Court Opinion

ID: 9396762
Source: CourtListenerOpinion
Date Created: 2023-05-23 18:00:48.871055+00
Date Added: 2024-06-11T17:19:19.490599
License: Public Domain

USCA11 Case: 20-14565    Document: 34-1      Date Filed: 05/23/2023   Page: 1 of 11

                                                              [PUBLISH]
                                    In the
                 United States Court of Appeals
                         For the Eleventh Circuit

                           ____________________

                                 No. 20-14565
                           ____________________

        ELKIN KING,
                                                       Plaintiﬀ-Appellant,
        versus
        FORREST KING, JR.,

                                                     Defendant-Appellee.

                           ____________________

                  Appeal from the United States District Court
                       for the Middle District of Florida
                   D.C. Docket No. 3:18-cv-01427-BJD-MCR
                           ____________________

        Before WILSON, BRANCH, and TJOFLAT, Circuit Judges.
USCA11 Case: 20-14565         Document: 34-1    Date Filed: 05/23/2023     Page: 2 of 11

        2                         Opinion of the Court               20-14565

        PER CURIAM:
               Elkin King (“Elkin”) brought a diversity suit 1 against his for-
        mer stepfather, Forrest King, Jr. (“Forrest”), alleging that Forrest
        owed him a fiduciary duty to disclose the existence of certain Set-
        tlement Funds arising from the wrongful death of Elkin’s biological
        father. We previously certified three questions to the Supreme
        Court of Georgia regarding Elkin’s breach of fiduciary duty for fail-
        ure to disclose claim. With the benefit of their response, we now
        vacate the District Court’s grant of summary judgment to Forrest
        on the failure to disclose claim and remand the matter for further
        proceedings.
                                           I.
              The facts of this case, as reproduced from our previous opin-
        ion certifying questions to the Supreme Court of Georgia, are as
        follows:
                       On September 6, 1985, Elkin’s biological fa-
                ther, Elkin Simpson, Sr., was killed in a plane crash.
                Elkin, then named Elkin Simpson, Jr., was approxi-
                mately seven years old. At the time of his death, Elkin
                Simpson, Sr., was in the process of divorcing Elkin’s
                mother, Peggy, but a final divorce decree had not yet
                been entered. See Simpson v. King, 383 S.E.2d 120, 121
                (Ga. 1989) (further describing Elkin Simpson, Sr.’s
                marital and relationship status at the time of his

        1 See 28 U.S.C. § 1332.
USCA11 Case: 20-14565     Document: 34-1     Date Filed: 05/23/2023     Page: 3 of 11

        20-14565              Opinion of the Court                        3

              death). Accordingly, Peggy filed a wrongful death
              suit against the airline company as a surviving spouse
              on behalf of herself and Elkin. See O.C.G.A. § 51-4-2
              (1991). In 1989, when Elkin was approximately
              eleven, Peggy and the airline company reached a set-
              tlement agreement from which at least $200,000 was
              set aside for Elkin’s benefit (“the Settlement Funds”).
              Peggy’s attorney, Glover McGhee, suggested that the
              Settlement Funds should be placed in an account in
              her then-husband Forrest’s name. Peggy agreed, and
              so the Settlement Funds check was made out to both
              Peggy and Forrest on behalf of Elkin. Forrest then
              placed the Settlement Funds in a separate account en-
              titled “Elkin’s Account with Custodian of Forrest
              King” at Charles Schwab in Atlanta, Georgia. The
              parties dispute whether Peggy was also a party to the
              account. There is no evidence that a formal, written
              trust governing the use of these Settlement Funds
              ever existed.
                      Forrest and Peggy divorced in approximately
              February 1999, when Elkin was 20 years old. The par-
              ties dispute whether Forrest turned over control of
              the account to Peggy following the divorce, but it is
              undisputed that Forrest’s name was on the account
              until at least the divorce. Apparently, the last of the
              Settlement Funds (approximately $50,000) was used
              by Peggy in around 2005 as a down payment for a
USCA11 Case: 20-14565    Document: 34-1      Date Filed: 05/23/2023      Page: 4 of 11

        4                    Opinion of the Court                  20-14565

             condominium she purchased in Louisiana. Elkin tes-
             tified in a deposition that he first learned about the
             Settlement Funds in 2017 from his maternal grandfa-
             ther. Elkin also testified that he would have taken
             control of the Settlement Funds had he known about
             them when he was 18. Forrest, meanwhile, testified
             in a deposition that he informed Elkin about the ex-
             istence of the Settlement Funds when Elkin was
             around 17 or 18 years old.
                    On November 30, 2018, Elkin sued Forrest in
             the Middle District of Florida. In his amended com-
             plaint, Elkin alleged that Forrest converted Elkin’s
             Settlement Funds and that Forrest breached fiduciary
             duties to Elkin under Georgia law because he (1)
             “failed to disclose and concealed the fact of the settle-
             ment” and (2) “failed and refused to account for [the
             Settlement Fund] proceeds or to pay the proceeds to
             [Elkin].” In his answer, Forrest responded by raising
             the statute of limitations as an affirmative defense.
             Following discovery, Forrest moved for summary
             judgment on October 14, 2019, on both his statute of
             limitations defense and on the merits. In turn, Elkin
             moved for partial summary judgment on his claims
             on March 30, 2020. On August 24, 2020, the District
             Court granted summary judgment for Forrest on the
             merits, holding (1) that a jury could find that Forrest
             and Elkin were in a confidential relationship under
USCA11 Case: 20-14565         Document: 34-1        Date Filed: 05/23/2023         Page: 5 of 11

        20-14565                  Opinion of the Court                                5

                Georgia law and so the statute of limitations could be
                tolled; (2) that Forrest did not convert the Settlement
                Funds because he used them only for Elkin’s benefit;
                and (3) that if Forrest did owe Elkin a fiduciary duty
                under Georgia law, it was only to “ensure the Settle-
                ment Funds were used to [Elkin]’s benefit,” which
                Forrest did.
        King v. King, Jr., 46 F.4th 1259, 1262–63 (11th Cir. 2022) (per
        curiam) (footnotes omitted).
               Elkin filed a motion for reconsideration under Federal Rules
        of Civil Procedure 59(e) 2 and 60(b). 3 Elkin argued, primarily, that
        (1) the District Court had failed to consider the growth of the Set-
        tlement Funds while invested in the Charles Schwab account, and
        (2) that the Court failed to consider his failure to disclose argument.
        The District Court rejected both arguments and denied Elkin’s mo-
        tion. With respect to the second argument, the Court found that

        2 Rule 59(e) allows a district court to alter or amend a judgment if a motion is
        filed no later than 28 days after entry of the judgment. Fed. R. Civ. P. 59(e).
        The only grounds for granting a motion to alter or amend a judgment are
        newly discovered evidence or manifest errors of law or fact. Arthur v. King,
        500 F.3d 1335, 1343 (11th Cir. 2007).
        3 Rule 60(b) allows relief from a final judgment, order, or proceeding on the
        basis of mistake, inadvertence, surprise, excusable neglect, newly discovered
        evidence that, with reasonable diligence, could not have been discovered in
        time to move for a new trial, fraud, because the judgment is void, because the
        judgment has been satisfied, released or discharged, or for any other reason
        that justifies relief. Fed. R. Civ. P. 60(b).
USCA11 Case: 20-14565      Document: 34-1      Date Filed: 05/23/2023     Page: 6 of 11

        6                      Opinion of the Court                 20-14565

        Elkin had not sufficiently pleaded a breach of fiduciary duty prem-
        ised on a failure to disclose, and that even if he had, “a failure by
        Defendant to disclose the existence of the settlement funds does
        not alter whether Defendant used the settlement funds for Plain-
        tiff’s benefit.”
               Elkin timely appealed to this Court. In our earlier opinion,
        we held that the District Court correctly granted Forrest summary
        judgment on the claim that he breached his fiduciary duty to Elkin
        by misusing the Settlement Funds. King, 46 F.4th at 1263–64 n.4.
        We further held that Elkin had forfeited his conversion claim by
        not raising it on appeal. Id. Finally, though the District Court held
        that Elkin had not alleged breach of fiduciary duty claim based on
        a failure to disclose, we found that “Elkin’s short and plain state-
        ment describing his failure to disclose claim was expressly incorpo-
        rated into the breach of fiduciary duty section of his amended com-
        plaint. Forrest thus had fair notice of Elkin’s failure to disclose
        claim.” Id. at 1263 n.3 (internal quotation marks and citations omit-
        ted).
               With respect to Elkin’s failure to disclose claim, we certified
        the following three questions to the Supreme Court of Georgia:
              (1) If a confidential relationship creates a duty to disclose
                  which, if breached, would constitute fraud sufficient to
                  toll the statute of limitations, would that duty to disclose
                  also support a breach of fiduciary duty tort claim under
                  Georgia law?
USCA11 Case: 20-14565      Document: 34-1       Date Filed: 05/23/2023     Page: 7 of 11

        20-14565               Opinion of the Court                          7

               (2) If so, may an adult fiduciary in a confidential relationship
                   with a minor beneficiary without a written agreement
                   discharge his duty to disclose by disclosing solely to the
                   minor’s parents or guardians?
               (3) If the adult fiduciary does have an obligation to disclose
                   to the minor beneficiary directly without a written agree-
                   ment, when must the adult fiduciary disclose or redis-
                   close to the minor beneficiary?
        Id. at 1267.
                                          II.
               The only claim left for us to resolve is whether the District
        Court erred when it granted Forrest summary judgment on Elkin’s
        breach of duty for failure to disclose claim. With the benefit of the
        Supreme Court of Georgia’s answer to our first question, we now
        do so.
               We review grants of summary judgment de novo. Brown v.
        Nexus Bus. Sols., LLC, 29 F.4th 1315, 1317 (11th Cir. 2022). Sum-
        mary judgment is proper “if the movant shows that there is no gen-
        uine dispute as to any material fact and the movant is entitled to
        judgment as a matter of law.” Id. (quoting Fed. R. Civ. P. 56(a)).
        On summary judgment review, we view all evidence in “the light
        most favorable to the nonmoving party” and draw “all justifiable
        inferences in that party’s favor.” Id. at 1317–18 (internal quotation
        marks omitted).
USCA11 Case: 20-14565      Document: 34-1      Date Filed: 05/23/2023     Page: 8 of 11

        8                      Opinion of the Court                 20-14565

               As we previously stated, it appears as though Elkin had a
        right to control the Settlement Funds when he turned 18. King, 46
        F.4th at 1264–65 (citing O.C.G.A. § 19-7-1(a)). We continue to
        agree with the District Court that “a reasonable jury could find De-
        fendant assumed a fiduciary or confidential relationship with re-
        spect to Plaintiff and the Settlement Funds.” [Doc. 71 at 7] It re-
        mains true that “when a confidential relationship exists, the failure
        to disclose a material fact constitutes fraud for purposes of tolling
        the statute of limitations.” King, 46 F.4th at 1265 (citing O.C.G.A.
        § 23-2-53; Doe v. Saint Joseph’s Catholic Church, 870 S.E.2d 365, 371
        (Ga. 2022)).
               The Supreme Court of Georgia provided guidance as to
        whether the same breach of a duty to disclose a material fact in the
        context of a confidential relationship—which constitutes fraud suf-
        ficient to toll the statute of limitations—would also support a
        breach of fiduciary duty tort claim under Georgia law. To begin,
        the Supreme Court of Georgia stated that “while all fiduciary rela-
        tionships are confidential in nature, only some confidential rela-
        tionships are fiduciary relationships.” King v. King, Jr., -- S.E.2d –
        (Ga. 2023), 2023 WL 3468616 at *3.
               In determining whether a confidential relationship is also a
        fiduciary relationship, “the guiding principle is that the fiduciary
        has a duty to act with the utmost good faith” and “a failure to act
        with the utmost good faith constitutes a breach of fiduciary duty.”
        Id. The Court went on to say that when a party to a confidential
        relationship has a duty to disclose and breaches that duty in a
USCA11 Case: 20-14565       Document: 34-1       Date Filed: 05/23/2023     Page: 9 of 11

        20-14565                Opinion of the Court                           9

        manner sufficient to toll the statute of limitations, “such a breach
        could violate a fiduciary’s duty of utmost good faith.” Id. The
        Court recently reiterated that standard in Doe. See Doe, 870 S.E.2d
        at 371 (“To benefit from tolling under OCGA § 9-3-96, [a plaintiff]
        must first establish . . . actual fraud. Doing so requires a showing
        of . . . a fraudulent breach of a duty to disclose that exists because
        of a relationship of trust and confidence.”) (internal quotation
        marks and citations omitted).
                Put simply, we asked: “If a confidential relationship creates
        a duty to disclose which, if breached, would constitute fraud suffi-
        cient to toll the statute of limitations, would that duty to disclose
        also support a breach of fiduciary duty tort claim under Georgia
        law?” And the Supreme Court of Georgia answered: “[I]f the par-
        ties in a confidential relationship are also in a fiduciary relationship,
        a fraudulent breach of the duty to disclose would support a breach-
        of-fiduciary duty tort claim under Georgia law.” King, 2023 WL at
        *3. The question, then, is whether Elkin and Forrest were in a fi-
        duciary relationship. The District Court already held that a reason-
        able jury could find that they were.
               A breach of fiduciary duty claim under Georgia law has
        three elements: “(1) the existence of a fiduciary duty; (2) breach of
        that duty; and (3) damage proximately caused by the breach.” Ray
        v. Hadaway, 811 S.E.2d 80, 84 (Ga. Ct. App. 2018) (internal quota-
        tion marks omitted). Ultimately, the District Court was correct in
        finding that a reasonable jury could find a fiduciary relationship ex-
        isted between Elkin and Forrest. The Court erred, however, in
USCA11 Case: 20-14565         Document: 34-1         Date Filed: 05/23/2023         Page: 10 of 11

        10                         Opinion of the Court                        20-14565

        holding that “if a fiduciary duty did exist, it was merely to ensure
        that Settlement Funds were used for [Elkin’s] benefit,” [Doc. 71 at
        11] because the Supreme Court of Georgia found that violating a
        duty to disclose within a fiduciary relationship can also constitute
        a breach of fiduciary duty. And “the issue of the existence of a fi-
        duciary relationship is a question for the jury unless there is a com-
        plete absence of evidence of such a relationship.” Levine v. SunTrust
        Robinson Humphrey, 740 S.E.2d 672, 683 (Ga. Ct. App. 2013).
               Under Georgia law, the same breach of a duty to disclose
        that would toll the statute of limitations can also support a breach
        of fiduciary duty tort claim. The District Court should only have
        granted Forrest summary judgment if there was no genuine dis-
        pute as to any material fact regarding the tort claim and Forrest
        was entitled to judgment as a matter of law, viewing all evidence
        and making all inferences in the light most favorable to Elkin.
        Viewing the record in that light, a reasonable jury could find the
        following facts at trial: 4 (1) Elkins and Forrest were in a confidential
        or fiduciary relationship such that, under Georgia law, the statute
        of limitations could be tolled and a claim for breach of fiduciary
        duty could be supported; (2) at the time Elkin turned 18, at least
        $50,000 of the Settlement Funds remained in the Charles Schwab
        account; (3) Elkin had a right to take control of the Settlement
        Funds when he turned 18; (4) Forrest had a duty to disclose the
        existence of the Settlement Funds and turn over control of those

        4 To be clear, that is not to say that a jury necessarily will find these facts at
        trial. Just that a reasonable jury could.
USCA11 Case: 20-14565    Document: 34-1     Date Filed: 05/23/2023   Page: 11 of 11

        20-14565              Opinion of the Court                     11

        funds to Elkin when he turned 18; (5) Forrest failed to do so; and
        (6) Elkin would have taken control of the funds when he turned 18.
               As such, summary judgment was inappropriate, and we va-
        cate the District Court’s order with respect to that claim.
              VACATED AND REMANDED.