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Lebitz-Freeman v. Lebitz

August 01, 2002

ELLEN LEBITZ-FREEMAN, PLAINTIFF-APPELLANT,
v.
MARY ELIZABETH LEBITZ AS EXECUTRIX OF THE ESTATE OF ALEXANDER LEBITZ, DEFENDANT-RESPONDENT.



On appeal from Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-5795-99.

Before Judges Skillman, Carchman and Wells.

The opinion of the court was delivered by: Skillman, P.J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued January 29, 2002

This case involves a claim by plaintiff Ellen Lebitz- Freeman to certain securities which her father, Alexander Lebitz, held in a brokerage account at the time of his death. Defendant is the executor of decedent's estate, Mary Elizabeth Lebitz, who is plaintiff's sister.

On March 22, 1997, decedent opened a joint brokerage account at Dean Witter in his and plaintiff's names. Before opening the account, decedent informed his account representative, Jeremiah McNamara, that he was concerned about plaintiff and wanted the securities in his account to pass to her in the event of his death. Consequently, he attempted to open up a trust account with plaintiff as the named beneficiary. However, because decedent did not complete the paperwork required to open the account, McNamara suggested that he create a joint account, with a right of survivorship, to accomplish his purpose. Decedent and plaintiff then signed the Dean Witter form required to open such an account.

After the form was executed, decedent transferred the securities he had previously held in an individual Dean Witter account into the new joint account. The Dean Witter form that decedent and plaintiff signed to open this account provided that either of them could buy or sell securities and receive distributions of securities or cash "as fully and completely as if he alone were interested in said account, all without notice to the other or others interested in said account."

Decedent maintained sole control over the joint account. He was the only one who communicated with Dean Witter, he received the income from the account and paid the taxes, and the monthly statements were sent to his residence.

On December 9, 1997, after some discord developed between decedent and plaintiff, decedent authorized the transfer of the securities in the Dean Witter account to a joint account at Merrill Lynch. As a matter of office policy, although not a term of the agreement creating the joint account, Dean Witter required both holders of the account to sign the transfer form. To satisfy this requirement, decedent signed his own name and forged plaintiff's name on the form.

Shortly thereafter, on December 29, 1997, decedent transferred all the securities in the joint account to an individual account solely in his name. Decedent's representative testified that decedent told him that he had a number of reasons for transferring those securities from the joint account to an individual account, including that "they were his assets." Similar to Dean Witter, as a matter of office policy although not set forth in the joint account agreement, Merrill Lynch required both holders of a joint account to sign the form required for such a transfer. Decedent again signed his own name and forged plaintiff's name on the transfer form.

Decedent passed away on January 22, 1999. His will, which had been executed on September 9, 1998, was probated in the Monmouth County Surrogate's Office. The will made specific bequests of most of the securities in the Merrill Lynch account to defendant and another daughter, Rosanne Ford. Plaintiff also received certain specific bequests.

Plaintiff subsequently brought this action against her father's estate, alleging that the transfer of the Dean Witter joint account to Merrill Lynch and the subsequent transfer of the securities in the account into an individual account in decedent's name constituted a "conversion by false pretenses." Plaintiff sought to set aside the transfers and also sought compensatory and punitive damages.

After a bench trial, the trial court concluded in an oral opinion that even though decedent had forged plaintiff's signature on the forms transferring the securities in the joint account from Dean Witter to Merrill Lynch and then into his individual account, those forgeries were "immaterial" to decedent's "right" to those securities. Based on this opinion, the trial court entered judgment dismissing plaintiff's complaint.

Plaintiff's essential argument is that by creating a joint account, with a right of survivorship, decedent made an irrevocable gift to her of a joint interest in the securities, which he converted by forging her name on the forms transferring the account ...


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