Oreal v. Steven Kwartin, P.A., — So.3d —-, 2016 WL 1239756 (Fla. 4th DCA March 30, 2016)

certaintyHaving your case decided against you because a well-intentioned judge chose not to apply some provision of our Probate Code for “equitable” reasons is to stare into the abyss. Why? Because there’s no certainty if we can’t rely on our statutes being followed when they’re most needed — in the midst of conflict. And if there’s no legal certainty, there’s no rule of law. It’s that simple.

Uncertainty breeds litigation:

Certainty is especially important in estate proceedings because one of our primary goals as lawyers in these cases should be to avoid litigation. The collateral damage suffered by families involved in estate litigation is often devastating and irreversible. When parties differ in their predictions of the outcome of a disputed issue, they’re more likely to litigate because no one knows for sure which way the judge’s going to rule.

Also, we operate within an underfunded and overworked court system (in Miami-Dade – on average – each probate judge took on 3,122 NEW cases in FY 2014-15). We simply can’t afford to waste precious judicial resources litigating cases that should’ve been resolved by applying the clear text of our Probate Code.

Bottom line, our Probate Code might seem harsh at times (it is), but in the long run abiding by its mandates is the most “equitable” option for all concerned — and it’s the law. So saith the 4th DCA.

Case Study:

In this case a creditor filed a claim against an estate to collect on an unpaid promissory note. At the time the claim was filed the unpaid principal amount was $375,000, with an accrued interest amount of $397,000, for a total of $772,500. The estate didn’t file a timely objection to the claim, and the probate judge denied the estate’s motion for an extension of time to file an objection. But the judge was apparently unhappy with how the debt was pursued, so he exercised his “equitable powers” and reserved the right to determine whether a set-off against the creditor’s “interest component [was] appropriate due to any unexcused and excessive delay exercised by [the creditor] in attempting to perfect and collect on [its] valid unpaid claim.”

Clearly reading the tea leaves, the estate filed a motion for equitable set-off which (surprise!) the judge granted, finding that the creditor had an equitable duty to prevent the accumulation of interest. According to the 4th DCA, this ruling was directly contrary to the terms of the subject promissory note and section 733.705(9) of our Probate Code:

Section 733.705(9), Florida Statutes, provides that “[i]nterest shall be paid by the personal representative on written obligations of the decedent providing for the payment of interest.” In First Union National Bank of Florida v. Aftab, 689 So.2d 1137 (Fla. 4th DCA 1997), the claimant filed a statement of claim, seeking principal and interest due under two promissory notes executed by the decedent. The estate did not object to the claims. The probate court disallowed default interest. This court reversed, reasoning that “section 733.705(8) [now section 733.705(9)] provides for the payment of interest by a personal representative on a claim that is ‘founded on a written obligation of the decedent providing for the payment of interest.’ Thus, the statute requires that the personal representative pay interest in accordance with the written instrument.” Id. at 1139.

Can a probate judge use his “equitable powers” to override our Probate Code? NO:

OK, so the judge’s ruling ran head on against the law on the books, but what if that law’s unfair. In other words, if the end result is just and equitable, can a probate judge use his “equitable powers” to override our Probate Code? NO, so saith the 4th DCA:

Just as a court cannot rewrite a contract to relieve a party from an “apparent hardship of an improvident bargain,” see Dickerson Fla. ., Inc. v. McPeek, 651 So.2d 186, 187 (Fla. 4th DCA 1995), a court cannot use equity to remedy a situation the court perceives to be unfair.

As the Florida Supreme Court has explained:

[W]e cannot agree that courts of equity have any right or power under the law of Florida to issue such order it considers to be in the best interest of ‘social justice’ at the particular moment without regard to established law. This court has no authority to change the law simply because the law seems to us to be inadequate in some particular case.

Flagler v. Flagler, 94 So.2d 592, 594 (Fla.1957) (en banc). “Where the legislature has provided” “a plain and unambiguous statutory procedure … courts are not free to deviate from that process absent express authority.” Pineda v. Wells Fargo Bank, N .A., 143 So.3d 1008, 1011 (Fla. 3d DCA 2014).

In the instant case, section 733.705(9) plainly and unambiguously provides for the payment of interest and does not provide any judicial discretion. Because “there is a full, adequate, and complete remedy at law,” equity has no role. U.S. Bank Nat’l Ass’n v. Farhood, 153 So.3d 955, 958 (Fla. 1st DCA 2014) (quoting Wildwood Crate & Ice Co. v. Citizens Bank of Inverness, 98 Fla. 186, 123 So. 699, 701 (Fla.1929)). “The imposition of sanctions which contravene … statutes … exceed a trial court’s discretion and require reversal.” Id at 959.