How do you compel a trustee to comply with her duties as trustee? Contempt can work, but only if the proper procedural rules are followed.
In Weinberg v. Weinberg (4th DCA 2014), the sons from a first marriage sued their father’s surviving spouse, as trustee of Decedent’s trust. As trustee, the surviving spouse was tasked with distributing assets to her late husband’s sons. Instead, upon Decedent’s death, the trustee sought to revoke the trust.
The sons sued the trustee wife, alleging that the distributive portions of the trust became irrevocable upon their father’s death. The Florida probate court agreed with the sons. The Florida appellate court confirmed the ruling. The trustee wife was required to (and purportedly did) distribute half of the trust assets to the sons.
The sons, concerned about whether they received a full distribution, requested an accounting from the trustee wife. The trustee wife failed to comply, and the sons moved to compel a full accounting, under oath. An agreed order was entered giving the trustee wife 30 days to complete an accounting. The trustee wife failed to comply. The sons moved for contempt and sanctions. Neither the trustee wife nor her attorney attended the hearing, and the court granted the sons’ motion. The order instructed the trustee to provide an accounting within five days, and failure to comply would result in a $500 per diem fine (“Contempt Order #1).
The trustee wife did not comply. Another order was entered requiring the trustee to supply the accounting, but reserving jurisdiction concerning the $500 per diem penalty. The trustee appealed the contempt order that found the trustee failed to perform the accounting. The appellate court affirmed the ruling.
The sons once again moved for contempt and sanctions. The judge deferred ruling for 20 days to give the trustee another opportunity to comply. The trustee failed to comply. Another show cause order was issued as to why the trustee should not be held in contempt of court for failing to provide an accounting.
Trustee responded by filing a sworn First and Final Accounting. It was incomplete and an order was entered giving the trustee an additional 20 days to amend her accounting. The trustee failed to comply. Instead, the trustee moved to vacate Contempt Order #1. The judge denied the trustee’s motion as untimely, and granted the sons’ motion for contempt and sanctions. The judge deferred ruling on specific sanctions until an evidentiary hearing could be conducted.
The trustee filed a supplemental accounting, which was also found to be insufficient. The trustee was ordered to file an affidavit attesting that she had provided a full accounting. The trustee did not comply, and the sons again moved to hold the trustee in contempt. The judge entered an omnibus order denying sons’ contempt motions without prejudice to permit additional discovery.
At this point the sons moved for entry of a monetary sanctions award pursuant to Contempt Order #1. By now, the accumulated fine had reached $215,000. The trustee’s new counsel filed a response to the motion suggesting that Contempt Order #1 was unenforceable due to the invalidity of the penalty provision. The trustee argued that Contempt Order #1 indicated a finding of criminal contempt, but the trustee had not been afforded procedural due process protection. If however, Contempt Order #1 had intended to operate as a coercive civil contempt fine, it was fatally flawed because the $500 per diem fine was not premised upon proof of the trustee’s financial resources. Alternatively, the trustee argued that, if Contempt Order #1’s purpose was to compensate the sons, there was no evidence of economic loss.
The new judge denied the sons’ motion for monetary sanctions. The judge reasoned that she couldn’t enter final judgment on Contempt Order #1 because the original trial judge didn’t hold a hearing or make any findings of fact regarding the trustee’s financial resources or the damages suffered by the sons. The new judge found that none of the appeals had rendered Contempt Order #1 final, leaving the issue under the judge’s control as an interlocutory order.
The Florida appellate court held that Contempt Order #1 was defective and could not be enforced. Contempt Order #1 was entered after a uniform motion calendar, and neither the trustee nor her counsel were present.
However, the Florida appellate court refused to reward the trustee for her repeated bad behavior, ruling that the trial court erred in not holding an evidentiary hearing and in not entering a sanctions order for the trustee’s repeated and flagrant non-compliance with multiple court orders. The Florida appellate court ruled that the trustee’s punishment should be reconsidered, but this time with procedural safeguards in place.
We begin with the maxim that “[a] party may not ignore a valid order of court except at its peril.” Johnson v. Allstate Ins. Co., 410 So. 2d 978, 980 (Fla. 5th DCA 1982). The pivotal question is whether the defective nature of the original contempt order prevented the new judge from conducting a new hearing to determine an appropriate sanction. The answer is no. The new judge could move forward notwithstanding the defects in the original contempt order.