Nestor v. Est. of Victor Posner , 260 So. 3d 417 ( 2018 )

Third District Court of Appeal
State of Florida
Opinion filed November 28, 2018.
Not final until disposition of timely filed motion for rehearing.
________________
No. 3D16-1330
Lower Tribunal No. 02-595
________________
Brenda Nestor, etc.,
Appellant,
vs.
The Estate of Victor Posner,
Appellee.
An Appeal from the Circuit Court for Miami-Dade County, Celeste Hardee
Muir, Judge.
Crabtree & Auslander, and John G. Crabtree, Charles M. Auslander and
Brian C. Tackenberg, for appellant.
Akerman LLP, and Brett Marks, Dale Noll and Richard C. Milstein, for
appellee.
Before ROTHENBERG, C.J., and EMAS and LUCK, JJ.
PER CURIAM.
Brenda Nestor appeals an order granting a joint motion to approve a
settlement agreement between the Estate of Victor Posner and the Pension Benefit
Guaranty Corporation (“PBGC”), pursuant to section 733.708, Florida Statutes
(2016). We hold that the trial court did not abuse its discretion in approving the
settlement agreement, and affirm.
Following Mr. Posner’s death in 2002, Nestor, the sole residuary beneficiary
of his estate, was appointed personal representative of the Estate by the trial court.
Posner had owned several companies, and sponsored a single-employer defined
benefit pension plan covered by Title IV of ERISA.1
In 2011, due to a lack of activity moving the Estate toward a final resolution,
the trial court ordered Nestor to “propose a plan for ascertaining and paying the
federal and state estate tax obligations,” or show cause why the court should not
appoint an attorney ad litem to assist in closing the probate of the Estate. In May
2012, apparently unsatisfied with Nestor’s response to the show cause order, the
trial court appointed Michael Axman “to serve as attorney/administrator ad litem,
1 Employment Retirement Income Security Act (ERISA), 29 U.S.C. §§ 1001-1461.
“PBGC is the United States government agency that insures pensions in
accordance with title IV of ERISA. If a plan sponsor is unable to support its
defined benefit pension plan, PBGC becomes the statutory trustee of the plan and
pays guaranteed pension benefits according to the plan provisions, subject to legal
limits set by Congress under ERISA.” PBGC Case No. 206371, 2018 WL
3104865 (April 30, 2018). See also 29 U.S.C. §1302. Following Posner’s death,
the Estate became the contributing sponsor of the pension plan and his various
companies (“VP Entities”) were all members of the plan’s “controlled group,”
jointly and severally liable for certain pension related obligations.
2
and representative of the creditors and beneficiaries of the estate, and special
fiduciary.”
During Axman’s tenure, it came to light that no contributions had been paid
to the ERISA pension plan since 2010, and in July 2013, PBGC filed notices of
federal liens against the Estate and the VP Entities. Nestor attempted at that time
to settle the pension obligations with PBGC, but she was unsuccessful.2
On July 24, 2013, Axman filed his initial report, detailing these and other
pertinent matters, and reported that as of the report date, the Estate (and the VP
Entities) faced a liability of more than $38 million as a result of the failure to pay
pension plan contributions.
In April 2015, Nestor was removed as the Estate’s personal representative
based on, inter alia, her failure to comply with court orders requiring an
accounting, and the trial court appointed a curator.3 Six months later, in October
2015, the Estate and PBGC executed a settlement agreement providing terms for
terminating the pension plan and paying the obligations owed to PBGC. The
Estate and PBGC filed a joint motion to approve the settlement agreement, and the
lone objector was Nestor, who argued that the settlement agreement was not in the
2 PBGC is authorized to settle claims with those who become liable for a failure to
make required contributions under ERISA plans. 29 U.S.C. §1367.
3 Nestor appealed her removal as personal representative, and we affirmed the trial
court’s order on April 6, 2016. Nestor v. Estate of Victor Posner, 191 So. 3d 472
(Fla. 3d DCA 2016).
3
best interest of the interested persons.4 In April 2016, the trial court held an
evidentiary hearing on the joint motion to approve the settlement agreement. The
evidence presented at that hearing established, inter alia:
●At the time the settlement agreement was executed, the Estate and the VP
Entities owed $46.7 million as a result of the unpaid pension plan
contributions;
●Under the terms of the settlement, the maximum allowed claim against the
Estate and VP Entities would be $32.25 million, consisting of:
• A first-priority claim of $28 million against the sale of certain real
estate assets of the Estate and the VP entities;
• An unsecured claim for any balance after the sale of those real estate
assets, to be paid after professionals and IRS obligations are paid and
distributed pro rata with other unsecured claims.
●The agreement reduced the liability of the Estate and the VP Entities by
31% (from $46.7 million to $32.25 million); and
●PBGC would not initiate or complete foreclosure actions against the estate
assets while the agreement was in effect.5
4 Section 733.708, Florida Statutes (2015) provides in pertinent part:
When a proposal is made to compromise any claim,
whether in suit or not, by or against the estate of a
decedent or to compromise any question concerning the
distribution of a decedent's estate, the court may enter an
order authorizing the compromise if satisfied that the
compromise will be for the best interest of the interested
persons. The order shall relieve the personal
representative of liability or responsibility for the
compromise (emphasis added).
4
After considering the evidence presented, including testimony from Nestor,
the trial court approved the settlement. On appeal, Nestor contends that the trial
court erred in approving the settlement without competent substantial evidence,
and erred in concluding the settlement was in the best interests of the interested
persons.
Upon our review of the record, we hold that the trial court’s determinations
are supported by competent substantial evidence and the trial court did not abuse
its discretion in granting the joint motion and approving the settlement. See In re
Paine’s Estate, 174 So. 430, 437 (Fla. 1937) (confirming that the trial court may
approve a settlement “if it is fair, beneficial to the estate, and free from fraud,
negligence or misconduct”); Buettner v. Estate of Buettner, 993 So. 2d 640 (Fla.
4th DCA 2008); Security Ins. Co. v. Estate of Stillson, 397 So. 2d 1206 (Fla. 1st
DCA 1981). See also In re Estate of Dickson, 559 A.2d 331, 334 (D.C. 1989)
(adopting the abuse of discretion standard of review established in Stillson, and
further observing: “In deciding whether to grant the petition to settle, the trial court
must determine that the settlement is in the best interest of the estate, and that the
personal representative has fulfilled his or her fiduciary duty to act as a ‘prudent
person.’ In making these determinations, the court should consider, among other
5 Litigation against several VP Entities had already been commenced and was
pending at the time of the settlement.
5
factors, the validity of the claim, the personal representative's investigation of the
claim, and the defenses to the claim, and the reasonableness of the compromise”))
(citations omitted).6
Affirmed.
ANY POST-OPINION MOTION MUST BE FILED WITHIN SEVEN
DAYS. A RESPONSE TO THE POST-OPINION MOTION MAY BE
FILED WITHIN FIVE DAYS THEREAFTER.
6We affirm without further discussion the remaining issues raised by Nestor in this
appeal.
6