Most families squabble, and when the stakes are high enough, some even sue each other . . . but few do it quite like the Perelmans. The latest twist in this ongoing family saga played itself out in Florida, where the 4th DCA ruled in favor of Jeffrey Perelman (brother of controversial billionaire Ronald Perelman, who’s at the center of another mega inheritance dispute involving his former in-laws), and against his father, Raymond Perelman, in a case involving the estate of Ruth Perelman, Jeffrey’s mother and Raymond’s wife.
Mrs. Perelman executed a Will in 2010 naming her son Jeffrey — and not her husband — as executor and personal representative of her estate. Ruth Perelman died at the age of 90 at the Hospital of the University of Pennsylvania on July 31, 2011. Two months earlier, in May 2011, she and her husband had signed paperwork for the naming rights to the University of Pennsylvania School of Medicine after they made a $225 million donation to the school.
Jeffrey filed a petition to probate his mother’s 2010 Will in Pennsylvania. Thirteen days later, his father, Raymond, filed a competing petition to probate a 1991 Will in Florida. The elder Perelman accuses his son of illegally tampering with his mother’s death certificate in order to claim she was domiciled in Pennsylvania. The younger Perelman says it’s just a case of sour grapes because his mother’s 2010 Will appointed him PR of her estate instead of his father. Both are suing each other on multiple fronts in multiple courts, as reported by the Philadelphia Inquirer in Perelman family feud takes a new legal turn:
Firing the latest salvo in a philanthropist-family feud, Raymond Perelman on Tuesday accused his son Jeffrey of illegally altering the elder Perelman’s wife’s death certificate last year.
In a complaint to Montgomery County prosecutors, the elder Perelman said his son and a lawyer persuaded a funeral director last summer to change Ruth C. Perelman’s primary residence on the document from their Palm Beach, Fla., home to a Rittenhouse Square address he calls a second home.
Raymond Perelman claims the change amounts to record-tampering and document deception, crimes that could cause him “significant financial harm.”
A spokeswoman for Jeffrey Perelman, Anne Gordon, said the Philadelphia register of wills had already ruled that Ruth Perelman lived in Philadelphia at the time of her death in July 2011.
As to the complaint, Gordon said, “Raymond is upset that Ruth named Jeffrey as executor and personal representative of her will.”
It was unclear whether prosecutors would pursue the private complaint. Montgomery County District Attorney Risa Vetri Ferman could not be reached for comment.
But the claim signaled that no end is looming in the saga pitting the 95-year-old socially active businessman against his 63-year-old equally prominent and civic-minded offspring.
The Perelmans – the family includes another son, billionaire investor Ronald – have long been generous donors and active figures in the region’s arts, culture, medical, and business communities. (Both father and son also have been involved in various bids to buy The Inquirer, and Gordon is a former managing editor of the newspaper.)
The dispute over the family fortune moved into federal courts in 2010. A suit filed there by Jeffrey Perelman against his father is pending.
So here’s the problem: what do you do when two courts in different states with equal jurisdictional authority are asked to adjudicate the same dispute? That’s what happened in this case: two probate courts, one in Pennsylvania and the other in Florida, with equal jurisdictional authority over probate matters, are being asked to adjudicate the same domiciliary probate proceeding. Here are the key facts/dates as reported by the 4th DCA:
Following Ruth’s death, Raymond filed an informal caveat in Pennsylvania on August 5, 2011. On August 11, 2011, Jeffrey delivered a petition for probate to the Pennsylvania Register of Wills, seeking to probate Ruth’s 2010 Will. On August 12, 2011, the Office of the Register of Wills sent Raymond’s counsel a letter via certified mail, notifying Raymond’s counsel of the petition and explaining that a formal caveat must be filed within ten days from the receipt of the letter or else the 2010 Will would be probated without further notice.
On August 24, 2011, Raymond filed a Petition for Administration in the probate court of Palm Beach County, Florida. In the Florida proceeding, the petition for administration was served by formal notice upon all respondents, including Jeffrey, between August 29 and August 31, 2011. Raymond’s Florida petition asserted that Ruth’s 2010 Will was invalid and sought to probate her 1991 Will.
How to resolve jurisdictional deadlocks: Florida’s “principle of priority”:
Neither the court in FL or the court in PA has the authority to order the other to stand down, although both have the discretionary authority to stay their own proceedings as a matter of comity in favor of the foreign proceeding. How this kind of deadlock is resolved in Florida turns on the “principle of priority.”
Under the principle-of-priority doctrine, which I’ve previously written about in the context of dueling inter-state guardianship proceedings, the court that first “exercises its jurisdiction” over the matter has priority (i.e., should be permitted to adjudicate the matter to conclusion), while the second court should stay or dismiss its proceedings pending a final adjudication of the first case, unless there are “special circumstances” justifying denial of a stay/dismissal of the second case.
What’s the test? First filed vs. first to “get the ball rolling”:
In this case the first probate petition was filed in Pennsylvania. But filing alone won’t cut it under the principle-of-priority test; one of the courts has to actually do something to get the ball rolling in order to be considered first in line.
The Second District has noted that there do not appear to be any cases that “actually rule on the question of whether filing, as opposed to the exercise of jurisdiction, triggers priority.” In re Guardianship of Morrison, 972 So.2d 905, 908 (Fla. 2d DCA 2007). “Thus, there is no reasonable basis to conclude that the trigger for priority is anything but the exercise of jurisdiction as was stated by the supreme court in Siegel.” Id. In Morrison, the Second District held that a foreign court first exercised jurisdiction when it entered an order to show cause; by issuing an order to show cause, the foreign court indicated its intent to grant relief unless the opposing party could convince it otherwise. Id. at 909. “The ball is rolling, so to speak, and will not be stopped until the court issues an order or the plaintiff dismisses the lawsuit.” Id.
So the first question for the 4th DCA to decide was whether the PA court had exercised jurisdiction over the matter when on August 12, 2011 — 12 days prior to the FL probate petition being filed — the PA Office of the Register of Wills sent Raymond’s counsel a letter notifying him of the petition and explaining that a formal caveat must be filed within ten days from the receipt of the letter or else the 2010 Will would be probated without further notice. According to the 4th DCA this is enough, “the ball was rolling” in Pennsylvania:
We conclude that Pennsylvania first exercised jurisdiction on August 12, 2011, when the Register of Wills issued a notice to Raymond’s counsel stating that Ruth’s 2010 Will would be probated “without further notice to you” unless Raymond filed a formal caveat. The notice in this case clearly stated that relief would be granted unless Raymond filed a formal caveat. Therefore, following the Second District’s reasoning in Morrison, the Register’s notice indicated that “the ball [was] rolling” in Philadelphia, twelve days before Raymond filed his Florida petition on August 24, 2011.
What about the “extraordinary circumstances” exception?
Having concluded the PA probate court was first in line, the 4th DCA then had to determine if there were “extraordinary circumstances” warranting the FL court’s refusal to stay its probate proceeding in favor of the PA proceeding, such as evidence of anticipated undue delay in the disposition of the PA proceeding. Answer: NO. Case goes back to PA. Here’s why:
Having concluded that Pennsylvania was the first state to exercise jurisdiction, we next consider whether the trial court abused its discretion in refusing to stay Raymond’s petition in Florida. The trial court’s order simply denied the motion to stay and did not make any finding of extraordinary circumstances that would justify refusing to apply the principle of priority as a matter of comity. Nor did Raymond make any showing that the Pennsylvania proceeding would cause undue delay. All he offered in this regard was speculation. The mere fact that Pennsylvania allows for the possibility of a de novo proceeding in the Orphans’ Court does not, without more, establish undue delay.
While Raymond argues that this case is controlled by Parker v. Estate of Bealer, 890 So.2d 508, 512 (Fla. 4th DCA 2005), we find that Parker is distinguishable. There, although the Maryland proceeding was filed first, the Maryland probate court had never admitted the will to probate, no probate proceedings in Maryland had begun, estate administration had been ongoing for six months in Florida, and significant adverse tax consequences would have occurred if the will was probated in Maryland. The extraordinary circumstances in Parker simply are not present in this case.
Accordingly, we reverse the final judgment and the order on domicile, and remand for the trial court to issue a stay pending the resolution of the Pennsylvania probate proceeding.