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What Happens When One Florida Estate Sues Another Florida Estate?


One of the key objectives of Florida probate administration is disposing of potential claims by and against the estate. In the latter case, the personal representative or administrator has a legal duty to pay all valid debts incurred by the deceased. At the same time, the estate must also take legal steps in order to minimize its potential liability to a particular creditor.

Insurer Faces Potential $4M Claim From Accident Victim’s Estate

For example, let’s say two people are killed in a car accident. A subsequent investigation revealed the driver’s negligence caused the accident. From a probate standpoint the passenger’s estate can pursue a wrongful death claim against the driver’s estate, which in turn must take reasonable action to minimize its liability as much as possible.

This is not just a hypothetical scenario. It is the subject of an ongoing lawsuit in a Miami federal court. The actual lawsuit is not between the two estates, but rather between the passenger’s estate and the deceased driver’s insurance company.

At the time of the accident, the driver had a policy with the insurance company. The policy limits were relatively small, just $10,000 per person and $20,000 per accident. However, the policy also provided the insurer would “defend any suit” on behalf of the driver, i.e. pay for his legal defense.

However, when the passenger’s estate filed a wrongful death lawsuit against the driver’s estate, the insurer did not provide a defense. Indeed, it appears according to court records the insurer took no action whatsoever. Consequently, the administrator of the driver’s estate decided to negotiate a $4 million settlement with the passenger’s estate.

In Florida law this is known as a “Coblentz agreement.” Basically, the insured party settles a claim and then assigns its right to sue the insurance company for bad faith in refusing to provide a defense. Here, the driver’s estate assigned its rights to the passenger’s estate, which then demanded payment of the $4 million settlement.

Not surprisingly, the insurer balked at this demand. The case remains pending before a federal court and may head to trial. Recently, the judge overseeing the case denied the insurer’s motion for summary judgment. As the judge explained, enforcement of a Coblentz agreement requires the party seeking recovery to prove three things: (1) the agreement is valid; (2) the settlement amount is “reasonable”; and (3) the agreement was the product of “good faith” negotiations. The judge said there was disputed evidence on the last two points, which necessitated a trial.

As to the validity of the agreement, the judge said the insurer had already waived its right to pursue this issue. The insurer argued that the Coblentz agreement was filed after the expiration of the three-month deadline for presenting creditor claims under Florida probate law. But the insurer never raised that issue while the original wrongful death lawsuit was pending. It therefore could not raise it now.

Speak With a Florida Estate Administration Lawyer Today

It is impossible to predict what kind of legal issues may arise after your death. This is why it is critical to have a proper estate plan, since it ensures someone you trust will be in a position to deal with any issues. If you need assistance from an experienced Fort Myers estate planning attorney in preparing a will or trust, contact the Kuhn Law Firm, P.A., at 239-333-4529 to schedule a free consultation today.


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