March 20, 2009
IN THE MATTER OF THE ESTATE OF MARILYN VARCADIPANE, DECEASED.
On appeal from the Superior Court of New Jersey, Chancery Division, Probate Part, Passaic County, Probate No. 187436.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted March 4, 2009
Before Judges Fisher and King.
In this appeal, we consider the validity of James Diminich's claim for reimbursement of funeral and burial expenses allegedly paid by him, and the impact on that claim of a settlement of an earlier dispute in this probate matter. Because the record on appeal does not reveal the judge's rationale for rejecting James's claim, we remand for further proceedings.
Marilyn Varcadipane died in June 2004.*fn1 Her 1992 will was probated by her father, Pat Mei, who was named as executor in the will. On October 20, 2004, James Diminich filed a complaint seeking to set aside the will. James alleged that in 1995 he and Marilyn had entered into an oral agreement, which contained his promises to care for Marilyn, who was then suffering from cancer, and to pay certain household expenses during her lifetime, in exchange for a distribution to him from her estate of $225,000 and a one-year life estate in real property owned by her. James alleged in his complaint a breach of that oral agreement because the probated will did not contain the provisions for which he had bargained.
The enforceability of this oral agreement and the identification of its precise terms were never resolved by the court. Instead, on June 27, 2005, despite the considerable burden James faced in prosecuting that claim, see, e.g., N.J.S.A. 3B:1-4; Klockner v. Green, 54 N.J. 230 (1969), the parties entered into a settlement agreement, which called for, among other things, James's entitlement to fifty-one percent of the estate after the payment of all estate liabilities.
On January 29, 2008, the executor filed a complaint seeking approval of his final accounting and the distribution of the estate. James filed a responsive pleading, asserting his right to be reimbursed from the estate for various expenses allegedly incurred by him both during Marilyn's life and as a consequence of her death. James asserted, as he claimed in his earlier complaint, that he had maintained Marilyn's home and cared for her from approximately October 1995 until her death. In addition, he claimed that he paid expenses "related[d] to [Marilyn's] last illness and her funeral," arguing that these were liabilities of the estate for which he should have been compensated prior to a final distribution of the residuary estate.
On March 7, 2008, the trial judge heard argument, which included a discussion about the impact of the earlier settlement agreement on James's claim for reimbursement. The judge observed that she could not determine whether James's claim to "these [expenses] . . . were resolved [by] the [s]ettlement" absent further documentation. The matter was adjourned to allow for additional submissions.
On May 2, 2008, the adjourned return date, the trial judge concluded that James's claim to reimbursement largely consisted of those expenses that were incurred as part of his oral agreement with Marilyn, which was the subject of the first suit, and were resolved by the settlement agreement. On the other hand, the trial judge recognized that any expenses paid by James for Marilyn's funeral and burial were not barred by the settlement agreement. Referring to the large "stack of documents" submitted by James, the judge indicated she would "take a look . . . but . . . the cemetery and the funeral are the responsibility of the estate," and are "something that should be paid for by the estate."
The record on appeal, however, does not indicate any further decision by the judge; all that followed was the entry of judgment on May 27, 2008. That judgment permitted the payment of the executor's corpus commissions and attorneys' fees, and directed the distribution of the balance of the estate in accordance with the June 27, 2005 settlement agreement. The judgment made no mention of James's claim for reimbursement; we assume, as have the parties, that the absence of any mention of James's claim in the judgment reveals that the judge denied the entirety of his claim.
The judgment's failure to allow for the reimbursement to James of any of the living expenses, as well as Marilyn's funeral expenses, prompted James's appeal. After carefully considering the parties' arguments and the record on appeal, we (1) reject James's argument that he was entitled to be reimbursed for living expenses because of the preclusive effect of the settlement agreement, (2) reject the executor's arguments that James's claim for funeral and burial expenses was precluded by either the settlement agreement, res judicata or the statute of limitations, but (3) remand for further proceedings regarding the funeral and burial expenses.
James's claim turns on the scope of the settlement agreement. That question is largely governed by the nature of James's earlier suit and the alleged terms of his oral agreement with Marilyn. In other words, absent an express provision in the settlement agreement on the precise point in question, we are left to interpret the reach of the settlement agreement by ascertaining the scope of the issues then in dispute.
James's agreement with Marilyn, as described in James's verified complaint in the first suit,*fn2 only required that he care for Marilyn during her lifetime; James did not allege that part of his performance of that agreement required his eventual payment of Marilyn's funeral and burial expenses. As part of the parties' settlement, James's complaint was dismissed; any right to reimbursement from the estate became subject to the settlement agreement. Accordingly, we must examine the settlement agreement to determine the validity of James's claims for reimbursement.
Because the settlement agreement makes no specific disposition of James's claims, we must apply standards that have been developed for the interpreting of settlement agreements. Those standards were outlined in Dep't of Pub. Advocate v. N.J. Bd. of Pub. Util., 206 N.J. Super. 523 (App. Div. 1985). There, we recognized that parties to a dispute "are in the best position to determine how to resolve a contested matter in a way which is least disadvantageous to everyone." Id. at 528. As a result, we held that courts should "strain to give effect to the terms of a settlement wherever possible," and that "any action which would have the effect of vitiating the provisions of a particular settlement agreement and the concomitant effect of undermining public confidence in the settlement process in general, should not be countenanced." Ibid. See also Brundage v. Estate of Carambio, 195 N.J. 575, 601 (2008).
Here, James asserted that Marilyn's will, which made no mention of him, breached Marilyn's promise to provide for him in exchange for his payment of her living expenses and his care for her during her lifetime. The parties settled that claim, and their agreement provided James with a fifty-one percent interest in the estate. James was, thus, as the trial judge correctly held, barred by the settlement agreement of further seeking payment from the estate of the living expenses incurred by him during Marilyn's lifetime.*fn3 The dismissal with prejudice of his earlier suit, which was an aspect of the settlement agreement, demonstrates the parties' intention that James could not reassert his claim for reimbursement of Marilyn's living expenses at a later date.
However, James did not allege in his earlier suit that his oral agreement with Marilyn included a promise that he would bear responsibility for Marilyn's funeral and burial expenses. Even though our public policy favors settlements, Nolan v. Lee Ho, 120 N.J. 465, 472 (1990), in the absence of clear direction from a settlement agreement, we presume only that the parties intended to terminate the issues pending in the existing lawsuit, Isetts v. Borough of Roseland, 364 N.J. Super. 247, 254 (App. Div. 2003).
In addition, the parties' settlement agreement did not expressly stipulate James's responsibility for the funeral and burial expenses. Instead, the settlement agreement declared James's entitlement to fifty-one percent of the estate "after all liabilities if any are satisfied out of the estate." This provision strongly suggests that expenses incurred after Marilyn's death, such as funeral, burial and repast expenses, would remain the obligation of the estate, as is the general custom. See Donato v. Mason, 117 N.J. Super. 1, 3-4 (App. Div. 1971) (holding that funeral expenses are "primarily chargeable to [the] estate"); Alfred C. Clapp & Dorothy G. Black, Wills and Administration, 7 New Jersey Practice § 1272 at pages 419-20 (3rd ed. 1984) (stating that "[a]n executor or administrator is bound to provide for his decedent an appropriate funeral, and the estate in his hands is bound to pay the expense thereof[;] if he fails to act either because of neglect or otherwise . . . and if a proper third person as a matter of duty or necessity provides for the funeral, then the representative must reimburse that person"). It is also noteworthy that Marilyn's will also contains a direction, consistent with that custom, stating that all of her "just debts, funeral and testamentary expenses . . . be paid and satisfied out of my residuary estate as soon as conveniently can be done after my decease," and that the remainder thereafter be distributed to her beneficiaries. The settlement agreement does not suggest that this aspect of Marilyn's will had been reformed to require some other disposition of the estate's obligation to pay Marilyn's funeral expenses.
Because the parties did not specify in their settlement agreement that James would bear responsibility for funeral expenses, we agree with the trial judge that the claim for funeral and burial expenses was not barred by the settlement agreement. To the extent that James actually paid those expenses, he was entitled to reimbursement from the estate before final distribution pursuant to the will as reformed by their settlement agreement.
As to the specifics of his claim, James asserted that he paid funeral and burial expenses in the amount of $11,692.60. In reviewing the documentation provided to the trial judge, we observe the presence of: a bill from the Hackensack Cemetery Company, addressed to James, in the amount of $4464; a check made out to that company in the amount of $4464; and two checks payable to G. Thomas Gentile in the amounts of $9,370 and $933, which bear notations suggesting they related to Marilyn's funeral. The sum of these items exceeds the amount sought by James. The record on appeal provides no greater clarity with regard to this claim.*fn4
In any event, as we have observed, the trial judge indicated she would examine the documentation provided by James following the May 2, 2008 hearing, but she did not later explain her reasons for denying James's claim for relief. Because the judge correctly ruled that this claim was not barred by the settlement agreement, the reason for the ultimate denial of the claim -- if there was one -- is not suggested by the record. We remand for appropriate findings regarding James's claim for reimbursement of Marilyn's funeral and burial expenses. If the judge deems it necessary, an evidentiary hearing may also be conducted.
Remanded. We do not retain jurisdiction.