Lawyers' Title Guaranty Fund v. Koch

• Decision Date: 29 April 1981
• Docket Number: 80-389,Nos. 80-104,s. 80-104
• Citation: 397 So.2d 455
• Parties: The LAWYERS' TITLE GUARANTY FUND, a business trust, etc., et al., Appellants/Cross-Appellees, v. William F. KOCH, Jr., Mary Lou Koch, William F. Koch, Jr., Inc., a FloridaCorporation, P. Jack Harrah and Margaret Harrah, Appellees/Cross-Appellants, v. James L. LEAVITT, as Trustee et al., Appellees. The LAWYERS' TITLE GUARANTY FUND, a business trust, etc., et al., Appellants, v. James L. LEAVITT, as Trustee, et al., Appellees.
• Court: Florida District Court of Appeals

Page 455

397 So.2d 455

The LAWYERS' TITLE GUARANTY FUND, a business trust, etc., et al., Appellants/Cross-Appellees, v. William F. KOCH, Jr., Mary Lou Koch, William F. Koch, Jr., Inc., a FloridaCorporation, P. Jack Harrah and Margaret Harrah, Appellees/Cross-Appellants, v. James L. LEAVITT, as Trustee et al., Appellees.

The LAWYERS' TITLE GUARANTY FUND, a business trust, etc., et al., Appellants, v. James L. LEAVITT, as Trustee, et al., Appellees.

Nos. 80-104, 80-389.

District Court of Appeal of Florida, Fourth District.

April 29, 1981.

Arnold R. Ginsberg of Horton, Perse & Ginsberg, and Carl L. Laks, Miami, for appellants/cross-appellees.

MacMillan, Newett, Adams, Strawn, Stanley & Botos, Delray Beach, and Larry Klein, West Palm Beach, for appellees/cross-appellants Koch, Jr., Koch, Koch, Jr., Inc., Harrah and Harrah.

Dean Andrews of Andrews & Lubbers, P.A., Fort Lauderdale, and Theodore P. Mavrick, Fort Lauderdale, for appellees Knauer, Leavitt, Leavitt and Akins.

HERSEY, Judge.

Appellant, as the owner and holder of a promissory note which was secured by a mortgage and on which a default had occurred, filed suit against James Leavitt as trustee under a purported Illinois land trust and against the individual beneficiaries of that land trust. After dismissal of several counts of a fourth amended complaint for failure to state a cause of action against the beneficiaries of the trust and for failure to sufficiently allege facts upon which jurisdiction over those beneficiaries could be sustained, this appeal was taken. That portion of the complaint stating a cause of action against the trustee for default remains viable in the trial court.

It is appellant's position that the document which purportedly created the land trust in fact created a partnership or a joint venture thereby subjecting the individual investors to personal liability as partners or joint venturers.

We hold that the order dismissing various counts of the complaint with prejudice is sustainable on either of two grounds. First the complaint alleges legal conclusions rather than specific facts tending to show that the land trust is defective. We do not suggest that evidence should be pled but more is required than to simply state that the document constitutes an agreement of partnership or joint venture. It was reasonable for the trial court to assume after four tries that such factual allegations could not be made.

Additionally the terms of the trust agreement would not control unless that agreement were part of the transaction between the original mortgagor and mortgagee. This could have been accomplished specifically between the parties or by recording the trust agreement and referring to it appropriately in the mortgage documents. That was not done here. Section 689.071, Florida Statutes (1979), clearly sanctions the use of the so-called "Illinois Land Trust" in Florida.

It is too clearly ingrained into our jurisprudence to require citation that the beneficiary of a trust, validly established, is not rendered personally liable by the acts, omissions, contracts or other activities or undertakings of his trustee.

The document appended to the complaint established a land...