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Sometimes third parties who had no knowledge of a family’s probate proceeding and wouldn’t have had standing to intervene anyway, are nonetheless adversely impacted by legally improper (and usually self serving) orders entered in these proceedings.

In a lot of ways, when third parties are confronted with probate orders that are facially invalid, challenging the merits of the order is the easy part. The hard part is getting past all of the procedural hurdles protecting these orders from collateral attack once the probate proceeding’s concluded. Those arguments are front and center in this thoughtful and well-researched federal court order … which should make it required reading for anyone making a living as a probate attorney in Florida.

Case Study

Warner v. Quicken Loans, Inc., 2020 WL 2097981 (M.D. Fla. May 01, 2020 Slip Copy)

Assume a husband and wife own their home as tenants by the entireties (TBE). Under Florida law when a spouse dies her TBE property passes to her surviving spouse automatically by operation of law, which means TBE property isn’t a probate asset (or subject to the probate court’s jurisdiction).

Now what would happen if a family agreed to a homestead order in a wife’s probate proceeding that simply ignored Florida’s TBE law and instead granted a life estate in the couple’s home to her husband, with a vested remainder interest to his daughters? If no one objects and the probate judge doesn’t catch the error, nothing happens; the legally improper homestead order stands. And that’s what happened in this case.

Fast forward a few years; assume husband mortgages the home (the debts payable to Quicken Loans), defaults on the loan, and dies shortly thereafter. If the homestead order entered years earlier in his wife’s probate proceeding controls, Quicken’s mortgage is worthless (when husband died his life estate evaporated).

What’s a “brutum fulmen” and why should I care?

Relying on a delightful Latin phrase that should warm the heart of even the crustiest logophile, Quicken argued the homestead order was a brutum fulmen that didn’t impact its mortgage rights. A brutum fulmen, according to Black’s Law Dictionary, is a “judgment void upon its face which is in legal effect no judgment at all, and by which no rights are divested, and from which none can be obtained, and neither binds nor bars anyone.” For example, in In Re Prudence Co., 79 F.2d 77 (2d Cir. 1935), the court held that a declaration by a state that a certain class of corporations cannot file bankruptcy petitions is brutum fulmen. 79 F.2d at 80.

Here’s how the court framed the competing arguments in this case:

The crux of the dispute concerns the effect of the homestead order. Quicken argues the order is a brutum fulmen as to ownership interests in the property, emphasizing the probate court was without jurisdiction to adjudicate interests in the property because the property had passed to the father outside of probate. The daughters argue the order provided their father a life estate interest in the property and them remainder interests. Their father’s mortgage, they continue, could encumber only his interest—the life estate—and that interest was extinguished upon his death, “removing any title for which [the mortgage] could attach.”

Did the probate judge have the jurisdictional authority to enter a homestead order contrary to Florida TBE law? NO

The court ruled in Quicken’s favor on the key underlying issue: the homestead order was invalid because the probate judge lacked jurisdictional authority over the house, which was TBE property and thus bypassed the probate proceeding as a matter of law.

A probate court has no jurisdiction over property not cognizable in probate, and any judgment is binding only on the rem over which the probate court has jurisdiction. Spitzer v. Branning, 135 Fla. 49, 53 (1938); accord Carlton Fields, P.A. v. Locascio, 81 So. 3d 611, 612 (Fla. 3d DCA 2012). “It, therefore, follows that if the judgment of the probate court purports to bind the rem over which the court is without jurisdiction the judgment is not binding on such rem and is a nullity in that regard.” Spitzer, 135 Fla. at 53. Where a probate court is without jurisdiction to dispose of property, no party’s conduct can confer jurisdiction. Id. Thus, the “mere inclusion of the description of property in pleadings or orders in probate proceedings cannot confer jurisdiction of the rem.” Id.

Can you collaterally attack a homestead order entered by a probate judge lacking jurisdictional authority over the homestead property? YES

Having quickly disposed of the jurisdictional argument, the court turned to the issues that usually trip third parties up in cases like this. It’s this discussion that makes this order worth holding onto for Florida probate attorneys.

The daughters argued Quicken was barred as a matter of law based on “issue preclusion” from challenging the homestead order. This argument went nowhere for two reasons. First, the homestead issue was never litigated in the original probate proceeding. Second, issue preclusion won’t preserve an order that’s entered by a probate judge lacking jurisdiction.

Under Florida law, issue preclusion applies if an identical issue has been fully litigated by the same parties or their privies and a court of competent jurisdiction has rendered a final decision. Id. (citing Essenson v. Polo Club Assocs., 688 So. 2d 981, 983 (Fla. 2d DCA 1997)). Florida courts enforce “with rigor” the requirement that issue preclusion extends only to an issue that was actually adjudicated. Crowley Mar. Corp. v. Nat’l Union Fire Ins. Co. of Pittsburgh, PA, 931 F.3d 1112, 1129 (11th Cir. 2019).

Here, at a minimum, issue preclusion does not apply because whether the homestead order provided the father a life-estate interest in the property and the daughters remainder interests—the issue here—was never litigated during the probate proceedings. Moreover, because the probate court lacked jurisdiction over the property, no judgment purporting to bind the property could be binding.[FN12] See Spitzer, 135 Fla. at 53.

[FN12] Under Florida law, the misapplication of the law to the facts and circumstances that took place is not a proper basis for estoppel. Clifton v. Clifton, 553 So. 2d 192, 194 n.3 (Fla. 5th DCA 1989). Here, as stated, the homestead order did not purport to effectuate a change in ownership interest in the property. Had it, the order would provide no basis for estoppel because the court would have been adjudicating interest in property outside the estate.

Daughters also argued Quicken can’t challenge a homestead order entered in a probate proceeding it had no standing to participate in that had long-since concluded. And oh by the way, Quicken should have known about the homestead order before the home was mortgaged.

Before the homestead order, the county tax collector levied taxes against the property in the father’s and mother’s names. … After the order but before the father died, the county tax collector levied taxes against the property in his name as a “life estate” and the name of one daughter. … After the father died, the county tax collector levied taxes against the property in the name of both daughters.

Once the court decided the original probate judge didn’t have the jurisdictional authority to enter the homestead order, none of these secondary arguments mattered.

While arguing Quicken is bound by the homestead order, the daughters also argue Quicken lacks standing to challenge the validity of the homestead order, contending Quicken was a third party on notice of the order (through the order itself and the tax bills) when it acquired its interest. The argument fails because Quicken is challenging not the validity of the order but the consequence of the order on the mortgage Quicken holds.

In short, the daughters acquired no interest in the property through the homestead order, Quicken’s mortgage interest stands, and their [contrary] quiet-title claim fails as a matter of law.

So what’s the take away?

According to F.S. 731.105, “[p]robate proceedings are in rem proceedings.” And judgments in rem are generally “regarded as an exception to the rule of res judicata limiting the conclusiveness of a judgment to the parties to the proceeding.” Cavanaugh v. Cavanaugh, 542 So. 2d 1345, 1352 (Fla. 1st DCA 1989).

It’s this general rule that usually makes it impossible for third parties to challenge the preclusive effect of facially invalid homestead orders entered by consent in probate proceedings long since concluded. The key to solving this riddle is focusing on the original court’s lack of jurisdiction. In other words, you’re not asking a new judge to re-litigate an issue previously decided by prior judge; you’re asking a new judge to conclude the original judge never had the jurisdictional authority to decide the homestead issue in the first place. That distinction may seem subtle, but it’s outcome determinative.