Kent v. Kent, 82-794

CourtCourt of Appeal of Florida (US)
Citation431 So.2d 279
Docket NumberNo. 82-794,82-794
PartiesDavid C. KENT, et al., Appellants, v. Marshall KENT, etc., et al., Appellees.
Decision Date12 May 1983

Mark A. Zimmerman, of James, Zimmerman, Paul & Clayton, DeLand, for appellants.

Donna Sumner Cox and Charlie Luckie, Jr., of Dayton, Sumner, Luckie & McKnight, P.A., Dade City, for appellees.

FRANK D. UPCHURCH, Jr., Judge.

Appellants David and Joel Kent, the beneficiaries of two separate trusts created by appellee Marshall Kent, appeal from an order dismissing their second amended petition with prejudice.

Appellants raise three questions which require discussion. The first is whether their second amended petition seeking to impose a constructive trust over certain real property stated a cause of action. The second is whether their count alleging civil conspiracy stated a cause of action. Finally, appellants claim that the trial court erred in discharging the notice of lis pendens.

In count I of their second amended petition, appellants sought to impose a constructive trust over certain real property located in Volusia County. They alleged that this property was a major asset of the trusts and that it had been transferred by Marshall Kent, trustee of the trusts, to the Larry Kent Profit Sharing Trust and then to Larry Kent Homes Employees Pension Trust for less than fair consideration with intent to defraud them.

The trial court gave no reasons for dismissing the petition and appellees (Marshall Kent and his son Larry), argue that the court acted properly because:

1) under the terms of the trusts, the trustee, Marshall Kent, had the authority to sell trust property;

2) appellants' petition was based on section 726.01, Florida Statutes (1981), dealing with fraudulent conveyances and a cause of action under this statute may only be maintained by a creditor of the grantor; and

3) appellants failed to allege equitable circumstances justifying imposition of a constructive trust.

Initially it should be noted that in their second amended petition, appellants do not seek to hold Marshall Kent, as trustee, personally liable in damages for the alleged breach of his fiduciary duties in selling the property in question for a depressed price. § 737.306, Fla.Stat. (1981). See Boalt v. Hanson, 412 So.2d 880 (Fla. 3d DCA 1982).

Rather, appellants seek to recover the property by imposing a constructive trust over it. There are cases establishing that the beneficiary of a trust may pursue trust funds which have been wrongfully diverted, provided their identity has not been lost and they have not passed into the hands of a bona fide purchaser for value without notice. First State Trust & Savings Bank v. Therrell, 103 Fla. 1136, 138 So. 733 (1932). See also Smith v. Massachusetts Mutual Life Ins. Co., 116 Fla. 390, 156 So. 498 (1934); Standard Oil Co. v. Mehrtens, 96 Fla. 455, 118 So. 216 (1928). In Smith, the court noted that a purchaser with knowledge of the facts giving rise to the breach of trust takes the property impressed with the trust. Smith, 156 So. at 509. See also First State Trust & Savings, 138 So. at 739; Standard Oil Co., 118 So. at 220.

Appellants have alleged that appellee Larry Kent had knowledge that the property in question was trust property, was aware of the inadequate price, and acted in concert with the trustee, his father, to defraud the beneficiaries. Under this set of facts, appellants stated grounds for equitable relief and could have recovered the property for the benefit of the trusts. Therefore, the trial court erred in dismissing count I of the second amended petition. 1

Count II sought damages based on civil conspiracy. The gist of civil conspiracy is not the conspiracy itself but the civil wrong which is done through the conspiracy which results in injury to the plaintiff. Buckner v. Lower Florida Keys Hospital Dist., 403 So.2d 1025 (Fla. 3d DCA 1981). An act which does not constitute the basis for an action against one person cannot be the basis of a civil action for conspiracy. Churruca v. Miami Jai-Alai, Inc., 353 So.2d 547 (Fla.1978); Buckner v. Lower Florida Keys Hospital.

In Churruca v. Miami Jai-Alai, the supreme court noted that:

[O]rdinarily there can be no independent tort for conspiracy. However, if the plaintiff can show some peculiar power of coercion possessed by the conspirators by virtue of their combination, which power an individual would not possess, then conspiracy itself becomes an independent tort.... The essential elements of this tort are a malicious motive and coercion through numbers or economic influence.

353 So.2d at 550.

In Bond v. Koscot Interplanetary, Inc., 246 So.2d 631 (Fla. 4th DCA 1971), the Fourth District, in discussing the essentials of a complaint for civil conspiracy, listed the following requirements:

(a) a conspiracy between two or more parties, (b) to do an unlawful act, or to do a lawful act by unlawful means, (c) the doing of some overt act in pursuance of the conspiracy, and (d) damage to plaintiff as a result of the acts done under the conspiracy.

246 So.2d at 635.

In Smyrna Developers, Inc. v. Bornstein, 177 So.2d 16 (Fla. 2d DCA 1965), the Second District held that a cause of action for civil conspiracy was stated where the complaint alleged that the defendants, attorneys who had been retained by plaintiff corporation and who were informed of the corporation's land development plans, conspired together and used this knowledge to deprive the corporation of the property and obtain it for themselves.

We conclude that the case before us is analogous to Smyrna Developers. Appellants alleged Marshall and Larry Kent conspired to deplete the trust assets and to convert those assets to themselves. They further alleged that Marshall Kent leased and sold trust assets to Larry Kent for consideration which they both knew was inadequate in a scheme to defraud appellants as beneficiaries. These allegations, if proven, would constitute conduct amounting to a civil wrong.

Finally, since it appears that the trial court discharged the lis pendens only because it dismissed the second amended petition, it is proper that upon reinstatement of the complaint on remand, the lis pendens likewise should be reinstated.

REVERSED and REMANDED.

DAUKSCH, J., concurs.

COWART, J., concurs specially with opinion.

COWART, Judge, concurring specially:

I concur with the majority opinion but I believe the matter of the lis pendens warrants further discussion because I agree with the dissenting view of Judge Anstead in Boca Raton Land Development, Inc. v. Sparling, 397 So.2d 1053, 1054 (Fla. 4th DCA 1981). There is a good and simple reason for the distinction made by Section 48.23(3), Fla.Stat. (1981), between a lis pendens in an action "founded on a duly recorded instrument" and in an action which is not. "Founded on" means based upon; arising from, growing out of, or resting upon; as in "founded in fraud" "founded on the consideration", "founded on contract" and the like. Black's Law Dictionary 591 (rev. 5th ed. 1979). When a plaintiff's cause of action is founded on a duly recorded instrument the plaintiff's lis pendens can not effectively or wrongfully cloud the defendant's title to the property in question because the duly recorded instrument upon which the plaintiff's action is based already constitutes constructive notice of the plaintiff's right or claim. This commonly occurs when a mortgagee sues to foreclose a recorded mortgage, a contract purchaser sues for specific performance of a recorded purchase agreement, an owner under a recorded deed sues for a petition, ejectment or to quiet his title. In such instances under the statute a plaintiff is entitled to maintain a lis pendens as a matter of right. 1 On the other hand as to a plaintiff without a recorded interest in the property a lis pendens acts in the nature of a temporary injunction or restraining order to summarily grant a remedy that is effective to prevent the defendant from selling his property interest to a good faith purchaser for value. This is why, in this situation, Section 48.23(3), Fla.Stat. (1981), purports to give the court the same control over the lis pendens which the court has over injunctions. Likewise, this is why Section 48.23(2), Fla.Stat. (1981), makes a distinction as to the life of a lis pendens in favor of an action founded on a duly recorded instrument and against an action that is not. When the recorded instrument involved in an action is the one upon which the defendant's claim is based and the recorded instrument does not constitute the basis for the plaintiff's action then the reason for the statutory preference in favor of actions founded on recorded instruments does not exist and a misconstruction of the statute in such instance deprives a defendant of its intended benefit. This does not mean that a...

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