Fourth District Court of Appeals Reverses Broward County Probate Judge’s Order Requiring Trustee and Lawyer to Repay Fees to the Estate. Wintter & Associates, P.A. v. Terry Kanowsky, . 33 Fla. L. Weekly D2471a; — So.2d —-, 2008 WL 4643358 (Fla.App. 4 Dist, October 22, 2008.).
David Mercer, the executor of the Estate of Blanche Heische, and trustee of the Sixth Amended and Restated Declaration of Trust of Blanche Heische testamentary trust, submitted his final accounting to Broward County Probate Judge Mel Grossman. Because the trustee had performed what he considered “extraordinary” services in connection with work to clear title to a parcel of real property devised to him through the testator’s will, the trustee included extraordinary fees in his accounting. The residual beneficiary of the trust, Terry Kanowsky, objected to the “extraordinary” fee request in the accounting. Following an evidentiary hearing, Broward County Probate Judge Mel Grossman determined that the trustee was not entitled to extraordinary fees and costs and ordered the trustee and law firm to repay them to the probate estate.
After the hearing, the beneficiary requested attorney’s fees against the trustee and his attorney and the Broward County Probate Court ordered that the beneficiary was entitled to recover from the trustee and the law firm her attorney’s fees and costs incurred in pursuing her objection.
The trustee and his lawyer appealed the order requiring them to pay the beneficiary’s attorney’s fees and costs in pursuing her objection. The Fourth District Court of Appeals reversed Judge Grossman and provided an instructive opinion on its interpretation of Stockman v. Downs, due process, and the probate process in Wintter & Associates, P.A. v. Terry Kanowsky, . 33 Fla. L. Weekly D2471a; — So.2d —-, 2008 WL 4643358 (Fla.App. 4 Dist.).
Stockman v. Downs
First, a word on Stockman v. Downs, 573 So.2d 835 (Fla. 1991). Stockman, simply stated, holds that “a claim for attorney’s fees, whether based on statute or contract, must be pled. Failure to do so constitutes a waiver of the claim.” Id. at 837-38. Subsequent to Stockman v. Downs, the Supreme Court of Florida adopted Rule of Civil Procedure 1.525, which provides that any party seeking a judgment taxing costs, attorney’s fees, or both must serve a motion within 30 days after filing of the judgment, including a judgment of dismissal, or the service of a notice of voluntary dismissal. Importantly, Rule 1.525 only established the time requirements for serving motions for costs, attorney’s fees, or both and in no way affects or overrules the pleading requirements outlined by Stockman v. Downs.
Law Based on Reason
There are good reasons for Courts to adhere to the holding of Stockman v. Downs and require parties to plead entitlement to attorneys’ fees and costs. First, by pleading a claim to attorney’s fees, a party notifies the opposing party of the claim and prevents unfair surprise. A party should not have to speculate throughout the entire course of an action about what claims ultimately may be alleged against him or her; additionally, the potential that one may be required to pay an opposing party’s attorney’s fees often may be determinative in a decision on whether to pursue a claim, dismiss it, or settle.
In their appeal to the Fourth District, the law firm that was ordered to repay their fees to the probate estate, claimed that Judge Grossman erred in awarding attorney’s fees where they were not pled as required by Stockman v. Downs. The Fourth District Court of Appeals agreed with the law firm.
May I Make a Suggestion?
Importantly, the beneficiary did not request attorney’s fees in her objection to the final accounting and in fact she did not request attorney’s fees until her written closing argument. She requested fees not from the estate, but directly from the trustee and his attorney. The Fourth District made it clear that it believes that the Stockman rationales of due process notice and prevention of surprise required the beneficiaries to reveal her intention to make such a claim.
It should be noted that there is an exception to the rule and holding of Stockman v. Downs. The exception to the rule applies “[w]here a party has notice that an opponent claims entitlement to attorney’s fees, and by its conduct recognizes or acquiesces to that claim or otherwise fails to object to the failure to plead entitlement.” The exception to the Stockman rule did not apply in the Wintter v. Kanowsky case, as neither the law firm nor the trustee waived its objection to the beneficiary’s failure to plead entitlement to attorney’s fees. The conduct of the law firm and trustee did not demonstrate acquiescence to the claim for fees. In fact, at the hearing before the Broward County Probate Court, the law firm objected to the request for attorney’s fees on the grounds that it was not pled. The Fourth District Court of Appeals agreed with the law firm and reversed the Broward County Probate Court ruling.
The beneficiary’s mistake in this case, in my view, was that in addition to not filing a brief with the Court of Appeals, she didn’t request the fees from the estate, but rather, she requested them to be paid directly by the trustee and his lawyer. If the fees were requested from the probate estate, Stockman might not apply. The beneficiary could have argued that the fees incurred by her in connection with her efforts in objecting to the “extraordinary” fees of the trustee and his lawyer, conferred a “benefit” to the estate under Fla.Stat. §733.106. I’m confident that the beneficiary would have prevailed had she taken this route, especially in light of the Fourth District Court of Appeals opinion in Duncombe v. Adderly, -So.2d-, 2008 WL 4489234, 33 Fla.L. Weekly D2367a (4th DCA October 8, 2008) discussed in my blog of October 9, 2008, wherein the Court not only expanded the definition of what constitutes a “benefit” to the estate, but also established a de novo standard of review for fee petitions.Share This