Monday, January 17, 2011

Party overcame the presumptions of undue influence with respect to both the Will IN THE MATTER OF THE ESTATE OF HARRIET ALEXANDRA SYDLAR, DECEASED.

Party overcame the presumptions of undue influence with respect to both the Will IN THE MATTER OF THE ESTATE






December 13, 2010

Before Judges Cuff, Sapp-Peterson and Simonelli.

On appeal from the Superior Court of New Jersey, Chancery Division, Probate Part, Hudson County, Docket No. 297104.




In this probate matter, appellants Eileen Amato and Dianne Sydlar, the children of the decedent Harriet Sydlar (Harriet),1 appeal from the October 16, 2009 Chancery Division judgment, entered after the trial judge found they failed to prove that Harriet's granddaughter, respondent Krystalle-Leigh Bacia (Bacia), exerted undue influence in Harriet's execution of a Last Will and Testament (the Will) and in inter vivos transfers of real and personal property to Bacia. We affirm in part, reverse in part, and remand for further proceedings.

Shortly before her death, Harriet executed the Will bequeathing nearly her entire estate to Bacia and nominal sums to appellants and other family members. Harriet also made inter vivos transfers through the creation of a joint tenant account and transfer of real property to Bacia. Appellants alleged that Bacia exerted undue influence on Harriet to execute the Will and make the inter vivos transfers.2

After a three-day bench trial, the judge found that appellants were entitled to a presumption of undue influence, stating as follows:

I am satisfied and so find that the totality of the proof presently before the court clearly establishes a confidential relationship between Harriet and [Bacia] beyond the mere per se [relationship] and that there are some additional circumstances of an arguably "suspicious" character which, at the very least, require explanation so that the [appellants] are initially entitled to a "presumption" of undue influence and the shifting of the burden of coming forward with proof to rebut the presumption to [Bacia].

After finding appellants' testimony not credible, the judge seemed to apply a preponderance of the evidence standard in concluding that Bacia overcame the presumptions of undue influence with respect to both the Will and the inter vivos transfers.

The judge also concluded that the parties were entitled to an award of counsel fees payable from the Estate's corpus. He entered an order on October 16, 2009, memorializing his decision. This appeal followed. Subsequently, the court entered two orders on January 6, 2010, declaring the Estate insolvent and denying the parties' fee applications.

On appeal, appellants contend that (1) the judge erred in failing to apply the clear and convincing standard of proof to the inter vivos transfers; (2) the clear and convincing standard of proof should apply to the rebuttal of the presumption of undue influence as to the Will due to an attorney conflict of interest and evidence of suspicious circumstances; (3) the evidence did not support the finding that Bacia overcame the presumption of undue influence by a preponderance of the evidence; and (4) the judge misinterpreted the shifting burdens of proof in Will contests.3

A trial judge's findings on the issue of undue influence "are entitled to great weight [because] 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 Livingston, 5 N.J. 65, 78 (1950). "Such factual findings should not be disturbed unless they are so manifestly unsupported or inconsistent with the competent, reasonably credible evidence so as to offend the interests of justice." In re Will of Liebl, 260 N.J. Super. 519, 524 (App. Div. 1992), certif. denied, 133 N.J. 432 (1993).

Applying these standards, in light of the record and applicable legal principles, we conclude that appellants' second, third and fourth contentions are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). We affirm substantially for the reasons expressed by the trial judge in his well-reasoned oral opinion rendered on October 6, 2009, and memorialized in the October 16, 2009 order. However, because the judge ostensibly applied a preponderance-of-the-evidence standard to Bacia's rebuttal of the presumption of undue influence vis-à-vis the inter vivos transfers, we address appellants' first contention.

It is generally presumed that a testator is of sound mind to execute a will. Haynes v. First Nat'l State Bank of N.J., 87 N.J. 163, 175-76 (1981). That presumption can be overcome, however, upon a showing of undue influence, which is "defined as 'mental, moral or physical' exertion which has destroyed the 'free agency of a testator' by preventing the testator 'from following the dictates of his own mind and will and accepting instead the domination and influence of another.'" Id. at 176 (quoting In re Estate of Neuman, 133 N.J. Eq. 532, 534 (E. & A. 1943). The burden of proving undue influence normally lies with the party contesting the will. Ibid. If, however, (1) "'the will benefits one who stood in a confidential relationship to the testat[or] and [(2)] there are additional circumstances of a suspicious character present which require explanation'," undue influence is presumed, and the will proponent must overcome this presumption by a preponderance of the evidence. Id. at 176-78 (quoting In re Will of Rittenhouse, 19 N.J. 376, 378-79 (1955)).4

Inter vivos transfers may also be subjected to undue influence analysis. Pascale v. Pascale, 113 N.J. 20, 29-31 (1988). "In respect of an inter vivos gift, a presumption of undue influence arises when the contestant proves that the donee dominated the will of the donor, . . . or when a confidential relationship exists between the donor and donee[.]" Id. at 30 (citing In re Dodge, 50 N.J. 192, 227 (1967); Mott v. Mott, 49 N.J. Eq. 192,198 (Ch. 1891)). The donee must overcome that presumption by clear and convincing evidence showing "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.'" Id. at 31 (quoting In re Dodge, supra, 50 N.J. at 227). The rationale behind the lower standard of proof to invoke the presumption and a concomitantly more demanding standard of proof to overcome it is the assumption that "'a living donor is not likely to give to another something that he or she can still enjoy.'" In re Estate of Mosery, 349 N.J. Super. 515, 522 (App. Div.) (quoting Pascale, supra, 113, N.J. at 31, certif. denied, 174 N.J. 191 (2002)).

Regarding joint bank accounts:

Sums remaining on deposit at the death of a party to a joint account belong to the surviving party or parties as against the estate of the decedent unless there is clear and convincing evidence of a different intention at the time the account is created.

[N.J.S.A. 17:16I-5a.]

Notwithstanding this statutory presumption of survivorship rights, the creation of joint accounts is treated as an inter vivos transfer. See In re Estate of Penna, 322 N.J. Super. 417, 424-25 (App. Div. 1999); Bronson v. Bronson, 218 N.J. Super. 389, 392-95 (App. Div. 1987). Thus, "if the challenger can prove . . . that the survivor had a confidential relationship with the donor who established the account, there is a presumption of undue influence which the survivor donee must rebut by clear and convincing evidence." Estate of Ostlund v. Ostlund, 391 N.J. Super. 390, 401 (App. Div. 2007). The rationale for the higher burden of proof in cases of inter vivos transfers also applies to cases involving the creation of joint accounts. Bronson, supra, 218 N.J. Super. at 394-95.

Here, the trial judge found there was both a confidential relationship between Harriet and Bacia as well as suspicious circumstances warranting a presumption of undue influence. Thus, Bacia had to overcome the presumption by a preponderance of the evidence with respect to the Will, and by clear and convincing evidence with respect to the inter vivos transfers. Although the trial judge said he was "convinced" that Bacia had overcome the presumption, this is insufficient for us to conclude that Bacia met the clear and convincing standard as to the inter vivos transfers. Because there should be no doubt as to what standard the judge applied, we remand for a determination of whether the evidence is clear and convincing as to the inter vivos transfers.

Affirmed in part, reversed in part, and remanded for further proceedings consistent with this opinion. We do not retain jurisdiction.

1 The decedent's two other children were not parties to the will contest.

2 Appellants had also claimed that Harriet lacked testamentary capacity but abandoned that claim.

3 We decline to address appellants' contention that they are entitled to counsel fees regardless of their success. The court entered the order denying counsel fees on January 6, 2010, after the filing of this appeal. Appellants did not file an amended or separate notice of appeal. Thus, the issue is not properly before us. Pressler & Verniero, Current N.J. Court Rules, comment 6.1 to R. 2:5-1(f)(1); Campagna v. Am. Cyanamid Co., 337 N.J. Super. 530, 550 (App. Div.), certif. denied, 168 N.J. 294 (2001).

4 A burden of clear and convincing evidence is appropriate in cases where an attorney benefits from the will of his or her client, In re Will of Davis, 14 N.J. 166, 169-70 (1953), or where "the testator's attorney has placed himself [or herself] in a conflict of interest and professional loyalty between the testator and the beneficiary." Haynes, supra, 87 N.J. at 182. Despite appellants' protestations to the contrary, we conclude that neither of those situations exist here.