First filed in 2014, this contested guardianship proceeding has dragged on in one form or another for six years (which is a really long time, even by guardianship standards).
By now the three elderly friends at the center of this saga have all died. But a small part of their story lives on in a wonderfully detailed account of the case first published in a 2015 Sarasota Herald-Tribune story entitled A civil dispute over guardianship. Here’s an excerpt:
Leon Bloom, 96, the founder of an international swimming pool chemical company, is by all accounts a sociable and generous man — the kind who inspires steadfast loyalty among his friends, his family, and the trio of caregivers who now see to his needs around the clock.
He is also the focus of an unusual elder guardianship case that pitted his longtime friend and attorney, former state Sen. Bob Johnson, against his wife of 41 years, Dorothy Bloom.
The Blooms’ friendship with the Johnsons was almost as old as their marriage. The two families celebrated holidays together, and the couples went on cruises to Alaska and the Caribbean.
By the way, the Sarasota Herald-Tribune reporter who wrote this story, Barbara Peters-Smith, was also responsible for a series of groundbreaking exposés on Florida’s elder guardianship system, which were at least partially responsible for important legislative reforms.
Back in 2015, Bob Johnson (acting as trustee of Leon’s trust), and Dorothy (Leon’s wife), settled their differences over how best to pay for Leon’s care and Dorothy’s related expenses in mediation. As reported in the Herald-Tribune, the two insisted on remaining civil to the very end.
According to Johnson’s attorney, “There were no entrenched interests that were adverse … As far as I can tell, these were delightful people; they had a lovely courtship; he was successful; they had a nice life; she was accomplished; they had a fantastic friendship. I mean, this is Bob’s best friend in the world. This is not about money.”
Unfortunately, the case soon became very much “about money.”
Within months of the mediation conference, Leon and Bob both passed away. So why has this case continued for another five years, including seven separate appellate proceedings … all post mediation? Hard to say. But this we do know, a lot of that litigation had to do with legal wrangling over fees. As in, who’s supposed to get paid from Leon’s trust, and how much are they entitled to?
Fee disputes are unpleasant affairs and almost always bad for business for the attorneys involved. But sometimes they’re unavoidable. Here’s what is avoidable: procedural mistakes that make a bad situation worse for all concerned.
Guardianship litigation + trust litigation = confusion?
Trust disputes and guardianship disputes are governed by separate bodies of law. This distinction’s often lost when trusts get dragged into contested guardianship proceedings — especially if the dispute involves fees. It’s a mistake that can be costly … as the parties in the Bloom case have learned over the years.
For example, if your plan is to get paid from the ward’s guardianship estate, you’re required to serve notice on all “interested persons,” as that term’s used in Ch. 744, Florida’s guardianship law (see here). On the other hand, if your plan is to get paid from the ward’s trust, you’re now operating within the confines of Ch. 736, Florida’s Trust Code, which means you have to serve notice on all “qualified beneficiaries” (possibly including dozens of individuals and charities who previously had no part in the case), as reported here the last time I wrote about the Bloom case.
This time the issue is more basic: who’s supposed to benefit from legal fees incurred by a ward’s trustee? The trustee or the beneficiaries of the trust? In retrospect the answer is self evident: the trust beneficiaries.
But real life is never that simple. For reasons not fully explained in the 2d DCA’s latest opinion in this case linked-to above, the trial judge concluded it would be unfair to require the trustee to refund all of the fees he’d paid his lawyer with trust funds for services that never should have been performed without prior court approval. That may have been the “fair” result, but it wasn’t the “legal” result, as explained by the 2d DCA:
Despite finding that the payments to [trustee’s attorney] were “ill-advised and inappropriate,” the court declined to order [the trustee] to return them—but not because [the trustee] met his burden that such payments were reasonably necessary and for the benefit of the Trust. Instead, the court concluded that it “would be inappropriate and an undue punishment” to [the trustee] because those funds had gone to his lawyer … rather than to [the trustee] directly. However, as [the opposing party] correctly contends, those funds went to his attorney for the benefit of [the trustee]—not for the benefit of the Trust. Cf. McCormick v. Cox, 118 So. 3d 980, 987 (Fla. 3d DCA 2013) (affirming disallowance of attorney’s fees that trustee paid to law firm in beneficiaries’ action to remove trustee for breaches of fiduciary duties). Given that [the trustee] failed to demonstrate that his payments to [his attorney] were “for the benefit of the trust, and not for his own benefit,” the circuit court abused its discretion in failing to order [the trustee] to return those funds to the Trust. See Barnett, 340 So. 2d at 550. Accordingly, we reverse and remand with instructions that the circuit court enter an order requiring [the trustee] to return all of the funds he paid to his attorney.