Can a Florida probate court reduce the amount of interest owed when it is outlined in apromissory note? Do Florida probate statutes allow for judicial discretion in this type of case? Can a probate court use equity to remedy a situation they think is unfair?
Check out what the Fourth District Court of Appeals had to say about this issue in a recent March 30,2016 case.
Oreal v. Kwartin, P.A.
- Here, Steven Kwartin P.A.(firm) and it’s principal each filed a claim against Oreal’s estate based on a promissory note.
- What is a promissory note?
- A promissory note is a signed, written promise to pay a stated amount to a party by a specific date or on demand.
- Here, a principal amount was owed plus accrued interest.
- How much accrued interest?
- There were terms in the promissory note stating the note’s interest rate and default interest rate.
- The court directed the Florida estate to pay the note’s principal.
- However, “the court exercised its “equitable powers” and reserved the right to determine whether a setoff against the firm’s interest component was appropriate due to any unexcused and excessive delay exercised by the firm in attempting to perfect and collect its valid unpaid claim.”
- The estate filed a motion for equitable setoff and the probate court granted the estate’s motion.
- What does this mean?
- The court decided that the amount of interest owed should be less than what was outlined in the promissory note because the firm had a duty to prevent the accumulation of interest.
- The Fourth DCA had a problem with this.
- Can a probate court use equity to remedy a sitation that it thinks is unfair?
- No!
- The Fourth DCA said that the court did not have the discretion to impose a setoff in regards to the interest owed simply because they thought the firm should have asked for their money sooner.
- Therefore, as indicated in Florida Statute 733.705(9), the firm was entitled to the entire amount of interest as stated in the promissory note.
Want to learn more? Check out the entire case by clicking here.
Want to know more about Florida probate litigation? Consider these free resources:
- Read the Florida Courts webpage on the probate process:http://www.flcourts.org/resources-and-services/family-courts/family-law-self-help-information/probate.stml
- Read the Florida Probate Code:http://www.floridabar.org/tfb/TFBLegalRes.nsf/
- Read the Florida Probate Rules:https://www.floridabar.org/tfb/TFBLegalRes.nsf/
- Here are the Rules Regulating the Florida Bar if you are interested in hiring a Florida probate litigation lawyer and want to know more about our ethical rules and our rules of conduct:http://www.floridabar.org/divexe/rrtfb.nsf/WContents?OpenView
- Here are the Florida Rules of Civil Procedure:http://www.floridabar.org/tfb/TFBLegalRes.nsf/
- Watch free Florida Trust, Probate & Guardianship videos, which include important topics of Florida estate, guardianship, attorneys fees, & trust law.
- There is no cost, no sign up, no one will ask you for your email address to see these dozens of free Florida probate videos:http://www.pankauskilawfirm.
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