Florida Probate & Trust Litigation Blog : Florida Probate Litigation, Will Contest Lawyer & Attorney : Juan C. Antúnez : Serving Miami, Jacksonville, Tampa Saint Petersburg, Orlando, Fort Lauderdale

As I've written before, under Florida law you don't need to actually produce a dead body to have someone declared dead [click here].  If someone's missing for over 5 years or there's direct or circumstantial evidence of death, under F.S. 731.103 a court can enter an order declaring that person dead.

According to a CNN article entitled Son of wanted Nazi wants him declared dead, the son of notorious Nazi doctor Aribert Heim is apparently relying on a similar statute to have his father declared legally dead so he can take control of a bank account with $1.78 million and other investments in his father's name and donate some of it to help document the suffering that occurred at a former concentration camp.  Here's an excerpt from the linked-to story:

Ruediger Heim told the Bild am Sonntag newspaper that his father -- dubbed "Dr. Death" and atop the Simon Wiesenthal Center's list of most-wanted suspected Nazi war criminals -- should officially be declared missing and then dead.

He reiterated he has not had any contact with his father since he fled Germany in 1962, save two short notes in his family's mailbox.

"Between 1962 and 1967, two notes appeared in our mailbox. There was a single sentence written on them, 'I am doing fine.' But if those letters were really from my father, I do not know," the paper quoted him as saying.

Heim also said that he has no idea if his father, who would be 94, is alive or dead.

He told the paper he is working with a lawyer to see how he can have his wanted father declared missing and then dead so as to get control of the man's bank account. [Watch the video].

He said he, his brother and sister only discovered in 1997 that a bank account in his father's name existed. If he could get control of the money, he told the newspaper he would donate to help document suffering in the Mauthausen concentration camp near Linz, Austria, where his father worked as camp doctor in October and November 1941.

So far, Heim's children have made no claim to a bank account with $1.78 million and other investments in his name. To do that, they would have to produce proof that their father is dead.

Blogging credit:

Credit goes to the estate lawyers of Hull & Hull at the firm's Toronto Estate Law Blog for bringing the CNN article to my attention in this blog post.

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Tampa probate litigator Russell R. Winer was kind enough to point me to an interesting will-contest story in the St. Petersburg Times by staff writer Chris Tisch entitled A will casts a shadow on a prominent lawyer who stands to gain millions. 

When I read the linked-to story two points jumped out at me.  First, the decedent's attorney wrote himself into the will, which is a clear ethics violation.  Fla. Bar Rule 4-1.8(c) prohibits an attorney from preparing an instrument giving the attorney or a person related to the attorney any substantial gift from a client, including a testamentary gift, unless the client is related to the proposed donee.  Second, bad facts can kill you at trial, even if these facts are arguably irrelevant as a matter of law.  On this second point read the following excerpt from the linked-to story:

But one piece of evidence convinced the judge the most that something improper was occurring. In her order, Laughlin calls it "The Agreement."

It was signed in 2002 by Carey, DuBois and Tornwall and their spouses. It says that no breach of fiduciary duty had occurred in regard to Murphy and that "should any of the parties have a mind to upset the grand plan, they should first check with the other two parties," Laughlin wrote.

"This document wreaks of a consciousness of fraud, and the court finds it to be persuasive evidence of undue influence," Laughlin wrote. "The Agreement is also compelling evidence that the perpetrators knew all of the elements of undue influence were present."

*     *     *

As for "The Agreement," Fleece said it doesn't reflect what should be most important in the case: Murphy's intent.

"Does it look good? No. Did it really matter? No. It didn't really deal with her intent," Fleece said.

Murphy's $7.2-million residuary estate remains in the hands of a curator until all appeals are exhausted.

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As a self confessed trusts-and-estates “law geek”, I obviously believe courts (and thus litigants) are guided by the rule of law.  But I’ve also been around long enough to have a healthy respect for the “legal realism” school of thought: all law is made by human beings and, thus, is subject to human foibles, frailties and imperfections.

So thinking about what makes a particular group of human beings (judge, lawyers, clients) involved in a particular case “tick” is just as important as figuring out the law.  With that background in mind, I found a recent article by Arthur D. Burger of the New Jersey Law Journal entitled Why Do Lawyers Lie? One Word: Narcissism particularly interesting.

Next time your judge, opposing counsel or one of the clients does something baffling, take a step back and think about that person as a human being who may be under a lot of pressure and is just having a bad day.  If the particular person going crazy on you is opposing counsel, consider the following excerpt from the linked-to article:

Richard Ratner, a board-certified psychiatrist since 1973, has many lawyers as patients in his clinical work and also serves as a forensic psychiatrist in bar disciplinary cases and other types of litigation. He says a lot of "psychopathology" takes place in litigation, for a variety of reasons.

First, he notes that lawyers, generally, and litigators, in particular, tend to "have generous helpings of narcissism," which he says can be both good and bad. Narcissistic people, he states, "want to go out of their way to shine and make themselves look terrific." This is a good thing to the extent it motivates them to work hard and be prepared.

The problem, he says, comes when you put such people in the crucible of litigation, which after all is a competition with winners and losers. He says that this competition aspect creates a polarization of issues and, for narcissistic people, places their fragile egos directly onto center stage.

Ratner explains that extremely narcissistic people are so "needy for the affirmation of success," that the idea of losing is seen as unbearable. They will therefore use the psychological defenses of "rationalization" and "denial" to enable themselves to intentionally mislead -- and even lie -- if they believe that is the only way to win.

Ratner states that as a result of this rationalization and denial, they do not see themselves as having done anything wrong. Instead, they see themselves as justified , because they were acting for a "higher purpose." He explains that the power of rationalization can be enormous. It can even be seen in such horribly extreme examples as when the killing of innocent civilians by terrorists is seen as "heroic."

It is useful to understand this dynamic in our adversaries so we know what we are up against , and see the element of insecurity and desperation driving such behavior. It is also useful, however, to examine ourselves and look for similar symptoms.

None of us likes to lose, and nearly all of us, at times, get carried away in litigation by a certain "bunker mentality," through which we see our side as "good" and the other side as "bad." Ratner says that it's important to take one's own temperature during the course of a contentious case to assess whether you have maintained perspective. One good way to do this, he says, is to discuss the case with a colleague or at least to take time to calmly review the record and look at the facts.

. . .

Being aware of Ratner's observations provides a tool for us to periodically look at ourselves, which should work to our benefit by allowing us to avoid court sanctions, see the strengths of an opponent's case or simply avoid looking silly.

Our clients want us to fight hard -- and to win. But we can do that best if we keep our wits and see reality. If that requires putting our egos in check, so be it. After all, it's doctor's orders.

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I've written before about the upswing in trusts-and-estates litigation in this country [click here]. Now it's the U.K.'s turn.  An article in the Telegraph entitled Inheritance disputes: where there's a will there's a war, reported on factors fueling increased probate litigation in the U.K. If you take a look at the U.S. article linked-to above and the linked-to U.K. piece it's amazing how the same demographic and societal trends in both countries are playing themselves out in a similar fashion through probate litigation.  Here's an excerpt from the U.K. article:

But it should not be surprising that inheritance disputes are so common: three-quarters of British citizens do not have a will, and 24 per cent of people anticipate that their inheritance could cause arguments among relatives, according to new research from Friends Provident. Lawyers from across Britain have told the Telegraph that they are handling ever-increasing numbers of will contentions. One northern firm, Brabners Chaffe Street, has reported a 200 per cent rise in the number of contested wills in the past three years alone.

While some solicitors cite high property prices, which make an estate well worth fighting over, others put the trend down to our newly litigious society and the fractured nature of modern families.

"Remarriages and children from previous relationships complicate an estate," says Simon Rylatt, head of contentious trusts and probate at law firm Boodle Hatfield. "There are more people who might be expecting to get a share ­- and more to feel resentment."

Blogging credit:

Credit goes to Prof. Gerry Beyer's Wills, Trusts & Estates Prof Blog for bringing the U.K. article to my attention in this blog post.

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In Florida the law is clear: you can't contest a will until after the testator dies. F.S. 732.518. But that doesn't necessarily mean you can't preempt a will contest before the testator dies.

For example, suppose you're working with an older client with diminishing capacity whose will is sure to be contested.  What if you initiated a voluntary guardianship proceeding and obtained a final judgment specifically approving the ward's will and specifically finding that the ward's will is NOT the product of undue influence, fraud, etc?  Unlike in a will contest, you'd have the actual testator in front of the judge testifying as to the validity of his will.  This judgment should collaterally estopp re-litigation of these same issues in a will contest after the testator/ward dies if all interested persons in this estate were given notice of the guardianship proceeding and an opportunity to be heard.  Presto! Will contest has been preempted.

That's basically what happened in a recent California case that received some national attention in a short piece by Pamela A. MacLean of the The National Law Journal entitled In Appellate First, Attacks on Wills Barred After Estate Owner Dies. Here's an excerpt:

For the first time, a California appellate court has said that when a conservator seeks court approval of an estate plan, while the subject is living, any challenge to the will must be raised at that hearing -- not when the person dies. [Murphy v. Murphy, No. A115177.]

The appellate decision is the first in the country to say attacks on wills would be barred after the estate owner dies, if there has been a court-approved substituted judgment, according to David Baer, attorney at Hanson Bridgett Marcus Vlahos & Rudy in San Francisco. Baer represented the daughter of William J. Murphy in an estate battle with her brother.

The opinion essentially bulletproofs the will of a person found incompetent and placed under the protection of a conservator, if the court OKs a revised estate plan, according to Baer. He added that the court made clear that notice to potential objectors is required to protect due process.

"You essentially can't contest an estate plan that has been approved in by a substituted judgment order," Baer said. "A substituted judgment is an opportunity to get a court order for the conservator to sign various instruments," he said.

The 1st District Court of Appeal in San Francisco held in the June 26 decision that an attack on such a court order, after the conservatee dies, is barred by collateral estoppel rules. Murphy v. Murphy, No. A115177.

Lesson learned?

One of the most challenging attorney-client scenarios is the older client with diminishing capacity. There are lots of solid articles/resources out there addressing this scenario from an estate-planning perspective [click here for Older Clients With Diminishing Capacity And Their Advance Directives (by A. Frank Johns)], but I haven't seen any that points to guardianship proceedings as a tool for heading off future will contests. The linked-to California case could provide a template for that strategy.

Blog Post Update:

As an update to this post, in this post the Pennsylvania Fiduciary Litigation Blog pointed me to an article published in "Trusts and Estate Fiduciary Litigation Update," August 20, 2008, by Samantha E. Weissbluth, senior counsel, and John P. Mounce, summer associate, Foley & Lardner LLP, Chicago, entitled Barred by Lunatics Law.  The article discusses the implications of the California case linked-to above and concludes with the following observations:

The lesson here is that court approval of an individual’s estate plan when that individual is under a conservatorship will protect the plan against any posthumous contest to it (assuming, of course, that interested parties receive notice of the conservator’s petition to approve the plan).

Those of you with clients in dicey family situations in which you worry about a posthumous contest might want to weigh the risks, costs and public nature of a conservatorship proceeding (or some kind of declaratory judgment action if permitted in your state) to try and bulletproof your client’s plan.

And, attorneys representing clients disgruntled by a now incapacitated relative’s estate plan should certainly come armed and ready for battle upon receiving notice of an action for court approval of that plan.

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For no reason other than I find this bit of historical/T&E crossover trivia interesting, here's a copy of the arbitration clause contained in George Washington's will:

But having endeavoured to be plain, and explicit in all Devises--even at the expence of prolixity, perhaps of tautology, I hope, and trust, that no disputes will arise concerning them; but if, contrary to expectation, the case should be otherwise from the want of legal expression, or the usual technical terms, or because too much or too little has been said on any of the Devises to be consonant with law, My Will and direction expressly is, that all disputes (if unhappily any should arise) shall be decided by three impartial and intelligent men, known for their probity and good understanding; two to be chosen by the disputants--each having the choice of one--and the third by those two. Which three men thus chosen, shall, unfettered by Law, or legal constructions, declare their sense of the Testators intention; and such decision is, to all intents and purposes to be as binding on the Parties as if it had been given in the Supreme Court of the United States.

Not that I'm taking any credit for uncovering this gem all on my own, this clause has been popping up on various blogs for some time [click here, here, here].

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LaCalle v. Barquin, --- So.2d ----, 2008 WL 3358300 (Fla. 3d DCA Aug 13, 2008)

Sometimes even when you're right, you still lose (yet another example of the risks inherent to litigation).  In the linked-to case the 3d DCA reversed a probate court order dismissing a properly filed petition to establish and probate a lost will.  The 3d DCA based its reversal on the following:

1.  Ongoing probate of an earlier will does not preclude a later-filed petition to probate a lost will

3d DCA: [T]he trial court might have been swayed [into granting the motion to dismiss] by Movant's argument that a petition to administer another earlier-dated will already had been granted. [This fact] does not preclude or estop the advancement of [a petition to establish and probate a lost will]. A petition for administration of a will and a petition to establish a lost or destroyed will in probate are different proceedings. See Lowy v. Roberts, 453 So.2d 886 (Fla. 3d DCA 1984).

2.  Yes, even in probate, the rules for motions to dismiss still apply

3d DCA: The trial court might have been misled by affidavits-attached to the motion to dismiss-of the two parties alleged to have witnessed the execution of the destroyed will, stating they “do not recall” having witnessed the will's execution  .  .  .   [I]t is apodictic that matters dehors the four corners of a complaint or petition may not be considered on a motion to dismiss. See Fla. Prob. R. 5.025(d)(2) (“[T]he proceedings [to probate a lost or destroyed will], as nearly as practicable, shall be conducted similar to suits of a civil nature and the Florida Rules of Civil Procedure shall govern, ...”); see also Pizzi v. Cent. Bank & Trust Co., 250 So.2d 895, 897 (Fla.1971) (holding-on a motion to dismiss-that “[t]he court must confine itself strictly to the allegations within the four corners of the complaint” (quoting Kest v. Nathanson, 216 So.2d 233, 235 (Fla. 4th DCA 1968))); N.E. at West Palm Beach, Inc. v. Horowitz, 471 So.2d 570, 570-71 (Fla. 3d DCA 1985) (“The purpose of a motion to dismiss is to ascertain whether a plaintiff has alleged a good cause of action and the court must confine itself strictly to the four corners of the complaint.”).

Lesson learned?

Florida's probate courts are underfunded and overworked. So it should come as a surprise to no one that smart, well meaning judges will make mistakes from time to time.  So how do we and our clients "deal" with this fact?  If at all possible, negotiate a settlement.  If that doesn't work, take full advantage of the other ADR tools available to Florida litigants [click here].  If that doesn't work and you find yourself in court in spite of your best efforts, plan accordingly.

First, factor in the risk of an appeal (or multiple appeals) into your litigation budget. If your client has set aside $10,000 or $100,000 or $1,000,000 to spend on your case, make sure a good % of that budget is set aside to pay for appeals.  Second, manage expectations. No matter how badly your client wants to be assured his case is a slam dunk (and how many times he asks you), don't fall for that trap. Keep reminding him of the facts of life: in litigation, even when you're right, you can still spend a lot of money and lose.

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Demello ex rel. Jerome Adams Trust, Irene V. Adams Trust v. Buckman, --- So.2d ----, 2008 WL 2906652 (Fla. 4th DCA Jul 30, 2008)

In the linked-to case the beneficiary of a trust successfully sued her trustee for breach of trust. As a result of this win the trial court awarded her attorneys' fees and costs. Although unstated, I am assuming the statutory basis for the trial court's fees/costs award was the then-applicable version of F.S. 736.1004(1)(a), which provides as follows:

(1)(a) In all actions for breach of fiduciary duty or challenging the exercise of, or failure to exercise, a trustee's powers . . . the court shall award taxable costs as in chancery actions, including attorney fees and guardian ad litem fees.

This, in essence, is a “prevailing party” provision. See In re Estate of Simon, 549 So.2d 210 (Fla. 3 DCA 1989) ("In chancery or equity actions, the well-settled rule is that 'costs follow the judgment unless there are circumstances that render application of this rule unjust.'"). I am also assuming the trial-court's ruling as to costs was guided by the recently revised Uniform Guidelines for Taxation of Costs [click here].

NO Evidence = NO Fees

In the linked-to case that old nemesis of the trusts-and-estates bar - an appellate worthy evidentiary record (or lack thereof) - reared its ugly head on appeal, undercutting the trust beneficiary's trial-court win. While a trustee may not have to put on expert-witness testimony in support of an attorney's fee/cost award [F.S. 736.0206(5)], a trust beneficiary certainly does . . . at least according to the 4th DCA.  Here's how the 4th DCA made this point:

This court has previously recognized that “an award of attorney's fees must be supported by expert evidence, including the testimony of the attorney who performed the services.” Rodriguez v. Campbell, 720 So.2d 266, 267 (Fla. 4th DCA 1998).

Generally, when an attorney's fee or cost order is appealed and the record on appeal is devoid of competent substantial evidence to support the order, the appellate court will reverse the award without remand. However, when the record contains some competent substantial evidence supporting the fee or cost order, yet fails to include some essential evidentiary support such as testimony from the attorney performing the services, or testimony from additional expert witnesses, the appellate court will reverse and remand the order for additional findings or an additional hearing, if necessary.

Id. at 268 (citations omitted).

In this case, Jay Schwartz, who was Buckman's trial counsel, testified regarding his fee. Buckman also presented the expert testimony of Henry Zippay, Esq. Zippay testified that he was hired to evaluate the materials presented to him by Schwartz for the purpose of evaluating a reasonable hourly rate and fee in the case. Zippay testified:

I don't have an actual reasonable attorney's fee. I can only suggest as to reasonable hours, and what I've read through here, you had somewhere around 340 some hours, and you're the only one that I really can testify as to having knowledge of. I find that your 346 or 344, or whatever figure it was, is a reasonable fee or reasonable amount of hours subject to certain qualifications.

Demello correctly argues that the expert witness only testified to the reasonableness of attorney Schwartz's hours and rates. The expert witness offered no testimony regarding any of the other attorneys and paralegals who worked on the case. There is no expert testimony to support the award of attorney's fees for work other than that performed by Schwartz. Accordingly, the attorney's fee order is vacated and this case is remanded for entry of an order awarding only those attorney's fees that were supported by the expert testimony.

Lesson learned?

If you're litigating attorney's fees and costs, a trial court ruling based on a solid evidentiary record is almost invincible on appeal. The linked-to case + the underlying statutory authority cited above should provide a solid road map for building that record. On the other hand, if your record has holes in it, you (and your client) may be in for a rude awakening on appeal.

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Payment of trustee attorneys' fees when defending breach-of-duty claims has been a hot topic over the last few years due to appellate decisions out of the 3rd and 4th DCA's that were decidedly non-trustee friendly [click here, here].  The Florida Bankers Association swung into action, proposing new legislation that would make it more difficult to cut off a trustee's access to trust funds when defending against a breach-of-duty claim. The end product is new F.S. 736.0802(10), which became effective July 1, 2008.

Access to trust funds to pay for litigation - vs. the substance of the claim - often determines the outcome of the case. If you're suing a trustee or defending a trustee, you need to be aware of this new legislation. Trustees also need to be aware of the new affirmative notice obligation created by this change in the law.

736.0802 Duty of loyalty.--

(10) Payment of costs or attorney's fees incurred in any proceeding from the assets of the trust may be made by the trustee without the approval of any person and without court authorization, unless the court orders otherwise as provided in paragraph (b).

(a) If a claim or defense based upon a breach of trust is made against a trustee in a proceeding, the trustee shall provide written notice to each qualified beneficiary of the trust whose share of the trust may be affected by the payment of attorney's fees and costs of the intention to pay costs or attorney's fees incurred in the proceeding from the trust prior to making payment. The written notice shall be delivered by sending a copy by any commercial delivery service requiring a signed receipt, by any form of mail requiring a signed receipt, or as provided in the Florida Rules of Civil Procedure for service of process. The written notice shall inform each qualified beneficiary of the trust whose share of the trust may be affected by the payment of attorney's fees and costs of the right to apply to the court for an order prohibiting the trustee from paying attorney's fees or costs from trust assets. If a trustee is served with a motion for an order prohibiting the trustee from paying attorney's fees or costs in the proceeding and the trustee pays attorney's fees or costs before an order is entered on the motion, the trustee and the trustee's attorneys who have been paid attorney's fees or costs from trust assets to defend against the claim or defense are subject to the remedies in paragraphs (b) and (c).

(b) If a claim or defense based upon breach of trust is made against a trustee in a proceeding, a party must obtain a court order to prohibit the trustee from paying costs or attorney's fees from trust assets. To obtain an order prohibiting payment of costs or attorney's fees from trust assets, a party must make a reasonable showing by evidence in the record or by proffering evidence that provides a reasonable basis for a court to conclude that there has been a breach of trust. The trustee may proffer evidence to rebut the evidence submitted by a party. The court in its discretion may defer ruling on the motion, pending discovery to be taken by the parties. If the court finds that there is a reasonable basis to conclude that there has been a breach of trust, unless the court finds good cause, the court shall enter an order prohibiting the payment of further attorney's fees and costs from the assets of the trust and shall order attorney's fees or costs previously paid from assets of the trust to be refunded. An order entered under this paragraph shall not limit a trustee's right to seek an order permitting the payment of some or all of the attorney's fees or costs incurred in the proceeding from trust assets, including any fees required to be refunded, after the claim or defense is finally determined by the court. If a claim or defense based upon a breach of trust is withdrawn, dismissed, or resolved without a determination by the court that the trustee committed a breach of trust after the entry of an order prohibiting payment of attorney's fees and costs pursuant to this paragraph, the trustee may pay costs or attorney's fees incurred in the proceeding from the assets of the trust without further court authorization.

(c) If the court orders a refund under paragraph (b), the court may enter such sanctions as are appropriate if a refund is not made as directed by the court, including, but not limited to, striking defenses or pleadings filed by the trustee. Nothing in this subsection limits other remedies and sanctions the court may employ for the failure to refund timely.

(d) Nothing in this subsection limits the power of the court to review fees and costs or the right of any interested persons to challenge fees and costs after payment, after an accounting, or after conclusion of the litigation.

(e) Notice under paragraph (a) is not required if the action or defense is later withdrawn or dismissed by the party that is alleging a breach of trust or resolved without a determination by the court that the trustee has committed a breach of trust.

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