Petition for Writ of Certiorari — U. S. Borax Inc. v. Forster

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Suprémé Court, U.S.

\ FILED

991638 APR 1 1 2000

No. 99-___

OFFICE OF THE CLERK

In The

Supreme Court of the United States

*°

U.S. BORAX INC.,

Petitioner,

NANCY FORSTER, as Personal Representative of

the Estate of CHARLES F. READE, SR.,

Respondent.

On Petition For A Writ Of Certiorari

To The Fourth District Court Of Appeal

Of The State Of Florida

PETITION FOR A WRIT OF CERTIORARI

Drew S. Days III MIcHELE B. CorASH

Morrison & Foerster LLP BARRY S. SANDALS

2000 Pennsylvania Ave, (Counsel of Record)

N.W. Brooxs M. BEARD

Suite 5500 Morrison & Foerster LLP

Washington, DC : 425 Market Street

20006-1888 San Francisco, CA

(202) 887-1500 94105-2482

Mic (415) 268-7000

ICHAEL I. STOCKMAN

U.S. Borax Inc. Counsel for Petitioner

26877 Tourney Road

Valencia, CA 91355

(661) 287-5400

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (402) 342-2831

ihe

QUESTIONS PRESENTED

May a decedent’s estate dispense with providing

actual notice of estate administration to contingent,

but reasonably ascertainable, creditors — such as

claimants for contribution under the Comprehensive

Environmental Response, Compensation and Liability

Act — consistent with the requirements of due process

reaffirmed most recently by this Court in Tulsa Prof'l

Collection Servs., Inc. v. Pope?

Does the three-year statute of limitations established

by Congress for contribution claims under CERCLA

preempt shorter state statutes governing the adminis-

tration of decedents’ estates?

LIST OF PARTIES

The parties are as stated in the caption.

RULE 29.6 STATEMENT

In accordance with Rule 29.6, Petitioner U.S. Borax

Inc. states that its parent corporation is Rio Tinto America

Inc.

es alt I Va a4 nt

iil

TABLE OF CONTENTS

Page

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EN oon A oct e Ue sue dnpcaeseciceeerees 1

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CONSTITUTIONAL AND STATUTORY PROVI-

Es 5 vie as cane aade bev et enensse ce 1

ne Perr rar er ree 2

i ine cthckanaeweewieecenebeduees 2

RTT Tee ETC Teee 3

C. Florida State Court Proceedings ..........- 5

Bu) DUONG PeOwOte COU, 2... cc ceeccesss 5

2. Florida Fourth District Court of Appeal.. 7

3. Supreme Court of Florida.............. 9

II.

TABLE OF CONTENTS - Continued

Page

REASONS FOR GRANTING THE PETITION...

A. The Ruling Below That A Decedent’s Estate

May Dispense With Providing Actual Notice

To “Contingent,” But Reasonably Ascertain-

able, Creditors - Such As Claimants For

Contribution In Accordance With CERCLA -

Is Inconsistent With The Requirements Of

Due Process Reaffirmed Most Recently By

This Court In Tulsa Prof’l Collection Servs. v.

Pope And Undermines Congressional Intent

That Everyone Who Is Responsible For Haz-

ardous Waste Contamination Should Con-

tribute To The Costs Of Cleanup...........

The Ruling Below That The Three-Year Stat-

ute Of Limitations Established By Congress

For Contribution Claims Under CERCLA

Does Not Preempt Shorter State Statutes

Governing The Administration Of Dece-

dents’ Estates Poses An Obstacle To The

Accomplishment And Execution Of The Full

Purposes And Objectives Of That Act......

ee om Rs | errr rere Te rere Ter eT Seer Tere

a coichs SemPR ener MUR

Sf eed Bt Le ARLE Man ER MN UA a p8 eon

TABLE OF AUTHORITIES

Page

Cases

California Fed. Sav. & Loan Ass'n v. Guerra,

GPe We Bre CRUE 65d de deeskiecuscaxavanens 8, 11, 16

Freudenberg-NOK Gen. Partnership v. Thomopoulous,

Case No. C91-297-L, 1991 U.S. Dist. LEXIS

avees Cree: Wee. 9, DOPE). ee coe vesccicciseesats 17

In re Estate of Anderson, 615 N.E.2d 1197 (Ill. App. |

ROPES 5 ca PRA Re Hee CRNA AEE SS SERA 14

In re Estate of Reynolds, 970 P.2d 537 (Kan. 1998) .... 14

Meghrig v. KFC W., Inc., 516 U.S. 479 (1996)......... 15

Mennonite Bd. of Missions v. Adams, 462 U.S. 791

GROEN ks 3A. Nwks00900 beensy cieh peek eee tee, 12

Mullane v. Central Hanover Bank & Trust Co.,

ee I er errr 12, 13, 14

Soo Line R.R. Co. v. B.J. Carney & Co., 797 F. Supp.

Ware GA TR, WIG ine 6s ccecee cence ieiweaxnaens 17

Steego Corp. v. Ravenal, 830 F. Supp. 42 (D. Mass.

EDs 56 cea dah heb cae habe eee 16

Tulsa Prof’! Collection Servs., Inc. v. Pope,

Ce Wri re Rk 6 ohana ete eae kia eee passim

U.S. Trust Co. of Fla. Sav. Bank v. Haig,

694 So. 2d 769 (Fla. 4th DCA 1997)..... 8, 12, 13, 14

United States v. Bestfoods, 524 U.S. 51 (1998)....... 9, 10

Witco Corp. v. Beekhuis, 38 F.3d 682

ree Ge PO a ce aeeaa cap cienene ei creeks 7, 8, 18, 19

TABLE OF AUTHORITIES - Continued

Page

STATUTES

BO UGA. © WFR ovccdctsacncevesssactesssees eee 6

42 U.S.C.

i PE 65.050 caseccdeucecvinessneete eee 15, 17

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DS COC +h: s000cne¥i pueenceseceatseeseensoel 16

Poactiin Doabuten, © Tags s < 6060s 605054 wevsaadeeeeees 5

OTHER MATERIALS

Simon and Hennessey, Estates, Trusts, & Guardian-

ships: 1998 Survey of Florida Law, 23 Nova L. Rev.

B99 CD DOE havc cdneusces sac80sacesuciennl eee 13

Liston uashiathiae

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PETITION FOR A WRIT OF CERTIORARI

U.S. Borax Inc. (“Petitioner”) respectfully petitions

for a writ of certiorari to review the judgment of the

Fourth District Court of Appeal of the State of Florida in

this case.

OPINIONS BELOW

The Opinion of the Florida Court of Appeal is

reported at 24 Fla. Law W. D 1220, Case No. 97-4107, 1999

Fla. App. LEXIS 6494 (May 19, 1999). See App. at 3-13.

The Order of the Circuit Court of the Nineteenth Judicial

Circuit in and for Martin County, Florida, see App. at

14-15, is not officially reported.

JURISDICTION

The judgment of the Florida Court of Appeal was

entered on July 23, 1999. The Supreme Court of Florida

denied Borax’s Petition for Review on January 13, 2000.

See App. at 1-2. The jurisdiction of this Court rests on 28

U.S.C. § 1257(a).

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

The Due Process Clause of the Fourteenth Amend-

ment to the United States Constitution, U.S. Const.

amend. XIV, § 1, provides that “[n]o State shall

... deprive any person of life, liberty, or property, with-

out due process of law[.]”

The Supremacy Clause of the United States Constitu-

tion, U.S. Const. art. VI, cl. 2, provides that “[t]his Consti-

tution, and the Laws of the United States which shall be

made in Pursuance thereof. . . shall be the supreme Law

of the Land; and the Judges in every State shall be bound

thereby, any Thing in the Constitution or Laws of any

State to the Contrary notwithstanding.”

Relevant portions of the Comprehensive Environ-

mental Response, Compensation and Liability Act of

1980, as amended, and the Florida Probate Code are set

forth at App. at 39-58.

I. STATEMENT

A. Introduction

Sued for CERCLA contribution, Petitioner in turn

sought contribution from the estate of a “potentially

responsible party” being probated in Florida. Petitioner

seeks review by this Court of rulings by Florida courts

that: (1) a decedent’s estate may dispense with providing

actual notice of estate administration to contingent, but

reasonably ascertainable, creditors — such as claimants for

contribution under the Comprehensive Environmental

Response, Compensation and Liability Act of 1980, as

amended, 42 U.S.C. §§ 9601 et seq. (“CERCLA”) - consis-

tent with the requirements of due process reaffirmed

most recently by this Court in Tulsa Prof'l Collection Servs.,

Inc. v. Pope, 485 U.S. 478 (1988); and (2) the three-year

Shererens enero ane

statute of limitations established by Congress for contri-

bution claims under CERCLA does not preempt state

Statutes governing the administration of decedents’

estates.

B. Proceedings Below

Involvement of the Florida courts was triggered by

events that began in the State of Missouri in 1990 when

the Missouri Department of Natural Resources (and later

the United States Environmental Protection Agency)

began raising concerns about environmental conditions at

a former industrial site (the “Site”) located in Kansas

City. The Site had been operated for decades by the

Reade Manufacturing Company (“Reade Manufactur-

ing”) as one of its several herbicide facilities. In 1963,

Petitioner entered into an agreement to lease Reade Man-

ufacturing’s herbicide facilities for five years with an

option to purchase the facilities, including the Site. At the

end of the five-year term, Petitioner chose not to exercise

the option and returned the leased properties to Reade

Manufacturing in 1968.

After Petitioner’s decision not to exercise its option

to purchase the Site, Reade Manufacturing sold the Site

and its herbicide facility to another concern, the Horne-

Boatright Chemical Company (later Habco, Inc.). Habco,

Inc., operated the Site until at least 1986, when a partner-

ship affiliated with Habco, K.C. 1986 Limited Partnership

(“K.C. 1986”), took ownership of the by-then inactive

property. Reade Manufacturing, however, continued in

business in other product lines until 1983. In that year,

Charles F. Reade, Sr., the great-grandson of the founder

of Reade Manufacturing, and at that time a long-standing

company executive and owner of all of Reade Manufac-

turing’s common stock, sold his entire interest to Reactive

Metals & Alloys Corporation (“REMACOR”). REMACOR

thereafter operated Reade Manufacturing’s business as a

division under the fictitious name Reade Manufacturing

Company. |

In 1992, K.C. 1986 sent a demand letter to REMACOR

alleging that, as the successor to Reade Manufacturing,

REMACOR was responsible for cleaning up contamina-

tion (mainly arsenic) from the Site. The following year,

K.C. 1986 filed an environmental action, under CERCLA,

in the United States District Court for the Western Dis-

trict of Missouri against REMACOR and Petitioner.! The

Missouri_ federal district court established a March 14,

1997 deadline for the addition of new parties. In early

March 1997, during a computer database inquiry per-

formed by its counsel to determine if new parties should

be added, Petitioner first learned of Charles F. Reade,

Sr.’s death on May 16, 1995. On April 22, 1997, Petitioner

filed a Third-Party Complaint against Nancy Reade Fors-

ter, as the Personal Representative of the Estate of

Charles F. Reade, Sr. (the “Estate”). Petitioner sought

contribution from the Estate to pay for past and future

1 The following parties were later added as defendants and

third-party defendants in the Missouri federal proceedings:

Hardee’s Food Systems; Terracon Environmental, Inc.; Habco,

Inc.; Donald E. Horne; Victor A. Horne, Jr.; DEH Merrywood

Co.; Habco International, Inc.; Nancy Reade Forster, as Personal

Representative of the Estate of Charles F. Reade, Sr.; Burlington

Northern Railroad Company; British Aluminum Limited; and

Magnesium Elektron, Inc.

esta a 0 sn

2 ie ancl SERIO ALI

oi iF a i ol ls a

response costs resulting from the contamination of the

Site, contending that Charles F. Reade, Sr. (and, since his

death, his successor Estate) was liable as an “operator” of

a site where hazardous substances were disposed and

released. A Third-Party Summons and Complaint were

served on Ms. Forster by mail on April 29, 1997.

C. Florida State Court Proceedings

1. Florida Probate Court

As a protective measure, on May 15, 1997, Petitioner

filed a statement of claim in Florida probate proceedings

that the Estate had initiated in the Probate Division of the

Circuit Court for Martin County, Florida. Estate adminis-

tration had commenced when the Estate filed a Notice of

Administration on June 5, 1995. Under the Florida Pro-

bate Code requirements, Florida Statutes § 733.702 (App.

at 50-52), creditors are normally required to file claims

within three months after estate administration com-

mences. Petitioner’s statement of claim requested that the

probate court grant it an extension of time for filing the

claim against the Estate.

In support of its request for an extension, Petitioner

contended, first, that it should have been provided actual

notice of the administration of the Estate because, under

Pope: (1) it was “reasonably ascertainable” as a creditor

under the circumstances; and (2) constitutional due pro-

cess required actual notice or at least notice in a news-

paper of national circulation. Petitioner had not received

actual notice of Charles F. Reade, Sr.’s death or of the

commencement of the Estate’s administration. Nor had

Petitioner received effective constructive notice; the only

notices of administration published by the Estate were in

small-town local newspapers in Florida and North Caro-

lina. Second, Petitioner argued that the CERCLA three-

year statute of limitations preempted the three-month

Florida limitations period. The Estate opposed Peti-

tioner’s claim as untimely.

On October 22, 1997, the probate court held, inter alia,

that: (1) as a contingent claimant, Petitioner was not

entitled to actual notice of Charles F. Reade, Sr.’s death

and that the Estate’s newspaper notices of the probate

claims bar date satisfied constitutional due process

requirements; (2) Petitioner was not a reasonably ascer-

tainable creditor nor known to the personal representa-

tive of the Estate; and (3) CERCLA did not preempt the

three-month Florida statute. See App. at 14-15.3

2 On June 16, 1997, Petitioner moved for summary

judgment in the Missouri federal proceedings on its CERCLA

claims against the Estate. Thereafter, on September 17, 1997,

Petitioner moved the Florida probate court to stay any ruling on

the petition for an extension of time to file until the Missouri

federal district court acted on the summary judgment motion.

Petitioner argued that the parties had already fully briefed and

submitted for a ruling in the federal proceeding both the

questions of CERCLA preemption and due process at issue

before the probate court. On October 1, 1997, the probate court

denied Petitioner’s motion to stay.

3 After the probate court’s ruling, the Estate moved in the

Missouri federal district court f dismiss Petitioner’s CERCLA

complaint based on collateral estoppel grounds, invoking the

federal full faith and credit statute, 28 U.S.C. § 1738. On January

30, 1998, the federal court denied Petitioner’s summary

judgment motion regarding the Estate’s liability (based on the

existence of disputed facts as to Charles F. Reade, Sr.’s personal

liability as an “operator” under CERCLA), but held that

“ee

nag TONE ale Lae) SA

2. Florida Fourth District Court of Appeal

Petitioner appealed the Florida probate court’s ruling

to the Florida Fourth District Court of Appeal. On May

19, 1999, that court affirmed, inter alia, the probate court's

determinations that CERCLA does not preempt the Flor-

ida Probate Code’s three-month filing limitations period

and that Petitioner was not entitled to actual notice of the

Estate’s administration and the three-month bar date. See

App. at 3-13.

With respect to the preemption issue, the District

Court of Appeal relied primarily upon the reasoning of

the United States Court of Appeals for the Third Circuit

in Witco Corp. v. Beekhuis, 38 F.3d 682 (3d Cir. 1994). In

Witco, the Third Circuit held that CERCLA’s three-year

statute of limitations for contribution claims did not pre-

empt Delaware's eight-month statutory deadline, based

upon its application of the federal preemption analysis

CERCLA preempts Florida’s three-month probate limitations

period. See App. at 26-38. The court aiso denied the Estate’s

motion to dismiss, holding that Petitioner was not barred on

collateral estoppel grounds from litigating the question of

whether CERCLA preempts the Florida statute. See App. at

16-25. The court held, however, that principles of collateral

estoppel prevented Petitioner from revisiting the ruling of

the Florida probate court that Petitioner was afforded

constitutionally-adequate notice by the Estate. See App. at

23-24. No appeals were taken by either party from those district

court rulings. In December 1998, the Missouri federal district

court granted the parties’ joint request for a voluntary dismissal

without prejudice of all claims, cross-claims, and third-party

claims pending the selection by the United States

Environmental Protection Agency of a remedy for the Site,

when total cleanup costs will be more predictable.

set out by this Court in California Fed. Sav. & Loan Ass'n v.

Guerra, 479 U.S. 272 (1987). Finding Witco “persuasive”

authority, the Florida Fourth District Court of Appeal

agreed with the Third Circuit’s determinations that, “in

enacting CERCLA Congress has not explicitly preempted

all state law on environmental subject matters, nor has

Congress enacted such a comprehensive scheme of regu-

lation as to provide no room for supplementation by the

states.” Witco, 38 F.3d at 687. Finally, it found that there

was no conflict between CERCLA and Florida’s three-

month statute since “compliance with both statutes was

possible.” App. at 7-11.

The Fourth District Court of Appeal also affirmed the

probate court’s determination that Petitioner was not

entitled to actual notice. See App. at 12-13. It held in effect

that the lower court had properly followed its own earlier

precedent on that issue, U.S. Trust Co. of Fla. Sav. Bank v.

Haig, 694 So. 2d 769 (Fla. 4th DCA 1997) (App. at 59-64).4

+ In Haig, the Fourth District Court of Appeal interpreted

this Court’s statement in Pope that “it is reasonable to dispense

with actual notice to those with mere conjectural claims,” Pope,

485 U.S. at 490, to mean that those with contingent claims were

also not entitled to actual notice. Hence, it held in that case that

actual notice was not due even to persons whose identities and

whereabouts were fully known to the decedent’s personal

representative if their claims depended upon “some future

event” that might or might not happen. Haig, 694 So. 2d at 771.

In the case here in which certiorari is being sought, the Fourth

District Court of Appeal declined Petitioner’s request that the

court reconsider its decision in Haig. Petitioner had urged it to

“reconsider and modify its holding in Haig so that ‘contingent’,

as distinguished from ‘conjectural’ claimants who are known or

reasonably ascertainable, are entitled to receive actual! notice,

just like non-contingent claimants known to the Estate.”

FN ala i Pt bar

On July 2, 1999, the Fourth District Court of Appeal

denied Petitioner’s motion that the case be certified to the

Supreme Court of Florida to give that court the oppor-

tunity to review on policy grounds the question of

whether a state court should stay consideration of a fed-

eral preemption issue when that same issue is pending

before a federal court.5

3. Supreme Court of Florida

On January 13, 2000, the Supreme Court of Florida

declined to accept, pursuant to article V, section 3(b) of

the Florida Constitution, discretionary review of the deci-

sion of the Fourth District Court of Appeal.

II. REASONS FOR GRANTING THE PETITION

The decision of the Florida Fourth District Court of

Appeal warrants review by this Court because it places

two major obstacles, operating in tandem, in the path of

effective enforcement of an important federal statute, the

Comprehensive Environmental Response, Compensation

and Liability Act of 1980, as amended, 42 U.S.C. §§ 9601

et seq. (“CERCLA”), “enacted in response to the serious

environmental and health risks posed by industrial pollu-

tion.” United States v. Bestfoods, 524 U.S. 51, 55 (1998).

° The Fourth District Court of Appeal had held that the

probate court had not abused its discretion in denying

Petitioner’s motion to stay the probate proceedings pending the

Missouri federal district court’s resolution of the preemption

and adequacy of notice issues. See App. at 11-12.

Central to that remedial scheme is the principle that

“those actually responsible for any damage, environmen-

tal harm, or injury from chemical poisons may be tagged

with the cost of their actions.” Id. at 55-56.

Customarily, CERCLA litigation cases are bifurcated

into issues of liability and damages, with liability deter-

minations being made first. Claims are not typically

brought immediately against all potential defendants

because it is not cost-effective for the litigants or the

courts to consider all potential defendants until the costs

of remedial action are better known. In addition, time is

typically required to develop sufficient information about

a party’s responsibility under the law. As a result, in

many cases, as here, a claim will not be filed and litigated

until years after the initial filing of a CERCLA cost-

recovery lawsuit.

For that reason, the Florida District Court of Appeal’s

ruling that “contingent” claimants are not entitled to

actual notice by a decedent's estate significantly disrupts

the orderly resolution of CERCLA litigation, since

CERCLA claims may, by definition, be “contingent” and

unliquidated for many years or (as here) even decades.

As a result of the Florida court’s misreading of Tulsa

Prof'l Collection Servs., Inc. v. Pope, 485 U.S. 478 (1988),

CERCLA claimants in Florida, even ones that are “known

or reasonably ascertainable,” may be denied, as here,

sufficient due process to ensure that the estates of parties

liable for cleanup costs are not absolved of their respon-

sibilities under the Act.®

The second obstacle is the Florida appellate court’s

determination that Florida’s three-month limitations

period for filing claims in probate proceedings is not

preempted by CERCLA’s three-year statute of limitations.

If adopted more widely, that ruling would basically stand

the Act on its head, given the realities of the CERCLA

litigation process described above. Congress quite plainly

intended CERCLA’s limitations provisions to preempt

shorter statutes of limitations, concerned as it was with

long-term responsibility for long-term environmental

problems. Unlike the conclusion reached by the Florida

court here and by one federal court of appeals, four

federal district courts (including the federal district court

with jurisdiction over the Estate in the Missouri CERCLA

litigation) have ruled that the three-year limitations

period contained in CERCLA preempts shorter state pro-

bate limitations periods. Clarification in this regard is

called for to ensure that these state laws do not stand “as

an obstacle to the accomplishment and execution of the

full purposes and objectives of Congress” embodied in

CERCLA. California Fed. Sav. & Loan Assoc. v. Guerra, 479

U.S. 272, 280-81 (1987).

6 [ndeed, CERCLA claimants anywhere in the country with

claims against potentially responsible parties domiciled in

Florida are affected by this ruling.

A. The Ruling Below That A Decedent's Estate

May Dispense With Providing Actual Notice To

“Contingent,” But Reasonably Ascertainable,

Creditors - Such As Claimants For Contribu-

tion In Accordance With CERCLA - Is Inconsis-

tent With The Requirements Of Due Process

Reaffirmed Most Recently By This Court In

Tulsa Prof’l Collection Servs. v. Pope And

Undermines Congressional Intent That Every-

one Who Is Responsible For Hazardous Waste

Contamination Should Contribute To The Costs

Of Cleanup.

In Pope, this Court held that the Due Process Clause

of the Fourteenth Amendment requires a decedent’s

estate to provide actual mail notice of an estate’s adminis-

tration if the identity of a claimant is “reasonably ascer-

tainable” through “reasonably diligent efforts.” Pope, 485

U.S. at 490. Pope follows a long line of decisions by this

Court, from Mullane v. Central Hanover Bank & Trust Co.,

339 U.S. 306 (1950), through Mennonite Bd. of Missions v.

Adams, 462 U.S. 791 (1983), designed to underscore the

fundamental principle that

[aJn elementary and fundamental requirement

of due process in any proceeding which is to be

accorded finality is notice reasonably calculated,

under all the circumstances, to apprise inter-

ested parties of the pendency of the action and

afford them an opportunity to present their

objections.

Mullane, 339 U.S. at 314.

Nine years after Pope, the Florida Fourth District

Court of Appeal decided U.S. Trust Co. of Florida Sav. Bank

v. Haig, 694 So. 2d 769 (Fla. 4th DCA 1997), a decision

upon which the same court relied in ruling that Petitioner

was not entitled to actual notice from the Estate in this

litigation. Seizing upon a snippet taken from the Pope

opinion, the Florida court fashioned a narrow doctrine

hostile to Pope - one that, in fact, completely relieves

decedents’ estates of providing actual notice to contin-

gent claimants like Petitioner, with dire consequences

generally for those seeking contribution in CERCLA cost-

recovery suits.

In Pope, this Court stated as follows: “Here as in

Mullane, it is reasonable to dispense with actual notice to

those with mere ‘conjectural’ claims.” Pope, 485 U.S. at

490. The Florida court’s Haig decision, however, inter-

preted Pope to mean that “[actual] notice is not due to

contingent or conjectural claimants.” Haig, 694 So. 2d at

771 (emphasis added). That court, in other words, plainly

confused “contingent” claims with the “conjectural” ones

exempted by Mullane and Pope and reasoned that the two

were one and the same. It therefore ruled that actual

notice of estate administration was not owed to General

Alexander Haig, who had purchased a home from the

decedent; the decedent had executed a guaranty against

structural defects. The Florida court ruled that the Gen-

eral’s claim was “contingent” because he had not yet

proved in court that the home had actionable defects or

the amount of damages. Consequently, it held that no

actual notice was necessary. In this case, the same Florida

appeals court rejected Petitioner’s Due Process argu-

ments with the terse comment: “We decline Borax’ invita-

tion to reconsider our decision in Haig.” App. at 13.

The Florida court’s reading of Mullane and Pope

places a major obstacle in the path of effective enforce-

ment of CERCLA, since claims under that federal statute

are by definition “contingent” and unliquidated - but

that does not mean that they are in any sense “conjec-

tural.”” A careful reading of Mullane reveals that certain

“conjectural” claimants need not be given notice because

the burden of determining their identity is too great, see

Mullane, 339 U.S. at 317-18; “contingent” claimants by

contrast may be perfectly obvious. For CERCLA litiga-

tion, what Haig means is that a decedent’s estate may be

aware that a cost-recovery action is pending involving a

site for which the decedent was a responsible party and

yet may have no duty to provide actual notice of the

decedent’s death to claimants in that litigation. Indeed,

according to the Florida court’s rationale in Haig, the

estate could intentionally (and with impunity) allow the

state’s three-month claim period to run. Review by this

Court is warranted because such an outcome is funda-

mentally inconsistent with Pope and deeply inimical to

the enforcement scheme Congress envisioned in enacting

CERCLA.

7 The reasoning in Haig poses a threat to contingent

claimants generally. Florida probate law specialists have written

that “Haig represents a small but significant retreat from Pope

and could prove extremely troublesome to contingent

creditors. .. . ” Simon and Hennessey, Estates, Trusts, &

Guardianships: 1998 Survey of Florida Law, 23 Nova L. Rev. 119,

132-33 (Fall 1998). Moreover, jurisdictions other than Florida

have struggled with the “contingent vs. conjectural” dichotomy.

See In re Estate of Anderson, 615 N.E.2d 1197 (Ill. App. 1993); In re

Estate of Reynolds, 970 P.2d 537 (Kan. 1998).

B. The Ruling Below That The Three-Year Statute

Of Limitations Established By Congress For

Contribution Claims Under CERCLA Does Not

Preempt Shorter State Statutes Governing The

Administration Of Decedents’ Estates Poses An

Obstacle To The Accomplishment And Execu-

tion Of The Full Purposes And Objectives Of

That Act.

One of CERCLA’s key purposes is to require respon-

sible parties to clean up hazardous waste sites. See

Meghrig v. KFC W., Inc., 516 U.S. 479, 483 (1996). To help

accomplish this objective in view of the fact that environ-

mental problems may not come to light for decades after

relevant acts of pollution, CERCLA contains its own,

liberal statute of limitations:

An initial action for recovery of the costs

referred to in section 9607 of this title must be

commenced —

(A) for a removal action, within 3 years after

completion of the removal action, except that

such cost recovery action must be brought

within 6 years after a determination to grant a

waiver under section 9604(c)(1)(C) of this title

for continued response action; and

(B) for a remedial action, within 6 years after

initiation of physical on-site construction of the

remedial action, except that, if the remedial

action is initiated within 3 years after the com-

pletion of the removal action, costs incurred in

the removal action may be recovered in the cost

recovery action brought under this subpara-

graph.

42 U.S.C. § 9613(g)(2) (App. at 42-43). CERCLA also pro-

vides:

No action for contribution for any response

costs or damages may be commenced more than

3 years after -

(A) the date of judgment in any action under

this Act for recovery of such costs or damages,

(B) the date of an administrative order under

section 122(g) (relating to de minimis settle-

ment) or 122(h) (relating to cost recovery settle-

ments) or entry of a judicially approved

settlement with respect to such costs or dam-

ages.

42 U.S.C. § 9613(g)(3) (App. 43-44). As the facts of this

case indicate, Congress acted wisely in this regard. At the

time Petitioner filed its claims against the Estate, Site

conditions were still being investigated. There had not

yet been any cleanup activity, nor had there been a judg-

ment or settlement. Therefore, the CERCLA limitations

period had not even begun to run on Petitioner’s contri-

bution claims against the Estate.

Consistent with Guerra, 479 U.S. 272, most federal

courts have concluded that probate limitations are pre-

empted and therefore invalid under the Supremacy

Clause of the United States Constitution because they

stand in the way of accomplishing CERCLA’s purpose.

See Steego Corp. v. Ravenal, 830 F. Supp. 42, 47-48 (D. Mass.

1993) (Rhode Island probate statute preempted due to

“CERCLA’s broad remedial purpose and Congress’s

expressed intent that those responsible for hazardous

waste sites bear the cost of cleaning them up”) (internal

quotes omitted); Soo Line R.R. Co. v. B.J. Carney & Co., 797

F. Supp. 1472, 1485 (D. Minn. 1992) (“[t]o the extent that

the state [probate] law purports to release responsible

parties from liability for releasing hazardous wastes into

the environment, CERCLA preempts state law”); Freuden-

berg-NOK Gen. Partnership v. Thomopoulous, Case No.

C91-297-L, 1991 U.S. Dist. LEXIS 19421, at **7-9 (D.N.H.

Dec. 9, 1991) (New Hampshire’s six-month probate lim-

itations period preempted because CERCLA’s legislative

history left “little doubt” that “Congress intended that

those responsible for problems caused by the disposal of

chemical poisons bear the costs and responsibility for

remedying the harmful conditions they created”) (cita-

tions omitted).

There is a clear judicial conflict in this very case on

the preemption issue. The Missouri federal district court

has held that CERCLA preempts Florida’s probate limita-

tions period, while the Florida courts have reached the

opposite conclusion. Noting that “Congress intended

CERCLA to be uniformly enforced in federal court using

federal law[,]” App. at 33, the Missouri federal district

court based its decision on several key factors, including

that: (1) Charles F. Reade, Sr.’s Estate was still open at the

time the CERCLA claim was filed against it; (2) Congress

intended that CERCLA actions be prosecuted under fed-

eral law, not state law; (3) CERCLA liability exists “not-

withstanding any other provision of rule or law .. . [,]” 42

U.S.C. § 9607(a); see also 42 U.S.C. § 9613(f)(1) (CERCLA

contribution actions are “brought according to the Fed-

eral Rules of Civil Procedure and shall be governed by

federal law”); (4) “[a] federal statute of limitations is

especially important because Congress knew that

CERCLA liability would extend to past owners or opera-

tors” and, given the likely lag time between contaminat-

ing activities and a resulting CERCLA lawsuit, the

probate limitations period might run before a suit is filed,

increasing the risk that the public will be required to bear

the expense of a cleanup, rather than the responsible

party as Congress intended; and (5) the polluting party

must pay for the cleanup and, because an estate is a

fictional entity created by the law as an extension of the

decedent, “an estate . . . cannot be innocent if the dece-

dent is not innocent.” App. at 35.

By contrast, the Florida appeals court ruled that

CERCLA does not preempt Florida’s three-month probate

limitations period. The Florida court relied solely on a

decision by the Third Circuit Court of Appeals, Witco

Corp. v. Beekhuis, 38 F.3d 682 (3d Cir. 1994), without

discussing or even mentioning the federal district court

cases that have gone the other way, including the Mis-

souri federal district court’s decision that intervened

between the decisions of the Florida probate court and

the Florida Court of Appeal.

Witco is the only federal case (and the only appellate

decision to address the issue) that has ruled that CERCLA

does not preempt state probate provisions. In Witco, the

Third Circuit concluded that CERCLA did not preempt

Delaware’s statute because, inter alia: (1) Congress did

not expressly preempt state probate laws through

CERCLA, and it was possible to comply with both

CERCLA’s and Delaware’s limitations periods; (2) pro-

bate issues are traditionally within the states’ realm, and

states have an interest in the prompt settlement of pro-

bate; (3) the Delaware statute did not obstruct congres-

sional intent; and (4) preemption would be unworkable

because a CERCLA suit could arise long after the settle-

ment of an estate, which could compromise the “goals of

certainty and promptness in the settlement and distribu-

tion of decedent’s estate.” 38 F.3d at 689-90.

The practical result of the Third Circuit’s approach,

however, is that CERCLA’s limitations period would be

displaced altogether for claims against estates. It would

require, instead, that claims for contribution under

CERCLA be based on at least fifty state probate limita-

tions periods. Such a result would frustrate Congress’

intent that polluters pay and would also inappropriately

burden the federal courts, because claimants would be

forced to initiate CERCLA actions — not within CERCLA’s

limitations period — but rather within the appropriate

state probate limitations periods, which are generally (as

with Florida’s three-month period) very short.

Resolution of these conflicting federal and state court

views regarding CERCLA preemption turns upon noth-

ing less than whether state statutes governing the admin-

istration of decedents’ estates will be allowed to stand as

obstacles “to the accomplishment and execution of the

full purposes and objectives of Congress[,]” including the

principle that the polluter pays.

CONCLUSION

For the reasons set forth above, the petition for cer-

tiorari should be granted.

Respectfully submitted,

Drew S. Days III MicHéLe B. CorasH

Morrison & Foerster LLP Barry S. SANDALS

2000 Pennsylvania Ave, (Counsel of Record)

N.W. Brooxs M. BEARD

Suite 5500 Morrison & Foerster LLP

Washington, DC 425 Market Street

20006-1888 San Francisco, CA

(202) 887-1500 94105-2482

MicHaev |. STOCKMAN (415) 268-7000

U.S. Borax INc. Counsel for Petitioner

26877 Tourney Road

Valencia, CA 91355

(661) 287-5400

April 11, 2000

App. 1

APPENDIX

Supreme Court of Florida

THURSDAY, JANUARY 13, 2000

CASE NO.: SC96258

Lower Tribunal No.: 4D97-4107

U.S. BORAX, INC. vs. NANCY FORSTER, ETC.

Petitioner Respondent

This cause having heretofore been submitted to the

Court on jurisdictional briefs and portions of the record

deemed necessary to reflect jurisdiction under Article V,

Section 3(b), Florida Constitution, and the Court having

determined that it should decline to accept jurisdiction, it

is Ordered that the Petition for Review is denied.

No Motion for Rehearing will be entertained by the

Court. See Fla. R. App. P. 9.330(d).

SHAW, WELLS, ANSTEAD, LEWIS and QUINCE, Jj.,

concur.

A True Copy

Test:

/s/ Debbie Causseaux (SEAL)

Debbie Causseaux

Acting Clerk, Supreme

Court

App. 2

Served: Hon. Marshal Stiller, Clerk

Sylvia H. Walbolt Barry S. Sandals

Roger Dean Schwenke Hon. Marilyn Beuttenmuller,

Joseph H. Lang, Jr. Clerk

Jody H. Oliver David E. Shay

Edna L. Caruso

Hon. David Harper, Judge

Drew S. Days, III

App. 3

IN THE DISTRICT COURT OF APPEAL

OF THE STATE OF FLORIDA

FOURTH DISTRICT JANUARY TERM 1999

U.S. BORAX, INC.,

Appellant,

NANCY FORSTER, As Personal Representative

of the Estate of CHARLES FE READE, SR.,

Appellee.

CASE NO. 97-4107

Opinion filed May 19, 1999

Appeal from the Circuit Court for the Nineteenth

Judicial Circuit, Martin County; David J. Harper, Judge;

L.T. Case No. 95-297 CP.

Roger D. Schwenke, Steven C. Dupre, and Susan L.

Landy of the Law Office of Carlton, Fields, Ward,

Emmanuel, Smith and Cutler, P.A., Tampa, for appellant.

Edna L. Caruso of the Law Office of Caruso, Bur-

lington, Bohn & Compiani, P.A., West Palm Beach, and

_ Jody H. Oliver of the Law Office of Gary, Dytrich & Ryan,

P.A., North Palm Beach, for appellee.

TAYLOR, J.

The issue in this case is whether the federal Compre-

hensive Environmental Response Compensation and Lia-

bility Act of 1980 (CERCLA), 42 USC § 9601 et seq.,

preempts Florida’s nonclaim statute for filing claims

against estates, Fla. Stat. section 733.702 (1995). U.S.

App. 4

Borax, Inc. (“Borax”) appeals two orders entered by the

Martin County probate court in favor of appellee, Nancy

Forster, the personal representative of the Estate of

Charles F. Reade. We find that the probate court correctly

ruled that CERCLA does not preempt Florida’s nonclaim

statute and that the court did not abuse its discretion in

denying Borax’s request for an extension and motion for

a stay to allow the federal court to first decide the pre-

emption and notice issues.

On May 26, 1995, Nancy Forster, as Personal Repre-

sentative of the Estate (“the Estate”) of her father, Charles

F. Reade, Sr. (“the decedent”) filed a petition for the

administration of his estate in Martin County, Florida.

Forster was appointed personal representative of the

Estate on May 31, 1995. In May, 1995, the decedent’s

obituary was published in the New York Times, the Newark

Star-Ledger, The Providence Rhode Island Press, the Stuart

County News, The Carteret Times and another newspaper

in North Carolina. Beginning on June 5, 1995, Forster

published a Notice of Administration of the decedent's

estate in newspapers in Stuart and Port St. Lucie, Florida

and in Carteret County, North Carolina. The three month

period for filing claims against the estate expired on

September 5, 1995.

On May 15, 1997, approximately a year and eight

months after the claims period expired, U.S. Borax, Inc.

(“Borax”) filed a claim against the Estate in probate court.

Borax’s claim was based upon a lawsuit filed in 1993 by

current owners of property in North Kansas City, Mis-

souri against Borax and Reade Manufacturing Company

(“RMC”), a Division of Reactive Metal & Alloys Corpora-

tion (REMACOR), in a Missouri federal district court

App. 5

under CERCLA. The civil action sought to recover the

costs of cleaning up the property, which had allegedly

been contaminated when previously occupied by the

defendants and used as a herbicide blending facility.

According to Borax’s claim, the decedent had been an

officer of RMC and exercised operational control of the

facility. Borax claimed that it was entitled to contribution

from the decedent toward the cost of cleaning up the

property.!

In 1997, the federal district court established a dead-

line of March 14, 1997 for the joinder of additional parties

to the CERCLA lawsuit. Soon thereafter, REMACOR

announced that it was insolvent. Borax’s counsel then

conducted a computer data inquiry in early March of

1997 to identify and locate other potential defendants.

This computer search led to the decedent’s obituary in

the New York Times. On April 28, 1997, Borax filed a third

party complaint against the Estate in the federal proceed-

ing. Additionally, Borax filed a claim against the Estate in

the Florida probate proceedings on May 15, 1997, along

with a petition for extension of time to file its claim

pursuant to sections 733.702 and 733.710, Florida Statutes.

Borax acknowledged in the petition that its claim was

contingent and unliquidated.

' CERCLA imposes liability upon those persons who fall

within one of four groups - owners of contaminated property,

operators of contaminated property, persons who arranged for

the disposal or treatment of hazardous substances, and persons

who transported hazardous substances there. 42 U.S.C.

§ 9607(a).

App. 6

In response to the complaint filed in the CERCLA

action, the Estate asserted that Borax’s claim was barred

by Florida’s three-month claims filing limitations period.

On June 16, 1997, Borax moved for summary judgment in

federal court, arguing that the decedent was personally

liable as an “operator” under CERCLA. Borax further

argued that the limitations period in the Florida probate

code is preempted by CERCLA’s three-year statute of

limitations, and that barring its claim under section

733.702 violated due process because Borax was not given

actual or effective constructive notice of the Estate.

In the probate court proceedings, the Estate filed a

petition to-strike Borax’s claim. Prior to the evidentiary

hearing on the petition, Borax moved to stay the probate

administration proceedings pending the federal court’s

resolution of the federal preemption and constitutional

issues raised by Borax in its summary judgment motion.

Essentially, Borax argued that comity and judicial econ-

omy warranted a stay of the probate proceeding pending

the outcome of the summary judgment motion in federal

court. The probate court denied the motion to stay and

proceeded with an evidentiary hearing on the Estate’s

petition to strike on October 20, 1997.

Following the evidentiary hearing, the probate court

granted the Estate’s petition to strike Borax’s untimely

filed claim and denied Borax’s petition for an extension

to file a claim. The court ruled that CERCLA does not

preempt section 733.702, Florida Statutes (1995). It also

concluded that Borax was a contingent claimant not enti-

tled to actual notice of decedent’s death; that the publica-

tion notice to creditors provided by the personal

representative comported with sections 733.212 and

App. 7

733.702, Florida Statutes, which statutes satisfy constitu-

tional due process mandates; that Borax was not a reason-

ably ascertainable creditor nor known to: the personal

representative; that the trust fund theory was inapplica-

ble as an exception to the non-claim statute for a contin-

gent claimant not identifying a specific piece of property;

that lack of interference with administration of the Estate

did not constitute grounds for an extension under section

733.702, Florida Statutes; and that granting an extension

would unduly interfere with the Estate’s administration.

Borax appeals from both the order denying its motion to

stay and the order denying its petition for extension of

time.

On January 30, 1998, the federal district court denied

Borax’s summary judgment motion, concluding that there

were disputed issues of fact as to whether operator lia-

bility could be imposed personally on the decedent.

However, contrary to the probate court's ruling, it deter-

mined that the longer CERCLA statute of limitations

preempted Florida’s three-month nonclaim statute and

that a trust should be imposed on the Estate’s assets to

guarantee any judgment against the Estate. In a separate

order, the federal court denied the Estate’s motion to

dismiss Borax’s CERCLA claim, rejecting the Florida pro-

bate court’s resolution of the CERCLA preemption and

due process notice issues.

We agree with the probate court's ruling that

CERCLA does not preempt Florida’s nonclaim statute for

filing claims against an estate. Although there is little

case law authority on this issue, we find Witco Corp. v.

Beekhuis, 38 F.3d 682 (3d Cir. 1994), to be persuasive.

Witco, the owner of a contaminated site, brought a

App. 8

CERCLA claim for contribution against Jeanne Beekhuis,

the daughter of Dr. H. Beekhuis and executrix of his

estate. Dr. Beekhuis was an officer, director and majority

stockholder of the company which had owned the con-

taminated land. In 1988 Witco had notified Dr. Beekhuis

of his potential liability under CERCLA. In 1989 Dr. Beek-

huis died. However, Witco did not seek contribution until

1990, when it petitioned the state court for a constructive

trust on the assets of Dr. Beekhuis’ estate. The district

court dismissed the petition for failure to state a cause of

action. In 1991, when the EPA notified Witco that it was a

potentially responsible party (PRP) under CERCLA for

the disposal of hazardous waste, Witco filed a claim

against the estate. The district court granted the estate’s

motion for summary judgment on the contribution claim,

based upon the fact that Delaware’s eight-month non-

claim statute had expired, and also denied Witco’s peti-

tion to imposes [sic] a constructive trust on the estate

assets. In affirming the district court, the third circuit

held that CERCLA’s three-year statute of limitations for

contribution claims does not preempt state nonclaim stat-

utes. Id. at 684.

In Witco, the third circuit applied the Supreme

Court’s analysis of federal preemption of state law in

California Federal Savings & Loan Ass'n v. Guerra, 479 U.S.

272, 280-81 (1987), stating as follows:

In determining whether a state statute is

preempted by federal law and therefore invalid

under the Supremacy Clause of the Constitu-

tion, our sole task is to ascertain the intent of

Congress. Federal law may supersede state law

in several different ways. First, when acting

App. 9

within constitutional limits, Congress is

empowered to preempt state law by so stating in

express terms. Second, congressional intent to

preempt state law in a particular area may be

inferred where the scheme of federal regulation

is sufficiently comprehensive to make reason-

able the inference that Congress “left no room”

for supplementary state regulation... .

As a third alternative, in those areas where

Congress has not completely displaced state

regulation, federal law may nonetheless pre-

empt state law to the extent it actually conflicts

with federal law. Such a conflict occurs either

because ‘compliance with both federal and State

regulations is a physical impossibility,’ or

because the state law stands ‘as an obstacle to

the accomplishment and execution of the full

Purposes and objectives of Congress.’

Witco, 38 F.3d at 687.

With respect to the first and second bases for pre-

emption of state law under Guerra, the third circuit noted

its prior decisions holding that “in enacting CERCLA

Congress has not explicitly preempted all state law on

environmental subject matters, nor has Congress enacted

such a comprehensive scheme of regulation as to provide

no room for supplementation by the states.” Witco at 687

(citing Manor Care, Inc. v. Yaskin, 950 F.2d 122, 125-26 (3d

Cir. 1991)). Regarding the third basis for preemption -

i.e., conflict between the state and federal laws, the court

concluded that it was possible for Witco to have complied

with both the federal and the state statutes. Delaware’s

eight-month nonclaim statute and CERCLA’s three-year

period for filing a contribution claim were not mutually

exclusive, because a claimant could notify an estate of a

App. 10

contingent claim within eight months of a decedent's

death, and also file a contribution action within three

years. While recognizing that there could be instances

where a claimant would be unable to comply with both

the state nonclaim statute and the CERCLA statute of

limitations, because a claimant did not become aware of

his or her own CERCLA liability until after a nonclaim

statutory period had expired, the court nevertheless con-

cluded that preemption is not appropriate. Rather, the

court reasoned that the primary focus is whether a non-

claim statute presents an “obstacle” to the aims and

objectives of CERCLA.

In determining that Congress could not have

intended to preempt state law governing claims against

decedents’ estates, the court stated:

First, and most significantly, a state’s inter-

est in the prompt settlement of its citizens’

estates is particularly strong. Probate law

... has traditionally been within the province of

the individual states. Longstanding precedent

recognizes that federal claims against decedents’

estates are subject to state probate laws and

procedures, unless federal law specifically pro-

vides otherwise.

Id. at 688-689 (citations omitted).

Additionally, Witco pointed out that nothing in the

language of CERCLA excepts it from probate laws; that

Congress provided for an “innocent landowner” defense

which would apply to one who inherits contaminated

property; and, that pursuant to the Federal Rules of Civil

Procedure, the capacity of an individual to sue or be sued

under CERCLA is determined by state law. Id. at 689.

App. 11

For the same reasons explained in Witco, we find that

CERCLA’s three-year statute of limitations does not pre-

empt Florida’s nonclaim probate statute. Here, there was

no conflict between the state and federal laws, since

compliance with both statutes was possible. Borax knew

of the decedent's identity and potential liability under

CERCLA and could have filed its contribution claim

against him prior to his death in 1995; instead it chose to

exclude the decedent from its original suit against several

other parties. Additionally, as pointed out in Witco, Borax

could have conducted its computer inquiry, notified the

estate within the three month period allowable under

section 733.702, and filed a contribution action within the

three years provided by CERCLA. It was not physically

impossible for Borax to comply with both the state and

federal statutes. Borax’s ill-timed decision to pursue its

claim against the decedent is not a sufficient basis to

justify preempting Florida probate law and disturbing

what has traditionally been within the province of the

states. Unless federal law specifically provides otherwise,

long standing precedent favors subjecting federal claims

against decedents’ estates to state probate laws and pro-

cedures and recognizes the state’s paramount interest in

the prompt and final settlement of its citizens’ estates.

Next, we find that the probate court did not abuse its

discretion in denying Borax’s motion to stay the probate

proceedings pending the district court’s resolution of the

preemption and adequacy of notice issues. Because the

federal and state courts did not have concurrent jurisdic-

tion, we find that the rule of priority, relied upon by

Borax, does not apply in this case. Cf. Lawyers Professional

Liability Ins. Co. v. Shand, Morahan & Co., 394 So.2d 238

App. 12

(Fla. lst DCA 1981) (citing Wade v. Clower, 114 So. 548

(Fla. 1927)) (“In the interests of state and federal comity,

where there is concurrent jurisdiction, the general rule is

that the court whose jurisdiction first attaches may deter-

mine the controversy, and the proceedings in the last

action filed should be stayed or suspended until the first

action is tried and determined.”) (emphasis supplied).

The federal and state actions implicated in this case are

not between the same parties and do not involve the

same issues. The federal CERCLA claim is an in personam

action to recover cleanup costs in connection with con-

taminated property and is before the district court pur-

suant to federal-question jurisdiction. The state action is

an in rem probate action for the distribution of the dece-

dent’s estate and is before the circuit court pursuant to

Florida probate laws. Because of the exclusive jurisdiction

of each court, this case is distinguishable from those cases

cited by Borax, which hold that it is appropriate to stay

duplicate proceedings where the resolution of the federal

action would obviate the need to pursue the state action.

See 42 U.S.C. § 9613(b); Art. V, § 20(c)(3), Fla. Const.

Whether Borax’s claim was timely filed in the probate

court and whether Borax should have been granted an

extension to file an untimely claim in that court are

probate issues, which only the probate judge had jurisdic-

tion to determine.

Finally, we reject Borax’s contention that the probate

court erred in denying its request for an extension to file

a claim against the estate. We agree with the probate

court’s determination that Borax was not entitled to

actual notice. See U.S. Trust Co. of Florida Savings Bank v.

Panecne e Seci ecs eoa misma

Sea eg

App. 13

Haig, 694 So.2d 769 (Fla. 4th DCA 1997). We decline

Borax’s invitation to reconsider our decision in Haig.

Accordingly, we affirm the probate court’s orders

granting the Estate’s petition to strike Borax’s untimely

filed claim and denying Borax’s Motion to Stay and Peti-

tion for Extension of time to file its untimely claim.

AFFIRMED.

POLEN and GROSS, JJ., concur.

NOT FINAL UNTIL THE DISPOSITION OF ANY

TIMELY FILED MOTION FOR REHEARING.

App. 14

IN THE CIRCUIT COURT OF THE

NINETEENTH JUDICIAL CIRCUIT

IN AND FOR MARTIN COUNTY,

FLORIDA

CASE NO: 95-297 CP

IN RE: ESTATE OF

CHARLES F. READE, SR.

Deceased.

ORDER GRANTING ESTATE’S PETITION TO STRIKE

UNTIMELY FILED CLAIM AND DENYING BORAX’S

PETITION FOR EXTENSION TO FILE A CLAIM

THIS CAUSE having come before the Court at an

Evidentiary Hearing held on October 20, 1997, on the

Estate’s Petition To Strike Untimely Filed Claim And

Borax’s Petition for Extension to File a Claim and the

Court having heard the testimony of witnesses and argu-

ment of counsel, it is hereby

ORDERED AND ADJUDGED that the Estate’s Peti-

tion to Strike Untimely Filed Claim is granted and

Borax’s Petition for Extension to File a Claim is denied on

the following grounds:

A. The publication notice to creditors provided by

Nancy Forster, Personal Representative of the Estate of

Charles F. Reade, Sr., comported with Florida law, speci-

fically Sections 733.212 and 733.702, Florida Statutes

(1995), which statute satisfies constitutional due process

mandates. As a contingent claimant, Borax is not entitled

to actual Notice;

App. 15

B. The court finds Borax was not a reasonably ascer-

tainable creditor nor known to the Personal Representa-

tive;

C. The trust fund theory is inapplicable as an excep-

tion to the nonclaim statute for a contingent claimant not

identifying a specific piece of property;

D. CERCLA does not preempt Section 733.702, Flor-

ida Statutes (1995);

E. Lack of interference with administration of the

Estate does not constitute grounds for an extension under

733.702, Fla. Stat. (1995); however, granting an extension

would unduly interfere with this Estate’s administration.

The court specifically reserves jurisdiction to assess

fees and costs.

DONE AND ORDERED in Chambers, Martin County,

Florida this 22nd day of October, 1997. :

/s/ David J. Harper

The Honorable David J. Harper,

Acting Circuit Court Judge

Copies furnished:

JODY H. OLIVER, ESQUIRE, GARY, DYTRYCH & RYAN,

701 USS. Highway One Suite 402, North Palm Beach, FL

33408

ROGER D. SCHWENKE, ESQUIRE, CARLTON FIELDS,

P.O. Box 3239, Tampa, FL 33601-3239

App. 16

IN THE UNITED STATES DISTRICT COURT FOR THE

WESTERN DISTRICT OF MISSOURI

WESTERN DIVISION

K.C. 1986 LIMITED

PARTNERSHIP,

Case No.

Plaintiff, 93-1062-CV-W-5

READE MANUFACTURING,

et al.,

- Defendants.

HABCO, INC., et al.,

Third-Party Defendants.

Nm me me ee ee eee ee ee”

ORDER DENYING U.S. BORAX’S MOTION

TO STRIKE THE ESTATE OF READE’S MOTION TO

DISMISS AND ORDER DENYING THE ESTATE

OF READE’S MOTION TO DISMISS

CLAIMS OF U.S. BORAX, INC.

(Filed Jan. 30, 1992)

This action was commenced by K.C. 1986 Limited

Partnership (“K.C. 1986”) in 1993 pursuant to the Com-

prehensive Environmental Response Compensation and

Liability Act of 1980, (“CERCLA”) 42 U.S.C. § 9601, et

seqg., and U.S. Borax, Inc. (“Borax”) was named as a

Defendant. Subsequently, Borax filed a Third-Party Com-

plaint against Nancy Reade Forster as the personal repre-

sentative of the Estate of Charles F. Reade, Sr. (the

“Estate”). Borax seeks contribution from the Estate to pay

for past and future response costs resulting from the

contamination of property located on Holmes Road in

App. 17

Kansas City, Missouri (the “Site”). Borax contends that

Charles F. Reade, Sr. (“Reade”) (and, since his death, his

successor Estate) is liable as an owner/ operator of a site

where hazardous wastes were disposed. The Estate has

now filed a Motion to Dismiss the Third-Party Claim, and

Borax has filed a Motion to Strike the Estate’s Motion to

Dismiss.

I. Background

It is alleged that for some period of time Reade

operated the Reade Manufacturing Company (“Reade

Manufacturing”), a family business which mixed her-

bicides at a number of locations, including the Site in

Kansas City, Missouri. Reade Manufacturing operated the

herbicide facility at the Site for at least twenty years

before leasing the Site to Borax. Borax occupied the Site

as lessee from 1963 to 1968, and Reade Manufacturing

then sold the Site to Habco, Inc. Borax’s Third-Party

_ Complaint claims that Reade is personally liable under

CERCLA as an owner/operator of the Site because haz-

ardous waste was disposed of at the Site while Reade was

an officer of Reade Manufacturing.

Reade died on May 16, 1995. The Estate went through

probate in Florida State Court, and Borax filed its claim in

that action as well. In the probate action, the Estate

Petitioned to strike Borax’s claim alleging that it was not

filed within the three (3) months permitted by the Florida

non-claim statute. Borax argued that it was not properly

notified of Reade’s death and that CERCLA preempts the

Florida non-claim statute. On October 22, 1997, the Flor-

ida Probate Court struck Borax’s probate claim, finding

App. 18

that the notice given by the Estate was constitutional and

that CERCLA did not preempt the Florida non-claim

statute. The written Order issued by the Florida court

gave no explanation for its rulings. The Estate now

asserts, in its Motion to Dismiss in this Court, that the

Florida Probate Court’s Order must be given preclusive

effect in this federal CERCLA action under the full faith

and credit statute, 28 U.S.C. § 1738, and that Borax’s

CERCLA claim must be dismissed because there is no

possibility that Borax can collect on any judgment

entered in this case given that its claim against the Estate

was struck by the Florida Probate Court. Borax seeks to

strike the Estate’s Motion to Dismiss claiming that the

Motion does not comply with the Federal Rules of Civil

Procedure or the Local Rules because it relies on a matter

outside the pleadings and should have been filed as a

Motion for Summary Judgment.

“

II. Borax’s Motion to Strike the Estate’s Motion to Dis-

miss

While Borax is correct that the Estate’s Motion

should have been for summary judgment and should

have complied with Federal Rule of Civil Procedure 56

and Local Rule 56, the Court will not strike the Estate’s

Motion because of the procedural defects. In the Estate’s

Motion and the attached exhibits, the Estate makes it

clear that its request for dismissal is based on the favor-

able ruling which it received in the Florida Probate Court.

There is no genuine issue about the authenticity of the

Probate Court’s Order, so only legal issues remain to be

decided by the Court.

App. 19

Because it is clear that only legal issues are raised by

the Estate’s Motion to dismiss, it would be an exercise in

formalism to require the Motion to be submitted to this

Court as a Motion for Summary Judgment. Furthermore,

after Borax filed its Motion to Strike, the Estate did

respond with a Statement of Uncontroverted Facts as

required by the Local Rules.

III. The Estate’s Motion to Dismiss

In its Motion to dismiss, the Estate claims that the

Florida Probate Court's Order of October 22, 1997, must

be given preclusive effect in this CERCLA action because

of 28 U.S.C. § 1738, the full faith and credit statute. That

statute requires a federal court to give a state court judg-

ment the same preclusive effect as the courts of the same

state would give to the judgment. Simmons v. O’Brien, 77

F.3d 1093, 1096 (8th Cir. 1996). Such deference “pro-

mote[s} the comity between state and federal courts that

has been recognized as a bulwark of the federal system.”

Allen v. McCurry, 449 U.S. 90, 95-96 (1980). The applica-

tion of 28 U.S.C. § 1738 in this case, however, presents a

difficult question of federal/state comity because

CERCLA actions are exclusively within the jurisdiction of

the federal court and because the CERCLA claim in this

Court is not a subsequently filed action. The CERCLA

claim against the Estate was filed in this Court and the

Florida Probate Court contemporaneously, and the issues

decided by the Probate Court were contemporaneously

presented to this Court in Borax’s Motion for Summary

App. 20

Judgment against the Estate. It is only because the Pro-

bate Court entered its Order first that preclusion is now

an issue.

The Estate correctly points out that the U.S. Supreme

Court has held that “a state court judgment may in some

cases have a preclusive effect in a subsequent action

within the exclusive jurisdiction of the federal court.”

Marrese v. American Academy of Orthopaedic Surgeons, 470

U.S. 373, 380 (1985). Because 28 U.S.C. § 1738 does not

always require preclusion in such cases, the Supreme

Court crafted a two-step test for determining collateral

estoppel. The trial court must first look at the law of the

state to determine if the state would find that collateral

estoppel applied. If the state court would apply collateral

estoppel precluding relitigation of the issues, the federal

court must then see if a statute passed after 28 U.S.C.

§ 1738 was passed has amended by implication Congress’

requirement in § 1738 that federal courts recognize state

court judgments. Marrese, 470 U.S. at 381-82.

The Estate insists that Florida state courts would give

preclusive effect to the Florida Probate Court Order. The

Estate specifically rejects Borax’s claim that the public

policy of CERCLA is grounds for finding that collateral

estoppel should not apply. Of course, there would never

be a situation where a state court in Florida would be

confronted with this collateral estoppel question in the

context of CERCLA, because CERCLA is exclusively

within the jurisdiction of the federal court. Justice O’Con-

nor, in Marrese, recognized this conundrum and

explained that the federal court need only apply the

principles of collateral estoppel adopted by the state. It

need not locate a state court opinion applying or refusing

App. 21

to apply collateral estoppel in the exact circumstances

raised in the federal claim. Marrese, 470 U.S. at 381-82.

In at least one case, the Florida courts have recog-

nized the exceptions to collateral estoppel contained in

§ 28 of the Restatement (Second) of Judgment. In State of

Florida v. Freund, 626 So.2d 1043 (Fl. App. 4 Dist., 1993),

the Florida court stated:

[R]elevant to the issue are two exceptions to the

application of collateral estoppel found in

- RESTATEMENT (SECOND) OF JUDGMENT § 28 (1980), p.

273:

‘[A]lthough an issue is actually litigated

and determined by a valid and final judg-

ment, and the determination is essential to

the judgment, relitigation of the issue in a

subsequent action between the Parties is not

precluded in the following circum-

stances: ...

(3) A new determination of the issue

is warranted by differences in the qual-

ity or extensiveness of the procedures

followed in the two courts or by factors

relating to the allocation of jurisdiction

between them... .

(5S) There is a clear and convincing

need for a new determination of the

issues (a) because of the potential

adverse impact of the determination on

the public interest or the interests of

persons not themselves parties in the

initial action.

Id. at 1046, (quoting RestaTEMENT (SECOND) OF JUDGMENTS

§ 28 (1980), p. 273). Because Florida courts are willing to

App. 22

recognize these exceptions in their own application of

collateral estoppel doctrine, it is appropriate for this

court to apply these principles in deciding whether or not

collateral estoppel should apply in this case.

Collateral estoppel should not be applied in this

CERCLA action because of factors relating to the alloca-

tion of jurisdiction between the state and federal courts.

When it enacted CERCLA, Congress decided to make

polluters pay the cost for cleaning up their pollution.

Congress placed CERCLA jurisdiction exclusively in the

federal courts. This jurisdictional design makes sense

given the interstate consequences of pollution, the

mobility of persons disposing of hazardous waste, and

the possible reluctance of state courts to subject its citi-

zens to the broad-reaching remedies and obligations

imposed by CERCLA. This jurisdictional design would be

thwarted if preclusive effect were given to a state court

judgment regarding the preemptive effect of a federal law

in a case which pits an individual Florida state resident

against a non-resident corporation, particularly where the

issues are raised at the same time in both the federal and

state court actions, and the contaminated property is not

located in Florida. It rnay also be that where the federal

and state claim are proceeding contemporaneously, it

would violate principles of Donovan v. City of Dallas, 377

U.S. 408, reh'g denied, 379 U.S. 871 (1964), to give preclu-

sive effect to the state court judgment where to do so

would interfere with this court’s power over a named

party. A state court has no authority to directly or indi-

rectly control the jurisdiction of the federal court.

Borax makes the further argument that other parties

to this litigation may be adversely affected if collateral

ve Se tes tan L iti hi pie ES ghee ro Pee we Bi i eR MON PANT BRIE STOTT gr sil Shahi abn A nl a a a aad ee sp

App. 23

estoppel prevents this Court from relitigating the issues

ruled by the Florida Probate Court. Presently, no other

party has a claim against the Estate, but all the other

parties will benefit indirectly from Borax’s claim against

the Estate, because the Estate would have to contribute to

the cleanup if found liable, thereby reducing the contri-

bution that the other parties would have to make.

The Court does recognize the possibility that the

other parties in this litigation could file claims against the

Estate for contribution. If such claims were filed, the

Estate would still be in the position of having to deal with

the CERCLA preemption issue because only Borax was a

party to the probate litigation in Florida. The decision of

the probate judge in Florida would have no preclusive

effect on their claims against the Estate. While this may

demonstrate how the other parties in the litigation would

not be injured by the application of collateral estoppel to

Borax, it also demonstrates the futility of applying collat-

eral estoppel to Borax. Ultimately, this Court must decide

the issue of preemption and the liability of the Estate for

its share of the Site contamination. Any payment by the

Estate will necessarily benefit all of the other parties,

including Borax.

This Court, therefore, finds that the Florida Probate

Court’s Order does not collaterally estop this Court from

relitigating the question of whether CERCLA preempts

the Florida non-claim statute and the propriety of using a

trust fund theory to reach the assets of the Estate. On the

other hand, the Court expressly finds that the ruling of

the Probate Court concerning the adequacy of the notice

in the Florida probate proceeding is coilaterally estopped

in this action. The adequacy of notice in a probate action

App. 24

is traditionally resolved by the state courts and is subject

to review through the state court system and ultimately

by the United States Supreme Court. In contrast, the

preemptive reach of CERCLA is appropriately decided by

the federal court under the circumstances of this case

because it relates to the standing of the Estate to be sued

in federal court on an exclusive federal court claim and

involves the enforcement of a federal court judgment.

Even if the Court were to find the preemption ques-

tion, as it applies to Borax, is precluded by the Probate

Court Order, it would still not dismiss the Estate from

this lawsuit. The Estate relies on Crosson v. Conlee, 745

F.2d 896, 903 (4th Cir. 1984), cert. denied, 470 U.S. 1054

(1985), to support its argument that it would be futile to

force the Estate to remain in this litigation if no judgment

could ever be collected from it because of the Probate

Court’s Order. In Crosson, The Fourth Circuit expressly

referred to the unique circumstances in that case which |

involved a diversity suit where there was no possibility

of enforcing the judgment against the defendant because

of a prior ruling in a state court action. In this case, the

probate judge’s Order is on appeal in Florida, and the

possibility of eventually collecting a judgment against the

Estate is not completely foreclosed. Furthermore, unlike

Crosson, jurisdiction in this case is based on federal ques-

tion jurisdiction, not diversity jurisdiction, raising more

complicated enforcement of judgment questions, espe-

cially if claims are filed against the Estate by the remain-

ing parties in this lawsuit. For these reasons, it is

necessary for the Estate to remain in this litigation so that

an orderly resolution of its CERCLA liability can be com-

pleted. Accordingly, it is

Breil ret Las,

App. 25

ORDERED that Borax’s Motion to Strike Estate’s

Motion to Dismiss (Doc. #518) is DENIED. It is further

ORDERED that Estate’s Motion to Dismiss (Doc.

#493) is DENIED.

/s/ Nanette K. Laughrey

NANETTE K. LAUGHREY

United States District Judge

Dated: 1-30-98

Kansas City, Missouri

App. 26

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF MISSOURI

WESTERN DIVISION

K.C. 1986 LIMITED

PARTNERSHIP,

Plaintiff,

READE

MANUFACTURING,

)

) Case No. 93-1062-CV-W-5

)

et al.,

)

Defendants,

HABCO, INC., et al.,

Third-Party

Defendants.

ORDER DENYING U.S. BORAX, INC.’S

MOTION FOR SUMMARY JUDGMENT

AGAINST THE ESTATE OF READE

(Filed Jan. 30, 1998)

This action was commenced by K.C. 1986 Limited

Partnership (“K.C. 1986”) in 1993 pursuant to the Com-

prehensive Environmental Response Compensation and

Liability Act of 1980, (“CERCLA”) 42 U.S.C. § 9601, et

seq., and U.S. Borax, Inc. (“Borax”) was named as a

Defendant. Subsequently, Borax filed a Third-Party Com-

plaint against Nancy Reade Forster as the personal repre-

sentative of the Estate of Charles F. Reade, Sr. (the

“Estate”). Borax seeks contribution from the Estate to pay

for past and future response costs resulting from the

contamination of property located on Holmes Road in

li Oi et Oe

Jali icin hh &

AGT Re ay Tee SB OT RR wa 8a Re Ld

App. 27

Kansas City, Missouri, (the “Site”). Borax contends that

Charles F. Reade, Sr. (“Reade”), and the Estate as his

successors, is liable as an owner/operator of a site where

hazardous wastes were disposed. Borax has filed a

Motion for Summary Judgment against the Estate which

is opposed by the Estate.

I. Background

It is alleged that for some period of time Reade

operated the Reade Manufacturing Company (“Reade

Manufacturing”), a family business which mixed her-

bicides at a number of locations, including the Site in

Kansas City, Missouri. Reade Manufacturing operated the

herbicide facility at the Site for at least twenty years

before leasing the Site to Borax. Borax occupied the Site

as Lessee from 1963 to 1968, and Reade Manufacturing

then sold the Site to Habco (“Habco”). Borax’s Third-

Party Complaint claims that Reade is personally liable

under CERCLA as an owner/ operator of the Site because

hazardous waste was disposed of at the Site while Reade

was an officer of Reade Manufacturing. The Estate denies

that Reade is liable and further claims that Borax has not

demonstrated, as a matter of law, that Borax is entitled to

summary judgment.

Reade died on May 16, 1995, and his estate published

a Notice of Administration on June 5, 1995. Publication

was done locally in Florida. No Notice of Administration

was received by Borax, and Borax alleges that it did not

learn of Reade’s death until March of 1997. After learning

of his death, Borax filed a claim against Reade’s estate in

App. 28

both this CERCLA action and in the Florida court where

Reade’s estate was being probated.

Pending before the Court is Borax’s Motion for Sum-

mary Judgment against the Estate and Suggestions in

Support of that Motion, the Estate’s Opposition, and

Borax’s Reply. In addition, numerous Motions to Strike

Affidavits have been filed by both parties.

Il. Standard

A moving party is entitled to summary judgment “if

the pleadings, depositions, answers to interrogatories,

and admissions on file, together with the affidavits, if

any, show that there is no genuine issue as to any mate-

rial fact and that the moving party is entitled to judgment

as a matter of law.” Fed. R. Civ. P. 56(c). The party

moving for summary judgment bears the burden of

showing that there is no genuine issue of material fact for

trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256

(1986). When considering a motion for summary judg-

ment, a court must consider the evidence in the light

most favorable to the nonmoving party, and the nonmov-

ing party “must be given the benefit of all reasonable

inferences.” The main purpose of a motion for summary

judgment, however, is to identify factually unsupported

claims. If a party has the burden of proof at trial on a

claim and the opposing party has filed a motion for

summary judgment, the party bearing the burden of

proof must identify admissible evidence sufficient to

make a submissible case at trial. Celotex Corp. v. Catrett,

477 U.S. 317, 323-24 (1986). If the party with the burden of

proof cannot identify such evidence, the opposing party

App. 29

is entitled to judgment as a matter of law. Lujan v. Nat’!

Wildlife Fed’n, 497 U.S. 871, 884 (1990) (quoting Celotex,

477 U.S. at 322)).

To establish a genuine issue of fact sufficient to war-

rant trial, the nonmoving party “must do more than

simply show that there is some metaphysical doubt as to

the material facts.” Matsushita Elec. Indus. Co., Ltd. v.

Zenith Radio Corp., 475 U.S. 574, 586 (1986). Instead, the

nonmoving party bears the burden of setting forth speci-

fic facts showing there is a genuine issue for trial. Ander-

son, 477 U.S. at 248 (quoting First Nat’! Bank of Ariz. v.

Cities Serv. Co., 391 US. 253 (1968)).

Ill. Discussion

The Estate argues Summary judgment is not appro-

priate because there are genuine issues of material fact in

dispute and because Borax’s claim against the Estate is

barred by Section 733.702(1) of Florida Statutes Anno-

tated. That statute provides:

(1) ...[N]o claim or demand against the

decedent's estate that arose before the death of

the decedent, including claims of the state in

any of its subdivisions, whether due or not,

direct or contingent, or liquidated or unliqui-

dated; . . . is binding on the estate, on the

personal representative, or on any beneficiary

unless filed within the later of three months

after the time of the first publication of the

notice of administration or, as to any creditor

required to be served with a copy of the notice

of administration, thirty days after the date of

service of such copy of the notice on the credi-

tor, even though the personal representative has

App. 30

recognized the claim or demand by paying a

part of it or interest on it or otherwise.

Borax admits that it did not file a claim against the

Estate within three months after the first publication of

the Notice of Administration. Borax contends, however,

that it did not receive constitutionally adequate notice of

Reade’s death and that the Florida non-claim statute is

preempted by CERCLA’s three-year statute of limitations

for contribution actions. See 42 U.S.C. § 9613. Borax

clearly filed its claim against the Estate in this Court

within the CERCLA statute of limitations. The question of

the adequacy of the notification in the probate proceeding

has already been addressed by the Probate Court in Flor-

ida and will not be reexamined by this Court. The issue of

preemption and the trust fund theory will be reexamined.

A. Preemption and Trust Fund Theory

To determine whether a federal statute preempts a

state statute “our sole task is to ascertain the intent of

Congress.” California Fed. Sav. & Loan Assoc. v. Guerra, 479

U.S. 272, 280-81 (1987). Preemption may be found where

(1) the federal law expressly preempts state law; (2) Con-

gressional intent to preempt state law can be implied

where the scheme of federal regulation is sufficiently

comprehensive to make reasonable inference that Con-

gress left no room for supplementary regulation; (3) fed-

eral law conflicts with state law either because

compliance with both federal and state law is a physical

or practical impossibility, or because the state law stands

as an obstacle for the accomplishment and execution of

the full purposes and objectives of Congress. Guerra, 479

are:

‘

App. 31

U.S. 280-81 (citing Florida Lime & Avocado Growers, Inc. v.

Paul, 373 U.S. 132, 142-43 (1962) and Hines v. Davidowitz,

312 U.S. 52, 67 (1941)). To find preemption based on a

conflict between federal and state law, the United States

Supreme Court has said that the conflict must be signifi-

cant. Boyle v. United Techs. Corp., 487 U.S. 500, 507 (1988).

Regardless of the basis for finding preemption, the Eighth

Circuit has held that in order to find that federal law

preempts state law in an area traditionally regulated by

the states, Congress’ intent to supersede state law must

be manifestly clear. Gregory v. Ashcroft, 898 F.2d 598 (8th

Cir. 1990), aff'd, 501 U.S. 452 (1991).

There is a split in the jurisdictions as to whether

CERCLA preempts state probate statutes of limitation.

Relying on the remedial nature of CERCLA, several dis-

trict courts have held either that CERCLA preempts state

probate statutes of limitation or that an estate and its

beneficiaries hold the decedent’s assets in trust for the

benefit of satisfying environmental liability of the

deceased. Steego Corp. v. Ravenal, 830 F. Supp. 42, 47-48

(D. Mass. 1993); Soo Line R.R. Co. v. B. J. Carney & Co., 797

F. Supp. 1472, 1484 (D. Minn. 1992); Freudenbere-NOK

Gen. Partnership v. Thomopoulos, 1991 WL 325290 (D.N.H.

1991); State of N.C. ex rel. Howes v, W. R. Peele Sr. Trust, 876

F. Supp. 733, 743 (E.D.N.C. 1995); United States v. Martell,

887 F. Supp. 1183 (N.D. Ind. 1995). In contrast, the Third

Circuit in Witco Corp. »v. Beekhuis, 38 F.3d 682 (3d Cir.

1994), the only circuit which has addressed the issue, held

that CERCLA did not preempt a Delaware probate statute

of limitation.

App. 32

The Third Circuit-in Witco articulated six reasons for

finding no preemption. The Court first noted that Con-

gress did not expressly preempt state probate laws in the

CERCLA statute or even refer to estates when it listed

parties responsible for cleanup. Second, the Witco Court

explained that it was possible to comply with both the

Delaware probate and the CERCLA statutes of limitation

because the CERCLA claim could have been made within

the eight-month period allotted under the Delaware pro-

bate statutes for filing a claim against an Estate. Third,

the Court gave great weight to a state’s interest in the

prompt settlement of probate estates and the fact that

probate is an area of law traditionally handled by the

states without federal intervention. Fourth, the Court

concluded that “Congress created [the innocent land-

owner defense under 42 U.S.C. § 9607(b)(3)] in order not

to disturb state law controlling the descent and distribu-

tion of property.” Witco, 38 F.3d at 689. The Court rea-

soned that because Congress permitted an “innocent”

third party to keep real property acquired by inheritance

without contributing to the cost of cleaning up the prop-

erty. Congress did not want to disturb state law control-

ling descent and distribution. Fifth, the Court held that

the Delaware probate statute did not stand as an obstacle

to Congressional intent. Sixth, the Court concluded that

preemption would be inherently unworkable, because

“[t]he possibility of a CERCLA claim arising long after

the settlement of the estate would hang its dark cloud

over any such settlement, thereby compromising the

goals of certainty and promptness in the settlement and

distribution of decedent’s estate.” Witco, 38 F.3d at 690.

App. 33

Although CERCLA was a product of legislative com-

promise and the blending of three separate bills, it is clear

in each of those three bills that Congress wanted the

persons and businesses which released hazardous waste

into the environment to pay the costs of cleaning up the

hazardous waste. 20 Harv. Envtt. L. Rev. 199, 271-78

(1996); United States v. Reilly Tar & Chem. Corp., 546 F.

Supp. 1100, 1112 (D. Minn. 1982). The mantra of CERCLA

is that the guilty must pay. The statute itself also makes

clear that Congress intended CERCLA to be uniformly

enforced in federal court using federal law. The question

in this case is whether the Florida non-claim statute inter-

feres with these Congressional objectives and is, there-

fore, preempted by CERCLA. This Court finds that it

does. Because the Estate of Reade was open at the time

the CERCLA claim was filed and because the CERCLA

Statute of limitation has not run, the CERCLA claim

against the Estate is not barred by the Florida non-claim

Statute and a trust shall be imposed on the assets of the

Estate to guarantee payment of any judgment in this case

against the Estate.

While Congress did not expressly preempt probate

non-claim statutes, the structure of CERCLA makes it

clear that Congress intended the federal courts to pros-

ecute CERCLA actions using federal, not state law.

CERCLA provides that owners and operators of property

at the time hazardous waste is disposed shall be liable for

an equitable share of the cleanup. This liability exists

“notwithstanding any other provision or rule of law and

subject only to the defenses in subsection (b) of this

section.” 42 U.S.C. § 9607(a). In 42 U.S.C. § 9613(f)(1),

Congress provided that a CERCLA contribution action

App. 34

was to be “brought according to the Federal Rules of

Civil Procedure and shall be governed by federal law.” In

the same section it provided a specific, federal statute of

limitation for CERCLA contribution actions. 42 U.S.C.

§ 9613(g)(3). A federal statute of limitation is especially

important because Congress knew that CERCLA liability

would extend to past owners of property. See 42 U.S.C.

§ 9607(a) which references “owners and operators at the

time hazardous waste is disposed.” (emphasis added).

Given the likely lag time between contamination and a

CERCLA action, state statutes of limitation might have

run, increasing the risk that the cost of cleanup would be

borne by the federal government, contrary to the mani-

fest intent of Congress. In a separate section of CERCLA,

unrelated to contribution, Congress went so far as to

create a federal discovery rule for determining when a

state statute of limitation would begin to run on a state

claim for property damage and personal injury caused by

exposure to hazardous substances or pollutants or con-

tamination. 42 U.S.C. § 9658(a)(1). This provision shows

how pervasively Congress intended federal law to control

the national response to environmental problems.

Congress also made it clear that the party or parties

producing pollution must pay the cost of cleaning up the

pollution. That liability exists “notwithstanding any other

provision or rule of law.” 42 U.S.C. § 9607(a). On the

other hand, Congress did not intend the innocent to pay.

In 42 U.S.C. § 9607(b), Congress provides that no liability

exists for landowners who have no connection with the

disposition of the toxic waste and who have taken reason-

able precautions with respect to the toxic waste. Evidence

of Congress’ intent to protect innocent third parties is

App. 35

also found in 42 U.S.C. § 9607(1), where Congress pro-

vided that a lien would attach against all real property of

a party liable under CERCLA, but provided protection for

third party purchasers of the property whose interest in

the property predated notice of the federal lien. Congress

went on to say, however, that nothing in the section

“should be construed to prevent an action to recover cost

as against liable persons [under CERCLA].” 42 U.S.C.

§ 9607(1)(4). The innocent are to be protected, but those

liable under CERCLA must Pay.

In this case, it is alleged that Reade is liable under

CERCLA as an owner/ operator. If this is true, Reade is

not an innocent party, nor is the estate. An estate is a

fictional entity created by the law as an extension of the

decedent to allow for the orderly distribution of assets

and liabilities. An estate, therefore, cannot be innocent if

the decedent is not innocent. The Third Circuit’s explana-

tion that the “innocent landowner” defense was intended

to protect state laws controlling state inheritance schemes

does not take into account that Congress protected all

Current property owners who were unconnected to the

contamination, not just persons who acquired the prop-

erty by inheritance. Congressional focus throughout the

statute is on the innocence of the party holding the prop-

erty, not the manner by which the property was acquired.

Just because someone who inherits land does not have to

pay for the cleanup of the land does not mean that the -

assets which are in the estate should be given to the

beneficiaries. There is a big difference between not hav-

ing to pay for the cleanup and not getting the decedent's

assets. In the first scenario, the beneficiary simply might

App. 36

have to spend his own money. In the second scenario, the

beneficiary does not get to keep the decedent’s money.

It is true that CERCLA incorporates by reference the

Federal Rules of Civil Procedure, and Fed. R. Civ. P. 17 (b)

provides that the capacity of a representative in a federal

court shall be determined by the law of the state where

the federal court sits. It is illogical, however, to conclude

that Congress by referencing the Federal Rules intended

to permit state statutes of limitation to control CERCLA

contribution actions, thereby altering its earlier express

statement concerning federal statutes of limitation and its

rules concerning substantive liability. Finally, while it is

necessary in a diversity case for state capacity laws to

control because of the mandate of Erie R.R. Co. v.

Tompkins, 304 U.S. 64 (1938); it is not necessary in a

federal question case. Compare Woods v. Interstate Realty

Co., 337 U.S. 535 (1949) with Roby v. Corporation of Lloyd's,

796 F. Supp. 103 (S.D.N.Y. 1992); and Sierra Ass'n for Env't.

v. Federal Energy Regulatory Comm’n., 744 F.2d 661 (9th Cir.

1984).

Nor would it unduly burden estate administration

for a decedent’s CERCLA liability to be determined in

federal court. Probate courts in Florida and elsewhere

have rules concerning contingency claims. Under Florida

probate law, an estate can be closed without final deter-

mination of contingency claims and the probate court

may impose a trust to secure payment. See § 733.705, Fla.

Stat. Ann. (West 1997). when a federal court imposes a

trust on the assets of the estate, it is doing little more than

probate courts have traditionally done with contingent

claims, except the time during which the contingency

claim can be filed is extended according to federal law.

App. 37

Finally, to apply the Florida non-claim Statute in this

case would permit the Estate to escape all liability while

other occupiers of the Site would end up paying the cost

of cleanup even though their pollution might be substan-

tially less or their period of occupancy negligible in com-

parison. Indeed, to the extent State statutes of limitation

for probate, dissolution of corporations and successor

liability of corporations were to prevail, it would be

governments or large ongoing corporations or enduring,

charitable organizations which would most often bear the

costs of pollution cleanup. This would be inconsistent

with Congress’ Statutory scheme in CERCLA.

B. Liability

While the Court finds that CERCLA preempts the

State probate statute of limitations, the Court declines to

enter a summary judgment at this time. Having reviewed

the numerous motions to strike and the attached affi-

davits in support and in Opposition to this Motion for

Summary Judgment, it appears that there is a genuine

issue of material fact in dispute precluding entry of a

summary judgment. This is, in part, because the movant,

Borax, has the burden of proof at trial on its claim and,

therefore, the credibility of its affiants must be evaluated

by the factfinder. Furthermore, even using Borax’s anal-

ysis of the applicable legal standard, inferences must be

made from the facts, a function reserved for the fact-

finder. Accordingly, it is hereby

App. 38

ORDERED that Borax’s Motion for Summary Judg-

ment against the Estate of Reade (Doc. #294) is DENIED.

/s/ Nanette K. Laughrey

NANETTE K. LAUGHREY

United States District Judge

Dated: 1-30-98

Kansas City, Missouri

App. 39

42 U.S.C.S. § 9613. Civil proceedings

(a) Review of regulations in Circuit Court of Appeals of

the United States for the District of Columbia Review of

any regulation promulgated under this Act may be had

upon application by any interested person only in the

Circuit Court of Appeals of the United States for the

District of Columbia. Any such application shall be made

within ninety days from the date of promulgation of such

regulations. Any matter with respect to which review

could have been obtained under this subsection shall not

be subject to judicial review in any civil or criminal

proceeding for enforcement or to obtain damages or

recovery of response costs.

(b) Jurisdiction; venue. Except as provided in subsec-

tions (a) and (h) of this section, the United States district

courts shall have exclusive original jurisdiction over all

controversies arising under this Act, without regard to

the citizenship of the parties or the amount in contro-

versy. Venue shall lie in any district in which the release

or damages occurred, or in which the defendant resides,

may be found, or has his Principal office. For the pur-

poses of this section, the Fund shall reside in the District

of Columbia.

collection or tax regulation review The Provisions of sub-

sections (a) and (b) of this section shall not apply to any

controversy or other matter resulting from the assessment

of collection of any tax, as provided by title II of this Act,

or to the review of any regulation promulgated under the

Internal Revenue Code of 1954 [26 USCS §§ 1 et seq. ].

App. 40

(d) Litigation commenced prior to December 11, 1980

No provision of this Act shall be deemed or held to moot

any litigation concerning any release of any hazardous

substance, or any damages associated therewith, com-

menced prior to enactment of this Act [enacted Dec. 11,

1960}.

(e) Nationwide service of process. In any action by the

United States under this Act, process may be served in

any district where the defendant is found, resides, trans-

acts business, or has appointed an agent for the service of

process.

(f) Contribution

(1) Contribution. Any person may seek contribution

from any other person who is liable or potentially liable

under section 107(a) [42 USCS § 9607(a)], during or fol-

lowing any civil action under section 106 [42 USCS

§ 9606] or under section 107(a) [42 USCS § 9607(a)]. Such

claims shall be brought in accordance with this section

and the Federal Rules of Civil Procedure, and shall be

governed by Federal law. In resolving contribution

claims, the court may allocate response costs among lia-

ble parties using such equitable factors as the court deter-

mines are appropriate. Nothing in this subsection shall

diminish the right of any person to bring an action for

contribution in the absence of a civil action under section

106 or section 107 [42 USCS § 9606 or 9607].

(2) Settlement. A person who has resolved its lia-

bility to the United States or a State in an administrative

or judicially approved settlement shall not be liable for

claims for contribution regarding matters addressed in

the settlement. Such settlement does not discharge any of

App. 41

the other potentially liable persons unless its terms so

provide, but it reduces the potential liability of the others

by the amount of the settlement.

(3) Persons not party to settlement.

(A) If the United States or a State has obtained

less than complete relief from a person who has resolved

its liability to the United States or the State in an adminis-

trative or judicially approved settlement, the United

States or the State may bring an action against any person

who has not so resolved its liability.

(B) A person who has resolved its liability to

the United States or a State for some or all of a response

action or for some or all of the costs of such action in an

administrative or judiciaily approved settlement may

seek contribution from any person who is not party to a

settlement referred to in paragraph (2).

rights of any person who has resolved its liability to the

United States or a State shall be subordinate to the rights

of the United States or the State. Any contribution action

brought under this paragraph shall be governed by Fed-

eral law.

(g) Period in which action may be brought

(1) Actions for natural resource damages Except as

provided in paragraphs (3) and (4), no action nay be

commenced for damages (as defined in section 101(6) [42

USCS § 9601(6)]) under this Act, unless that action is

commenced within 3 years after the later of the following:

(A) The date of the discovery of the loss and its

connection with the release in question.

App. 42

(B) The date on which regulations are promul-

gated under section 301(c) [42 USCS § 9651(c)].

With respect to any facility listed on the National

Priorities List (NPL), any Federal facility identified under

section 120 [42 USCS § 9620] (relating to Federal facili-

ties), or any vessel or facility at which a remedial action

under this Act is otherwise scheduled, an action for dam-

ages under this Act must be commenced within 3 years

after the completion of the remedial action (excluding

operation and maintenance activities) in lieu of the dates

referred to in subparagraph (A) or (B). In no event may

an action for damages under this Act with respect to such

a vessel or facility be commenced (i) prior to 60 days after

the Federal or State natural resource trustee provides to

the President and the potentially responsible party a

notice of intent to file suit, or (ii) before selection of the

remedial action if the President is diligently proceeding

with a remedial investigation and feasibility study under

section 104(b) or section 120 [42 USCS § 9604(b) or § 9620}

(relating to Federal facilities). The limitation in the pre-

ceding sentence on commencing an action before giving

notice or before selection of the remedial action does not

apply to actions filed on or before the enactment of the

Superfund Amendments and Reauthorization Act of 1986

[enacted Oct. 17, 1986.]

(2) Actions for recovery of costs. An initial action

for recovery of the § costs referred to in section 107 [42

USCS § 9607] must be commenced -

(A) for a removal action, within 3 years after

completion of the removal action, except that such cost

recovery action must be brought within 6 years after a

App. 43

determination to Srant a waiver under section

104(c)(1)(C) [42 Uuscs § 9604(c)(1)(C)] for continued

response action; and

(B) for a remedial action, within 6 years after initia-

tion of physical on-site construction of the remedial

action, except that, if the remedial action is initiated

within 3 years after the completion of the removai action,

costs incurred in the removal action may be recovered in

the cost recovery action brought under this subpara-

graph.

In any such action described in this subsection, the

court shall enter a declaratory judgment on liability for

response costs or damages that will be binding on any

subsequent action or actions to recover further response

costs or damages. A Subsequent action or actions under

section 107 [42 USCS § 9607] for further response costs at

the vessel or facility may be maintained at any time

during the response action, but must be commenced no

later than 3 years after the date of completion of all

response action. Except as otherwise provided in this

paragraph, an action may be commenced under section

107 [42 USCS § 9607] for recovery of costs at any time

after such costs have been incurred.

(3) Contribution. No action for contribution for any

response costs or damages may be commenced more than

3 years after -

(A) the date of judgment in any action under this

chapter for recovery of such costs or damages, or

(B) the date of an administrative Order under sec-

tion 122(g) [42 USCS § 9622(g)] (relating to de minimis

App. 44

settlements) or 122(h) [42 USCS § 9622(h)] (relating to

cost recovery settlements) or entry of a judicially

approved settlement with respect to such costs or dam-

ages.

(4) Subrogation. No action based on rights subro-

gated pursuant to this section by reason of payment of a

claim may be commenced under this title [42 USCS

§§ 9601 et seq.] more than 3 years after the date of

payment of such claim.

(5) Actions to recover indemnification payments.

Notwithstanding any other provision of this subsection,

where a payment pursuant to an indemnification agree-

ment with a response action contractor is made under

section 119 [42 USCS § 9619], an action under section 107

[42 USCS § 9607] for recovery of such indemnification

payment from a potentially responsible party may be

brought at any time before the expiration of 3 years from

the date on which such payment is made.

(6) Minors and incompetents The time limitations

contained herein shall not begin to run -

(A) against a minor until the earlier of the date

when such minor reaches 18 years of age or the date on

which a legal representative is duly appointed for such

minor, or

(B) against an incompetent person until the ear-

lier of the date on which such incompetent’s incompe-

tency ends or the date on which a legal representative is

duly appointed for such incompetent.

(h) Timing of review. No Federal court shall have juris-

diction under Federal law other than under section 1332

App. 45

of title 28 of the United States Code (relating to diversity

of citizenship jurisdiction) or under State law which is

applicable or relevant and appropriate under section 121

[42 USCS § 9621] (relating to cleanup Standards) to

review any challenges to removal or remedial action

selected under section 104 [42 USCS § 9604], or to review

any order issued under section 106(a) [42 USCS

§ 9606(a)], in any action except one of the following:

(1) An action under section 107 [42 USCS § 9607] to

recover response costs § or damages or for contribution.

(2) An action to enforce an order issued under sec-

tion 106(a) [42 USCS § 9606(a) or to recover a penalty for

violation of such order.

(3) An action for reimbursement under section

106(b)(2) [42 uscs § 9606(b)(2)}.

(4) An action under section 310 [42 USCS § 9659]

(relating to citizens suits) alleging that the removal or

remedial action taken under section 104 [42 USCS § 9604]

or secured under section 106 [42 USCS § 9606] was in

violation of any requirement of this Act. Such an action

may not be brought with regard to a removal where a

remedial action is to be undertaken at the site.

(5) An action under section 106 [42 USCS § 9606] in

which the United States has moved to compel a remedial

action.

(i) Intervention. In any action commenced under this

Solid Waste Disposal Act in a court of the United States,

any person may intervene as a matter of right when such

person claims an interest relating to the subject of the

action and is so situated that the disposition of the action

App. 46

may, as a practical matter, impair or impede the person’s

ability to protect that interest, unless the President or the

State shows that the person’s interest is adequately repre-

sented by existing parties.

(j) Judicial review.

(1) Limitation. In any judicial action under this Act,

judicial review of any issues concerning the adequacy of

any response action taken or ordered by the President

shall be limited to the administrative record. Otherwise

applicable principles of administrative law shall govern

whether any supplemental materials may be considered

by the court.

(2) Standard. In considering objections raised in any

judicial action under this Act, the court shall uphold the

President’s decision in selecting the response action

unless the objecting party can demonstrate, on the

administrative record, that the decision was arbitrary and

capricious or otherwise not in accordance with law.

(3) Remedy. If the court finds that the selection of

the response action was arbitrary and capricious or other-

wise not in accordance with law, the court shall award

(A) only the response costs or damages that are not

inconsistent with the national contingency plan, and (B)

such other relief as is consistent with the National a-

tingency Plan.

(4) Procedural errors. In reviewing alleged pro-

cedural errors, the court may disallow costs or damages

only if the errors were so serious and related to matters of

such central relevance to the action that the action would

App. 47

have been significantly changed had such errors not been

made.

(k) Administrative record and Participation procedures.

(1) Administrative record. The President shall

establish an administrative record upon which the Presi-

dent shall base the selection of a response action. The

administrative record shall be available to the public at or

near the facility at issue. The President also may place

duplicates of the administrative record at any other loca-

tion.

(2) Participation procedures.

(A) Removal action. The President shall promulgate

regulations in accordance with chapter 5 of title 5 of the

United States Code [5 USCS § 501 et seq.] establishing

procedures for the appropriate Participation of interested

persons in the development of the administrative record

on which the President will base the selection of removal

actions and on which judicial review of removal actions

will be based.

§ (B) Remedial action The President shall provide

for the participation of interested persons, including

potentially responsible parties, in the development of the

administrative record on which the President will base

the selection of remedial actions and on which judicial

review of remedial actions will be based. The procedures

developed under this subparagraph shall include, at a

minimum, each of the following:

(i) Notice to potentially affected persons and the

public, which shall be accompanied by a brief analysis of

the plan and alternative plans that were considered.

App. 48

(ii) A reasonable opportunity to comment and

provide information regarding the plan.

(iii) An opportunity for a public meeting in the

affected area, in accordance with section 117(a)(2) [42

USCS § 9617(a)(2)] (relating to public participation).

(iv) A response to each of the significant com-

ments, criticisms, and new data submitted in written or

oral presentations.

(v) A statement of the basis and purpose of the

selected action. For purposes of this subparagraph, the

administrative record shall include all items developed

and received under this subparagraph and all items

described in the second sentence of section 117(d) [42

USCS § 9617(d)], The President shall promulgate regula-

tions in accordance with chapter 5 of title 5 of the United

States Code [5 USCS §§ 501 et seq.] to carry out the

requirements of this subparagraph.

subparagraphs (A) and (B) are promulgated, the adminis-

trative record shall consist of all items developed and

received pursuant to current procedures for selection of

the response action, including procedures for the partici-

pation of interested parties and the public. The develop-

ment of an administrative record and the selection of

response action under this Act shall not include an adju-

dicatory hearing.

(D) Potentially responsible parties. The President

shall make reasonable efforts to identify and notify

potentially responsible parties as early as possible before

App. 49

selection .f a response action. Nothing in this paragraph

shall be construed to be a defense to liability.

(1) Notice of actions. Whenever any action is brought

under this Act in a court of the United States by a

plaintiff other than the United States, the plaintiff shall

provide a copy of the complaint to the Attorney General

of the United States and to the Administrator of the

Environmental Protection Agency.

App. 50

Fla. Stat. § 733.702 Limitations on presentation of claims.

(1) If not barred by s. 733.710, no claim or demand

against the decedent's estate that arose before the death

of the decedent, including claims of the state and any of

its subdivisions, whether due or not, direct or contingent,

or liquidated or unliquidated; no claim for funeral or

burial expenses; no claim for personal property in the

possession of the personal representative; and no claim

for damages, including, but not limited to, an action

founded on fraud or another wrongful act or omission of

the decedent, is binding on the estate, on the personal

representative, or on any beneficiary unless filed within

the later of 3 months after the time of the first publication

of the notice of administration or, as to any creditor

required to be served with a copy of the notice of admin-

istration, 30 days after the date of service of such copy of

the notice on the creditor, even though the personal rep-

resentative has recognized the claim or demand by pay-

ing a part of it or interest on it or otherwise. The personal

representative may settle in full any claim without the

necessity of the claim being filed when the settlement has

been approved by the beneficiaries adversely affected

according to the priorities provided in this code and

when the settlement is made within the statutory time for

filing claims; or, within 3 months after the first publica-

tion of the notice of administration, he or she may file a

proof of claim of all claims he or she has paid or intends

to pay.

(2) No cause of action heretofore or hereafter accru-

ing, including, but not limited to, an action founded upon

fraud or other wrongful act or omission, shall survive the

death of the person against whom the claim may be

App. 51

made, whether an action is pending at the death of the

person or not, unless the claim is filed within the time

periods set forth in this part.

(3) Any claim not timely filed as provided in this

section is barred even though no objection to the claim is

filed on the grounds of timeliness or otherwise unless the

court extends the time in which the claim may be filed.

Such an extension may be granted only upon grounds of

fraud, estoppel, or insufficient notice of the claims

period. No independent action or declaratory action may

be brought upon a claim which was not timely filed

unless such an extension has been granted. If the per-

sonal representative or any other interested person serves

on the creditor a notice to file a petition for an extension

or be forever barred, the creditor shall be limited to a

period of 30 days from the date of service of the notice in

which to file a petition for extension.

(4) Nothing in this section affects or prevents:

(a) A proceeding to enforce any mortgage, security

interest, or other lien on property of the decedent.

(b) To the limits of casualty insurance protection

only, any proceeding to establish liability of the decedent

or the personal representative for which he or she is

protected by the casualty insurance.

nue subsequent to the expiration of the time for filing

claims provided in subsection (1), provided it does so file

within 30 days after the service of the inventory by the

personal representative on the department or, in the

event an amended or supplementary inventory has been

App. 52

prepared, within 30 days after the service of the amended

or supplementary inventory by the personal representa-

tive on the department.

(d) The filing of a cross-claim or counterclaim

against the estate in an action instituted by the estate;

however, no recovery on such a cross-claim or counter-

claim shall exceed the estate’s recovery in such an action.

(5) Nothing in this section shall extend the limita-

tions period set forth in s. 733.710.

App. 53

Fla. Stat. § 733.705 Payment of and objection to claims.

(1) The personal representative shall pay all claims

within 1 year from the date of first publication of notice

of administration, provided that the time shall be

extended with respect to claims in litigation, unmatured

claims, and contingent claims for the period necessary to

dispose of such claims pursuant to subsections (4), (5),

(6), and (7). The court may extend the time for payment

of any claim upon a showing of good cause. No personal

representative shall be compelled to pay the debts of the

decedent until after the expiration of 5 months from the

first publication of notice of administration. If any person

brings an action against a personal representative within

the 5 months on any claim to which the personal repre-

sentative has filed no objection, the plaintiff shall not

receive any costs or attorneys’ fees if he or she prevails,

nor shall the judgment change the class of the claim for

payment under this code.

(2) On or before the expiration of 4 months from the

first publication of notice of administration or within 30

days from the timely filing of a claim, whichever occurs

later, a personal representative or other interested person

may file a written objection to a claim. An objection to a

claim shall contain a statement that the claimant is lim-

ited to a period of 30 days from the date of service of the

objection within which to bring an action on the claim as

provided in subsection (4). The failure to include such a

statement in the objection shall not affect the validity of

the objection but may be considered as good cause for

extending the time for filing an action or proceeding after

the objection is filed. If an objection is filed, the person

filing it shall serve a copy of the objection by registered

App. 54

or certified mail to the address of the claimant or the

claimant’s attorney as shown on the claim or by delivery

to the claimant to whose claim the person objects or the

claimant’s attorney of record, if any, not later than 10

days after the objection has been filed, and also on the

personal representative if the objection is filed by any

interested person other than the personal representative.

The failure to serve a copy of the objection constitutes an

abandonment of the objection. For good cause, the court

may extend the time for filing an objection to any claim

or may extend the time for serving the objection. The

extension of time shall be granted only after notice.

(3) An objection by an interested person to a per-

sonal representative's proof of claim shall state the partic-

ular item or items to which the interested person objects

and shall be filed and served as provided in subsection

(2). Issues of liability as between the estate and the per-

sonal representative individually for items paid by the

personal representative and thereafter listed in a personal

representative's proof of claim shall be determined in the

estate administration proceeding, in a proceeding for

accounting. surcharge, or other appropriate proceeding,

whether or not an objection has been filed. If an objection

to an item listed as to be paid in a personal representa-

tive’s proof of claim is filed and served, and the personal

representative has not paid the item, the other subsec-

tions of this section shall apply as if a claim for the item

had been filed by the claimant; but if the personal repre-

sentative has paid the claim after listing it as to be paid,

issues of liability as between the estate and the personal

representative individually shall be determined in the

manner provided for an item listed as paid.

App. 55

(4) The claimant is limited to a period of 30 days

from the date of service of an objection within which to

bring an independent action upon the claim, or a declara-

tory action to establish the validity and amount of an

unmatured claim which is not yet due but which is cer-

tain to become due in the future, or a declaratory action”

to establish the validity of a contingent claim upon which

no cause of action has accrued on the date of service of an

objection and that may or may not become due in the

future. For good cause, the court may extend the time for

filing an action or proceeding after objection is filed. The

extension of time shall be granted only after notice. No

action or proceeding on the claim shall be brought

against the personal representative after the time limited

above, and any such claim is thereafter forever barred

without any court order. If an objection is filed to the

claim of any creditor and an action is brought by the

creditor to establish his or her claim, a judgment estab-

lishing the claim shall give it no priority over claims of

the same class to which it belongs.

(5) A claimant may bring an independent action or

declaratory action upon a claim which was not timely

filed pursuant to s. 733.702(1) only if the claimant has

been granted an extension of time to file the claim pur-

suant to s. 733.702(3).

(6) If an unmatured claim has not become due

before the time for distribution of an estate, the personal

representative may prepay the full amount of principal

plus accrued interest due on the claim, without discount

and without penalty, regardless of any prohibition

against prepayment or provision for penalty in any

instrument on which the claim is founded. If the claim is

App. 56

not prepaid, no order of discharge may be entered until

the creditor and personal representative have filed an

agreement disposing of the claim, or in the absence of an

agreement until the court provides for payment by one of

the following methods:

(a) Requiring the personal representative to reserve

such_assets as the court determines to be adequate to pay

the claim when it becomes due; in fixing the amount to be

reserved, the court may determine the value of any secu-

rity or collateral to which the creditor may resort for

payment of the claim and may direct the reservation, if

necessary, of sufficient assets to pay the claim or to pay

the difference between the value of any security or collat-

eral and the amount necessary to pay the claim. If the

estate is insolvent, the court may direct a proportionate

amount to be reserved. The court shall direct that the

amount reserved be retained by the personal representa-

tive until the time that the claim becomes due, and that so

much of the reserved amount as is not used for payment

be distributed thereafter according to law;

(b) Requiring that the claim be adequately secured

by a mortgage, pledge, bond, trust, guaranty, or other

security, as may be determined by the court, the security

to remain in effect until the time that the claim becomes

due, and that so much of the security or collateral as is

not needed for payment be distributed thereafter accord-

ing to law; or

or satisfaction of the claim as is equitable, and in a

manner so as not to delay unreasonably the closing of the

estate.

App. 57

(7) If no cause of action has accrued on a contingent

claim before the time for distribution of an estate, no

order of discharge may be entered until the creditor and

the personal representative have filed an agreement dis-

posing of the claim or, in the absence of such agreement,

until:

(a) The court determines that the claim is ade-

quately secured or that it has no value,

(b) Three months from the date on which a cause of

action accrues upon the claim, provided that no action on

the claim is then pending,

notice of administration, or

(d) The court provides for payment of the claim

upon the happening of the contingency by one of the

methods described in paragraph (a), paragraph (b), or

paragraph (c) of subsection (6),

whichever occurs first. No action or proceeding may be

brought against the personal representative on the claim

after the time limited above, and any such claim shall

thereafter be forever barred without order of court. If an

action is brought within the time limited above, a judg-

ment establishing the claim shall give it no priority over

claims of the same class to which it belongs.

(8) No interest shall be paid by the personal repre-

sentative or allowed by the court on a claim until the

expiration of 5 calendar months from the first publication

of the notice of administration, unless the claim is

founded on a written obligation of the decedent provid-

ing for the payment of interest. Interest shall be paid by

App. 58

the personal representative on written obligations of the

decedent providing for the payment of interest. On all

other claims, interest shall be allowed and paid beginning

5 months from the first publication of the notice of

administration.

(9) The court may determine alt issues concerning

claims or matters not requiring trial by jury.

(10) An order for extension of time authorized

under this section may be entered only in the estate

administration proceeding.

App. 59

U.S. TRUST COMPANY OF FLORIDA SAVINGS

BANK, as Personal Representative of the Estate of

Rudolph J. Leitgeb, Appellant,

General and Mrs. Alexander M. HAIG, Jr., Appellees.

No. 96-1670.

District Court of Appeal of Florida,

Fourth District.

April 16, 1997.

Rehearing and Certification Denied

June 12, 1997

Peter Matwiczyk of Heinrich Gordon Hargrove

Weihe & James, P.A., Palm Beach, for appellant.

Robert M. Weinberger of Cohen, Chernay, Norris,

Weinberger & Harris, North Palm Beach, for appellees.

STONE, Judge.

We reverse an order granting a motion to extend time

for filing a claim against an estate.

Appellees purchased a residence from the decedent.

The decedent received a purchase money mortgage on

the residence, and also executed a five-year guaranty in

favor of Appellees. The guaranty provided that a portion

of the house would be free from leaks and cracks caused

by structural defects. In the event a defect appeared

within the guaranty period, the decedent would repair it

or Appellees would be entitled to a set-off against the

mortgage. The guaranty set forth a procedure for making

claims under the agreement.

App. 60

The decedent died and letters of administration were

issued to Appellant. A notice of administration was pub-

lished and the claims period expired on February 8, 1995.

The personal representative, who possessed copies of

‘ the mortgage and guaranty, wrote Appellees a letter

dated January 30, 1995, to verify the existence of the note

as an estate asset. At the same time, Appellees, unaware

of his death, attempted to reach the decedent by mail.

They sent the letter to the decedent’s former place of

employment, despite a requirement that any notice be

mailed to his home address. The decedent had not been at

the former place of employment for several years.

The personal representative did not receive Appel-

lees’ letter until February 16, eight day's after the period

for filing claims against the estate had expired. The trial |

court granted Appellees’ petition to extend time to file a ,

claim against the estate. The court reasoned that Appel- |

lees were reasonably ascertainable creditors who should ;

have received actual notice of the filing of the decedent's

estate.

All claims against an estate, whether due or not, and

whether direct or contingent, must be ffiled in a probate

proceeding within ninety days after the first publication

of notice of administration. § 733.702(1), Fla. Stat. (1995).

The court can extend this time only upon a showing of

fraud, estoppel, or insufficient notice of the claims

period. § 733.702(3); American & Foreign Ins. Co. v. Dimson,

645 So.2d 45 (Fla. 4th DCA 1994).

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~ 2

App. 61

Appellees contend that they received insufficient

notice of the claims period because they were not person-

ally served with notice of the administration of the dece-

dent’s estate. Section 733.212(4)(a), Florida Statutes,

Provides that a personal representative is required to

“promptly make a diligent-search to determine the names

and addresses of creditors of the decedent who are rea-

sonably ascertainable and shall serve on those creditors a

copy of the notice within three months after the first

publication of the notice.” This statute and Florida’s pro-

bate rules were amended to comply with Supreme

Court’s ruling in Tulsa Prof'l Collection Services, Inc. v.

Pope, 485 U.S. 478, 108 S.Ct. 1340, 99 L.Ed.2d 565 (1988).

See In re Rules of Probate and Guardianship Procedure, 537

So.2d 500 (Fla.1988); In re Estate of Gleason, 631 So.2d 321

(Fla. 4th DCA 1994); In re Estate of Hill, 582 So.2d 701 (Fla.

Ist DCA 1991).

Pope holds that if a party's identity as a creditor is

known or reasonably ascertainable, due process requires

the personal representative to give notice by any means

that is certain to ensure actual notice of the running of the

non-claim period. Pope, 485 U.S. at 491, 108 S.Ct. at 1348:

American & Foreign Ins. Co. v. Dimson, 645 So.2d 45 (Fla.

4th DCA 1994) (en banc). See also In re Estate of Puzzo, 637

So.2d 26 (Fla. 4th DCA 1994).

However, actual notice is only owed to ascertainable

creditors. Such notice is not due to contingent or conjec-

tural claimants. Because we find that Appellees were

contingent claimants, they were not entitled to actual

notice. The Florida Supreme Court, in recognizing that

“the law universally favors Promptness in closing

App. 62

estates,” has defined contingent claims in the following

way:

‘A contingent claim is one where the liability

depends upon some future event, which may or

may not happen, which renders it uncertain

whether there ever will be a liability. Nonclaim

statutes have been applied to claims arising

from a breach of covenant in a deed; to guaranty,

suretyship and endorsement contracts; obliga-

tions contained in a lease; breach of contract to

convey land; * * * .’

Fowler v. Hartridge, 156 Fla. 585, 24 So.2d 306, 309 (1945),

(emphasis added) (citations omitted), quoting American

Sur. Co. of N.Y. v. Murphy, 151 Fla. 151, 9 So.2d 355, 357

(1942). See also Spohr v. Berryman, 589 So.2d 225 (Fla.1991);

Jones v. Sun Bank/Miami, N.A., 609 So.2d 98 (Fla. 3d DCA

1992); In re Klotz Estate, 394 So.2d 509 (Fla. 5th DCA 1981);

In re Shaw's Estate, 340 So.2d 491 (Fla. 3d DCA 1976).

The Supreme Court, recognizing the burden which

actual notice places on estate administration, stated:

Nor do we consider it unreasonable for the State

to dispense with more certain notice to those

beneficiaries whose interests are either conjec-

tural or future or, although they could be dis-

covered upon investigation, do not in due

course of business come to the knowledge of the

common trustee. We recognize the practical dif-

ficulties and costs that would be attendant on

frequent investigations into the status of great

numbers of beneficiaries, many of whose inter-

ests in the common fund are so remote as to be

ephemeral; and we have no doubt that such

impracticable and extended searches are not

required in the name of due process.

App. 63

Mullane v. Central Hanover Bank and Trust Co., 339 U.S.

306, 317, 70 S.Ct. 652, 658-59, 94 L.Ed. 865 (1950). See also

Pope, 485 U.S. at 490, 108 S.Ct. at 1347-48 (“it is reasonable

to dispense with actual notice to those with mere conjec-

tural claims.”)

Appellees’ claim must be contingent because in order

for a cause of action to accrue under the guaranty agree-

ment, Appellees would have to prove that there was a

defect that was covered under the guaranty. We note that

even if it could be determined that the alleged defects are

covered under the guaranty, the amount of the potential

claim has yet to be quantified. *

Because Appellees’ claim was contingent, they were

not entitled to actual notice of the claims period, and

must have filed their claim within 90 days after publica-

tion notice. Since the claim was not filed in a timely

manner, the trial court was without discretion to grant

Appellees’ motion for an extension of the claims period.

Florida Statute § 733.702(3) states that:

Any claim not timely filed as provided in this

section is barred . . . unless the court extends the

time in which the claim may be filed. Such an

extension may be granted only upon grounds of

fraud, estoppel, or insufficient notice of the

claims period.

This court recently recognized that this section was a

“statute of nonclaim” rather than merely a “statute of

limitation,” and as such operated as an automatic bar to

untimely claims. See Comerica Bank & Trust v. SDI Operat-

ing Partners, 673 So.2d 163 (Fla. 4th DCA 1996).

Ee —————————— —_——— —_______ rr

App. 64

Notwithstanding the foregoing, we recognize that the

guaranty may give Appellees a right to set-off the amount

of the unpaid claims against the amount owing on the

mortgage. The issues before this court do not involve, nor

have the parties addressed, set-off or counterclaim rights

Appellees may retain with respect to the mortgage and

this opinion should not be construed as addressing such.

WARNER and POLEN, JJ., concur.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.