June 14, 2010
IN THE MATTER OF THE ESTATE OF ELISABETH WENNING DAVIDSON, DECEASED
On appeal from the Superior Court of New Jersey, Chancery Division, Probate Part, Mercer County, Docket No. 94-00884.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued May 17, 2010
Before Judges Reisner and Yannotti.
This appeal arises from a probate case in which Hildegarde Wenning Meech objected to an accounting filed by R. Maximilian Goepp III, the executor of the Estate of Elisabeth Wenning Davidson. Goepp now appeals from a July 16, 2008 order of the Probate Part, enforcing a settlement of the accounting dispute and permitting Meech's counsel to file an application for fees.
He also appeals from an October 16, 2008 order denying his motion for reconsideration and awarding Meech's counsel $11,344 in fees.
These are the most pertinent facts. Goepp was appointed executor of his mother Elisabeth Wenning Davidson's estate in 1994. In 2007, Goepp, represented by his attorney Coulter K. Richardson, filed a verified complaint for approval of an accounting and final distribution of the estate. The accounting covered the period 1994 to 2000. The complaint listed Goepp, his sister Meech, and the estate of their late sister Carla E. Goepp, as the residuary legatees of Davidson's estate. According to the accounting, Davidson's estate was insolvent, with the principal creditors being Goepp and his late sister Carla. The accounting sought approval to transfer Davidson's house to Goepp and the estate of Carla, in proportion to the sums they allegedly had loaned Davidson's estate.
Meech filed objections to the accounting, claiming an interest in the Davidson house, objecting to certain estate expenditures, and questioning why title to the house had been transferred into Goepp's sole name. Goepp defended the action, contending that the estate had previously settled with Meech for $60,000 and that the accounting was necessitated only by her refusal to acknowledge the settlement. With the parties' consent, Judge Shuster referred the accounting case to mediation by order dated February 18, 2008.
After a lengthy mediation session, the parties signed a four-page handwritten settlement agreement dated February 22, 2008. There is no dispute that Goepp's attorney Coulter Richardson acted as the scrivener of the handwritten agreement. In pertinent part, the agreement provided that the estates of Elisabeth Wenning Davidson and Carla Goepp would pay Meech $50,000, and would also bear all of the costs for the accounting litigation. Goepp agreed to transfer to Meech his 25% interest in a Vermont property. Under the agreement, if there were insufficient funds in the estates to pay Meech and the litigation expenses, the Davidson house was to be sold to raise the necessary funds.
Under the agreement, Richardson was to prepare a typed formal version of the settlement for review by Meech's counsel. If the parties could not agree on the appropriate language, they authorized the mediator "to finalize the language consistent with the agreement in mediation." The mediator drafted a typed version of the agreement, which provided that if the house was sold, Goepp would pay the closing costs. After Goepp refused to sign the typed agreement, Meech filed a motion on May 23, 2008 to enforce the settlement. The motion was supported by a certification from Meech's counsel attesting to the settlement.
In response to the motion, Ambrose Richardson, the named partner in the firm that employed Coulter Richardson, sent Judge Sypek a letter dated June 6, 2008, stating that Goepp's attempt to "avoid or modify" the settlement placed his law firm in a conflict of interest, because his firm also represented several of Goepp's creditors who would benefit by the settlement. Additionally, Ambrose indicated that to the extent Goepp intended to argue that he did not knowingly or voluntarily sign the agreement "we could not advocate that position in good faith."
The letter noted that Meech's counsel and the mediator "spoke of criminal referrals, which may have intimidated Mr. Goepp." The letter also advocated on Goepp's behalf certain points that Ambrose asserted should be argued by "non-conflicted counsel." Hence, he asked that the motion be adjourned to allow Goepp to retain new counsel.
On June 18, 2008, Coulter Richardson filed a motion to be relieved as counsel, supported by a certification from Ambrose Richardson. The certification asserted the economic conflict of interest and the fact that Goepp was refusing to take the firm's advice on the advisability of honoring the settlement. Judge Sypek granted the motion by order dated June 27, 2008, permitting Coulter Richardson to withdraw as counsel.
At the oral argument of the enforcement motion, on July 11, 2008, Goepp appeared pro se, requesting more time to retain counsel. The judge denied his request, reasoning that he had known for weeks that he would need to obtain new counsel; he held out no prospect of actually being able to retain a new attorney; the house was in foreclosure, thus threatening the interests of all parties; and Goepp admitted that he had taken no steps to oppose the foreclosure.
At the oral argument, Goepp raised several objections to the substance of the settlement as typed by the mediator. However, he did not object that his attorneys had lent him money, or claim that they browbeat him into settling the case. Nor did he contend that his attorneys had failed to pursue claims on his behalf. He did not offer any certifications or other legally competent evidence to support any of his objections to the settlement.
The judge found there was no basis to conclude that the settlement was not voluntarily entered into, and she concluded that the settlement as typed by the mediator was consistent with the handwritten version. She also found that time was of the essence in implementing the settlement because the house, which was apparently the only asset from which the settlement monies might be raised, was in foreclosure. In her order of July 16, 2008, enforcing the settlement, Judge Sypek noted that she had considered the motion, and "the letters of Coulter Richardson, Esq. and the objector dated July 16, 2008 which did not provide any substantive objections."
Goepp filed a motion for reconsideration, and an attorney represented him at the oral argument of that motion. In support of the motion, Goepp filed a lengthy certification setting forth his dissatisfaction with the settlement, and with his attorneys' representation of him at the mediation, including their alleged failure to respond to accusations that he had committed criminal wrongdoing. At the oral argument of the motion, Goepp's new counsel argued that the settlement was the result of coercion in the form of a threat of criminal prosecution, to which threat Goepp's former attorneys did not properly respond because they had a conflict of interest.
The alleged source of the conflict arose from the fact that Goepp had heavily mortgaged the Davidson house to fund his litigation expenses. Ambrose Richardson, one of Ambrose's clients, and a company in which Ambrose held an interest, all held mortgages on the house. The mortgages were either security for counsel fees or security for loans Goepp used to pay counsel fees. The record reflects that the retainer agreement between the Richardson firm and Goepp clearly disclosed the mortgages to Ambrose, and the other client's interests, and Goepp consented and waived any conflict. Moreover, the mortgage agreement with Chariot Recovery Inc. was signed by A.M. Richardson, President, and by Goepp; hence Goepp clearly knew of Ambrose's interest in that company. However, he asserted that Ambrose failed to advise him to have independent counsel review the mortgage agreements, in violation of RPC 1.8(a)(2).*fn1
Goepp also contended that it would be impossible to comply with the settlement because there was not enough equity in the house to fund the settlement. His attorney did not state any objection to the fee application that Meech's attorney had filed.
In an oral opinion placed on the record on October 16, 2008, the court determined first that the reconsideration motion was untimely, having been filed 50 days after the order on reconsideration. However, she considered the merits. She noted that the claim of coercion was unpersuasive and untimely, because Goepp waited until the eleventh hour to raise the issue. He did not raise the issue during any of the telephone conferences with the court concerning the settlement, and only asserted the claim after Meech finally moved to enforce the settlement. She also found no merit in the claim of alleged impossibility. She awarded Meech's attorneys their fees for the cost of the enforcement action, without objection from Goepp's counsel.
On this appeal, Goepp contends that: 1) the settlement agreement was unenforceable because of his counsel's conflicts of interest; 2) the court should have held a testimonial hearing due to material disputes of fact over whether the parties reached agreement on essential settlement terms; 3) the agreement "was signed under duress in the face of threatened criminal prosecution"; and 4) the trial court erred in awarding counsel fees and costs. We find no merit in these contentions and, except to the extent discussed below, they do not warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).
"The settlement of litigation ranks high in our public policy." Brundage v. Estate of Carambio, 195 N.J. 575, 601 (2008) (quoting Jannarone v. W. T. Co., 65 N.J. Super. 472, 476 (App. Div.), certif. denied, 35 N.J. 61 (1961)). Absent compelling circumstances we are reluctant to set aside a settlement, nor are we inclined to deprive an innocent party of its benefits because of an attorney's ethical lapses. See Brundage v. Carambio, supra, 195 N.J. at 613. Absent abuse of discretion, we defer to a trial judge's decision to uphold a settlement. Ibid. On this record we find no basis to disturb Judge Sypek's decision to enforce the settlement.
Goepp claims that he should be able to avoid the settlement because his attorneys had a conflict of interest in representing him. We cannot accept that contention in the context of this case. Even if his attorneys did not comply with RPC 1.8, in failing to advise Goepp of his right to have independent counsel advise him about the mortgages, there is no doubt on this record that Goepp knew that Ambrose or his clients had a financial interest in all of the mortgages. Goepp consented in writing to the Richardson firm representing him despite those financial interests.
The firm's alleged violations of RPC 1.8(a)(2), if they occurred, may provide Goepp with a basis to avoid the attorneys' fees or the associated mortgages.*fn2 See Milo Fields Trust v. Britz, 378 N.J. Super. 137, 149 (App. Div. 2005). Likewise, if Goepp is dissatisfied with the substance of his attorneys' services during the mediation, he may seek other redress from them outside the context of this lawsuit. However, neither the alleged violations of RPC 1.8(a)(2), nor Goepp's dissatisfaction with his counsel's representation, provides a basis to relieve Goepp of his obligations to Meech under the settlement.
As significantly, we find no basis to disturb Judge Sypek's conclusion that Goepp sat on his rights by failing to allege that there was a problem with the February 2008 settlement until months later, when Meech moved to enforce it. By that time, the house was in foreclosure, and Goepp was taking no steps to defend against the foreclosure. Further, in opposing the motion to enforce the settlement, Goepp presented no legally competent evidence that he was coerced into settling the case.
Contrary to Goepp's appellate argument, a plenary hearing was not required to determine the settlement terms, because the parties signed a handwritten settlement agreement containing the essential terms of their agreement. See Weichert Co. Realtors v. Ryan, 128 N.J. 427, 435 (1992). The handwritten agreement further specifically provided that it was binding on the parties, and it explicitly authorized the mediator to flesh out any missing details in a typed version of the agreement. See Brawer v. Brawer, 329 N.J. Super. 273, 283 (App. Div.), certif. denied, 165 N.J. 138 (2000). Goepp's reliance on Harrington v. Harrington, 281 N.J. Super. 39, 47 (App. Div.), certif. denied, 142 N.J. 455 (1995) and Lehr v. Afflito, 382 N.J. Super. 376, 383 (App. Div. 2006), is misplaced. In those cases, the parties did not reduce their purported settlements to writing, thus requiring a plenary hearing as to whether they had actually reached a settlement and if so, on what terms.
We also agree with the judge's conclusion that the mediator's typed version of the settlement was consistent with the handwritten version, and the settlement was sufficiently specific to be enforceable. Goepp's arguments on those points warrant no discussion beyond the following comments. R. 2:11-3(e)(1)(E). The handwritten version does not specifically address who will pay the closing costs when the house is sold. However, it logically follows that Goepp, as the seller, would be responsible for the closing costs because he had transferred the house into his own name even though it was an estate asset. Nothing in the settlement suggests that the parties intended to depart from the usual rule that the seller in a real estate transaction pays the closing costs out of the sale proceeds, and that is how we construe the settlement document drafted by the mediator.*fn3
While the parties agreed that the estates should bear the cost of the mediation, they were bound by Judge Shuster's February 18, 2008 order specifically requiring "the participants" to pay the mediator. The mediator's version of the settlement provided that the estates would "pay or reimburse the costs of litigation and mediation incurred by all parties" and that "Meech and Goepp shall each be responsible for 50% of mediation fees incurred." The mediator's version thus faithfully reflected both the parties' agreement and Judge Shuster's order. The fact that Goepp can project possible future scenarios that might call for judicial construction of the settlement documents, does not render the settlement unenforceable.
Finally, having failed to object to the counsel fee award at the trial level, Goepp may not raise objections for the first time on appeal. Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973).