On appeal from the Superior Court of New Jersey, Chancery Division, Probate Part, Camden County, Docket No. CP-089-01.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Lintner, S.L. Reisner and C.L. Miniman.
Residuary beneficiaries Alexandra Mazer and her brother Benjamin Mazer, two of five natural-born grandchildren of decedent Marvin Mazer, appeal from an October 17, 2005, order overruling their exceptions and approving the final accounting of the executrix, Sandra Mazer Moss, and approving the payment by the Estate of counsel fees in the amount of $199,572.17 to the firm of Cozen O'Connor for services they rendered in connection with the probate of the will, the defense of will-contest litigation, two interim accountings, and a final accounting. We reverse and remand for further proceedings.
The events giving rise to the exceptions to the final accounting provide important background to an understanding of the basis for the exceptions. Marvin Mazer had three children, Lawrence Mazer, Sandra Mazer Moss, and Norman Mazer. Alexandra and Benjamin are the natural-born children of Norman Mazer. Lawrence Mazer had one natural-born child, Zachary Mazer, and one stepchild, Erick Eidus. Sandra Mazer Moss had two natural-born children, Deborah Picker Vankin and David Picker.
Sandra Mazer Moss, the executrix under Marvin Mazer's 1999 will, submitted that will for probate after Marvin died on January 11, 2001. Her brother, Lawrence, filed a verified complaint on June 7, 2001, to contest the will and to secure the appointment of an administrator pendente lite. He did not name any individual defendants in the verified complaint. That day the court entered an order compelling Sandra to show cause why the will should not be stricken due to its invalidity.
In the first count of the verified complaint, Lawrence alleged that Marvin Mazer suffered from dementia at the time of his death, and that after Marvin's wife Sylvia died in 1999, Marvin became mentally unable to care for himself. He alleged that Marvin was not competent to make a will on October 7, 1999 (the 1999 will), and that Sandra exerted undue influence and duress over the decedent at the time the will was drafted. Lawrence further alleged that Sandra had arranged for a lawyer of her own choice to draft the will and that she manipulated Marvin into signing it. He contended that a confidential relationship existed between Marvin and Sandra, and that Marvin gave up all of his responsibility for his medical care and financial transactions to Sandra because she was a judge. Lawrence also alleged in the first count of the complaint that the attorney who drafted the will was a former judge who was a close personal friend of Sandra. Finally, he alleged that the will was inconsistent with representations made by the decedent prior to his death regarding the bequest of his property.
In the second count, Lawrence alleged that Sandra had violated the Pennsylvania Judicial Code of Conduct in the manner in which she conducted herself vis-à-vis her father and his affairs. He sought to have Sandra disqualified and subjected to sanctions or disciplinary measures for violations of that Judicial Code of Conduct.
In the third count, Lawrence alleged the making of an October 28, 1992, will (the 1992 will) and the creation at that time of two living trusts. The trusts bequeathed $5000 to the step-grandchild, Erick, and the remainder of the trust property was divided equally among the five natural-born grandchildren. Lawrence was the successor executor of the 1992 wills of both parents, and co-trustee of both trusts along with Sandra's daughter Deborah. At least one of the decedent's pieces of real property, a condominium in Atlantic City, was conveyed to the living trusts. Lawrence alleged that Sandra took advantage of her father's ill health and manipulated him into signing a will that did not actually reflect his wishes and that was contrary to the intent of the 1992 living trusts.
In paragraph twenty-two of the third count, Lawrence alleged that Sandra advised him "that she did this because she did not agree with Decedent's intent to leave his estate to the grandchildren and because she wanted to retire to [decedent's] Florida Condominium." He alleged that Sandra exerted undue influence and made misrepresentations to further her own financial gain not only with respect to the real estate in Florida, but also with respect to all of the tangible personal property, which was bequeathed solely to her under the 1999 will, yet had been distributed equally among the three children pursuant to the 1992 will.
In the fourth count of the verified complaint, Lawrence alleged that Marvin owned a condominium in Palm Beach, Florida, which he devised to Sandra in the 1999 will, rather than bequeathing it to the 1992 living trusts for the benefit of the five natural-born grandchildren, as had been Marvin's intent in 1992. Lawrence alleged in paragraph twenty-eight that, after execution of the 1999 will, Marvin deeded the Florida Condominium together with all of its furnishings and personalty to Sandra in December 1999. He also alleged that Sandra used her power and leverage over her father to have him transfer ownership of other tangible personal property to her before his death.
In the fifth count Lawrence identified all of the persons interested in the Estate and sought to have all of the assets of the Estate preserved in the hands of an impartial, disinterested and fit person. The ad damnum clause contains thirteen prayers for relief demanding that, among other things, any assets belonging to decedent or his wife that were wrongfully converted by Sandra be restored to the Estate and that the court find that the 1999 will was invalid and unenforceable due to the undue influence of Sandra, as well as the testator's incapacity. Lawrence also sought imposition by the court of sanctions or disciplinary measures with respect to Sandra's improper judicial conduct and for damages resulting therefrom.
Cozen O'Connor, on behalf of the Estate, filed an answer to the complaint. The firm defended all of the allegations of the verified complaint, including those of improper conduct on the part of Sandra.*fn1 On August 10, 2001, Sandra moved to dismiss the second count of the verified complaint alleging violations of the Pennsylvania Judicial Code of Conduct. That motion was granted on September 10, 2001, for lack of jurisdiction and for failure to state a claim. Sandra did not move to strike the portion of the fourth count of the verified complaint that attacked the inter vivos gifts of real estate and tangible personal property on the ground that Sandra was not a party to the action, nor did she move to dismiss the claims respecting the inter vivos gift of the condominium on the ground that Lawrence had no standing to dispute it.
On September 18, 2002, Lawrence filed a First Amended Complaint. He alleged the execution of the 1992 will and alleged that he was bringing the action individually, as well as in his capacity as the executor of the 1992 will. Except for these additions, the first count of the amended pleading was identical to the original complaint. Count Two, naturally, was deleted and the remaining counts of the verified complaint were renumbered, but the allegations were not otherwise modified. He did not name any additional parties to the suit.
The litigation between Lawrence and Sandra dragged on for two years. Concerned about the financial drain of the litigation on the Estate, Norman filed a motion returnable July 7, 2003, seeking an order compelling Sandra and Lawrence to be solely responsible for the legal fees, costs, and other expenses related to the litigation.*fn2 Norman certified that the 1992 will provided that the tangible personal property of the Estate would go to Lawrence, Sandra and Norman, whereas under the 1999 will all of the tangible personal property went to Sandra. He also certified that, under the 1992 will and living trusts, all of the real property and intangible personal property went to the living trusts, under which the step-grandchild, Erick, received $5000 and the remainder was split equally among the five natural-born grandchildren. By contrast, under the 1999 will, the Florida Condominium and the tangible personal property was bequeathed to Sandra, and only the intangible personal property was split equally among the five grandchildren.*fn3 Norman certified that he was making the motion because it was inequitable and patently unfair that Norman's minor children should be compelled to pay the counsel fees of the litigation, because the defense of Sandra was not benefiting the Estate, only Sandra.
Sandra filed a certification in opposition to Norman's motion. She certified that she did not bring the lawsuit, but was only defending it. She stated that as the personal representative of the Estate she was obligated to defend the testator's intent in the will contest and the gift contest. She agreed that the Estate was being depleted and that she had been unable to settle the litigation as a result of Norman's conduct, because he refused to participate in the settlement of the litigation. She discussed at length all of the occasions when Norman was unwilling to be drawn into the litigation. She also blamed the expense of the litigation on Lawrence and pointed out that she had successfully moved for an order striking count two, which charged her with violations of the Pennsylvania Judicial Code of Conduct. She expressed the opinion that, if Norman had only participated in the settlement negotiations, the case could have been resolved, and she accused Norman of not acting in the best interests of his children. Sandra also attached an earlier certification that she had filed in the case in which she pointed out that Lawrence, personally, only stood to gain one-third of the total tangible, personal property if the 1992 will was probated, roughly $7000.
On July 8, 2003, Norman filed a responsive certification. In that certification he refuted each of Sandra's allegations that he had thwarted settlement of the will contest. He explained that his position had been that his sister and brother should come to an agreement and then present it to him and he would take a position on the proposed settlement. He further explained that he felt that mediating the case would be a waste of the estate's assets and did not want to participate, again advising Sandra and Lawrence that if they came to an agreement he would consider it. However, by the Summer of 2003 no agreement had been reached.
Norman objected to having the cash portion of the Estate fund the litigation over the Florida Condominium. He stated that Sandra was defending her receipt of the Florida Condominium against allegations of undue influence and was using the cash portion of the Estate to fund that defense. He averred that his father would never have wanted his inheritance to go to attorneys in a dispute such as this.
Norman denied that any settlement in principle had been reached or presented to him in June 2002. He had considered a proposal and made counteroffers, but nothing was resolved because Sandra would not commit to anything. He pointed out that it was Sandra's actions in obtaining a large portion of his father's assets prior to his death and her conduct in arranging for a new will that led to the will-contest litigation. He also noted that Sandra had received the condominium in Florida that would have gone to the five grandchildren under the 1992 will. He certified that he was powerless to conserve his children's remaining inheritance, and, as a consequence, filed the motion seeking to have a determination of responsibility for counsel fees. The court never decided Norman's motion even though all required materials were presented to the court.
On December 23, 2003, Sandra filed a motion for partial summary judgment. In support of the motion, Sandra certified that the partial summary judgment motion concerned only her father's gift of the Florida Condominium, not her father's will or any of his various gifts of personalty to her. She certified that "[t]he main issue in this case is the issue regarding the Florida Condominium. The other issues are minor in comparison." One of the subheadings in the certification is "THE VALIDITY OF THE GIFT OF THE FLORIDA CONDOMINIUM IS THE MAIN ISSUE IN THIS CASE." Of course, that gift was made after the 1999 will was executed.
Sandra again pointed out that Lawrence stood to gain very little from the will contest. Because the condominium had been gifted, it was not Estate property.*fn4 She contended that the value of the personalty did not justify the expense of the litigation. She also expressed an intention to share the personalty passing under the 1999 will with her brothers. Because the Florida Condominium was gifted to her by her father, all of its contents also were gifted to her. She stated "[t]he value of the Florida Condominium eclipses the value of the personalty and, as such, is the key issue in this litigation."
Sandra set forth facts supporting her contention that the gift was made knowingly, freely, and with all mental capacity intact. She explained her father's reasons for gifting the condominium to her. She also explained why she selected the attorney from Cozen O'Connor to prepare a new will for her father and denied being involved in any discussions about the content of the will. The attorney who drafted the 1999 will also prepared the deed transferring the Florida Condominium from Marvin to Sandra. She blamed Lawrence for causing the Estate to be depleted by over $170,000 in legal fees and expenses, and stated that Lawrence never should have challenged the gift of the Florida Condominium to Sandra. She pointed out that Lawrence is pursuing his challenge to my father's gift of the Florida Condominium to me and he stands to gain nothing if he is successful.
If the Florida Condominium were drawn back into the Estate, it would become part of the Estate's residuary which passes to the five Natural Grandchildren. Three of the Natural Grandchildren are adults (my children and Plaintiff's son). None of them are pursuing this challenge. My children have told me that they do not support Plaintiff's actions. The two minor Natural Grandchildren are Norman's children. Norman is not a party to this suit. Indeed, Norman testified at his deposition that he did not want to take time and energy away from his children and his business to pursue this litigation. He stated that he felt it would not be worth it considering the amount of money and other things could be won and considering the fact that challenges such as this are difficult to win under the best circumstances.
The record does not contain any response to this motion, nor does it contain an order disposing of it. It was carried by the judge and never listed for disposition.
On February 25, 2004, Lawrence and Sandra placed a settlement of the will contest on the record. Counsel for Norman was present at the time. Alexandra had reached the age of majority, and counsel on her behalf and on behalf of Norman as the guardian of Benjamin, objected to the settlement, stating that they still had a motion pending with respect to the payment of attorney's fees out of the Estate. The judge asked if Alexandra and Benjamin had filed an answer in the will contest, but the attorney was unable to represent that they had done so. The court then stated, "So at this juncture, as far as I am concerned, . . . there are two parties to this proceeding. The
[E]state as represented by the executrix, and Lawrence Mazer who has filed a complaint." The court would not entertain the objections of Alexandra and Benjamin to the settlement. Their counsel then asked if his clients would be entitled to object to the settlement on a final accounting of the Estate. The dialogue continued:
THE COURT: Oh, I'm not -- I'm making no comment prospectively. I'm talking about the claims made by Lawrence Mazer by virtue of a formal complaint and with respect to the Estate's response by way of answer. That's all I'm making reference to.
MR. MELLETZ: I understand that. And what I am referring to, Your Honor, so that the record is clear, was the final accounting and the objections to the accounting. Because I don't want anybody saying hey no one said anything at the time of this --
MR. MELLETZ: -- putting on the record.
THE COURT: Your client's -- if your client's children are heirs under the law, and an accounting is filed, they have a right to file any objection as any beneficiary would have the ...