A few years ago Jonathan Galler published an excellent article in the Florida Bar Journal explaining the nuts and bolts of how creditor claims are litigated in probate proceedings. The article’s entitled This Party’s Dead! But Will the Lawsuit Survive? Here’s an excerpt:
The creditors’ claims process can be broken down into four phases: 1) service or publication of the notice to creditors; 2) the filing of a statement of claim; 3) the filing of an objection to the claim; and 4) the filing of an independent action to litigate the substance of the claim. The process is designed to promote “the public policy of providing for the speedy settlement of estates” and “the payment of claims and the distribution to the beneficiaries” in a timely fashion.
What makes this claims process challenging is that it plays out across two co-equal branches of the same circuit court: the Probate Division (where the estate’s administered) and the Civil Division (where independent actions are adjudicated).
When a creditor files a claim in the Probate Division, the estate can test its facial sufficiency in two ways. First, did it follow the “form and manner” requirements of Fla. Prob. R. 5.490? And second, was it filed within the strict filing deadlines contained in F.S. 733.702? If the answer to either question is “no,” the estate can file a motion to strike the claim in the Probate Division.
If the creditor filed a facially sufficient claim, the estate can test its merits by filing an “objection,” which then obligates the creditor to file an “independent action” in the Civil Division. The merits of creditor claims are adjudicated in the Civil Division.
If an estate simultaneously pursues both defenses, i.e., a motion to strike and an objection, the case is now before two co-equal judges: one in the Probate Division, the other in the Civil Division. The question then becomes, which judge decides this initial round of challenges? That procedural question’s answered by the Abbott case discussed below.
Northern Trust Company v. Abbott, — So.3d —-, 2021 WL 45668 (Fla. 2d DCA January 06, 2021)
This case involved a contested creditor claim. The estate challenged both the claim’s facial sufficiency by filing a “motion to strike” in the Probate Division, and the claim’s merits by filing an “objection,” which then obligated the creditor to file an independent action in the Civil Division.
When the estate asked the probate judge to rule on it’s motion to strike, the claimant cried foul, arguing the probate judge’s jurisdiction to adjudicate any aspect of the claim ended once the independent action was filed in the Civil Division. Here’s how the 2d DCA framed the issue:
[W]e write to address the parties’ arguments related to the scope of the probate court’s jurisdiction when faced with both an objection, which results in the filing of an independent action in circuit court, and a motion to strike a statement of claim. [Claimant] takes the position that when she filed her independent action under section 733.705(5), the probate court’s jurisdiction ended. Neither the probate rules nor chapter 733 address the filing of a motion to strike, but the cases allow an interested party to file both an objection and a motion to strike a statement of claim, as [the estate] did here. See Simpson v. Estate of Simpson, 922 So. 2d 1027, 1029 (Fla. 5th DCA 2006); Bell, 366 So. 2d at 767.
A claim’s facial sufficiency is a pure probate-law issue, which means it makes sense to allow probate judges to adjudicate motions to strike in the Probate Division before wasting time on the merits of an independent action pending in the Civil Division. That bit of common sense prevailed both at the trial court level and on appeal in this case. Bottom line, if you file both an objection and a motion to strike a statement of claim, your claim gets decided in the Probate Division. So saith the 2d DCA:
A motion to strike tests the facial sufficiency of the statement of claim, whereas the objection—which requires the claimant to file an independent action—relates to the validity or merits of a facially sufficient claim. See Simpson, 922 So. 2d at 1029 (noting the probate court should have ended its inquiry after determining whether the claimant was a reasonably ascertainable creditor and erred in proceeding to determine the validity of the claimant’s claim, stating “the merits of [the claimant’s] claim should have been determined in an independent action”); Bell, 366 So. 2d at 767 (“The personal representative’s objection to the sufficiency of the [s]tatement of [c]laim can be raised only in the probate court. The personal representative may not collaterally attack the sufficiency of the claimant’s [s]tatement of [c]laim in the trial court which will hear the independent action.” (citations omitted)). When a challenge to the legal sufficiency of a claim is made, the probate court must first determine the facial sufficiency of the claim before the parties litigate the subject matter of the claim in circuit court. See id. Similarly, a challenge to the timeliness of the claim is also a matter within the jurisdiction of the probate court. See Picchione, 354 So. 2d at 955 (holding the probate court properly entered summary judgment on an untimely claim filed against the estate). If the statement of claim is not facially sufficient or is time barred, then there is no reason to require the parties to participate in an independent action to determine the merits of the claim.