Part I
Nebraska and Florida probate courts involved in a jurisdictional showdown.
Comity, or legal reciprocity, refers to the legal presumption that different jurisdictions recognize the validity and effect of their respective judicial acts.
Last week the Second District issued an opinion highlighting some strain on the courtesies generally connected with comity, and clarifying some jurisdictional boundaries in Kountze v. Kountze, –So.3d–, 2009 WL 3320200, 34 Fla.L.Weekly D2142a (Fla.2nd DCA, October 16, 2009). Kountze involved a complicated factual and procedural backdrop, even for a probate litigation dispute. Basically, the dispute involved an inter Vivos heirloom trust as part of a marital settlement agreement between the decedent and his former spouse. The parties to the lawsuit were the remainder beneficiaries of the Trust.
In 2005, Edward Kountze, (“Edward”) as personal representative of the estate, deposited the decedent’s last will and testament in Collier County, Florida, where the decedent lived at the time of his death. The heirloom trust, however, had Nebraska as its principal place of administration. Thus, in 2006, Charles Kountze (“Charles”) filed a petition for trust administration in Nebraska.
Two competing courts then began journeying in different directions. The Florida Court, ruling on a filing by the personal representative, issued an order ruling that Edward could take possession of assets of the estate. The Nebraska court was requested by Edward to sell the trust assets at an auction, however, the Nebraska court ordered that no trust assets should be moved, given away, sold, or borrowed against without court permission. Edward then attempted to register the Florida court order with the Nebraska court.
The Nebraska court entered an order holding that Florida did not have jurisdiction over the trust because Nebraska was the principal place of administration and because the trust was registered there. The Nebraska court held that the Florida court order was null and void.
Edward countered with an emergency motion for injunctive relief and motion to enforce the court’s prior order authorizing Edward to take possession of the trust assets. Thereafter, the Collier County, Florida court countered with an order of its own—ruling that, contrary to the Nebraska court’s opinion, the Florida court did in fact have jurisdiction over the trust assets, and granted mandatory injunctive relief as to the trust assets.
Why the disparity of conclusions between the two courts? The answer is probably in that the Nebraska court conducted an evidentiary finding and then issued specific findings of fact and conclusions of law. The Florida court, as pointed out by the Second District Court of Appeals, simply issued orders without conducting an evidentiary hearing. It was upon this basis, and other reasons, that the case was sent back to Collier County with instructions for further handling.
Importantly, the opinion in Kountze touches on an issue that is commonly overlooked by litigators in the probate arena—personal, or in personam jurisdiction by a court over an estate beneficiary. In Kountze, one of the reasons the appellate court returned the case to Collier County was because it was unclear whether Charles was an “interested person” in the probate estate (it was argued that he was only a trust beneficiary, not a beneficiary of the probate estate, and since the trust assets are distinct from the estate assets, Charles is arguably not an interested person). The Second District ordered the Collier County probate court to conduct an evidentiary hearing to answer this question. (In my view, if Charles can reasonably expect to be affected by the outcome of the estate proceedings, then he is an interested person under the Florida Probate Code).
If Charles is an interested person, and if he was served with the motions filed by Edward via the formal notice, then the probate court would likely have jurisdiction over Charles’ interest in the estate. However, if Charles is not an interested person under the probate code, then Edward could seek to have the Florida court exert long-arm jurisdiction as set forth in Fla.Stat.§48.193.
I’m constantly confronted with the issue of whether a person claiming to have an interest in the estate is bound by a probate court order; in other words, what is the test to determine whether the court has jurisdiction over a person who may have an interest in the estate? For example, does the court have personal jurisdiction over a disinherited family member who was not served with the notice of administration, but who mailed in a handwritten letter to the court with objections to the decedent’s estate plan and administration?
Florida law holds that in personam jurisdiction may be acquired in probate proceedings by consent, by the voluntary general appearance of an interested person, or by an interested person asking the court for affirmative relief. One court has held that minimal actions by a beneficiary in an estate administration were deemed to be a waiver of objections to personal jurisdiction for the separate matter of determining the ownership of contested assets that were located with the estate beneficiary in the State of Ohio. Markowitz v. Merson, 869 So.2d 728 (Fla. 4th DCA 2004).
Comity Act: Part 2…..Let’s wait and see.