Joseph R. Biden, I I I, the Attorney General etc. v. John S. Lord, Herbert H. Peyton , 147 So. 3d 632 ( 2014 )

IN THE DISTRICT COURT OF APPEAL
FIRST DISTRICT, STATE OF FLORIDA
JOSEPH R. BIDEN, III, THE NOT FINAL UNTIL TIME EXPIRES TO
ATTORNEY GENERAL OF FILE MOTION FOR REHEARING AND
THE STATE OF DELAWARE, DISPOSITION THEREOF IF FILED
Appellant,
v. CASE NO. 1D13-5053
JOHN S. LORD, HERBERT H.
PEYTON, JOHN F. PORTER,
III, WILLIAM T. THOMPSON,
III, WINFRED L. THORNTON,
WACHOVIA BANK, N.A., AS
TRUSTEES UNDER THE LAST
WILL AND TESTAMENT AND
CODICILS THERETO OF
ALFRED I. DUPONT,
DECEASED, HARRY L.
SHORSTEIN, STATE
ATTORNEY IN AND FOR THE
FOURTH JUDICIAL CIRCUIT
OF THE STATE OF FLORIDA,
AND THE NEMOURS
FOUNDATION, A NOT-FOR-
PROFIT CORPORATION
ORGANIZED UNDER THE
LAWS OF FLORIDA,
Appellees.
_____________________________/
Opinion filed September 16, 2014.
An appeal from the Circuit Court for Duval County.
Waddell A. Wallace, Judge.
John B. Macdonald, Katherine E. Giddings, and Kristen M. Fiore of Akerman
LLP, Tallahassee, for Appellant.
Blaine H. Winship, Special Counsel, Tallahassee; Daniel K. Bean, Edward F.
Koren, Ben Z. Williamson, and Jennifer L. Kifer of Holland & Knight,
Jacksonville; Sarah Butters of Holland & Knight, Tallahassee; R. Eric Bilik, Emily
Y. Rottmann, and Rory J. Diamond of McGuire Woods, LLP, Jacksonville, for
Appellees.
CORRECTED OPINION
ROWE, J.
We deny Appellant’s motion for rehearing and request for the certification
of a question of great public importance. We grant Appellant’s motion for a
corrected opinion, withdraw our original opinion dated July 16, 2014, and
substitute this corrected opinion.
Joseph R. Biden, III, as the Attorney General of Delaware, challenges the
trial court’s order denying his post-judgment motion to intervene in a case where
final judgment was entered in 2004. Because he has failed to show that the trial
court abused its discretion, we affirm.
Factual Background
In 1935, Alfred I. duPont died as a resident and citizen of Duval County,
Florida. Mr. duPont’s will established a testamentary trust and required it to be
administered under Florida law and subject to the jurisdiction of Florida courts.
2
The Trust provided for the creation of a charitable organization known as “The
Nemours Foundation.” The purpose of the foundation was for the care and
treatment of “crippled children, but not incurables, or the care of old men or old
women, and particularly old couples, first consideration, in each instance, being
given to beneficiaries who are residents of Delaware. . . .” In 1971, the Trustees
filed a lawsuit seeking judicial guidance in interpreting this purpose. The
Delaware Attorney General was not a party to the litigation. The Duval County
Circuit Court entered a judgment defining the term “crippled children” to include
“persons under 21 years of age, who by reason of a physical defect or infirmity,
whether congenital or acquired by accident, injury or disease, has been deprived of
strength, activity or capability for service or use, in any part of the human body.”
In 1977, multiple lawsuits involving the Trust were filed, including a lawsuit
between the Trustees. This Court affirmed the circuit court’s denial of the
Delaware Attorney General’s motion to intervene in that action. Del. ex rel.
Gebelein v. Fla. First Nat’l Bank, 381 So. 2d 1075, 1078 (Fla. 1st DCA 1979).
The Delaware Attorney General also filed his own lawsuit against the Trust. In
1980, the Trustees, Nemours, the Florida Attorney General, the Delaware Attorney
General, and the Florida State Attorney for the Fourth Judicial Circuit entered into
a stipulation to resolve all pending lawsuits. The stipulation named the Florida
Attorney General as the representative of the “ultimate” charitable beneficiaries of
3
the Trust and named the Delaware Attorney General as the representative of the
Delaware charitable beneficiaries. The parties acknowledged that the Trust was
governed by Florida law, and the stipulation incorporated the definition of
“crippled children” set forth in the 1971 judgment. Moreover, the Delaware
Attorney General, the Florida Attorney General, and the Florida State Attorney for
the Fourth Judicial Circuit were tasked with “closely observ[ing] the operations
and activities of the Trust.” The circuit court entered a final judgment adopting
and incorporating the terms of the stipulations.
In 1984, Alfred duPont Dent, as a trustee, filed a lawsuit against the other
trustees to increase the trustee fee. Dent lost the case; Delaware was not a party to
this action. In 1993, the Trustees sought judicial modification of the Trust.
Delaware had notice of this action and elected not to participate.
In 2004, the Trustees filed an action to modify the Trust, and the Florida
State Attorney for the Fourth Judicial Circuit and Nemours were the named
defendants. The result of this litigation was a 2004 final judgment that redefined
“crippled children” as “persons under 18 years of age,” although it provided that
existing beneficiaries would not be affected by this change. The judgment
expanded the Trust’s purpose to include preventative care services for beneficiaries
of the Trust. The judgment also required the Trustees to distribute three percent of
the fair market value of the Trust every year, even if such distribution required
4
taking part of the principal. Delaware was not a party to this action, but the
uncontroverted evidence demonstrates that the Delaware Attorney General was
made aware of Nemours’ planned expansion into preventative care services in
2004. The 2004 judgment resulted in more than $111 million in preventative care
services being provided to the Delaware beneficiaries.
In 2012, the Delaware Attorney General filed a post-judgment motion to
intervene as an indispensable party and to set aside the 2004 final judgment. The
trial court denied the motion, finding that the original parties to the action would be
injured by the intervention and that the interests of justice would not be served by
intervention. The trial court also found that the Delaware Attorney General was
not an indispensable party to the 2004 action. This timely appeal follows.
Intervention
The sole issue before this Court is whether the trial court properly denied the
motion to intervene. A trial court’s denial of a motion to intervene will not be
reversed absent a showing of an abuse of discretion. Litvak v. Scylla Props., LLC,
946 So. 2d 1165, 1172 (Fla. 1st DCA 2006).
After final judgment, intervention is not generally permitted. Dickinson v.
Segal, 219 So. 2d 435, 436 (Fla. 1969); PS Capital, LLC v. Palm Springs Town
Homes, LLC, 9 So. 3d 643, 645 (Fla. 3d DCA 2009) (“[I]ntervention after
judgment . . . is extraordinary and disfavored.”). However, a very narrow
5
exception to the general rule permits post-judgment intervention “when to do so
would in no way injuriously affect the original litigants and when allowing
intervention will further the interests of justice.” Lewis v. Turlington, 499 So. 2d
905, 907-08 (Fla. 1st DCA 1986). Accordingly, in order for the Delaware
Attorney General to be permitted to intervene in the 2004 action, the trial court was
required to find (1) that intervention would not injuriously affect the original
litigants and (2) that intervention would serve the interests of justice. The record
does not support such findings, and the trial court did not err by denying the
motion to intervene.
The Delaware Attorney General failed to demonstrate that post-judgment
intervention would in no way injure the original litigants to the 2004 action. In
Interest of M.L.M., 528 So. 2d 54, 56 (Fla. 1st DCA 1988) (holding that the
exception allowing post-judgment intervention exists only “where intervention
would in no way injuriously effect the original litigants. . . .”). If the Delaware
Attorney General were permitted to intervene and set aside the 2004 judgment, the
original litigants would be injured in several respects. 1 First, the preventative
program that was put into place as a result of the 2004 judgment would no longer
be authorized under the terms of the unmodified Trust. Second, vacating the 2004
1
The Delaware Attorney General conceded this point by stating in the motion to
intervene that the original parties “may be affected” by Delaware’s intervention in
the case.
6
judgment would radically alter the provision of care to trust beneficiaries because
the preventative programs would cease to exist. Third, vacating the 2004 judgment
would result in the invalidation of over $111 million in benefits distributed to
Delaware residents. Because intervention by the Delaware Attorney General
would injure the original litigants, the trial court properly denied the motion to
intervene.
The Delaware Attorney General also failed to show that the interests of
justice would be served by permitting intervention eight years after the entry of
final judgment. See In re Adoption of a Minor Child, 593 So. 2d 185, 190 (Fla.
1991) (permitting post-judgment intervention in a case involving grandparents’
interest in adopting their grandchild); Wags Transp. Sys. v. City of Miami Beach,
88 So. 2d 751, 752 (Fla. 1956) (permitting post-judgment intervention in a case
involving the enforcement of zoning restrictions that would materially reduce the
value of the homeowners’ property). Allowing such action would be contrary to
Florida’s policy favoring judgment finality. Lewis, 499 So. 2d at 907 (holding that
the trial court abused its discretion in allowing a party to intervene seventeen
months after entry of a final order). Further, the Delaware Attorney General has a
separate action pending in the circuit court concerning the Trust. It would be more
appropriate for the Delaware Attorney General to seek modification of the Trust in
that proceeding rather than attempting to invalidate a judgment that has been final
7
for eight years.
Additionally, Delaware had the responsibility to “closely observe the
operations and activities of the Trust.” The elapse of eight years between the entry
of the 2004 judgment and Delaware’s motion to intervene demonstrates that either
Delaware had knowledge of, but no objection to, the 2004 judgment or that
Delaware neglected its responsibility under the 1980 stipulation. Most
importantly, the Delaware Attorney General failed to show that his intervention
was necessary to protect the interests of Delaware’s beneficiaries with regard to the
2004 judgment. Not only did the judgment expand benefits to Delaware
beneficiaries to include over $111 million in preventative care services, but the
interests of the Delaware beneficiaries were adequately represented in the 2004
proceedings. As was his statutory duty under the Florida Charitable Trusts
Statutes, the Florida State Attorney for the Fourth Judicial Circuit represented the
interests of all of the trust beneficiaries in the 2004 action, including the Delaware
beneficiaries. § 737.507, Fla. Stat. (2004). As such, the trial court did not abuse
its discretion in finding the interests of justice exception did not extend to the
circumstances here.
Accordingly, because intervention by the Delaware Attorney General would
injure the original litigants to the 2004 action and the interests of justice would not
be served by the intervention, the trial court did not abuse its discretion in denying
8
the motion to intervene.
Indispensable party
Disregarding the two-prong test for intervention, the Delaware Attorney
General and the dissent urge this Court to proceed immediately to a determination
of whether Delaware was an indispensable party to the 2004 litigation. However,
neither presents any legal authority that would permit intervention for
indispensable parties that do not meet the two-prong test. Regardless, the trial
court properly determined that the Delaware Attorney General was not an
indispensable party to the 2004 action.
The Florida Supreme Court has defined an indispensable party as “one
whose interest in the controversy makes it impossible to completely adjudicate the
matter without affecting either that party’s interest or the interests of another party
in the action.” Fla. Dep’t of Revenue v. Cummings, 930 So. 2d 604, 607 (Fla.
2006). The previous actions modifying the Trust demonstrate that the Delaware
Attorney General does not meet this definition. In 1993, Delaware was notified of
proceedings to modify the Trust and chose not to intervene. The fact that the
Delaware Attorney General does not now argue that the 1993 judgment is void
demonstrates that it is not impossible to completely adjudicate a modification of
the Trust without the presence of the Delaware Attorney General.
Further, Delaware’s presence in the 2004 action was not necessary for the
9
matter to be completely adjudicated. Mr. duPont chose to have the Trust
administered in Florida. In 2004, Florida law provided that the state attorney for
the judicial circuit where a trust had its principal place of administration was the
proper representative of a charitable trust’s beneficiaries.2 §§ 737.501(5), 737.506,
737.507, Fla. Stat. (2004). Here, the Florida State Attorney for the Fourth Judicial
Circuit was a named party in the 2004 action. As such, the interests of the trust
beneficiaries, including the Delaware beneficiaries, were represented in the 2004
action. A specific representation by the Delaware Attorney General was not
required. 3
2
Florida’s trust statutes also permits the Florida Attorney General to intervene on
the behalf of charitable trust beneficiaries. However, the Florida Attorney General
is not considered an indispensable party with regard to a trust administered under
Florida law. § 736.0110(3) Fla. Stat. (2006) (“The Attorney General may assert
the rights of a qualified beneficiary with respect to a charitable trust having its
principal place of administration in this state.”) (emphasis added). It would defy
logic to confer indispensable party status on the Delaware Attorney General where
the Florida Attorney General has no such standing under Florida law.
3
The dissent also argues that the Delaware Attorney General was entitled to notice
of the 2004 proceedings. This argument fails for several reasons. First, there is no
requirement in Florida trust laws or in the language of the 1980 stipulation to
notify the Delaware Attorney General about any attempts to modify the Trust.
Under the 2004 statutes, the only parties required to be notified prior to an
amendment to a charitable trust were the named charity and the state attorney for
the judicial circuit where the trust had its principal place of administration. §§
737.501(5), 737.506, Fla. Stat. (2004). Here, Nemours and the Florida State
Attorney for the Fourth Judicial Circuit were notified of the action. Second, even
though not legally required, a representative of Nemours met with the then-serving
Delaware Attorney General in 2004 and informed her about the new goal of
providing preventative programs to the Delaware beneficiaries. This was sufficient
10
Because the Delaware Attorney General was not an indispensable party to
the 2004 action and the interests of the Delaware beneficiaries were represented by
the Florida State Attorney for the Fourth Judicial Circuit, the trial court did not
abuse its discretion when it denied the motion to intervene.
AFFIRMED.
MARSTILLER, J., CONCURS; SWANSON, J., DISSENTING WITH OPINION.
notice to trigger the Delaware Attorney General’s duty under the 1980 stipulation
to “closely observe the operations and activities of the Trust.” However, the record
is devoid of any evidence that Delaware failed to further investigate this change.
11
SWANSON, J., dissenting.
The trial court’s refusal to allow the Delaware Attorney General to intervene
as an indispensable party to this case involving this trust resulted in a fundamental
denial of due process. It is undisputed the Delaware Attorney General was a party
to the 1980 court-approved settlement agreement regarding the proper
interpretation of the testamentary trust created by Alfred I. duPont, which
established and funds a charitable corporation known as “The Nemours
Foundation.” Specifically, the agreement expressly recognized that first
consideration is to be given to beneficiaries who are residents of Delaware and that
the “Attorney General of the State of Delaware is the representative of the
Delaware charitable beneficiaries of the Alfred I. duPont Testamentary Trust and
of The Nemours Foundation, and as head of the Department of Justice of the State
of Delaware is charged with protecting the rights of the said Delaware
beneficiaries . . . .” It is also undisputed the Delaware Attorney General was never
made a party in the subsequent action resulting in the 2004 judgment, which
modified the trust and the 1980 agreement interpreting it by (1) reducing benefits
to “crippled children” by three years by terminating them at age eighteen instead of
age twenty-one; (2) requiring the trustees to invade the principal of the trust if
necessary to ensure a three-percent distribution of the fair market value of the trust;
12
and (3) eliminating the requirement that the Nemours Board of Managers be
comprised of a three-fifths majority of Delaware residents.
Clearly, these material modifications were made without the participation
of the designated representative of the primary intended beneficiaries of the trust.
Because the Delaware Attorney General was an indispensable party to this action
as the Delaware beneficiaries’ lawful representative, due process required that the
Delaware Attorney General be given formal notice of the action. Failure to
provide such notice would render the 2004 judgment void and subject to challenge
at any time under Florida Rule of Civil Procedure 1.540(b)(4). See Space Coast
Credit Union v. The First, F.A., 467 So. 2d 737, 739 (Fla. 5th DCA 1985) (holding
that “[j]urisdiction is perfected by a proper service of sufficient process on all
indispensable parties” and the trial court’s failure to acquire jurisdiction over a
party in the proper manner renders its judgment void and subject to attack at any
time under rule 1.540(b)). Although the trustees asserted below that the Delaware
Attorney General had actual notice of the action, this is disputed by the Delaware
Attorney General. At a minimum, intervention and an evidentiary hearing are
required to determine whether sufficient notice was provided and to resolve any
other factual disputes regarding the validity of the 2004 judgment. Accordingly, I
would reverse and remand with directions that the Delaware Attorney General be
allowed to intervene for purposes of filing a rule 1.540(b)(4) motion to vacate the
13
2004 judgment as void. However, in light of the majority’s decision to affirm, I
have no choice but to respectfully dissent.
14