On appeal from Superior Court of New Jersey, Chancery Division, Probate Part, Gloucester County, Docket No. 05-108.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted September 9, 2008
Before Judges Wefing, Parker and LeWinn.
In this probate case, plaintiff Isaac Slutsky*fn1 appeals from a final judgment entered on March 8, 2007 after a bench trial in the Chancery Division, Probate Part. Isaac's wife, Catherine Storione Slutsky died during the pendency of a divorce action and Isaac sought a constructive trust and equitable distribution of the marital assets. We reverse and remand.
Isaac and Catherine were married in 1967. Defendant Carmella Pappert, Catherine's daughter from a previous marriage, was ten when Isaac and Catherine married. Isaac and Carmella apparently had a good relationship and he supported her until she married in 1974. Carmella has two sons, Jason and Joel, who were twenty-nine and twenty-seven years old at the time of trial. Isaac and Catherine purchased a home in Wenonah, Gloucester County, for $14,990 in 1968. Over the years of their marriage, Isaac supported the family while Catherine, who did not work outside the home, managed the family's finances and paid the bills.
Defendant James Mach is a Vietnamese immigrant who befriended Catherine in 1985. When he was eighteen, Catherine invited Mach to move into the marital home, over Isaac's objection, telling Isaac that it was temporary until Mach's mother came back from Vietnam. Mach contributed to the household by doing yard work and cleaning. When he was twenty-two, he obtained a job and began paying Catherine weekly rent of $125 to $150. Isaac was apparently unaware that Mach paid any rent.
Isaac worked for George Wallman's meat packing house from 1967 until 1982, and gave his paychecks to Catherine who, in turn, gave him $40 a week spending money. When Wallman's business closed in 1982, Isaac received $67,000 gross severance pay/profit sharing, which he gave to Catherine. Catherine used $10,000 of that money as a down payment for the joint purchase of a rental duplex in Philadelphia. Isaac and Catherine obtained a $25,000 mortgage for the balance of the purchase price for the Philadelphia duplex.
After the Wallman business closed, Isaac obtained employment with Mrs. Ressler's Food Products Company. He earned approximately $560 per week, which he gave to Catherine, who continued to give him an allowance.
After Mach moved into the marital home, Isaac's and Catherine's relationship deteriorated. Catherine took care of Mach, washing his clothes, cooking for him and teaching him to save money and be financially responsible. Isaac stopped attending family dinners and stayed in his own room after Mach moved into the marital home.
In 1993, Catherine told Isaac they needed money and they obtained an $81,000 home equity loan. Catherine used $19,000 of that money for a new car and approximately $25,000 to pay off the mortgage on the Philadelphia property. What happened to the balance of that money is unknown.
In 1999, Isaac was diagnosed with multiple sclerosis (MS) and was unable to continue working. Although he experienced unsteadiness, weakness, fatigue, falling episodes, tingling, numbness and episodes of vision loss, Catherine did not believe that he had MS and was angry when he stopped working. Isaac's health insurance terminated on January 1, 2000, and Catherine refused to pay his medical expenses. She reduced his allowance to $25 a week.
In January 2000, Catherine refinanced the marital home with a $58,600 mortgage. Although Isaac signed the papers, he did not recall the transaction.
In March 2000, Catherine purchased Certificates of Deposit (CDs) in her name alone for $12,669.82, $15,000 and $17,000. Isaac was not aware of these purchases.
In April 2000, Isaac began receiving $1,273 per month in social security disability benefits and had the checks deposited directly into his and Catherine's joint checking account at Commerce Bank, but Catherine still limited his allowance to $25 a week. Catherine also received her own social security payment of $617 a month.
When he left his employment at Mrs. Ressler's, Isaac received $26,000 in severance pay. With that money, he repaid a $13,000 loan from his sister and gave the remaining $13,000 to Catherine. Catherine deposited it in their joint checking account in October 2000. In November 2000, however, Catherine withdrew $13,000 from the joint account and purchased yet another CD in her name only. Isaac was unaware of that transaction.
In 2000, Catherine asked Mach if he was interested in purchasing the marital home. She claimed she was struggling financially and could not manage the payments. Mach agreed and said that Catherine and Isaac could remain in the house after he purchased it. An undated contract of sale with both Isaac's and Catherine's signatures as sellers and Mach's signature as buyer stated a purchase price of $100,000. Isaac did not recall signing the contract, nor did he recognize his signature on the document.
In August 2000, Isaac, Catherine and Mach went to a title company and, with a title clerk present, signed the closing documents. Isaac had never seen any of the documents before and there was no lawyer present to explain them to him. Isaac recalled that he and Catherine received a check at the time of the closing, but he did not remember the amount. The deed and settlement statement, dated August 9, 2000, state that Isaac and Catherine sold the Wenonah home to Mach for $100,000 and received a check for $40,623 at settlement. Mach financed his purchase of the home with a $90,000 mortgage. The deed, which recited that Catherine had prepared it, did not provide for a life estate to Isaac and Catherine.
After the closing, Catherine kept the utility bills in her name and continued to pay them. Mach agreed to whatever improvements Catherine wanted to make in the house and contributed what he could afford. Isaac had no part in discussions about household finances. In August 2000, Catherine signed a receipt stating that she had sold "all home furnishings to Jimmy Mach for the amount of $1,000." Isaac was not aware that the furnishings had been sold until after Catherine died.
Between July 2001 and March 2004, Catherine wrote checks from the joint checking account payable to Mach, totaling $8,313.77. A $500 check in July 2001 was designated a "loan." Other checks payable to Mach included $400 in February 2003, $2,000 in June 2003, $2,000 in July 2003, $800 in September 2003 and $650 in December 2003.
In September 2001, Catherine opened a money market account at Wachovia with $45,292.67. She designated Carmella's two sons as beneficiaries of the account upon her death. By June 2002, the account had a balance in excess of $90,000. Some of the monies deposited in that account were from Catherine's mother's estate.
In January 2003, Isaac redirected his social security disability checks into his own account, but the rental proceeds from the Philadelphia property ...