March 18, 2008
IN THE MATTER OF THE ESTATE OF MICHAEL D. STANCHECK, DECEASED.
On appeal from Superior Court of New Jersey, Chancery Division, Middlesex County, Docket No. 210941.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted February 14, 2008
Before Judges Wefing and Lyons.
Joan Howard (Howard) appeals from an order entered April 18, 2007, approving a settlement agreement concerning a will contest. We affirm.
The following factual and procedural history is relevant to our consideration of the issues advanced on appeal. On September 15, 2005, Michael D. Stancheck (decedent) executed a will which provided that his son, Sam Stancheck, was to receive twenty-five percent of his residuary estate and that all the rest of the estate was to be given in equal shares to the following: his brother Thomas Stanchec; his sister Joan Howard; his friend Suzanne Scheck; his nephew Thomas Stanchec, Jr.; his nephew Christopher Stanchec; his nephew Scott Stanchec; his niece Patricia Stanchec; his nephew Craig Stanchec; and his nephew James Stanchec. His will made no provision for his sons Michael and Matthew. On October 7, 2005, decedent died.
Suzanne Scheck filed a verified complaint seeking to challenge the will in December 2005. Notice of the suit was sent to all interested parties, including Howard. On December 15, 2005, Howard signed a certification in which she stated that the will "could not possibly be what [decedent] intended."
In June 2006, decedent's sons filed a complaint also seeking to challenge the will. The parties thereafter engaged in extensive litigation. On or about January 24, 2007, the parties negotiated a settlement agreement. Howard did not participate in the litigation, nor did she participate in the settlement negotiations. The negotiated settlement agreement did not provide for her.
The litigants then filed a motion for approval of the settlement agreement. When Howard received notice of this motion, she filed a cross-motion opposing the settlement agreement. On April 18, 2007, oral argument was heard by the trial court concerning the motion to approve the settlement agreement. Howard argued that she should be permitted to vacate any default that was entered against her and allowed to file an answer out of time so that she could participate in the litigation and settlement regarding her brother's will. In her certification submitted to the trial court, she claimed that she had not received notice of the litigation until February 13, 2007, when she got notice of the motion to confirm the settlement. She argued that it was patently unfair for the proposed settlement to exclude her.
The trial court, after hearing argument, found that Howard had received notice of the lawsuit in December 2005, as evidenced by a signed return receipt mail card. The court also noted that Howard had signed an affidavit in December 2005 in support of Suzanne Scheck in which she stated that the will "could not possibly be what [decedent] intended." The trial court noted that the matter was heavily litigated at substantial expense to the parties. It found it would be inequitable to allow Howard to participate in the settlement stating "you can't sit back and not do anything and then suddenly appear and say, well now I want to do something." The trial court, therefore, denied Howard's application and approved the settlement. This appeal ensued.
On appeal, Howard presents the following argument for our consideration:
THE TRIAL COURT ERRED IN DENYING THE APPELLANT'S REQUEST TO FILE AN ANSWER OUT OF TIME AND APPEAR IN THE MATTER WHERE (I) THE APPELLANT ALLEGES THAT SHE DID NOT RECEIVE NOTICE OF THE MATTER; (II) NO DEFAULT WAS EVER ENTERED UNDER R. 4:43-1; AND, (III) WHERE THE APPELLANT WAS NEVER AFFORDED THE TWO PART NOTICE THAT R. 4:43-1 AND R. 4:43-2 WERE MEANT TO CREATE.
Howard argues that the trial court erred in denying her request to file an answer out of time because she did not receive notice of the matter. When an error in a fact finding of a trial judge is alleged, the scope of our review is limited. Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 483-84 (1974). We will only decide whether the finding could reasonably have been reached on sufficient credible evidence present in the record, considering the proofs as a whole with due regard to the ability of the trial court to judge credibility. Ibid. We are satisfied from our review of the record that the trial court had sufficient credible evidence to determine that Howard had notice of the initial suit in December 2005.
Howard argues that a default judgment was not entered against her pursuant to Rule 4:43. Accordingly, she then argues that if default alone were entered, her application to vacate that default should be viewed with great liberality. Rule 4:43-3 permits a default to be set aside for good cause shown. A finding of good cause requires the exercise of sound discretion by the trial court in light of the facts and circumstances of the particular case. See O'Connor v. Altus, 67 N.J. 106, 129 (1975). Having reviewed the factual circumstances in this matter, we find that the trial court appropriately exercised its discretion not to vacate the default. Howard had notice of the suit for at least sixteen months. Extensive and expensive discovery was engaged in by all the parties. Howard chose not to participate in that, nor to answer. Moreover, during the oral argument before the trial court, her attorney candidly stated, "She's not looking to litigate it, frankly, Your Honor, she is looking to participate in the settlement." Howard, therefore, did not seek in good faith to vacate the default and litigate the matter, but simply to participate in a settlement. That does not constitute good cause in this case.
A will contest may be compromised and settled providing all of the parties at interest are notified, and provided further, that the court approves the settlement. 5 N.J. Practice, Wills and Administration, § 138 (Alfred C. Clapp) (rev. 3d ed. 1982). In passing upon a will contest settlement, the trial court must determine whether the agreement is fair. See De Caro v. De Caro, 13 N.J. 36 (1953). In reviewing such a settlement, the trial court must consider at the outset that termination of a family dispute is a goal highly favored by the law. Id. at 43-44. In addition, it should consider whether the settlement was arrived at fairly and whether there is any inadequacy of consideration. Id. at 44. The inadequacy of consideration, however, must be "so gross as to shock [the court's] conscience." Ibid. We have noted recently that "[t]he purpose of a fairness hearing is to assure that the settlement is reasonable, not to adjudicate the case on its merits." Builders League v. Glouster Utils., 386 N.J. Super. 462, 472 (App. Div. 2006).
Our role in reviewing the trial court's determination in approving the settlement is to determine whether the trial court's finding that the settlement agreement was fair and reasonable was supported by the evidence presented at the hearing. Ibid. In this case, the record clearly demonstrates that Howard was not included in any prior wills, nor would she take by intestacy if the will at issue were set aside. Moreover, the certification executed by Howard sets forth her firm belief that the proffered will did not reflect decedent's intent. We fail to see, therefore, how the settlement agreement, in particular, given her certification, was inequitable to her. If the matter were litigated to its conclusion and her position as evidenced in the certification were successful, she would have received nothing. While she would have received a bequest if the will were upheld, she has sworn that the will did not reflect her brother's intent. Accordingly, we find that the court's determination that the settlement was fair and reasonable is supported by sufficient credible evidence in the record, such that it should be affirmed.
We do not, however, find that Howard was barred from objecting to the settlement by way of laches, waiver, or judicial estoppel. Her failure to assert her right timely did not result in any prejudice to the other litigants. United States v. Scurry, ___ N.J. ___, ___ (2008) (slip op. at 14). While she did not act to timely intervene, there is no indication of her voluntarily and knowingly relinquishing her right to participate in a settlement. Clarke v. Clarke, 359 N.J. Super. 562, 571 (App. Div. 2003). Lastly, while her certification would severely prejudice her if the litigation had continued, it does not rise to the level of judicial estoppel at this point. Judicial estoppel "only arises when a party advocates a position contrary to a position it successfully asserted in the same or other proceeding." Kimball Int'l, Inc. v. Northfield Metal Prods., 334 N.J. Super. 596, 606 (App. Div. 2000), cert. denied, 167 N.J. 88 (2001). In this case, there was no successful adjudication of Howard's position.
We find that the trial court's finding of notice, as well as its denial of the application to vacate, was well supported in the record. In addition, its equitable determination as to the fairness of the settlement is also adequately supported in the record. Accordingly, we affirm.
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