Probate Litigation and Pattern Recognition
Probate litigation almost without fail is caused by the actions of an antagonist or the inaction of a decedent who failed to implement an effective estate plan coupled with one or more of the following recurring fact patterns: a dysfunctional family; a second spouse and children from prior marriages; significant wealth involving a family business; an elderly infirm widow or widower who allegedly changed his or her intentions shortly before death; and either a tyrannical or dilatory fiduciary. Should these explosive conditions exist, after the funeral unspoken words often lead to heated words, followed by less than diplomatic late night emails. Thereafter lines are drawn, détentes formed and the best lawyer sought—all the precursors that lead to battle. These ingredients when mixed, battered, or boiled result in a contested estate in which aggrieved heirs seek to:
- Set aside a will as the product of undue influence, fraud, or lack of capacity;
- Set aside the titling of investment management accounts or deed;
- Set aside beneficiary forms for life insurance policies and retirement accounts;
- Enforce the rights of income beneficiaries or remainder persons of an estate or trust;
- Set aside the acts of the agent while supposedly authorized by a power of attorney;
- Demand an estate accounting and then object to the accounting when produced;
- Remove an executor or trustee for malfeasance or breach of fiduciary duty;
- Demand a sale or distribution of estate assets; and
- Appraise and properly distribute jewelry, photographs, and the contents of the home.
Threatening letters from lawyers may be exchanged, but rarely do such letters result in an amicable resolution. The next action may be the filing of a caveat, a one-paragraph warning to the court, in the county where the decedent resided. If the caveat is properly filed, typically within ten days from date of death or before the will is offered for probate, the will is blocked from being admitted to probate. The filing of a caveat requires the proponent of the will to file an order to show cause seeking to set aside the caveat and thus allowing the will to be admitted to probate. Generally, both sides prepare and sign certifications telling their side of the story, and then a court issues a return date for preliminary oral argument. If the court is persuaded that something is amiss and that perhaps there was wrongdoing, before vacating the caveat, the court will set the matter down for discovery, which includes interrogatories, depositions, exchange of paper discovery, expert reports, motion practice, and briefs, which typically are required to be completed within a six-month timeframe. Extensions are generally required, and court-ordered mediation is not unusual before a trial date is set. In the interim, the court may appoint an administrator of the estate who will be fair and impartial during the litigation.
The road to the estate’s conclusion will occur either in mediation, a settlement just before trial or by Order of the Court. Some probate litigation cases are promptly resolved, while others, such as Jarndyce v. Jarndyce as described in Charles Dickens’ ninth novel, Bleak House, rumble on for years, decades, or generations, and the estate assets wind up absorbed by costs—a legacy lost.
Application Seeking to Set Aside Consent Order Entered in Probate Matter is Denied
In the Matter of the Estate of Lillian A. Hogan, Deceased, 2012 N.J. Super. Unpub. ____ (Docket No.: A-1920-11T2) (App. Div. 2012). On appeal from the Superior Court of New Jersey, Chancery Division, Probate Part, Hunterdon County. Before Judges Espinosa and Koblitz.
Plaintiff, Decedent’s son, appeals from the lower Court’s order denying his application to set aside a Consent Order of settlement resolving the underlying probate matter.
Decedent died in 2002, leaving surviving her two children, Brian and Betty. Decedent’s estate was divided in two equal shares, with Betty receiving her share outright and Brian’s share being held in further trust for his benefit (the “Hogan Trust”). Pursuant to the Will, Betty and a cousin serve as Trustees of the Hogan Trust. The Hogan Trust allows for discretionary distributions, in the Trustees’ sole and non-reviewable discretion, out of the income and principal for Brian’s health, maintenance, support and education. Upon Brian’s death, the remaining principal is distributed to Betty or her descendants.
Brian enjoys purchasing old fire trucks, restoring them and then gifting them to local fire departments. In addition to monthly support payments, the Trustees of the Hogan Trust distributed $300,000 to Brian to pay for his restoration of old fire trucks. The remaining principal of the Hogan Trust approximates $3.0 million. In 2009, after the Trustees refused to distribute additional funds to Brian to allow for him to continue to restore fire trucks, he filed suit, alleging breach of fiduciary duty, waste, conflict of interest, tortious interference with inheritance and he sought an accounting. A settlement was placed on the record on August 26, 2010, when the parties agreed that the Trustees would pay Brian $110,000 to satisfy his debts, $35,000 for vans, and $7,100 for his monthly expenses going forward. In exchange, Brian agreed to release and discharge the Trustees from all claims. Brian agreed to these terms on the record.
After the Consent Order was signed, Brian communicated to his attorney that he was dissatisfied and instructed counsel not to abide by the agreement. Counsel filed a motion to be relieved and the Trustees filed a motion requesting an Order requiring Brian to abide by the Agreement. Both motions were granted. Brian then filed a motion seeking to set aside the settlement, which was denied. The trial Court found that Brian understood and voluntarily entered into the terms of the agreement. Brian appealed, seeking to set aside the Will and the Hogan Trust and to invalidate the agreement because of fraud, undue influence, duress, lack of independent advice and trickery, claiming he was pressured to accept the settlement.
On appeal, the trial Court decision was affirmed, with the Appellate Division pointing to the fact that the same judge who had questioned Brian extensively regarding his satisfaction with the settlement at the time it was entered on the record also had the opportunity to observe Brian’s demeanor and ensure that he understood the settlement. Therefore, there was no abuse of discretion in denying Brian’s application to have the settlement set aside.
Application to Reconsider Terms of Consent Judgment Entered in Probate Matter is Denied
In the Matter of the Estate of Raymon Antelman, 2012 N.J. Super. Unpub. ____ (Docket No.: A-5399-10T1) (App. Div. 2012). On appeal from the Superior Court of New Jersey, Chancery Division, Probate Part, Passaic County. Before Judges Espinosa and Koblitz.
Plaintiff, Lisa Antelman, daughter of Decedent, appeals the lower Court’s denial of her request to reconsider the terms of a Consent Judgment entered with her step-mother, which required Plaintiff to cancel a duplicate homeowner’s insurance policy she held on Decedent’s residence and ordered her to refrain from prepaying real estate taxes owed on the residence.
Plaintiff, represented by counsel, her step-mother, Ruth, and others resolved a probate dispute concerning Plaintiff’s father’s estate in a January 7, 2010 consent judgment that provided that Plaintiff would own the residence subject to Ruth’s life estate. Plaintiff was also obligated to pay Ruth $114,000, $20,000 of which was subject to certain deductions. Ruth remained responsible for taxes, utilities, insurance and routine maintenance on the residence. Should Ruth fail to make such payments, Plaintiff reserved the right to make the payments directly with said payments being deductible from the amount due Ruth under the judgment.
In response to a subsequent motion filed by Plaintiff, Ruth cross-moved to compel Plaintiff to terminate the duplicate insurance policy she obtained, or, in the alternative, to prevent Plaintiff from deducting the amount of the policy from the amount due Ruth under the judgment. Ruth attached evidence of a policy she obtained on the residence to the motion, and the Court ordered Plaintiff to terminate the duplicate policy, and also ordered her not to pay the property taxes early, and to give Ruth the opportunity to pay the taxes timely.
Plaintiff filed a motion for reconsideration, claiming that the Court did not order her to terminate the policy until she ascertained that the policy obtained by Ruth was appropriate. At oral argument on this motion, the Court accepted the statement from Ruth’s insurance carrier that its policy was the proper insurance policy for a person with a life estate. Plaintiff also asked to be reimbursed for the property taxes she paid early, which Ruth maintained was already reimbursed. The Court denied any further reimbursement, informing Plaintiff that if she insisted on paying the taxes early, she ran the risk of not being reimbursed for those payments.
Plaintiff appealed, arguing the Court erred in finding the insurance policy appropriate without a plenary hearing. The Appellate Court found the lower Court reviewed a written explanation of the policy and from that was able to determine the issue without the need for testimony. The lower Court also determined that the taxes which were paid by Plaintiff were not past due and therefore Plaintiff did not have authority under the consent judgment to pay the taxes. Nonetheless, they were already reimbursed. Affirmed.
Interim Ruling on Complaint Seeking Removal of Executor, Replevin, Conversion and Exceptions to Accounting
In the Matter of the Estate of Patricia Hardy Johnson, 2012 N.J. Super. Unpub. ____ (Docket No.: ESX-CP-0013-2011) (Ch. Div. 2012).
The Decedent died testate on May 21, 2008, survived by three daughters, Plaintiff, Mistri and Alexander. Decedent’s 1998 Will was admitted to probate and Letters Testamentary were issued to daughter, Mistri. The Will provides for a bequest of $10,000 to Decedent’s grandson, and divides the residuary equally between her three daughters. The Estate included joint brokerage and bank accounts, a residence in Decedent’s name, and a condo owned as tenants in common with Mistri. Due to the titling of accounts which created an uneven distribution between the daughters, Plaintiff filed a Complaint seeking removal of Mistri as Executor, replevin of certain items which Plaintiff claimed were removed from Decedent’s residence, return of the assets converted by Mistri, and sought an accounting. Mistri then filed a formal accounting. Plaintiff filed numerous exceptions to this accounting.
After completion of discovery, the parties filed cross-motions for summary judgment which were denied in pertinent part, with the Court finding sufficient facts to overcome the motions. In doing so, the Court performed a detailed analysis of the burden of proof pertaining to each account and asset, defining the burdens among the parties in anticipation of trial.
As to the exceptions, Mistri claimed that Plaintiff’s exceptions to the formal accounting should be dismissed as a matter of law. The Court disagreed, finding that although the exceptions do not include “the modification sought in the account and the reasons for the modification,” as required by R. 4:87-8, the Court found that Plaintiff articulated her particular issues with each entry and the Court understands the basis for her Exceptions.
On summary judgment, the Court was also asked to determine as a matter of law whether Mistri and Decedent shared a confidential relationship, which would shift the burden to Mistri to prove that the accounts were properly formed and created. After a thorough analysis, the Court found that there were sufficient factual issues to overcome summary judgment on this issue.
On the issue of Decedent’s IRA, Alexander argued that she should have been included as a beneficiary of the IRA along with her two sisters. However, the Court granted summary judgment on this issue, finding that Alexander had no standing to object to the beneficiary designation as she was never named as a beneficiary, with three prior designations only naming her two sisters.
Finally, the Court declined to order partial distributions until the accounting and other issues were resolved at trial.
Motion to Compel Arbitration of the Value of Decedent’s Interest in LLC is Granted
Ora Billig v. Estate of Josef Billig, et al., 2012 N.J. Super. Unpub. ____ (Docket No.: BER-C-374-11) (Ch. Div. 2012).
Motion was filed by Valley National Bank, the Executor of the Decedent’s Estate, seeking to compel the parties to arbitrate the value of Decedent’s interest in Billig Realty Co., LLC (the “LLC”). The parties agreed to submit to arbitration in accordance with the LLC’s Operating Agreement, but the LLC’s minority members objected to the participation of Decedent’s widow in the arbitration. After reviewing the arguments of the parties, the Court granted the motion and directed that Decedent’s widow be included in the arbitration.
The Arbitration process will be critical in establishing the value of Decedent’s interest in the LLC, and the interest of Decedent’s widow as beneficiary of the Estate will therefore be affected by the outcome of the arbitration. The results of the arbitration will also be binding on the Estate. The fact that the Estate is a party to the arbitration is not sufficient to protect the interest of Decedent’s widow in the Estate, as their interests are not directly aligned, given tax and other considerations. Finally, the participation of Decedent’s widow in the arbitration will promote judicial economy as the valuation and accounting issues will be minimized.
The Court therefore granted the motion and directed that Decedent’s widow, as beneficiary of the Estate, be allowed to participate in the arbitration.
Motion to Set Aside Florida Judgment in New Jersey Required Plenary Hearing in Light of Plaintiffs’ Claims of Lack of Notice
Samuel Schuyler, et al. v. Eileen Meltzer, 2012 N.J. Super. Unpub. ____ (Docket No.: A-5937-10T1) (App. Div. 2012). On appeal from the Superior Court of New Jersey, Law Division, Essex County. Before Judges Fuentes, Graves and Koblitz.
Plaintiffs appeal from the trial Court’s order vacating a judgment obtained in Florida which dismissed Defendant’s unsuccessful will contest. The Florida judgment was entered in 1994 and the Plaintiffs’ docketed it in New Jersey in 2000.
In 2002, Defendant moved in the Law Division, Essex County, seeking to declare the Florida judgment void and unenforceable. The motion was unopposed and therefore granted by the trial Court. In 2011, Plaintiffs moved to vacate the trial Court’s order, claiming that they did not receive notice of Defendant’s motion, and once they received a copy of the trial Court’s order and copy of Defendant’s certification, they promptly moved to vacate the trial Court’s order removing the Florida judgment. Plaintiffs’ motion was denied by the trial Court, which did not make any findings of fact in light of the lack of any opposition, and Plaintiffs appealed.
On appeal, the order was reversed, with the Appellate Division remanding the matter to the trial court to make findings of facts and conduct a plenary hearing on the notice and other issues, which is required on every motion tried without a jury and appealable as of right.
Omitted Spouse Claim Barred by Laches
Lilly Buie and Antwan Moses v. The Estate of Isom Buie, et al., 2012 N.J. Super. Unpub. ____ (Docket No.: ESX-C-192-10) (Ch. Div. 2012).
Decedent died on January 9, 1996 survived by his then wife, Lilly, and his six children. Decedent’s Will dated March 12, 1988 which left his Newark residence to his six children, equally, named one of his sons as Executor.
One week after Decedent’s death, his wife, Lilly, received non-probate assets of approximately $95,000, consisting of joint bank accounts and a life insurance policy of $10,000. Lilly then immediately left the Newark residence and moved back to her home state of South Carolina with her son, Antwan. Since that time, Decedent’s remaining children maintained the house, paid debts and fees owed on the house, and made repairs and capital improvements. These children lived in the house and paid rent, continuing to make payments on the mortgage.
Lilly and Antwan filed a Complaint on April 22, 2010, fourteen years after Decedent’s death, seeking Lilly’s intestate share as an omitted spouse, or an elective share, along with Antwan’s 1/6 interest in the house under the Will.
Under the omitted spouse statute, Lilly claims she is entitled to her intestate share, $50,000 plus 50% of the residuary estate, as she was not mentioned in the Will. Although Lilly only had an eighth grade education and was otherwise unsophisticated, the Court found that the doctrine of laches should apply to bar her claim as an omitted spouse and for her elective share.
When determining whether laches should apply, the court considers (1) the length of the delay, (2) the reasons for the delay, and (3) how the circumstances of the parties have changed over the course of the delay. First, there has been substantial delay in filing the action, fourteen years. Despite being given notice that she had an obligation under the mortgage secured by the Newark residence, Lilly failed to take any action after Decedent’s death. Second, Lilly was the cause of the delay in this matter. She voluntarily removed herself to South Carolina a week after Decedent’s death, and despite receiving a letter regarding her spousal interest in the Estate back in 1996, she failed to act. Finally, the remaining children were prejudiced by Lilly’s failure to act, as they have carried the residence for fourteen years with no contribution from Lilly, and have been foreclosed from performing a proper investigation into Lilly’s claims. Therefore, the doctrine of laches bars the claim and Lilly’s portion of the Complaint was dismissed with prejudice.
The matter was then remanded on the issue of the partition of the Newark residence to properly determine Antwan’s 1/6 interest in the property.
Palimony Agreement Had No Effect on Allocation of Proceeds of Wrongful Death Action in Light of Plaintiff’s Failure to Pursue her Rights in the Wrongful Death Action Filed by Decedent’s Estate
In the Matter of Approval of a Settlement Reached in the Matter of Kevin J. Daul, Individually and as Administrator of the Estate of Christopher J. Daul, Deceased v. East Coast Jets, Inc., 2012 N.J. Super. Unpub. ____ (Docket No.: A-3190-11T1) (App. Div. 2012). On appeal from the Superior Court of New Jersey, Law Division, Atlantic County. Before Judges Lihotz and Kennedy.
Decedent, Christopher Daul, was killed in a plane crash on July 31, 2008. Plaintiff asserted a claim for palimony against the Estate.
On behalf of the Estate, Kevin Daul as administrator settled a wrongful death action filed in the Court of Common Pleas, Philadelphia County, Pennsylvania against East Coast Jets on behalf of the Estate. The Pennsylvania court directed the Estate administrator to obtain approval of the allocation of the settlement proceeds from the Superior Court, Law Division, New Jersey.
The Estate then filed an action in the Law Division in New Jersey seeking approval of the allocation of the proceeds in the wrongful death action and Plaintiff answered, claiming an equitable interest in the Estate based upon her palimony claim. She claimed that a portion of the recovery should be allocated to the survivor action and payable to the Esate to which she seeks entitlement. On December 22, 2010 the Law Division approved the 100% allocation to the wrongful death portion. Plaintiff did not appeal this order.
Over a year later, Plaintiff filed a R. 4:50-1 motion seeking to vacate the December 22, 2010 Order.
According to Plaintiff, she had cohabited with Decedent for more that 4 years with Decedent and they planned to marry. On January 13, 2010, Plaintiff filed a palimony claim against the Estate which was dismissed by the Chancery Division for failure to comply with the Statute of Frauds. This was reversed on appeal and the matter reinstated on August 12, 2012, as the action occurred prior to the enactment of the Statute.
In the interim, the Estate filed and then settled its wrongful death claim, with the Pennsylvania court allocating 100% of the recovery to the wrongful death portion. Plaintiff sought to intervene in that action which was denied based on lack of standing. Plaintiff did not appeal this order. Plaintiff also sought to intervene to object to the allocation by the Pennsylvania Court, which was denied. Plaintiff also failed to appeal this order.
In her R. 4:50-1 motion, filed over a year after its entry, Plaintiff sought relief from the December 22, 2010 order, claiming that reinstatement of her palimony claim justified allocating a portion of the recovery to the survivorship claim. The Appellate Division disagreed, finding that the Law Division, in upholding the allocation, properly followed Pennsylvania law requiring approval of its allocation.
In light of her failure to appeal the Pennsylvania orders, and in light of the Law Division’s reasoned analysis, the Law Division’s decision was upheld on appeal.
Palimony Agreement Upheld Despite the Trial Court Holding a Plenary Hearing the Same Day Default Was Entered Against Pro Se Defendant
Grazyna Kozikowaka v. Wieslaw Wykowski, 2012 N.J. Super. Unpub. ____ (Docket No.: A-5466-09T1) (App. Div. 2012). On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Hudson County. Before Judges Axelrad, Sapp-Peterson and Ostrer.
Defendant seeks reversal of the trial Court’s judgment awarding palimony to his former paramour, claiming the Court erred in not retroactively applying the Statute of Frauds requiring palimony agreements to be in writing and entered into with advice of counsel, erred in proceeding with a default hearing the same day default was entered against Defendant, that Plaintiff failed to establish a valid palimony agreement, that the award was unsupported by the evidence, and that the court failed to find Defendant was incompetent.
Defendant and Plaintiff had two children and lived with each other for 20 years, and the Plaintiff moved out because she was afraid of Defendant’s conduct. Plaintiff filed a Complaint in June 2008, a year and a half before the Amendment to the Statute of Frauds was enacted, seeking palimony. After protracted proceedings, and as a result of Defendant’s failure to provide discovery, the trial Court entered a default against him, suppressing his Answer. While Defendant acted pro se, the trial Court held a proof hearing and thereafter awarded Plaintiff palimony. Plaintiff testified that Defendant promised to support her and to marry her, but “something happened” to Defendant. The trial Court found valid consideration for Defendant’s promise as Plaintiff cohabited with Defendant for 20 years, she prepared meals, shared responsibilities of the home, raised the children and took care of tenants. The Court also found that Plaintiff was simply unable to support herself and the children on her salary. The parties had two multi-unit residences and the Court awarded Plaintiff one of the residences for her and her children, with the value to serve as a reduction in the total palimony award.
Defendant appealed, then filed a motion for a stay and for an Order declaring him incompetent. However, Defendant’s expert failed to opine that Defendant was incompetent and the motion was denied. On appeal, a majority of the Court upheld the lower Court. A dissent was entered, claiming that having the proof hearing the same day the default was entered, at a time when Defendant was acting pro se, was reversible error given Defendant’s capacity issues.
Settlement Upheld Despite Failure of Parties to Put Settlement in Writing
Vincent Rutigliano v. James P. Rutigliano, 2012 N.J. Super. Unpub. ____ (Docket No.: A-2797-11T1) (App. Div. 2012). On appeal from the Superior Court of New Jersey, Law Division, Ocean County. Before Judges Axelrad and Haas.
Plaintiff appeals from the Law Division’s Order upholding a settlement reached at a mediation session with his brother, the Defendant herein, regarding the disposition of their mother’s estate, claiming that the Court erred in allowing Defendant to testify as to the terms of settlement in light of the confidential nature of the mediation. The settlement and order were affirmed on appeal.
Plaintiff and Defendant are brothers and beneficiaries under their mother’s Will. Plaintiff alleged by way of a Complaint that Defendant induced their mother to leave a portion of the Estate to Defendant’s children. The Court ordered the parties to mediation. On July 21, 2011, after a six and a half hour mediation session, held at Plaintiff’s attorney’s office, the mediator advised the Court that a settlement had been reached.
On July 28, 2011, Plaintiff’s attorney sent a letter to Defendant’s attorney that Plaintiff does not consider the settlement binding. Defendant’s attorney responded in a letter concluding that a settlement was reached after full disclosure before the mediator and also set forth the complete terms of settlement. Defendant subsequently filed a motion to enforce the settlement.
The Court set down a hearing and in light of the confidential nature of the mediation, only allowed testimony from Plaintiff and Defendant. While Plaintiff refused to testify, Defendant testified about the settlement. Defendant told the Court about the terms of settlement which were reached in front of the mediator, that despite not being reduced to writing, that the Plaintiff understood and agreed to the terms of settlement, and that the agreement was not reduced to writing because Plaintiff had to leave for a previous engagement.
Based on this testimony, the Court determined that Plaintiff has authorized the settlement, its terms were clear and definite, there was adequate consideration, and that the absence of a written agreement was not fatal. Plaintiff’s argument on appeal that the testimony of Defendant should not have been considered as the settlement was confidential was rejected, and the matter affirmed, with the Appellate Division finding that the parties had waived the mediation privilege in light of their consent to report the matter settled to the Court after the mediation.
Settlement Upheld in Light of Parties’ Voluntary Agreement Which Was Placed on the Record
Rosemary Casagrande, et al. v. Roberta Casagrande, et al. and Mark Casagrande, et al., 2012 N.J. Super. Unpub. ____ (Docket No.: A-3609-09T3) (App. Div. 2012). On appeal from the Superior Court of New Jersey, Chancery Division, Bergen County. Before Judges Messano, Yannotti and Kennedy.
Defendant, Mark Casagrande, appeals from Chancery Division orders enforcing a settlement agreement between the parties claiming that there was no meeting of the minds, that enforcement was unconscionable and would violate public policy, various conflicts of interest and that mediation was contrary to the Court’s Order formally directing the parties to mediation.
Frank and Roberta Casagrande were married in 1974 and had three children, Mark, Sabrina and Christina. Frank purchased life insurance in the amount of $1.7 million from Sentry Life and named Roberta as primary beneficiary with their children as equal contingent beneficiaries. Frank also purchased a $1.0 million policy from Guardian Life naming Roberta as primary beneficiary.
Frank and Roberta divorced in 1995, and as part of their matrimonial settlement agreement (MSA), Frank was required to maintain life insurance in favor of Roberta and the children.
On September 6, 2000, Frank created a trust naming his girlfriend, Rosemary, as trustee, and providing that the life insurance requirement of the MSA should be segregated and held in a separate fund in the trust as long as the obligation remained. In 2001, Frank transferred the Sentry policy to the trust but failed to change the beneficiary. In 2002, Frank married Rosemary. In 2007, he executed a new Will leaving small bequests for his children with the remainder of his Estate distributable to Rosemary.
On June 13, 2008, Frank died, prompting Rosemary to file a Complaint seeking reformation of the Sentry policy, which Frank never changed, to conform to the MSA, trust and Will. Defendants, Roberta, Mark, Sabrina and Christina answered seeking payment of the insurance proceeds and payments under the MSA.
After some discovery, the parties were ordered to mediation and the matter was mediated in front of Judge John M. Boyle. After ten hours of discussions, the matter was settled with the parties placing their agreement on the record as to the disposition of the Sentry policy proceeds among the parties as well as disposition of the Estate.
Judge Boyle then questioned Rosemary who acknowledged, along with the other parties, that they understood the terms of settlement, that they were represented by counsel who answered their questions, that the settlement was voluntary, that it was a compromise and was reasonable, that they had the right to litigate in lieu of settling, and that they were satisfied with the services provided by counsel. Judge Boyle also warned the parties that the settlement was binding on them. Counsel also agreed that a Consent Order and Releases would be signed by the parties.
When Mark, Sabrina and Roberta refused to sign the releases, Rosemary filed a Complaint seeking to enforce the settlement. Mark, Sabrina and Roberta claimed that they did not understand that the settlement was binding. This argument was rejected out of hand in light of the entry of their knowing and voluntary agreement to the settlement on the record. Mark also argued that there existed conflicts of interest, which was rejected.
The trial Court upheld the settlement and Mark appealed, claiming there was no meeting of the minds. The Appellate Division upheld the lower Court, finding adequate evidence in the record to support enforcement of the settlement. Mark was advised that the settlement would be binding and conclusive and he explicitly approved the settlement on the record, and there is no basis to vacate the settlement.
Settlement During Non-Binding Mediation is Enforceable
Willingboro Mall, Ltd. v. 240/242 Franklin Avenue, LLC, et al., 421 N.J. Super. 445 (App. Div. 2011). On appeal from the Superior Court of New Jersey, Chancery Division, Burlington County. Before Judges Cuff, Simonelli and Fasciale.
The Appellate Division upheld the lower court’s enforcement of a settlement reached at non-binding mediation between a vendor of commercial real estate and some purchasers. By way of analogy, so long as there is an agreement at mediation which is reduced to writing shortly thereafter, the agreement will be upheld.
In this case, the court held that a settlement reached at mediation was not required to be reduced to writing during the mediation session to be enforceable, but instead could be reduced to writing after the conclusion of the mediation session. The addition of terms to effectuate the settlement that do not alter the basic agreement will not operate to avoid enforcement of an agreement to settle a litigated matter.
Settlement reached at a mediation session between vendor and purchaser of real estate was sufficiently reduced to writing, as required for settlement to be enforceable, where three days after the mediation session, purchasers’ attorney prepared and sent a letter stating the terms of the agreement reached by the parties and two weeks later sent another letter informing purchasers that he had placed the sum required to resolve the dispute in an escrow account.
The parties had waived confidentiality of mediation proceedings to resolve dispute, and the court did not find the settlement to be the product of coercion, fraud, deception, undue pressure or unseemly conduct. It was therefore enforceable.
Settlement – Upholding Settlement Agreement
In the Matter of Peter, Susan and Steven Lindner Irrevocable Trust, 2011 N.J. Super. Unpub. ____ (Docket No.: A-0634-10T1) (App. Div. 2011). On appeal from the Superior Court of New Jersey, Chancery Division, Union County. Before Judges Lisa and Sabatino
Appeal was taken from the lower court’s decision to vacate the terms of a consent order to enforce the terms of settlement entered into between the parties. Finding sufficient questions of fact, the Appellate Division remanded the matter to the lower court to conduct a plenary hearing as to whether the parties in fact reached a settlement.
Plaintiff and Defendant are siblings and Co-Trustees of their mother’s Trust. Plaintiff filed suit seeking to have Defendant removed as Co-Trustee for allegedly removing funds from the Trust for his own benefit and Defendant counterclaimed, seeking Plaintiff’s removal. After undergoing mediation, Plaintiff and Defendant signed a three page handwritten Mediation Agreement prepared by the mediator. Thereafter, Plaintiff moved on several occasions to enforce the terms of the Mediation Agreement, eventually receiving Orders from the Court requiring Defendant to comply.
Following the signing of the Mediation Agreement, the parties attempted to enter into a more comprehensive and formal settlement agreement, but were unable to do so. On June 18, 2009, Plaintiff’s counsel submitted an unsigned copy of the settlement agreement together with a Consent Order for the Court’s signature under the five day rule, which the Court signed on June 25, 2009. No opposition was filed by counsel for Defendant. The Court also dismissed the matter. On July 24, 2009, Defendant moved to enforce a visitation provision of the Mediation Agreement requiring Plaintiff to return their mother to New York, and the Court entered an oral decision denying that motion on September 15, 2009, holding that the settlement agreement, not the Mediation Agreement, controlled the parties’ visitation arrangement.
On November 6, 2009, Defendant filed a motion for reconsideration requesting the Court to vacate the settlement agreement, which was denied.
On January 20, 2010, Plaintiff filed an Order to Show Cause and Complaint seeking to enforce the Court’s previous orders, and on February 22, 2010, the Court held a hearing. Defendant represented himself pro se, claiming that he never agreed to the terms of the settlement agreement. The Court enforced the terms of the settlement agreement. Defendant hired new counsel and moved to vacate the prior orders as Defendant did not give his prior counsel authorization to settle on his behalf and did not consent to the terms of the settlement agreement. Confidential emails were sent to the trial court in support of Defendant’s lack of consent. The trial court ultimately concluded that Defendant did not consent to the settlement.
Finding that the trial court did not make any credibility determinations regarding Defendant’s lack of consent, the Appellate Division remanded the matter for a plenary hearing, ordering that the emails be disclosed to opposing counsel, after redacting all information not pertaining to the consent.
Legal Malpractice – Beneficiary Suit Against Estate Attorneys May Move Forward Despite Prior Probate Proceedings
Higgins v. Thurber, 2011 N.J. Unpub. ____ (Docket No.: A-12-10) (2011). Before the New Jersey Supreme Court. On certification to the Superior Court of New Jersey, Appellate Division, whose opinion is reported at 413 N.J. Super. 1 (2010).
The Supreme Court considered whether Plaintiff’s legal malpractice action against the attorneys who represented their late father’s estate was barred by the entire controversy doctrine in light of the disposition of earlier law suits including an accounting action.
In a prior probate proceeding, the executor sought approval of his formal accounting of a Trust formed by plaintiffs’ deceased father. Plaintiffs’ filed exceptions in the prior proceeding, sufficient to constitute a legal malpractice claim against defendants, who intervened in the accounting action before trial. Following the conclusion of the accounting action, plaintiffs filed the within malpractice action. Summary Judgment was entered in favor of defendants barred the suit under the entire controversy doctrine. The Appellate Division reversed.
The Supreme Court, in upholding the Appellate Division’s remand, found that although a potential claim sounding in legal malpractice may have been raised in the probate proceeding, it cannot be said that plaintiffs had a “full and fair opportunity to litigate those claims or that it would otherwise be equitable to bar this subsequent suit” under the entire controversy doctrine.
The Court also found that an accounting proceeding in the probate part is formalistic in nature, involving line by line exceptions, and that the entire controversy doctrine is out of place. It involves a proceeding to address the conduct of an executor but not others. The Court also took note of the fact that the underlying pleadings in the accounting actions did not encompass claims for legal malpractice.
Legal Malpractice – No Duty of Care to Beneficiary Adverse to the Estate
Taffaro v. James R. Connell, Esq., at al., 2011 N.J. Unpub. ____ (Docket No.: A-4928-09T2) (2011). On appeal from the Superior Court of New Jersey, Law Division, Bergen County. Before Judges Payne, Simonelli and Hayden.
This matter involves plaintiffs’ appeal of the lower court’s dismissal of his malpractice actions against his step-mother’s estate planning attorneys for failure to include him as beneficiary of her Will. On appeal, the Appellate Court upheld the lower court’s dismissal finding that defendant attorneys, as estate planning attorneys, owed no duty to plaintiff as they represented plaintiff’s step-mother, not plaintiff, in preparing her estate plan. The Court also held that no duty was owed to plaintiff who failed to file a Will contest but instead filed a claim adverse to the interest of the estate.
Vincent Taffaro was the father of plaintiff, Michael Taffaro, and Scott Taffaro. After Vincent’s wife died, he married Dolores Taffaro, and they had 2 children. After Vincent’s death in 1998, Dolores’ daughter, Susan, asked attorney Connell to prepare a Will on Delores’ behalf. Connell met twice with Delores, who was unsure whether to include plaintiff as a beneficiary under her Will, as he was on disability and suffered from drug use. Delores signed a Will prepared by Connell on December 2, 1999, deciding to include plaintiff as a beneficiary. Soon thereafter, Delores was hospitalized until her death on December 24, 1999. On December 17, 1999, Delores called Connell and told him she had a change of heart and wanted to remove plaintiff as a beneficiary of her estate. Delores executed a new will (the “second Will”) on December 20, 1999, which did not include plaintiff as a beneficiary.
Following Delores death, the second Will was probated. Plaintiff did not challenge this Will as he claims that his sister, Susan, as Executrix agreed to include him as a beneficiary. Plaintiff eventually filed a Complaint seeking to establish a constructive trust over the assets of the Estate in an effort to receive his 1/4 share. The matter settled on December 5, 2005 with plaintiff receiving $110,000, representing his 1/4 share of Delores’ residence which was in addition to the 1/4 share he had previously received from Delores’ residual estate. On August 2, 2007, plaintiff and his brother Scott filed a complaint against attorney Connell claiming malpractice in the preparation of the second Will. Plaintiff also sued his attorney in the initial suit claiming that he failed to advise plaintiff that he had a viable claim for malpractice against Connell. The malpractice action was dismissed on summary judgment based on estoppel, statute of limitations, unclean hands and failure to establish damages. Plaintiff appealed.
To establish legal malpractice, a plaintiff must show:
- the existence of an attorney-client relationship creating a duty of care upon the attorney;
- the breach of that duty; and
- proximate causation.
An attorney preparing a will owes a duty only to the testator, unless the attorney undertook a duty to the beneficiary. Also, an attorney owes no duty of care to a potential beneficiary if a beneficiary’s interest is adversarial to the interest of the estate and contrary to the will of the testator.
Based on the foregoing, the Appellate Division held that attorney Connell owed no duty to plaintiff because he represented Delores with respect to preparing the second Will, not the plaintiff. In addition, attorney Connell owed no duty to plaintiff as he took an adversarial position against the estate. Note: plaintiff did not seek to have the second Will set aside.
Palimony Claims – Prospective Application of Statute of Frauds
Botis v. Estate of Gary G. Kudrick, 2011 N.J. Super LEXIS 76 (Docket No.: A-5562-09T4) (App. Div. 2011). On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Monmouth County.
This case required the Appellate Division to determine whether to retroactively apply the amendment to the Statute of Frauds requiring palimony agreements to be in writing and for each party to be represented by separate counsel. The Court held that the amendment applies prospectively, thereby allowing a palimony claim filed against the Decedent’s estate prior to the effective date of the amendment on an alleged agreement enforceable when the complaint was filed to proceed against the Decedent’s estate.
In her complaint, Plaintiff alleged that she and Decedent lived in a marital-type relationship for over 30 years, that they purchased real property together, and that Decedent promised to provide for her at his death. Prior to the enactment of the statute, such a claim was cognizable under the common law. Decedent passed and his Will failed to provide for Plaintiff. She sued the Estate seeking palimony. The trial court failed to retroactively apply the amendment to the statute of frauds, and defendant estate appealed.
In affirming the trial court’s decision not to apply the amendment retroactively, the Appellate Court found significant the fact that the parties were simply unable to comply with the requirements of the amendment prior to its enactment. In this case, Decedent had died over a year and a half before its enactment and Plaintiff filed her Complaint almost a year before enactment. Decedent was simply unable to comply with the new statutory requirements, and prior to the amendment, case law supported a mutual expectation that the palimony agreement was enforceable without a writing executed after consultation with an attorney.
Palimony Claims – Prospective Application of Statute of Frauds
Pierson v. the Estate of Christopher Dahl, 2011 N.J. Super. Unpub. _____ (Docket No.: A-5997-09T4) (App. Div. 2011). On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Atlantic County.
The Appellate Division, relying on its decision in Botis v. Kudrick, 2011 N.J. Super LEXIS 76 (App. Div. 2011), reversed the trial court’s dismissal of Plaintiff’s palimony claim which had been filed before the effective date of the amendment to the Statute of Frauds requiring palimony agreements to be in writing.
In Botis, the Court held that the statutory amendment should not be given retroactive effect to dismiss palimony suits that were filed and pending before the date of enactment.
Probate Litigation – Settlement and Dispute of Disposition of After-Discovered Assets
In the Matter of the Estate of Lillian L. Fischer, Deceased, 2011 N.J. Super. Unpub. ____ (Docket No.: A-0091-10T2) (App. Div. 2011). On appeal from the Superior Court of New Jersey, Chancery Division, Probate Part, Atlantic County. Before Judges Axelrad and J.N. Harris.
This matter involved a probate dispute between decedent’s domestic partner and decedent’s sister over the estate. The parties entered into a settlement agreement in May 2009, after which a disagreement arose concerning the disposition of certain assets that had not been disclosed during the court-ordered mediation. The trial court ordered that the assets be distributed to decedent’s sister, and an appeal was taken.
Appellant is 91 years old and the 66 year domestic partner of decedent. Decedent’s sister is 90 years old. Decedent died intestate on 12/31/08 at the age of 86.
Decedent and her domestic partner jointly owned real estate in Somers Point, NJ and Croydon, Pa. The NJ property was titled in joint names and the Pa. property was acquired in 1967 as joint tenants with rights of survivorship. After her death, decedent’s domestic partner was appointed as administratrix. Decedent’s sister filed a complaint seeking to remove her as administratrix. The parties mediated their dispute and entered into a settlement agreement, which was subsequently incorporated into an order. According to the agreement, decedent’s domestic partner was to receive the securities listed in Schedule A, and decedent’s sister was to receive the Pa. property and “100% of ….[unidentified] additional assets…”
On 6/23/09, the Pa. property was conveyed to decedent’s sister pursuant to the agreement. Some time thereafter decedent’s sister claimed she was entitled to certain “additional assets”, some stock, not listed in Schedule A of the settlement agreement. Following discovery, a hearing was held and the court awarded the securities to decedent’s sister, despite the fact that she was aware of the securities before the mediation and failed to disclose them. She claimed no one asked her about it, and that her sister wanted her to have them. On appeal, decedent’s domestic partner claimed bad faith. The trial court ruled that a reasonable reading of the agreement contemplated that decedent’s sister would receive any assets not listed on Schedule A. This was affirmed on appeal. The settlement agreement was a contract, and settlement has long been encouraged by the Supreme Court. The court did not find bad faith, and that appellant received the benefit of her bargain.