Hill v. HCA Health Services of Florida, Inc. 582 So. 2d 701

ALLEN, Judge.

The personal representative of the estate of Norma Jean Hill appeals from an order denying his motion to strike the appellee creditor’s claim, and granting the appellee’s motion under Rule 5.495, Florida Probate Rules, to extend the time for filing the claim. The appellant argues (1) that Rule 5.495 is improperly being given a retroactive application; and (2) that even if Rule 5.495 is applicable, the appellee failed to plead and prove sufficient facts to entitle it to relief. Because the “operative event” for the purpose of applying Rule 5.495 occurred after the effective date of the rule, we determine that the rule is applicable. However, upon review of the appel-lee’s Rule 5.495 petition and the transcript of the hearing thereupon, we conclude that the appellee has failed to sufficiently plead and prove an entitlement to relief under the rule. Accordingly, we reverse the order under review.

To set the facts of this case in proper context, some background information should first be provided. On April 19, 1988, the United States Supreme Court decided Tulsa Prof. Collection Servs., Inc. v. Pope, 485 U.S. 478, 108 S.Ct. 1340, 99 L.Ed.2d 565 (1988). There, the court addressed an Oklahoma probate statute which, similar to section 733.702, Florida Statutes (1987), provided that the claims of estate creditors would be barred unless filed within the time specified in a newspa*702per publication. The court held that estate creditors who are known to or reasonably ascertainable by a decedent’s personal representative have a due process right to actual notice of the pendency of probate proceedings, and that proof of newspaper publication alone will not bar the claims of such creditors.

To address the impact of the Pope decision, the Supreme Court of Florida requested the Probate and Guardianship Rules Committee of The Florida Bar and the Probate and Guardianship Rules Committee of the Real Property, Probate and Trust Law Section, acting as a joint committee, to suggest appropriate changes to the Florida Probate Rules. The committee responded by proposing an amended Rule 5.240 and the addition of Rule 5.495, which were approved by the court and became effective on January 1, 1989. In re Rules of Probate and Guardianship Procedure, 537 So.2d 500 (Fla.1988). Rule 5.495 is titled “Petition To Extend Time For Filing Claim” and provides as follows:

If a creditor of the estate files a petition to extend the time for filing a claim, after the time allowed by law for presenting claims, or a petition to require payment of claim, which claim was filed after the time allowed by law ' for presenting claims, and the petition alleges that the creditor was known to or reasonably ascertainable by the personal representative, but was not served with a copy of the notice of administration, such petition shall specifically allege facts showing that such creditor was known to or reasonably ascertainable by the personal representative. It shall also include a verified statement alleging either (i) the creditor did not have actual knowledge of those matters relating to creditors’ claims required to be set forth in the notice of administration during the period allowed for filing claims against the estate, or (ii) facts sufficient to obtain relief under Rule of Civil Procedure 1.540(b).

The committee note indicates that the rule is designed to provide a procedure for the filing of claims by estate creditors who have missed the filing deadline imposed by section 733.702.1

We now turn to the specific facts of the case before us. The decedent died on September 1, 1988, and the notice of administration was published for the first time on September 28, 1988. The section 733.702, Florida Statutes (1987), three-month period within which estate creditors could file their claims expired on December 28, 1988, but the appellee did not file a claim until January 13,1989. The appellant responded by moving to strike the claim, because it had not been filed within the time prescribed by section 733.702.

Then, specifically in reliance upon Rule 5.495, the appellee filed its petition to extend the time for filing its claim. The appellee alleged that the appellant knew it to be an estate creditor, but failed to take any steps to notify the appellee of the administration of the estate, other than to publish notice of administration. The ap-pellee further alleged that one of its employees had prepared a statement of claim on October 6, 1988, but that the claim had not been forwarded to the clerk of the circuit court for filing. The petition offered no explanation for the failure to timely file the claim. Rather, it indicated that, for unknown reasons, the original was still unmailed and in the appellee’s possession on February 2, 1989. Nevertheless, the appellee alleged that its failure to file the *703claim by December 28, 1988, was a result of mistake or excusable neglect.

The appellant responded with an admission that he had known the appellee to be an estate creditor, and that he had only given notice of the administration of the estate through newspaper publication. But the appellant denied the assertion that the appellee’s failure to file its claim prior to December 28, 1988, was a result of mistake or excusable neglect.

At the hearing on the appellee’s petition, and again in the appellee’s post-hearing memorandum, counsel for the appellee indicated that the appellee was relying upon its assertion of mistake or excusable neglect of a type sufficient for the granting of relief under Rule 1.540(b), Florida Rules of Civil Procedure, rather than any claim of an absence of timely, actual knowledge of the administration of the estate.

Although the appellee offered no testimony or other evidence in support of its petition, the trial court denied the appellant’s motion to strike the claim, and granted the appellee’s petition, determining that “[u]nder Rule 5.495 FPR and case law developed under Rule 1.540(b) Fla.R.Civ.P., the creditor has established sufficient proof to be entitled to relief under its provisions.”

The appellant first argues that the trial court has improperly given Rule 5.495 a retroactive application. We disagree.

Florida rules of court have long been established as having prospective application only, absent an express statement to the contrary. See, e.g., Poyntz v. Reynolds, 37 Fla. 533, 19 So. 649 (1896). In adopting Rule 5.495, the supreme court made no provision for retroactive application, so the rule applies only to such proceedings as are commenced after the rule’s January 1, 1989 effective date. Accordingly, the issue before us is the determination of the relevant “proceeding” or, otherwise stated, the “operative event” to which the rule is to be applied.

In Zabrani v. Cowart, 502 So.2d 1257 (Fla. 3d DCA 1986) (en banc), approved, 506 So.2d 1035 (Fla.1987), the court was faced with a similar question. Zabrani had been taken into custody in July of 1984 and, in 1985, moved for discharge under Rule 3.191, Florida Rules of Criminal Procedure, the speedy trial rule. The issue was whether the “conditional” discharge provisions of the rule as amended on January 1, 1985, or the earlier “automatic” discharge provisions of the rule were applicable. The en banc court held that the “operative event” for the purpose of applying the rule was the filing of the motion for discharge, and, since the motion was filed after January 1, 1985, the 1985 rule was applicable. The court reasoned that “[s]ince there was plainly no ‘right to discharge’ until the defendant moved for it, the consequences of filing that motion must be determined by the rule on the date it was made.” Zabrani v. Cowart, 502 So.2d at 1259. The supreme court specifically approved and adopted this reasoning in Bloom v. McKnight, 502 So.2d 422 (Fla.1987). For a similar application of this same rationale, see State v. Greenberg, 564 So.2d 1176 (Fla. 3d DCA 1990), rev. denied, 576 So .2d 287 (Fla.1991).

In accordance with the reasoning in Za-brani, we believe the operative event for the purpose of applying Rule 5.495 occurred during 1989. Just as a prisoner has no right to a judicial determination of his entitlement to a speedy trial discharge until such time as he files his motion for discharge, an estate creditor has no right to a judicial determination of the merits of its claim against an estate until the creditor files an appropriate pleading asserting the claim. Just as the speedy trial rule in effect at the time a prisoner files his motion for discharge is applicable to his claimed right to discharge, the pertinent probate rules in effect when a creditor files its pleading asserting its claim are applicable to the creditor’s claim. Here, no pleading asserting the appellee creditor’s claim was filed until January of 1989, when Rule 5.495 was in effect. Since the operative event for the purpose of applying the rule occurred after the rule’s effective date, the rule applies to the appellee’s claim.

*704Next, the appellant argues that, even if Rule 5.495 is applicable to the appel-lee’s claim, the appellee failed to plead and prove sufficient facts to entitle it to relief under the rule. We must agree with this argument. The rule unmistakably requires pleading and proof either (1) that the creditor lacked timely, actual knowledge of “those matters relating to creditors’ claims required to be set forth in the notice of administration,” or of (2) “facts sufficient to obtain relief under Rule of Civil Procedure 1.540(b).” Our review of the record reveals that the appellee satisfied neither of these alternative requirements.

Neither the appellee’s petition nor its post-hearing memorandum suggest that the appellee lacked timely, actual knowledge of all information necessary for it to have filed its claim within the time allowed by section 738.702. No evidence suggesting any lack of such knowledge was offered at the hearing on the petition. In fact, at the hearing, the appellee’s counsel said:

The problem is, is that we had actual notice. Our contention is that even if we had actual notice, we should be allowed up and given some relief for excusable neglect.

Without question, there was no basis for the trial court to have found that the appel-lee either pleaded or proved an absence of timely, actual knowledge.2

While the appellee’s petition asserted that its oversight in failing to timely file its claim was due to mistake or excusable neglect, the appellee offered no explanation for the oversight. Accordingly, it is apparent that no mistake or excusable neglect of a type which would entitle a party to relief under Rule 1.540, Florida Rules of Civil Procedure, was plead or proved by the ap-pellee. See, e.g., Goldome v. Davis, 567 So.2d 909 (Fla. 2d DCA 1990); Shipp Corp., Inc. v. Charpilloz, 414 So.2d 1122 (Fla. 2d DCA 1982); Vanguard Group, Inc. v. Vanguard Sec., Inc., 409 So.2d 1219 (Fla. 3d DCA 1982); John Crescent, Inc. v. Schwartz, 382 So.2d 383 (Fla. 4th DCA 1980); and committee note to Rule 1.540 (appearing at footnote 1, supra) (“inadvertence” not sufficient basis for late filing of claim).

Because the appellee failed to plead and prove an entitlement to relief under Rule 5.495, Florida Probate Rules, the order under review is reversed, and this cause is remanded to the trial court for entry of an order granting the appellant’s motion to strike the claim and denying the appellee’s motion to extend the time for filing its claim.3

JOANOS, J., concurs.

BOOTH, J., dissents with written opinion.

BOOTH, Judge,

dissenting:

I respectfully disagree with the majority view that Rule 5.495, Florida Rules of Probate and Guardianship Procedure, applies *705and precludes the trial court from granting an extension for filing the claim. I am also concerned that the majority implicitly equates “actual knowledge” with “actual notice,” the latter being required to be served by one using state action to cut off protected rights. Tulsa Professional Collection Services, Inc. v. Pope, 485 U.S. 478, 108 S.Ct. 1340, 99 L.Ed.2d 565 (1988).

The Pope case holds unconstitutional an Oklahoma statute of nonclaim similar to Florida’s on the ground that the notice by publication which the statute required denied due process to known creditors. Section 733.702, Florida Statutes, is thus invalid as a basis for terminating the claim of a known creditor. Pope has been applied to pending cases in Florida. See, e.g., Estate of Jara, 526 So.2d 745 (Fla. 2d DCA 1988); and see Estate of Kopely, 159 Ariz. 391, 767 P.2d 1181, 1183 and n. 3 (Ct.App.1989).

On September 1,1988, decedent Hill died. First publication of notice to creditors was September 28, 1988. The three-month non-claim period expired December 28, 1988, without the claim of appellee being filed. Under Pope, supra, these proceedings clearly were without effect as to appellee’s claim, since published notice was ineffective to commence the running of the limitation period. See In re Estate of Barnett, 549 So.2d 1166 (Fla. 4th DCA 1989); Estate of Jara, supra.

Effective January 1, 1989, Rule 5.495 was adopted without expressly providing for a retroactive effect. In the related “Pope ” amendment to Rule 5.240, the committee note provides as follows:4

1988 Revision: The obligation to mail notice of administration to all known or reasonably ascertainable creditors has been added to comply with the dictates of Tulsa Professional Collection Services, Inc. v. Pope, [485 U.S. 478] 108 S.Ct. 1340 [99 L.Ed.2d 565] (1988).

This rule does not require sending notice of administration to creditors in estates where the time for filing claims has expired before the effective date of this rule. However, no opinion is offered whether such claims are barred by the provisions of F.S. 733.702.

On the date the amended rule became effective, the time for filing under Section 733.702, Florida Statutes, had expired. However, appellee’s claim was not barred. No notice had been served on appellee to commence the running of any nonclaim period. There was no statutory nonclaim period applicable. “[C]reditors who are entitled to notice but do not receive it should be left in the same position as they were in before the death.” M. Reutlinger, State Action, Due Process, and the New Non-claim Statutes, 24 Real Property Probate & Trust Journal 433, 466 (Winter 1990).

I suggest that the majority’s view that the filing of the claim is the operative event, thereby allowing the new rule to operate “prospectively,” is untenable from either a constitutional or practical point of view. Rule 5.495 cannot apply to pending proceedings to cut off the protected property interest of a known creditor. The rule itself does not purport to apply to claims pending prior to its effective date, and it should not be so interpreted. Validity vel non of the new rule as applied prospectively to proceedings commenced after its effective date is not before us.

Even were we to “apply” the new rules, however, affirmance is still required for any of the following reasons:

a. Appellee’s claim was not time-barred when the new rules came into effect. Appellant did not at any time give notice as required by new Rule 5.240; therefore, ap-pellee was not required to comply with new Rule 5.495 and obtain an extension in order to pursue its claim.

b. The trial court found that appellee did not know the critical dates of the non-claim period. Appellee’s “actual knowledge” was therefore incomplete and not equivalent to the notice appellant was required to serve. Falender, “Notice to Creditors,” 63 N.C.Law Rev. 659, 701 at n. 237, 703-704 (1990). Under the rule, an extension was properly allowed on that basis.

*706c. The trial court’s discretion was properly exercised in finding excusable neglect in view of the state of the law with no valid statutory procedure and uncertainty as to applicability of the new rules.

Appellant equates “notice” and “knowledge.” However, review of the decision of the United States Supreme Court in Pope, supra, and cases on which that case is based,5 establish that the requirements of actual notice are not obviated by the actual knowledge of one entitled to receive the notice. Service of the notice is jurisdictional.

The creditors in Mennonite Board of Missions, Inc. v. Adams, 462 U.S. 791, 103 S.Ct. 2706, 77 L.Ed.2d 180 (1983), Continental Insurance Company v. Moseley, 463 U.S. 1202, 103 S.Ct. 3530, 77 L.Ed.2d 1383 (1984), and Pope, supra, had actual knowledge of facts and proceedings affecting their rights. Nonetheless, the United States Supreme Court did not excuse the failure to give actual notice. Those cases, therefore, support the general rule that knowledge is not a substitute for notice required to be furnished by the party seeking to affect protected rights.

In Pope, the creditor was the collection agency for the hospital where the decedent had received his last medical services. The Supreme Court of Oklahoma (733 P.2d 396, 399 (1986)) rejected out-of-hand the lower state court’s ruling that excused the estate from providing actual notice to the hospital because the hospital made no showing that it did not have actual knowledge of the pendency of the estate.6 This ruling was not reversed by the United States Supreme Court’s remand.

The United States Supreme Court, noting conflict between the Oklahoma Supreme Court decision in Pope7 and the Nevada Supreme Court decision in Continental Insurance Company v. Moseley, 100 Nev. 337, 683 P.2d 20 (1984), accepted jurisdiction and reversed and remanded, holding (485 U.S. at 486-488, 108 S.Ct. at 1345-1347): (1) that the creditors’s unsecured claim was an “intangible interest in property protected by the Fourteenth Amendment from deprivation by state action”; (2) that “state action” is involved in the operation of the Oklahoma nonclaim statute because, unlike a self-executing statute of limitations, the nonclaim statute requires the involvement of the probate court to activate the statutory time bar; and (3) that the protected property interest is adversely affected, because untimely claims are forever barred.

In Pope, supra, the United States Supreme Court remanded for determination as to whether the creditor’s claim was known or ascertainable by appellee’s reasonably diligent efforts, and concluded (485 U.S. at 491, 108 S.Ct. at 1348):

[I]f appellant’s identity as a creditor was known or “reasonably ascertainable,” then the Due Process Clause requires that appellant be given “[njotice by mail or other means as certain to ensure actu*707al notice.” Mennonite, supra, at 800, 103 S.Ct., at 2712 [8]

The determination in Pope, supra, that statutes such as Oklahoma’s are jurisdictional statutes of nonclaim9 rather than statutes of limitations, brings into operation established law governing notice. The general rule is that a party entitled to receive actual notice of impending state action is not precluded from challenging the statute and the proceedings by the fact that the party has actual knowledge acquired informally or extrajudicially, as stated in 16A American Jurisprudence 2d, Constitutional Law at Section 830, as follows: 10

Actual knowledge cannot operate as a substitute for notice required by due process of law; hence, extraofficial or casual notice is not sufficient. The statute itself must, to be constitutional, specifically require notice.

Due process notice requirements are not dependent on the knowledge and/or sophistication of the party entitled to receive the notice. On the contrary, once the court has established that there is state action affecting a constitutionally-protected interest, the notice required under due process requirements is the same for all persons having that protected interest.

In Mennonite Board of Missions, Inc. v. Adams, supra, the United States Supreme Court held invalid the constructive notice provisions of a tax sale statute as to a mortgagee of the affected property. The state appellate court11 had upheld the statutory notice based in part upon an earlier case holding notice by publication was sufficient as to sophisticated creditors. In reversing, the United States Supreme Court held:12

Personal service or mailed notice is required even though sophisticated creditors have means at their disposal to discover whether property taxes have not been paid and whether tax sale proceedings are therefore likely to be initiated. In the first place, a mortgage need not involve a complex commercial transaction among knowledgeable parties, and it may well be the least sophisticated creditor whose security interest is threatened by a tax sale. More importantly, a party’s ability to take steps to safeguard its interests does not relieve the State of its constitutional obligation.

It is important to note that the Illinois Supreme Court in Mennonite rejected the mortgagor’s other argument, that the creditor’s actual knowledge eliminated the need for notice, and held that knowledge obtained “by means other than notice given under the ... statutes is not pertinent.” 13

*708In Continental Insurance Company v. Moseley, 98 Nev. 476, 653 P.2d 158 (1982), the Nevada Supreme Court, affirming the lower state court’s dismissal of a late-filed claim, held that Nevada’s notice-by-publication statute satisfied due process requirements and, in addition, that the creditor had actual knowledge of the decedent’s death. The United States Supreme Court granted certiorari and remanded [463 U.S. 1202, 103 S.Ct. 3530, 77 L.Ed.2d 1383 (1984) ], directing that the Nevada Supreme Court reconsider its holding in light of Mennonite, supra. On remand, the Supreme Court of Nevada reversed the dismissal of the claim and held that notice by publication was insufficient.14 Thus, the Pope, Mennonite, and Moseley cases required notice be served despite the creditor’s actual knowledge of the critical events.

Further, it is clear under Florida law that there must be strict and full compliance with due process notice requirements. In Henry v. Department of Administration, Division of Retirement, 431 So.2d 677 (Fla. 1st DCA 1983), this court held that notice mailed to the affected party by the agency that referred generally to rights under Chapter 120 but did not expressly inform the party of his right to request a hearing and the time limits for doing so, was inadequate to “trigger” commencement of the statutory period within which to seek a hearing, holding in part (431 So.2d at 431):

The requirements for such notice are objective rather than subjective in nature, and apply regardless of actual or presumed notice of agency action, as stated in Wahlquist [v. School Board of Liberty County,] 423 So.2d [471], at page 473:

This court has recently reaffirmed the rule that actual notice of agency action which does not inform the affected party of his right to request a hearing and the time limits for doing so, is inadequate to “trigger” the commencement of the administrative process.

Thus, the sufficiency of the notice is not affected by the actual knowledge of the recipient. Appellee’s contention that, because appellant is an attorney, a different standard applies in determining sufficiency of notice is also devoid of merit.

Accord, Guerra v. State, Department of Labor, 427 So.2d 1098 (Fla. 3d DCA 1983); Sterman v. Florida State University Board of Regents, 414 So.2d 1102, 1104 (Fla. 1st DCA 1982), and City of St. Cloud v. Department of Environmental Regulation, 490 So.2d 1356, 1358 (Fla. 5th DCA 1986).

The content of a notice satisfying due process requirements is stated in Martin v. Dugger, 686 F.Supp. 1523, 1562 (S.D.Fla.1988), as follows:

At the very least, due process requires that notice be sufficient to inform someone of the pendency of an action. See Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 70 S.Ct. 652, 94 L.Ed. 865 (1950). This alone, however, may not be sufficient, for notice must be sufficient to provide a person with a meaningful opportunity to be heard, [citations omitted] [T]he particular notice that is required is dependent upon the nature of the proceeding, [citations omitted]

For this reason, the particular type of notice required differs from one situation to the next. In the bankruptcy context, the mere giving of notice that informs a creditor of the pendency of the action is insufficient. Under the bankruptcy law, a creditor has a set time in which to file a claim. The sending of notice without informing the creditor of the *709 time frame in which to file a claim violates fundamental fairness, [emphasis added]

Here, appellee was not given notice of the “time frame” within which to file its claim. Appellant did not serve actual notice on appellee, and appellee’s knowledge, acquired informally, was incomplete, being even less than the information prescribed to be given under Sections 733.701 and 733.212, Florida Statutes, for constructive notice by publication. Assuming that a party could waive his rights to notice required by due process, appellant has not asserted waiver and none is inferable on the facts here.

The judgment below should be affirmed.