Kountze v. Kountze

• Decision Date: 16 October 2009
• Docket Number: No. 2D09-283.,2D09-283.
• Parties: Elizabeth KOUNTZE and Charles Denman Kountze, as beneficiary and successor trustee, Appellants, v. Edward Harris KOUNTZE, as personal representative of the Estate of Denman Kountze, Jr., deceased, Appellee.
• Court: Florida District Court of Appeals

20 So.3d 428

Elizabeth KOUNTZE and Charles Denman Kountze, as beneficiary and successor trustee, Appellants, v. Edward Harris KOUNTZE, as personal representative of the Estate of Denman Kountze, Jr., deceased, Appellee.

No. 2D09-283.

District Court of Appeal of Florida, Second District.

October 16, 2009.

Jeffrey D. Fridkin and Michael T. Traficante of Grant, Fridkin, Pearson, Athan & Crown, P.A., Naples, for Appellants.

Richard D. Cimino of Richard D. Cimino, P.A., Naples, for Appellee.

MORRIS, Judge.

The appellants, Elizabeth Kountze and Charles Denman Kountze, challenge a nonfinal order determining that the circuit court had jurisdiction over them and requiring that they maintain the status quo of personal property which has been alleged to be part of the probate estate of the decedent, Denman Kountze, Jr. Because there are unresolved issues of fact as to whether the trial court had jurisdiction over the appellants and whether the appellee, Edward Harris Kountze, satisfied the four-part test for obtaining temporary injunctive relief,¹ this court treats the trial court's order as having entered a temporary injunction and we reverse and remand for an evidentiary hearing.

I. Facts

This case presents convoluted facts, and therefore, it is necessary to discuss the parallel proceedings in Florida and Nebraska to have a full understanding. However, we are including only those facts which are pertinent to the issues.

In 1976, the decedent established an inter vivos heirloom trust as part of a marital settlement agreement with his former wife, Elizabeth Kountze. The decedent and Elizabeth were both lifetime beneficiaries, while Charles Denman Kountze and the appellee were remainder beneficiaries. The principal place of administration for the trust was in Douglas County, Nebraska. However, when the decedent died in August 2005, he resided in Collier County, Florida.

A. The early Florida proceedings

In October 2005, the appellee, as personal representative of the decedent's estate, deposited the decedent's last will and testament with the circuit court for Collier County. The appellee then filed a petition for administration of the estate in February 2006. The petition did not mention the trust or the assets referenced in the trust.

Subsequently, in October 2006, the appellee filed a petition to determine the whereabouts and the value of missing assets. In that petition, the appellee acknowledged the existence of the trust and alleged that the estate had an interest in the trust assets for federal estate tax purposes. The appellee also alleged that he had been unable to locate many of the trust assets and that Elizabeth Kountze had not been forthcoming with information. The appellee maintained that he believed that the missing trust assets were in the appellants' possession or they had been hidden, secreted away, sold, dissipated, or otherwise disposed of in violation of the trust documents.

The appellants then filed a motion to dismiss the petition to determine the whereabouts and the value of missing assets on the bases: (1) that there had "been no proper service of process," (2) that the court had no personal jurisdiction over them, and (3) that the court had no subject matter jurisdiction. No hearing was held on the motion to dismiss, and the trial court never ruled on whether it had subject matter jurisdiction.

In April 2007, the appellee filed a formal notice and a notice of the personal representative's taking possession of assets of the estate. Therein, he alleged that he had taken possession of certain assets which had been listed in the trust. However, the appellee also alleged that the assets referenced therein did not appear to be in the possession of a person who had an interest in them.

In June 2007, the trial court, sua sponte, entered an order on the notice, ruling that the appellee was entitled to take possession of the listed trust assets. The order also stated that the assets "shall be retained for the purposes set forth in the Notice."

In response, the appellants filed a motion to set aside the order and for sanctions. They alleged that they had not been properly served with formal notice or with the notice of the personal representative's taking possession and that although their prior counsel had prepared an objection to the notice, he had inadvertently failed to file the objection. The appellants also argued that the trial court's order should be vacated as it was based solely on the formal notice but not on any motion or pleading requesting such relief. The trial court denied the appellants' motion but made no finding on the jurisdictional issues.

B. The Nebraska proceedings

In June 2006, Charles Denman Kountze filed a petition for trust administration with the Douglas County Court in Nebraska. In December 2006, the appellee filed a motion seeking in part to have the trust assets sold at auction. After a hearing on the motion, the Nebraska court ordered that no trust assets should be moved, given away, sold, or borrowed against without court permission.

In August 2007, the appellee filed a motion to dismiss challenging the validity of the trust for the first time. Subsequently, in December 2007, the appellee attempted to register the Collier County court's June 2007 order with the Nebraska court.

In January 2008, the Nebraska court held a hearing to determine the validity of the Florida court's order. In April 2008, the Nebraska court entered its evidentiary rulings, findings, and orders. The Nebraska court determined that it acquired jurisdiction over the trust because Douglas County was the principal place of administration and because the trust was registered there. The Nebraska court also determined that the Florida court had no jurisdiction over the trust or the assets therein. In making that finding, the Nebraska court noted that the Florida court had made no findings of fact to support its ruling that the appellee was entitled to take possession of the certain trust assets. Additionally, the Nebraska court disagreed with the facts as found by the Florida court concerning the title, ownership, and custody of the assets at issue. On the basis of those findings, the Nebraska court held that the Florida court order was null and void. Ultimately, the Nebraska court held that the appellee's motion to dismiss was barred by the applicable statute of limitations, the trust was valid, and the title to the trust assets was properly held by the successor trustee.

C. The subsequent Florida proceedings

In November 2008, the appellee filed a verified motion to enforce the June 2007 final order and to impose sanctions. The appellee asserted that he had not been able to obtain possession of the assets described in the June 2007 order. He also alleged for the first time in the Florida proceedings that the trust was invalid.

The appellants responded by filing a motion to continue the hearing on the appellee's motions; they reasserted that the trial court lacked jurisdiction over them. They also reiterated that their prior motion to dismiss had not been ruled on by the trial court.

The appellee then filed an emergency motion to impose stay, alleging that the estate would suffer irreparable harm without it.

At a hearing on the motion for continuance, the emergency motion to impose stay, and the verified motion to enforce final order and impose sanctions, the appellee's counsel argued that if a continuance were granted, then a stay should also be entered so as to prohibit the appellants from disposing of any and all trust assets due to an upcoming hearing in the Nebraska proceedings which would address disbursement of the trust assets. The appellants' counsel argued that such a stay would be improper and that the trial court could not enjoin the appellants unless it first found it had personal jurisdiction over them.

Ultimately, the trial court ruled that it had jurisdiction over the appellants, and it granted mandatory injunctive relief as to the trust assets. Specifically, the trial court ordered the appellants to "maintain the status quo as to the heirloom assets which are the subject of the personal representative's Emergency Motion, until further order of this Court."

II. An evidentiary hearing is needed for the trial court to determine if it, in fact, has jurisdiction over the appellants and the assets at issue.

We first note that a plaintiff bears the burden of pleading a sufficient basis to obtain jurisdiction over a person. See Hall v. Tungett, 980 So.2d 1289, 1291 (Fla. 2d DCA 2008). It is only when the plaintiff meets that requirement that the burden shifts to the defendant to file a legally sufficient affidavit or other sworn proof contesting the essential jurisdictional facts. Id.

Here, the appellee, who was the plaintiff below, asserts that this court should affirm because he served appellants with formal notice of the Florida estate proceedings pursuant to section 731.301(2), Florida Statutes (2005-2009), and that the trial court therefore had personal jurisdiction over them.² Section 731.301(2) provides that "[f]ormal notice shall be sufficient to acquire jurisdiction over the person receiving formal notice to the extent of the person's interest in the estate."³

An interested person is defined in the probate code as "any person who may reasonably be expected to be affected by the outcome of the particular proceeding involved." § 731.201(23). However, the meaning of interested person "may vary from time to time and must be determined according to the particular purpose of, and matter involved in, any proceedings." Id.

The appellants contend they are not interested persons within the meaning of section 731.201(23). Specifically, they disclaim any interest in the estate assets. Our understanding of appellants' position is that the assets in question are trust assets that are separate and distinct from the estate assets and therefore they would not "reasonably...