We speak with clients every day who worry that estate trust assets are going to waste or being actively misappropriated. Some cases involve a breach of fiduciary duties, while others may involve fraud or undue influence in the inception. Though the facts and circumstances vary, the concern is the same: irreparable harm is occurring and time is of the essence.
In these situations, an injured party can appeal to the courts and invoke one of the most powerful tools available to the judicial system, the injunction. An injunction is a court order that prohibits a party from doing some act that injures another party. Injunctions are a function of the court sitting in equity, meaning they address the harm that cannot be adequately addressed by filing a lawsuit and receiving later damages from the offending party. For example, if a trustee is actively melting down priceless family heirlooms to sell for scrap metal, no lawsuit that provides money damages will adequately make the offending family members whole. The family members may, however, move the court for an injunction and ask for an order freezing the assets in order to prohibit the trustee’s actions while the court determines whether those actions are legally allowed. Furthermore, the litigants may move the court for injunctive relief ex parte, meaning the court may hear the motion more expeditiously and without requiring the attendance of the trustee.
Florida Statute § §736.1001 provides that a court has the authority to enjoin a trustee from committing a breach of trust. This is an extremely broad judicial power and the benefits of convincing a judge to exercise this power and enter an injunction freezing trust assets are twofold. First, the injunction puts an immediate stop to the injury occurring and prevents any further injury. Second, the injunction hits the “pause” button on the ever-changing facts of the case, allowing the injured parties to litigate in a temporary vacuum. With the offending trustee’s hands effectively tied by an injunction, litigants are free to conduct discovery and file complaints and additional motions without worrying that, with each second that passes, the trustee may continue to harm the estate assets. Imagine if a surgeon could operate without having to constantly monitor blood pressure, heart rate, and a thousand other things; the operation would likely be quicker, more painless, and more successful. So too does an injunction freezing trust assets allow a litigator to focus on the immediate task of holding the trustee accountable.
In order to obtain an injunction freezing trust assets, a litigant must demonstrate to a court the following: (1) that the plaintiff will suffer irreparable harm absent the entry of the injunction; (2) that no adequate legal remedy exists; (3) that the plaintiff enjoys a clear legal right to the relief sought; and (4) that the injunction will serve the public interest. See Randolph v. Antioch Farms Feed & Grain Corp., 903 So.2d 384 (Fla. 2d DCA 2005). It is essential that the litigant present evidence to the court regarding each of these four elements, either in the form of sworn testimony, sworn affidavits, or a verified pleading. See Saunders v. Butler, —So.3d —LEXIS 2115 (Fla. 2d DCA February 13, 2013). It is also essential that the Court enter detailed findings of fact as to each element for the injunction to stand up on appeal. See id. See also, Juan Antunez, 2d & 5th DCA: What’s it Take for a Probate Judge to Properly Enter a Temporary Injunction or “Freeze” Order in Trust Litigation?, Florida Probate & Trust Litigation Blog (July 15, 2013) http://www.flprobatelitigation.com/.
Once the injunction is in place, our clients can rest a little easier and feel secure in the knowledge that, though the trustee is yet to be held accountable for past bad acts, the trust assets will remain safe under the court’s order, the status quo of the case will be maintained, and we as attorneys now have some room to operate.
If you have a question about freezing assets, contact the attorneys at Adrian Philip Thomas, P.A. for a free consultation.