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

Celebrities loom large in the world of probate litigation. They've often lead messy lives, which means their estates are magnets for litigation [click here]. And (if their heirs are lucky), they leave  behind huge fortunes that actually get bigger over time. In fact Forbes publishes an annual Top-Earning Dead Celebrities list that tracks this phenomenon.

So far Michael Jackson's estate is following the celebrity-probate script to a "T". 

Jackson's life was messy: three children by different women; complicated family dynamics involving his brothers, sister, mom and dad; drug abuse . . . you get the picture.  And even if Jackson's will isn't challenged or some unkown heir doesn't come forward with some other type of claim, figuring out how to manage his estate will be a monumental task akin to reorganizing a multimillion dollar media conglomerate on the verge of insolvency. Here's an excerpt from a WSJ piece entitled Jackson Will From 2002 In Spotlight that gives us a glimpse of what's to come:

Unwinding Mr. Jackson's estate is likely to be a thorny challenge, given the size and complexity of both the assets and the debts involved. In all, Mr. Jackson died with around $500 million debt, but the value of his assets probably outweigh that, possibly by $200 million or more, according to people familiar with the matter.

Mr. Jackson's most valuable asset is believed to be his 50% stake in Sony/ATV Music Publishing, a joint venture with Sony Corp. That stake is collateral for a $300 million loan held by Barclays PLC. And Mr. Jackson's level of control over the venture was reduced in a 2006 refinancing. For instance, he no longer has veto power over key executive appointments, according to people familiar with the situation. Sony also has the right to buy half of Mr. Jackson's 50% stake when it chooses.

Mr. Jackson's other assets include Mijac, a publishing catalog that comprises his own musical composition that is collateral for a separate $73 million loan. And control of the master recordings of his albums, currently in the hands of Sony, is set to revert to him in five years, according to people familiar with the matter.

But Mr. Jackson last year defaulted on a $24.5 million loan backed by another major component of his portfolio, Neverland Valley Ranch. He then became a partner in a venture -- Sycamore Valley Ranch Co., LLC -- that now owns the property. It is not clear what will become of the property once the will is executed.

On the upside, in the midst of this recession Jackson's estate is the kind of economic stimulus package that'll "provide a lifetime annuity for scores of trust and estate lawyers," as predicted in the WSJ's Wealth Report Blog [click here].

Stay tuned for more . .

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Glantz and Glantz, P.A. v. Chinchilla, --- So.3d ----, 2009 WL 1531644 (Fla. 4th DCA June 3, 2009)

An appellate court won't reverse a probate judge's ruling cutting attorneys fees unless there's been an "abuse of discretion." In other words, if reasonable minds could disagree on how the court should have ruled, then the appellate court must affirm the trial court's ruling . . . even if the appellate judges would have come to a different conclusion. Here's how the Florida Supreme Court put it in Canakaris v. Canakaris, 382 So. 2d 1197 (Fla. 1980): "the appellate court must fully recognize the superior vantage point of the trial judge . . . . If reasonable men could differ as to the propriety of the action taken by the trial court, then the action is not unreasonable and there can be no finding of an abuse of discretion.”

So it's a rare case indeed when an appellate court comes across a set of facts that compels it to step in and reverse a fee ruling that is so patently unfair it simply can't be left alone. This is one of those cases. Here are the facts:

The personal representative of an estate was a member of prepaid legal services program. The program referred her to the law firm of Glantz & Glantz, P.A., where the personal representative retained Mark Mastrarrigo to handle estate matters.

Subsequently, the personal representative wrote a letter to the court expressing her concern about the law firm's billing, prompting the trial court to conduct an evidentiary hearing. Testimony revealed that the attorney documented 123 billable hours defending a will contest, filing and pursuing a motion to disqualify another attorney based on a conflict of interest, and working with a curator in connection with the sale of the estate's property.

Pursuant to the prepaid legal services program, the attorney charged $115 per hour, a 51% discounted rate from the normal billing rate of $225 per hour. The total charges amounted to $12,400 plus costs. The law firm submitted an affidavit from an expert attesting to the reasonableness of the fees and costs, specifically that $13,500 was a reasonable fee for the services rendered. Testimony evidenced that this amount was based on the discounted hourly rate and not on the normal billing rate.

The court entered an order awarding the law firm fees in the amount of $6,885, 51% of the $13,500 reasonable fee attested to by the expert. The court denied the law firm's motion for rehearing, from which the law firm now appeals.

The 4th DCA went on to explain the legal basis for its reversal as follows:

Here, the prepaid legal services contract rate of $115 per hour is presumed to be reasonable. See, e.g., Sotolongo v. Brake, 616 So.2d 413, 413-14 (Fla.1992). The 123 hours expended is also reasonable given that the attorney testified to the services rendered by the law firm in representing the personal representative in a will contest, a motion to disqualify another lawyer, and work done with the curator. The trial court accepted the expert's affidavit that $13,500 was a reasonable, already discounted fee. The trial court did not find the hours or the discounted rate to be unreasonable. Nevertheless, the trial court inexplicably reduced the reasonable fee by another 51%. In doing so, it abused its discretion.

The exception that proves the rule.

The fact that the probate attorney won this fee dispute shouldn't embolden anyone; it's an exceptional case that only proves your fees have to be ridiculously low to begin with to have a prayer of winning on appeal. Not a good strategy for staying in business for very long. The better lesson to be drawn from this case is that fee disputes are no-win situations. And the best way to win that battle is to take the time up front to make sure your client doesn't object to your fees once you've done all the work. Billing is part science, part art. For an excellent article discussing how to get this right in the trusts and estates context, read Understanding the Legal and Emotional Aspects to Billing and Collecting for Legal Services [click here for slide show] by frequent lecturer and Chicago estate planning attorney Louis Harrison.

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Undue influence is one of the mainstays of probate litigation and a frequent topic of discussion on this blog [click here, here, here]. Probate lawyers need to know this area of the law cold.

Orlando litigator David P. Hathaway tackled the issue from an interesting perspective in a June 2009 Florida Bar Journal article entitled Make It an Even 10: Courts Rely on More Than the Seven Carpenter Factors to Analyze a Claim for Undue Influence of a Will or Trust.

David's thesis is that probate litigators need to think beyond the seven Carpenter factors we all know and love.

In addition to the seven Carpenter factors, however, Florida law recognizes at least three other indicators of active procurement: a) isolating the testator and disparaging family members; b) mental inequality between the decedent and the beneficiary; and c) the reasonableness of the will or trust provisions. This article analyzes the case law surrounding these additional factors to assist practitioners in fully developing a case for or against undue influence.

And here's how David goes on to introduce each of these factors:

Isolating the Testator and Disparaging Family Members
As early as 1919, the Florida Supreme Court found undue influence where a beneficiary purposefully isolated the decedent by denying access to family and friends, with hopes of breaking down whatever ties of affection existed between the decedent and his family and friends.9 In Newman v. Smith, 82 So. 2d 236 (Fla. 1919), a beneficiary of a will had intercepted letters and telegrams sent to the decedent by his daughter, ignored all requests contained within them, and responded only to prevent the decedent’s daughter from visiting the decedent.10 The beneficiary’s isolation of the decedent denied the daughter all access to the decedent, such that “the ties of fatherly affection [were] destroyed.”11 The court stated that based on these facts, it would have invalidated the will on the grounds of undue influence alone without any evidence of lack of testamentary capacity.12

Mental Inequality Between the Decedent and the Beneficiary
Florida courts have considered the inequality of mental acuity between the decedent and beneficiary to determine whether a will was procured by undue influence. Although this factor is similar to the issue of voiding a will for lack of testamentary capacity, it differs in that it assumes the decedent does have testamentary capacity, but is weak-minded and, therefore, easily influenced. Essentially, the factor compares the decedent and the influencer rather than merely evaluating the testamentary capacity of the decedent.

Reasonableness of the Will or Trust Provisions
A sometimes obvious sign of undue influence in the procurement of a will or trust is the instrument itself. The 1919 case of Newman v. Smith, discussed earlier, stated that a suspicion of undue influence was inevitable because the will seemed to contradict, ignore, and disregard the promises and assurances made by the decedent to his needy child, yet provided substantial bequests to an “affluent wife, held in slight regard.”47 In Newman, the decedent had promised and assured his beloved daughter that he would provide for her upon his death and had an original will reflecting such intent.48 However, this “equitable, rational, and just” will was replaced by a subsequent will which disinherited the daughter and devised all of the decedent’s property to his affluent wife.49 The Florida Supreme Court stated that a will should not be revoked “merely because it is unreasonable and unjust.” However, where “it does violence to the natural instincts of the heart, to the dictates of fatherly affection, to natural justice, to solemn promises, to moral duty, such unexplained inequality and unreasonableness is entitled to great influence in considering the question of testamentary capacity and undue influence.”50 The court also stated “[i]n doubtful cases the reasonableness or not of a will, in its various provisions is entitled to great weight.”51

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Geary v. Butzel Long, P.C., --- So.3d ----, 2009 WL 1606034 (Fla. 4th DCA Jun 10, 2009)

In the commercial litigation context F.S. § 57.105 is a powerful tool for curbing abusive litigation tactics: if you engage in bad faith or frivolous litigation, not only will you eventually lose, you’ll also end up paying the other side’s legal fees. This is a commonly-used device that everyone knows about and has been the subject of multiple Florida Bar Journal articles [click here, here, here, here]. F.S. § 57.105 also occasionally pops up in the probate-litigation context [click here].

What’s often overlooked is that Florida’s probate code provides a similar remedy that’s just as powerful, but doesn’t require you to jump through any of the procedural hoops built into F.S. § 57.105. In both F.S. § 733.106(4) and F.S. § 733.6175(2), a probate judge is given the express statutory authority to determine from whose share of the estate attorneys fees incurred in frivolous or bad faith litigation will be paid. You might want to go this route in lieu of a personal judgmenet for fees against a bad actor under F.S. § 57.105 because you don't have to worry about collecting on your judgement: the probate-code route allows you to simply go after assets already available and subject to the court's authority as part of the probate estate.

Here's how the 4th DCA explained the law on when a probate judge can shift the winning side's attorney's fees against one of the estate's beneficiaries for frivolousness:

In In re Estate of Lane, 562 So.2d 352 (Fla. 4th DCA 1990), we examined the propriety of a probate court's order assessing attorney's fees from a will contest proportionally against the specific beneficiaries as well as the residuary estate. We noted that section 733.106(4), Florida Statutes, permits the court to direct from what part of an estate a fee assessment shall be paid (just as section 733.6175(2) does). However, we explained:

This section does not give the trial court unbridled discretion to award fees from any part of the estate. Before the trial court may assesses fees against a beneficiary's share of an estate there must be a finding of bad faith or wrongdoing by the beneficiary or other circumstances which would warrant such an assessment.

Id. at 353. Despite our use of “bad faith and wrongdoing,” we relied on and agreed with Cohen v. Schwartz, 538 So.2d 922 (Fla. 3d DCA 1989), in which the court suggested that in trying to close a prolonged estate, the trial court could assess attorney's fees against a beneficiary's portion of the estate for frivolous litigation consistent with section 733.106(4). We agree that if the litigation pursued is frivolous, then the court would have the authority under that section to assess fees against a specific beneficiary's portion of the estate.

The trial court found that the fees incurred in pursuing the fees on fees litigation constituted essentially frivolous litigation and were unreasonably incurred. Therefore, it acted within its discretion to apportion the fees for that litigation to Geary. However, the court did not make a finding that the personal representative engaged in frivolous litigation in its initial defense to Butzel Long's motion for fees and seeking disgorgement of fees paid. To the contrary, it noted that that defense may have been justified. It found only that the fees on fees litigation, which pushed the fees and costs awarded to Butzel Long from $19,000 to $49,000 (and subsequently even more), was unreasonable and unnecessary. Therefore, while the court could properly assess the fees on fees litigation against Geary, it should not have imposed the initial $19,000 for the fees litigation on Geary's share of the estate without a finding of wrongful conduct, bad faith, or frivolousness.

Lesson learned? Think 57.105 motion.

First, if you look over the Florida Bar Journal articles explaining F.S. § 57.105 you’ll see that the standard for determining what constitutes “frivolous” litigation in that context is identical to the frivolity standard applied under F.S. § 733.106(4) and F.S. § F.S. 733.6175(2).

Second, a probate judge can’t shift fees for frivolous litigation unless its order contains specific findings of fact establishing “wrongful conduct, bad faith, or frivolousness.” Again, this “specific findings” requirement is identical to that required under F.S. § 57.105.

Bottom line, given that there are very few appellate-court decisions discussing when and how to apply F.S. § 733.106(4) and F.S. § F.S. 733.6175(2) to curb wrongful conduct, bad faith, or frivolousness in the probate-litigation context, looking to cases discussing F.S. § 57.105 makes sense; also, “framing” the issue for your probate judge as being analogous to a “57.105 motion” is probably the best short-hand way of making clear to your judge exactly what kind of remedy you’re looking for and why. Your judge may not be all that familiar with the ins and outs of fee-shifting under F.S. § 733.106(4) and F.S. § F.S. 733.6175(2), but he or she will almost certainly know exactly what you’re talking about the moment you say, “judge, this is like a 57.105 motion.”

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Herrilka v. Yates, --- So.3d ----, 2009 WL 1531772 (Fla. 4th DCA June 03, 2009)

Homestead property is something probate lawyers deal with in almost every estate-administration  proceeding, but it's NOT a probate asset. This disconnect is a source of never-ending client consternation and attorney heartburn. The linked-to case is a prime example.

In this hotly-contested estate the court appointed a curator and this curator set about doing what curators do. Apparently there wasn't enough cash in the estate to pay for this work, so the curator asked the judge (who had appointed her) to please put a lien on what may have been the decedent's single most valuable asset - his homestead property - to pay her fees. The court obliged her . . .  and was reversed on appeal.

The probate court's order was reversed for two reasons: [1] the decedent's alleged spouse occupied the house at all times - so the curator never actually took possession of the property (strike one); and [2] the curator's work related to general estate-administration matters - not preserving the homestead property (strike two). The statute governing this dispute is F.S. 733.608, and the 4th DCA does an excellent job of explaining it:

The trial court's decision to impose the lien pursuant to section 733.608 was improper because, in accordance with the plain meaning of the statute, Yates failed to meet its requirements. This is because: (1) Yates has not, and cannot, take possession of the property, as it is occupied by an “interested person;” and (2) the fees incurred by Yates for which the lien was imposed were not incurred for the purpose of preserving, maintaining, insuring, or protecting the homestead property.

With respect to section 733.608, subsection (3) allows for imposition of a lien on “property referenced in subsection (2).” § 733.608(3). The property referenced in subsection (2) is “protected homestead” that “is not occupied by a person who appears to have an interest in the property” which the personal representative has “take[n] possession of ... for the limited purpose of preserving, insuring, and protecting it for the person having an interest in the property.” Id. § 733.608(2). For purposes of probate litigation, the Florida Legislature has defined an “interested person” as “any person who may reasonably be expected to be affected by the outcome of the particular proceeding involved.” Id. § 731.201(23). In order to impose a lien, section 733.608(3) also requires that the “expenditures and obligations incurred,” which include “fees and costs,” for which the lien is imposed were incurred for the purpose of “preserv[ing], maintain[ing], insur[ing], or protect[ing]” the homestead property.

In this case, the trial court erred in imposing the lien because the homestead property was never taken into possession, either legally or factually, by Yates, as Constance still occupies it. This failure to take possession negates a claim for the imposition of the lien because, to do so, section 733.608 first requires that the personal representative take possession of the property “for the limited purpose of preserving, insuring, and protecting it.” § 733.608(2). Furthermore, Yates cannot legally take possession of the property because it is “occupied by a person who appears to have an interest in the property,” id., i.e., Constance. Constance is an “interested person” because, by potentially being Joseph's surviving spouse and joint owner of the property, as well as being the property's current occupant, she is a “person who may reasonably be expected to be affected by the outcome of the particular proceeding involved.” Id. § 731.201(23).

Even if Yates met the threshold possession requirement of section 733.608, the lien was still not properly imposed. This is because the expenses the lien represents were incurred for legal services having to do with the administration of the Estate. The services, as required by section 733.608(3), were not incurred for the specific purpose of preserving, maintaining, insuring, or protecting the homestead property.

Accordingly, the imposition of the lien was improper because it failed to meet the requirements of section 733.608. We, therefore, reverse its imposition.

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