INTHE MATTER OF THE ESTATE OF WILLIAM J MALLAS, Deceased
Annotate this CaseNOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
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SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-5593-15T3
IN THE MATTER OF THE
ESTATE OF WILLIAM J.
MALLAS, Deceased.
———————————————————————
Argued January 30, 2018 – Decided March 6, 2018
Before Judges Reisner, Hoffman and Mayer.
On appeal from Superior Court of New Jersey,
Chancery Division, Middlesex County, Docket
No. P-229203.
Marco M. Benucci argued the cause for
appellant Angelina Picciolo (Wronko Loewen
Benucci, attorneys; Marco M. Benucci, of
counsel and on the joint brief).
Richard M. Sasso argued the cause for
appellant Frank Picciolo (Thomas A. Szymanski,
on the joint brief).
Ronald J. Busch argued the cause for
respondent Nicole Zablocki (Busch and Busch,
LLP, attorneys; Ronald J. Busch, on the
brief).
PER CURIAM
Following a bench trial, appellants Frank Picciolo and
Angelina Picciolo,1 husband and wife, appeal from an October 15,
2013 Probate Part "order of judgment"2 requiring Angelina to
disgorge all funds and distributions she received from an annuities
transfer Frank completed while acting as attorney-in-fact for the
late William C. Mallas (Mr. Mallas), appellants' neighbor. Prior
to his death, Mr. Mallas executed a power of attorney (POA) naming
Frank as attorney-in-fact, a new will naming Angelina as a
beneficiary, and later a codicil appointing Frank as executor.
While the trial court upheld the POA, will, and codicil, the
court nevertheless determined Frank "failed to prove . . . that
no undue influence was exerted" upon Mr. Mallas regarding the
purchase of an Allianz Life Insurance Company (Allianz) annuity,
which designated Angelina as sole beneficiary. As a result, the
court ordered Angelina to disgorge all Allianz-related benefits
and ordered the Allianz beneficiary changed to "the Estate of
William Mallas." For the reasons that follow, we affirm.
1
For ease of reference, and intending no disrespect, we refer to
the parties by their first names.
2
Appellants also challenge numerous related orders that followed
concerning related issues, including counsel fees, surcharge of
Frank for failing to properly account for his actions as attorney-
in-fact, and denial of reconsideration motions.
2 A-5593-15T3
I
We discern the following facts from the trial record. On
June 19, 2006, Mr. Mallas executed a will that divided his estate
evenly between his brother Peter and respondent, decedent's niece
Nicole Zablocki (Nicole). On March 12, 2008, Mr. Mallas signed a
POA designating Frank as his attorney-in-fact. The trial court
described Frank as "a good friend, neighbor and [confidant]."
In August 2008, Frank used the POA to transfer funds contained
in a long-standing Bristol Myers Squibb IRA into two annuities,
in roughly equal amounts, with New York Life and ING. Both
annuities listed the Estate of William Mallas as beneficiary.
On November 13, 2008, Mr. Mallas executed a new will,
designating Angelina,3 his brother Peter, and Nicole as one-third
residuary beneficiaries. On the same date, Mr. Mallas executed a
new POA, again appointing Frank as his attorney-in-fact, but naming
a different alternate attorney-in-fact. On September 22, 2009,
Mr. Mallas executed a codicil, which named Frank as executor and
Angelina as alternate executor. Attorney Robert C. Nisenson
prepared these three documents and attended to their execution.
On the same date Mr. Mallas signed the codicil, Frank used his POA
3
Because Frank had IRS liens, he suggested Mr. Mallas name
Angelina in the will, rather than himself.
3 A-5593-15T3
to transfer the New York Life and ING annuities into one annuity
with Allianz, and designate Angelina as sole beneficiary.
Notably, the sales agent for the Allianz transaction
testified that Frank directed him to make Angelina, instead of
himself, the primary beneficiary because Frank had an IRS lien
against him. The sales agent also testified that he met with
Frank and Angelina on several occasions, but he never met with Mr.
Mallas. When the agent requested to meet Mr. Mallas, Frank told
the agent it "wouldn't be feasible to go meet him."
At his deposition, Frank testified that the Allianz sales
agent met with Mr. Mallas in his home. At trial, Frank changed
his testimony, claiming he had confused the Allianz sales agent
with a bank employee who handled the accounts of Mr. Mallas.
At trial, Angelina admitted that Frank told her about the
Allianz transaction when it occurred in 2009, recalling, "He told
me that I was going to get this – receive this gift because he
couldn't accept it. . . . Because of [his] tax lien." She also
admitted she "had very little contact with Mr. Mallas," and "never
set foot in his house."
On September 24, 2009, Adult Protective Services (APS)
received a report that Mr. Mallas was the victim of financial
exploitation. Based on this referral and conduct of Mr. Mallas
at an unannounced visit, APS subpoenaed the bank records of Mr.
4 A-5593-15T3
Mallas and found "numerous checks written out to Paperboard
Foodsavers Properties." Upon investigation, APS discovered that
"the only person associated with [Paperboard Foodsavers
Properties] was . . . Angelina Picciolo." Subsequently, APS
initiated a guardianship proceeding, and on April 9, 2010, the
Chancery Division entered a judgment of incapacity and appointed
an attorney as guardian for Mr. Mallas.
After Mr. Mallas died on June 19, 2010, Frank filed a verified
complaint seeking to probate the November 13, 2008 will and the
September 22, 2009 codicil. Two of decedent's nieces, Nicole and
Pamela Sulewski,4 challenged decedent's will, codicil, POA, and
the Allianz transaction.
In August 2013, the Chancery Division conducted a seven-day
trial. In a written opinion, the court held the March 12, 2008
POA, the November 13, 2008 will, and the September 22, 2009 codicil
were all valid, finding Mr. Mallas had the required capacity to
execute each document and the benefit of independent counsel.
However, the court also concluded that Frank "failed to prove that
the Allianz transaction was not the product of undue influence."
The court therefore invalidated the Allianz beneficiary
designating Angelina "as the sole beneficiary and order[ed] that
4
Pamela subsequently dismissed her claims with prejudice.
5 A-5593-15T3
the beneficiary be changed to "the Estate of William
Mallas[,] . . . consistent with [his] November 12, 2008 [w]ill."
The court further concluded that Frank "failed to properly
account" for his actions using the POA; as a result, the court
also removed Frank as executor because, "[a]s a result of this
[c]ourt's decision, the Estate of William Mallas has substantial
claims against him."
II
A trial court's findings of fact are binding on appeal if
supported by "adequate, substantial, and credible evidence." Rova
Farms Resort, Inc. v. In'vrs Ins. Co. of Am.,
65 N.J. 474, 484
(1974). Such findings made by a judge in a bench trial "should
not be disturbed unless they are so wholly insupportable as to
result in a denial of justice." Id. at 483-84. Factual findings
that "are substantially influenced by [the judge's] opportunity
to hear and see the witnesses and to have the 'feel' of the case"
enjoy deference on appeal. State v. Johnson,
42 N.J. 146, 161
(1964).
Our Supreme Court has "firmly established in our case law"
that a will may be set aside based upon a demonstration that it
was procured through undue influence. In re Estate of Stockdale,
196 N.J. 275, 302 (2008). The concept of undue influence connotes
"mental, moral, or physical exertion of a kind and quality that
6 A-5593-15T3
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 . . . ." Id. at 302-03. This is
generally accomplished "by means of a will or inter vivos transfer
in lieu thereof." Id. at 303.
Typically, the challenger of a will maintains the burden of
proof in showing undue influence. Ibid. However, that burden
shifts when a beneficiary "stood in a confidential relationship
to the testator and if there are additional 'suspicious'
circumstances" present. Ibid. (citing In re Rittenhouse's Will,
19 N.J. 376, 378-79 (1955)). If the confidential relationship is
not a professional one, as in an attorney-client relationship, the
burden may be overcome by a preponderance of the evidence. Ibid.
(citing In re Catelli's Will,
361 N.J. Super. 478, 487 (App. Div.
2003)).
A confidential relationship exists when "the testator, '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 exist[ed].'" Stockdale,
196 N.J. at 303 (alteration in
original) (quoting In re Hopper,
9 N.J. 280, 282 (1952)).
Additionally, a confidential relationship is present "when the
circumstances make it certain that the parties do not deal on
7 A-5593-15T3
equal terms, but on the one side there is an overmastering
influence, or, on the other, weakness, dependence or trust,
justifiably reposed." In re Codicil of Stroming,
12 N.J. Super.
217, 224 (App. Div. 1951). To find suspicious circumstances that
shift the burden, those suspicions "need only be slight."
Stockdale,
196 N.J. at 304; see also Haynes v. First Nat'l State
Bank,
87 N.J. 163, 176-78 (1981).
Similar principles apply for setting aside inter vivos gifts
and property transfers on the grounds of undue influence. To
establish a presumption of undue influence and shift the burden
of proof, a challenger must show either that "the donee dominated
the will of the donor, Seylaz v. Bennett,
5 N.J. 168, 172 (1950);
Haydock v. Haydock,
34 N.J. Eq. 570, 574 (E. & A. 1881), or . . .
a confidential relationship exist[ed] between [the] donor and
donee, In re Dodge, [
50 N.J. 192, 227 (1967)]; Mott v. Mott,
49 N.J. Eq. 192, 198 (Ch. 1891)." Pascale v. Pascale,
113 N.J. 20,
30 (1988); see also Sipko v. Koger, Inc.,
214 N.J. 364, 376,
(2013). However, inter vivos gifts, unlike wills, do not require
challengers to show suspicious circumstances to set them aside.
Id. at 30-31.
To rebut the presumption after the burden switches, the
beneficiary of a gift challenged for undue influence must establish
his or her case by clear and convincing evidence. Id. at 31. The
8 A-5593-15T3
beneficiary must prove "not only that 'no deception was practiced
therein, no undue influence used, and that all was fair, open and
voluntary, but that it was well understood.'" Ibid. (citing Dodge,
50 N.J. at 227).
Applying these standards here, the trial judge reasonably
determined that a confidential relationship existed between Mr.
Mallas and Frank, finding it "clear that Mr. Mallas depended upon
[Frank] in many respects." After finding a confidential
relationship, and suspicious circumstances surrounding the
execution of each of the challenged documents in the case, the
judge concluded that Frank "met his burden of proving that there
was no undue influence exerted by him in connection with the
November 13, 2008 Will, the November 13, 2008 [POA] and the
September 22, 2008 [c]odicil." Frank met his burden because,
"[i]n connection with each of those documents[,] Mr. Mallas was
represented by independent counsel, Mr. Nisenson."
Addressing the Allianz transaction, the judge came to a
different conclusion, finding that appellants failed to carry
their burden of proving the absence of undue influence. He
explained that Frank's own expert,
Dr. Goldwasser, testified that Mr. Mallas was
not capable of understanding a complicated
transaction like the Allianz transaction. Mr.
Mallas did not have the benefit of independent
counsel or[,] for that matter[,] even direct
9 A-5593-15T3
interaction with [the sales agent] who sold
the Allianz product. [Frank] contends that it
was Mr. Mallas who made this sophisticated
business decision. There was no need for Mr.
Mallas to enter into the Allianz transaction
at that time. If Mr. Mallas wanted to leave
more to [Frank] (through [Angelina]), he
certainly could have given instructions to Mr.
Nisenson in connection with the preparation
of the [c]odicil. The codicil could have
included not only a designation of a different
[e]xecutor, but it could have also designated
that [Angelina] would receive a larger share
of his estate.
We are mindful of our limited scope of review. Although a
probate judge's post-trial factual findings concerning issues of
capacity and undue influence are not automatically controlling,
such findings "are entitled to great weight [on appeal] since the
trial court had the opportunity of seeing and hearing the witnesses
and forming an opinion as to the credibility of their testimony."
In re Will of Liebl,
260 N.J. Super. 519, 523 (App. Div. 1992),
(quoting Gellert v. Livingston,
5 N.J. 65, 78 (1950)). Unless the
trial judge's findings are "so manifestly unsupported or
inconsistent with the competent, reasonably credible evidence" the
factual conclusions should not be disturbed. Id. at 524 (citing
Leimgruber v. Claridge Assocs.,
73 N.J. 450, 456 (1977)).
Such a "manifest" lack of evidential support simply has not
been demonstrated by appellants on this appeal. The record is
replete with proof of the confidential relationship between Mr.
10 A-5593-15T3
Mallas and Frank and the highly suspicious circumstances regarding
the Allianz transaction; in contrast, the record contains no
credible evidence to rebut the presumption of undue influence.
Appellants argue the trial court erred when it considered the
"Allianz transaction as a whole rather than simply" focusing on
the designation of beneficiary. Specifically, they argue the
trial court erred in relying upon expert testimony that decedent
would not have been capable of understanding the Allianz
transaction's complexity. We disagree. The expert testimony in
question came from appellants' own expert. The testimony severely
undermined Frank's testimony that Mr. Mallas made the decision to
change to the Allianz annuity, and that "he read every line of
everything . . . ." Even if we were to limit our focus to "the
designation of beneficiary," the record lacks any credible
evidence to prove the designation was not the product of undue
influence.
Appellants also argue that the judge's factual findings are
against the weight of the evidence. We disagree. Our review of
the record reveals substantial, credible evidence supporting the
trial judge's decision.
Appellants further argue that Angelina's status as a third-
party beneficiary entitles her to retain the Allianz annuity as a
matter of law because she was merely a passive recipient rather
11 A-5593-15T3
than a participant in her husband's actions. In opposition, Nicole
cites
N.J.S.A. 46:2B-8.13(a), which prohibits attorneys-in-fact
from giving themselves gifts without express authority, and argues
this provision should apply since Frank admitted the designation
of Angelina was merely a ploy to avoid tax liens, a contention
that Angelina has no basis to dispute.
"[A] court of equity has the power of devising its remedy and
shaping it so as to fit the changing circumstances of every case
and the complex relations of all the parties." Sears, Roebuck &
Co. v. Camp,
124 N.J. Eq. 403, 412 (E. & A. 1938) (citations
omitted). "[A] court of equity should not permit a rigid principle
of law to smother the factual realities to which it is sought to
be applied." Graziano v. Grant,
326 N.J. Super. 328, 342 (App.
Div. 1999).
Here, the judge crafted an equitable remedy that accounted
for the fact that there was no credible evidence that Mr. Mallas
authorized the Allianz transaction or that he intended to use the
Allianz transaction to nullify the estate plan he established,
with the benefit of counsel, in his will and codicil. Moreover,
the judge found credible the testimony of appellants' own expert,
Dr. Goldwasser, that by September 2009, Mr. Mallas was no longer
capable of understanding a complicated transaction like the
Allianz transaction. Since the record indicates the designation
12 A-5593-15T3
of Angelina as beneficiary of the Allianz annuity did not represent
an intention of Mr. Mallas to benefit Angelina, but instead
reflected Frank's scheme to avoid his IRS liens, the trial court
reasonably concluded, "[Angelina] cannot benefit from her
husband's wrongful conduct and be 'unjustly enriched' thereby."
Angelina had little contact with Mr. Mallas and her testimony
provided no basis for any reasonable expectation she would receive
the proceeds of the Allianz annuity, particularly where, as here,
the court found the transaction unauthorized and the product of
undue influence.5
The balance of appellants' arguments lack sufficient merit
to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).
Affirmed.
5
We also find relevant that Angelina is the spouse of the person
responsible for the unauthorized transaction and the undue
influence. See Palisades Safety & Ins. Ass'n v. Bastien,
175 N.J. 144, 151 (2003) (denying personal injury protection coverage for
the wife, who was "in a unique position to be aware of the other
spouse's interactions with the insurer of the household's
vehicles[,]" where the named insured husband falsely represented
no other persons of driving age resided in the household).
13 A-5593-15T3
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