Steven Kwartin, P.A. v. Henry Oreal, as Personal Representative of the Estate of Wayne Henry Oreal a/k/a Wayne H. Oreal

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
HENRY OREAL,
as Personal Representative of the
Estate of Wayne Henry Oreal a/k/a Wayne H. Oreal,
Appellant,
v.
STEVEN KWARTIN, P.A.,
Appellee.
No. 4D13-3617
__________________________________________________
STEVEN KWARTIN, P.A.,
Appellant,
v.
HENRY OREAL,
as Personal Representative of the
Estate of Wayne Henry Oreal a/k/a Wayne H. Oreal,
Appellee.
No. 4D14-2688
[March 30, 2016]
Consolidated appeals from the Circuit Court for the Seventeenth
Judicial Circuit, Broward County; Mark A. Speiser, Judge; L.T. Case No.
PR-C-09-0004069.
Randall Burks and Robin I. Bresky of the Law Offices of Robin Bresky,
Boca Raton, for Henry Oreal.
Steven Kwartin of Steven Kwartin, P.A., Hollywood, for Steven Kwartin,
P.A.
LEVINE, J.
Among several issues raised in this consolidated appeal, we find
meritorious only the claimant’s argument that the probate court erred in
failing to award all of the interest due to the claimant under the promissory
note. Because the estate did not file a timely objection to the claim, the
estate could not contest the award of interest. We find the plain language
of section 733.705(9) and the promissory note did not allow the probate
court to relieve the estate of the interest as previously agreed to by the
parties. Thus, we reverse the probate court’s “equitable set-off” since it
effectively rewrote the written obligations agreed to by the parties.
The claimant also appeals an order striking the decedent’s deposition.
Additionally, the estate appeals an order finding that the claimant was
entitled to accrue default interest. We find all other issues in these
consolidated appeals to be without merit, and affirm without comment.
The decedent, Wayne Oreal, died in 2009, and his will was submitted
to probate. Later that year, Steven Kwartin, P.A. (“the firm”), and its
principal, Steven Kwartin, each filed a statement of claim against the
estate. Kwartin’s individual claim was based on a $125,000 promissory
note. The firm’s claim was based on a promissory note in the amount of
$500,000. At the time, the remaining principal on the firm’s note was
$375,000 with an accrued interest of $397,000, for a total of $772,500.
The estate objected to Kwartin’s individual claim, but not to the firm’s
claim.
The estate later moved for an extension of time to object to the firm’s
claim. Several months later, the firm moved to compel payment of the
claim based on the promissory note. The probate court denied the estate’s
motion for an extension of time, and granted the firm’s motion to compel
payment. The court directed the estate to pay the note’s principal, but
reserved jurisdiction to determine the amount of interest due on the note.
The estate appealed both orders, and this court affirmed without opinion.
See Oreal v. Kwartin, 145 So. 3d 856 (Fla. 4th DCA 2014).
Meanwhile, to determine the amount of default interest, the probate
court considered the promissory note’s terms. The promissory note had
an interest rate of 8% per annum and a default interest rate of 12% per
annum. The note further provided:
All of the then outstanding principal due on this Note shall
be immediately due and payable if the Event of Default, as
defined below, shall occur. In the event of such acceleration
of maturity, interest shall accrue from the date of default until
the date of payment at 12% per annum.
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The note listed several occurrences which would constitute an Event of
Default, including “(I) If the Makers shall fail to make any payment of
principal or interest when due and such failure shall be continuing for five
days . . . .”
The probate court entered an order on the firm’s motion to compel
payment of claim. The probate court found that since the estate failed to
file a timely objection to the claim, the probate court had no authority to
conduct an evidentiary hearing on the issue of how much interest was due
under the promissory note. However, the court also 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 on [its] valid unpaid claim.”
The estate filed a motion for equitable setoff. After a hearing, the
probate court granted the estate’s motion, finding that the firm had an
equitable duty to prevent the accumulation of interest. The court ruled
that interest shall accrue only until December 28, 2011—the date the
estate moved for an extension of time to object to the firm’s claim.
The firm appeals the probate court’s ruling, which limited the amount
of interest due as a result of the firm’s alleged delay in pursuing payment
of its claim.
Section 733.705(9), Florida Statutes, provides that “[i]nterest shall be
paid by the personal representative on written obligations of the decedent
providing for the payment of interest.” In First Union National Bank of
Florida v. Aftab, 689 So. 2d 1137 (Fla. 4th DCA 1997), the claimant filed a
statement of claim, seeking principal and interest due under two
promissory notes executed by the decedent. The estate did not object to
the claims. The probate court disallowed default interest. This court
reversed, reasoning that “section 733.705(8) [now section 733.705(9)]
provides for the payment of interest by a personal representative on a claim
that is ‘founded on a written obligation of the decedent providing for the
payment of interest.’ Thus, the statute requires that the personal
representative pay interest in accordance with the written instrument.” Id.
at 1139.
Based on the plain language of section 733.705(9) and Aftab, the firm
was entitled to the entire amount of interest as outlined in the promissory
note, and specifically the default interest. However, the probate court
imposed the setoff to lower the amount of default interest owed by the
estate because the court believed the firm should have filed its motion to
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compel payment sooner.
The probate court erred when it imposed an “equitable setoff” and
decreased the amount of the interest due to the firm. Just as a court
cannot rewrite a contract to relieve a party from an “apparent hardship of
an improvident bargain,” see Dickerson Fla., Inc. v. McPeek, 651 So. 2d
186, 187 (Fla. 4th DCA 1995), a court cannot use equity to remedy a
situation the court perceives to be unfair.
As the Florida Supreme Court has explained:
[W]e cannot agree that courts of equity have any right or power
under the law of Florida to issue such order it considers to be
in the best interest of ‘social justice’ at the particular moment
without regard to established law. This court has no authority
to change the law simply because the law seems to us to be
inadequate in some particular case.
Flagler v. Flagler, 94 So. 2d 592, 594 (Fla. 1957) (en banc). “Where the
legislature has provided” “a plain and unambiguous statutory procedure .
. . courts are not free to deviate from that process absent express
authority.” Pineda v. Wells Fargo Bank, N.A., 143 So. 3d 1008, 1011 (Fla.
3d DCA 2014).
In the instant case, section 733.705(9) plainly and unambiguously
provides for the payment of interest and does not provide any judicial
discretion. Because “there is a full, adequate, and complete remedy at
law,” equity has no role. U.S. Bank Nat’l Ass’n v. Farhood, 153 So. 3d 955,
958 (Fla. 1st DCA 2014) (quoting Wildwood Crate & Ice Co. v. Citizens Bank
of Inverness, 123 So. 699, 701 (Fla. 1929)). “The imposition of sanctions
which contravene . . . statutes . . . exceed a trial court’s discretion and
require reversal.” Id at 959.
In sum, we affirm all other aspects of the consolidated appeals, but
because the probate court did not have the discretion to impose a setoff,
we reverse and remand on that issue and direct the probate court to award
the full amount of interest due to the firm.
Affirmed in part, reversed in part, and remanded with directions.
GROSS and CONNER, JJ., concur.
* * *
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Not final until disposition of timely filed motion for rehearing.
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