HENRY NOWAKOWSKI v. HENRYKA SCHNEIDER

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1730-05T51730-05T5

HENRY NOWAKOWSKI,

Plaintiff-Appellant,

v.

HENRYKA SCHNEIDER a/k/a

HENRYKA VOULGARAKIS,

Defendant/Third-Party

Plaintiff-Respondent,

v.

HELEN BAKIS,

Third-Party Defendant.

 

Submitted September 27, 2006 - Decided October 20, 2006

Before Judges Cuff, Winkelstein and Messano.

On appeal from the Superior Court of New Jersey, Chancery Division, Civil Part, Camden County, C-107-04.

Amacker & Singley, attorneys for appellant (George J. Singley, on the brief).

Thomas F. Bullock, attorney for respondent.

PER CURIAM

By deed of May 7, 1998, plaintiff Henry Nowakowski conveyed his interest in real property located at 229 Walnut Street, Gloucester City, to defendant Henryka Voulgarakis, one of his three daughters. Plaintiff now challenges the conveyance, claiming he did not have a true donative intent when he executed the deed. Following a four-day bench trial, the court, in an October 31, 2005 order, dismissed plaintiff's complaint, but required defendant to execute a deed conveying a life estate to plaintiff. In arriving at his decision, the trial judge placed the burden of proof, by a preponderance of the evidence, on plaintiff. Because under the facts presented here the burden of proof, by clear and convincing evidence, should have been on defendant to establish that plaintiff had the requisite donative intent when he executed the deed, we vacate the trial judge's order and remand for further proceedings.

Plaintiff was eighty-one years old at the time of trial in March 2005. At issue is the validity of his transfer of his interest in the Walnut Street property, where he resided for many years, to defendant, his youngest daughter. Until the events leading to the commencement of this litigation, plaintiff and defendant enjoyed a close relationship. Plaintiff was largely estranged from his other two daughters for much of their adult lives.

The property was originally owned by defendant's first husband, whom she married in 1966. When they divorced, apparently in 1970, defendant received the property. In September 1971, she conveyed her interest in it to her parents in fee without consideration. Defendant claims she transferred title to her parents at plaintiff's request so the "bills would come to [plaintiff]." She further asserts that her agreement with her father was that he could live in the property during his lifetime, as long as he paid the property's expenses. In 1991, after plaintiff's wife began to experience health problems, defendant helped plaintiff execute a new deed that divested his wife of her interest in the property, leaving sole ownership in plaintiff.

The deed challenged in this lawsuit was executed by plaintiff in May 1998. In it, he conveyed the property to defendant in fee. Plaintiff claims the property transfer was defendant's idea and he did not know what he was signing. Defendant prepared the deed. She claims that plaintiff approached her and told her he wanted to return the property to her.

The trial judge concluded that the conveyance from defendant to her parents in 1971, though on its face unconditional, was subject to an agreement between defendant and her father that he could occupy the property as long as he wanted, and when he was ready, he would convey it back to her. The judge also determined that plaintiff knew what he was signing when he signed the May 1998 deed, which vested title in defendant.

In arriving at his decision, the judge placed the burden of proof on plaintiff by a preponderance of the evidence. We agree with plaintiff that as a result of the confidential relationship between plaintiff and defendant, the burden of proof should have been (1) by clear and convincing evidence; and (2) placed on defendant.

For an inter vivos gift to be valid, there must be:

(1) an unequivocal donative intent on the part of the donor; (2) an actual or symbolical delivery of the subject matter of the gift; and (3) an absolute and irrevocable relinquishment by the donor of ownership and dominion over the subject matter of the gift, at least to the extent practicable or possible, considering the nature of the articles to be given.

[In re Dodge, 50 N.J. 192, 216 (1967).]

An adult donor is generally presumed to be competent to make a gift. Pascale v. Pascale, 113 N.J. 20, 29 (1988). While gifts from parents to children normally enjoy a greater presumption of validity than do those between non-family members, Bankers' Trust Co. v. Bank of Rockville Ctr. Trust Co., 114 N.J. Eq. 391, 399 (E. & A. 1933), that principle is only operative where the parent is not dependent upon the child. Cluzel v. Brown, 133 N.J. Eq. 156, 162 (E.& A. 1943).

In the context of an inter vivos gift, a presumption of undue influence arises if a confidential relationship exists between donor and donee. Pascale, supra, 113 N.J. at 30. When this occurs, the donee has the burden to show, by clear and convincing evidence, that no deception was employed; no undue influence was used; and that all was fair, open and voluntary and well understood. In re Dodge, supra, 50 N.J. at 227.

Here, the judge placed the burden of proof on plaintiff notwithstanding the existence of a confidential relationship between plaintiff and defendant. He also used the preponderance of the evidence standard for the burden of proof. Given these deficiencies, the judge's conclusions of law cannot stand.

We also note that the October 31, 2005 order required defendant to execute a new deed conveying a life estate to plaintiff. That action essentially reformed the May 1998 deed, which conveyed title to plaintiff in fee without reference to a life estate. Thus, should the court, on remand, determine that the same relief may be warranted, the judge must examine the criteria necessary to establish reformation of a document and render his findings on that issue based on clear and convincing evidence. See Lederman v. Prudential Life Ins. Co., 385 N.J. Super. 324, 345 (App. Div.) (reformation requires clear and convincing proof that the original written agreement does not reflect intent of the parties), certif. denied, ___ N.J. ___ (2006).

Accordingly, we vacate the order on appeal and remand for further proceedings consistent with this opinion. The court shall prepare supplemental findings of fact and conclusions of law. We do not mean to imply by this opinion what the ultimate result should be. That is entirely up to the trial judge based on his analysis of the facts under the appropriate legal criteria. Because the judge's subsequent decision may raise additional issues that could require new arguments, we do not retain jurisdiction.

Reversed and remanded.

 

Plaintiff's wife, Stella, died in March 1993.

The deed is not included in the appendix on appeal.

(continued)

(continued)

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A-1730-05T5

October 20, 2006