Today I removed the tires and inspected the spindles and brake areas. It appeared to have either a grease leak or cooked brake fluid around the inside of the spindles and below the brake disc pads.
Acme thinks I blew the seals but I am not sure why. They say if I did I will have to rebuilt the brakes.
They also suggested that I get a reverse brake surge solenoid which when activated will stop fluid from flowing to the brakes and enable backing of the trailer without damages.
I wish now that I had bought the electric brake models but the surge brake trailers I have had in the past mainly on boats were perfect. I towed a 24' off shore fisherman for many a miles, never added fluid or had a leak on any of the 4 brakes.