Estate Trust Litigation New Jersey

Frivolous sanctions tied to Estate and Trust Litigation Attorneys’ conduct remanded for further proceedings

In an ongoing estate dispute between Ronald Perelman and his ex father-in-law’s Estate, the Appellate Division recently remanded the imposition of nearly $2 million in sanctions which were imposed against Perelman’s attorneys. The matter is titled Estate of Claudia L. Cohen, by its Executor, Ronald P. Perelman, et a. v. Robert Cohen and James Cohen; and Lowenstein Sandler, PC, and Paul, Weiss, Rifkind, Wharton & Garrisson, LLP.

Perelman, acting as the Executor of the Estate of his late wife, Claudia L. Cohen, filed a claim against her father, Robert Cohen, arguing that Robert promised that Claudia would share equally in his Estate, and also that the transfer of $10 million to Claudia from Robert was a loan and not a gift.

Photo of Russell J. Fishkind, Esq. A New Jersey attorney specializing in estate and trust litigation,

As part of this hotly contested Estate and Trust Litigation in New Jersey, a claim was asserted that Robert was incompetent, and the discovery was quite grueling for Robert. The litigation was the subject of numerous motions, hearings and appeals. As a result, Robert was forced to incur $2 million in legal fees. A motion to impose frivolous sanctions was filed, with the trial Court ruling that after Perelman’s attorneys received Robert’s estate planning files and failed to find any support for the argument that he promised to provide Claudia with an equal share of his Estate, the Complaint should have been withdrawn. It was at that time that the matter became frivolous. The Court went on to assess sanctions against the attorneys for Perelman for the fees incurred by Robert in having to defend the action.

On appeal, the Appellate Division affirmed the dismissal of the claims filed by Perelman and Claudia’s Estate, and remanded the sanctions imposed on the attorneys, requesting that the trial Court revisit the imposition of sanctions. While the Appellate Division agreed that the matter became frivolous after Robert’s estate planning files were disclosed and it was discovered that there was no support for Perelman’s argument, the Appellate Division believed that the trial Court relied on certain factors in imposing sanctions which were inappropriate, including: the firms’ overaggressive spirit; their lack of remorse; the action’s disruption of family relations, including manipulation of Claudia’s daughter; and the effect the litigation had on Robert Cohen’s health. Instead, in awarding frivolous sanctions, the primary focus should have been on the nature of the claim and the evidence to support it and the attorneys’ conduct in that context, not the trial conduct or the effect their trial conduct had on the parties. On remand, in reconsidering the imposition of frivolous sanctions against the law firms, the Chancery Division was directed to also consider the absence of a prior history of frivolous litigation, the firms’ good reputation, as well as the preventive measures implemented by one of the law firms, which the court found to be salutary.

Knowing the boundaries of a frivolous claim is one of the many reasons that hiring an experienced Estate and Trust Litigation Attorney in New Jersey can make all the difference in litigating estate and trust disputes.  We are experienced in handling New Jersey Estate and Trust Litigation cases and have proved to be an efficient resource for clients in resolving disputes.  Should you wish to consult with an attorney regarding your particular issue, feel free to contact us.