Fla. Stat. § 736.0104 - Commentary to Florida Trust Code

Legal Commentary on Fla. Stat. § 736.0104

Fla. Stat. § 736.0104 specifies when a person is deemed to know a fact under the Florida Trust Code. There are three possible ways for person to be deemed to have knowledge of a fact. The first is actual knowledge, which simply means knowledge as understood in the common vernacular. If a jury thinks you know a fact, then the Code agrees that you know the fact. The second way to be deemed to have knowledge of a fact is by receiving notice or notification of that fact. Thus, under the Florida Trust Code, being notified (including all the methods of notice under Fla. Stat. § 736.0109) is the same as knowing. Finally, a person may know a fact if they have reason to infer the fact from all the circumstances actually known to the person. Thus, if a fact is reasonably inferred, then it is known under the Florida Trust Code.

Subsection (2) limits the deeming of knowledge for organizations, excluding circumstances in which notice was given to an employee of the organization who had no responsibility to act on matters regarding the trust unless reasonable diligence would have resulted in the notice being passed to the proper employee at the institution. This is mostly applicable to corporate trustees. For example, under this rule, a bank acting as trustee would probably not be deemed to have knowledge of a fact simply because a janitor at a local branch was handed notice.

In Berlinger v. Wells Fargo, N.A., the United States District Court in the Middle District of Florida used Fla. Stat. § 736.0104 to infer that a corporate trustee either knew or reasonably should have known that a trust beneficiary was using a portion of his trust distributions to meet an alimony obligation. 2015 WL 6125529 (M.D. Fla. 2015).

Text of Fla. Stat. § 736.0104

Knowledge.—

(1) Subject to subsection (2), a person has knowledge of a fact if the person:

(a) Has actual knowledge of the fact;

(b) Has received a notice or notification of the fact; or

(c) Has reason to know the fact from all the other facts and circumstances known to the person at the time in question.

(2) An organization that conducts activities through employees has notice or knowledge of a fact involving a trust only from the time the information was received by an employee having responsibility to act on matters involving the trust, or would have been brought to the employee’s attention if the organization had exercised reasonable diligence. An organization exercises reasonable diligence if the organization maintains reasonable routines for communicating significant information to the employee having responsibility to act on matters involving the trust and there is reasonable compliance with the routines. Reasonable diligence does not require an employee of the organization to communicate information unless the communication is part of the individual’s regular duties or the individual knows a matter involving the trust would be materially affected by the information.

History of Fla. Stat. § 736.0104

Fla. Stat. § 736.0104 became law on July 1, 2007 as part of the Florida Trust Code. It has not been amended or revised since that date.

The statute section is largely taken from Section 104 of the Uniform Trust Code, with only small edits made to clarify the language. The Uniform Trust Code based its draft of Section 104 on Section 1-202 of the Uniform Commercial Code. Florida’s version of Section 1-202 of the Uniform Commercial Code is found in Fla. Stat. § 671.101(26)-(28).

This article is part of the PTM Legal Commentary to the Florida Trust Code. Click here to navigate through the entire commentary.