August 3, 2009
IN THE MATTER OF THE ESTATE OF PHILOMENA SICA, DECEASED, A/K/A FILOMENA SICA
GERARD SICA, PLAINTIFF-RESPONDENT/ CROSS-APPELLANT,
RONALD DEVITO, RALPH DEVITO AND 10TH GROUP, LLC, DEFENDANTS-APPELLANTS/CROSS-RESPONDENTS.
On appeal from the Superior Court of New Jersey, Chancery Division, Probate Part, Essex County, Docket No. CP-0011-2006.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued May 26, 2009
Before Judges Carchman and Sabatino.
This is a will contest wherein plaintiff Gerard Sica, a surviving grandson claimed that he was entitled to share in the residuary estate of his grandmother Philomena Sica (Philomena). His cousins, defendants Ronald DeVito and Ralph DeVito challenged his claim. The trial judge interpreted the will and concluded that plaintiff shared in the estate. In addition, she awarded defendants certain management fees and improvement costs for managing and improving property that was part of the residuary estate. Defendants appeal and plaintiff cross-appeals. We affirm and dismiss both appeals.
The facts are not in significant dispute. The testator, Philomena died on January 14, 1960, leaving a will dated August 10, 1945. She was survived by nine children: Geraldine Sica, Thomas De Maio, James De Maio, Angelo Sica, Joseph Sica, Nunzio Sica, Anna Sica, Fred Sica and Frank Sica. Her son Sam De Maio had predeceased her leaving five children: Gaetano, Filomena, Geraldine, Leonora and Gloria De Maio, who also survived the testator. Under Article Second of her will, Philomena bequeathed $500 to each such grandchild who survived her. The share of any named grandchild who predeceased her was to be divided equally among the remaining grandchildren. Philomena devised the remainder of her estate under Article Third, which states as follows:
THIRD: I give, devise and bequeath all the rest, residue and remainder of my property, both real and personal, to which I may be entitled and over which I have any disposing power, at the time of my death to my daughter, Geraldine Sica, until such time as she marries. In the event of her marriage or upon her death said property is to be divided equally between my said children, Geraldine Sica, Thomas De Maio, James De Maio, Angelo Sica, Joseph Sica, Nunzio Sica, Anna Sica, Fred Sica and Frank Sica. In the event of the death of any of the above mentioned children prior to my death and or prior to the marriage of my said daughter Geraldine Sica, the share of said deceased child is to be devised to his or her child or children, if any, providing said surviving child or children are the natural born child or children of said deceased parent. For the purpose of this devise adopted children are not to be considered natural born children. In the event of the death of any of my above mentioned children without leaving issue their said share is to be devised equally between my said surviving children. [(Emphasis added).]
Article Fourth appointed Geraldine as executrix.
Critically important, Geraldine never married and died on September 29, 2002. The only child of Philomena still alive at the time was Anna DeVito (Anna), who was then appointed substitute administrator. Eight of Philomena's children who survived her predeceased Geraldine. Four of the deceased children left surviving children (grandchildren of the testator) and one also left surviving grandchildren (great-grandchildren of the testator).
As we have noted, Anna was the only one of the testator's children who survived Geraldine. Anna applied to be appointed Substitute Administration, C.T.A. of Philomena's estate naming herself and the five children of Sam DeMaio, who were named on the will, and Frank Sica as the testator's only heirs. Notably, Frank Sica was deceased at that time and some of the other surviving grandchildren were named, including plaintiff. Her designation of only the grandchildren as heirs reflected an interpretation that Anna and her children would be the only heirs under Article Third of the will. No explanation was provided for including Frank Sica who predeceased Geraldine.
On November 19, 2002, Anna conveyed the real property owned by Philomena on North 10th Street (the real estate) to herself. Anna died on March 6, 2003. Her will was probated in Essex County, and in her Will, she devised her entire estate to her children, defendant Ronald DeVito (Ronald), defendant Ralph DeVito and Mary Ann Campenella. As executor of the Estate of Anna, Ronald conveyed, for no consideration, the real property to defendant 10th Group, LLC, of which he and Mary Ann Campenella were principals. Subsequently, defendants gave a mortgage in the amount of $200,000 secured by the real estate.
Gerard*fn1 challenged defendants' interpretation of Article Third. The judge interpreted Article Third so as to include those heirs of children who predeceased Philomena as well as Geraldine. The judge interpreted the will to provide for a division of the residuary estate into five equal shares with one share to each: (1) the heirs of Anna DeVito; (2) the heir of Thomas DeMaio; (3) the heirs of Nunzio Sica; (4) the heir of Alfred Sica; and (5) the heir of Frank Sica. The court imposed a constructive trust "upon the assets of the Estate of Philomena Sica in the hands of the Estate of Anna DeMaio, Ronald DeVito, Ralph DeVito, Maryann Campenella, and the 10th Group, L.L.C[.]"
Following trial, the court entered a final judgment of distribution ordering defendants to reconvey the real estate at 180-182 and 184-186 North Tenth Street, Newark, New Jersey to the Estate of Philomena (the Estate), to be listed for sale and distributed in cash.
At trial, defendants claimed that they expended $57,000 in improvements to the property. The court ruled that they did not have to reimburse the Estate to the extent that they could document such expenditure. At the time of trial, they could verify approximately $37,000. The court further ruled that "the burdens and the benefits should be borne by the Philomena Sica Estate by all the heirs." The court awarded defendants, as constructive trustees of the real estate, a commission fee of five percent of "the gross rents collected for the period of April 15, 2003, through the date of the sale of the real estate." The court found that plaintiff failed to meet his burden of proof as to "the contents of the safe deposit box at the Bank of America" and "of the safe located in the apartment of Geraldine Sica." This appeal followed.
While defendants raise a number of issues on appeal, the critical inquiry is the meaning of the third sentence of Article Third. To repeat, that sentence provides: "In the event of the death of any of the above mentioned children prior to my death and or prior to the marriage of my said daughter Geraldine Sica, the share of said deceased child is to be devised to his or her child or children, if any . . . [.]"
The ultimate inquiry is the intent of the testator. Defendants contend that "[t]he application of the rules of will construction to the Will of Philomena Sica clearly demonstrates that the entire estate [was] devised to Anna DeVito upon the death of Geraldina Sica." Defendants rely on the doctrine of probable intent of the testator. Plaintiff, on the other hand, relies on a literal construction of the third sentence of Article Third but asks that the last sentence of that Article not be limited to its literal meaning. Specifically, plaintiff contends that (1) "[t]he third sentence of Article T[hird] states that children of a child of Philomena Sica dying before the marriage of Geraldine take their parent's share," and seven children died before her marriage because Geraldine never married and (2) the term "surviving children" should be interpreted broadly to include descendants of deceased children.
All parties agree that the challenged language of the will is inartfully drafted. Notwithstanding the limitations in language, the probable intent of the testator must prevail. In re Estate of Payne, 186 N.J. 324, 335 (2006) (stating "[i]n interpreting a will, [the Court's aim] is to ascertain the intent of the testator"); Matter of Estate of Zahn, 305 N.J. Super. 260, 271 (App. Div. 1997) (stating "[u]nder the probable intent doctrine, New Jersey courts construe wills to 'ascertain and give effect to the probable intention of the testator'") (quoting Fidelity Union Trust Co. v. Robert, 36 N.J. 561, 564 (1962)) (internal quotation marks omitted); In re Estate of Ericson, 152 N.J. Super. 250, 253 (Ch. Div. 1974) (stating "[i]n construing a will[,] testator's intent is the cornerstone"), aff'd in part and rev'd in part, 152 N.J. Super. 169 (App. Div. 1976), rev'd, 74 N.J. 300 (1977). In interpreting a will, a court may look to the probable intent of the testator as described by the language utilized in the challenged instrument. Fidelity, supra, 36 N.J. at 564-65. See also In re Trust Created By Agreement Dated December 20, 1961, ex rel. Johnson, 194 N.J. 276, 282 (2008). The doctrine of "probable intent must be applied sparingly and only where necessary to give effect to the intent of the will or trust without varying the terms of the document." In re Estate of Gabrellian, 372 N.J. Super. 432, 441 (App. Div. 2004) (citing In re Munger's Estate, 63 N.J. 514, 521 (1973); In the Matter of the Estate of Baker, 297 N.J. Super. 203, 209 (App. Div. 1997), certif. denied, 182 N.J. 430 (2005)). The doctrine "cannot be used to 'conjure up an interpretation or derive a missing testamentary provision out of whole cloth.'" Ibid. (quoting In re Estate of Burke, 48 N.J. 50, 64 (1966)). Also, "[t]he doctrine of probable intent is not applicable where the documents are clear on their face and there is no failure of any bequest or provision." Id. at 443. Accordingly, "[w]here the doctrine has been used it has been done only with caution and to clarify ambiguities in a will, usually where an unforeseen contingency occurred which might have resulted in unexpected intestacies . . . [.]" Id. at 442 (citing Burke, supra, 48 N.J. at 64-65; Engle v. Siegel, 74 N.J. 287 (1977)).
We discern the estate plan enunciated in Article Third to contain, among others, two critical elements. First, Geraldine, Philomena's unmarried daughter, was to receive a life estate in the real estate. Second, the operative provision that would terminate that life estate while Geraldine was alive would be her marriage. The very nature of the life estate would likewise terminate upon her death. The operative provisions suggest that upon the death of child of Philomena prior to Geraldine's marriage, that deceased child's children would take from Philomena's estate subject to Geraldine's life estate. We cannot accept that only "upon marriage" would the challenged provision become operative. The intent was to protect an unmarried Geraldine's interest. If she never married, the life estate would continue until her death. If she died without being married, the various inchoate rights of the surviving grandchildren would still be preserved.
Nothing in the will suggests that Philomena intended to divest her surviving children or grandchildren of their respective interests during the pendency of Geraldine's life estate or when that life estate terminated. That is the result suggested by defendants, and a result we reject.
Four of Philomena's children who outlived her died before Geraldine's death and left surviving children and one, Anna, survived. We conclude that Philomena's intent was to have these five interests share, per stirpes, in the residuary estate, and we further conclude that the trial judge correctly divided the estate into five shares reflecting that intent.
We reject the alternative interpretation of the will offered by Liberty Mutual Insurance Company, named as a party defendant because of its status as a surety, an interpretation that appellants advocate in the event that their primary argument is rejected. Following that alternative interpretation to its logical conclusion, if all of Philomena's children predeceased her, there would be an intestacy, a result that would be intolerable. See Burke, supra, 48 N.J. at 65 (stating "[a] testator, by the act of the making of a will, casts grave doubt on any assumption that he [or she] expressly intends to chance dying intestate as to any portion of his property") (quoting Fidelity, supra, 36 N.J. at 572) (internal quotation marks omitted). See also In re Will of Maliniak, 199 N.J. Super. 490, 493-94 (App. Div.) (stating "[t]here is a strong and well-recognized presumption against partial intestacy"), certif. denied, 101 N.J. 267 (1985).
On the cross-appeal, defendants contend that "[t]he court was unreasonable in basing the amount of the management fee awarded on general property market increase." Specifically, defendants argue that Ronald DeVito made significant upgrades to the property, which "had a substantial positive impact in the increase to the value of the property." Defendants contend that, for the management and improvements to the property, the court should have awarded Ronald DeVito five percent of the gross sales price, rather than five percent of the total rent collected, because market effects alone would not have doubled the value of the property. Plaintiff contends that the court should not have awarded defendants management fees because (1) they breached their fiduciary duties as constructive trustees; and (2) the property was managed by the Calello Agency.
We reject plaintiff's contention and note that plaintiff agreed at trial that it is customary for a property manager, or alternatively, a constructive trustee, to receive a fee. Second, the trial court did not find that defendants acted with unclean hands. The only finding of unclean hands made by the court was against Anna, as she acted wrongfully "in conveying the property to herself and misleading the Essex County Surrogate as to the names of all the heirs [of Philomena Sica]." Accordingly, the court ordered the reconveyance of the property to the Estate. However, as to defendants, the judge acknowledged their services in improving and managing the property and made no finding of unclean hands.
Third, the court found that Ronald DeVito and the 10th Group actively participated in the management of the property by supervising and instructing the Colello Agency, "aggressively assist[ing] in making sure that Colello Agency collected the rents" and setting up an account to ensure future assets "to continue the operation . . . and improvement of the property." On review, we will give due deference to the factual findings of a trial court. Rova Farms Resort, Inc. v. Investors Ins. Co., 75 N.J. 474, 484 (1974).
We likewise defer the judge's discretionary determination as to the appropriate compensation to Ronald DeVito. Notably, the trial court placed the financial burden of such improvements on the Estate, to the extent that the expenditures were verified. As for the services of Ronald DeVito and the 10th Group in managing the real estate, the court awarded the trustee commission in their favor. "[F]ixing of trustee's commissions will not be overturned absent abuse of discretion." Semler v. CoreStates Bank, 301 N.J. Super. 164, 186 (App. Div.) (citing Bank of N.J. v. Abbott, 207 N.J. Super. 29, 38 (App. Div. 1986)), certif. denied, 151 N.J. 467 (1997). Here, nothing in the record supports defendant's position that the court abused its discretion in fixing the trustee commission.
We affirm the judgment in all respects and the appeal and cross-appeal are dismissed.