46 F.4th 1259
11th Cir.2022Background
- In 1989 Peggy (Elkin’s mother) settled a wrongful-death claim that set aside at least $200,000 for Elkin (then a minor); the settlement check was made out to Peggy and her then-husband Forrest, who opened an account titled “Elkin’s Account with Custodian of Forrest King.”
- No written trust or formal guardianship of the Settlement Funds was created; Forrest’s name remained on the account at least through his divorce from Peggy in 1999. The funds were later spent by Peggy for Elkin’s education and other expenses; the last funds were used in 2005 to buy a condominium.
- Elkin says he first learned of the Settlement Funds in 2017 and sued Forrest in 2018 alleging conversion and breach of fiduciary duty for failing to disclose the funds and failing to account for them; Forrest raised a statute-of-limitations defense.
- The district court granted summary judgment for Forrest, finding (among other points) that any fiduciary duty was limited to using the funds for Elkin’s benefit and that Forrest did not misuse the funds; Elkin appealed.
- The Eleventh Circuit recognized that (1) under the law then in force a minor beneficiary acquires rights in a wrongful-death recovery upon reaching majority, and (2) a confidential relationship may exist where an adult controls a minor’s assets, but found Georgia law unsettled on whether the duty to disclose that tolls the statute of limitations also gives rise to a breach-of-fiduciary-duty tort.
- Because Georgia precedent does not squarely answer three determinative questions about the scope and timing of disclosure obligations in confidential relationships with minor beneficiaries, the Eleventh Circuit certified those questions to the Supreme Court of Georgia.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a duty to disclose arising from a confidential relationship (sufficient to toll the statute of limitations) also furnishes a standalone breach-of-fiduciary-duty tort under Georgia law | Elkin: yes — the same suppression that tolls SOL can form the basis for fiduciary breach and damages | Forrest: distinguish cases like Goldston; tolling/fraud duty for SOL does not automatically create a fiduciary-tort claim here | Question certified to the Supreme Court of Georgia (no controlling GA precedent) |
| Whether an adult fiduciary can discharge any disclosure duty to a minor beneficiary by disclosing only to the minor’s parent/guardian (without direct disclosure to the minor) | Elkin: fiduciary must disclose directly to the minor (or re-disclose at majority) | Forrest: disclosing to the child’s parent/guardian (who controls the assets while minor) suffices | Question certified to the Supreme Court of Georgia |
| If direct disclosure is required, when must disclosure or re-disclosure to the now-adult beneficiary occur (while minor, upon majority, or both)? | Elkin: duty persists until the beneficiary reaches majority — disclosure or re-disclosure required at/after majority | Forrest: earlier disclosure to parent/guardian discharged any duty | Question certified to the Supreme Court of Georgia |
| Whether Elkin acquired the right to control the Settlement Funds upon reaching age 18 under Georgia wrongful-death/guardian law | Elkin: yes — minors’ shares of wrongful-death recovery vest and control ends at majority | Forrest: disputed facts about whether Elkin was notified, but did not contest the legal principle | Eleventh Circuit concluded it appears Elkin had a right to control at 18 under the 1989 statutes (apparent legal right) |
Key Cases Cited
- Simpson v. King, 383 S.E.2d 120 (Ga. 1989) (describing marital status and procedural posture of the underlying wrongful-death matters)
- Doe v. Saint Joseph’s Catholic Church, 870 S.E.2d 365 (Ga. 2022) (held suppression in a confidential relationship can constitute actual fraud for tolling and discussed elements of breach-of-fiduciary claims)
- Cottrell v. Smith, 788 S.E.2d 772 (Ga. 2016) (analyzed when a confidential relationship supports a breach-of-fiduciary-duty claim)
- Goldston v. Bank of Am. Corp., 577 S.E.2d 864 (Ga. Ct. App. 2003) (involved a written trust with express disclosure terms and was distinguished by the Eleventh Circuit)
- Savu v. SunTrust Bank, 668 S.E.2d 276 (Ga. Ct. App. 2008) (explained that whether a confidential relationship exists is ordinarily a jury question)
- Yarbrough v. Kirkland, 548 S.E.2d 670 (Ga. Ct. App. 2001) (recognizes the jury’s role in resolving existence of confidential relationships)
- Ray v. Hadaway, 811 S.E.2d 80 (Ga. Ct. App. 2018) (set out elements of a breach-of-fiduciary-duty claim under Georgia law)