Benedetto v. Columbia Park Healthcare Systems, 922 So.2d 416 (Fla. 5th DCA Mar 10, 2006)

The question of whether a person should be required to hire a lawyer if he or she wants to petition a court to probate a will has been the subject of a good amount of blogosphere commentary lately. Texas law professor Gerry W. Beyer has covered the issue on his blog Wills, Trusts & Estates Prof Blog (see here, here, and here) and Chicago-area probate attorney Joel A. Schoenmeyer has done the same on his blog Death and Taxes – The Blog (see here and here). In Florida, the answer is simple: with limited exceptions, every guardian and personal representative MUST hire a lawyer. That’s the lesson to be drawn from the Fifth DCA opinion cited above. In this case the Fifth DCA was unable to tell from the record on appeal whether the personal representative was the “sole interested person” in the estate (thus qualifying for the exception to the general rule requiring representation) or not. If the personal representative was not the “sole interested person” in the estate, then his appeal was subject to dismissal. Here’s how the Fifth DCA explained the law in Florida on this point:

Florida Rule of Probate Procedure 5.030(a) provides in relevant part as follows: (a) Required; Exception. Every guardian and every personal representative, unless the personal representative remains the sole interested person, shall be represented by an attorney admitted to practice in Florida. A guardian or personal representative who is an attorney admitted to practice in Florida may represent himself or herself as guardian or personal representative. Because an independent action on behalf of an estate is ancillary to the estate administration, this rule governs both the estate administration itself and any independent proceedings prosecuted or defended by the estate. Thus, unless Appellant is the “sole interested person,” as defined by law, he is precluded from maintaining this appeal without counsel. See, Dimitroff v. Taylor, 651 So.2d 131 (Fla. 2d DCA 1995). See also § 731.201(21), Fla. Stat. (2005) (defining “interested person”).

Simpson v. Estate of Simpson, __ So.2d __ (Fla. 5th DCA Feb 17, 2006) In this case the personal representative of the estate knew that her nephew was claiming he was entitled to an ownership stake in a citrus business owned by the decedent. Nephew never received the notice-to-creditors mandated by 2005->Ch0733->Section%20701#0733.701″>F.S. § 733.701. Nephew filed a petition under 2005->Ch0733->Section%20702#0733.702″>F.S. § 733.702(3) seeking an extension of time to file his claim against the estate based on the estate’s failure to provide the statutorily required creditors’ notice. The evidentiary hearing on Nephew’s petition for extension of time did not end well for him. Unfortunately Lake County Probate Judge Mark J. Hill failed to distinguish between (1) a proceeding to determine Nephew’s entitlement to an extension of time vs. (2) a proceeding to determine the validity of his claims. According to the Fifth DCA, the undisputed evidence presented at the hearing established that Nephew was a “reasonably ascertainable” creditor who was not given notice, and thus entitled to an extension of time to file his claim against the estate.

The undisputed evidence establishes that Mark’s claim was not only reasonably ascertainable, it was known to Anita. Robert testified that shortly after Jim died, Anita said to him, “We’ve got to make sure Mark gets his stock.” However, after Mark turned 21 on September 17, Anita changed her position, stating, “I can’t do anything to get the stock to Mark for his 21st birthday because it’s all tied up in the probate court, and we can’t touch it.” Then, on October 2, 2001, Robert wrote a letter to Anita asking her to give Mark the 10.5 shares of stock. Clearly, Anita had actual knowledge of Mark’s potential claim.

Once the evidence established that Nephew was entitled to file his claim, the probate court should have stopped there and let the parties fully litigate Nephew’s claim in a separate independent action. That’s not what the probate court did. Which was reversible error according to the Fifth DCA:

Instead of ending its inquiry there, the probate court proceeded to determine the validity of Mark’s claim. Under the applicable probate statutes, the merits of Mark’s claim should have been determined in an independent action. In disputes over the validity of timely filed claims, section 2005->Ch0733->Section%20705#0733.705″>733.705(4) requires the claimant to “bring an independent action upon the claim” if an objection to the claim is served. Section 2005->Ch0733->Section%20705#0733.705″>733.705(5) contemplates the use of an independent action after the probate court permits the filing of an untimely claim. It states, “A claimant may bring an independent action or declaratory action upon a claim which was not timely filed pursuant to s. 2005->Ch0733->Section%20702#0733.702″>733.702(1) only if the claimant has been granted an extension of time to file the claim pursuant to s. 2005->Ch0733->Section%20702#0733.702″>733.702(3).” The term “independent action” requires the filing of a separate action upon a claim against the estate. In re Pridgeon’s Estate, 349 So.2d 741 (Fla. 1st DCA 1977). This requirement allows pleadings and responses sufficient to set the issues before the court prior to hearing. In re Fornash’s Estate, 372 So.2d 128, 129 (Fla. 2d DCA 1979).

British Aristocrat Turns to “Apprentice”-style Reality TV Program in Hunt for American Heir

Proving once again that tacky U.S. pop culture ideas never die, they just morph into new versions of themselves around the globe, Sir Benjamin Slade, British aristocrat and heir to a $13 million estate, doesn’t just want to give his estate away to any old Yank, he wants a group of hardy souls to trek to his 13th-century manor house in North Newton, England, and allow themselves to be “ejected,” apparently while being filmed for TV, from contention with his own variation on “The Donald’s” now-famous you’re fired line: “You’re disinherited!”

Sir Slade’s line doesn’t seem to have quite the same “humph” to it that Donald’s catchphrase does, but it certainly is off the charts on the “eccentricity” scale (maybe that’s the problem?). This story was reported here in the New York Times. The following are excerpts from the linked-to story (note the litigation angle):

NORTH NEWTON, England, March 2 — WANTED: Heir for $13 million estate, including 13th-century manor house, in bucolic Somerset. Must be able to pay $140,000 annual upkeep and meet incidental costs of, for example, repairing the driveway ($70,000) and fixing the stables ($1 million).

Also, “He can’t be a drug addict,” said Sir Benjamin Slade, the current owner of the estate and its manor, Maunsel House, which has been in the family since 1772. “He can’t be a Communist. It’s politically incorrect to say so, but he can’t be gay, because he may not produce any children.”

The problem, said Sir Benjamin, who is 59 and childless himself, is that none of his army of relatives is willing to take on the property when he dies. So he is searching for an heir in America, where some Slades settled in the 18th century.

“Americans have more energy and a better work ethic,” he said, sipping tea in his sumptuous library. (“There are no bookcases, because my family was illiterate,” he said.) Paintings of ancestors plastered the walls; a fire roared in the hearth; a leak dripped steadily from the ceiling.

Sir Benjamin has a ready store of scandalous stories about his ancestors, to whom he refers in the first-person plural. Many of his tales have to do with the Slade habit of losing money in inheritance-related disputes. The hardest fought of these, perhaps, was between a set of male Slade twins in the 19th century, only one of whom could be the heir.

“The problem was that no one knew who popped out first,” Sir Benjamin said. The ensuing suit — Slade v. Slade — cost a fortune in legal fees, adding to the family’s financial woes. “We were absolutely stuffed,” Sir Benjamin said.

He got the idea for the heir hunt when an American television company, researching a program about Britons’ American relatives, got in touch.

The television company — which Sir Benjamin said has asked him not to discuss too many details — is now hoping to turn the search into an “Apprentice”-style reality program, in which potential heirs would live at Maunsel House and undergo a series of challenges, with Sir Benjamin eliminating them one by one.

Sir Benjamin is looking forward to ejecting the losers with his own aristocratic catchphrase: “You’re disinherited.”

Roberts v. Sarros, __ So.2d __ (Fla. 2d DCA Feb 15, 2006) Probate appellate decisions come in all flavors. Some sparkle with creative lawyering by one of the advocates (see here), some can make you dizzy following the appellate court’s complex but ultimately convincing line of reasoning (see here), and some just get the job done. This is one of those cases that just get’s the job done. No fireworks, just good lawyering and solid guidance for us practitioners. In this case the Second DCA walks us through an exercise probate lawyers encounter every day: how to read or “construe” a trust agreement. Step 1: Zero in on the problematic language. I say problematic because no matter how ambiguous a provision may be, it doesn’t really matter if it has no impact on any of the interested parties. In this case the problematic language revolved around whether a surviving widow had the authority to revise a trust agreement after her husband had passed away. Surviving widow signed a trust amendment disinheriting one set of her grandchildren. Grandchildren understandably didn’t think this was a good idea, and the case ended up in court. Here’s the “problematic” language, as described by the Second DCA:

Article XV of the Trust provides, “AMENDMENT AND REVOCATION: This Trust is subject to revocation, change or amendment, in writing, by the Grantors from time to time.” Article XII contains rules of construction for the Trust instrument, including the following provision that is pertinent to this appeal: “Unless the context required [sic] otherwise, masculine personal pronouns include the feminine, and the singular and plural may be construed interchangeably.”

Step 2: Identify the applicable law. Here’s what the Second DCA had to say about the law in Florida applicable to trust-construction disputes:

This court has recognized that “[t]he polestar of trust interpretation is the settlors’ intent.” L’Argent v. Barnett Bank, N.A., 730 So.2d 395, 397 (Fla. 2d DCA 1999). If the trust language is unambiguous, the settlors’ intent as expressed in the trust controls and the court cannot resort to extrinsic evidence. Id.; Ludwig v. AmSouth Bank of Fla., 686 So.2d 1373, 1376 (Fla. 2d DCA 1997). In determining the settlors’ intent, the court should not “resort to isolated words and phrases”; instead, the court should construe “the instrument as a whole,” taking into account the general dispositional scheme. Pounds v. Pounds, 703 So.2d 487, 488 (Fla. 5th DCA 1997); see also L’Argent, 730 So.2d at 397.

Step 3: Apply law to the facts. At the trial court level the judge ruled that surviving widow lacked the authority to amend the trust agreement. The trial court agreed with the disinherited-grandchildren when they argued that use of the plural form “Grantors” in the trust-amendment section meant widow lacked authority to unilaterally amend the document. The Second DCA reversed, based on the following line of reasoning:

[I]n considering the trust instrument as a whole, it is clear that if the singular/plural clause were not applied, it would produce absurd results. Every reference in Article I is to the plural form “Grantors.” Article I deals with the disposition of principal and income of the Trust to the Grantors during their lifetime. If the references to the “Grantors” were construed to mean only the plural form, then after the death of the first Grantor the surviving Grantor could no longer receive income from the Trust. Such a result is contrary to the stated purpose of the Trust, which is to provide for the McNeills “for so long as they may live.” Article I also provides that “the Trustees shall make payments from the principal of the Trust Fund to or for the benefit of the Grantors in such sums and at such times as the Grantors may request from time to time.” Again, if construed to mean only the plural “Grantors,” then the surviving Grantor would have no access to the principal of the Trust even though the trust was established to provide proper care for the McNeills and to allow them to maintain “a style of living to which they have been accustomed.” Like Article I, Article XV must be construed in accordance with the singular/plural clause. This is consistent, as in Article I, with the overall plan that the Grantors retain control over their assets as long as either of them lived. Nothing in the context of Article XV requires that “Grantors” be construed to mean only the plural form. When construed to include the singular “Grantor,” Louise M. McNeill, as the surviving Grantor, could amend the Trust pursuant to the power to revoke or amend contained in Article XV. Thus, we reverse the trial court’s order granting summary judgment as to count I and determining that the Amendment by Louise M. McNeill was invalid and remand for further proceedings on the Appellees’ complaint.

McMonigle v. McMonigle, __ So.2d __ (Fla. 2d DCA Feb 17, 2006)

Note: on its own motion the Second DCA withdrew its February 17, 2006, opinion and substituted the following in its place: McMonigle v. McMonigle, __ So.2d __ (Fla. 2d DCA Mar 29, 2006)

POP QUIZ: What do you do if you’re the beneficiary of an estate and you think the personal representative owes the estate a debt he’s not paying up on?

[A.] File a statement of claim in the estate.

[B.] File a separate cause of action seeking declaratory relief in the form of a determination of what interests the estate has in the funds allegedly owed by the personal representative to the estate.

[C.] File a petition seeking removal of the personal representative on conflict of interest grounds and appointment of a successor personal representative to file an action to recover the alleged debt.

[D.] All of the above.

If you picked any answer other than [C.], not only would you be wrong, but according to Pasco County Judge Stanley R. Mills, you’d be liable for the other side’s attorney’s fees under 2005->Ch0057->Section%20105#0057.105″>F.S. § 57.105. The grounds for such sanctions would be that because claims pursued under options [A.] and [B.] were dismissed on lack-of-standing grounds, they lacked “justiciable issues of law or fact.”

Not so says the Second DCA, which reversed the trial court’s sanctions order. The beneficiary in this case was legitimately attempting to protect the interests of the estate. The fact that he initially went about it the wrong way doesn’t mean his actions rise to the level of warranting attorneys-fees sanctions.

The Second DCA explained its ruling as follows:

Although [Tiedeman v. City of Miami, 529 So.2d 1266 (Fla. 3d DCA 1988)] does suggest that the lack of standing may be the basis of an award of section 57.105 fees, it does not require that the fees be awarded. Clearly, Robert did not have standing to bring the separate civil action. However, the factual issues raised in the civil action were the same factual issues litigated in the probate action seeking the removal of Ronald as Personal Representative. To award fees under section 57.105, the trial court must conclude there is a total absence of a justiciable issue of either fact or law. Haas v. Roe, 696 So.2d 1254 (Fla. 2d DCA 1997); Fernandez v. Chiro Risk Mgmt., Inc., 700 So.2d 65 (Fla. 2d DCA 1997). Since the factual issues here were actionable, the trial court abused its discretion by finding a total lack of justiciable issue of fact. Because we conclude there was a justiciable issue of fact, fees should not have been awarded under section 57.105.

Furthermore, we find the facts of this case to be similar to those in O’Brien v. Sarka, 613 So.2d 47 (Fla. 2d DCA 1993). In O’Brien, Sarka, who was serving as the guardian of the deceased at the time of the deceased’s death, filed an independent action against the estate to collect guardianship fees allegedly owed by the estate. O’Brien was a beneficiary of the estate and concluded that the personal representative had a conflict due to her business relationship with the guardian. Accordingly, O’Brien moved to intervene in the independent action, and the motion was granted. The guardian, Sarka, then moved for a judgment on the pleadings, which was granted. She then moved for section 57.105 fees against O’Brien, arguing that O’Brien should not have been allowed to intervene in the action as the estate already was represented and O’Brien’s interest was but a claim under the estate. The trial court awarded the fees, but this court reversed. “As a beneficiary, [O’Brien] was attempting to protect the assets of the estate. Although her intervention was invalid, the action was not so frivolous as to require that she and her attorney be punished for attempting it.” Id. at 48.

In re Estate of Wejanowski, __ So.2d __ (Fla. 2d DCA February 15, 2006)

It’s not unusual for a personal representative to seek explicit prior approval from the probate judge when contemplating some sort of litigation involving the estate – even is such authority is not required. This type of pre-approval is sought pursuant to 2005->Ch0733->Section%20602#0733.602″>F.S. § 733.602(2), which removes liability for any act of administration of the state if the act was “authorized” at the time.

This case is an example of what can go wrong when asking a probate judge for prior approval. You may not like the answer you get. Here the personal representative filed a motion with the probate court seeking approval of costs and fees associated with prosecuting an appeal of a wrongful-death judgment pending against the estate.

The trial court denied the personal representative’s motion without prejudice to resubmit the request at the conclusion of the appeal upon a showing of monetary benefit to the estate and ordered him not to expend estate funds for prosecution of the appeal, to include attorney’s fees and costs.

The Second DCA reversed, essentially holding that a monetary benefit (i.e., prevailing party) standard was too high a bar for approval of fees and costs associated with an appeal, stating as follows:

Requiring [the personal representative] to show a monetary benefit to the estate before he is entitled to reimbursement for appellate expenses narrows the definition of “benefit to the estate” to an unworkable level in this appellate context. An appellate attorney has an ethical duty not to prosecute a baseless or frivolous appeal. Payment of appellate fees and costs cannot be contingent upon prevailing on appeal because neither party can guarantee the outcome. The true benefit to an estate provided by an appellate attorney is the presentation of a good-faith appeal and its ultimate resolution. Our system affords litigants the right to resolve disputes with due process, safeguarded by appellate review of the trial court’s decisions. Cf. Brake v. Murphy, 693 So.2d 663 (Fla. 3d DCA 1997) (reversing an order that required the personal representative and her husband to post a bond in order to file further pleadings in a surcharge proceeding because the order violated the access to the courts provision and due process clause of the state constitution).

Tripp v. Salkovitz, __ So.2d __ (Fla. 2d DCA Feb 08, 2006)

Adult Comprehensive Protection Services (“ACPS”) was appointed the decedent’s plenary guardian prior to his death. Following his death, the decedent’s estate sued ACPS for negligence and breach of fiduciary duty. During the discovery process the estate filed a motion seeking an order from Pinellas County Judge Kelly N. Khouzam addressing the following:

  • requiring the production of documents regarding confidential communications between ACPS and its lawyer during the pendency of the guardianship, and
  • ruling on whether ACPS could raise the attorney-client privilege at deposition in response to questions related to confidential communications between ACPS and its lawyer during the pendency of the guardianship.

The probate court ruled in favor of the ward’s estate on both issues, determining that the attorney-client privilege now belonged to the estate. The problem with this ruling is that it failed to recognize that some of the confidential communications between ACPS and its lawyer had to do with protecting ACPS’ self interests: not its ward. The Second DCA reversed the trial court with instructions to parse its ruling so that communications between ACPS and its lawyer having to do with protecting ACPS’ self interests remained privileged. The Second DCA based its ruling on the same logic it applied when addressing the same issue in a trust context:

In Jacob, this court explained who holds the attorney-client privilege in trust situations: Usually, a lawyer retained by a trust represents the trustee, not the beneficiary, even though the fees are paid with trust funds that would otherwise go to the beneficiary. If the attorney represents the trustee, the trustee holds the lawyer-client privilege. In some circumstances, however, the beneficiary may be the person who will ultimately benefit from the legal work the trustee has instructed the attorney to perform. See, e.g., Riggs Nat’l Bank of Washington, D.C. v. Zimmer, 355 A.2d 709, 711 (Del.Ch.Ct.1976) (noting that legal memorandum concerning trust tax issues, written before beneficiaries’ litigation against trustee began, was prepared for the benefit of the trust beneficiaries) (cited in [ Barnett Banks Trust Co., N.A. v.] Compson, 629 So.2d [849, 850 (Fla. 2d DCA 1993)] ). In that situation, the beneficiary may be considered the attorney’s “real client” and would be the holder of the lawyer-client privilege. But if the “real client” is the trustee, the beneficiary would have to prove the existence of some exception to overcome the privilege. Jacob, 877 So.2d at 937 (some citations omitted). (Emphasis added.)

New legislation should make these types of disputes a thing of the past. As I reported here, the Florida Bar’s Probate & Trust Litigation Committee is proposing new blanket-privilege legislation that would legislatively abolishing the fiduciary-exception rule. Stay tuned for more!

The ABA Journal reported here on a Connecticut Bar proceeding in which Connecticut attorney, Joseph J. Notopoulos, was sanctioned for writing a letter to the probate judge handling his mother’s estate. What I found most interesting about this story is that Mr. Notopoulos was sanctioned for accusing the Connecticut probate system of the same nefarious conduct that Prof. John H. Langbein, the Sterling Professor of Law and Legal History at Yale Law School, complained of in written testimony just last year (see here). The following are excerpts from the linked-to ABA story:

“A Connecticut attorney says he was writing as a common, if angry, citizen when he sent a letter blasting a probate judge. But that didn’t stop him from being reprimanded–nor did his appeal to the state supreme court. Stating that Joseph J. Notopoulos provided no factual basis for statements he made attacking the probate judge overseeing his mother’s estate, the Connecticut Supreme Court upheld the Statewide Grievance Committee’s reprimand of the attorney. The court rejected Notopoulos’ claim that it was improper to reprimand him for comments made while acting outside his role as an attorney, and that the reprimand violated his free-speech rights. Notopoulos v. Statewide Grievance Committee, No. SC 17341 (Feb. 14).” “Notopoulos says the disciplinary action ignores the real issue of the probate system in Connecticut, which he believes is rife with conflicts of interest and cronyism. In Connecticut, probate judges are “elected town politicians with no educational requirements placed on them,” Notopoulos says. Yet he admits Berman is an attorney by training and a member of the Connecticut bar.”

And here is an excerpt from Prof. Langbein’s testimony:

“The sad truth is that much of what goes on in Connecticut probate courts can only be called a shakedown. Our procedures invite judges to extort money from the estates of decedents by insisting upon needless court filings and court approvals.”

Maybe Prof. Langbein is next on the Connecticut Bar’s hit list?

Engelke v. Estate of Engelke, __ So.2d __ (Fla. 4th DCA February 8, 2006) Navigating Florida’s homestead-protection laws is one of the primary focus points for estate planning attorneys in this state. There were two Florida Supreme Court opinions in 2005 alone attempting to unravel the thorny probate issues inherent to Florida homestead properties (see here and here). In this case the 4th DCA addressed one of the most common questions faced by Florida estate planning attorneys: should the homestead property be put into the client’s revocable trust? According to the 4th DCA, the answer is an unqualified YES. There has been hesitation in the past to put homestead property into a revocable trust because of an unfortunate Florida bankruptcy-court opinion that stood for the proposition that homestead property in a revocable trust was not owned by a “natural person,” thus it lost its creditor protection. As far as I know, every published Florida opinion addressing the same issue since then has ruled the other way. The 4th DCA case linked-to above does the same, directly answering two key estate-planning questions as follows:

  • “We note that in this case while [the decedent’s] residence was held in a revocable trust, it was owned by a “natural person” for purposes of the constitutional homestead exemption. Because [the decedent] retained a right of revocation, he was free to revoke the trust at any point in time. Accordingly, he maintained an ownership interest in his residence, even though a revocable trust held title to the property. We therefore conclude that [the decedent’s] interest as beneficiary of his own revocable trust would entitle him to constitutional homestead protections.” (Emphasis added.)
  • Frequently, as here, the trust contains provisions regarding the payment of expenses of the estate after the settlor’s death. We have found no case in which a general direction to pay the estate expenses has trumped the constitutional homestead protections which are the rights of the heirs as much as the decedent. Because revocable trusts are merely will-substitute devices, we see no reason why the reasoning of Thompson v. Laney, precluding use of the homestead to satisfy estate debts, should not apply with equal force when homestead property is transferred through a revocable trust. Therefore, unless the trust specifically directs that the freely devisable homestead be sold, the rights of the heirs attach at the death of decedent, and the property is protected from the claims of all creditors.” (Emphasis added.)

Special thanks to Florida/New York attorney Amy B. Beller of the West Palm Beach, Florida office of Kaye Scholer LLP, for giving me the heads up on an article she recently published entitled “New York vs. Florida: A Forum Selection Guide for Will Contests,” NYSBA Trusts and Estates Law Section Newsletter, Winter 2005, Vol. 38, No. 4. Ms. Beller does a great job of outlining the distinctions between New York and Florida in the will-contest arena. From a Florida perspective, I found the following observations the most interesting:

  • New York law recognizes IN TERROREM clauses as enforceable and they are commonly used. In Florida, these clauses are NOT enforceable.
  • New York law provides a right to JURY TRIALS in will contests. No such right exists in Florida.
  • New York law does not have an equivalent to Florida’s HOMESTEAD LAWS. In New York, subject to a spouse’s right of election, a decedent can devise his or her home to whomever he or she pleases.