IN THE MATTER ESTATE OF BERNARD R. DOLAN

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0823-04T20823-04T2

IN THE MATTER OF THE ESTATE

OF BERNARD R. DOLAN,

Decedent.

____________________________________

 

Submitted September 28, 2005 - Decided

Before Judges Conley and Sapp-Peterson.

On appeal from the Superior Court of New Jersey, Chancery Division, Probate Part, Bergen County, P-046-01.

Walsh & Walsh, attorneys for appellant Elizabeth Jenkins-Dolan (John K. Walsh, Jr., of counsel and on the brief).

Cole, Schotz, Meisel, Forman & Leonard, attorneys for respondent and cross-appellant, Estate of Bernard R. Dolan (Thomas J. LaConte, of counsel and on the brief; Wendy F. Klein, on the brief).

Stevens & Schwab, attorneys for respondent Patrick J. Dolan (David R. Cosgrove, of counsel and on the brief).

PER CURIAM

Appellant, Elizabeth Jenkins-Dolan, appeals a November 12, 2003, R.4:37-2(b) order, entered during a bench trial "on the sole remaining issue of [her deceased husband's] annuity policy," dismissing her claims relating thereto. She also appeals a June 18, 2004, order denying her motion for counsel fees, and a September 3, 2004, order denying her motion for reconsideration thereof. Decedent's estate cross-appeals from the June 18, 2004, order which, as well, denied its application for counsel fees.

This litigation arises from a two-year marriage between appellant and decedent, a prenuptial agreement between them, an amendment thereto, and certain actions taken by one of defendant's seven children, Patrick J. Dolan (Patrick), with respect to an annuity decedent had with MassMutual. At trial, evidence was also presented concerning appellant's waiver of a 401K plan. But neither the original complaint nor the amended complaint assert any cause of action as to the 401K plan.

Indeed, resolution of this appeal is made somewhat difficult because, as Patrick asserts in his brief: "The claims presented by [appellant] against [Patrick] at trial do not clearly fit the issues now on appeal, framed as a 'contract' issue by [appellant]." Those claims, to a large extent, seemingly focus upon various tortious conduct and breach of fiduciary duties on the part of Patrick, set forth in plaintiff's amended complaint. All of these claims, however, in fact had previously been either dismissed or disposed of by summary judgment and have not been appealed by appellant.

To understand exactly what is before us, and to, in that context, consider the trial judge's R. 4:37-2(b) dismissal, certain factual and procedural circumstances must be set forth. Appellant and decedent were married on December 27, 1997. At the time of their marriage, appellant was fifty-seven and divorced and decedent was seventy-four and widowed. A few days after the marriage, they executed a marital agreement that had been prepared and agreed to prior to the marriage. The prenuptial agreement provided that so long as the parties were living together and had not filed for divorce at the time of decedent's death, appellant would receive a life estate in the marital residence located at 109 Airmont Road, Mahwah, New Jersey. The agreement required decedent's estate to be responsible for all costs of maintaining the home, "including without limitation, maintenance costs, utilities and taxes . . . ." Decedent, further, agreed to execute a will implementing the prenuptial agreements. In all other respects, the prenuptial agreement left the parties to their own respective premarital assets, waived alimony and "all rights which he or she might otherwise have as a surviving spouse," including but not limited to, "the right of election to take against any Last Will and Testament of the other Party."

In September 1998, an amendment to the prenuptial agreement was executed by appellant and decedent. This amendment reaffirms appellant's right to a life estate in the marital property, but provides: "the parties have agreed that in full satisfaction of the estate's obligation to be responsible for costs of maintaining the home, [decedent] shall bequeath, for [appellant's] benefit, the sum of One Hundred Thousand ($100,000) Dollars." The $100,000 was to be held by trustees of a Q-Tip trust created in decedent's will for the benefit of appellant, with appellant having the "right to all of the income from such property together with as much principal as she needs to defray the cost of operating the home." In fact, decedent's last will and testament, executed on November 19, 1998, conforms to the terms of this amendment by providing for the $100,000 maintenance trust for the marital residence.

Decedent died on June 21, 2000, and the will was admitted into probate on July l7, 2000, with letters testamentary issued to Patrick as executor. Apparently, disputes over the estate's obligation to pay for maintenance costs of the marital home arose from the outset, prompting appellant to file a three-count verified complaint in January 2001 against the estate. She sought: (1) her elective share of decedent's estate pursuant to N.J.S.A. 3B:8-1; (2) to void the prenuptial agreement and amendment to the prenuptial agreement unenforceable; (3) to, alternatively, direct the estate to pay the maintenance costs of the marital residence without limit for the duration of her life. The estate answered and counterclaimed, seeking specific enforcement of the prenuptial agreement and the amendment, and attorneys' fees incurred in enforcing the prenuptial agreement.

In February 2002, appellant agreed to waive her claim to an elective share, and the estate agreed to waive its claim to enforce the amendment. But, thereafter, appellant obtained copies of MassMutual documents concerning decedent's annuity. Premised upon those documents, she filed an amended complaint on June 19, 2002. This amendment adds six more counts, all directed at decedent's sons, Patrick and Bernard M. They sound in tortious conduct and breach of fiduciary duties. All of these claims save one as to Patrick were ultimately dismissed by way of a summary judgment order entered May 6, 2003. That order has not been appealed by appellant. It recites in part:

ORDERED that all claims for punitive damages are dismissed with prejudice; and it is further

ORDERED that all claims alleging breach of fiduciary duty are dismissed with prejudice; and it is further

ORDERED that all claims for treble damages are dismissed with prejudice; and it is further

ORDERED that any and all claims other than the $200,000.00 relating to the MassMutual annuity are dismissed with prejudice . . .

. . .

ORDERED that all claims against Bernard M. Dolan are dismissed with prejudice; . . . .

As we understand this order, the only issue left for trial, aside from the counsel fee issues between appellant and the estate, was that set forth in the fourth count of the amended complaint. It alleges:

1. Plaintiff, Elizabeth L. Jenkins-Dolan ("Plaintiff") repeats each and every allegation of the First, Second and Third Counts of the Verified complaint as if set forth herein at length and verbatim.

2. On or about March 25, 1993, and for a number of years prior thereto and continuously through to the present, Defendant, Patrick J. Dolan ("Patrick") was an agent for Massachusetts Mutual Life Insurance Company ("MassMutual") (Agency No. 143, Agent No. 23176). In his capacity as agent for MassMutual, Patrick assisted the Decedent in completing an Application for a Variable Annuity product marketed and sold by MassMutual.

3. The application was accepted, and MassMutual Contract No. 8-460-756 was issued ("Variable Annuity"). Decedent made an initial investment of $50,000.00 and agreed to make annual payments of $6,000.00 As agent for the procurement of the Variable Annuity, the underwriting worksheet indicated that Patrick received a $10,000 commission.

4. At or about the time of the purchase by the Decedent, he designated his seven (7) children, including Patrick and Bernard M. Dolan ("Bernard") as primary beneficiaries.

5. The beneficiary designations remained this way until the Decedent requested the beneficiary designation be changed. Decedent and Plaintiff were married on December 27, 1997. Less than a year after their marriage, the Decedent requested that MassMutual, through its agent, Patrick, change the beneficiary designation. Decedent requested that the beneficiary designation be changed to provide for the Plaintiff to receive $200,000 from the annuity upon Decedent's death, and the balance be divided among his children, including MassMutual's agent, Patrick, and Bernard. A true copy of the Agent's Request to MassMutual is annexed hereto as Exhibit A.

6. On December 2, 1998, MassMutual responded to the agent by providing the appropriate Amendment to Contract which embodied the expressed desires of the Decedent to designate his wife, Plaintiff, as a beneficiary to the extent of $200,000. A true copy of the Amendment to Contract is annexed hereto as Exhibit B.

7. In December 1998, and subsequent thereto, the Decedent informed the Plaintiff that he had in fact designated the Plaintiff as beneficiary of the Variable Annuity to the extent of $200,000, stating that he in fact executed a change of beneficiary request.

8. The Decedent requested that MassMutual's agent, Patrick, effect the change of beneficiary as aforestated and indeed believed he had effected the change.

9. In spite of the desires and request made by the Decedent, which if effected would have reduced amounts to be paid to Patrick and his siblings upon the death of the Decedent, Patrick failed and/or refused to process the change of beneficiary forms prepared by MassMutual and executed by Decedent, and thereby wrongfully interfered with her expectation of the right to receive $200,000 upon the death of Decedent.

10. Patrick interfered with this change by the Decedent intentionally, wrongfully, and with the intent to deprive the Plaintiff of the right to the benefit and divert the benefits to his own advantage.

This is what appellant characterizes in her appellate brief as a "breach of contract" claim. In fact, it seems more to be an interference with contractual rights claim which, in light of the unappealed dismissal of all breach of fiduciary claims, must be analyzed without the legal complications of fiduciary duty concepts. With those observations, we turn to appellant's trial evidence as it related to the annuity issue and the judge's R. 4:37-2(b) ruling made at the end of her case.

In November and December 1998, decedent was diagnosed with lung cancer and, on December 22, 1998, underwent a lobectomy. Appellant testified that prior to the lobectomy, decedent had told her, if "anything happens to me in surgery, I want you to know that I made you the beneficiary of my $200,000 annuity." In April 2000, on an airplane, they again had a discussion about the annuity. At that time, decedent told her, "I'm concerned I'm going to die and I want you to know you have nothing to worry about, I've taken care of you." Appellant testified that she and decedent had a final conversation in June 2000 when he was in the hospital, where he took her hand, talked about how much they cared for each other and in a forty-five minute conversation, told her, because "I'm not going to make it this time" that she would have "well over $500,000 plus the ability to live in the house" until she died. Appellant said he told her she was "well covered" and "didn't have to worry about it." He told her that he had signed the necessary change of beneficiary designation form and had sent it to Patrick to file with MassMutual. And, in fact, appellant introduced at trial a November 21, 1998, "MassMutual Service Request" indicating that Patrick had requested, on behalf of decedent, a change of beneficiary form, making appellant a beneficiary of $200,000 of the annuity. She also introduced a December 2, 1998, letter from MassMutual indicating the requested form was sent to Patrick to obtain decedent's signature.

Of course, the judicial function on a motion for an involuntary dismissal under R. 4:37-2(b) should be "a mechanical one" where neither the trial nor appellate court is concerned with "the worth, nature or extent (beyond a scintilla) of the evidence, but only with its existence, viewed most favorably to the party opposing the motion." Dolson v. Anastasia, 55 N.J. 2, 5 (1969). "A dismissal at the close of a plaintiff's case invokes more searching appellate review than does one at the close of the entire case." Cameco, Inc. v. Gedicke, 157 N.J. 504, 509 (1999). "When reviewing such a dismissal, [we accept] the truth of the plaintiff's evidence together with the legitimate inferences that the evidence supports." Ibid. Credibility of the witnesses is not a factor on such a motion. Id. at 510.

Here is what the trial judge said in granting Patrick's motion:

[a]side from the anecdotal testimony of the decedent's telling the plaintiff that she would be comfortable with a fair amount of money, I think a half million the testimony was, from these various sources including this $200,000 annuity policy, there is no evidence, whatsoever, to suggest that that is bolstered. As a matter of fact, the evidence submitted by the plaintiff contradicts her own position because all the documents appear to indicate the decedent's having intended to limit the extent to which the plaintiff would share in his estate by virtue of the pre-nuptial agreement and the two amendments . . .

. . . .

There's no suggestion that the man had diminished capacity or didn't understand what he was doing. That's not before the Court.

Aside from rather conventional routine discussion by the son who was involved in matters financial, Patrick, that she relied on his advice and did something other than what she had planned to do. There's no expert testimony or report to suggest that there was a standard that's been departed from here . . . but beyond [a res ipsa case of negligence], we have no expert opinion here so that's the short version of my granting your motion. I'll give judgment for the defendant.

We first briefly address the judge's comments regarding diminished capacity and deviation of a standard of care and/or expert testimony thereon. All of that was irrelevant as no claims requiring such proof remained in the case.

As to the annuity "breach of contract" claim, the judge weighed appellant's evidence, and found it deficient. That is not his function on a R. 4:37-2(b) motion. To the contrary, the evidence we have set forth above, viewed most favorably to her, particularly in light of the MassMutual documents, totally ignored by the judge, would support a reasonable inference that, indeed, decedent had done all that was necessary to effectuate the change of beneficiary, including signing the form. If so, appellant would have a valid claim to the $200,000. At the least, she presented enough evidence on the annuity to withstand a R. 4:37-2(b) motion and to compel Patrick to put forth a defense. At the end of all of the evidence, the trial judge may, based on credibility assessments, reject appellant's proofs. But he cannot do that by way of Patrick's R. 4:37-2(b) motion.

We, then, move to the counsel fee appeal and cross-appeal. Appellant premised her claim for counsel fees, in part, upon R. 5:3-5(c) and R. 4:42-9(a)(1). We see no abuse of discretion in the denial of an award under those court rules. Rendine v. Pantzer, 141 N.J. 292, 317 (1995). Neither do we find any error in the judge's conclusion that the counsel fees provided for by paragraph C are limited to fees incurred in the preparation of the agreement. Indeed, that is precisely the language of paragraph 7.C.

We, then, turn to the parties' reliance upon paragraph 7.B. It provides:

If, however, either Party should default in the performance of any term or provision of this Agreement, and the non-defaulting Party deems it necessary to engage counsel and institute legal proceedings to effect or compel performance of any provision of this Agreement, the Court hearing such proceeding shall be empowered and authorized to fix reasonable attorneys fees for legal services against the defaulting Party rendered to and on behalf of such complaining Party in such proceeding and the defaulting Party hereby agrees to pay the reasonable legal fees so determined in the event the non-defaulting Party is successful in having the same assessed.

Although appellant had alleged various defaults under the agreement, at the time of her fee application her claim was limited to the estate's maintenance obligations. That there was a dispute from the outset over maintenance costs is clear. The estate, however, has consistently contended that the items appellant sought to impose upon it were not within the scope of its obligations under the prenuptial agreement. This dispute was never resolved by the judge. It is critical to a determination of default under 7.B. When presented with the need for such a determination, the judge said that he was not "trying a case inside of a case to decide counsel fees." Further, he said:

. . . I cannot determine from what's presented to me who the fault, party in fault is. That appears to me to be a mutuality.

. . . .

I'm not going to have - you want to have a plenary hearing and ratchet up the counsel fees more, be my guest.

[Emphasis added.]

That is precisely what appellant wanted. She was entitled to such a hearing as there clearly are material disputes of fact as to whether the estate defaulted on its maintenance obligations. Of course, if it did and counsel fees would be appropriate under 7.B, they would be limited to fees incurred only in connection with that issue.

As to the estate's cross-appeal, it too is premised upon 7.B as it claims appellant defaulted under the prenuptial agreement when she filed her complaint seeking an elective share, contrary to her waiver thereof in the agreement. The basis for the denial of its cross-motion for fees was, essentially the same as for the denial of appellant's motion, i.e., the motion judge's inability to determine who had defaulted without a plenary hearing. Since we agree that appellant is entitled to a plenary hearing on her 7.B contractual counsel fee claims, so too is the estate.

We, therefore, reverse the R. 4:37-2(b) dismissal of appellant's "breach of contract" claim relating to decedent's promise to name her a beneficiary of the MassMutual annuity for $200,000 and remand for completion of the trial. We leave it to the discretion of the parties and trial judge to determine whether appellant's testimony need be repeated, or the trial simply continued with Patrick's evidence. We reverse and remand

for a plenary hearing the counsel fee disputes under paragraph 7.B of the prenuptial agreement.

Reversed and remanded. We do not retain jurisdiction.

 

Much of appellant's testimony concerned Patrick's investment advice to her. None of that is relevant to the "breach of contract" issue that remained for trial. We do not repeat it here.

(continued)

(continued)

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A-0823-04T2

October 11, 2005