Elkin King v. Forrest King, Jr.

USCA11 Case: 20-14565 Date Filed: 08/26/2022 Page: 1 of 16

[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 ____________________ USCA11 Case: 20-14565 Date Filed: 08/26/2022 Page: 2 of 16

2 Opinion of the Court 20-14565 Before WILSON, BRANCH, and TJOFLAT, Circuit Judges.

PER CURIAM: Elkin King (“Elkin”) contends that his former stepfather, Forrest King (“Forrest”), owed him a fiduciary duty to disclose the existence of certain Settlement Funds arising from the wrongful death of Elkin’s biological father. As this diversity action 1 turns on the precise parameters of Georgia’s fiduciary duty to disclose and we are unable to locate any controlling precedent from a Georgia court, we respectfully certify three questions to the Supreme Court of Georgia.

I.

On September 6, 1985, Elkin’s biological father, Elkin Simp- son, Sr., was killed in a plane crash. Elkin, then named Elkin Simp- son, Jr., was approximately seven years old. At the time of his death, Elkin Simpson, Sr., was in the process of divorcing Elkin’s mother, Peggy,2 but a final divorce decree had not yet been USCA11 Case: 20-14565 Date Filed: 08/26/2022 Page: 3 of 16

20-14565 Opinion of the Court 3 entered. See Simpson v. King, 383 S.E.2d 120, 121 (Ga. 1989) (fur- ther describing Elkin Simpson, Sr.’s marital and relationship status at the time of his 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 settlement agreement from which at least $200,000 was set aside for Elkin’s benefit (“the Settlement Funds”). Peggy’s at- torney, 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 entitled “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 gov- erning the use of these Settlement Funds ever existed.

Forrest and Peggy divorced in approximately February 1999, when Elkin was 20 years old. The parties 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 (ap- proximately $50,000) was used by Peggy in around 2005 as a down payment for a condominium she purchased in Louisiana. Elkin tes- tified in a deposition that he first learned about the Settlement Funds in 2017 from his maternal grandfather. Elkin also testified USCA11 Case: 20-14565 Date Filed: 08/26/2022 Page: 4 of 16

On November 30, 2018, Elkin sued Forrest in the Middle District of Florida. In his amended complaint, 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 settlement” 3 and (2) “failed and refused to account for [the Settlement Fund] pro- ceeds or to pay the proceeds to [Elkin].” In his answer, Forrest re- sponded by raising the statute of limitations as an affirmative de- fense. 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, hold- ing (1) that a jury could find that Forrest and Elkin were in a USCA11 Case: 20-14565 Date Filed: 08/26/2022 Page: 5 of 16

20-14565 Opinion of the Court 5 confidential relationship under Georgia law and so the statute of limitations could be tolled; (2) that Forrest did not convert the Set- tlement 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 Settlement Funds were used to [Elkin]’s benefit,” which Forrest did. Elkin then timely appealed.

II.

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 (quotation and quo- tation marks omitted).

When deciding state law claims, we apply state law to sub- stantive legal issues. See Ungaro–Benages v. Dresdner Bank AG, 379 F.3d 1227, 1232 (11th Cir. 2004); 28 U.S.C. § 1652. In determin- ing the meaning of state law, we defer to the state supreme court’s interpretation of its own law. LaFrere v. Quezada, 582 F.3d 1260, 1263–64 (11th Cir. 2009). If the state supreme court has not ad- dressed the question, we defer to the state’s intermediate appellate courts “absent some persuasive indication that the state’s highest court would decide the issue otherwise.” People’s Gas Sys. v. USCA11 Case: 20-14565 Date Filed: 08/26/2022 Page: 6 of 16

III.

The sole issue 4 on which we certify questions to the Su- preme Court of Georgia is Elkin’s claim that Forrest breached a fi- duciary duty by not disclosing the existence of the Settlement

4 Elkin also argues that Forrest breached his fiduciary duties to Elkin by mis- using the Settlement Funds. However, Peggy testified under oath that the Settlement Funds were all used for Elkin’s benefit and provided a rough chro- nology and accounting of expenses detailing how she used the Settlement Funds to buy several cars for Elkin, pay Elkin’s private elementary and high school tuition, pay Elkin’s college tuition, and pay rent for Elkin’s apartments.

In response, Elkin has provided no evidence or testimony of misuse other than Peggy’s 2005 purchase of the condominium. As Elkin has not pointed to “spe- cific facts showing that there is a genuine issue for trial” on whether Forrest (not Peggy) misused the Settlement Funds, this claim cannot survive summary judgment. Jeffery v. Sarasota White Sox, Inc., 64 F.3d 590, 594 (11th Cir. 1995) (per curiam).

Elkin purports to appeal the summary judgment of his conversion claim as well. However, Elkin never presented any arguments or even cita- tions in his opening brief to show that Forrest converted the Settlement Funds.

Instead, Elkin simply tacked the word “conversion” onto his arguments that Forrest breached his fiduciary duties to Elkin. This is insufficient to raise con- version as a separate issue on appeal. Sapuppo v. Allstate Floridian Ins. Co., 739 F.3d 678, 681 (11th Cir. 2014) (“We have long held that an appellant aban- dons a claim when he either makes only passing references to it or raises it in a perfunctory manner without supporting arguments and authority.”). Ac- cordingly, Elkin has forfeited his conversion claim. United States v. Campbell, 26 F.4th 860, 873 (11th Cir. 2022) (en banc).

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20-14565 Opinion of the Court 7 Funds to Elkin when he turned 18. 5 To support that claim, Elkin argues that (1) he was entitled to control the Settlement Funds when he turned 18 and (2) Forrest owed him a fiduciary duty to disclose the existence of the Settlement Funds when he turned 18 due to their confidential relationship. Whether these arguments are valid turns on Georgia law.

For the first argument, it appears that Elkin did have a right to control the Settlement Funds when he turned 18. Under the version of § 51-4-2 applicable during the 1989 settlement, 6 children

6 Our analysis assumes that the 1989 version of § 51-4-2(d)(1) governs Elkin’s Settlement Funds. See Fowler Props., Inc. v. Dowland, 646 S.E.2d 197, 200 (Ga. 2007) (recognizing that “legislation which affects substantive rights may only operate prospectively”). We note, however, that § 51-4-2(d)(1) has been substantively amended in both 1993 and 2022. Between 1993 and 2022, § 51- 4-1(d)(1) stated: Any amount recovered under subsection (a) of this Code sec- tion shall be equally divided, share and share alike, between the surviving spouse and the children per capita, and the de- scendants of children shall take per stirpes, provided that any such recovery to which a minor child is entitled and which equals less than $15,000.00 shall be held by the natural guard- ian of the child, who shall hold and use such money for the USCA11 Case: 20-14565 Date Filed: 08/26/2022 Page: 8 of 16

§51-4-2(d)(1) (1991). This is true whether the children recover un- der a judgment or a settlement. § 51-4-2(c) (1991) (requiring that a surviving spouse releasing the claims of a child to “hold the consid- eration for such release subject to subsection (d) of this Code sec- tion”). So, any right Peggy (and by extension Forrest) had to con- trol Elkin’s Settlement Funds could only arise from the right of par- ents and guardians to control the property of their minor children, which ends once the minor child reaches the age of majority. See O.C.G.A. § 19-7-1(a).

For the second argument, Forrest and Elkin may have been in a confidential relationship. The applicable version of O.C.G.A.

§ 23-2-58 7 states:

benefit of the child and shall be accountable for same; and any such recovery to which a minor child is entitled and which equals $15,000.00 or more shall be held by a guardian of the property of such child.

§ 51-4-2(d)(1) (1994). In 2022, the Georgia legislature amended § 51-4-2(d)(1) to say, “Any amount recovered under subsection (a) of this Code section shall be equally divided, share and share alike, among the surviving spouse and the children per capita, and the descendants of children shall take per stirpes.” § 51-4-2(d)(1) (2022). The same bill which amended § 51-4-2(d)(1) in 2022 also amended O.C.G.A. § 29-3-3(c) to govern the settlement of minors’ claims. Ga. L. 2022, p. 207, §§ 3, 7.

20-14565 Opinion of the Court 9 Any relationship shall be deemed confidential, whether arising from nature, created by law, or re- sulting from contracts, where one party is so situated as to exercise a controlling influence over the will, conduct, and interest of another or where, from a similar relationship of mutual confidence, the law re- quires the utmost good faith, such as the relationship between partners, principal and agent, etc. § 23-2-58 (1991). Here, the District Court held, and we agree, that a jury could find that Forrest, then Elkin’s stepfather, entered into a confidential relationship with Elkin when he placed Elkin’s Set- tlement Funds into a bank account in his name and thus situated himself so “as to exercise a controlling influence over the will, con- duct, and interest of” Elkin. Id.; Savu v. SunTrust Bank, 668 S.E.2d 276, 282 (Ga. Ct. App. 2008) (“Because a confidential relationship may be found whenever one party is justified in reposing confi- dence in another, the issue of whether a confidential relationship

Any relationship shall be deemed confidential, whether arising from nature, created by law, or resulting from contracts, where one party is so situated as to exercise a controlling influ- ence over the will, conduct, and interest of another or where, from a similar relationship of mutual confidence, the law re- quires the utmost good faith, such as the relationship between partners; principal and agent; guardian or conservator and mi- nor or ward; personal representative or temporary administra- tor and heir, legatee, devisee, or beneficiary; trustee and bene- ficiary; and similar fiduciary relationships.

Ga. L. 2020, p. 377, § 2-26.

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Two effects would flow from Forrest and Elkin being in a confidential relationship. First, when a confidential relationship ex- ists, the failure to disclose a material fact constitutes fraud for pur- poses of tolling the statute of limitations. O.C.G.A. § 23-2-53; Doe v. Saint Joseph’s Catholic Church, 870 S.E.2d 365, 371 (Ga. 2022).

Second, a confidential relationship may establish the existence of a fiduciary duty for a breach of fiduciary duty claim. See, e.g., Cot- trell v. Smith, 788 S.E.2d 772, 786 (Ga. 2016) (analyzing whether a confidential relationship under § 23-2-58 existed to support a breach of fiduciary duty claim); Douglas v. Bigley, 628 S.E.2d 199, 204–05 (Ga. Ct. App. 2006) (reversing a summary judgment on a breach of fiduciary duty claim because “[a]t least some evidence supports the conclusion that a confidential relationship arose be- tween” the parties such that “a jury could conclude that [the de- fendants] controlled her interest to such an extent that a confiden- tial relationship developed”). However, as far as we can tell, no Georgia case addresses whether a breach of the duty to disclose can support a breach of fiduciary duty claim.

The District Court believed that there was a distinction be- tween the duty to disclose for tolling purposes and the duty to dis- close for breach of fiduciary duty claims. While the Court held that Forrest and Elkin’s potential confidential relationship created a jury question on whether Forrest had a duty to disclose the existence of the Settlement Fund to Elkin for tolling purposes, the Court USCA11 Case: 20-14565 Date Filed: 08/26/2022 Page: 11 of 16

20-14565 Opinion of the Court 11 granted summary judgment to Forrest because it thought Forrest’s only duty under the breach of fiduciary duty claim was to use the funds for Elkin’s benefit. On appeal, Elkin contends that “it is axi- omatic that the same fraud and breach of fiduciary duty that tolled the statute of limitations also will establish the basis for a claim for an accounting or from damages resulting from the breach of the fiduciary duty to disclose.” Appellant Br. at 39 (citing Goldston v. Bank of Am. Corp., 577 S.E.2d 864, 870 (Ga. Ct. App. 2003)). In response, Forrest simply distinguishes Goldston, the case Elkin pri- marily relied on, and does not directly address why his duty to dis- close under § 23-2-53 for tolling would not also support a breach of fiduciary duty claim. Appellee Br. at 13–14.

Goldston, the case both Elkin and Forrest relied on for their arguments, is distinguishable because Goldston concerned a writ- ten trust with terms requiring that certain disclosures be made to the minor beneficiaries. 577 S.E.2d at 690–93. Here, there is no written trust. Our review of Georgia caselaw (and the paucity of the parties’ briefing on this issue) did not reveal any case directly answering the question of whether the duty to disclose under § 23- 2-53 for tolling also supports a breach of fiduciary duty claim.

Without any Georgia caselaw directly on point to answer this de- terminative question, 8 we feel it is appropriate to certify this ques- tion to the Supreme Court of Georgia. See O.C.G.A. § 15-2-9(a).

8 The Supreme Court of Georgia’s recent decision in Doe arguably touches on this question. Doe concerned whether a former altar boy could toll the USCA11 Case: 20-14565 Date Filed: 08/26/2022 Page: 12 of 16

20-14565 Opinion of the Court 13 If a confidential relationship can create a duty to disclose suf- ficient to both toll the statute of limitations and support a breach of fiduciary duty claim, then another question arises: how may an adult fiduciary in a confidential relationship with a minor benefi- ciary discharge his duty to disclose absent a written agreement?

For example, may an adult fiduciary discharge his duty to disclose by disclosing to the minor’s parents or guardians without ever dis- closing to the minor directly? After all, the minor’s parent or guard- ian will likely control the minor’s assets until the minor comes of age, not the minor. If so, Forrest would have discharged any duty he may have had to disclose by informing Peggy about the Settle- ment Funds account.

breach of fiduciary duty); Garcia v. Unique Realty & Prop.

Mgmt. Co., Inc., 205 Ga. App. 876, 878 (2), 424 S.E.2d 14 (1992) (holding that “the trial court correctly granted sum- mary judgment to [the] appellees on [a] claim for breach of fi- duciary duty” because the “appellees cannot be held liable for failing to disclose what they did not know and could not have foretold”).

Id. at 375 (emphasis added). By stating that Doe’s breach of fiduciary claim required a showing “that the Church misrepresented or concealed its knowledge of a ‘material fact,’” the Supreme Court of Georgia implied that the fiduciary duty the Catholic Church breached was its duty to disclose. See id. Further, the Supreme Court of Georgia relied in part on § 23-2-53—the same statute used to toll the statute of limitations when a party fails to disclose a material fact in a confidential relationship—as support. But because the dis- cussion of § 23-2-53 was brief and the question in this case was not squarely presented, we seek the Supreme Court of Georgia’s guidance on the question.

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IV.

Accordingly, we respectfully certify the following three questions to the Supreme Court of Georgia under § 15-2-9(a) and Georgia Rule of the Supreme Court 46:

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20-14565 Opinion of the Court 15 (1) If a confidential relationship creates a duty to disclose which, if breached, would constitute fraud sufficient to toll the stat- ute of limitations, would that duty to disclose also support a breach of fiduciary duty tort claim under Georgia law? (2) If so, may an adult fiduciary in a confidential relationship with a minor beneficiary without a written agreement dis- charge 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 agreement, when must the adult fiduciary disclose or redisclose to the minor beneficiary?

As we have stated before: The particular phrasing used in the certified question is not to restrict the Georgia Supreme Court’s consid- eration of the problems involved and the issues as the Supreme Court perceives them to be in its analysis of the record certified in this case. This latitude extends to the Georgia Supreme Court’s restatement of the issue or issues and the manner in which the answers are to be given, whether as a comprehensive whole or in subordinate or even contingent parts.

In re Cassell, 688 F.3d at 1301 (quoting Martinez v. Rodriquez, 394 F.2d 156, 159 n.6 (5th Cir. 1968) (alterations omitted)). The entire record on appeal in this case, including copies of the parties’ briefs, USCA11 Case: 20-14565 Date Filed: 08/26/2022 Page: 16 of 16

QUESTIONS CERTIFIED.