Settlement in Probate Proceeding? Magic Language Should be in the Order!

In a probate proceeding, the personal representative and beneficiaries may have a dispute and reach a settlement agreement to resolve the controversy. The terms of the settlement agreement must be drafted carefully and referenced in the order approving the settlement so the agreement can be enforced if the terms of the settlement agreement are not met.

In Pulte v. New Common School Foundation, the court determined that a settlement agreement signed in a probate proceeding could not be enforced in the same probate proceeding.

William J. Pulte, a developer and philanthropist died in 2018 and his son, Mark Pulte (“Mark”), was named as personal representative. William had pledged donations and guaranteed loans for the New Common School Foundation (“Foundation”). The Foundation filed a claim in the estate. Mark objected and the Foundation brought a lawsuit. The matter was ultimately resolved, and Mark petitioned the court for approval of the settlement agreement (“Agreement”). The Approval Order was entered but did not incorporate the terms of the Agreement or reserve jurisdiction to enforce the Agreement in the Order. 

Eventually a dispute arose over the Agreement and a related trust stopped making payments to the Foundation. The Foundation moved in probate court to enforce the Approval Order. Mark opposed the motion by arguing that the probate court had no jurisdiction to enforce the Agreement. For the first time the probate court expressly retained jurisdiction to enforce the Agreement and ruled for the Foundation. An appeal followed.

Mark argued that pursuant to a Supreme Court case which states that “a court has jurisdiction to enforce a settlement agreement where the court has either incorporated the agreement into a final judgment or approved the agreement by order and retained jurisdiction to enforce it[s] terms”. The probate court had no jurisdiction to decide the case because the probate court did not incorporate the Agreement into a final judgment or retain jurisdiction to enforce the Agreement’s terms. Thus, the probate court lacked jurisdiction to enforce the Agreement.

The Foundation argued that (1) Mark did not raise this argument in the trial court and waived such argument, (2) the probate court incorporated the agreement into the Approval Order and (e) the probate court “implicitly” retained jurisdiction. The appellate court only addressed the waiver argument as the other 2 arguments failed because the Approval Order was not a final order and by its plain language did not retain jurisdiction or incorporate the Agreement.

The appellate court relied on precedent that Mark did not waive this jurisdictional challenge by failing to raise it below. The appellate court also cited a case that found the exact opposite but had to rule in favor of finding no waiver because of the precedent in the Second District Court of Appeal. Thus, Mark could raise such argument in the lower court.

The appellate court reversed the lower court decision and remanded the case to vacate the order granting the Foundation’s enforcement motion. The appellate court then certified the conflict in the District Court decisions to the Supreme Court.

ADVICE:  Be sure that the Order entered in the probate court proceeding authorizing a settlement incorporates the “magic” language. Be sure that, if you are handling a probate settlement, that a probate litigator reviews the settlement and order.

WORD OF THE WEEK:  Certification of conflict is a discretionary decision by the Florida Supreme Court to resolve conflicts in rulings by any of the five District Courts of Appeal. Thus, if a District Court of Appeal rules one way on an issue and another District Court rules the exact opposite, the appellate court can “certify” a conflict to the Supreme Court to resolve the matter.  Another example of discretionary jurisdiction includes a review of District Court decisions that uphold a state law, interpret a provision of the state or federal constitution or certify an issue one of “great public importance.”

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