PROBATE CORNER

By: David M. Garten, Esq.

ARTICLE: What Is The Proper Procedure For Bringing An Action Against A Trustee For Breach Of Trust After Service Of A Trust Accounting And Limitation Notice?

Sec.736.1008(2), F.S. reads in relevant part: “Unless sooner barred by adjudication, consent, or limitations, a beneficiary is barred from bringing an action against a trustee for breach of trust with respect to a matter that was adequately disclosed in a trust disclosure document unless a proceeding to assert the claim is commenced within 6 months after receipt from the trustee of the trust disclosure document or a limitation notice that applies to that disclosure document, whichever is received later.” [Emphasis added]

Sec. 736.1008(4)(c), F.S. defines a “Limitation notice” as: “[A] written statement of the trustee that an action by a beneficiary against the trustee for breach of trust based on any matter adequately disclosed in a trust disclosure document may be barred unless the action is commenced within 6 months after receipt of the trust disclosure document or receipt of a limitation notice that applies to that trust disclosure document, whichever is later.” [Emphasis added]

With regard to limitations of actions (Ch.95), the terms “action” and “proceeding” are used interchangeably. Refer to §95.011 which reads in relevant part: “A civil action or proceeding, called “action” in this chapter,…shall be barred unless begun within the time prescribed in this chapter or, if a different time is prescribed elsewhere in these statutes, within the time prescribed elsewhere.”

ISSUE: What do you have to file to stop the 6 month statute of limitations from running on your client’s breach of trust claim(s)?

Assuming that the drafters of the Trust Code incorporated the terms “action” and “proceeding” used in Ch. 95 into the Trust Code, then there should be little confusion as to the proper procedure for bringing an action against a trustee for breach of trust:

  • No Pending Litigation: If there is no pending litigation against the trustee, then it will be necessary to file a lawsuit against the trustee for breach of trust. §736.0201(1), F.S.
  • Pending Litigation: If there is pending litigation against the trustee, the beneficiary should file an amended complaint or supplemental pleading with court approval setting forth the breach of trust claim(s) which have happened since the date of the pleading sought to be supplemented. See Fla. R. Civ. P. 1.190(a) and (d).

PLEADING v. OBJECTION: There is some disagreement among attorneys as to whether they are limited to the above procedure on economic grounds given the fact that there may be multiple subsequent claims against the trustee for breach of trust in subsequent accountings. The disagreement lies in the conflicting definition of the term “proceeding”. In contrast with Ch. 95, a “proceeding” is defined by case law as: ●A particular step or series of steps in the enforcement, adjudication, or administration of rights, remedies, laws, or regulations. ●Both the entire course of action at law or suit in equity; or any of the possible steps in an action. ●Anything that occurs within a case is a proceeding. ●The steps within the case and to any sub-action within the case that may raise a disputed or litigated matter. See Velde v. Velde, 867 So. 2d 501(Fla. 4th DCA 2004); Raymond James Fin. Servs. v. Phillips, 126 So. 3d 186 (Fla. 2013). As a result, some attorneys merely file an objection to the trust accounting to stop the 6 month statute of limitations from running on their client’s breach of trust claim(s). Arguably, if the objection is filed with court authorization, it could be viewed as a supplemental pleading. But see Garcia v. M & T Mortg. Corp., 980 So. 2d 538 (Fla. 4th DCA 2008)(a motion seeking additional damages must be in the form of an amended complaint or supplemental pleading). Regardless, if the plaintiff wants to prohibit the trustee from using trust assets to pay his litigation fees/costs, he must file his breach of trust claim in a “filed pleading”. See §736.0802(10)(b), F.S.

Given the risk of blowing the 6 month statute of limitations, you should file an amended complaint or supplemental pleading for breach of trust with court approval and not merely file an objection to the trust accounting to stop the 6 month statute of limitations from running.