May 10, 2010
IN THE MATTER OF THE ESTATE OF PHILOMENA VICINIO, DECEASED.
On appeal from the Superior Court of New Jersey, Chancery Division, Ocean County, Docket No. 174577.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued: April 14, 2010
Before Judges Axelrad, Sapp-Peterson and Espinosa.
Defendant Peter Vicinio appeals from an order that removed him as executor of the estate of his mother and voided inter vivos transfers of virtually all of her estate to him based on the finding of undue influence. We affirm.
Ninety-one-year-old Philomena Vicinio passed away testate on October 11, 2007, leaving her daughter Roseann Pakay and appellant as beneficiaries.*fn1 On March 4, 2008, Roseann filed a complaint alleging breach of fiduciary duty, negligent misrepresentation, fraud and unjust enrichment and seeking to remove and replace appellant as the executor of the estate and void inter vivos transfers of liquid assets and real estate from Philomena to him. Appellant filed an answer to the complaint.
After a three-day bench trial, Judge John A. Peterson, Jr. placed his findings of fact, credibility assessments, conclusions of law and decision on the record on April 21, 2009, memorialized in an order of the same date. He found appellant had exercised undue influence over Philomena and thus entered an order in favor of Roseann, naming her executrix and returning the transferred assets to the estate. This appeal ensued.
Appellant concedes that a confidential relationship existed between him and his mother, but argues the trial court erred in finding he did not adequately rebut the presumption of undue influence. Specifically, appellant argues the presumption was rebutted in light of the competent and disinterested legal counsel Philomena received from two separate attorneys, John Jorgensen and Kenneth Bieg, who purportedly advised her to transfer her entire estate to him as part of an asset protection plan. He alternatively argues that the judge erred in failing to award him a proper credit for his substantial work on Philomena's real estate ("the Kenilworth property") and for his mileage to and from the property. We affirm substantially for the reasons articulated by Judge Peterson in his comprehensive oral opinion. R. 2:11-3(e)(1)(A)&(E). We add the following comments.
Philomena had lived with her husband at the Kenilworth property, a duplex, for fifty-three years. In May 2002, her husband suffered a stroke, was hospitalized, and died three months later. Her mental and physical health then began to deteriorate and she began to suffer the early effects of Alzheimer's.
While her husband was in the hospital, Philomena moved in with Roseann and her family. She then moved in with appellant and his family in November 2002, and remained there until June 2006, when she moved back in with Roseann. Unfortunately, during the time Philomena lived with appellant, he and Roseann's relationship became strained due to his perception that he was shouldering the entire burden of caring for their mother and Roseann's frustration over his interference with her ability to visit their mother at his house.
On April 7, 2003, Jorgensen prepared and witnessed a will that Philomena executed, bequeathing her estate to both children in equal shares. Philomena's estate consisted of the Kenilworth property, as well as liquid assets in the form of checking and savings accounts and annuities totaling about $150,600.*fn2 Within a few weeks, she met with Bieg to discuss estate and Medicaid planning, and he recommended that she begin transferring assets to both of her children. However, despite Bieg's recommendation and unbeknownst to Roseann, in May 2003, Philomena transferred all of her liquid assets into appellant's name.
On or about June 1, 2004, Philomena again met with Bieg and deeded the Kenilworth property to appellant alone for the sum of $1. Appellant submitted the certifications of Bieg and his legal assistant, in which they both attested that Philomena was of sound mind and fully competent when the deed was executed. However, appellant did not mention to Bieg that he had submitted a May 25, 2004 certification to the court that Philomena was "legally deaf, partially blind... and suffer[ing] from Alzheimer's." Moreover, two days after the deed was executed, appellant testified at a court hearing*fn3 that Philomena was "totally incompetent" and "doesn't remember [for] more than minutes." Appellant did not inform anyone, including the court, that his mother had just transferred the balance of her estate to him two days before. Roseann did not become aware of the transfer of the property until two years later.
At trial, appellant testified that both his parents had expressed a desire to disinherit Roseann, despite the contents of their wills. He also claimed the inter vivos transfers were made pursuant to an asset protection plan and attempted to explain the fact the transfers were at odds with the estate planning advice given by attorneys to make gifts to both children and Philomena's April 2003 will.
The judge made extensive credibility findings, expressly discrediting appellant's testimony. The court found that "there were so many [of appellant's] statements... not corroborated by any [other] independent testimony, evidence, or documents" and "[t]here were clearly numerous instances of incredible testimony, misrepresentations of other items in evidence, and bare allegations that were not corroborated in any way by any of the other witnesses in the case or writings entered into evidence through both counsel." The court further found appellant's own admissions as to his mother's "vulnerability, exploitation, lacking capacity, her weakness and dependence all support a presumption of undue influence" and that "[n]othing in the certifications of the professionals as to alleged capacity and their observations or any testimony [by appellant] has overcome this presumption."
Judge Peterson further explained:
And clearly this Court finds that there was adequate mental, moral, and indeed physical dependence and coercion exerted upon the decedent by her son. This dependence is supported further even independent of the debilitating effects of dementia. The decedent, by [appellant's] own admission, had macular degeneration, had significant problems with hearing, and was otherwise under [appellant's] sole control for the considerable period of time in question.
This Court notes that each case must be governed by its own merits on a case by case basis, and it is clear as to the voluminous evidence, documentation, much of which is not refuted, that undue influence clearly was exerted in this case. The suspicious circumstances, the reliance has been demonstrated before the Court. In fact, this Court finds nothing has been presented to the Court to refute the findings and observations made by Judge Williams back in the June 10, 2004 Court proceeding....
This Court notes that the same animosities toward his sister color much of [appellant's] testimony [as in the visitation case]. In fact, the Court finds that [appellant] in many instances could barely control his anger toward his sister.
The judge further discounted appellant's attempt to rely upon the independent advice of Jorgensen and Bieg, noting that Philomena's last will and testament prepared by Bieg and her power of attorney prepared by Jorgensen "clearly and unequivocally showed [her] intent to treat both her son and daughter equally" and the fact she never changed her will was "further support of her clear intent." The court also noted that Bieg had not been advised of appellant's own assessment of his mother's impaired mental capacity made less than a month before she signed the deed, the strained relationship between the siblings or the pending litigation involving visitation. Nor had he been told that Philomena had previously transferred all of her liquid assets to appellant and that the transfer of the Kenilworth property represented the balance of her assets.
The court concluded:
Most importantly, however, the Court notes that the late Philomena Vicinio without hesitation clearly expressed her love for both of her children. Even in her diminished state and suffering from dementia as she was at time, that love was clearly expressed, and this Court finds that to have been her overwhelmingly and long standing Estate plan to treat both of her children equally.
For the reasons stated and applying the body of case law as to inter vivos transfers, this Court finds that clearly the confidential relationship existed and there are overwhelming facts and circumstances supporting the suspicious circumstances existing as to the transfers about which [appellant] was never open with either [Roseann] or with any professional.
Having found the presumption of undue influence, the Court finds very little, if any, credible testimony to overcome such presumption. As such, the Court finds that all of the transfers of the decedent's property including the real estate itself should be voided....
The court also did not have any confidence that if appellant were maintained in his position as executor, the estate would be accurately finalized with the appropriate accounting. Accordingly, the court directed the substitution of Roseann as executrix.
Based on our review of the record and applicable law, we are satisfied the court performed an accurate and comprehensive review of the trial record, made extensive credibility assessments, and articulated its findings of fact and conclusions of law in a cogent opinion. Appellant sets forth no arguments on appeal that would persuade us to interfere with Judge Peterson's sound ruling, which is based on his "feel of the case" and supported by substantial credible evidence in the record. See Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474 (1974).
We turn now to appellant's alternative argument. Appellant contends the $87,358 in rental income he received from the Kenilworth property, which the court considered to be "a wash" for his out-of-pocket expenses for materials, was not adequate compensation. At trial appellant urged he was entitled to some compensation for his "sweat equity," namely the 3,599.5 hours of labor in maintaining and upgrading the Kenilworth property, the primary asset of the estate, and some credit for the 26,638 total miles he drove back and forth to the property over the course of six years to work on it. However, appellant failed to articulate what amount of loss, if any, he sustained or to submit any proofs for the court to have calculated a reasonable quantum of compensation. Nor did appellant articulate to the trial court the theory of unjust enrichment that he now raises on appeal.
Appellant has failed to convince us that a remand on this issue is in order. To establish unjust enrichment, the proponent must show both that a benefit was bestowed, and that retention of that benefit without payment would be unjust. Assocs. Commercial Corp. v. Wallia, 211 N.J. Super. 231, 243 (App. Div. 1986). Appellant has failed to articulate what benefit, if any, Roseann or the estate gained other than the generalized allegation that the property has appreciated in value because of his labor. Additionally, appellant's failure to show that he expected remuneration for his labor and mileage at the time he performed the services or conferred a benefit unequivocally precludes the argument that Roseann or the estate has been unjustly enriched. See VRG Corp. v. GKN Realty Corp., 135 N.J. 539, 554 (1994); Assocs. Commercial, supra, 211 N.J. Super. at 244. Appellant was reimbursed for his out-of-pocket costs of materials by the offset of rent. Although Roseann confirmed that her brother performed significant labor on the property, there never existed any arrangement whereby appellant would be paid for such labor or reimbursed mileage. It is clear appellant undertook the services of his own volition with no reasonable expectation of payment and no demand for payment from Philomena or Roseann. Accordingly, appellant is now precluded from asserting his theory of unjust enrichment.