Columbia Bank v. Heather Johnson Turbeville, & St. Paul Mercury Ins. Co., 1D13–2750.

• Decision Date: 14 August 2014
• Docket Number: No. 1D13–2750.,1D13–2750.
• Citation: 143 So.3d 964
• Parties: COLUMBIA BANK, Appellant, v. Heather Johnson TURBEVILLE, and St. Paul Mercury Insurance Company, Appellee.
• Court: Florida District Court of Appeals

143 So.3d 964

COLUMBIA BANK, Appellant,

v.Heather Johnson TURBEVILLE, and St. Paul Mercury Insurance Company, Appellee.

No. 1D13–2750.

District Court of Appeal of Florida, First District.

July 7, 2014.

Rehearing Denied Aug. 14, 2014.

Rutledge R. Liles and Robert B. George of Liles, Gavin & George, P.A., Jacksonville, for Appellant.

Whitney K. McGuire and Michael E. Demont of Smith, Hulsey & Busey, Jacksonville, and Kevin M. Mekler of Mills Paskert Divers, P.A., Tampa, for Appellee.

MAKAR, J.

Columbia Bank sued a former employee, Heather Johnson Turbeville, to recover funds she withdrew from an account owned by her grandmother. Because the trial court's dismissal of the Bank's claims against Ms. Turbeville was error, we reverse.

I.

We present the facts as alleged in the Bank's complaint. In August 2005, Ms. Jewel H. Pueschel and her son, James, opened five accounts totaling $1,220,432.30 with Columbia Bank. To help her grandmother and father manage these accounts, Ms. Turbeville, a branch manager, offered her assistance and was thereafter added as a joint account holder for this purpose. The funds were solely those deposited by Ms. Pueschel and her son; Ms. Turbeville never deposited any money of her own into the accounts.

When her son died about a year and a half later, Ms. Pueschel transferred the funds into five new accounts with the Bank, each listing her as a joint account holder with her granddaughter. A short time later, Ms. Pueschel executed a Durable Power of Attorney granting Ms. Turbeville certain rights, including the right to manage Ms. Pueschel's bank accounts. Ms. Pueschel also opened a sixth account into which she deposited $50,000; Ms. Turbeville was listed on this new account as well.

At some point, Ms. Pueschel, suspecting that her granddaughter had ulterior motives, decided to either transfer the funds or remove Ms. Turbeville from the accounts. Ms. Pueschel went to the bank and requested that her funds—then totaling $1,320,286.50—be transferred to six new accounts in her name only. A bank employee told Ms. Pueschel that it would “not be a problem to transfer the funds into new accounts.” But another bank employee, Tammy Clarke, intervened and said Ms. Pueschel could not close the accounts or transfer the funds into new accounts bearing only her name; she was also told that she had to present the account certificates, which she did not have with her at that time, and had to comply with other conditions before withdrawing the funds. Ms. Pueschel became upset, so Ms. Clarke said that the Bank would “freeze the accounts so that no money could be removed from said accounts until such time as the issue concerning [Ms. Turbeville]'s status as a joint account holder was resolved.”

Ms. Clarke then called Ms. Turbeville to inform her of Ms. Pueschel's intentions to transfer the funds; she knew Ms. Turbeville from working at the Bank and also knew of the relationship between her and her grandmother. That day or the next, Ms. Turbeville went to her branch office and instructed a teller to withdraw $671,696.57 from the accounts and draft a cashier's check payable to her name only. Ms. Turbeville then deposited the funds into her own personal account, a transaction that prompted Ms. Pueschel to revoke the Durable Power of Attorney and seek recovery of the funds.

To get her monies back, Ms. Pueschel sued the Bank alleging that it wrongfully allowed Ms. Turbeville to withdraw the funds. That case settled, the Bank paying $1.1 million to Ms. Pueschel to resolve all of her claims and receiving an assignment of Ms. Pueschel's claims against Ms. Turbeville. The Bank then sued Ms. Turbeville and its insurer, St. Paul Mercury Insurance Company. ¹ It amended its complaint twice, seeking a declaration of rights and asserting a breach of contract against its insurer and suing Ms. Turbeville on three theories: equitable subrogation, conversion, and breach of fiduciary duty. Ms. Turbeville moved to dismiss the three claims against her with prejudice. After a hearing on the motion, the trial court dismissed the Bank's claims against Ms. Turbeville with prejudice and this appeal ensued.

II.

On appeal, the Bank argues that dismissal with prejudice was erroneous because it adequately and properly alleged the required elements for each of its three claims, which we address in turn.

A.The Equitable Subrogation Claim

Two types of subrogation exist in Florida: conventional and equitable. Dade Cnty. Sch. Bd. v. Radio Station WQBA, 731 So.2d 638, 646 (Fla.1999). Conventional subrogation, which arises from a contract between parties, is inapplicable here because no contract in subrogation exists between the Bank and Ms. Turbeville. Equitable subrogation, which the Bank asserts against Ms. Turbeville, is an equitable remedy rooted in the legal consequence of the actions and relationship between the parties. Id.;see also Aurora Loan Servs. LLC v. Senchuk, 36 So.3d 716, 718 (Fla. 1st DCA 2010). The “policy behind the doctrine is to prevent unjust enrichment by assuring that the person who in equity and good conscience is responsible for the debt is ultimately answerable for its discharge.” Kala Inv., Inc. v. Sklar, 538 So.2d 909, 917 (Fla. 3d DCA 1989). The doctrine places “one party into the shoes of another so that the substituting party retains the rights, remedies, or securities that would otherwise belong to the original party.” Aurora Loan Servs., 36 So.3d at 722.

Use of this equitable remedy is appropriate when the subrogee (here, the Bank):

(1) made the payment to protect its own interest,

(2) did not act as a volunteer,

(3) was not primarily liable for the debt,

(4) paid off the entire debt, and

(5) works no injustice to the rights of a third party by its equitable subrogation claim.

Dade Cnty. Sch. Bd., 731 So.2d at 646. Tracking these elements, the Bank's second amended complaint alleges that it made the payment to Ms. Pueschel to protect its interests and to “discharge[ ] the debt owed to and compensated” for the “wrongful actions taken by Ms. Turbeville.” The Bank further alleged it “did not act as a volunteer in making such payment to Ms. Pueschel” and that it “was not primarily responsible” for the entire amount paid; instead, “Ms. Turbeville was primarily responsible because she wrongfully removed the funds from Ms. Pueschel's accounts.” Finally, it alleged that subrogation “will not work any injustice to the rights of any party.”

To supplement these allegations, which could be characterized as conclusory, the Bank initially pled facts underlying its settlement with Ms. Pueschel, whose complaint against the Bank was an attachment. The Bank did not attach her complaint to the second amended complaint at issue, but recited the factual allegations supporting the elements of its equitable subrogation claim including the Bank's reasons for entering a settlement agreement with Ms. Pueschel, which resolved all of her claims and the entire amount sought.

Ms. Turbeville asserts that the voluntariness element has not been adequately asserted, but the Bank essentially claims it settled “[i]n the face of the lawsuit in which it was named as a defendant ... to protect its own interests.” West American Ins. Co. v. Yellow Cab Co. of Orlando, Inc., 495 So.2d 204, 207 (Fla. 5th DCA 1986). Such an allegation is enough to plead the involuntariness element. Ms. Turbeville also claims the Bank is primarily liable, the Bank countering that it was her conduct outside the scope of employment that primarily caused liability to Ms. Pueschel. This factual dispute, rather than a basis for dismissal of the equitable subrogation claim, falls into the category for decision by a jury. See Dade Cnty. Sch. Bd., 731 So.2d at 646; see also West American, 495 So.2d at 205. The same is true of Ms. Turbeville's claim the Bank did not obtain a...