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

Texas probate litigator J. Michael Young wrote here on his Texas Probate Litigation Blog about a recently published AARP research piece entitled Power of Attorney Abuse: What States Can Do About It. Here's an excerpt:

The primary goal of this report is to inform state legislators, policymakers, practitioners, and advocates about the [Uniform Power of Attorney Act (UPOAA), click here]. provisions that protect against POA abuse and promote autonomy, and to support enactment efforts within the states. The secondary goal is to offer legal professionals information about their own state's law and the laws of other states. The latter information may foster inclusion of additional protections in the POA those professionals draft for clients, as well as inform advocacy efforts by the-state bar association or other organizations.

Toward those goals, this report highlights the problem of PO A abuse, explains why the UPOAA was developed, and identifies and discusses the UPOAA provisions related to protecting against POA abuse and promoting autonomy. It provides a series of charts that compare the state POA laws in effect on December 31, 2007, to each relevant provision of the UPOAA, as well as a master chart for all provisions. Finally, the report's appendixes include tips for advocates who desire to promote adoption of the UPOAA provisions in their state, a document titled "Why States Should Adopt the Uniform Power of Attorney Act (2006)," and a chart of citations to state POA laws.

Last year the UPOAA reporter, Prof. Linda Whitton of Valparaiso University - Law School, published an excellent article discussing the perceived shortcomings of current power-of-attorney statutes and how the UPOAA addresses those issues. Entitled The New Uniform Power of Attorney Act: Balancing Protection of the Principal, the Agent, and Third Persons, it's another solid resource for anyone working on a particularly thorny power-of-attorney matter.

Why read this stuff? Issue spotting, issue spotting, issue spotting . . .

It doesn't matter if you're an estate planner or probate litigator, spotting the issues most relevant to your client's interests is how we really add value as lawyers. The linked-to materials highlight the planning and litigation issues to think about in connection with powers of attorney, be it up front in the planning stage or at the back end when fraud or abuse is detected.

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Five Points Health Care, Ltd. v. Mallory, --- So.2d ----, 2008 WL 5411834 (Fla. 1st DCA Dec 31, 2008)

Under Florida law an attorney-in-fact's authority is limited solely to actions "specifically enumerated in the durable power of attorney." F.S. 709.08(7)(a). Sounds simple enough. But the question courts have to grapple with is how specific does the enumerated grant of authority in the durable power of attorney (DPOA) have to be?

With respect to arbitration agreements, the 2d DCA has recently come out at both ends of the spectrum. In January of 2008 the 2d DCA ruled in In re Estate of McKibbin that a specific reference to the arbitration agreement in the DPOA was needed. Having apparently experienced a change of heart, a few months later in September of 2008 the 2d DCA basically reversed itself, ruling in Jaylene, Inc. v. Moots that a general grant of authority in the DPOA was all you need.

My guess is that most Florida appellate courts will err on the side of enforcing arbitration agreements whenever they can. So I expect they'll enforce arbitration agreements executed under broadly-stated grants of authority in DPOA's more often than not. And that's exactly what happened in the linked-to opinion.

In the linked-to opinion the 1st DCA described the key provisions of the contested DPOA as follows:

The nursing home admission agreement which contained the arbitration clause was signed by Carlene Mallory under the durable power of attorney (POA) granted her by her mother. The “Durable Power of Attorney” signed by Alfreda Mallory a year before she was admitted to the nursing home stated, in part:

All acts done by my attorney-in-fact pursuant to this power shall bind me, my heirs, devisees and personal representatives; provided, however, that all such acts performed hereunder shall be for my benefit only and not for the benefit of my attorney-in-fact.

The POA listed seventeen paragraphs specifying the powers of the attorney-in-fact, one of which stated that the attorney-in-fact was authorized to: “Prosecute, defend and settle all actions or other legal proceeding touching my estate or any part of it or touching any matter in which I may be concerned in any way.” The seventeenth paragraph authorized the attorney-in-fact to: “Do anything regarding my estate, property and affairs that I could do for myself.” 

Based on the foregoing, and relying in part on the 2d DCA's McKibbin decision, the trial court ruled that because the DPOA didn't contain a specific reference to arbitration agreements, the contested arbitration clause was unenforceable.  The 1st DCA reversed, basing its analysis on the less stringent standard applied in the 2d DCA's Jaylene opinion:

[W]e find persuasive Jaylene, Inc. v. Moots, 2008 WL 4181140 (Fla. 2d DCA Sept. 12, 2008), in which the Second District Court of Appeal declined to follow its prior opinion in McKibbin, noting that “the opinion in McKibbin does not set forth the language of the power of attorney under review in that case” and “is not controlling here where the POA unambiguously makes a broad, general grant of authority to the attorney-in-fact.” Id. at p. 3. In Jaylene, the court reversed an order denying a motion to compel arbitration in circumstances similar to the case at issue.

.  .  .  .  .

We note that the trial court did not have the benefit of the opinion in Jaylene when it entered its order. Nevertheless, we find the reasoning in that opinion persuasive, and we find that the POA at issue is sufficiently similar to the POA at issue in that case to warrant application of that reasoning to the case at issue.

The order denying the motion to compel arbitration is REVERSED and the case is REMANDED for further proceedings.

Lesson learned?

I have no doubt that the specific context of this case and others addressing the enforceability of arbitration agreements signed by attorneys-in-fact operating under DPOA's is significant. Which means you need to be careful when looking to these opinions in the types of cases probate lawyers usually run into as part of their practice: DPOA's being used to change estate planning documents [click here] or change life-insurance beneficiary designation forms [click here, here] or otherwise defraud elderly clients [click here]. In those cases I expect you'll find appellate courts will demand a much higher level of specificity in terms of the authority granted under the DPOA.

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Jaylene, Inc. v. Moots, --- So.2d ----, 2008 WL 4181140 (Fla. 2d DCA Sep 12, 2008)

It's not uncommon for intermediate-level appellate courts to disagree with each each other, that's why we have supreme courts.  But here's something you don't see every day: the 2d DCA disagreeing with itself by ruling two different ways on the same issue within a single 12-month period. 

In January 2008 the 2d DCA reversed a trial judge's order in In re Estate of McKibbin [click here] holding that a decedent's estate was NOT bound by an arbitration agreement signed prior to her death by her attorney-in-fact because the power of attorney did not specifically grant the attorney-in-fact authority to enter into an arbitration agreement.  Fast forward to the current linked-to opinion: the 2d DCA reversed a trial judge's order by basically ignoring its own prior opinion (trial courts in the 2d Circuit must love this).  This time around the 2d DCA held that a decedent's estate IS bound by an arbitration agreement signed prior to her death by her attorney-in-fact, in the absence of specif arbitration authority, based on general language contained in the decedent's power of attorney.  Here's how the 2d DCA explained its current ruling:

.  .  .  In the POA, the principal gave the attorney-in-fact “full power and authority to act on my behalf.” This full power and authority extended to include the authority “to manage and conduct all of my affairs and to exercise all of my legal rights and powers.” The POA provided further that it was to “be construed broadly as a General Power of Attorney.” The POA unequivocally expresses the principal's intent to make a comprehensive grant of authority to the attorney-in-fact. We conclude that the grant of authority in the POA was broad enough to authorize the attorney-in-fact to consent to arbitrate claims arising out of the Agreement. See Bryant, 937 So.2d at 269.

Ms. Moots correctly points out that the power of attorney under review in the Bryant case specifically authorized the attorney-in-fact to agree to arbitration. Id. at 268. Here, the power to consent to arbitrate the principal's claims was not one of the powers specifically listed in the extensive list of powers explicitly granted. Nevertheless, the POA also provided that “[t]he listing of specific powers is not intended to limit or restrict the general powers granted in this Power of Attorney in any manner.” (Emphasis added.) In light of this provision, Ms. Moots' argument that the absence of an express grant of authority to arbitrate in the POA compels a restrictive interpretation precluding the authority to consent to arbitration is unpersuasive.

 When the 2d DCA was reminded of it's own prior opinion, the court brushed it aside as follows:

In support of affirmance, Ms. Moots relies on this court's decision in McKibbin v. Alterra Health Care Corp. (In re Estate of McKibbin), 977 So.2d 612 (Fla. 2d DCA 2008). In McKibbin, the resident at an assisted living facility did not sign the residency agreement that included an arbitration agreement. Id. at 613. Instead, the resident's son signed on his mother's behalf under a durable power of attorney from the resident. Id. The McKibbin court noted the limitations of the power of attorney under review in that case as follows:

Nothing in that power of attorney, however, gave Ms. McKibbin's son the legal authority to enter into an arbitration agreement on behalf of his mother. See Kotsch v. Kotsch, 608 So.2d 879, 880 (Fla. 2d DCA 1992) (holding that powers of attorney are strictly construed to grant only the powers specified). Furthermore, there was no other basis upon which to bind Ms. McKibbin to the arbitration agreement. Hence, the Estate was not bound to arbitrate....

Id. For this reason, the McKibbin court held that the circuit court erred in granting Alterra's motion to compel arbitration. Id.

However, McKibbin does not compel a different result here. The McKibbin case is controlling only to the extent that it is possible to determine from the court's opinion that the power of attorney at issue in that case was similar to the POA held by Ms. Moots. See Shaw v. Jain, 914 So.2d 458, 461 (Fla. 1st DCA 2005). But the opinion in McKibbin does not set forth the language of the power of attorney under review in that case. Id. Thus McKibbin is not controlling here where the POA unambiguously makes a broad, general grant of authority to the attorney-in-fact.

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In re Estate of McKibbin, --- So.2d ----, 2008 WL 161322 (Fla. 2d DCA Jan 18, 2008)

This case is yet another example of the distinction between the agency-law principals governing power-of-attorney disputes, versus the fiduciary-law principals governing trustee and personal-representative disputes.  This distinction is significant and goes a long way towards understanding how Florida's appellate courts have consistently interpreted Florida law governing powers of attorney.

Florida law is clear: an attorney-in-fact's authority is limited solely to actions "specifically enumerated in the durable power of attorney." F.S. 709.08(7)(a). This authority is much narrower than the general scope of authority granted to personal representatives and trustees [click here for past examples].

In the linked-to case the issue was whether a decedent's estate was bound by an arbitration agreement signed prior to her death by her son and attorney-in-fact.  Nothing in the power of attorney granted the attorney-in-fact authority to enter into an arbitration agreement.  Unfortunately this point was lost on the trial-court judge, who ruled the arbitration agreement was binding.  The 2d DCA explained its rationale for reversing the trial-court's ruling as follows:

Ms. McKibbin's son presented a durable power of attorney to Alterra to demonstrate that he had the legal authority to enter into the residency agreement on behalf of his mother. Nothing in that power of attorney, however, gave Ms. McKibbin's son the legal authority to enter into an arbitration agreement on behalf of his mother. See Kotsch v. Kotsch, 608 So.2d 879, 880 (Fla. 2d DCA 1992) (holding that powers of attorney are strictly construed to grant only the powers specified). Furthermore, there was no other basis upon which to bind Ms. McKibbin to the arbitration agreement. Hence, the Estate was not bound to arbitrate, and the trial court erred in granting Alterra's motion to compel binding arbitration. See id.; Regency Island Dunes, Inc. v. Foley & Assocs. Constr. Co., 697 So.2d 217, 218 (Fla. 4th DCA 1997) (“One who has not agreed, expressly or implicitly, to be bound by an arbitration agreement cannot be compelled to arbitrate.”). Accordingly, we reverse the trial court's order granting the motion to compel binding arbitration.

Lesson learned?

If you're an estate planner, you want to make sure the powers of attorney you draft explicitly authorize those actions that are most important to your clients.  If you're a litigator, the starting and end point of your case will be the actual text of the power of attorney.  If the disputed action is not expressly authorized by the text of the power of attorney, chances are it's not legally binding.

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Gurfinkel v. Josi, --- So.2d ----, 2007 WL 4322156 (Fla. 3d DCA Dec 12, 2007)

Probate litigation involving powers of attorney seem to always revolve around whether the attorney in fact acted outside the scope of authority granted by the instrument [click here, here for past examples].  This case is yet another variation on the same theme.  Here the issue was whether the attorney in fact was authorized to amend the settlor's revocable trust effectively disinheriting two of the settlor's three children.  The trial court said "yes," the 3d DCA said "no way."

Simply figuring out what to focus on in any type of litigation - including contested probate proceedings - is half the battle.  In probate litigation involving powers of attorney, focus is everything.

1.  POA v. Revocable Trust: Focus on the Trust Agreement:

If the dispute revolves around the use of a POA to amend or revoke a trust agreement, don't let yourself get sucked into a battle over whether or not the POA is valid, the product of undue influence, lack of capacity, blah, blah, blah.  Stay focused on the trust agreement!  In this case, the trial court ruled that a POA could be used to amend a trust agreement . . . even though the express language of the trust agreement said that was a definite "no-no."  Here's how the 3d DCA explained its reversal of the trial court on this point:

In this case, the Trust expressly reserves the right to amend or withdraw assets from the Trust to the grantor. Article VI, Paragraph E, further prohibits any “conservator,” “guardian,” or “any other person” from exercising these rights during the lifetime of the grantor. (Emphasis added.) The language of the reservation and prohibition in this case are very similar to those considered by the First District Court of Appeal in Mann v. Cooke, 624 So.2d 785, 786-87 (Fla. 1st DCA 1993). Although the prohibition in Mann also included an “attorney-in-fact” among those prohibited from exercising the rights of the grantor during his lifetime,[FN1] we find that to be a distinction without a difference. As in Mann, we conclude the prohibition in this case “unambiguously provides that the holder of a durable power of attorney cannot withdraw trust funds.” Id. at 787.


[FN1.] The prohibition treated in Mann reads: “Neither a conservator, attorney in fact, nor a guardian of the Grantor, nor any person other than Grantor may exercise any of the rights reserved to Grantor by the provisions of this Article.” Mann, 624 So.2d at 787 (emphasis added).

2.  ANY contested POA: Focus on F.S. 709.08:

What is often overlooked in litigation involving POAs is that under F.S. 709.08 the authority granted by a POA is very narrow.  In other words, under F.S. 709.08 an attorney is usually NOT authorized to take action (such as amending a revocable trust) unless the POA expressly says you CAN do it [click here for prior example of same point].  So if the POA is being challenged, focusing on the F.S. 709.08 makes sense.  Here's on the 3d DCA made this point in the linked-to case:

Josi argues that Paragraph 16 of the Durable Power of Attorney condones his father's attempt to amend the Trust. We disagree. Just as the power to revoke or amend a trust must be exercised in strict conformity with the terms expressed in the instrument, see MacFarlane, 203 So.2d at 60, authorizations conferred through powers of attorney likewise must strictly conform. See § 709.08(7)(b)(5), Fla. Stat. (1999) (providing that an attorney-in-fact acting under a Durable Power of Attorney may not “[c]reate, amend, modify, or revoke any document or other disposition effective at the principal's death or transfer assets to an existing trust created by the principal unless expressly authorized by the power of attorney ....”) (emphasis added); James v. James, 843 So.2d 304, 308 (Fla. 5th DCA 2003) (“In general, an agent cannot make gifts of his principal's property to himself or others unless it is expressly authorized in the power .”) (emphasis added); Vaughn v. Batchelder, 633 So.2d 526, 528 (Fla. 2d DCA 1994); Kotsch v. Kotsch, 608 So.2d 879, 880 (Fla. 2d DCA 1992); De Bueno v. Alejandro Bueno Castro, A.B.P., Inc., 543 So.2d 393, 394 (Fla. 4th DCA 1989); Bloom v. Weiser, 348 So.2d 651, 653 (Fla. 3d DCA 1977) (“[T]he instrument will be held to grant only those powers which are specified.”).

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Liberty Life Assur. Co. of Boston v. Miller, 2007 WL 4233547 (S.D.Fla. Nov 29, 2007)

This case is helpful because it provides an example of a power-of-attorney (POA) that authorized the attorney in fact to change the named beneficiary of an insurance policy.  All of the Florida cases I've written about lately involved POAs being used to take action NOT authorized by the instrument [click here, here, here, here].

So what does the POA have to say to authorize the attorney in fact to change an insurance policy beneficiary designation form?  Glad you asked.  Here's your answer:

Construction of a durable power of attorney is a matter of law. Spoerr v. Manhattan Natl. Life Ins. Co., 2007 WL 128815 (S.D.Fla.2007). In construing a power of attorney the court must look at the language of the instrument in order to ascertain its object and purpose. Id. However, power of attorneys are strictly construed. Id. And, only the principal's intent is considered when construing the power of attorney, not the agent's intent. Kotsch v. Kotsch, 608 So.2d 879 (Fla.App. 2 Dist.1992).


First, the Decedent intended to give broad powers to Mrs. Miller as his attorney-in-fact. Under paragraph 4 of the power of attorney, labeled “No Limitation on Attorney-In-Fact's Powers,” the Decedent states that he “intend [s] to give [his] Attorney-in-Fact the fullest powers possible, including all powers set forth in Florida Statute Section 709.08 as now in effect or hereafter enacted, and [he] [does] not intend, by the enumeration of [his] Attorney-in-Fact's powers to limit or reduce them in any fashion.” (Durable Power of Att'y ¶ 4.) Here, the Decedent expressed his desire to relay to Mrs. Miller all the powers that he could possibly give her. ( Id.)

The Decedent specifically states that he intends to give her the full extent of powers under available pursuant to 709.08. ( Id.) Among the powers available pursuant to 709.08, is the power to “amend or modify any document or other disposition effective at the principal's death.” § 709.08(7)(a). This power is only available if the decedent expressly authorized his attorney in fact, Mrs. Miller, to use that power. See § 709.08(7)(a). Therefore, the powers are available because he expressly states that he intends to give Mrs. Miller the full powers available under 709.08, (Durable Power of Att'y ¶ 4.), and the power to change beneficiaries under his insurance policy is one of the powers available under 709.08. § 709.08(7)(a).

Furthermore, under the section entitled “Management and Contracting Powers,” the Decedent expressly authorizes Mrs. Miller to alter, insure, and in any manner deal with any real or personal property tangible or intangible and any interest therein. (Durable Power of Att'y ¶ E.) He further authorized Mrs. Miller under this same section to improve, manage and insure intangible property that he owns “upon such terms and conditions as the Attorney in Fact shall deem proper.” ( Id.) And, under section P, “Special,” the Decedent declares that he gives his attorney in fact the full power of substitution, in other words, the full power to do and perform every act necessary and convenient to be done as if he were still personally present. (Durable Power of Att'y ¶ P.)

The Decedent clearly intended to give his attorney-in-fact, Mrs. Miller, the full extent of the powers that he could give her. The Decedent granted Mrs. Miller the “fullest powers possible” pursuant to Florida Statute Section 709.08, which he did not intend to limit by enumerating further power. Therefore, his intent was clear, and strictly construing this contract, we must conclude that the Decedent intended to authorize Mrs. Miller to be able to change the named beneficiary on the insurance policy. Because there is no genuine issue of material fact and the law indicates that Mrs. Miller was authorized to change the named beneficiary on the Decedent's insurance policy, summary judgment shall be granted in favor of Mrs. Miller and the Estate of the Decedent is entitled to the proceeds of the Decedent's insurance policy.

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Forman v. State Dept. of Children & Families, 2007 WL 601628 (Fla. 4th DCA Feb 28, 2007)

Sometimes it's good to review the basics, like needing a license to practice law.  And no, a power of attorney wont cut it.  The fact that we need an appellate opinion to make this point should probably be troubling.  But here we are . . .

Mrs. Forman's daughter, Sara Leftow, has filed a brief on behalf of her mother. It appears that Ms. Leftow is acting under a power of attorney to proceed on her mother's behalf. Ms. Leftow's brief raises valid points of concern.

However, pleadings filed by a non-lawyer on behalf of another are a nullity. See Torrey v. Leesburg Reg'l Med. Ctr., 769 So.2d 1040, 1043 (Fla.2000). The same rule applies to briefs filed in this court. Ms. Leftow's power of attorney to act on her mother's behalf authorizes her to act as her mother's agent, not as her mother's attorney at law. See Hodges v. Surratt, 366 So.2d 768, 773 (Fla. 4th DCA 1979); Pryor v. King, 485 So.2d 28, 29 (Fla. 1st DCA 1986) (holding that trial court was correct in not allowing appellant's wife, who was armed with appellant's power of attorney, to represent him in a quiet title action).


The Florida rule declaring a non-lawyer's pleadings filed on behalf of another to be a nullity is the product of the state's policy against the unauthorized practice of law. See Torrey, 769 So.2d at 1043.

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Spoerr v. Manhattan Natl. Life Ins. Co., 2007 WL 128815 (S.D.Fla. Jan 12, 2007)

I've written previously about the probate-litigation issues lurking at the end of many divorces (see here).  Case in point: receipt of life insurance proceeds by ex-spouse.  That's what the linked-to case is about: ex-husband was the named beneficiary of a life insurance policy on his ex-wife.  Ex-wife executed a durable power of attorney ("POA") designating her son as her attorney-in-fact.  Son used the POA to change the beneficiary designation form on his mom's life insurance policy.  When mom died, the insurance company paid son $250,445.80.  Dad found out and sued everyone in sight to get his hands on the insurance money.

Probate disputes involving conflicting claims to life insurance proceeds are common.  There are three aspects of this case that I find most interesting.

1.    Increased federal jurisdiction over probate disputes.

Although not technically a dispute involving the decedent's probate administration, the litigation at issue in the linked-to case is part and parcel of the big picture involving who gets what after mom died.  The fact that this particular piece of the litigation ended up in court (diversity jurisdiction) may mean nothing, or could be another example of the increased "federalization" of trust-and-estates litigation predicted by those following the U.S. Supreme Court's decision in Marshall v. Marshall, and written about recently in Marshall v. Marshall -- Rashomon Revisited, Prob. & Prop., Jan./Feb. 2007.

2.   The scope of authority conveyed in a Durable Power of Attorney

Abuse and exploitation of the elderly by means of durable powers of attorney is an often-written about problem (see here).  In the linked-to case, the court ruled that son's use of his mom's POA to change the beneficiary designation on her life insurance policy was was void ab initio, based on the following rationale:

The construction of the durable power of attorney (“POA”) executed by Patricia in July of 2003 is a matter of law. See James v. James, 843 So.2d 304, 308 (Fla. 5th DCA 2003) (“Construction of a power of attorney, like contract law, is a matter of law.”). In construing a POA, “[t]he court must look to the language of the instrument, as with any other contract, in order to ascertain its object and purpose.” Johnson v. Fraccacreta, 348 So.2d 570, 572 (Fla. 4th DCA 1977). In addition, “ ‘powers of attorney are strictly construed.’ “ Alterra Healthcare Corp. v. Bryant, 937 So.2d 263, 269 (Fla. 4th DCA 2006) (quoting De Bueno v. Castro, 543 So.2d 393, 394 (Fla. 4th DCA 1989)). The POA at issue in this case contains a limitation on the authority granted to the attorney-in-fact.  Specifically, the POA states:

Limitation. Notwithstanding the powers contained in this Durable Power of Attorney, my attorney in fact may not perform duties under a contract that require the exercise of my personal services; make any affidavit as to my personal knowledge; vote in any public election on my behalf; execute or revoke any Will or Codicil on my behalf; create, amend, modify, or revoke any document or other disposition effective at my death or transfer of assets to an existing trust created by me unless expressly authorized by this Power of Attorney or said document; or exercise powers and authority granted to me as trustee or court appointed fiduciary unless otherwise expressly authorized by said instrument of the court.

(D.E. No. 33 Exh. B ¶ (q)) (emphasis added). See also Fla. Stat. § 709.08 (stating the same limitation on an attorney-in-fact).  Thus, this language specifically prohibits the attorney-in-fact from changing the beneficiary of a life insurance policy as was done in this case unless the POA specifically authorizes the attorney-in-fact to perform this action. Upon examination of the POA, there is no provision which expressly authorized Richard T. as Patricia's attorney-in-fact to change the beneficiary on her insurance policy. Manhattan's contention that paragraph (i) of the POA which provides that the attorney-in-fact could “execute and deliver applications for insurance ··· and to cancel and select the amounts therefor” authorized Richard T. to change the beneficiary on an existing policy is without merit. Applying for insurance is not the same as changing the beneficiary on an existing policy and paragraph (i) is in no way an “express” authorization for Richard T.'s actions as required by paragraph (q) of the POA. Therefore, the policy change request executed with Richard T.'s signature as Patricia's attorney-in-fact is void ab initio. See, e .g., Campbell v. Metropolitan Life Ins. Co., 812 F.Supp. 1173 (E.D .Okla.1992) (finding where a change of beneficiary form for a Federal Employees Group Life Insurance policy was not witnessed as required by the applicable law the attempted change was “invalid and of no effect.”).

3.   No immunity for insurance company under F.S. 627.423

The last thing insurance companies want is to get sucked into probate litigation.  The purposes of F.S. 627.423 is to make sure they don't.  This statute basically says that insurance companies can't be sued for paying out insurance proceeds in accordance with a policy's beneficiary designation form.  The trial court said the statute didn't apply, and thus the insurance company could be sued by dad to recover the insurance proceeds wrongfully paid to son, based on the following rationale:

First, the court ruled that because the beneficiary designation was void ab initio the statute did NOT apply.

[A]s payment was made to Richard T. and not Richard E. and as the change of beneficiary was void ab initio, the payment was not made “in accordance with the terms of the policy” to the “person then designated.”

Second, the court ruled that the insurer essentially had constructive knowledge of the fact that it was paying the insurance proceeds to the wrong person, thus for this reason as well the statute did NOT apply.

Furthermore, an insurer is only immune from liability where payment to the beneficiary was done in good faith without knowledge.

---

Here, it is undisputed that the policy only gave the power to change the beneficiary to the owner of the policy, who in this case was Patricia. (D.E. No. 1, Exh. A at 4,8). It is also undisputed that Manhattan received the POA and relied upon it in approving the change of beneficiary request signed by Richard T. (D.E. No. 32, Exh. 2 at 2). As the POA did not allow Richard T. as attorney-in-fact to execute the change of beneficiary form, a fact that is clear from the face of the POA, Manhattan was on notice that this change of beneficiary form was invalid and that Richard E. remained the beneficiary of the policy. See, e.g., Stavros v. Western & Southern Life Insurance Company, Inc., 486 S.W.2d 712 (Ky.1972) (where the Court found an insurance company was not immune from liability under a similar statute because insurer should have known that the change of beneficiary was unauthorized as the form changing the beneficiary was not executed by the insured, an eleven-year-old-boy or his parent or guardian as required by the policy). Thus, section 627.423 does not preclude Manhattan from liability.

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I recently wrote here about some of the tools available to Florida probate attorneys involved in cases where the decedent is alleged to have been the victim of financial elder abuse/exploitation.  The Wall Street Journal recently published an article entitled Intimate Betrayal: When the Elderly Are Robbed by Their Family Members, that underscores the comments I made regarding how prevalent this problem is.  Here is an excerpt from the linked-to story:

Note to retirees: Beware the family.

Financial swindles are one of the fastest-growing forms of elder abuse. By some estimates, as many as five million senior citizens are victimized each year, says Sara Aravanis, director of the nonprofit National Center on Elder Abuse, which provides information to federal and state policy makers. Because of the problem's spread, "many states have laws authorizing financial institutions to report suspicions of elderly abuse," says Bruce Jay Baker, general counsel for the Illinois Bankers Association. Earlier this summer, the Securities and Exchange Commission hosted a Seniors Summit to highlight the issue, with SEC Chairman Christopher Cox noting that protecting seniors' pocketbooks "is one of the most important issues of our time."

Yet it's not dodgy financial experts or crooked caregivers who are the biggest threat. It's family. Children, siblings, grandchildren, nieces and nephews, and even spouses are the people most likely to rob the elderly, according to elder-law advocates and attorneys. The data that exist -- albeit in a spotty manner -- suggest that financial crimes rank as the third-most prevalent abuse of the elderly.

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Conseco Ins. Co. v. Clark, 2006 WL 2024401 (M.D.Fla. Jul 17, 2006) (NO. 8:06CV462 T30EAJ)

Exploitation of the elderly is endemic.  This case provides a good road map for probate litigators involved in cases where the decedent was victimized by his or her power-of-attorney holder, with the facts coming to light in the context of probate proceedings.

If someone has taken the time to prepare estate planning documents, a power of attorney is usually part of the package.  But my sense is that the POA usually doesn't receive the level of scrutiny is should -- especially when it comes to retirees who move to Florida and detach themselves from the web of family and friends that looked after and supported them "back home."

The victim in this case was Anthony Jeski, who was 89 years old when he died in 2005 the resident of a Florida nursing home.  Myra Clark acted as Mr. Jeski's power of attorney from 1997 to 2005.  Originally, the sole remainder beneficiary of Mr. Jeski's seven annuity contracts (paying $342,177.58 at his death), revocable trust, which contained $40,000 at his death,  a Prudential insurance contract whose value was unreported, and the heir who would receive title to his $158,000 condominium, was Mr. Jeski's nephew Joseph Dal Campo.  This all changed in 2002, when Ms. Clark used the power of attorney to write Mr. Campo out, and write herself in, as sole beneficiary of all of the annuity contracts, the revocable trust, the insurance policy, and last but not least, quit claim the condo to herself for $11.00.  Oh, and guess who was the agent that sold Mr. Jeski his annuity contracts?  Ms. Clark's husband.

Confronted with this set of facts, litigation counsel for Mr. Campo could pursue a number of different strategies.  In this case, Mr. Campo pursued the following claims, all of which were essentially "blessed" by the trial court.

• Breach of Fiduciary Duty.  Key point here was that the trial court held that Mr. Campo was an "interested person" with respect to his uncle's power of attorney, and thus Ms. Clark owed him the same fiduciary duties applicable to trustees in Florida.
• Fraud.  The trial court dismissed this claim, but hinted strongly that if the plaintiff could allege facts showing he had himself relied upon fraudulent statements made by Ms. Clark, then the claim could proceed.
• Civil Conspiracy.  The trial court let this claim proceed.  Key point being that Ms. Clark's husband was thus brought into the case as a named defendant.
• Exploitation of an Elderly Person.  The trial court dismissed this claim with instructions to the plaintiff on how to replead the claim, hinting again that the judge was predisposed to let this count proceed.  This can be a very powerful weapon, because by statute the successful plaintiff is entitled to treble damages and his attorney's fees.  See Counsel Beware: Considerations Before Implementing Florida’s Civil Theft Statute for a good summary of what trial counsel needs to know with respect to asserting these types of claims.
• Tortious Interference with Expectancy.  The trial court let this count proceed with respect to all non-probate assets (i.e., everything except the condo).  This is an important weapon to keep handy when most if not all of the key assets in dispute fall outside of the probate court's jurisdiction.

For an interesting non-Florida case dealing with legal and ethical issues surrounding the drafting of a power of attorney see In re Winthrop, 848 N.E.2d 961 (Ill. 2006), and a related discussion of the case in Helen Gunnarson's article, POA Perils, 94 Ill. B.J. 403 (2006), in which she concludes as follows:

The complexity of the proceeding does . . . suggest that reinventing the wheel when it comes to drafting powers of attorney may be unwise. Even more important, an attorney would be well advised to exercise extra caution when a third party initiates a request for the attorney to draft an instrument for an elderly person.

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