LACK OF FORMAL NOTICE UPON THE PERSONAL REPRESENTATIVE’S COUNSEL RESULTED IN REVERSAL OF THE COURT’S ORDER DIRECTING COUNSEL TO DISGORGE FEES DEEMED EXCESSIVE

In Simmons v. Estate of Baranowitz, 2015 Fla. App. LEXIS 6733 (Fla. 4th DCA 2015), the Fourth DCA held that it was error to enter an order directing a personal representative’s counsel to disgorge fees which the circuit court determined to be excessive because the petition to review the compensation of the personal representative’s counsel was never served by formal notice. The subject case was a consolidated appeal from orders entered by the Fifteenth Judicial Circuit to the Fourth DCA.

The estate’s personal representative (“Appellant”) had filed a petition for discharge and final accounting. The accounting indicated that the personal representative and his counsel received specific amounts as compensation for their services. The trustee of the decedent’s trust (“Appellee”) filed objections to the accounting, as well as a petition to review the compensation which the personal representative and his counsel received. The trustee argued that the compensation received was excessive in relation to the compensable value of the estate and that any excessive compensation should be refunded pursuant to Sections 733.617(1) and 733.6171(3), Fla. Stat. (respectively providing that compensation to the personal representative and counsel shall be based on “the compensable value of the estate”). The court held an evidentiary hearing on the objections and petition. At the hearing, the personal representative argued that the court lacked jurisdiction over his counsel because counsel was not a party. The personal representative and his counsel then presented evidence in an attempt to support the compensation which they received. See, Section 733.6175(3), Fla. Stat. (“The burden of proof of propriety of the employment and reasonableness of the compensation shall be upon the personal representative and the person employed.”). Following the hearing, the court entered an order determining that the compensation which the personal representative and his counsel received was excessive. The court ordered the personal representative and his counsel to disgorge those amounts which the court determined to be excessive.

The Fourth DCA affirmed all of the orders from the circuit court except for one portion of an order directing the personal representative’s counsel to disgorge fees which the court determined to be excessive. In the appeal of that portion of the order, the personal representative argued that the court had no personal jurisdiction over his counsel to compel the disgorgement of fees because they were never served with process by summons or formal notice. The court agreed and reversed based on its holding in Kozinski v. Stabenow, 152 So. 3d 650 (Fla. 4th DCA 2014) where the court found that “the remedy of ‘surcharge’ . . . constituted an adversary proceeding requiring service by formal notice under the Florida Probate Rules in order for the probate court to have personal jurisdiction over her individually . . . .” The Appellee in Simmons v. Estate of Baranowitz argued that service by formal notice was not required as Section 733.6175(1), Fla. Stat. gives the court authority to review compensation paid to a personal representative’s employee and, if the court finds that excessive compensation was paid, to order that employee to make an appropriate refund.  While recognizing the court’s authority pursuant to Section 733.6175(1) and (3), Fla. Stat., the Fourth DCA stated that the issue in the subject case was not the court’s authority to act, but rather the manner by which the court notified the employee that action may be taken. “As was held in Kozinski, service by formal notice is required.” Due to the lack of service by formal notice on the personal representative’s counsel, that portion of the circuit court’s order directing counsel to disgorge fees which the court deemed to be excessive was reversed. The court remanded for further proceedings upon service by formal notice upon the personal representative’s counsel.

If you or anyone you know is in need of representation in actions involving Guardianship, Probate and/or Trust Disputes, or questions pertaining to such proceedings, please contact The Law Offices of Glenn M. Mednick, P.L., at (954) 315-1154 or gmednick@mednicklawgroup.com.