Gilbert v. Gilbert, s. 83-501

• Decision Date: 27 January 1984
• Docket Number: 83-821,Nos. 83-501,s. 83-501
• Citation: 447 So.2d 299
• Parties: Fenton L. GILBERT, Appellant, v. Betty J. GILBERT, Appellee. SOUTHEAST BANK, N.A., formerly known as Southeast Bank Trust Company, Appellant, v. Betty J. GILBERT, Appellee.
• Court: Florida District Court of Appeals

Page 299

447 So.2d 299

Fenton L. GILBERT, Appellant, v. Betty J. GILBERT, Appellee.

SOUTHEAST BANK, N.A., formerly known as Southeast Bank Trust Company, Appellant, v. Betty J. GILBERT, Appellee.

Nos. 83-501, 83-821.

District Court of Appeal of Florida,

Second District.

Jan. 27, 1984.

Rehearings Denied March 21, 1984.

Larry Helm Spalding of Lewis & Spalding, Sarasota, for appellant Fenton L. Gilbert.

George R. McLain of Harnden, McLain, Spivey & Dart, Chartered, Sarasota, for appellant Southeast Bank.

Arthur D. Ginsburg of Ginsburg, Byrd, Jones & Dahlgaard, Sarasota, for appellee Betty J. Gilbert.

GRIMES, Acting Chief Judge.

Among other points, this appeal poses, for the first time in Florida, the question of whether the assets of a spendthrift trust may be garnished for arrearages in alimony.

In the judgment of dissolution, the court ordered the husband to pay permanent periodic alimony of $2,500 per month and lump sum alimony in the amount of $35,000 payable in six-month installments of $3,500. The court also required that he be responsible for reasonable and necessary medical expenses of the wife attributable to her multiple sclerosis and that he pay her attorney's fees of $24,750. The husband never paid the attorney's fees and later stopped paying alimony and the wife's medical expenses. The court entered a writ of ne exeat and held him in contempt, but these actions proved futile because he fled the jurisdiction. He is now thought to be living in England. The husband also removed his assets from the state, thereby thwarting the wife's efforts to collect the arrearages.

In her efforts to enforce the dissolution judgment, the wife sought to garnish the husband's interest in a trust established by Emily H. Gilbert for the benefit of various beneficiaries and administered by Southeast Bank as trustee. The trust contained the following paragraph:

5.2--Spendthrift Provision; the interest of each beneficiary in the income or principal of each trust hereunder shall be free from the control or interference of any creditor of a beneficiary or of any spouse of a married beneficiary and shall not be subject to attachment or susceptible of anticipation or alienation.

Notwithstanding this provision, the court entered judgment in garnishment against the bank as trustee for $50,500 arrearages in alimony and medical expenses and $18,000 in attorney's fees. The court also entered a continuing writ of garnishment directing the bank to pay to the wife out of the trust the periodic and lump sum alimony as it becomes due.

The language of paragraph 5.2 appears adequate to constitute a spendthrift trust which would protect the beneficiaries' interests from invasion by their creditors. See Waterbury v. Munn, 159 Fla. 754, 32 So.2d 603 (1947). Though the quoted provision does not specifically exclude the claim of ex-spouses, the spendthrift language does not suggest any intent on the part of the settlor to make an exception for unpaid alimony. The bank contends that assets in the hands of a trustee under the terms of a spendthrift trust cannot be garnished for the collection of alimony.

The resolution of this issue involves a choice between competing interests. The cardinal rule of construction in trusts is to determine the intention of the settlor and give effect to his wishes. Cartinhour v. Houser, 66 So.2d 686 (Fla.1953). Thus, in refusing to permit the invasion of a spendthrift trust for alimony, it has been said that "[w]hen unrestrained by statute it is the intent of the donor, not the character of the donee's obligation which controls the availability and disposition of his gift." Erickson v. Erickson, 197 Minn. 71, 78, 266 N.W. 161, 164 (1936). Accord Bucknam v. Bucknam, 294 Mass. 214, 200 N.E. 918 (1936); Dinwiddie v. Baumberger, 18 Ill.App.3d 933, 310 N.E.2d 841 (1974). On the other hand, there is a strong public policy argument which favors subjecting the interest of the beneficiary of a trust to a claim for alimony. Clay v. Hamilton, 116 Ind.App. 214, 63 N.E.2d 207 (1945); O'Connor v. O'Connor, 3 Ohio Op.2d 186, 141 N.E.2d 691 (Ohio Ct.Com.Pl.1957); Shelley v. Shelley, 223 Or. 328, 354 P.2d 282 (1960); Dillon v. Dillon, 244 Wis. 122, 11 N.W.2d 628 (1943). As one court stated, the obligation to pay alimony "is a duty, not a debt." Safe Deposit & Trust Co. v. Robertson, 192 Md. 653, 65 A.2d 292 (1949).

The weight of authority permits the invasion of spendthrift trusts to collect unpaid alimony. See Annot., 91 A.L.R.2d 262 (1963). According to 2 A. Scott, The Law of Trusts § 157.1 (3d ed. 1967) (footnotes omitted):

Dependents of the beneficiary. Whether or not ordinary contract creditors can reach the interest of the beneficiary of a spendthrift trust, it has been held in a number of cases that his interest can be reached by his wife or children to enforce their claims against him for support. There are statutes in several states so providing. There are several grounds on which the dependents have been given protection.

In the first place, it has been held in a number of cases that a provision in the terms of the trust that the interest of the beneficiary should not be subject to the claims of creditors was not intended to apply to dependents of the beneficiary. They are not "creditors" of the beneficiary, and the liability of the beneficiary to support them is not a debt....

Even though it is clear that the settlor intended to exclude the beneficiary's wife and children from enforcing their claims for support against his interest in the trust, it has been held in some cases that they are not thereby precluded from reaching the trust estate. This result has been reached on the ground that it is against public policy to permit the beneficiary to have the enjoyment of the income from the trust while he refuses to support his dependents whom it is his duty to support. The claim of a wife and dependent children to support is based upon the clearest grounds of public policy. They are in quite a different position from ordinary creditors who have voluntarily extended credit. It would be shocking indeed to permit a husband to receive and enjoy the whole of the income from a large trust fund and to make no provision for his needy dependents.

Accord Restatement (Second) of Trusts § 157 (1959). However, some of the cases representing the majority rule are controlled by statute and other authorize the court which has jurisdiction over the trust to exercise its discretion to determine the extent of the alimony to be paid from the trust. E.g., Shelley v. Shelley; Restatement (Second) of Trusts § 157, comment on clause (a) (1959).

While our state has no statute on the subject, certain Florida decisions suggest an inclination toward the majority rule. The court in City of Miami v. Spurrier, 320 So.2d 397 (Fla. 3d DCA 1975), cert. denied, 334 So.2d 604 (Fla.1976), held that it was against public policy to attempt to preclude the garnishment of a pension to satisfy an award of alimony, child support, and maintenance. In that case, an ex-wife was permitted to garnish monthly payments to the husband from the City of Miami's retirement fund even though the enacting ordinance specifically exempted the pension funds from garnishment. In Page v. Page, 371 So.2d 543 (Fla. 3d DCA 1979), the court indirectly approved the invasion of a spendthrift trust by directing the trial judge to take into consideration the income received by the father from a spendthrift trust in determining the proper amount of child support.

In light of our strong public policy toward requiring persons to support their dependents, we hold that spendthrift trusts can be garnished for the collection of arrearages in alimony. We also believe that a claim for attorney's fees awarded incident to the divorce is collectible in the same manner.

In our consideration of this appeal, we are hampered by the fact that the entire trust document was not made a part of the record. We are told by counsel, however, that the instrument provides for the husband to receive $50,000 from the corpus of the trust together with accrued income each December 10 until the corpus is exhausted. The lower court's original restraining order against the bank was entered on November 6, 1981; consequently, by the time the garnishment judgment was entered on April 11, 1983, the bank was holding more than $100,000 which was payable to the husband under the trust. Because this sum exceeded the amount of the arrearages, there is no need to consider whether the court could have gone so far as to order payment to the wife of any portion of the trust not yet payable to the husband. The same court had jurisdiction over both the dissolution and the trust; therefore, we may presume that the court has exercised its discretion in determining that the entire arrearages should be paid out of the trust. See Safe Deposit & Trust Co. v. Robertson.

The husband also complains of that portion of the order representing a continuing writ of garnishment to pay future alimony. He points out that section 61.12(2), Florida Statutes (1981), which authorizes continuing writs of garnishment to enforce orders for alimony and child support, refers only to the garnishment of an employer. However, the same result could be obtained under the provisions of section 61.11, Florida Statutes (1981), which reads as follows:

61.11 Effect of judgment of alimony.--A judgment of alimony granted under s. 61.08 or s. 61.09 releases the party receiving the alimony from the control of the other party, and the party receiving the alimony may use his alimony and acquire, use, and dispose of other property uncontrolled by the other party. When either party is about to remove himself or his property out of the state, or fraudulently convey or conceal it, the court may award a ne exeat or injunction against him or his property and make such orders as will secure alimony to the party who should receive it.

The remedy is drastic...