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In re Johnson 1961 Charitable Trust

February 15, 2001

IN THE MATTER OF THE TRUST CREATED BY AGREEMENT DATED DECEMBER 20, 1961 BY AND BETWEEN JOHN SEWARD JOHNSON, GRANTOR, AND PHILIP B. HOFMANN, GUSTAV O. LIENHARD, AND KENNETH PERRY, TRUSTEES, (KNOWN AS THE JOHN SEWARD JOHNSON 1961 CHARITABLE TRUST)


The opinion of the court was delivered by: Verniero, J.

Argued October 10, 2000

On certification to the Superior Court, Appellate Division.

This appeal involves a dispute among the offspring of J. Seward Johnson (Seward Sr.), son of the founder of the Johnson & Johnson corporation. It is one of many such disputes involving trusts or trust property that have arisen within the Johnson family over the past three decades. See Hill v. Estate of Richards, 142 N.J. 639 (1995); Wiedenmayer v. Johnson, 106 N.J. Super. 161 (App. Div.), aff'd sub nom. Wiedenmayer v. Villanueva, 55 N.J. 81 (1969).

Seward Sr.'s son, John Seward Johnson, Jr. (Seward Jr.), divorced his first wife in 1965. During the divorce proceeding, Seward Jr. acknowledged in writing that he was the father of Jenia Anne Josephine Johnson (Jenia). That acknowledgment is consistent with Jenia's birth and baptismal certificates, each of which identifies the child's father as Seward Jr. At the conclusion of the proceeding, the trial court found as fact that Seward Jr. was Jenia's father and entered judgment accordingly.

Some thirty-five years after entry of that judgment, we are called on to determine whether Jenia's parentage may be collaterally attacked by third parties seeking to defeat her existing status as an eligible beneficiary under a trust established by Seward Sr. in 1961. The trial court foreclosed the third-party challenge, concluding that the prior adjudication of Seward Jr.'s paternity applied to the present administration of the trust. The Appellate Division disagreed, remanding the matter for further proceedings. We now reverse.

I.

The complete history of this case is extensive. We recite only those facts that are pertinent to this appeal. Seward Jr. married Barbara Eisenfuhr in Virginia City, Nevada, on September 16, 1956. Two years later, Seward Jr. adopted Barbara's son, Bruce Alexander, who was born of a previous marriage. On January 11, 1961, Mrs. Johnson gave birth to Jenia in Princeton, New Jersey. Seward Jr. is listed as Jenia's father on her birth certificate, as well as on a May 20, 1961, baptismal certificate. (The parties variously refer to Jenia as Jenny Anne or Jennie Anne Josephine Johnson, Kookie Johnson, and Jeniah Johnson. We refer to her as Jenia, the first name listed on her birth certificate.)

On December 20, 1961, Seward Sr. created an irrevocable charitable trust (the 1961 trust), naming four of his six children and eleven grandchildren as the trust's measuring lives. In a trust instrument, a "measuring life" refers to the lives of individuals named by a grantor whose death as a group would terminate the trust. The 1961 trust expressly names Jenia for that purpose.

The trust was funded with 4,600 shares of Johnson & Johnson common stock. The trust directs the trustees to pay all net trust income to "educational, religious, or charitable organizations" until the earlier of January 10, 1997, or the deaths of Seward Sr.'s four named children and eleven named grandchildren. Thereafter, the trust authorizes the trustees, in their "absolute and uncontrolled discretion," to distribute the trust's proceeds to Seward Sr.'s four children, Mary Lea Johnson Ryan, Elaine Johnson Wold, Seward Jr., and Diana Melville Johnson Stokes, "their spouses, and their issue, or any one or more of them[.]" The trial court summarized the trust's distribution provisions as follows:

All of the net income from the 1961 Trust has been paid to charitable organizations since its creation on December [20], 1961. On January 10, 1997, the mandatory charitable phase of the Trust will conclude. Thereafter, the Trustees are authorized, in their absolute and uncontrolled discretion . . . whenever they deem it to be for his or her best interests . . . , to pay any and all of the income and corpus of the Trust "to and among the Grantor's four children . . . , their spouses, and their issue, or any one or more of them . . . ." The Trust provides for its termination "upon the death of the last to survive of the Grantor's . . . four children . . . and the Grantor's eleven [named] grandchildren . . ." and for the distribution of any remaining property to the Grantor's children and their issue based upon a formula of survivors at a generational level.

As defined in the 1961 trust, "issue" includes "an adopted child and children[.]" Under the trust, Jenia would be considered the issue of Seward Jr. for purposes of distribution unless her parentage was successfully contested. Because several of the persons named as measuring lives are still living, the mandatory charitable phase of the trust concluded on January 10, 1997. According to the Appellate Division, the value of the trust is estimated at $350,000,000.

Seward Jr. filed a complaint for divorce in 1962, asserting as grounds his wife's alleged cruelty (which included allegations of desertion) and adultery. To prove the adultery claim, Seward Jr. sought and obtained an order from the Chancery Division directing that Jenia and the parties submit to blood tests in advance of trial. The Appellate Division reversed that directive, concluding that it was premature. In an opinion written by Judge Conford, the court stated that an infant, as ward of the court acting as parens patriae, is entitled to its discretionary protection from the threats in respect of its legitimacy and property rights involved in the taking of blood grouping tests in these circumstances unless and until no alternative is left to such action in the performance of the court's paramount objective to ascertain the truth in order to do justice in deciding the controversy between the parties hereto.

The panel remanded the matter, directing that the trial court consider other evidence of Mrs. Johnson's alleged adultery prior to considering Seward Jr.'s blood-test application.

Thereafter, Seward Jr. admitted that he was Jenia's father and signed a document entitled "ACKNOWLEDGMENT OF PATERNITY." That acknowledgment states in relevant part: "TO WHOM IT MAY CONCERN: The Undersigned, JOHN SEWARD JOHNSON, JR. . . . hereby unequivocally acknowledges paternity of Jennie Anne Josephine Johnson . . . born of Barbara E. Johnson at Princeton, New Jersey, on January 11, 1961." The document was signed, witnessed, and notarized on March 3, 1965.

The trial court granted the divorce on the ground of Mrs. Johnson's desertion. The court also made several findings of fact, including "[t]hat Jennie Anne Josephine Johnson was duly born of the marriage." Additionally, the judgment nisi entered at the conclusion of the proceedings provides that "the paternity of [Seward Jr.] as the father of the infant, Jennie Anne Josephine Johnson, born January 11, 1961, is hereby adjudicated." (A judgment nisi is an interim decree that ripens into a final judgment unless challenged. Black's Law Dictionary 944 (5th ed. 1979)). Because neither Seward Jr. nor Barbara Johnson contested the judgment nisi, it became final on June 14, 1965. The marriage of the parties dissolved on that date.

In 1968, in connection with a dispute involving an unrelated 1944 trust, see Weidenmayer, supra, 106 N.J. Super. 161, Seward Jr. testified, "I do not consider these [Barbara Johnson's children] my children. . . . These are children of other men. This is my position." That apparent disavowal of Jenia's paternity, however, was not adjudicated by any court. Years later, on September 28, 1977, in an earlier phase of the administration of the 1961 trust, Seward Jr. again represented that he was Jenia's father. In that action, he petitioned the court to appoint a guardian ad litem for all of his children, including Jenia. The petition, signed by Seward Jr., unambiguously states that he "is the father of Jenny Anne Josephine Johnson[.]"

After his son began divorce proceedings, but before the court entered the divorce decree, Seward Sr. created another charitable trust on December 31, 1963 (the 1963 trust). That trust was funded with 12,730 shares of Johnson & Johnson common stock. The provisions of the 1963 trust generally track the language of the 1961 trust, except that the 1963 trust expressly excludes Jenia and her half-brother, Bruce Alexander, as distributees. Specifically, the 1963 trust provides "that no child born to or adopted by the Grantor's son, JOHN SEWARD JOHNSON, JR., during his marriage to BARBARA E. JOHNSON (including specifically but not in limitation thereof BRUCE ALEXANDER JOHNSON and JENNY ANNE JOSEPHINE JOHNSON) and no issue of any such child shall be included as a distributee[.]"

During the course of their administration of the 1961 trust, the trustees filed nine intermediate accountings. Throughout those accountings, the trustees named Jenia as a grandchild of Seward Sr., i.e., "issue" of Seward Jr., and in so doing, they presumably considered her to be an eligible beneficiary under the trust. At no time in the prior accountings did anyone challenge Jenia's status under the 1961 trust.

The trustees filed a verified complaint with the Chancery Division for settlement of the ninth intermediate accounting on March 27, 1996. Because the trust's January 10, 1997, expiration date was approaching, the trustees sought instruction from the court on several subjects, including the interpretation of the term "issue" and who comprised that class, and whether the trustees' understanding of the class of beneficiaries was correct.

At the initial case conference, Seward Jr., his second wife, and their two children, John Seward Johnson III and Clelia Constance Johnson, challenged Jenia's inclusion as a member of the class of eligible beneficiaries under the 1961 trust. Jenia's cousins, Eric Bruce Ryan and Hillary A. Ryan (the Ryans), children of Seward Jr.'s deceased sister, made a similar challenge. In a letter to the trial court, the trustees expressed the view that the paternity contest might be resolved as a matter of law, thereby avoiding lost time and expense. The trustees reiterated that position at the second case conference. The trial court agreed, directing that Jenia move for partial summary judgment on the issue of paternity. Jenia complied, seeking confirmation of her status as an eligible beneficiary under the 1961 trust and requesting that discovery regarding that subject be precluded.

In an unreported opinion and subsequent order, the trial court granted partial summary judgment in favor of Jenia. The court held that Jenia's status as a child of Seward Jr. was conclusively established as a matter of law in 1965. The court further determined that Jenia was an eligible beneficiary under the 1961 trust, and that all other parties were precluded from seeking discovery relating to that issue. In so ruling, the trial court concluded that the twenty-three-year limitations period found in the New Jersey Parentage Act, N.J.S.A. 9:17-38 to -59 (the Act), served as a statute of repose that barred any challenge to the 1965 determination of Seward Jr.'s paternity. The court considered the Act to be the exclusive method for determining paternity, thus confirming that Jenia was "a child of J. Seward Johnson, Jr."

Before the Appellate Division, the Ryans, Seward Jr., and his immediate family argued that the trial court erred in its ruling in respect of the Parentage Act and raised other issues. In an unreported opinion, the Appellate Division agreed with the trial court that Seward Jr., his second wife, and their children were barred from contesting Jenia's legitimacy on account of res judicata, collateral estoppel, and judicial estoppel. The panel disagreed, however, with the trial court's interpretation of the Act. It concluded that the Act's time limitations do not apply to actions seeking to construe the language of a will or trust.

Further, the panel rejected Jenia's argument that the Ryans lacked standing to challenge Seward Jr.'s paternity. The panel also reasoned that laches did not bar that challenge because if made earlier, the challenge to Seward Jr.'s paternity would have been rejected as premature. The panel remanded the matter to the trial court to determine whether Jenia "is ?issue' [of Seward Jr.] and whether [Seward Sr.] might have intended her to benefit even if she were not the child of Seward, Jr."

The Appellate Division disposed of other issues not pertinent to this appeal. We granted Jenia's petition for certification, limited to the parentage issue, and granted a nearly identical petition filed by the appointed guardian ad litem of Jenia's son, Henry Bruce Sheeran. 163 N.J. 77 (2000). We denied the cross-petition, filed by John Seward Johnson III and Clelia Constance Johnson, challenging that part of the Appellate Division's decision barring them from contesting their father's paternity of Jenia. 163 N.J. 78 (2000). Our sole focus is on whether the Ryans or similarly situated persons may challenge Jenia's parentage and beneficiary status within the context of the administration of the 1961 trust.

II.

The Court resolves this dispute by analyzing the interplay among the policies undergirding the Parentage Act and certain other principles. We also address the doctrine of probable intent, as well as the Ryans' claim that principles of fundamental fairness or due process require that they be permitted to contest Jenia's parentage.

A.

We begin our analysis by reciting the long-standing precept that "a child born in wedlock is presumed to be the legitimate offspring of the husband and wife." Sarte v. Pidoto, 129 N.J. Super. 405, 410 (App. Div. 1974). That principle has deep roots in New Jersey, Wallace v. Wallace, 73 N.J. Eq. 403 (E. & A. 1907), was reaffirmed in this jurisdiction at about the time of Jenia's birth, In re Adoption by K., 92 N.J. Super. 204 (Cty. Ct. 1966), and is widely recognized in jurisdictions throughout the country. See Kowalski v. Wojtkowski, 19 N.J. 247, 254-61 (1955) (tracing history of rule from law of England in 1777); 41 Am. Jur. 2d Illegitimate Children § 10, at 212 (1995) ("The principle that children born in wedlock are presumed to be legitimate is universally recognized.") (footnote omitted).

The common-law presumption of legitimacy sought to avoid the effects of the doctrine of nullius filius (the child of nobody), an ancient tenet that essentially treated an illegitimate child as a non-person in the eyes of the law. As explained in a prior opinion of this Court:

At common law, the putative father was under no obligation to maintain his illegitimate offspring. The duty of support came by statute: first, on the motion of the overseer of the poor or other local representative to exonerate the municipality, and then at the instance of the mother or other interested person on behalf of the child itself, the latter a measure of relief conforming with others of the same pattern to a more enlightened concept of social justice as against the harsh medieval doctrine of nullius filius that, for the moral sin ...


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