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Friday, January 01, 2010

PROBATE PROCEDURE FOR FILING LATE CLAIMS [FLORIDA]

One of the benefits of probate administration is the accelerated procedure for dealing with creditor claims. Creditors have only a 90 day period from the estate’s publication of a Notice to Creditors to submit a claim. Otherwise, the claim will be forever barred, regardless of its validity.

In Tulsa Professional Collection Services, Inc. v. Pope, 485 U.S. 478, 108 S.Ct. 1340, 99 L.Ed.2d 565 (1988), the U.S. Supreme Court held that due process requires that actual notice of the claims period be provided to reasonably ascertainable creditors (not just a published notice). Thus, the door is open to creditors who do not receive actual notice within the 90 day period to file an enforceable claim after the 90 day period.

To step through his open door, claimants still must follow certain procedural steps, as the creditor in a recent Florida case learned to his dismay. In the case, a purportedly reasonably ascertainable creditor did not receive a Notice to Creditors within the 90 day period. The creditor filed a claim against the estate, thirteen months after publication of the Notice to Creditors, alleging that he was a reasonably ascertainable creditor.

The claim was determined by the probate court to be unenforceable per its tardiness, and the 1st District Court of Appeals upheld the determination. This is because Fla.Stats. §733.702 requires that before a late claim can be considered as timely filed, the creditor must seek an extension from the court to file the claim (on the grounds of fraud, estoppel, or insufficient notice of the claims period). In the case, the creditor skipped that step – thus its claim was unenforceable.

The creditor argued that Burgis v. Burgis, 611 So. 2d 594 (Fla. 2d DCA 1993) allows an untimely petition to require payment of a claim to effectively serve as the required request for an extension to file the claim, if the petition alleges the claimant was a readily ascertainable creditor of the estate that was not given actual notice of the claim (as did the creditor’s petition in the current case). That was the case law at one time, but that case was based on a Florida Probate Rule that allowed for such a petition to challenge lack of notice. However, that Rule has since been modified to remove that route, and thus the appellate court found that Burgis is not longer good law for this issue.

Thus, an unfortunate case for a creditor serves as clear guidance to others that late claims will be entertained only upon the claimant first seeking (and obtaining) an extension from the probate court to file the claim.

 Morgenthau v. Estate of Andzel, 35 Fla. L. Weekly D86a (1st DCA 2009)

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