JAMES S. COHEN v. SAMANTHA O. PERELMAN
Annotate this CaseNOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NOS. A-3275-14T4
A-3286-14T4
JAMES S. COHEN, as Trustee of
the Robert B. Cohen Living Trust,
Plaintiff-Appellant,
v.
SAMANTHA O. PERELMAN,
Defendant-Respondent.
IN THE MATTER OF THE ESTATE
OF ROBERT B. COHEN,
Deceased.
JAMES S. COHEN, as Trustee of
the Robert B. Cohen Living Trust,
Plaintiff-Respondent,
v.
SAMANTHA O. PERELMAN,
Defendant-Appellant.
IN THE MATTER OF THE ESTATE
OF ROBERT B. COHEN,
Deceased.
Argued October 18, 2017 – Decided November 19, 2018
Before Judges Alvarez, Nugent, and Geiger.
On appeal from Superior Court of New Jersey,
Chancery Division, Bergen County, Docket Nos.
C-000094-12 and P-000211-12.
Benjamin Clarke argued the cause for appellant in A-
3275-14 and respondent in A-3286-14 (DeCotiis,
FitzPatrick, Cole & Giblin, LLP, attorneys; Benjamin
Clarke and Erik M. Corlett, on the briefs).
Edward A. Friedman (Friedman Kaplan Seiler &
Adelman LLP) of the New York bar, admitted pro hac
vice, argued the cause for respondent in A-3275-14 and
appellant in A-3286-14 (Friedman Kaplan Seiler &
Adelman LLP, Greenbaum Rowe Smith & Davis LLP,
Edward A. Friedman and Jeffrey C. Fourmaux
(Friedman Kaplan Seiler & Adelman LLP) of the New
York bar, admitted pro hac vice, and Brown & Connery,
LLP, attorneys; Robert J. Lack, Alan S. Naar, Edward
A. Friedman, and Jeffrey C. Fourmaux, on the briefs).
PER CURIAM
Robert Cohen (Cohen), a man of great wealth, suffered for years from a
rare and progressive form of Parkinson's disease, and died at age eighty-six on
A-3275-14T4
2 February 1, 2012. His son James Cohen 1 thereafter filed a complaint in
Chancery seeking, among other things, a declaratory judgment that Cohen's July
17, 2009 will, as subsequently modified, was valid and enforceable. About two
months later, Cohen's granddaughter, Samantha O. Perelman, filed a verified
complaint alleging that all of Cohen's wills and testamentary trusts after her
mother Claudia's death in 2007 were the product of undue influence and were
therefore invalid. She later amended her complaint, alleging that the earlier
2007 will and trust also resulted from James's undue influence, and that an
earlier 2004 will, trust, and codicil were the documents that should be probated.
After extensive pretrial motion practice, the consolidated actions were tried over
seven months, during which fifty experts and fact witnesses testified. Judge
Estela M. De La Cruz rendered a comprehensive and cogent 119-page written
decision on June 24, 2014, upon which we principally rely in issuing our
affirmance.
At the close of Samantha's case-in-chief, the trial judge ruled that
Samantha was entitled to a presumption of undue influence. In accord with well-
established precedent, the ruling shifted the burden of proof to James to refute
the presumption with clear and convincing evidence. The court reserved
1
We refer to Cohen's wife, children and grandchildren by their first names to
avoid confusion.
A-3275-14T4
3
decision on Samantha's further allegation that James's undue influence had
caused Cohen to allow two substantial life insurance policies, naming Claudia
as beneficiary, to lapse.
The judge's decision, which we more fully describe as necessary in the
relevant portion of this opinion, dismissed Samantha's claims in their entirety.
The judge granted declaratory judgment that Cohen's last will and testament
consisted of the July 2009 will, the March 2010 Fifteenth Amendment, and the
December 2010 First Amendment. Because she found James had not exerted
undue influence, all other wills and trust documents were therefore null and
void.
The court also assigned the discovery master the further task of reviewing
Samantha's demand for $23.5 million in legal fees and denied James's demand
for frivolous litigation sanctions. After consideration of the master's report on
fees, rendered months after exhaustive submissions by the several firms
representing Samantha and James, the court allowed $10,578,101 in fees and
costs. See R. 4:42-9(a)(3). We affirm the judge's decision regarding dismissals,
the declaratory judgment, as well as the request for legal fees.
The parties previously engaged in protracted litigation related to Cohen's
holdings in this and other jurisdictions. In New Jersey alone, this includes: In
A-3275-14T4
4
re Cohen, No. A-5852-08 (App. Div. July 5), certif. denied, 208 N.J. 371 (2011);
Estate of Cohen v. Booth Computers, 421 N.J. Super. 134 (App. Div.), certif.
denied, 208 N.J. 370 (2011); Estate of Cohen v. Cohen, Nos. A-0713-10,
A-0864-10, and A-0941-10 (App. Div. Oct. 3, 2013), certif. denied, 217 N.J.
287 (2014); and Estate of Cohen v. Estate of Cohen, No. A-3779-13 (App. Div.
Mar. 7), certif. denied, 226 N.J. 212 (2016).
Additionally, the parties have litigated Cohen's estate in federal court, and
in Florida and New York: Estate of Cohen v. Cohen, Civil No. 09-2281 (JJL)
(D.N.J. Mar. 16, 2010); In re Petition of Perelman, File No. 2318/2007
(Surrogate Ct., Cty. of N.Y. June 4, 2010); and In re Estate of Cohen, File No.
50-2012-CP000819-XXXXMB (Probate Div., Palm Beach Cty., FL Feb. 21,
2012).
Cohen's two sons, James and Michael, always worked in the family
business enterprises. Claudia and her father enjoyed an excellent relationship
up to her death on June 15, 2007. Until she became too ill to do so, she assisted
in her parents' care. Additionally, Claudia had a career independent of the
family businesses, in which she never worked. Claudia married Ronald
Perelman, also a man of great wealth, and their only child is Samantha, born
June 1990. Although Claudia and Perelman divorced, she named him the
A-3275-14T4
5
executor of her estate. Michael predeceased Claudia on June 30, 1997, leaving
a son, Michael Spencer Cohen, born July 1994, who became a part of James's
household when his mother also died.
The parties have engaged in bitter and protracted years of litigation,
beginning after Claudia's death but before Cohen's. In 2008, Perelman, acting
on behalf of Claudia's estate, later joined by Samantha when she reached the age
of majority, alleged Cohen had breached an oral promise to divide his estate
equally among his three children. The complaint also alleged Cohen was
incompetent and required the appointment of a guardian ad litem, and that James
exerted undue influence on his father, based on Cohen's substantial inter vivos
transfers to him. The 2009 decision by Judge Ellen Koblitz laid the groundwork
for this opinion.
Because Perelman and Samantha averred that Cohen was not competent,
Judge Koblitz bifurcated the trial. She first addressed the issue of Cohen's
mental capacity and the necessity for a guardian, and on June 1, 2009, she
concluded that although his illness slowed Cohen's thought processes and he had
difficulty communicating, he was functionally competent. On June 15, 2009,
the judge found that Perelman and Samantha had failed to prove that pre-
A-3275-14T4
6 September 1, 1978, Cohen had made an enforceable promise to Claudia to divide
his estate equally among his children.
On June 26, 2009, Judge Koblitz found that Cohen was not legally
incapacitated. She noted: "for [Cohen] to be the subject of this many medical
examinations of such extensive length was in my view tremendously
burdensome to him." On two occasions she observed Cohen's trial testimony
first-hand, and she also watched his videotaped deposition testimony. She
observed:
He is 84 years old. He has a very limited quality of life.
He seems to have rather an amazing personality and
strength of will which was described by various
witnesses as "courageous," in that he does seem to find
enjoyment in his life, as restricted as it is. He enjoys
his plane, flying to Florida, smoking his cigar, hearing
about horse racing, watching politics on television. He
seems to enjoy hearing about this case.
The judge further observed that Cohen did "not view any danger or risk c oming
from his one living child."
Having found Cohen competent, in an August 19, 2009 written opinion,
Judge Koblitz dismissed the remaining counts of the amended complaint. Estate
of Cohen v. Cohen, No. BER-C-134-08 (Ch. Div. Aug. 19, 2009) (slip op. at
11), aff'd in part & remanded in part, Estate of Cohen, Nos. A-0713-10,
A-0864-10, and A-0941-10. This included the claim of undue influence:
A-3275-14T4
7
The facts presented here do not persuade this Court to
make new law in this state by allowing an attack on the
choice of a living donor, with capacity, to transfer his
assets prior to death. Robert is not incapacitated, and
as long as Robert has capacity he may both alter his will
and transfer his assets.
[Id. at 8.]
We affirmed the decision, except as to counsel fees. Estate of Cohen, Nos.
A-0713-10, A-0864-10, and A-0941-10 (slip op. at 3-4). The Supreme Court
denied certification.
On February 8, 2012, shortly after Cohen's death, James submitted to the
Surrogate his father's July 17, 2009 will and the two related testamentary
instruments. 2 On February 21, 2012, the Surrogate accepted the July 2009 will
for probate.
Turning back to this dispute, with the 2009 litigation as backdrop, b y the
time Cohen passed away, the business was almost entirely outside of his estate.
As James explained:
This was his plan. His plan had been more
successful than he ever could have dreamed. He used
his professionals to implement those plans. And—and
2
References to Cohen's "will" include both his last will and testament and a
companion living trust, including amendments and restatements of the trust
agreement. As the trial court explained in its opinion dated June 24, 2014, "each
time a new Will was executed, a restated Trust Agreement was simultaneously
executed."
A-3275-14T4
8
his goal of keeping this business going and having me,
his son who worked with him for 30 years, be his
successor was—was—was successful. This is what he
wanted, and that's why it was fair to him.
According to James, his father had excellent relationships with Claudia
and Samantha, but in October 2008 his father was saddened after Samantha
prepared an affidavit saying her grandfather was "not of sound mind, or
something to that effect." In May 2009, Cohen was angered when Samantha
and her father filed a civil complaint against James, alleging he had defrauded
federal and state tax authorities in violation of the New Jersey Racketeer
Influenced and Corrupt Organizations (RICO) Act, N.J.S.A. 2C:41-1 to -6.2.
The trial judge in this case observed that "somewhere between 70-80% of
the time spent on this trial was consumed by testimony and related evidence
concerning the contested inter vivos transfers, while significantly less time was
spent, in comparison, on the contested Wills and other testamentary
instruments." The proceedings were an "intense challenge considering the
unyielding advocacy fed by unlimited funds." She concluded:
Robert Cohen's intentions were clear that he wanted to
pass the Cohen family business, Hudson Media, Inc.,
on to his son, James Cohen, and the 2009 Final Will
(and Trust) fulfills that objective;
Changes to the 2009 Final Will to remove Samantha
Perelman from the residuary and reduce her bequest in
A-3275-14T4
9
the Palm Beach residence to a lifetime twenty-one day-
per-year use license, were consistent with specific
recommendations made to Robert Cohen by his
attorneys during an April 2, 2009 meeting and there is
no evidence that James Cohen was privy to or that he
suggested these changes;
Robert Cohen made these changes at his own discretion
and by his own free will in response to prior bitter
litigation with his granddaughter and ex son-in-law;
Although Robert Cohen suffered from severe physical
disabilities due to a form of Parkinson's disease, his
cognitive abilities were largely intact, and he could still
speak and communicate, albeit with difficulties, up
until and beyond the date when the 2009 Final Will was
executed on July 17, 2009;
Robert Cohen was legally competent and had the
required testamentary capacity to make changes to his
2009 Final Will as ruled by Judge Koblitz just weeks
before the 2009 Final Will was executed, and [h]is
competency was further supported by the evidence
presented at this trial concerning the time period
leading up to the Final Will's execution;
The relationship between James Cohen and Robert
Cohen was harmonious and remarkably free from any
conflicts, disagreements or arguments;
Robert Cohen's personality, despite his Parkinson's
disease, remained as it was, strong-willed and
determined, resisting even medical advice in doing
what he wanted for pleasure despite his ailments; and
James Cohen had a tremendous amount of deference to
his father and there is no evidence whatsoever that
James attempted to "coerce" or "dominate" his father
A-3275-14T4
10
and, most likely, could not have done so even if he had
wanted.
The court found that, with the execution of the July 2009 will, the earlier
contested wills and testamentary instruments were rendered null and void.
Consequently, the court found it was "unnecessary to probe back beyond the
valid 2009 Last Will and Testament."
The trial judge also dismissed Samantha's claims of undue influence over
the contested inter vivos transfers and related transactions executed between
2001 and 2008. She found that Samantha was
not a beneficiary to the residuary estate under the 2009
Final Will. As noted, any judgment to restore any or
all of the inter vivos transfers of business assets, or their
monetary equivalent, to the estate of Robert Cohen, as
[Samantha] argues should be done, would become part
of the residuary estate, because there are no specific
bequests in the 2009 Final Will that would govern how
these restored funds would be bequeathed.
Accordingly, with the 2009 Last Will validated and
with [Samantha] having no claim on the residuary
estate, [Samantha], therefore, has no standing to assert
a claim on the inter vivos transfers she contests.
Thus, the trial court denied as moot Samantha's claim that James must return to
his father's estate an estimated $384.4 million in cash allocated to him from the
Advent International (Advent) acquisition of the Cohen family's airport retail
business in March 2008, and dismissed other transactions totaling millions.
A-3275-14T4
11
The court found that Cohen had purchased two insurance policies in 2003
with the goal of supplementing his daughter's income when her alimony
payments ended in 2008. After Claudia's death, Cohen did not want to be
responsible for the premiums on the policies, claiming they "were for Claudia,
not Samantha." The court relied on trial testimony that after the accrued cash
value was gone, despite the fact James favored continuing the policies, Cohen
refused to do so after his daughter's death. This evidence was consistent with
Cohen's intent to provide for his surviving children. The judge dismissed
Samantha's claim that James unduly influenced his father to allow the two
insurance policies to lapse.
The court further dismissed Samantha's claim that in December 2007
James unduly influenced his father to change a $5 million insurance policy from
a trust for Claudia and Samantha, to include James's four children instead. The
change in beneficiaries occurred around the same time as changes in a November
2007 will, which Cohen made in response to a dinner meeting with Samantha.
Given the generous bequests he made to Samantha in the November 2007 will,
the court found nothing particularly suspicious about the alteration.
On appeal, Samantha raises the following points:
I. [COHEN'S] ATTORNEY WAS CONFLICTED,
THUS REQUIRING JAMES TO REBUT THE
A-3275-14T4
12
PRESUMPTION OF UNDUE INFLUENCE OVER
[COHEN'S] WILLS BY CLEAR AND CONVINCING
EVIDENCE.
II. JAMES FAILED TO REBUT THE
PRESUMPTION OF UNDUE INFLUENCE OVER
THE JULY 2009 WILL.
A. The Trial Court Erred in Considering the
July 2009 Will in Isolation from the Successive
Changes to [Cohen's] Wills That Began When
James Became Involved.
B. James Failed to Rebut the Presumption of
Undue Influence Created by the Provisions of the
July 2009 Will, Including Those Carried Over
from Prior Wills James Was Involved In, and by
James's Prior Acts.
1. The Provision Purporting to Nullify
Any Court Judgment Against James.
2. James and Kochman's Thwarting of
[Cohen's] Intent for Samantha's Share of
the Palm Beach Residence.
3. Shifting Monetary and Other Non-
Business Bequests from Samantha to
James.
4. Reduction and Removal of
Samantha's Interest in [Cohen's] Residuary
Estate.
5. Eliminating Loan Forgiveness for
Claudia but Not James.
A-3275-14T4
13
C. The Court's Reasons for Concluding James
Rebutted the Presumption of Undue Influence
Were Based on Legal Errors and Not Supported
by Substantial Evidence.
1. An Intent to Bequeath Business
Assets to James Does Not Explain Why
[Cohen] Would Change His Will to Take
Non-Business Assets from Samantha and
Give Them to James.
2. Conflicted Counsel's Involvement in
Stripping Samantha's Residuary Bequest
from the 2009 Will Did not Cleanse, But
Rather Tainted, That Change.
3. Alleged Bitterness Over Litigation
Does Not Explain Changes That Preceded
Any Litigation.
4. [Cohen's] Communicative Abilities
and Capacity Did Not Negate Undue
Influence, Because Capacity and Undue
Influence Are Distinct Legal Concepts.
5. The Trial Court's Findings about
[Cohen's] and James's Personalities and
Their Relationship Were Not Supported
by Substantial Evidence.
III. THE TRIAL COURT ERRED IN ITS
ANALYSIS OF THE NOVEMBER 2007 WILL.
IV. THE TRIAL COURT'S FINDINGS
CONCERNING SAMANTHA'S INTER VIVOS
CLAIMS RESTED ON LEGAL ERRORS.
A-3275-14T4
14
A. Samantha Has Standing to Challenge the
Inter Vivos Transactions.
B. The Trial Court Erroneously Held It Was
Irrelevant Whether the Inter Vivos Transactions
Were Unfair.
C. The Trial Court Legally Erred in Rejecting
Samantha's Tax Expert.
By way of separate appeal, James challenges the counsel fee award of
$9,539,626 and costs of $1,038,475—a total of $10,578,101:
POINT I
THE TRIAL COURT ERRED IN FAILING TO
CONSIDER AND FOLLOW THIS COURT'S RILEY
DECISION, AND IN ORDERING [COHEN'S]
ESTATE TO PAY $10.6 MILLION TO, OR FOR THE
BENEFIT OF, RONALD O. PERELMAN, A NON-
PARTY TO THE LITIGATION WITH NO INTEREST
IN [COHEN'S] ESTATE.
POINT II
THE TRIAL COURT ERRED IN REFUSING TO
ALLOW DEFENDANTS TO BE HEARD ON
WHETHER AN AWARD SHOULD BE MADE.
POINT III
THE TRIAL COURT ERRED IN FAILING TO
IMPOSE ANY PENALTY FOR THE GROSS
EXCESSIVENESS OF PLAINTIFF'S $23.5 MILLION
APPLICATION.
POINT IV
THE TRIAL COURT ERRED IN AWARDING FEES
FOR THE 70%-80% OF THE CASE THAT IT
A-3275-14T4
15
ACKNOWLEDGED TO BE NON-PROBATE IN
NATURE AND SUBSTANCE.
POINT V
THE TRIAL COURT FAILED TO IMPOSE
ADEQUATE DISCOUNTS FOR LACK OF
SUCCESS, OVERSTAFFING, UNPRODUCTIVE
WORK, IMPROPER BILLING AND LACK OF
BENEFIT TO THE ESTATE.
POINT VI
THE ESTATE OF ROBERT COHEN SHOULD NOT
HAVE TO PAY ANY FEES FOR WORK
PERFORMED BY THE FRIEDMAN FIRM, WHICH
GAINED AND RETAINED ITS PRO HAC
ADMISSION BY CONCEALING A
DISQUALIFYING CONFLICT OF INTEREST.
We first address Samantha's points on appeal.
I.
Samantha contends that the court did not find by clear and convincing
evidence that James countered the presumption of undue influence. She anchors
the claim on the alleged conflicts of interest of Cohen's advisors over years of
transfers, among other factors. To the contrary, we conclude the judge did find
James had met his burden of proof by clear and convincing evidence, and the
record did provide ample support for her conclusion.
It is presumed that a testator was competent and of sound mind when he
or she executed a will. Haynes v. First Nat'l State Bank of N.J., 87 N.J. 163,
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16
175-76 (1981). A will, however, may be overturned if tainted by undue
influence. Id. at 176.
"[U]ndue influence is a mental, moral, or physical exertion of a kind and
quality that destroys the free will of the testator by preventing that person from
following the dictates of his or her own mind as it relates to the disposition of
assets, generally by means of a will or inter vivos transfer . . . ." In re Estate of
Folcher, 224 N.J. 496, 512 (2016) (alteration in original) (quoting In re Estate
of Stockdale, 196 N.J. 275, 302-03 (2008)). It represents conduct that causes a
testator to accept another person's domination or influence, rather than follow
his or her own wishes. Stockdale, 196 N.J. at 303.
The party contesting the will has the burden of establishing undue
influence. Folcher, 224 N.J. at 512. If the will benefits someone who stood in
a confidential relationship to the testator and if there are additional suspicious
circumstances, a different presumption arises—that the proponent of the will
exerted undue influence. Ibid. The burden of proof shifts to the proponent of
that will to overcome the presumption. Ibid. When the burden shifts, the will
proponent can overcome the presumption by a preponderance of the evidence.
Ibid.
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17
There are circumstances, however, "where the presumption of undue
influence is so heavily weighted with policy that the courts have demanded a
sterner measure of proof . . . ." Haynes, 87 N.J. at 178 (quoting In re Estate of
Weeks, 29 N.J. Super. 533, 539 (App. Div. 1954)). Generally, courts require
the higher burden of proof when the attorney who drafted the will has a conflict
of interest. Pascale v. Pascale, 113 N.J. 20, 35-38 (1988). Where an attorney
has a professional conflict of interest, and the testator, beneficiary, as well as
the attorney have confidential relationships, the proponent of the will must rebut
the presumption of undue influence by clear and convincing evidence.
Stockdale, 196 N.J. at 303; Haynes, 87 N.J. at 183. Even where a testator did
not have independent counsel, and a confidential relationship existed, the real
issue is whether the testator understood the consequences of his actions.
Pascale, 113 N.J. at 37-39. In this case, the trial judge applied the higher
standard of proof given the testator's unique circumstances. The judge held the
testator absolutely understood his actions—his business and estate plans, and
his intent to engage in tax planning while benefitting the child with whom he
had worked for over thirty years.
The trial court found James had rebutted the presumption by both a
preponderance of the evidence and by clear and convincing evidence. A trial
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18
judge may make alternative findings. See State ex rel. Y.C., 436 N.J. Super. 29,
40-41 (App. Div. 2014) (remanding with directions that the administrative law
judge make alternative findings as to whether the Juvenile Justice Commission
proved its case by clear and convincing evidence and, if not, by a preponderance
of the evidence). Here, the trial judge considered both standards. The proofs
supported her factual findings and legal conclusions.
II.
In her second point, Samantha contends the court erred by finding James
did not exert undue influence upon his father regarding the July 2009 will. She
argues the court improperly considered the July 2009 will in isolation from
Cohen's earlier wills, failed to address his new and carryover provisions from
prior wills that were to James's benefit and to her detriment, and made factual
findings unsupported by evidence or law. We do not agree.
In its written decision, the court reiterated the reasons it decided to shift
the burden of proof to James: that Samantha had presented sufficient evidence
of a confidential relationship and evidence of suspicious circumstances. The
timing of the changes to Cohen's testamentary instruments, given the
progression of his disease and the changes to those documents, created a
presumption of undue influence.
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19
The court then considered whether James met his burden to rebut the
presumption as to the July 2009 will. It found that Cohen intended to pass the
family business to James, remove Samantha from the residuary estate, and
reduce her bequest in the Palm Beach residence based on recommendations by
his attorneys at an April 2009 meeting outside James's presence. Additionally,
Cohen made these changes in response to the prior bitter litigation pursued by
Samantha and her father. At the time of the July 2009 will's execution, Cohen
had the ability to communicate, had the required testamentary capacity, had a
relationship with James that was "remarkably free from any conflicts," and had
retained his strong personality. James had "a tremendous amount of deference
to his father" and he likely could not have coerced or dominated his father, even
if he had wanted to do so. The witnesses universally described Cohen as
someone who knew what he wanted. Even Perelman described Cohen as
someone who would not react well to threats. The evidence showed that Cohen
controlled James, not the reverse.
Additionally, the court found James credible, "although maybe a bit
defensive at times." It observed that he was "mild-tempered, [c]ourteous and,
at all times, a gentleman." He was not "pompous in words" and "did not appear
to exaggerate." "In short, he appeared to be a good complement to his father's
A-3275-14T4
20
more autocratic and confident personality." The only evidence out of character
was a March 2007 email in which James suggested holding a meeting away from
the offices, because his "ailing father might 'show up' out of the blue and change
the complexion of the meeting." This one communication did not "even dent"
the overwhelming evidence from all witnesses for both parties that the father-
son relationship was sound and respectful. The email implicitly recognized
Cohen's strong character and the control he exercised at meetings he attended.
Based on its findings, the court concluded that James had rebutted the
undue influence presumption. Hence the July 2009 will was Cohen's true and
valid last will and testament. The March and December 2010 amendments
lacked new language or changes that would have affected the bequests to
Samantha.
Not all influence is undue. In re Will of Livingston, 5 N.J. 65, 73 (1950).
Mere suggestions, persuasions, or the possession of influence and the
opportunity to exert it, are not sufficient to find undue influence. In re Will of
Liebl, 260 N.J. Super. 519, 528 (App. Div. 1992) (quoting Livingston, 5 N.J. at
73). A court also will not set aside a will solely because it is unequal or unjust.
Id. at 529. "[A] testator is not required to divide his or her estate evenly among
his or her children and may even exclude a child or family member completely."
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21
Ibid. Each case requires an analysis of the particular facts and circumstances
surrounding the execution of the will and the conduct of the parties who
participated. Livingston, 5 N.J. at 73.
To establish a presumption of undue influence, the opponent of the will
must prove the existence of a confidential relationship coupled with suspicious
circumstances. Stockdale, 196 N.J. at 303. A confidential relationship is
present if the testator either "'by reason of . . . weakness or dependence,' reposes
trust in the particular beneficiary, or if the parties occupied a 'relation[ship] in
which reliance [was] naturally inspired or in fact existed.'" Ibid. (quoting In re
Estate of Hopper, 9 N.J. 280, 282 (1952)). "Among the most natural of
confidential relationships is that of parent and child." Pascale, 113 N.J. at 34.
To determine whether a confidential relationship exists, the test is "whether the
relations between the parties are of such a character of trust and confidence as
to render it reasonably certain that the one party occupied a dominant position
over the other and that consequently they did not deal on terms and conditions
of equality." Estate of Ostlund v. Ostlund, 391 N.J. Super. 390, 402 (App. Div.
1952).
The contestant of a will also must establish suspicious circumstances,
however "slight." Stockdale, 196 N.J. at 303; Pascale, 113 N.J. at 30; Haynes,
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22
87 N.J. at 176. Suspicious circumstances may arise from a "drastic change in
the testamentary dispositions" of the testator. Haynes, 87 N.J. at 177. "When
there is a confidential relationship coupled with suspicious circumstances,
undue influence is presumed and the burden of proof shifts to the will proponent
to overcome the presumption." Stockdale, 196 N.J. at 303.
Samantha contends the court erred by failing to consider whether James's
exertion of undue influence over the 2007 and 2008 wills tainted the July 2009
will. She argues that incremental changes in Cohen's wills began in February
2007, that most were made prior to the July 2009 will, and that the changes,
along with inter vivos transactions during the same period, redu ced her
inheritance from "over $400 million to zero."
The court rejected Samantha's argument about the validity of the prior
testamentary instruments. It found no merit in claims of undue influence over
the earlier contested wills, including the February 2007 will, the November 2007
will, and the October 2008 will. With the execution of the July 2009 will, and
with its ruling that James had rebutted the presumption of undue influence, all
prior testamentary instruments were rendered null and void. Thus, Samantha
could not assert a claim attacking a prior will.
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23
A challenger can prove undue influence by direct evidence or infer its
presence from facts and circumstances. In re Estate of Raynolds, 132 N.J. Eq.
141, 151 (Prerog. Ct. 1942), aff'd, 133 N.J. Eq. 346 (E. & A. 1943). It is not
necessary to prove that undue influence was exercised at the exact time of
execution of the will. Id. at 151-52. However, "whenever exerted, whether
months or years before, [the undue influence] must still be operative upon the
testator's mind in the very act of executing the instrument and be an effective
cause of the disposition made therein." Id. at 152 (quoting In re Everett's Will,
166 A. 827, 830 (Ut. 1933)). Raynolds held that even if the court inferred undue
influence over the years by the plaintiff's stepmother, there was no evidence that
at the time of the will's execution she controlled the decedent's mind or will. Id.
at 153-54. Despite its ultimate conclusion that the 2009 will rendered prior wills
null and void, the court discussed Cohen's prior wills and said it "examined very
closely the actual contents of the Wills, the related Trusts and the attendant
circumstances, particularly the 2004 Will and Trust that plaintiff seeks to revive,
as well as all the Will[s] through the last one executed in 2009 which [Samantha]
contests."
A trial court's factual findings are accorded deference if they are supported
by substantial credible evidence. Rova Farms Resort, Inc. v. Inv'rs Ins. Co. of
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24
Am., 65 N.J. 474, 484 (1974); Liebl, 260 N.J. Super. at 524. Such findings are
entitled to great weight because the trial court had the opportunity to see and
hear the witnesses and form opinions about the credibility of their testimony.
Livingston, 5 N.J. at 78. We review de novo questions of law and the legal
consequences that flow from the established facts. Manalapan Realty, LP v.
Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995).
The record supports the trial judge's findings and conclusions of law. For
example, in his September 2008 affidavit, Cohen said he did not need anyone to
do his thinking or make his estate-planning decisions, explaining he could read
with complete understanding. He added that the claim of undue influence with
respect to his businesses, the transfers of his business assets during his lifetime,
and his estate plan were "false and untrue." At his November 2008 deposition,
Cohen said "[James] didn't know about my will."
In a December 2010 affidavit, Cohen stated that James never unduly
influenced him or exercised control over his testamentary plan. Cohen said he
had asked his attorney, on his own initiative, to remove Samantha from any
possible ownership of his Palm Beach home and "to make sure that, upon my
death, James has ownership and control of all of my business interests and our
Palm Beach home." Cohen added:
A-3275-14T4
25
I have not lost my mind or my free will. If Ronald
Perelman or Samantha claim, after I have died, that any
aspect of my estate plan was the product of undue
influence or fraud by my son James, I want the court
and the world to know that the claim is false, and I
knowingly and unequivocally re-affirm and ratify all
transfers and transactions that have come, or may come,
under legal challenge. All changes to my testamentary
documents, both before and after the death of my
beloved daughter Claudia, reflect my own testamentary
intent, and I ask that my intent be given full force and
effect after my death.
As the trial judge found, there is no evidence supporting Samantha's claim
that James was "intimately involved in procuring" the changes to Cohen's 2007
and 2008 wills. 3 No evidence supports the allegation that Cohen was unduly
influenced at the time of the July 2009 will's execution. Cohen expressly stated
on the first page of his July 2009 Last Will and Testament that he was "revoking
all prior Wills and Codicils made by me." After finding that the July 2009 will
was not the product of undue influence and that it was Cohen's true and valid
3
Samantha relies on an unpublished opinion, In re Estate of Olsen, No. A-5542-
11 (App. Div. Apr. 30, 2014), to argue that the court erred by failing to consider
evidence of undue influence in the years preceding the execution of the July
2009 will. That case, however, is factually distinguishable. In Olsen, the court
found that the plaintiff failed to rebut the presumption of undue influence over
the last will and, therefore, reviewed the earlier wills to determine which one to
admit for probate. Olsen, slip op. at 20-21. In any event, Olsen is not
precedential. R. 1:36-3.
A-3275-14T4
26
last will, the court had no reason to determine whether his revoked wills were
tainted by undue influence.
Samantha also argues on appeal that the court failed to address a new
provision in the July 2009 will and four carry-over provisions from earlier wills,
and that James failed to rebut the presumption of undue influence created by
these provisions. The new provision was designed "to reverse the effect of any
court judgment requiring . . . James to pay damages to [Cohen's] estate for undue
influence[;]" thus, Samantha claims, this provision "could only harm Robert's
estate and was the clearest possible evidence of undue influence." The new
provision, Section 3:5E(1), which appeared in Cohen's Fourteenth Amendment
and Restatement of Trust Agreement, dated July 17, 2009, provided in relevant
part:
My Trustee shall distribute to JAMES:
. . . (b) the proceeds of sale from all business entities
included in the definition of Robert Cohen Enterprises
herein, which at any time were a part of my estate and
which proceeds were brought back into my estate as a
result of any litigation brought against me or my estate
by either RONALD O. PERELMAN, the ESTATE OF
CLAUDIA L. COHEN or my granddaughter,
SAMANTHA PERELMAN, if he is then surviving, or
if not, to his then surviving descendants, per stirpes
....
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27
Cohen's estate attorney, Ronald Kochman, testified that he suggested the
provision at the April 2009 meeting with Cohen and another attorney, Robert
Gold. He explained that if proceeds from a sale of business interests were
returned to Cohen's estate because of a court judgment, this provision would
bequeath the funds to James.
Kochman denied inserting this provision in the event the court found
undue influence by James. To the contrary, he understood that the court had
rejected the claims of undue influence as premature in the promise case. Instead,
Kochman maintained throughout his testimony that Cohen's goal was to leave
the business to James and there was never any deviation from that intent.
Contrary to Samantha's assertion, the new provision was not evidence of
undue influence or harmful to Cohen's estate. It was consistent with his
longtime desire for James to inherit the business assets, and advanced that
purpose.
Samantha also argues that the Booth buyout initiated by James, with
Kochman's assistance, thwarted Cohen's intention to let Samantha keep her
mother's interest in the Palm Beach residence. She relies on Kochman's
testimony that it was impossible for her to own a 50% interest, unless James
withdrew his demand for the buyout. Because James did not withdraw it,
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28
Samantha argues, the evidence confirmed James's undue influence over his
father.
We previously addressed the issue of the buyout in Booth Computers,
concluding, among other things, that the buyout agreement was enforceable, and
the disparity between book and market values did not render the agreement
unconscionable. 421 N.J. Super. at 139. The agreement was consistent with
Cohen's intent for the beneficiaries to be family members. Id. at 160. We
explained: "The possibility or even probability that a surviving child would be
the ultimate beneficiary of the assets of the partnership was apparent on the face
of the agreement." Ibid.
Furthermore, as Cohen explained in his 2010 affidavit, he intended to ask
his attorney to remove Samantha from any possible ownership in his Palm Beach
home. And as the trial court found, Cohen made the changes to his July 2009
will "at his own discretion and by his own free will in response to prior bitter
litigation with his granddaughter and ex son-in-law." Accordingly, the trial
judge correctly found that neither James nor Kochman thwarted Cohen's intent
to honor Samantha's request to inherit her mother's ownership interest in the
Palm Beach residence.
A-3275-14T4
29
Samantha also challenges Cohen's decision in his November 2007 will to
divide his residuary estate among his six grandchildren. She argues that
"[g]iving James's children two-thirds" of his residuary estate would "only
increase the advantage of James's children" over her and that "[n]o witness gave
any plausible explanation why [Cohen] would want to do that."
This argument ignores the record. Kochman testified that he advised
Cohen that James's children would incur an additional "generation-skipping tax"
because they had a living parent in their line of descent, but Cohen did not care.
James similarly testified that he asked his father to eliminate his children as
residual beneficiaries to avoid the tax. However, Cohen wanted all of his
grandchildren to be treated substantially the same and did not want Samantha to
get "a great deal more than any of the other grandchildren."
III.
Samantha also challenges the court's finding that Cohen intended to pass
the Cohen family business to James, claiming it does not explain why Cohen
changed his wills over time to leave his son the non-business assets as well.
Prior to the February 2007 will, Samantha—if her mother predeceased Cohen—
was to inherit cash bequests, Cohen's interest in the Palm Beach residence, two
business entities, and the entire residuary estate. James was to receive
A-3275-14T4
30
ownership of the Hudson business, including its wholesale and retail operations.
Samantha argues that after James became involved in his father's estate
planning, Cohen changed his wills over time to leave James the assets initially
intended for her mother.
The trial court found that "Robert Cohen's intentions were clear that he
wanted to pass the Cohen family business, Hudson Media Inc., on to his son,
James Cohen, and the 2009 Final Will (and Trust) fulfills that objective."
Samantha does not dispute that her grandfather intended for James to inherit the
family business. Instead, she argues that the presumption of undue influence
arose from changes in the 2007 and 2008 wills that transferred bequests of
certain non-business assets to James. Contrary to Samantha's assertion, the
record provides ample evidence that these changes do not impact the trial court's
finding of no undue influence.
The evidence establishes that Cohen changed his testamentary instruments
following Claudia's death. Cohen had taken steps to provide financially for
Claudia in anticipation of the end of her alimony payments, but Cohen told
Kochman that Samantha's father was a billionaire and she did not need his
money. Even Samantha acknowledged at trial that Cohen intended to leave the
non-business assets to her mother and that she did not consider it unreasonable
A-3275-14T4
31
for Cohen, after her mother's death, to factor into his testamentary plans "her
status as the daughter of one of the wealthiest people in the world." Kochman
testified at trial that it was not surprising that Cohen wanted to change his will
within weeks of Claudia's death, explaining: "When a child dies, those kinds of
things happen."
After Claudia's death, Cohen wanted to change his will to give essentially
equal bequests to his six grandchildren. When Jay Marshall advised Cohen at a
meeting "very close" to Claudia's death in 2007 that any bequests to her would
go to Samantha, Cohen expressed surprise that Samantha would receive a "great
deal more" than his other grandchildren. He told Marshall that he wanted to
treat all his grandchildren substantially the same.
Consequently, Cohen's November 2007 will named his six grandchildren
as equal beneficiaries of the residue, not just Samantha. When Kochman
explained that James's children would incur an additional generation-skipping
tax, Cohen did not care.
Cohen also told Kochman that he wanted to leave more to his children
than to his grandchildren. His speech therapist, Katherine Malmrose, recalled a
similar response from Cohen in response to her question about estate planning,
when he replied: "A child is a child. A grandchild is a grandchild." Thus, after
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32
Claudia's passing, Cohen's additional bequests to James were consistent with his
intention to favor his son over his grandchildren.
The evidence also established that Kochman and Gold recommended
Samantha's removal from the residuary estate and the change to a lifetime
license to use the Palm Beach residence, instead of an ownership interest. They
suggested these changes at the April 2009 meeting, outside of James's presence.
As the court found, the attorneys recommended these modifications to protect
their client by limiting Samantha's opportunity to sue Cohen or his family after
he died. The judge found Gold particularly credible in his testimony concerning
his attempts to protect his client.
Contrary to Samantha's assertion, the judge did not err. There was
substantial credible evidence in the record to support her finding that Cohen's
changes in his testamentary bequests were consistent with his estate plan. Rova
Farms Resort, 65 N.J. at 484; Liebl, 260 N.J. Super. at 524.
Samantha also challenges the court's finding that the changes in the
bequest of the Palm Beach residence were consistent with recommendations
made by Cohen's attorneys at the meeting on April 2, 2009, and, therefore, they
were not the products of undue influence. She bases this point on an allegation
the attorneys had conflicts of interest at the time of the meeting.
A-3275-14T4
33
The court, to the contrary, made the following finding of fact:
Changes to the 2009 Final Will to remove Samantha
Perelman from the residuary and reduce her bequest in
the Palm Beach residence to a lifetime twenty-one day-
per-year use license, were consistent with specific
recommendations made to Robert Cohen by his
attorneys during an April 2, 2009 meeting and there is
no evidence that James Cohen was privy to or that he
suggested these changes.
The court also found that Kochman and Gold made these recommendations at
the April 2 meeting given the litigation underway and the likelihood of more
litigation in the future. The "very real threat" of continuing litigation made it
reasonable for Cohen's attorneys to take steps to protect their client by limiting
Samantha's standing to sue Cohen when he was alive, or to sue his family
members after he died. "The lawsuits filed since certainly prove that this
recommendation was wisely prescient."
The court also found no evidence that James attended the April 2 meeting,
that he suggested the changes, or that he discussed the changes with the two
attorneys or with his father. There was no conflict of interest and, regardless of
any conflict, it made "perfect sense" for Cohen to make the recommended
changes to his will "given the litigious circumstances at that time." The evidence
supports that conclusion.
A-3275-14T4
34
Samantha also argues that, prior to the meeting on April 2, 2009, Kochman
engaged in regular communications with James's attorney Frank Huttle, that he
sent him a copy of the draft July 2009 will for review, and that Gold had divided
loyalties as well.
Kochman acknowledged that he spoke on the telephone with Huttle almost
every day in 2008 and 2009 in connection with litigation matters. He denied
working with Huttle, however, on drafting the July 2009 will. Huttle had input
into only one dispositive provision with respect to subtracting litigation fees
from any proceeds Samantha would receive from the Palm Beach residence.
According to Kochman, Huttle "added four or five words."
The evidence shows that Kochman and Gold were long-time friends.
Kochman advised Cohen to retain litigation counsel and recommended Gold for
the position. Before then, Gold, an experienced New York attorney, represented
Kochman in a Security and Exchange Commission (SEC) case, and Kochman
represented Gold's family with respect to certain trusts.
Gold's interview with Cohen took place in March 2008 and lasted for
about thirty minutes. Huttle was present initially, but then left Gold and Cohen
alone, with a nurse. Cohen subsequently hired Gold as chief trial counsel, and
James signed the engagement letter using a power of attorney.
A-3275-14T4
35
Shortly after being retained, Gold signed a joint defense agreement with
James based on his conclusion that there was no existing conflict between father
and son. In fact, during the entire time he represented Cohen, Gold said he never
perceived a conflict of interest between them. Gold said he understood from his
first meeting with Cohen and from follow-up conversations with Kochman that
he would not be representing James. Indeed, at trial, Samantha's attorney
acknowledged that he never contended Gold represented James, explaining:
"We understand that Mr. Gold represented Robert Cohen." There is no evidence
to suggest otherwise.
Moreover, Gold testified that he did not engage in communications with
Kochman "outside the context of litigation." He asked Kochman to attend a
meeting with Cohen on April 2, 2009, to make changes in Cohen's will, but
James was not present. Gold said Cohen's mood that day was remarkably sad.
Because Gold relied on the litigation privilege throughout discovery, the court
ruled that the details of the meeting were not permissible at trial.
Based on the record, and the court's findings on the credibility of
Kochman and Gold, the record supported the finding that they had no conflicts
of interest when they met with Cohen on April 2, 2009. Moreover, there is no
evidence that James suggested the changes or discussed them with the attorneys
A-3275-14T4
36
before the meeting. Contrary to Samantha's assertion, there is simply no
evidence that Gold supported the changes because they were in the best interest
of Kochman.
IV.
Samantha next argues that the court erred by finding Cohen made the
changes to his July 2009 will in response to prior "bitter litigation" with
Samantha and her father. The court found that Cohen made the changes to the
July 2009 will "at his own discretion and by his own free will in response to
prior bitter litigation with his granddaughter and ex son-in-law." It also
described the prior litigation history as a "major catalyst" for the unusual length
of this trial.
There was substantial credible evidence supporting the court's finding that
Cohen's response to the prior litigation was a factor in his decision to make
changes to his July 2009 will. See Liebl, 260 N.J. Super. at 524. In February
2008, after Cohen received a request from Perelman's attorney to hold a portion
of the Advent proceeds for Claudia's estate, Kochman advised Cohen to retain
trial counsel. As we have said, the Perelmans subsequently filed lawsuits
against Cohen and James in New Jersey, New York and Florida state courts, and
in federal court, plus pursued four appeals in New Jersey.
A-3275-14T4
37
James testified that his father understood the claims, that he and his father
met daily to discuss the ongoing litigation, and that his father read the court
decisions or he read them to his father. James recalled that his father was very
sad after reading Samantha's 2008 affidavit in which she described her
grandfather as "not of sound mind, or something to that effect." His father was
angry after Samantha and her father filed a RICO complaint against him.
As a result of the litigation, Cohen underwent medical examinations, gave
deposition testimony, and testified at trial. Judge Koblitz described the medical
examinations as extensive, "tremendously burdensome[,]" and even Samantha
acknowledged that her grandfather would not have liked the medical
examinations. Cohen gave his videotaped deposition in 2008 while velcro -
strapped into his wheelchair.
Cohen also testified twice at trial in April and May 2009. Gold said the
first day ended after two hours because Cohen was exhausted, choking, and
having difficulty breathing. Afterwards, Gold described Cohen as angry and
James as distraught. James similarly described his father as exhausted after his
trial testimony. It is no surprise that, two months after his May 2009 trial
testimony, Cohen made changes to his July 2009 will that favored James over
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38
Samantha. Clearly, Cohen changed his July 2009 will based, in part, on his
response to prior litigation.
V.
Samantha argues that the court erred by conflating the prior findings of
Cohen's mental capacity with evidence of a lack of undue influence. She objects
to the finding that "[a]lthough Robert Cohen suffered from severe physical
disabilities due to a form of Parkinson's disease, his cognitive abilities were
largely intact, and he could still speak and communicate, albeit with difficulties,
up until and beyond the date when the 2009 Final Will was executed on July 17,
2009." She selectively quotes the trial judge's finding that "Robert Cohen was
legally competent and had the required testamentary capacity to make changes
to his 2009 Final Will[,]" but she omits the rest of the sentence—"as ruled by
Judge Koblitz just weeks before the 2009 Final Will was executed, and [h]is
competency was further supported by the evidence presented at this trial
concerning the time period leading up to the Final Will's execution."
The trial judge's assessment of Cohen's cognitive abilities accurately
summarized the testimony of numerous witnesses who testified during the trial.
The court was "particularly persuaded" by Gold and Christopher Weiss, who
testified that Cohen participated in trial preparation work in 2008 and 2009, and
A-3275-14T4
39
understood what they told him. Overall, the evidence supports her conclusion
that despite his devastating disease, Cohen retained his cognitive abilities. The
finding on his legal competence referred to Judge Koblitz's ruling shortly before
the execution of the July 2009 will. Neither finding expressly or implicitly
suggests that Cohen's mental capacity prevented James from exercising undue
influence over him.
Samantha also disputes the court's finding that "[t]he relationship between
James Cohen and Robert Cohen was harmonious and remarkably free from any
conflicts, disagreements or arguments." The court also found: "Cohen's
personality, despite his Parkinson's disease, remained as it was, strong -willed
and determined, resisting even medical advice in doing what he wanted for
pleasure despite his ailments." Moreover, "James Cohen had a tremendous
amount of deference to his father and there is no evidence whatsoever that James
attempted to 'coerce' or 'dominate' his father and, most likely, could not have
done so even if he had wanted."
The evidence showed Cohen remained strong-willed and controlling until
the end of his life. For example, as the court found, Cohen was propped by
nurses to sit upright in his wheelchair, always wore a suit and tie, and had "a
tremendous and admirable sense of dignity and pride that dominated a room."
A-3275-14T4
40
Witnesses universally described James as deferential and respectful to his father.
Although father and son lived and worked together for over fifty years, the court
found not a single witness who recalled disagreements between them. That
finding of fact—that Cohen and his son retained a harmonious relationship—did
not undercut the judge's conclusion that James did not exert undue influence
over Cohen's management of his affairs. Simply put, the record supports the
trial judge's conclusions.
Contrary to Samantha's assertion, James did not dominate his father's
personal affairs. For example, according to Samantha, James demanded that
Jeffrey Margel, Cohen's chef and house manager, spend the summer working for
him and fired Margel when he objected. She also claims that James fired David
Merritt, Cohen's aide, even though Cohen had no issue with Merritt , and that
James disregarded Cohen's directions "in his wills" to keep Juan Espinal, his
chauffer for twenty-five years, as Harriet's driver. She cites further examples
where James controlled employee salaries and bills.
A review of the record reveals that Samantha's analysis is incomplete.
Margel explained that James wanted him to spend the summer of 2011 in East
Hampton, but the housing arrangements would not accommodate his wife so he
was terminated from employment. Margel acknowledged at his deposition that
A-3275-14T4
41
James and Claudia paid a portion of his salary. Likewise, Merritt testified that
James fired him in December 2007 because he was tired and unable to perform
his duties. Espinal confirmed that he became James's driver after Cohen died,
but said his job changed based on a conversation that James had with his father.
As for the payment of salaries and bills, James testified that he ran the Hudson
business for approximately twenty years as president and CEO, while his father
made the major decisions. This evidence does not prove undue influence, nor
does it weaken the trial court's conclusion.
VI.
We next address Samantha's contentions that the trial court erred by
finding she lacked standing to challenge the inter vivos transactions, refusing to
examine their fairness, and rejecting the opinions of her tax expert. With respect
to inter vivos transfers, the presumption of undue influence arises when the
challenger proves that the donee dominated the will of the donor, or when a
confidential relationship exists between donee and donor. Pascale, 113 N.J. at
30. In such cases, "the donee has the burden of showing by clear and convincing
evidence not only that 'no deception was practiced herein, no undue influence
used, and that all was fair, open and voluntary, but that it was well understood.'"
Id. at 31 (quoting In re Dodge, 50 N.J 192, 227 (1967)). If a donor is dependent
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42
on the donee and makes a gift that "strips the donor of all or virtually all his
assets, a presumption arises that the donor did not understand the consequences
of his act." Ibid. However, when the donor is not dependent on the donee,
independent advice is not a prerequisite to the validity of an improvident gift
even when the parties have a relationship of trust and confidence. Id. at 31, 39
(holding son had rebutted the presumption of undue influence, where the father,
"an experienced and shrewd businessman," understood the consequences of
what he was doing when he made the transfers).
The court found that any judgment restoring to Cohen's estate all or part
of the inter vivos transfers of business assets, or their monetary equivalent,
would become part of the residuary estate because the July 2009 will did not
include specific bequests that would govern how the restored funds would be
bequeathed. Samantha, however, was not a beneficiary to the residuary estate
under the July 2009 will. The court, therefore, concluded that she had no
standing to assert a claim on the inter vivos transfers. Given the dismissal of
Samantha's undue influence claims for the inter vivos transfers, the court found
moot her remaining claim that James return an estimated $384.4 million to
Cohen's estate.
A-3275-14T4
43
Standing requires a plaintiff to have the ability or entitlement to maintain
an action before the court. In re Adoption of Baby T., 160 N.J. 332, 340 (1999).
A plaintiff must have "a sufficient stake and real adverseness with respect to the
subject matter of the litigation" and a substantial likelihood of harm in the event
of an unfavorable decision. Jen Elec., Inc. v. Cty. of Essex, 197 N.J. 627, 645
(2009) (quoting In re Baby T., 160 N.J. at 340). "[A] lack of standing by a
plaintiff precludes a court from entertaining any of the substantive issues for
determination." Ibid. (quoting In re Baby T., 160 N.J. at 340). See Stockdale,
196 N.J. at 302 (noting that standing to challenge will that has been or is
expected to be offered for probate requires status as one injured by probate of
will being contested); In re Tierney, 175 N.J. Super. 614, 618 (Law Div. 1980)
(holding the plaintiff must have standing for the court to reach the substantive
issue of incompetency), aff'd o.b., 177 N.J. Super. 245 (App. Div. 1981). Since
we affirm the trial court's finding admitting the July 2009 will to probate,
Samantha lacks standing to challenge the inter vivos transactions because she
was not a residuary beneficiary.
Samantha also contends that the court erred by finding it was irrelevant
whether the inter vivos transfers and related transactions were unfair. She
argues that the transactions "eviscerated" Cohen's testamentary bequests,
A-3275-14T4
44
"gutted" his bequests to his wife, Harriet, and "nullified" eleven years of
consistent bequests providing that she or her mother would receive certain other
assets.
The court acknowledged the position taken by Samantha and her witnesses
that James was unfair to his father by executing "transfers of business assets that
his father never would have agreed to or approved had he fully understood them,
including their potential for hidden tax risks." It found that Stephen Blum,
Samantha's tax and estate expert, was the primary source of testimony of unfair
dealings between Cohen and James with respect to the inter vivos transfers.
The court, however, found Blum's testimony to be unpersuasive. Blum
considered the transfers unfair from a financial perspective because James did
not provide sufficient consideration in return for receiving his father's ownership
in Hudson News and later, Hudson Media. But the court found the issue was
"not to determine whether the results of the transfers or transactions were 'fair'
to Robert Cohen, but . . . to determine the donor's intent and whether there was
any undue influence in the donor's exercise of his intent."
The court explained: "With all due respect to Mr. Blum, his overall
premise that an inter vivos gift structured specifically to save on taxes must be
'fair' to a testator, irrespective of his intent, is simply not based on any binding
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45
or controlling law." Blum conceded at trial that he did not consider Cohen's
intent.
Cohen testified in the prior litigation that he intended to and had
transferred the majority of his business assets to his son. He knew that "Jimmy"
made at least $500 million from the transactions, but did not want the money
back, and did not consider his son to have pressured him to make the transfers.
He also understood that his estate plan provided his son with substantial assets
in addition to the inter vivos transactions.
In his 2008 affidavit, Cohen said the allegation of undue influence in
connection with the transfers of his business assets during his lifetime was
"completely false and untrue." Likewise, in his 2010 affidavit, Cohen said it
was his wish for James to have ownership and control of all of his business
interests, and denied that any aspect of his estate plan was the product of undue
influence. He stated: "I want the court and the world to know that the claim [of
undue influence] is false, and I knowingly and unequivocally re-affirm and ratify
all transfers and transactions that have come, or may come, under legal
challenge."
Gold, who drafted the 2008 affidavit, testified that he reviewed it with
Cohen, who requested modifications. At his deposition, Cohen recalled
A-3275-14T4
46
preparing the affidavit with his attorney and said it was his idea. Lik ewise,
Kochman testified that he read the 2010 affidavit to Cohen prior to the signing,
asked if Cohen agreed with its contents, and Cohen blinked yes.
In his own words, Cohen intended to make the inter vivos transfers to
James. There is no evidence in the record to suggest that the transfers of
business assets during his lifetime were the result of any deception or undue
influence, or that they were not fair, open, voluntary and well understood by
him. Instead, Cohen, an experienced and successful businessman, completed
the inter vivos transfers consistent with his intention in his testamentary
instruments to pass the business, and far more, to his son.
Samantha argues the court erred by rejecting the testimony of her tax
expert, Anita Siegel, who opined that the inter vivos transactions created the risk
of substantial gift tax liabilities. Like with Blum, the trial court rejected the
underlying premise of Siegel's testimony. A "large percentage of the trial"
consisted of "lengthy, detailed and arcane testimony regarding the nature and
structure of these complex contested inter vivos transfers," which the expert
believed were all flawed.
"Not too surprisingly," James's tax expert, Glen Henkel, believed neither
the contested transfers nor the $600 million cash allocation to James created
A-3275-14T4
47
unpaid gift tax liabilities. The evidence showed that the IRS had conducted and
completed an audit on some of the transactions, "with all discrepancies
identified by the I.R.S. resolved."
The court engaged in a comprehensive review of Siegel's and Henkel's
testimony, and simply found unpersuasive Siegel's opinion that there were flaws
in the structure of the inter vivos transactions and the calculations used to
allocate $600 million in cash to James from the Advent acquisition.
The trial court reviewed the conflicting expert testimony and resolved the
conflict in favor of James. It cannot be disputed that a judge has the discretion
to accept or reject all or a portion of an expert's testimony. Torres v. Schripps,
Inc., 342 N.J. Super. 419, 430-31 (App. Div. 2001). Separately from Samantha's
lack of standing, we see no abuse of discretion in the judge's decision to reject
her experts' testimony.
VII.
Over the course of the litigation, Samantha was represented by four law
firms: Friedman, Kaplan, Seiler & Adelman, LLP (Friedman Kaplan);
Greenbaum, Rowe, Smith & Davis, LLP (Greenbaum Rowe); Aronsohn,
Weiner, Salerno & Bremer, PC (Aronsohn Weiner); and Sills Cummis & Gross,
PC (Sills Cummis). Affidavits of services were submitted by each of these
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48
firms, with Edward A. Friedman submitting an affidavit with ninety attached
exhibits for Friedman Kaplan; Paul A. Rowe submitting an affidavit with
seventeen attached exhibits for Greenbaum Rowe; Richard Epstein submitting
an affidavit with thirty-five attached exhibits for Sills Cummis; and Richard H.
Weiner submitting an affidavit with two attached exhibits for Aronsohn Weiner.
The discovery master reviewed these submissions along with James's
responding papers, which included certifications from James's attorneys and
line-by-line coded objections to the time entries in the billing statements
provided by Friedman, Rowe, Epstein, and Weiner. The discovery master also
reviewed Samantha's reply submissions and attachments.
The discovery master discussed the history of the present litigation,
explaining that he was appointed to serve as a special discovery master to assist
the court in resolving "a vast sea of disputes relating to a range of issues . . . ."
He listed some of the many discovery disputes that had arisen, and observed that
the case involved almost sixty depositions and eighty-five trial days. He then
discussed his lodestar calculations for each of the law firms' fees as well as his
calculation of reasonable costs.
Friedman Kaplan, admitted pro hac vice, took the lead role in conducting
discovery and preparing for trial, and claimed fees for legal services from April
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49
2012 to March 2014. Thirty-eight timekeepers submitted billing, including
seven partners, nine associates, one staff attorney, two paralegal supervisors,
one librarian, one managing clerk, twelve paralegals, one temporary paralegal,
and four litigation support managers. The billings ranged from $725 per hour
for Friedman to $32 per hour for a temporary paralegal. The discovery master
reduced the hourly rates charged by Friedman Kaplan by 20 to 25% as a result
of his research into the prevailing hourly rates for comparable work by
comparably experienced counsel. Although many of the invoices contained
difficult to understand redactions, they were not entirely incomprehensible.
More than one attorney attended each proceeding, although the discovery master
concluded that it was unwarranted to compensate Samantha for those multiple
billings. After his review of the submissions, he reduced the number of hours ,
with reductions varying from 12.5% for Friedman to 50% for an associate who
billed the lowest number of hours. After these adjustments, the firm's initial fee
request of $12,274,740.18 was reduced to a lodestar of $7,383,842.
Greenbaum Rowe's final submission for fees covered the period from June
2013 through March 2014. The master adjusted the relevant billing period to
September 2013 through March 2014 to avoid accusations of duplication of
efforts as Greenbaum Rowe replaced Sills Cummis in September 2013. The
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50
master applied a 20% across-the-board hourly-rate reduction for the attorneys
who attended trial regularly on behalf of the firm. He observed that the firm's
billable hours should be reduced by 25% as despite their full participation in the
proceedings, intra-office conference time and work performed by Friedman
Kaplan should not be counted. Accordingly, he reduced the firm's requested
$3,994,717 to a lodestar of $2,345,084. He explained in a footnote, although he
should perhaps have allowed more of the Greenbaum Rowe fee and less of
Friedman Kaplan, these disparities were not significant because in the final
analysis the award was to Samantha and not to individual firms.
Aronsohn Weiner also eliminated its billing between June 2013 and
August 2013, and the discovery master excluded from consideration the bill for
April 2014. The firm, which expended considerable time in settlement efforts,
requested $448,868.75 in fees. Applying the same principles, he concluded the
lodestar was $269,321.
Sills Cummis submitted only an affidavit of services covering March 2012
through September 2013. A number of those efforts significantly overlapp ed
and duplicated those of Friedman Kaplan. The firm's request was thus reduced
by 41%, from $3,264,891 to a lodestar of $1,926,286.
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51
Thus, the lodestar fee for the four firms totaled $11,924,533. The master
noted that while Samantha was able to shift the burden of proof to James, she
ultimately did not prevail. Thus he adjusted those figures downward by 20%,
resulting in an award of $9,539,626.
Samantha's costs included expert witnesses, electronic discovery vendor
costs, trial technology operator costs, court reporter and videographer fees,
outside document review costs, photocopying expenses, computerized research
costs, transcript costs, and other sundry expenses. The discovery master, after
careful review, reduced expert fees by slightly more than 50%. He then, item
by item, reduced other expenses in amounts ranging from 50% to 25%. He did
not reimburse Samantha for her share of his own fees.
The master arrived at a base amount of $1,038,475 for costs. This
assumed that the court would award fees for the work performed in presenting
the inter vivos transfers to the court.
In rendering its decision after reviewing the report, the trial court stated:
Understanding this litigation thoroughly and
having issued the June 24, 2014 Decision, I am satisfied
that the Discovery Master has a meticulous and
comprehensive understanding of the billing involved,
both before and during trial and, as such, I accept his
Report and his recommendations. The Court sat
through the entire bench trial, absorbing the evidence
on a daily basis, and I am thoroughly acquainted with
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52
the subject discovery that preceded the trial.
Acceptance of the Discovery Master's thorough,
organized and thoughtful recommendations is reached
after my own review of the parties' submissions,
including their replies to the Discovery Master's
Report, as well as my personal day-to-day six month
involvement with the case.
VIII.
James's primary argument in support of his appeal of the fee award is that
any reimbursement is really to Perelman and not Samantha herself. 4 He further
contends that Samantha's attorneys' failure to produce their retainer agreement
is proof that their engagement was unethical, and warrants a remand.
Samantha responds that nothing in Rule 4:42-9(a)(3) restricts an attorney
fee award to those who actually paid the sum out-of-pocket and that when a
claim is being made against an estate, it is not uncommon for legal action to be
funded by family. She further asserts that since there is no conflict between
herself and her father, there is no ethical violation. She was a teenager when the
litigation began, and obviously lacked the resources to fund the lawsuit. Finally,
she also observes that "[w]here a prevailing party is entitled to counsel fees by
4
In making that argument, he relies on an unpublished opinion, which has no
precedential value. R. 1:36-3; see also Trinity Cemetery Ass'n v. Twp. of Wall,
170 N.J. 39, 48 (2001) (Verniero, J., concurring) (stating that an unreported
decision "serve[s] no precedential value and cannot reliably be considered part
of our common law").
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53
rule, courts have awarded fees against the losing side regardless of the manner
in which the litigation was financed." See Specialized Med. Sys., Inc. v.
Lemmerling, 252 N.J. Super. 180 (App. Div. 1991).
A trial court's fee determinations are accorded substantial deference, and
are disturbed only on the rarest of occasions—because of a clear abuse of
discretion. Packard-Bamberger & Co. v. Collier, 167 N.J. 427, 444 (2001);
Rendine v. Pantzer, 141 N.J. 292, 317 (1995); Yueh v. Yueh, 329 N.J. Super.
447, 466 (App. Div. 2000); In re Bloomer's Estate, 43 N.J. Super. 414, 416 (App.
Div. 1957). An abuse of discretion in the award of counsel fees may be
demonstrated "if the discretionary act was not premised upon consideration of
all relevant factors, was based upon consideration of irrelevant or inappropriate
factors, or amounts to a clear error in judgment." Masone v. Levine, 382 N.J.
Super. 181, 193 (App. Div. 2005).
Whether an allowance is permissible under the court rules, however, is a
question of law that is subject to de novo review. See Balsamides v. Protameen
Chems., Inc., 160 N.J. 352, 372 (1999) ("Matters of law are subject to de novo
review."); Manalapan Realty, 140 N.J. at 378 ("A trial court's interpretation of
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54
the law and the legal consequences that flow from established facts are not
entitled to any special deference."). 5
Rule 4:42-9(a)(3) provides that in a probate action, "[i]f probate is
granted, and it shall appear that the contestant had reasonable cause for
contesting the validity of the will or codicil, the court may make an allowance
to the proponent and the contestant, to be paid out of the estate." In accordance
with this rule, courts may allow counsel fees to the contestant in a will dispute
"'[e]xcept in a weak or meretricious case.'" In re Probate of Will & Codicil of
Macool, 416 N.J. Super. 298, 313 (App. Div. 2010) (alteration in original)
(quoting In re Reisdorf, 80 N.J. 319, 326 (1979)).
Other than an unpublished opinion, James does not offer any precedent
for his position that legal fees should not be reimbursed where they did not come
from the party involved in the litigation. In this particular case, involving an
intra-family dispute and a challenger who was a minor at the time litigation
began, reimbursement is appropriate.
5
James's reliance on In re Malone, 381 N.J. Super. 344, 349 (App. Div. 2005)
for the proposition that the award of counsel fees is a mixed question of law and
fact for which review is de novo is misplaced. Malone was an appeal from an
award of attorneys' fees by the Merit System Board, and the court, upon noting
that setting an award of counsel fees is a judicial function, declined to apply the
deferential standard of review typically afforded to administrative decisions. Id.
at 348-49. It is thus distinguishable from the situation here where a trial court
made the fee determination, but in doing so ruled on several issues of law.
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The authority in this area is scant. In New Jersey, no case addresses
whether counsel fees should be awarded to an unsuccessful will contestant
whose expenses are paid by a third party. The circumstances of this case, the
relationship between the parties, the lingering and devastating illness suffered
by Cohen before his death, the business relationship between Cohen and his son,
and the size of the estate at issue, make this case not only one of first impression,
but the circumstances are unlikely to be repeated. In our view, however, so long
as the award is authorized by statute or rule in the first place, and the funding
for the litigation does not run contrary to the public interest, there should not be
a bar to reimbursement. This was a father and daughter. There is no suggestion,
for example, that the funding of the litigation satisfied some destructive
economic purpose, such as unfair competition, or that the funding supported
litigation that was intended to harm, or that otherwise ran contrary to the public
interest.
Under Rule 4:42-9(a)(3), a party is entitled to receive an allowance for
fees and costs regardless of whether they prevailed. The case most similar to
the one under consideration here is Carmel v. Borough of Hillsdale, 178 N.J.
Super. 185, 189-90 (App. Div. 1981). In that case, we found that Rule 4:42-
9(a)(8) permitted a counsel fee award to parties who successfully challenged the
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validity of a municipal ordinance under 42 U.S.C.A. § 1988. Carmel, 178 N.J.
Super. at 188. The counsel fee award was not rendered unjust because the fees
were advanced by a privately funded entity. This enabled litigants who might
not otherwise pursue the vindication of their civil rights to obtain legal
representation. Id. at 189-90. As the court in Carmel noted, the greater concern
is whether the party seeking fees is entitled to an award by contract, statute, or
rule. Rule 4:42-9(a)(3) entitles a party to receive an allowance for fees and costs
regardless of whether they prevail.
We agree with James's contention that attorney's fees in will contests are
available only where the contestant has reasonable cause to challenge. In this
case, however, there was a reasonable basis for the litigation. That Cohen was
found to be competent at the time of the execution of the will documents did not
address the question of undue influence, admittedly a separate issue.
Regardless of the alleged bad blood between Perelman and anyone else,
there was a legitimate basis for the dispute. Awarding fees to contestants whose
good faith litigation is funded by third parties does not encourage interlopers to
disturb the orderly administration of estates. It simply enables those who have
colorable claims to litigate in good faith.
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James's charge of unethical behavior on the part of Samantha's attorneys
lacks merit because no conflict of interest is revealed in the record between
Samantha and her father. Nor can James identify a reason production of the
retainer agreements might have shaped the judge's final decision regarding the
amounts. The trial judge clearly understood who was paying the bills, and made
an award in accord with the rules.
IX.
James also contends that the court's comment when initially discussing
the fee application he should "forget about zero," meant he was not heard. We
do not agree that it foreclosed counsel from defending against a fee award, or
improperly limited him to "quantum" arguments. Even if we were to assume
hypothetically that the judge's mind was made up that some award was
appropriate, that is not the equivalent of barring argument. We consider this
point to be so lacking in merit as to not warrant further discussion in a written
opinion. R. 2:11-3(e)(1)(E).
X.
James also contends that the amount initially sought by counsel, a total
with costs of $23.5 million, is so excessive as to warrant a sanction against
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Samantha. In support of this position, he cites to federal caselaw holding that
when fee applications are grossly excessive, they are denied in their entirety.
James essentially accuses the court of avoiding stating the full amount of
the fee request in print because the amount was so outrageous, and accuses
Samantha of seeking reimbursement for unproductive work, overstaffing, and
noncompensible claims. He characterizes the fee application as "appalling," and
lists seven time sheet entries that he asserts illustrate "jaw-dropping excess,
vagueness or opacity." He asserts that Cohen's heirs should not see their
inheritance nullified by "a lawsuit that, from start to end, was an exercise in
spite." These comments are inapposite in light of the six-month trial, and the
court's decision to shift the burden to James to prove by clear and convincing
evidence that no undue influence was exerted upon Cohen in the formulation of
his final estate plan.
In Clemens v. New York Central Mutual Life Insurance Co., 903 F.3d 396, 402-03 (3rd Cir. 2018), Fair Housing Council of Greater Washington v.
Landow, 999 F.2d 92, 98-99 (4th Cir. 1993), Lewis v. Kendrick, 944 F.2d 949,
958 (1st Cir. 1991), and Brown v. Stackler, 612 F.2d 1057, 1059 (7th Cir. 1980),
the courts exercised their discretion under federal fee-shifting statutes by
disallowing attorneys' fee awards in order to sanction parties who submitted fee
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applications that were "utterly unreasonable," "extreme," or "outrageously
excessive." The court in Stackler explained:
If . . . the Court were required to award a reasonable fee
when an outrageously unreasonable one has been asked
for, claimants would be encouraged to make
unreasonable demands, knowing that the only
unfavorable consequence of such misconduct would be
reduction of their fee to what they should have asked
for in the first place. To discourage such greed a
severer reaction is needful, and the District Court
responded appropriately in the case at bar.
[Stackler, 612 F.2d at 1059.]
The problem for James is that neither the court nor the discovery master
found that Samantha's fee application was outrageous or utterly unreasonable.
The discovery master discussed the complexity of the litigation, and the sheer
volume of depositions, motions and oral arguments that were generated. In that
context, he did not believe that the fee application was unusual or shocking. The
court likewise did not question the reasonableness or accuracy of the fee
application.
A discretionary award of counsel fees will only be reversed if it was not
premised on consideration of all relevant factors, involved consideration of
inappropriate factors, or constituted a clear error in judgment. Masone, 382 N.J.
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60 Super. at 193.6 Here, the court considered all relevant factors, including the
length and complexity of the litigation. It did not consider any factor that was
not relevant to a lodestar analysis. Its decision to reject James's request for the
unusual and extreme sanction of denying the entire fee application was not
clearly erroneous. For that reason, we reject James's argument on this point.
XI.
James also contends that the court had no authority under Rule
4:42-9(a)(3) to award fees for work that related to the inter vivos transactions.
Those charges should have been segregated, as they did not relate to the probate
claim. This argument also lacks merit. In order to establish undue influence,
Samantha produced years of transactions which benefitted James, at times, she
believed, even to the detriment of Cohen's tax position. Tracking inter vivos
transfers was inextricably intertwined with the position that earlier will or
related documents should have been admitted to probate. As the court said:
the claims for undue influence would not have existed
in substantial form but for the inclusion in this litigation
of these inter vivos transactions that occurred before
Robert's death. Moreover, the fundamental basis
supporting Samantha's undue influence claim, to a large
extent, were these non-testamentary transactions. The
6
We question the wisdom of Samantha's use of multiple attorneys for court
proceedings, depositions, and the like because of the significant impact on the
ultimate amount of fees. Given the sums at stake, however, this is not the case
in which to issue guidelines in that regard.
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movement of millions of dollars during the last years of
Robert's life, that arguably—had the transactions not
occurred—would have ended up in Robert's estate, was
the bedrock of Samantha's charges for undue influence.
These are fees and costs that were related to the
ultimate question of undue influence. Finally, trying to
peel off the welded layers of legal billing that
specifically concern discovery and trial on the inter
vivos transactions from the billing concerning the
testamentary-related events would be both virtually
impossible and unnecessary. The fees and costs I award
shall thus include litigation expenses and costs
involving those non-testamentary instruments and
issues that were presented in support of the undue
influence claims, which were intricately intertwined
throughout this bench trial.
XII.
In Hensley v. Eckerhart, 461 U.S. 424, 437 (1983), the Court held that the
applicant for attorneys' fees "should maintain billing time records in a manner
that will enable a reviewing court to identify distinct claims." It noted, however,
that "there is no certain method of determining when claims are 'related' or
'unrelated'" and counsel "is not required to record in great detail how each
minute of his time was expended. . . . But at least counsel should identify the
general subject matter of his time expenditures." Id. at 424 n.12.
Nothing in the record suggests that Samantha's counsel failed to identify
the general subject matter of the time expenditures. The trial court at least was
satisfied that the billing records were sufficiently detailed to allow it to identify
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the subject matter of the time entries. Whether fees that would normally be
noncompensable must be paid because they are inseparable from compensable
claims is a decision calling upon the trial court's exercise of discretion.
XIII.
James also argues that the award in this case violated the principles of In
re Bloomer, 37 N.J. Super. 85, 94 (App. Div. 1955). He further contends that
the work performed by Samantha's attorneys was unnecessary, duplicative, and
excessive, and that she is undeserving of an award in light of the weakness of
her position. Thus he reasons that the twenty percent discount for lack of
success is "paltry" and "glaring," and complains that no attempt was made by
Samantha's attorneys to limit their fee request to compensable work.
The discovery master's detailed methodology, and the court's thoughtful
and thorough consideration of his report and discussion of the parties' position s
need not be repeated. We agree that it is apparent from the massive record in
this case, reflecting a months-long trial, that "absolutely no expense was spared
in preparation and it appears that no stone was unturned before or during trial."
The court said:
There was virtually not one single day of trial where
each side had less than four attorneys in attendance,
assisted by computer technicians, as well as a myriad
of support staff.
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It is therefore no surprise that Samantha's initial
requested fee allowance exceeded $22,000,000. After
self-reflection on the enormity of the request, in this
context—replying to James' opposition to the request—
as well as temperance due to the Discovery Master's
recommendations, Samantha's request whittled down to
a total of $11.8 million.
....
I conclude that it would be of no service to the parties,
nor would it serve judicial economy (a concept foreign
to the parties in this litigation) to direct discovery
regarding the hours actually expended by Samantha's
counsel. . . . Enough is enough. Again, the goal is not
exactitude, and the determination need not be
unnecessarily complex or protracted, but I should
satisfy myself that the assigned hourly rates and
assessment is fair and realistic, after the appropriate
adjustments.
It is well-established that when awarding fees under a fee-shifting
provision, first the courts must determine the lodestar, "the number of hours
reasonably expended multiplied by a reasonable hourly rate." Rendine, 141 N.J.
at 334-35. A judge in making the determination as to reasonable fees should not
passively accept the submissions of counsel, but must exclude hours that are not
reasonably expended if "excessive, redundant, or otherwise unnecessary." Id. at
335 (quoting Rode v. Dellarciprete, 892 F.2d 1177, 1183 (3d Cir. 1990)). A
further reduction is called upon if the level of success is limited compared to the
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relief that is sought. This is true even if the claims were "'interrelated,
nonfrivolous, and raised in good faith.'" Id. at 336 (quoting Hensley, 461 U.S.
at 436).
"[T]he attorney's presentation of billable hours should be set forth in
sufficient detail to permit the trial court to ascertain the manner in which the
billable hours were divided among the various counsel." Id. at 337. However,
"'[i]t is not necessary to know the exact number of minutes spent nor the precise
activity to which each hour was devoted nor the specific attainments of each
attorney.'" Ibid. (quoting Lindy Bros. Builders, Inc. v. Am. Radiator & Standard
Sanitary Corp., 487 F.2d 161, 167 (3d Cir. 1973)).
In the specific context of a probate action, the court in Bloomer, 37 N.J.
Super. at 94, set forth a non-exclusive list of factors to consider in fixing an
allowance for legal services:
(1) the amount of the estate and the amount thereof in
dispute or jeopardy as to which professional services
were made necessary; (2) the nature and extent of the
jeopardy or risk involved or incurred; (3) the nature,
extent and difficulty of the services rendered; (4) the
experience and legal knowledge required, and the skill,
diligence, ability and judgment shown; (5) the time
necessarily spent by the attorney in the performance of
his services; (6) the results obtained; (7) the benefits or
advantages resulting to the estate, and their importance;
(8) any special circumstances, including the standing of
the attorney for integrity and skill; and, (9) the
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65
overhead expense to which the attorney has been put.
In any case, the counsel fee allowed should never
exceed reasonable compensation for the services
rendered the estate.
In Township of West Orange v. 769 Associates, LLC, 198 N.J. 529, 542 (2009),
the Court cited Bloomer as setting forth factors bearing on the reasonableness
of attorneys' fees in estate cases. Viewing the fee award in the Bloomer
framework, it appears that many, but not all, factors favor Samantha.
James contends that the estate's worth, if inter vivos claims were excluded,
was between $10 million and $25 million. However, had Samantha prevailed
and the May 2004 will admitted into probate, her share would have been $65
million in cash bequests, real estate, personal property, and the residuary estate.
Had the inter vivos transfers been nullified, an additional $384 million plus
interest would have been paid into the residuary estate. Obviously, the stakes
were high. The first Bloomer factor was satisfied.
Consideration of the second factor is not helpful under the circumstances
presented. Samantha's father funded the litigation, thus she personally had little
to lose by engaging in it and everything to gain. Of course, if she and her father
are viewed as an economic unit, they had a great deal to lose in terms of litigation
expenses.
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Turning to the third Bloomer factor, the nature, extent, and difficulty of
the services rendered, this was very complex litigation. It involved not only the
presentation of the growth, evolution, and management of a financial empire, it
required complex medical expert testimony and history that also spanned the
years since Cohen was afflicted with his disease.
As to the fourth factor, a great deal of expertise and legal knowledge were
required, and skill, diligence, ability, and judgment were shown on both sides.
That Samantha was able to hold James to the higher standard of proof given the
prior rulings regarding competence is noteworthy. James's characterization of
the quality of those services as lacking is not accurate.
The fifth factor also favors Samantha. The discovery master thoroughly
examined the amount of time involved. He complied with Rendine and
Bloomer, sifted through hundreds, if not thousands, of pages related to the
billings and performed the close analysis required by the relevant precedent. He
reduced billable hours to account for duplication of effort, excessive staffing,
and unproductive forays. His clear and detailed explanation of his lodestar
calculations, for which there is ample support in the record, warranted the trial
judge's reliance on his report.
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While factor six, the results obtained, does not favor Samantha, she did
prevail in several contests in the discovery stage, successfully defended against
summary judgment motions, and in an important turning point, shifted the
burden to James. Indeed, the court found that Samantha had reasonable cause
to contest her grandfather's testamentary instruments. In consideration of
Samantha's lack of successful results, the court applied an overall discount in
addition to the preliminary discounts imposed.
With regard to factor seven, there were no benefits to the estate. The goal
of Rule 4:42-9(a)(3), however, is not to benefit the estate, but rather to provide
a means of effecting the true intentions of the testator by allowing the award of
attorneys' fees and costs to unsuccessful contestants who had reasonable cause
for challenging the validity of the will. We note that Bloomer was not a will
contest; it involved fees paid to counsel for administering an estate. 37 N.J.
Super. at 87-89. While the benefit to an estate is very relevant when assessing
fees charged by an estate administrator, it is not as relevant when evaluating fees
awarded in a will contest. Indeed, it is difficult to imagine a situation where an
unsuccessful challenge to a will would benefit the estate. That observation is in
accord with the analysis in In re Estate of Reisen, 313 N.J. Super. 623, 632 (Ch.
Div. 1998), where the court found that the fact that the litigation benefitted only
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68
the contestant was irrelevant "precisely because the matter was a will contest."
We do not go so far as to say that the benefit (or lack thereof) derived by the
estate in an unsuccessful will contest can never be afforded significant weight,
we simply hold that the benefit derived by the estate under the circumstances
presented here merits only slight consideration.
The final Bloomer factor, the overhead expense, was reduced by the court
by more than half except for external costs. Additionally, Samantha was not
allowed any reimbursement for her portion of the discovery master's fees.
In sum, Bloomer factors one, three, four and five weigh in Samantha's
favor. While factors six and eight do not, the court took those factors into
account and imposed appropriate discounts. Although factor seven weighs
against Samantha, we do not believe that factor, standing alone, is sufficient to
disallow the award of attorneys' fees in this case.
"Counsel fee allowance is a matter which rests in the sound discretion of
the trial court. An appellate tribunal will not interfere unless the record discloses
manifest misuse of the discretion." In re Landsman, 319 N.J. Super. 252, 271-
72 (App. Div. 1999) (citing Bloomer, 43 N.J. Super. at 416). Nothing in the
record suggests a manifest misuse of the considerable discretion afforded the
court in these matters.
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XIV.
James argues that because Friedman Kaplan shared office space with an
attorney who years prior had worked on some of Cohen's testamentary
documents, a disqualifying conflict of interest existed, and pro hac vice
admission should not have been granted. The attorney in question was a law
school professor who was the father-in-law of the attorney who was the principal
draftsman of Cohen's testamentary documents, and who consulted with him
when drafting some of those documents. The professor had occupied the office
for some twenty years. He was not listed on the firm's website, stationery, or
business cards. He had not collaborated with counsel for that office for some
ten years. Although he utilized their systems, he never shared documents or
emails regarding those testamentary documents with anyone at the firm.
Admission under Rule 1:21-2 is also discretionary. It will not be reversed
absent a showing that the court applied its discretion arbitrarily. NAACP v.
State, Dep't of Law & Pub. Safety, 312 N.J. Super. 552, 557-58 (App. Div.
1998); L. Feriozzi Concrete Co. v. Mellon Stuart Co., 229 N.J. Super. 366, 369
(App. Div. 1988). "[O]ur review of a trial court's evaluation of competing
evidence as to the existence of attorney conflict of interest is limited to deciding
whether the findings could reasonably have been reached on sufficient or
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substantial credible evidence in the record, considering the proof as a who le."
State v. Murray, 345 N.J. Super. 158, 171 (App. Div. 2001). The court's decision
here was not arbitrary and was supported by substantial credible evidence in the
record.
The issue was actually addressed by the parties, related to an ongoing
discovery dispute, prior to the commencement of the trial. The judge who
presided over the matter issued a written opinion in which he found that the
relationship between the professor and Friedman Kaplan "does not rise to the
level of an actual conflict of interest" because "there is no reasonable basis to
conclude that the appearance of impropriety, caused by [the professor's]
relationship with Friedman Kaplan is anything more than a 'fanciful
possibility.'"
In light of the prior findings, there is no question that the association
between the professor and Friedman Kaplan is attenuated. In a different context,
we have found that "sharing [ ] office space alone does not give rise to attorney
conflict of interest." Murray, 345 N.J. Super. at 171. No appearance of
impropriety even exists in this situation. Id. at 172-73.
Friedman permitted the professor to share office space, rent-free, as a
gesture of respect for a well-regarded law professor who was also his friend.
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They had never held themselves out as being members of the same firm, did not
refer clients between them, and had not collaborated on a case in at least ten
years. They had no financial or other business entanglements. The professor's
files would only have been accessible to the firm's IT professionals. The judge's
decision to admit the firm pro hac vice and discount the alleged conflict of
interest was a reasonable exercise of discretion.
There simply was no basis for a finding that a conflict of interest existed
which would have an effect on Samantha's recovery of an award of legal fees.
James prevailed. If anyone is aggrieved by the alleged ethical violation, it is
Samantha and not he. There is no basis for modification of the judgment
awarding counsel fees on these grounds.
Affirmed.
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