St. Martin's Episcopal Church v. Prudential-Bache Securities, Inc., PRUDENTIAL-BACHE
| Decision Date | 27 January 1993 |
| Docket Number | PRUDENTIAL-BACHE,No. 91-3540,91-3540 |
| Citation | 613 So.2d 108 |
| Parties | 18 Fla. L. Week. D386, 18 Fla. L. Week. D427 ST. MARTIN'S EPISCOPAL CHURCH, Appellant, v.SECURITIES, INC., Appellee. |
| Court | Florida District Court of Appeals |
Raymond J. Doumar, Jr. and John R. Gillespie, Jr. of Dykema Gossett, Fort Lauderdale, for appellant.
John D. Boykin, of Boose, Casey, Ciklin, Lubitz, Martens, McBane & O'Connell, West Palm Beach, for appellee.
The beneficiary of an express trust (St. Martins) has sued a securities dealer (Prudential-Bache) for damages from negligence and improper trading of securities. The beneficiary had no direct dealings with the dealer. Rather, shortly after his appointment as trustee, the trustee had placed the trust's funds into an account with the dealer for investment purposes. It happens that at the time of his appointment the trustee was also a full time employee of the dealer and worked under its direction and control.
The beneficiary had also named the trustee as a party defendant in its lawsuit, but the trustee died during the pendency of this litigation. His personal representative was then substituted. Later, the beneficiary settled with the estate of the trustee, and the action was dismissed as against the estate of the trustee. The beneficiary now appeals a later order of the trial court granting a summary judgment 1 in favor of the dealer on the grounds that the beneficiary lacked standing to sue the dealer alone, after the settlement with the trustee's estate. 2
We cannot agree that the trust beneficiary categorically lacked standing to sue the dealer under the particular facts alleged in this case. The beneficiary has carefully alleged that Prudential-Bache breached its duty of care in the selection, management and supervision of its employee who became the trustee. It has also alleged that the trustee deliberately embarked on a fraudulent scheme to generate additional commissions by excessive and improper trades--a practice commonly known as "churning" the account--with the knowledge, consent and approval of Prudential-Bache.
Issues of standing, as a prudential 3 question anyway, are undoubtedly affected by Florida Rule of Civil Procedure 1.210(a), which provides in part:
(a) Parties Generally. Every action may be prosecuted in the name of the real party in interest, but an executor, administrator, guardian, trustee of an express trust, a party with whom or in whose name a contract has been made for the benefit of another or a party expressly authorized by statute may sue in his own name without joining with him the party for whose benefit the action is brought. All persons having an interest in obtaining the relief demanded may join as plaintiffs and any person may be made a defendant who has or claims an interest adverse to the plaintiff. [e.s.]
We read the text of this rule as one of enlargement, rather than of limitation. Indeed, it is all but expressly assumed in this rule that a beneficiary of a trust may sue someone other than the trustee for something. Its function is to add that the trustee may sue for the beneficiary as well, even though the beneficiary is thought to be the "real party in interest."
Although in dicta, at least one court of this state has stated unequivocally that a beneficiary of a private trust has the power to maintain a lawsuit to enforce the trust. State of Delaware v. Florida First National Bank, 381 So.2d 1075, 1077 (Fla 1st DCA 1979). It is not surprising, therefore, that standing to sue--as to property of the trust, anyway--is thus recognized a priori by the rule in favor of the beneficiary. 4
Moreover, we do not agree with the trial court that section 737.405, Florida Statutes (1991), 5 while it may appear to have some surface connection to the case, controls the issue of standing to sue. That statute has as its purpose the protection of third parties to whom trust property is conveyed, where the third party has no knowledge of any defect in their grantor's authority or use of trust powers. We hardly see any relevance between this statute and a claim that a securities dealer has improperly combined with a trustee, who happens to be employed by it as an a securities broker, to churn a trust investment...
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...its reasoning applies equally to appellate standing under section 120.68. See also St. Martin's Episcopal Church v. Prudential–Bache Sec., Inc., 613 So.2d 108, 110 n. 4 (Fla. 4th DCA 1993) (“the concept of standing should not be confused with the elements or merits of the claim”); Peace Riv......
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...952 So.2d at 505. It does not depend on the elements or merits of the underlying claim. See St. Martin's Episcopal Church v. Prudential-Bache Sec., Inc., 613 So.2d 108, 110 n. 4 (Fla. 4th DCA 1993). Therefore, standing—a forward-looking concept—cannot "disappear" based on the ultimate outco......
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Martin County Conservation Alliance v. Martin County
...Statutes (2009), its reasoning applies equally to appellate standing under section 120.68. See also St. Martin's Episcopal Church v. Prudential-Bache Sec., Inc., 613 So. 2d at 110 n.4 ("the concept of standing should not be confused with the elements or merits of the claim"); Peace River/Ma......
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