FOUR DAYS NOTICE OF A HEARING TO APPOINT AN EMERGENCY TEMPORARY GUARDIAN WHICH RESULTED IN THE TRANSFER OF STOCK WAS HELD TO BE INSUFFICIENT AND A DUE PROCESS VIOLATION, BUT THIS DID NOT SALVAGE THE SAME PARTIES FAILURE TO TIMELY OBJECT TO A FINAL REPORT AND TO SCHEDULE THEIR OBJECTION FOR HEARING PURSUANT TO FLA. PROB. R. 5.680(f)

Posted on August 17, 2015

In Flegal v. Swistock, 2015 Fla. App. LEXIS 10752 (Fla. 4th DCA 2015), the Fourth DCA held that giving four days notice of a hearing on a petition to appoint an emergency temporary guardian to interested persons which resulted in the transfer of stock where ownership was disputed was insufficient in a guardianship proceeding, resulting in a due process violation. In the subject case, a father and ward had four daughters (“Appellants”), to whom stock shares were devised as joint tenancy with the father. Appellants lived out-of-state, and the fifth daughter lived in Florida as did the father. A dispute arose between the four out-of-state daughters and their father over 39,668 shares in Omega Bank. When First National Bank purchased Omega Bank, it issued new share certificates to the father and Appellants. Appellants each claimed ownership with their father as joint tenants with right of survivorship of 9,917 shares each.

In 2010, the father sued Appellants in Pennsylvania. He alleged that he had transferred the stock shares to Appellants as a joint tenancy with right of survivorship, but had intended for them to inherit the stock upon his death. He had not intended to gift the stock to them. He paid for the stock, kept possession of the certificates, retained all dividends, and paid income tax on those dividends. The father had requested Appellants to sign the stock back to him, but they refused so the father sought a declaration that he was the sole owner of the stock.  The father died during the course of that litigation. 

In 2011, while the Pennsylvania suit was pending, Appellants filed a petition in Florida to: (1) determine the father’s capacity; and (2) appoint them plenary guardians of the father’s person and property. The father moved to dismiss the proceedings, alleging the petition had been filed in bad faith to avoid the outcome of the Pennsylvania action. When three court-appointed medical examiners concluded that he was not incapacitated, Appellants voluntarily dismissed their petition.

In September 2012, the father suffered a stroke, and was hospitalized in critical condition. The fifth daughter, who lived in Florida, petitioned the circuit court to have the father declared incapacitated, and to be appointed emergency temporary guardian and plenary guardian. She alleged her father was in imminent danger because his recent stroke rendered him vulnerable to “elderly exploitation and abuse” by Appellants, who were “currently the subjects of open elder abuse claims filed in Pennsylvania.” The petition for appointment of plenary guardian listed the stock as property subject to the guardianship.

The trial court entered three orders: (1) appointing counsel for the father; (2) directing an examination of the father; and (3) setting the hearing on the petition for September 11, 2012. The orders were mailed to Appellants, who received them just four days prior to the hearing. Two of them sent a letter to the court stating that they could not attend the hearing on such short notice. The incapacity petition was set for hearing on October 19, 2012. Appellants were mailed a copy of the notice sent to the father.  At the September 11, 2012 hearing, the court appointed the fifth daughter the emergency temporary guardian (“ETG”) for ninety days with full power over the stock at issue.  The following day the fifth daughter submitted a proposed order to transfer all of the stock, 39,668 shares of which were the subject of the Pennsylvania litigation, to her as guardian.  Without notice to the Appellants, the court signed the order on September 12th; the father died the next day.  The following month the daughter petitioned to be discharged as the ETG, filed her final report, and transferred all of the stock from herself as ETG to herself as personal representative of her father’s estate.

In January 2013, the Pennsylvania court found in favor of Appellants and held that the stock was held as joint tenants with rights of survivorship.  Five months after the fifth sister filed her final report, Appellants filed an untimely objection claiming ownership to the 39,668 shares of stock. They also objected to the September 12th order that allowed the transfer of the stock.  They argued that they lacked notice and an opportunity to be heard, and asked the court to disapprove of the fifth daughter’s final report and turn over their stock.

The guardianship court entered an order approving the final report and noted that Appellants had objected, but that their objection was untimely.  The court also approved the distribution of the shares to the father’s estate. Appellants moved to vacate the discharge order and argued that they were deprived of their stock without due process.

The Fourth DCA stated that Fla. Prob. R. 5.648(b) only requires notice of the petition for appointment of the fifth daughter as ETG to be served on the alleged incapacitated person and his attorney, not Appellants. Appellants argued that since Rule 5.401 provides that “every petition or motion for an order determining rights of an interested person…shall be served on interested persons,” they should have received notice because they claimed to be interested persons.  The Court agreed, since their interests were affected by the court’s order transferring the stock to the fifth daughter as ETG.  The Fourth DCA noted that the Fifth DCA held that four days notice is unreasonably short in guardianship proceedings. See Anderson v. Sun Trust Bank/N., 679 So.2d 307, 308 (Fla. 5th DCA 1996). Because Appellants did not receive reasonable notice, they were deprived of their property without due process. The Court also found, however, that Appellants’ objection to the fifth daughter’s report was untimely as they failed to file same within thirty days of the petition being filed, and also failed to notice a hearing on their objection within ninety days after filing it.  They therefore abandoned or waived any objection to that report pursuant to Fla. Prob. R. 5.680(f).  The Fourth DCA reversed in part, and remanded for further proceedings.

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.

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