November 16, 2007
HENRY T. DIMEGLIO, PLAINTIFF-RESPONDENT,
DENISE DIMEGLIO, DEFENDANT-APPELLANT.
On appeal from the Superior Court of New Jersey, Civil Part, Chancery Division, Atlantic County, C-116-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted: September 24, 2007
Before Judges A.A. Rodríguez and C.L. Miniman.
This is an appeal from a final order of ejectment from a home in Brigantine in favor of plaintiff Henry T. "Rick" DiMeglio and against defendant Denise DiMeglio. The final judgment dismissed Denise's counterclaim, which asserted that the inter vivos deed from her husband, Henry J. DiMeglio, to Rick, his only surviving child, was the fruit of undue influence exerted by Rick, with whom Henry had an alleged confidential relationship. The final judgment also dismissed Rick's claims that the marriage of Denise and Henry was void and the transfers of pay-on-death bank accounts in favor of Rick to pay-on-death accounts in favor of Denise and Rick were invalid. No appeal was taken from these determinations. We affirm.
Henry, a retired supervising aircraft mechanic, was in his late eighties when he passed away. Several years after the death of Henry's first wife in 1984, he moved from Maryland to Brigantine, where he purchased the home that is the subject of this appeal.
Henry had very little formal education. He did not graduate from high school as a youth, but eventually earned a GED. Rick and several other witnesses described Henry as an extremely "self-sufficient" and "independent man." He did not rely on Rick in any way. In fact, even as Henry progressed in age, he never requested any help managing his financial affairs, performing physical tasks or securing medical care.
Rick is a college graduate with degrees in commerce and finance, with a concentration in accounting. For many years, he worked as a certified public accountant, but more recently has been employed in the aviation industry as a pilot for a private company. He is currently married, has a young daughter and lives in Florida.
Rick described his relationship with his father as fairly "typical." He testified that they were "close," but admitted that he visited his father less frequently throughout the years because they lived such a distance apart. Rick encouraged Henry to move to Florida so they could see each other more frequently. Rick admitted that he did not see his father between March 2003 and April 2005, when his father was admitted to the hospital. Rick, however, stayed in close telephone contact with Henry.
In the early 1990s, Henry became friendly with Pete J. Capalino. On almost a daily basis Henry and Pete would go to Atlantic City to the casino where Denise worked. Through Pete, Henry became friendly with Denise. Pete died on May 22, 1994, but Henry and Denise remained friends throughout the years. Denise began to share Henry's home in the late 1990s but the relationship was purely platonic, not marital.
In 2000 Rick and Henry had several conversations about estate planning and discussed the importance of drafting a will. Henry told Rick that he already had a will and showed him a handwritten paper with "cross outs" on the face of the document. Rick testified that he did not read the document in any great detail. However, having concerns about its potential validity and efficacy, Rick encouraged Henry to draft a new will.
Thereafter, Henry told Rick that Rick was the beneficiary of several sizeable payable-on-death accounts. Henry stated that, as his only son, Rick would also inherit Henry's home upon his death. Rick repeated his earlier suggestion that Henry prepare a will effectuating his stated intentions, but Henry insisted that he could simply transfer his home to Rick.
Rick testified that he initially recommended that he and his father hold joint ownership of the house, but Henry wished to transfer sole title to Rick. Rick told Henry that the next step would be to contact a title company to transfer the property. Henry, however, preferred to have Rick handle all of the details related to the transfer, which Rick agreed to do. Henry never obtained any outside legal advice related to the transfer.
Rick then contacted a title company in New York. He told the title company that his father wished to transfer property to him and, thereafter, an attorney prepared a deed to that effect. When Rick received the deed, he contacted Henry to notify him that he would be mailing the deed to him for his execution. After Henry received the deed, he executed the document. The effective date of the deed was September 6, 2000. Immediately following the transfer, Rick told his father that he needed to file a gift-tax return for the property. Henry continued to remain primarily responsible for all expenses of the home, including property taxes.
Following the 2000 transfer, Rick testified that Henry never complained or expressed any regret about transferring title to the property to him. Rick further testified that his father never once questioned whether he had given title of the property to him. Henry's neighbor, Terry Carracio, testified that Henry had always expressed his intent to leave his home to Rick, and that this intent was expressed both prior to and after Denise moved into Henry's home. Carracio testified that Henry seemed mentally fine and understood his assets until sometime in 2002.
Denise admitted that Henry never communicated to her that he regretted transferring ownership of his home to Rick. In fact, she admitted that when Henry transferred the property he believed it was a "good idea" and that "he did not make a mistake." Further, Denise testified that Henry never explicitly told her that he ever asked Rick to return the property.
Denise testified that by 2002 Henry could no longer manage the staircases in his home and they discussed moving to a home with only one level. They began looking for real estate and sometime in 2002 found a condominium in a high-rise building that had an elevator from the parking garage to the tenth floor. They were both quite pleased with the unit but Henry said that he could not afford to pay for it. After urging Henry to sell his home, he told her he could not do so because he had transferred the title to Rick. Denise then urged Henry to telephone Rick immediately and ask for the return of title. Denise testified that while listening on an extension to the telephone conversation that day between Henry and Rick, she heard Henry ask Rick to return the property.
Rick denies that this conversation ever took place. Instead, he testified that in 2002 Henry was notified by the Brigantine Tax Collector that he was ineligible to receive a tax rebate because the property was no longer titled in Henry's name. At his father's direction, Rick contacted the tax collector's office and learned that, by granting Henry a life estate, his father would regain his tax-rebate eligibility. Rick testified that he contacted an attorney and executed a deed, which granted his father a life estate.
Denise testified that when it became apparent that Henry could not afford to purchase another home, Henry and Denise moved to a local senior-citizen complex sometime in 2002. On July 19, 2004, Henry and Denise were married and it was only at that point that their relationship became intimate. Henry was 88 and Denise was 75. Rick repeatedly asked Henry to move with Denise to Florida so that Henry could be closer to Rick and Henry's granddaughter. Rick offered to sell the Brigantine home and buy a home in Florida in which they could live. Henry never accepted any of these offers to move and they remained in the senior-citizen apartment.
Rick testified that, while Henry was in the hospital in April 2005, Denise precluded him from seeing his father and Rick had to get a court order to secure admittance to his father's hospital room. On May 16, 2005, the day that his father died, Denise through a friend asked Rick to transfer title of the Sheridan Boulevard property to her. Rick denied this request but communicated to Denise that he would allow her to remain in the house for as long as she desired. Unhappy with this arrangement, Denise threatened to cremate his father's body unless Rick agreed to transfer Henry's home to her. Denise acknowledged making these statements. At trial Rick was not certain if Denise was actually living in the Sheridan Boulevard property but testified that she had not removed her possessions.
The Chancery judge placed a lengthy decision on the record at the conclusion of the trial. Preliminarily, the judge concluded that Denise had not carried her burden of proving the alleged 2002 request from Henry to Rick for return of the property. Otherwise, he found that the parties and witnesses were generally credible. He determined that Rick had not proven by a preponderance of the evidence that Henry did not have the mental capacity to marry Denise on July 19, 2004. No appeal has been taken from this decision and we will not recite the factual predicates for it.
As to the real estate, the judge concluded that the transfer was intended as an inter vivos gift "and, as such, it is subject to attack if it was founded on undue influence under a variety of principles that have been developed in our case law." After discussing applicable case law, the judge concluded that there was no proof that Rick "dominated [Henry's] will at the time that the real estate transfer took place; in fact, the affirmative proofs as to specifically what happened are to the opposite."
The judge then considered whether a confidential relationship existed between Henry and Rick, recognizing that, if there was one, a presumption of undue influence would arise and shift the burden of proof to Rick and require that he establish by clear and convincing evidence that there was no undue influence or deception. After noting that Denise bore the initial burden of proving a confidential relationship, the judge observed that not every parent-child relationship was the type of confidential relationship that would trigger shifting the burden of proof. Rather, he concluded that the specific facts of the relationship were essential in determining the inquiry. He held that "trust" and "confidence" as used in the relevant case law require a showing that "one particular person has entrusted certain responsibilities to another party and is in one way or another somehow dependent because of those circumstances." The judge concluded that a confidential relationship had not been established by the facts of this case because he had no sense "that the decedent was, in essence, somehow dependent on or had entrusted his affair[s] to his son such that one would conclude that a confidential relationship existed."
With respect to undue influence, the judge concluded that there was "nothing in the record to suggest, independent of any burden shifting, that the plaintiff did anything untoward or engaged in any type of undue influence with respect to the real estate transaction in question." He also noted that, had a confidential relationship been proven, Rick established by clear and convincing evidence that there was no undue influence. After concluding that there was no impropriety with respect to the bank account transfers, the judge determined that counsel fees were not warranted.
Denise contends that the judge erred as a matter of law in concluding that she was required to prove that Henry depended on Rick in some fashion in order to establish a confidential relationship. She also asserts that the judge erred in failing to require Rick to prove that Henry fully understood the consequences of the inter vivos transfer of the Sheridan Boulevard property to Rick.
Generally speaking, we give great deference to the findings of fact made by a judge following a bench trial. "Indeed, the fact-finding function is entirely within the province of the Chancery judge. Findings by the trial judge are considered binding on appeal when supported by adequate, substantial and credible evidence." Barlet v. Frazer, 218 N.J. Super. 106, 111 (App. Div. 1987) (citing Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474, 484 (1974)). However, we owe no special deference to the judge's "interpretation of the law and the legal consequences that flow from established facts" and our review of those conclusions is de novo. Manalapan Realty v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995).
In order to gift property effectively, the donor must possess the intent to give. Pascale v. Pascale, 113 N.J. 20, 29 (1988) (citing R. Brown, Personal Property, § 7.1, at 77-78 (2d ed. 1975)). Such intent may not be a product of "undue influence" precluding the donor "'from following the dictates of his own mind and will and accepting instead the domination and influence of another.'" Haynes v. First Nat'l State Bank, 87 N.J. 163, 176 (1981) (quoting In re Neuman, 133 N.J. Eq. 532, 534 (E. & A. 1943)). "[A] presumption of undue influence arises when the contestant proves that the donee dominated the will of the donor . . . ." Pascale, supra, 113 N.J. at 30 (citations omitted). Here, the judge found as a matter of fact that there was no domination by Rick of Henry's will; rather, "the affirmative proofs as to specifically what happened are to the opposite." There is "adequate, substantial and credible evidence" to support that fact-finding and we may not disturb it on appeal. Rova Farms, supra, 65 N.J. at 484.
Where domination is absent, a presumption of undue influence may arise "when a confidential relationship exists between donor and donee." Pascale, supra, 113 N.J. at 30. In determining whether such a relationship exists, the trial judge should consider family ties, friendship, trust, love, affection, the donor's delegation of authority over his or her assets to the donee and the donor's reliance on the donee's superior knowledge. Id. at 32 (citing In re Dodge, 50 N.J. 192, 228 (1967)). Essentially, a confidential relationship may be found whenever it appears that the relations between the parties to an inter vivos gift are of such character that in reasonable probability they do not deal with each other on terms of equality because one has given friendship and justifiably reposes confidence in the other, that on the donee's side superior knowledge exists as to the nature of the transaction proposed by him, as well as the detriment to be suffered by the donor if he engages in it . . . . [In re Dodge, supra, 50 N.J. at 228.]
Our Supreme Court has explained the reason for a presumption of undue influence when a confidential relationship exists. Ibid.
"Its purpose is not so much to afford protection to the donor against the consequences of undue influence exercised over him by the donee, as it is to afford him protection against the consequences of voluntary action on his part, induced by the existence of the relationship between them, the effect of which upon his own interests he may only partially understand or appreciate." [Ibid. (quoting Slack v. Rees, 66 N.J. Eq. 447, 449 (E. & A. 1904)).]
With respect to an inter vivos gift, as distinct from a will, the donee must prove "by clear and convincing evidence not only that 'no deception was practiced therein, no undue influence used, and that all was fair, open and voluntary, but that it was well understood.'" Pascale, supra, 113 N.J. at 31 (quoting In re Dodge, supra, 50 N.J. at 227).
If the donor is dependent on and makes an "improvident gift" to the donee that strips the donor of all or virtually all his assets, a presumption arises that the donor did not understand the consequences of his act. In this context, the donee must show that the donor had the benefit of competent and disinterested counsel. A similar rule applies when a physically or mentally weakened donor, without receiving any advice, makes a gift to a donee on whom the donor depends. If that gift leaves the donor without adequate means of support, the presumption of undue influence is conclusive. When the donor is not dependent on the donee, however, independent advice is not a prerequisite to the validity of an improvident gift even though the relationship between the parties is one of trust and confidence. [Ibid. (citations and quotations omitted).]
The Chancery judge here applied these criteria to the facts developed at trial and concluded that there was no confidential relationship between Rick and Henry because Denise had failed to prove that Henry reposed any trust or confidence in Rick. It is of course true that they shared the relationship of father and son and clearly loved each other. But those characteristics alone do not create a confidential relationship.
Although Rick was more educated than his father, Henry was a "self-sufficient" and "independent man" who did not delegate his affairs to Rick or ask his assistance in any respect other than in preparation of the deed to the Sheridan Boulevard property. Rick never asked his father to deed the property to him; rather, Rick only suggested that his eighty-four-year-old father update his will so that Henry's testamentary wishes would be effectuated. Furthermore, Henry had expressed for many years that he intended to leave his home to Rick, his only remaining child. Rick did not propose this transaction. Although Henry did gift his home to Rick, he did not surrender or even share control over his sizeable bank accounts with Rick as they were only pay-on-death accounts. Clearly, Henry was not impoverished by the gift of his home to Rick. Thus, there was no "'improvident gift'" to the donee that strip[ped] the donor of all or virtually all his assets." Ibid. Furthermore, it is clear from their dealings with each other that Rick understood that the gift of the home was always subject to a life estate in Henry. Rick corrected the deed to so provide and later offered to sell the Brigantine home and purchase a new home in Florida for the use of Henry and Denise.
There is more than adequate evidence to establish that Henry did not delegate authority over his assets to Rick, did not rely on Rick's superior education and did not repose such confidence in Rick that Henry was induced to part with his home, although he clearly loved Rick and was proud of him. The judge properly articulated and applied the legal principles governing the determination of the existence of a confidential relationship and found as fact that none existed. Again, there is "adequate, substantial and credible evidence" to support that fact-finding and we may not disturb it on appeal. Rova Farms, supra, 65 N.J. at 484. Because there was no confidential relationship, Rick was not required to rebut a presumption of undue influence by clear and convincing evidence.
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