Brake v. Murphy
| Decision Date | 22 March 1994 |
| Docket Number | No. 93-1514,93-1514 |
| Citation | 636 So.2d 72 |
| Parties | 19 Fla. L. Weekly D658 Eileen M. BRAKE, Appellant, v. Eve E. MURPHY, et al., Appellees. |
| Court | Florida District Court of Appeals |
Robert M. Brake, for appellant.
Harold M. Braxton and Richard T. Kozek, Jr., for appellees.
Before SCHWARTZ, C.J., and HUBBART and COPE, JJ.
Eileen Brake appeals an order surcharging her pursuant to section 733.609, Florida Statutes (1991), for negligence and breach of fiduciary duty as personal representative of the estate of Eileen E. Murphy. We affirm in part and reverse in part.
After approximately eighteen days of evidentiary hearings, the trial court found that Eileen Brake had "acted improperly and in bad faith in the actions she undertook or failed to undertake while serving as ... personal representative." The trial court found that Ms. Brake had failed to act prudently in selling an office building which was the estate's largest asset. There was sharply conflicting evidence, which the trial court heard at length. As the findings are supported by substantial competent evidence, the judgment is affirmed with one exception.
One of the surcharge components considered by the trial court was the legal expense incurred by the estate in defending a foreclosure action brought by Ms. Brake to foreclose four mortgages on the office building. The order states:
Eileen Brake breached her fiduciary duty as personal representative by filing a foreclosure action against the estate and the beneficiaries, which action on her part required substantial additional legal proceedings and attorneys' fees and ultimately resulted in three of her four mortgages being declared an indebtedness of the estate, with additional interest and with the award of attorneys' fees to her husband, Robert Brake, in the amount of $40,000.00, which created an additional expense to the estate.
The first three of the above mentioned mortgages were mortgages placed on the office building prior to the demise of Eileen E. Murphy. 1 The fourth mortgage was placed on the office building while Ms. Brake was personal representative.
As the probate proceedings grew protracted, the trial court found it necessary to appoint an administrator ad litem to take charge of the office building. At the time Ms. Brake filed the foreclosure action, she was still personal representative of the estate, but was no longer in control of the office building. In the foreclosure action the administrator ad litem served as the representative of the estate. As Florida Probate Rule 5.120(a) indicates, "When it is necessary that the estate of a decedent ... be represented in any probate ... proceeding and ... the personal representative ... is ... interested adversely to the estate ... or is enforcing the personal representative's ... own debt or claim against the estate ... the court may appoint an administrator ad litem...." * Furthermore, upon the filing of the foreclosure action, Ms. Brake was removed as personal representative.
Under the statute regulating personal representatives, "If the exercise of power concerning the estate is improper or in bad faith, the personal representative is liable to interested persons for damage or loss resulting from a breach of his fiduciary duty to the same extent as a trustee of an express trust." Sec. 733.609, Fla.Stat. (1991). The statute by its terms applies to improper conduct while exercising one's power as personal representative. In this case the trial of the foreclosure action took place when Ms. Brake was acting in her individual capacity, not as personal representative, and the foreclosure action was defended on behalf of the estate by Herbert Stettin as administrator ad litem.
When the foreclosure action was tried, 2 the court found in Ms. Brake's favor on the first three mortgages. The court found the fourth note and mortgage 3 "voidable at the election of beneficiaries and therefore unenforceable because it was made in violation of Section 733.610, F.S." 4 Thus Ms. Brake was the prevailing party with respect to three of the four mortgages.
Appellee Eve Murphy acknowledges that Ms. Brake was acting in her individual capacity in the foreclosure action, and that the estate's interests were being defended by the administrator ad litem. Appellee argues, however, that the surcharge is nonetheless appropriate. She reasons that if Ms. Brake had proceeded diligently to sell the office building, then the foreclosure action never would have been necessary because the mortgages would have been paid off with the proceeds of sale.
It is true that the...
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Brake v. Murphy, 96-3026
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