Apr. 18, 2016

The Technicalities of Creditor Claim Deadlines in Florida Probate Estates

By Jeffrey Fauer

Creditor claims are a common source of litigation in probate estates.   Whether large or small, almost every probate estate has a creditor that files a claim.  Creditor claims are typically based on the debts of the decedent that arose prior to death, and can range anywhere from a claim by American Express for unpaid credit card bills, to a claim by a former business partner for payment of principal and interest on a multi-million dollar promissory note.  Regardless of the size of the claim, strict deadlines apply to both creditors and estates alike.  These deadlines are somewhat quirky, and not readily known to most civil litigators.  Failure to comply with these deadlines can be fatal.  A legitimate claim can be abandoned, while a tenuous claim can be validated. See, e.g. Sessoms v. Johnson, 378 So.2d 1260 (Fla. 5th DCA 1979) (citing Goggin v. Shanley, 81 So.2d 728 (Fla.1955)) (“Unless timely objection is filed, there is no occasion for a hearing on the merits.”); see also HCA New Port Richey Hosp. v. Estate of Boschelli, 588 So.2d 1012 (Fla. 2d DCA 1991) (To avoid a claim filed in a probate estate, a personal representative has to file a timely objection).

§733.702, Fla. Stat. governs limitations on presentation of claims.  It states:

[N]o claim… is binding on the estate, on the personal representative, or on any beneficiary unless filed in the probate proceeding on or before the later of the date that is 3 months after the time of the first publication of the notice to creditors or, as to any creditor required to be served with a copy of the notice to creditors, 30 days after the date of service on the creditor...

Thus, a typical creditor, unknown to the personal representative, has 3 months from the date of first publication of the notice to creditors to file a claim.  On the other hand, if a creditor is reasonably ascertainable, they must be served with a copy of the notice to creditors, and they have 30 days after being served to file their claim in the estate.  Therefore, a reasonably ascertainable who is never served with the notice to creditors, has up to 2 years from the date of death to timely file a claim in an estate (i.e. their claim is only governed by the “Statute of Repose”).  Although fact specific, a reasonably ascertainable creditor is one who can be identified by the personal representative through a diligent search.  Strulowitz v. Cadle Company, II, Inc., 839 So. 2d 876 (Fla. 4th DCA 2003).

Courts have differentiated between reasonably ascertainable creditors and conjectural creditors. Reasonably ascertainable creditors include creditors that the personal representative actually knows to exist.  For instance, a creditor who emails back and forth with the personal representative about payment of money owed by the decedent is likely to be considered reasonably ascertainable, as the personal representative has actual knowledge of their claim. 

Conjectural creditors, on the other hand, are creditors that the personal representative would have to speculate as to whether they have a claim.  There is no duty for the personal representative to speculate and conjecture that someone might possibly have a claim against the estate Strulowitz v. Cadle Co. II, 839 So.2d 876, 880 (Fla. 4th DCA 2003).

§733.705(2), Fla. Stat. governs payment and objection to claims, it states:

On or before the expiration of 4 months from the first publication of notice to creditors or within 30 days from the timely filing or amendment of a claim, whichever occurs later, a personal representative or other interested person may file a written objection to a claim.

If an objection is filed, the creditor has 30 days to bring either an independent action or a declaratory action on the claim. §733.705(5), Fla. Stat.

Litigation can arise when a creditor is not served with the notice to creditors, and the creditor files a claim in the estate more than 3 months after the first publication of the notice to creditors.  To be deemed timely, the creditor would have to establish that they were reasonably ascertainable. This would be a factual dispute, and would likely require an evidentiary hearing to determine whether the creditor was reasonably ascertainable.  Likewise, litigation can occur when a creditor or the personal representative misses one of the deadlines set forth above, and tries to file a claim or lodge an objection after the time frame within which to act.  If a creditor or the estate can show “good cause” for failing to comply with a deadline, probate courts have discretion and will sometimes extend the time frame within which to act. See, e.g., In re Estate of Norregaard, 220 So. 2d 653 (Fla. 3d DCA 1969) (the time limit to object to a claim operates as a rule of judicial procedure and not a statute of non-claim.)  Good cause may be established by demonstrating human error as a result of some confusion or a clerical-type mistake. If a deadline is missed, it is imperative that you act promptly to remedy the mistake.  Consulting an experienced probate litigation attorney when confronted with creditor claims can be the difference between a claim being stricken, and the claim being deemed binding on the estate.  

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