Friday, January 22, 2016

Blackburn v. Boulis

Blackburn v. Boulis, 184 So.2d 565 (Fla. 4th DCA 2016)

This appeal centers around two distinct issues with regard to a surviving spouse's elective share: (1) first, whether a court can direct the payment of interest on a portion of the elective share amount, and (2) whether attorney's fees can be charged against the elective share.

Interest on elective share:

The probate court ordered that the spouse was entitled to interest at the statutory interest rate on forty percent of the elective share amount, from the date of the order determining the value of the spouse's minimum elective share.  The Court held that it would be inequitable for the spouse to be denied the opportunity to a reasonable return on her elective share, and that it would likewise be inequitable for the spouse to enjoy a windfall of interest on a portion of the value of the elective share, which due to taxes, she would not be entitled to retain (since the elective share must bear its own taxes).  Therefore, it was appropriate to assess interest on only a portion of the elective share value.

Attorney's fees:

The probate court also charged a portion of the attorney's fees incurred by the estate in litigating the elective share claims against the spouse's elective share.  The Court, in reviewing the elective share statute, found that the plain meaning of the statute clearly and unambiguously only set forth four types of expenses or costs which the probate court  can deduct from the elective share (claims, mortgages, liens or security interests).  Since the statute does not include attorney's fees, the probate court erred by deducting the fees from the spouse's elective share.

Wednesday, January 13, 2016

Dowdy v. Dowdy

Dowdy v. Dowdy, 182 So.3d 807 (Fla.2d DCA 2016)

This decision centered around whether the construction of a trust could support the issuance of a temporary injunction directing the trustee to deposit proceeds of a property sale into the court registry pending the court's decision on the construction petition.  

A husband and wife established a family trust which owned real estate.  Each had children from previous marriages.  Following the husband's death, the wife amended the trust to remove her husband's children as successor trustees and beneficiaries.  She then sold the trust property.  One of the husband's sons learned of the sale and filed a petition for construction of the original trust and a temporary injunction to compel preservation of the sale proceeds.  

To obtain a temporary injunction, the moving party must demonstrate (1) that he will suffer irreparable harm without an injunction, (2) that he has no adequate remedy at law, (3) that he enjoys a substantial likelihood of success on the merits, and (4) that an injunction would be in furtherance of the public interest.  The Court held that he was not entitled to a temporary injunction because he would not prevail on the merits in his underlying construction action.

The construction petition sought a determination of whether the son was appointed as successor trustee upon his father's death, based on the language in the trust which read, "In the event of the death of the Initial Trustees...."  The son argued that the phrase "death of each" meant the death of either of the initial trustees.  The wife argued that both trustees had to pass before the successor trustees would be appointed.  The Court, upon review of the trust document, found the wife to be correct for the following reasons.  First, the trust document also named one of the wife's daughters as successor trustee, and did not specify which of them would succeed a particular deceased initial trustee.  Second, elsewhere in the document the trust used the term "death of each of the trustees" in circumstances where it clearly meant after the death of both trustees.  Since there was nothing in the trust to suggest that the phrase "death of each" has a different meaning in one provision than it does in another, the Court felt that the son would lose his construction petition, and did not become successor trustee at his father's death, and therefore the wife had sole authority and discretion to sell the remaining trust property for her own benefit.

Monday, January 11, 2016

Robert Rauschenberg Foundation v. Grutman

Robert Rauschenberg Foundation v. Grutman, --- So.2d --- (Fla. 2d DCA 2016)

In this decision, the Court considered which methodology to apply when calculating trustee fees.  The beneficiary of the trust, a charitable foundation, argued that the trustee fees should be calculated using the lodestar method set forth in Florida Patient's Compensation Fund v. Rowe, 472 So.2d 1145.  The trustees argued that their fees should be calculated based on the factors set forth in West Coast Hospital Ass'n v. Florida National Bank of Jacksonville, 100 So.2d 807 (Fla. 1958).  

The Court reviewed the history of the two methods and ultimately determined that the West Coast factors should be used to calculate trustee fees, not the lodestar method described in Lowe.  

As a review, the West Coast factors include: the amount of capital and income received and disbursed by the trustee; the wages or salary customarily granted to agents or servants for performing like work in the community; the success or failure of the administration of the trustee; any unusual skill or experience which the trustee in question may have brought to his work; the fidelity or disloyalty displayed by the trustee; the amount of risk and responsibility assumed; the time consumed in carrying out the trust; the custom in the community as to allowances to trustees by settlors or courts and as to charges exacted by trust companies and banks; the character of the work done in the course of administration, whether routine or involving skill and judgment; any estimate which the trustee has given of the value of his own services; payments made by the cestuis to the trustees and intended to be applied toward compensation.

Thirty years after the West Coast decision, the Rowe decision adopted the lodestar method for determining reasonable attorney fees.  The lodestar method calculates fees by multiplying the number of hours reasonably expended by a reasonable hourly rate.  To determine the reasonable number of hours or the reasonable hourly rate, the court considers factors similar to the West Coast factors.  Following the Rowe decision, the Court  held that the use of the word "reasonable" in the fee statute was consistent with the lodestar method for attorneys and personal representatives in In re Estate of Platt, 586 So.2d 328 (Fla. 1991).  

Another fifteen years went by, and the Florida legislature enacted F.S. 736.0708(1) which provides for trustee's fees that are "reasonable under the circumstances."  The Court considered the legislative history of the statute, and determined that the legislative history showed an intent to apply the West Coast  factors, and that there was no legislative intent to apply the lodestar method.  The Court upheld the trial court's calculation of fees using the West Coast factors and found that the court's findings regarding those factors and the reasonable fee amount were supported by the evidence presented at trial.

Friday, January 8, 2016

In re Guardianship of Hawley

In re Guardianship of Hawley, 188 So.2d 882 (Fla. 2d DCA 2016), 2016 WL 66700

In this appeal, the Court reviewed a trial court order removing a trustee and limited guardian of the person of a ward.  The Court held that while the trial court had the authority to enter the order pursuant to F.S. 744.1075(4)(b), where it found that such action was necessary to protect the physical or mental healthy or property of the ward, upon the entering the order the court was also required to comply with F.S. 744.1075(4)(a), which requires the court to issue an order to show cause stating the essential facts constituting the conduct charged and requiring the respondent to appear before the court to show cause why the court should not take further action.