United American Bank of Cent. Florida, Inc. v. Seligman

• Decision Date: 24 April 1992
• Docket Number: No. 91-1316,91-1316
• Citation: 599 So.2d 1014
• Parties: 17 Fla. L. Weekly D1062 UNITED AMERICAN BANK OF CENTRAL FLORIDA, INC., Appellant, v. Donald SELIGMAN and John G. Pierce, Appellees.
• Court: Florida District Court of Appeals

Page 1014

599 So.2d 1014

17 Fla. L. Weekly D1062

UNITED AMERICAN BANK OF CENTRAL FLORIDA, INC., Appellant, v. Donald SELIGMAN and John G. Pierce, Appellees.

No. 91-1316.

District Court of Appeal of Florida Fifth District.

April 24, 1992.

Rehearing Denied June 17, 1992.

John V. Baum of Panico & Baum, Maitland, for appellant.

John G. Pierce, Orlando, for appellees.

COWART, Judge.

The Griffins owned, controlled and worked at a brokerage firm, Professional Realty and Development Company, which firm had the right to receive from third parties certain real estate commissions. Donald Seligman worked for the Griffins (Professional Realty) as a commissioned salesman.

The Griffins borrowed money from a bank securing the loan by a second mortgage on their home. As additional security for the Griffins' debt to the bank, Professional Realty assigned to the bank its right in and to certain real estate commissions in which Seligman had some interest. As further additional security Seligman executed a limited guaranty of the Griffins' debt to the bank.

A dispute arose between the Griffins, as brokers, and Seligman, as salesman, as to their respective rights to certain funds derived from real estate commissions and, pending resolution of their dispute, the Griffins and Seligman agreed to, and did, deposit the disputed funds in escrow with Seligman's attorney, John G. Pierce.

The Griffins defaulted in repaying their debt to the bank and the bank filed an action to foreclose the Griffins' mortgage, to recover the commissions assigned as collateral and to recover from Seligman on the limited guaranty. In this posture and to facilitate resolution of the question of Seligman's liability to the bank on the limited guaranty, on December 23, 1987, Seligman's attorney, Pierce, negotiated a settlement agreement with the bank. In the agreement the bank agreed that the balance on Seligman's guaranty to the bank was $12,894.34 and Seligman agreed that the funds ultimately due Seligman under the original escrow agreement would "be paid over to the Bank". Paragraphs 4 and 5 of this agreement provided:

4. John Pierce, Esq., agrees to retain, in escrow, the $30,000.00 [actually $30,250] he currently holds ... until such time as an agreement is reached between Professional Realty and Development Company, Inc., Seligman and the Bank, as to its distribution, or a determination is made by a court of competent jurisdiction. All proceeds payable to Professional Realty and Development Company, Inc. shall be paid directly to the Bank to be credited against sums due or to become due pursuant to the transaction currently being litigated in the matter described in Paragraph 5 herein. The portion due Seligman, as set forth above, to the extent necessary to pay in full the amounts set forth in Paragraph 3A above, shall be paid to the Bank to be credited against his said obligations to the Bank. (Emphasis added).

5. In the event the dispute described in Paragraph 3B above is not resolved and funds disbursed by April 1, 1988, Seligman agrees to execute a promissory note in form [attached] for the difference between the said $31,019.34 less credits for fifty per cent (50%) of the sums paid pursuant to the Settlement Agreement, to wit: $18,125.00, subject to adjustments pursuant to Paragraph 3C, either before or after the execution of said promissory note. Said note shall be secured by an assignment of Seligman's interest in the escrow held by John G. Pierce, per Paragraph 4 above. (Emphasis added).

Thereafter the Griffins filed for bankruptcy and a trustee was appointed to take possession of their assets and property. The trustee in bankruptcy, who had succeeded to the Griffins' interests, and attorney Pierce, acting on behalf of Seligman, negotiated a settlement of the original commission dispute between the Griffins, as brokers, and Seligman, as salesman, and pursuant to that negotiated settlement agreement attorney Pierce, as escrow agent, disbursed the funds being held in escrow by paying one half ($15,125) of those funds to the bankruptcy trustee ¹ and the other half to Seligman.

The bank, which had not otherwise received all sums due it from the Griffins, brought this action against Seligman and his attorney Pierce. Count I was against Seligman on his guaranty, Count II was against Pierce for an accounting relating to the escrowed funds and Count III was against Pierce for conversion. Pierce admits he was at all times well aware of the terms of the December 23, 1987, settlement agreement but defended on the grounds that he was not a party to the December 23, 1987 agreement and had no fiduciary or other duty to the bank relating to the escrow funds on which legal liability could be predicated. From a summary judgment in favor of Pierce the bank appeals. We reverse.

An escrow agent is, in effect, a stakeholder who agrees, expressly or impliedly, to hold possession of some property (usually funds) and to act with regard thereto (usually meaning to disburse the funds) in accordance with some agreement...