On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Burlington County, Docket No. FM-03-0012-07.
The opinion of the court was delivered by: Grall, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Skillman, Graves and Grall.
Defendant George Kay died during the pendency of an action for divorce on plaintiff Hildegard Kay's complaint and his counterclaim. Bernard Kanefsky, as executor of defendant's estate, sought a constructive trust to prevent the unjust enrichment that would allegedly occur if plaintiff and her daughter retained marital property beneficially belonging to defendant. The trial court denied the estate leave to substitute for defendant and file amended pleadings, dismissed the divorce action and stayed its order for three weeks to allow the estate to file "appropriate" pleadings in the General Equity Part.*fn1
On appeal, the estate contends that the trial court erred by relying on Krudzlo v. Krudzlo, 251 N.J. Super. 70, 73 (Ch. Div. 1990). In Krudzlo, the court held that, unlike a surviving spouse, the estate of a decedent spouse "is not entitled to assert equitable claims against the marital estate sounding in constructive trust, resulting trust, quasi-contract or unjust enrichment" in accordance with Carr v. Carr, 120 N.J. 336 (1990). Plaintiff and the estate view the trial court's order as barring the estate's assertion of such claims in any Part or Division of the Superior Court.
We conclude that the trial court should have accepted the pleadings and considered whether the equities stemming from the facts alleged call for relief from the strict legal effects of defendant's death during the pendency of the divorce action. Carr, supra, 120 N.J. at 351. To the extent that Krudzlo provides a contrary rule, we disapprove it.
The parties were married in 1973. It was the second marriage for both, and no children were born of this marriage. Plaintiff has one daughter, Marion Jolly, and defendant had two children and four grandchildren.
The Kays separated in March 2005. In May 2005, they sold the marital residence, which was titled in both parties' names although it was defendant's residence during his first marriage. Unable to agree upon a final disposition of the proceeds, each of the Kays took one-quarter and placed the remainder in escrow. They also jointly held a UBS Financial brokerage account, which defendant had placed on hold prior to his death. Between April 29 and July 1, 2005, plaintiff charged $4666 on defendant's credit card for goods, services, cash advances and tax payments.
Plaintiff filed her complaint for divorce in July 2006. Defendant filed his answer and counterclaim in October 2006. Defendant was then eighty-three years of age and retired.
Plaintiff, also retired, was seventy years of age and working part-time in a department store. Plaintiff managed the family assets for many years and had accounts and certificates of deposits in her name, her name and Jolly's and Jolly's name alone.
On May 9, 2007, the court entered an order prohibiting dissipation of marital assets and compelling the parties to comply with discovery deadlines. Prior to his death, defendant identified the following assets held in his name and plaintiff's jointly: $81,282.34 in escrow from the sale of the marital home; approximately $87,000 in the UBS brokerage account; and stock in ExxonMobil and Proctor & Gamble with a total value of approximately $11,000. He acknowledged sole possession of assets with a value of approximately $50,000 and estimated that ...