Second District Finds No Authority Under Probate Code for Class Claims
The Second District Court of Appeals rendered a harsh rejection of a Lee County Circuit Court’s decision allowing a class action claim against a decedent’s estate. Baillargeon v. Sewell, 2010 WL 1727892, 35 Fla.L.Weekly D978a, (Fla.2d DCA April 30, 2010) announced a decision important to inheritance lawyers and others interested in Florida probate law and Florida probate and will and estate administration issues.
When Frank D’Alessandro (the Decedent) died, he was one of several defendants named in a class-action lawsuit in federal court filed by Randolph Sewell and Daphne Sewell (the Sewells), on behalf of themselves and all others similarly situated, founded upon allegations involving a failed investment scheme. The Personal Representative was substituted as a party in the pending action after the decedent’s death. Within three months after the first publication of notice to creditors, the Sewells filed a statement of claim “both individually and on behalf of [a] class of claimants.” In their statement of claim, the Sewells did not list the names and addresses of the other members of the putative class.
The Personal Representative moved to strike because, inter alia, “Florida law does not permit a claimant to file a claim on behalf of other unnamed claimants.” At the trial court, there was much discussion regarding In re Estate of Gay, 294 So.2d 668 (Fla. 4th DCA 1974). This is because the Gay decision is the only reported Florida case (and the only case in the nation) that has addressed the issue of whether a class claim may properly be filed in a probate proceeding. In Gay, a federal class action was pending against the decedent and other defendants when the decedent died. The claimant, who had been approved by the federal court as the class representative, filed a claim in the probate proceedings “on behalf of himself and all others similarly situated.” The executors of the estate moved to dismiss or strike the claim on the grounds “that it was unauthorized by the probate code and that it failed to state the names and addresses of the class members as required by the statute. The claimant moved to amend his claim by adding the names and addresses of the class members when they are finally determined’ (in the Federal Court action).” The circuit court denied the executors’ motion, and allowed the claimants to amend the claim to list the names and addresses of the class members when they “have been finally determined in the Federal Court action.” On appeal, the Fourth District reversed and ruled that the claim filed in probate court was to be stricken to the extent that it asserted a claim on behalf of any person other than the claimant. The court reasoned that the class claim failed to comply with the requirements of the probate code because it failed to identify the names and addresses of the other members of the class. Second, the court expressed concern that if class claims were allowed in probate, the delays inherent in determining the identity of the class claimants would unnecessarily delay the closing of decedents’ estates.
The Second District, using Gay as precedent, then noted the paucity of case law on the issue and turned its focus to the bankruptcy law for guidance. There, the court found that subject to certain limitations, class claims may be allowed in bankruptcy proceedings. The primary argument in favor of allowing the filing of class claims in bankruptcy is to ensure that all of the debtor’s creditors may share equally in the assets available for distribution from the bankruptcy estate. Other factors the Second District considered included the argument in favor of allowing class claims in probate based on the goal of promoting equality of distribution among all of the decedent’s creditors. Nevertheless, we conclude that countervailing factors were more compelling. Simply stated, the Second District was not inclined to expand Gay since the Florida legislature had made no changes to the probate code since the Gay opinion.
The Court said it is not unfair to require the individual class claimants to take the relatively simple step of filing a statement of claim with the probate court in order to preserve their claims against the Decedent. A statement of claim may be filed on a simple, one-page form that is designed to be prepared and filed by nonlawyers. The Court said, “If — speaking hypothetically — the maintenance man who mowed the Decedent’s lawn must file a statement of claim to recover a relatively small sum for the final month’s lawn service, then there is nothing inequitable about requiring the individual members of the class to file statements of claim to preserve their claims to the substantially larger amounts alleged to be due them.”
Hats off to the Second District for following the presumption that the legislature adopted the Fourth District’s holding in Gay that class actions may not be filed in probate. In my view, any change in the probate claims process to allow the filing of class claims should come from the legislature instead of through a judicial construction of the Code by a court.