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Fernicola v. Duchess

March 28, 2008


On appeal from Superior Court of New Jersey, Chancery Division, Monmouth County, Docket No. C-5-07.

Per curiam.


Argued January 30, 2008

Before Judges Cuff, Lihotz and Simonelli.

In this matter, we review the Chancery Division's order, which dismissed plaintiff's action for lack of subject matter jurisdiction and applied the principles of comity to stay the first-filed New Jersey matter, pending resolution of the issues between the parties in a second suit, also initiated by plaintiff for equivalent relief in the State of Florida. Plaintiff argues subject matter jurisdiction rests in New Jersey because the outcome affects New Jersey real estate. He also asserts that comity favors preference for the first-filed action, which was in New Jersey. Therefore, the trial court erred in dismissing this action. We reject plaintiff's arguments and affirm.

Plaintiff, John A. Fernicola is the son of decedent, Jean A. Fernicola, late of Clearwater, Florida, and the brother of defendant, Judith M. Duchess of Tampa, Florida. Jean died testate on March 26, 2006. Judith was Jean's named personal representative. On September 1, 2006, Judith submitted Jean's will to probate in Pinellis County, Florida, and sought to qualify as the administrator of her estate. Judith certified the approximate value of the estate was $499,776. Jean did not name John as a beneficiary in her will. The probate court approved Judith's petition and issued letters of administration.

John lives in Ocean County. Pursuant to the terms of a judgment entered in another litigation, Jean transferred realty known as Block 86, Lots 1, 2, 3, 4, 11 and 12, located in the Borough of Point Pleasant Beach (the property) to John. On May 18, 1989, the date of the transfer, John executed a $600,000 note secured by a mortgage on the property to Jean. The property is commonly known as the Bel Aire Motel.

The terms of the original note and mortgage were modified on October 7, 1993, by a recorded modification agreement, which reduced the interest rate and correspondingly, the monthly payment paid by John to Jean. In his actions filed in Florida and New Jersey, John alleges that a second oral modification agreement was reached with Jean, further reducing the amount due under the mortgage note.

John maintains that on April 2, 1996, he and Jean agreed to reduce the principal balance by $151,000. That sum represented Jean's share of attorney's fees and costs expended by John to defend and resolve a 1993 lawsuit brought by Jersey Central Power and Light Company (JCPLC) against John and Jean for pirated electric services benefiting the property from 1979 to 1991, along with Jean's share of the settlement paid in 2003. John has not itemized these expenditures or stated the amount of Jean's asserted proportionate share.

On December 14, 2006, John filed a statement of claim as a creditor of Jean's estate. In that claim, John suggested the estate owed him approximately $200,000. Judith, on behalf of the estate, objected to John's claim. As provided by Florida Probate Rule 5.496 and section 733.705 of the Florida Probate Code, John, as a creditor, was required to file an action on his claim within thirty days of being served with the objection to the claim.

John filed a New Jersey Chancery Division complaint on January 4, 2007. Then, on January 16, 2007, John filed an action in Florida. He alleged the identical causes of action and prayers for relief sought in his New Jersey matter. In each of these suits, John requested that Judith, as the administrator of Jean's estate, correct the note and mortgage to properly reflect the current status of the principal, interest and duration of the amended principal balance consistent with the 1996 oral agreement with Jean. John states that the uncertainty as to the amount owed creates a cloud on the property's title.

The original note executed in 1989 included a provision for the payment of 9% interest on the principal balance and was amortized over thirty years. John's monthly payment was $4,827.75. The 1993 modification agreement reduced the interest rate to 4 1/2% over a term of twenty-two years. The monthly payment was correspondingly reduced to $3,584.32. The alleged oral modification agreement further reduced the monthly payment to $2,600. John states, since 1996 he paid Jean $2,600 each month; after Jean's death, Judith accepted the $2,600 monthly payments.

Judith vehemently disputes the veracity of John's agreement modification claims and asserts that Jean never orally modified the note or monthly payment. Judith produces correspondence authored by Jean in 1999 and 2000, which reiterated that John's monthly mortgage obligation was $3,584.32. Jean's letters mention that John did not consistently make payments as required, but was paying $2,600 per month.

Judith did not answer the New Jersey complaint. Instead, she filed a motion to dismiss for lack of subject matter jurisdiction or stay the New Jersey suit pending disposition of the same issues in Florida. The Chancery judge's order stated: "Defendant's motion to dismiss or stay the [plaintiff's] complaint for lack of subject matter ...

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