Richmond v. State Title & Guar. Co., Inc.
| Decision Date | 26 September 1989 |
| Docket Number | No. 88-2845,88-2845 |
| Citation | 553 So.2d 1241,14 Fla. L. Weekly 2264 |
| Parties | 14 Fla. L. Weekly 2264 Paul RICHMOND, Trustee, Appellant, v. STATE TITLE & GUARANTY COMPANY, INC., a Florida corporation, and Georgina Esteva, Appellees. |
| Court | Florida District Court of Appeals |
Lapidus & Frankel, and Robert P. Frankel, Miami, for appellant.
Taylor, Brion, Buker & Greene, and Arnaldo Velez, Miami, for appellees.
Before BASKIN, FERGUSON and LEVY, JJ.
Paul Richmond, Trustee, appeals an adverse final judgment in favor of State Title & Guaranty Co., Inc., and Georgina Esteva, an officer and co-owner of State Title, entered in an action to recover damages for alleged misdisbursement of loan proceeds. We affirm.
This case involves the failure of complex financial plans for developing a residential condominium project; only a few of the facts are pertinent to this appeal. Richmond entered into a loan agreement with Kramer Homes, Inc. 1 State Title and Esteva acted as closing or disbursing agents. Before the closing, Richmond's agent specifically instructed Esteva and State Title to disburse the loan proceeds as follows: "$350,000 to W.C. Investments, Inc. for the purpose of acquisition by Larry C. Griggs of one hundred percent (100%) ownership of all of the stock of Kramer Homes, Inc.,...." Esteva drew checks for $272,182.99 to W.C. Investments, Inc., and for $170,365.76 2 to Central Bank of North Dade to obtain the stock. She disbursed the funds to Central Bank because it held Kramer Homes stock which W.C. Investments, Inc., had pledged. Subsequently, Richmond filed an action against State Title and Esteva alleging that they wrongfully disbursed the funds. The trial court referred the matter to a special master who issued findings of fact and conclusions of law. The special master's pertinent finding stated:
Instead of following this instruction [pertaining to the $350,000.00] Ms. Esteva and State Title only distributed $272,182.99 to W.C. Investments, Inc., and distributed the balance of the $350,000.00 to other creditors of Kramer Homes and/or Griggs.... $77,817.01 was improperly disbursed on August 4, 1981.
Based upon that finding the special master concluded that Richmond was entitled to a judgment for $77,817.01.
Upon appellee's motion for rehearing following entry of the final judgment adopting the special master's final report, the court vacated the judgment and entered judgment in favor of State Title and Esteva. The court stated that the master's finding concerning disbursement was contrary to the evidence and that:
... the balance of the $350,000 which was earmarked for the purpose and (sic) was disbursed to an entity which stood in the position of W.C. Investments, Inc., with regard to the stock.
Additionally, [Richmond] suffered no damage in the manner in which the $350,000.00 was disbursed; it obtained 100% of the stock of Kramer Homes, Inc.
Richmond contends the trial court abused its discretion in granting the motion for rehearing and failing to enter judgment in accordance with the special master's conclusion that Richmond was entitled to judgment against Esteva and State Title. We disagree for several reasons. First, we find that the record demonstrates the correctness of the trial court's refusal to adopt the master's determination that Richmond was entitled to recover $77,817.01--the balance of the $350,000; that determination was not supported by competent evidence and was clearly erroneous. See Frank v. Frank, 75 So.2d 282 (Fla.1954); Goldman v. Smargon, 524 So.2d 479 (Fla. 3d DCA 1988); Linn v. Linn, 523 So.2d 642 (Fla. 4th DCA), review denied, 534 So.2d 400 (Fla.1988); Bragassa v. Bragassa, 505 So.2d 556 (Fla. 3d DCA 1987); Ben-Hain v. Tacher, 418 So.2d 1107 (Fla. 3d DCA 1982). The record does not contain evidence demonstrating that Esteva "distributed the balance of the $350,000.00 to other creditors of Kramer Homes and/or Griggs." Contrary to the special master's finding, the balance of the $350,000 was distributed to Central Bank, which held the pledged stocks.
Second, we agree with the trial court that Richmond did not demonstrate that he was damaged by the disbursement. Although the $350,000 was not disbursed to W.C. Investments, Inc., in accordance with the directions, the disbursement fulfilled the ultimate purpose of the instructions: acquisition of the ownership of all of the stock of Kramer Homes, Inc.
Finally, we hold that the trial court had broad discretion to grant rehearing and reconsider its decision in order to correct any errors. See Francisco v. Victoria Marine Shipping, Inc., 486 So.2d 1386, 1389 (Fla. 3d DCA), review denied, 494 So.2d 1153 (Fla.1986) ().
Affirmed.
The trial court abused its discretion in granting the motion for rehearing and overruling the general master's findings and recommendations because those findings and recommendations were supported by competent substantial evidence. A trial court may not reject a general master's findings of fact and conclusions drawn therefrom unless there has been a showing of clear error in that those findings or conclusions are not supported by reliable evidence and are not in accordance with prevailing law. Frank v. Frank, 75 So.2d 282 (Fla.1954); Goldman v. Smargon, 524 So.2d 479 (Fla. 3d DCA 1988); Rosenthal v. Rosenthal, 464 So.2d 594 (Fla. 3d DCA 1985); Brinkley v. Brinkley, 453 So.2d 941 (Fla. 4th DCA 1984).
Here, the critical, and undisputed, fact found by the master was that the specific and unambiguous instruction given to the escrow agent, Esteva, to disburse $350,000 to W.C. Investments, Inc., was not specifically followed. In light of this undisputed evidence, the general master concluded that Richmond was entitled to recover the $77,817.01 which was not disbursed to W.C. Investments, Inc. as required by appellant's specific instructions. I find this conclusion to be supported by reliable evidence and, furthermore, to be in accordance with the prevailing law in the area of deposits and escrow agents.
Once Esteva assumed the role of escrow agent for the parties, her responsibilities became as that of a trustee in charge of the performance of an express trust. Tomasello v. Murphy, 100 Fla. 132, 129 So. 328 (1930); Chace v. Johnson, 98 Fla. 118, 123 So. 519 (1929). As an escrow agent, Esteva owed fiduciary duties to both parties to strictly comply with the terms of the escrow agreement. Tucker v. Dr. P. Phillips Co., 139 F.2d 601, 602 (5th Cir.1943); Five Hundred North Atlantic, Inc. v. Ritter, 475 So.2d 1264 (Fla. 5th DCA 1985); Armbruster v. Alvin, 437 So.2d 725 (Fla. 3d DCA 1983); Biadi v. Lawyers Title Ins. Corp, 374 So.2d 30 (Fla. 3d DCA 1979); Cradock v. Cooper, 123 So.2d 256 (Fla. 2nd DCA 1960). As stated in Tucker, 139 F.2d at 602: "In Florida an escrow agent holds as a trustee charged with the performance of an express trust, and he must act in strict accordance with the terms of the escrow agreement lest he be liable in damages for any loss suffered by reason of any departure from those terms." (emphasis added). See also, Malta v. Phoenix Title & Trust Co., 76 Ariz. 116, 259 P.2d 554 (1953) (); Colonial Sav. and Loan Ass'n. v. Redwood Empire Title Co., 236 Cal.App.2d 186, 46 Cal.Rptr. 16 (1965) (); Marvel Industries v. Boatmen's Nat. Bank of St. Louis, 362 Mo. 8, 239 S.W.2d 346 (1951) (...
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