On August 30, 2023, the Florida Third District Court of Appeal affirmed the dismissal of negligence claims against First National Bank of South Miami brought by a group of limited liability companies after a bank customer used the companies, which she did not own, as collateral for a $5.5 million loan that she later defaulted on. When the customer applied for the loan, she claimed to own certain LLCs that, in reality, she only managed. She pledged the companies as collateral for the loan, which the bank approved. When the customer defaulted on the loan, First National collected the deficit from the LLCs’ bank accounts. The LLCs then sued First National for negligence—arguing that First National owed them a duty to refrain from negligent lending—and unjust enrichment.

The trial court dismissed the claims, and on appeal, the appellate court affirmed, holding that the borrower could not “unilaterally impose a fiduciary responsibility on another simply by reposing trust; absent some conscious acceptance of such duties, no fiduciary relationship is created.” Additionally, in Florida, “banks have no duty to customers to prevent negligent lending absent a fiduciary relationship.” Therefore, the LLCs were unable to show that First National owed them any duty and did not show a claim of negligence. The court also rejected the unjust enrichment claim, reasoning that “the $5.5 million loan was adequate consideration to someone related to the LLCs for the benefit conferred.”

The case is Suzmar LLC v. First National Bank of South Miami, No. 3D22-1839 (Fla. Dist. Ct. App. Aug. 30, 2023). The LLCs are represented by Squire Patton Boggs LLP. First National is represented by Carlton Fields. The opinion is available here.