IN THE MATTER ESTATE OF THOMAS R. SMITH

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-6820-03T16820-03T1

IN THE MATTER OF THE ESTATE

OF THOMAS R. SMITH,

Deceased.

____________________________________

 

Submitted October 26, 2005 - Decided

Before Judges Conley and Weissbard.

On appeal from Superior Court of New Jersey, Chancery Division, Probate Part, Somerset County, 01-01492.

Thomas F. Smith, appellant pro se.

John F. Richardson, attorney for respondent Marguerite Hale.

PER CURIAM

After the death of his father, appellant contested, on the basis of undue influence, his father's last will, along with prior wills, all of which, incrementally, increased the devise of the father's estate to his companion of eight years, Marguerite Hale, and decreased that to appellant. Appellant also contested certain inter vivos gifts to Hale, claimed that she was negligent in her executrix fiduciary duties, "double-dipped" from the estate, should not be repaid for loans she had made to the estate, and should not be reimbursed for her counsel fees in the will contest but, rather, counsel fees should be awarded to appellant. Following a four-day bench trial, which included the testimony of decedent's accountant and attorney, along with that of family members, the trial judge admitted the will into probate, finding no undue influence had been exerted by Hale, and rejected all of appellant's other contentions. We affirm.

Appellant's father died on December 19, 2001, at the age of 83. He was survived by two children, appellant, Thomas F. Smith, and his sister, Sandra M. Smith, who lives in California. The decedent was predeceased by appellant's mother, Margaret Smith, who died in March 1990. Marguerite Hale and the decedent became close friends around the time of decedent's wife's death, despite a prior long-term disagreement between the Smith and Hale families, who lived on the same street, over a zoning issue.

Shortly before having prostate surgery in 1992, decedent asked Hale for help in his recovery. Hale agreed and decedent moved into her home to more easily facilitate his care. Thereafter, Hale and decedent became close companions. Although they did not have a sexually-intimate relationship, they were emotionally close. It was uncontested that they lived together, shared household expenses and had a joint checking account. In addition, the decedent contributed $40,000 to renovate the kitchen in Hale's house and bought her a car. As decedent's health and hearing diminished, Hale took the decedent to appointments with his doctors and attorney. She also made phone calls for him, including talking to his daughter in California on a regular basis.

Decedent owned a tavern in Piscataway. Appellant had worked with decedent in the tavern for about twenty years but in October 1994 he was fired for stealing money. That was a precipitating factor in the deterioration of the relationship between appellant and his father.

The decedent, who had one will in his lifetime prior to his wife's death, executed five wills and one codicil, all prepared by counsel, throughout the 1990s until his death, beginning in February 1994. In the February will, he devised nearly his entire estate to his son and daughter. Hale was named executrix, and decedent devised to her his 1991 Ford Explorer. In December 1994, decedent added a codicil which provided for his grandson. In October 1996, decedent significantly changed his estate planning, executing a will bequeathing all of his tangible personal property to Hale. Appellant was to receive the Piscataway tavern and liquor license, minus a $40,000 interest for decedent's grandson. In September 1998, decedent executed another will, which instructed his estate to sell the property where his tavern was located and to distribute twenty-five percent to Hale, twenty-five percent to appellant and twenty-five percent to each of decedent's grandsons.

The decedent wrote two final wills in the last year of his life. First, he executed a will on August 8, 2000, one day before having surgery to receive a pacemaker, which provided that seventy-five percent of the net proceeds from the sale of the tavern should go to Hale, five percent to appellant plus forgiveness of an $18,000 indebtedness, and ten percent to each of decedent's grandsons in trust.

This will was the subject of much debate during trial as to decedent's knowing and voluntary execution. The decedent's daughter testified that the decedent could not have known what the new will stated because he had neither his hearing aid nor glasses at the hospital. However, Gary Walker, the attorney who drafted the will, testified that when he arrived at the hospital on August 8, he asked Hale to leave the room to discuss the contents of the new will and to ensure that the changes were decedent's own. Walker testified he saw nothing untoward to raise a question of decedent's competency. His memo of the meeting, drafted immediately after the execution of the August 2000 will, states:

This afternoon, Noelle, Linda and I went to Overlook Hospital to meet with Thomas Smith and sign a new will. The revisions to Mr. Smith's will had been discussed over the phone with Mr. Smith and Marguerite Hale yesterday and today.

When we arrived in Mr. Smith's room, he was awake and seemed to be doing pretty well. He informed us that he was having a pacemaker inserted tomorrow around lunch time. Mrs. Hale was present when we arrived, but I asked her to leave so I could review the terms of Mr. Smith's will with him and ask him a few questions in private. She left the room and did not return.

After Mrs. Hale left, I reviewed the changes Mr. Smith asked me to make to his will, emphasizing the most significant revision, the disposition of his residuary estate. His prior will divided his residuary estate equally between Mrs. Hale, his son and his two grandsons, with an adjustment to his son's share for money his son owed him. His new will disposes of his residence estate 75% to Mrs. Hale, 5% to his son and 10% to each of his grandsons. I asked Mr. Smith several times if this distribution of his residuary estate was what he wanted. He confirmed that it was. I asked him if he was making this change of his own free will and he indicated that he was.

I asked him to confirm for me that he wanted Mrs. Hale to be the primary beneficiary of his estate. He indicated that was the case, stating that Mrs. Hale takes care of him and he wants her to have the bulk of his residuary estate. I asked Mr. Smith if he wanted death taxes paid as an administration expense before his residuary estate was divided among the beneficiaries, or whether he wanted Mrs. Hale's portion of his residuary estate to be responsible for the New Jersey inheritance tax generated by the gift to her. He indicated taxes should be paid from the residuary estate as an administration expense with the net residue being divided between the residuary beneficiaries.

The undersigned have read this memorandum and agree that it is an accurate description of our meeting with Mr. Smith at Overlook Hospital on August 8, 2000.

The final will was executed on October 10, 2000, two months before decedent's death. The only change from the August 2000 will was a provision covering the eventuality of Hale's predeceasing decedent. If that were to have happened, Hale's seventy-five percent interest in the tavern was devised to decedent's grandsons, in trust, and ten percent was devised to each of Hale's two grandchildren. The devise to appellant of five percent with forgiveness of the $18,000 indebtedness was unchanged.

During the trial, Michael T. Jankowski, the decedent's long-time accountant, testified to a conversation in 1994 that he had with decedent in which decedent asked what would happen to the money in his bank account when he died. When Jankowski told him that the money would go into the estate, decedent replied that he did not want that but, rather, wanted to deposit his money into an account with Hale. And, in fact, thereafter, Hale and decedent's joint account was placed in Hale's name only, into which decedent deposited his money. The trial judge found Jankowski's testimony to be credible.

In addition, the judge considered two letters written by the decedent explaining his actions. The first, written to appellant and his sister in December 1997, explains:

I want you both to know that it was my wishes that Marguerite Hale should be the Executrix of my Last Will and Testament and that she should take the fees [that] she is entitled to.

She has taken good care of me these many years. During illness and after several operations, she has nursed me back to health. She has been a great companion and has filled my days with love and happiness. I do not know what I would have done without her; I would have just been a lonely old man at 11 Katherine Drive.

As you both know, she has also nursed my business back to health; into a money[-] making business again. When I was at the verge of bankruptcy, she loaned me her monies and I love her very much.

The second, written to appellant on October 13, 2000, explains:

I feel it is necessary for me to explain to you why I left you 5% of my residual estate. I can only imagine that you feel you were somehow "cheated." The truth is Tom, I have been very generous to you. An inheritance is a gift and not an entitlement. I believe I have also been very generous in forgiving you the $18,000.00 debt you owe me. This was the money you borrowed from me to buy your house.

I must admit there was a time that I wanted to leave my business to you. I have worked long hours for 50 years to build up my business and I did my best to provide for my family. I would have gladly left you my business if you could have proven to be trustworthy. But as you and I both know[,] that is not the case. You admitted to me that you were stealing from me during our sessions with your counselor and in discussions with my accountant, Mike J[a]nkowski.

I decided that I would not leave you the business when I learned the extent to which you had stolen from me. The incident with the juke box earnings was the last straw. I would be foolish to leave the business to you.

You can't imagine how painful it was for me to find out that you had stolen money from me. You know Tom, I had to put my rent and social security checks [into] the business when you worked for me. I did this to cover the bills. And this was at a time when I was doing a bigger business than I do now. The accountant told me that I was close to bankruptcy. Since you left, I am able to keep my social security and rent money.

I really do not understand why you thought you could steal from me. And I don't understand why you continually blamed me for the poor choices you have made in your life. I can tell you that the hateful letters you mailed me and the way you have behaved show what little regard you have for me as your father. It is very sad. I only hope that your son never treats you the way that you have treated me.

I have included this column from Ann Landers. I agree with the writer, "to reward unloving behavior is for the birds."

Based upon his assessment of the evidence and the credibility of the various witnesses, the trial judge concluded that while appellant had presented prima facie evidence to support a presumption of undue influence, Hale had overcome that presumption. In that respect, he said:

All of that evidence refutes the argument . . . that this must have been a concerted plan . . . and that as soon as she learned that the first wife was dying, . . . she saw this as an opportunity to move in on Mr. Smith and engage in a long[-]term predatory depletion of his assets, and alienation of his relationship with his children.

First of all, there was no alienation of Mr. Smith's relationship with his daughter, Sandra Smith. Throughout the entire time that Mrs. Hale lived with Smith Senior in her home, there was a good and consistent relationship with Sandra Smith. From the beginning of this case, when there was a will executed by Mr. Smith that didn't involve Mrs. Hale in any way, from the beginning when he was leaving something for his daughter and her son, the situation stayed essentially the same to the end, and until his last will in October . . . 2000, when she still was inheriting what she was always, according to her own testimony, according to the testimony of others here, expected to inherit. The family home.

In addition to that, there was no reduction of the bequest to her son. Sandra Smith testified that she had a good relationship with her father, although it was a long distance relationship. She apparently welcomed her father and Mrs. Hale into her home in Sherman Oaks, California, when they were traveling out west. She never indicated in anyway that she had any kind of problem with Mrs. Hale. And as the person who had some involvement in understanding the relationship between her own father and Mrs. Hale, she had given me very strong evidence that this was, I don't want to indicate a normal, but a good relationship, as something like a second marriage between Smith Senior and Mrs. Hale.

She took care of him, she did things for him, helped provide a roof over his head. She provided companionship and love, which was more important than anything else. She took care of his medical needs, she took care of his hygienic needs, and there were some that were unusual. And she did this for a period of some eight years, during most of which there was -- there were wills that left a substantial amount of his property to his children.

There's a suggestion that incrementally she influenced him unduly to deprive his own children of their inheritance, and to give it to her and her family.

As I said earlier, almost all [of] the undue influence cases talk about some kind of drastic change that occurs when someone in a confidential relationship becomes involved in the estate planning of an elderly person.

It is just as reasonable and, in fact, more reasonable to infer, from the evidence that's been presented to me, regarding the incremental changes in several wills between 1994 and 2000, that what happened here is that Mr. Smith Senior, as he grew older and as his relationship with his own son did not improve, and, in fact, deteriorated, made decisions that he was, as an adult, as a cognizant, competent adult, perfectly capable of making, that he did not want to leave an inheritance to his son.

That because of the strain in the relationship and because his son repeatedly blamed him, through written letters that are in evidence, . . ., because his son would not relinquish the notion that his father had wronged him and had deprived him of his right to inherit and to be involved in the business, that Mr. Smith Senior eventually decided that he didn't want to leave Tom Junior anything.

It's just as reasonable to infer that the reason he didn't do that, that he really didn't, at that point, in the early to mid
[-]nineties, have a satisfactory alternative. Maybe he hadn't decided yet that he wanted to disinherit his son.

But the fact that he has an eight-year relationship with someone who is in a position of a second wife to him, and during those eight years he decides that he wants to leave her 75 percent of the residuary estate instead of his son, is just as likely to be explained by his voluntary decision over a period of time as it is by any suggestion of undue influence.

There is a presumption of undue influence, as I said, although that presumption was hanging on by a very, very slender thread at the end of the Plaintiff's case, because there was a confidential relationship and there are a few things that may be considered slight evidence of suspicious circumstances. Those few things, as I said, are Mrs. Hale's direct involvement with the lawyers, and the fact that she was -- hostile. She didn't like Tommy Smith Junior and the fact that ultimately she and her heirs are the primary beneficiaries of the last will of Mr. Smith.

But she testified here. She was the first witness. And that's why the defense didn't need to repeat that testimony here. And I found her to be very credible with respect to almost everything she testified about. I watched her testify in her wheelchair here, I listened to what she had to say. I listened to her explanations of what had happened, and in my mind she is a highly credible witness about the circumstances of her relationship and why things were done.

Does that mean that she's without fault? That she's perfect? That she doesn't do anything for personal motives or she doesn't have a financial interest? No, it doesn't mean that.

And the alleged fraud on the Veteran's Administration has been argued to me here vehemently at the end suggests that maybe she's not so perfect. I'm not finding by any means that there is any fraud on the Veteran[']s Administration. Because in my experience, it's not unusual to have older people engaged in a late life relationship decide that they don't want to get married for reasons of maintaining certain benefits and to avoid conflict with inheritance for their children or for other reasons.

The fact that she decides that she doesn't want to be married, officially, so that she can retain certain benefits, by itself does not mean that, number one, that she was defrauding anybody. It may be a misrepresentation that some agency would follow up on and a tribunal of some kind would conclude that there was a deception and a misrepresentation, that she wasn't entitled to the benefits, I don't know that. But that's not the case that I heard.

But by itself, it doesn't mean that. And more important, even if it does mean that, that she engaged in some deceptive conduct for financial gain, it doesn't mean that she's lying about other things she's saying, and that she has a motive, or she had a motive all along to deprive Mr. Smith of his property.

First of all, I have no evidence that she actually deprived Mr. Smith of his property. To the end of his life, Mr. Smith had all rights to enjoyment of his property. There is nothing here to suggest that she took something away from him and kept it from him. Yeah, he bought her a Buick, paid for most of it, and he did fix the kitchen at the cost of $40,000. But he enjoyed those assets as much as she did, or he had a right to. He lived in the house, he used the kitchen, or he ate food cooked in that kitchen by others. So, it was a benefit to him.

He got her a car. What's so strange about a man living with a woman for a number of years paying for the car that's registered in her name? Husbands and wives do it all the time. And the fact that these people weren't married isn't that significant. He could do it as well. There's nothing unusual about that, and it's not suspicious transfer of assets from him to her.

As far as his business was concerned, he was always the owner of the tavern business. She never deprived him of his property there. To the end of his life, he enjoyed his property, he had someone to live with, who cared for him, and he apparently was in a satisfactory relationship to him. Not a single witness, not even Tom Junior took the stand and said ["]my father was unhappy or dissatisfied in his relationship with Marguerite Hale.["] Not a single person here, over three days, said that to me. Not a single witness took the stand and said ["]Mr. Smith Senior indicated to me, in one way or another, that he was being taken advantage of, or that Marguerite was taking all his money, or she was making all the decisions contrary to his wishes, or she was somehow abusing him as an elderly person.["]

No one suggested that, and no one suggested that, not even the adverse parties here, because obviously, it's not true. He had a good relationship with her. She was like a wife to him and he wanted to provide for her. That's where the evidence leads, and there's no contrary evidence. There's a great deal of evidence that supports that conclusion.

One of the strongest pieces of evidence is Mr. Jankowski's testimony this morning saying that, in fact, Mr. Smith asked him, ["]what happens to my cash in the banks if I die?["] And when he heard that it would become part of his estate, he said he didn't want that. He wanted Marguerite Hale to have all his bank accounts, all the cash he had in the bank.

Mr. Jankowski didn't say Marguerite Hale was there at the time, urging him to say that. What's more, when I tried to narrow down the time frame, he said that it was closer to 1994 than to the time of his death. Meaning that over a period of five or six or seven years, Mr. Smith wanted to give what he owned to Mrs. Hale to share with him and to have if he dies. At least as far as the cash in the banks is concerned. There is a speaking of his intent that is not in anyway tainted by suggestion of undue influence.

If he were unduly influenced, why would he make that suggestion on his own to his long-time accountant? It doesn't make any sense to me at all that it wasn't his decision and it was hers and his will was overborne by her influence on him.

The suggestion that his relationship with his son was unnatural and it was influenced by her, as I said repeatedly, is absolutely belied by his own words in his own letters.

I don't want to quote anything in particular, because it's not one sentence or one phrase on his part, but he wrote long three[-] or four-page single-spaced letters to his father, the dates aren't clear, but it's apparently over a period of time after he was fired in 1994.

Reading those letters leaves no doubt that Mr. Smith Junior understood that his father did not want to have the same relationship with him as he had had in the past. Marguerite Hale was not the cause, and he knew it. Because if Marguerite Hale had been the cause, he would have said something to that effect in his letters. That's not what he said. He knows in those letters that it's his father's decision to break off the relationship, to cut him out of the tavern. He doesn't agree with that decision, but he certainly indicates in what he writes to his father that he understands that his father, as an adult, and a competent person, is making the decision to cut him out.

He doesn't like it, he complains about it, and tries to make his father feel guilty, makes a lot of excuses, but he knows that it's his father's decision and the letters reveal it.

That's overwhelming evidence that Mr. Smith Senior decided to reduce his son's inheritance freely, voluntarily, and without undue influence from Mrs. Hale.

. . . .

Also, very strong evidence that there was no undue influence causing the execution of wills of 2000, is that there was independent advice given to Mr. Smith at a time when Mr. Smith was competent. He understood, he had experienced lawyers who represented his interest, handled his estate matters. There is no evidence whatsoever that Mrs. Hale was the client that Mr. Herold and Mr. Walker represented. Mr. Herold had a great deal of experience at the time of his initial involvement in the drafting of the wills. He had 35 years of experience in estate planning and administration. Mr. Walker, at the time of his involvement, had about ten or eleven or twelve years in that field. Both of them indicated that they'd received their instructions from Mr. Smith Senior and even though Mrs. Hale was present and Mr. Herold was of the belief that they were married secretly in the Catholic Church, or something of that nature. I don't know what difference that makes in how he does the will, but both of them were satisfied the wills were executed through all the proper procedures and regularities.

Mr. Walker made a memo when he did the Overlook will in August . . . 2000, because there were unusual circumstances. But the memo served the purpose that he wanted it to serve, to make sure that he remembered, in the event of litigation, the circumstances, and he remembered them. He spoke to Mr. Smith alone in the hospital room, he made sure that the will reflected Mr. Smith's wishes, and after making sure of that, that it was Mr. Smith's wishes that are expressed in that will, he had the will executed with the witnesses that are required.

The lawyers and their participation clearly showed that there was no undue influence in the preparation or execution of Mr. Smith's final will of October[] 2000, and certainly, in this case, the burden of proof by a preponderance has been satisfied by Mrs. Hale in overcoming any presumption imposed by law that because she had a confidential relationship with Mr. Smith, and because there were slight suspicious circumstances, that the will of Mr. Smith was not of his own making, but a result of her undue influence on him.

As to appellant's other contentions, the judge made the following findings and conclusions:

[W]ith respect to the loans[,] Mrs. Hale is claiming somewhere in the neighborhood of $205,000 in loans. But reviewing the documents that were presented at the time of trial, I don't find that figure supported by documents that have been admitted in evidence. 80 thousand dollars was provided by Mrs. Hale to the tavern after Mr. Smith's death to continue the tavern in business. Another $82,900 was provided by Mrs. Hale out of her own accounts to pay the inheritance tax. And that clearly is an amount that she is entitled to be reimbursed for out of the estate.

The argument with respect to the $80,000 to keep the business going is that the business should have been closed down and the money should not have been spent on the tavern when it was apparently not supporting itself. The tavern had a buyer. And Mr. Smith's will said specifically that the tavern should be sold and the money distributed to the beneficiaries. The tavern had a buyer. It was as a result of this litigation that the sale did not occur earlier. It was a result of a stay sought and obtained by [decedent's children] in this case that the tavern could not be sold to the buyer in the early months of 19 -- the early months of 2003. When the stay was eventually lifted and the sale could go through, the mortgage commitment that the buyer had had expired and so there was a need to apply for a new mortgage. There is an argument here . . . that the tavern should have been closed down there. The contrary testimony of Mrs. Hale is that the buyer would only buy if it were an active going concern and not a closed business. Not just the property, the liquor license. Plaintiffs argue that nothing in the contract contained such a provision but the contract had in effect expired because the mortgage commitment had expired and the buyer was not under an obligation to purchase after the stay had been entered by this court and his mortgage commitment was no longer available to him. So under those circumstances the buyer could insist on an additional term that the tavern continue in business. It is not at all an unreasonable term. And it's credible to me when Mrs. Hale says that those were the terms. The tavern had to keep operating. It is certainly understandable that a buyer would not want the tavern closed so that customers don't stop coming there and find other places, and so it doesn't appear as a closed business when he starts off.

The fact that there was no written agreement doesn't mean that an understanding between Mrs. Hale and the buyer was not in existence. And so her expenditure of funds on the tavern and her loans to the tavern for that purpose are reasonable and will not be charged back against her.

. . . .

One other . . . issue is the post[-
]death salary to Mrs. Hale. The plaintiff challenges the $531 per week that Mrs. Hale collected as salary since Mr. Smith's death, primarily arguing that Mrs. Hale was duplicating the work that was being done by other managers because her list of job duties, work responsibilities . . . is the same as the work responsibilities of the manager who ran the tavern. My simple answer to that argument is that Mr. Smith himself earned a higher salary as the owner of the tavern while he carried out these managerial responsibilities and yet he had managers. Obviously the amount of work that is contained in running the tavern is not work that can be done just by a manager who works in the tavern itself and does the day-to-day operation but it may include tasks that were acknowledged even by the plaintiffs [that are] to have been carried out by Mrs. Hale. Plaintiffs' witnesses testified that she did go there, keep the books, she purchased and ordered things, she cleaned up at the tavern. I don't know how many hours she worked, I don't know whether she worked 40 hours a week or less than 40 hours a week, that is not a particularly significant finding that I have to make. My finding is that when Mr. Smith died, she stepped into his shoes as far as managing the tavern at least to some extent and that the salary of $531 per week was not unfair for her.

Furthermore, these were not duties that she was carrying on as the executrix of the estate, these were separate duties. As the executrix she could have -- she could have hired somebody at a similar or higher salary to do the tasks that she performed herself. And she probably saved money for the business by carrying out these duties and taking a salary for her time for herself.

So to the extent that there is an objection to her taking a salary after Mr. Smith's death, that objection is also rejected.

Lastly, I come to the issue of removal of Mrs. Hale as the executrix. Especially, because . . . plaintiffs have failed in this case to show that there was undue influence or that Mrs. Hale has failed to administer the estate in a manner that would preserve the rights of the beneficiaries, the request to remove her as the executrix is denied.

On appeal, appellant contends:

POINT I: UNDUE INFLUENCE WAS EVIDENT AND ESTABLISHED DURING TRIAL. THE BURDEN OF PROOF WAS SHIFTED TO THE DEFENSE, WHERE THE EVIDENCE WAS NOT SUFFICIENT TO DISPROVE UNDUE INFLUENCE.

POINT II: THERE WAS SUFFICIENT EVIDENCE SHOWING THAT THE EXECUTRIX, MARGUERITE HALE, WAS NEGLIGENT [IN] [AL]MOST ALL FIDUCIARY RESPONSIBILITIES . . . IN BOTH THE PERSONAL AND BUSINESS MATTERS OF THE DECEASED AND SHOULD HAVE BEEN REMOVED AS EXECUTRIX.

POINT III: A CONFLICT OF INTEREST WAS ESTABLISHED BY ALLOWING THE EXECUTRIX, MARGUERITE HALE TO "DOUBLE DIP" AND COLLECT BOTH EXECUTRIX FEES AND DRAW A SALARY BY MANAGING THE DECEDENT'S BUSINESS.

POINT IV: THERE IS SUFFICIENT CASE LAW SHOWING THAT THE INTER VIVOS GIFTS SHOULD NOT HAVE BEEN RETAINED BY THE EXECUTRIX AND RETURNED TO THE ESTATE.

POINT V: THE MAJORITY OF THE MONEY LOANED TO THE DECEDENT'S BUSINESS BY THE EXECUTRIX, BOTH BEFORE AND AFTER DEATH, WERE MONIES BELONGING TO THE DECEDENT HIMSELF, THUS THE LOANS WERE ERRONEOUS AND IN CONFLICT OF INTEREST.

POINT VI: SINCE UNDUE INFLUENCE WAS EVIDENT AS NOTED BY THE TRIAL JUDGE AND THE PLAINTIFF'S CASE HAD MERIT, ATTORNEY FEES INCURRED BY THE DEFENDANT SHOULD BE REIMBURSED TO THE ESTATE.

POINT VII: SINCE UNDUE INFLUENCE WAS ESTABLISHED, ATTORNEY FEES INCURRED BY THE PLAINTIFF MAY BE PAID OUT OF THE ESTATE.

In his reply brief, appellant renews these contentions and adds "On the will of Yolande Gregory."

We have considered these contentions, all rejected by the trial judge, in light of the applicable law and the record, as well as the trial judge's findings and conclusions, which are amply supported by the record, and the judge's credibility determinations. We find no basis for interfering with the judge's rejection of these claims or for discoursing on them in an extended opinion. R. 2:11-3(e)(1)(E).

We add only the following brief comments. As we recently reiterated:

The law governing undue influence is well established. While we generally presume that the testator is of sound mind and competent to execute a will, [In re Will of Robert] Livingston, 5 N.J. 65, 71 (1950), even a will[,] which on its face appears to have been validly executed[,] can be overturned upon a demonstration of undue influence. Haynes v. First Nat'l State Bank of N.J., 87 N.J. 163, 175-76 (1981). Similarly, an inter vivos transfer, . . . is equally governed by the undue influence analysis. In re Dodge, 50 N.J. 192, 227-29 (1967); see Pascale v. Pascale, 113 N.J. 20, 29-31 (1988). Undue influence is "defined as 'mental, moral or physical' exertion[,] which has destroyed the 'free agency of a testator' by preventing the testator 'from following the dictates of his own mind and will and accepting instead the domination and influence of another.'" Haynes v. First Nat'l State Bank of N.J., supra, 87 N.J. at 176 (quoting In re Neuman, 133 N.J. Eq. 532, 534 (E. & A. 1943)). Where the will benefits one who enjoyed a confidential relationship with the testator, and where there are suspicious circumstances surrounding the will, the law presumes undue influence and the burden is upon the proponent of the will to disprove the presumption. In re Rittenhouse's Will, 19 N.J. 376, 378-79 (1955).

. . . .

 
Once the burden has shifted, the will proponent must overcome that presumption by a preponderance of the evidence. Haynes v. First Nat'l State Bank of N.J., supra, 87 N.J. at 177-78; In re Weeks, 29 N.J. Super. 533, 538-39 (App. Div. 1954); see In re Estate of Churik, 165 N.J. Super. 1, 5, 397 (App. Div. 1978), aff'd o.b., 78 N.J. 563 (1979). See also Pascale v. Pascale, supra, 113 N.J. at 31 (holding that donee of inter vivos gift bears burden of proof by clear and convincing evidence).

[In re Probate of Last Will & Testament of Catelli, 361 N.J. Super. 478, 486-87 (App. Div. 2003).]

Generally, the burden of proof for the proponent of a will is the preponderance of the evidence standard. However, there are circumstances, such as where the drafting attorney receives a substantial portion of the estate, that call for the higher standard of clear and convincing. Haynes v. First Nat'l Bank of N.J., supra, 87 N.J. at 178-79. The clear and convincing standard is also applicable to inter vivos gifts. Pascale v. Pascale, supra, 113 N.J. at 31.

A trial judge's findings on the issue of undue influence are "entitled to great weight [because] the trial court had the opportunity of seeing and hearing the witnesses and forming an opinion as to the credibility of their testimony." In re Will of Robert Livingston, supra, 5 N.J. at 78. "Such factual findings should not be disturbed unless they are so manifestly unsupported or inconsistent with the competent, reasonably credible evidence so as to offend the interests of justice." In re Will of Sidney Liebl, 260 N.J. Super. 519, 524 (App. Div. 1992), certif. denied, 133 N.J. 432 (1993).

Here, the confidential relationship between the decedent and Hale was undisputed. And, too, in denying Hale's motion to dismiss, the trial judge found that there were circumstances that raised slight suspicion. The burden, then, shifted to Hale, the proponent of the will. The trial judge found, on this issue, that there was "overwhelming evidence that [decedent] decided to reduce his son's inheritance freely, voluntarily, and without undue influence . . . ." The judge, also, found that in 1994, decedent made clear to his accountant that he wanted the money in his bank account to go to Hale. Importantly, the judge found that deterioration of the relationship between appellant and decedent was not influenced by Hale's relationship with decedent. And, too, the judge noted the participation of decedent's lawyers in the execution of the wills, further rebutting the presumption of undue influence. We are not in a position to disagree.

As to appellant's claim that Hale should have been removed as executrix because she "embezzled, wasted or misapplied any part of the estate committed to [her] custody, or has abused the trust and confidence reposed in [her] . . . ," N.J.S.A. 3B:14-21(c), while a trial judge does possess this power, courts generally are reluctant to exercise it, absent "extreme provocation." Behrman v. Egan, 25 N.J. Super. 109, 121 (Ch. Div. 1953), remanded on other grounds, 16 N.J. 97 (1954). Mere hostility between the fiduciary and the beneficiaries will not result in removal. Wolosoff v. CSI Liquidating Trust, 205 N.J. Super. 349, 360 (App. Div. 1985). Here, simply put, the trial judge concluded that appellant had not proven any action on the part of Hale that would warrant her removal. That conclusion is amply supported by the record.

Appellant also argues that Hale should not have been allowed to receive a salary from the decedent's tavern before its sale while acting as executrix of the decedent's estate. Generally, an executor or executrix cannot receive compensation, beyond their executor or executrix fee, for continuing a decedent's business during the probate period. Laforraca v. Laforraca, 132 N.J. Eq. 40, 48 (Ch. 1942), aff'd o.b., 133 N.J. Eq. 298 (E & A 1943); Gilligan v. Daly, 79 N.J. Eq. 36, 41 (Ch. 1911). However, when the will does not speak to carrying on the business, the executor or executrix, if he or she continues running the business, may be entitled to additional compensation. In re Appeal of Larrabee, 98 N.J. Eq. 655, 658 (Ch. 1925); Gilligan v. Daly, supra, 79 N.J. Eq. at 41-42.

Here, the decedent's will directed the executrix, Hale, to sell the tavern property and its liquor license. It did not direct her to continue to operate the tavern. However, it took two and one-half years before the tavern was sold during the course of which appellant pursued legal action to stay the sale. During the interim, Hale continued the business and served as its manager, a job she was not obligated to do under the will. We find no abuse of discretion in the trial judge's conclusion that under those circumstances, the salary Hale received therefore was not improper.

As to the partial reimbursement of loans made by Hale, one to pay an inheritance tax and the other to keep the tavern in business while its sale was pending, and the counsel fee determinations by the trial judge, they are supported by the judge's factual findings and legal conclusions. They warrant no further comment by us. R. 2:11-3(e)(1)(A),(E).

Affirmed.

 

The decedent bequeathed to his daughter his property on Katherine Drive, where decedent lived before moving into Hale's home. This bequest never changed during the redrafting of wills. The property was a subject of this litigation, as his daughter challenged the requirement that she pay the mortgage on the property. However, the daughter has not appealed the trial judge's conclusion that the property was bequeathed subject to the mortgage.

We do not address the Yolande Gregory will issue. During trial, appellant raised the fact that Hale had inherited under another neighbor's will but the judge found insufficient evidence of the circumstances surrounding that will to draw the inference of prior undue influence by Hale that appellant had argued. Appellant's appellate appendix contains further evidence relating to that will, but we denied his motion to supplement the record.

(continued)

(continued)

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A-6820-03T1

November 7, 2005