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Divigenze v. Estate of Divigenze

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


December 6, 2007

ANTHONY DIVIGENZE, PLAINTIFF-RESPONDENT,
v.
ESTATE OF MICHAEL DIVIGENZE, ROSALIE LABO, ADMINISTRATRIX AND AS AN INDIVIDUAL, DEFENDANT-APPELLANT, AND HARLEYSVILLE INSURANCE COMPANY OF NEW JERSEY, A NEW JERSEY CORPORATION, DEFENDANT.

On appeal from the Superior Court of New Jersey, Chancery Division, Probate Part, Gloucester County, Docket No. C-00-1009.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted October 30, 2007

Before Judges Skillman and Yannotti.

Defendant Rosalie Labo, administratrix of the Estate of Michael DiVigenze, appeals from a final judgment entered in this probate matter on November 9, 2006, which awarded plaintiff Anthony DiVigenze $57,753.83 and attorneys' fees in the amount of $35,681.75. For the reasons that follow, we affirm.

I.

Michael DiVigenze died intestate on September 1, 2000. Plaintiff was Michael's father; defendant was his mother. They had divorced in the early 1960's. Michael had been married to Nancy Russo, but the marriage was dissolved by a final judgment of divorce filed on June 28, 2000. No children were born of the marriage.

Defendant applied to the Gloucester County Surrogate for appointment as administratrix of the estate. Defendant posted a surety bond issued by Harleysville Insurance Company, and on October 23, 2000, the Surrogate granted defendant letters of administration for the estate. Defendant published notice of the issuance of the letters of administration in two newspapers, one published in Gloucester County and one published in Salem County.

Plaintiff is a life-long resident of South Philadelphia, Pennsylvania. He asserted that he did not see the published notices and was not informed that he might have an interest in his son's estate. On November 22, 2004, plaintiff commenced this action seeking an accounting and one-half of the estate.*fn1

Defendant filed an answer in which she asserted that Michael's expenses exceeded the value of the estate, and therefore, the estate was not liable to plaintiff. Defendant also filed a counterclaim in which she alleged that plaintiff had "forcefully and violently" raped her, causing her severe and permanent injuries; plaintiff "willfully failed to support" Michael; and plaintiff's complaint was frivolous.

In a certification dated December 28, 2004, which was filed with her answer and counterclaim, defendant asserted that she only married plaintiff "to legitimize [her] son." Defendant stated that shortly after Michael was born, plaintiff was incarcerated for a homicide and she divorced him.

Defendant additionally asserted that plaintiff's family members knew about Michael's death and she published notice of her appointment as administratrix of the estate because she did not know of plaintiff's whereabouts. Defendant said that if the court were to allow plaintiff to appear in this matter, he should be required to pay the child support that he owed defendant over eighteen years of Michael's life.

Plaintiff filed a motion to dismiss defendant's counterclaims pursuant to Rule 4:6-2(e). The judge entered an order dated February 22, 2006, which dismissed without prejudice any claims related to the alleged sexual assault based on the statute of limitations. The order additionally required defendant to provide a formal accounting for the estate.

In September 2005, plaintiff filed a motion to compel defendant to deposit the estate's funds with the Surrogate. According to plaintiff, defendant stated in her deposition that she had placed all of the estate's funds in her own name. Defendant responded to this motion with a certification dated September 30, 2005, in which she alleged that she raised Michael on her own without any financial assistance from plaintiff. She noted that she had provided plaintiff with a preliminary accounting and he was not entitled to any monies from the estate.

Defendant additionally asserted that plaintiff sent flowers when Michael died but he did not appear at the funeral, "and there was no communication from [p]laintiff whatsoever until four years later when he found out through a friend that" he might be allowed "to step in and take half of the net proceeds of the estate." Defendant stated that plaintiff had not provided Michael with financial assistance when he needed it. Defendant said that she had provided Michael with financial assistance in the form of loans that she had documented.

On February 10, 2006, plaintiff filed a motion for summary judgment seeking a determination that he was entitled to one-half of Michael's net estate; approving certain exceptions to defendant's informal accounting; granting him one-half of certain benefits paid upon Michael's death; and requiring defendant to provide copies of all documents related to Michael's death benefits.

On May 1, 2006, the judge entered an order which stated that plaintiff was entitled to one-half of Michael's net estate, including any life insurance and annuities that were payable to the estate. The judge ordered defendant to provide copies of all documents related to the life insurance, annuities and other such benefits that were payable upon Michael's death.

On August 3 and 7, 2006, the judge conducted a trial on certain contested issues. The judge filed a written opinion on October 11, 2006, in which he found that plaintiff was entitled to judgment against defendant in the amount of $57,270.65 and counsel fees in the amount of $35,681.75. The judge determined that defendant was personally liable, as administratrix of the estate, to pay plaintiff his share of the estate. The judge stated that defendant's administration of the estate and the distribution of the estate's assets, "could be considered, at best, to be grossly negligent."

The judge found that the value of the real property owned by Michael at the time of his death or at the time when the property should have been sold was $180,000. The judge held that the following costs were validly incurred in connection with the sale of the property: septic repair; plumbing repairs; termite inspection; septic hauling; water tests; the mortgage payoff; the application fee for the certificate of occupancy; and carpet cleaning. The judge also allowed as charges against the estate certain costs incurred in connection with the property in the few months after Michael's death. The judge determined that the net proceeds from the real estate should be $112,700.48, after allowable expenses.

The judge rejected defendant's claims for reimbursement of certain monies she claimed were loans that she made to Michael. The judge noted that there were no documents memorializing the alleged loans. The judge stated that defendant had written "lone" on certain checks which she alleged were evidence of the loans, but there were "significant credibility issues" related to those documents. The judge also noted that there was no documentary evidence that Michael had repaid any of the loans. The judge determined that defendant had not overcome the presumption that the monies given to Michael were gifts, and the statute of limitations had run on claims for the repayment of some of the alleged "loans."

The judge also found that the costs incurred by defendant for the care and feeding of Michael's pet wolves over a two-year period after his death would not be considered as estate expenses. The judge additionally rejected defendant's claim for past due child support, concluding that the doctrine of laches would bar the claim. The judge also stated that the evidence submitted by plaintiff indicated that he had complied with all child support orders, and defendant had never instituted any enforcement proceedings.

The judge further determined that defendant had received certain benefits upon Michael's death and those benefits should be treated as estate assets. The judge noted that the issue of whether defendant or Michael's ex-wife was entitled to the death benefits had been raised in an action in the Family Part. The orders entered in that matter stated that the benefits should be paid to the estate, rather than to defendant. The judge therefore found that the benefits received by defendant in the amount of $30,219.79 should be considered estate assets.

In addition, the judge refused to award defendant attorney's fees "based on her administration," but held that the estate was responsible for plaintiff's counsel fees in the amount of $35,681.75. The judge found that defendant had breached her fiduciary duties to the estate and "but for [defendant's] deceptiveness, [plaintiff] would not have been forced to file this action and litigate all the issues at trial." The judge entered an order on November 9, 2006, which memorialized the findings in his written opinion, and this appeal followed.

II.

Defendant first argues that the judge erred by finding that certain monies that she provided to Michael were gifts instead of loans. We disagree.

At trial, defendant claimed that she made loans to Michael in the amount of $96,392.87, of which only $500 had been repaid. The alleged loans included: $12,679.87 to purchase a truck; $15,363 to purchase a motorcycle; $16,500 to pay attorneys for services rendered to Michael and his former wife in the divorce proceedings; $10,000 to open a business; and $37,490 for certain expenses incurred as a result of Michael's illness.

In support of these claims, defendant presented copies of certain checks. Some of the checks were drawn on defendant's account; others were drawn on a joint account maintained by defendant and her husband Gary Labo; and others were drawn on a joint account maintained by defendant and Michael. At the bottom of some of these checks, defendant had written: "Lone [sic] to Michael," "Lone [sic] for Truck," and "Lone [sic] to Michael for Lawyer."

Defendant also introduced a copy of a promissory note dated December 26, 1992 in the amount of $10,000. The note was signed by Michael and his then-wife, Nancy. The note stated that Michael and Nancy promised to pay themselves $10,000. However, at the top of the note the following statement was written: "Lender - Rosalie Labo."

Defendant testified that in 1997 or 1998, Michael was diagnosed with Hepatitis C and, as result, was unable to work many hours. Defendant claimed that Michael had insisted that the monies that she provided to him were loans. Defendant explained that she never wrote anything down because Michael did not have any income and she gave him the money when she went to see him. Defendant asserted that from time to time she would leave $50 "on the table or whatever." She did not "know how many times" she had given Michael money but she anticipated that she would get back "the big loans" that she provided to Michael for such things as the truck and the motorcycle.

Defendant further testified about the checks upon which she had written "lone." She said that the word "loan" was purposely misspelled. Defendant stated that Michael's nickname was "Lone Wolf" and she claimed that he wanted the word "loan" spelled as "lone" on the checks. Defendant asserted that she wrote these statements on the checks after they had been cashed and were returned to her.

On cross examination, defendant conceded that Michael had not written any checks to her in repayment of the alleged loans. Defendant was asked whether she knew that in his divorce proceeding, Michael had stated on his case information statement that the motorcycle had been a gift from his mother and was exempt from equitable distribution. She replied, "I think that maybe he put down just what he was thinking at the time. I don't know. My son was sick."

Christopher Manganaro had been one of Michael's friends and testified that Michael told him that his mother had given him money to pay off his motorcycle and he was "paying her back." Manganaro stated that Michael was "paying her payments" but, other than the motorcycle, he had no knowledge concerning any other expenses that defendant paid on Michael's behalf.

Defendant's husband also testified concerning the alleged loans. Mr. Labo asserted that defendant paid for Michael's motorcycle. He said that when defendant issued the check, Michael told her to remember to "mark it down, Mom." Mr. Labo said that he occasionally saw Michael pay defendant in cash. He stated that defendant provided Michael with cash almost on a weekly basis. Mr. Labo also asserted that on occasion, he heard Michael state that the money defendant was giving him was a loan.

Anna Gates is defendant's mother. She testified that she observed defendant giving money to Michael. Mrs. Gates said that she knew the monies were loans because she "heard them talking." She said that Michael said "[i]t was a loan. I mean, I was there and I heard. I heard him say it." Mrs. Gates conceded that she never saw Michael repay any money to defendant.

Regarding the alleged loans, the judge made the following findings of fact and conclusions of law:

All the claims are clearly defective under the law. There is no written evidence of any loan agreement. It should be specifically noted that certain of these loans, for example, the check to Harold Crass in the amount of $15,000 is a check drawn from a joint account of Rosalie Labo and Michael DiVigenze. The check is signed by Michael. Obviously, Michael DiVigenze could have written this check out of a joint account and could have provided funds to that joint account on his own. There was no evidence presented at the trial from either party regarding the nature of this joint account.

Additionally, the check to Nancy and Michael DiVigenze for cabinets in the amount of $3,000 was from a joint account in the name of Rosalie D'Ambrose and Michael DiVigenze.

This check was signed by Rosalie, and the word "lone" is inserted over the word for the cabinets. There [are] significant credibility issues involved in the insertion of the word "lone" on each of these checks.

There is no evidence of any repayment of any loans or . . . evidence of any agreement for any repayment. All the evidence concerning these "loans" is deficient. . . . Several of the listed expenses are beyond the statute of limitations for collection of a loan. Therefore, . . . these loans will not be permitted as an Estate expense and will be excluded from the accounting.

It is presumed that when a parent gives property to a child, the property is a gift rather than a loan. Bankers' Trust Co. v. Bank of Rockville Ctr. Trust Co., 114 N.J. Eq. 391, 399 (E. & A. 1933). To rebut that presumption, there must be evidence that is "certain, definite, reliable and convincing, and leave no reasonable doubt as to the intention of the parties." Ibid.

Here, the judge found that defendant failed to present sufficient evidence to rebut the presumption that the monies she gave to Michael were gifts rather than loans. As the judge pointed out in his opinion, there was no documentary evidence indicating that Michael had ever repaid any of the alleged loans. Defendant had written "lone" on the checks, purportedly indicating that the monies given to Michael were "loans."

However, defendant wrote on the checks after they were cashed and returned to her. The judge aptly noted that there were "significant credibility issues" arising from defendant's insertion of the word "lone" on the checks.

Moreover, the fact that Michael asserted on the case information statement filed in his divorce action that the motorcycle was a gift from his mother also undermined defendant's claim that she had loaned Michael the money to purchase the motorcycle. In addition, the judge correctly pointed out that the statute of limitations had run on any claim for repayment of some of the alleged loans.

We will not disturb the "'factual findings and legal conclusions of the trial judge unless we are convinced that they are so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice.'" Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974) (quoting Fagliarone v. Twp. of No. Bergen, 78 N.J. Super. 154, 155 (App. Div. 1963)). We are convinced from our review of the record that there is sufficient credible evidence in the record to support the judge's finding that the monies defendant provided to Michael were gifts and not loans.

III.

We next consider defendant's contention that the judge erred by failing to recognize certain costs as valid expenses of the estate. Defendant maintains that the judge erred by disallowing: the costs incurred by defendant because plaintiff named Harleyville as a defendant: the attorney's fees that she incurred to defend against plaintiff's claims; the cost to maintain the real property; an insurance payment for one of Michael's vehicles; and expenses incurred to care for Michael's pet wolves.

The allowance or disallowance of estate costs are matters committed to the sound discretion of the trial court. In re Caruso, 18 N.J. 26, 38 (1955). Furthermore, the burden is on the fiduciary "to establish to the satisfaction of the court" that expenses "qualify for payment from the estate." In re Estate of Risica, 179 N.J. Super. 452, 456 (App. Div. 1981).

We reject defendant's contention that the estate should have been responsible to pay her attorney's fees. Here, the judge found that defendant had been deceptive by failing to provide notice to plaintiff of his potential claim against the estate. There is sufficient credible evidence in the record to support that finding. The judge further found that had it not been for defendant's deceptiveness, plaintiff would not have been compelled to file this action and litigate the issues at trial. We are satisfied that the judge did not abuse his discretion by refusing to allow defendant to charge her counsel fees to the estate.

We also reject defendant's contention that the judge erred by disallowing the costs incurred by defendant to maintain Michael's real property. The record shows that on December 11, 2000, defendant transferred title to the property to herself and allowed Manganaro to live there rent-free because, as defendant stated, Manganaro was "doing [her] a favor" by staying there.

The judge allowed the costs incurred by defendant to maintain the property for several months after Michael's death. However, the judge found that the estate should not be burdened with additional costs incurred after defendant had the property transferred to her own name and failed to promptly arrange for its sale. We are satisfied that the judge did not abuse his discretion by rejecting this claim.

The judge additionally refused to require the estate to pay a premium for insurance on Michael's vehicles. The judge found that defendant had not shown that this particular expense was reasonably necessary for the administration of the estate. Defendant elected to keep Michael's motorcycle and truck for a period of time after his death. Obviously, had defendant sold the vehicles promptly, there would have been no need to make the insurance payment. In our view, the judge's decision was a proper exercise of discretion.

In addition, the judge did not err by disallowing the costs incurred by defendant to care for Michael's pet wolves for two years after Michael's death. Defendant testified that she called "a lot of places to try and place" the wolves. She said that she "searched an[d] searched" until she "finally found" a place in New Hampshire that agreed to take the animals. However, the record supports the judge's finding that these costs were not appropriate estate expenses.

IV.

We next consider defendant's contention that the judge erred by valuing Michael's real estate at $180,000. Defendant argues that the fair market value of the property at the time of Michael's death was $175,000. Defendant also contends that the judge should have reduced that amount by the realtor's commission as well as other customary settlement charges.

However, defendant did not produce an expert at trial to testify concerning the value of the property. Moreover, defendant submitted an accounting to the court in which she stated that the net proceeds from the sale of the property on November 22, 2002 were $179,754.06. The judge's valuation was consistent with defendant's statement. Furthermore, since defendant received about $180,000 from the sale of the property, the judge did not abuse his discretion by treating the sale proceeds as assets of the estate.

V.

Defendant additionally argues that the judge erred by finding that certain benefits paid on Michael's death are estate assets. Defendant says that initially Michael's wife Nancy was named as beneficiary and defendant was named as contingent beneficiary for the benefits. Defendant asserted that after Michael's death, she found a change of beneficiary form "on his table."

As we pointed out previously, the issue of whether Nancy or defendant should receive these benefits was litigated in the Family Part. An order was entered in that action on May 23, 2003, which stated that an agreement concerning the life insurance policy had been reached between Nancy and defendant, who was identified as the general administratrix of the estate. The order provided that the benefits due under the insurance policy would be divided equally.

Another order was entered in the Family Part action on January 7, 2002, with regard to a lump sum death benefit in the amount of $8,922.07, and a account held by the Sheet Metal Workers Local 27 in the amount of $15,256.07. The order was prepared by defendant's attorney, Angelo J. Falciani. It stated that defendant, as general administratrix of the estate, would be "sole owner" of both benefits.

Moreover, after the words "sole owner", the judge inserted the phrase "for the benefit of the estate." Mr. Falciani testified that the judge apparently included this phrase because Mr. Falciani was concerned about creditors who might have claims against the estate. However, Mr. Falciani asserted that he always "posited [that] the money was [defendant's]."

We are satisfied that the judge did not err by treating the death benefits as estate assets. The orders entered in the Family Part action made clear that defendant was pursuing the claim to the benefits not as an individual but rather as administratrix of Michael's estate. Defendant's attorney prepared orders that identified her in that manner, and the judge specifically included language in the January 7, 2002 order stating that monies paid to defendant were "for the benefit of the estate."

Thus, in the Family Part action, defendant treated the death benefits as assets of the estate but apparently decided to take a different stance when she saw that plaintiff might claim a share of these benefits. In the circumstances, the judge did not err by considering defendant bound by the orders entered at her behest in the Family Part action.

Defendant also takes issue with the judge's finding that the amount of these benefits is $30,219.79. The contention is without merit. R. 2:11-3(e)(1)(E).

VI.

In addition, defendant contends that the judge erred by refusing to consider the child support arrears purportedly owed by plaintiff. However, defendant did not prove that plaintiff failed to comply with any court orders requiring payment of child support. Moreover, Michael was forty-two years old when he died. Clearly, the time within which to make a claim for child support arrears had long since passed. We are satisfied that the judge correctly found defendant's claim for unpaid child support was groundless and barred by the doctrine of laches.

Defendant also argues that the judge erred by awarding plaintiff attorney's fees in the amount of $35,681.75. Again, we disagree. Here, the judge found that "at best" defendant's handling of the estate was "grossly negligent." In In re Estate of Vayda, 184 N.J. 115, 124 (2005), the Court stated that counsel fees may be awarded under Rule 4:42-9(a)(3) to a party with an interest in a decedent's estate, and the court may require that the fees be paid out of the estate when a non- attorney executor negligently administers the estate. In our view, the judge did not abuse his discretion by awarding plaintiff counsel fees and requiring that they be paid out of the estate.

Affirmed.


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