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

If you're an estate planner, it's only a matter of time until someone asks you to turn over a deceased client's estate planning file. Don't automatically say "yes," you'd be surprised (horrified!) by the ethical traps lurking in this seemingly simple request (if you want to make sure you don't get sued for getting this wrong, read Florida Bar Advisory Opinion 10-3, which I've previously written about here).

And if you're a probate lawyer, sooner or later you're going to find yourself representing a personal representative, trustee or guardian on the receiving end of discovery requests demanding privileged communications (in which case you'll want to cite F.S. 90.5021, the evidentiary privilege rule specifically designed for fiduciaries, which I've previously written about here).

So what's the link between the ethical duty to keep client information confidential and the evidentiary rule shielding this information from disclosure? Think in camera (Latin for: "in a chamber") inspection. If there's a dispute, a court's going to have to decide which documents get turned over and which don't. In order to preserve the confidentiality of information claimed to be privileged during the process of determining the propriety of those claims, there's no other logical alternative than for the court to independently review the material in camera.

Can a court say NO to the in-camera review process? NO

Patrowicz v. Wolff, --- So.3d ----, 2013 WL 1352488 (Fla. 2d DCA April 05, 2013)

In this case the same lawyer was apparently estate planner for the decedent and counsel for the personal representative of his estate (which is common). So when the plaintiff subpoenaed his records, it was in his capacity as a non-party estate planner, not probate counsel. Why does this matter? Because it means the law governing if or when these records get turned over are the ethics rules dissected in Florida Bar Advisory Opinion 10-3, not evidentiary rule F.S. 90.5021. This distinction matters.

In any event, when the subpoena was challenged, no matter what law governs the ultimate outcome the path for getting there is the same: court must conduct an in camera review. So can a probate judge simply skip this step? NO, so sayeth the 2d DCA:

Sarah R. Patrowicz, as Personal Representative of the Estate of Joseph H. Winner, petitions this court for a writ of certiorari quashing a discovery order compelling the production of documents allegedly subject to the attorney-client privilege. Because the trial court departed from the essential requirements of the law by ordering the production of allegedly privileged documents without first conducting an in camera inspection to determine whether the privilege applies, we grant the petition and quash the order.

. . .

“A trial court's order erroneously compelling discovery of information protected from discovery by the attorney-client privilege is reviewable by certiorari.” Bennett v. Berges, 84 So.3d 373, 374–75 (Fla. 4th DCA 2012). A party claiming that documents sought by an opposing party are protected by the attorney-client privilege is entitled to have those documents reviewed in camera by the trial court prior to their disclosure. Id. at 375. This is equally true where the subpoena on its face requests communications between attorney and client. See Nationwide Mut. Fire Ins. Co. v. Hess, 814 So.2d 1240, 1243 (Fla. 5th DCA 2002). The failure to address whether a claimed privilege applies prior to ordering the disclosure of documents is a departure from the essential requirements of the law. See Snyder v. Value Rent–A–Car, 736 So.2d 780, 782 (Fla. 4th DCA 1999).

. . .

[T]he reason we must quash the order is that the trial court ordered production of the documents without first reviewing them and determining whether the attorney-client privilege applied. Not only did Linde specify that his objection was based on the attorney-client privilege, but the subpoena on its face explicitly requested communications between an attorney and his client. Consequently, the trial court was required to conduct an in camera inspection of the documents prior to ordering their disclosure. We therefore quash the order compelling the production of the documents and remand the case for further proceedings. 

OK, so if a court can't say no to the in-camera review process, can you? NO

Bennett v. Berges, --- So.3d ----, 2012 WL 832730 (Fla. 4th DCA March 14, 2012)

In probate litigation the same person is your judge and jury; these are all bench trials. So if you're worried something you told your lawyer is going to prejudice you in the eyes of your judge/fact-finder, having this same judge conduct the in camera review of your files isn't going to help much, the damage is done. Assuming this scenario, then maybe you're going to really want to block the in-camera review process. That may be so, but don't count on an appellate court coming to your rescue. If your judge says turn over the documents, that's it, you're done. So sayeth the 4th DCA:

Here, the trial court properly ordered an in camera review of the relevant documents claimed to be privileged. The order does not compel Petitioners to produce the documents to Respondents. After an in camera inspection, the trial court may determine that the documents are privileged and uphold Petitioners' objection to the discovery request. Accordingly, because the order requires a party to submit allegedly protected materials only for an in camera inspection, and the trial court may never require disclosure of the documents to the opposing party, we hold that the petition is premature. See Cape Canaveral, 917 So.2d at 340 (holding certiorari review was premature because no irreparable harm had been demonstrated where the order under review merely required documents to be produced for an in camera inspection and no discovery had yet been ordered); Gaton v. Health Coal., Inc., 774 So.2d 59 (Fla. 3d DCA 2000) (certiorari review of an order requiring submission of documents allegedly protected by the trade secret privilege to the courts for an in camera inspection was premature because no production had been ordered to the opposing party). But see Cebrian By & Through Cebrian v. Klein, 614 So.2d 1209 (Fla. 4th DCA 1993) (granting a writ of certiorari and quashing an order requiring in camera inspection of certain HRS investigation reports because the shield law found in section 415.52(2), Florida Statutes (1990), created a privilege for such reports; thus, an in camera inspection was not necessary to determine whether the material was or was not protected).

Whether the trial court has misapprehended the scope of the privilege is a question we need not decide because to date, no discovery has been ordered. Accordingly, the petition is denied.

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Griffith v. Slade, 95 So.3d 982 (Fla. 2d DCA August 22, 2012) 

Contesting durable powers of attorney (DPOA's) is the kind of case that usually ends up on a probate litigator's desk. Probate matters are all in rem proceedings. Since in rem proceedings aren't based on personal jurisdiction, probate litigators (like me) get used to litigating cases without ever having to go through the trouble of personally serving anyone. Here's the problem: this mindset can be a trap when you run across a case that "feels" like a probate matter, but isn't. Prime example: DPOA litigation.

Is personal service of process needed to challenge a DPOA? YES.

When family members contest a DPOA's validity, it's usually a thinly-veiled inheritance dispute. This means these cases look and feel a lot like your standard probate case. They're not. One big difference: DPOA cases are NOT in rem proceedings; you need to personally serve opposing parties if you want your winning court order to mean anything. In the linked-to case above the contesting parties skipped this step, relying instead on the old probate standby: service by certified mail. This cut-to-the-chase approach may have worked with the trial judge, but it fell flat on appeal. Here's why:

[In this case], neither a summons nor other process was issued, and service of process was not accomplished. Griffith was sent a “Notice of Hearing” via certified mail. Although Florida Rule of Civil Procedure 1.070(i) provides that defendants may accept service of process by mail and waive formal service, the rule has strict requirements that were not followed here. For example, there is no evidence in the record that the “Notice of Hearing” was accompanied by the petition, requested that Griffith waive service of a summons, or informed Griffith of the consequences of compliance or failure to comply with the request to waive service. See [Shurman v. Atl. Mortg. & Inv. Corp., 795 So.2d 952, 954 (Fla.2001)]. Significantly, “[a] judgment entered without service of process is void and will be set aside and stricken from the record on a motion at anytime.” Myrick v. Walters, 666 So.2d 249, 250 (Fla. 2d DCA 1996) (quoting Kennedy v. Richmond, 512 So.2d 1129, 1130 (Fla. 4th DCA 1987)) (alteration added).

We have also considered the possible effect of the notice requirements contained in section 709.08, Florida Statutes (2010)[FN1]. Section 709.08(5) provides in pertinent part as follows:

(a) A notice, including, but not limited to, a notice of revocation, notice of partial or complete termination by adjudication of incapacity or by the occurrence of an event referenced in the durable power of attorney, notice of death of the principal, notice of suspension by initiation of proceedings to determine incapacity or to appoint a guardian, or other notice, is not effective until written notice is served upon the attorney in fact or any third persons relying upon a durable power of attorney.

(b) Notice must be in writing and served on the person or entity to be bound by the notice. Service may be by any form of mail that requires a signed receipt or by personal delivery as provided for service of process. Service is complete when received by interested persons or entities specified in this section and in chapter 48, where applicable.

The statute does not contemplate an alternative method for service of process, but rather it addresses the notice referenced by section 709.08(4)(a), which provides: “Any third party may rely upon the authority granted in a durable power of attorney that is not conditioned on the principal's lack of capacity to manage property until the third party has received notice as provided in subsection (5).” In other words, a notice may be issued that informs the recipient that a person may no longer have authority to act pursuant to a power of attorney. However, such notice is not sufficient to bring a person within the jurisdiction of a court for legal proceedings. Indeed, nothing in the statute suggests that it may be used instead of service of process to bring a person before the court.

Although we acknowledge the circuit court's concern over the alleged behavior of Griffith, “[p]rocedural due process requires that each litigant be given proper notice and a full and fair opportunity to be heard.” Carmona v. Wal–Mart Stores, E., LP, 81 So.3d 461, 463 (Fla. 2d DCA 2011). Griffith was afforded neither.

Because service of process was never properly accomplished or waived, we reverse the order terminating Griffith's power of attorney and the order denying her motion to strike and set aside the order terminating her power of attorney. 

[FN1]: In 2011, the Florida Legislature substantially revised and renumbered Chapter 709, and repealed sections 709.01, 709.015, 709.08 and 709.11. Ch.2011–210, § 33, at 3273, Laws of Fla. (2011) [click here]. These changes became effective on October 1, 2011, and are not applicable to the case at bar. 

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Beekhuis v. Morris, --- So.3d ----, 2012 WL 2121258 (Fla. 4th DCA June 13, 2012)

F.S. 736.0201 tells us that "judicial proceedings concerning trusts shall be commenced by filing a complaint and shall be governed by the Florida Rules of Civil Procedure." It's a simple rule, which I've been writing about for years [click here].

If you want to get your hands on trust property, all you have to do is file a complaint and follow the Rules of Civil Procedure. Is that really too much to ask for? Apparently it was in this case. In the midst of a contested guardianship proceeding, and in response to nothing more than a motion filed by the guardian, the probate judge simply entered an ex parte order compelling the ward's trustee to hand over trust assets. Wrong answer! So saith the 4th DCA:

Beekhuis argues that the probate court did not have jurisdiction over the trust or its trustee because she “filed no pleadings and sought no relief in her capacity as [t]rustee and did not subject either herself or the trust to the jurisdiction of the probate court.” See Chaffin v. Overstreet, 982 So.2d 11, 14 (Fla. 5th DCA 2008) (explaining that appearing before the probate court in one capacity does not subject that party in a separate capacity to the jurisdiction of the court); see also Mfrs. Nat. Bank of Detroit v. Moons, 659 So.2d 474, 475 (Fla. 4th DCA 1995) (holding that the probate court did not have jurisdiction over the trustees because there was no service of process on trustees and the trustees did not voluntarily submit to the jurisdiction of the court).

We conclude that it was error for the probate court to assert jurisdiction over the trust property and Beekhuis, in her capacity as trustee, when the original pleadings never raised any claim over the trust or its property, and Beekhuis continually asserted that the court lacked jurisdiction over the trust and trustee. See Chaffin, 982 So.2d at 14.

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There's trouble brewing over a bank account and vacant lot "Widow" claims she owned jointly as "tenancy by the entireties" or "TBE" property with her now deceased husband. The call with Widow's family lawyer went well, so you agree to meet with her to discuss the case. You won't have a prayer of properly evaluating this case if you don't know the dramatically different evidentiary rules applying to TBE cases involving personal property vs. real property. The most important decision any probate litigator makes happens long before the first pleading is filed: it's deciding when to say NO and when to say YES to a new case.

Fortunately for you and your prospective client, the 4th DCA recently published two opinions in separate cases explaining in plain English the very different evidentiary rules controlling TBE cases involving personal property vs. real property. This is your road map for successfully evaluating TBE cases.

[1] Joint Bank Account Cases (Personal Property):

Wexler v. Rich, --- So.3d ----, 2012 WL 555482 (Fla. 4th DCA February 22, 2012)

In Beal Bank, SSB v. Almand and Assocs., 780 So.2d 45 (Fla.2001), the Florida supreme court receded from its prior law that created no presumption of a tenancy by the entireties when a husband and wife opened a joint bank account. The court held that unless the signature card on the account expressed a contrary intent, an account opened by a husband and wife creates a presumption that the account is held by the entireties, assuming that the other unities of time, title, and possession are present. “The presumption we adopt is a presumption affecting the burden of proof pursuant to section 90.304, Florida Statutes (2000), thus shifting the burden to the creditor to prove by a preponderance of evidence that a tenancy by the entireties was not created.” Beal Bank, 780 So.2d at 58–59. The court's holding in Beal was later codified in a 2008 amendment to F.S. 655.79(1), providing that "[a]ny deposit or account made in the name of two persons who are husband and wife shall be considered a tenancy by the entirety unless otherwise specified in writing."

So here's the question, what does a bank account opening form have to say to qualify as having "specified in writing" that a husband and wife joint account is NOT a TBE account? Answer: if the form had an option for TBE ownership and a separate option for "joint account," and the married couple checks the joint account box, even if they didn't have the foggiest idea of what they were doing legally, that's enough. They've "specified in writing" that they did not want their joint account to be deemed a TBE account. Here's how the 4th DCA made this point in the linked-to case above.

This case demonstrates [one] type of express disclaimer contemplated by Beal Bank. Bank United provided the Riches with account agreements containing the option of a tenancy by the entireties, but that option was not selected. Rather, the agreements established joint tenancies with right of survivorship. The Riches signed the agreements after having had a chance to review them. Freedom of contract “includes freedom to make a bad bargain.” Posner v. Posner, 257 So.2d 530, 535 (Fla.1972). Florida adheres to the principle that a “party has a duty to learn and know the contents of a proposed contract before he signs” it. Mfrs.' Leasing, Ltd. v. Fla. Dev. & Attractions, Inc., 330 So.2d 171, 172 (Fla. 4th DCA 1976). Therefore, “[o]ne who signs a contract is presumed to know its contents.” Addison v. Carballosa, 48 So.3d 951, 954 (Fla. 3d DCA 2010). When the Riches signed the account agreements, they “expressly select[ed]” a form of account ownership other than a tenancy by the entireties, within the parameters set by the Supreme Court in Beal Bank.

The trial judge found no express disclaimer of tenancies by the entireties primarily because the bank employee did not discuss or explain the account ownership options with the Riches. As it applies to the mechanics of the bank-customer relationship in the opening of accounts, Beal Bank does not require a bank to explain the legal ramifications of the various account options. Only a handful of attorneys in Florida are able to describe the differences between a tenancy by the entireties bank account and a joint account with right of survivorship. The bank's obligation is to clearly provide customers with the option of a tenancy by the entireties account, not to assist them in making a considered choice. To paraphrase the old proverb, a bank's duty under Beal Bank is to lead the horse to water, not to make him drink it.

The parties have not argued the application of section 655.79(1), Florida Statutes (2009), apparently believing it is inapplicable because an amendment to it did not become effective until October 1, 2008. This 2008 amendment provides that “[a]ny deposit or account made in the name of two persons who are husband and wife shall be considered a tenancy by the entirety unless otherwise specified in writing.” Ch. 2008–75, § 8, Laws of Fla. (2008). We note that if the statute were to apply here, the signed account agreements containing the option of a tenancy by the entireties and designating the accounts as “Multiple–Party Account[s] with Right of Survivorship” would satisfy the statutory requirement that an alternative form of account ownership be “specified in writing.” 

Lesson learned?

TBE cases involving joint bank accounts will turn on the boilerplate text of the account opening form, regardless of what the parties were actually thinking when they checked the box and signed at the bottom. If you're thinking about taking one of these cases on, step 1 is to review the account opening form.

[2] Joint Deed Cases (Real Estate):

Bridgeview Bank Group v. Callaghan, --- So.3d ----, 2012 WL 1020044 (Fla. 4th DCA March 28, 2012)

What's interesting about joint real estate cases is that it all boils down to the deed. If the deed doesn't mention some form of ownership other than TBE, then the real property is deemed to be owned as TBE, and that presumption is NOT rebuttable by evidence of contrary intent. The only way to get around this TBE presumption for deeds is if you can prove it's the product of fraud. Proving fraud is orders of magnitude more difficult than the evidence-shifting rule applicable to joint bank accounts. In other words, once the presumption of TBE ownership is triggered by the deed . . . your case is probably over. Here's how the 4th DCA articulated this point in the linked-to case above.

Beal recognized the rule with respect to real property, stating “[w]here real property is acquired specifically in the name of a husband and wife, it is considered to be a ‘rule of construction that a tenancy by the entireties is created, although fraud may be proven.’” 780 So.2d at 54 (quoting First Nat. Bank of Leesburg v. Hector Supply Co., 254 So.2d 777, 780 (Fla.1971)). Beal also cited with approval to In re Suggs' Estate, 405 So.2d 1360, 1361 (Fla. 5th DCA 1981), that “‘[a] conveyance to spouses as husband and wife creates an estate by the entirety in the absence of express language showing a contrary intent.’” 780 So.2d at 54 (emphasis supplied).

Based upon the foregoing, the conveyance to Daniel and Milea created a tenancy by the entireties, and no express language in the deed showed a contrary intent. Therefore an estate by the entireties is presumed. That presumption is not rebuttable, according to [Losey v. Losey, 221 So.2d 417 (Fla.1969)], although it could be set aside if fraud were proven. Bridgeview did not even attempt to prove fraud in this case with respect to the creation of the tenancy by the entirety in 2004.

Beal does not change this result. First and foremost, Beal did not overrule Losey, and the supreme court does not intentionally overrule itself sub silentio. Puryear v. State, 810 So.2d 901, 905 (Fla.2002). Second, Beal involved personal property in the form of bank accounts. . . . . [In Beal] the court established a rebuttable presumption for bank accounts, involving the burden of proof, not the rule of construction established in Losey for real property.

Applying a rule of construction for real property instead of a burden-shifting presumption can be explained by the real property transaction itself. The use of a rebuttable presumption applied to the title to real property would cause significant problems with titles, which are recorded and serve as notice to the world of the ownership of property. Which title insurer could feel secure in insuring property having a conveyance to a husband and wife in the chain of title, if that title could be rebutted by evidence extrinsic to the deed itself? The integrity of the title to real property could be called into question when titles could be overturned in litigation by rebuttable presumptions.

Lesson learned?

In a TBE case involving real estate, it's all about the deed. If it names husband and wife, the TBE presumption is irrevocably triggered in the absence of fraud (which is never easy to prove). When one of these cases comes your way, you won't know enough to figure out the fraud question until you've dug into the facts, but by simply knowing what question to ask ("is there fraud?"), you've won half the battle. What you don't want to do is find yourself on the losing end of one of these cases because you didn't even know fraud was an issue, which is apparently what happened to the creditor in the linked-to case above. As noted by the 4th DCA, "Bridgeview did not even attempt to prove fraud in this case." Oops!

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Pasquale v. Loving, --- So.3d ---- 2012 WL 933030 (Fla. 4th DCA March 21, 2012)

The popularity of revocable trusts and pour-over wills as "package deals" creates interesting strategic choices when challenging their validity; all of which revolve around legitimately exploiting the procedural and substantive differences between probate actions (think will contest) and tort actions (think trust contest). As I recently wrote here, although the public policy merits of this kind of forum shopping potential remain very much in dispute among academics, it's a fact of life working probate litigators can't ignore. This case is another example of that dynamic.

Case Study:

In this case the defendants tried to turn the probate vs. tort action forum-shopping tactic on its head with the following elegant argument:

1. If the decedent executed a pour-over will and revocable trust (she did), and 
2. if the decedent's trust was incorporated by reference into her will if needed to give it effect (it was), and
3. if the plaintiffs filed suit challenging only her trust, but not her will (the appeal turned on this question), and
4. if the plaintiffs are now time barred by the probate rules from challenging the will (they are),
5. then even if the plaintiffs challenging the revocable trust win their case, the now bullet proof pour-over-will will in all events "save" the trust and give it effect.
6. Ergo: the trust contest should be dismissed.

The trial court judge accepted this argument and dismissed the trust contest with prejudice.

What's most interesting about this case is that the 4th DCA does not reject the underlying logic of the argument resulting in dismissal. Instead, the 4th DCA read the operative complaint in the most expansive terms possible, allowing them to "see" a will contest hidden within its four corners, thus saving the plaintiffs from dismissal of their case on pleading grounds alone (something courts try to avoid whenever possible).

We note, first, that the Pasquales could not challenge the validity of the trust without also contesting the will. The trust was incorporated by reference into the 2005 will. See Lewis v. SunTrust Bank, Miami, N.A., 698 So.2d 1276, 1277 (Fla. 3d DCA 1997) (“A writing in existence when a will is executed may be incorporated by reference if the language of the will manifests this intent and describes the writing sufficiently to permit identification.”) (quoting section 732.512(1), Florida Statutes (1995)). . . . 

. . .

While the complaint at issue is not a model of clarity, we find that it adequately constituted a will contest. “A petition for revocation of probate shall state the interest of the petitioner in the estate and the facts constituting the grounds on which revocation is demanded.” Fla. Prob. R. 5.270(a). “All technical forms of pleadings are abolished” and “[n]o defect of forms impairs substantial rights.” Fla. Prob. R. 5.020(a). Though the complaint does not specifically identify the 2005 will, count I challenges the validity of all testamentary documents executed after 2000[, thus by implication challenging the 2005 will] . . . Additionally, the complaint was filed in response to the notice of administration of the 2005 will, wherein the decedent completely revoked the Pasquales' interest in the trust. Compare Feather v. Sanko's Estate, 390 So.2d 746, 747 (Fla. 5th DCA 1980) (interpreting older version of probate code, finding that pleading filed by decedent's disinherited child, entitled “Notice of Appearance,” was sufficient to contest will where pleading stated that she had interest in estate, and the will at issue disinherited her, making it clear that she opposed it). . . .

. . . In reversing and remanding this cause for further proceedings, we, of course, express no opinion as to the merits of appellants' petition for revocation of probate.

 Lesson learned?

If you're playing offense and your client hires you to challenging a revocable trust, always check the residuary clause of the underlying pour-over will as well. It will almost certainly contain a sentence incorporating the trust into the will if needed to give it effect. I don't think I've ever read a Florida pour-over will that didn't contain this boilerplate savings language in its residuary clause. Here's the residuary clause from the pour-over-will at issue in this case, which contains the typical savings language.

I give all the residue of my estate, including my homestead, to the Trustee then serving under my revocable Trust Agreement dated October 26, 1999, as amended or hereafter amended (the “Existing Trust”), as Trustee without bond . . . The residue shall be added to and become a part of the Existing Trust, and shall be held under the provisions of said Agreement in effect at my death, or if this is not permitted by applicable law or the Existing Trust is not then in existence, under the provisions of said Agreement as existing today. If necessary to give effect to this gift, but not otherwise, said Agreement as existing today is incorporated herein by reference. 

As noted by the 4th DCA, these clauses are statutorily sanctioned by F.S. 732.512(1). Lesson learned? When in doubt, always challenge both the pour-over will and revocable trust.

If you're playing defense and only the trust is challenged, you may want to take another shot at the argument employed by the defendants in this case. Although the argument eventually failed on appeal, it worked at the trial court level and its underlying logic seemed to be accepted on appeal by the 4th DCA. Food for thought.

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Relinger v. Fox, --- So.3d ----, 2011 WL 439428 (Fla. 2d DCA Feb 09, 2011)

There are a number of reasons why a case may be abated and proceedings suspended. The court may order abatement because of the death of one of the parties. See here, for example, where a pending action to partition a joint tenancy with right of survivorship was abated by one joint tenant’s death. A case may also be abated if the same claims are already being litigated elsewhere. The administration of trusts can sometimes spawn multiple lawsuits, so litigators should be aware of how abatement works in this context.

In this case, the siblings of the decedent petitioned to revoke their brother’s 1984 will, and filed a petition for administration of another 2007 pour-over will and trust. The personal representative of the decedent, as a defendant in the probate case, challenged the validity of the 2007 will, claiming that there was undue influence and that the will was not properly executed. In a separate civil action, the personal representative as a plaintiff also attacked the validity of the trust for the same reasons, claiming that the trust had testamentary provisions and that there was undue influence and a lack of formalities. Because the parties were the same, and essentially the same issues were being litigated, you might think there was good reason to abate the civil case. The trial court certainly thought so, and granted the siblings’ motion to abate because of the existence of the probate proceedings.

Abatement? Wrong Answer:

But the 2d DCA disagreed. Not only must the issues and the parties be the same in order to abate a case, but the plaintiff in one case cannot be the defendant in the other. Because the personal representative was the defendant in the probate case and the plaintiff in the civil action, abatement was not proper:

[T]the abatement of Relinger's action was a departure from the essential requirements of law. Abatement requires a strict identity of parties between the two suits, and it can be ordered only when the plaintiffs and the defendants in the actions are the same. Bruns v. Archer, 352 So. 2d 121, 122 (Fla. 2d DCA 1977).

[T]he general rule [is] that a plea of a prior action pending applies only where plaintiff in both suits is the same person, and both are commenced by himself, and not to cases in which there are cross-suits by a plaintiff in one suit who is defendant in the other; in other words, that, where the party defendant in the prior suit is plaintiff in the subsequent suit, the first suit cannot be pleaded in abatement of the second.

Horter v. Commercial Bank & Trust Co., 126 So. 909, 912 (Fla. 1930). Abatement may be ordered only where the identities of parties in the actions are exact "because the court is necessarily projecting the effect of a case which has not been tried and a judgment which has not yet been rendered." Burns v. Grubbs Constr., Inc., 174 So. 2d 476, 478 (Fla. 3d DCA 1965). Here, Relinger is the plaintiff in the later civil action challenging the validity of the trust, but he is the defending party in the Foxes' probate action seeking to establish the validity of the concomitant will. This critical difference rendered abatement inappropriate in this case.

Consolidation? Right Answer:

While a consolidation of the cases may have been proper, the court refused to ignore the error and treat the abatement as if it were a consolidation:

It may be that the circuit court was concerned because the two actions raise similar, if not identical, questions about the decedent's capacity, whether he was unduly influenced, and whether the necessary formalities were met. But other procedures are available to address any problems caused by the pendency of two similar actions, such as a consolidation of the actions or a limited stay of one of them. Moresca, 231 So. 2d at 286 n.5; see also Martin v. Martin, 687 So. 2d 903, 907 (Fla. 4th DCA 1997) ("We know of no reason why a will contest pending in the probate division of the circuit court and an action involving the validity of a trust pending in the civil division of the circuit court cannot be consolidated under appropriate circumstances, such as where . . . the factual issues are the same."). The Foxes argue that we should view the circuit court's action "in essence" as a consolidation; we cannot. The circuit court granted their motion to abate, and in doing so, it departed from the essential requirements of law causing irreparable harm. We must therefore quash the order of abatement.

 

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Rocca v. Boyansky, --- So.3d ----, 2012 WL 280752 (Fla. 3d DCA February 01, 2012)

When an interested person files a caveat to a will, F.S. § 731.110(3) requires that Formal Notice be given to the caveator, and that such person be given the opportunity to participate in proceedings before a will is admitted or a personal representative is appointed. The consequences of not giving timely notice to a caveator were previously addressed on this blog here, and related legislation discussed here.

But what happens when Formal Notice is given to a caveator, and the caveator fails to timely file responses and affirmative defenses? Florida Probate Rule 5.040(a)(1) requires interested persons to serve written defenses “within 20 days after service of the notice.” Is the caveator barred from participating in the proceedings if the answer and affirmative defenses are untimely?

"Formal Notice" is neither a statute of limitations nor a mandatory non-claim provision:

In this case Rocca filed a caveat and was given the required Formal Notice, stating that a response was due by September 21, 2009, twenty days after the notice was served. Rocca did not file a response within the required time, but the probate court granted a motion for extension until December 15, 2009. However, Rocca did not file a response until December 22, the night before a hearing on the amended petition for administration. At the hearing, the probate court did not address the arguments raised in Rocca’s response, and ultimately admitted the will. It seems that the probate court thought that Rocca was barred from contesting the will because his answer and affirmative defenses were untimely.

The 3rd DCA disagreed, and reversed the trial court's dismissal. According to the 3d DCA, despite the untimely response, the probate court should have heard Rocca’s arguments before admitting the will. Thus, F. S. § 731.110(3) was not satisfied because Rocca was not given the opportunity to participate in the proceedings. Here's how the 3d DCA explained its ruling:

The appellees would excuse this error on the basis that Rocca was barred from defending against the allegations of the Amended Petition by the untimely filing of his answer and affirmative defenses to the Amended Petition. We find no merit to this argument. Rocca was obligated to serve written defenses to the petition served on him within twenty days after formal notice of the petition. Fla. Prob. R. 5.040(a)(1). His Answer, Affirmative Defenses, and Counter Petition in this case was due (after court sanctioned extensions) on December 15, 2009. He filed this response seven days late and thirty minutes before the December 22, 2009, hearing. If the trial court was annoyed with Rocca and his counsel, it had every right to be so. However, the law is clear that Rule 5.040(a)(1) is neither a statute of limitations nor a mandatory non-claim provision. See Long v. Willis, 36 Fla. L. Weekly D1811 (Fla. 2d DCA Aug. 17, 2011) [click here]; Nardi v. Nardi, 390 So. 2d 438, 440 n. 2 (Fla. 3d DCA 1980). Rather, this Court and other Florida courts which have considered the question all treat the [Formal Notice] rule as a procedural one. See Long, 36 Fla. L. Weekly at D1814; see also Tanner v. Estate of Tanner, 476 So. 2d 793, 794 (Fla. 1st DCA 1985). Since Rocca’s Answer, Affirmative Defenses, and Counter Petition was filed before the hearing on the petition, Rocca was not barred from participation in the hearing on the Amended Petition or asserting such defenses as he had to that petition. Tanner, 476 So. 2d at 794 (reversing order striking beneficiaries’ untimely filed answers to petition for administration, which were filed before the hearing on the petition and before entry of order admitting will to probate and granting letters of administration).

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Taplin v. Taplin, --- So.3d ----, 2012 WL 1605253 (Fla. 3d DCA May 09, 2012)

Under F.S. 95.031, the statute of limitations period for most lawsuits starts running as of the date "when the last element constituting the cause of action occurs." Not so for breach of trust actions. Under F.S. 736.1008, the clock usually starts ticking as of the date the beneficiary knew or should have known of the breach of trust. This distinction is huge, and can be the difference between life or death for your case, as it was in the linked-to case above.

Case Study:

Under F.S. 736.1008, the statute of limitations period for a breach of trust action is usually 4 years (although it can range from as little as 6 months [which I wrote about here] to as long as 40 years). F.S. 736.1008 doesn't explicitly say you have 4 years to sue (that would be too easy), instead it gets you to a 4-year limitations period by cross referencing to "the applicable limitations period provided in chapter 95." Because a breach of trust is a form of intentional tort, the applicable limitations period is found in F.S. 95.11(3)(o), which is 4 years.

But when does the 4-year clock start ticking? In the linked-to case above the trustees argued the clock starts ticking when the breach occurs. In other words, if the breach occurred more than 4 years prior to when the lawsuit was filed, game over, case dismissed. This argument worked with the trial judge. The 3d DCA didn't buy it.

As we understand the trustees' argument, the trustees contend section 95.11(3)(o) limits the reach back of the second amended complaint in this case to four years from the date it was filed. This contention also is flawed.

Why did the trustees' argument fail on appeal? Because in breach of trust cases you only get to F.S. 95.11(3)(o) after you've complied with F.S. 736.1008, which says the clock starts ticking on this kind of case only after the beneficiaries get fair notice of the breach of trust. At the time the trust was created, the then applicable trust limitations statute was F.S. 737.307. As the 3d DCA noted, "for purposes of the issues in this [case], there is no practical difference in the application of [F.S. 737.307 and F.S. 736.1008]." Under F.S. 737.307, you only get to F.S. 95.11(3)(o) after the beneficiary is given fair notice in the form of a trust accounting and opportunity to examine the trust's records. If that didn't happen, F.S. 95.11(3)(o) doesn't apply.

As previously noted, the second sentence of section 737.307 provides for a limited application of Chapter 95 to actions against a trustee, namely those actions where (1) “[the] trustee ... has issued a final account or statement [to] the beneficiary,” and (2) “has informed the beneficiary of the location and availability of records for his examination.” See § 737.307, Fla. Stat. (1975). Section 95.02 necessarily had to yield to this incursion by the Legislature into the law of equity. Absent fulfillment by a trustee of the two conditions set forth in the second sentence of section 737.307 of the Florida Statutes, the common law remains in full force and effect with respect to actions brought by a beneficiary against a trustee of a trust.

What happens if F.S. 95.11(3)(o) doesn't apply?

It might surprise some to learn that under Florida common law breach of trust cases are not subject to any statute of limitations defenses (the best you could do is assert an equitable laches defense). So if F.S. 95.11(3)(o) isn't triggered in your case, defaulting to common law means the trustee can't hide behind a statute of limitations defense. That's what the 3d DCA was alluding to in the last sentence quoted above . . 

Absent fulfillment by a trustee of the two conditions set forth in the second sentence of section 737.307 of the Florida Statutes, the common law remains in full force and effect with respect to actions brought by a beneficiary against a trustee of a trust.

. . . and here's how the 3d DCA summarized the common-law on this point earlier in its opinion.

It has long been recognized at common law that a statute of limitations is inapplicable to shield trustees from their responsibilities to their beneficiaries. Nayee v. Nayee, 705 So.2d 961, 963 (Fla. 5th DCA 1998). As the Florida Supreme Court stated before the turn of the last century:

[I]n cases of continuing trusts that are strictly such, and recognized and enforced in courts of equity only, so long as the relation of trustee and cestui que trust continues to exist, no length of time will bar the cestui que trust of his rights in the subject of the trust as against the trustee [subject to certain exceptions not relevant here].

Anderson v. Northrop, 30 Fla. 612, 12 So. 318, 324 (Fla.1892); see also Sewell v. Sewell Props., 30 So.2d 361, 362–63 (Fla.1947) (“Where the trustee by fraud or deception, or even by keeping quiet when he should speak and account to his cestui, causes the cestui to be ignorant of the rights of the cestui and of the duties of the trustee, laches will not be imputed to the cestui until discovery of the true condition.”). In fact, when the Legislature created chapter 95 in 1872, a statute-denominated “limitations on actions,” the Legislature expressly precluded the applicability of the statute to cases against a trustee of an express trust. See § 95.02, Fla. Stat. (1872) (“This chapter shall not apply to any action ... with respect to any moneys or property held or collected by any officer or trustee or his sureties .”).

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Saewitz v. Saewitz, --- So.3d ----, 2012 WL 10854 (Fla. 3d DCA January 04, 2012)

Tortious interference with an expected inheritance is a relatively new cause of action that's still evolving. So anytime one of these cases makes it into a Florida appellate opinion, it's noteworthy. The last time was back in 2007, coincidentally also before the 3d DCA. See Schilling v. Herrera, --- So.2d ----, 2007 WL 981627 (Fla. 3d DCA 2007). In that case the issue on appeal was when probate proceedings will effectively bar a tortious interference claim [click here]. This time around the issue is damages; or more specifically, how the lack of concrete damages evidence can get your case tossed out of court.

The five elements of this cause of action are generally described as follows:

1. the existence of some sort of expectancy on the plaintiff's part involving an inheritance;
2. the defendant's intentional interference with such expectancy;
3. involvement of tortious conduct, such as fraud, duress, or undue influence, in the defendant's interference;
4. reasonable certainty that the plaintiff's expectancy would have been realized if not for the defendant's interference; and
5. damages. 

No damages = No case:

In this case the decedent's two daughters sued their stepmother for tortiously interfering with their expected inheritance. Both the trial court and the 3d DCA seem to concede that the first four elements of the plaintiffs' case were proved. However, just because you have evidence of wrongdoing doesn't mean you have a lawsuit. You also need to quantify - and prove - economic damages. I'm often contacted by potential plaintiffs with sad stories of some truly appalling conduct, but when you try to nail them down on how they've been hurt economically, they can't tell you. Just because you've been wronged, doesn't mean you have a lawsuit. You need to be able to quantify concrete economic damages. Here's how the 3d DCA put it:

The daughters' initial brief on this appeal persuasively chronicles the record evidence presented to the jury of manipulative activity taken by their stepmother during their father's dying days and preceding months to contravene their father's wishes with respect to the disposition of his estate. It is apodictic, however, that a plaintiff's initial proof of a prima facie case of both conversion and tortious interference in her case-in-chief requires more than proof of liability. Prima facie proof of damages is required as well.

For trusts and estates litigators, the primary value of this case is the 3d DCA's discussion of what kind of damages evidence you need to put on. First you need to define what expected inheritance the defendant defrauded you out of; then you need to prove with "reasonable certainty" the amount of economic damages you've suffered.

The substance of the evidence the daughters presented to the jury on the element of damages is found in the testimony of three witnesses: Jack Rosenberg, the decedent's accountant; Ron Goldstein, a friend of the decedent; and Lynn Saewitz. Rosenberg provided general testimony that the value of the assets involved in the litigation was “over a million dollars” or “in the millions [of dollars].” Goldstein similarly testified the value of the allegedly misappropriated assets at “seven figures.” Although denying any wrongdoing, Lynn Saewitz similarly indicated the value of the assets in question was in the “millions of dollars.” However, none of the testimony was tied to a legally relevant time period. . . . This omission alone deprives this testimony of any probative value.

Additionally, this testimony is insufficient to satisfy the “reasonable certainty” threshold necessary to be considered legally probative of the amount or extent of damages suffered by the daughters. “Under the reasonable certainty rule, ... recovery is denied where the fact of damages and the extent of damages cannot be established with a reasonable degree of certainty.” . . . The proof adduced must be sufficiently definite for a reviewing court to perform its review obligation. . . . In the case before us, the proof adduced by the daughters in their case-in-chief fails to meet this fundamental requirement. . . 

Improvise. Adapt. Overcome.

To say the decedent's daughters must have been crushed by the outcome of this case is probably putting it mildly. Why? Because according to them they weren't able to prove damages with reasonable certainty due to their stepmother's failure to turn over accounting documents she was supposed to produce during pre-trial discovery. In a lesson for all of us, this complaint got them nowhere. According to the 3d DCA counsel for the daughters needed to, as we used to say in the Marine Corps when things didn't go as planned: "improvise, adapt and overcome." In other words, if your opponent doesn't hand you the facts needed to prove your case, you don't just cry foul, you find some other way to get the job done: you improvise, you adapt, you overcome. Here's how the 3d DCA made this same point in the milder vernacular of appellate-court speak:

The daughters argued below, and renew their argument before us, that they were prevented from proving their damages in this case by the failure of counsel for the stepmother to engage in discovery in good faith. The daughters specifically point to the fact, revealed during the testimony of Jack Rosenberg, that defense counsel failed to inquire of him or his accounting firm for documents relating to the value of the decedent's assets in response to a request for production that indisputably included them. As trustee of the Max P. Saewitz Revocable Trust, [stepmother] had the legal obligation to make such an inquiry. . . . The testimony of Jack Rosenberg indicated his firm had responsive documentation. During the course of the argument on the motion for directed verdict, counsel for the daughters placed substantial reliance on this lapse by defense counsel to ask the trial court to either re-open the case to allow more evidence on the element of damages, or, alternatively, grant a new trial as a sanction against [the stepmother] and her counsel for abuse of discovery. The trial court denied relief.

* * * * *

[T]he precise identification of each asset at issue was known to counsel for the daughters well before trial. If a prima facie case of the value of these assets could have been proven through the records or testimony of the decedent's accountants, it follows the assets also could have been valued by experts retained by the daughters. Unless knowingly waived or excused by the daughters themselves, counsel's obligation to the daughters in this case included an independent obligation to be prepared to present a prima facie case on the value of the daughters' damage claim at trial. The actions of defense counsel, even if a violation of a legal or ethical obligation existed, were not the “but for” cause of the daughters' failure to present a prima facie case to the jury. 

Lesson learned? 

According to the 3d DCA, the "but for" cause of the plaintiffs' loss in this case wasn't their stepmother's stonewalling, "even if a violation of a legal or ethical obligation existed," it was their own failure to retain their own independent expert to prove damages. Bottom line, when all is said and done it's up to you to win your case. If your opponent doesn't make this easy for you, don't expect your judge to come to your rescue. Repeat after me, improvise, adapt and overcome . . . improvise, adapt and overcome . . . improvise, adapt and overcome . . . improvise, adapt and overcome . . . 

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Layne v. Layne, --- So.3d ----, 2011 WL 5560563 (Fla. 1st DCA Nov 16, 2011) 

What "rights" do I have in an inheritance from my parents? Under Florida law, generally speaking the answer is none. At most I might expect or hope to one day maybe inherit a share of dad's estate, but an "expectancy" isn't a property right. These basic property-law and inheritance principles are at the heart of this case.

Case Study:

In this case "Son" owned a townhouse 50/50 with his "Dad" and Dad's wife at the time. A few years later, Son deeded his 1/2 share in the townhouse to Dad and Dad's now ex-wife, resulting in Dad and ex-wife each owning a 1/2 interest in the whole property as tenants in common. Dad dies intestate, survived by two heirs: Son and his sister. Son claims 1/2 of dad's intestate estate, including a share of Dad's interest in the townhouse. Ex-wife cries foul, saying Son shouldn't get any part of the townhouse. Why? According to ex-wife when Son deeded his share of the townhouse to Dad, he also deeded away his 1/2 share of Dad's future intestate estate (which included the townhouse). Sound crazy? Well, the trial court actually bought this argument and ruled against Son.

On appeal the 1st DCA reversed the trial court's ruling based in large part on the basic principles outlined above. Sometimes even the savviest judge can get the basics wrong. That's why opinions like this one are helpful, especially for practicing probate lawyers. The following is an excerpt from the 1st DCA’s linked-to opinion:

The court's order states that Appellant's quitclaim deed operated to “convey all of his interest” in the townhouse; thus, he is not entitled to any portion of the property that would otherwise pass to him as a beneficiary of his father's estate. Any right Appellant has to take an interest in the property as a beneficiary did not, however, exist at the time Appellant executed the quitclaim deed. A quitclaim deed conveys only that interest in a property held by the grantor at the time of the conveyance. See, e.g., Blitch v. Sapp, 142 Fla. 166, 194 So. 328, 330 (1940) (holding “a ‘quit-claim’ deed yields only such interest in land as the grantor had at the time of the making of such deed.”). In other words, “[t]he possibility that a person will inherit property from an ancestor is but an expectancy and not an interest in property. While a descendant may expect or hope to inherit, neither a present nor future interest in property actually exists in the absence of a conveyance.” Diaz v. Rood, 851 So.2d 843, 845 (Fla. 2d DCA 2003); see also § 732.101(2), Fla. Stat. (“The decedent's death is the event that vests the heirs' right to the decedent's intestate property.”).

We recognize that the court in Diaz also held that it is possible to convey an expectancy. 851 So.2d at 845. In that case, however, the assignment in question made it clear that the grantor was doing just that; here, the quitclaim deed conveyed only Appellant's interest in the townhouse as it existed at the time of the conveyance. It did not expressly convey any future right to the property Appellant may acquire by virtue of an expectancy, such as a will or via intestacy.

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Lituchy v. Estate of Lituchy, --- So.3d ----, 2011 WL 2135597 (Fla. 4th DCA Jun 01, 2011) 

I previously wrote here about whether a person should be required to hire a lawyer if he or she wants to petition a court to probate a will. In Florida the question is governed by Florida Probate Rule 5.030(a), which provides as follows:

(a) Required; Exception. Every guardian and every personal representative, unless the personal representative remains the sole interested person, shall be represented by an attorney admitted to practice in Florida. A guardian or personal representative who is an attorney admitted to practice in Florida may represent himself or herself as guardian or personal representative. A guardian advocate is not required to be represented by an attorney unless otherwise required by law or the court.

In this case the probate court denied the pro se petition for formal administration filed by the estate's sole beneficiary because he wasn't represented by an attorney. Wrong answer says Rule 5.030 (did no one point this simple rule out to the court?), and now the 4th DCA:

The trial court denied the pro se petition for formal administration of the estate of the appellant's wife, because the appellant was not represented by an attorney. We reverse, because the petition states that the appellant is his wife's sole beneficiary. Thus, he is entitled to file the petition without the necessity of an attorney. See Fla. Prob. R. 5.030(a) (“Every guardian and every personal representative, unless the personal representative remains the sole interested person, shall be represented by an attorney admitted to practice in Florida.”) (emphasis added); Benedetto v. Columbia Park Healthcare Sys., 922 So.2d 416 (Fla. 5th DCA 2006).

Reversed and remanded with directions to reinstate the petition for administration. 

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BankAtlantic v. Estate of Glatzer, --- So.3d ----, 2011 WL 1877839 (Fla. 3d DCA May 18, 2011)

When a business owner passes away you may be asked if this means the business needs to stop operating until the probate court appoints a personal representative or enters some other order having to do with the decedent's estate. The answer is usually NO.

Even when owned 100% by a decedent, corporations retain their separate legal existence, which means the corporation's asset don't automatically become assets of the probate estate. This rule is sometimes forgotten when probate courts deal with closely-held businesses. For example, earlier this year I wrote here about a probate judge getting reversed for failing to recognize the separate legal existence of a New York LLC for jurisdictional purposes, even if a Florida decedent owned 50% of the LLC.

In the linked-to case the dispute was over control of cash in a bank account held in the name of a deceased physician's professional association or "PA." A PA is a form of corporation. The probate judge ruled the cash in the PA's account had to be transferred to the estate's control, even though this cash had been pledged as security by the PA for a loan that came due when the physician died. As explained by the 3d DCA, this ruling ignored the separate legal existence of the PA, warranting reversal. Here's why:

The decedent personally guaranteed his professional association's promissory note, and his death constituted an event of default under that note. The orders requiring transfer of the funds to a different bank thus impaired BankAtlantic's right of setoff. Although the parties agreed that the deceased physician owned all of the shares of his professional association, there was no evidence presented to support a “piercing of the corporate veil” under Dania Jai–Alai Palace v. Sykes, 450 So.2d 1114 (Fla.1984), or any other alter ego theory. While the appellee Estate was apparently entitled to take possession of the professional association stock held by the doctor at his death, no such conclusion extended to the association's funds on deposit in the corporate name at BankAtlantic. In Gettinger v. Gettinger, 165 So.2d 757 (Fla.1964), the Supreme Court of Florida held that “the affairs of a corporation, even though substantially owned by a decedent, cannot be administered by decedent's executor as assets of the decedent's estate.” In this case, “substantially” is 100%, and the result is identical.

. . . The point in this case is that the stock of the professional association is an asset of the Estate, but the funds of the professional association are a step removed from the Estate. The decedent's Estate essentially ignored the separate corporate existence of the professional association and that entity's obligations to its own creditors.

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Henderson v. Elias, --- So.3d ----, 2011 WL 710190 (Fla. 4th DCA Mar 02, 2011)

Most civil litigators (and judges) spend most of their professional lives involved in cases based on in personam jurisdiction. Probate is different. In probate it's all about in rem jurisdiction. This fundamental distinction is often glossed over by practitioners and trial judges alike, leading to all sorts of unfortunate rulings. The linked-to opinion is an example of this fact of life.

The jurisdictional distinctions between probate and most other civil litigation come to a head whenever there's a disagreement involving a probate court's power over [a] someone's personal assets (vs. their share of the estate, click here), or [b] over foreigners/non-residents, click here).

In the linked-to opinion above the question was whether a Florida probate judge had jurisdictional authority to enter a freeze order over the assets of a NY LLC based solely on the allegation that the NY LLC was owned 50% by a FL decedent. The answer, by the way, is NO.

Here's the jurisdictional allegation made by the estate in support of its freeze-order petition. Note the emphasis on the court's inherent authority over assets of the estate, which is an in rem argument:

The amended petition is devoid of allegations that Stardale [the NY LLC] committed any act or omission within or directed towards Florida. The sole jurisdictional allegations found in the petition state that Stardale “is a foreign limited liability corporation owned 50% percent by the [e]state and 50% by Henderson” and that the court “has jurisdiction over the parties ... pursuant to its inherent jurisdiction to monitor the administration of the estate.” 

The 4th DCA didn't bite on the in rem reference, instead framing its analysis on the required two-part personal jurisdiction test I've written about before [click here]. This is an important point: framing the issue in terms of personal jurisdiction pre-determined the outcome of this appeal. Here's why:

We hold that these allegations in the amended petition are insufficient to state a basis for personal jurisdiction over Stardale. The estate made no allegations of conduct by Stardale which would subject the corporation to the jurisdiction of a Florida court under section 48.193(1). The fact that the corporation's two shareholders would be subject to personal jurisdiction in Florida in their individual capacities does not create personal jurisdiction over the corporation. Cf. Beasley v. Diamond R. Fertilizer, Co., 710 So.2d 1025, 1026 (Fla. 5th DCA 1998) (holding that the conduct of business in Florida by a corporation would not subject its shareholders to personal jurisdiction in Florida). The petition contains no allegations that Stardale is Henderson's alter ego. See, e.g., Nichols v. Paulucci, 652 So.2d 389, 393 (Fla. 5th DCA 1995). Likewise, no allegations of a principal-agent relationship were found in the petition. See, e.g., TRW Vehicle Safety Sys. Inc. v. Santiso, 980 So.2d 1149, 1152-53 (Fla. 4th DCA 2008). As the estate failed to allege facts bringing Stardale within the reach of the long-arm statute, we need not address whether the allegations, if proven, would demonstrate sufficient minimum contacts with Florida.

Because the allegations in the petition are insufficient, the trial court should have dismissed the amended petition as to Stardale without prejudice. See World Class Yachts, Inc. v. Murphy, 731 So.2d 798, 800 (Fla. 4th DCA 1999) (holding that dismissal of a complaint for insufficient jurisdictional allegations should be without prejudice to amend). As such, we need not decide whether the evidence adduced at the hearing was sufficient to establish jurisdiction. See Hall, 980 So.2d at 1291. We reverse and remand for further proceedings.

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O'Brien v. McMahon, --- So.3d ----, 2010 WL 3909644 (Fla. 1st DCA Oct 07, 2010)

In 1990 Calvin Todd purchased a life insurance policy from the Prudential Insurance Company and named his niece, Ms. O'Brien, and his daughter, Madison, as 50/50 beneficiaries.

In 1999 Mr. Todd signed a new beneficiary designation form, removing his niece and adding his newly adopted daughter, Heather, as a 1/2 beneficiary. When Mr. Todd died in 2007 only his two daughters were beneficiaries. Ms. O'Brien sued, claiming she was still a 1/2 beneficiary of her uncle's life insurance policy because the change-of-beneficiary form he filed in 1999 failed to comply with Prudential's contractual requirements.

Litigator's Toolbox:

From a litigator's point of view, there are two key issues addressed by the 1st DCA in this case that should be helpful for future litigants:

1. Who has standing to litigate these claims?
2. Is this a contract dispute or an inter vivos gift lawsuit?

[1] Who has standing to litigate these claims?

The first issue the court addresses is standing: did Ms. O'Brien have the right to file this lawsuit? She's claiming her uncle didn't comply with Prudential's contractual requirements for changing beneficiaries, making his 1999 change-of-beneficiary form invalid. But isn't that a claim only Prudential could assert? The 1st DCA seems to imply as much, but lets the issue go because it doesn't change the outcome (and apparently none of the parties raised this objection):

Ms. O'Brien grounds her entire position on Prudential's putative rights under the contract, rights which as to her are jus tertii. She asserts no rights that Prudential itself could not have asserted (if it had been so inclined) when she argues “that a beneficiary under a life insurance policy may be changed only by strict compliance with the conditions set forth in the policy.” . . . Yet Prudential does not make this argument or in any other way align itself with Ms. O'Brien's efforts to claim the policy proceeds (or a portion thereof) for herself. .  .  .  Pretermitting the question whether Ms. O'Brien should be heard to urge the rights of a third party who has elected to stand mute, we turn to the pertinent policy language.

Under traditional jus tertii jurisprudence, “In the ordinary course, a litigant must assert his or her own legal rights and interests, and cannot rest a claim to relief on the legal rights or interests of third parties.” Powers v. Ohio, 499 U.S. 400, 410, 111 S.Ct. 1364, 113 L.Ed.2d 411 (1991) (emphasis added). The 1st DCA seems to be hinting that if someone had raised the standing objection, they probably would have ruled Ms. O'Brien lacked standing and killed the lawsuit early.

[2] Is this a contract dispute or an inter vivos gift lawsuit?

How you frame a case will determine in large part what law governs your lawsuit. Sometimes this matters, sometimes it doesn't. For example, if Ms. O'Brien had framed her case as being about some sort of explicit or implied agreement by her uncle to make an inter vivos gift to her, she could have tapped into the body of law governing challenges to inter vivos gifts [click here, here]. She didn't do that, as noted by the 1st DCA:

Ms. O'Brien makes no claim here or below that her uncle was under any legal obligation to make or keep her as a beneficiary under the policy. See generally Palm Lake Partners II, LLC v. C & C Powerline, Inc., 38 So.3d 844, 849 (Fla. 1st DCA 2010) (“A ‘promisor and a promisee can by agreement create a duty to a beneficiary which cannot be varied without his consent. But in the absence of such an agreement the parties retain control over the contractual relation they have created.’ ”) (quoting Restatement (Second) of Contracts 311 cmt. f. (1981)).

Instead Ms. O'Brien framed her case as a contract dispute: did her uncle follow Prudential's contractual requirements for filing a change of beneficiary form? The important take-away from this decision is that this type of lawsuit will likely be governed by the rich body of law dealing with contract disputes, as specifically applied to insurance contracts.

In general, the right of an insured owner to change the beneficiaries of a life insurance policy “depends on the terms of contract between the insurer and insured as expressed in the insurance policy.” Martinez v. Saez, 650 So.2d 668, 669 (Fla. 3d DCA 1995) (quoting Shuster v. N.Y. Life Ins. Co., 351 So.2d 62, 64 (Fla. 3d DCA 1977)).

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Rossen v. Bilchik, --- So.3d ----, 2010 WL 4628288 (Fla. 4th DCA Nov 17, 2010)

Under Florida law, the custodian of a will is required to deposit the will with the clerk of the court having venue of the estate of the decedent within 10 days after receiving information that the testator is dead. And if you don't deposit the will, F.S. 732.901(2) says a court can order you to do it and make you pay the related attorneys fees and costs.

But two wrongs don't make a right. If you want to get a court order compelling someone to deposit a will, you have to give that person notice of the hearing and an opportunity to be heard. In the absence of that minimal due process, you order isn't valid. So says the 4th DCA:

These consolidated appeals arose out of a disagreement between two sisters after their father's death. Appellee Janice Bilchik filed a petition against appellant Betsy Ann Rossen under section 732.901, Florida Statutes (2008); subsection (2) of that statute provides:

Upon petition and notice, the custodian of any will may be compelled to produce and deposit the will as provided in subsection (1) [requiring deposit of a will “with the clerk of the court having venue of the estate of the decedent within 10 days after receiving information that the testator is dead”]. All costs, damages, and a reasonable attorney's fee shall be adjudged to petitioner against the delinquent custodian if the court finds that the custodian had no just or reasonable cause for failing to deposit the will.

Bilchik filed the petition with the clerk on January 11, 2008. Without a hearing and without any proof that the petition had been received by Rossen, on January 15, 2008, a circuit judge entered an order that was tantamount to a final judgment granting full relief under section 732.901 by requiring Rossen to produce the will and awarding $2,500 in attorney's fees against her. The entry of this order without due process generated a plethora of motions, hearings, and contempt orders.

Rossen appeared in the lawsuit, sometimes with an attorney and sometimes without. She . . . timely objected to the entry of the January 15 order entered without notice and without a hearing. She was entitled to have the order set aside under Florida Rule of Civil Procedure 1.540(b).

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Piloto v. Lauria, --- So.3d ----, 2010 WL 4103017 (Fla. 4th DCA Oct 20, 2010)

Increasing numbers of people have connections with one country, but live and work in another, frequently owning property or investments in several countries. So it shouldn't come as a surprise to anyone that every day more and more Florida estates are impacted by multi-national issues.

What's a probate lawyer to do?

Focus on a couple of guiding principles that only apply to multinational estates; then work the case like you would any other ancillary estate under Ch. 734 of Florida's Probate Code. In Nahar v. Nahar, 656 So.2d 225 (Fla. 3d DCA 1995), the court identified the two guiding principles that apply to any Florida court attempting to reconcile the separate arrangements for ownership, taxation, and succession governing multinational estates.

1. “Administration of an estate is governed by the law of the decedent's domicile”; and
2. “[w]here a party has had notice and opportunity to be heard and the foreign court has satisfied Florida's jurisdictional and due process requirements[,] their orders will be entitled to comity.” Id. at 229-30.

These principles were very much in play in this case. Here's how the 4th DCA summarized the key facts and foreign probate judgment at issue:

The decedent was survived by his wife and four adult children from a prior marriage. He died intestate, that is, without a will. The probate of his estate occurred in his domicile of Venezuela. A Venezuelan court entered a judgment finding that his wife and children were the sole heirs of his estate. The face of the judgment, however, makes no further findings and does not appoint a personal representative for the estate.

Key take-away points from this summary:

1. Decedent's domicile: Venezuela.
2. Decedent died intestate, i.e., without a will.
3. Limited scope of Venezuelan probate judgment: the Venezuelan probate judgment did NOT appointment a personal representative (PR) for the decedent's estate.

Both the probate judge and the 4th DCA agreed the Venezuelan probate judgment did NOT appointment a personal representative (PR) for the decedent's estate. As such, the key legal issue here in Florida was who should be appointed PR.

F.S. 734.102 governs the appointment of PR's for ancillary estates. According to that statute, if the decedent dies intestate you're supposed to apply the rules generally applicable in Florida for the appointment of PRs, which are found in F.S. 733.301. Under that statute the surviving widow is first in line to be PR, and that's how the Florida probate court ruled. Right answer!, says the 4th DCA. Here's why:

[The] first four sentences [of subsection (1) of F.S. 734.102] all address a situation in which the decedent dies testate, that is, with a will. Subsection (1)'s fifth sentence . . . is the only sentence which addresses what occurs “[i]f the decedent dies intestate.” In that situation, “the order of preference for appointment of a personal representative as prescribed in this code shall apply.” As the circuit court found, that language directs us to section 733.301(1)(b), Florida Statutes (2008), which provides that, in granting letters of administration in intestate estates, the order of preference is “[t]he surviving spouse” followed by “[t]he person selected by a majority in interest of the heirs.” Such an interpretation does not conflict with [subsection (4) of F.S. 734.102]'s insistence that “[a]ll proceedings for appointment and administration of an estate shall be as similar to those in original administrations as possible.” Here, the original administration did not involve the appointment of any personal representative, so appointing the wife as the ancillary personal representative does not conflict with the original administration.

 

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Covenant Trust Co. v. Guardianship of Ihrman, --- So.3d ----, 2010 WL 3564731 (Fla. 4th DCA Sept. 15, 2010)

Clients and lawyers alike must contend with an underfunded court system where procedural due process is often viewed as an unnecessary luxury. So what can you do? First, make sure you do your part to help your judge do his part (see Persuading a Cold Judge). Second, insist on evidentiary hearings (not just argument of counsel) to decide contested issues of fact. Sounds like pretty basic stuff; you'd be surprised how often it doesn't happen: click here, here, here, here.

Evidence, Evidence, Evidence . . .

In this case a probate judge entered multiple orders -- all on issues clearly requiring evidentiary hearings -- based on nothing other than argument of counsel. Not surprisingly the 4th DCA reversed all of these orders. The obvious take-away from this case is that evidentiary hearings matter. The less obvious point -- but really the more important one -- is that it's up to counsel to make sure they anticipate the tendency in probate proceedings to bypass evidentiary hearings and compensate accordingly. Your worst enemy is the rushed 15-minute hearing where the judge ends up entering an order that takes you the next 12 months to get reversed on appeal.

In this case Covenant Trust Company, an Illinois corporate trustee, got sucked into a contested Florida guardianship proceeding when it received a petition in the mail (i.e., no legal service of process) from the Florida guardian accusing it of breaching its fiduciary duties and asking the Florida probate judge to immediately take control of the trust by, among other things, ordering the trustee to pay guardianship-related expenses in Florida and ordering the trustee to no longer use trust funds to pay its lawyers.

Here's how the 4th DCA deconstructed each of the probate court's rulings: all of which were reversed for lack of evidence.

[1] Can a court haul a foreign trustee into a Florida court without evidence? NO

The Illinois trustee argued it shouldn't be subject to the Florida court's jurisdiction because it didn't have enough contacts with Florida to fall under F.S. 48.193, our long-arm statute. Both sides filed conflicting affidavits on this issue, as required under Florida law. Once you have conflicting affidavits, the trial court is required to conduct an evidentiary hearing to sort it all out. That didn't happen.

Here, Guardian's and Covenant's affidavits cannot be reconciled, as Guardian attested Covenant conducted business in Florida, and Covenant denied this. The trial court only held hearings and decided the issue based on the attorneys' arguments. See Ralph v. McLaughlin, 756 So.2d 240, 241 (Fla. 2d DCA 2000) (where trial court only heard the arguments of counsel before deciding the motions to dismiss based on lack of personal jurisdiction, the Second District, pursuant to Venetian Salami, reversed and remanded the case so the trial court could hold a limited evidentiary hearing on the minimum contacts issue to resolve the conflicting affidavits); Sonson v. Hearn, 17 So.3d 745, 747 n. 1 (Fla. 4th DCA 2009) (citing Leon Shaffer Golnick Adver., Inc. v. Cedar, 423 So.2d 1015, 1017 (Fla. 4th DCA 1982)) (unsworn statements by an attorney at a hearing do not establish facts upon which the trial court can rely). Therefore, the trial court erred by not conducting a limited evidentiary hearing to determine if Covenant had the required minimum contacts to expect to be haled into court in Florida. See Golant v. German Shepherd Dog Club of Am., Inc., 26 So.3d 60, 62-63 (Fla. 4th DCA 2010) (with regard to minimum contacts, due process is met if a non-resident defendant would reasonably anticipate being haled into a Florida court).

Even assuming the Florida court had jurisdiction over the Illinois trustee, it still had to contend with Florida's special venue statute for trust litigation: F.S. 736.0205. Under this statute the presumption is that you have to sue foreign trustees in their home states (click here, here, here). According to the 4th DCA, the trial court seems to have skipped this point too.

Assuming the trial court has the requisite in personam jurisdiction, Covenant argues section 736.0205 requires this action be brought in Illinois, unless all parties could not be bound by litigation in the courts where the trust is registered. . . . It is not clear from the record if “all interested parties could not be bound by litigation in the courts of the state where the trust is registered or has its principal place of administration.” Thus, if the trial court determines it has in personam jurisdiction, it will next need to determine if the interested parties could be bound by litigation in Illinois. . . . We reverse and remand the case to the trial court with directions to hold an evidentiary hearing on the issue of jurisdiction over Covenant.

[2] Can a court bar a trustee from using trust funds to pay its legal fees without evidence? NO

In trust litigation one of the biggest advantages a trustee-defendant has is its ability to pay for its legal defense with trust funds, while the plaintiff is left to pay for its side of the litigation out of its own pocket. Plaintiffs can level the playing field by getting the court to enter an order cutting the trustee off from trust funds to pay legal fees. This tactic was so troubling to Florida's trustee community that in 2008 it resulted in a brand new stand-alone statute intended to make sure trustees weren't unfairly treated in these proceedings: F.S. 736.0802(10). I wrote about the lead-up to this statute and its eventual passage here.

A key procedural protection built into F.S. 736.0802(10) is the trustee's entitlement to an evidentiary hearing. Again, that didn't happen. Again, the 4th DCA reversed. Here's why:

To obtain an order prohibiting Covenant from paying any more attorney's fees from the trust assets, section 736.0802(10)(b) states that the “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.” No evidence was provided or proffered showing a breach of trust.  . . . Accordingly, the trial court erred in entering this order without making any such finding of breach of trust.

[3] Can a court force a trustee to pay guardianship fees without evidence of the payments being mandated or the trustee acting arbitrarily? NO 

It's not unusual for probate courts to force the trustees of an incapacitated grantor's revocable trust to pay for some or all of the grantor's guardianship costs. This case demonstrates that although that practice may be common, it's at odds with long-standing Florida law if done over the legitimate objections of the trustees. This is an important point all trustees involved in guardianship proceedings need to remember. Finally, when reading the 4th DCA's analysis of this issue note again how we come back to the "no-evidence" theme.

In Cohen v. Friedland, 450 So.2d 905, 906 (Fla. 3d DCA 1984) (citing White v. Bacardi, 446 So.2d 150, 155 n. 5 (Fla. 3d DCA 1984)), the Third District explained that “[a] trustee, in the strictest sense, holds legal title to property which he administers for the named beneficiary in accordance with the terms of the instrument creating the trust.” The trust agreement provided that the beneficiary would receive the trust income and the trustees had sole discretion to invade the trust principal for the beneficiary's maintenance, comfort, and welfare. Id. But “[i]n the absence of proof that the trustee has failed to perform, or has performed arbitrarily, a court is without authority to remove trust assets from control of the trustee to be administered by the court or other guardian.” Id.

In Giglio v. Perretta, 493 So.2d 470, 470 (Fla. 4th DCA 1986), we held the “trial court erred in requiring the trustee to use trust assets to reimburse the guardian of the trust beneficiary for guardianship administration expenses, attorneys fees, and other costs.” We explained that although paying some of these costs may have been allowed, in the trustee's discretion, these payments were “not legally mandated by the trust provisions,” so the court had “no authority to compel the trustee to make such payments,” nor any authority for the attorney's fees award. Id. (citing Cohen, 450 So.2d 905).

Further, in Johnson v. Guardianship of Singleton, 743 So.2d 1152, 1153 (Fla. 3d DCA 1999), the Third District, citing Cohen, held that there was “no statutory or other satisfactory legal justification for the award” of legal expenses, where the trial court ordered the trustee “to pay from trust assets the legal expenses incurred” by the guardian.

Here, Covenant, as trustee, was granted, within the trust provision, the discretion to make payments from the trust assets. There was no evidence that Covenant acted arbitrarily. Therefore, the court lacked the authority to order Covenant to remove trust assets. As explained in Giglio, these payments were not legally mandated in the trust terms. Further, as in Johnson, there was no statutory or other legal authority for the court to order the payments. Because the trust did not provide for the payment of attorney's fees, and Covenant could make payments in its discretion for Lillian's best interests, the court was without authority to order Covenant to pay Guardian's attorney $10,000 from the trust assets.

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Congress shocked everyone by letting the estate tax lapse in 2010. What I've found most interesting about this state of affairs are the unintended consequences:

First, no estate tax in 2010 is great news for the super rich, like George Steinbrenner's heirs, but bad news for the moderately wealthy, people who have assets between $1.3 million and $3.5 million. For these families dying in 2010 likely means higher taxes. This is a federal tax issue only Congress can address.

Second, no estate tax in 2010 could lead to the unintended disinheritance of widows and widowers, which could in turn lead to expensive legal fights among family members. Potential inheritance litigation caused by Congressional inaction is a state-law issue that state legislators can step in and fix. And that's exactly what they've been doing.

Increased probate litigation threat: Florida's statutory fix: 733.1051 & 736.04114

As reported by Forbes in States Race To Clean Up Congress' Estate Tax Mess, state legislators have been busy passing legislation aimed at avoiding the unintended disinheritance of widows and widowers caused by the unforeseen lapse of the federal estate tax in 2010. Florida has now joined the club with passage of two new pieces of legislation: 733.1051 (governing wills), and 736.04114 (governing trusts). This White Paper does a good job of explaining the reasoning behind the new legislation.

Most states enacted simple one-size-fits-all statutes. The upside to this approach is that it's less expensive to implement. Here's how these statutes were described in the Forbes piece:

Most of the new emergency laws would set a default rule for interpreting wills and trusts while the federal estate tax is repealed, if the document itself doesn't spell one out. The rule: Any tax terms or formulas should be read as if the estate tax law of 2009 were still in effect. The proposed emergency laws also typically include a backstop provision allowing any potential beneficiary or executor to go to court, within a year from the date of death, if he or she doesn't think that this default is what the deceased really wanted.

The downside to the one-size-fits-all approach is that saving court costs is given priority over ensuring the testator's intent is followed. Maybe the testator knew exactly what would happen if he died in 2010 and intended that outcome? A one-size-fits all statute could essentially strip this testator of his testamentary freedom.

Florida didn't adopt a one-size-fits-all statute, opting instead for a more nuanced approach aimed at determining the testator's probable intent from all of the facts and circumstances. If your primary goal is effectuating testator intent, Florida's approach makes sense. But it comes at a cost: Florida's legislation makes it impossible to avoid the time and expense of a judicial construction proceeding. Here's how the Forbes piece described Florida's approach:

One renegade state--Florida--is proposing to send folks with ambiguous documents to court from the start to determine the deceased's intent, instead of assuming the deceased wanted to follow the estate tax law of 2009. The court could consider outside evidence, such as the estate attorney's testimony. The proposed law would allow estate assets to be used to pay for this proceeding and says that heirs might have to wait for distributions pending the outcome of the court's decision.

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Fernandez v. Guardianship of Fernandez, --- So.3d ----, 2010 WL 2178831 (Fla. 3d DCA Jun 02, 2010)

Contested guardianship proceedings are bench trials, which means the same person is both your fact finder and lawgiver: the judge. As explained in When the Judge Is the Jury, there are real advantages to bench trials:

“And one of the biggest advantages over the traditional courtroom is that the lawyers get to ‘read the jury’ all through the case. And since the judge can—and often will—ask questions, you’re always aware of what’s on the jury’s mind,” said Standwell."

I think most practicing lawyers have mixed feelings about questions from the bench. When the questions make clear the judge is leaning your way, you love 'em! When the opposite is true, you know it's going to be a bad day. Love 'em or hate 'em, questions from the bench are a fact of life and explicitly authorized under F.S. 90.615.

But when does questioning from the bench go too far? The answer to that question depends in large part on the facts and circumstances of your particular case, so hard and fast rules are difficult to come by. But most of us know it when we see it . . . and so does the 3d DCA. Here are the facts the appellate court was confronted with in the linked-to contested guardianship case:

[The trial court] decided that the hearing would proceed more expeditiously if the trial court conducted the examination of witnesses instead of allowing counsel to do so. The trial court swore the witnesses and denied the daughter's request to invoke the rule of exclusion of witnesses. The court called and questioned the witnesses, affording almost no opportunity for examination or cross-examination by the parties. There were no opening or closing statements.

According to the 3d DCA, this was too much. Questioning from the bench is proper, but if it's done to the exclusion of everyone else in the room, the parties aren't getting their fair day in court. Here's how the 3d DCA put it:

Respectfully, this was not proper procedure. The Florida Probate Rules provide that in adversary proceedings, “the proceedings, as nearly as practicable, shall be conducted similar to suits of a civil nature and the Florida Rules of Civil Procedure shall govern....” Fla. Prob. R. 5.025(d)(2). See generally In re Guardianship of King, 862 So.2d 869, 870-71 (Fla. 2d DCA 2003); The Florida Bar, Litigation Under Florida Probate Code § 1.6 (7th ed.2009); 28 Fla. Jur.2d Guardian and Ward, § 35 (updated Feb. 2010). “The adjudicatory hearing must be conducted at the time and place specified in the notice of hearing and in a manner consistent with due process.” § 744.331(5)(a), Fla. Stat. (2008).

As this was an evidentiary hearing in a contested proceeding, the matter should have been tried as is customary in a bench trial. The parties should have been given an opportunity to make opening and closing statements. Each party should have been given an opportunity to present evidence, call and question witnesses, and cross-examine the other side's witnesses. When the guardian ad litem gave her report, cross-examination by the parties should have been allowed.

At the start of the hearing, the daughter invoked the rule of exclusion of witnesses [under F.S. 90.616]. The trial court denied that request. The request should have been granted.

Lessons learned?

First: contested guardianship proceedings are treated like any other kind of bench trial under Florida law, and need to be adjudicated accordingly. The parties are entitled to all of the due-process rights any litigant is entitled to in a Florida court room, including at a bare minimum:

1. The opportunity to make opening and closing statements.
2. The opportunity to present evidence, call and question witnesses, and cross-examine the other side's witnesses.
3. The opportunity to cross examine the guardian ad litem.
4. The exclusion of witnesses from the courtroom in accordance with F.S. 90.616.

Second: lawyers on the wrong end of an overactive judge have to object. To put it mildly, this kind of objection needs to be handled "delicately." So what's a lawyer to do? The Winter 2009 edition of the ABA's Litigation magazine has an excellent article by Houston, Texas litigator Martin J. Siegel that speaks directly to this question. Entitled When Judges Want to Get in the Game: Lessons from Another Court, Mr. Siegel's article is thoughtful, well written, and well researched. Here's an excerpt:

“[L]awyers on the wrong end of the overactive judge have to object. As with questions from opposing counsel, failure to object to improper examination from the bench will waive the error. Ditto with remarks to the jury. On appeal, if no objection was made, review will be for plain error, and only those errors resulting in an unfair trial will merit reversal. Courts recognize that objecting to the judge’s questions and comments can be touchy and difficult, but still require counsel to give it a go. If the judge wishes to examine witnesses at any length, there is precedent for seeking a sidebar out of the hearing of the jury or a recess and asking the court to inform counsel of the desired line of questioning so that the examination will come from the lawyers and not carry the imprimatur of the court.

To the extent possible, lawyers should also make sure the objectionable conduct is fully on the record, even the little things that will add flavor to the appeal but may not always come through on the cold page, like the judge’s demeanor, tone, or volume. For example, in one case, the judge’s repeated pointing to the defendant’s lawyer in an effort to prompt him to object made it into the record because the plaintiff’s lawyer, finally exasperated with the court’s unusual theatrics, said, ‘Your Honor, I haven’t even finished my question, and you’re pointing to the defense counsel to object to my question.’ Nationwide Mutual, 174 F.3d at 808.”

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Yawt v. Carlisle, --- So.3d ----, 2010 WL 1879697 (Fla. 4th DCA May 12, 2010)

In probate proceedings you don't need to file a new complaint every time you want your probate judge to rule on some new issue. Why? Because probate is an in rem proceeding where the Florida Rules of Civil Procedure generally don't apply. That's NOT how it's supposed to work in trust litigation. Subject to a few clearly-defined exceptions, F.S. 736.0201 says "proceedings concerning trusts shall be commenced by filing a complaint and shall be governed by the Florida Rules of Civil Procedure."

Probate Custom vs. Trust Litigation

Here's the problem: most trust litigation takes place before probate judges, and probate judges are - quite naturally - accustomed to playing by the rules that apply to probate proceedings, NOT the Florida Rules of Civil Procedure applicable to trust litigation. This clash between probate-court custom and the procedure governing trust litigation is at the heart of what went wrong in the linked-to case above.

In the linked-to case above the probate judge entered a final judgment approving the sale of trust property. After this final judgment was entered, the purchaser received the results of its environmental inspection and declined to close under the approved agreement. The trustee and potential purchaser negotiated and entered into a new contract, which significantly reduced the purchase price and extended the closing date. The trustee then sought court approval of the new agreement by filing an unsworn “Petition for Approval of Amended Contract.”

This approach could work in a probate proceeding, but NOT in trust litigation. Here's how counsel for the objecting beneficiaries, Stephen Zimmerman, argued this point:

MR. ZIMMERMAN: ... The current proceeding that's before the Court right now was initiated by a motion in a case that's already closed and then by only a couple of days notice without even a chance to respond. We're not even having an evidentiary hearing, we're just having attorneys argue about this, so it's entirely inappropriate for the Court to dispose of this matter in a summary way like this without an evidentiary hearing, without a new case being filed, without a pleading.

THE COURT: What would be the purpose of an evidentiary hearing, what are we going to establish?

MR. ZIMMERMAN: Establish whether this is a fair price for this property. I mean, the Court is just relying upon attorneys coming in here and talking. We think this is not a fair price for this property....

New claim = New pleadings

Mr. Zimmerman was right, of course. No pleadings, no discovery, no evidence: that's not the way to try a case. Unfortunately the probate judge didn't see it his way and ruled against him. Wrong answer says the 4th DCA. Here's why:

Appellants rely upon the provisions in Florida Rule of Civil Procedure 1.110(h) for their argument that appellees needed to file subsequent or supplemental pleadings for the relief they sought. This rule provides as follows:

When the nature of an action permits pleadings subsequent to final judgment and the jurisdiction of the court over the parties has not terminated, the initial pleading subsequent to final judgment shall be designated a supplemental complaint or petition. The action shall then proceed in the same manner and time as though the supplemental complaint or petition were the initial pleading in the action, including the issuance of any needed process. This subdivision shall not apply to proceedings that may be initiated by motion under these rules.

Fla. R. Civ. P. 1.110(h).

The Committee Note to this rule states, in pertinent part:

Subdivision (h) is added to cover a situation usually arising in divorce judgment modifications, supplementary declaratory relief actions, or trust supervision.... The last sentence exempts post judgment motions under rules 1.480(c), 1.530, and 1.540, and similar proceedings from its purview.

Fla. R. Civ. P. 1.110(h), Committee Note, 1971 Amendment.

Appellants argue that appellees failed to comply with this statute and that the trial court erred in granting relief based on their mere filing of a petition. They sufficiently preserved this issue for appeal, as they similarly argued below that the case was not procedurally ripe because appellees did not file a new pleading or afford them an opportunity for discovery and an evidentiary hearing.

*     *     *     *     *

Because appellees have sought different relief than that originally pled, they were required to re-serve appellants in the same manner as they did originally and give them a new opportunity to respond ...

 

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Thomas v. Thomas, --- So.3d ----, 2010 WL 391833 (Fla. 5th DCA Feb 05, 2010)

There are certain key milestones in a probate proceeding where Florida's probate rules build in ultra-short limitations periods designed to bring disputes to a head quickly or forever bar them. One of those milestones is when the personal representative files his final accounting. Probate Rule 5.401 says that anyone wanting to object to a final accounting has only 30 days to file an objection, and 90 days from the filing of the objection in which to serve a notice of hearing. Miss those deadlines and you're out of luck, no matter how legitimate your objections may be. Here are the relevant portions of Rule 5.401:

Rule 5.401. Objections to . . . Final Accounting

(a) Objections. An interested person may object to the . . . final accounting within 30 days after the service of the later of the . . . final accounting on that interested person.

*     *     *

(d) Hearing on Objections. Any interested person may set a hearing on the objections. Notice of the hearing shall be given to all interested persons. If a notice of hearing on the objections is not served within 90 days of filing of the objections, the objections shall be deemed abandoned and the personal representative may make distribution as set forth in the plan of distribution.

In the linked-to opinion the parties objecting to the final accounting argued that because the accounting wasn't complete, it didn't count as a "final" accounting, so Rule Rule 5.401's ultra-short limitations periods didn't apply. Clever, but no cigar. The probate judge didn't buy this argument, and neither did the 5th DCA. Here's how the 5th DCA explained its ruling:

On December 3, 2008, the court entered a final judgment granting .  .  .  the motion to strike the objection to the final accounting. The Appellee argues that the court based its ruling on the fact that the objection to the final accounting was not timely filed. That is, the accounting was filed June 16, 2006, and the objection was not filed until October 12, 2006, well beyond the 30 days in which to object as provided by rule 5.401(a).

Appellants contend that the final accounting filed in this case was not complete and, therefore, it was not a final accounting. The Appellants cite no authority for their position and this Court disagrees.

It is clear that a final accounting was filed June 19, 2006, and if infirmities in the final accounting existed, the Appellants had 30 days in which to file an objection, and 90 days from the filing of the objection in which to have a hearing. They did neither. The court found that the objection was waived.

But Wait, There's More!

I received a comment to this blog post from über probate litigator Brian Felcoski. He makes an important point that goes to the 5th DCA's construction of the rule's 90-day requirement.

Hi Juan. I saw your post concerning the Thomas decision. The language in the decision suggesting one needs to have a hearing within 90 days from filing the objection to accounting does not appear to be consistent with Florida Probate Rule 5.401. The language of the rule speaks to service of the notice of hearing and not the actual hearing itself. The committee notes reflect that (d) was amended “to clarify that 90-day period pertains to service of hearing notice, not the actual hearing date.” You might want to make an editor’s note on your probate litigation blog to make your readers aware of this issue. I am copying Tae Bronner, Chair of the Section’s probate law and procedure committee, and asking that her committee review the issue and determine if action is warranted to clarify the rule further. Best regards. Brian Felcoski

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Buroz-Henriquez v. De Buroz, --- So.3d ----, 2009 WL 3271354 (Fla. 3d DCA Oct 14, 2009)

It's not unusual in probate litigation for parties to underestimate the importance of complying with discovery deadlines. However, this frustrating fact of life is also an opportunity: I recently won a case simply by obtaining an ex parte order compelling a recalcitrant will-challenger to respond to my pending discovery requests. For reasons that remain unclear to me, this bit of pressure was enough to get this guy out of the case: he voluntarily withdrew his claim with prejudice in lieu of complying with my discovery order. The basis for my order was a local rule applicable in Miami (Admin. Order 06-09), but the underlying authority should be applicable anywhere in Florida.

In the linked-to case the winning side used a discovery-sanctions order to not only default the sitting personal representative out the estate, they also walked away with an order compelling the estate to pay $25,875 in attorneys fees. All that just because the losing side couldn't get its act together when it came to responding to discovery deadlines.

Lesson learned? Use an opponent's recalcitrance to your advantage. Push him to respond to discovery deadlines by relying on the kind of authority cited in Admin. Order 06-09; and once you've got your first order -- follow the example of the winning side in the linked-to case: move for a default judgment and other sanctions if it's ignored.

In the linked-to opinion the 3d DCA explains what kind of findings need to be included in a probate judge's order defaulting an opponent out of a case as a discovery sanction. The order in this case didn't contain the necessary findings, so it got bounced back to the trial judge for a "do over."

It is well established that before a court may dismiss a cause or default a party as a sanction, it must first consider each of the following six factors set forth in Kozel v. Ostendorf, 629 So.2d 817, 818 (Fla.1993):

[1] whether the attorney's disobedience was willful, deliberate, or contumacious, rather than an act of neglect or inexperience; [2] whether the attorney has been previously sanctioned; [3] whether the client was personally involved in the act of disobedience; [4] whether the delay prejudiced the opposing party through undue expense, loss of evidence, or in some other fashion; [5] whether the attorney offered reasonable justification for noncompliance; and [6] whether the delay created significant problems of judicial administration.

Accord Ham v. Dunmire, 891 So.2d 492 (Fla.2004). Moreover, before a trial court enters the extreme sanction of dismissal or default, it must set forth explicit findings of fact in the order imposing the sanction. Alvarado v. Snow White & The Seven Dwarfs, Inc., 8 So.3d 388 (Fla. 3d DCA 2009) (reversing and remanding dismissal for findings on all six Kozel factors); Coconut Grove Playhouse, Inc. v. Knight-Ridder, Inc., 935 So.2d 597 (Fla. 3d DCA 2006) (quashing order tantamount to default and remanding for trial court to make express findings). “Express findings are required to ensure that the trial judge has consciously determined that the failure was more than a mistake, neglect, or inadvertence, and to assist the reviewing court to the extent the record is susceptible to more than one interpretation.” Ham, 891 So.2d at 496 (citing Commonwealth Fed. Savings & Loan Ass'n v. Tubero, 569 So.2d 1271, 1273 (Fla.1990)).

Because the order on appeal contains no findings of fact concerning any of the Kozel factors, we are compelled to reverse the order and remand for consideration of the Kozel factors. In doing so, we do not address the merits of the underlying claims for contempt and sanctions made by the appellee below. If, on remand, the trial court determines that, after considering the Kozel factors, sanctions of dismissal and/or default are appropriate, then the trial court shall include in its order findings of fact with respect to each factor. See Alvarado, 8 So.3d at 389.

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Littell v. Law Firm Of Trinkle, Moody, Swanson, Byrd and Colton, 2009 WL 2749666 (11th Cir.(Fla.) Sep 01, 2009)

The linked-to opinion is the culmination of litigation involving a "Joint Trust" created by a husband and wife in 1992 that has played itself out in two different courts for over 8 years.

Stage One: Probate Court Trust-Construction Action: Littell Loses

Stage one of the litigation was a trust-construction action before a probate judge in which the court ruled that the Joint Trust was NOT "amendable" after the first spouse died. This issue isn't as simple as it sounds, as demonstrated in another joint-trust revocation case I wrote about earlier this year [click here].

In the trust-construction action the drafting estate planning attorney (Byrd) testified that he had been instructed to draft the Joint Trust in a way that would allow it to be amended after the first spouse's death. In other words, based on the probate court's ruling, he apparently admitted to a drafting mistake. The second estate planning attorney involved in the matter (Stuart) testified that she thought the Joint Trust was amendable, and advised her client accordingly. In other words, again based on the probate court's ruling, she apparently admitted to having mistakenly interpreted the trust agreement. Both admissions are significant in light of the results of the second action.

Stage Two: Malpractice Action v. Estate Planning Attorneys: Littell Loses Again:

The linked-to opinion involves this second stage of the litigation. In this action Plaintiff Littell argued that if the Joint Trust agreement was NOT amendable, then he should be able to sue the estate planning attorneys for malpractice. The trial court judge ruled against him, dismissing his claims against both of the estate planning attorneys.

[1] Lack of Standing = No Claim v. Byrd:

The ruling that will probably be of most interest to Florida estate planners is this one. Here the court ruled that an heir that is NOT mentioned in the operative will or trust agreement (a "disinherited" heir), does NOT have standing as a third-party beneficiary to sue the estate planning attorney for malpractice.

Whether any heir ever has standing as a third-party beneficiary to sue an estate planning attorney for malpractice was unclear under Florida law, until the 4th DCA's 2007 ruling in the Gunster case [click here]. But what if the heir is NOT a named beneficiary of the operative will or trust agreement, does he still have standing to sue? Earlier this year I wrote about a California appellate opinion that ruled there was NO standing in those cases [click here]. The 11th Circuit ruled the same way in this case, concluding that under Florida law a plaintiff that is NOT a named beneficiary of the operative will or trust agreement, does NOT have standing as a third-party beneficiary to sue the estate planning attorney for malpractice.

Applying [Florida] law to the case at hand, we conclude that Littell does not have third-party beneficiary standing to bring a malpractice action against Byrd and Trinkle Moody. Florida's narrowly defined exception to the privity requirement limits an attorney's professional liability to foreseeable plaintiffs, namely, to clients and to those persons that the client apparently intended to be third party beneficiaries of the attorney's services. See Rosenstone, 560 So.2d at 1230 (limiting privity exception to “one who [the attorney] knows is the intended beneficiary of his services”) (emphasis added); Angel, Cohen & Rogovin, 512 So.2d at 193 (noting that attorney's professional liability is limited to clients and to those who can demonstrate that the apparent intent of the client in engaging the services of the lawyer was to benefit that third-party); see also Machata v. Seidman & Seidman, 644 So.2d 114 (Fla.Dist.Ct.App.1994), rev. denied, 654 So.2d 919 (Fla .1995) (liability of an accountant for negligence is expanded beyond persons in privity to include those persons the accountant knows intend to rely on the accountant's opinion for a specific purpose).  .  .  .  In this case, Littell points to no evidence indicating that he was an apparent intended beneficiary of the services Byrd provided to the Hermans or that the Hermans engaged Byrd intending to benefit Littell. At best, Littell was only an incidental third-party beneficiary of Byrd's services and the “Florida courts have refused to expand [the privity] exception to include incidental third-party beneficiaries.” Angel, Cohen & Rogovin, 512 So.2d at 194. [Because Littell was not named in the documents drafted by Byrd], Littell was not an apparent third-party beneficiary of Byrd's services. For this reason, the district court properly found that Littell has no standing to bring a malpractice action against Byrd and Trinkle Moody.

[2] Do Over Ruling = No Claim v. Stuart: "Heads I win, tails you lose"

This is the leg of the case that must have driven the plaintiff (and his attorney) crazy. With respect to the malpractice claim against the second estate planning attorney (Stuart), the court ruled there was no claim because this court interpreted the Joint Trust exactly opposite to the way the same instrument had been interpreted by the probate court. In the probate court the plaintiff had lost because the judge concluded the Joint Trust was NOT amendable after the first spouse's death. This time around the plaintiff lost - AGAIN - because the court concluded the Joint Trust WAS amendable after the first spouse's death, so the estate planning attorney (Stuart) did nothing wrong; ergo: malpractice action dismissed.

Littell also asserts that the district court erred in finding that the Trust was amendable by the sole surviving settlor and that therefore Stuart and Gray Robinson were not negligent in executing amendments to the Trust.FN2

FN2. Although the probate court reached the opposite conclusion, the district court properly found that because Stuart and Gray Robinson were not parties in the probate case, the probate court's decision has no preclusive effect in this case. See Albrecht v. State, 444 So.2d 8 (Fla.1984) (noting that issue preclusion applies only when the identical parties wish to relitigate issues that were actually litigated as necessary and material issues in a prior action).

Lesson learned? THINK "JOINDER OF PARTIES"

It's unfair to second guess anyone after 8 years of litigation. Viewed in retrospect, no one is perfect; and perfection isn't the standard we're supposed to be judged by. However, looking forward, what lessons can trusts and estates litigators draw from this case? I was especially struck by the "heads I lose, tails you win" nature of this case. It's OK for a judge to rule against you; smart, reasonable minds can disagree on how to interpret a trust agreement. It happens every day. But it's not OK if two different judges rule in exactly opposite ways on the same trust agreement: and you lose no matter what.

One way to avoid the risk of inconsistent results among different judges adjudicating the same trust agreement is to make sure all related claims are tried in one lawsuit before the same judge. That way, no matter how the judge rules, everyone has to live with that ruling for all purposes. How do you do that? Florida's joinder-of-parties rule. Under Fl. Civ. Pro. Rule 1.210(a), any person can be made a defendant who has or claims an interest adverse to the plaintiff and any person can, at any time, be made a party if that person's presence is necessary or proper to a complete determination of the cause. If the same judge had adjudicated both the trust-construction action and the malpractice action, each side would have won one and lost one, but no one would have been stuck with the "heads I lose, tails you win" outcome the plaintiff walked away with in this case.

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Blake v. Waks, --- So.3d ----, 2009 WL 1212242 (Fla. 3d DCA May 06, 2009) (NO. 3D09-980)

One of the defining characteristics of probate litigation is that cases are always decided by judges: no juries here. So if you're afraid you won't get a fair hearing because a judge says or does something demonstrating bias against you, you're entitled to request that he or she disqualify himself or herself. F.S. § 38.10; Fla. R. Jud. Adm. 2.330. In the linked-to opinion the 3d DCA applied this standard in granting a request to disqualify a probate judge for apparently being biased against the petitioner. Here's the court's one-paragraph explanation of its ruling:

According to duly executed affidavits, in denying agreed motions to disburse the net proceeds of an intestate estate to the petitioner Blake, a genealogical researcher who had found and who held unchallenged powers of attorney from the previously unknown heirs of the decedent, see Morse v. Clark, 890 So.2d 496 (Fla. 5th DCA 2004) (recognizing party status of genealogical service holding assignments from heirs), the presiding probate division circuit judge volunteered the statement, among others, that she did not trust him to make the required distribution to his principals. This comment, based on nothing in the record or otherwise, well justified the petitioner's expressed belief that she was not impartial, and therefore required the granting of his application for her disqualification. See Grandview Palace Condo. Ass'n v. City of N. Bay Vill., 974 So.2d 1170 (Fla. 3d DCA 2008); Miami Dade Coll. v. Turnberry Invs., 979 So.2d 1211 (Fla. 3d DCA 2008).

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Juega ex rel. Estate of Davidson v. Davidson, --- So.2d ----, 2009 WL 321564 (Fla. 3d DCA Feb 11, 2009)

The basic rule in Florida is that a representative party need not have standing if (1) that party has authority to act on behalf of the real party in interest and if (2) the real party in interest has standing. Florida rule of civil procedure 1.210(a) lists six types of representative parties who can bring an action in their own name without suing in the name of the real party in interest. One of those categories is the personal representative of a decedent's estate.

The first time the 3d DCA ruled in this case it focused on the personal-representative category [click here], but overlooked Florida's common-law rule with respect to standing: even if the plaintiff does not fall within one of the six exempt categories listed in rule 1.210(a), the plaintiff may still have standing to sue if he can establish he has some legal right to proceed on behalf of the real party in interest. It's this common-law rule that's at the heart of the linked-to opinion, in which the 3d DCA reversed itself on the issue of standing based on the following law:

Florida's real party in interest rule “is permissive only....” Kumar Corp. v. Nopal Lines, Ltd., 462 So.2d 1178, 1184 (Fla. 3d DCA 1985). The rule states:

Every action may be prosecuted in the name of the real party in interest, but a personal representative, administrator, guardian, trustee of an express trust, a party with whom or in whose name a contract has been made for the benefit of another, or a party expressly authorized by statute may sue in that person's own name without joining the party for whose benefit the action is brought.

Fla. R. Civ. P. 1.210(a) (emphasis added).

“[A] nominal party, such as an agent, may bring suit in its own name for the benefit of the real party in interest.” Kumar, 462 So.2d at 1185 (emphasis added). “[A] principal may subsequently ratify its agent's act, even if originally unauthorized, and such ratification relates back and supplies the original authority.” Id.

“Thus, where a plaintiff is either the real party in interest or is maintaining the action on behalf of the real party in interest, its action cannot be terminated on the ground that it lacks standing.” Id. at 1183; see Mortgage Elec. Registration Sys., Inc. v. Revoredo, 955 So.2d 33, 34 (Fla. 3d DCA 2007) (collection and litigation agent has standing to bring mortgage foreclosure action); Eastern Inv., LLC v. Cyberfile, Inc., 947 So.2d 630, 632 (Fla. 3d DCA 2007) (action may be maintained by assignee; “Florida Rule of Civil Procedure 1.210(a) permits an action to be prosecuted in the name of someone other than, but acting for the real party in interest.”)

The affidavit filed by the son in this case is indistinguishable from the affidavit filed by the principal in Kumar. Id. at 1181. The facts stated in the Kumar affidavit, as here, establish that the agent, Juega, has standing.

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Here are the 2007 stat's for the probate courts in Dade, Broward and Palm Beach county. You can find all of this data here and download numbers for your local probate court here. My chart only reports on the "cases filed" figures; click here, here and here for all the details. But numbers alone don't tell the whole story. To understand the breadth of issues probate judges contend with in an average year, below is the official definition given for each of the listed categories. Finally, as a rough measure of how busy these judges are on average, I took the total filing figure and divided it by the number of probate judges serving in each respective county.

So what’s it all mean?

In Dade - on average - each judge took on close to 2,600 NEW cases in 2007, and in Broward and Palm Beach counties the average new case load figure hovered around 2,000 per judge. Keep in mind that these figures don’t take into account each judge’s EXISTING case load. These case-load figures may be appropriate for uncontested probate proceedings, which likely represent 99% of the cases administered by our probate courts. However, when it comes to that 1% of probate cases that are litigated, these same case-load figures suggest to me that the “cold judge” factor I wrote about here needs to be weighed heavily every time you ask a court system designed to handle un-contested proceedings to adjudicate a complex trial or basically rule on any contested and technically demanding issue or pre-trial motion of significance that can’t be disposed of in the few minutes allotted to the average probate matter. 

2007 Probate Court Filing Statistics

Type of Case	Dade	Broward	Palm Beach
Probate	4,103	4,917	4,823
Guardianship	936	504	495
Trust	67	84	234
Baker Act	3,653	1,943	1,110
Substance Abuse	709	589	1,021
Other Social	884	392	246
Total	10,352	8,429	7,929
# Judges	4	4	4
Total/Judge	2,588	2,107	1,982

Glossary: 

Probate: All matters relating to the validity of wills and their execution; distribution, management, sale, transfer and accounting of estate property; and ancillary administration pursuant to chapters 731, 732, 733, 734, and 735, Florida Statutes.

Guardianship (Adult or Minor): All matters relating to determination of status; contracts and conveyances of incompetents; maintenance custody of wards and their property interests; control and restoration of rights; appointment and removal of guardians pursuant to chapter 744, Florida Statues; appointment of guardian advocates for individuals with developmental disabilities pursuant to section 393.12, Florida Statutes; and actions to remove the disabilities of non-age minors pursuant to sections 743.08 and 743.09, Florida Statutes.

Trusts: All matters relating to the right of property, real or personal, held by one party for the benefit of another pursuant to chapter [736], Florida Statutes.

Florida Mental Health Act or Baker Act: All matters relating to the care and treatment of individuals with mental, emotional, and behavioral disorders pursuant to sections 394.463 and 394.467, Florida Statutes.

Substance Abuse Act: All matters related to the involuntary assessment/treatment of substance abuse pursuant to sections 397.6811 and 397.693, Florida Statutes.

Other Social Cases: All other matters involving involuntary commitment not included under the Baker and Substance Abuse Act categories. The following types of cases would
be included, but not limited to:

• Tuberculosis control cases pursuant to sections 392.55, 392.56, and 392.57, Florida Statutes;
• Developmental disability cases under section 393.11, Florida Statutes;
• Review of surrogate or proxy’s health care decisions pursuant to section 765.105, Florida Statutes, and rule 5.900, Florida Probate Rules;
• Incapacity determination cases pursuant to sections 744.3201, 744.3215, and 744.331, Florida Statutes;
• Adult Protective Services Act cases pursuant to section 415.104, Florida Statutes.

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Griem v. Becker, --- So.2d ----, 2009 WL 454517 (Fla. 3d DCA Feb 25, 2009)

My assumption regarding "bearer" shares in offshore companies is that they're sold to people who are up to no good (probably trying to cheat on their taxes), and I'm not the only one who feels that way [click here]. From an asset protection standpoint, the main advantage of bearer shares is the supposed ability to quickly and anonymously transfer ownership of your shares. That may be well and good while you're alive, but if you drop dead, figuring out who owns your shares won't be easy, as the litigants in this case found out.

At the probate court level the judge bought the argument that when it comes to bearer shares in a BVI company, possession = ownership, period, end of story. Which is a fair assumption, and what I would have guessed before reading the linked-to opinion. Not so, says the 3d DCA, in an opinion that's a road map for anyone who ever has to deal with this issue in the future. The two big take-away points from this case are:

1. Florida law does NOT control the ownership issue:

The appellee relies on section 673.2011(1), Florida Statutes (2005), which states, “[I]f an instrument is payable to bearer, it may be negotiated by transfer of possession alone.” . . . This reliance, however, is misplaced. Under the UCC, “instruments” are unconditional promises or orders to pay a fixed amount of money and are addressed in Article 3 (chapter 673 of the Florida Statutes), as distinguished from “securities,” addressed in Article 8 (chapter 678 of the Florida Statutes). The shares in Conti-Tech are securities. Under section [678.1101], the local law of the issuer's jurisdiction, BVI, governs claims regarding transfer of the Conti-Tech shares.

2. Determining ownership of bearer shares is a fact-intensive exercise:

On appeal the 3d DCA reversed the probate court's summary judgment order expressly rejecting the argument that possession is "ten tenths of the law" when it comes to figuring out who owns bearer shares. Ownership of bearer shares turns out to be way more fact intensive than most of us would have guessed.

Simply stated, the mere possession of these BVI share certificates does not immunize the appellee from investigation or claim by the personal representative. The appellee's affidavit raises more questions than it answers: since Conti-Tech had a U.S. securities account, did it file U.S. income tax returns in 2003, 2004, and 2005, potentially providing evidence linking the company to its shareholder? If Conti-Tech's shareholder received any part of its income, would that not have been disclosed on his or her U.S. income tax return? FN6 Did Conti-Tech's memorandum authorize bearer shares? Wouldn't Merrill Lynch, Miami, have required a copy of the memorandum as part of the account-opening documentation for Conti-Tech's securities account? Wouldn't Conti-Tech's registered agent and the depositary custodians have records revealing the beneficial holders and transfers? How could Becker have obtained her appointment as director effective over seven months after Mr. Griem's death unless she delivered documentary evidence of her ownership of the shares to the registered agent of Conti-Tech before that? Does the registered agent have other certificates evidencing transfers of ownership or custodians in effect before Mr. Griem's death?

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Fintak v. Wachovia Bank, N.A., Slip Copy, 2009 WL 413599 (M.D.Fla. Feb 18, 2009)

Say you have a trust that owns two CDs that together are worth a little over $200,000 and Wachovia pays them out to one of your three co-trustees . . . and he runs off with the loot. Now assume the bank wasn't supposed to pay those CDs unless at least two of the co-trustees signed off on the transaction. Oops!!

Most of us - whether we represent the bank or the trust - would intuitively know there's a lawsuit lurking around in there somewhere, but actually formulating that lawsuit (or predicting what the claims will be if you're playing defense) is how lawyers add value. Once you know what the claims will be, both sides can evaluate the risks of winning/losing and negotiate a settlement  before a lot of money, time and effort is poured into pre-trial motion practice.

And that's where the linked-to order comes into play: we now have a battle-tested road map for evaluating this type of case. The plaintiffs in this case sued Wachovia on the following three grounds:

• conversion (Count I),
• breach of contract (Count II), and
• negligence (Count III)

Wachovia sought to dismiss the conversion and negligence counts . . .  and lost. Here's why the court said the claims stood.

Conversion:

In Count I, the plaintiffs allege that Wachovia is liable for [Wachovia's] conversion of the trust's funds in violation of Section 673.4021, Florida Statutes. (Doc. 2, ¶ 13) The defendant argues that the conversion claim fails because no conversion action arises from a mere obligation to pay money and because the plaintiffs “fail to describe with particularity any identified, specific money.” (Doc. 7 at 3) The statute provides:

The law applicable to conversion of personal property applies to instruments. An instrument is also converted if it is taken by transfer, other than a negotiation, from a person not entitled to enforce the instrument or a bank makes or obtains payment with respect to the instrument for a person not entitled to enforce the instrument or receive payment.

§ 673.4021, Fla. Stat . Under the Florida Commercial Code, a certificate of deposit is an “instrument.” See § 673.1041, Fla. Stat .

The plaintiffs allege that Wachovia converted the certificates of deposit by allowing Edmund Fintak to redeem the certificates without obtaining the signatures of two trustees. Construed most favorably to the plaintiffs, the allegations in the complaint establish that [Wachovia] permitted Edmund Fintak to redeem the certificates of deposit and that Edmund Fintak lacked the authority to receive payment without the signature of at least one more trustee. Accordingly, the motion to dismiss Count I is DENIED.

Negligence:

In Count III, the plaintiffs allege that [Wachovia] negligently failed to comply with the terms of the certification of trust. (Doc. 2, ¶¶ 22-29) Moving for dismissal of Count III, Wachovia argues that the economic loss rule bars the plaintiffs' negligence claim. However, the economic loss rule primarily applies “to limit actions in the product liability context.” See Moransais v. Heathman, 744 So.2d 973, 983 (Fla.1999); Ron's Quality Towing, Inc. v. Se. Bank of Fla., 765 So.2d 134, 136-37 (tort claims against bank not barred by the economic loss rule). Wachovia fails to show that the economic loss rule bars the plaintiffs' negligence claim. See Fed. Ins. Co. v. NCNB Nat'l Bank of N.C., 958 F.2d 1544, 1546 (11th Cir.1992) (applying Florida law and recognizing a negligence action against a bank for bank's failing to obtain two hand signatures before paying on corporate checks). Accordingly, Wachovia's motion to dismiss Count III is DENIED.

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Belanger v. Salvation Army, 2009 WL 223884 (11th Cir.(Fla.) Feb 02, 2009) [Attorney Interview]

The Salvation Army has been enmeshed in litigation since 2007 over approximately $105,000 it received from a pay-on-death account [click here]. At issue was whether a corporation, such as the Salvation Army, could be the beneficiary of a pay-on-death bank account under Florida law. According to the trial court and now the 11th Circuit, the answer is "yes." The following excerpt from the 11th Circuit opinion does a good job of framing the issue and explaining the court's statutory-construction ruling:

Richard Jason Belanger, as son and personal representative of the Estate of Richard Jose Belanger, deceased, brought this diversity action against The Salvation Army to recover funds which The Salvation Army had obtained from a pay-on-death bank account established in the name of “Richard J. Belanger, In Trust For The Salvation Army.” The Estate argues that The Salvation Army, a corporation, cannot be considered a “surviving beneficiary” under the pay-on-death account provisions of section 655.82, Florida Statutes. The district court granted a motion to dismiss in favor of The Salvation Army, finding that a corporation can be a beneficiary of a pay-on-death bank account under Florida law. The Estate appeals.

This case presents an issue of first impression: whether a corporation qualifies as a “person” permitted to be a lawful beneficiary of a pay-on-death account under section 655.82 of the Florida Statutes. We, therefore, must form a reasoned opinion as to how this statute should be interpreted. We determine that the plain language of section 655.82 permits a corporation to be a beneficiary of a pay-on-death account because the definition of the term “person” in section 1.01(3) of the Florida Statutes includes corporations. Accordingly, for the reasons set forth in greater detail below, we affirm.

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Barash v. Kates, --- F.Supp.2d ----, 2008 WL 4922787 (S.D.Fla. Jun 25, 2008)

Serial litigation by vexatious litigants in trusts-and-estates proceedings and how courts go about dealing with them has been a frequent topic on this blog [click here, here, here]. The take-away from these cases is: [1] if your client is on the receiving end of lawsuit, after lawsuit, after lawsuit by an abusive litigant, counsel patience: courts will bend over backwards to accommodate litigants whose conduct is far outside the bounds of acceptable behavior for very long periods of time prior to taking action to stop future abuses; and [2] you don't have to put up with this garbage forever, there is a tipping point, and once you've reached it, courts do have the authority to tailor appropriate protective measures.

The linked-to case is helpful because it delivers on three fronts:

• it provides yet another concrete example of how bad things have to get before a court will step in and take action against an abusive litigant continuously filing new lawsuits against your client [i.e., these facts help you manage your client's expectations];
• it summarizes the law you'll need to cite if you're ever confronted with a vexatious litigant whose making your life and the life of your client miserable; and
• it gives you an example of the type of protective order you'll want entered to stop the madness.

The Facts:

You'll have to read the opinion for all the details, but note that the plaintiff whose conduct is the subject of the linked-to order had been litigating against the defendants over inheritance issues for over seven years (since 2001) in both state and federal courts in Florida, Colorado and New York. Again, the point to take away here is that you'll probably have to put up with years of abuse before a court will enter a protective order against future vexatious litigation (that doesn't mean you can't ask for sanctions as soon as the other side goes crazy on you).

The Law:

Here's how Judge Hopkins summarized the law in the 11th circuit regarding a court's inherent authority to curb future abuses by vexatious litigants:

The 11th Circuit has long recognized the court's ability to protect itself from abusive litigants. See Procup v. Strickland, 792 F.2d 1069, 1071-1074 (11th Cir.1986) (en banc) (affirming in part order of district court enjoining pro se litigant from filing any cases unless represented by counsel). See also United States v. Hintz, 229 Fed. App'x 860, 861 (11th Cir.2007) (citing Procup, 792 F.2d at 1073-1074). The Court has also stated that district courts have the authority to impose “serious restrictions” on a litigant's ability to bring matters to court without an attorney. See Procup, 792 F.2d at 1070. “Federal courts have both the inherent power and the constitutional obligation to protect their jurisdiction from conduct which impairs their ability to carry out Article III functions.” Martin-Trigona v. Shaw, 986 F.2d 1384, 1386-1387 (11th Cir.1993) (quoting Procup, 792 F.2d 1069)). As a result, “considerable discretion is necessarily reposed in the district court” to draft orders enjoining abusive litigation tactics. See Martin-Trigona, 986 F.2d at 1387 ( citing Procup, 792 F.2d at 1074). See also May v. Hatter, No. 00-4115-Civ-Moore, 2001 WL 579782, *4 (S.D.Fla. May 15, 2001) (quoting Martin-Trigona, 986 F.2d at 1387) (citing Procup, 792 F.2d at 1074). Such orders may be appropriate to protect both the courts and its staff, as well as the rights of all litigants in the federal system. See Procup, 792 F.2d at 1071-1072 (noting that the claims of all other litigants suffer when a single litigant files “upwards of a lawsuit a day,” and that every lawsuit filed, no matter how frivolous or repetitious, requires the investment of court time, whether the pleadings are reviewed by a law clerk, staff attorney, magistrate, or judge).

Courts can be creative in fashioning appropriate injunctions against abusive litigation tactics. See Procup, 792 F.2d at 1072-1073. See also Hintz, 229 Fed. App'x at 861 (citing Procup, 792 F.2d at 1073-1074). For example, courts have entered orders which (1) enjoin “prisoner litigants from relitigating specific claims or claims arising from the same set of factual circumstances;” (2) require “litigants to accompany all future pleadings with affidavits certifying that the claims being raised are novel, subject to contempt for false swearing;” and, (3) direct “the litigant to seek leave of court before filing pleadings in any new or pending lawsuit.” Procup, 792 F.2d at 1072-1073) (citations omitted; other examples of court orders omitted). See also Hintz, 229 Fed. App'x at 861 (noting that the court has approved order limiting further pleadings without order of the court, after the complaint has been filed); Martin-Trigona, 986 F.2d at 1387 (noting that the Eleventh Circuit “has upheld pre-filing screening restrictions on litigious plaintiffs.”) (citing Copeland v. Green, 949 F.2d 390 (11th Cir.1991); Cofield v. Alabama Public Serv. Comm., 936 F.2d 512, 517-18 (11th Cir.1991)).

Moreover, courts may enjoin not only the abusive litigant, but also those working in concert with them, or at the behest of the litigant. See Martin-Trigona, 986 F.2d at 1287-1389 (affirming order of district court which applied equally to Martin-Trigona and “persons or entities acting at his behest, at his direction or instigation, or in concert with him.”) The only limitation on the court's discretion to enjoin abusive litigation is that courts are not permitted to completely bar all access to the courts. See Procup, 792 F.2d at 1074. Should an injunction be entered, abusive litigants may be sanctioned for violating the injunction. See Martin-Trigona, 986 F.2d at 1389 (affirming order dismissing lawsuit filed by the mother of Martin-Trigona, because the mother acted in concert with her son to violate previous court order); May, 2001 WL 579782 at *5 (dismissing lawsuit with prejudice after abusive litigant violated injunction three times) (citing World Thrust Films, Inc. v. Int'l Family Enter., Inc., 41 F.3d 1454, 1456 (11th Cir.1995)).

The Remedy:

Here's the remedy granted by Judge Hopkins. Note that this type of remedy is typical: it doesn't close the courtroom doors to the abusive litigant, but it does make the litigant jump through a series of hoops prior to granting him future access to the court system. If you read the case you'll also note that this remedy is being granted in addition to personal sanctions being entered against the abusive litigant.

1.) Philip Barash is ORDERED to cease filing any further pleadings unless Ordered by this Court, or unless prior approval is obtained by this Court.

2.) In order to obtain court approval to file any pleading, Philip Barash is ORDERED to abide by the following procedure. Failure to follow such procedure may result in the dismissal, striking, or denial of the Motion or offending pleading, or other sanctions.

First, Barash shall file with the Court a “Motion for Court Approval to File Pleading,” wherein he shall (a) state that he seeks the Court's approval to file a particular pleading; (b) explain the legal purpose or basis of the pleading; and, (3) describe the nature of the pleading with specificity.

Second, Barash shall attach as a clearly labeled exhibit to the “Motion for Court Approval to File Pleading” the pleading he seeks to file.

Third, the filing of any “Motion for Court Approval to File Pleading” shall also comply with all aspects of the Federal Rules of Civil Procedure, as well as the Local Rules for the Southern District of Florida (including service on Defendant, the submission of motions only to the Clerk of Court, and no direct correspondence to Chambers).

3.) This Order shall apply to Barash and anyone working in concert with him, at his direction, or at his behest, including, but not limited to his wife Sandra, or any other family members, friends, associates, or acquaintances.

4.) IT IS FURTHER ORDERED THAT Defendant Kates need not respond to any of Barash's filings which may be filed subsequent to this Order, unless Ordered by this Court.

5.) Any violations of this Order may result in sanctions.

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Brindle v. Brindle, --- So.2d ----, 2008 WL 4722746 (Fla. 3d DCA Oct 29, 2008)

Sometimes it pays to step back and review the basics, like the difference between in rem jurisdiction and in personam jurisdiction in probate proceedings, or the finality of settlement agreements no matter what courtroom you happen to be in. Both issues come up with some frequency in contested probate proceedings, which is why I was happy to see them both addressed squarely in the linked-to opinion.

In Rem v. In Personam Jurisdiction:

When the personal representative of this estate realized he didn't have enough cash to pay his administrative expenses, he figured why not make his brother (a 50% beneficiary of the estate) pick up half the tab. Sounds reasonable, which is probably why the probate court went along with the idea. Wrong answer said the 3d DCA, and here's why:

We reverse the order on appeal for further proceedings. The administration of an estate in probate is an in rem proceeding. § 731.105, Fla. Stat. (2006); Hoffman v. Murphy ( In re Estate of Williamson), 95 So.2d 244 (Fla.1956). Beneficiaries are not ordinarily “parties” to the proceeding. Payette v. Clark, 559 So.2d 630 (Fla. 2d DCA 1990); see also Sean Kelly & Shane Kelly, Litigation Under the Florida Probate Code § 1.29 (6th ed. 2006) (“Generally, in a probate administration, the personal representative is the only person over whom the court has in personam jurisdiction.”). Thus, absent consent or statutory authority, a probate court may not apportion the expenses of an estate among the beneficiaries of an estate personally. See Dayton v. Conger, 448 So.2d 609, 611-12 (Fla. 3d DCA 1984); Dourado v. Chousa, 604 So.2d 864, 865 (Fla. 5th DCA 1992); cf. § 733.106(3)-(4), Fla. Stat. (2006) (allowing, in proper circumstances, attorneys fees and costs to be awarded from interests in an estate). There is no agreement or statute applicable to this case by which a personal award of estate expenses against Richard and Charles can be sustained.FN1 The record in this case indicates the probate judge ordered Richard and Charles to split the expenses of the estate as a matter of convenience.

FN1. Although the circuit judge in the civil division had the authority to apportion the costs of that proceeding personally individually among the litigants, § 733.106(1), Fla. Stat. (2006); Dayton, 448 So.2d at 612, the parties, with the approval of the personal representative, resolved those costs in their settlement agreement.

Finality of Settlement Agreements:

No one's perfect, but it you cut a deal that goes south on you, most of us know you can't ask for a re-play. You suck it up and move on. Well that's not what happened in this case. In this case the probate court decided a settlement agreement signed by the litigants two years ago didn't make sense anymore, so the judge tweeked it a bit. Again, may have sounded like a reasonable "solomaic" solution to a dispute between two brothers disputing their mother's estate, but it was bad law, so says the 3d DCA:

Finally, neither division of the circuit court possessed the authority to set aside the terms of the settlement agreement for any purpose. The agreement had been approved and compliance ordered by the civil division of the circuit court almost two years before, with jurisdiction retained only “[as] necessary to enforce the Settlement Agreement.” All the facts pertaining to the existence and amount of the expenses needed to be paid by the estate were known or knowable to the personal representative when he embarked upon the distribution of estate assets-more than half to himself-pursuant to the settlement agreement. His argument that “it is no longer equitable that the [order] should have prospective application” within the meaning of Florida Rule of Civil Procedure 1.540(b)(5) is not supported. See Hensel v. Hensel, 276 So.2d 227, 228 (Fla. 2d DCA 1973) (“[T]he equities spoken of in ground No. 5 of [Rule 1.540(b) ] are those which come to fruition [a]fter a final judgment ....”); accord Baker v. Baker, 920 So.2d 689 (Fla. 2d DCA 2006); Gregory v. Connor, 591 So.2d 974, 977 (Fla. 5th DCA 1991).

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Urbanek v. Hopkins, --- So.2d ----, 2008 WL 4489266 (Fla. 4th DCA Oct 08, 2008)

What this case is really about is good lawyering. Miami probate litigator David H. Goldberg was hired to represent an 88-year old man suffering from Parkinson's disease who had the misfortune of getting sucked into trust litigation he didn't start and wasn't a party to. The trustee/defendant in this case decided he needed to depose this poor guy, and come hell or high water, the Broward County probate judge adjudicating this matter was going to make sure he got his way.

I don't know David Goldberg, but I think his work in this matter is a case study in effective advocacy and hope someone let's him know I said so.

GOOD LAWYERING

• Action:

The trustee/defendant in this case sought to take an oral deposition of August Urbanek, the 88-year old grantor of the irrevocable trust at the center of this case and the father of the trust-beneficiary who's the plaintiff in this case.

• Reaction:

David Goldberg filed an objection to the deposition on the grounds of age, health and privacy. In support of his objection, Goldberg filed a detailed affidavit from a physician specializing in neurology, having specific knowledge about the grantor-father's condition concluding that the proposed deposition “would have detrimental effects on his Parkinson's disease” and his health would be “severely impacted.”

It's unclear from the linked-to opinion, but Goldberg apparently then also filed a motion to limit his client's deposition to written questions.

• Action:

In response to Goldberg's motion, the trial court ordered the grantor-father and his physician to appear in court for a hearing on the grantor-father's medical condition. In spite of the affidavit establishing danger to the grantor-father's health from being forced to appear for a deposition, the judge nevertheless insisted that he come to court to testify. The judge rejected the alternative of first permitting only a written deposition. The judge also failed to ascertain how any testimony of the grantor-father might be relevant or lead to relevant evidence.

• Reaction:

Goldberg immediately filed a motion seeking to have the hearing on his client's medical condition conducted by telephone.  On the day of the hearing, Goldberg showed up in court without his client explaining, again, that if his client were required to be there in person his health would be “severely impacted.”

• Action:

Apparently getting a little pissed off by now, the court ordered the grantor-father to submit to a compulsory medical examination by a physician chosen by the trustee within the next 30 days. At this point I think it's important to say again that the grantor-father was not a party to this lawsuit. What happened to him could have conceivably happened to any bystander the parties to the lawsuit took it upon themselves to decide was a necessary witness: a lawyer says he wants to depose you, you say no for medical reasons and "presto," a judge is ordering you to surrender all of your personal privacy rights and submit yourself to a physical examination by a doctor not of your own choosing. Am I the only one who finds this entire situation more than a little scary?

• Reaction:

Goldberg filed a petition for writ of certiorari asking the 4th DCA to quash the trial court's compulsory-medical-examination order.

THE LAW

Based on this record (again, the product of good lawyering), the 4th DCA made short work of the probate court's order, quashing the directive requiring an examination of the grantor-father and requiring any deposition of the grantor-father to be limited initially to written deposition questions.  For future reference, here's the legal reasoning underlying the 4th DCA's ruling:

• Probate court lacked authority to sanction witness:

The grantor-father was never served with a subpoena to appear, and the court made no finding of contempt for the personal failing of the grantor-father to attend the hearing. See Pevsner v. Frederick, 656 So.2d 262 (Fla. 4th DCA 1995) (sanctions may not be imposed against nonparty for discovery violation in absence of finding of contempt). The affidavit of the personal physician raises substantial doubts as to whether the grantor-father was even physically capable of appearing personally for a deposition or in court. In the absence of contempt, under our Pevsner decision the trial court had no authority at this point to impose any sanctions on the grantor-father. Id.

•  Grantor-father was entitled to a protective order based on his affidavit:

As to the compulsory medical examination (CME) of the grantor-father, the trial judge overlooked the burden placed by Florida Rule of Civil Procedure 1.360 on the proponent of a CME. Under the rule, the party seeking a CME must show that the person to be examined is a party in the litigation who has himself placed his physical condition at issue. The party seeking the CME must establish good cause for such an exam. Here the trial judge should have first required written deposition questions of the grantor-father. Before the trustee could thereafter show good cause for a CME, he would thereupon have to show why the results of the written deposition failed to furnish the relevant information sought from the grantor-father.

Without a showing of good cause, the burden never shifted to the grantor-father to sustain his objection to the CME, and the grantor-father was entitled to a protective order on the basis of his physician's affidavit. See Olges, 856 So.2d at 11 (“But the question of protective rules or protective orders never arises and the burden never shifts unless the proponent of the examination shows good cause for an examination in the first place.”). “Good cause” for such an examination is not made on the basis of conclusory allegations or assertions of counsel. See Fruh v. Dept. of Health & Rehab. Serv., 430 So.2d 581 (Fla. 5th DCA 1983) (two requirements of “in controversy” and “good cause” not met by mere conclusory allegations in pleadings, nor by mere relevance to case, but require affirmative showing by movant that each condition as to which examination is sought is really and genuinely in controversy).

THE OTHER SIDE OF THE STORY

This is the first time I’ve ever done this, and I don’t plan on doing it again. However, because I laid it on so thick in favor of David Goldberg, I think it’s only fair to “even out” the coverage (if only to make sure David’s head doesn’t get too big). Below is a redacted version of a comment I received in response to this blog post.

But first an explanatory note. The linked-to opinion is only four pages long, and of those four pages the “facts of the case” represent only a few paragraphs. When the 4th DCA was drafting its opinion I assume they only focused on the facts most relevant to their legal conclusions. They have limited resources, and there’s no sense in making the opinion any longer than it needs to be. However, a byproduct of the court’s editing process is that most, if not all, of the “facts” supporting the losing side of this appeal probably didn’t make it into the published opinion. These facts may not have been directly relevant to the outcome of the appeal, but perhaps they would have cast a completely different light on this case, perhaps a light less favorable to the winning side. The point is I don’t know, and it’s simply impossible for me to read each side’s appellate briefs before writing about the published appellate opinion.

Note to self and blog readers: Remember there’s always multiple sides to every story, and the side that makes it into the published appellate decision may not always be the one closest to the "truth".

"What this case is really about is permitting an 88 year old man to be fleeced by his son who is involved in litigation over the irrevocable trust established by his father a number of years ago. By taking advantage of a vulnerable adult, the son is taking funds from his father outside of the trust and is now using that money to sue on the trust as well. The issue is whether the Court had the authority to order a independent medical examination of the 88 year old to give a deposition raised by the son and then the gentlemen's counsel. I think your statements on the support of the decision are wrong and defeat the protection of vulnerable adults."

Again, if anyone has any other comments they’d like to share regarding this case, please post them on the comment page to this blog post.

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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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Hirchert v. Hirchert Family Trust, --- So.2d ----, 2008 WL 2695897 (Fla. 5th DCA Jul 11, 2008)

California constructive-trust judgment:

This case started in California where, after a two-day bench trial, the trial court found that a California trustee had breached his fiduciary duties by wrongfully withdrawing trust funds, which were then used to buy a house for himself and his wife in California. After the trustee died, his widow sold their California home, moved to Florida, and bought a Florida home with the sales proceeds of the California residence. The California court entered a judgment imposing a constructive trust on the widow's Florida home.

The first issue on appeal was whether the California court had jurisdictional authority to enter a judgment imposing a constructive trust on Florida real property. The trial court said yes, based on the following reasoning, which was adopted verbatim by the 5th DCA:

The trial court analyzed the jurisdictional issue as follows:

The Superior Court of the State of California for the County of San Diego, which entered the judgment in question in this matter, entered said judgment after a trial on the merits. Counsel for Defendant, JOHNEE ANN ALLE HIRCHERT actively participated in the trial. The California court, while not having in rem jurisdiction over the property that was situated in Florida did have in personam jurisdiction over the Defendant, JOHNEE ANN ALLE HIRCHERT.
....

A court of one state does not have the power to directly affect title to land physically located in another state. However, “[a] court of equity, having authority to act upon the person, may indirectly act upon real estate in another state, through the instrumentality of this authority over the person.” Fall v. Eastin (1909) 215 U.S. 1 at 8, 30 S.Ct. 3, 54 L.Ed. 65 (Emphasis supplied) [sic]. “The court's decree does not operate directly upon the property or affect its title, but is made effectual through coercion of the defendant.” Groza-Vance v. Vance, 834 NE.2d 15 (Ohio App.2005) citing Fall at 10, 11 supra. See also MDO Development corporation v. Kelly, 735 F.Supp 591 (S.D.N.Y.1990)....

Counsel for the Defendant has raised the “local action rule.” Under such rule, “... court may not exercise in rem jurisdiction over property located outside its geographical territory.” Bauman v. Rayburn, 878 So.2d 1273 (Fla. 5th DCA 2004) (Emphasis in the original] [sic]. However, as long as in personam jurisdiction exists, relief may be granted even if it might incidentally affect real property. Bauman at 1274. In that the California court in this matter had in personam jurisdiction, the local action rule would not apply for the relief sought and subsequently obtained in this matter. See also Gardiner v. Gardiner, 705 So.2d 1018 (Fla. 5th DCA 1998).

While “... jurisdictional authority exists over the property only in the circuit where the land is situated,” this rule does not apply where a party, “... [seeks] equitable relief alleging, inter alia, resulting and constructive trust claims....” Ruth v. Department of Legal Affairs, 684 So.2d 181, 186 (Fla.1996). “The court's in personam jurisdiction alone provides the court with authority to determine the equitable rights of the parties.” Id. See also General Electric Capital Corporation v. Advance Petroleum, Inc., d/b/a World Fuel Services of Florida and World Fuel Services, 660 So.2d 1139 (Fla. 3d DCA 1995) [In personam jurisdiction comports with the mandates of the Federal and Florida Due Process Clause.]

(Emphasis in original). We agree with the trial judge's analysis.

Was Florida's homestead creditor protection pierced? Probably NOT

As I've written before, under Florida law the circumstances permitting the imposition of an equitable lien on homestead property are extremely narrow [click here, here]. Apparently hoping to avoid getting sucked into the twilight zone that is Florida homestead jurisprudence, the trial court attempted to punt on this issue as follows:

The trial court went on to note:

Defendant has also raised the issue of her homestead status of the Florida property. Here, the property is not being conveyed or the title changed or transferred. No change in legal ownership has been ordered. A constructive trust has been established by the California court and the legal document so establishing the constructive trust is being filed in the Florida courts. Homestead is not a matter before the Court at this point.[FN 1]

[FN 1]. It may be that at a later point when, and if, there is an attempt to convey the property an issue may arise as to the validity of the Homestead status based, in part, on the source of the funds used to purchase the property. LaBelle v. LeBelle, [sic] 624 So.2d 741 (Fla. 5th DCA 1993) [.] That issue is one for another day and another court.

Nice try, but no cigar. The 5th DCA remanded the case back to the trial court to decide the homestead issue:

We believe that the homestead issue raised in Ann's declaratory judgment count was properly before the court. The domesticated California judgment is creating homestead issues which the trial judge needs to resolve. We therefore remand for a judicial determination of homestead status and the legal effect, if any, of the California judgment on Ann's property.

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Klem v. Espejo-Norton, --- So.2d ----, 2008 WL 2511276 (Fla. 3d DCA Jun 25, 2008)

What do you do if an heir shows up after the probate proceeding has been closed? You can try to reopen the estate under F.S. 733.903.  But what if that doesn't work, then what? The 3d DCA answers that question in this case by first suggesting that the plaintiff pursue a "constructive trust" theory, then explaining the quasi in rem jurisdictional basis for this type of claim.

Constructive Trust

The linked-to opinion is actually the second time this case has come before the 3d DCA.  In the first appeal the 3d DCA affirmed a probate court's order refusing to reopen a probate proceeding so that a newly-discovered heir could claim her share of the estate. But in a specially concurring opinion the court suggested that the "lost heir" sue for her share of the estate's assets under a constructive trust theory.  Here's an excerpt from the first appellate opinion in this case, Espejo-Norton v. Estate of Merry, 869 So.2d 1255 (Fla. 3d DCA 2004), where the court explained the constructive trust theory:

This is a fascinating case in which one of the two goddaughters who were the named residual devisees of the testatrix's $400,000.00-plus estate turned up several years after the estate had been closed, after she had quite erroneously been declared dead by the circuit court, and after all the proceeds had been distributed to the other devisee. Because, insofar as the record shows, diligent, although futile, efforts had been expended to find her, I must agree with affirmance of the order before us denying her motion to reopen the estate.

It should be pointed out, however, a separate action may now be successfully maintained against the other devisee to impose a constructive trust upon the half of the estate that that devisee received, but which in law and equity belongs to the appellant. As the Restatement says:

§ 126. Rights of Intended Payee or Grantee. Business Transaction.

(1) Where a person has paid money or transferred property to another in the erroneous belief, induced by a mistake of fact, that he owed a duty to the other so to do, whereas such duty was owed to a third person, the transferee, unless a bona fide purchaser, is under a duty of restitution to the third party.

* * *

Illustrations:

2. A, administrator of B's estate, pays money out of the assets of the estate to C, B's brother, whom both A and C believe to be B's sole relative. Later D, B's son and next of kin, believed to be dead, appears. D is entitled to restitution from C. (e.s.)

Quasi in Rem Jurisdiction

Based on the 3d DCA's friendly advice in the first appeal, the plaintiff, a California resident, sued the defendant, a Maryland resident, in a Miami-Dade County court house seeking to impose a constructive trust on a brokerage account in Broward County, which is where some of the subject probate funds had been deposited.  Obviously the Miami court didn't have in personam jurisdiction over the California defendant, and the court didn't have general in rem jurisdiction over the estate assets because the estate had already been closed.  What the Florida court did have was quasi in rem jurisdiction over the brokerage account. Confused yet?

Reading the 3d DCA's linked-to opinion wont exactly clarify things for you. It's basically a series of long string cites and close to zero discussion by the 3d DCA of the point it was trying to make. If you're ever confronted with a quasi in rem issue in the future take the time to read a March 2008 Florida Bar Journal article cited by the 3d DCA in its opinion entitled Florida's Third Species of Jurisdiction. Written by Tampa trial judge Scott Stephens, this article does an excellent job of actually explaining why the 3d DCA ruled the right way in this case.

The logic underlying the 3d DCA's ruling on the quasi in rem issue in this case can be broken down as follows:

1. A Florida circuit court has authority over any person or item of property located anywhere in the state of Florida. In other words, a circuit court in Key West has jurisdictional authority to enter a judgment determining ownership of a bank account located in Key West, or "next door" in Miami, or across the state in Pensacola.
   
2. The phrase "territorial jurisdiction" is used as a stand in for the word venue in quasi-in-rem cases. Which means just like with venue, you can waive an objection to territorial-jurisdiction if not properly asserted at the beginning of your case. But just because your case may end up getting litigated in the wrong venue/territory somewhere within the State of Florida, doesn't mean your Miami-Dade County judge lacks "jurisdictional" authority to enter a judgment affecting a bank account in Broward County.
   
3. What's confusing about all this is the use of the same word "jurisdiction" to mean different things within a single case. This is the key point made by Judge Stephens in his exceptional Florida Bar Journal article.

Here's how the 3d DCA "explained" the territorial-jurisdiction point in the linked-to opinion:

As Escudero indicates, the fact that the res in question is not within the Eleventh Circuit makes no difference. This is because the issue, properly considered, is not one of subject matter jurisdiction, which may not be waived. . . . Rather, it involves a question of “territorial jurisdiction,” as it is sometimes called in this context, which may be waived by a failure properly to assert it below, as it was in this case.

Bonus material:

Judge Stephens provides the following factoids in footnote 1 to his article:

A sample of 7,490 district court of appeal cases using the term “jurisdiction” was taken through Lexis-Nexis on August 10, 2007. Cases using the term “subject matter jurisdiction” were counted separately, as were cases using one of several variants of personal or in personam jurisdiction.  .  .  .  The various subspecies of subject matter and personal jurisdiction collectively add up to less than one percent of the appearances of “jurisdiction” in the district court of appeal cases: pendent jurisdiction, three cases; ancillary, one; in rem, 43; quasi-in-rem, six.

If only 6 appellate decisions out of 7,490 mention the phrase "quasi in rem jurisdiction" (less than one-tenth of 1%), is it any wonder these sorts of questions make most lawyers break out in hives?

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Staup v. Wachovia Bank, N.A., Slip Copy, 2008 WL 2598005 (S.D.Fla. Jun 27, 2008)

The substantive issue in this case is pretty simple: if you lose in state court, you don't get another bite at the apple by simply re-filing your same case in federal court. More technically speaking the plaintiff's lawsuit was dismissed under the Rooker-Feldman doctrine, which I recently wrote about here in connection with a contested guardianship proceeding.

Poster child for mandatory arbitration clauses:

When you read the background facts of this case, the substantive ruling becomes almost meaningless. This opinion is just that last stop for a litigation train involving this trust that has been rolling along for over 10 years! A mandatory arbitration clause in the trust agreement, as expressly authorized by F.S. 731.401 [click here for form clauses], wouldn't have eliminated all of the litigation involving this trust, but I'm sure it would have dramatically reduced its scope and cost. Here's how the court described the "back-story" on this case:

By way of background, Plaintiff filed more than thirty state court actions dating as far back as 1996 with the same operative facts in Circuit Court in and for Sarasota County Florida. That court found it necessary to order a permanent injunction restricting Plaintiff from filing civil actions relating to cases involving the Mary Staup Estate in the state of Florida. Additionally, Plaintiff has filed at least eight federal court lawsuits on similar operative facts in the Middle District of Florida. Each of these lawsuits was dismissed for lack of subject matter jurisdiction under the Rooker-Feldman doctrine.

Note to estate planners: include mandatory arbitration clauses in your trust agreements.

The Rooker-Feldman doctrine:

Here's how the court explained its application of the Rooker-Feldman doctrine to this case:

Next, Defendant argues the Rooker-Feldman doctrine bars the Court from having jurisdiction over Counts I and II, as a state court previously rendered judgments for the claims raised in these two counts. Plaintiff responds by concluding that the underlying state court judgment is void, resulting in the Rooker-Feldman doctrine being inapplicable. Plaintiff goes on to acknowledge that although the claims in Counts I and II have previously been litigated, he has never plead the postal service fraud count. (Plaintiff's Response [DE 20], p. 7.)

The Rooker-Feldman doctrine provides that no federal courts, other than the United States Supreme Court, have the authority to review final judgments of state courts. Goodman v. Sipos, 259 F .3d 1327, 1332 (11th Cir.2001). This doctrine encompasses claims that are “inextricably intertwined” with a state court judgment. Id. The Rooker-Feldman doctrine applies to “cases brought by state-court losers complaining of injuries caused by state-court judgments rendered before the federal district court proceedings commenced and inviting district court review and rejection of those judgments.” Exxon Mobile Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 281 (2005).

Essentially, Plaintiff is asking the Court to invalidate the state court actions by ruling that the state court judgment is void. Additionally, the postal fraud claim has been dismissed, making this action identical to the previous state court claim. Accordingly, this Court lacks subject matter jurisdiction, as Plaintiff seeks a de facto appeal of a previously litigated state court matter. Defendant's Motion to Dismiss as to Count I and II of the Complaint will be granted.

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Mercurio v. Headrick, --- So.2d ----, 2008 WL 2434193 (Fla. 1st DCA Jun 18, 2008)

The finality of death is the sort of thing most people can figure out pretty much on their own. Unfortunately, once you walk into the alternate reality of litigation, just because your opponent is dead doesn't mean your case is over.  In the linked-to case the joint owners of a piece of property were suing each other for partition. The twist here is that they owned the property as joint tenants with right of survivorship.  So when one side died, "bingo" the survivor automatically owned the entire property, end of story, game over. Only problem is that the trial court didn't see it that way, so now we have an appellate decision that reiterates property law 101:

The trial court ordered the parties to mediation in September 2006, but they apparently did not reach an agreement over their lingering disputes before Mr. Headrick died in late October. Ms. Mercurio moved for summary judgment on the ground that the joint tenancy remained intact at Mr. Headrick's death, and that she was entitled to an undivided interest in the property as his joint tenant with a right of survivorship. Both the original judge and his successor judge denied Ms. Mercurio's motion, finding that Ms. Mercurio's admissions in her answer signified the parties' mutual intent to partition the property. The successor judge ultimately rendered a final order partitioning the property and directing the parties to sell it at a private sale. Ms. Mercurio appeals that order.

The question in this case is whether a pending action to partition a joint tenancy with right of survivorship survives one joint tenant's death. We hold that such an action does not survive the death of a joint tenant and, accordingly, absent a final judgment of partition at the tenant's death, the action is abated, because the surviving tenant receives full title to the property, consistent with the right of survivorship.

This issue is one of first impression in Florida. Other jurisdictions, however, have confronted the question, and we adopt their common approach which we find persuasive and logical.
.     .     .     .     .

This approach comports with the established and undisputed rule in Florida that only a complete, final conveyance or disposition of jointly held property severs a joint tenancy with right of survivorship.  .  .  .   This case, as many divorce cases, involves a dispute over the disposition of jointly held property. In the case of a joint tenancy, the death of one party resolves that dispute by operation of law.

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Berkow v. Isaevna, --- So.2d ----, 2008 WL 2511272 (Fla. 3d DCA Jun 25, 2008)

Lest we forget, the 3d DCA reminds us all once again that a summary judgment hearing isn't a trial.

The Appellants, Counter-Petitioners in a dispute over an estate that has escheated to the State of Florida, appeal an order that denied their motion for summary judgment, granted the Appellees/Petitioners final summary judgment, and awarded Petitioners the escheated funds. We reverse.

The record demonstrates that there were genuine issues of material fact regarding whether the Appellees were legitimate heirs of the decedent. Hence, the court erred in granting summary judgment. Moore v. Morris, 475 So.2d 666 (Fla.1985); Copeland v. Fla. New Invs., Corp., 905 So.2d 979, 980 (Fla. 3d DCA 2005). The Appellants had presented affidavits asserting that all of the decedent's heirs above them in the statutory hierarchy had died, § 732.103, Fla. Stat. (2004), arguably entitling them to the funds. They had also presented affidavits challenging the legitimacy of the Appellees as heirs. These issues of fact cannot be resolved on summary judgment. Moreover, on summary judgment the court cannot weigh testimony or make factual findings. Deakter v. Menendez, 830 So.2d 124 (Fla. 3d DCA 2002). Therefore, the court erred in entering the orders on appeal here.

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Sarhan v. Rothenberg, Slip Copy, 2008 WL 2474645 (S.D.Fla. Jun 17, 2008)

Dr. Robert Sarhan, on behalf of himself and his mother, Yvonne Sarhan, filed suit in Miami's U.S. District Court against one of this city's most experienced and esteemed probate judges, Arthur Rothenberg, alleging that his mother's constitutional rights had been violated when Judge Rothenberg adjudicated his mother incapacitated and appointed her a guardian.  Apparantly unhappy with the fact that Judge Rothenberg's ruling was upheld on appeal by the 3d DCA, Dr. Sarhan sought another bite at the apple before a federal court.  And just to make sure everyone knew he meant business, Dr. Sarhan's federal claim also sought $100 million in punitive damages.

This case highlights two themes I've written about before.  First, vexatious pro se litigants are simply a fact of life in probate litigation and counsel/judges need to know how to manage that problem, because it's not going away [click here, here].  Second, the U.S. Supreme Court's 2006 decision limiting the scope of the "probate exception" to federal jurisdiction is likely to trigger a surge in probate-related matters (like the linked-to case) ending up in federal court [click here, here].  Again, probate counsel need to know how to manage this jurisdictional issue as well.

No, you can't relitigate your guardianship case in federal court:

The linked-to opinion is an excellent road map for probate counsel trying to figure out when (if ever) litigation related to contested guardianship proceedings can end up in federal court.  Most of us would automatically assume this case was silly to begin with (which probably explains why Dr. Sarhan filed it pro se), but not many could articulate exactly why, as a matter of jurisdictional jurisprudence, you'd get laughed out of court for pulling a prank like this.  After this case, you'll know why.

Probate Exception to Federal Jurisdiction:

Under the probate-exception to federal jurisdiction, a U.S. District Court is preculded from adjudicating disputes having to do with property that is in the custody of a state probate court.  Here's how the U.S. Supreme Court articulated the rule in 2006:

.  .  .  when one court is exercising in rem jurisdiction over a res, a second court will not assume in rem jurisdiction over the same res. Thus, the probate exception reserves to state probate courts the probate or annulment of a will and the administration of a decedent's estate; it also precludes federal courts from endeavoring to dispose of property that is in the custody of a state probate court. But it does not bar federal courts from adjudicating matters outside those confines and otherwise within federal jurisdiction.

Marshall v. Marshall, 547 U.S. 293, 311-12, 126 S.Ct. 1735, 164 L.Ed.2d 480 (2006) (emphasis added).

In this case the Miami U.S. District Court applied this general rule to a contested guardianship proceeding relying heavily on an opinion out of the U.S. 7th Circuit penned by none other than Judge Richard Posner, probably one of the U.S.'s most prolific and well-known legal theorists (and blogger!).  Here's your road map:

As explained by Judge Posner in Struck v. Cook County Pub. Guardian, 508 F.3d 858, 860 (7th Cir.2007), a case with very similar facts to the Petition before this Court, proceedings to resolve disputes over the administration of a incompetent's estate are still in rem in character. “That is, they are fights over a property or a person in the court's control.” Id. The Petition is an example of a case falling squarely within the probate exception as clarified by the Supreme Court in Marshall. Dr. Sarhan requests this Court to reverse the orders of the probate court and to return all assets and property distributed pursuant to the guardianship to him. (See D.E. 8 at 15.) These are not matters that are “outside the confines” of the state probate court's supervision of Yvonne Sarhan's guardianship. As such, Judge Posner's analysis of the application of the probate exception in Stroud is directly on point here:

The res-the plaintiff's mother-is in the control of the guardian appointed by the state court, and decisions concerning the plaintiff's right of access to his mother and to her assets, her records, and her mail are at the heart of the guardian's responsibilities and are supervised by the court that appointed him ... [P]laintiff is seeking to remove into the federal court the res over which a state court is exercising control. That is the sort of maneuver that the probate/domestic-relations exception is intended to prevent.

508 F.3d at 860.

Rooker-Feldman doctrine:

Under the Rooker-Feldman doctrine, a United States District Court lacks subject matter jurisdiction to review final judgments of a state court.  If you don't like a state-court ruling, then your options are to appeal up through to the Florida Supreme Court and from there the U.S. Supreme Court, but you can't simply walk across the street to your local federal court house and ask for a do-over.

In this case Judge Rothenberg's guardianship ruling had already been affirmed per currium by the 3d DCA before Dr. Sarhan filed his federal claim.  Rather than going up the appellate court chain, Dr. Sarhan simply refiled his case in the Miami U.S. District Court.  Wrong answer.  Here's how the magistrate judge in the linked-to opinion applied the Rooker-Feldman doctrine to this case:

As was the case in the Seventh Circuit's probate exception decision, Struck v. Cook County Public Guardian, there is also persuasive precedent for the application of the Rooker-Feldman jurisdictional doctrine to a guardianship proceeding. The Tenth Circuit's recent decision in Mann v. Boatright, 477 F.3d 1140 (10th Cir.2007), stands squarely for the proposition that a pro se litigant in Dr. Sarhan's position cannot obtain a do-over in federal court against the judges and interested persons in a state court guardianship proceeding that has been finally adjudicated. The Court relied primarily on the Rooker-Feldman doctrine:

To [petitioner] this means that having lost in probate court, she cannot file a federal complaint seeking review and reversal of the unfavorable judgment. Even if the probate court's decision was wrong, that does not make its judgment void, but merely leaves it “open to reversal or modification in an appropriate and timely appellate proceeding.” ... Nearly all of [petitioner's] claims against the individual defendants assert injuries based on the probate court's judgments and, for her to prevail, would require the district court to review and reject those judgments. As such, her claims are inextricably intertwined with the probate court judgments and are therefore barred by the Rooker-Feldman doctrine.

Id. at 1146-1147 (quoting Exxon-Mobil, 544 U.S. at 284, 125 S.Ct. 1517, 161 L.Ed.2d 454).

The very same type of claims raised in Mann have been raised here, over the same type of guardianship proceeding that was finally adjudicated in state court, and against the same defendant-the state court probate judge. Whatever merit Dr. Sarhan's claims may have, they are left for the Third District Court of Appeal or the Florida Supreme Court to decide. And if those state appellate courts fail to grant him the relief he seeks, Dr. Sarhan's sole remedy is to proceed by way of certiorari to the United States Supreme Court, as per 28 U.S.C. § 1257. This District Court, however, has no power to consider whether Dr. Sarhan was right and whether Judge Rothenberg's judgments should be vacated or voided, as per 28 U.S.C. § 1331. The Rooker-Feldman doctrine, therefore, requires the dismissal of his Petition.

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Hall v. Tungett, --- So.2d ----, 2008 WL 2065802 (Fla. 2d DCA May 16, 2008)

Jurisdictional issues in probate proceedings are a source of recurring confusion for litigants and courts alike. If the court is proceeding based on its in rem jurisdiction, then under F.S. 731.301(2) all you need to do is serve anyone with a stake in the probate estate with "formal notice" under Probate Rule 5.040 and bingo, they're bound by the resulting court order to the extent of their interest in the estate. If the court is asserting in personam jurisdiction over a particular person (vs. in rem jurisdiction over the assets of the estate), then formal notice is not sufficient, in those cases a "summons"/service of process under Civil Procedure Rule 1.070 on the person you want to subject to court authority is necessary. Applying these basic concepts in a real life probate proceeding isn't always easy.

[A]  Procedural Road Map for Contesting Jurisdiction:

In this case the 2d DCA basically avoided stepping into the in rem vs. in personam jurisdictional thicket by concluding that the issue was forfeited at the trial court level because the side contesting jurisdiction failed to follow the procedural/evidentiary steps necessary to contest jurisdiction. The 2d DCA then goes on to provide an excellent procedural road map for probate counsel to follow if they ever find themselves in a dispute over jurisdiction.

Step 1: Did PR satisfy initial pleading requirement? YES

The PR, as plaintiff in this proceeding, bore the initial burden of pleading a sufficient basis to obtain jurisdiction over Ms. Hall. Venetian Salami Co. v. Parthenais, 554 So.2d 499, 502 (Fla.1989). According to the 2d DCA the PR met its pleading burden as follows:

.  .  .The statute defines a “distributee” as “a person who has received estate property from a personal representative or other fiduciary other than as a creditor or purchaser.” § 731.201(10). A distributee who improperly receives assets or funds from an estate may be compelled to return the assets or funds received. § 733.812.

    The PR's motion alleged that the brokerage account was titled in the decedent's name at the time of his death, was wrongfully distributed to Ms. Hall by Ms. Green as the predecessor personal representative, and was in Ms. Hall's possession. The motion claimed that the account and other property belonged to the Estate and must be returned to it, or if the account and property were no longer in Ms. Hall's possession then she had to return to the Estate the equivalent value, as well as any income earned on the assets or any gain received with respect to the assets.

    These allegations were sufficient to meet the PR's pleading requirement and to support service on Ms. Hall by the formal notice method permitted under section 731.301 and rule 5.040. Further, Ms. Hall did not contest the allegations by affidavit or other sworn proof. Thus, the court could properly find that it had jurisdiction over Ms. Hall to the extent of her interest in the Estate and to the extent that she received Estate property, other than as a creditor or purchaser, from Ms. Green.

Step 2: Did Ms. Hall contest the jurisdictional allegations by affidavit or other sworn proof? NO

Once the PR met its burden of pleading, the burden shifted to the person contesting jurisdiction to contest the essential jurisdictional allegations in the manner laid out in the following quoted text. Ms. Hall didn't comply with this procedure, so she effectively forfeited the issue (ouch!!).

In [Hilltopper Holding Corp. v. Estate of Cutchin, 955 So.2d 598, 601 (Fla. 2d DCA 2007)], we explained as follows:

    If the plaintiff meets this pleading requirement, the burden shifts to the defendant to file a legally sufficient affidavit or other sworn proof that contests the essential jurisdictional facts of the plaintiff's complaint. To be legally sufficient, the defendant's affidavit must contain factual allegations which, if taken as true, show that the defendant's conduct does not subject him to jurisdiction.... If the defendant does not fully dispute the jurisdictional facts, the motion must be denied....

    If the defendant's affidavit does fully dispute the jurisdictional allegations in the plaintiff's complaint, the burden shifts back to the plaintiff to prove by affidavit or other sworn proof that a basis for long-arm jurisdiction exists. If the plaintiff fails to come forward with sworn proof to refute the allegations in the defendant's affidavit and to prove jurisdiction, the defendant's motion to dismiss must be granted.

955 So.2d at 601-02 (citations omitted).

Step 3:  Is the litigation about whether the brokerage accounts are probate assets? NO

On appeal Ms. Hall argued that she shouldn't be subject to the probate court's in rem jurisdiction because she had not conceded that the brokerage account at issue in this case was in fact a probate asset. The 2d DCA basically said that's a fine argument at the trial court level, but gets you nowhere if you bring it up for the first time on appeal. Again, the 2d DCA skirted the substantive issue by basically ruling that Ms. Hall's failure to follow the proper procedure at trial resulted in her forfeiting this point.

[T]he PR alleged that Mr. Green owned the brokerage account at the time of his death, that upon his death the account was an Estate asset, and that as the initial personal representative Ms. Green improperly distributed the account proceeds to herself and Ms. Hall. Unlike the litigation in [Estate of Vernon v. Resolution Trust Corp., 608 So.2d 510 (Fla. 4th DCA 1992)], the present litigation is not intended to determine whether the Estate, in the first instance, had any interest in the brokerage account; rather, the litigation is intended to recover an Estate asset that allegedly had been improperly distributed by Ms. Green. The allegations contained in the motion were not refuted by Ms. Hall in her response to the motion or by sworn evidence challenging the PR's factual allegations. Thus, based on the information before it, the probate court properly determined that service by formal notice was sufficient and that it could exercise jurisdiction over Ms. Hall.

[B]  Do you really need evidence in contested probate proceedings? YES!!

Ms. Hall got a partial win out of this appeal when the 2d DCA reversed the trial court's ruling on the contested brokerage account. The trial court apparently ruled based solely on argument of counsel, which is flattering to the attorneys, but scores a big zero on the evidence meter. Getting back to basics here, counsel's argument is NOT evidence. I've written before about probate court's deciding issues in the absence of evidence [click here]. Here's how the 2d DCA tackled the no-evidence issue in this appeal:

    Concerning that part of the probate court's order that directed Ms. Hall to transfer property to the PR, Ms. Hall argued to the probate court that once the court resolved the issue of jurisdiction, an evidentiary hearing would be necessary to resolve disputed issues of fact relating to the property and the relief sought by the PR. After hearing the arguments of counsel as to jurisdiction and service by formal notice, the probate court took these issues under advisement. Then, the court entered its order determining that service had been proper and that it had jurisdiction over Ms. Hall. In the same order, and without receiving any evidence, the court determined that the Estate was entitled to return of the property and directed Ms. Hall to transfer the property to the PR.

    As an interested person regarding the disputed property, Ms. Hall was entitled to be heard and to present evidence in support of her position. See Fleming v. Demps, 918 So.2d 982, 984 (Fla. 2d DCA 2005) (reiterating that due process requires that a party be given the opportunity to be heard and to present evidence “to determine who is the rightful owner of the funds and whether the funds should be administered as estate assets or otherwise distributed to the proper owner”). Moreover, the PR did not present any evidence establishing the Estate's entitlement to return of the property. Because the court acted without an evidentiary basis in directing Ms. Hall to transfer the property to the PR, we reverse and remand for an evidentiary hearing.

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American Home Assur. Co. v. Junger, --- So.2d ----, 2008 WL 1958615 (Fla. 3d DCA May 07, 2008)

It's not unusual for probate lawyers to have to figure out what to do when a lost deed or contract needs to be reestablished for some reason. The linked-to opinion is a great resource because it tells us what burden of proof to expect. Although not directly cited by the 3d DCA, I'm assuming the plaintiff filed her claim under Florida's general-purpose "lost instruments" statute: F.S. 71.011.

Evidence of Lost Insurance Policy:

The decedent's spouse, Mrs. Junger, won at trial and the court entered a judgment in her favor reestablishing her late husband's life insurance policy and awarding her $302,888 in death benefits and prejudgment interest. From a practitioner's viewpoint it's useful to know what evidence she used at trial to reestablish the life insurance policy. Here's how the 3d DCA summarized the winning evidence:

Following a bench trial, the court determined that Mrs. Junger was entitled to the death benefits described in the MAC Agreement. While neither party could produce a copy of the insurance policy, Mrs. Junger introduced the MAC Agreement into evidence as well as the correspondence among her late husband, Eastern Air Lines, and AHA. These documents confirmed that AHA issued a check to Captain Junger for $50,000 in disability benefits under “policy number 9902046” for an illness incurred while he was working for the MAC Operation. Captain Junger's cardiologist tied Captain Junger's later death to that covered illness.

The trial court concluded that the MAC Agreement evidenced the primary terms of coverage-terms confirmed by AHA's payment of the disability claim-and awarded Mrs. Junger the death benefits plus interest.

Standard of Proof for Lost Insurance Policies:

On appeal the key issue was what burden of proof should the trial court have applied: the "preponderance of the evidence" standard or the more stringent "clear and convincing evidence" standard. The 3d DCA agreed with the trial court's application of the lower standard based on the following analysis:

In support of its lost instrument argument, AHA cites a number of Florida cases that hold a clear and convincing standard of proof applies when a party has the burden of proving the contents of a lost instrument. None of these cases, however, deals with a lost insurance policy. See Fries v. Griffin, 17 So. 66, 68 (Fla.1895) (lost deed); Am. Sav. & Loan Ass'n of Fla. v. Atl. Inv. Corp., 436 So.2d 442, 443 (Fla. 4th DCA 1983) (lost lease agreement); Weinsier v. Soffer, 358 So.2d 61 (Fla. 3d DCA 1978) (lost loan agreement); Locke v. Pyle, 349 So.2d 813 (Fla. 1st DCA 1977) (lost deed).FN3 AHA submits that no Florida case applies this standard of proof to a lost insurance policy, and we have found none.

We find the lost instruments in the cases cited by AHA warrant a heightened evidentiary standard because deeds, wills, oral contracts and the like are susceptible to fraud. See 9 John Henry Wigmore, Wigmore on Evidence § 2498(3) (James H. Chadbourn rev.1981). Insurance policies identified by number and known to have been issued by the insurer, on the other hand, are not as vulnerable to fraud as these other instruments. This is so because “[t]he evidence used to establish the existence and contents of [insurance] policies is usually comprised of business records and standard forms made by and found in the possession of the party against whom they are being offered.” Remington Arms Co. v. Liberty Mut. Ins. Co., 810 F.Supp. 1420, 1425-26 (D.Del.1992).

Similarly, the Law Revision Council Note to section 90.803(6), Florida Statutes (1976), provides that the reliability of business records justifies an exception to the hearsay rule.FN4 This exception underscores the likelihood that an insurance policy, presumably in the records of the insurer which issued it, is not vulnerable to fraudulent assertions by an insured seeking to prove the policy's contents and coverage.FN5 Accordingly, we find that an insured seeking to prove coverage under a lost insurance policy (a policy identifiable and shown to have been issued or acknowledged by the insurer) need only do so by the usual and less-stringent preponderance of the evidence standard.

Lesson learned?

If you're trying to reestablish a lost or destroyed document that could result in someone else having to pay your client money, expect resistance. This opinion let's you plan accordingly. If the goal is to reestablish a lost insurance policy, at least in the 3d DCA you now know you'll be subject to the less-stringent preponderance of the evidence standard. By contrast, if the goal is to reestablish a lost or destroyed deed, lease agreement or loan agreement you'll have to be ready to satisfy the much tougher clear and convincing evidence standard.

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Julia v. Russo, --- So.2d ----, 2008 WL 1883905 (Fla. 4th DCA Apr 30, 2008)

Jointly titled bank accounts are often the source of much confusion . . . and litigation . . . once one of the title holders dies. A classic example of this type of litigation is when an elderly parent puts a child's name on an account for convenience purposes and then that child does something unexpected . . . like looting the account [click here].

In the linked-to case the facts are a bit more dramatic than usual. In this case boyfriend put his girlfriend's name on an investment account and a bank account as "joint tenants with right of survivorship." The accounts were funded 100% by boyfriend. Girlfriend shot and killed boyfriend. Boyfriend's estate makes the following two-step argument against girlfriend getting any of the assets in these accounts.

Step 1: Slayer Statute = Joint Tenant's Survivorship Rights Extinguished

Boyfriend's estate argued that girlfriends rights of survivorship were extinguished under Florida's Slayer Statute, F.S. 732.802(2). Here's how the 4th DCA stated the argument:

If the Slayer Statute is applied, appellant's right of survivorship is extinguished and the accounts became tenancies in common at the time the decedent died. See Capoccia v. Capoccia, 505 So.2d 624 (Fla. 3d DCA 1987).

Unfortunately for boyfriend's estate, the trial court's order did not contain findings necessary to sustain a slayer-statute ruling, so the 4th DCA reversed this part of the trial court's order.

[T]he trial court erred in granting the Estate access to the account. For purposes of ruling on appellant's motion, the Slayer Statute was assumed to apply. There has yet to be an evidentiary hearing or any fact finding determination that appellant unlawfully and intentionally killed John Russo. Should there be such a factual determination, then and only then, would these assets pass to the Estate.

Step 2: Rebut presumption that accounts held by tenants in common are owned 50/50

In order to obtain 100% of the account funds for boyfriend's estate, not only must girlfriend's survivorship rights be extinguished, but the presumption that tenants in common own accounts 50/50 also had to be overcome. Boyfriend's estate won on this point.

“In absence of evidence to the contrary, co-tenants are presumed to owe [sic] equal undivided interests.” Levy v. Docktor, 185 B.R. 378, 381 (S.D.Fla.1995). “[U]pon the death of a cotenant, the deceased cotenant's interest in the property subject to the tenancy in common passes to his or her heirs, and not to the surviving cotenant.” 12 Fla. Jur.2d Cotenancy and Partition § 4 (1998). See, e.g., Reinhardt v. Diedricks, 439 So.2d 936, 937 (Fla. 3d DCA 1983).


The “equal share presumption” applied to tenancies in common may be rebutted by proof of unequal contribution and the absence of intent to confer a gift. See Estate of Dern Family Trust, 279 Mont. 138, 928 P.2d 123, 131-32 (Mont.1996).

As found by the trial court, appellant did not contribute any of her own funds to the accounts at issue and the decedent trusted her not to steal from him. Appellant accessed the accounts only at the behest of the decedent. The trial court specifically concluded that the decedent did not intend to make a gift to appellant of any of the money in either account.

This evidence clearly rebuts the presumption of equal contribution and the trial court correctly concluded that appellant was not entitled to any portion of the two accounts assuming the application of the Slayer Statute.

Lesson learned?

The trial court was partially reversed in this case for failing to support its slayer-statute ruling on the necessary findings of intentional and unlawful killing by girlfriend. I would assume that girlfriend is at the very least the subject of a criminal investigation in connection shooting and killing boyfriend. Until that criminal investigation gets resolved in some way, I don't see how the probate court can proceed with the civil action before it.

So why didn't the parties simply freeze the accounts until state prosecutors finished doing their job? Criminal prosecution first, slayer-statute ruling second, is the way it's usually done [click here]. Also, staying civil proceedings that overlap with criminal proceedings is common [click here]. Acting hastily with respect to a slayer-statute ruling may just end up getting you reversed on appeal . . . as the parties in this case learned.

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American United Life Ins. Co. v. Barber, Slip Copy, 2008 WL 1766916 (M.D.Fla. Apr 15, 2008)

Justin Barber was convicted in 2006 of murdering his 27 year old wife to collect on a $2.3 million life insurance policy. In an opinion I first wrote about last year [click here], the 1st DCA upheld a trial court order applying F.S. 732.802, Florida's "slayer statute," to disinherit Mr. Barber - even though his murder conviction was being appealed. In this interpleader action the federal district court for the Middle District of Florida came to the same conclusion by adopting, verbatim, the 1st DCA's analysis of the governing Florida law. The following excerpts from the district court's opinion frame the issue nicely:

Parrish argues that summary judgment should be granted in her favor. She argues that under Florida's slayer statute the judgment in Barber's criminal case is conclusive evidence of his responsibility for April's death, thereby rendering him ineligible for any distribution of life insurance benefits. In opposition, Barber argues that his appeal must be decided before his criminal judgment is “final” under the statute.

.  .  .

The First District Court of Appeal rejected this same argument raised by Barber in a case involving the same parties under one of the other life insurance policies held by April.

On appeal, Appellant argues that the trial court erred in granting summary judgment because his conviction cannot be considered final before he has exhausted his appellate rights. This argument has previously been rejected. In Prudential insurance Company of America, Inc. v. Baitinger, 452 So.2d 140, 141 (Fla. 3d DCA 1984), the insured's husband, who was the primary beneficiary of a life insurance policy, was found guilty of the insured's murder. The probate court entered an order directing the insurance company to pay the policy proceeds to the personal representatives of the insured's estate. Id. The insurance company appealed the order arguing that the husband's conviction could not be considered final due to a pending appeal. Id. at 142. The Third District Court of Appeal examined the legislative intent behind section 732.802 and determined that amendments to the statute demonstrated the Legislature's intent to make it more difficult for a killer to receive a financial benefit for his wrongdoing. Id. at 142-43. It concluded that the term “final judgment of conviction” meant an adjudication of guilt by the trial court, and it affirmed the trial court's order directing the insurance company to pay the proceeds to the personal representatives. Id. at 143. See also Cohen v. Cohen, 567 So.2d 1015, 1016 (Fla. 3d DCA 1990) (holding that irreparable harm would not occur to a primary beneficiary, even if her conviction was reversed on appeal, if the estate was distributed to the remaining beneficiaries because she would be able to seek money damages from those beneficiaries).


We agree with the reasoning of the Third District in its finding that the Legislature intended a trial court's adjudication of guilt to be final for purposes of section 732.802, even if appellate remedies have not been exhausted. We therefore conclude that the trial court properly granted summary judgment in favor of Appellee and accordingly affirm the judgment.

Barber v. Parrish, 963 So.2d 892, 893 (Fla.Dist.Ct.App.2007).

The Court is persuaded by this analysis by the state appellate court on this point of Florida law. While the Florida Supreme Court has not addressed this precise issue, the Court has not found any decision by the Florida courts that would call into question the conclusions reached by the First and Third District Courts of Appeal in Barber and Prudential. Thus, with Barber ineligible, Parrish, as contingent beneficiary, is entitled to the insurance proceeds.

Lesson learned:

As I've written before [click here], and as made clear by the federal court's decision in this case and the 1st DCA's prior opinion addressing the same set of facts, Florida's slayer statute does NOT require a final murder conviction to apply.

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Cleare v. EA Management Services, Inc., Slip Copy, 2008 WL 1711533 (S.D.Fla. Apr 10, 2008)

The linked-to case does a nice job of explaining the pleading requirements for establishing diversity jurisdiction in a case involving a personal representative. The point to keep in mind is that you have to focus on the domicile of the decedent, NOT the personal representative.  Here's how the court explained the rule:

Section 1332(c) specifically prescribes the allegations sufficient to establish jurisdiction in federal court. The district courts “have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000” and is between “citizens of different states.” 28 U.S.C. § 1332(a)(1) (2006). Residency is not the equivalent of citizenship for diversity purposes. See 13B Wright, Miller & Cooper, Federal Practice and Procedure: Jurisdiction 2d § 3611 (1984).


Moreover, it is not Plaintiff's citizenship that controls whether diversity between the Parties exists. For purposes of establishing diversity pursuant to § 1332, “the legal representative of the estate of a decedent shall be deemed to be a citizen only of the same State as the decedent.” 28 U.S.C. § 1332(c)(2) (2006). Defendants have failed to include any allegation of the deceased Stephen Fenner's citizenship. The only allegation in the record to this effect is found in the state court Amended Complaint: “2. At all times material, Plaintiff's decedent, Stephen Fenner (“Mr.Fenner”), was a resident of Georgia.” DE 1, Ex. 4, p. 2. However, as stated above, this allegation is insufficient to establish citizenship. 13B Wright & Miller, supra.

If you're wondering why simply alleging that the decedent was a resident of Georgia doesn't cut it for purposes of pleading diversity jurisdiction, the following excerpt from 13B Wright, Miller & Cooper, Federal Practice and Procedure: Jurisdiction 2d § 3611 (1984), which is cited in the quoted text above, explains why:

The diversity jurisdiction of the federal courts is defined in terms of the citizenship of the parties to the action. According to Section 1332 of Title 28 of the United States Code, diversity jurisdiction exists if the action is between citizens of different states of the United States or between citizens of states of the United States and citizens or subjects of foreign nations.[FN1] However, neither the Constitution nor the Judicial Code describes the degree of identification with a state or a foreign country contemplated by the term “citizen.” The definition of citizenship in this context has been left to judicial development. The result has been the evolution by the courts of the following tests for determining the citizenship of natural persons: (1) a person is considered a citizen of a state if that person is domiciled within that state[FN2] and is a citizen of the United States;[FN3] (2) a person is considered a citizen or subject of a foreign nation if he or she is accorded that status by the laws or government of that country.[FN4]

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In re Estate of Woodward, --- So.2d ----, 2008 WL 942044 (Fla. 2d DCA Apr 09, 2008)

A basic rule under Florida's probate code is that specifically-devised property is inherited subject to any existing mortgages or other encumbrances unless the decedent's will specifically directs otherwise. Here's the governing rule:

733.803 Encumbered property; liability for payment.--The specific devisee of any encumbered property shall be entitled to have the encumbrance on devised property paid at the expense of the residue of the estate only when the will shows that intent. A general direction in the will to pay debts does not show that intent.

In the linked-to case the personal representative (PR) was managing several farms that were part of a single probate estate.  The estate-administration process stretched out for several years.  During that time the PR sold one of the farms and used the sales proceeds to pay off some debt, thererby satisfying a $241,805.81 mortgage on farm property that had been specifically devised to one of the heirs.  The decedent's will did NOT state that the specifically-devised property was to be distributed debt-free.  Oops!

One of the residuary beneficiaries cried foul, arguing that under F.S. 733.803 the PR should have set aside the sales proceeds for the residuary beneficiaries of the estate, rather than paying off debt on the specifically devised property.  The PR said this rule only applied if the debt was in place at the time of distribution, but didn't stop her from paying off debt encumbering specifically devised property during the course of the probate proceeding.  Wrong answer!

No matter how long the estate-administration process takes, you can't re-write the testator's will.  Which is effectively what the PR did in this case when she paid off the debt on the specifically devised property at the expense of the residuary estate. Here's how the 2d DCA explained the rule:

The trial court's rejection of Brian's objection to the satisfaction of the encumbrance is inconsistent with the governing provision of the Florida Probate Code. Section 733.803, Florida Statutes (2002), provides that “[t]he specific devisee of any encumbered property shall be entitled to have the encumbrance on devised property paid at the expense of the residue of the estate only when the will shows that intent ” and that “[a] general direction in the will to pay debts does not show that intent.” (Emphasis added.) This statute makes clear that Jay was to inherit his father's interests in the three encumbered farms free of debt only if the will or codicil specifically expressed the decedent's intent that Jay would inherit the interests free of debt. Neither the will nor the codicil shows the intent required by the statute. Cf. In re Estate of Sterner, 450 So.2d 1256, 1257 (Fla. 4th DCA 1984) (holding that section 773.803 required residue of estate to pay encumbrances on property where codicil leaving life tenancy in property to specific devisee specifically stated that life tenancy was to be “free of rent and of any encumbrance of any nature whatsoever, such as taxes, liens, pledges, etc., except utilities and telephone”). Although the will states that all the decedent's legal debts should be paid, the statute plainly provides that such a general direction for the payment of debts does not evidence an intent that encumbrances on devised properties be paid at the expense of the residuary estate.


We reject the personal representative's argument that section 733 .803 only applies to encumbrances that remain unsatisfied at the time of distribution and that she had unfettered discretion to pay debts of the estate during the period of administration. Such an interpretation is inconsistent with the design of section 733.803 to carry out the testator's intent with respect to the devise of encumbered property.

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Chaffin v. Overstreet, --- So.2d ----, 2008 WL 678664 (Fla. 5th DCA Mar 14, 2008)

In contested probate proceedings involving larger estates things can quickly get messy from a jurisdictional and civil procedure perspective because people don't order their lives into nice neat categories labled "probate" and "non-probate" assets.  Heirs inevitably get in front of the probate judge and ask the court to rule on all sorts of issues that simply have nothing to do with administering the decedent's probate estate, although they may have a huge impact on the economic well being of the decedent's heirs.  A prime example of this type of hodgepodge approach to litigation is the intermixing of contested trust actions with completely unrelated probate proceedings.

In the linked-to case the personal representative of "Wife's" estate was also co-trustee of a trust established by her husband ("Husband's Trust"), a trust established by Wife and a trust referred to as the "Family Trust."  The PR filed a petition within the probate proceeding seeking to remove the co-trustee of the Family Trust.  At a hearing involving the Family Trust litigation all of sudden the probate court started entering rulings having to do with Husband's Trust.  Here's how the 5th DCA described this part of the case:

On 12 September 2006, Chaffin, acting as the personal representative of [Wife's] estate, filed a Petition to Remove Robert Clay Overstreet as Co-Trustee of the [Family Trust]. Chaffin alleged that Clay was “presently ‘unable’ to serve as Co-trustee of the [Family Trust].”  .  .  .

.  .  .

During the hearing, the trial judge also inquired about the sale of the Ham Brown Road property, which was fifty acres given in trust to Cole in [Husband's Trust]. Because the property was not part of the [Family Trust], Chaffin argued that the probate court lacked jurisdiction to rule on this issue. Nevertheless, the probate judge found that Chaffin did not have authority under the language of [Husband's Trust agreement] to sell the property. Shortly thereafter, the probate judge announced that he was requiring yearly accountings on everything that goes through the trust or probate estate.

The 5th DCA agreed with the trustee's jurisdictional objection, reversing the probate court as follows:

We .  .  .  find that Chaffin's due process rights were violated when the probate court considered issues other than the Petition to Remove Clay. The only matter noticed for hearing was whether Clay should be removed as the co-trustee of the [Family Trust]. Thus, the probate court lacked jurisdiction over the [property owned by Husband's Trust] because the issue was not sufficiently raised by the pleading and noticed for hearing. See Alvarez v. Singh, 888 So.2d 159 (Fla. 5th DCA 2004).


In addition, we find that Chaffin was before the court solely in his capacity as co-trustee of the [Family Trust] and the probate court lacked jurisdiction over any other trusts. Although Chaffin sought the appointment of the guardian ad litem and the attorney ad litem in his capacity as trustee of [Husband's Trust] and [Wife's Trust], this was insufficient to constitute a general appearance by Chaffin in these capacities. See McKelvey v. McKelvey, 323 So.2d 651, 653 (Fla. 3d DCA 1976) (holding that a general appearance will ordinarily be effected by making any motion involving the merits of a plaintiff's claim and his or her right to maintain the suit and secure the relief sought); Snipes v. Chase Manhattan Mortg. Corp., 885 So.2d 899 (Fla. 5th DCA 2004). Accordingly, we find that, while Clay is entitled to the use of [Family Trust] money to obtain counsel to defend against attacks brought by Chaffin, the probate court lacked jurisdiction to award Clay trust money from any other trusts. See In re Estate of Stisser, 932 So.2d 400, 402 (Fla. 2d DCA 2006) (holding that trustees are indispensable parties and the probate court must have jurisdiction over the trustees in order to enter a ruling affecting the corpus of the trust); McLendon v. Smith, 589 So.2d 410 (Fla. 5th DCA 1991) (holding that presence in one capacity does not subject a party in another capacity to the jurisdiction of the court).

Lesson learned?

If you're already in front of a probate court and it looks like a related trust may be affected by the probate litigation, you need to anticipate the jurisdictional issues and make a choice: either file a petition getting your trust in front of the same probate judge or file a separate trust action in the general-jurisdiction division of the circuit court and get your trust in front of a different judge.  There are pros and cons to either choice, but at least you've dealt with the jurisdictional issues head on (and hopefully plead the separate trust action in a way that makes sense from a procedural view point).

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Brooks v. AMP Services Ltd., --- So.2d ----, 2008 WL 373423 (Fla. 4th DCA Feb 13, 2008)

The prior opinion dated February 13, 2008 was withdrawn and substituted with the following in its place: Brooks v. Amp Services Ltd., --- So.2d ----, 2008 WL 1806204 (Fla.App. 4 Dist. Apr 23, 2008)

At issue in the linked-to case was whether a probate court could vacate its prior order granting a NY attorney's pro hac vice motion for purely technical reasons that had nothing to do with intentional misconduct by the NY attorney and in no way adversely impacted that administration of justice here in Florida.  Although the answer should be an obvious "no", the probate court ruled the other way.  Here's how the 4th DCA explained its rationale for quashing the probate court's order:

Here, the judge revoked Brooks' admission based only on his failure to corroborate his good standing [in NY] before applying [in FL], an act which did not affect the administration of justice or disrupt any proceedings.  .  .  .

*     *     *     *     *

“The right of an attorney of another state to practice is permissive and subject to the sound discretion of the court to which he applies for the permission. The right to revoke this permission is inherent in the right to grant it.” Parker v. Parker, 97 So.2d 136, 137 (Fla. 3d DCA 1957). Certainly a trial court's discretion to deny a motion to appear pro hac vice, or to revoke such admission, is quite broad. See Huff v. State, 569 So.2d 1247, 1249 (Fla.1990); Jernigan, 751 So.2d at 681. Nevertheless, it is not absolute, and must be balanced by a party's right to representation by counsel of choice.  .  .  .

The trial court apparently accepted Brooks' explanation that he had no reason to believe he did not continue to be in good standing; it did not find he had committed any intentional misconduct, refusing to sanction him even with the imposition of a fine. Its vacation of his status was merely for a technical reason which in no way adversely impacted the administration of justice. Even if it was appropriate technically to vacate Brooks' prior admission due to his lack of good standing on July 11, the trial court should have accepted his ore tenus motion to appear pro hac vice on August 29, when that deficiency no longer applied. The trial court's refusal to do so did not serve the ends of justice and we conclude that it constituted a departure from the essential requirements of law under the facts of this case.

As a bonus point to this blog post, readers should note that that the Florida Supreme Court has provided a suggested form of pro hac vice motion in Fla. R. Jud. Admin. 2.510.  Counsel should always use the court-suggested form.

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Young v. Kurlansik, --- So.2d ----, 2008 WL 508427 (Fla. 4th DCA Feb 27, 2008)

The trustee of a decedent's revocable trust and the personal representative of the decedent's estate are inextricably linked because the PR has a claim on all assets of the revocable trust needed to pay probate administration expenses.  F.S. 736.05053.  Although this background information is not addressed in the linked-to opinion, I am assuming it had something to do with the underlying litigation. 

In the linked-to case the PR sued the trustee of the decedent's revocable trust over a promissory note executed by the trustee.  The PR apparently had a good day at trial, because the trial-court judge not only awarded the PR damages on the promissory note (implying the note had been breached and was no longer in effect), but also "reformed" the promissory note to include omitted terms (implying the note was still in effect and would now be enforced in accordance with the new terms added by the judge).    The trustee cried foul, arguing you can't have it both ways, and the 4th DCA agreed, reversing the trial court's judgment as follows:

In its final judgment the trial court reformed a promissory note to include omitted terms. At the same time it entered a judgment for damages based upon several legal theories that the appellants engaged in tortious conduct by omitting those terms. The amount of the damages constituted the principal amount of the note, and in her complaint appellee had requested damages and cancellation of the note.


*     *     *     *     *

We reverse the final judgment with directions that the trial court shall allow the appellee to elect her remedy. Electing reformation will permit the appellee to sue on the promissory note and foreclose on the mortgage securing the note. The promissory note and mortgage also include an attorney's fee provision. Electing a judgment for damages constitutes a disavowal of the promissory note and will require its cancellation. It will permit the appellee to obtain interest at the statutory rate instead of the promissory note rate. The trial court will then enter judgment on the remedy elected by the appellee. That remedy would include prejudgment interest, which we conclude is proper for this pecuniary loss. See Siedlecki v. Arabia, 699 So.2d 1040, 1042 (Fla. 4th DCA 1997).

Lesson learned?

Sometimes "probate" litigation has nothing to do with Florida's probate code.  In those cases I'm a big believer in co-counseling with competent counsel specializing in the particular type of case at issue, e.g., breach of a promissory note.  Bringing in specialized co-counsel is good for the client: the cost is usually equal to or less than the cost of paying me to handle the case solo, and the end results are usually better.  Who can argue with that math?

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RBC Ministries v. Tompkins, --- So.2d ----, 2008 WL 398821 (Fla. 2d DCA Feb 15, 2008)

How a will contest is framed can make all the difference in the world.  If the will is being challenged on undue influence grounds, you can forget ending the case at a summary judgment hearing once the "presumption" of undue influence is established.  The probate court in this case ruled differently, and was reversed on appeal.  The following excerpts from the linked-to opinion sum up the 2d DCA's analysis of the controlling Florida law on this point.
 

The rebuttable “presumption of undue influence implements public policy against abuse of fiduciary or confidential relationships and is therefore a presumption shifting the burden of proof.” § 733.107(2), Fla. Stat. (2005). Such a presumption “affecting the burden of proof”-as distinct from a presumption affecting the burden of producing evidence-“imposes upon the party against whom it operates the burden of proof concerning the nonexistence of the presumed fact.” § 90.302(2), Fla. Stat. (2005). Accordingly, once a will contestant establishes the existence of the basis for the rebuttable presumption of undue influence, the burden of proof shifts to the proponent of the will to establish by a preponderance of the evidence the nonexistence of undue influence. Diaz v. Ashworth, 963 So.2d 731, 735 (Fla. 3d DCA 2007); Hack v. Janes, 878 So.2d 440, 443-44 (Fla. 5th DCA 2004).

*     *     *     *     *

“[O]nce the presumption arises, the undue influence issue cannot be determined in a summary judgment proceeding.” Allen v. In re Estate of Dutton, 394 So.2d 132, 135 (Fla. 5th DCA 1981). “[A] summary judgment cannot be entered in favor of one who has the burden of overcoming the presumption of undue influence for such proceeding does not afford the contesting party the right of cross-examination and an opportunity to present rebuttal testimony.” Knight v. Knight (In re Estate of Knight), 108 So.2d 629, 631 (Fla. 1st DCA 1959). Instead, “the proponent of the contested will must come forward with a reasonable explanation of his active role in the decedent's affairs,” and “the trial court is left to decide the case in accordance with the greater weight of the evidence.” Allen, 394 So.2d at 135.

Lesson learned?

In an undue-influence case, establishing the presumption of undue influence doesn't just shift the burden of proof, it forecloses the prospect of a quick win on summary judgment for the proponent of the will.  Understanding this point is key to understanding how high the stakes are - for both sides - once a court is asked to rule on whether the presumption's been triggered.

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Our court system relies in large part on voluntary compliance with the "rules of the game."  In contested probate/trust proceedings litigants can (and are expected to) vigorously compete with each other, but the system collapses in on itself if it turns into a mud-slinging free for all. 

There are all sorts of pressures, both formal and informal, that keep lawyers (and by extension their clients) in line.  But when it comes to out-of-control pro se litigants the checks-and-balances built into our court system don't work nearly as well, as explained in an excellent 2006 article by J. Caleb Donaldson entitled: Vexatious Pro Se Civil Litigants in the Massachusetts Courts (2006).  Here's an excerpt:

Pro se litigants are . . . immune from many of the . . . pressures that would cause attorneys to desist from frivolous or harassing litigation. For one thing, an attorney is a repeat player whose livelihood is at stake – a reputation as a bad-faith litigant can harm an attorney’s career long before formal sanctions apply. Attorneys are also subject to discipline from the Bar and to disbarment proceedings. A pro se litigant, therefore, is not subject to the same wide range of disincentives to vexatious, frivolous or harassing litigation. And there is an additional problem, often left unspoken. Many of the most egregious vexatious pro se civil litigants appear from their pleadings to be suffering from mental illness. Such litigants cannot be expected to respond rationally to the threat of penalties.


As a result, some pro se litigants impose undue burdens on the courts. Litigants who file harassing, duplicative or incomprehensible pleadings, and whose motion practice is meritless and disproportionate to the action at bar create a drag on the system and poison the well of goodwill toward other litigants who represent themselves. Additionally, such proceedings make a mockery of the court system and threaten the respect for the judiciary that is essential to its functioning in society.

Although the "Florida Vexatious Litigant Law" [F.S. 68.093] is specifically designed to address this problem, the statute is not fool-proof.  In fact I think the procedural hurdles built into the statute render it meaningless for the vast majority of contested probate/trust proceedings where a vexatious pro se litigant is interfering with everyone's ability to get a fair hearing on the merits. 

The following two opinions provide valuable guidance for probate counsel seeking to craft a proper response to the vexatious pro se litigant in those cases where F.S. 68.093 falls short.

4th DCA: Court to pro se litigant: Put it in writing

Bernheim v. Broberg, --- So.2d ----, 2008 WL 441621 (Fla. 4th DCA Feb 20, 2008)

In this case the personal representative obtained an order from the probate court requiring a pro se litigant to communicate solely through writing.  The opinion doesn't explain why this order was needed, but I like it, and can easily imaging all sorts of scenarios where this minor restriction on a pro se's conduct would make everyone's life (especially the judge's) dramatically easier. 

When reading the following excerpt it's also important to note that this is NOT the type of order that can be appealed/quashed by an appellate court (i.e., you shouldn't get sucked into 6-12 months of meaningless appellate motion practice if the probate court grants this order).

This case involves .  .  .  a certiorari petition challenging an order granting the personal representative's motion to require Bernheim, who was pro se, to communicate with the personal representative and his counsel solely through writing.  .  .  .  We dismiss the certiorari petition directed to the order on communication as the petitioner failed to meet his burden of demonstrating the “jurisdictional” “irreparable harm” prong of certiorari review. See Bared & Co. v. McGuire, 670 So.2d 153 (Fla. 4th DCA 1996) (en banc).

1st DCA: Court to pro se litigant: Go hire a lawyer

Pflaum v. Pflaum, --- So.2d ----, 2008 WL 425585 (Fla. 1st DCA Feb 19, 2008)

As I've written before [click here], Florida probate courts have recognized that requiring a pro se litigant to simply hire a lawyer can be a very effective tool for curbing vexatious conduct.  That's what the appellate court did in this case.  When you read the following excerpt note that the court also finds that Florida's vexatious-litigant statute does NOT apply in appellate proceedings.

Having now considered appellees' motion and appellant's response, and taken notice of Peter E. Pflaum's cases in this court and his filings therein, we conclude that imposition of a sanction is appropriate in accordance with Florida Rule of Appellate Procedure 9.410 and this court's authority to control its docket. See May v. Barthet, 934 So.2d 1184 (Fla.2006); Lee v. Fla. Dep't of Corrs., 873 So.2d 489 (Fla. 1st DCA 2004). Accordingly, Peter E. Pflaum is hereby prohibited from appearing before this court as appellant or petitioner unless represented by a member in good standing of The Florida Bar. He is permitted 15 days from the date of this order within which to retain a Florida attorney who shall file a notice of appearance in this and his other active cases, failing which the cases will be subject to dismissal. The clerk of this court is directed to accept no further pro se filings from Peter E. Pflaum; if received, the filings shall be returned to the sender without filing and with reference to this order.


Appellees have asked this court to certify that Peter E. Pflaum is a vexatious litigant pursuant to section 68.093, Florida Statutes. That portion of appellees' motion must be denied because the statute, by its express terms, applies only to proceedings in the trial courts. That limitation, of course, does not affect our authority to impose the sanction described above. Appellees also move for an award of attorney's fees pursuant to section 57.105, Florida Statutes, and we defer a ruling on that portion of the motion until final disposition of this proceeding. Appellees' motion to dismiss is denied at this time, but the case will be subject to dismissal if appellant fails timely to comply with the terms of this order.

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In re Estate of Cummins, --- So.2d ----, 2008 WL 373414 (Fla. 3d DCA Feb 13, 2008)

Florida Probate Rule 5.401(d) requires a party objecting to a personal representative's petition for discharge or final accounting to serve notice of hearing on the objections within 90 days of the date the objection is filed.  In the linked-to case counsel for the objecting party blew this deadline due to secretarial oversight. 

My personal philosophy is to never excuse a mistake by blaming my secretary for a foul up; if something goes wrong I take the hit.  However, if it's my client that's being prejudiced by something a member of my staff messed up, that's a different story.  The issue in the linked-to case was whether secretarial oversight = excusable neglect, thus allowing the objecting party to have a hearing on its objections to the PR's final accounting.  The probate judge said NO, and was reversed when the 3d DCA said YES.

Florida Probate Rule 5.402(b) allows a probate judge to extend a deadline date in certain circumstances based on "excusable neglect." Florida Probate Rule 5.402(b) provides as follows:

(b) Enlargement. When an act is required or allowed to be done at or within a specified time by these rules, by order of court, or by notice given thereunder, for cause shown the court at any time in its discretion . . .


(2) on motion made and notice after the expiration of the specified period may permit the act to be done when failure to act was the result of excusable neglect. The court under this rule may not extend the time for serving a motion for rehearing or to enlarge any period of time governed by the Florida Rules of Appellate Procedure.

For future reference, I've excerpted below the operative facts and law as summarized by the 3d DCA in support of its ruling that secretarial oversight does = excusable neglect.

The Facts:

At the hearing on the abandonment of Objections, Cummins' counsel detailed the reasons for failing to comply with the ninety-day time period for filing the notice of hearing under Florida Probate Rule 5 .401(d). Counsel explained that the legal assistant responsible for procuring the hearing date was informed by the court that the presiding judge would not have a sufficient amount of time available for the hearing until September, 2007. In order to obtain an earlier hearing date, Cummins' counsel decided to utilize the services of a special master. The legal assistant attempted to schedule a hearing with the special master but was informed that the attorney for the personal representative was out of the office and that only the attorney himself could place a hearing on his calendar. Subsequently, the legal assistant instructed Cummins' counsel that she would follow-up on scheduling a hearing. However, without notice, the legal assistant ceased reporting for work in late June, 2007. On July 7, 2007, the individuals who were reassigned the legal assistant's tasks realized that the ninety-day period for sending notice had expired. Cummins' counsel attempted to obtain a hearing date, but because a full day was requested, the scheduling clerk could not immediately provide one. On July 17, 2007, a hearing date was set for August 29, 2007, at which time a notice of hearing was sent to the attorney for the personal representative. Additionally, throughout the course of the ninety days, Cummins' counsel stated that the attorney for the personal representative suggested that a “global settlement” would be forthcoming, thus rendering a hearing on the Objections unnecessary.

The Law: Secretarial Oversight = Excusable Neglect

The 3d DCA based its ruling reversing the probate judge on cases construing Civil Procedure Rule 1.090(d), which also contains an "excusable neglect" out for deadline extensions and is otherwise "almost identical" to the Probate Rule 5.042(b).  Here's how the 3d DCA framed its analysis:

The ninety-day time limit for filing a notice of hearing on the Objections is not jurisdictional. The standard of review applied to a trial court's analysis of excusable neglect is abuse of discretion. Boudot v. Boudot, 925 So.2d 409, 415 n. 2 (Fla. 5th DCA 2006) (citing Smith v. Smith, 902 So.2d 859, 861 (Fla. 1st DCA 2005)); State Dep't of Transp. v. Southtrust Bank, 886 So.2d 393, 396 (Fla. 1st DCA 2004) (citing Lyn v. Lyn, 884 So.2d 181, 185 (Fla. 2d DCA 2004)). A trial court is afforded discretion to consider objections for which a notice of hearing was not served within ninety days of the filing of said objections.


In Southtrust Bank, the trial court's finding of excusable neglect pursuant to Florida Rule of Civil Procedure 1.090(b) was affirmed because “the secretary's oversight is precisely the type of error found to constitute excusable neglect.” Southtrust Bank, 886 So.2d at 396.

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McKoy v. DeSilvio, --- So.2d ----, 2008 WL 343255 (Fla. 2d DCA Feb 08, 2008)

Inheritance disputes usually play themselves out in one of three forums: [1] trust litigation, [2] probate litigation and [3] real property litigation.  The linked-to case provides solid guidance on the real-property-litigation front by addressing two frequently-litigated points involving contested deeds:

What counts as valid consideration?

One way to challenge a deed is on lack-of-consideration grounds: it's an indicator of undue influence or lack of capacity.  In the linked-to case the trial court granted summary judgment invalidating a contested deed in part on lack-of-consideration grounds.  The 2d DCA reversed the trial court's ruling on this point reminding us that when it comes to weighing consideration, it's the thought that counts, not the dollars exchanged:

Both deeds recited “consideration of the sum of $1.00 and other good and valuable consideration.” In the quiet title action, DeSilvio alleged that the deeds failed for lack of consideration. There were disputed issues of material fact on this issue. See Diaz v. Rood, 851 So.2d 843, 846 (Fla. 2d DCA 2003) (stating that “a promise, no matter how slight, can constitute sufficient consideration so long as a party agrees to do something that they are not bound to do”) (citations omitted). Notwithstanding, the circuit court ruled that the deeds were void due to a lack of consideration. In granting DeSilvio's motion for summary judgment on this ground, the circuit court erred. See Fla. R. Civ. P. 1.510(c) (directing that summary judgment shall be granted only when the record evidence shows “there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law”); see also Holl v. Talcott, 191 So.2d 40 (Fla .1966). Accordingly, we reverse on this point.

Is failure to properly execute a deed fatal?

The second issue on appeal was whether a deed with only one subscribing witness was fatally flawed.  The trial court said yes and the 2d DCA affirmed.  From a probate attorney's viewpoint, what's interesting about this portion of the linked-to opinion is the reference to a remedy for such cases that is NOT available when the grantor is dead:

Our reversal affects only the Herron deed, however, because the Earnshaw deed suffers from an additional deficiency. As alleged in DeSilvio's motion for summary judgment, the Earnshaw deed contained the signature of only one subscribing witness. As to this deed, the summary judgment was also based on the undisputed fact that the deed was not signed by the requisite number of subscribing witnesses. See § 689.01, Fla. Stat. (2003) (requiring presence of two subscribing witnesses to convey real estate).


The McKoys claimed that the notary also acted as a subscribing witness. But she did not sign the deed as such, and the McKoys did not file a counterclaim seeking to reform the deed. See Smith v. Royal Auto. Group, Inc., 675 So.2d 144, 153-54 (Fla. 5th DCA 1996) (stating that reformation action may be used to supply missing signature). In any event, any such action would have required that the original grantor be joined as an indispensable party. See Palm v. Taylor, 929 So.2d 566 (Fla. 2d DCA 2006) (reversing judgment reforming deed when claim was not raised until amendment of complaint during trial, over objection, and when original grantor was not party to suit). Therefore, although we reverse the summary judgment as to Herron's deed, we affirm the summary judgment as to Earnshaw's deed.

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Barrett v. Barrett, --- So.2d ----, 2008 WL 239032 (Fla. 4th DCA Jan 30, 2008)

Pro se (self-represented) litigants are not sensitive to the sanctions normally applied to counsel for bringing frivolous actions, and indigent litigants are not sensitive to fee-shifting or fines.  Little wonder then that an out of control pro se litigant can be especially difficult for both courts and opposing parties to contend with. I've written before about the "inherent power" Florida courts have to manage a vexatious pro se litigants [click here].

In the linked-to case the trustee of a family trust admitted that he had taken "several hundred thousand dollars" from the trust in the early 80's; when confronted by his brothers, he promised not to do it again and to pay the money back.  Fast forward to 2005, wayward trustee is again "experiencing financial difficulties" and again tries to dip into trust funds.  This time his brothers sued to have him formally removed as trustee.

Although he was represented by counsel for the appeal, it's unclear whether wayward trustee ("Marc"), was pro se for the underlying trial.  To me, it looks like he was pro se.  The issue on appeal was whether the trial court erred when it denied his last-minute attempt to amend his answer and claim a new affirmative defense.  The trial court said no, and the 4th DCA upheld that decision as follows:

In 2005, when Marc was again experiencing financial difficulties, he attempted to interfere with the management of the trust, and his brother's filed this lawsuit seeking to have him removed as co-trustee and a declaratory judgment ordering that any funds improperly taken from the trust by Marc would be deemed advancements, to be recouped as an offset against future disbursements to Marc from the trust.


The first issue Marc raises, and the only one we address, is the denial of his motion to amend his answer to raise the defense that any money he owed the trust had been discharged in bankruptcy. The complaint was filed in October, 2005, and seventeen days before the trial in July, 2006, Marc filed a motion for leave to amend with his proposed amendment attached. The proposed amendment alleged that Marc had gone through a bankruptcy in 1985 in Colorado and that the indebtedness to the trust was based on promissory notes he had executed in the early 1980's before the bankruptcy.

*     *     *     *     *

Significantly, Marc did not attach any documents to support his statements about the bankruptcy. The court entered an order denying the motion to amend without prejudice.

The non-jury trial did not begin as scheduled in July, 2006, but did take place at the end of September, 2006. At the beginning of the trial, Marc asked the court to continue the trial for a week or two stating that the bankruptcy court had reopened his bankruptcy case. The court refused to delay the trial but agreed to “incorporate whatever the bankruptcy court says” into the final judgment. No orders or any other documents from the bankruptcy court were filed.

Amendments to pleadings under rule 1.190 should be liberally granted when justice requires, but the closer a case is to trial when amendment is requested, the less likely a denial of amendment will be an abuse of discretion. Zikofsky v. Robby Vapor Sys., Inc., 846 So.2d 684 (Fla. 4th DCA 2003).

If Marc, who alleged that he had just reviewed the court file of his bankruptcy, had attached documents supporting his proposed affirmative defense that these claims were discharged, we have no doubt that the trial court would have allowed him to amend. Notably, the court denied the motion without prejudice, and the trial was postponed for several months, yet Marc made no effort to support his claim by attaching documents. Under these circumstances the court did not abuse its discretion in denying the motion.

Lesson learned?

Motions to amend pleadings under Rule 1.190 of the Florida Rules of Civil Procedure are almost always granted.  I have never objected to such motion.  This case is a good example of when "NO" might be the right answer to a motion to amend.  If a litigant appears to NOT be acting in good faith, the trial court should be willing to call him or her on it; and opposing counsel shouldn't feel constrained from asking a trial court to reign in this type of behavior . . . which in my opinion is most often seen in cases involving pro se litigants.

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Macier v. Estate of Giamportone, --- So.2d ----, 2008 WL 80199 (Fla. 3d DCA Jan 09, 2008)

Sometimes new assets are discovered after probate proceedings are completed and it becomes necessary to "reopen" an estate.  Examples include stocks, bonds, real estate holdings or cash.  Finding a new will after an estate is closed is NOT a valid basis for reopening an estate.  The controlling statute is F.S. 733.903, which provides as follows:

733.903. Subsequent administration

The final settlement of an estate and the discharge of the personal representative shall not prevent further administration. The order of discharge may not be revoked based upon the discovery of a will or later will.

In the linked-to case the probate court's order reopening an estate was upheld on appeal.  The three-paragraph opinion is cryptic, to say the least; but here it is:

Richard Macier and Foreclosure Management Services, Inc. appeal a non-final order of the circuit court, probate division, re-opening the Estate of Bessie Giamportone, Appellee, and denying the appellants' motion to quash service and to dismiss the motion to re-open the Estate. Inasmuch as the probate judge had jurisdiction and the power to re-open the Estate under section 733.903, Florida Statutes (2007), as well as the authority to protect an alleged property interest of the Estate, we affirm.


Macier and Foreclosure Management Services were given the courtesy of notice, based on the personal representative's knowledge of the name and address of their counsel in other litigation among the parties in the civil division of the circuit court. This afforded them the opportunity to be heard, and it also provided them actual notice of the actions taken in the probate court so that they may move to dissolve the injunction entered there.

At this interlocutory point, and with the matter apparently referred for criminal investigation, the probate judge assuredly did not abuse his discretion or disregard any controlling principle of law.

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• 3d DCA: Macier v. Estate of Giamportone, --- So.2d ----, 2008 WL 80199 (Fla. 3d DCA Jan 09, 2008)

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Griem v. Becker, --- So.2d ----, 2007 WL 4482171 (Fla. 3d DCA Dec 26, 2007)

In the linked-to case the trial court first entered an order in favor of one side on a petition to determine heirs because the opposition failed to file a timely response.  When opposing counsel asked the court to reconsider its order, it completely reversed itself and entered an order that went way beyond simply setting aside its original ruling.  Here's how the 3d DCA framed the issue and its ruling:

Pursuant to appellee's motion, the court set aside the Original Order and issued the Order on Appeal which stated in pertinent part:

1. The Motion to Set Aside Order Determining Heirs is hereby GRANTED.

2. The Order Determining Heirs dated October 10, 2006, is hereby set aside and shall have no legal effect. INGRID DIANA GRIEM and DEBORAH GRIEM POSADA are not the beneficiaries of the Estate of Ronald Griem.

3. The marriage between the decedent, RONALD GRIEM, and ANITA BECKER is declared to be in full force and effect since its inception as recognized by the State of Florida.

(Emphasis added.)

It appears that the court endeavored to simply negate the language in the Original Order, but exceeded its intended result. However, while the circuit court attempted to set aside the prior determination as to the heirs, it confusingly stated that Griem's Daughters “are not beneficiaries.” The language used by the court in the Order on Appeal can be interpreted as making a final determination as to whether Griem's Daughters are beneficiaries of Decedent's estate. Likewise, the court specifically “declared” the marriage between the Decedent and appellee “to be in full force and effect since its inception,” despite the fact that the validity of the marriage is being contested in appellant's petition to determine heirs.

Florida Probate Rule 5.385(c) provides that following the filing of a petition to determine heirs, “[a]fter formal notice and hearing, the court shall enter an order determining the beneficiaries or the shares and amounts they are entitled to receive, or both.” Here, there is no indication in the record that a hearing was held on either the determination of heirs or on the validity of Decedent's marriage to appellee.

Accordingly, we affirm Paragraph 1 of the Order on Appeal and Paragraph 2, to the extent that it reads “[t]he Order Determining Heirs dated October 10, 2006, is hereby set aside and shall have no legal effect,” and reverse as to all remaining portions.

Lesson learned?

This case underscores the need for counsel to jealously preserve their client's due process rights in contested probate proceedings.  As I've written about before [click here, here], all too often these proceedings are determined in the absence of valid evidentiary findings or by ignoring existing procedural safeguards.  Don't let this happen to you or your clients.

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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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In Florida a death certificate is prima facie proof of the “fact, place, date, and time of death as well as the identity of the decedent.” § 731.103(2), Fla. Stat. (2007). It is not conclusive proof of any fact related to the death.  If insurance proceeds are at stake, you'll need a lot more than a death certificate to prove the insured is dead [click here and here for real-life examples of this point].

In a CNN article entitled Wife of missing adventurer wants him declared dead, we get a glimpse of the quantity and quality of the circumstantial evidence Steve Fossett's wife will be submitting in Illinois to legally establish the fact of his death.  I am assuming insurance proceeds are at stake in this case.  Excerpts from the linked-to CNN article demonstrate that Mrs. Fossett is going far beyond simply filing a copy of his death certificate:

"As difficult as it is for me to reach this conclusion, I no longer hold out any hope that Steve has survived," wrote Peggy V. Fossett in court documents filed Monday with the Cook County [Illinois] Circuit Court.

She asked that the will of her husband of 38 years be admitted to probate.

*     *     *     *      *

"No one involved in the search holds out any hope that Fossett is still alive," the petition said.

Rick Rains, a sheriff's supervisor of the San Diego County Sheriff's Department, said Fossett's plane was last spotted at 11 a.m. less than 20 miles from the ranch's airport. "Given the timeline and the sighting of Fossett's plane, I believe he was within 20 to 25 miles of the ranch when he crashed," Rains said.

But, he noted, "the terrain is very difficult to search, with many areas where the crevices, deep ravines and closely grown trees make it impossible to see from the air what is on the ground."

"If Fossett was physically able to find water to survive on in the Nevada desert, he would have been physically capable of signaling searchers, by doing something as simple as crafting a large X of sticks or rocks, or by starting a signal fire," Rains said.

In affidavits supporting his wife's petition, Fossett's doctor described the 63-year-old man as physically and mentally fit.

Robert Keilholtz, a captain in the California Civil Air Patrol who was involved in the search, noted that the difficulty in finding wreckage was underscored by the fact that World War II-era plane wreckage was discovered last spring in the mountain range.

In the search for Fossett, wreckage from eight other crashes was discovered, one of them from the 1960s, the lawyers said.

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The level of interest expressed in connection with the million dollar malpractice verdict against Gunster recently upheld by the 4th DCA [click here] is so high, I've decided to post copies of the 200+ pages of appellate briefs filed in that case as follows:

• Initial Brief of Appellants, Gunster Yoakley and Daniel Hanley
• Appendix to Initial Brief of Appellants, Gunster Yoakley and Daniel Hanley
• Answer Brief of Appellees Initial Brief of Cross-Appellants
• Appendix to Brief of Appellees/Cross-Appellants
• Reply Brief and Cross-Appeal Answer Brief of Appellants, Gunster Yoakley and Daniel Hanley
• Reply Brief of Cross-Appellants
• Gunster, Yoakley & Stewart, P.A. v. McAdam, --- So.2d ----, 2007 WL 2376658 (Fla. 4th DCA Aug 22, 2007)

What do you make of the briefs; what could Gunster have done differently?

The 4th DCA's opinion is woefully lacking in the sort of factual detail needed to provide real day-to-day guidance to practitioners or future litigants.  To make any sense out what happened here, you need to read the briefs.  Rather than attempting to figure out the briefs on my own, I'd like to tap into the collective wisdom of the readers of this blog.  After you've read the briefs, please post a comment answering the following question:

QUESTION:

Assuming the 4th DCA correctly decided the case, and everyone was acting in good faith and in the best interest of the client, what could Gunster could have done differently to avoid being sued?

Your comments will hopefully help all of us avoid being the target of the next estate-planning/ probate malpractice claim.  If you're a law student, banker, accountant, etc., I'd like to hear from you too.  Every Florida attorney who reads this blog will appreciate your thoughts (which can be posted anonymously), and I'm guessing that "crowdsourcing" these appellate briefs will result in collective insights none of us on our own would have ever dreamed of.

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Wolfe v. Stevens, --- So.2d ----, 2007 WL 2891413 (Fla. 2d DCA Oct 05, 2007)

Florida is the largest recipient of state-to-state migration in the U.S.  Here are a few stats from State-to-State Migration Flows: 1995 to 2000, a U.S. census report:

Florida’s net domestic migration of 607,000, the largest of any state, came primarily from states in the Northeast, particularly New York, which had a net contribution of 238,000 to Florida. Illinois, New Jersey, Ohio, and Pennsylvania also had substantial net outmigration to Florida.

Is it any wonder then that Florida probate proceedings often require service by publication when an individual cannot be located in Florida?

The linked-to case is instructive because it reports on a personal representative that got service by publication WRONG.  Which means we now all have a specific example of what NOT to do if we want to make our next attempted service by publication stick.

Here's why the 2d DCA said the PR got it wrong:

Stevens, as personal representative of her mother's estate, sued Wolfe alleging that he had defrauded their mother out of her home by falsifying Stevens' and the mother's signatures on a “Deed to Trust .” Approximately two months after filing suit, Stevens filed a sworn statement for constructive service pursuant to sections 49.031 and 49.041, Florida Statutes (2005), and subsequently served Wolfe by publication. Wolfe did not respond, and the trial court entered a default final judgment against him. Approximately seven months later, Wolfe moved to set aside the final judgment under Florida Rule of Civil Procedure 1.540 on the ground that service was defective because Stevens had failed to conduct a diligent search before resorting to service by publication. The trial court denied Wolfe's motion finding that he had actual notice of the final judgment and that in failing to act diligently to set it aside, “he was not reasonable.”


“‘When a complainant resorts to constructive service, he should make an honest and conscientious effort, reasonably appropriate to the circumstances, to acquire the information necessary to fully comply with the controlling statutes, to the end that the defendant, if it be reasonably possible, may be accorded notice of the suit.’“ Gmaz v. King, 238 So.2d 511, 514 (Fla. 2d DCA 1970) (quoting Klinger v. Milton Holding Co., 186 So. 526, 534 (1939)). If constructive service is challenged on the ground that the plaintiff failed to conduct a diligent search, the trial court must determine whether the plaintiff “reasonably employed knowledge at his command, made diligent inquiry, and exerted an honest and conscientious effort appropriate to the circumstances, to acquire the information necessary to enable him to effect personal service on the defendant.” McDaniel v. McElvy, 108 So. 820, 831 (Fla.1926); see Gmaz, 238 So.2d at 514. Further, “when a ‘red flag’ is waved to a complainant notifying or warning him of facts which put him on a reasonable course of inquiry as to the whereabouts or residence of a party-defendant to his law suit, he is bound to follow that course to its logical end.” Id.

Stevens had notice of facts that she should have followed before resorting to service by publication. The record indicates that when Stevens filed her complaint she and her attorney knew that Wolfe was represented by counsel. However, instead of contacting Wolfe's attorney regarding the lawsuit, Stevens filed an affidavit of diligent search and inquiry and proceeded to serve Wolfe by publication. At the hearing on Wolfe's motion to set aside the final judgment, Stevens' attorney admitted he had the address and phone number of Wolfe's attorney and that he could have notified him of the lawsuit but he “made the decision, knowing all the circumstances regarding the accusations that were going back and forth, that I would rather go the statutory route.” Under these circumstances, we cannot conclude that Stevens exercised due diligence in attempting to locate Wolfe. Accordingly, service by publication was improper. See Levenson v. McCarty, 877 So.2d 818 (Fla. 4th DCA 2004) (holding that where the plaintiff made no attempt to contact the defendant by telephone or through his known attorneys, service by publication was improper); Torelli v. Travelers Indem. Co., 495 So.2d 837 (Fla. 3d DCA 1986) (holding that the plaintiff did not exercise due diligence in attempting to locate the defendant where she failed to follow an obvious lead to the defendant's whereabouts by inquiring of the defendant's known attorney).

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One of the primary benefits of mediating trusts-and-estates disputes is that the mediation session focuses everyone's attention and brings the case "to a head" in much the same way as a trial date; except it happens before the parties pour huge sums of money - and time - into pretrial discovery and motion practice. Taking full advantage of this window of opportunity requires thorough preparation, and nothing beats a good checklist when it comes to making sure you've covered all your basis.

California attorney and mediator David Laufer has just published the "mother" of all premediation checklists in How To Prepare For Mediation: The Mediator’s Check List Of Key Legal And Factual Issues.  The next time you're getting ready to mediate a case pull this checklist, you'll be happy you did . . . and so will your client.

THE MEDIATOR’S CHECK LIST 

ALL INFORMATION WILL BE MAINTAINED IN THE STRICTEST CONFIDENCE.

A CONFIDENTIALITY AGREEMENT HAS BEEN SIGNED BY ALL PARTICIPANTS IN THE MEDIATION BEFORE THE EXCHANGE OF ANY CONFIDENTIAL INFORMATION.

PARTIES

1. Identify each party and title of all participants involved in the dispute.

2. Identify each Disputant required to be present during the mediation process.

3. Identify each decision maker who will not be present during the entire mediation process.

4. Describe any special needs, demands, interests and goals of each Disputant and Counsel.

DISPUTE

5. Describe each claim, dispute and defense.

6. Describe each Disputant’s demands –the best case outcome-to be achieved in the Mediation.

7. Identify and quote the key statutes governing the claims and defenses.

8. Identify and quote the key cases governing the outcome of the liability issues. For example: Stout v. Turney (1978) 22 Cal.3d 718: “Of the two measures the ‘out-of-pocket’ rule has been termed more consistent with the logic and purpose of the tort form of action (i. e., compensation for loss sustained rather than satisfaction of contractual expectations) while the ‘benefit-of-the-bargain’ rule has been observed to be a more effective deterrent (in that it contemplates an award even when the property received has a value equal to what was given for it.)”

9. Identify the legal support for each demand for special, general and punitive damages.

10. Identify all defenses to the claims for special, general damages and punitive damages.

11. Identify key disputed facts discussed in the legal briefs.

12. Identify any key facts and legal issues overlooked by Counsel and the Disputants.

13. Identify other issues that may have an effect on the dispute, including change in case and statute law, change in management, change in key decision maker, vacations, trial dates, motions for summary judgment, divorce, employment termination, surgery, promotion, restructure of company, bankruptcy, sale of business, cancellation of insurance coverage, and the need for closure.

14. Should the mediation be conducted in segments? For example, if the claimant is rehired in wrongful terminations claim will the damage claim be resolved? If the franchisor reinstates a franchise will the damage claim be resolved? If the insurance company renews the insurance policy will the claim for bad faith claim be dismissed?

15. Identify possible resolutions of dispute by restoring, creating or enhancing a commercial relationship that the defendant may be able to provide as an alternative to payment of money damages. For example, a HR Director may be able to re-hire an employee without consulting with a higher authority, whereas the payment of a damage claim may have to go through several levels of review and approval and consultations with the company’s risk manger for reporting to an insurance carrier or audit committee.

EVIDENCE:

16. Identify and quote the key provisions of the key documents each party relies on to support a claim or defense.

17. Identify key witnesses necessary to support each Disputant’s claim or defense, and summarize the testimony.

18. Identify key authenticated documents that have been exchanged to support or refute the damage claims.

19. Identify all out of pocket expenses (loss of earnings, medical bills , repairs) exchanged to support or refute the claim.

20. Identify a key decision maker who has surfaced during the mediation.

21. Have arrangements been made to assure that the identified decision makers will be present during the mediation?

22. Which newly identified decision makers will not be able to participate in the mediation process? Should the mediation be rescheduled?

23. Identify all people who have had input on the value of claim.

24. Will an expert (and describe the area of expertise) be helpful in resolving the Dispute.

25. Will it be necessary to postpone the mediation pending a verification of an appraisal, an expert opinion or other information that needs to be made available to key decision makers.

SETTLEMENT

26. Identify all sources of insurance or other funds that will be available to pay a settlement.

27. What has been offered, demanded and rejected in any prior settlement discussions?

28. Describe what each Disputant demands as the minimum acceptable settlement to avoid a trial or other consequence.

29. Identify other cases or settlements of similar cases that have resulted in the minimum acceptable settlement value demanded during the mediation.

30. Is there a settlement in kind or a source of creating settlement value other than the payment of money that may result in resolution of the dispute? For example, in a dispute over the under-sized beams for a construction project, will the under-sized beams create value for another use for another project? In looking for value or settlements in kind, the Disputants should be encouraged to look for all potential sources of value.

RESOLUTION

31. Is a partial resolution possible?

32. Have the parties documented the settlement and final resolution in an enforceable format in compliance with the law?

33. Is the settlement confidential? If so, under what conditions may it be disclosed?

34. Has the mediator completed her case file, closure documents and procedures for any future references to the mediation. In court-annexed mediations the Mediator must file a form stating the matter resulted in partial agreement, total agreement or non-agreement.

35. For any information that has been disclosed to the Mediator in confidence, state how disclosure of that information affected the mediation?

FEES

36. Is there a dispute between the parties and their lawyers about the amount that is owed to the lawyers?

37. Is there a dispute between a party and her insurance company over coverage, legal fees and costs?

38. Identify the legal basis for the claim of recovery of reasonable attorney fees and costs.

39. Identify all objections to the claim for attorney’s fees and costs.

40. List all legal fees, expert fees and costs incurred by each party through the date of the first mediation session.

41. How much of any settlement payment will be paid to the lawyers?

42. Has the Mediator made arrangement for final payment of her fees, received evaluation forms of her performance and obtained permission to use favorable evaluations by Counsel and Disputants as references for marketing purposes?

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Effective July 1, 2007, Florida adopted legislation expressly authorizing mandatory arbitration clauses in wills and trusts.  The new statute provides as follows:

731.401 Arbitration of disputes.--

(1) A provision in a will or trust requiring the arbitration of disputes, other than disputes of the validity of all or a part of a will or trust, between or among the beneficiaries and a fiduciary under the will or trust, or any combination of such persons or entities, is enforceable.

(2) Unless otherwise specified in the will or trust, a will or trust provision requiring arbitration shall be presumed to require binding arbitration under s. 44.104.

Two of the Florida attorneys instrumental in passage of the new legislation, Bruce M. Stone and Robert W. Goldman, also co-authored a 2005 ACTEC article discussing mandatory arbitration clauses in wills and trusts entitled Resolving Disputes with Ease and Grace.  The ACTEC article does a good job of summarizing the pros and cons of arbitration, concluding that arbitration is likely "ideal" in the following circumstances:

1. Fee disputes, including fiduciary and legalfees
2. Prudent investing disputes
3. Document construction
4. Principal and income disputes, includingadjustment powers
5. Trust terminations or severances
6. Accounting disputes
7. Declaratory relief in general

This list of "ideal" abritration senarios implicitly recognizes that arbitration is NOT the best solution for resolving ALL disputes, a view I share and have written about [click here].

Sample arbitation clauses:

Sample clauses are often the best way to understand in concrete terms how a general concept may be applied in the real world.  Note that all of the sample clauses do two things:

• require arbitration; and
• define the procedural rules that would govern the arbitation proceeding (for example, who appoints the arbitrator, how many arbitrators are required, what are the discovery rules, etc). 

Under the new Florida arbitration statute, if the settlor does not identify  the procdural rules he or she would like to apply the default rules are provided by F.S. 44.104.

The AAA's website [click here] provides specific procedural rules for arbitrating such wills-and-trusts claims and the following sample arbitration clause:

AAA Standard Arbitration Clause:

In order to save the cost of court proceedings and promote the prompt and final resolution of any dispute regarding the interpretation of my will (or my trust) or the administration of my estate or any trust under my will (or my trust), I direct that any such dispute shall be settled by arbitration administered by the American Arbitration Association under its Arbitration Rules for Wills and Trusts then in effect. Nevertheless the following matters shall not be arbitrable questions regarding my competency, attempts to remove a fiduciary, or questions concerning the amount of bond of a fiduciary. In addition, arbitration may be waived by all sui juris parties in interest.

The arbitrator(s) shall be a practicing lawyer licensed to practice law in the state whose laws govern my will (or my trust) and whose practice has been devoted primarily to wills and trusts for at least ten years. The arbitrator(s) shall apply the substantive law (and the law of remedies, if applicable) of the state whose laws govern my will (or my trust). The arbitrator's decision shall not be appealable to any court, but shall be final and binding on any and all persons who have or may have an interest in my estate or any trust under my will (or my trust), including unborn or incapacitated persons, such as minors or incompetents. Judgment on the arbitrator's award may be entered in any court having jurisdiction thereof.

The authors of Resolving Disputes with Ease and Grace also provided four sample arbitration clauses, including the following two:

Generic provision—Short version:

It is my hope and expectation that there will be no dispute in relation to this Trust [my estate]. Nevertheless, if there is any dispute or controversy among any of the Trustee [personal representative] and the beneficiaries involving any aspect of this Trust [my estate] or its administration, the parties to the dispute may agree on the manner of resolution. If there is no such agreement, the disputing parties shall submit the matter to mediation, and, if unresolved by mediation, to binding arbitration. If a party to the dispute fails to participate in good faith in the mediation or arbitration, the arbitrator or the court having jurisdiction over this trust [my estate] is authorized to award costs and attorney’s fees from that party’s beneficial share or from other amounts payable to that party (including amounts payable to that party as compensation for services as a fiduciary).

Generic provision—Long version with forfeiture clause:

[Comment: As with other language in these sample clauses, the forfeiture provision in paragraph (c) below has not been tested in the courts. Assuming that a mandatory arbitration provision in a will or trust is otherwise enforceable in a given jurisdiction, it is believed that a forfeiture provision is likely to be enforceable also, including in jurisdictions that do not recognize the validity of no-contest provisions.]

(a) It is my hope and expectation that there will be no dispute in relation to this Trust [my estate]. Nevertheless, if there is any dispute or controversy among any of the Trustee [personal representative] and the beneficiaries involving any aspect of this Trust [my estate] or its administration, the parties to the dispute may agree on the manner of resolution. If there is no such agreement, the disputing parties shall submit the matter to mediation, and, if unresolved by mediation, to binding arbitration. If the parties are unable to agree on the selection of a mediator or arbitrator, the court having jurisdiction over this Trust [my estate] shall select the mediator or arbitrator. [The mediator or arbitrator shall have the following qualifications: ACTEC fellow; attorney with at least 10 years’ experience in trusts and estates; etc.]

(b) In the case of arbitration, the arbitrator shall establish the procedure for arbitrating the matter or matters and recognizing the goals of privacy, efficiency, less formality than in a judicial tribunal, and less expense than might be incurred in a judicial forum, while reaching a fair result. The decision of the arbitrator shall be final and binding on the Trustee [Executor], all beneficiaries, and their heirs, successors, and assigns. If the arbitrator determines that a guardian ad litem is needed to represent the interests of unborn, unascertained, or incapacitated interested persons, a guardian ad litem shall be appointed by the court having jurisdiction over this Trust [my estate].

(c) If a disputing beneficiary fails to participate in good faith in the agreed-on procedure for resolution, or in the mediation or arbitration if there is no such agreement, the disputing beneficiary’s interest in this Trust [my estate] shall be forfeited and the beneficiary, if an individual, shall be treated as having predeceased the Settlor [me] [with no surviving issue]. If for any reason it is determined by the court having jurisdiction over this Trust [my estate] that the foregoing provision for forfeiture is not effective, the arbitrator or the court having jurisdiction over this trust [my estate] is authorized to award costs and attorney’s fees from the beneficiary’s share or from other amounts payable to the beneficiary.

(d) The provisions of subparagraph (c) above shall not apply to the beneficial interests of:

(1) the Settlor’s [my] spouse, to the extent that his [her] interest would otherwise qualify for an estate or gift tax marital deduction;

(2) any beneficiary, to the extent that the beneficial interest would otherwise qualify for an income, gift, or estate tax deduction for charitable purposes unless and until all such charitable beneficial interests have expired.

If, however, the Settlor’s [my] spouse or any such beneficiary who is a disputing beneficiary to whom the above forfeiture provisions do not apply nevertheless fails to participate in good faith in the agreed-on procedure for resolution or in the mediation or arbitration, the arbitrator or the court having jurisdiction over this trust [my estate] is authorized to award costs and attorney’s fees from his, her, or its beneficial share.

(e) The acceptance of the Trust by any trustee or co-trustee constitutes the trustee’s or co-trustee’s agreement to comply with the above provisions. If a trustee or co-trustee is a party to a dispute and fails to participate in good faith in the agreed-on procedure for resolution or in the mediation or arbitration, it shall be deemed that the trustee or co-trustee has breached its fiduciary duties and has resigned, and the court having jurisdiction over this Trust is authorized to surcharge the trustee or co-trustee for costs, attorney’s fees, and any other sums deemed appropriate. [The personal representative’s consent to act constitutes his, her, or its agreement to comply with the above provisions. If a personal representative is a party to a dispute and fails to participate in good faith in the agreed-on procedure for resolution or in the mediation or arbitration, it shall be deemed that the personal representative has breached his, her, or its fiduciary duties and has resigned, and the court having jurisdiction over my estate is authorized to surcharge the personal representative for costs, attorney’s fees, and any other sums deemed appropriate.]

(f) If the validity of these provisions requiring arbitration is contested, the court having jurisdiction over this Trust [my estate] shall resolve that issue prior to resolution of the balance of the dispute. If the arbitration provisions are determined to be valid, the balance of the disputed issues shall be resolved as provided in this Article __.

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Ramunno v. Terranova, --- So.2d ----, 2007 WL 2480980 (Fla. 4th DCA Sep 05, 2007)

It happens all the time.  One side or the other in a probate proceeding files an un-sworn petition seeking an order that clearly determines someone's property rights.  For example, who benefits from a life insurance policy.  The petitioning party then argues the issue at a hearing where absolutely NO testimony or documentary material that's admissible in evidence ever makes an appearance.  And then the court rules.  Usually the economic stakes aren't high enough to appeal a no-evidence ruling.  But when they are, be careful, because as the linked-to case demonstrates, you just might end up getting reversed:

Lorenzo Ramunno appeals an order entered by the probate court, contending the court miscalculated the amount he owes under a final judgment obtained by the personal representative against him. We affirm the order in all respects, except as to that portion of the order which charges Mr. Ramunno $16,758.61 for life insurance proceeds he received from Metropolitan Life Insurance Co. upon his mother's death. This amount represents four-fifths of the proceeds, which the trial court concluded should have been shared equally by Lorenzo and his siblings.


We reverse as to this portion of the order because the only evidence presented to the trial court concerning the life insurance proceeds was Mr. Ramunno's testimony that he properly received the money. The trial court's contrary findings are supported only by the arguments of the estate's counsel and the unsworn pleadings and attachments from the estate's previous action against Metropolitan Life. These do not suffice as competent, substantial support for the trial court's ruling. See Romeo v. Romeo, 907 So.2d 1279, 1284 (Fla. 2d DCA 2005) (unauthenticated documents and arguments of counsel were not evidentiary support for general master's ruling); Loiaconi v. Gulf Stream Seafood, Inc., 830 So.2d 908, 910 (Fla. 2d DCA 2002) (document and argument of counsel were not sufficient proof to support venue determination); see also Leon Shaffer Golnick Adver., Inc. v. Cedar, 423 So.2d 1015, 1016-17 (Fla. 4th DCA 1982).

We therefore reverse only as to this $16,758.61 charge to Lorenzo Ramunno.

Lesson learned: evidence matters.

Most probate practitioners chose this practice area to specifically avoid anything having to do with civil litigation, including evidentiary rulings.  In 99% of probate proceedings, that's fine.  But when it's a contested proceeding, evidence, civil procedure, discovery, it's all there.  And it all matters. 

If you're the petitioning party, even when your side of the argument is a slam dunk, take the time to make sure you've created a solid evidentiary record.  If the probate court rules in your favor, the odds of surviving an appellate challenge are astronomically higher if the order is supported by evidence reflected in the record.  As the winning side learned in the linked-to case, in the absence of such evidence your victory may be short lived indeed.

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Barber v. Parrish, --- So.2d ----, 2007 WL 2384521 (Fla. 1st DCA Aug 23, 2007)

Justin Barber was convicted in 2006 of murdering his 27 year old wife to collect on a $2.3 million life insurance policy.  This case was the subject of intense media attention (see here, here).  Mr. Barber continues to profess his innocence . . . and he's still not willing to walk away from the insurance money.

In the linked-to opinion the 1st DCA upheld a trial court's decision applying F.S. 732.802, Florida's "slayer statute."  Mr. Barber argued that since his murder conviction was being appealed, Florida's slayer statute shouldn't apply.  As I've written before, Florida's slayer statute does NOT require a final murder conviction to apply (see here).  That's the same conclusion the 1st DCA came to in the linked-to opinion, based upon the following rationale:

On appeal, Appellant argues that the trial court erred in granting summary judgment because his conviction cannot be considered final before he has exhausted his appellate rights. This argument has previously been rejected. In Prudential Insurance Company of America, Inc. v. Baitinger, 452 So.2d 140, 141 (Fla. 3d DCA 1984), the insured's husband, who was the primary beneficiary of a life insurance policy, was found guilty of the insured's murder. The probate court entered an order directing the insurance company to pay the policy proceeds to the personal representatives of the insured's estate. Id. The insurance company appealed the order arguing that the husband's conviction could not be considered final due to a pending appeal. Id. at 142. The Third District Court of Appeal examined the legislative intent behind section 732.802 and determined that amendments to the statute demonstrated the Legislature's intent to make it more difficult for a killer to receive a financial benefit for his wrongdoing. Id. at 142-43. It concluded that the term “final judgment of conviction” meant an adjudication of guilt by the trial court, and it affirmed the trial court's order directing the insurance company to pay the proceeds to the personal representatives. Id. at 143. See also Cohen v. Cohen, 567 So.2d 1015, 1016 (Fla. 3d DCA 1990) (holding that irreparable harm would not occur to a primary beneficiary, even if her conviction was reversed on appeal, if the estate was distributed to the remaining beneficiaries because she would be able to seek money damages from those beneficiaries).

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A Legal Times article entitled Considering Arbitration's Costs and Dangers does a good job of pointing out arbitration's hidden costs within the context of commercial disputes.  The same pros/cons apply in the probate litigation context. The article concludes by asking:

Why not mediate instead? Because it is nonbinding, mediation may at first glance seem to be a waste of time -- if you're in a dispute, why would you want to spend time in a process that cannot guarantee a resolution? But in many respects, mediation offers all the benefits of arbitration -- lower costs, faster results -- without the limitations. It provides a less formal opportunity for both sides to present their views on a dispute, without having to engage in expensive discovery. It can be performed at the outset of a dispute, or later, within the context of a raging litigation (and in fact, courts more and more require parties to attend nonbinding mediation before permitting a case to be brought to trial). Mediation therefore does not preclude litigation, as arbitration does, but complements it. And the average mediation can be performed in a day.

The nature of the mediator's function is the hidden strength of the mediation process. Arbitrators are essentially private judges, paid to determine an outcome in an impartial fashion. Although arbitrators often seem interested in reaching equitable outcomes to the benefit of all parties, they in fact have no intrinsic interest in the outcome. Mediators, by contrast, are brought to a dispute expressly to find common ground, if possible, and thus have a strong interest in ending a dispute in a manner most fair to all parties.

In the probate-litigation context, mediation is almost always the right answer.  Probate disputes lend themselves to resolution in the mediation context because the costs of litigation are often prohibitive: for BOTH sides.  A good mediator will take a personal interest in brokering a deal both parties can live with . . . and making it happen all in one day.  When I take off my litigator hat and put on my "estate planner" hat, I usually include the following mediation language in my wills and trusts:

Dispute Resolution. If there is a dispute or controversy of any nature involving the disposition or administration of my estate, I direct the parties in dispute to submit the matter to mediation or some other method of alternative dispute resolution selected by them. If a party refuses to submit the matter to alternative dispute resolution, or if a party refuses to participate in good faith, I authorize the court having jurisdiction over my estate to award costs and attorney’s fees from that party’s beneficial share or from other amounts payable to that party (including amounts payable to that party as compensation for service as fiduciary) as in chancery actions.

When is arbitration a good idea?

In the probate litigation context, arbitration may be the right tool if formerly waring parties enter into a settlement agreement or some other type of deal requiring them to work together on multiple issues prior to finally parting ways forever. Examples would include closing down or selling a large family business, partitioning real property, or otherwise liquidating a large and complex estate.  In these cases you have two elements that argue for arbitration: [1] frequency and [2] no bet-the-farm decisions.

[1]  Frequency: In a complex settlement situation, there will be multiple "forks in the road" that all have the potential for bringing the entire process to a screeching halt.  An arbitrator can step in at any time, make a ruling, and keep the parties moving forward.  Here's how this point was made in the linked-to article:

Where companies are wise to think of arbitration as a means of resolving their contractual problems, the common denominator in all such circumstances is frequency. Companies whose businesses inevitably involve transactions with numerous entities are more likely to benefit from designating arbitration as a means of resolving disputes. Arbitration clauses can, in such circumstances, help companies avoid becoming entangled in multiple concurrent court proceedings. The savings and efficiencies clearly outweigh foreseeable disadvantages.

[2]  No bet-the-farm decisions: The fact that appellate rights are almost non-existent in arbitration means you have to be willing to live with wrong or manifestly unjust arbitration rulings from time to time.  In a complex settlement situation, all the arbitrator should be doing is resolving minor "intermediate-step" disputes so that all parties can arrive at a mutually-agreed upon end point.  In this context, the costs of a wrong arbitration ruling should be something the parties can live with.

If the issue being disputed is important enough that you want to make sure your client can appeal a wrong decision, then arbitration is probably not the way to go (mediation, however, remains an excellent choice).  Here's how the linked-to article addressed this point:

[I]t is extremely difficult, if not impossible, to get arbitral decisions overturned through the court system -- let alone reviewed. The proof is in the small number of decided cases in which an arbitral decision or procedure is challenged. For example, according to Stephen Huber's article "The Arbitration Jurisprudence of the Fifth Circuit" for the Texas Tech Law Review, between June 2002 and May 2003, the 5th Circuit issued 155 written opinions, with only 21 of them involving issues relating to arbitration. Indeed, the trend is for courts to conclude that an enforceable arbitration clause swallows up just about every dispute under the contract -- including whether a dispute could be decided by arbitration in the first place. Once you've committed to arbitrate a potential dispute, you're not likely to attract a lot of sympathy from a court if things don't work out as you would have hoped.

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Estate of Zlotowski v. C.I.R., T.C. Memo. 2007-203 (Jul 24, 2007)

In a probate proceeding the person primarily responsible for getting the job done right is also the person primarily liable if things go wrong: the personal representative ("PR").  When a PR hires a lawyer to advise him or her, the PR is entitled to good advice, but the mantle of ultimate responsibility/ liability for the estate remains with the PR, not the lawyer.

"Disengaged" PR

In the linked-to case an 85-year old PR (referred to as "executor") who had assumed responsibility for administering the estate of a former business partner's widow apparently failed to recognize the gravity of his responsibilities.  The following excerpt from the linked-to opinion is how the Tax Court characterized his conduct:

Mr. Roisen testified about his administration of the estate, and, from that testimony, we draw the conclusion that he was almost completely disengaged from estate administration, relying on Mr. Ledley to do virtually all that was required of him and Mr. Helman. Specifically, we make the following findings, based on Mr. Roisen's testimony: He agreed to serve as an executor to accommodate his old business acquaintance, decedent's husband. He relied on decedent's attorney for the selection of Mr. Ledley as executors' counsel. He knew nothing about the estate and relied fully on Mr. Ledley, who, from his perspective, was in charge of the estate. Apart from signing the Form 706, he did not participate in filing it, which job, he believed, was in Mr. Ledley's hands. He never discussed with Mr. Ledley penalties for a late-filed return. He only discussed with Mr. Ledley whether the return was going to be filed on time after it already was late.

Mr. Roisen's almost complete disengagement from return preparation is captured by his final exchange with one of respondent's counsel:

Q: So, essentially your testimony is that they [i.e., Mr. Ledley] took care of everything relative to the filing of the return?

A: Absolutely. That is a hundred percent correct.

Q: And you had no participation in the filing of the return?

A: No, except that they required my signature, because being the executor of the will, I had to sign it, and which I did. I had full confidence in them.

Mr. Roisen signed the estate tax return, on August 28, 2001, after it was more than 8 months overdue.

Blown estate tax filing deadline = $233,359 late penalty

When the IRS assessed a $233,359 late penalty because the PR filed the estate's Form 706 Estate Tax Return 8 months late, the PR argued his lawyer was responsible for filing the estate tax return, and so the estate shouldn't be held responsible for his lawyer's mistake.  The Tax Court rejected this argument, but summarized the controlling law as follows:

In [United States v. Boyle, 469 U.S. 241, 245 (1985),] at 249-250, the Supreme Court stated:

Congress has placed the burden of prompt filing [of an estate tax return] on the executor, not on some agent or employee of the executor. * * * Congress intended to place upon the taxpayer an obligation to ascertain the statutory deadline and then to meet that deadline, except in a very narrow range of situations.

The Court recognized that engaging an attorney to assist in probate proceedings is “plainly an exercise of the ‘ordinary business care and prudence’ prescribed by [section 301.6651-1(c)(1), Proced. & Admin. Regs.]”. Id. at 250. Nevertheless, describing the executor's duty to file the return as an “unambiguous, precisely defined duty”, the Court cautioned that the executor's expectation that the attorney, as his agent, would attend to the matter “does not relieve the principal of his duty to comply with the statute.” Id.

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City of Key West v. Knowles, 948 So.2d 58 (Fla. 3d DCA Jan 10, 2007)

I think cases involving dead bodies often end up getting appealed because families find it hard to believe how limited a person's legal rights are with respect to the remains of his or her loved ones (see here).

This issue received national attention in Florida during the Anna Nicole Smith case, as chronicled on this blog (see here and here) and by Prof. James T.R. Jones of the Louis D. Brandeis School of Law, in an article entitled Anna Nicole Smith and the Right to Control Disposition of the Dead.

In the linked-to case a surviving widow, Lorraine Knowles, filed a federal section 1983 claim against the City of Key West and its former Cemetery Sexton, Gilbert Suarez, on the grounds, among other things, that she was deprived of a property interest in her husband's buried remains without due process.  The 3d DCA ruled that the trial court should have granted the City's motion for directed verdict because the surviving widow lacked a protected property interest in her dead husband's body.  Here's the key language from the linked-to opinion:

To determine whether a property interest exists, for purposes of a section 1983 claim, we must look to state law. Board of Regents v. Roth, 408 U.S. 564, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972); Crocker, 778 So.2d at 984 (citing Bishop v. Wood, 426 U.S. 341, 96 S.Ct. 2074, 48 L.Ed.2d 684 (1976)). “[I]n Florida there is a legitimate claim of entitlement by the next of kin to possession of the remains of a decedent for burial or other lawful disposition.” Crocker, 778 So.2d at 988. These rights to a deceased's remains, however, exist only for purposes of burial, or for other statutory purposes, and nothing further. Id. See Lascurain v. City of Newark, 349 N.J.Super. 251, 793 A.2d 731 (2002). Thus, for purposes of a section 1983 claim, constitutionally protected property interest to decedent's remains ends at the point of burial or other lawful disposition. Any claims for events occurring thereafter must be pursued under traditional common law causes of action. See Crocker, 778 So.2d at 987-88. In this case, Knowles's complaint arises solely from events after the lawful burial of her husband. Hence, there is no constitutionally protected property interest on which Knowles can rest her section 1983 claim under the facts of this case. Therefore, the trial court should have granted the City's directed verdict motion as the close of Knowles's evidence.

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I've previously written about how the U.S. Supreme Court's ruling in Marshall v. Marshall will lead to more trusts-and-estates cases being litigated in Federal Court (see here).  In Marshall v. Marshall: The Supreme Court's Get-Out-of-Probate-Free Card, University of Washington School of Law law student Julian Hurst (2008 J.D. Candidate) examines Marshall's "practical consequences from the perspective of probate law and for those who find themselves challenging the validity of a will or trust."

One of these days you'll either be pushing for federal jurisdiction or opposing it in some form of trusts-and-estates litigation.  When that day comes, remember the linked-to law review article.  Here's the abstract:

Abstract:

The probate exception to federal jurisdiction is a legal doctrine self-imposed by federal courts barring jurisdiction over probating wills or administering estates, or related actions that would interfere with property in the custody of state courts. Courts have struggled with cases that fall at the margins of the exception, creating one of the most mysterious and esoteric branches of the law of federal jurisdiction.

In Marshall v. Marshall, the Supreme Court addressed the federal probate exception for the first time in over 60 years. Eight members of the Court held that the doctrine was legitimate, but more narrow than many lower courts thought. Unfortunately, the decision leaves as many questions as answers. The history, scope and purpose of the federal probate exception, as well as its place in the Supreme Court's federal jurisdiction jurisprudence, has already been treated by other authors. I will examine Marshall's practical consequences from the perspective of probate law and for those who find themselves challenging the validity of a will or trust.

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I previously wrote here about a case where an ex-spouse was the windfall beneficiary of insurance benefits because her ex had the audacity of dying after their divorce but before getting around to revising his insurance beneficiary designation forms (it's always the little things that get you!).  This outcome probably seemed unfair to many (except the ex), including Stetson Law student Suzanne Soliman, who just published A Fair Presumption: Why Florida Needs a Divorce Revocation Statute for Beneficiary-Designated Nonprobate Assets, in 36 Stetson L. Rev. 397 (2007).  Here's an excerpt:

Like many Americans, Floridians invest significantly in beneficiary-designated nonprobate estate planning tools such as life insurance. These types of assets comprise the bulk of many Floridians' estate plans because they are easy to obtain and, in many instances, affordable compared to other estate planning tools. It is important to effectuate the policyholder's intent, particularly because so many families trust that these assets will provide some degree of security. Enacting a divorce revocation statute to protect nonprobate assets will provide protection and security for many Florida families.

Special thanks to the Wills, Trust & Estates Prof Blog for posting here on this article.

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Mike Dillon, General Counsel for Sun Microsystems, Inc., publishes a great blog called The Legal Thing.  In a blog post entitled On Litigation...(Azul), Mr. Dillon shared his "four principals" for evaluating when litigation is appropriate.  I thought his comments were dead on, and applicable to any form of litigation - including probate litigation.  I've reproduced his four principals below with my practice-specific comments:

No. 1 - You only litigate when you have an important interest to protect. Litigation is costly. Incredibly costly. But it is not the expense that is the real issue, it's the diversion of resources. Time employees spend reviewing e-mails and documents, educating lawyers and preparing for depositions is time away from the business. That's the real cost of litigation.


Probate comment: Ask your lawyer to assume the worst case scenario and then estimate how long you should expect the process to last (1 to 2 years is the norm) and how much it will all cost (it will always be higher than you expected).  Then ask yourself, "is it really worth it?"  If the answer is yes, then proceed to point no. 2, otherwise stop immediately and move on with your life.

No. 2 - A non-judicial resolution is almost always preferable. When you file a complaint, you are turning over resolution of an issue to a third party - be it a judge, arbitrator or jury. To a great degree you lose control of the outcome.

Probate comment: In the probate-litigation context, every penny spent on legal fees siphons off a piece of the family inheritance to a third party: the lawyers.  The quickest way to stop the bleeding is to settle the case.  Mediation should be a no-brainer in this type of litigation.

No. 3 - You litigate when you have a high degree of confidence that you will prevail. Bluffing is for weekend games of Texas Hold'em . When you file suit, you need to have fully evaluated all aspects of the case to ensure that the outcome will be favorable.

Probate comment:  Pick your battles carefully.  This is where lateral thinking pays off.  In the probate-litigation context there are often multiple approaches to achieve a desired result.  Some approaches usually favor the defendant, some usually favor the plaintiff.  Depending on what side you're on, play to your strengths.  How you address this point no. 3 will inform points 1 and 2 above.

No. 4 - You litigate to win. This means that your employees, board and management team fully understand and support the commitment (both financial and time) required to prevail. It also means having seasoned litigation counsel who understand your business and objectives.

Probate comment: Litigation is not a negotiation strategy.  Once you've decided a lawsuit is your last best option, you need to be willing to see the process through to the end.

 

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Kranias v. Tsiogas, 941 So.2d 1173 (Fla. 2d DCA Oct 13, 2006)

Attorneys witness their clients' signatures on documents all the time. In the estate planning context, attorneys regularly witness their clients signatures on wills and trusts.  Is the attorney-client privilege waived every time you witness a signature?  The 2d DCA says NO.

The specific exception to the attorney-client privilege at issue here is found in Florida Statutes section 90.502(4)(d), which provides as follows:

(4) There is no lawyer-client privilege under this section when: . . . . . (d) A communication is relevant to an issue concerning the intention or competence of a client executing an attested document to which the lawyer is an attesting witness, or concerning the execution or attestation of the document.

In the linked-to case the petitioners were suing the trustee of a land trust for somehow defrauding them in connection with a deed.  The petitioners' own attorney had written to them about the deed, and also witnessed their signatures on the deed.  The trial court said that was enough to require disclosure of attorney's letter.  Wrong answer.  As explained by the 2d DCA, just because counsel witnesses his clients' signatures, doesn't mean the attorney-client privilege is lost:

We conclude that the circuit court erred in ordering the production of this letter based on section 90.502(4)(d), because this exception to the attorney-client privilege does not apply here. There has been no argument that the Petitioners either did not intend to sign or were not competent to sign the quitclaim deeds that conveyed property from a land trust to the Petitioners. The attorney-client privilege is not waived as to communications between an attorney and a client when such communications pertain to the preparation of a document merely because the attorney later acts as a witness to the parties' signatures on that document.

Lesson learned: anticipate privilege waiver issues

A significant cultural difference between planning/transactional attorneys and litigators is their respective sensitivity to circumstances that may result in a waiver of the attorney-client privilege.  Sensitivity to this issue is second nature to litigators (it's part of their every-day practice), non-litigators need to make a conscious effort to keep it in mind.  As I've written before (see here), sometimes it's OK to purposely step into the attorney-as-trial-witness role, you just don't want to end up there inadvertently.

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Many predicted that Anna Nicole Smith's 2006 Supreme Court victory involving her late husband's estate would lead to increased numbers of trust-and-estate cases being litigated in federal court (see here and here).

A recent example of the "federalizing" of trust-and-estates litigation is reported on in 2nd Circuit Re-Examines Standard for Probate Exception.  As the following excerpts make clear, it will now be much easier for litigants in the North East (i.e., litigants within the 2nd Circuit's jurisdictional boundaries) to adjudicate trusts-and-estates disputes in federal court:

 A retired attorney's long-running fight with the Bank of New York and a White Plains, N.Y., law firm over her parents' estate gave a federal appeals court the chance to explore the new standard on the probate exception to federal diversity jurisdiction.

The 2nd U.S. Circuit Court of Appeals said a 2006 U.S. Supreme Court decision changed the scope of the exception and the circuit's own case law, with the result that some of the claims brought by Adrienne Marsh Lefkowitz against the bank and McCarthy, Fingar, Donovan, Drazen & Smith can stay in federal court.

Second Circuit Judges John Walker and Peter Hall, with Southern District of New York Judge Denise Cote, sitting by designation, decided Lefkowitz v. The Bank of New York, 04-0435-cv. Hall wrote for the panel.

.     .     .     .     .

[I]n 2006, the U.S. Supreme Court decided Marshall v. Marshall, 126 S.Ct. 1735. In that case, former Playboy playmate and TV reality show star Anna Nicole Smith won a procedural victory in her attempt to collect a bequest from her late 90-year-old husband, Texas oil magnate J. Howard Marshall.

Hall, in writing the 2nd Circuit's opinion, said Marshall "reigned in the boundaries of the probate exception."

"The court explained that in Marshall the probate exception did not apply because plaintiff sought neither to (1) 'administ[er] an estate, ... probate ... a will, or [do] any other purely probate matter,' nor (2) 'to reach a res in the custody of a state court,'" Hall said. "From these statements, we discern that under the clarified probate exception a federal court should decline subject-matter jurisdiction only if a plaintiff seeks to achieve either of these in federal court."

Hall said that, therefore, "insofar as our Court's decision in Moser purported to direct courts to exercise subject-matter jurisdiction over in personam and other claims that might 'interfere' with probate proceedings only ... that holding was overly broad and has now been superseded by Marshall's limitation of the exception."

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Robinson v. Weiland, 936 So.2d 777 (Fla. 5th DCA Sep 01, 2006)

In the linked-to case two annuities were at issue.  At the center of the dispute were two change-of-beneficiary forms allegedly signed by the decedent right before he died.  Relying on these change-of-beneficiary forms, the decedent's girlfriend claimed a 60% interest in the annuities (surviving son got the other 40%).  Decedent's sister claimed these change-of-beneficiary forms were invalid because they either weren't signed by the decedent or were the product of undue influence.

The "Smoking Gun" Witness

After trial but before judgment was entered, counsel for decedent's sister hit the jack pot when he managed to track down girlfriend's former roommate who signed an affidavit completely undermining girlfriend's trial testimony.  Roommate's affidavit ended with this bombshell:

After the forms were at the house for a number of weeks, I personally was present when she completed the annuity beneficiary change forms. She told me she was including herself as a 40% beneficiary because she did not want to appear to be too greedy.... The forms were definitely not completed in the presence of John S. Cetrano [the decedent] and were not placed in their envelopes for mailing by John S. Cetrano; Michael Weiland filled them out at 1711 Joshua Drive, NE, Palm Bay, Florida and mailed them many weeks after she first had possession of the forms.

But what if the trial court says "who cares"?

Assume you've found the smoking gun witness, and that the only reason you didn't have this witness at trail was because an opposing party (girlfriend) defrauded you and the court during the discovery phase of the case.  No matter how un-enthusiastic the trial court may be when you seek to have this new evidence admitted, once you allege "fraud", the trial court MUST conduct an evidentiary hearing to address your claims, and failure to do so is reversable error. 

In this case counsel for sister filed motions under Civ. Pro. Rules 1.530 and 1.540(b)(3) trying to get a new trial or to set aside the judgment.  The trial judge summarily denied both motions and was reversed on appeal.  Here's how the 5th DCA summarized its rationale:

The courts consistently agree that the trial court has discretion to grant a motion to reopen a case for presentation of additional evidence after the parties have rested and even after granting a motion for directed verdict for a party. .  .  .  Factors the trial court should consider in determining whether to reopen the case to allow presentation of additional evidence include whether the opposing party will be unfairly prejudiced and whether it will serve the best interests of justice.

Because the trial court summarily denied Robinson's motion, we are unable to determine why the trial court made that decision or what factors, if any, the trial court considered. Moreover, given the allegations of fraud made by Robinson to support her motion, we think an evidentiary hearing was essential for the trial court to properly determine whether to grant the request to present the testimony of Adams.

After the final judgment was entered, Robinson filed her Motion for Rehearing, New Trial, or Evidentiary Hearing, pursuant to rule 1.530, Florida Rules of Civil Procedure, once again alleging fraud as a basis for relief. Cetrano and Weiland argue that Robinson failed to demonstrate the trial court abused its discretion in denying the motion, primarily arguing cases discussing motions for relief from judgment made pursuant to rule 1.540, Florida Rules of Civil Procedure. This court and others have held that if a party files a motion pursuant to rule 1.540(b)(3), pleads fraud or misrepresentation with particularity, and shows how that fraud or misrepresentation affected the judgment, the trial court is required to conduct an evidentiary hearing to determine whether the motion should be granted.  .  .  .  Moreover, the courts have held that the hearing requirement applies when fraud is asserted as a grounds for relief under either rule 1.530 or 1.540, Florida Rules of Civil Procedure.  .  .  .  The motion filed by Robinson sufficiently alleges fraud and demonstrates how it affected the judgment, thereby satisfying the requirement for an evidentiary hearing under either rule 1.530 or 1.540. Therefore, we reject the arguments advanced by Cetrano and Weiland.

We conclude that Robinson was entitled to an evidentiary hearing based on the motion she filed prior to entry of final judgment and the motion she filed thereafter. We, therefore, reverse the order summarily denying Robinson's Motion to Reopen Trial For Newly Discovered Evidence and her Motion for Rehearing, New Trial, or Evidentiary Hearing and remand for an evidentiary hearing. Should the trial court determine that fraud occurred as Robinson alleged, we believe that a new trial would be warranted.

Key word: EVIDENCE

Your client doesn't have a right to a favorable ruling, but he or she is entitled to a fair day in court.  Which means that if the other side cheats, lies or otherwise defrauds you and the court to keep you from finding your smoking gun witness, you have a right to an evidentiary hearing to establish this fraud and a new trial if evidence of fraud is in fact established.

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Weiss v. Berkett, 949 So.2d 1092 (Fla. 3d DCA Feb 07, 2007)

This one-paragraph opinion doesn't explain the facts of the case, but it appears that a probate adversarial proceeding was dismissed for lack of prosecution under Florida Rule of Civil Procedure 1.420(e).  The party whose claim was dismissed then filed a Petition for Writ of Prohibition with the 3d DCA apparently arguing that the trial court improperly applied Rule 1.420(e).  The 3d DCA agreed as follows:

We grant the petition for writ of prohibition. The Florida Rules of Civil Procedure apply to adversarial proceedings in probate court. See Mangasarian v. Mercurio, 570 So.2d 356 (Fla. 3d DCA 1990); Fla. Prob. R. 5.020(d)(2); Fla. R. Civ. P. 1.420(e). The trial court has exceeded its jurisdiction as the order under review does not comport with the requirements of Florida Rule of Civil Procedure 1.420(e) for dismissal for lack of prosecution.

Sample Pleading:

After initially posting on this case, the petitioner, Patricia Pollak Weiss, posted a comment (see below) and was kind enough to email me a copy of her winning Petition for Writ of Prohibition, which, with her authorization, I've copied to this blog post for those interested in reviewing it for future reference.

Lesson learned:

Adversarial proceedings in probate are subject to dismissal for lack of prosecution under Florida Rule of Civil Procedure 1.420(e), which provides as follows:

(e) Failure to Prosecute. In all actions in which it appears on the face of the record that no activity by filing of pleadings, order of court, or otherwise has occurred for a period of 10 months, and no order staying the action has been issued nor stipulation for stay approved by the court, any interested person, whether a party to the action or not, the court, or the clerk of the court may serve notice to all parties that no such activity has occurred. If no such record activity has occurred within the 10 months immediately preceding the service of such notice, and no record activity occurs within the 60 days immediately following the service of such notice, and if no stay was issued or approved prior to the expiration of such 60-day period, the action shall be dismissed by the court on its own motion or on the motion of any interested person, whether a party to the action or not, after reasonable notice to the parties, unless a party shows good cause in writing at least 5 days before the hearing on the motion why the action should remain pending. Mere inaction for a period of less than 1 year shall not be sufficient cause for dismissal for failure to prosecute.

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Favreau v. Favreau, 940 So.2d 1188 (Fla. 5th DCA Oct 06, 2006)

Pro se (self-represented) litigants are not sensitive to the sanctions normally applied to counsel for bringing frivolous actions, and indigent litigants are not sensitive to fee-shifting or fines.  Little wonder then that an out of control pro se litigant can be especially difficult for both courts and opposing parties to contend with.  (For a recent in depth analysis of this issue from Harvard Law student J. Caleb Donaldson, see "Vexatious Pro Se Civil Litigants in the Massachusetts Courts" (2006)).

The linked-to case is a good example of a Florida probate court using its "inherent power" to manage a vexatious pro se litigant.  The next time you're confronted with the pro se litigant "from hell," you'll be happy you read this opinion .  .  .

The order is not a reviewable non-final order. See Florida Rule of Appellate Procedure 9.130. The remaining avenue for review is certiorari but Edna has failed to establish the requisites for issuance of the writ in this case. A court has the inherent power to prevent abuse of court procedure which interferes with the effective administration of justice. Platel v. Maguire, Voorhis & Wells, P.A., 436 So.2d 303 (Fla. 5th DCA 1983). A requirement that pleadings be accompanied by an attorney's signature is not a restraint which amounts to a complete denial of access to courts. Id.; May v. Barthet, 886 So.2d 324 (Fla. 4th DCA 2004); see also § 68.093, Fla. Stat. (2005) (the Florida Vexatious Litigant Law). The trial court followed procedural requirements by issuing an order to show cause, affording Edna an opportunity to explain why she should not be barred from future pro se filings. Edna has failed to establish a clear departure from the essential requirements of law resulting in irreparable harm. See Cape Canaveral Hospital, Inc. v. Leal, 917 So.2d 336 (Fla. 5th DCA 2005).

My guess is that the sub-section of § 68.093 alluded to above by the 5th DCA is the following:

(4) In addition to any other relief provided in this section, the court in any judicial circuit may, on its own motion or on the motion of any party, enter a prefiling order prohibiting a vexatious litigant from commencing, pro se, any new action in the courts of that circuit without first obtaining leave of the administrative judge of that circuit. Disobedience of such an order may be punished as contempt of court by the administrative judge of that circuit. Leave of court shall be granted by the administrative judge only upon a showing that the proposed action is meritorious and is not being filed for the purpose of delay or harassment. The administrative judge may condition the filing of the proposed action upon the furnishing of security as provided in this section.

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Marshall v. HQM of Winter Park, LLC, --- So.2d ----, 2007 WL 1647561 (Fla. 5th DCA Jun 08, 2007)

In Florida a death certificate is part of every probate proceeding.  The fact that these documents are given conclusive effect in uncontested probate proceedings probably explains why parties attempt to use them to the same effect in contested proceedings, and end up getting reversed on appeal if the trial judge goes along with them (see here).

In the linked-to case a death certificate was used to obtain a summary judgment ruling disposing of a wrongful death claim.  The trial court was reversed on appeal based on the following black letter Florida law:

In granting summary judgment, the trial judge apparently gave conclusive effect to the death certificate and disregarded the opinion of Appellants' expert. This was error. A death certificate is prima facie proof of the “fact, place, date, and time of death as well as the identity of the decedent.” § 731.103(2), Fla. Stat. (2007). It does not constitute prima facie proof of the cause of death, nor does it create conclusive proof of any fact related to the death. As it relates to the cause of death, it simply states the ultimate opinion of the attesting physician. When, as here, a conflicting medical opinion on causation is offered, summary judgment is not appropriate.

Lesson learned?

Death certificates may be necessary to your case, but they are rarely sufficient to get the job done in contested proceedings.  If the circumstances surrounding a decedent's death are being contested, make sure your client understands that simply pulling out a death certificate containing helpful facts will NOT win the day in court (i.e., client should understand and expect to incur the expense and delay inherent to any case where circumstantial evidence is being contested).

Cardinal rule of all litigation: no surprises! (I've ranted on this point before).

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The following is from the Wills, Trusts & Estates Prof Blog:

By Texas Senior U.S. District Judge Jerry Buchmeyer, et cetera, 70 Tex. B.J. 193 (2007):

    D. Clinton Brasher of Beaumont, Texas, received these marvelous admissions “from defense counsel regarding an employee of theirs (up until the time of his death)” who was listed as a fact witness:

1. Admit that ______ is dead.

RESPONSE: Admit insofar as this question is regarding information regarding the death of ______’s body, as his spirit surely lives on.

2. Admit that ___________ will be unavailable to testify at trial.

RESPONSE: Admit subject to ___’s coming back to life and subsequently testifying in this matter, or, for that matter, testifying through a duly appointed oracle. … Inasmuch as this request for admission is meant to cover such things other than whether or not ____ will be available to testify live at trial, no pun intended, Plaintiff objects to the request as vague.

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Estate of Hester v. U.S., --- F.Supp.2d ----, 2007 WL 703170 (W.D. Va. Mar 02, 2007)

The estate tax automatically makes the IRS the biggest creditor of most large estates.  Understanding this dynamic can translate into millions in savings for a client . . . or a colossal missed opportunity.

In the linked-to case the estate attempted to claim a $2.8 million estate tax refund based on the theory that the decedent had misappropriated millions in trust funds and thus the remainder beneficiaries of the subject trust would have claims against the estate that would result in corresponding estate tax deductions.  The estate's theory collapsed in on itself because it didn't claim the $2.8 million estate tax refund until after the statue of limitations period had run on possible claims against the decedent's estate for misappropriating trust funds.  Here's how the court articulated this point:

Allowing a deduction here, where a taxpayer is attempting to secure a refund for a theoretical liability that will never be paid and that is now barred by the statute of limitations, would essentially “exalt form over substance.” Estate of Hagmann, 60 T.C. at 468. Therefore, because the estate has neither an actual or expected claimant, or a cognizable claim, the misappropriated assets are not deductible under § 2053(a)(3).

Lesson Learned: Probate administration and estate tax reporting need to go hand-in-hand

In the linked-to case the estate failed to coordinate the probate proceeding with its anticipated estate tax positions.  The outcome would have likely been very different if - prior to expiration of the applicable statute of limitations - the estate had simply conceded a liability to the trust beneficiaries in the context of the probate proceedings - utilizing whatever mechanism is available under Virginia  law for doing so (in Florida, F.S. 733.703(2) authorizes a Personal Representative to file a proof of claim for all claims he or she has paid or intends to pay).

Failing to anticipate the estate-tax ramifications of actions taken - or not taken - in the probate proceeding likely cost this estate $2.8 million in avoidable estate taxes.

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Arthur v. Milstein, --- So.2d ----, 2007 WL 602630 (Fla. 4th DCA 2007)

Poor Judge Seidlin.  Even when he gets it right . . . he's wrong.  Relying on the "tipsy coachman" doctrine, which allows allows an appellate court to affirm a trial court that “reaches the right result, but for the wrong reasons” so long as “there is any basis which would support the judgment in the record,” the 4th DCA upheld Judge Seidlin's ruling granting power to decide where Smith will be buried to Richard C. Milstein, as guardian ad litem for Smith's 5-month-old daughter, Dannielynn Hope Marshall Stern.

According to the 4th DCA, the trial court incorrectly based its ruling on Florida statutes intended to guide funeral home operators and medical examiners:

The trial court relied upon section 406.50(4) to determine that Dannielynn had priority over Arthur. .  .  .  .  We find that neither section 497.005(37) [superceded by 497.005(39)], nor section 406.50, control the outcome of this case, which in essence involves private parties engaged in a pre-burial dispute as to the decedent's remains. Otherwise stated, the trial court was not being asked to consider whether a funeral home or medical examiner was liable for its decision with respect to the disposition of a decedent's remains.

Instead, as I predicted here, the 4th DCA held that its prior ruling in the Cohen case was the correct basis for deciding this dispute: Anna Nicole Smith's body should be disposed of in accordance with her intent, as established by clear and convincing evidence. Here's how the 4th DCA articulated its rationale:

In this case, common law is dispositive. Kirksey v. Jernigan, 45 So.2d 188, 189 (Fla.1950); Cohen v. Guardianship of Cohen, 896 So.2d 950 (Fla. 4th DCA 2005); Leadingham v. Wallace, 691 So.2d 1162 (Fla. 5th DCA 1997). Generally, in the absence of a testamentary disposition, the spouse of the deceased or the next of kin has the right to the possession of the body for burial or other lawful disposition. Kirksey. In Cohen, we held that a written testamentary disposition is not conclusive of the decedent's intent if it can be shown by clear and convincing evidence that he intended another disposition for his body. Cohen looked to decisions of other states which determined that whether to enforce the will provisions regarding disposition of the testator's body depends upon the circumstances of the case.

*     *     *     *     *
Cohen noted that there were “no cases in Florida or across the country in which a testamentary disposition has been upheld even though credible evidence has been introduced to show that the testator changed his or her mind as to the disposition of his/her body.” 896 So.2d at 954. There, we found no abuse of discretion associated with the trial court's finding of the decedent's intent. See also Leadingham. We note that even under section 497.005[39], the first priority is to the wishes of the decedent “when written inter vivos authorizations and directions are provided” and that the remaining list of legally authorized persons are those who are most likely to know and follow those wishes. To the extent sections 497.005[39] and 406.05(4) provide guidance, the priorities therein could set forth a presumption, rebuttable by clear and convincing evidence of the decedent's intent, as was the will in Cohen, and as found here.

Probate litigator's toolkit: 

"Burial disposition" cases are rare. So if you find yourself involved in one, you'll want to read Judge Seidlin's trial court order [click here] and the excellent legal analysis of the case prepared by attorney Shane Kelley, which can be found in “Who Can Dispose of Her Body”: Disposition of the Remains of a Decedent under Florida Law.

For an excellent article tackling the need for better burial statutes nationwide, you’ll want to read Uniform Acts-Can the Dead Hand Control the Dead Body? The Case for a Uniform Bodily Remains Law. What I find particularly helpful about this article is that it provides a detailed, well-researched and thoughtful proposed statute from beginning to end. For those of you finding yourself involved in one of these cases, you’ll want to read this article. It highlights issues you’ll have never thought of on your own.

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Juega v. Davidson, --- So.2d ----, 2007 WL 465523 (Fla. 3d DCA Feb 14, 2007)

[THIS OPINION WAS WITHDRAWN AND SUBSTITUTED HERE]

Who has standing to sue and when is a recurring them in trusts and estates litigation.  In probate proceedings, the issue is framed in terms of who is an "interested person,"  In non-probate trust litigation, the issue is governed by Florida Rule of Civil Procedure 1.210(a).

In this case an estate administrator appointed as part of estate proceedings in Spain filed a 1994 lawsuit in Miami, Floria.  The case apparently dragged on for years.  In 2003, the Spanish estate was closed on the estate administrator was discharged.  Having acquired a taste for U.S. litigation, in 2004 the foreign administrator proceeded with his case in Miami after having been discharged in Spain.

The trial court dismissed the discharged-foreign administrator from the lawsuit on lack-of-standing grounds.  The 3d DCA agreed, providing the following helpful guidance:

Florida Rule of Civil Procedure 1.210(a) states, in pertinent part:

Every action may be prosecuted in the name of the real party in interest, but a personal representative, administrator, guardian, trustee of an express trust, a party with whom or in whose name a contract has been made for the benefit of another, or a party expressly authorized by statute may sue in that person's own name without joining the party for whose benefit the action is brought.

By its express wording, Rule 1.210(a) enumerates six categories of persons who may bring an action for the benefit of another without joining the real party in interest. However, the real party in interest may prosecute in his own name as well even if one of those six categories of persons is available. See Estate of Morales v. Iasis Healthcare Corp., 901 So.2d 965, 966 (Fla. 2d DCA 2005) (“[i]n cases involving claims made by ... an estate, there are two parties: the estate and the personal representative”). Here, [foreign administrator] ceased to be the estate administrator and the Estate ceased to be the real party in interest in 2003.

Because [foreign administrator] ceased to act in his representative capacity in 2003, he did not have standing in 2004 to raise claims on behalf of the estate.

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Matsumoto v. American Burial and Cremation Services, Inc., --- So.2d ----, 2006 WL 3733310, 32 Fla. L. Weekly D26 (Fla. 2 DCA Dec 20, 2006)

In light of the ongoing litigation involving conflicting claims for custody of Anna Nicole Smith's body (see here), the linked-to case seems especially timely (thanks to Alachua, FL attorney Jane E. Hendricks for pointing it out to me).

The linked-to case answers two questions that can be expected to come up from time to time in a probate practice.  After the publicity the Anna Nicole Smith case is bringing to litigation involving control of a decedent's body, these questions may come up with more frequency.

• Question 1: Can you sue someone for causing you emotional pain and suffering over the disposition of a family member's dead body?  Answer: YES.  Here's how the 2d DCA described this particular tort:

Ms. Matsumoto sued the appellees in June 2003, claiming that they tortiously interfered with the body of her deceased father, Lenzo Chavis. Her pleading and her trial theme more accurately reflect a tort claim for outrageous conduct causing severe emotional distress. See, e.g., Smith v. Telophase Nat'l Cremation Soc'y, Inc., 471 So.2d 163 (Fla. 2d DCA 1985) (acknowledging Florida's recognition of tort of intentional infliction of emotional distress caused by extreme and outrageous conduct in handling of cremation); Williams v. City of Minneola, 575 So.2d 683, 690-91 (Fla. 5th DCA 1991) (holding that cause of action lies in tort for infliction of emotional distress by outrageous conduct involving dead body); Baker v. Fla. Nat'l Bank, 559 So.2d 284, 287 (Fla. 4th DCA 1990) (recognizing that claim for intentional infliction of emotional distress and “tort of outrageous conduct” are the same claim).

• Question 2:  Does a funeral home have an affirmative duty to find the next of kin with highest priority under Florida law when seeking authority to cremate a decedent's body?  Answer: NO. According to the 2d DCA Florida Statutes section 470.002(18) [now repealed] specifies the priority of persons who may direct the disposition of the decedent's body.  Under this statute, a decedent's child has priority over a brother or sister.  In the linked-to case the decedent's estranged daughter claimed the funeral home should have tried to locate her prior to following the directions of the decedent's brother.   The 2d DCA rejected her claim as follows:

Ms. Matsumoto .  .  .  urges us to graft upon the statute a requirement that the funeral home undertake a diligent search for the closest next of kin if their whereabouts are unknown by those lower in priority under the statute. She suggests that the funeral home must make a good faith effort, similar to that required for constructive service of process, to locate the unavailable next of kin. See § 49.041(1), Fla. Stat. (2002). The statute does not impose a due diligence requirement on funeral homes. Nor does it require funeral homes to provide others with higher priority notice of a family member's death. We decline to impose such obligations on the funeral home.

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Glover v. Miller, 2007 WL 247899 (Fla. 4th DCA Jan 31, 2007)

In 2005 sixteen-year-old Jerrod Miller was shot to death by a Delray Beach police officer.  Ten years earlier, in 1995, Kenneth Miller was declared Jerrod's father by an adjudication of paternity and judgment requiring child support.  In 2006 posthumous DNA testing revealed a 99% likelihood that another man, Terry Glover, is really the biological father of Jerrod.  Because Jerrod died without a will, under Florida's laws of intestacy (F.S. 732.103), Jerrod's estate passes to his parents in equal shares or to his sole surviving parent if either predeceased him.  Jerrod's mother died in 2003, so whomever ends up designated as his father gets everything.  According to this Sun-Sentinel report, millions could be at stake:

Miller's attorney, T.J. Cunningham, said Willie Gary would file a wrongful-death lawsuit as soon as Miller is formally appointed personal representative of the estate. Gary, a high-profile Stuart attorney, previously notified Delray Beach that the estate would settle the case for $7.5 million.

Both men filed dueling petitions for administration of Jerrod Miller's estate.  The probate court ruled in favor of Miller based on the 1995 paternity adjudication -- and the 4th DCA upheld that ruling based in part on the following rationale:

Section 732.101(2) provides that the decedent's date of death is the event vesting the heirs' rights to intestate property. At the date of Jerrod's death, Glover was not considered Jerrod's father for purposes of intestate succession, because he never married Jerrod's mother, was never adjudicated to be his father, and never acknowledged in writing that he was Jerrod's father. In contrast, Miller was Jerrod's father for purposes of intestate succession because he was adjudicated to be Jerrod's father. Thus, Miller's rights vested on Jerrod's death because he is Jerrod's father by a paternity judgment. Jerrod was a lineal descendant of Miller within the meaning of section 732.108(2)(b), so he is an heir for purposes of section 733.301(1)(b) 3.

. . . . . .

As noted by the trial court, Glover did not move to set aside the adjudication of Miller's paternity. His petition for administration of the estate merely alleged that he is the biological father of Jerrod. Yet Miller is Jerrod's father in the eyes of the law, regardless of the results of DNA testing. FN1 The legal father has substantial rights (in this case vested rights) which cannot be lightly dismissed, even by the discovery that the legal father is not the biological father. In fact, our supreme court has held that the mere fact that biological testing shows that a man other than a legal father is the biological father of the child without more does not require the granting of a paternity petition. Dep't of Health & Rehabilitative Servs. v. Privette, 617 So.2d 305 (Fla.1993).

FN1. Glover's contention that he is entitled to summary judgment of fatherhood based upon DNA testing alone is also statutorily inaccurate. Where DNA testing shows a 95 percent or more confidence level that the man is the biological father, it creates only a rebuttable presumption of fatherhood. § 742.12(4), Fla. Stat. (2006).

. . . . . .

We agree with the trial court that in order for Glover to assert a right as an heir, the existing judgment of paternity would have to be vacated. A child cannot have two legally recognized fathers. See Achumba v. Neustein, 793 So.2d 1013, 1015 (Fla. 5th DCA 2001).

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Disque v. Unger, 2007 WL 101375 (Fla. 4th DCA  Jan 17, 2007)

The linked-to case does a good job of underscoring a key concept often lost on personal representatives: they are fiduciaries.  In other words, no matter how strongly they may personally feel about a contested issue, prior to using estate funds (i.e., assets that belong to someone else) to embark on new litigation they need to be able to answer the following question with an unqualified YES: is this litigation in the best interest of the estate?

The PR in the linked-to case failed the "best interest" test when he filed a declaratory judgment action seeking construction of a marital settlement agreement.  Only problem was that no matter how the court construed the contested marital settlement agreement . . .  no assets would flow into the probate estate being administered by the PR filing the declaratory judgment suit.  Both the trial court and the 4th DCA ruled the PR had failed the best-interest test and dismissed his action.  The following excerpts from the linked-to case summarize the controlling law at play in this case:

Section 733.602(1), Florida Statutes (2003), which describes the general duties of a personal representative, provides:

A personal representative is a fiduciary who shall observe the standards of care applicable to trustees as described by s. 737.302. A personal representative is under a duty to settle and distribute the estate of the decedent in accordance with the terms of the decedent's will and this code as expeditiously and efficiently as is consistent with the best interests of the estate. A personal representative shall use the authority conferred by this code, the authority in the will, if any, and the authority of any order of the court, for the best interest of interested persons, including creditors. (emphasis added)

The parties do not contest the trial court's conclusion that, no matter which way the dispute was resolved, it would be of no financial benefit to the estate. The appellants contend, however, that the probate court should have resolved the issue because the property settlement agreement authorized Rose's estate to enforce it. The fact that the estate was authorized by the property settlement agreement to enforce it, however, does not satisfy the requirement of section 733.602(1), that the personal representative act in the best interest of interested persons.

In this case the persons interested in the estate, beneficiaries or creditors, have no interest in the dispute involving Alvin's will. We accordingly agree with the trial court that, under these specific facts, where the estate could not benefit financially, and the dispute could be resolved in a lawsuit between all of the interested parties without the estate being a party, the estate should not be involved.

*     *     *     *     *

When the personal representative found himself in a quandary as to whether to file this lawsuit, he should have sought court approval before filing the lawsuit, as is authorized by section 733.603, Florida Statutes (2003). When the trial court concluded, on its own, that pursuing this litigation was not in the best interest of the estate, it was simply doing what was contemplated by section 733.603. Because it is undisputed that the estate cannot benefit financially, and that further litigation will deplete the assets which would otherwise go to interested persons, there is no reason to prolong this proceeding.

Lesson Learned:

The concepts at play in this case can be used very effectively as defensive tools.  It will often be easier, cheaper and quicker to obtain a court order barring a PR (or any other type of fiduciary) from pursuing litigation on the grounds that the action is not in the best interests of the estate vs. obtaining a dismissal of the actual lawsuit.  For example, in the linked-to case, the initial declaratory judgment action would have probably been dismissed if at the outset the parties opposed to the action had simply filed a motion to dismiss based on the law cited above with a short affidavit stating that the outcome of the action, no matter who won, would not benefit the estate.

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Jonathan Alper's Asset Protection Blog had an interesting post entitled Bank Accounts to Avoid Probate: POD vs. ITF accounts.  In estate administrations you come across pay-on-death "POD" bank accounts and in-trust-for or "ITF" bank accounts (also known as Totten trusts) all the time.  Jonathan makes some interesting points regarding the differences between these two non-probate accounts on asset-protection grounds.  Although I'm not sure I agree with his conclusions, here's an excerpt:

Here's my understanding, although I know of no cases comparing the two types of accounts. . ITF , “in trust for” implies the existence of a trust relationship so that the beneficiary of the trust (Mary) would have equitable ownership in the account funds from the day John funds the account. . Of John opened a POD account, Mary would have no rights or interest in the account during John’s life, and Mary would first acquire an interest upon John’s death. From an asset protection standpoint, John is a trustee over Mary’s money during his life in the case of an ITF account, and John has no equitable ownership in the money which would be vulnerable to his creditors. Creation of the ITF account is an immediate gift in trust to Mary. If John’s POD account John has a life estate in the account and the beneficiary has a remainder interest. During his lifetime John has full access to money in his POD account; Mary’s interest is limited to what is left in the POD account upon John’s death.. Because John can access for his own use money in a POD account during his lifetime I expect that John’s creditors could attack money his POD account as they can get whatever rights John has in the POD account. For that reason, I believe an ITF account provides better asset protection as well as probate avoidance.

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Rice v. Greene, 2006 WL 3327665 (Fla. 5th DCA Nov 17, 2006)

It's not often that a probate-related case forces the parties to distinguish between Equitable Title in real property (i.e., the present right to possession with the right to acquire legal title once a preceding condition has been met) and Marketable Title in real property.  Well that's exactly what happened in this case.

Here widow inherited real property from her husband in 1994 pursuant to her late husband's will . . . but she never got around to probating the will.  Ten years later widow sells the same property to two different buyers.  "Buyer A" bought the property in June 2004 and received a warranty deed from widow.  A few months later in October of 2004 widow sold same property to "Buyer B" and also gave him a warranty deed.  Buyer B recorded his deed before Buyer A. 

So who owns what?

• Upon husband's death, widow instantly vested as an equitable owner of the property . . . even though she never probated his will.  F.S. 732.514.
• Although she had equitable ownership, widow's failure to probate her husband's will meant she never acquired marketable title.  F.S. 733.103(1).
• Buyer A was out of luck under Florida's recording statute (F.S. 695.01(1)), because Buyer B recorded his deed first.  This doesn't mean Buyer B had clear title, only that Buyer A is now out of the picture and Buyer B has first dibs on working with one apparently easily confused widow on cleaning up the title mess she created.

Here are a few excerpts from the linked-to case summarizing the points above:

[Buyer A] is correct that under section 733.103, Mr. Schwartz's unprobated will was ineffective to “prove title” to the property, under section 732.514. But, it was Mr. Schwartz's death that vested Mrs. Schwartz's rights in the property. Reading these statutes in concert, it is clear that because Mrs. Schwartz never offered Mr. Schwartz's will for probate, she lacked marketable title to the property. However, she clearly acquired equitable title to the property upon her husband's death, assuming, as have the parties, that Mr. Schwartz's will, which was presented to the court below, is authentic. Admittedly, because Mrs. Schwartz's title was not marketable, under certain circumstances, it might have been subject to divestment for the payment of claims, expenses of administration or taxes. Regardless, those are matters that affect the quality of the title, which is not at issue here. Instead, the only issue is which party has a priority claim to the property as between [Buyer A] and [Buyer B].

**********
“[A]n unrecorded deed is not good or effectual in law or equity against creditors or subsequent purchasers for valuable consideration who are without notice of the transaction.” Fryer v. Morgan, 714 So.2d 542, 545 (Fla. 3d DCA 1998). Therefore, because [Buyer B] had no notice of the earlier warranty deed between [Buyer A] and Mrs. Schwartz and paid valuable consideration for the property, [Buyer B's] recording of his warranty deed before [Buyer A] gives [Buyer B] priority to the property. Since there is no genuine issue of material fact and [Buyer B] is entitled to judgment under section 695.01(1), the trial court did not err in granting [Buyer B's] motion for summary judgment.

We do note that the language of the final judgment is overly broad, in that it purports to quiet title to the property in [Buyer B]. While the final judgment adjudicated the dispute between [the buyers] .  .  .  much more work is necessary before [Buyer B] will have marketable title to the property.

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Cone v. Anderson, 2006 WL 2986471, 31 Fla. L. Weekly D2621 (Fla. 1st DCA Oct 20, 2006)

The 1st DCA's opinion provides no facts whatsoever to explain what was going on when the trial court entered an order enjoining the trustee-defendant from seeking compensation without prior court approval (which begs the question: why even publish an opinion that provides close to zero guidance to future litigants??).  However, reading between the lines I think what happened here was that the appellee obtained the injunctive order on an ex parte basis . . . which is a no-no in the absence of the compelling circumstances required by Civ. Pro. Rule 1.610 for ex parte injunctive relief:

Florida Rule of Civil Procedure 1.610 governs injunctions. If the language of an order is injunctive in nature, the order must comply with the requirements for the issuance of an injunction, even if the trial court merely intended to preserve the status quo in the order. See Spradley v. Old Harmony Baptist Church, 721 So.2d 735, 737 (Fla. 1st DCA 1998). In the present case, the trial court “enjoined” Cone from seeking any and all compensation until “further order of this Court or any other Court of competent jurisdiction.” Clearly, the language of the order is injunctive in nature. Appellee concedes that the trial court did not comply with rule 1.610. Accordingly, we REVERSE the order and QUASH the injunction.

Lesson learned:

Just because you've figured out the underlying substantive trust or probate law doesn't mean you can't get tripped up on the civil procedure.

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Pisciotti v. Stephens, 2006 WL 3077750 (Fla.App. 4 Dist. Nov 01, 2006)

I plead the Fifth!!! Ahh, those immortal words of American jurisprudence.  Well, if you thought your friends in the criminal defense bar were the only ones who got to have fun with this bit of legal jargon . . . think again.  In this case brother figures out sister may have stolen a few checks while mom was alive.  Brother filed an adversary proceeding to remove sister as PR of mom's estate and then sued sister for theft.  Brother then gets an order from probate court requiring sister to answer deposition questions and file a final accounting . . . overruling sister's refusals based on her Fifth Amendment constitutional right against self-incrimination.  Wrong answer says the 4th DCA, which reversed the probate court's order on both counts.  Here are a couple of key excerpts from the 4th DCA's opinion:

Sister's first argument on appeal is that the trial court's order requiring her to answer deposition questions violates her Fifth Amendment privilege against self-incrimination, particularly in light of her brother's comments regarding criminal prosecution of her. We agree.

**********

Here, given the potentially incriminating nature of the evidence, coupled with brother's professed intent to seek criminal prosecution, sister had reasonable grounds to fear that her deposition testimony could be used as a link in a chain of evidence against her in a later criminal proceeding.  .  .  .  Thus, in this case the trial court failed to recognize that there was a reasonable possibility of prosecution, and ultimately applied the wrong law.

**********
Second, sister argues that the trial court's order requiring her to file final accountings also violates her Fifth Amendment privilege. Generally, the privilege does not apply to documents that are required under the law to be prepared by a PR to carry out a fiduciary duty. [In re Rasmussen, 335 So.2d 634, 636 (Fla. 1st DCA 1975)].

**********
Yet given the fundamental nature of the Fifth Amendment's constitutional guarantees, we perceive grave difficulties in applying the privilege to the deposition questions but not to the related final accountings. To refuse to apply the privilege to the order for a final accounting document in this case would have the rather perverse effect of protecting sister from giving testimonial answers conceivably providing a link in the chain of evidence but then refusing the same protection by requiring her to file accountings yielding the same information. Because of the facts and circumstances of this case, we distinguish Rasmussen.

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Aronson v. Aronson, 930 So.2d 766, 31 Fla. L. Weekly D1317 (Fla. 3d DCA May 10, 2006)

Revocable trusts are widely used in Florida for estate planning purposes.  The standard procedure is to title large assets in the name of the revocable trust to avoid having to probate those assets when the settlor dies and also to make it easier for a successor trustee to administer those assets for the benefit of an incapacitated settlor.  On the other hand, because clients can change or "revoke" their revocable trusts at any time and revocable trusts offer zero asset protection from creditors, some may feel that titling assets in the name of the trust is a technical matter with no real-life significance.  Wrong answer . . .  as demonstrated by this case.

Mr. Aronson titled his condo located on Key Biscayne (read: $500,000+ FMV real estate) in July of 1996 to his revocable trust.  I'm assuming this trust mostly favored his children.  A few months later, in December of 1996 Mr. Aronson deeded this same condo to his second wife.  Perhaps inevitably, Mr. Aronson's children and second wife ended up in litigation over who owns the condo: the trust or second wife?  At trial, the court ruled in favor of second wife.  On appeal, the 3d DCA reversed, ruling that an individual can't deed a property in his individual capacity if he's previously deeded it over to his revocable trust, even if he had the authority at any time to revoke his own trust.  The following are a few excerpts from the 3d DCA's opinion:

Here, the Settlor executed a warranty deed conveying the property to himself, as trustee. Thus, the Settlor, in his capacity as trustee, became the legal title holder of the trust property. See Buerki, 570 So.2d at 1063. Once the Settlor held the property as trustee, for the benefit of the beneficiaries of the trust, he no longer possessed the power to convey the property in his individual capacity.

*     *     *     *     *

However, assuming that the Trust reserved to the Settlor and the Trustee certain powers to dispose of trust assets, there is no question that Mr. Aronson failed to withdraw the property in strict compliance with the Trust instrument as it required the Settlor to deliver a written document to the Trustee in order to withdraw the Trust assets. See Bongaards, 793 N.E.2d at 339. Instead, Mr. Aronson conveyed real property in his individual capacity, which he did not legally own in that capacity. Accordingly, the subsequent transfer was invalid as a matter of law.

We need not and, indeed, cannot attempt to glean Mr. Aronson's intent in transferring the property to the trust, or subsequently to Ms. Aronson in his individual capacity. Here, there was no ambiguity in either the original transfer of the property to the Trust by warranty deed or the subsequent transfer of the property to Ms. Aronson by quit claim deed. See Dolphins Plus, Inc. v. Hobdy, 650 So.2d 213, 214 (Fla. 3d DCA 1995)(noting that unambiguous language of a written instrument is not subject to judicial construction or interpretation). Having created a valid trust and being familiar with the powers he retained therein, as well as the law in this area, Appellants contend that Mr. Aronson's intent was to appease his second wife and effectuate a sham transaction he knew to be legally invalid. Conversely, it is argued that Ms. Aronson was the natural object of Mr. Aronson's bounty and that the subsequent transfer must be held to be valid to give meaning to Mr. Aronson's actions. These and other explanations may exist in attempting to ascertain the true motive behind Mr. Aronson's actions. However, the choice of any particular scenario to explain and give meaning to Mr. Aronson's intent involves guesswork that is not likely to produce enduring legal principles under which to consider future cases.

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In re Estate of Stisser, 932 So.2d 400, 31 Fla. L. Weekly D1008 (Fla. 2d DCA Apr 07, 2006)

Technical issues such as whether a Florida court has in rem jurisdiction over a matter or whether in personam jurisdiction is required can have huge impacts on how a case is litigated.  In this case, the outcome of that question determined whether a Florida personal representative was forced to sue the successor trustee of the decedent's revocable trust for payment of expenses and taxes in Florida or Minnesota.  The PR won the argument before the probate court, even though the trust was administered in Minnesota by an individual trustee residing in Minnesota containing trust assets that apparently were located in Minnesota.  Based on these facts, I don't see how the probate court concluded that it had in rem jurisdiction over the trust -- none of the assets were located in Florida.  On appeal, the 2d DCA reversed. 

The 2d DCA got to the right result, but its expressed reasoning is flawed because it fails to zero in on the single key issue before it: was the lawsuit limited solely to questions involving the parties' rights over property in Florida or was the lawsuit seeking to impose a judgment directly against a person or party?  Instead the 2d DCA framed its opinion in terms of an "indispensable party" analysis.  For the record, here's how the 2d DCA expressed its reasoning:

[T]he probate court could not enter such a ruling in the absence of the Cotrustees. “‘The law is settled that, in suits against the trustee affecting trust property, the trustees as well as the cestuis que trustent should be made parties defendant.’ ” First Nat'l Bank of Hollywood v. Broward Nat'l Bank of Fort Lauderdale, 265 So.2d 377, 378 (Fla. 4th DCA 1972) (quoting Griley v. Marion Mortgage Co., 132 Fla. 299, 182 So. 297, 300 (1937)).  The general rule is that a “trustee is an indispensable party in all proceedings affecting the estate.” Id. Yet, in the instant case, both the probate court and the parties appeared to agree that the court did not have personal jurisdiction over the Cotrustees. The probate court stated that it did not require personal jurisdiction over the Cotrustees and proceeded without it in the mistaken belief that it had in rem jurisdiction, which it believed was sufficient. Stisser conceded at the hearing that the probate court did not have personal jurisdiction over the Cotrustees.

Given the fact that the law requires the probate court to have personal jurisdiction over the Cotrustees of a trust in order to enter a ruling affecting the corpus of the trust and given the fact that the court lacked such jurisdiction over the Cotrustees, the probate court was without authority to rule on the complaint filed by Stisser. We conclude therefore that the probate court erred in denying the Cotrustees' motion to quash service of process and in taking jurisdiction over the instant case. Accordingly, we reverse.

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Estate of Gunderson v. School Dist. of Hillsborough County, 2006 WL 2612678 (Fla. 1st DCA Sept. 13, 2006)

Apparently the Hillsborough County School District wanted to get out of a $52,808 workers'-comp' settlement agreement in the worst way possible.  The decedent in this case signed the settlement agreement -- then died before signing the general release agreed to as part of the deal.  When the decedent's widow sought to enforce the settlement agreement, the School District told her to take a hike.  Widow lost this argument before the probate court!  (Just goes to show, nothing is ever certain in litigation . . . even if the legal issues are a slum dunk in your favor.)

Widow then appealed the probate court's order - and won on appeal.  The 1st DCA reversed the probate court's order and rejected the School Board's two arguments for non-enforcement.  The School Board had argued that the settlement agreement was unenforceable (1) because execution of the general release - by the decedent - was a condition to the formation of a contract between the parties, and (2) the settlement agreement was a personal services contract that could only be performed by the decedent - because only he could sign the general release.  The 1st DCA unequivocally rejected both of these arguments.  The following excerpts from the linked-to opinion reflect the 1st DCA's rationale on both counts:

In defense of its failure to perform the settlement agreement, the E/C asserts that the deceased's execution of the general release and voluntary resignation were either conditions precedent or conditions subsequent to the formation of a valid contract and, thus, the failure to execute the documents renders the settlement agreement non-binding. This argument is without merit. Provisions of a contract will only be considered conditions precedent or subsequent where the express wording of the disputed provision conditions formation of a contract and or performance of the contract on the completion of the conditions. [Citations omitted.]  No such wording exists in the disputed contractual provisions.

*     *     *     *     *

The general rule is that contracts for personal services contain an implied condition that such contracts dissolve at the time of the contractor's death. See CNA Int'l Reinsurance Co., Ltd. v. Phoenix, 678 So.2d 378, 380 (Fla. 1st DCA 1996). Restatement (Second) of Contracts § 262 defines a contract for “personal services” as a contract where the existence of a particular person is necessary for the performance of a duty. In addition, section 733.612(2), Florida Statutes (2004), authorizes a personal representative to “perform or compromise, or when proper, refuse to perform, the decedent's contracts····” Similarly, section 733.612(24), Florida Statutes (2004), authorizes a personal representative to “satisfy and settle claims.”  .  .  .  The duty of performance on the claimant's part was a duty which could statutorily be performed by his representative in the event of his death through the effectuation of the necessary documents. These were not duties which the claimant's death rendered impossible to perform.  .  .  .  More importantly, the death of a claimant following the execution of a settlement agreement will not affect the agreement's enforcement if the personal representative can show that a binding contract was reached. See Jacobson v. Ross Stores, 882 So.2d 431 (Fla. 1st DCA 2004).

[Emphasis added.]

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Weinberg v. Weinberg, 2006 WL 2265216, 31 Fla. L. Weekly D2094 (Fla.App. 4 Dist. Aug 09, 2006)

Is it just me, or does it seem like venue has all of a sudden become a hot topic in trust litigation?  I wrote previously about recent trust-litigation venue rulings here and here.  Well, you can add this case to the list as well.  Here the 4th DCA has weighed in on the subject in the context of a dispute involving a lawsuit by the adult-children-of-first-marriage against second wife, who revoked a trust in Palm Beach County then moved south to Miami-Dade County.  The kids sued her in Palm Beach County.  Second wife argued that since she was presently residing in Miami-Dade County, the lawsuit against her in Palm Beach County should be dismissed on venue grounds.  The trial court denied her motion, and she appealed.  On appeal the 4th DCA upheld the trial court's decision citing to the following set of facts as grounds for its ruling:

In this case, Palm Beach County was the situs of the trust and its assets, the trust was administered in Palm Beach County before Betty purported to revoke it, and the distributions would have been made by the trustee in Palm Beach County upon Sidney's death. When Betty attempted to revoke the trust in its entirety and take title to all of the trust property, the last event necessary to make her liable for breach of trust took place. That is where the injury to the sons first took place. We therefore hold that the cause of action for breach of trust accrued in Palm Beach County, where Betty purported to revoke the trust.

Our resolution of this issue makes it unnecessary to decide whether venue was proper on any other basis.

Lesson Learned:

I found it interesting that the 4th DCA never mentions Florida's trust-litigation venue statute (F.S. 737.202).  Regardless, this case underscores the level of scrutiny courts will apply to the unique facts of a case when determining venue disputes.  It seems to me that the party that most persuasively argues the facts establishing a clear link between its favored venue and the facts directly underlying the cause of action being litigated is most likely to win.

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In Florida, trustees and personal representatives have an affirmative statutory duty to keep trust and estate beneficiaries informed (see new Ch. 736 for trustees; 733.602 and 733.604 for PRs).  Additionally, being pro-active, let alone responsive, with respect to keeping everyone informed is probably the cheapest way to avoid getting sued by the beneficiaries, a point underscored in this newspaper article.  The following is an excerpt from the linked-to article:

Friday, August 18, 2006
By FRED CONTRADA
fcontrada@repub.com

AMHERST - When William J. Bernotas shot his estranged wife Jean Hosmer to death in front of the Northampton police station in 1999 and then turned the gun on himself, he left their two children orphans.

One of Hosmer's sisters came forward to take care of Sandra and Kevin Bernotas, but their estate was entrusted to Amherst lawyer Nancy J. Sardeson.

Now the family has questions about how the estate has been managed and Sardeson has been suspended from practicing law for failing to provide the answers.

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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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Meyer v. Meyer, __ So.2d __, 2006 WL 1708155 (Fla. 5th DCA June 23, 2006) 

Venue rulings can be powerful tools in litigation. Requiring parties to drop their lawsuit in one state and re-file in another (in this case New York) may sound like a minor inconvenience, but the real life implications are significant. A party seeking to enforce his or her rights under a Florida-law governed trust in another state must now hire two sets of lawyers: local counsel to file the initial complaint and navigate the civil procedure requirements of that jurisdiction plus Florida counsel to educate a probate judge in another state regarding what can be very complicated and state-specific Florida trust laws.

In this case an alleged beneficiary of the trust filed a petition in Florida seeking construction of a Florida-law governed trust. The trial court denied a motion to dismiss on venue grounds under F.S. § 737.203. The trial court was reversed by the Fifth DCA. The most significant aspect of the Fifth DCA’s opinion is that it basically maps out the factual allegations a party seeking to keep an action involving a Florida-law governed trust in this state should prove.

Here, the trust is being administered in New York where the trustee resides. None of the parties has any connection with the state of Florida, and we note that the petition filed by Laurie does not contain any factual allegations showing that venue properly lies in this state. Because a proper objection has been filed by parties who are beneficiaries of the trust protesting the proceedings by the Florida court concerning a trust registered or having its principal place of administration in New York, the trial court should have properly applied the dictates of section 737.203. We are unable to determine whether this is what the trial court did because it simply denied the motion to dismiss without revealing the basis for its denial. Accordingly, we reverse the order denying the motion to dismiss and remand for the purpose of allowing the trial court to determine whether all interested parties could be bound by litigation in New York. Perry. If the trial court finds the parties may be bound by New York litigation, “the court shall continue, stay, or dismiss the suit” filed by Laurie. Perry, 903 So.2d at 377. If the parties are not bound, the court may deny the motion to dismiss.

We note, parenthetically, that although the trust agreement contains a choice of law provision, it does not designate Florida as the principal place for administration of the trust. Unless specified in the trust agreement, the “principal place of administration of a trust” is “the trustee's usual place of business where the records pertaining to the trust are kept or, if he or she has no place of business, the trustee's residence.” § 737 .101(1), Fla. Stat. (2005). Accordingly, New York is the principal place for administration of the trust because the trustee is a resident of that state and the trustee's attorney for legal matters pertaining to the trust is also in New York.

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In re Estate of Faskowitz, __ So.2d __ (Fla. 2d DCA Mar 31, 2006)

The decedent left no surviving spouse or lineal descendants. At a hearing on a petition for determination of heirs, Highlands County Probate Judge J. David Langford ruled that the petitioners were the decedent's paternal heirs, and thus entitled to one-half of the estate. So far, so good. The probate court then went on to rule that because no evidence had been presented by the alleged paternal heirs that no maternal heirs existed, one-half of the estate would be held by the clerk of the court in accordance with F.S. § 733.816 for the unknown maternal kindred, where presumably it would escheat to the State if no maternal heirs claimed the funds within the 10-year claims period. This is where the probate court got it wrong.

The Second DCA reversed the probate court's ruling regarding the half of the estate set aside for the decedent's maternal kindred, providing the following excellent summary of the statutory framework governing unclaimed assets in Florida probate proceedings:

Under section 732.103(4)(c), "[i]f there is no paternal kindred or if there is no maternal kindred, the estate shall go to such of the kindred as shall survive." Pursuant to this provision, in the absence of any maternal kindred of Irving Faskowitz, his paternal kindred-- namely, the appellant and his sisters--are entitled to inherit the whole estate. The State does not have a right to half of an intestate estate when there are lawful heirs under section 732.103. The two specific provisions of the Florida Probate Code governing the escheat of estate property--sections 732.107 and 733.816--do not in any way displace the rule of descent set forth in section 732.103(4)(c).

Section 732.107(1) simply provides that "[w]hen a person leaving an estate dies without being survived by any person entitled to it, the property shall escheat to the state." [FN1] Here, the paternal kindred have established their status as lawful heirs under section 732.103(4)(c). Accordingly, the predicate for the operation of 732.107(1) --that "a person leaving an estate [has] die[d] without being survived by any person entitled to it"--does not exist in this case.

Similarly, the provisions of section 733.816 concerning the disposition of unclaimed property held by personal representatives do not defeat the rights the paternal kindred here have under section 732.103(4)(c). Section 733.816(1) addresses circumstances where "unclaimed property in the hands of a personal representative ... cannot be distributed or paid ... because of inability to find [the lawful owner] or because no lawful owner is known." Neither of these circumstances have been established here. Unless it is shown that there are maternal kindred entitled to inherit from the estate, the paternal kindred are the "lawful owner[s]" of the entire estate. Contrary to the trial court's ruling, there is nothing in the statutory scheme suggesting that once claimants have established their status as lawful heirs the State is entitled to escheat of a portion of the estate simply because there is uncertainty concerning whether there may be other lawful heirs.

Based on the clear language of the governing statutes, the Second DCA dismissed the probate court's evidentiary burden-shifting ruling as follows:

Nothing in the case law cited by the appellees undermines this straightforward interpretation of the relevant statutory provisions. The appellees rely primarily on two cases to support the trial court's ruling. The appellees cite In re Estate of Tim, 180 So.2d 161 (Fla.1965), and In re Estate of Russell, 387 So.2d 487 (Fla. 2d DCA 1980), for the proposition that the paternal heirs had the burden of proving the nonexistence of maternal heirs in order to avoid the operation of the statutory provisions providing for escheat of unclaimed estate property. Neither Estate of Tim nor Estate of Russell supports the position advanced by the appellees.

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Benedetto v. Columbia Park Healthcare Systems, __ So.2d __ (Fla. 5th DCA Mar 10, 2006)

The question of whether a person should be required to hire a lawyer if he or she wants to petition a court to probate a will has been the subject of a good amount of blogosphere commentary lately. Texas law professor Gerry W. Beyer has covered the issue on his blog Wills, Trusts & Estates Prof Blog (see here, here, and here) and Chicago-area probate attorney Joel A. Schoenmeyer has done the same on his blog Death and Taxes - The Blog (see here and here).

In Florida, the answer is simple: with limited exceptions, every guardian and personal representative MUST hire a lawyer. That's the lesson to be drawn from the Fifth DCA opinion cited above. In this case the Fifth DCA was unable to tell from the record on appeal whether the personal representative was the "sole interested person" in the estate (thus qualifying for the exception to the general rule requiring representation) or not. If the personal representative was not the "sole interested person" in the estate, then his appeal was subject to dismissal. Here's how the Fifth DCA explained the law in Florida on this point:

Florida Rule of Probate Procedure 5.030(a) provides in relevant part as follows:

(a) Required; Exception. Every guardian and every personal representative, unless the personal representative remains the sole interested person, shall be represented by an attorney admitted to practice in Florida. A guardian or personal representative who is an attorney admitted to practice in Florida may represent himself or herself as guardian or personal representative.

Because an independent action on behalf of an estate is ancillary to the estate administration, this rule governs both the estate administration itself and any independent proceedings prosecuted or defended by the estate. Thus, unless Appellant is the "sole interested person," as defined by law, he is precluded from maintaining this appeal without counsel. See, Dimitroff v. Taylor, 651 So.2d 131 (Fla. 2d DCA 1995). See also § 731.201(21), Fla. Stat. (2005) (defining "interested person").

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Siegel v. Novak, 2006 WL 119545 (Fla. 4th DCA Jan 18, 2006)

Probate litigation is often rife with conflict of law issues. For example, it is not uncommon to have a trust governed by the law of one jurisdiction (e.g., Florida law) administered in another jurisdiction (e.g., New York). In this case the parties were litigating whether the decedent's sons had standing to challenge trust disbursements made from their mother's revocable trust prior to her death. Both sides agreed New York law applied to the trust accounting issue. The point of contention arouse around standing. Under New York law the sons had standing to sue, under Florida law they apparently did not.

Question for Florida Court: Does New York law apply to the standing issue or does Florida law apply? In other words, is standing to sue a substantive or procedural matter for choice of law purposes?

Palm Beach County Judge Gary L. Vonhof ruled the decedent's sons lacked standing under Florida law and thus dismissed their claims on summary judgment. The Fourth DCA reversed holding that standing is a substantive matter for choice of law purposes, thus New York law applied because New York bore the most significant relationship to the trust, thus the decedent's sons had standing to sue. The Fourth DCA explained its ruling as follows:

"In a choice of law context, Florida maintains the traditional distinction between substantive and procedural matters." "As the forum state in this case, Florida law determines whether [the issue of standing] is substantive or procedural for choice of law purposes." Generally, when confronted by a choice of law problem, a court will apply foreign law when it deals with the substance of the case and will apply the forum's law to matters of procedure. Substantive law generally relates to the rights and duties of a cause of action, while procedural law involves the "'machinery for carrying on the suit.'".

No Florida case has decided whether standing is a substantive or procedural matter for choice of law purposes. Recently, the eleventh circuit has indicated that "[u]nder Florida's choice of law provisions, Florida law governs all substantive issues, including the question of whether an individual has standing and capacity to sue." In Merkle v. Robinson, 737 So.2d 540, 542 (Fla.1999), the Florida Supreme Court held that "statute of limitation choice of law questions [should be treated] the same as 'substantive' choice of law questions which,**** Florida decides pursuant to the 'significant relationship' test."

In this area, the question of standing to assert a claim is analogous to a statute of limitations defense. Both issues relate to whether a cause of action may proceed; neither involves the "machinery for carrying on the suit" once the right to proceed has been determined. The ability to bring an action at law is a "most valuable attribute" of a legal right, a factor favoring the classification of standing as a substantive matter.

Here, the right of the [decedent's sons] to challenge the distributions from the trust should be decided under New York law. For the challenged distributions, New York bears the most significant relationship to the trust.

(Emphasis added; internal citations omitted.)

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Smith v. Smith, 2005 WL 3439889, 30 Fla. L. Weekly D2845 (Fla. 5th DCA Dec. 16, 2005)

Both in the divorce context and for estate planning purposes, reviewing beneficiary designation forms for insurance policies, IRAs, and pension plan benefits is one of those "to do" items that often gets left to the end. Well, this case should be the sort of "cautionary tale" you may want to share with those clients who never quite get around to signing their change of beneficiary designation forms.

As part of Mr. and Mrs. Smith (that's their real names) divorce, they signed a marital settlement agreement (prepared by Mrs. Smith) splitting everything up including, at least they thought, their respective insurance policies, IRAs and pension plans. Unfortunately for the beneficiaries of Mr. Smith's estate, he sat on the change of beneficiary designation forms for a year and half before he died - without having executed the forms (oops!). Seminole County Trial Judge Nancy F. Alley sided with Mr. Smith's estate, and ruled that the marital agreement was enough all by itself to entitle the estate to the disputed funds generated by Mr. Smith's life insurance policies and retirement plan benefits.

The Fifth DCA said not so fast, reversing the trial judge based on the following:

In Cooper v. Muccitelli, 661 So.2d 52 (Fla. 2d DCA 1995) ("Cooper I"), the Second District Court of Appeal held that "without specific reference in a property settlement agreement to life insurance proceeds, the beneficiary of the proceeds is determined by looking only to the insurance contract." Id. at 54. The Florida Supreme Court affirmed, saying that a contrary holding would put insurance companies in an "impossible position." Cooper v. Muccitelli, 682 So.2d 77, 79 (Fla.1996) (" Cooper II"). The high court pointed out that despite specific and clearly worded language in an insurance contract, a carrier could never be certain to whom to pay the proceeds. The lesson from Cooper I and Cooper II is that while it may be possible in a marital settlement agreement to waive one's right as a beneficiary of insurance policies, that waiver can only be accomplished if the waiving party specifically gives up his or her rights to the "proceeds" of these policies.FN1 Otherwise, one must look only to the beneficiary designation made by the insured and filed with the insurer.

In the present, case the marital settlement agreement fails to make specific reference to the proceeds of the life insurance policy in question, and the decedent, in the words of the Florida Supreme Court in Cooper II,"did just what he needed to ensure that the proceeds would go to [Ms. Smith]-he did nothing." Cooper II, 682 So.2d at 79. He had a year and a half to execute change of beneficiary forms as required by his policy of insurance, but for whatever reason, he did not do so. Thus, Ms. Smith is entitled to the proceeds of the life insurance policies. (Emphasis added.)

FN1. Obviously some other language such as "death benefits" would likely suffice.

The Fifth DCA came to the same conclusion with respect to the decedent's IRAs and pension plan benefits: no change of beneficiary form means the disputed funds go to the original beneficiary - Mr. Smith's ex-wife.

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Fleming v. Demps, 2005 WL 3481367 (Fla. 2d DCA Dec 21, 2005)

In this case there was a dispute regarding whether $317,000 in a certain bank account belonged to the probate estate or the decedent's niece, Ms. Henrietta Fleming, the designated beneficiary of the account. This is the sort of issue probate judges deal with every day. Which may explain in part why Hillsborough Judge Rex Martin Barbas felt it was OK to enter a final judgment ruling in favor of the estate and against Ms. Fleming without conducting an evidentiary hearing.

Ms. Fleming appealed, and the Second DCA reversed the trial judge on the following due-process grounds:

Concerning the lack of an opportunity to be heard prior to entry of the final judgment, "[d]ue process requires that a party be given the opportunity to be heard and to testify and call witnesses on his behalf, and the denial of this right is fundamental error." Pettry v. Pettry, 706 So.2d 107, 108 (Fla. 5th DCA 1998) (citations omitted); see also Pope v. Pope, 901 So.2d 352, 353-54 (Fla. 1st DCA 2005) (same); Hinton v. Gold, 813 So.2d 1057, 1060 (Fla. 4th DCA 2002) (same). Here, the personal representative's motion of March 1, 2004, to determine who is the rightful owner of the funds and whether the funds should be administered as estate assets or otherwise distributed to the proper owner was resolved without giving Ms. Fleming any opportunity to be heard and to present evidence on the issues. (Emphasis added.)

Lesson Learned:

The probate-administration process is often criticized as being too slow and costly. In contested proceedings, this criticism can conflict with basic notions of fairness underlying every Floridian's due process rights. Hopefully the parties (and the trial judge) will realize this without having to incur the extra cost and expense associated with appellate proceedings.

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Estate of Blount v. C.I.R., --- F.3d ----, 2005 WL 2838478 (11th Cir. Oct 31, 2005)

Buy-sell agreements are often used in business succession planning to fix the fair market value of a closely held business interest for gift and estate tax purposes. In this case the decedent, George C. Blount (founder of Blount Construction Company), executed an amendment to his 1981 buy-sell agreement in November of 1996, about one month after being diagnosed with cancer and a little under a year prior to his death in September of 1997. After his death the IRS successfully challenged the tax-planning effectiveness of the buy-sell agreement on grounds that came into play only because the agreement had been "substantially modified" after October 8. 1990.

Two Key Points:

• Always exercise extreme caution when revising any buy-sell agreement entered into before October 8, 1990 because of the IRS's aggressiveness in disallowing estate-tax valuation discounts if the agreement was "substantially modified" after that date.
• If a closely-held business purchases life insurance to fund a buy-sell agreement obligation, the value of those insurance proceeds may not be counted for purposes of establishing the estate-tax value of the business.

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Valdes v. Estate of Valdes, 2005 WL 2861179 (Fla. 3d DCA Nov. 2, 2005)

Ambiguity is the bane of a probate practitioners life. When the answers are clear, opposing parties are able to define their positions with certainty and usually come to some sort of negotiated compromise without the need for expensive litigation. When the law is "fuzzy," litigation is often the only tool available to achieve clarity.

Which is why the concrete, unambiguous, nuts-and-bolts guidance provided by the Third DCA in this case should be welcomed. Here the key legal question was the following: may a probate judge revisit earlier decisions setting the amount of reasonable family allowance? Miami-Dade Probate Judge Arthur Rothenberg said YES, and was upheld on appeal (although his second ruling reducing the amount of family allowance was reversed). The appellate court provided the following summary of the law:

Section 732.403 authorizes a probate court to award a "reasonable allowance" out of the money of the estate for the benefit of a surviving spouse or lineal heirs the decedent was supporting or was obligated to support during administration of the estate. § 732.403, Fla. Stat. A surviving spouse and qualified lineal descendant are "entitled" to a family allowance without regard to the necessity of the allowance. DeSmidt v. DeSmidt, 563 So.2d 193, 194 (Fla. 2d DCA 1990). However, the reasonableness of the allowance must still be established. Id. As such, we conclude the probate court necessarily retains the authority to re-examine and modify an award, either upward or downward as circumstances may require, during the course of administration of the estate. Id.

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Sandler v. Jaffe, 2005 WL 2655765 (Fla. 4th DCA Oct. 19, 2005)

Elderly parents often title bank accounts jointly with their children. Although extremely common, the problem with this type of arrangement is that the temptation to walk away with some of mom or dad's funds can sometimes be irresistible. This case is a prime example of that risk.

Facts: Concerned about possible incapacity issues arising out of her advanced age, mom titled all her bank accounts jointly with her daughter; daughter then transferred $84,000 from one of these joint accounts to an account titled in the name of her own husband and daughter (the family dynamics of this case are "interesting" to say the least). Mom finds out about transfer, sues daughter for return of funds, then dies while lawsuit is pending. Mom's other child, son, carries on with suit as personal representative of mom's estate.

Key points of the case:

• Daughter argued that F.S. § 655.78(1) absolved her from any liability. The 4th DCA rejected this argument, noting that this statute is intended to protect banks from getting drawn into disputes between title holders of an account. It in no way shields joint title holders from liability for their own actions.
• Daughter argued that since she was a joint title-holder with right of survivorship, she was entitled to all of the funds at mom's death anyway or, in the alternative, mom gifted all of these funds to her when she titled the bank accounts jointly. So no harm done. These arguments failed because mom actually found out about the transfers pre-death and sued for their return.

Lesson learned:

Obviously mom was trying to plan for her incapacity; she certainly never intended to gift all of her estate to her daughter at the expense of her son. Joint bank accounts are a clumsy way of planning for incapacity and often run afoul of the "Trust, but verify" maxim. Revocable trusts are a much better alternative.

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Herskovitz v. Hershkovich, 2005 WL 2254003, 30 Fla. L. Weekly D2209 (Fla. 5th DCA Sept. 16, 2005) (Trial Court Affirmed)

This case is yet another example of why probate litigation can be especially challenging. Not only must counsel in these cases have the ability to quickly spot the often highly technical probate-law issues in play in the relatively short period of time permitted to challenge a will in probate, he or she must also be sufficiently knowledgeable in civil procedure and trial techniques to successfully venture into the litigation arena.

The decedent's surviving brother in this case challenged the validity of a second codicil to his brother's will (which completely cut him out of the estate) on the grounds that the two attesting witnesses to that codicil were unaware of the testamentary nature of the instrument they were signing. In other words, counsel for surviving brother correctly identified a substantive issue under Florida probate law that favored his client. Counsel made this argument when he successfully opposed a summary judgment motion filed by the surviving spouse. So far, so good. Unfortunately, counsel failed to make this argument again when the probate court conducted an evidentiary hearing on the matter . . . thereby waiving the issue on appeal. The Fifth District Court of Appeal summed up its ruling on this point as follows:

In [his memorandum opposing summary judgement, surviving brother] contended questions of fact existed as to whether the witnesses could authenticate the documents. Subsequently, the trial court denied [surviving spouse's] motion for summary judgment. Once the summary judgment was denied, it was incumbent upon [surviving brother] to present whatever arguments and documents he believed relevant to determining those questions of fact to the trial court at the evidentiary hearing. By failing to do so, he waived this issue for appellate review.

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When I first started out as a trusts and estates lawyer one of the senior partners at my firm gave me some very good advice. He told me that if you're ever unsure about visiting someone at the hospital or going to a funeral . . . always opt for showing up. This report on NPR's "This I Believe" series reminded me of that wise advice. The following are a few highlights from that piece:

I believe in always going to the funeral. My father taught me that.

The first time he said it directly to me, I was 16 and trying to get out of going to calling hours for Miss Emerson, my old fifth grade math teacher. I did not want to go. My father was unequivocal. "Dee," he said, "you're going. Always go to the funeral. Do it for the family."

Sounds simple -- when someone dies, get in your car and go to calling hours or the funeral. That, I can do. But I think a personal philosophy of going to funerals means more than that.

"Always go to the funeral" means that I have to do the right thing when I really, really don't feel like it. I have to remind myself of it when I could make some small gesture, but I don't really have to and I definitely don't want to. I'm talking about those things that represent only inconvenience to me, but the world to the other guy. You know, the painfully under-attended birthday party. The hospital visit during happy hour. The Shiva call for one of my ex's uncles. In my humdrum life, the daily battle hasn't been good versus evil. It's hardly so epic. Most days, my real battle is doing good versus doing nothing.

In going to funerals, I've come to believe that while I wait to make a grand heroic gesture, I should just stick to the small inconveniences that let me share in life's inevitable, occasional calamity.

On a cold April night three years ago, my father died a quiet death from cancer. His funeral was on a Wednesday, middle of the workweek. I had been numb for days when, for some reason, during the funeral, I turned and looked back at the folks in the church. The memory of it still takes my breath away. The most human, powerful and humbling thing I've ever seen was a church at 3:00 on a Wednesday full of inconvenienced people who believe in going to the funeral.

Source: Legacy Matters Blog

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Martin v. Hacsi, 2005 WL 1842678 (Fla. 5th DCA August 5, 2005) (Trial Court Affirmed)

Counsel for the defendant in a personal injury action filed a motion for enforcement of Florida Rule of Civil Procedure 1.260(a) based on the plaintiff's failure to move to substitute a party defendant within 90 days after a suggestion of death was filed. Sumter County Circuit Court Judge Hale R. Stancil granted the motion and dismissed the lawsuit. On appeal, the 5th DCA affirmed, providing some very helpful guidance along the way for plaintiffs trying to figure out what to do when a defendant dies and no personal representative is appointed.

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Cason v. Hammock, 2005 WL 1488650 (Fla. 5th DCA June 24, 2005) (Trial Court Reversed)

Florida's probate code and procedural rules are designed to cut off possible litigation as soon as possible . . . whenever possible. Used wisely by an experienced probate attorney, these statutory and procedural rules are a powerful shield. On the other hand, not focusing on these seemingly mundane details exposes an estate to all the potential delays, expenses and rancor inherent to litigation.

In this case the estate was challenged on two fronts: petitions were filed seeking (1) removal of the personal representative and (2) revocation of the probate proceedings. Citrus County Judge Richard Howard denied both petitions on purely procedural grounds. In other words, the estate seemed to have successfully employed the "litigation shields" built into Florida's probate code and procedural rules. On appeal, the Fifth DCA snatched both victories away from the estate.

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Beseau v. Bhalani, 2005 WL 1488584 (Fla. 5th DCA June 24, 2005) (Trial Court Reversed)

In the underlying wrongful death suit, the defendants prevailed after a jury trial. They then obtained an order awarding attorney's fees and costs against the personal representative of the decedent's estate . . . in her individual capacity. Apparently Volusia County Judge J. David Walsh thought this was OK because the personal representative was named "individually" in the complaint's caption and she never objected. The Fifth DCA made quick work of the case pointing out that regardless of what the complaint's caption may have said, the body of the complaint made clear that the lawsuit was brought on behalf of the estate, not the individual who happened to be serving as personal representative. And if you're not a party to the lawsuit, the court can't assess a judgment against you . . . even if you don't object.

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Perry v. Agnew, 2005 WL 1397427 (Fla. 2d DCA June 15, 2005) (Trial Court Reversed)

Sometimes the best defense is a good offense. In this case, an individual trustee working out of his office in Boston, Massachusetts was sued by three beneficiaries, one of whom was a resident of Florida. The trustee moved to dismiss the complaint for improper venue under F.S. § 737.203. Charlotte County Judge Isaac Anderson, Jr. denied the trustee's motion to dismiss on two grounds, the most interesting of which was based on a finding that the trust's Florida choice-of-law provision exempted it from the application of F.S. § 737.203.

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McMullin v. Beaver, 2005 WL 1278870 (Fla. 4th DCA June 1, 2005) (Trial Court Reversed)

When a trust terminates as of a certain date, it is reasonable to assume that winding up the affairs of that trust may take some time after the termination date. But what if the "winding up" process includes filing a lawsuit after the trust termination date? Indian River Circuit Court Judge Robert A. Hawley ruled that was too much, and granted final summary judgement against the plaintiff trustee, finding that the trustee lacked standing to bring the action because the trust was already terminated. Although unclear from this opinion, apparently the defendants in this case argued that the trustee was attempting to unduly extend the winding up period for the trust by commencing litigation after the trust's termination date.

The Fourth DCA disagreed, and reversed the trial court finding that the trustee did in fact have standing to file his lawsuit after the trust termination date.

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Blankfeld v. Richmond Health Care, Inc., 2005 WL 1226070 (Fla. 4th DCA May 25, 2005) (Trial Court Reversed)

In what will surely be a disturbing decision to all Florida nursing home administrators, the Fourth DCA just made it a lot tougher to avoid trials in nursing home cases. First, the Fourth DCA held that an arbitration clause administered by the American Health Lawyers Association "substantially limits the remedies created by [F.S. § 400.023(2)] and is [thus] void as contrary to public policy." Second, the Fourth DCA held that even if the AHLA's arbitration clause were enforceable, which it's not, a person acting under the health care proxy authority granted by F.S. § 765.401 can only make "health care decisions," and agreeing to arbitration is not a health care decision. If a nursing home wants to bind an incapacitated patient to a valid arbitration clause, it will have to seek the appointment of a temporary guardian pursuant to F.S. § 744.3031(1) to sign the agreement. As the concurring opinion put it . . .

If a nursing home wants to deal with someone competent to make such decisions, it has the right to seek the appointment of a guardian. For only a court appointed guardian could waive or compromise property rights, such as civil remedies in negligence or the right to trial by jury.

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Kutlesic v. Estate of Mervel, 30 Fla. L. Weekly D753 (Fla. 3 DCA March 16, 2005) (Trial Court Affirmed)

The decedent allegedly promised his entire estate to his girlfriend. Unfortunately for her, he then died intestate, leaving her with nothing. Probate proceedings were commenced in 1999. In 2000 the girlfriend sued the decedent's estate on a number of grounds in the general jurisdiction division of the Circuit Court, all of which were eventually dismissed but for a "quantum meruit" claim. The estate then commenced an adversary proceeding before probate-division Judge Sidney B. Shapiro, that resulted in the girlfriend being ordered to vacate the decedent's former apartment. The Third DCA held that this ruling was not an abuse of discretion, even though the girlfriend's "quantum meruit" claim remained pending in the general jurisdiction division of the Circuit Court.

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Estate of Morales v. Iasis Healthcare Corporation, 2005 WL 1107067 (Fla. 2 DCA May 11, 2005) (Trial Court Reversed)

Normally, Florida Rule of Civil Procedure 1.260 requires that a plaintiff be substituted in a pending lawsuit within 90 days after the original plaintiff's death is "suggested on the record." Failure to comply with this deadline results in dismissal of the pending lawsuit. In this case, the personal representative of the estate died while a medical malpractice lawsuit was pending. Pinellas County Circuit Court Judge James R. Case dismissed the pending malpractice lawsuit under Civil Procedure Rule 1.260 because the estate's successor personal representative did not file a motion for substitution within 90 days of the suggestion of death.

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Dempsey v. Dempsey, 2005 WL 954856 (Fla. 2 DCA April 27, 2005) (Appeal Dismissed)

Under Florida Probate Rule 5.360, determining the elective share is a two step process. First, the trial court must rule on the issue of entitlement (Rule 5.360(c)). Second, if the trial court finds entitlement, then it must determine the amount of the elective share, the assets to be distributed to satisfy the elective share, and, if contribution is necessary, the amount of contribution for which each recipient is liable (Rule 5.360(d)).

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Steadman v. Department of Management Services, 2005 WL 924314 (Fla. 5 DCA April 22, 2005)

The Florida Division of Retirement wanted a court order determining an employee's heirs prior to paying survivor benefits. Only one problem. In 2003 Florida Probate Rule 5.385(c) was amended so that the terms "heirs or devises" were replaced with "beneficiaries" for purposes of the court order a person ends up with when filing a petition in circuit court pursuant to Florida Statute Section 733.105 seeking an order determining beneficiaries of an estate. Undaunted by the fact that the requested order no longer existed, the Division refused payment of the requested survivor benefits because it didn't get the order. The fact that an appeal had to be filed so that the Division would change its position is troubling to say the least. The Fifth DCA apparently shared that view, because it held that the Division's refusal to accept an order complying with the provisions of amended Rule 5.385(c) "was a gross abuse of discretion" and ordered the Division to pay the petitioner's attorney's fees.

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Jensen v. Estate of Gambidilla, 30 Fla. L. Weekly D578 (Fla. 4 DCA March 2, 2005) (TRIAL COURT REVERSED)

St. Lucie County Circuit Court Judge Marc A. Cianca entered a civil contempt order requiring an estate's former personal representative to be incarcerated until she returned certain items of personal property to the estate. The Fourth DCA reversed the trial court's order holding that Probate Rule 5.440(d) contempt proceedings require that a trial court expressly find that the removed personal representative had the present ability to comply its order.

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Parker v. Estate of Bealer, 890 So.2d 508 (Fla. 4 DCA January 5, 2005) (TRIAL COURT AFFIRMED)

The key issue in this case was whether an interested person's attorney had to actually file a notice of appearance in the probate proceedings before he or she would be deemed to be "the attorney representing [the] interested person" for purposes of Probate Rule 5.040(a)(3)(A)(i) (Formal Notice) and Probate Code Section 731.301 (Notice). Palm Beach Circuit Court Judge Mary E. Lupo ruled that filing a notice of appearance in the probate proceedings was not required.

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Magnolia Manor, Inc. v Siegel, 866 So.2d 142 (Fla. 5th DCA Feb. 13, 2004) (TRIAL COURT REVERSED)

In a case that has been pending for years, and was already the subject of a previously published appellate opinion in which the trial court was reversed in part and directed to allow Magnolia Manor, Inc., a nursing home where the decedent's parents resided before their deaths and the sole beneficiary of the decedent's 1978 will, to offer the 1978 will for probate (see First Union Nat'l Bank of Fla., N.A. v. Estate of Byron B. Mizell, 807 So.2d 78 (Fla. 5th DCA Feb. 2001) ), Orange County Circuit Court Judge W. Rogers Turner apparently was losing his patience when he dismissed with prejudice the petition filed on behalf of Magnolia Manor for apparently minor drafting errors committed by its counsel. The trial court dismissed the petition because the attorney who had prepared the papers had named himself as the "petitioner," which was unfortunate for all concerned because the filing attorney was not himself an "interested party" under Section 731.201(21), thereby prompting the court to dismiss his petition with prejudice. The 5th DCA reversed the trial court noting that although the "papers filed by [petitioner's counsel] were not models of clarity," a "fair reading of the papers [counsel] filed demonstrates that [he] was proceeding not for his own personal interest, but as a representative of Magnolia Manor."

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Great Southern Life Ins. Co. v. Porcaro, 869 So.2d 585 (Fla. 4th DCA Feb. 25, 2004) (TRIAL COURT REVERSED)

Palm Beach County Circuit Court Judge Thomas M. Lynch, IV granted summary judgement against a life insurance company in favor of a woman whose husband had "mysteriously disappeared" more than two years prior to when she first filed a petition in probate court to have him declared dead. The 4th DCA reversed on the grounds that a death certificate obtained through probate proceedings pursuant to Section 731.103 "no longer has evidentiary value outside the context of probate proceedings." As such, it was reversible error for the trial court judge to shift the burden of proving the decedent's death away from the widow and onto the insurance company based on the evidentiary value of the death certificate.

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Velde v. Velde, 867 So.2d 501 (Fla. 4th DCA February 25, 2004) (TRIAL COURT AFFIRMED)

At issue in this case was whether simply filing a petition for extension of time to make an elective share election was a "proceeding," and thus sufficient under old Section 732.212 to toll the then applicable four-month deadline date for making an election. Effective as of October 1, 2001, this statute was substantially revised and renumbered as Section 732.2135, which now explicitly states that a "petition for an extension of the time for making the election or for approval to make the election shall toll the time for making the election." However, because the decedent died on October 9, 2000, the court was required to apply old Section 732.212. Nonetheless, the 4th DCA noted that interpreting the tolling period under old Section 732.212 as only applying to litigation "would not give effect to the legislature's intent and would yield an absurd result." Consequently, the court held that the word "proceeding" should be "interpreted broadly enough" to encompass the extension petitions at issue in the case.

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