Golden v. Jones, — So.3d —-, 2013 WL 5810360 (Fla. 4th DCA October 30, 2013)
So here’s the question that’s been roiling certain quarters of our probate bar for the last few years: Assuming I file my creditor claim before the 2-year post-death deadline set by F.S. 733.710 (Florida’s “statute of repose” for probate creditor claims), what’s my deadline for litigating whether or not I’m a reasonably ascertainable creditor?
The 1st and 2nd DCA’s have held a creditor forfeits his chance to argue his status as being “reasonably ascertainable” and thus his entitlement to personal service of a “notice to creditors” (vs. publication notice alone), if he doesn’t also file a motion for an extension of time under F.S. 733.702(3) within the two-year repose period of F.S. 733.710. See Morgenthau v. Estate of Andzel, 26 So.3d 628 (Fla. 1st DCA 2009); Lubee v. Adams, 77 So.3d 882 (Fla. 2d DCA 2012). In the linked-to case above, the 4th DCA split with its sister courts, reversing this trial-court order based upon the following logic: There is NO deadline for litigating a creditor’s status as being “reasonably ascertainable,” as long as the creditor gets his claim filed before the 2-year post-death deadline set by F.S. 733.710. In other words, according to the 4th DCA, a creditor doesn’t have to also file a motion for an extension of time before the 2-year post-death deadline to preserve the opportunity to litigate his status as “reasonably ascertainable.” This may sound like an esoteric point, but it ended up getting the creditors in both the Morgenthau and Lubee cases bounced out of court before they ever had a chance to argue the merits of their claims (see here, here for my take on these cases).
Here’s how the 4th DCA summed up its decision in the linked-to case above:
We hold that if a known or reasonably ascertainable creditor is never served with a copy of the notice to creditors, the statute of limitations set forth in section F.S. 733.702(1), Florida Statutes, never begins to run and the creditor’s claim is timely if it is filed within two years of the decedent’s death.
Constitutionally-Protected Property Rights:
It’s not often probate disputes turn on constitutionally-protected property rights, but this is one of them. In Tulsa Professional Collection Services, Inc. v. Pope, 485 U.S. 478 (1988), the U.S. Supreme Court held that where a creditor’s identity is known or reasonably ascertainable, that creditor’s constitutionally-protected due-process rights are violated if his claim is barred merely by general publication of the estate’s notice to creditors in a local newspaper (as was the practice in many jurisdictions, including Florida, before 1988); personal notice by mail or other means equally certain to ensure actual notice is the required minimum to satisfy constitutional due process concerns.
On balance then, a requirement of actual notice to known or reasonably ascertainable creditors is not so cumbersome as to unduly hinder the dispatch with which probate proceedings are conducted. Notice by mail is already routinely provided at several points in the probate process. . . . We do not believe that requiring adherence to such a standard will be so burdensome or impracticable as to warrant reliance on publication notice alone.
In analogous situations we have rejected similar arguments that a pressing need to proceed expeditiously justifies less than actual notice. For example, while we have recognized that in the bankruptcy context there is a need for prompt administration of claims, . . . we also have required actual notice in bankruptcy proceedings. . . . Probate proceedings are not so different in kind that a different result is required here.
Id. at 491.
Our probate code put Pope’s directive into effect in F.S. 733.2121(3), which imposes a duty on all personal representatives to search out all reasonably ascertainable creditors and personally serve them with a “notice to creditors.” Once personally served, F.S. 733.702(1) tells us reasonably ascertainable creditors have until the later of the “date that is 3 months after the time of the first publication of the notice to creditors or, as to any creditor required to be served with a copy of the notice to creditors, 30 days after the date of service on the creditor,” to file their claims.
In his critique of the Morgenthau and Lubee decisions (which was quoted by the 4th DCA), Ft. Lauderdale attorney Rohan Kelley focuses on the minimum due process rights established for probate creditors in Pope, arguing that the end result of these decisions is to rob a creditor of “his day in court,” thus depriving him of his property rights “without due process.”
One might tend to dismiss Morgenthau because of its strange procedural history and the court’s apparent statutory misinterpretation and failure to consider due process requirements. However, the District Court of Appeal, Second District, subsequently cited Morgenthau with approval and decided similarly on even clearer facts. Lubee v. Adams, 77 So.3d 882 (Fla. 2d DCA 2012). Once again, no attention was given in the opinion to constitutional due process issues. Lubee recited the same mantra as Morgenthau and also cited Miller, with apparently the same misreading as the first district. The court in Lubee said: “Because he was not served with a copy of the notice to creditors, Mr. Lubee was required to file his claim in the probate proceeding within the three-month window following publication.” Lubee at 884. Of course, this misses the point of the statute, because it is not the fact of service that makes the publication date inapplicable to the beginning of the period to bar claims, it is the entitlement to service that is relevant. Mr. Lubee, like Mr. Morgenthau, was denied his day in court to show that he was ascertainable and was therefore deprived of property without due process.
See Rohan Kelley, Probate Litigation, Practice Under Florida Probate Code § 21.40 (Fla. Bar CLE 7th ed.2012) (emphasis added). For those of us left to make sense of all this, Mr. Kelley provides the following words of encouragement on the legislative front and a possible constitutional line of argument based on Pope’s due process analysis.
The Real Property, Probate and Trust Law Section of The Florida Bar is drafting proposed legislation that would reverse the results in Morgenthau and Lubee, but it is unlikely to take statutory form until summer or fall of 2014.
Until then, or until another appellate court decides the issue differently, trial courts even outside the first and second districts may also be bound to follow Morgenthau and Lubee . . . However, that may not be true as to the due process issue in Morgenthau and Lubee, because neither opinion addressed that issue and the decisions do not constitute stare decisis on that issue.
Id. (emphasis added). As predicted by Mr. Kelley, the Bar is in fact working on proposed legislation that should resolve the current split between the 4th DCA and the 1st and 2nd DCA’s, as reported by Tampa attorney Tae Kelley Bronner, in her presentation at this year’s legislative update.
The Probate Law Committee is working on a proposed statute to clarify the rights of an ascertainable creditor who has not received a notice to creditors and a new procedure to allow a personal representative to force a creditor to timely establish any rights they may have as an ascertainable creditor or strike the late filed claim. Until the legislation is completed a petition for extension of time should be filed with any claim filed after the expiration of the 3 month creditor period and the petition should be set for hearing prior to the expiration of 2 years from the decedent’s date of death to preserve all rights of the creditor and assure the creditor is provided the opportunity to establish whether their claim was timely filed.
See Practical Pointers for Probate Administration (Legislative Update 2013), by Tae Kelley Bronner. In addition to giving us all a heads up on what’s to come legislatively (as well as good practical advice to follow in the meantime), Ms. Bronner summarized her presentation for those of us who think best “visually” (like me!) in the following chart.