July 7, 2010
IN THE MATTER OF THE ESTATE OF ANTHONY J. NAPOLEON
On appeal from the Superior Court of New Jersey, Chancery Division, Probate Part, Ocean County, Docket No. C-158656.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued March 17, 2010
Before Judges Axelrad, Fisher and Espinosa.
The estate's sole beneficiary, Anthony J. Napoleon, Jr. (Anthony), moved for leave to appeal an order that compelled the sale of a condominium unit owned by the estate; the order was intended to provide the illiquid estate with funds to address various obligations. We granted leave to appeal and consolidated the matter with an appeal filed by a former co-administrator seeking review of orders that enjoined disbursements and imposed sanctions. We affirm the orders regarding the sale of the condominium unit and affirm in part and reverse in part the orders concerning the injunction.
Anthony J. Napoleon (decedent) was murdered, along with Josephine O'Brien, at their home in Toms River on May 7, 2004. Decedent's Last Will and Testament left certain specific real estate and property interests to Josephine. Because Josephine was murdered at the same time, bequests made to her became part of the remainder, and that remainder, which decedent directed be placed in a credit-shelter trust, likely passed equally to Josephine's son, Peter O'Brien (O'Brien), and Anthony. O'Brien, however, was charged with the murder of both his mother and decedent, and later waived his interest in decedent's estate.*fn1
See, e.g., N.J. Div. of Youth & Family Servs. v. M.W., 398 N.J. Super. 266, 298 (App. Div. 2008); Estate of Kalfas v. Kalfas, 81 N.J. Super. 435, 437-39 (Ch. Div. 1963). As a result, Anthony became the sole beneficiary of the estate.
The record reveals that the estate's administration has been fraught with inconstancy. William Moscatello, Esq., who was named in the Will as executor, qualified and held that position for a while. However, he successfully petitioned for relief from that position on February 18, 2005. The judge handling the matter at the time replaced the executor with James J. Curry, Jr., Esq., over Anthony's objection; that appointment was followed by conflicts between Curry and Anthony.
In April 2006, Curry agreed to step aside in favor of Anthony, but the judge insisted an attorney act with Anthony and, as a result, on May 25, 2006, appointed Ronald P. Colicchio, Esq., and Anthony as co-administrators. Curry, however, with the consent of the substitute co-administrators, continued to represent the estate in other suits then and still pending.
By order entered on July 25, 2008, the judge discharged Colicchio and Anthony as substitute co-administrators; in their stead, the judge appointed Frank J. Dupignac, Jr., Esq. as successor substitute administrator. Dupignac continues to hold that office.
As can be seen, numerous attorneys have been involved in the administration of this estate to date. In addition, some of the attorney-administrators also retained their own counsel. And the record also reflects the occasional appearances of other attorneys whose involvement in this case we have no way of understanding from the record on appeal. Considerable attorneys' fees have been generated as a result.
The record also provides an incomplete picture of the estate's assets and their current status. The estate has been involved in various lawsuits regarding assets or interests that decedent may or may not have held at the time of death. The record on appeal, however, does not contain certain pleadings or other relevant materials from these lawsuits, thereby precluding a complete understanding of their nature or impact on the administration of the estate. While the estate has been extensively involved in one suit in which it would appear to have no great interest,*fn2 the record also suggests a general disregard for decedent's Florida home, which has fallen into default and faces foreclosure.
The current substitute administrator has asserted that the estate has insufficient funds to bring the Florida mortgage current or to pay taxes or other obligations on two Hoboken condominium units. As summarized by the current administrator in a certification filed in the trial court:
When turned over to me the [e]state account had a negative balance and the mortgage on the Florida home owned by the decedent was in default. There were judgments for [c]court ordered fees in excess of $500,000.00. The [e]state was involved in four separate law suits in two counties. There were condominium fees and real estate taxes due. While the [e]state had assets, it had no funds to meet those expenses.
In addition, despite these and other circumstances, the record reveals that Anthony has resided in one of the Hoboken condominium units without paying rent and, by occupying the unit, has prevented the estate from raising income through a rental to a third person.*fn3
We, thus, examine the orders in question with the understanding that the estate, once with a gross estimated value of $2,517,434, as reflected in an estate tax return, has been troubled by numerous changes in representatives, plagued by the claims of attorneys for the payment of fees that seem to have been incurred at least in part without any ostensible benefit for the estate, and burdened by multiple lawsuits. And, despite the estate's lack of liquid assets, it appears that interim disbursements were made to the beneficiary. In short, the estate has assets but no cash; it has incurred a considerable amount of legal fees; and the lawsuits in which it has been immersed have yet to be concluded.
It is with these circumstances as a backdrop that we consider these consolidated appeals. The orders under review require that we examine (a) the judge's prohibition on certain distributions from the estate, and the sanctions imposed based on an alleged violation of that injunction, as to which Colicchio filed a notice of appeal; and (b) orders entered on July 29, 2009 and September 22, 2009, which authorized the administrator's sale of a condominium unit in Hoboken, as to which we granted leave to appeal.
The first group of orders under review relate to restraints imposed upon Colicchio and Anthony pursuant to a motion filed by Brick Professional, LLC (Brick), which is an entity that commenced a suit against the estate that awaits trial,*fn4 and the enforcement of those restraints. The first difficulty presented revolves around the fact that the judge rendered an oral decision on November 26, 2007, but did not memorialize those restraints until entry of the June 10, 2008 order, which restrained the estate and its administrators from making any distribution of income, money or real or personal property for any purpose except for the payment of... state taxes, federal taxes, real estate taxes for real property owned by the [e]state, premiums for insurance for property owned by the [e]state and premiums for bonds required by this [c]court or the [s]urrogate.
That order also directed the filing of an accounting.
In what we assume was an informal accounting submitted in response to that order, Colicchio acknowledged that Anthony received from the estate -- between the judge's oral decision of November 26, 2007 and the judge's order of June 10, 2008 --disbursements in the amount of $28,267.*fn5 The accounting was never approved.
On September 21, 2009, the judge ordered Anthony to repay any funds received by him "in contravention of the restraints verbally entered... on November 26, 2007."*fn6 That order also rendered Colicchio jointly liable with Anthony for the return of "any payment made to Anthony J. Napoleon, Jr., or others, in contravention of the restraints verbally entered by this [c]court on November 26, 2007 and memorialized in its [o]rder of June 10, 2008." The September 21, 2009 order did not state the amount to be returned and left the door open to other sanctions depending upon further proceedings following the submission of a certified accounting.
Colicchio appealed, and has presented the following arguments for our consideration:
I. THE TRIAL COURT FAILED TO PROVIDE THE SPECIFICITY REQUIRED BY RULE 4:52-4 AS TO THE CONDUCT BEING ENJOINED IN ITS ORAL PROCLAMATION OF NOVEMBER 26, 2007.
II. IT IS CLEAR ERROR TO RETROACTIVELY APPLY AN INJUNCTION AND TO IMPOSE SANCTIONS FOR VIOLATION OF SUCH INJUNCTION DURING THE TIME PERIOD THAT SAID INJUNCTION WAS NOT IN EFFECT.
III. THE ISSUANCE OF AN INJUNCTION BY THE TRIAL COURT WAS NOT JUSTIFIED AS THE MOVANT WAS MERELY A CLAIMANT AGAINST THE ESTATE WHO SOUGHT MONEY DAMAGES, AND THE LEGAL CLAIMS CONTINUE TO BE HOTLY CONTESTED.
IV. A HEARING SHOULD BE ORDERED ON ANY OUTSTANDING ACCOUNTING ISSUES DURING THE PERIOD WHEN I ACTED AS CO-ADMINISTRATOR OF THE ESTATE WITHOUT FURTHER DELAY.
Although we reject the argument in Point III that a person or entity who possesses a claim or holds a judgment against the estate cannot obtain injunctive relief in these circumstances, we agree with the argument contained in Point I that the November 26, 2007 oral decision lacked specificity or an apparent intent to restrain Colicchio or Anthony; as a result, the judge was mistaken in sanctioning Colicchio for making disbursements before entry of the June 10, 2008 order. That determination negates our need to discuss the arguments contained in Point II, and we find Point IV to have insufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). We briefly explain.
First, we reject Colicchio's contention that because Brick ultimately seeks monetary relief from the estate that injunctive relief is not available. The argument that a litigant who seeks or may ultimately be entitled only to damages is not entitled to equitable relief because the litigant has a "remedy at law" is an oversimplification. The focus is not on whether there is a remedy at law but whether the litigant has "an adequate remedy at law." See, e.g., Morris County Transfer Station v. Frank's Sanitation Serv., Inc., 260 N.J. Super. 570, 574 (App. Div. 1992) (emphasis added). A party may not have an adequate remedy at law if monetary damages are difficult to quantify or is likely not to be available at the end of the day. See, e.g., Steiner v. Stein, 141 N.J. Eq. 478, 479-80 (Ch. 1948). In such circumstances, a court may grant equitable relief in the form of an injunction or a decree of specific performance. See Fleischer v. James Drug Stores, Inc., 1 N.J. 138, 146-47 (1948); Houseman v. Dare, 405 N.J. Super. 538, 542-43 (App. Div. 2009); see also First Nat'l State Bank of N.J. v. Commonwealth Fed. Sav. & Loan Ass'n, 610 F.2d 164, 171 (3rd Cir. 1979) (applying New Jersey law). We, thus, reject the argument that Brick's claim for money damages in its suit against the estate creates an insurmountable obstacle to preliminary injunctive relief. The current administrator has certified, and no one has disputed, that the estate is without liquid assets and its other assets are in flux or subject to what might prove to be ruinous litigation. In that circumstance, the court's authority to enter an interlocutory injunction restraining distributions is well-established. See Beatty v. Wunschel, 123 N.J. Eq. 192 (E. & A. 1938); In re Swetland's Estate, 105 N.J. Eq. 603 (Prerog. Ct. 1930). We, thus, conclude that the judge was authorized to restrain expenditures from the estate.*fn7
The next question concerns the effective date of the restraints. Brick argues the restraints went into effect when the judge delivered his oral decision on November 26, 2007; Colicchio argues no restraints were imposed until the judge entered an order on June 10, 2008. Although we agree, in general, with the premise of Brick Professional's argument --that the jural act may at times be a judge's oral pronouncement of judgment and not necessarily a later memorializing order, see Community Realty Mgmt., Inc. v. Harris, 155 N.J. 212, 228 (1998) -- the judge's oral ruling on November 26, 2007 lacked the requisite specificity or sufficient imperative tone to make a reasonable person believe the restraints were put in effect at that moment.
In Parker v. Parker, 128 N.J. Super. 230, 232-33 (App. Div. 1974), Judge (later Justice) Handler said for this court that when a judge expresses in an oral decision "a definitive adjudication of the controversy, reflecting its conclusive determination," the later entry of a written judgment "is essentially a non-discretionary act" that merely records what was previously imposed. The judge's oral ruling here lacks the qualities found important in Parker to warrant a conclusion that the restraints orally described became instantaneously effective. Indeed, no greater proof of the distinction between this case and Parker exists than the oral ruling itself.
The judge's November 26, 2007 oral decision found that restraints were appropriate and described them as not being "applicable, naturally, to taxes and also to ongoing carrying charges, insurance, taxes concerning the real estate." The judge found that Brick's attempts, through the filing of that motion, to "have access to whether or not [the estate] is retaining an expert or who's the expert" would not be appropriate, but the judge also held that "the overall reasonableness of any and all fees related to any such experts is something that can be subject and should be subject to the [c]court's ultimate review." In short, the judge did not clearly define what was and was not permitted.
That the judge recognized that he had not, in the oral decision, demarcated the expenditures that were or were not permitted is also revealed by the judge's later comments wherein he expressed that "[t]he intent and purpose of the [c]court's order" was to preserve the status quo "to the best extent possible," which would include "reasonable outlays" without restraining "any and all distributions." And, immediately after that comment, the judge said:
Perhaps, with the [c]court's findings all counsel could work if you need to clarify the actual carrying charges. I'm not aware of what they are and what the status of the Estate assets are at this very moment.
The colloquy among the judge and counsel that followed demonstrated that the specific terms of the restraining order were yet to be declared but instead were to be hammered out by counsel and, if necessary, by the judge's later resolution of the form of the order.
There is no doubt the judge intended in light of the estate's liquidity problems to restrain any unnecessary disbursements, but he recognized in rendering his oral decision that he was then unable to define the injunction's precise reach. In short, the judge revealed his intentions and provided an outline of what was to be restrained, but left it to counsel to provide clearer terms that would be included in a written order. As a result, the oral decision here was not "the definitive adjudication of the controversy," and did not express the "conclusive determination" required by Parker, supra, 128 N.J. Super. 232-33. We thus find it inappropriate to conclude that Colicchio would have clearly understood from the oral decision the precise actions that were prohibited and the date upon which that prohibition would take hold. See, e.g., In re Educ. Assoc. of Passaic, Inc., 117 N.J. Super. 255, 262 (App. Div. 1971) (holding that enforcement of an injunction requires that the violator know or have reason to know of the conduct prohibited), certif. denied, 60 N.J. 198 (1972).
For these reasons, we affirm the June 10, 2008 order and that part of the September 19, 2009 order that directed Colicchio to submit a more thorough accounting; we reverse that part of the September 19, 2009 order that imposed sanctions on Colicchio or rendered him liable for disbursements made between November 26, 2007 and June 10, 2008.
By order entered on July 29, 2009, the judge approved the current administrator's contract to sell one of the estate's condominium units in Hoboken for $628,000. That order also barred Anthony, or anyone acting on his behalf, from interfering with the sale.
The sale was permitted in order to infuse the estate with funds with which it could begin addressing its monetary obligations. An order entered on September 22, 2009 reiterated the confirmation of the sale and directed that, from the net proceeds, the administrator: satisfy a consent judgment*fn8; pay the debts and obligations necessary to bring the Florida property out of default; and pay any other estate expenses referred to in an earlier order.*fn9 Otherwise, the September 22, 2009 order mandates that the net proceeds be held in trust by the administrator pending further order.
We granted Anthony's motion for leave to appeal these orders. In his brief, Anthony presents the following arguments for our consideration:
I. IT WAS AN ABUSE OF DISCRETION FOR THE COURT BELOW TO HAVE APPROVED THE CONTRACT FOR THE SALE OF CONDO UNIT 12A BECAUSE THE PROPOSED SALES PRICE IS SUBSTANTIALLY LESS THAN THE WORTH OF THE PROPERTY AND THEREFORE DOES NOT BENEFIT THE ESTATE.
II. AS THE SOLE BENEFICIARY, ANTHONY NAPOLEON, JR. HAD A RIGHT TO BE INVOLVED AND IT AS AN ABUSE OF DISCRETION FOR THE COURT BELOW TO HAVE THREATENED HIM WITH IMMEDIATE INCARCERATION AS PROVIDED FOR IN THE ORDER OF JULY 29, 2009.
We find no merit in these arguments.
Within Point I, Anthony appears to suggest we should review past orders approving fees sought by various attorneys. We share some concern about the unusually large amount of fees already approved in an estate that, until the appointment of the current administrator, seemed in so much disarray with at least one asset, a boat, being ignored, and another, the Florida home, being permitted to fall into arrears and in danger of foreclosure. Nevertheless, those fee orders are not presently before us; nor are they final orders. The trial judge, in his oral ruling of November 26, 2007, appears to have revealed to the attorney-claimants his intent to re-examine the propriety of their fees in the future: "[t]he reasonableness of those fees along with costs and counsel fees would be something to review in terms of an overall accounting submitted by the [e]state or an interim accounting submitted by the [e]state, and the [c]court should have the right to review any and all such submissions."
Although not entirely clear on this point, we assume the judge has correctly determined that the prior fee awards are subject to additional review once a better understanding of the estate's assets and liabilities can be ascertained; that determination would likely have to await the conclusion of some or all the lawsuits in which the estate is engaged. Only then will the judge be presented with a true picture of whether any of these attorneys provided any benefit to the estate. Fees ostensibly incurred on behalf of the estate are subject to reduction or rejection based upon whether those fees have benefited the estate, see, e.g., In re Bloomer, 37 N.J. Super. 85, 91 (App. Div. 1955), certif. denied, 23 N.J. 667 (1957); In re Stone, 21 N.J. Super. 117, 130-32 (Ch. Div. 1952), and, of course, are only permitted to the extent they are reasonable, see, e.g., Clapp & Black, Wills and Administration, 7A New Jersey Practice § 1547 at 97 (1984). We trust that at a more propitious time, the trial judge will, as he appears to intend, examine all the fees incurred before permitting payment in whole or in part, in order to determine whether any of the fees sought or previously awarded have benefited the estate,*fn10 and whether they are reasonable.
More specifically, Anthony and others have made accusations regarding the propriety or reasonableness of fees in connection with the need to sell the condominium unit in question.*fn11
Anthony claims the judge abused his discretion in acceding to the administrator's desire to sell the property in order to provide needed cash to the estate because the sale would not have been necessary but for the numerous fee awards and requests.*fn12 We disagree.
The expansive authority of a personal representative over the estate's property cannot be doubted. See N.J.S.A. 3B:10-30 (declaring that "[u]ntil termination of his appointment a personal representative has the same power over the title to property of the estate that an absolute owner would have, in trust however, for the benefit of the creditors and others interested in the estate"); N.J.S.A. 3B:14-23(e)(2) (declaring that a fiduciary "shall, in the exercise of good faith and reasonable discretion, have the power... [w]ith respect to any property or any interest therein owned by an estate or trust, including any real property belonging to the fiduciary's decedent at death, except where the property or any interest therein is specifically disposed of... [t]o sell the property...").
Although N.J.S.A. 3B:14-23(e)(2) renders the representative chargeable when the terms of the transaction are not "advantageous," the record here does not support Anthony's contention that the sale price of $628,000 is so unreasonably low as to fit that description. Anthony refers us to an appraisal that suggests a value of the unit of $730,000. That conclusion, however, is contained in a report rendered on December 30, 2005, nearly four years before the date on which the judge made his ruling on this point. Even assuming this appraisal had probative value in light of its age and the intervening economic upheaval that has reduced property values, the appraisal was not even provided to the judge at the time he approved the sale on July 20, 2009; as a result, it can have no influence on our review of that determination. See Triffin v. Am. Int'l Group, Inc., 372 N.J. Super. 517, 520 (App. Div. 2004); Cooper River Plaza East, LLC v. The Briad Group, 359 N.J. Super. 518, 530 (App. Div. 2003). Having failed to present sufficient evidence from which the judge could have determined that the agreement reached by the administrator with the unit's buyer was unreasonable, Anthony's argument on this point must fail.
Beyond his unsupported argument that the sales price obtained by the administrator was unreasonably low, which we reject, Anthony argues there was no justifiable need to sell the property because the outstanding fee awards are excessive or unwarranted.*fn13 Even if we were to agree that the trial court previously awarded fees that provided no benefit to the estate or were unreasonable in amount, we are nevertheless satisfied there is sufficient evidence of a need to liquidate some portion of the estate's assets, as the status of the Florida home reveals. The estate has a need for cash beyond any obligation it may have to pay any or all of the fees to which Anthony continues to object.
We find insufficient merit in Point II to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).
To summarize, with regard to Colicchio's appeal, we affirm the June 10, 2008 order and also that part of the September 19, 2009 order that directed Colicchio to submit a more thorough accounting; we reverse that part of the September 19, 2009 order that imposed sanctions on Colicchio or rendered him liable for disbursements made between November 26, 2007 and June 10, 2008.
With regard to Anthony's interlocutory appeal, we affirm the orders of July 29, 2009 and September 22, 2009.
In this court's order of October 13, 2009, which granted leave to appeal, we stayed "any other proceedings with regard to this estate, pending disposition of the appeal." That stay is hereby dissolved.
The matter is remanded for further proceedings in conformity with this opinion. We do not retain jurisdiction.