Abromats v. Abromats

Filing 117

OPINION AND ORDER denying 76 Motion for Preliminary Injunction; denying 89 Motion to Reopen Case; denying 89 Motion to Dismiss; denying 89 Motion to Consolidate Cases. Signed by Judge Beth Bloom on 10/13/2016. (yha) Modified text on 10/13/2016 (yha).

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 16-cv-60653-BLOOM/Valle

G. CLIFFORD ABROMATS,
individually and as Trustee of the Gloria J.
Abromats Revocable Trust Agreement
u/t/d September 15, 2005, as amended,
Plaintiff/Counter-Defendant,
v.
PHILIP ABROMATS,
individually and as qualified beneficiary
Gloria J. Abromats Revocable Trust Agreement
u/t/d September 15, 2005, as amended,
Defendant/Counter-Plaintiff.
_____________________________________/
ORDER ON MOTION TO REINSTATE CASE AND
MOTION TO ENJOIN TRUSTEE FROM USING TRUST ASSETS
THIS CAUSE is before the Court upon Defendant/Counter-Plaintiff Philip Abromats’s
(“Philip”) Motion to Reinstate N.Y. Case, Dismiss or Consolidate Fla. Case, and Grant Relief
Under N.Y. C.P.L.R. § 2701 (“Motion to Reinstate”), ECF No. [89], and Motion to Enjoin
Trustee from Using Trust Assets to Fund Legal Fees and Costs, ECF No. [76] (“Motion to
Enjoin”) (collectively, the “Motions”). In the latest installment of this contentious litigation,
Philip seeks to reopen and reinstate proceedings transferred from the Western District of New
York, and asks the Court to enjoin his brother, Plaintiff/Counter-Defendant G. Clifford Abromats
(“Clifford”), from using trust assets to fund this case. For the reasons that follow, both Motions
are denied.

Case No. 16-cv-60653-BLOOM/Valle
I.

BACKGROUND
The background of these proceedings is known to all parties and extensively documented

in this Court’s prior Orders. See Abromats v. Abromats, 2016 WL 4366480 (S.D. Fla. Aug. 16,
2016) (ECF No. [72]); Abromats v. Abromats, 2016 WL 4917153 (S.D. Fla. Sept. 15, 2016)
(ECF No. [93]); see also ECF No. [52]. For purposes of the instant Motions, Clifford is Trustee
of the Gloria Abromats (“Ms. Abromats” or “Gloria”) Trust (“Gloria Trust”), and George
Abromats Trust (“George Trust”) (collectively, the “Trusts”), settled by the parties’ parents
before they passed away. On March 11, 2010, Gloria Abromats accorded Clifford power of
attorney. See ECF No. [37] ¶ 96. Philip and Clifford were beneficiaries of both Trusts, but on
January 17, 2011, Ms. Abromats disinherited Philip from her Trust (the “January Amendments”).
See id. ¶ 111. Philip did not learn of the January Amendments until August 31, 2011. See id.
¶ 122. Shortly thereafter, in September of 2011, Philip traveled to his mother’s residence in Fort
Lauderdale, where Ms. Abromats purportedly again amended the Trust (the “September
Amendments”), “revok[ing] the January 2011 disinheriting amendment . . . reinstat[ing] the
equal (not necessarily 50% each) distribution between the brothers, and [making] Gloria’s trust
irrevocable.” Id. ¶ 155; see id. ¶¶ 145-58. On October 31, 2011, Gloria resigned as trustee of
both Trusts, and Clifford formally became Trustee. See id. ¶ 163. Philip did not inform Clifford
of the September Amendments until shortly before Ms. Abromats passed away, on March 18,
2015. See id. ¶ 24.
Since 2011, Clifford has received gifts and loans from the Gloria Trust, and has
transferred funds from the George Trust to the Gloria Trust. Philip alleges that these actions and
other inactions constitute a breach of trust, and that under Florida law, the Court should enjoin

2

Case No. 16-cv-60653-BLOOM/Valle
Clifford from using Trust assets to litigate this case. See Motion to Enjoin. Clifford’s Response,
and Philip’s Reply, timely followed. See ECF Nos. [88], [94].
II.

MOTION TO REINSTATE
Before reviewing the Motion to Enjoin, however, the Court addresses Philip’s Motion to

Reinstate, which became ripe on October 6, 2016. As the parties are well aware, Philip filed a
complaint against Clifford in the Western District of New York (the “New York action”) before
Clifford filed complaints in the Seventeenth Judicial Circuit in and for Broward County, Florida,
later removed to this Court. 1 After removal of the state court matters, the Western District of
New York transferred Philip’s case to the Southern District of Florida, which appeared on the
docket of this Court at Case No. 16-cv-61649-BB. On July 13, 2016, the Court consolidated the
transferred New York action with the instant proceedings and, pursuant to the Southern District
of Florida’s internal operating procedures, closed the case, directing that all future filings be
made in Case No. 16-60653-BB, as the lower-numbered case. See ECF No. [52]. In the three
months since the Court consolidated the New York action with the instant proceedings, the
parties have filed and the Court has adjudicated Philip’s motion to dismiss for lack of personal
jurisdiction, Clifford’s motion to dismiss Philip’s Counterclaims, and a litany of less dispositive
motions, all in an effort to ensure that this matter timely proceeds on the scheduling track
suggested by the parties in early August. See ECF Nos. [65], [67]. Philip now asks the Court to
reconsider its decision consolidating and closing the New York action.
The Court made it clear on August 15, 2016 that it “will deem the removed Complaint,
ECF No. [1], Exh. A, as the operative Complaint in this matter, with Philip’s Amended Answer
and Counterclaims, ECF No. [37], serving as Philip’s operative Answer and Counterclaims.”
1

The Court remanded the George Trust matter to state court on July 13, 2016. See ECF No. [52] at 8.

3

Case No. 16-cv-60653-BLOOM/Valle
ECF No. [72] at 16. Cognizant of the unique nature of these proceedings and in an abundance of
caution, the Court further noted that “[i]t appears that the parties do not object to this posture,
for, as of the date of this Order, both Counter-Defendants have moved to dismiss Philip’s
Counterclaims, and Philip has filed a Response in opposition to one of the motions.” Id. at 16
n.3. Subsequent actions by the parties confirmed the Court’s belief, and this matter has now
been extensively litigated under the assumption that Philip is the Defendant/CounterclaimPlaintiff, and the New York action is closed. Philip’s Motion to Reinstate asks the Court to
disrupt this posture. While Philip states in Reply that he “has no issue with the current alignment
of the parties,” the relief he seeks – application of New York law and remedies to the instant
dispute – necessarily requires that the Court reconsider its decision to consolidate and close the
New York action with Clifford’s Florida proceedings and apply Florida law to this dispute.
Because the decisions Philip asks the Court to revisit are “now the law of the case,” the Court
reviews Philip’s Motion to Reinstate as a motion to reconsider its prior Orders. Miccosukee
Tribe of Indians of Florida v. United States, 706 F. Supp. 2d 1296, 1320 (S.D. Fla. 2010),
modified in part, 2011 WL 1624977 (S.D. Fla. Apr. 26, 2011); see Fontainebleau Hotel Corp. v.
Crossman, 286 F.2d 926, 928 (5th Cir. 1961) 2 (“The rule of the law of the case is a rule of
practice, based upon sound policy that when an issue is once litigated and decided, that should be
the end of the matter.” (internal quotations omitted)).
“Courts have delineated three major grounds justifying reconsideration: (1) an
intervening change in controlling law; (2) the availability of new evidence; and (3) the need to
correct clear error or prevent manifest injustice.” Williams v. Cruise Ships Catering & Serv.

2

In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), the Eleventh Circuit
adopted as binding precedent all decisions of the former Fifth Circuit Court of Appeals issued prior to
October 1, 1981.

4

Case No. 16-cv-60653-BLOOM/Valle
Int’l, N.V., 320 F. Supp. 2d 1347, 1357-58 (S.D. Fla. 2004) (citing Sussman v. Salem, Saxon &
Nielsen, P.A., 153 F.R.D. 689, 694 (M.D. Fla. 1994)); see Burger King Corp. v. Ashland
Equities, Inc., 181 F. Supp. 2d 1366, 1369 (S.D. Fla. 2002). “[R]econsideration of a previous
order is an extraordinary remedy to be employed sparingly in the interests of finality and
conservation of scarce judicial resources.” Wendy’s Int’l, Inc. v. Nu-Cape Const., Inc., 169
F.R.D. 680, 685 (M.D. Fla. 1996); see also Campero USA Corp. v. ADS Foodservice, LLC, 916
F. Supp. 2d 1284, 1290 (S.D. Fla. 2012). “Motions for reconsideration are appropriate where,
for example, the Court has patently misunderstood a party.” Compania de Elaborados de Cafe v.
Cardinal Capital Mgmt., Inc., 401 F. Supp. 2d 1270, 1283 (S.D. Fla. 2003); see Eveillard v.
Nationstar Mortgage LLC, 2015 WL 1191170, at *6 (S.D. Fla. Mar. 16, 2015). To establish
grounds for reconsideration, “the movant must do more than simply restate his or her previous
arguments, and any arguments the movant failed to raise in the earlier motion will be deemed
waived.” Compania, 401 F. Supp. 2d at 1283.
According to Philip, reconsideration is warranted because after transfer of venue and
under the “first to file” rule, the law of the first-filed case normally applies to a dispute, making
the New York action the appropriate lead case in these consolidated proceedings. Philip requests
reconsideration because he desires that New York law apply, potentially affording him relief
under N.Y. C.P.L.R. § 2701.

The Court, therefore, interprets Philip as arguing for

reconsideration “to correct clear error or prevent manifest injustice.” Williams, 320 F. Supp. 2d
at 1358. Under the circumstances presented, the Court finds that Philip has failed to establish
grounds for reconsideration.
The Court consolidated the New York action with Clifford’s Florida case pursuant to
Fed. R. Civ. P. 42(a)(2), and, having consolidated the matters “‘for all purposes[,]’” the Court

5

Case No. 16-cv-60653-BLOOM/Valle
treats the cases “as a single, unified case.” Medina v. United Christian Evangelistic Ass’n, 2009
WL 3161654, at *2 (S.D. Fla. Sept. 29, 2009) (quoting Lewis Charters, Inc. v. Huckins Yacht
Corp., 871 F.2d 1046, 1048-49 (11th Cir. 1989)). “The ‘first to file’ rule states that ‘where two
actions involving overlapping issues and parties are pending in two federal courts, there is a
strong presumption across the federal circuits that favors the forum of the first-filed suit under
the first-filed rule.’” Hernandez v. Cracker Barrel Old Country Store, Inc., 2014 WL 5175715,
at *1 (M.D. Fla. Oct. 14, 2014) (quoting Manuel v. Convergys Corp., 430 F.3d 1132, 1135 (11th
Cir. 2005)). In general, “application of the first-filed rule is not mandatory, but rather committed
soundly to the district court’s discretion.” Id. at *2 (“district courts have the discretion to
dispense with the first-to-file rule where equity so demands”) (citing Allstate Ins. Co. v.
Clohessy, 9 F.3d 1314, 1316 (M.D. Fla. 1998) and quoting Barnett v. Ala., 171 F. Supp. 2d 1292,
1296 (S.D. Ala. 2001)). Where ‘compelling circumstances’ exist indicating the second-filed case
should proceed, a court properly declines to apply the first-to-file rule. Nation Motor Club, Inc.
v. Stonebridge Cas. Ins. Co., 2013 WL 6713567, at *6 (S.D. Fla. May 20, 2013) (quoting Merrill
Lynch, Pierce, Fenner & Smith v. Haydu, 675 F.2d 1169, 1174 (11th Cir. 1982)). Similarly,
“[w]hen ‘the balance of convenience tips in favor of the second forum or there are special
circumstances which justify giving priority to the second action,’ courts may deviate from the
first-filed rule.” Id. (quoting Vital Pharm., Inc. v. Cytosport, Inc., 2009 WL 302277, at *2 (S.D.
Fla. Feb. 9, 2009)). “Importantly, the factors considered when determining whether to follow the
first-filed rule, including considerations of convenience and judicial economy . . . are the same
factors which are considered in determining whether transfer is proper under 28 U.S.C. §
1404(a).” Id. (citing Manuel v. Convergys Corp., 430 F.3d 1132, 1135 (11th Cir. 2005)).

6

Case No. 16-cv-60653-BLOOM/Valle
At this point in the proceedings and considering the discretion afforded the Court in
applying the first to file rule, the Court does not find that its decision to consolidate and close the
New York action constituted “clear error,” or resulted in “manifest injustice.” In its decision to
consolidate the cases under Case No. 16-60653-BB, the Court considered, among other things,
the significant judicial resources already devoted to the Florida cases, and Philip’s demonstrated
intent to bring his affirmative claims as counterclaims in the Florida proceedings. Importantly,
this Court only had cause to consolidate the cases in the first place because the Western District
of New York determined that nearly all of the factors outlined at 28 U.S.C. § 1404(a) favored a
venue transfer.

Moreover, and unlike the many cases cited by Philip, there is no risk of

“potentially conflicting rulings” necessitating application of the first to file rule, as all
proceedings are consolidated together before this Court and the Court has found Florida law
applicable to the dispute. See Nebula Glass Int’l, Inc. v. Budnick Converting, Inc., 2010 WL
473330, at *1 (S.D. Fla. Feb. 5, 2010). Accordingly, the Court does not find cause to disrupt its
prior rulings. To the extent the Philip argues that justice requires he be afforded the remedy
provided at N.Y. C.P.L.R. § 2701, Florida trust law provides comparable remedies, 3 and in any
event, does not constitute sufficient grounds to upset the procedural posture of this case. Philip’s
Motion to Reinstate is denied.
III.

MOTION TO ENJOIN
Having decided that these proceedings will remain undisturbed, with the New York

action closed and consolidated with Case No. 16-60653, the Court addresses Philip’s Motion to
Enjoin under Florida law. Philip moves the Court, pursuant to Fla. Stat. § 736.0802(10)(e), to

3

Philip’s Motion to Enjoin, filed pursuant to Fla. Stat. Ann. § 736.0802(10)(e) and adjudicated
concurrently in this Order, is one such example.

7

Case No. 16-cv-60653-BLOOM/Valle
enjoin Clifford from using Trust assets to litigate this case. Having thoroughly considered both
Philip and Clifford’s arguments and the applicable law, the Court denies the Motion to Enjoin.
A.

Legal And Evidentiary Standard

Under Florida law, “[i]f a trustee incurs attorney fees or costs in connection with a claim
or defense of a breach of trust which is made in a filed pleading, the trustee may pay such
attorney fees or costs from trust assets without the approval of any person and without any court
authorization.” Fla. Stat. Ann. § 736.0802(10)(b). Simply put, “[i]n Florida, a trustee is entitled
to receive payment of his reasonable expenses in managing a trust, including attorney’s fees,
from the assets of a trust he manages.” First Union Nat’l Bank v. Jones, 768 So. 2d 1213, 1214
(Fla. 4th DCA 2000) (citing Bay Biscayne Co. v. Baile, 73 Fla. 1120, 75 So. 860 (1917) and
Smith v. Jones, 120 Fla. 237, 162 So. 496 (1935)). “‘Costs and counsel fees . . . should be
allowed in those cases where a trustee, in good faith, institutes or defends an action or incurs
legal expense in connection with his duties and responsibilities as trustee.’”

Id. at 1215

(alteration in original) (quoting West Coast Hosp. Ass’n v. Florida Nat’l Bank of Jacksonville,
100 So. 2d 807, 812 (Fla. 1958)). However,
[u]pon the motion of any qualified beneficiary who is not barred under
s. 736.1008 and whose share of the trust may be affected by the use of trust assets
to pay attorney fees or costs as provided in paragraph (b), the court may prohibit
the trustee from using trust assets to make such payment and, if such payment has
been made from trust assets after service of a notice of intent, the court may enter
an order compelling the return of the attorney fees and costs to the trust, with
interest at the statutory rate.
Fla. Stat. Ann. § 736.0802(10)(e). Florida trust law, nonetheless, favors allowing trustees to
recoup or pay litigation expenses with trust assets, mandating that a court “shall deny” a motion
to enjoin a trustee from using trust assets “unless it finds a reasonable basis to conclude that there
has been a breach of trust.” Fla. Stat. Ann. § 736.0802(10)(e)(1); see Schwab v. Huntington Nat.

8

Case No. 16-cv-60653-BLOOM/Valle
Bank, 516 F. App’x 545, 550 (6th Cir. 2013) (reviewing changes in Florida trust law and finding
“[i]n stark contrast to the old law, the new law puts the burden on the beneficiary to seek a court
order enjoining such payments.”). Moreover, even if a court “finds there is a reasonable basis to
conclude there has been a breach of trust, the court may still deny the motion if it finds good
cause to do so.” Fla. Stat. Ann. § 736.0802(10)(e)(1).
The movant bears the burden to show that a “reasonable basis exists, and the trustee may
rebut any such showing by presenting affidavits, answers to interrogatories, admissions,
depositions, and any evidence otherwise admissible under the Florida Evidence Code.” Fla. Stat.
Ann. § 736.0802(10)(e)(2). Accordingly, Philip has the burden to “‘make a reasonable showing
by evidence in the record or by proffering evidence that provides a reasonable basis for a court to
conclude that there has been a breach of trust.’” 4 Covenant Trust Co. v. Guardianship of
Ihrman, 45 So. 3d 499, 504 (Fla. 4th DCA 2010) (quoting former Fla. Stat. Ann.
§ 736.0802(10)(b)); see Schwab, 516 F. App’x at 550 (citing Covenant Trust Co., 45 So. 3d at
504).
B.

ANALYSIS

“A breach of trust is ‘[a] trustee’s violation of either the trust’s terms or the trustee’s
general fiduciary obligations.’” Covenant Trust Co., 45 So. 3d at 504 (quoting Black’s Law
Dictionary 201 (8th ed. 2004)); see BREACH OF TRUST, Black’s Law Dictionary (10th ed. 2014)
(“A trustee’s violation of either the trust’s terms or the trustee’s general fiduciary obligations; the
violation of a duty that equity imposes on a trustee, whether the violation was willful, fraudulent,
negligent, or inadvertent.”). “‘A violation by a trustee of a duty the trustee owes to a beneficiary
is a breach of trust.’” Berlinger Wells Fargo, N.A. v. Berlinger, 2016 WL 740521, at *9 (M.D.
4

While unsupported, conclusory allegations are insufficient, the Court does not believe that Philip has a
burden akin to that of a movant on summary judgment, as Clifford appears to argue. See ECF No. [88] at
5 n.4; see also Covenant Trust Co., 45 So. 3d at 504.

9

Case No. 16-cv-60653-BLOOM/Valle
Fla. Feb. 25, 2016) (quoting 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 breach.’” Id. (alternations omitted)
(quoting Treco Int’l S.A. v. Kromka, 706 F. Supp. 2d 1283, 1288 (S.D. Fla. 2010) and citing
Gracey v. Eaker, 837 So. 2d 348, 353 (Fla. 2002)).
Clifford clearly has a fiduciary duty as Trustee of both Trusts. Philip argues that Clifford
breached that duty by:
1. Gifting himself over $500,000 of assets from the Gloria Trust without informing
Gloria (the life beneficiary) or Audrey Joyce (a remainderwoman entitled to a
$150,000 bequest);
2. Transferring $229,492.06 of principal from the George Trust to the Gloria Trust
without informing Philip;
3. Borrowing $150,000 from the George Trust on October 10, 2011 without notifying
Philip and Gloria or seeking their consent, per established custom;
4. Failing to provide Philip with timely notices and accountings, or a distribution from
the George Trust;
5. Failing to inform Philip that he had assumed the trusteeships until May 9, 2012, over
six months after assuming the position; and
6. Failing to serve requisite notice of his intent to use trust funds in this litigation.
See Motion to Enjoin at 4-5, 6, 8, 9. In support of his position, Philip has produced a letter from
his wife and attorney – Letitia Abromats, an October 2011 letter from a Dr. Rooney concerning
Ms. Abromats’s health, a partial state court docket regarding the George Trust matter, his own
affidavit, an affidavit from Audrey Joyce, and an affidavit from attorney Gary Rudolf. See ECF

10

Case No. 16-cv-60653-BLOOM/Valle
Nos. [94-1]–[94-4], [96], [115]. Philip also cites to Clifford’s proposed accounting of the Gloria
Trust at ECF No. [1-1], and to various documents included with Philip’s original Counterclaims,
ECF No. [15].
While Gloria Abromats lived and her Trust remained revocable, Clifford owed Ms.
Abromats, and only Ms. Abromats, “the duties of [a] trustee.” 5 See Fla. Stat. 736.0603(1)
(“While a trust is revocable, the duties of the trustee are wed exclusively to the settlor.”). The
Gloria Trust explicitly permits Ms. Abromats to direct the Trustee to distribute gifts as Ms.
Abromats wished. It also allows, among other things, the Trustee “to make cash advances or
loans to beneficiaries with or without security.” ECF No. [1-1] at 15 (Gloria Trust Art. 11 § S).
Ms. Abromats additionally provided Clifford with power of attorney (“POA”), allowing Clifford
“full power to act for me and in [her] name with the same effect as though [she] were personally
present and acting for [herself].” ECF No. [15-48] ¶ 1. The POA authorized Clifford, Ms.
Abromats’s “Attorney-in-Fact,” to

“make gifts . . . including circumstances where my

Attorney-in-Fact is also a permitted donee hereunder.” Id. ¶ 9(o). All of this is in accordance
with Florida law, which permits a trustee to provide distributions to himself if “[t]he transaction
was authorized by the terms of the trust,” “[t]he beneficiary consented to the trustee’s conduct”
or ratified it, or “[t]he transaction was consented to in writing by a settlor of the trust while the
trust was revocable.” Fla. Stat. Ann. § 736.0802(a), (d), (f).
Ms. Abromats’s grant to Clifford of broad authority over her Trust and financial affairs –
and Philip’s apparent acceptance of this arrangement for many years – indicates that Ms.
Abromats trusted Clifford and consented to the actions he took as Trustee. Philip has the
evidentiary burden to establish a reasonable basis for the Court to conclude otherwise, but has
5

To the extent the September Amendments made the Trust irrevocable, both parties agree that because
Philip kept the Amendments secret, Clifford should be held to the fiduciary duty owed by a trustee of a
revocable trust until at least March 18, 2015.

11

Case No. 16-cv-60653-BLOOM/Valle
failed, providing largely speculative evidence in support of his position. Undoubtedly, Philip is
at a bit of a disadvantage, having to establish a basis for concluding that something did not occur
many years ago. But it is Philip who moves the Court to enjoin Clifford from exercising the
rights afforded to him under Florida law and the Trust document prior to the close of discovery.
In rebuttal, Clifford has provided an affidavit, in which he states that Ms. Abromats was aware of
his financial difficulties in 2008 or 2009, and accordingly told him “to take what [he] needed to
make it through this difficult time.” ECF No. [88-5] (“Clifford Aff.”) ¶ 38. Clifford explicitly
states that he “never took anything without [Ms. Abromats’s] knowledge or approval.” Id. ¶ 40.
Jack Baxter, an attorney who has represented George, Gloria, and Clifford Abromats at various
junctures, similarly states that he instructed Clifford “not to hide anything from his mother and
keep her informed on the administration of and distributions from the George Trust and the
Gloria Trust; and from my conversations, with both [Clifford] and Gloria J. Abromats, I
surmised that my directs were being followed.” ECF No. [88-4] (“Baxter Aff.”) ¶ 7 (emphasis
added). Faced with these sworn affidavits, Philip’s statements regarding his brother’s purported
character flaws, and Philip’s medical opinion that his mother “was in no mental position to
approve substantial gifts to anybody” as of November 2012, fails to establish a reasonable basis
to conclude that Clifford breached his fiduciary duties to Ms. Abromats. 6 ECF No. [94-4] ¶¶ 6,
13 (“Philip Aff.”).
Philip’s remaining accusations are similarly unpersuasive.

First, Philip claims that

Clifford transferred funds from the George Trust and into the Gloria Trust because Clifford
believed Philip disinherited from the Gloria Trust, thus allowing Clifford to rob Philip of his

6

The record contains competing and underdeveloped evidence of Ms. Abromats’s health during the time
periods in question. As the issue has a potentially dispositive effect on the validity of the January and/or
September Amendments – the central dispute at issue in this case – the Court reserves a determination of
Ms. Abromats’s mental state for a later, more fully briefed, day.

12

Case No. 16-cv-60653-BLOOM/Valle
share of the George Trust unencumbered.

Clifford, however, has provided a persuasive

explanation for his actions by way of affidavit, see Clifford Aff. ¶¶ 10-30, and while Philip does
not “believe” Clifford’s “narrative,” the Court finds that Clifford’s explanation sufficiently
rebuts Philip’s largely unsupported accusations. See Fla. Stat. Ann. § 736.0802(10)(e)(2). The
Court will not enjoin Clifford from exercising his rights as Trustee based primarily on Philip’s
contested logic and belief.
Philip stands on firmer evidentiary ground with his arguments regarding Clifford’s failure
to provide Philip with notice of transfers from the George Trust, but the Court nonetheless finds
that Philip has failed to establish a reasonable basis for a breach of trust on this ground. As an
initial matter, while a trustee has a duty to keep “beneficiaries reasonably informed about the
trust and its administration,” Brent v. Smathers, 547 So. 2d 683, 685 (Fla. 3d DCA 1989), Philip
has not cited to persuasive authority in which a court enjoined a trustee from using trust funds in
litigation based solely on allegations of insufficient notice related to the trust’s administration.
In any event, “‘in the absence of a request, the trustee is ordinarily not under a duty to furnish
information to the beneficiary.’” Schwab, 516 F. App’x at 551 (quoting Smathers, 547 So. 2d at
685-86). A trustee is, however, “‘under a duty to communicate to the beneficiary material facts
affecting the interest of the beneficiary which he knows the beneficiary does not know and which
the beneficiary needs to know for his protection in dealing with a third person with respect to his
interest.’” Id. (quoting Smathers, 547 So. 2d at 686). Throughout his tenure as Trustee, Clifford
periodically provided Philip with brokerage statements from Wells Fargo connected to the
George Trust.

See ECF No. [94] at 12; see also Philip Aff. ¶¶ 14-15.

The statements

specifically identified transfers to the Gloria Trust. See ECF No. [88] at 12 (uncontested by
Philip). Philip states that the statements were insufficient, as they “only provided information

13

Case No. 16-cv-60653-BLOOM/Valle
that money had been removed, and if one squinted and inferred from the statements that Gloria’s
trust was the recipient, where it went, but not why it went there.” ECF No. [94] at 12. Philip,
however, is a seasoned attorney who is clearly familiar with the financial background of both
Trusts. Clifford provided Philip with relevant statements, and Philip had another attorney review
the statements on occasion, but at no point did Philip raise concerns of improper withdrawals to
Clifford. 7 See ECF No. [96-1] ¶¶ 6-7. Squinting concerns aside, the statements document
withdrawals from the George Trust to the Gloria Trust, and under the circumstances presented on
the Motion to Enjoin, the Court finds the statements provided Philip with sufficient knowledge to
request further information, if he desired. See ECF No. [88] at 12. Absent such inquiry on
Philip’s part, the Court does not find that a reasonable basis exists to conclude Clifford failed to
“communicate . . . material facts affecting [Philip’s] interest.” Schwab, 516 F. App’x at 551.
Relatedly, in regards to Clifford’s alleged failure to provide notice of the $150,000 he borrowed
from the George Trust before he became Trustee, and his purported violation of the brothers’
“custom,” the record is undeveloped and does not establish a reasonable basis to conclude a
breach of trust.
Philip also argues that Clifford improperly failed to inform him that he had become
Trustee for six months in 2012.

However, the record indicates that Philip was aware of

Clifford’s status as Trustee shortly after his appointment to this role. Moreover, Philip has failed
to show what damages he proximately suffered as a result, four years ago. As to the Trust
accountings, Clifford has now provided them. Contrary to Philip’s assertions, Florida trust law
does not require that Clifford provide an accounting within 60 days of Ms. Abromats’s death, but
rather, that he “give notice . . . of . . . the right to accountings” within such time. Fla. Stat.
7

To the extent that Philip or his attorney requested information, Jack Baxter states that he would “supply
the requested information to Philip/Rudolph’s apparent satisfaction.” Baxter Aff. ¶ 3.

14

Case No. 16-cv-60653-BLOOM/Valle
736.0813(1)(b) (emphasis added). This, Clifford did, in response to Philip’s request within one
month of Ms. Abromats’s passing. See ECF No. [88] at 18. Finally, the Court rejects Philip’s
argument that Clifford failed to serve proper notice of his intent to use trust funds in this suit.
Florida trust law requires that “after a breach of trust action or defense has been asserted, the
trustee’s only affirmative duty is to give notice to the beneficiaries of the fees it intends to pay
from the trust.” Schwab, 516 F. App’x at 550; see Fla. Stat. Ann. § 736.0802(10)(b). Clifford
filed notice of his intent to use trust funds on April 1, 2016, and emailed notice to Philip’s
attorney (Philip’s wife) that same day, after Philip had been served with process in the state court
action and before Philip asserted a breach of trust defense or counterclaim in the Florida action.
See ECF Nos. [13-1], [15]. Moreover, Fla. Stat 736.0802(10)(c) provides that service of notice
can be made “in any manner provided for service of pleadings and other documents by the
Florida Rules of Civil Procedure.” The Florida Rules allow for service via email, see Fla. R. Jud.
Admin. 2.516, and Philip does not challenge the substance of Clifford’s email service. The
record clearly shows that Philip and his attorney were aware very early in these proceedings that
Clifford intended to use trust funds to litigate this matter. See ECF Nos. [13-1], [88-1]. Whether
Philip filed the notices in state court shortly after removal, rather than federal court, does not
change this fact. Thus, the Court finds that Philip has failed to meet his burden to establish a
reasonable basis to conclude that Clifford has committed a breach of trust. See Covenant Trust
Co., 45 So. 3d at 504.
The Court additionally finds good cause to deny Philip’s Motion to Enjoin in its
discretion, pursuant to Fla. Stat. § 736.0802(10)(e)(1). In order to properly adjudicate the
Motion to Enjoin, the Court must consider the context in which Philip brings his Motion, and the
context is this: both Abromats brothers ask the Court to determine that the other took advantage

15

Case No. 16-cv-60653-BLOOM/Valle
of their elderly mother. Philip claims that Clifford secured Philip’s expulsion from the Gloria
Trust, and that as Trustee, he systematically stole Trust funds through unscrupulous means and
undue influence. Clifford retorts that Philip convinced Ms. Abromats to reinstate him back into
the Trust through undue influence. Merits aside, only Philip kept his actions entirely secret,
informing Clifford of his reinsertion years later and shortly before Ms. Abromats’s death.
Timely disclosure of the September Amendments may have resulted in an unpleasant family
dispute, but surely no more unpleasant than the instant litigation has been, and would have
allowed Ms. Abromats to unambiguously express her intentions. Such a result would also have
avoided the gross expenditure of Trust resources that have seemingly flowed from this litigation
unabated. Faced with a record rife with cross-accusations, the Court believes it proper to err on
the side of Florida’s default trust law and the stated wishes of Ms. Abromats through the POA
and Trust instrument, which grant Clifford “full power to act” for Ms. Abromats, and provided
Clifford with broad powers, including the “specific power[ ] . . . [t]o employ and compensate
attorneys.” ECF No. [15-48] ¶ 1; Gloria Trust Art. 11 § F. If the Court is eventually required to
decipher the intent of the late Ms. Abromats, it will only do so upon an adequate record.
Accordingly, the Motion to Enjoin is denied. Clifford may continue to pay attorney’s fees and
costs from the assets of both Trusts, as appropriate.
IV.

CONCLUSION
For all of the reasons stated herein, it is ORDERED AND ADJUDGED as follows:
1. Philip’s Motion to Reinstate, ECF No. [89], is DENIED;
2. Philip’s Motion to Enjoin, ECF No. [76], is DENIED;
3. The parties and counsel are ORDERED to appear before the Court for a
hearing on November 18, 2016 at 10:00 a.m. At the hearing, the Court will

16

Case No. 16-cv-60653-BLOOM/Valle
address Philip’s Motion for Release of Funds, ECF No. [110], and will hold a
status conference, discussing, among other things, the parties’ appearance before
the Honorable Alicia O. Valle for a settlement conference.
DONE AND ORDERED in Miami, Florida, this 13th day of October, 2016.

_________________________________
BETH BLOOM
UNITED STATES DISTRICT JUDGE
Copies to:
Counsel of Record

17