In the past few years, the strangest things have started appearing in appellate decisions: images. That has been seen as so revolutionary that it has been widely covered in the legal press, with 7th Circuit opinions authored by Judge Richard Posner (as is often the case) drawing the most attention. The question is: why are judges now inserting images into their opinions?

The answer may be that astute judges are responding to the changing environment in which their opinions are being read. Appellate court opinions have been accessible online for years, and they are now more commonly read on “screens” — computers, iPads/tablets, and smartphones — than in books. And studies have shown that we read differently when looking at a screen than when looking at printed text on paper.

For example, here’s how scientists say our eyes track the data on a webpage:

http://www.usability.gov/images/fpattern.JPG

Notice the concentration of red on the left hand border of the page created by the eye searching down the page for its structure. Note also how the eye tends to skip around.

Astute legal writers — especially appellate lawyers — would be wise to take note of how different the reading experience is on a screen, and to take it into account when drafting court submissions. That point was persuasively made during a presentation at the Florida Conference of District Court of Appeal Judges last fall (which I and other members of the Florida Bar’s Appellate Practice Section were fortunate enough to attend).

Judges (and their clerks) are increasingly reading appellate briefs and other court submissions on computer screens, and when travelling, on iPads, Kindles and other e-readers, or on smartphones. (An informal survey during another presentation at the conference revealed Florida appellate judges to be tech-savvy and partial to iPhones and iPads, although Android phones were also represented).

The trend toward screen-reading will only increase now that e-filing is replacing paper filing.

In order for an appellate brief or any piece of legal writing to be persuasive, it must command the reader’s attention. And to get and keep a reader’s attention when he or she is reading on a screen, attorneys need to adopt the format of their documents to fit the environment.

How? In much the same way as one makes a webpage easy to read and engaging. Here are some suggestions:

  • Add spacing — Text is easier to read when it is surrounded by white space. Increase margins.  Large block paragraphs extending from margin to margin are a relic of book reading. They are difficult to digest when read on a screen, particularly when read on a Kindle or similar e-reader.
  • Shorten the paragraphs. Not only do shorter paragraphs make the document more palatable to the eye (and increase white space), but they also account for the attention span issues that have been engendered by the digital age.
  • Use headings more liberally. Effective headings are alot like soundbites — they grab the reader’s attention and drive home the point quickly before that attention is lost. Hopefully, they also encourage the reader to continue to read and pay attention.
  • Insert document bookmarks. If you’ve opened a .pdf of a recent Florida Supreme Court opinion, you may have noticed a menu bar on the left hand side mapping out the sections of the opinion. Document bookmarks help the reader to get a feel for the overall structure of the document. They also help the reader to easily navigate between sections and arguments. When the reader must scroll up and down the screen to find sections, a traditional table of contents is a much less helpful roadmap than a bookmarks bar, where the reader can click right on the section he or she is looking for.

And finally there’s the most radical idea: illustration with images. This practice is the most obvious concession to the effect the internet and it remains relatively unorthodox and somewhat controversial. So a fair amount of tact and judgment is needed.

But when used appropriately, tactfully, and sparingly, images can be highly effective. (If the picture is worth 1000 words, it can also help to make the brief shorter, which judges always appreciate). If nothing else, images command attention. Just ask Judge Posner. 

In its second look at the dispute in Siegel v. JP Morgan Chase Bank, No. 4D09-699 (released on October 19, 2011) Florida’s Fourth District Court of Appeal gave personal representatives and corporate trustees plenty of reason to be cautious about invading the principal of a trust during the settlor’s lifetime.  The 4th DCA again reversed the trial court’s decision to dismiss the case and strongly implied that the trustee and personal representative exceeded their powers and breached fiduciary duties in depleting the principal of the trust by “lavishing gifts on third parties” while the settlor was incapacitated prior to her death.

Background:

Dorothy Rautbord, the Settlor, appointed JP Morgan Chase as trustee of her trust, allowing it to make payments from principal and income as it deemed appropriate for her “support, maintenance, health, comfort or general welfare.” The remainder was to go to her surviving children, including her daughter (Novack) and sons (the Siegels). The trust document reserved to Rautbord the power of amendment, modification and revocation of the trust, and excluded anyone else from doing so, even if acting under a power of attorney.

Rautbord also executed a power of attorney appointing Novack as her attorney in fact, giving her, among other things, including the power to make gifts so long as they were consistent with her giving history and did not incur gift taxes. Prior to her death in 2002, Rautbord developed dementia.

While her mother was incapacitated, Novack, acting as her attorney in fact, withdrew large significant amounts of the principal in reliance on letters purporting to revoke portions of the trust, and made gifts to third parties. JP Morgan, the trustee, approved those gifts.

In a prior appeal, Siegel v. Novak, 920 So. 2d 89 (Fla. 4th DCA 2006), the 4th DCA had held that the sons had standing to challenge the propriety of Novack’s actions even though they were done while their mother was still alive, because her actions affected the corpus of the trust in which they had a direct interest after their mother’s death.

A Beneficiary’s Standing to Challenge a Trustee’s Conduct is a Separate Question From the Propriety of the Trustee’s Conduct

On remand from the first appeal, the trial court erred in taking up the issue of standing (again) by examining whether Novack’s withdrawals were within her discretionary powers. The resolution of that issue would resolve who was entitled to ultimately prevail on the merits, not whether the Siegels had a right to ask the court to decide the merits in the first instance:

The issue of whether the withdrawals and expenses were appropriate and authorized was not a preliminary standing question but the entire substance of the proceeding, i.e., whether the trustee and attorney-in-fact breached their fiduciary duties. The trial court incorrectly treated the question of whether the withdrawals were appropriate and authorized as a question of standing.

Thus, standing should have been considered a settled question on remand, as the 4th DCA had already found that the Siegels had standing to assert that their interests as trust beneficiaries were impaired by Novack and JP Morgan’s alleged improprieties.

Invading Trust Principal for Third Party Gifts Can Amount to Partial Revocation

The 4th DCA went on to explain that the trial court’s interpretation of the trust documents was wrong, and that the beneficiaries’ claims that the trustee and Novack breached their fiduciary duties could well be meritorious.  It held that the trustee had no right to make gifts in its own right, and that the attorney-in-fact had a very limited ability to make gifts.

JP Morgan had no right to make gifts to third parties as such. Its power to dip into trust principal was limited to spending for the Settlor’s maintenance and welfare. The court doubted that gifts to third parties could ever be justified as undertaken “for the support, maintenance, health, comfort, or general welfare of the Settlor.” Even if they could, the trustee would need to justify them as such through an evidentiary showing.

Regarding the personal representative, Novack’s power of attorney empowered her to make gifts on Rautbord’s behalf, but only if they were “reasonably consistent with any pattern of [Rautbord’s] giving or with [her] estate plan” or did “not exceed the annual exclusion available from time to time for federal gift tax purposes.”  But the Siegels asserted that the gifts did not comply with these limitations, and the trial court could not conclude that they were proper without an evidentiary record on these points.

The court also found that Novack’s power to make gifts under the PoA did not extend to using trust principal for that purpose. The trust document prohibited anyone other than the Settlor (excluding an attorney-in-fact acting on her behalf) from amending, modifying, or revoking the trust.

This prohibition, combined with the PoA’s statement that the attorney-in-fact was not being given the power “[t]o amend, modify or revoke, in whole or in part, or withdraw any of the principal of, any trust over which I have reserved or have been granted such power,” expressly prohibited Novack from invading the trust principal for any purpose. Under the facts of the case, Novack’s withdrawal of principal was essentially the same thing as partially revoking the trust, the court explained.

If Novack and JP Morgan exceeded their powers in using trust principal to make gifts to third parties, they can be held liable for breaching fiduciary duties to the trust’s beneficiaries. And  while the 4th DCA’s decision officially leaves that issue open for trial, it strongly suggests that that fiduciary duties were breached, commenting that if “the gifts were made from substantial invasion of principal,” that fact “at least suggests” that Novack “breached her fiduciary duty.”

The lesson here is that, at least under similar facts, fiduciaries’ distributions of trust principal during the settlor’s lifetime are definitely open to challenge.  And such challenges should not be lightly dismissed based on fiduciaries’ broad discretionary powers.

The Florida Supreme Court has acted quickly in response to the Florida Legislature’s June 2011 amendments to Florida’s Probate Code, which include some major departures from existing law.  Because the Code amendments also became effective as soon as the Governor signed them — even applying retroactively to pending cases — the Court immediately adopted a fast-track proposal by the Probate Rules Committee.

Florida lawyers that represent clients in probate cases would be wise to become familiar with the amended Rules.  To that end, here’s a cheat sheet of the Code amendments and corresponding Probate Rule changes (as well as changes to the Rules that weren’t prompted by legislative action).

Statutory Changes: Reformation.

The Code amendments allow two new types of petitions to reform a will.

The first and most drastic change, codified at Florida Statutes Section 732.615, allows for reformation of a will even if its language is unambiguous, where a petitioner proves through clear and convincing evidence that a provision was premised on a mistake of fact or law and is contrary to the intent of the testator.  Check out Craig Dreyer‘s post on Clark Skatoff‘s Florida Probate, Trust & Estate Blog for a more detailed explanation of this amendment.

The second, codified at Florida Statutes Section 732.616, allows for modification of the terms of a will “to achieve the testator’s tax objectives” so long as doing so “is not contrary to the testator’s probable intent.”    

Corresponding Rule Changes:  Adversary Proceeding Rules apply to reformation cases and cases involving pretermitted shares, but not to fee awards.

Rule 5.025 was amended to make all actions for reformation Adversary Proceedings to which Rule 5.025, and the Florida Rules of Civil Procedure, apply.  Although there were no corresponding statutory changes, this Rule was also amended to require that actions regarding pretermitted shares will now be treated as Adversary Proceedings. 

Rule 5.025(d)(2) was also amended to clarify that in all adversary proceedings, fee and cost awards are governed by the Probate Rules and decisions, not the Rules of Civil Procedure. 

Statutory Changes:  The Fiduciary Exception to the Attorney Client Privilege No Longer Applies.

In Florida, as elsewhere, the fiduciary exception to the attorney-client privilege had allowed beneficiaries of wills and trusts to obtain documents in discovery that reflected legal advice given to their fiduciaries.  That is because any legal advice that a fiduciary obtains has traditionally been considered to have been obtained for the benefit of the persons for whom the person was acting as a fiduciary (e.g., the beneficiaries of a trust when a trustee obtained legal advice regarding administration of the trust.)

But the legislature overruled that common law exception in the newly created Florida Statutes Section 90.5021, which makes communications between an attorney and a fiduciary “privileged and protected from disclosure under s. 90.502 to the same extent as if the client were not acting as a fiduciary.”  At the same time, the legislature amended Florida Statutes Section 733.212(2)(b) to require that Notices of Adminstration include a statement informing beneficiaries that “that the fiduciary lawyer-client privilege in s. 90.5021 applies with respect to the personal representative and any attorney employed by the personal representative.”

[Side note: Is it just me, or does giving this notice seem like a waste of ink?  If the beneficiary has a lawyer, the lawyer should already know that the fiduciary exception has been abolished (especially if he/she reads this blog!) and if the beneficiary does not have a lawyer, how likely is he/she to even know that the fiduciary exception ever existed, much less to understand the implication of its abolishment?]

Corresponding Rule Change:

The only change resulting from these amendments to the Probate Code is a minor change to Rule 5.240, which implements the Notice of Administration requirements of Section 733.212.  Rule 5.240(b)(2) was amended so that, consistent with the amendment to Section 733.212(2)(b), it now requires that Notices of Administration include a statement about the fiduciary’s communications with counsel being privileged.

 

That should cover it.  Note that the Rules amendments may be further revised based on comments submitted to the Court, which were not solicited prior to the changes becoming effective due to their fast track nature, but are being accepted until November 28, 2011.  However, because the statutory amendments aren’t going away, the corresponding Rules changes aren’t likely to be revised much either. 

Statutory changes of this magnitude, especially when made applicable to pending cases, usually result in more than a little confusion and much litigation over issues the legislature never even anticipated.  We can look forward to some interesting probate litigation and a good deal of uncertainty, at least until the appellate courts sort out these amendments.    

So much for easing back to work after the long weekend.  At least for judges in the First District and Fourth District Court of Appeal. 

As the Miami Herald reports, the 1st DCA is hearing consolidated oral argument this afternoon in Florida Gaming Centers, Inc. v. Florida Department of Business and Professional Regulation, and Calder Race Course, Inc. v. Florida Department of Business and Professional Regulation, two cases dealing with the effect of the 2004 amendment to the Florida Constitution that authorized certain existing parimutuel facilities in Broward and Miami-Dade counties (subject to voter approval in a county-wide referendum) to install slot machines.  Argument is set to begin at 2:00 PM in Courtroom One, before a panel consisting of Judges Davis, Van Nortwick, and Clark.  You can watch the argument live here.  If you miss it live, audio and video recordings of the argument should be available in the 1st DCA’s archives by no later than tomorrow morning.

[UPDATE: Here are some more details after watching the oral argument.  Former Florida Supreme Court justice Raoul Cantero argued on behalf of Hialeah Park and the other appellees, with Joel Perwin and Bruce Rogow arguing on behalf of the appellants, which are competitor parimutuels.  At issue is the validity of a 2010 law authorizing slot machines at Hialeah Park, and of the license to operate slot machines that the State granted to Hialeah Park last December, in light of the 2004 Constitutional Amendment. 

The 2004 amendment authorized slot machines only for parimutuels that were in operation from 2002-2004.  Hialeah Park didn’t qualify, so in 2010 the legislature separately authorized it to operate slot machines.  But the appellants, which stand lose business to Hialeah Park, argued that the 2004 amendment prohibited the legislature from enacting the 2010 statute. 

Counsel for the appellants conceded that prior to the 2004 amendment, the legislature had the power to authorize slot machines at Hialeah Park or anywhere else, and that it could still do so for facilities in any county except Broward and Miami-Dade, where Hialeah Park is located.  They argued, however, that by approving an amendment authorizing slot machines for Broward and Miami-Dade county parimutuels that met specified criteria, the voters impliedly prohibited the legislature from ever authorizing slot machines anywhere in Broward and Miami-Dade that did not meet those criteria. 

Appellees’ counsel countered that the amendment was merely an action by the voters to authorize slot machines in certain places.  It didn’t purport to prohibit anything, and couldn’t prohibit anything.  If that had been part of the amendment’s purpose, it would have violated the prohibition on multi-subject ballot initiatives, and the ballot materials that described the proposed amendment to voters in 2004, which said nothing about prohibiting anything, would have been misleading.

Handicapping appeals is always dangerous, but I’d put my money on the appellees in this one.  The appellants’ concession about the legislature’s power to authorize slots was probably necessary based on precedent, but it made the appellants’ argument tenuous. 

If the 2004 amendment had been the type of amendment that grants the legislature the power to do something it couldn’t previously do (i.e., to authorize slots in the first instance) then the appellants would have a strong argument for saying that the authorization was limited by its terms to entities that met the amendment’s specifications.  But I don’t see the court buying the argument that even though the legislature generally can authorize slots, an amendment authorizing slots in certain places actually took away the legislature’s power to authorize them in other places.  It takes a pretty big logical leap from the voters saying we’re only authorizing slots in certain places to the conclusion that they were really saying we’re prohibiting the legislature from ever authorizing slots anywhere else in these counties.]                 

A different panel, consisting of Judges Thomas, Wetherell, and Swan, heard oral argument this morning in Graham v. Haridopolos, which involves another Constitutional amendment adopted by ballot initiative, the 2002 amendment creating the Florida Board of Governors to be the central governing body for Florida’s state colleges and universities.  That case has something of a political history, as Democrat Graham, the former Governor and U.S. Senator, spear-headed the drive for passage of the ballot initiative after Republican then-Governor Jeb Bush signed legislation doing away with the former central governing body, the Florida Board of Regents.  Graham is the lead plaintiff/appellant and Mike Haridopolos, Republican and Florida Senate President, is the first named defendant/appellee in the case, although Graham’s co-plaintiff/appellant is former Republican Congressman Lou Frey.  The appellants assert that the Florida Legislature lacks the power to set tuition rates for state universities and colleges, because that power is vested in the Board of Governors.  Video and audio recordings of oral argument should be available in the 1st DCA’s archives shortly. 

And the 4th DCA heard oral argument yesterday in Bronner v. AMP Services, Limited, a case that is part of a multi-national litigation saga over the respective rights of heirs and charitable entities to the proceeds of the estate of Walter Bronner, a Columbian citizen and Jewish philanthropist who amassed a large estate after fleeing the Holocaust, and the estate of his widow, Anna.  According to Adolfo Pesquera’s coverage in the Daily Business Review (reg. req.’d), the Florida litigation came about, despite the Bronners having lived in Monaco prior to their deaths, based on the Bronners’ ownership of a residence in Fort Lauderdale.  Judges Hazouri and Taylor (and a third judge) sat on the panel.     

Real electronic filing may finally make its way to Florida courts in the not-too-distant future.  But before that happens, the Florida Supreme Court wants to make sure that there isn’t too much private information in court filings for the public to access.

On June 30, 2011, the Court adopted sweeping new rules about what information can and can’t be put in the court file.  Florida litigators who want to avoid the sanctions that can be imposed for violating the new rules shouldn’t wait too long to become familiar with them — they are going into effect on October 1, 2011.

For the time being, the privacy rules don’t affect criminal cases, for the most part, but they affect all civil cases.  And the reprieve in criminal cases isn’t likely to last very long.

Here is a breakdown of the Rule changes you need to know:

Florida Rule of Judicial Administration 2.425

Rule of Judicial Administration 2.425, which was added by the Court’s June 30, 2011 Amendments, contains the overarching principles. So if you learn that Rule (and remember to apply it in whatever context you find yourself) you’ll be most of the way there. But one caution: Rule 2.425 only states a default rule — it gives way to conflicting Rules, statutes, and orders.

This chart spells out the types of information that are subject to Rule 2.425:

Restricted Info:     Can include in a filing?           Exceptions:

Child’s Name           Initials only                        Orders re: time-sharing, parental
                                                                   responsibility, or child support. 
                                                                   Any document re: child’s ownership of real property.
Birthdates               Year only                           Any party’s full birthdate in writ of attachment
                                                                   or notice to payor. Child’s full birthdate when
                                                                   necessary for jurisdiction.
Social Sec. #s              No                               General exceptions
Bank Account #s           No                               General exceptions
Credit/Debit Card #       No                               General exceptions
Charge Account #          No                               General exceptions
Drivers License #          Last 4 digits only            General exceptions
Passport #                   Last 4 digits only            General exceptions
Taxpayer ID #              Last 4 digits only            General exceptions
Employee ID #             Last 4 digits only            General exceptions
Phone #                      Last 4 digits only            General exceptions
Insurance Policy #         Last 4 digits only            General exceptions
Loan #                        Last 4 digits only            General exceptions
Patient/health care #      Last 4 digits only            General exceptions
Customer Accont #        Last 4 digits only            General exceptions
Email address               Truncated                      General exceptions
User name                   Truncated                      General exceptions
Password                     Truncated                      General exceptions
PIN #s                        Truncated                      General exceptions
Other sensitive info:      Truncated as per court order

General Exceptions:

  • Statute, Rule or Order authorizes the inclusion of the information in a filing
  • Account number is necessary to identify property at issue in a case.
  • Information that is “relevant and material to an issue before the court.” [!!! This looks to me like an exception that you could drive a truck through.  It’ll be interesting to see how courts interpret it.]
  • Records in an administrative, agency, appellate, or review proceeding.
  • Information used by the clerk or the court for file and case management purposes.
  • Criminal cases are temporarily exempt.
  • Traffic court cases are temporarily exempt.
  • Small claims cases are temporarily exempt.

A Few Other Notes:

What effect does Rule 2.425 have on parties’ ability to obtain a protective order?  According to the Rule itself, none.  But I’d be surprised if judges’ opinions on what information should be kept private were not influenced by the views of the Supreme Court as expressed in Rule 2.425.

The Rule also claims that it “does not affect the application of constitutional provisions, statutes, or rules of court regarding confidential information or access to public information.”  I’m not sure how that could be so, but again, we’ll see how courts interpret that subsection.

The Court is also amending quite a few other Rules to accomodate Rule 2.425.  Changes are being made to the Rules of Civil Procedure, particularly with regard to filing discovery documents, the Family Law Rules of Procedure, the Rules of Appellate Procedure, Probate Rules, and to a lesser extent, Criminal Procedure and Small Claims Rules, as well as several forms.

The amendments to those rules and forms are listed below. 

Continue Reading A Primer on the New Privacy Rules for Florida Court Filings