STEVEN D. MERRYDAY, District Judge.
Mack Kaplan died testate on July 28, 2006, and probate began a month later in In re Estate of Mack Kaplan, No. 06-843-CP-02-LDM (Fla. 20th Cir. Ct. filed Aug. 28, 2006). After considering competing petitions from Leon, who is Mack's brother, and Alexander, who is Mack's son, the probate court appointed Leon as personal representative. Extensive and contentious litigation ensued;
In this action, Alexander sues (Doc. 43) Leon for breach of fiduciary duty, for "negligent retention of counsel," and for a violation of Florida's "Prudent Investor Rule." Each wrong alleged by Alexander occurred during Leon's administration of Mack's estate. Leon moves (Doc. 122) for summary judgment.
Alexander began this action in the Fort Myers Division of the Middle District of
On August 18, 2011, Alexander moved (Doc. 59) to strike Leon's affirmative defenses of res judicata, lack of personal jurisdiction, and lack of subject matter jurisdiction. In response, Leon argued (Doc. 60) that the August 3 order misreads Evans (Leon argued that "[the court's] quoted language from Evans is [] from [a] description of Florida's common law [before] 1927") and misapplies Huguenor (Leon argued that Huguenor is "a Florida personal jurisdiction case ... ha[ving] nothing to [do] with diversity jurisdiction"). On the one hand, Leon asked for reconsideration of the August 3 order and, on the other hand, Leon asserted that a denial of a motion to dismiss "is not `law of the case.'" Relying primarily on Judge Honeywell's August 3 order, an August 29, 2011 order, 2011 WL 3841552 (entered by Magistrate Judge Chappell) (Doc. 62) strikes the affirmative defenses of res judicata, lack of personal jurisdiction, and lack of subject matter jurisdiction. On December 21, 2011, Chief Judge Anne C. Conway issued a standing order (No. 2:11-mc-30-FtM-22) that transferred this action from Judge Honeywell to the Fort Myers "unassigned" docket. On August 22, 2012, this action was transferred to me.
In the motion for summary judgment, Leon again asks for reconsideration of the August 3 denial of the motion to dismiss. Although Leon asks for reconsideration of res judicata only, a review of res judicata, an examination of the motion for summary judgment (Doc. 122), and the reconsideration of Alexander's motion to compel (Doc. 126) require a reconsideration of abstention. Accordingly, an October 11, 2012, order (Doc. 181) directs Alexander to show cause why this action should not be stayed under Colorado River until the conclusion of Mack's probate. Alexander responds (Doc. 182).
Competing federal and state litigations similar to the competing litigations involving Mack Kaplan's estate appear rarely because the "probate exception" typically bars federal jurisdiction.
Marshall v. Marshall, 547 U.S. 293, 311-12, 126 S.Ct. 1735 (2006), defines "interfere":
(citations omitted). Seeking in the federal action to compel a disposition of neither the will, the estate, nor the res in the custody of the probate court, Alexander demands only a money judgment against Leon personally. Marshall, 547 U.S. at 311, 126 S.Ct. 1735; Lefkowitz v. Bank of N.Y., 528 F.3d 102, 106 (2d Cir.2007) ("[W]here exercise of federal jurisdiction will result in a judgment that does not dispose of property in the custody of a state probate court, even though the judgment may be intertwined with and binding on those state proceedings, the federal courts retain their jurisdiction."); Jones v. Brennan, 465 F.3d 304, 307-08 (7th Cir. 2006) (Posner, J.) (noting that a breach of fiduciary duty claim accusing the guardians of mismanaging an estate "does not ask the court ... to administer the estate"). Marshall's narrow definition of "interference" permits Alexander's federal pursuit of Leon despite the protection intended by the "probate exception."
However, Alexander's federal pursuit of Leon presents a demonstrably "exceptional" circumstance that compels a stay under Colorado River until the resolution of Mack's probate. See Ambrosia Coal & Const. v. Morales, 368 F.3d 1320, 1328 (11th Cir.2004) ("Federal courts have a `virtually unflagging obligation ... to exercise the jurisdiction given them.' A policy permitting federal courts to yield jurisdiction to state courts cavalierly would betray this obligation. Thus, federal courts can abstain to avoid duplicative litigation with state courts only in `exceptional' circumstances.") (quoting Colorado River, 424 U.S. at 817, 96 S.Ct. 1236). Considerations governing the grant of a stay include (1) whether federal or state law governs the action, (2) whether the federal court acquired jurisdiction first, (3) whether the state court can adequately protect the parties' rights, (4) whether simultaneous prosecution invites piecemeal litigation, (5) whether a court has assumed jurisdiction over property, (6) whether the federal forum is inconvenient. Moses H. Cone Mem. Hosp. v. Mercury Constr., 460 U.S. 1, 19-27, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983); Ambrosia Coal, 368 F.3d at 1332. The factors are applied in "a pragmatic, flexible manner with a view to the realities of the case at hand," Moses H. Cone, 460 U.S. at 21, 103 S.Ct. 927, and "[n]o one factor is necessarily determinative; a carefully considered judgment taking into account both the obligation to
In the federal action Alexander complains about an array of breaches of fiduciary duty allegedly committed by Leon while administering the estate, including (1) Leon's allegedly settling a wrongful death action "for a ridiculously low amount;" (2) Leon's allegedly failing to defend against claims from two attorneys; (3) Leon's allegedly submitting improper "bills for travel, hotel, food, etc.;" (4) Leon's allegedly billing "double" for guardianship costs; (5) Leon's allegedly abandoning Mack's "valuable personal property;" (6) Leon's allegedly failing to timely pay Mack's pharmacy bill; (7) Leon's allegedly failing to timely pay a funeral expense; (8) Leon's allegedly paying an attorney to defend an IRS audit instead of obtaining free representation from H & R Block; (9) Leon's allegedly failing to invest estate assets in accord with Florida's "Prudent Investor Rule;" and (10) Leon's allegedly failing to hire a competent attorney. State law governs each claim asserted by Alexander against Leon in the federal action.
"[T]he order in which jurisdiction was taken is not a mechanical concept automatically favoring the party who files first, but rather a concept that favors the case that is the more advanced." Elmendorf Grafica, Inc. v. D.S. America (East), 48 F.3d 46, 52 (1st Cir.1995). Certainly "more advanced," the probate administration was opened six years ago (four years before the federal action) and contains more than 1,020 docket entries, which include contests over a personal representative, over the settlements of claims, and over interim accountings. Both from the administration of probate and from Alexander's many associated lawsuits, the state court has acquired a brutally intimate familiarity with the dispute surrounding Leon's administration of Mack's estate. Interference from parallel federal litigation squanders the state court's accumulated investment.
Enjoying a singular expertise in Florida probate, the state trial and appellate
The Florida Probate Code provides a plenary procedure to resolve before the closing of the probate administration each claim asserted by Alexander in the federal action. Rule 5.345, Florida Probate Rules, permits the personal representative to "file an interim accounting at any time" and grants the probate court authority to require an interim accounting. An "interested person," such as Alexander, may move under Rule 5.150 to require the personal representative "to file an accounting ... not otherwise required by statute or rule." Among other details, the accounting for each accounting period (1) must list each cash and property transaction, (2) must include a schedule of assets computed at the end of the accounting period, and (3) must show each gain or loss. An "interested person," such as Alexander, may object to an accounting in writing under Rule 5.345(c) by stating "with particularity the item or items to which the objection is directed and the grounds upon which the objection is based." Additionally, even before the estate's closing, Rule 5.380 permits a beneficiary, such as Alexander, to petition for a compulsory distribution.
Rule 5.400 requires a personal representative "who has completed administration except for distribution [to] file a final accounting and a petition for discharge including a plan of distribution." The final accounting and petition for discharge must include (1) a statement that the personal representative has administered the estate, settled each claim, and paid each tax; (2) the amount of the personal representative's and the personal representative's attorneys' compensation and the method of determining the compensation; (3) a detailed plan of distribution; and (4) a statement requiring an interested party, such as Alexander, to object within thirty days. After receiving evidence "that the estate has been fully administered and properly distributed" and after overruling any objection, the probate court must discharge the personal representative under Section 733.901(1) and close the estate. An order discharging the personal representative is a final order subject to immediate appeal.
According to Section 733.901(2), the discharge "release[s] the personal representative and [ ] bar[s] any action against the personal representative, as such or individually." Because the "uncompromising fidelity of personal representatives" outweighs the concern that "the estates of decedents be finally determined with dispatch," Section 933.901(2) releases the personal representative from individual liability only if the personal representative discloses to the probate court the disposition of the disputed estate asset. Van Dusen v. Southeast First Nat'l Bank of
In sum, the state probate court can, should, and probably will resolve each claim raised by Alexander in the federal action. Before closing the probate administration, Leon is required to submit an accounting. If Leon discloses each allegedly improper expense (including those alleged in the federal action), Alexander and Leon must litigate in the probate court the propriety of those expenses. The probate court's resolution either inculpates Leon or absolves him through discharge. Thus, after the closing of probate, the federal action remains only in respect to a matter undisclosed by Leon, unknown to Alexander, and unadjudicated by the state probate judge.
The possibility of piecemeal litigation must pose a threat of waste that exceeds the threat posed by "the vast majority [of] federal cases with concurrent state counterparts." Ambrosia Coal, 368 F.3d at 1333.
KPS & Assoc. v. Designs By FMC, 318 F.3d 1, 10-11 (1st Cir.2003) (internal quotations omitted). Additionally, "`the vexatious or reactive nature of either the federal or the state litigation may influence the decision whether to defer to a parallel state litigation.'" Ambrosia Coal, 368 F.3d at 1331 (quoting Moses H. Cone, 460 U.S. at 17 n. 20, 103 S.Ct. 927).
Continued prosecution of this action invites piecemeal litigation and assorted other vexing mischief, both foreseeable and unforeseeable, both in the federal action and in the state probate administration. Alexander provides a compelling and illustrative
On August 21, 2012, Alexander moved (Doc. 156) for reconsideration and argued indignantly:
(Doc. 156) As Alexander persuasively demonstrates, the estate remains open, the administration remains active, and the probate accounting (both interim and final) remains incomplete and unreviewed by the probate court. Alexander admits that his federal court discovery request was delinquent, but Alexander argues "many more questions were raised than answered [in the probate court] as to the propriety of many payments." Alexander identifies no moment when the probate's "raising of questions" will stop but, instead, implies that federal court deadlines (intended to promote an orderly disposition of Alexander's federal action) must yield each time
The probate court has apparently already resolved at least one claim raised in the federal action. Acting as personal representative, Leon retained Cathy Reiman as counsel for Mack's estate, and the pair negotiated a settlement of a wrongful death action against Mack's nursing home. On November 26, 2007, Leon petitioned the probate court for approval of the settlement. On January 31, 2008, the probate court held a hearing in which Alexander appeared and objected to the amount of the settlement. Unpersuaded by the objection, the probate court in a final and appealable order granted the petition and approved the settlement (Doc. 123-5). See Brunson v. McKay, 905 So.2d 1058, 1061 (Fla. 2d DCA 2005) (hearing an appeal of a probate court's order approving the amount of a wrongful death settlement).
In this action, Alexander alleges in Count I that Leon "breached his fiduciary duty by negligently handling the litigation against the [nursing home] and settling the case for a ridiculously low amount." (Doc. 43, 1127) Section 733.612(24), Florida Statutes, grants a personal representative the authority without court approval to "[s]atisfy and settle claims," including a claim for wrongful death. However, a personal representative may petition for probate court approval, the granting of which absolves the personal representative of personal liability for the settlement:
Fla. Stat. § 733.708; Evans v. Tucker, 101 Fla. 688, 135 So. 305, 309 (1931);
A stay in favor of the probate administration permits the probate court to fulfill its established and salutary role and to resolve the probate issues without federal obstruction, permits Leon's disclosure of contested estate expenses to the probate court, preserves Leon's statutory right to a discharge determination in the probate court, halts Alexander's premature and partially redundant litigation in federal court, and likely in due course concludes the federal action when the probate court (the primary and preferred forum for probate matters) decides whether to discharge Leon as personal representative. The federal action must await respectfully the state probate court's administration of Mack's estate.
Containing a comprehensive set of rules, a heightened standard of personal representative liability, and an array of procedures for personal representative exoneration, the Florida Probate Code intends to protect the personal representative from exhausting and expensive collateral litigation, to promote the service of an attentive and qualified personal representative, and ultimately to sustain the resources of the estate through an orderly administration of probate. Further prosecution of this antagonistic federal action will oppress the personal representative, obstruct the administration of Mack's estate, pre-empt the comprehensive Florida Probate Code, ignore comity between state and federal courts, and squander state and federal judicial resources.
This action is
An October 30, 2012, order (Doc. 184) stays this action until entry in state court of a final judgment in the probate of Mack Kaplan's estate. Alexander moves (Doc. 186) for reconsideration.
Alexander implicitly argues among other points that a previous order established the "law of the case." In Alexander's words, "this Court [cannot] sit as an appellate court to overturn prior decisions [(Order Denying Leon's Motion to Dismiss, Doc. 56) in the same action] of another Federal District Court Judge of equal stature and authority." However, the law is quite to the contrary. Fed.R.Civ.P. 54(b) (noting that an order resolving fewer than all of the claims "may be revised at any time before the entry of a judgment adjudicating all the claims and all the parties' rights and liabilities"); Moses H. Cone Mem. Hosp. v. Mercury Const. Corp., 460 U.S. 1, 12, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983) ("[E]very order short of a final decree is subject to reopening at the discretion of the district judge."); Gregg v. United States Indus., 715 F.2d 1522, 1530 (11th Cir.1983) ("[The district judge] was not bound to give absolute effect to the first judge's rulings, and he did not do so.... [A]s an alternative, he carefully exercised his own power and duty of independent decision."); Wright & Miller, Federal Practice & Procedure § 4478.1 (2d ed. 2012) (detailing the policy supporting "a successor judge['s] ... free[dom] to attempt the best possible disposition of the case"). The October 30 order explains in detail the necessity of imposing a stay and departing from the August 3, 2011, order refusing to abstain.
Next, Alexander cites Glickstein v. Sun Bank/Miami, N.A., 922 F.2d 666 (11th Cir. 1991), abrogated in part, Saxton v. ACF Industries, 254 F.3d 959 (11th Cir.2001), and argues (Doc. 186 at 6) that the "probate exception" permits Alexander's federal action for personal liability against Leon. The October 30 order agrees but temporarily abstains under Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976), and Alexander again confuses abstention and a stay with the "probate exception" and a dismissal.
Involving simultaneous state and federal actions, Glickstein included three wills of Lilly Glickstein, the third of which the state court admitted to probate. The third will permitted Robert Grayson and Peggy Bonomo to inherit equal shares of the estate's remainder and appointed the two as beneficiaries of a marital trust established by Lilly's late husband. Sun Bank was appointed as the personal representative of the estate.
Howard Glickstein successfully challenged the third will in the probate court, which set aside the third will in favor of the first will. The will challenge was appealed, but before the decision was affirmed on appeal, Howard sued in federal court "on behalf of himself and the estate of Lilly Glickstein" for "wrongful interference with an inheritance." While the will challenge awaited resolution in the Florida courts, the district court dismissed the federal
In the Eleventh Circuit, Howard argued that dismissal was proper under both the probate exception and abstention. Glickstein rejected the probate exception argument, and in the final paragraph before the conclusion, summarily rejected the abstention argument:
922 F.2d at 674.
In the federal action, Howard sought (1) attorneys' fees and expenses to compensate for challenging the third will and (2) "overturn [of] certain inter vivos transfers made to the defendants" named in the federal action. Perforce the probate court's setting aside the third will, the defendants in the federal action were removed as trustee and personal representative before the commencement of the federal action. In other words, Howard sought in the federal action no damages for wrongs committed by a personal representative serving during the prosecution of the federal action, that is, no Glickstein defendant remained as personal representative during the on-going probate of the estate, and no Glickstein defendant awaited discharge in the probate court. Thus, Glickstein presented little possibility of piecemeal litigation from a federal court's disposition on the merits, little possibility that a ruling in federal court would disrupt the proceedings in state court, and little possibility that a ruling in state court would disrupt the proceedings in federal court.
By contrast, Leon remains personal representative of the on-going probate of Mack's estate, and Leon awaits discharge (or imposition of liability) by the probate court. As explained thoroughly in the October 30 order, (1) disposition of Alexander's federal action results in "substantial and troublesome" piecemeal litigation; (2) a ruling in federal court disrupts the proceedings in state court, robs Leon of his statutory right to a discharge determination in the probate court, and preempts the probate court's statutory duty to decide discharge; and (3) each event in the probate court (such as an interim accounting, See Doc. 184 at 12-14) disrupts the proceedings in the federal action.
Glickstein recognizes that Howard's appointment as personal representative awaited the conclusion of the appeal in the state court and consequently that Howard
922 F.2d at 671. The motion (Doc. 186) is
The tumultuous slide continued into both the Second District Court of Appeal and the Supreme Court of Florida. Kaplan v. Kaplan, 20 So.3d 854 (Fla. 2d DCA 2009); Kaplan v. Estate of Kaplan, 15 So.3d 587 (Fla. 2d DCA 2009), rev. dismissed, 19 So.3d 311 (Fla. 2009); Kaplan v. Kaplan, 983 So.2d 588 (Fla. 2d DCA 2008); Kaplan v. Kaplan, 963 So.2d 711 (Fla. 2d DCA 2007); Kaplan v. Kaplan, 968 So.2d 1025 (Fla. 2d DCA 2007); Kaplan v. Kaplan, 963 So.2d 711 (Fla. 2d DCA 2007); Kaplan v. Kaplan, 991 So.2d 865 (Fla. 2d DCA 2008).
135 So. at 309. Evans is supported by both a plain reading of Section 733.708 and a policy promoting the service of an attentive and qualified personal representative.
(Doc. 46 at 7) (citations omitted)
