HOMESTEAD AT MANSFIELD HOMEOWNERS ASSOCIATION v. THE ESTATE OF LOIS MOUNT and PATRICIA A. MOUNT

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

HOMESTEAD AT MANSFIELD

HOMEOWNERS ASSOCIATION,

Plaintiff-Appellant,

v.

THE ESTATE OF LOIS MOUNT and

PATRICIA A. MOUNT, As Heir

and Sole Beneficiary of the

ESTATE OF LOIS MOUNT,

Defendants-Respondents.

______________________________

July 8, 2014

Argued May 7, 2014 Decided

Before Judges Waugh and Accurso.

On appeal from Superior Court of New Jersey, Law Division, Special Civil Part, Burlington County, Docket No. DC-4667-13.

Donna L. Cettei argued the cause for appellant (Eisenberg, Gold & Cettei, P.C., attorneys; Ms. Cettei, of counsel and on the briefs).

Bonnie M. Weir argued the cause for respondents.

PER CURIAM

In this Special Civil Part matter, plaintiff Homestead at Mansfield Homeowners Association (the Association) appeals from a final order dismissing its complaint against defendant Patricia A. Mount, the residuary beneficiary under the will of her late mother Lois Mount, for unpaid assessments on the decedent's home coming due after her death. We affirm.

Although the record is somewhat scanty, the essential facts are undisputed. The decedent owned a home in the Association's development and was thereby responsible for payment of assessments in accordance with the Association's governing documents. The property was encumbered by a reverse mortgage exceeding its value and was in foreclosure when the trial judge issued her ruling.

The decedent left a will in which she made a specific bequest of $2000 to her son and devised "the rest, residue and remainder of [her] estate and property, real personal and mixed, of whatsoever it may consist and wheresoever it may be situate" to her daughter, defendant. In addition to being the residuary beneficiary, defendant is also the executrix of her mother's estate.

Although the record does not contain even an informal accounting, plaintiff does not dispute defendant's averments that there were limited funds in her mother's estate, that she was marketing the property in an attempt to get the bank to take a deed in lieu of foreclosure,1 and that the estate paid the monthly assessments for several months following her mother's death until "the funds simply ran out."

The Association sued both defendant and the estate for the unpaid assessments. Judge Janet Z. Smith heard the parties' cross-motions for summary judgment. The Association contended that because N.J.S.A. 3B:1-3 provides that upon a person's death, "his real and personal property devolves to the persons to whom it is devised by his will," defendant became the owner of her mother's home upon her mother's death and was thus responsible for payment of all assessments coming due thereafter. Defendant contended that the assessments were owed by the estate.

Judge Smith determined that the estate was responsible for the assessments and dismissed the complaint against defendant. Noting that the statute makes devolution "subject to rights of creditors and to administration," that a creditor had begun foreclosure, and that the property was not the subject of a specific devise but was instead included in the residuary, the judge rejected the Association's claim that the statute made defendant responsible for the debt. The Association thereafter took a consent judgment against the estate for $9,065.51, plus interest, costs, and attorney's fees. The Association appeals from the dismissal of its claim against defendant.

We review the grant of summary judgment using the same standard as the motion judge. Tymczyszyn v. Columbus Gardens, 422 N.J. Super. 253, 261 (App. Div. 2011), certif. denied, 209 N.J. 98 (2012). Our task is thus to determine whether the judge was correct in finding defendant not responsible for the assessments accruing after her mother's death on the undisputed facts presented on the motions.

The Association's argument is straight-forward. It contends that N.J.S.A. 3B:1-3 codifies what has long been the law in New Jersey, "that title to real estate vests in a devisee upon the testator's death 'even before admission of the will to probate.'" In re Will of Gardner, 215 N.J. Super. 578, 586 (App. Div. 1987) (quoting Montclair Nat'l Bank & Trust Co. v. Seton Hall Coll. of Med., 96 N.J. Super. 428, 434 (App. Div.), certif. denied, 50 N.J. 301 (1967)).

Gardner is a case addressing the standards for allowing intervention in a will contest and the devise at issue there involved a specific bequest and not a residuary one. Id. at 581-82. Nevertheless, immediately after the quoted passage on which plaintiff relies, we explain that "[t]herefore, upon Gardner's death, [the beneficiary] acquired a vested interest in the farm, subject to divestment should the will under which he claimed his interest not be admitted to probate." Id. at 586 (emphasis added). The case on which Gardner relies, Montclair Nat'l Bank & Trust Co., more fully explains the concepts of legal and equitable title and the nature of the "vested interest" a beneficiary acquires in a devise upon death of the testator. Montclair Nat'l Bank & Trust Co., supra, 96 N.J. Super. at 434-36. Our review of these cases and the authorities they cite, incline us to the view that the common law would find that defendant, as the residuary beneficiary, acquired a vested interest in her mother's home immediately upon her mother's death, but not the sort of ownership as would obligate her to assume payment of the association dues at that time. Cf. In re Estate of Widenmeyer, 70 N.J. 458, 462 (1976) (explaining with reference to an earlier iteration of the probate code when real estate can be said to come into an executor's hands).

We need not decide the issue on the basis of those cases, however, because the parties agree, as do we, that the statute controls. N.J.S.A. 3B:1-3 provides

[u]pon the death of an individual, his real and personal property devolves to the persons to whom it is devised by his will or to those indicated as substitutes for them in cases involving lapse, renunciation, or other circumstances affecting the devolution of testate estates, or in the absence of testamentary disposition, to his heirs, or to those indicated as substitutes for them in cases involving renunciation or other circumstances affecting devolution of intestate estates, subject to rights of creditors and to administration.

Although the property devolved to defendant as the residuary beneficiary upon her mother's death, it did so as Judge Smith noted, "subject to rights of creditors and to administration."

Plaintiff contends that the quoted language "simply provides that the beneficiary takes title subject to claims of creditors," here, the mortgagee. Although it is correct that the property devolved subject to the mortgage, plaintiff's argument ignores the remainder of the clause, which makes the devolution also subject to administration.

As our Supreme Court most recently explained, "If the plain language chosen by the Legislature 'leads to a clearly understood result' that is consistent with the legislative objectives of the statute and its context with related provisions, we apply the law as written." State v. Robinson,

__ N.J. __, __ (2014) (slip op. at 12) (quoting State v. Hudson, 209 N.J. 513, 529 (2012)). Here, related provisions of the probate code, most notably N.J.S.A. 3B:14-23, detailing the powers of executors, provide the context in which the relevant clause, "subject . . . to administration," must be understood.

N.J.S.A. 3B:14-23 provides that "[i]n the absence of contrary or limiting provisions . . . in the will" an executor

shall, in the exercise of good faith and reasonable discretion, have the power:

. . . .

e. With respect to any property or any interest therein owned by an estate or trust, including any real property belonging to the fiduciary's decedent at death, except where the property or any interest therein is specifically disposed of:

(1) To take possession of and manage the property and to collect the rents therefrom, and pay taxes, mortgage interest, and other charges against the property[.]

[(Emphasis added).]

This statute makes plain that because the decedent did not specifically devise her home, but let it fall into her residuary estate, her executor was responsible for taking possession and managing the property on behalf of the estate, including making payment of any "taxes, mortgage interest, and other charges" such as the assessments sued on, as a regular part of administration. Reading N.J.S.A. 3B:1-3 in the context in which the Legislature intended, we are satisfied that Judge Smith was correct that the statute does not make defendant responsible, as her mother's residuary beneficiary, for payment of the assessments coming due after her mother's death. Instead, N.J.S.A. 3B:14-23e(1) makes those assessments the responsibility of the executor on behalf of the estate.

Affirmed.

1 Defendant certified that the bank had advised it would not consider a deed in lieu unless the property had been actively marketed for sale for several months.