October 17, 2007
GAETANO V. BRACCO AND ANNETTE BRACCO, HIS WIFE, PLAINTIFFS-APPELLANTS,
ESTATE OF STEPHEN L. ORETO, DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Chancery Division, Ocean County, C-158-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted September 24, 2007
Before Judges Lintner and Sabatino.
In this partition case, plaintiff Gaetano V. Bracco, and his wife Annette Bracco*fn1 ("Bracco"), appeal a final judgment entered by the Chancery Division on August 4, 2006, after a non-jury trial. The partition action concerned real estate in Stafford Township that Bracco and the now-deceased Stephen L. Oreto had purchased as tenants in common in 1974. After a trial, the chancery judge divided the parties' interests in the premises, and awarded Oreto's estate ("the Estate") $102,624 as Oreto's net adjusted interest in the property.
On appeal, Bracco argues that the trial judge misapplied his discretion in awarding the Estate any interest in the property, contending that he exclusively deserves its full value. Alternatively, Bracco asserts that the trial judge used an incorrect date in valuing the Estate's separate interest. Bracco finally argues that the judge erred in not requiring the Estate to pay his counsel fees. We affirm.
Here are the pertinent facts, as developed at trial. Bracco and Oreto met one another in the late 1960s, when they were both single and working in Manhattan. A mutual friend informed them about a house for sale in Stafford Township, near the Jersey Shore. Bracco and Oreto decided to buy the property together, initially as an investment and also to use on weekends. On December 13, 1974, Bracco and Oreto purchased the Stafford property for $23,125. Each of them contributed one- half of the down payment and closing costs. The deed, which was never amended, listed Bracco and Oreto as tenants in common.
In or about 1976, Bracco and Oreto moved into the Stafford house as their primary residence. Shortly thereafter, the parties temporarily relocated back to New York for about six months, with Bracco residing with his parents in Staten Island and Oreto living in Brooklyn. They both resumed permanent residency at the Stafford house in 1977.
According to Bracco's testimony, the parties contributed about equally to the costs of the house until some time in 1977. Around this time, the parties began to have disagreements. Oreto had difficulty maintaining steady employment, and was plagued by alcohol and substance abuse. From that point forward, Bracco solely paid the mortgage, realty taxes, utilities, insurance, and other expenses for the house. Bracco also paid for various improvements to the property, including plumbing, fixtures, a new roof, new windows, new siding, an enclosed porch, and landscaping. Oreto, meanwhile, made no contributions except for occasional yard work.
In or about 1986, Oreto was admitted to a rehabilitation facility. After his discharge from that program, Oreto lived in Pennsylvania for awhile. When he returned to the subject premises, Oreto resumed drinking and remained unemployed. Oreto accumulated substantial debts, including unpaid DUI penalties, and borrowed funds from Bracco.
Bracco testified that he and Oreto discussed amending the deed to the property in 1989. At their request, an attorney prepared a new deed that would have changed their tenancy in common to a joint tenancy with a right of survivorship. However, Oreto came to the attorney's office intoxicated and refused to sign the deed. The new deed was never executed or recorded. After this incident, Oreto stopped residing at the house, although he continued to receive his mail there.
On November 13, 1991, Oreto showed up at the house intoxicated. An argument ensued. Oreto struck Bracco with a brass object and then threatened him with a knife. Bracco called the police, and both parties were arrested. Although no criminal charges were apparently filed, Bracco did obtain a Final Restraining Order (FRO) from the Family Part. The FRO, which remained in force for the rest of Oreto's life, prohibited Oreto from having contact with Bracco and barred him from the house. After the FRO was issued, Bracco never saw Oreto again. Bracco did not ask Oreto's parents, who happened to live two doors away, about his whereabouts.
Bracco married on September 15, 2001. He has lived at the subject premises with his wife since that time. Oreto died intestate on December 15, 2002. His parents are his sole heirs. His father, Benjamin Oreto, was appointed administrator of the Estate. Oreto left behind substantial debts.
After Oreto's death, Bracco and his wife brought this action in partition against the Estate, seeking clear title to the premises. The Estate filed a counterclaim, seeking a declaration that the Estate is entitled to a one-half share of the property. Both sides alleged in their pleadings various credits and offsets.
At trial, in which both parties were represented by counsel, the judge heard the testimony of Bracco, Benjamin Oreto, and a neighbor who had observed activities at the premises over the years, Theodore Wiles. The judge also considered photographs and numerous documents. The documents included two appraisals of the property. One of the appraisals, performed in November 1991, valued the property at $92,000. A second appraisal, performed in November 2005, valued the property at $360,000. The parties stipulated to a present value of the premises of $350,000.
After considering the proofs, the judge issued a written decision on June 15, 2006. The judge ruled that Oreto, by virtue of his continued part ownership of the premises as a tenant in common, was entitled to a one-half interest in its $350,000 stipulated present value, or $175,000, subject to offsets. The judge then applied numerous deductions to Oreto's $175,000 share, including sums for Bracco expended in maintaining and improving the property, along with an imputed management fee. These deductions, rounded to the nearest dollar, totaled $72,376, leaving Oreto with a net interest of $102,624. The judge directed that the Estate transfer its interest in the property to Bracco within forty-five days, subject to a judgment lien of $102,624. After initially assuming that there was legal authority for fee-shifting, the judge ultimately denied Bracco's application for an award of counsel fees.
The terms of the court's determinations were reduced to a final judgment on August 4, 2006. The judgment specifically provides that any liens or encumbrances against the Estate shall be deducted from its $102,624 interest in the property. This appeal by Bracco ensued. The Estate has not cross-appealed.
The power to maintain a suit in partition dates back to at least the reign of King Henry VIII in England. Wujciak v. Wujciak, 140 N.J. Eq. 487, 489. (Ch. Div. 1947). It is a right that may be exercised by an adult tenant, "without regard to the interests of the other tenants or the inconvenience or hardship that may result." Ibid. It is equally well settled that as between or among tenants in common, partition may normally be had as of course. Ibid.; see also Newman v. Chase, 70 N.J. 254, 261 (1976). Title, whether legal or equitable, and not the right to immediate possession, is the essential underpinning to a suit for the partition of realty. Hanson v. Levy, 141 N.J. Eq. 103, 106 (Ch. 1947) (citing Scott v. Scott, 112 N.J. Eq., 195, 198 (Ch. 1933)).
In circumstances where a tenant in common dies, his or estate may bring an action in partition to recover the decedent's undivided interest in the property. See N.J.S.A. 2A:56-1. As executor of his son's estate, Benjamin Oreto has the clear right to seek a judicial determination of his son's interest in the Stafford property. Reciprocally, Bracco has the right to demand partition, as the property's other tenant in common. The central issue for the trial judge therefore was to determine the value of Oreto's interest in the premises upon his death.
Partition is an equitable doctrine. Newman, supra, 70 N.J. at 263. "In the exercise of this power our courts of equity have not hesitated to exercise discretion as to the particular manner in which partition is effected between the parties." Ibid.; see also Baker v. Drabik, 224 N.J. Super. 603, 609 (App. Div. 1988). Among other things, a court may equitably reduce a tenant's share in the property where his or her co-tenant has made expenditures for taxes, mortgage interest, repairs, or other items necessary to maintain or enhance its value. See Baird v. Moore, 50 N.J. Super. 156, 164-65 (App. Div. 1958).
Because partition is a creature of equity, our standard of review of the terms of partition ordered by a chancery judge is limited. In such equitable contexts, we will not set aside the judge's determination unless it is shown to be arbitrary or capricious or an abuse of discretion. See In re Queiro, 374 N.J. Super. 299, 307 (App. Div. 2005) (affording "great deference" to a chancery judge's findings); Lohmann v. Lohmann, 50 N.J. Super. 37, 44-45 (App. Div. 1958) (finding that a trial court's factual determinations should not be lightly disturbed on appeal).
We discern no such misapplication of discretion by the chancery judge here. Nor did the judge, as Bracco contends, misapply the law.
Bracco argues that the judge erred in finding that Oreto died with a continued interest in the property. Bracco argues that Oreto manifested an intention to convert the property to a joint tenancy in 1991 when an attorney prepared a new deed, allegedly at the parties' mutual request. But that argument minimizes the fact that Oreto refused to sign the deed. An oral promise to convey or otherwise alter the terms of ownership of realty is ordinarily insufficient to transfer title. See N.J.S.A. 25:1-11a. The 1974 deed, still recorded in the County registry, reflecting Oreto's status as tenant in common, always remained in force and was never superseded. We defer to the trial judge's determination that the parties' aborted visit to a lawyer's office in 1991 had no legal significance.
We also are satisfied that the trial judge fairly took into account the totality of the circumstances in his allocation of the parties' interests. Bracco urges that the judge's award is inequitable, particularly in light of Oreto's failure to contribute to the house's expenses after 1977, his alcoholic and violent behavior on the premises that culminated with the 1991 FRO, and the many repairs and other expenditures that were solely paid for by Bracco.
Although we empathize with the difficulties that Oreto's irresponsible behavior caused Bracco over the years, the simple truth is that Bracco never attempted to partition the property during Oreto's life. In fact, Bracco enjoyed the exclusive use of the house for more than fourteen years after procuring the FRO that permanently excluded Oreto from the premises. Additionally, the judge did carefully tabulate Bracco's financial contributions to the property, even imputing a management fee for his time and efforts. We will not second-guess the judge's equitable assessment.
For similar reasons, the judge did not err in using the 2005 stipulated valuation of the premises rather than the 1991 appraisal to measure the parties' interests in the premises. Again, had the deed been altered in 1991, a different result would obtain. The judge was well within his discretion to utilize the 2005 valuation.
Finally, we sustain the judge's denial of counsel fees. Bracco points to no statute or court rule authorizing such fee-shifting in a partition action. See R. 4:42-9(a) (reaffirming and applying the "American Rule" on counsel fees, so that "[n]o fee for legal services shall be allowed," absent a showing that the claim for fees falls within one of the Rule's eight enumerated categories).