On appeal from the Superior Court, Appellate Division.
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).
In this appeal, the Supreme Court addresses the issue of the interpretation of the word "spouses" as used in a charitable trust settled by J. Seward Johnson of the Johnson & Johnson Company family.
Between 1939 and 1963, Johnson created a series of trusts to benefit his family members. At issue in this appeal is the December 20, 1961 irrevocable charitable trust (the 1961 trust), which named four of Johnson's six children, their spouses, and his eleven grandchildren as beneficiaries. The 1961 trust was an estate planning device to save taxes. According to the trust instrument, for a thirty-five year charitable phase, all net income of the trust was to be distributed to "educational, religious, and charitable organizations." At the conclusion of the charitable phase, the income and the corpus could be distributed to the beneficiaries at the "absolute and uncontrolled discretion" of the trustees. In naming the beneficiaries, the trust used the following language in respect of the distribution of the corpus: ".to use for or distribute and pay over to and among the Grantor's four children, MARY LEA JOHNSON RYAN, ELAINE JOHNSON WOLD, JOHN SEWARD JOHNSON, JR., and DIANA MELVILLE JOHNSON STOKES, their spouses, and their issue, or any one or more of them,." The testamentary language authorizing the trustees to distribute income is almost identical, naming the Johnson children, "their spouses, and their issue, or any one or more of them" as beneficiaries. The word "spouses" is not defined anywhere in the 1961 trust document.
Mary Lea Johnson died in 1990. She was survived by her six children and her third husband, Martin Richards. In 1995, the trustees began a ninth accounting of the 1961 trust in anticipation of distributing the interest and corpus to the beneficiaries after the charitable phase concluded. James Scott Hill, the scrivener of the trust and a trustee, believed that Richards continued to be a beneficiary of the 1961 trust despite his wife's death. The other trustees disagreed, believing that Johnson's failure to use the phrase "surviving spouses" indicated that he did not intend to include widows and widowers as beneficiaries. Because the trustees acknowledged the possibility that the 1961 trust could be interpreted to include widowers, they sought judicial guidance on this issue in March 1996.
After years of trials and appeals, a plenary hearing was held in April 2003 concerning Johnson's intent in respect of surviving and divorced spouses. The trial judge heard and assessed extrinsic evidence to ascertain the meaning of the ambiguous word "spouses." The evidence included Johnson's overall testamentary scheme; his direct involvement in creating the trust; and testimony from the parties and the scrivener, Hill. The trial judge found Hill's testimony to be "reliable, trustworthy, and very credible." On the basis of all the evidence, the judge ruled that surviving spouses were intended to be included as "spouses" but not those divorced from Johnson's legatees.
The Appellate Division affirmed the decision of the trial judge with one judge dissenting. The disagreement between the appellate majority and the dissent concerned Hill's testimony. Both the majority and the dissent recognized that, to the extent that Hill related his testimony to the particularized circumstances surrounding the creation of the trust, including statements and conversations with Johnson, such testimony was relevant and admissible. Where the members of the appellate panel parted company was in connection with Hill's testimony regarding his "understanding," "impression," "thinking," "belief," or "feeling" about Johnson's intent, unattached to any expression or action of Johnson himself. The dissenting member of the appellate panel opined that, to the extent Hill's testimony regarding Johnson's intent was not based on direct statements or other actions by Johnson, it was inadmissible under New Jersey's evidence rules.
Roderick Newbold Johnson, Alice Ryan Bower, Joseph R. Purcell, Eric B. Ryan, and Hillary A. Ryan (the heirs) appeal as of right from the Appellate Division's decision, contending that the record does not support the conclusion that the word "spouses" was intended to include widowers like Richards.
HELD: Notwithstanding the trial judge's reliance on some testimony that should not have been admitted, there was substantial credible evidence in the record as a whole to support the trial judge's conclusion that J. Seward Johnson wanted a broad class of possible beneficiaries, including surviving spouses. The trial court's finding that the word "spouses" was intended to include widows and widowers is affirmed substantially for the reasons expressed by the Appellate Division majority.
1. N.J.R.E. 701 governs the admissibility of witness opinion testimony. Under that evidence rule, a lay witness's testimony in the form of opinions or inferences may be admitted if it (a) is rationally based on the perception of the witness and (b) will assist in understanding the witness's testimony or in determining a fact in issue. Pivotal to the admissibility of N.J.R.E. 701evidence is perception acquired through the senses and the rule allows lay witness testimony regarding common knowledge based on observable perceptions. The Court has never interpreted N.J.R.E. 701, nor does it elect to do so here, as sanctioning a lay witness's opinion about the unspoken thought processes of another. Some of Hill's ideas were not declared by him to be based on any perception and are "obviously a conclusion by supposition by a lay witness who has no greater skill than the [trier of fact] in drawing inferences." As such, the Court agrees with the dissent that some of Hill's testimony was inadmissible. (Pp. 7-9)
2. Ordinarily the matter would be remanded to the trial judge for review of the record without the prohibited evidence and for further hearings if warranted. However, the trial judge is retired and unavailable to review this record. Moreover, Hill is deceased, making any further plenary hearings impossible. In the interests of finality, the Court chooses to excise the inadmissible portions of Hill's testimony and to determine whether the record that remains supports the trial judge's decision in respect of the meaning of the word "spouses." (Pp. 9-10)
3. The Court's careful review of the record leads to the conclusion that, when Hill's offending statements are removed there is ample evidence to support the trial judge's finding. The Court defers to the trial judge's assessment of Hill as "reliable, trustworthy, and very credible," and credits those portions of Hill's testimony that were based on specific conversations and interactions with Johnson. For example, Hill considered certain direct expressions as evidence of the notion that Johnson considered widows and widowers (unlike divorced spouses who were "outside the family") as included in the term "spouses." (Pp 10-11)
4. Also noteworthy is Hill's testimony that he used the word "spouses" in the 1961 trust because he viewed the term "surviving spouse" as a "redundancy" and considered both terms synonymous. A scrivener's rationale for selecting certain language when drafting a will is undeniably relevant testimony. Hill's sense of redundancy derived from his review of earlier Johnson trusts. In trusts from 1939, 1944, and 1963, Johnson used the words "surviving spouse," "spouse," and "husband" as interchangeable references to the widows or widowers of his children and grandchildren. In addition, the statute in existence at the time of the 1961 trust also used the words "husband or widow" as a substitute for "surviving spouse" in naming intestate beneficiaries. Given the previous trust documents and the statute, sufficient evidence existed to support Hill's belief that words like "husband," "wife'" and "spouse" incorporated surviving spouses, such that he did not need to make that explicit in the 1961 trust. (Pp. 11-13)
5. The trial judge also looked at Johnson's overall testamentary scheme in reaching his conclusion. The trusts created between 1939 and 1963 devised a comprehensive plan aimed at benefiting Johnson's heirs and their spouses. The Court agrees with the trial judge's conclusion that the testamentary scheme demonstrates that Johnson's "human impulses" were to include "surviving spouses within the broad concept of family." (Pp. 13-14)
Judgment of the Appellate Division is AFFIRMED.
JUSTICE HOENS, CONCURRING IN PART and DISSENTING IN PART, in which JUSTICE RIVERA-SOTO joins, concurs in the analysis of the meaning of the limitations of N.J.R.E. 701, the result of which is to exclude as inadmissible all of Hills' opinion testimony on which both the trial court and Appellate Division majority relied. Justice Hoens dissents from the majority's opinion to the extent that it concludes that the result reached by the trial judge, and affirmed by the majority of the appellate panel, can be sustained once that inadmissible opinion testimony has been excised. The majority overlooks the inescapable fact that Hill's trial testimony was overwhelmingly comprised of statements that amount to nothing more than his opinion.
CHIEF JUSTICE RABNER and JUSTICES LONG, LaVECCHIA, ALBIN, and WALLACE join in this opinion. JUSTICE HOENS filed a separate opinion concurring in part and dissenting in part, in which JUSTICE RIVERA-SOTO joins.
Argued September 25, 2007
This case involves the interpretation of the word "spouses" as used in a 1961 charitable trust settled by J. Seward Johnson of the Johnson & Johnson Company family. Martin Richards, the widower of Johnson's daughter Mary Lea Johnson, argues that he satisfies the definition and thus qualifies as a potential beneficiary of the trust. The trial judge ruled in favor of Richards, and, over a dissent, the Appellate Division affirmed that judgment.
Roderick Newbold Ryan, Joseph R. Purcell, Joseph R. Purcell, Eric B. Ryan, and Hillary A. Ryan (the heirs) appeal, as of right, from the Appellate Division's decision, contending that the record does not support the trial judge's conclusion that the word "spouses" was intended to include widowers like Richards. We have carefully reviewed the claims advanced by the heirs and have determined that they are unavailing. The record fully supports the trial judge's findings and conclusions. We therefore affirm, substantially for the ...