On certification to the Superior Court, Appellate Division.
For reversal -- Justices Sullivan, Pashman, Clifford, Schreiber and Handler. For affirmance -- None. The opinion of the Court was delivered by Handler, J. Clifford, J., dissenting in part.
This is a will contest in which the plaintiffs, two of the decedent's six grandchildren, seek to set aside the probate of their grandmother's will and two related trust agreements. The major issue presented is whether the will is invalid on the grounds of "undue influence" attributable to the fact that the attorney, who advised the testatrix and prepared the testamentary instruments, was also the attorney for the principal beneficiary, the testatrix's daughter, in whom the testatrix had reposed trust, confidence and dependency. A second question concerns the enforceability of a "non-contestability" or in terrorem clause in the testamentary documents under New Jersey common law since the decedent died before the effective date of the new probate code, N.J.S.A. 3A:2A-32, which invalidates such clauses in wills.
In an unreported opinion upholding the probate of the will and related trusts, the trial court held that the circumstances created a presumption of undue influence but that this presumption had been rebutted by defendants. It ruled further that the in terrorem clause was unenforceable. The case was appealed to the Appellate Division, which affirmed the trial court as to the lack of undue influence, sustaining the probate of the will and its judgment upholding the related trust agreements, but disagreed with the trial court's ruling that the in terrorem clause
was unenforceable. Plaintiffs then filed their petition for certification which was granted. 85 N.J. 99 (1980).
The issues raised by this appeal, particularly whether the contested will was invalid as a result of "undue influence," require a full exposition of the facts.
Mrs. Isabel Dutrow, the testatrix, was the widow of Charles E. Dutrow, an employee of Ralston Purina Co. who had acquired substantial stock in that corporation. Upon his death the stock, aggregating almost eight million dollars, was distributed to his widow and their two daughters, both outright and in trust.
Betty Haynes, one of the daughters of Charles and Isabel Dutrow, came with her two sons to live with her parents in the Dutrow family home in York, Pennsylvania in 1941 while Betty's husband was in military service during World War II. Following Charles Dutrow's death in 1945 and her own divorce, Betty and her sons continued to live with Mrs. Dutrow in York. The relationships between mother and daughter were extremely close, Mrs. Dutrow having deep affection for Betty, as well as her grandsons whom she practically raised. The two boys, however, left the York home sometime around 1968 to the considerable aggravation and disappointment of their grandmother.*fn1 But Betty remained with her mother until Betty's death in June 1973.
At the time of Betty's death, she had been living with her mother for more than 30 years. Mrs. Dutrow was then 84 years old and suffered from a number of ailments including glaucoma, cataracts and diverticulitis, and had recently broken her hip. Mrs. Dutrow, distraught over the death of her closest daughter
and somewhat alienated from the Haynes children, decided to move in with her younger daughter, Dorcas Cotsworth, and Dorcas' husband, John, who had homes in Short Hills and Bay Head, New Jersey. This decision was a reasonable one, freely made by Mrs. Dutrow, who despite her age, physical condition and feelings of despair was and remained an alert, intelligent and commanding personality until the time of her death.
During her lifetime, Mrs. Dutrow executed a great many wills and trust agreements. All of these instruments, as well as those her husband had executed prior to his death, were prepared by the longstanding family attorney, Richard Stevens, of Philadelphia. By June 1967 Stevens had prepared five wills and several codicils for Mrs. Dutrow.
As of the time she moved in with the Cotsworths, Mrs. Dutrow's estate plan reflected a basic disposition to treat the Haynes and the Cotsworth family branches equally. During the last four years of her life, however, while living with daughter Dorcas, Mrs. Dutrow's will went through a series of changes which drastically favored Dorcas and her children while diminishing and excluding the interests of the Haynes brothers. These changes, and their surrounding circumstances, bear most weightily upon the issue of undue influence.
Shortly after moving in with Dorcas, following a conference between her daughter and Stevens, the first of many will and trust changes was made by Mrs. Dutrow on July 25, 1973. Under the new provisions of the will, Mrs. Dutrow's residuary estate was to be divided into two equal trusts, one for Dorcas, the principal of which Dorcas could invade up to certain limits and the other a trust with income to each of the Haynes boys without a power of invasion. A new will and an inter vivos trust with almost identical provisions, including approximately 60,000 shares of Ralston Purina stock, were later executed on November 24, 1973 and December 4, 1973, respectively. Mrs. Dutrow also gave Dorcas 5,000 shares of stock outright to compensate her for the expense of having Mrs. Dutrow live with her.
During the time these instruments were being drawn, Dorcas and her husband, John Cotsworth, began actively to express their views about Mrs. Dutrow's estate plans to Stevens. In a meeting between Stevens, Mrs. Dutrow, and the Cotsworths on November 13, 1973 at the Cotsworth home in Short Hills, John Cotsworth gave Stevens two charts of Mrs. Dutrow's estate which Cotsworth had prepared. According to Stevens' testimony at trial, the import of the charts was to make "substantial outright gifts to the members of the Cotsworth family and smaller gifts to [plaintiffs, the Haynes children]." Stevens further testified that Mrs. Dutrow had told him at this meeting that the pressure upon her by the Cotsworths to change her will was enormous. On November 19, 1973, John Cotsworth wrote Stevens a long letter in which he summarized what he, Cotsworth, saw as Mrs. Dutrow's "objectives" with regard to her estate plans and then detailing in over five pages the calculations as to how these "objectives" could be achieved. An important aspect of his proposal was to deplete substantially the estate to simplify Mrs. Dutrow's "money worries." Cotsworth further noted at the beginning of this letter to Stevens that
[o]ur joint obligation -- you and the family -- is to accomplish these objectives with minimum tax effects upon the total estate. Obviously you are in a far better position to work out the details than I am, but you appear reluctant to go as fast or as far as I have suggested for reasons that are not clear to us.
Then, on November 26, 1973, Cotsworth proceeded to consult Grant Buttermore, his own lawyer, regarding Mrs. Dutrow's estate plans. Buttermore had been the attorney for the Cotsworth family and the Cotsworth family business, the Berry Steel Corporation, for six to seven years and had provided substantial legal advice concerning the corporation. He had also prepared wills for both Mr. and Mrs. Cotsworth and some of their children. For all intents and purposes, Buttermore can be viewed as having been the family attorney for the Cotsworths.
On November 29, 1973, following the initial contact by her husband, Dorcas Cotsworth went to Buttermore concerning the trust agreement of November 24 that Stevens had prepared for
her mother. As a result, Buttermore called Stevens while Dorcas was in his office and discussed the matter of Mrs. Dutrow's domicile. This subject, in addition to a proposal concerning "gifting" by Mrs. Dutrow, had earlier been broached to Buttermore by John Cotsworth. Both lawyers agreed that Mrs. Dutrow's domicile should be changed to New Jersey for tax purposes and Buttermore made the change on the instrument by hand. Later that day Buttermore wrote to Stevens to confirm the results of the call, as well as the fact that the Cotsworths were personally involved in Mrs. Dutrow's estate planning, viz:
We are in the process of reviewing Mrs. Dutrow's estate with her and Mr. and Mrs. Cotsworth along the lines suggested by Mr. Cotsworth in his outline heretofore submitted to you.
Buttermore concluded this letter by relaying Mrs. Dutrow's request to Stevens to provide "a complete list of all [her] assets . . . in order that we may make a proper analysis."
Stevens immediately responded, writing separate letters to Buttermore and Mrs. Dutrow on November 30. He gave Buttermore a skeletal list of Mrs. Dutrow's assets with no detail. At the same time he also undertook to make some technical corrections of Mrs. Dutrow's will, which was executed, as noted, on December 4. In the letter accompanying the will, he mentioned his conversation with Buttermore and his "assumption" that Mrs. Dutrow wanted him to give Buttermore the information he was requesting.
The response to this communication was a letter written to Stevens on December 3, 1973 in Dorcas Cotsworth's handwriting on her personal stationary, and signed by Dorcas and Mrs. Dutrow, which contained the following:
These are my mother's observations as she sits here besides me -- and she insists she is not being pressured. . . .
Mother and I have discussed this so often -- now she says get it over and let me forget it -- as it worries her with everything undone
Her desire and intent is to have Dorcas rewarded while alive -- to have an Irrevocable Trust set up to let Dorcas have income and right to sprinkle money to Grandchildren when necessary. . . .
When Dorcas dies then the per stirpes takes over. . . .
Mother approves of Mr. Grant Buttermore knowing all details and keeping in this estate.
A meeting of Buttermore and John Cotsworth with Stevens was scheduled for December 13, 1973. Prior to this meeting Buttermore met with Mrs. Dutrow alone, as he testified was his customary practice, "so that I could get the intent directly from . . . the testatrix." During this two hour conference, according to Buttermore, he explained various legal and tax aspects of estate planning to Mrs. Dutrow. He also told her "that intent was much more important and controlled over the other two items, meaning taxation and liquidity." Buttermore also reviewed at length Mrs. Dutrow's assets and her present will and trusts. Among other things, Mrs. Dutrow, according to Buttermore's testimony, said that "her first priority was to make sure she had enough to last during her lifetime," for which purpose Mrs. Dutrow said she would need $26,000 per year. Buttermore also explained to Mrs. Dutrow that the practical effect of the per stirpes disposition of the November 24 trust agreement would be to enable the two plaintiffs, the Haynes brothers, ultimately to "receive twice as much as each of the other grandchildren," to which Mrs. Dutrow responded, according to Buttermore, "I didn't realize that."
Buttermore testified that he told Stevens at the December 13 meeting that Mrs. Dutrow "wanted to go to the per capita basis equally among the grandchildren." Stevens, according to Buttermore, was very skeptical that Mrs. Dutrow wanted to do this and asked Buttermore to doublecheck it with her. Buttermore replied that "[i]n my mind she'd already made that decision after our talk on December the eleventh."
On December 17 and 18, a concerned Stevens wrote Buttermore letters confirming the discussion of December 13, and on December 18, specifically adverted to the possibility of "undue influence." There is no indication in the record that Buttermore responded to Stevens on this matter.
Buttermore, in response to a call from Dorcas Cotsworth, again met alone with Mrs. Dutrow in ...