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Once again we have a homestead case where the key to understanding what went wrong is is recognizing that one word: “homestead;” is used in three very different ways in Florida’s constitution:

  1. Exemption from forced sale: Article X, §4(a) and (b)
  2. Descent and devise: Article X, §4(c)
  3. Taxation: Article VII, §6

Courts get into trouble when they rely on a line of homestead case-law authority developed to address one facet of Florida homestead law (e.g., taxes), to decide a case involving another facet of Florida homestead law (e.g., creditor protection). That’s what happened in a 3d DCA case I previously wrote about here.

Case Study

Geraci ex rel. Geraci v. Sunstar EMS, — So.3d —- 2012 WL 2401793 (Fla. 2d DCA June 27, 2012)

This time around the confusion stems from In re Estate of Wartels, 357 So.2d 708, 710 (Fla.1978), in which the Florida Supreme Court held that the devise and descent restrictions applicable to homestead property (Article X, §4(c)) only apply to fee simple ownership interests in real property. Based on that authority, the probate judge ruled that the decedent’s condo, which was subject to a 100-year lease as of 1976, couldn’t qualify for Florida’s homestead creditor protection (Article X, §4(a) and (b)). In other words, the trial judge ruled that no matter what the facts are, a leasehold interest NEVER qualifies for Florida’s homestead creditor protection.

Wrong answer. According to the 2d DCA, whether or not your residence qualifies for Florida’s homestead creditor protection depends on whether you intend to make it your principal and primary residence, NOT what kind of ownership interest you may have. Fee simple, long-term lease, or co-op, it’s all creditor-protected homestead property if you intend to make it your principal and primary residence.

Article X, section 4(a) does not distinguish between the different kinds of ownership interests that are entitled to the homestead exemption against forced sale. In re Alexander, 346 B .R. 546, 549–50 (Bankr.M.D.Fla.2006); Cutler v. Cutler, 994 So.2d 341, 344 (Fla. 3d DCA 2008); S. Walls, Inc. v. Stilwell Corp., 810 So.2d 566, 571 (Fla. 5th DCA 2002). And the Florida Supreme Court has long since adopted the general rule that a fee simple estate is not necessary to this exemption. See Bessemer Props., Inc. v. Gamble, 27 So.2d 832, 833 (Fla.1946); Coleman v.. Williams, 200 So. 207, 209 (Fla.1941). In fact, “any beneficial interest in land” may entitle its owner to the exemption. Bessemer Props., Inc., 27 So.2d at 833.

In considering the exemption from forced sale, a court must instead “focus on the debtor’s intent to make the property his homestead and the debtor’s actual use of the property as his principal and primary residence.” In re Dean, 177 B.R. 727, 729 (Bankr.S.D.Fla.1995). When a lessee’s interest in a leasehold estate includes the right to use and occupy the premises for a long term and the lessee has made the residence his principal and exclusive residence, such an interest is entitled to Florida’s homestead exemption from forced sale. Id. at 729–30; see also In re McAtee, 154 B.R. 346, 348 (Bankr.N.D.Fla.1993) (finding a long-term lease to be subject to the exemption from forced sale because it constituted an interest in real property and was more than a “simple possessory interest”); S. Walls, 810 So.2d at 572 (finding a co-op to be subject to the exemption from forced sale because “a co-op owner owns the unit, pays valuable consideration for it, and has the right to the exclusive use and possession of it for the duration of the lease”). This construction of the homestead exemption from forced sale is consistent with “important public policy considerations such as promoting the stability and welfare of the state by encouraging property ownership and the independence of its citizens by preserving a home where a family may live beyond the reaches of economic misfortune.” In re McAtee, 154 B.R. at 347–48.

The waters remain muddy

Don’t expect this case to be the last word when it comes to whether or not Florida’s homestead creditor protection can apply to long-term leases or co-op property. As the 2d DCA noted, there are a couple of opinions out there that seem to make the same mistake the trial judge made in this case: applying Wartels’ “if it’s not fee simple, it’s not homestead” rule, which only applies for devise and decent purposes, to creditor-protection cases. Until we have a few more published opinions getting this distinction right, expect continued confusion at your local court house.

The trial court’s decision is erroneous because the homestead protection at issue in this case is not that of descent and devise. . . . Instead, this case involves the application of the homestead exemption from forced sale as set forth in article X, section 4(a)(1), to satisfy the appellee creditors’ claims. Cf. Cutler, 994 So.2d at 344 (analyzing whether property held in trust that was devised to an heir constituted homestead property for purposes of determining whether it was protected from forced sale under article X, section 4(a)(1)). Thus, Wartels is inapposite, and the general rule that a fee simple estate is not necessary to the forced sale exemption applies. See Dean, 177 B.R. at 730; S. Walls, 810 So.2d at 572.

We recognize that at least two courts have refused to so distinguish Wartels. See In re Lisowski, 395 B.R. 771, 777 (Bankr.M.D.Fla.2008) (concluding that, under Wartels, the homestead exemption from forced sale applies only to improved land or real property that is owned by the debtor); Phillips v. Hirshon, 958 So.2d 425, 430 (Fla. 3d DCA 2007) (holding that a co-op did not qualify for homestead exemption for purposes of descent and devise because it was not an interest in realty under Wartels ). However, we do not find the reasoning of these cases persuasive because they do not adequately reconcile the supreme court’s decision in Wartels with the court’s jurisprudence extending the exemption from forced sale to other beneficial interests in land and not limiting the exemption to a fee simple interest.

An “insider’s” view

For an insider’s view of this case, you’ll want to read this interview of one of the attorneys on the winning side of the case.

Relinger v. Fox, — So.3d —-, 2011 WL 439428 (Fla. 2d DCA Feb 09, 2011)

There are a number of reasons why a case may be abated and proceedings suspended. The court may order abatement because of the death of one of the parties. See here, for example, where a pending action to partition a joint tenancy with right of survivorship was abated by one joint tenant’s death. A case may also be abated if the same claims are already being litigated elsewhere. The administration of trusts can sometimes spawn multiple lawsuits, so litigators should be aware of how abatement works in this context.

In this case, the siblings of the decedent petitioned to revoke their brother’s 1984 will, and filed a petition for administration of another 2007 pour-over will and trust. The personal representative of the decedent, as a defendant in the probate case, challenged the validity of the 2007 will, claiming that there was undue influence and that the will was not properly executed. In a separate civil action, the personal representative as a plaintiff also attacked the validity of the trust for the same reasons, claiming that the trust had testamentary provisions and that there was undue influence and a lack of formalities. Because the parties were the same, and essentially the same issues were being litigated, you might think there was good reason to abate the civil case. The trial court certainly thought so, and granted the siblings’ motion to abate because of the existence of the probate proceedings.

Abatement? Wrong Answer:

But the 2d DCA disagreed. Not only must the issues and the parties be the same in order to abate a case, but the plaintiff in one case cannot be the defendant in the other. Because the personal representative was the defendant in the probate case and the plaintiff in the civil action, abatement was not proper:

[T]the abatement of Relinger’s action was a departure from the essential requirements of law. Abatement requires a strict identity of parties between the two suits, and it can be ordered only when the plaintiffs and the defendants in the actions are the same. Bruns v. Archer, 352 So. 2d 121, 122 (Fla. 2d DCA 1977).

[T]he general rule [is] that a plea of a prior action pending applies only where plaintiff in both suits is the same person, and both are commenced by himself, and not to cases in which there are cross-suits by a plaintiff in one suit who is defendant in the other; in other words, that, where the party defendant in the prior suit is plaintiff in the subsequent suit, the first suit cannot be pleaded in abatement of the second.

Horter v. Commercial Bank & Trust Co., 126 So. 909, 912 (Fla. 1930). Abatement may be ordered only where the identities of parties in the actions are exact "because the court is necessarily projecting the effect of a case which has not been tried and a judgment which has not yet been rendered." Burns v. Grubbs Constr., Inc., 174 So. 2d 476, 478 (Fla. 3d DCA 1965). Here, Relinger is the plaintiff in the later civil action challenging the validity of the trust, but he is the defending party in the Foxes’ probate action seeking to establish the validity of the concomitant will. This critical difference rendered abatement inappropriate in this case.

Consolidation? Right Answer:

While a consolidation of the cases may have been proper, the court refused to ignore the error and treat the abatement as if it were a consolidation:

It may be that the circuit court was concerned because the two actions raise similar, if not identical, questions about the decedent’s capacity, whether he was unduly influenced, and whether the necessary formalities were met. But other procedures are available to address any problems caused by the pendency of two similar actions, such as a consolidation of the actions or a limited stay of one of them. Moresca, 231 So. 2d at 286 n.5; see also Martin v. Martin, 687 So. 2d 903, 907 (Fla. 4th DCA 1997) ("We know of no reason why a will contest pending in the probate division of the circuit court and an action involving the validity of a trust pending in the civil division of the circuit court cannot be consolidated under appropriate circumstances, such as where . . . the factual issues are the same."). The Foxes argue that we should view the circuit court’s action "in essence" as a consolidation; we cannot. The circuit court granted their motion to abate, and in doing so, it departed from the essential requirements of law causing irreparable harm. We must therefore quash the order of abatement.

 

In Florida, Wills have to be in writing; you can’t simply tell someone what you want done with your property after you die and expect those oral instructions to hold up in court. F.S. §§ 731.201(40); 732.502. But what about a Will that basically says “do as I told you”? It’s in writing, does that make it OK? Consider the following:

I give, bequeath and devise all of my estate of whatsoever kind and nature and wherever located to BETTY GUY SHERMAN to dispose of as she has been instructed to do by me.

Does this clause work? Nope. Back in 1994 in Estate of Corbin v. Sherman, 645 So.2d 39 (Fla. 1st DCA 1994), the 1st DCA concluded this clause “clearly attempts to devise the decedent’s property to Sherman for Sherman to distribute according to oral instructions from the decedent. Florida does not recognize oral wills.”

Glenn v. Roberts, — So.3d —-, 2012 WL 2327756 (Fla. 3d DCA June 20, 2012):

In the linked-to case above a Miami probate judge was asked to invalidate a Will containing the following clause on the grounds that it’s a veiled oral will, which according to Corbin doesn’t work.

I hereby give, devise and bequeath all of the rest, residue and remainder of my estate, both real and personal, of whatsoever kind and nature, and wheresoever the same may be situate unto my friend, TERRY GLENN, having full confidence he will honor all requests made to him by me prior to my death as to friends whom I desire he benefit.

The Will also contained the following last and final Article:

In the preparation of this, my Last Will and Testament, I have carefully and thoughtfully considered each member of my family and all of my friends, and have not unintentionally omitted any of them, as it is my desire, and I so direct, that only those beneficiaries named herein, share as beneficiary of my probate estate.

Based on a motion for judgment on the pleadings filed by the decedent’s only grandchild and intestate heir (Roberts), the probate judge ruled the Will was invalid and thus the estate had to be distributed pursuant to Florida’s intestate statute. Wrong answer. According to the 3d DCA the probate judge got this one wrong for two reasons.

First, focusing on the word request the 3d DCA concluded the first quoted clause was a valid bequest coupled with “precatory” language, which is just fine under Florida law. Precatory statements express a wish but don’t create legal obligations or duties.

Here, unlike in Corbin, the language in French’s Will is merely precatory, and not mandatory.FN1 In Corbin, the language at issue was clearly mandatory as it referenced oral instructions for the distribution of property (“to dispose of as she has been instructed”). Because it mandated the distribution of the decedent’s estate pursuant to oral instructions, it constituted an unauthorized oral will. In contrast, the language here does not mandate Glenn to distribute the residuary estate according to instructions from French, but rather, simply expresses French’s hope that Glenn will honor all of her “requests.” In other words, the unambiguous language of the Third Article devises the entire residuary estate to Glenn, who then has the discretion to honor French’s requests.

Second, the 3d DCA focused on the Will’s final Article, which clearly indicated the testatrix (French) was knowingly disinheriting her family members (including Roberts), and clearly giving her estate to Glenn, the beneficiary named in her Will. When you read this clause, it’s hard to understand why the probate judge seems to have ignored it. According to the 3d DCA, the probate judge didn’t explain his ruling “in either a written order or at the hearing.” Anyway, this last clause seems to have been the clincher for the 3d DCA.

In construing the Will as a whole, we find further evidence that it was French’s intent to devise her residuary estate to Glenn without limitation from the express language of the Will’s final provision. The Fifth Article states as follows:

In the preparation of this, my Last Will and Testament, I have carefully and thoughtfully considered each member of my family and all of my friends, and have not unintentionally omitted any of them, as it is my desire, and I so direct, that only those beneficiaries named herein, share as beneficiary of my probate estate.

The Fifth Article establishes that: (1) French disinherited her family, among whom Roberts claims to be a member, and did not unintentionally omit them; and (2) the only beneficiaries of French’s estate are those named in the Will, i.e., Glenn and his wife Pearl.

Accordingly, because we find that the trial court erred in finding that the Will at issue was an oral will, we reverse the trial court’s order invalidating the Will and remand with directions to enter judgment finding that Glenn is the sole beneficiary under French’s Will.

Faulkner v. Faulkner, — So.3d —-, 2011 WL 2937302 (Fla. 1st DCA Jul 22, 2011)

If the examining committee says the person being examined is OK, that may be good news for the potential ward, but bad news for the examining committee. Why? Because now there’s no guardianship “estate” from which to pay their fees. So who pays? The statute doesn’t cover that contingency (oops!), a “gap” in the law this blog has covered in two prior cases [click here, here]. The judiciary’s consistent call has been for statutory reform to fill this “gap”; unfortunately we’re still waiting.

Case Study:

In this case a woman’s children filed a petition to determine her incapacity. The trial court ultimately dismissed the petition, but found that the children had filed it in good faith, and ordered their mother to pay the examining committee fees, among other costs. Mother appealed.

F.S. 744.331(7)(b) provides that the examining committee’s fees “shall be paid by the guardian from the property of the ward or, if the ward is indigent, by the state.” The 1st DCA noted, “this seems to presume that the petition for incapacity is granted and a guardian is appointed.” F.S. 744.331(7)(c) allows the court to charge the petitioner to assume the committee’s fees “if the court finds the petition to have been filed in bad faith.”

As we all know by now, and the 1st DCA pointed out again, there’s quite a gap between the two subsections: who pays the examining committee’s fees when the petition was found to have been filed in good faith (or there is no finding of bad faith), but ends up dismissed?

Rather than trying to stitch the two sections together, the 1st DCA focused on the fact that the trial court had appointed an emergency temporary guardian for the mother; this indicated that she “was a ward during the pendency of the incapacity proceeding.” This was sufficient, in the 1st DCA’s view, to justify holding her responsible for the examining committee’s fees (hint to guardianship litigators: when in doubt, get a temporary guardian appointed). All’s well that ends well, but what we really need is a statutory fix. Here’s how the 1st DCA summarized the current — unsatisfactory — state of the law, and how it ultimately justified the trial court’s fee ruling:

In Ehrlich v. Severson, the Fourth District reversed an order requiring the alleged incapacitated person to pay the examining committee’s fees because “the procedural statute for determining incapacity does not make the potential ward responsible for examining committee fees where the guardianship petition is dismissed or denied.” 985 So.2d 639, 640 (Fla. 4th DCA 2008) (citing section 744.331(7), Fla. Stat.). The court noted that there was a “gap” in section 744.331(7) where a good faith petition is denied or dismissed, and it urged the Legislature to amend the statute to specify who pays the examining committee’s fees in these circumstances. Id. at 640 n. 1. Although the court did not specify the party responsible for paying the examining committee fees, the court, in a subsequent decision involving the same appellant, determined under the same statute that “any award of fees incurred by counsel appointed to represent the subject must come, if at all, from the petitioner.” Ehrlich v. Allen, 10 So.3d 1210, 1211 (Fla. 4th DCA 2009) (emphasis supplied).

In [Levine v. Levine, 4 So.3d 730, 731 (Fla. 5th DCA 2009)], the Fifth District reversed an order requiring the petitioner to pay the examining committee fees where the petition to determine incapacity was dismissed and there was no finding that the petition was filed in bad faith. See 4 So.3d at 731. The court noted that “the statute [section 744.331(7)] has a gap in determining responsibility for payment of the examining committee fees when a good faith petition is denied or dismissed.” Id. (citing Ehrlich). And like the court in Ehrlich, the court in Levine urged the Legislature to address the issue. Id.

We do not disagree with Ehrlich or Levine; indeed, we agree with our sister courts that there is a “gap” in section 744.331(7) that the Legislature should address. Section 744.331(7)(b) provides that the examining committee fees are to be paid from the property of the ward, but this seems to presume that the petition for incapacity is granted and a guardian is appointed. And section 744.331(7)(c) provides that the costs of the proceeding—which, presumably, include the examining committee fees—are to be paid by the petitioner only if the court finds that the petition was filed in bad faith. The “gap” in the statute is that it does not specify who pays the examining committee fees when the petition is dismissed or denied and there is no finding that the petition was filed in bad faith or, as here, there is an express finding that the petition was filed in good faith. Requiring the petitioner to pay the fees in these circumstances would be inconsistent with section 744.331(7)(c) and requiring the guardian to pay the fee from the ward’s property under section 744.331(7)(b) would not be possible if a guardian is never appointed; however, someone has to pay the fees because section 744.331(7)(a) states that the committee are “ entitled to reasonable fees” and, moreover, it is unlikely that the professionals required for the examining committee would serve if there was a risk of non-payment or if the payment was dependent upon the outcome of the proceeding. Cf. Ehrlich, 985 So.2d at 640 (acknowledging that “payment of the examining committee’s fees should not be contingent on the outcome of the competency determination”).

We need not resolve the issue in this case, however, because an emergency temporary guardian was appointed for Appellant. Thus, unlike Ehrlich, where a guardianship was apparently never established for appellant because she was characterized only as a “potential ward” ( see 985 So.2d at 640) or “alleged ward” (see 10 So.3d at 1211), here, Appellant was a ward during the pendency of the incapacity proceeding because an emergency temporary guardian was appointed for her. See § 744.102(22), Fla. Stat. (defining “ward” as “a person for whom a guardian has been appointed”). The examining committee fees were incurred, and ordered, while the emergency temporary guardian had legal control over Appellant’s property and, therefore, the fees were properly assessed against her under section 744.331(7)(b). For these reasons, we affirm the trial court’s order requiring Appellant to pay the examining committee fees.

Hancock v. Share, — So.3d —-, 2011 WL 2650887 (Fla. 5th DCA July 8, 2011)

A guardian appointed by the court to take care of a minor child may act on behalf of the ward’s person or property, within certain statutorily defined limits. An important limitation is found in F.S. § 744.361(6)(c), which requires that the guardian, “[a]t the termination of the guardianship, deliver the property of the ward to the person lawfully entitled to it.” In other words, the guardian must hand over the property when the ward turns 18.

However, it’s not always so simple. As estate planners know, management of assets may involve long term effects, and actions that a guardian takes during the period of minority may affect the ward’s ability to access the assets after turning 18. For instance, does putting cash into an annuity, which can’t be accessed immediately upon the ward turning 18, violate F.S. § 744.361(6)(c)? 

Case Study:

In this case, after a settlement of a personal injury lawsuit, the ward’s mother, acting as guardian for her daughter, petitioned the trial court to put the proceeds of the settlement into an annuity that was payable over the next 27 years. The trial court denied the petition because the ward would not be able to access her money immediately upon turning 18:

After hearing a summary of the terms of the proposed settlement agreement, the trial court asked counsel whether the minor would be able to “get her cash out of the annuity when she turns 18”. Counsel replied, “no”.

The trial court entered an order approving the settlement of the minor’s personal injury lawsuit, but refusing to authorize the purchase of a structured settlement annuity. The order reads:

The Court denies the guardian’s request for authority to purchase an annuity contract for the benefit of the minor child payable beyond the age of majority. The Guardian of the property has no authority to bind the assets of the ward beyond the age of majority pursuant to Florida Statute 744.441(19); Guardianship of Bernstein v. Miller, 777 So.2d 1125 (Fla. 4th DCA 2001).

Because the trial court’s order turned on F.S. § 744.441(19), it’s worth stopping to read what the statute actually says. (Hint: focus on the statute’s limited application to trusts.)

After obtaining approval of the court pursuant to a petition for authorization to act, a plenary guardian of the property… may… create or amend revocable trusts or create irrevocable trusts of property of the ward’s estate which may extend beyond the disability or life of the ward in connection with estate, gift, income, or other tax planning or in connection with estate planning. The court shall retain oversight of the assets transferred to a trust, unless otherwise ordered by the court.

The 5th DCA held that the annuity should have been approved because F.S. § 744.441(21) allows guardians to “[e]nter into contracts that are appropriate for, and in the best interest of, the ward.” The trial court’s reliance on F.S. § 744.441(19) was in error, because that statue applies only to trusts, not annuities. Thus, there is no requirement that the annuity be created in connection with tax planning:

Here, there were no trust documents at issue and, thus, the limitation set forth in section 744.441(19) was not at issue. Instead, the parties in this case submitted a proposed annuity contract which, pursuant to section 744.441(21) of the Florida Statutes, a trial court is authorized to approve, provided that the contract is ‘appropriate for, and in the best interest of, the ward.’ All parties and the trial court agreed that the annuity contract proposed by the parties in this case was in the minor’s best interest. In addition, section 744.361(c) does not prohibit the entering into an annuity contract as long as the annuity contract is delivered to the ward at the termination of the guardianship. See § 774.102, Fla. Stat. (2009) (defining property as meaning ‘both real and personal property or any interest in it and anything that may be the subject of ownership.’). Accordingly, the trial court erred in refusing to approve the structured portion of the proposed settlement agreement.

Thorpe v. Myers, — So.3d —-, 2011 WL 2731937 (Fla. 2d DCA Jul 15, 2011)

In this case a 93-year-old ward had nine children who seemingly couldn’t agree that the sky was blue. After lengthy litigation, the trial court appointed a plenary guardian for the ward, who suffered from dementia. In separate appeals, the emergency temporary guardian and attorneys for two of the children appealed the court’s denial of their respective fee requests.

Guardian’s Fees:

The 2d DCA held that the trial court’s complete denial of fees to the guardian was based on a misreading of F.S. 744.108(1), which requires that attorneys, but not guardians, demonstrate the “beneficial nature of services rendered” to the ward. Unlike those of attorneys, guardians’ services are presumed to benefit the ward. However, a circuit court may reduce the requested compensation to the extent that the guardian’s services were “unnecessary or unproductive.”

There are some exceptions to the general rule entitling a guardian to payment for services rendered, but these exceptions are limited. We briefly mention three such exceptions. First, a guardian cannot expect to be compensated for services rendered outside the scope of his or her appointment. In re Guardianship of Jansen, 405 So.2d 1074, 1077 (Fla. 2d DCA 1981); Poling v. City Bank & Trust Co. of St. Petersburg, 189 So.2d 176, 182–83 (Fla. 2d DCA 1966). Second, a guardian guilty of theft or other breach of duty may forfeit the right to compensation. See Am. Surety Co. of N.Y. v. Hayden, 112 Fla. 17, 150 So. 114, 121 (1933). Third, on occasion, usually when a family member is appointed, a guardian may agree to serve without compensation. Here, there is no exception to the statutory requirement that guardians be compensated for their services.

In order for an attorney to be awarded fees from the ward’s estate under section 744.108(1), the attorney’s services must benefit the ward or the ward’s estate. See Butler, 898 So.2d at 1141. The clause in section 744.108(1) requiring the demonstration of the beneficial nature of the services rendered applies to attorneys, not guardians. Thus, under the statutory language, a guardian is not required to demonstrate that his or her services conferred a benefit on the ward or the ward’s estate as a prerequisite for obtaining a compensation award. The statute appears to presuppose that a guardian’s services benefit the ward or the ward’s estate. Cf. Essenson v. Lutheran Servs. Fla., Inc. (In re Guardianship of King), 862 So.2d 869, 870 (Fla. 2d DCA 2003) (“Florida cases in which fees have been denied to court-appointed representatives appear to be only those in which he or she was found to have exceeded the scope of appointment.” (citing Jansen, 405 So.2d at 1077)).

It follows that the circuit court reached an incorrect legal conclusion in ruling that Ms. Thorpe was required to demonstrate that her services as emergency temporary guardian were beneficial to the Ward or the Ward’s estate as a condition of receiving court-awarded compensation. The statutory scheme presumes that the services of guardians provide a benefit. To the extent that the services of a guardian are unnecessary or unproductive, the circuit court may reduce the requested compensation based on the factors listed in section 744.108(2) but may not deny compensation altogether.

Not only was the legal basis for denying the guardian any compensation flawed, but so too was the factual basis, the 2d DCA found. It disagreed with the circuit court’s finding that the guardian’s services “were of minimal, if any[,] benefit to the Ward, and were intended to benefit [two of the Ward’s children] in the Petition for Emergency Temporary Guardianship.” Instead, there was “nothing in the record suggesting that [the guardian] was working for [the two children] in disregard of her obligation to act in the best interests of the Ward. . . . The guardian works in the interest of the ward under the supervision and control of the court, not at the behest of the person or persons who sought the appointment.”

As evidence to support that claim, the 2d DCA pointed out that the “circuit court actually extended [the guardian’s] tenure as emergency temporary guardian for another four months.” It would make little sense, the 2d DCA implied, for a guardian providing “minimal, if any, benefit” to be asked to continue her responsibilities.

Attorneys’ Fees:

The 2d DCA also addressed the circuit’s order denial of attorney’s fees and costs requested by the attorneys of the two children of the Ward who submitted the original petition for guardianship. As alluded to above, attorneys are entitled to “reasonable compensation” only to the extent that their services demonstrably benefit the ward. Here’s how the 2d DCA summarized the law on this point:

Under section 744.108(1), “an attorney is entitled to receive a reasonable attorney’s fee for professional services rendered and reimbursement of costs incurred for the benefit of the ward; payment of reasonable compensation is mandatory.” Price v. Austin, 43 So.3d 789, 790 (Fla. 1st DCA 2010). Under the statute, “the probate court is not ‘at liberty to award anything more or less than fair and reasonable compensation for the services rendered or monies expended in each individual case.’” Lutheran Servs., 978 So.2d at 890 (quoting Lewis v. Gramil Corp., 94 So.2d 174, 176 (Fla.1957)). However, the attorney’s entitlement to payment of reasonable fees and costs is subject to the limitation that his or her services must benefit the ward. King v. Fergeson, Skipper, Shaw, Keyser, Baron, & Tirabassi, P.A., 862 So.2d 873, 874 (Fla. 2d DCA 2003) (Villanti, J., concurring specially); Butler, 898 So.2d at 1141.

The circuit court found that the two children’s attorneys did not provide any services for the ward. By an abuse of discretion standard, the 2d DCA acknowledged that some of the attorneys’ services amounted to “unproductive litigation over who would be appointed as guardian or other goals that did not benefit the Ward or her estate.”

But some work did make the ward better off. Were it not for the guardianship proceedings initiated by the attorneys, there would have been no determination of incapacity, and no appointment of a plenary guardian, each of which seemed to have been in the ward’s best interest. Accordingly, the 2d DCA remanded to the circuit court with instructions to “make an appropriate award of fees and costs.”

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When an interested person files a caveat to a will, F.S. § 731.110(3) requires that Formal Notice be given to the caveator, and that such person be given the opportunity to participate in proceedings before a will is admitted or a personal representative is appointed. The consequences of not giving timely notice to a caveator were previously addressed on this blog here, and related legislation discussed here.

What happens when Formal Notice is given to a caveator, and the caveator fails to timely file responses and affirmative defenses?

Florida Probate Rule 5.040(a)(1) requires interested persons to serve written defenses “within 20 days after service of the notice.” Is the caveator barred from participating in the proceedings if the answer and affirmative defenses are untimely? That’s the question at the heart of the following case.

Rocca v. Boyansky, — So.3d —-, 2012 WL 280752 (Fla. 3d DCA February 01, 2012):

In this case Rocca filed a caveat and was given the required Formal Notice, stating that a response was due by September 21, 2009, twenty days after the notice was served. Rocca did not file a response within the required time, but the probate court granted a motion for extension until December 15, 2009. However, Rocca did not file a response until December 22, the night before a hearing on the amended petition for administration. At the hearing, the probate court did not address the arguments raised in Rocca’s response, and ultimately admitted the will. It seems that the probate court thought that Rocca was barred from contesting the will because his answer and affirmative defenses were untimely.

The 3rd DCA disagreed, and reversed the trial court’s dismissal. According to the 3d DCA, despite the untimely response, the probate court should have heard Rocca’s arguments before admitting the will. Thus, F. S. § 731.110(3) was not satisfied because Rocca was not given the opportunity to participate in the proceedings. Here’s how the 3d DCA explained its ruling:

The appellees would excuse this error on the basis that Rocca was barred from defending against the allegations of the Amended Petition by the untimely filing of his answer and affirmative defenses to the Amended Petition. We find no merit to this argument. Rocca was obligated to serve written defenses to the petition served on him within twenty days after formal notice of the petition. Fla. Prob. R. 5.040(a)(1). His Answer, Affirmative Defenses, and Counter Petition in this case was due (after court sanctioned extensions) on December 15, 2009. He filed this response seven days late and thirty minutes before the December 22, 2009, hearing. If the trial court was annoyed with Rocca and his counsel, it had every right to be so. However, the law is clear that Rule 5.040(a)(1) is neither a statute of limitations nor a mandatory non-claim provision. See Long v. Willis, 36 Fla. L. Weekly D1811 (Fla. 2d DCA Aug. 17, 2011) [click here]; Nardi v. Nardi, 390 So. 2d 438, 440 n. 2 (Fla. 3d DCA 1980). Rather, this Court and other Florida courts which have considered the question all treat the [Formal Notice] rule as a procedural one. See Long, 36 Fla. L. Weekly at D1814; see also Tanner v. Estate of Tanner, 476 So. 2d 793, 794 (Fla. 1st DCA 1985). Since Rocca’s Answer, Affirmative Defenses, and Counter Petition was filed before the hearing on the petition, Rocca was not barred from participation in the hearing on the Amended Petition or asserting such defenses as he had to that petition. Tanner, 476 So. 2d at 794 (reversing order striking beneficiaries’ untimely filed answers to petition for administration, which were filed before the hearing on the petition and before entry of order admitting will to probate and granting letters of administration).

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Advancements in assisted reproductive technology have created a class of children that would have been unimaginable to prior generations: children both conceived and born after one, or maybe even both, of their genetic parents has died. Falling under the general umbrella term of “posthumous conception,” these children are the product of technological advancements dramatically extending the amount of time the average human has to reproduce. For example, live births have been reported using embryos frozen for over over 30 years.

Case Study

Astrue v. Capato ex rel. B.N.C., — S.Ct. —- 2012 WL 1810219 (U.S. May 21, 2012)

Courts have weighed in on several cases involving claims to federal Social Security Survivor benefits for posthumously conceived children. These case are determined by the child’s testamentary rights under state law. Now we have a U.S. Supreme Court opinion addressing the issue in Capato, a case that turned on the question of whether a posthumously conceived child can inherit under Florida law as an intestate heir.

Under Florida law the only way a posthumously conceived child can in inherit from his or her parent’s estate is if the child has been provided for in the parent’s will; they’re categorically disqualified as intestate heirs. We get to this outcome based on two statutes. First, there’s F.S. 732.106, which tells us that afterborn intestate heirs only include children conceived prior to the parent’s death.

732.106 Afterborn heirs.—Heirs of the decedent conceived before his or her death, but born thereafter, inherit intestate property as if they had been born in the decedent’s lifetime.

Second, there’s F.S. 742.17(4), which tells us that a posthumously conceived child may inherit from his or her parent if “the child has been provided for by the decedent’s will.”

742.17 Disposition of eggs, sperm, or preembryos; rights of inheritance. … (4) A child conceived from the eggs or sperm of a person or persons who died before the transfer of their eggs, sperm, or preembryos to a woman’s body shall not be eligible for a claim against the decedent’s estate unless the child has been provided for by the decedent’s will.

By the way, note that the important demarcation point under F.S. 742.17(4) is not the date of “conception” (a slippery term given today’s technology), but is instead the date of “transfer” to a woman’s body of the decedent’s eggs, sperm, or preembryos. While the date of conception may be open to interpretation, the date of transfer is not. (Excellent statutory drafting.)

Here’s how the US Supreme Court ruled in Capato based on the above Florida law:

Karen Capato claimed survivors insurance benefits on behalf of the twins. The SSA denied her application, and the U. S. District Court for the District of New Jersey affirmed the agency’s decision. See App. to Pet. for Cert.33a (decision of the Administrative Law Judge); id., at 15a (District Court opinion). In accord with the SSA’s construction of the statute, the District Court  determined that the twins would qualify for benefits only if, as §416(h)(2)(A) specifies, they could inherit from the deceased wage earner under state  intestacy law. Robert Capato died domiciled in Florida, the court found. Under [Florida] law, the court noted, a child born posthumously may inherit through intestate succession only if conceived during the decedent’s lifetime. Id., at 27a–28a.FN1.

FN1. The District Court observed that Fla. Stat. Ann. §732.106 (West 2010) defines “‘after born heirs’” as “‘heirs of the decedent conceived before his or her death, but born thereafter.’” App. to Pet. for Cert. 27a (emphasis added by District Court).

For an excellent write up this case you’ll want to read the analysis posted by Prof. Jeff Pennell on the LISI network entitled Jeff Pennell on the Supreme Court Decision in Capato: An Update on the New Biology. Here’s an excerpt:

The unanimous Supreme Court opinion in Capato validates the government’s state law intestacy approach as being consistent with Congress’ intent that survivor benefits only assist children who lost their source of support due to the unanticipated death of a parent. According to the Court, if state intestacy law permits a child to inherit, “it may reasonably be thought that the child will more likely be dependent during the parent’s life” – which is a funny construct in the case of a posthumously conceived child, who could not possibly have been the decedent’s dependent during life. In a sense, the government’s approach, blessed by Capato, avoids the dependency issue entirely.

In doing so, however, Capato does little to alter the fact that the government’s approach yields different results under different state laws, because intestacy statutes differ. In Capato, the Court relied on Florida law, under which a posthumously conceived child can only inherit as provided in a decedent’s will – not by intestacy. But the Court acknowledged that intestacy determined by statute in other states would provide an inheritance to posthumously conceived children who are born or conceived within statutorily specified time limits. As such, the Court’s conclusion simply blesses the SSA approach of looking to state intestacy law as a valid and controlling regulatory approach, but it fails to establish a uniform national rule.

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In a case concerning the “insane delusion” question, a mother thought that her daughter, Gail, had only visited her once in 11 years. The mother wrote her daughter an e-mail to this effect, and repeated the accusation to the attorney who drafted her will and trust. But the record contained evidence that indicated that Gail had visited her mother several times in the seven years prior to the execution of her mother’s will and trust.

Levin v. Levin, — So.3d —-, 2011 WL 1772245 (Fla. 4th DCA May 11, 2011):

Here’s how the 4th DCA summarized the standard for setting aside a will on “insane delusion” grounds:

Gail claims that the will and trust were based upon an “insane delusion.” The law states that “[w]here there is an insane delusion in regard to one who is the object of the testator’s bounty, which causes him to make a will he would not have made but for that delusion, the will cannot be sustained.” Miami Rescue Mission, Inc. v. Roberts, 943 So.2d 274, 276 (Fla. 3d DCA 2006) (quoting Newman v. Smith, 77 Fla. 633, 82 So. 236, 236 (1919)). “An insane delusion is a ‘spontaneous conception and acceptance as a fact, of that which has no real existence adhered to against all evidence and reason.’” McCabe v. Hanley, 886 So.2d 1053, 1055 (Fla. 4th DCA 2004) (citation omitted).

The trial court upheld the challenged will on testamentary capacity grounds, but failed to address the “insane delusion” claim in its post-trial order. This omission ended up getting the case bounced back to the trial judge for a new trial on this issue alone.

In the present case, the mother persisted in the belief that Gail had visited her only once in about ten years. The mother told William and the attorney who prepared the will and trust that she had not seen Gail anywhere from ten to eleven years ago.FN1 The mother sent Gail an email complaining that Gail had been to see her only once in eleven years. Gail replied and disputed in detail the mother’s contention.

FN1. In the taped execution of the will and trust documents, the mother again repeated to the attorney that she had not “seen my daughter but one time in seven years.”

In the record, there was evidence that the mother and Gail had seen each other multiple times within the seven-year period preceding the execution of the testamentary documents.FN2 The trial court did not address the evidence of visitations between the mother and Gail or that the evidence appeared to contradict the many assertions by the mother that Gail had not visited her in seven to eleven years. Thus, the trial court never decided whether this contradiction in evidence rose to the level of “insane delusion” and whether this incorrect statement repeated by the mother was linked to reducing the bequest to Gail from the 1987 will to the amount given to her in the disputed will and trust. We therefore reverse on this issue for the trial court to make findings on this issue either after reviewing the record or, in its discretion, after an evidentiary hearing.FN3

FN2. The record denotes that Gail and her mother saw each other in February 2001, August 2002, January 2003, September 2003, January 2004, January 2005, and March 2007.

Shapiro v. Tulin, — So.3d —-, 2011 WL 1878014 (Fla. 4th DCA May 18, 2011)

In a dispute arising out of the appellant’s mirror-image agreements with the decedent to make devises for each other in the event of either of their deaths, the personal representative of the decedent’s estate objected to the appellant’s claim. That resulted in the appellant’s suing for replevin, breach of contract, and breach of fiduciary duty.

The personal representative moved to dismiss on three grounds, only one of which—failure to comply with the requirements of F.S. 732.701—was addressed by the trial court. F.S. 732.701 is Florida’s "will contract" statute, and its key provisions are the following:

No agreement to make a will, to give a devise, not to revoke a will, not to revoke a devise, not to make a will, or not to make a devise shall be binding or enforceable unless the agreement is in writing and signed by the agreeing party in the presence of two attesting witnesses. . . .  The execution of a joint will or mutual wills neither creates a presumption of a contract to make a will nor creates a presumption of a contract not to revoke the will or wills.

The trial court granted the personal representative’s motion to dismiss, agreeing that the contract between the appellant and the decedent was signed by only one witness instead of the required two.

The 4th DCA reversed for two reasons. The first was that the trial court ran afoul of the “four corners” rule: the appellant’s complaint stated that “all conditions precedent [to his agreement with the decedent] were met, excused, or waived,” and this should have been accepted as true for purposes of considering the motion to dismiss. Since this was the only basis for having granted the motion, the decision was reversed:

The complaint alleged that all conditions precedent – which would include the signatures of two attesting witnesses – were met, excused, or waived and, as this court has stated, such allegations must be accepted as true. As such, the trial court’s finding that section F.S. 732.701 was not complied with was based on facts not within the scope of the appellant’s complaint. Thus, because a court may not look anywhere but to the document on a motion to dismiss, and the trial court here clearly exceeded the boundaries of the four corner of appellant’s complaint in dismissing the claim on the basis that two attesting witnesses did not sign the agreement in accordance with section F.S. 732.701, the trial court erred in its dismissal of appellant’s claim.

The 4th DCA also held that under Fla. R. Civ. P. 1.190(a) the appellant was entitled to at least one opportunity to amend his complaint before it was dismissed. Why? Because a motion to dismiss isn’t an answer, and under rule 1.190(a) you have a right to amend your complaint once as a matter of law before the other side files an answer.

Additionally, appellant was not afforded the opportunity to amend his complaint once as a matter of law, pursuant to rule 1.190(a), Florida Rules of Civil Procedure.

. . . [A]ppellant pled generally that all conditions precedent were met and that he was not afforded the opportunity to amend his complaint to specifically plead the same in regards to the signatures of two attesting witnesses. Further, appellant contended that he asked for leave to amend his complaint once to cure the defects discussed in Tulin’s motion to dismiss, as a matter of course, and was denied this opportunity by the trial court. As noted above, a motion to dismiss is not a responsive pleading and will not affect a party’s ability to amend, pursuant to the Florida Rules of Civil Procedure. Appellant should have been afforded the right to amend his complaint to allege the compliance with all conditions precedent more specifically before the trial court dismissed his claim with prejudice.