## Facts

- In 1972, Mary Woodward created the “Mary Woodward Trust” for the benefit of her grandchildren and appointed her son, Orator E. Woodward, as trustee.
- In 1996, beneficiary Gregor Woodward sued Orator for breach of trust, alleging Orator failed to provide accountings and misused trust assets (including allegedly improper mortgages of trust real property and use of trust funds for education expenses). Gregor also sought the trustee’s removal.
- The trial court dismissed Gregor’s 1996 complaint. In 2003, in connection with sanctions proceedings (arising from allegations that Gregor and another beneficiary had taken attorney-client communications from the trustee’s home), the trial court dismissed the 1996 action with prejudice. The Fourth District affirmed without opinion in 2004.
- On May 31, 2002, while the earlier litigation was pending, Orator terminated the Mary Woodward Trust and transferred its assets into two new trusts: the El Bravo Trust of 2002 and the Serena Woodward Trust of 2002.
- Gregor was not a beneficiary of either new trust.
- On October 11, 2011, Orator served Gregor with trust accountings for the Mary Woodward Trust and for the two new trusts. The Mary Woodward Trust accounting reflected a beginning value in early 2002 of $944,038.89 and a closing value on May 31, 2002 of $0.
- The 2011 accounting included the statutorily required limitations notice stating that claims concerning matters disclosed in the accounting had to be brought within six months.
- In April 2012—within six months of receiving the 2011 accounting—Gregor filed a new action alleging Orator breached fiduciary duties by terminating the Mary Woodward Trust and transferring its assets to new trusts in which Gregor had no interest.
- Orator sought summary judgment, arguing (1) res judicata barred the 2012 suit because Gregor had already sued in 1996 and lost; and (2) laches or a limitations bar applied because the challenged transfers occurred in 2002, ten years before the 2012 suit.

## Issues

1. Whether res judicata barred Gregor’s 2012 breach-of-fiduciary-duty claim because Gregor previously sued Orator in 1996 over the same trust and that action ended in a dismissal with prejudice.
2. Whether laches or a limitations defense barred the 2012 action where the trust termination and transfers occurred in 2002, but the trustee did not serve an accounting with statutory limitations notice until October 2011 and Gregor sued within six months.

## Decision

- The Fourth District Court of Appeal reversed the summary judgment for the trustee and remanded for further proceedings.
- Res judicata did not bar the 2012 case because the 2012 suit was based on different operative facts and a different alleged breach than the 1996 action; the 1996 suit concerned failures to account and alleged misuse of assets, while the 2012 suit challenged the later termination of the trust and transfer of assets into new trusts excluding Gregor.
- Laches (and a limitations-based summary judgment) did not bar the claim because the trustee first served the relevant accountings in 2011 with the required notice, and Gregor filed suit within the six-month period tied to matters disclosed by that accounting.
- To the extent the trustee argued Gregor had earlier notice of the 2002 transfers (including references to the transfers made during the earlier litigation), the appellate court held summary judgment was improper because a finding of earlier knowledge sufficient to cut off the claim required a stronger evidentiary showing than what was established on the summary-judgment record.

## Legal Principles

- Res judicata requires, among other elements, identity of the cause of action; a later claim is not precluded when it arises from a separate set of facts and alleges a different breach, even if it involves the same parties and trust relationship.
- Under Florida trust law, when a trustee serves an accounting (or report) that adequately discloses the matter and includes the required limitations notice, a beneficiary must bring an action based on those disclosed matters within the statutory period (six months as applied in this case).
- A laches or limitations defense should not be resolved on summary judgment when it depends on disputed facts about what the beneficiary knew, when the beneficiary knew it, and whether the trustee’s disclosure was sufficient to start the statutory period.

## Conclusion

The Fourth District held that Gregor’s 2012 suit challenging the 2002 termination of the Mary Woodward Trust and transfer of assets to successor trusts was not barred by res judicata because it alleged a different breach than the 1996 case, and it was not barred by laches or limitations because Gregor sued within six months after the trustee first served accountings in 2011 with the required limitations notice; the court therefore reversed summary judgment and remanded.


Woodward v. Woodward, 192 So. 3d 528 (2016)