Covenant Trust Co. v. Guardianship of Ihrman

Summary

The Florida Fourth District Court of Appeal held that the probate court erred in denying the trustee's motion to dismiss without conducting a limited evidentiary hearing to resolve conflicting affidavits concerning personal jurisdiction and minimum contacts. The court also held that orders prohibiting payment of trust-funded attorney's fees and requiring an additional retainer were improper absent the required finding of breach of trust or legal authority to compel discretionary trust payments. The orders were reversed and the case was remanded.

Holdings

1. When a plaintiff's pleading sufficiently alleges a basis for jurisdiction under Florida's long-arm statute, but the parties submit irreconcilable affidavits concerning the defendant's minimum contacts, the trial court must conduct a limited evidentiary hearing rather than decide personal jurisdiction based only on counsel's arguments.
2. If the trial court finds that it has personal jurisdiction over Covenant, it must determine whether all interested parties could be bound by litigation in Illinois, the trust's principal place of administration, before deciding whether section 736.0205 bars the Florida proceeding.
3. A court may prohibit a trustee from paying attorney's fees and costs from trust assets under section 736.0802(10)(b) only after finding a reasonable basis, supported by evidence in the record or a proffer, to conclude that the trustee breached the trust.
4. When a trust gives the trustee discretion to use trust assets for a beneficiary's health, support, maintenance, or best interests, and there is no evidence that the trustee acted arbitrarily, the court lacks authority to compel the trustee to pay the guardian's attorney from trust assets absent a statutory or trust-based legal mandate.

Questions Presented

1. Whether the trial court could exercise personal jurisdiction over Covenant, an Illinois trustee, without conducting a limited evidentiary hearing after the parties submitted conflicting affidavits concerning Covenant's Florida contacts.
2. Whether Florida Statutes section 736.0205 required the trust proceeding to be brought in Illinois if the trust was registered or principally administered there and all interested parties could be bound by litigation in Illinois.
3. Whether the trial court could prohibit Covenant from paying attorney's fees and costs from trust assets without finding a reasonable evidentiary basis to conclude that Covenant breached the trust.
4. Whether the trial court had authority to compel Covenant to pay a $10,000 retainer to the guardian's attorney from trust assets when the trust vested payment discretion in the trustee and no arbitrary conduct or other legal authority for compulsion was shown.

Disposition

reversed_and_remanded