Wednesday, February 4, 2009

estate can still make claims if spouse dies while divorce pending
01-28-09 Kay v. Kay
Bernard Kanefsky, Executor of the Estate of George Kay

George Kay died during the pendency of an action for
divorce, and the trial court denied his estate leave to
substitute for defendant and file amended pleadings. On appeal
the estate contends that the trial court erred by relying on
Krudzlo v. Krudzlo, 251 N.J. Super. 70, 73 (Ch. Div. 1990), in
which the court held that, unlike a surviving spouse, the estate
of a decedent spouse "is not entitled to assert equitable claims
against the marital estate sounding in constructive trust,
resulting trust, quasi-contract or unjust enrichment" in
accordance with Carr v. Carr, 120 N.J. 336 (1990).

We conclude that the trial court should have accepted the
pleadings and considered whether the equities stemming from the
facts alleged call for relief from the strict legal effects of
defendant's death during the pendency of the divorce action. To
the extent that Krudzlo provides a contrary rule, we disapprove

Sunday, February 1, 2009

Executor should not be removed without proof of fraud, gross carelessness, or indifference to duty

Recent case-



DOCKET NO A-4672-07T2


Argued: January 12, 2009 - Decided:

Before Judges Carchman and Simonelli

On appeal from the Superior Court of New Jersey,
Chancery Division, Probate Part, Ocean County,
Docket No. 174370.

Anne Baglivo Fitzpatrick argued the cause for
appellant Patricia Ann Sweeney (McDonald Law
Group, attorneys; Ms. Fitzpatrick, on the brief).

Joel A. Davies argued the cause for respondent
John J. Hnat (Taff & Davies, attorneys; Mr.
Davies, of counsel and on the brief).


Appellant Patricia A. Sweeney (Sweeney) appeals from the
April 21, 2008 order of a Chancery Part judge removing her as
executrix of the Estate of John H. Hnat (the decedent). We
The decedent and Sweeney, a quadriplegic, lived together
for almost fifteen years. They would have married if not for
the potentially adverse impact marriage would have on Sweeney's
January 29, 2009
medical benefits. During the last ten years of the decedent's
life, his son, plaintiff John J. Hnat (Hnat), and his daughters,
Bonnie Myszka (Myszka) and Wendy Wildman (Wildman), had little
contact with him.
The decedent appointed Sweeney as executrix of his Last
Will and Testament (the Will). Among other things, the decedent
bequeathed to Sweeney a life estate in the home where they
lived. After her death or her permanent inability to live in
the home, the property would be liquidated and the net proceeds
divided equally between the children. The decedent also
bequeathed to Sweeney $50,000 to be used to pay the expenses
associated with the disposition of the estate. Once all of the
estate's obligations were fulfilled, the children would equally
divide the remainder of the $50,000. Also, the decedent
bequeathed to Hnat a 1929 Ford, Haulmark trailer, and his
antique guns and tools; to Wildman his 1931 Ford; and to Myszka
his funeral plots located in the St. Josephs Cemetery. Decedent
bequeathed the remainder of his estate, including personal
property, to Sweeney and the children in equal shares.
The decedent died on September 26, 2007, at age seventy-
three. On or about October 26, 2007, Sweeney was appointed
executrix of the estate. She immediately retained counsel to
assist her in administering the estate.1 Thereafter, among other
things, Sweeney opened an estate account, closed the decedent's
checking, savings and credit card accounts, submitted insurance
claims for all policies the decedent held, and contacted Smith
Barney regarding the decedent's IRA accounts. She also
instructed her then attorney to prepare a draft of the
inheritance tax return, which was not due until May 2008.
On January 10, 2008, Sweeney was hospitalized for
respiratory failure following pneumonia. Following her
hospitalization, she spent time in a rehabilitation facility.
Sweeney has returned home and lives alone. There is no evidence
of any further illnesses or hospitalization. In late January
2008, Sweeney directed her then attorney to obtain an appraisal
of the home for inclusion in the inheritance tax return.
Hnat does not deny that during Sweeney's hospitalization,
he entered the home without her knowledge or authorization,
videotaped its contents, removed a dog that she and the decedent
jointly owned, and removed many of the decedent's personal
items, including the keys to the cars bequeathed to him and
Wildman. Hnat also changed the locks, depriving Sweeney of
access to her medical equipment.

Sweeney subsequently terminated the services of that attorney
after discovering that he was also providing legal advice
relating to the estate to Hnat and his sisters.
On February 27, 2008, Hnat filed a verified complaint and
order to show cause seeking Sweeney's removal as executrix
solely on the grounds that she was unfit and unable to serve due
to her medical condition and hospitalizations. He also sought
his appointment as executor of the estate, despite the fact that
the Will designated Wildman as alternate executrix.
The parties appeared before a Chancery judge on April 7,
2008, the return date of the order to show cause. Sweeney
attended, but no plenary hearing occurred. Hnat argued that
Sweeney was unable to fulfill her duties in a timely manner due
to her physical limitations and recent illness. Hnat raised no
friction or hostility claim. Nevertheless, based upon oral
argument alone, the judge summarily removed Sweeney as executrix
and appointed an independent third party as administrator of the
estate, concluding that "it would be inappropriate for the
parties who cannot cooperate with one another to proceed
further. It would inevitably entail further avoidable counsel
fees, time, energy and expense."
We review a trial judge's removal of a trustee,
executor/executrix or fiduciary under the abuse of discretion
standard. We will not disturb the judge's exercise of
discretion in removing a trustee absent "manifest abuse."
Wolosoff v. CSI Liquidating Trust, 205 N.J. Super. 349, 360
(App. Div. 1985) (citing 2 Scott on Trusts, 3d Ed. 1967).
Whether the trial judge properly exercised his or her discretion
"implies conscientious judgment and not arbitrary action." Id.
at 363 (citing In re Koretzky, 8 N.J. 506, 535 (1951)).
Further, such discretionary action requires
the trial judge to take account of the law
applicable to the particular circumstances
of the case under consideration. Should
that judge misconceive the applicable law or
misapply it to the factual complex, the
result is an impermissible arbitrary act
however conscientious the trial judge may
have been.


Under N.J.S.A. 3B:14-21, a fiduciary may be removed for the
following reasons:
a. After due notice of an order or
judgment of the court so directing, he
neglects or refuses, within the time fixed
by the court, to file an inventory, render
an account or give security or additional

b. After due notice of any other order or
judgment of the court made under its proper
authority, he neglects or refuses to perform
or obey the order or judgment within the
time fixed by the court; or

c. He has embezzled, wasted or misapplied
any part of the estate committed to his
custody, or has abused the trust and
confidence reposed in him; or

d. He has removed from the state or does
not reside therein and neglects or refuses
to proceed with the administration of the
estate and perform the duties and trust
devolving upon him; or

e. He is of unsound mind or mentally
incapacitated for the transaction of
business; or

f. One of two or more fiduciaries has
neglected or refused to perform his duties
or to join with the other fiduciary or
fiduciaries in the administration of the
estate committed to their care whereby the
proper administration and settlement of the
estate is or may be hindered or prevented.

To dismiss a trustee appointed by a will, "much more should
be shown by those who wish to see them dismissed than would be
the case where the trustees are appointed by the court". Braman
v. Central Hanover Banl & Trust Co., 138 N.J. Eq. 165, 197 (Ch.
1946). Removal of a trustee appointed by will should be granted
sparingly and with great caution. Ibid. Courts are reluctant
to remove a fiduciary appointed by a will unless there is "clear
and definite proof of fraud, gross carelessness or
indifference." Id. at 196-97; see also In re Will of Landsman,
319 N.J. Super. 252, 270 (App. Div.) certif. denied, 161 N.J.
335 (1999); In re Beales' Estate, 13 N.J. Super. 222, 228-29
(App. Div.), certif. denied, 7 N.J. 581 (1951). Not only should
the court be reluctant to remove fiduciaries, but "so long as an
executor or trustee acts in good faith, with ordinary discretion
and within the scope of his powers, his acts cannot be
successfully assailed." Connelly v. Weisfeld, 142 N.J. Eq. 406,
411 (E. & A. 1948). Therefore, to remove an executrix, the
court "must have some fact legally before it in order to justify
a removal." Matter of Konigsberg, 125 N.J. Eq. 216, 219
(Prerog. Ct. 1939). Where, such as here, the facts for and
against removal are disputed, a plenary hearing must be held.
See Wolosoff, supra, 205 N.J. Super. at 366.
Here, no plenary hearing occurred. There is no proof that
any of the reasons for removal set forth in N.J.S.A. 3B:14-21
exist. There also is no proof of fraud, gross carelessness,
indifference to duty, or that Sweeney did not act in good faith
or continues to suffer from an illness that prevents her from
properly administering the estate. Thus, had Hnat asserted any
of these reasons for Sweeney's removal and had the judge relied
upon them to remove Sweeney, the result would constitute a
manifest abuse of discretion.
The judge removed Sweeney for a reason not asserted by
Hnat. That is, the judge summarily removed Sweeney due to
assumed friction and hostility between the parties. "The
general rule is that mere friction or hostility between a
beneficiary and a trustee is not necessarily a sufficient ground
for removal. If not, a beneficiary who otherwise lacks
sufficient grounds for removal of a trustee could nevertheless
compel that removal simply by instigating a fight." Wolosoff,
supra, 205 N.J. Super. at 360 (citations omitted); see also
Braman, supra, 138 N.J. Eq. at 196). "[T]he mere fact that a
beneficiary disagrees with a fiduciary's proper exercise of
discretionary powers, or is resentful of the fiduciary's
authority, or is antagonized by his personality, is not
sufficient [cause for] his removal." In re Koretzky, 8 N.J.
506, 531 (1951). "Generally, in order for friction or hostility
between the beneficiary and trustee to form the basis for
removal, there must be a demonstration that the relationship
will interfere materially with the administration of the trust
or is likely to do so." Wolosoff, supra, 205 N.J. Super. at
360-61. There also must be proof that the friction or hostility
arose out of the trustee's behavior. Ibid.; Starr v. Wiley, 89
N.J. Eq. 79, 90 (Ch. 1918).
Here, there is no evidence whatsoever that Sweeney caused
any friction or hostility between the parties, either before or
after her hospitalization. To be sure, Hnat did not even assert
this as a reason for Sweeney's removal. Rather, the record
indicates that Hnat "instigated a fight" with the appointed
executrix and caused whatever friction and hostility may exist
here, a fact the judge, in a manifest abuse of discretion,
We reverse and remand with direction to reinstate Sweeney
as the executrix of the estate.