16-11 (providing order from state court
denying motion to remove Trustee pending resolution of the State Court Action).)
Plaintiffs initiated this action on March 22, 2013 against Kane, the Kane Firm,
Robert McIntosh, Esq. (“McIntosh”), and Stenstrom McIntosh, P.A. (the “McIntosh Firm”).
(Doc. 1.) In an Order dated August 7, 2013, the Court granted summary judgment to
McIntosh and the McIntosh Firm, and they were terminated as parties to this action. 2
(Doc. 55.) Thereafter, Plaintiffs filed a Third Amended Complaint asserting a breach of
fiduciary duty claim against Kane (Count I) (Doc. 145, ¶¶ 35–39), and a respondeat
superior claim against the Kane Firm (Count II) (id. ¶¶ 40–45). Plaintiffs demand recovery
of all Trust funds paid to Defendants and punitive damages. (Id.)
Defendants moved for summary judgment (Doc. 131), Plaintiffs responded
(Docs. 151–52), 3 and Defendants replied (Doc. 153). Plaintiffs filed a motion to strike
Defendants’ expert witness (Doc. 121), and Defendants responded (Doc. 125). The

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The Court also adjudged Plaintiffs’ attorneys liable for sanctions for asserting
frivolous claims against McIntosh and the McIntosh Firm. (Doc. 82.) Plaintiffs appealed
(Docs. 89–91), and the U.S. Court of Appeals for the Eleventh Circuit affirmed this Court’s
decision.
3 Plaintiffs’ counsel withdrew from their representation of Plaintiffs, and Plaintiffs
are now proceeding pro se. (Docs. 113, 115, 138, 146.)

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matter is now ripe for adjudication by the Court.
STANDARDS
Summary judgment is appropriate only “if the movant shows that there is no
genuine dispute as to any material fact and that the movant is entitled to judgment as a
matter of law.” Fed. R. Civ. P. 56(a). “There can be no ‘genuine issue as to any material
fact,’ when there is a complete failure of proof concerning an essential element of the
nonmoving party’s case.” Kahama VI, LLC v. HJH, LLC, No. 8:11-cv-2029-T-30TBM,
2014 WL 521085, at *2 (M.D. Fla. Feb. 10, 2014) (quoting Celotex Corp. v. Catrett,
477 U.S. 317, 323 (1986)). “A dispute about a material fact is ‘genuine,’ when ‘the
evidence is such that a reasonable jury could return a verdict for the nonmoving party.’”
Id. (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).
To defeat a motion for summary judgment, the nonmoving party must “come
forward with specific factual evidence sufficient to establish the existence of each element
essential to his claim on which he will bear the burden at trial.” Coleman v. Miller,
117 F.3d 527, 529 (11th Cir. 1997). The nonmoving party must “go beyond the pleadings,”
Porter v. Ray, 461 F.3d 1315, 1320 (11th Cir. 2006), and present “more than mere
allegations” Gargiulo v. G.M. Sales, Inc., 131 F.3d 995, 999 (11th Cir. 1997). See Avirgan
v. Hull, 932 F.2d 1572, 1577 (11th Cir. 1991) (“The evidence presented cannot consist of
conclusory allegations or legal conclusions.”). The Court must “draw all justifiable
inferences in favor of the nonmoving party, including questions of credibility and of the
weight to be accorded to particular evidence.” Masson v. New Yorker Magazine, Inc.,
501 U.S. 496, 520 (1991).

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DISCUSSION
Both of Plaintiffs’ claims require them to establish a breach of fiduciary duty owed
to Plaintiffs by Kane. (Doc. 145, ¶¶ 35–45.) In Florida, the “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.” Gracey v. Eaker, 837 So. 2d 348,
353 (Fla. 2002). “If a relation of trust and confidence exists between the parties (that is to
say, where confidence is reposed by one party and a trust accepted by the other),” that
is sufficient to establish the existence of a fiduciary duty. Quinn v. Phipps, 113 So. 419,
421 (Fla. 1927). “Moreover, ‘[a] fiduciary relation exists between two persons when one
of them is under a duty to act for or to give advice for the benefit of another upon matters
within the scope of that relation.’” Doe v. Evans, 814 So. 2d 370, 374 (Fla. 2002) (quoting
Restatement (Second) of Torts § 874 cmt. a (1979)).
Defendants move for summary judgment on Plaintiffs’ breach of fiduciary duty
claims on the ground that Kane owed no duty to Plaintiffs under Florida law—fiduciary or
otherwise. (Doc. 131, p. 3.) Defendants point to record evidence that Kane “was retained
solely by [the Trustee], to assist with the preparation of trust accounting documents and
to defend” the Trustee against Plaintiffs’ threats of suit and the State Court Action.
(See Doc. 131, pp. 1–2; Doc. 153, pp. 9–10; see also supra, pp. 2–3 (providing summary
of record evidence).) Plaintiffs have not submitted or cited contrary record evidence.
(See Doc. 152.) Rather, Plaintiffs simply recite the allegations of their Third Amended
Complaint, and they argue that the “fiduciary duty” exception to a trustee’s assertion of
the attorney-client privilege somehow establishes a duty owed to them by Kane for
purposes of a fiduciary duty claim. (See id.)

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Plaintiffs’ argument fails for several reasons. Importantly, Plaintiffs rely on a case
from a Delaware state court that no Florida court has cited for the proposition that an
attorney retained by a trustee may be liable to the trust beneficiaries for breach of fiduciary
duty. (See id. (citing Riggs Nat'l Bank of Washington, D.C. v. Zimmer, 355 A.2d 709, 711
(Del. Ch. 1976)).) Indeed, the few Florida cases citing the Riggs decision declined to apply
the fiduciary duty exception where the evidence indicated that the trustee—not the
beneficiaries of the trust—was the attorney’s client. See Barnett Banks Trust Co., N.A. v.
Compson, 629 So. 2d 849, 851 (Fla. 2d DCA 1993) (rejecting trust beneficiary’s
arguments). 4 Further, the Florida has enacted legislation explicitly rejecting the fiduciary
duty exception. Fla. Stat. § 90.5021(2) (“[O]nly the person or entity acting as a [trustee]
is considered a client of the lawyer.”). Thus, Plaintiffs’ legal argument fails. Plaintiffs’
failure to submit or cite any evidence or to go beyond their initial allegations also supports
entry of summary judgment in favor of Defendants. See Avirgan, 932 F.2d at 1577.
CONCLUSION
Accordingly, it is hereby ORDERED AND ADJUDGED:
1.

Defendants’ Motion for Summary Judgment and Memorandum of
Supporting Legal Authority (Doc. 131) is GRANTED.

2.

Plaintiffs’ Amended Motion to Strike David Brennan Esq., as an Expert
Witness (Doc. 121) is DENIED AS MOOT.

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See also Tripp v. Salkovitz, 919 So. 2d 716, 718–19 (Fla. 2d DCA 2006)
(requiring in camera inspection of documents to determine which documents concerned
attorney’s representation of trustee versus his representation of the trust); Hooper v.
UNUM Life Ins. Co. of Am., No. 5:11-cv-624-Oc-10TBS, 2012 WL 1415585, at *2
(M.D. Fla. Apr. 24, 2012) (noting that the fiduciary duty exception does not apply if the
interests of the beneficiaries and the trustee “have diverged” such that the trustee is
defending himself against the beneficiaries).

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3.

The hearing scheduled for July 29, 2014 is CANCELLED.

4.

The Clerk is DIRECTED to enter judgment in favor of Defendants Steven
Kane, Esq. and Kane & Koltun and against Plaintiffs Dorothy B. Walther and
Howard Walther.

5.

The Clerk is further DIRECTED to CLOSE this case.

DONE AND ORDERED in Chambers in Orlando, Florida, on July 24, 2014.

Copies:
Counsel of Record

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