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In re Estate of Shinn

June 20, 2007

IN THE MATTER OF THE ESTATE OF EDWARD H. SHINN, IV, DECEASED.
STACEY SHINN, INDIVIDUALLY, PLAINTIFF-APPELLANT, AND STACEY SHINN, AS GUARDIAN AD LITEM OF THE INFANT, SAMANTHA SHINN, PLAINTIFF,
v.
BONNIE SCHAAL, AS GUARDIAN AD LITEM OF THE INFANT, JODI SHINN, EDWARD V. SHINN, V, INDIVIDUALLY, COURTNEY SHINN, INDIVIDUALLY, AND STEPHEN SHINN, EXECUTOR AND TRUSTEE FOR THE ESTATE OF EDWARD SHINN, IV, DEFENDANTS-RESPONDENTS, AND BONNIE SCHALL, INDIVIDUALLY, DEFENDANT.



On appeal from the Superior Court of New Jersey, Chancery Division, Probate Part, Morris County, Docket No. MRS-P-1104-98.

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

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Argued May 9, 2007

Before Judges Parker, C.S. Fisher and Yannotti.

In this appeal, we consider, among other things, whether the trial judge properly invoked the doctrine of equitable estoppel in order to enforce plaintiff Stacey Shinn's premarital waiver of an elective share to the estate of her late husband, Edward Shinn, IV, which, in the circumstances, was otherwise rendered unenforceable by N.J.S.A. 3B:8-10 and N.J.S.A. 37:2-38. Because "equity follows the law," the doctrine of equitable estoppel should not have been utilized to override the Legislature's declaration that a premarital agreement, which did not fully disclose what was being waived or which did not contain an adequate waiver of such a disclosure, must not be enforced.

I.

Stacey and Edward met in August 1991 and, by September 1992, began living together in Edward's rented townhouse. In August 1994, Edward purchased a home in Rockaway, where they thereafter resided together.

Stacey and Edward became engaged in December 1994, and agreed to a small wedding in Hawaii in August 1995. Approximately one month before the wedding, Stacey planned to visit her mother and sister in Florida. The night before this trip, Edward presented Stacey with a draft of an agreement prepared by his attorney.*fn1

The agreement included, among other things, a waiver of Stacey's right to an elective share of Edward's estate. It also purported to limit Stacey's right to equitable distribution if she and Edward divorced, entitling her only to $3,000 multiplied by the number of years the parties were married prior to the dissolution of the marriage if dissolution occurred on or before their tenth wedding anniversary, and $5,000 multiplied by the number of years the parties were married if dissolution occurred after their tenth wedding anniversary.*fn2 In addition, the agreement contained limits on Stacey's right to alimony upon a dissolution of the marriage.*fn3 Edward also agreed that in the event of his death, Stacey would be entitled to receive a death benefit of $100,000.

Stacey left for Florida the day after receiving a copy of the agreement. She conversed with a New Jersey attorney about the agreement while in Florida. Stacey's attorney, Alan Rich, Esq., then contacted Edward's attorney, Edward Rosen, Esq., and, on July 17, 1995, Rosen forwarded to Rich a copy of the agreement.

Following his review of the agreement, Rich requested that Rosen provide the financial information that was referenced, but not included, within the agreement; Rosen immediately sent to Rich a copy of a document entitled "Financial Statement of Edward H. Shinn, IV, as of July 18, 1995," and advised Rich to append this document, as Rider A, to the agreement.

The financial statement revealed Edward's ownership of: a certificate of deposit (in the amount of $20,000); 100% of the stock in Edward Shinn United Crane, Inc. (valued at $635,000); 50% of the stock in Shinn Brothers Associates Inc. (valued at $80,000); 50% of the stock in Shinn Brothers Properties Inc. (valued at $6,750); a loan receivable due from Shinn Brothers Properties Inc. (in the amount of $52,000); 1.83% ownership of commercial rental properties referred to as Kenilworth Properties (the value of which was described on the document as "not available"); 6.66% ownership of commercial rental properties referred to as Lakewood Properties (the value of which was described as "not available"); 6% of the stock in United Crane & Shovel Service Co. Inc. (the value of which was described as "not available"); and the Rockaway residence (the equity of which was valued at $60,000 based upon an original purchase price of $290,000 and an outstanding mortgage of $230,000).

The financial statement did not disclose: Edward's earnings (of approximately $300,000 per year); his financial obligations relating to his purchase of the entity later known as Edward Shinn United Crane, Inc.; an annuity of $95,022.32; and a pension payable to Edward at age 55 of $892.76 per month and at age 60 of $1,539.65 per month. And, as already mentioned, the financial statement failed to attribute a value to Kenilworth Properties, Lakewood Properties, or United Crane & Shovel Service Co., Inc. As a result of these omissions, the figures provided by the financial statement indicated that Edward had a net worth of only $853,750. Contrary to this representation, it was revealed at trial that in applying for life insurance in 1992 and again in 1995, Edward represented his net worth to be in excess of $6,000,000.

On July 25, 1995, Rich expressed to Rosen that there were problems with the agreement, including the lack of a complete statement of Edward's financial condition. Rosen responded that Stacey and Rich had already received all the information they were going to get.

On July 26, 1995, Rich met with Stacey. He attempted to negotiate changes in the agreement and obtain additional financial information, but Rosen reiterated Edward's intractable position and advised that Stacey would have to sign the agreement as is or the marriage was off. When this response and Rich's advice that she not sign the agreement was relayed, Stacey left Rich's office in tears. She called Edward a few minutes later, and pleaded for him to give Rich additional information as well as his consent to the changes in the agreement that Rich sought. Edward summarily refused, saying that Stacey "had to sign it the way it was or [they] weren't getting married." This further upset her, but Stacey returned to Rich's office and signed the agreement.*fn4

Stacey and Edward married in Hawaii on August 16, 1995. On May 17, 1996, Stacey gave birth to Samantha.

Following Samantha's birth, Edward and Stacey went to Rosen's office to sign wills. Edward's will directed, among other things, that upon his death Stacey would receive the Rockaway home, and that his estate would pay off the mortgage on that property. The remainder of Edward's estate was to be split equally between ...


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