I enjoy working with other lawyers on unusual cases. Typically, these cases are interesting because the facts are unusual or convoluted, or the law (sometimes even which set of laws to use) is unclear. I unravel these strange situations.
John L. Zoltak started a company that eventually became very successful. When his company was still young, he owned 60% of its stock, his wife owned 20% of the stock and each of their two children owned 10% of its stock. The four of them (and the company) entered into an agreement in New York restricting the transfer of the shares of the company while they were alive and at death. That agreement required all of the shareholders to execute a will requiring their personal representative to sell the shares back to the company at the death of that shareholder.
Then, Mr. Zoltak, his wife and son (who was then second to his father in running the company) moved to Florida and relocated the company to Florida. It became apparent that the company had become so successful that Mr. Zoltak and his wife would be facing massive probate fees and enormous estate taxes. So they engaged a New York firm they had worked with before to devise an estate plan to minimize these expenses.
Among other things, a part of the estate plan, the revocable trust, transferred Mr. Zoltak’s stock to his son. To work, the shares would have to be placed in that trust. The will drafted for Mr. Zoltak poured-over all assets not otherwise disposed of into the trust. It failed to direct the personal representative to transfer the shares back to the company. The will and trust taken together breach the shareholders’ agreement because they transfer the shares to the son instead of back to the company.
The company continued to be run by Mr. Zoltak in a very informal fashion. Corporate formalities were not observed. Mr. Zoltak died in 2014.
His son took over as president of the company and proceeded as if he owned his father’s shares (per the trust language). Eventually, his sister asked for an explanation of how their father’s shares got transferred to her brother. She also had questions about its corporate procedures-i.e. the lack of formal corporate meetings and the fact that certain personal expenses had been passed through the company’s accounts.
Because the sister considered the answers inadequate, in 2017, she petitioned the court in Indian River County, Florida to probate their father’s will. Objections and counter-petitions followed. In June 2018, the probate judge decided that none of the potential beneficiaries were appropriate to name as personal representative and appointed an administrator ad litem (my soon to be client) to probate the will.
Meanwhile, the sister sued her brother, mother and the company and soon added the estate of her father to the lawsuit. That case is still pending. Here is a link to it: Marshall v Zoltak, 312017CA000319 XXXXXX.
What a mess!
Florida has a statute of repose that bars any claims against an estate that are not brought within two years of death. Here, the claims against the estate were not brought in that time period as the estate was not opened until well after that two-year period expired (which is never a legally viable excuse). The shareholders’ agreement did require the representative of the decedent to offer the shares back to the company after death; the argument is that that obligation would not be subject to the two-year statute of repose. That issue remains pending.
All of the distributions to the son made because the son claimed he owned his father’s shares had to be returned to the estate. Since the income from the shares was reported as belonging to the son and not the estate, income tax returns had to be filed for the estate. The returns and the taxes were late and penalties were assessed. (Some of these have been waived by the IRS and requests for waivers of the other penalties remain pending).
Since the father’s shares in the company were transferred to the estate as probate assets, the administrator ad litem was in control of them and became the majority shareholder. As majority shareholder, we proceeded (and continue) to attempt to work out the corporate governance issues.
The failure to consider the shareholders’ agreement and the failure to effect the transfer of Mr. Zoltak’s shares into his trust cost his estate probate fees, fees for the administrator ad litem, fees for the administrator ad litem’s atttorney (me), fees for the attorneys who initiated the probate proceeding, interest and penalties payable to the IRS, and fees for the estate accountants. The damages will exceed several hundreds of thousands of dollars.
Because the New York attorneys who designed the estate plan were responsible for these damages, we sued them for professional malpractice. The case was filed in state court and removed to federal court by the defendants. The defendants immediately moved to dismiss based on the Florida two-year statute of limitations for professional malpractice. Here is the magistrate’s report and recommendation to deny that motion. MacWilliam v Schanker, et al, 19-14354-CIV-Martinez/Maynard (S.D. Fla., May 8, 2020). We expect to recoup most of the estate’s damages through this lawsuit.
Mr. Coburn married his longtime gay partner. Then he changed his will to exclude all gifts to his daughter, naming his husband personal representative and leaving the bulk of his estate to him. Mr. Coburn’s daughter sued to revoke the probate asserting that the will was procured through undue influence and that her father lacked testamentary capacity when he signed the will.
When the litigation escalated, I was asked to become involved. Neither the medical records nor the testimony of the lawyer that drafted the will supported the daughter’s conclusions about testamentary capacity. The lawyer that drafted the will had extensive notes about why Mr. Coburn excluded his daughter from any testamentary gifts.
I was eventually able to persuade Mr. Coburn’s daughter to drop her case without any recovery from the estate. (Some keepsakes were given to her gratuitously).
My client Ms. Smith was a beneficiary of her father’s trust. The trustee of that trust failed to account properly to her. The trustee also failed to pursue debts owed to the estate. We objected and were able to secure the appropriate benefits for Ms. Smith.
I was brought into this case by another lawyer because our client’s decedent was obviously mostly at fault for a single car collision that killed plaintiff’s decedent. Our client’s estate had substantial assets that a judgment could reach. The damages were arguably in excess of $1,000,000 and plaintiff’s decedent would probably appear to the jury as likable, leading them to identify with her.
A claim was sent into the insurance company. It denied coverage, arguably, in bad faith.
The likelihood of a collectable judgment in excess of $1,000,000 concerned our client.
I was called in by the attorney for the estate of the at fault driver, and I had to work out a way to protect the estate’s assets.
I entered into an agreement with plaintiff’s counsel. The agreement called for an arbitration trial to set the amount of damages. In connection with the agreement, plaintiff’s counsel agreed to pursue the insurance policy exclusively to satisfy the arbitration judgment. We agreed to assign our bad faith claim against the insurance carrier to plaintiff. Plaintiff agreed to release the estate of the at-fault driver.
We then went through a day long arbitration trial that resulted in a decision setting the damages well in excess of the available policy limits. Because of our agreement, our client then assigned his bad faith case to plaintiff and was released from any personal liability.
I was brought into this case because plaintiff (the son of the defendant) asserted novel causes of action in attempts to enforce an agreement for the purchase of real estate. The parties had modified a lease to make it into a purchase and sale contract with the lease payments being consideration for the purchase of the real estate. Oral portions (irrelevant because of the parol evidence rule and the statute of frauds) of the agreement were asserted. I obtained dismissals of all the Complaints and Amended Complaints.
The judge held a hearing before she dismissed the last Amended Complaint and plaintiff attended in person. It was apparent from the judge’s questioning that his case was not viable. Plaintiff then abandoned his position and changed what he asserted to have been the agreement between his mother and himself. After that change, the parties worked out their differences and the real estate sale closed.
This was a massive products liability case I was defending on behalf of an insurance carrier. A young boy, Jonathan Birth was burned over 70%-80% of his body with second and third degree burns when his clothing caught fire. He came near death several times, but, survived, after many operations, with scarring on almost his whole body. His lawyer, Sheldon Schlesinger, had sued the supposed retailer and supposed manufacturer of the clothing, Wal-Mart and J.J.’s Mae, Inc. The carrier had retained our firm to defend J.J.’s Mae, Inc. At the time I began the defense there were over fourteen defendants, over 10,000 filings in the court, and over 100 transcribed depositions; the file would not fit in five, five drawer lateral file cabinets.
However, the most important issues seemed to have been overlooked. Out client claimed not to have manufactured the clothing. But, we had joined our client’s suppliers of fabric asserting indemnification claims. We had not retained any experts to analyze the remains of the clothing to determine if our client did in fact manufacture it. I flew out to San Francisco to meet with our client’s representatives to discuss the issue of whether they manufactured the clothing. They were able to determine, from the fabric in Jonathan’s clothing, and the clothing’s construction, that they did not manufacture it. So, I had to persuade the adjuster why we now had to dismiss all the defendants we joined if we had any hope of winning in front of a jury. I was successful and proceeded to dismiss the third-party claims. I was also successful in avoiding most of the enormous potential liability to pay their fees and costs. Then I developed positive proof that our client did not manufacture the clothing, identifying the origin of the fabric as Asian. (Our client only used domestic goods).
Jonathan’s father was trying to start a Briggs & Stratton Engine which had been affixed to a Brownie’s Third Lung when Jonathan caught fire. (Two more defendants) He was priming the engine with gasoline at the time. Many witnesses recalled smelling gasoline on Jonathan after he was burned. However, his father denied splashing him, and the plaintiffs’ experts said there was no gasoline on Jonathan’s clothing. All the defense attorneys vehemently opposed my motion to test the clothing for traces for gasoline. Their “experts” had told them that due to gasoline’s volatility and the passage of time, that we would not find gasoline in the clothing. They preferred to argue that gasoline was present from the witness’s testimony only. But, I knew that the fabric, spandex- nylon melted and re-solidified in the fire, possibly forming encased bubbles of vapor. So, I asked the judge to allow our expert to dissect the clothing looking for a label (and releasing the vapor) and to then test the clothing for gasoline. I was right, all the other defense attorneys were wrong: gasoline was positively identified.
Finally, we constructed a see-through chamber, placed an instrumented, warm-water filled, child-sized mannequin dressed in similar clothing in it. Then we filled it with propane and lit it. The clothing would not catch fire. We added a little gasoline to the clothing. Still, no fire. Then we added two ounces of gasoline and duplicated the described accident. These tests were videotaped.
Since the damages were far in excess of the $1,000,000 policy limits I submitted all this information to the plaintiffs’ lawyer with a suggestion that we settle. We did settle, for less than the remaining cost of defense. By focusing and being creative, I was able to achieve an outstanding result for the insured.
Patricia P. as Personal Representative of the Estate of J.P. v. B. Manufacturing Company
A lawyer in Vero Beach associated me on this case. He thought there was an insurmountable problem with liability: the defective machine that injured his client was manufactured long ago and all claims against the manufacturer reposed before the legislature repealed the statute of repose. The Florida case law seemed inescapable. However, I realized that the defendant operated in most, if not all, of the fifty states. My goal was to find a state that would exercise jurisdiction over the defendant, that would apply a choice of laws approach resulting in the application of local instead of Florida law on the repose question (no borrowing statute), and that either had no statute of repose or, (even better) that had one recently declared unconstitutional as violative of the state constitution’s guarantee of equal protection. Since we would file the case in federal court (or be removed) I needed to examine how the federal court would deal with these issues.
The only states in the nation that were possibilities were New Hampshire and North Dakota. Since North Dakota invariably applied its own statutes of limitation but New Hampshire’s choice of laws rule was unsettled I choose to sue in North Dakota. I verified that even upon transfer of the case to Florida the federal case law required the transferee court to apply the statute of repose that the transferor court would have applied. I verified that the transferor court would have applied the North Dakota statute of repose (which the North Dakota Supreme Court had declared unconstitutional under state law) since the federal courts treat the issue as procedural.
We did not get a chance to test my legal analysis as the defense attorney never guessed why we brought the Florida Wrongful Death Action in North Dakota.
Donna B. as Personal Representative of the Estate of J.B. v. B. Manufacturing Company
Mrs. B.’s husband was killed when his handgun fell from the map pocket of his truck onto the ground, and discharged with the bullet fatally penetrating his lung, heart and spleen. She came to me after three well-respected law firms in Vero Beach had rejected her case. One firm took the handgun to a local police range and had the rangemaster test fire the handgun to determine if it functioned properly (he told them it did).
After I conducted a little scientific and factual research I concluded that the design of the handgun was defective. For more than 100 years manufacturers have designed and produced firearms that will not fire upon being dropped. Of course, test firing the handgun had reduced its value as evidence. Fortunately, the police had taken many photographs of the evidence and one photograph showed the asphalt from the road on the hammer of the handgun. I had a forensic analysis done of the handgun’s sear and hammer. That analysis was consistent with a drop-fire.
I sued in state court (no diversity) against the importer. When I told the defense attorney that I was having the complaint translated into German (to comply with the Hague Convention for service on the German manufacturer) he asked what our demand was and then paid it (mid six figures).
Mary P. v. Publix
This was a TMJ dysfunction/whiplash case resulting from an automobile accident. The defense attorney argued that the accident did not cause Ms. P’s injuries. The verdict was more than $200,000 and we taxed attorney’s fees under the demand for judgment rule.
Mildred B. v. Ford Motor Credit Company, et. al.
The defendant had been drinking at his golf club. He broadsided Ms. B.’s car in the parking lot at a low speed, causing minimal damage to her car. She developed a whiplash injury. Before this accident she had never earned more than $6,000 in any one year. I subpoenaed the defendant to trial (I wanted to ask him how much he had had to drink). He took a vacation to Canada and refused to return for the trial. The judge, on my motion, struck his (but not the other defendants’) pleadings. During my closing argument I placed a whisky bottle on the witness stand and cross-examined it as if it were this missing defendant. Verdict $60,000+.
Margaret B. v. P.
Not surprisingly, the defendant offered nothing to settle this zero car damage-whiplash case. I put an accident reconstructionist on the stand to explain to the jury that the fact that there was zero car damage meant that all the force of the impact was transferred to Ms. B.’s neck rather than being absorbed by the car as it would have been if the car had been designed to crumple on impact. Verdict $20,000.
D.B. Amateur Radio Operator Litigation.
The county did not like Mr. B’s 100 foot amateur radio tower and antenna. It ordered him to remove it. We appealed to the circuit court and the three judge panel understood that the FCC preempted the county’s right to regulate the tower’s height.
Then Mr. B’s neighbors sued him. They alleged that:
- he was creating a common-law nuisance by interfering with their television reception
- he was creating a common-law nuisance by the general appearance of the tower, and
- that his use of his land violated a deed restriction.
I removed the case to federal court on federal question jurisdiction and had the common-law nuisance counts dismissed.
The state court conducted a view and concluded that the operation of the antenna violated the covenants. The judge enjoined that use and ordered Mr. B to remove the antenna.
We appealed and reversed the scope of the injunction. Alas, the appeals court refused to address the only weighty issue, (federal preemption).
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