In the trusts and estates world, if it’s not in writing it usually doesn’t count. We all know wills have to be in writing, F.S. 732.502, and the same goes for most trusts, F.S. 736.0403(2). And most of us know waivers of spousal rights also have to be in writing. F.S. 732.702. But what if you’re one step removed from actually making a will? For example, what if “A” promises “B” that at some time in the future he’ll sign a will leaving 50% of his estate to B in exchange for B promising to do the same for A, does that have to be in writing? Yup, that too. F.S. 732.701. And what about agreements among estate beneficiaries to carve up a probate estate in a manner altering what they’re otherwise legally entitled to? Again, it needs to be in writing. F.S. 733.815.

Taking off the blinders:

So here’s the problem. If our training and experience teach us that oral agreements having to do with inheritance rights are NOT enforceable 99% of the time, how likely are we to spot the rare case where the general rule doesn’t apply? Not very, especially if we don’t have examples of what those cases might look like in real life. Fortunately, this year we have two such examples that resulted in published appellate opinions, both of which arose in circumstances that should sound familiar to probate practitioners.

Case study #1: Is an oral agreement to split mom’s inheritance enforceable? YES

Ferguson v. Carnes, — So.3d —-, 2013 WL 1316345 (Fla. 4th DCA April 3, 2013)

This case involved a brother and sister’s common-sense solution to their mom’s frequent threats to disinherit one or the other of them. As alleged by brother (“Ferguson”), rather than roll the dice on who would be in mom’s good graces when she passed away, he and his sister (“Carnes”) agreed to split the inheritance pot 50/50 no matter what mom’s will said. Here’s how the 4th DCA described their deal:

In his complaint, Ferguson alleged that he and Carnes are the only living children of a wealthy mother, who frequently threatened to disinherit both siblings. The complaint further alleged that Ferguson and Carnes entered into an oral agreement in order to afford each other assurance against disinheritance. The oral agreement provided that if one sibling were disinherited, Ferguson and Carnes would divide evenly between them whatever property either received from their mother’s estate.

If true (sister now denies this deal ever existed), brother and sister are to be commended for their good sense . . . but for one problem. No one thought it would be a good idea to put this deal in writing. Oops! Mom died, and sure enough, one of the siblings was disinherited (brother). When brother asked sister to live up to their handshake deal (surprise!) she refused. Brother then sued sister for breach of contract. Sister responded by moving for summary judgment, claiming that the alleged mutual promises failed for lack of consideration. Not so says the 4th DCA. Here’s why:

The oral agreement between Ferguson and Carnes did not lack consideration. Essentially, the terms of the oral agreement as pleaded, which Carnes admitted for purposes of her motion, delineated mutual promises. In other words, Ferguson and Carnes each promised the other to split their respective inheritances with the other, so that each would receive equal shares of whatever amount their mother willed to one or both of them. The consideration lies in the fact that each gave up the possibility of inheriting more than the other in return for insuring that neither would be disinherited in whole or in part. See Ashby, 651 So.2d at 247. The trial court erred by viewing each promise in isolation of the other, rather than viewing them as mutual corresponding promises.

We conclude that Ferguson alleged sufficient facts to establish the creation of an oral agreement and to withstand summary judgment. Accordingly, we reverse and remand for further proceedings.

Unwritten promises are the kind of thing you can expect to get dredged up in contested estates. Usually these promises aren’t worth suing over, but that may not always be true. If faced with this kind of situation and the economics of the claim warrant actually filing suit, the 4th DCA’s summary of the law controlling the enforceability of mutual promises should be helpful.

An oral contract must meet the requirements of a written contract, including offer, acceptance, consideration, and sufficiently specific terms. St. Joe Corp. v. McIver, 875 So.2d 375, 381 (Fla.2004). Promises have long been recognized as valid consideration in forming a contract. Diaz v. Rood, 851 So.2d 843, 846 (Fla. 2d DCA 2003) (“‘[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.’ ” (quoting Ashby v. Ashby, 651 So.2d 246, 247 (Fla. 4th DCA 1995))); Wright & Seaton, Inc. v. Prescott, 420 So.2d 623, 626 (Fla. 4th DCA 1982) (“[M]utual promises constitute considerations for each other.”); Jenkins v. City Ice & Fuel Co., 118 Fla. 795, 160 So. 215, 218 (1935) (“[M]utually enforceable promises may constitute a valid consideration for each other.”). A bilateral contract results from “mutual promises to do something in the future, in which the consideration of the one party is the promise on the part of the other, each party being both a promisor and a promisee.” McIntosh v. Harbour Club Villas Condo. Ass’n, 468 So.2d 1075, 1076 (Fla. 3d DCA 1985).

Case study #2: How long are oral agreements good for? Aren’t they limited to one year by the statute of frauds? NO

Browning v. Poirier, — So.3d —-, 2013 WL 842853 (Fla. 5th DCA March 08, 2013)

Inheritance disputes are usually the last battle in a family war that’s been going on for years, sometimes decades. So if anyone’s making claims based on an oral agreement, chances are that unwritten promise was made years ago. But wait, doesn’t our statute of frauds (F.S. 725.01) bar enforcement of oral agreements that aren’t performed within one year? Not exactly. In this case the 5th DCA tells us why enforcement of an oral agreement made 14 years earlier is NOT barred by the statue of frauds.

Here’s how the oral agreement at the heart of this case was described by Judge Sawaya in his dissenting opinion:

This case involves two romantically involved individuals who allegedly agreed to split the proceeds of any lottery tickets they purchased, only to have the eventual winning ticket split their romance. The purchaser of the winning ticket is Lynn Anne Poirier, the Appellee. The claimant of half of the proceeds is Howard Browning, the Appellant. Browning testified at trial that he and Poirier became romantically involved in 1991 and started living together that year. He further testified that in 1993, they entered into an oral agreement to split the proceeds of any lottery tickets they may purchase and that this agreement was to last as long as they remained romantically involved. Some fourteen years after the alleged agreement was made and while the parties were still romantically involved and living together, Poirier purchased the winning ticket, collected one million dollars, and refused Browning’s request for half of the proceeds. The displeased and disgruntled Browning then filed the underlying suit for breach of contract and unjust enrichment seeking half of the proceeds. Poirier denied the existence of any oral agreement to split future lottery proceeds and interposed the defense of the statute of frauds.

Fourteen years is a long time, especially if we’re talking about an oral agreement (I can’t remember what I had for breakfast yesterday). Isn’t this exactly the type of bramble bush the statue of frauds is supposed to keep us out of? Yes, but no rule’s perfect. If it’s possible for the oral agreement to be performed within one year, the statute of frauds doesn’t apply . . . even if your handshake deal ends up spanning 14 years. So saith the 5th DCA:

Although the parties contemplated that the relationship would last more than one year, there was nothing in the agreement, which was terminable at will, to show that it could not be performed within one year, or which required performance for a period of time exceeding one year. Hence, Browning’s suit for breach of contract is not barred by the statute.

By the way, boyfriend also sued girlfriend for unjust enrichment, an equitable claim we see with some frequency in inheritance disputes. At the trial-court level the judge ruled this claim was barred as a matter of law because you can’t simultaneously argue the existence of an oral agreement and also seek redress on the grounds of unjust enrichment, which presupposes there’s no contract. Again, wrong answer.

There’s nothing wrong with hedging your bets in litigation by asserting alternate — or even inconsistent — arguments. In fact, under our rules of civil procedure it’s explicitly authorized. See Fla. R. Civ. P. 1.110(g) (“A party may … state as many separate claims or defenses as that party has, regardless of consistency and whether based on legal or equitable grounds or both.”). So pleading mutually exclusive claims in a single lawsuit, such as breach of contract and unjust enrichment, is OK. Depending on how the facts play out at trial, one of those claims will remain viable, so litigating them both simultaneously in the same lawsuit makes sense. Here’s how the 5th DCA made this point:

We also reverse the dismissal of Browning’s count for unjust enrichment. The trial court dismissed this count on the basis of Tobin & Tobin Ins. Agency, Inc. v. Zeskind, 315 So.2d 518 (Fla. 3d DCA 1975). Logically, a party whose contract is unenforceable due to the statute of frauds cannot recover for unjust enrichment, as the law will not imply a contract where an express contract exists regarding the same subject matter. Kovtan v. Frederiksen, 449 So.2d 1, 1 (Fla. 2d DCA 1984). Thus, once it is shown that an express contract exists, the claim for unjust enrichment necessarily fails. Real Estate Value Co. Inc. v. Carnival Corp., 92 So.3d 255, 262 n. 2 (Fla. 3d DCA 2012). Here, however, Poirier denied the existence of an express contract and the jury has yet to determine whether an express contract exists. Under these circumstances, the two claims can be maintained simultaneously. Id., ThunderWave, Inc. v. Carnival Corp., 954 F.Supp. 1562, 1566 (S.D.Fla.1997) (citing Hazen v. Cobb, 96 Fla. 151, 117 So. 853, 857–58 (1928)).