01-001185 Dreka Andrews vs. Department Of Banking And Finance Status: Closed Recommended Order on Thursday, June 14, 2001.

Summary: Despite probate order awarding asset to heirs, non-heir claimant demonstrates entitlement to the asset, which is in jurisdiction of Department of Banking and Finance.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DREKA ANDREWS, )

)

Petitioner, )

)

vs. ) Case No. 01-1185

)

DEPARTMENT OF BANKING AND )

FINANCE, )

)

Respondent, )

)

and )

)

ESTATE OF FLORA KENISTON, )

)

In tervenor. )

______________________________)

RECOMMENDED ORDER

Robert E. Meale, Administrative Law Judge of the Division

of Administrative Hearings, conducted the final hearing in

Tampa, Florida, on May 15, 2001.

APPEARANCES

For Petitioner : Denise Douglas

Qualified Representative

2616 Jetton Avenue

Tampa, Florida 33629

For Respondent : Staci A. Bienvenu

Assistant General Counsel

Department of Banking and Finance

Suite 526, Fletcher Building

101 East Gaines Street

Tallahassee, Florida 32399-0350

For Intervenor : no appearance

STATEMENT OF THE ISSUE

The issue is whether Petitioner is entitled to the

previously unclaimed property held by Respondent in the form of

cash realized from the sale of 24 shares of AT&T.

PRELIMINARY STATEMENT

By Notice of Intent dated February 27, 2001, Respondent

stated that it intended to issue a final order awarding certain

unclaimed property to Intervenor, not Respondent. Petitioner

timely requested a hearing.

On April 13, 2001, Intervenor file d a Motion to Intervene,

which the Administrative Law Judge granted by order entered

April 16, 2001.

After successfully opposing Respondent's motion to continue

the final hearing, Intervenor filed a Motion for Permission to

Appear Telephonically on May 11, 2001. By order entered the

same day, the Administrative Law Judge denied the motion,

explaining that the hearing room did not have a telephone and

inadequate time remained to change the location of the hearing,

which was scheduled to start in four days.

At the hearing, Petitioner called no witnesses and offered

into evidence no exhibits. Respondent called two witnesses and

offered into evidence one exhibit, which was admitted. The sole

exhibit is a copy of Respondent's file.

The parties did not order a transcript.

FINDINGS OF FACT

1. Originally residents of New Hampshire, the now-deceased

Flora and William Keniston vacationed annually in Tampa. During

their visits, they became good friends with Herman Ortmann. At

some point, Mr. Ortmann suggested to Mr. and Mrs. Keniston that

they share his home with him--rent-free--during their annual

September-to-April stay in Florida. The Kenistons accepted his

suggestion and, for five or six winters, occupied Mr. Ortmann's

home, which is located at 3102 Paul Avenue.

2. Mr. Ortmann died on March 8, 1966. In his will,

Mr. Ortmann left five dollars to his son and the residue of his

estate to Petitioner, who was his cousin. On December 19, 1966,

Petitioner, as executrix of Mr. Ortmann's estate, conveyed all

interest in the Paul Avenue property to Mr. Keniston for $5500.

On the same date, Mr. Keniston conveyed the fee simple interest

in the Paul Avenue property, subject to a life estate in

himself, to Petitioner and her husband.

3. After the sale of the Paul Avenue property, Petitioner

helped the Kenistons, who did not have a car, with many chores,

such as taking them to buy groceries, attend church, and get

hair cuts. On November 15, 1975, Mr. Keniston died.

4. Following Mr. Keniston's death, Petitioner helped

Mrs. Ken iston, who no longer had a legal interest in the Paul

Avenue property, find a new residence in a home shared by

several unrelated adults of similar age. Petitioner testified

that Mrs. Keniston lived several years in this home; however,

her death certificate states that she died on October 4, 1976--

less than one year after the death of her husband. By operation

of law, Petitioner and her husband acquired the fee simple

interest in the Paul Avenue residence upon Mr. Keniston's death,

and Petitioner remains in the house today.

5. When Mrs. Keniston moved from the Paul Avenue property,

she handed Petitioner two certificates evidencing ownership of

12 shares, each, in American Telephone and Telegraph Company

(ATT). Mrs. Keniston instructed Petitioner to use these stock

certificates to pay for Mrs. Keniston's funeral and "keep the

rest." However, Mrs. Keniston, who was the sole registered

owner of both certificates, never executed any instrument

transferring an interest in these certificates to Petitioner.

After delivering the certificates to Petitioner, Mrs. Keniston

continued to receive and cash her monthly dividend checks of

approximately $28.

6. After Mrs. Keniston's death, Petitioner bought her a

casket and paid for the funeral, at a total cost of about $3000.

Petitioner retained the original stock certificates, but, after

obtaining legal advice, determined that the she could not sell

the certificates due to the absence of an assignment.

Petitioner did not file a claim against the estate of

Mrs. Keniston for reimbursement of the $3000, and Petitioner has

not otherwise been reimbursed for these expenses. Petitioner

has retained the original stock certificates.

7. At some point, ATT transferred either the stock--

presumably by replacement stock certificates--or its cash

equivalent to Respondent as unclaimed property; the value of the

property at the time of the transfer was $1154.70. If ATT

transferred the stock to Respondent, Respondent has since sold

it. Either way, Respondent maintains the cash derived from the

sale of the ATT stock in a noninterest-bearing account. Due to

periodic payments received since its transfer to Respondent--

probably dividend payments earned prior to Respondent's sale of

the stock--the current value of the account is $3081.04

(Account).

8. Mrs. Keniston died intestate. By Order of Summary

Administration entered May 24, 2000, the Hillsborough County

Circuit Court, Probate Division, ordered an immediate

distribution among four persons of Mrs. Keniston's assets, which

consist of the Account. The order states that all interested

persons were served with notice of the hearing or waived notice

of the hearing, even though neither Petitioner nor Respondent

seems to have received notice of the hearing. The order

acknowledges that Respondent holds the Account and authorizes

persons holding any property of the decedent to transfer it,

pursuant to the order.

9. On June 16, 2000, the representative of the four heirs

named in the probate order filed with Respondent a claim of

ownership of the Account. On June 1, 2000, Petitioner filed

with Respondent a claim of ownership of the Account.

Determining that Mrs. Keniston was the actual owner of the

Account, Respondent concluded that her four heirs were entitled

to the Account.

10. On May 8, 2001, Respondent filed with the probate

court a Motion to Vacate Order and Reopen Summary

Administration. The probate court had not taken any additional

action by the time of the final hearing in this case.

CONCLUSIONS OF LAW

11. The Division of Administrative Hearings has

jurisdiction over the subject matter. Sections 120.57(1) and

717.126, Florida Statutes. (All references to Sections are to

Florida Statutes.)

12. Section 717.124 authorizes persons claiming an

interest in unclaimed property to file a claim with Respondent

for the property. Section 717.126 provides that the burden of

proof is on the claimant to prove his entitlement to the

property by a preponderance of the evidence.

13. Section 717.1242 provides:

(1 ) It is and has been the intent of the

Legislature that, pursuant to

s. 26.012(2)(b), circuit courts have

jurisdiction of proceedings relating to the

settlement of the estates of decedents and

other jurisdiction usually pertaining to

courts of probate. It is and has been the

intent of the Legislature that, pursuant to

s. 717.124, the department determines the

merits of claims for property paid or

delivered to the department under this

chapter. Consistent with this legislative

intent, any estate or heir of an estate

seeking to obtain property paid or delivered

to the department under this chapter must

file a claim with the department as provided

in s. 717.124.

(2 ) Should any estate or heir of an estate

seek to obtain or obtain an order from a

circuit court sitting in probate directing

the department to pay or deliver to any

person property paid or delivered to the

department under this chapter, the estate or

heir may be ordered to pay the department

reasonable costs and attorney's fees in any

proceeding brought by the department to

oppose, appeal, or collaterally attack the

order.

14. Section 717.1242 vests exclusive jurisdiction in

Respondent, as opposed to circuit court, to determine the

ownership of property that has been transferred to Respondent.

Any ambiguity left after the first two sentences of Section

717.1242(1) is dispelled by the third sentence of Section

717.1242(1), which directs "heirs" and "estates" to take their

claims to Respondent for unclaimed property in its custody, and

Section 717.1242(2), which provides Respondent with specific

relief if it must participate in the circuit court action to

oppose a probate order awarding unclaimed property.

15. Petitioner's claim to the Account arises out of the

circumstances surrounding the transfer of the stock certificates

prior to Mrs. Keniston's death. Clearly, Mrs. Keniston did not

intend a present, unconditional transfer when she gave the

certificates to Petitioner; otherwise, she would not have

continued to receive the dividends derived from the shares. The

conditions attached to the transfer were that Petitioner should

pay for Mrs. Keniston's funeral expenses and then use the value

of the stock to pay these expenses, keeping anything remaining

after these expenses were paid.

16. By agreement, after paying Mrs. Keniston's funeral

expenses, Petitioner would occupy two roles as to the stock.

She would be a secured creditor, to the extent of the funeral

expenses, and she would be an owner, to the extent of any

remainder. The small difference between the value of the

Account and the cost of the funeral characterizes nearly all of

Petitioner's claim as that of a creditor.

17. Section 732.701(1) requires a written agreement,

witnessed by two persons, for a person to enter an enforceable,

binding agreement to make a will or give a devise.

18. Section 733.710(1) limits the liability of a personal

representative or beneficiary to a creditor of the decedent to

two years after the decedent's death. Section 733.710(3)

provides that Section 733.710(1) does not apply to "the lien of

any person in possession of personal property."

19. Section 733.702(1) requires that no claim for "funeral

or burial expenses" is binding on the estate, personal

representative, or beneficiary, unless filed within three months

after the first publication of the notice of administration or,

as to any creditor required to be served, 30 days after the date

of service of notice to the creditor. Section 733.702(3) bars

all claims not timely filed, unless the court extends the filing

period, and the court may do so for "fraud, estoppel, or

insufficient notice of the claims period."

20. Section 733.212(4)(a) requires that a personal

representative "shall promptly make a diligent search to

determine the names and addresses of creditors" and serve on

them a copy of the notice of administration.

21. This case presents an clear jurisdictional issue. If

the asset were within the jurisdiction of the probate court,

Petitioner's claim would be subject to examination under the

statutes described above. The small, residual portion of her

claim as an owner of $81.04 would fail under the statute

prohibiting unwritten contracts to make devises. The larger

portion of her claim as a creditor in the amount of $3000 would

fail unless the probate court exercised its discretion to

enlarge the period for Petitioner to file a claim, Petitioner

timely filed a claim, and the court ordered that the claim be

paid.

22. However, the asset is not in the jurisdiction of the

probate court; it is in the jurisdiction of Respondent. And the

Legislature has clearly reserved to Respondent the disposition

decision. The statutes governing probate provide a carefully

considered framework for resolving this matter, but application

of them in this case would defeat the legislative division of

responsibilities between the courts and Respondent. The

Legislature did not intend that Respondent determine ownership

of unclaimed property using, when applicable, the principles

governing probate, but that Respondent make this determination

based on its own principles.

23. Without regard to probate law, Petitioner is entitled

to the Account as the equitable owner. Mrs. Keniston gave

Petitioner the stock to pay for funeral expenses, with

Petitioner keeping any residue. Respondent should therefore

deliver the Account to Petitioner.

24. Respondent and Intervenor have each sought sanctions

against the other. Intervenor filed the first such motion on

May 29, 2001, primarily due to Respondent's handling of the

case. Respondent filed the second such motion on June 4, 2001,

primarily due to the first motion. The Administrative Law Judge

denies both motions.

RECOMMENDATION

It is

RECOMMENDED that the Department of Banking and Finance

enter a final order awarding the Account to Petitioner.

DONE AND ENTERED this 14th day of June, 2001, in

Tallahassee, Leon County, Florida.

___________________________________

ROBERT E. MEALE

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488- 9675 SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 14th day of June, 2001.

COPIES FURNISHED:

Honorable Robert F. Milligan

Office of the Comptroller

Department of Banking and Finance

The Capitol, Plaza Level 09

Tallahassee, Florida 32399-0350

Robert Beitler, General Counsel

Department of Banking and Finance

Fletcher Building, Suite 526

101 East Gaines Street

Tallahassee, Florida 32399-0350

Denise Douglas

Qualified Representative

2616 Jetton Avenue

Tampa, Florida 33629

Staci A. Bienvenu

Assistant General Counsel

Department of Banking and Finance

Fletcher Building, Suite 526

101 East Gaines Street

Tallahassee, Florida 32399-0350

Linda Dunphy, Esquire

Post Office Box 16008

West Palm Beach, Florida 33416

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this recommended order. Any exceptions

to this recommended order must be filed with the agency that

will issue the final order in this case.