Temporary injunctions or “freeze” orders are supposed to simply maintain the status quo, but often who wins or loses this battle can determine the ultimate outcome of a trust case. Why? Because when done “right,” a probate judge’s order either denying or granting a temporary injunction signals very early on in the process how he or she, as judge, is weighing the strengths and weaknesses of your case. This kind of signaling is especially significant in trust litigation because these cases are almost always tried as bench trials. In other words, the same fact finder deciding your injunction motion is going to ultimately decide your case at trial. So yeah, knowing which way your judge is leaning early on is really important. For more on the signaling theory swirling around freeze orders you’ll want to read Signaling, Learning and Screening Prior to Trial: Informational Implications of Preliminary Injunctions.
What’s it take for a probate judge to properly enter a temporary injunction or “freeze” order in trust litigation?
Last year I wrote here about McKeegan v. Ernst, a 4th DCA opinion that’s significant for trusts and estates litigators because it confirms that the traditional standards controlling the issuance of freeze orders apply in trust litigation. In other words, to do it right, your judge is required to enter detailed findings of fact based on evidence (not just legal briefs or argument of counsel) before granting a freeze order.
We now have two more decisions, one from the 2d DCA and a second from the 5th DCA, arriving at the same conclusion. What’s important about these decisions is that they’ll hopefully put the brakes on the almost haphazard manner freeze orders are sometime granted. Dispensing with the need for an order containing detailed findings of fact based on evidence before granting a freeze order may be expedient for the judge, but it actually makes litigating these cases harder and more expensive for everyone else.
Saunders v. Butler, — So.3d —-, 2013 WL 514057 (Fla. 2d DCA February 13, 2013)
In this case the plaintiff filed a “verified” motion for ex parte injunction seeking, among other things, to freeze the assets of a contested trust. The first issue on appeal was whether a verified motion, which is analogous to a sworn affidavit, all by itself is enough to grant a freeze order, or if an evidentiary hearing is necessary as a matter of law. According to the 2d DCA, a verified motion is all you need:
First, Mr. and Mrs. Saunders argue that the trial court did not have the sufficient evidence to allow it to issue an emergency ex parte, temporary injunction. We disagree. Mr. and Mrs. Saunders argue that the trial court had no factual basis to enter the injunction because the complaint was not verified and no evidentiary hearing was held. Contrary to the representations made at oral argument by counsel for Mr. and Mrs. Saunders, the trial court did have sworn testimony to consider in the form of the verified motion for the ex parte injunction. These allegations are sufficient to provide the trial court with a factual basis on which to enter the emergency temporary, ex parte injunction. . . . We therefore conclude that Mr. and Mrs. Saunders are not entitled to relief based on this argument.
The probate judge may have gotten away with just relying on a verified motion and foregoing the trouble of actually taking evidence at an evidentiary hearing, but there’s no getting around the “detailed” factual findings a freeze order’s required to contain. It’s this transparency that assures the parties the judge actually considered all of the elements necessary to grant a freeze order (which is supposed to be an extraordinary measure granted only when absolutely needed) — and it’s this same transparency that’s so important to the party’s early understanding of which way their judge is leaning in the case. Skip this step and the order’s fatally flawed as a matter of law; but more importantly, the order loses all value in terms of “signaling” your judge’s initial assessment of the case (which makes settling the case harder/more expensive for all concerned).
Mr. and Mrs. Saunders also argue, however, that the trial court’s order is deficient in that it fails to make factual findings as to each of the four elements the moving party must establish in order to obtain a temporary injunction. With this argument, we must agree. See Randolph v. Antioch Farms Feed & Grain Corp., 903 So.2d 384 (Fla. 2d DCA 2005). As noted in Randolph, the trial court has an “obligation to state sufficient factual findings in support of each element entitling a party to a temporary injunction.” Id. at 385. Like the order in Randolph, the order on review in the instant case “omits any recitation of facts justifying a finding (1) that the plaintiff [ ] will suffer irreparable harm absent the entry of the injunction; (2) that no adequate legal remedy exists; (3) that the plaintiff[ ] enjoy[s] a clear legal right to the relief sought; and (4) that the injunction will serve the public interest.” Id. This omission of factual findings by the trial court requires us to reverse the injunction and remand for further proceedings. On remand, the trial court must either make the factual findings required or dissolve the injunction. See Seashore Club of Atl. City, Inc. v. Tessler, 405 So.2d 767, 768 (Fla. 4th DCA 1981).
After ruling in favor of the appellants, the 2d DCA then goes on to imply the expense and delay of the appeal could have been avoided if they had immediately filed and litigated a motion to dissolve the flawed freeze order.
We note that had the motion to dissolve the temporary injunction been filed and litigated immediately after the entry of the injunction in May 2011, many of the issues raised on appeal already would have been resolved.
I’m not so sure I agree with this advice. For the reasons explained in the 5th DCA’s opinion discussed below, sometimes a motion to dissolve a freeze order in lieu of an immediate appeal can result in a waiver of your defenses.
McKinnon v. Weinstein, — So.3d —-, 2013 WL 3237839 (Fla. 5th DCA June 28, 2013)
Appeals are expensive, so you don’t want to file one unless you really have to. Here’s the problem, sometimes it’s not 100% clear if you need to appeal or if your order is even appealable. What to do? If the stakes are high enough, when in doubt, appeal. If you don’t you may end up waiving a valid defense. That’s what happened in this case.
On appeal the 5th DCA makes clear the underlying freeze order is fatally flawed, but also makes just as clear that failure to appeal the order in the first instance means the objecting party waived its arguments. It’s this risk of waiver that makes the “motion to dissolve” advice at the end of the 2d DCA’s opinion risky. What to do? Make sure your client – not you as his attorney – assume this risk. If the client wants to be absolutely sure objections to an improper freeze order aren’t waived, he’ll pay for the appeal; if the client believes the costs of filing a protective appeal outweigh the risks of waiver, that’s OK too. Bottom line, it’s all good as long as the client is given the opportunity to make an informed decision about the pros and cons of going with the “motion to dissolve” advice at the end of the 2d DCA’s opinion above or filing an immediate appeal to avoid the risk of waiver explained below by the 5th DCA.
Appellant, Mollie McKinnon, is the trustee of the Veronica A. Weinstein Irrevocable Living Trust (“Trust”). Appellees filed suit below seeking to force the trustee to distribute assets, which they claim to be due to them from the Trust. Following a hearing on the matter, the trial court issued an order essentially freezing all Trust assets indefinitely, until it could conduct further proceedings to sort out the parties’ claims. The order, which both parties characterize as a temporary injunction, does not contain any findings that would support an injunction, and does not require the posting of any type of bond. And, although neither party requested the injunction, neither party appealed from the order. Instead, McKinnon later filed a motion with the trial court, arguing that the injunction should be set aside because it was improperly entered. When the trial judge denied that motion, McKinnon appealed from the later denial order in an improper attempt to belatedly challenge the original injunction order. See, e.g., Betancourt v. Estate of Misdraji, 13 So.3d 489 (Fla. 3d DCA 2009) (declining to consider issues raised on appeal from denial of successive petition to re-open estate when same issues had been decided in prior orders from which moving party had not appealed); Ferguson v. Ferguson, 921 So.2d 796 (Fla. 5th DCA 2006) (holding that former husband was not entitled to evidentiary hearing on petition to modify alimony where he failed to demonstrate substantial change in circumstances since entry of a prior order denying modification of alimony from which he did not appeal); M.G. v. State, 711 So.2d 1377 (Fla. 1st DCA 1998) (holding that mother’s failure to appeal prior contempt order precluded her challenge to prior order in appeal from later order entered based upon prior contempt order).
Because McKinnon did not appeal from the injunction order, we will not consider the propriety of that order on appeal.