Handling Late Estate Claims – Hurdles to Recovering Property

Bernhard Law FirmA newly discovered inheritance is discovered too late. A creditor untimely learns of his debtor’s death. The estate has gone through administration and the property divvied out. But you’ve got a claim. Can a court reopen an estate to re-divide the property and include your claim? Maybe. A late claimant to an estate faces various hurdles, including legal deadlines to claims (the statutes of limitations and repose); property sales to unfamiliar people; and legal burdens to show evidence excusing an absence during initial estate administration. This article provides a primer to these hurdles on your road to reopening an estate or defending a late claim to an estate. If you have any questions on estate and property disputes, please contact Bernhard Law Firm, www.bernhardlawfirm.com, abernhard@bernhardlawfirm.com, 786-871-3349.

Really, Really Old Claims – The Statute of Repose

Florida Statutes § 733.702 provides a 3-month statute of limitations to present a claim or file an action on an estate, while Florida Statutes § 733.710 provides a 2-year statute of repose to any claim to an estate whatsoever. Unless the late claimant is a mortgagee or creditor who filed within 2 years of administration, there are no exceptions. § 733.710, Fla. Stat. (2016). The 2-year statute of repose automatically removes a court’s jurisdiction over an estate, bars untimely claims, and is not subject to waiver or extension in probate. May v. Illinois Nat’l Ins. Co., 771 So. 2d 1143, 1157 (Fla. 2000); Rice v. Greene, 941 So. 2d 1230 n.2 (Fla. 5th DCA 2006).

Biltmore_Estate
By JcPollock – Self-published work by JcPollock, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=1220643

The Florida Supreme Court and every District Court of Appeal uphold this statute of repose to reverse any lower probate court that attempts to exercise jurisdiction over a claim despite this jurisdictional time-bar. May, 771 So. 2d at 1157 (Fla. 2000); Rice, 941 So. 2d at n.2 (Fla. 5th DCA 2006) (finding claims “barred by section 733.710 . . . a two-year jurisdictional statute of non-claim that automatically bars claims that are not asserted within two years following the date of death.”); In re Estate of Fleming, 786 So. 2d 660, 661 (Fla. 4th DCA 2001) (holding former wife’s claim time-barred under 2-year statutory period, despite contention that personal representative induced her to delay filing her claim); Dobal v. Perez, 809 So. 2d 78, 79–80 (Fla. 3d DCA 2002) (holding claims barred by 2-year statutorty period); Bush, 939 So. 2d at 216 (holding claims by decedent’s children were barred when made more than 2 years after decedent’s death, under two-year limitation established in statute of non-claim, despite decedent’s directives otherwise); see also Interim Healthcare of NW Fla., Inc. v. Estate of Ries, 910 So. 2d 329, 329–30 (Fla. 4th DCA 2005) (holding claimant jurisdictionally barred from moving probate court to vacate order determining claims where claimant failed to timely appeal and 2-year repose period expired).

This statute of repose generally prohibits any court from reopening or granting an extension on grounds of fraud, estoppel, or insufficient notice. May, 771 So. 2d at 1157 (Fla. 2000) (discussing that fraud, estoppel, and insufficient notice cannot extend the 2-year statute of repose). In considering extension of the 2-year statute of repose for fraud or insufficient notice, and Florida Supreme Court has found that enlarging the repose period “would be contrary to the structure and text of . . . the probate code” and “would also frustrate the obvious purpose underlying section 733.710 to provide an absolute bar date” for claims to an estate. Id. at 1156; Bush v. Webb, 939 So. 2d 215, 216 (Fla. 1st DCA 2006) (holding claims by decedent’s children were time-barred after two years). Based on a thorough analysis of the statutes and underlying case law, the Florida Supreme Court has held that “§ 733.710 is a jurisdictional statute of nonclaim that automatically bars untimely claims and is not subject to waiver or extension in the probate proceedings.” Id. at 1157.

Thus, if you seek to make claims to an estate over 2 years after the a death or the estate’s administration, the claims may be automatically time-barred under the statute of repose, the courts have no jurisdiction to consider your claims, and it is reversible error to do so. § 733.710, Fla. Stat. (2016); May at 1157. Allegations of lack of notice, intentional exclusion, and lack of awareness as to the property’s potential value, among other excuses, may not circumvent this statute of repose. Id.

 

Property Long Gone – The Bona Fide Purchaser

Under Florida Statutes § 735.206(4)(c), bona fide purchasers for value generally take estate property free of all claims of creditors of the decedent and all rights of the surviving spouse and all other beneficiaries. § 735.206(4)(c), Fla. Stat. (2016). Thus, where a bona fide purchaser for value has purchased estate property through a beneficiary, devisee, or other recipient from the estate, the new buyer has taken his or her ownership interest in estate property free of later claims. Where this occurs, a late claimant may no longer be able to obtain relief through reopening of the estate, and a court should deny their petition to reopen or re-administer the estate. If you have a late claim, you should quickly analyze whether the property has since been sold to an unfamiliar third party, as your claims to the property may then be cut off.

Stairtpwer
Public Domain, https://en.wikipedia.org/w/index.php?curid=21337616

 

Why Not Keep It Closed? – The Burden to Reopen

Even if the above don’t prohibit reopening, you may still have to meet a difficult evidentiary burden to re-open or re-administer an estate. A late claimant carries the burden to show grounds to reopen under good grounds—e.g. intentional fraud, lack of search for true legal heirs, or lack of notice. Some courts may find that even these grounds are insufficient to reopen an estate, as these arguments arise from the Florida Rules of Civil Procedure, which do not apply to non-adversarial probate proceedings. Estate of Ries at n.1; Steele v. Brown, 2016WL3880719 at n.1 (Fla. 3d DCA 2016). Even where a court will hear such arguments, Fla. R. Civ. P. 1.540(b) prohibits a motion to vacate court orders after one (1) year where the grounds are mistake, neglect, newly discovered evidence which by due diligence could not have been discovered in time to move for rehearing, fraud (“whether heretofore denominated intrinsic or extrinsic”), misrepresentation, or other misconduct. Fla. R. Civ. P. 1.540(b); See Steele v. Brown, 2016WL3880719 at *2 (Fla. 1st DCA 2016) (holding motion on estate time-barred as relief can only be granted on fraud if a motion is filed a year or less after the order, where movant filed 8 years after order).

If a court overcomes these issues and considers a late claim, the court still cannot vacate a final estate administration order as a simple exercise of its discretion. Steele v. Brown, 2016WL3880719 at *3 (Fla. 3d DCA 2016) (holding that 2007 order settling estate was final order that could not be vacated in 2015 as simple exercise of court discretion without movant fully establishing Rule 1.540-based grounds for relief). A late claimant must meet the burden of proof in his or her petition with sufficient admissible evidence. Pacheco v. Indymac Fed. Bank, F.S.B., 92 So. 3d 276, 277 (Fla. 4th DCA 2012) (unsworn motion to vacate on fraud, with no authenticated evidence, must be denied); Copeland v. Capital Bank of Miami, 372 So. 2d 1149, 1151 (Fla. 3d DCA 1979).

Meeting that evidentiary burden on a late claim is difficult, as the records are often missing to support a late claim. Where the extant record shows that attempts were made to locate heirs, and many years have passed since discharge, it is not necessary or proper to reopen an estate. In re Bateman’s Estate, 290 So. 2d 528, 530 (Fla. 3d DCA 1974) (affirming denial of petition to reopen and holding it improper to reopen estate where there was an indication that efforts were made to locate the petitioner and almost 5 years elapsed before to petition to re-open was filed); see also Espejo-Norton v. Estate of Merry, 869 So. 2d 1255, 1256 (affirming denial of petition to reopen administration as untimely, even where heir was erroneously excluded, where record showed efforts to locate heirs). Although the record may be incomplete or lost at this late stage, a late claimant must bear the consequences of a lost record or other lost evidence essential to his or her position. Pacheco at 277; Copeland at 1151. For example, on Copeland, the appellate court denied a Rule 1.540 request to vacate an order on the allegation that it has been procured through “fraud, trickery, misrepresentation and other unethical, unfair and improper conduct,” where the court was unable to reconstruct the record and the late claimant failed to meet his burden of proof. 372 So. 2d 1149, 1151.

A late claimant’s allegations that he did not receive notice of decedent’s death or probate often do not usually amount to fraud for purposes of reopening administration. In re Estate of Clibbon, 735 So. 2d 487, 488 (Fla. 4th DCA 1998) (holding allegations that beneficiaries did not receive notice of decedent’s death or probate did not amount to fraud). In the absence of proven fraud, no proceedings are allowed generally after termination of probate and discharge of personal representative in either testate or intestate proceedings, even upon newly discovered evidence or rights. In re Estate of Killinger, 448 So. 2d 1187, 1188–89 (Fla. 2d DCA 1984) (holding estate could not be reopened even though decedent’s will discovered only 3 months after closing estate, as statutory subsequent administration is only for discovery of new property, not new will or new rights). In these circumstances, the estate cannot be reopened nor the probate of the estate revoked. Id.

Biltmore_estate_garden,_looking_at_house

Even where the late claimant timely and properly raises fraud, Florida law strictly requires showing that: (1) somebody made a false statement regarding a material fact; (2) that person knew that the statement was false when he made it; (3) that person intended the recipient to rely and act on the false statement; and (4) that person justifiably relied on the false statement to its detriment. Simon v. Celebration Co., 883 So. 2d 826, 832 (Fla. 5th DCA 2004) (dismissing insufficient claim for fraud); In re Estate of Clibbon, 735 So. 2d 487, 488 (Fla. 4th DCA 1998) (aff’ing denial of petition to reopen on grounds of fraud and lack of notice). All of these elements must be shown using specific, ultimate facts, including the exact damages incurred, the specifically identified misrepresentation, and the time, place, and manner in which they were made. Id.; Cedars Healthcare Group, Ltd. v. Mehta, 16 So. 3d 914, 917 (Fla. 3d DCA 2009). A late claimant is not entitled to an evidentiary hearing where his petition does not sufficiently raise fraud and explain why the fraud would allow the court to set aside the order at issue. Pacheco at 277.

Where a late claimant failed to meet his or her burden and there is no evidenced basis in the record to sustain their claims, a court should not reopen. Where the initial estate administrators hired legal counsel, made diligent efforts to find beneficiaries with legal counsel, and did not knowingly misrepresent anything to the court or the new claimants, the court should not reopen. Espejo-Norton, 869 So. 2d at 1256 (affirming order denying moiton to reopen estate even though beneficiary erroneously excluded, where record shows diligent but futile efforts to find beneficiaries). In other words, without good facts, a strong record, and a judge that has a wide interpretation on Florida law, a late claimant may be simply unable to reopen an estate.

In sum, a newly discovered inheritance may simply be discovered too late. A late claimant to an estate faces various hurdles, including legal deadlines to claims (the statutes of limitations and repose); property sales to unfamiliar people; and legal burdens to show evidence excusing an absence during initial estate administration. A competent attorney can help you manage these hurdles on your road to reopening an estate or defending a late claim to an estate. If you have any questions on estate and property disputes, please contact Bernhard Law Firm, www.bernhardlawfirm.com, abernhard@bernhardlawfirm.com, 786-871-3349.

Bernhard Law Firm

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