In short: The lender lost. In Brock v. Miklas (Fla. 3d DCA 2012), the court affirmed without opinion a Monroe County summary judgment for the defendants. As argued, a private lender claimed the lawyer who held his loan funds in trust owed him a fiduciary duty as escrow agent, although he was not party to any escrow agreement.
The Facts
The Third District affirmed without a written opinion. The facts below are what the parties argued, as described in the oral argument video, not court findings.
A private lender wired $285,000 into a lawyer’s trust account to fund a loan for a modular “second home” in the Florida Keys. The home was never delivered, and the money was paid out of the trust account. The lender sued, including claims against the lawyer on the theory that the lawyer acted as an escrow agent and owed him fiduciary duties.
The trial court granted summary judgment for the escrow agent. On appeal, the lender argued that the construction contract and the loan documents should be read together to create escrow obligations running to him. The defense argued the lawyer was not the lender’s attorney and there was no escrow agreement with the lender.
The Decision
The court affirmed in a per curiam decision without explanation, leaving the summary judgment in place. Because it is a PCA, the decision is not precedent and does not tell us which argument the panel found persuasive. It does show that this lender did not persuade the court that the trial judge erred.
The Law
Under Florida law, an escrow agent owes fiduciary duties to the parties to the escrow. The agent must hold and disburse funds strictly according to the escrow instructions. The harder question is who counts as a party. Someone who sends money into a trust account without a written escrow agreement, or under instructions from someone else, may have trouble proving the agent owed them a duty at all.
Lawyers holding client or third-party funds are also subject to the trust accounting rules in Chapter 5 of the Rules Regulating The Florida Bar. A Bar rule violation does not by itself create a civil claim, though. Private lenders should insist on a written escrow agreement naming them, with clear disbursement conditions.
Lessons
- Before wiring loan funds, get a signed escrow agreement that names you and spells out exactly when money can be released.
- Do not assume a lawyer’s trust account protects you if the lawyer represents someone else.
- Tie disbursements to proof of progress, such as delivery, inspections, or recorded liens.
- Claims against an escrow agent turn on the documents. Read them together before relying on them.
Source: Brock v. Miklas, No. 3D12-394 — Fla. 3d DCA (December 12, 2012).
Watch the Oral Argument
This is the recording of the actual oral argument, posted on the channel. What lawyers and judges say at argument is not the ruling; the decision is summarized above. (The channel has this argument posted twice; the other upload is here.)
Lender Lost $285K in a Lawyer's Trust Account — Who's Liable? | Brock v. Miklas, 3D12-0394
Go Deeper
- Deed Fraud in Florida: How Homes Are Stolen on Paper and How to Get Them Back
- How Appeals Work in Florida: The 30-Day Deadline, Costs, and What a PCA Means
Frequently Asked Questions
Does an escrow agent owe a fiduciary duty in Florida?
Yes, to the parties to the escrow agreement. The agent must follow the escrow instructions exactly. Whether a person who is not a signatory is owed that duty is a harder question. In Brock v. Miklas a lender raised that issue, and summary judgment for the defense was affirmed without opinion.
Can I sue a lawyer who held my money in a trust account?
Possibly, if the lawyer agreed to hold the funds for you under escrow terms and disbursed them in violation of those terms. If the lawyer represented someone else and you had no agreement with the lawyer, the claim is much harder. Consult counsel promptly. Time limits apply to these claims.
How can a private lender protect funds for a construction loan in Florida?
Use a written escrow agreement naming you, with release conditions tied to milestones such as delivery or inspection. Record a mortgage. Get title insurance where possible. Never send funds to a trust account on a handshake. Confirm who the lawyer represents and what written instructions control the money.
What does a per curiam affirmance mean for my case?
It means the appellate court upheld the trial court’s ruling without writing an opinion. The decision binds the parties in that case but is not precedent for anyone else, and generally the Florida Supreme Court cannot review it. Rehearing motions are possible but rarely succeed.
Talk to a Florida real estate litigation lawyer
Weidner Law, P.A. handles Florida real estate disputes, title problems and appeals from St. Petersburg. If you need a real estate litigation lawyer, call (727) 954-8752 or email weidner@mattweidnerlaw.com.
Read the law yourself, free: every Florida statute and court rule is on floridarules.net.
This article is general information about Florida law, not legal advice about your situation. Reading it, watching the videos, or contacting the firm does not create an attorney-client relationship. Every case turns on its own facts, and past results do not guarantee a similar outcome. The hiring of a lawyer is an important decision that should not be based solely upon advertisements.
