The procedural ground rules governing probate and trust litigation are very different. A probate case is usually going to be governed by the Florida Probate Rules. And a trust case is usually going to be governed by the Florida Rules of Civil Procedure. This distinction can have profound implications for how these cases are litigated.
For example, once a probate proceeding is commenced your probate estate is subject to continuing judicial supervision, which means anytime a dispute pops up you don’t have to file a new lawsuit. Just file a motion in the existing court proceeding. You essentially have an open door to a judge who’s on standby to rule on whatever might come up for the duration of the entire probate proceeding.
Not so with trusts. If you want to trigger a court’s jurisdictional authority to rule on a dispute involving a trust, F.S. 736.0201(1) tells us that unless you fall under one of the explicitly identified statutory exceptions, your dispute needs to be plead in “a complaint,” and that complaint’s going to be “governed by the Florida Rules of Civil Procedure.” What this distinction means in real life is that once a specific trust dispute comes to its judicial end, your case is over. And your judge doesn’t remain on standby to rule on whatever new dispute might arise. In other words, trusts (unlike probate estates) are not subject to continuing judicial supervision.
What’s the problem?
Unfortunately, the very same statute that tells us trusts aren’t subject to continuing judicial supervision also tells us this rule doesn’t apply if the court orders otherwise. Here’s the key text of F.S. 736.0201(3):
A trust is not subject to continuing judicial supervision unless ordered by the court.
As a general rule, under the Florida Rules of Civil Procedure a judge can’t retain jurisdiction over your case once it’s concluded unless you — the litigant — ask her to. So what happens when there’s a direct conflict between a court order retaining continuous jurisdiction of your trust case under F.S. 736.0201(3), and a Florida Rule of Civil Procedure that simultaneously prohibits the court’s retained jurisdiction over the same case? That question’s at the heart of the Baden case, a must read for trust litigators.
This case involved a mix of trust and non-trust claims, which is typical. The trust claims were settled and the court entered a partial final judgment accepting the parties’ settlement agreement and retaining jurisdiction over the trust. Here’s how the 2d DCA described the order:
All counts relating to the Trust in Mr. Baden’s operative complaint were resolved by the parties by a stipulated agreement reached in late 2014. … [T]he trial court accepted the parties’ stipulation in its entirety and rendered an order titled “Partial Final Judgment for Judicial Modification of the Baden Irrevocable Trust-2012.” The trial court concluded the partial final judgment with this statement: “The [c]ourt shall retain continuing jurisdiction to supervise the [Trust] pursuant to [section] 736.0201[, Florida Statutes, 2017].”
The plaintiff in this case was the trust’s settlor. Subsequent to settlement of the original trust-related claims the trustee and beneficiaries filed multiple motions asking the court to rule on new disputes related to the trust. No one filed a new lawsuit to do any of this or in any other way complied with the basic pleading requirements mandated by the Florida Rules of Civil Procedure.
In an apparent attempt to close this courthouse revolving door the trust’s settlor (the plaintiff in the case) filed a notice of voluntary dismissal of all of his remaining non-trust claims pursuant to Fla. R. Civ. P. 1.420(a)(1). That’s how civil cases are supposed to end. Did it work? Not according to the trial judge, as recounted by the 2d DCA:
In what seems to have been an attempt to extricate himself from further litigation in the case he initiated and is currently before us, Mr. Baden filed a notice of voluntary dismissal of the operative complaint’s remaining three counts … pursuant to Florida Rule of Civil Procedure 1.420(a)(1). But his attempt to voluntarily dismiss what was left in the case he initiated was to no avail. Specifically, the trial court entered a sua sponte order rejecting Mr. Baden’s notice of voluntary dismissal, ruling that it was a “legal nullity.” In rejecting Mr. Baden’s notice of voluntarily dismissal, the trial court … noted that it had retained jurisdiction pursuant to section 736.0201 to supervise the Trust in the partial final judgment … where the parties agreed to dismiss all of the Trust-related counts set forth in Mr. Baden’s operative complaint.
Does a voluntary dismissal of your trust case trump a standing court order retaining jurisdiction? YES
The 2d DCA quashed the trial court’s order. Why? Because under rule 1.420 a party’s right to voluntarily dismiss his own lawsuit is “almost absolute,” and it’s “jurisdictional.” As in, once this right is triggered the trial court’s jurisdictional authority is “instantaneously” divested. So saith the 2d DCA:
Our supreme court has determined that the effect of a plaintiff’s notice of voluntary dismissal “under rule 1.420(a) is jurisdictional,” Pino v. Bank of N.Y., 121 So.3d 23, 32 (Fla. 2013), and that the right to dismiss is “almost absolute,” Tobkin, 777 So.2d at 1163. The Pino court reasoned that a “voluntary dismissal serves to terminate the litigation, to instantaneously divest the court of its jurisdiction to enter or entertain further orders that would otherwise dispose of the case on the merits, and to preclude revival of the original action.” 121 So.3d at 32.
So if rule 1.420 applies to this case, the trial court was barred as a matter of law from continuing to involve itself in the trust’s affairs — no matter what it’s prior order said about retained jurisdiction.
And did rule 1.420 apply to this case? Yes. Why? Because F.S. 736.0201(1) tells us exactly when the Florida Rules of Civil Procedure do not apply to a trust case, and an order entered under F.S. 736.0201(3) is not one of those listed exceptions. Ergo: rule 1.420 applies to the case. And that means that when plaintiff filed his notice of voluntary dismissal under rule 1.420 the case was over and the trial judge’s authority over his trust ended — no matter what the trial court’s prior order said. So saith the 2d DCA:
The trial court … set forth an additional exception, separate from those enumerated by the legislature, to the mandatory application of the Florida Rules of Civil Procedure pursuant to section 736.0201. That is, the trial court ruled that it maintained jurisdiction over Mr. Baden’s operative complaint pursuant to subsection 736.0201(3), which states that “[a] trust is not subject to continuing judicial supervision unless ordered by the court.” (Emphasis added.) … We reject the notion that subsection (3) somehow renders inapplicable the legislature’s mandate that the Florida Rules of Civil Procedure “shall” apply in this context. … It would render subsection (1), where the legislature explicitly identifies the three exceptions, wholly superfluous if we interpret subsection (3) in isolation, as the daughters suggest.
Subsection (3) merely provides the trial court the discretion to continue supervision of a trust. It does not, and cannot, nullify subsection (1)’s mandate as to the applicability of the Florida Rules of Civil Procedure. This would make little sense. As we explained earlier, if a statutory provision “appears to have a clear meaning in isolation, ‘but when given that meaning is inconsistent with other parts of the same statute or others in pari materia,'” we must examine “the entire act and those in pari materia in order to ascertain the overall legislative intent.” … Reading these subsections of the same statute together so as to not render subsection (1)’s enumerated exceptions as superfluous, as we must, yields the conclusion that section 736.0201(3) does not provide a means for the trial court to sidestep section 736.0201(1)’s mandate that the Florida Rules of Civil Procedure section “shall” apply. …
Is retained jurisdiction in trust actions never allowed? NO
So can a trial court never retain ongoing jurisdiction over a trust? No. But when the trial court does reserve such jurisdiction it has to be done in a way that doesn’t run afoul of the Florida Rules of Civil Procedure (unless your case falls into one of the exceptions spelled out in F.S. 736.0201(1)). The 2d DCA provided the following example of when that might happen:
One scenario in which a trust case would presumably be permitted to remain open, assuming court approval, would be when a trustee initially seeks instruction of the court pursuant to section 736.0201(4)(e) (“A judicial proceeding involving a trust may relate to the validity, administration, or distribution of trust, including proceedings to … (e) … instruct trustees ….”) and also requests that the case remain open in anticipation of issues likely to arise in the short or medium term.
What’s the takeaway?
First, if anyone with a stake in the Baden trust wanted to trigger the court’s jurisdictional authority to rule on any new dispute or question involving the trust there are multiple ways to do that the right way in accordance with the Florida Rules of Civil Procedure. (All of those options would have been infinitely cheaper and quicker than litigating an appeal.) What you can’t do is simply file a motion in a preexisting lawsuit and ask the court to rule on whatever new dispute arises. So saith the 2d DCA:
And section 736.0201(3) certainly does not permit the daughters or the trustee to keep Mr. Baden’s lawsuit pending so that the trustee may file claims, motions for guidance, and so on. Of course, the legislature has provided an avenue for a party to the trust to file his or her own separate action consistent with the Florida Trust Code. See generally § 736.0201(4). But that is not the case before us.
Second, trust litigation has been heavily codified by Florida’s Trust Code. If you find yourself litigating how a trust case should play out (as in this case), you’re best bet is to stick as closely as possible to the statute vs. relying on general common law arguments. And if the controlling statute seems to be self-contradictory (as in this case), the side that figures out a reading of the statute that somehow makes the apparent self-contradiction go away (as in this case), is likely going to prevail (as in this case).