HomeMy WebLinkAbout2948Public Records of St. Lucie County, Florida, BARHARA C. ASH, after
discussing the situation with RICHARD FLANZBAUM, and after the Debtor
had knowledge that the Trustee was aware of his placfng the Trust
property in the name of BARBARA C. ASH to secure his peraonal debts,
subsequently conveyed the said Lots 10, 11, 12, and 13, Block 645~
to a company known as RELIABLE BUILDERS, INC. In connection with this
transaction, RELIABLE BUILDERS paid the sum of $8,079.79 cash at
closirig, which has allegedly been glaced back into a bank account,
and delivered back to MICHAEL D. FLANZBAUM a purchase money mortgage in
the sum of $10,000.00 which came due on January 16, 1981, but by
aqreement of the parties, has not been paid pending the outcome of
this proceeding.
~~ The Court finds, from the,evidence, that'the Defendant,
RICHARD FLANZBAUM,has by his actions, in conveying the trust property
to his close personal friend, as security for his personal debts,
so disregarded the formalities and purpose of the trust, which was
created with his assets at a time when he had creditors holding allowable
unsecured claims, as to cause the trust to fail in its purpose, rendering
the trust assets liable in satisfaction of his personal debts. The
failure of a trustee to carry~out the trust purposes constitutes,
under appropriate circumstances, a ground for termination of the
trust. 76 Am. Jur. 2d, Trusts, s_87. Re: Patterson's Estate, 333 PA 92,
3 A. 2d 320, 120 A.L.R. 967 (1939). 'See, also, City of Islandia v.
Metropolitan Dade Count~, 362 So.2d 385 (3rd DCA Fla. 1978)(holding
that a trust may be dissolved where its purpose has been so frustrated
that it serves no useful purpose). Smith vs. Massachusetts Mutual Life
Insurance Co., 116 Fla. 390, 156 So. 498 (1934).
Further, the Court finds that the actions of Defendant,
RICHARD FLANZBAUM, subsequent to the creation of the trust, in pledging
the trust assets for his personal debts and throuqh his self-dealing
therein, are such as to be tantamount to a~merger of the legal and
equitable interests in the trust, thus terminating the trust and vesting
title in the trustee, subject to his creditors• claims. U.S. Fidelity
and G. Co. v. Salmon, 81 F.2d 420 (3rd Cir. 1935), 165 A.L.R. 1064.
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