August 19, 2010
IN THE MATTER OF THE ESTATE OF JEWELL B. SYKES, DECEASED.
THE ESTATE OF JEWELL B. SYKES AND EVELYN SYKES ZIELKE, AS CO-EXECUTOR AND INDIVIDUALLY, PLAINTIFFS-APPELLANTS,
GERALD W. SYKES AND G & G COMMUNICATIONS, INC., DEFENDANTS-RESPONDENTS, AND CELLCO PARTNERSHIP, A DELAWARE GENERAL PARTNERSHIP, D/B/A VERIZON WIRELESS, DEFENDANT.
On appeal from Superior Court of New Jersey, Chancery Division, Gloucester County, Docket No. 98-225.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted May 26, 2010
Before Judges Axelrad, Sapp-Peterson and Espinosa.
Evelyn Sykes Zielke (Evelyn) and Gerald W. Sykes (Gerald) are the two children of Jewell B. Sykes (Jewell) and the co-executors of her estate. On behalf of herself, individually and as co-executor of the estate, Evelyn*fn1 challenged the validity of two leases Jewell entered into with a company owned by Gerald that permitted the construction of two telecommunications towers on Jewell's farm and sought the removal of Gerald as co-executor. Following a trial, the court rejected Evelyn's claims that Gerald exercised undue influence over Jewell in obtaining the two leases and that Jewell was mentally incompetent when she entered into the second lease. The court also refused to remove Gerald as co-executor and declined to award counsel fees to Evelyn. In this appeal, Evelyn argues that each of these rulings was error. We affirm.
Jewell executed the leases for the towers on her property on February 15, 1981 and December 6, 1986. The lessor for each of these leases was G&G Communications, a company owned and operated by Gerald.
Gerald lived with his mother in her home on seventy-three acres in Monroe Township from 1976 until she entered a nursing home in 1992. In 1981, Gerald decided to erect a transmission tower to expand the coverage area of his business, which was involved in the transmission of radio signals. He testified that he chose to build the tower on Jewell's property so that she could receive passive unearned income.
According to Gerald, Jewell told him that he did not have to pay her any rent for the tower. However, after consulting with an accountant, Gerald set the rent at $433 per month over a ten-year term because that was the maximum amount that G&G could pay to a "close relative" of Gerald's without arousing the suspicion of taxing authorities. Although Jewell, then seventy-one, was not represented by counsel, it is undisputed that she understood the terms of the lease when she executed it. Gerald unilaterally increased the monthly rent to $508 in 1985 although he stated that the revenue generated by the tower prior to 1987 was "barely enough to pay for the [lease] payment" to Jewell.
In December 1986, Jewell executed a second lease, permitting Gerald to build a second, taller tower on her property. Once again, the lease was drafted by Gerald's attorney and Jewell was not represented by counsel. This lease provided for a monthly payment of $200 over a term of twenty-five years. Although G&G had essentially abandoned the first tower, it continued to make the monthly payments due under that lease. As a result, Jewell received $708 per month for the rental of the two towers. Gerald testified that he explained the terms of the second lease to Jewell and she asked no questions about it.
Jewell had executed a handwritten will in 1965 that divided her estate equally between her two children and named them both as co-executors. In 1987, Evelyn became concerned that Gerald was going to have Jewell execute a secret will that would eliminate her as a beneficiary. She took Jewell to a lawyer who recommended that she prepare a will to replace the handwritten one and referred her to another attorney, Richard Kaser. He interviewed Jewell, then seventy-seven, for approximately thirty minutes to ascertain her mental competence to sign a will. Kaser testified that he was confident that she was competent to do so. Jewell also discussed a power of attorney and living will that she asked Kaser to prepare for her. She subsequently executed the will, which divided her estate equally between her children and named them as co-executors, as well as the power of attorney and living will.
Although Evelyn contests her mother's competence to enter into the lease in 1986, she does not assert that Jewell lacked the mental capacity to make the 1987 will or understand its provisions.
In early 1988, Gerald's attorney retained another lawyer, William J. Golden, as an independent party to meet with Jewell "to make sure she was competent, to make sure there was no question that she was voluntarily entering into these leases [with G&G], to make sure she was doing it of her own free will."
Golden testified about his interaction with Jewell. He met with her in March 1988, found her "alert" and "sharp as a tack" and that she "knew what she wanted to do" with her property. Jewell was aware of the nature and extent of her property and told Golden that no one had exercised any undue influence upon her. She understood that the income she received from the rental of the second tower may have been less than fair market value and that she was giving her son a better deal than if he were a stranger but was satisfied with the rental income. She liked the fact that she would receive income from the lease and that the lease helped Gerald and his business. She emphasized that she did not seek or want any advice from Evelyn about the lease because "I don't have to, it's my land."
Jewell executed an affidavit that summarized her sentiments and stated the following regarding the leases:
3. As the owner of the above-described property, I have entered into two leases with my son, Gerald Sykes. Under the leases, my son has the right to build and maintain towers for his business during the term of the lease. In return, I receive monthly payments. I am fully satisfied with the terms of the lease agreements.
4. I agreed to enter the leases for both business and personal reasons. I wanted to help my son with his business. Additionally, the rental income is beneficial to me as it gives me an additional source of income.
5. I entered into the leases voluntarily. There was no pressure or undue influence exerted on me at any time to agree to the leases.
In early 1988, Jewell stopped driving and gave her automobile to her daughter. Evelyn testified that Jewell was competent to make that gift because she "knew what she wanted to do with her car."
After Jewell entered a nursing home in 1992, Evelyn took over her banking and financial affairs. G&G continued to make monthly $708 lease payments to Jewell and she paid her expenses at the nursing home from her own funds until 1995, when her funds were exhausted. Evelyn then applied for Medicaid to assume the cost of Jewell's medical care. Evelyn learned that, unless she qualified for an exemption, Jewell would have to sell her real property to receive Medicaid payments. The exemption would apply if Jewell's interest in her home was transferred to a child "who was residing in the individual's home for a period of at least two years immediately before the date the individual becomes an institutionalized individual and who has provided care to such individual which permitted the individual to reside at home rather than in an institution or facility." N.J.A.C. 10:71-4.7(d).
By letter dated September 29, 1995, a lawyer retained by Evelyn wrote to Jewell's personal physician, setting forth the criteria for the Medicaid exemption and noting that Gerald had lived with Jewell for many years and had "been seeing to her care prior to her entering" the nursing home. He asked the physician for a letter indicating Jewell's condition two years prior to her entering the nursing home and the nature of care provided by Gerald.
In response, Dr. William L. Hingston wrote a letter in which he stated that Jewell had been a patient under his care from 1980 to January 31, 1992. He stated further, "In June of 1984 it became clear that she was experiencing signs of Alzheimer's Disease." Aside from this statement, Dr. Hingston identified no deficiencies in Jewell's mental capacity at any time while she was under his care. At his deposition, Dr. Hingston said that Jewell's medical records had been thrown out and that his diagnosis of Alzheimer's Disease was based upon general conversations he had with Jewell on about a dozen occasions in which she complained about becoming forgetful. He testified that he was not "sure" about the level of Jewell's competency in 1984 or in 1987.
The Board of Social Services concluded that Jewell qualified for the exemption. However, the property was never transferred to Gerald despite that condition for the exemption.
Thereafter, Evelyn was concerned that the $708 in monthly payments would jeopardize Jewell's qualification for Medicaid benefits. G&G continued to pay $708 per month but only $200 was paid to Jewell; the remaining $508 payment was split by Evelyn and Gerald. After Jewell's death in 1998, the $708 monthly payment was divided evenly between Evelyn and Gerald.
At trial, Evelyn, her husband, a friend of her husband and Evelyn's daughter-in-law testified that in the early to mid-1980s, Jewell's cooking skills declined; she occasionally dressed inappropriately, failed to recognize acquaintances, engaged in repetitive speech, hoarded food, ate inappropriately for a diabetic and wandered the grounds around her home.
Evelyn also presented the testimony of Dr. Barbara Malamut, a neuropsychologist, who concluded that Jewell suffered from Alzheimer's disease when she signed the second lease. Her opinion was based upon the notation in Dr. Hingston's letter as well as anecdotal reports from Evelyn and other lay witnesses. She testified that Jewell had "suffered from a slowly progressive dementia . . . for at least 20 years prior to her death" in 1998; that "her rate and progression of symptoms is what we see in probable Alzheimer's Disease[,]" and that her "level of severity of Alzheimer's Disease was moderate" at the time she signed the second lease.
Aside from the comment in Dr. Hingston's letter, Dr. Malamut was unaware of any diagnosis of Alzheimer's Disease by any other physician; had no knowledge of any medications that Jewell was taking and had not reviewed any medical records from Jewell's other treating physicians prior to reaching her conclusion. She accepted all versions of events presented by Evelyn as true, even if uncorroborated, and generally declined to accept any version of events offered by Gerald. Dr. Malamut also admitted that she did not base her conclusion upon any medical standards for diagnosing Alzheimer's Disease.
The trial court rejected Dr. Malamut's opinion and found more persuasive the evidence that indicated that Jewell was not mentally incapacitated in December 1986. In rejecting the undue influence claim, the court noted that no evidence had been presented that the amount of rent paid to Jewell was below fair market value. The trial court also denied Evelyn's request for the removal of Gerald as co-executor and Gerald's request that she be removed as co-executor.
Evelyn presents the following issues for our consideration:
POINT I STANDARD OF REVIEW.
POINT II DUE TO A CONFIDENTIAL RELATIONSHIP BETWEEN MOTHER AND SON, SYKES AND G&G CANNOT ESTABLISH THAT MRS. SYKES MADE A GIFT TO THEM OF THE LESS THAN FAIR MARKET TERMS FOR THE TWO LEASES.
POINT III DUE TO THE EXERCISE OF UNDUE INFLUENCE THE LEASES ARE SUBJECT TO JUDICIAL SCRUTINY FOR FAIRNESS.
POINT IV MRS. SYKES WAS INCOMPETENT TO SIGN THE SECOND LEASE.
POINT V SYKES SHOULD BE REMOVED AS A CO-EXECUTOR.
POINT VI THE ESTATE AND SYKES SHOULD PAY THE COUNSEL FEES OF ZIELKE.
After reviewing the record and the arguments of counsel, we conclude that these arguments lack sufficient merit to warrant discussion in a written opinion, R. 2:11-3(e)(1)(E), beyond the following comments.
There is an irreconcilable contradiction between the contention that Jewell was not competent to enter into a lease in 1986 and the assertions that she was competent to make a will in 1987 and to make a gift of an automobile to Evelyn in 1988. In concluding that there was no evidence to establish that Jewell was incapacitated at the time she executed the leases, the trial court made specific credibility findings, rejecting Dr. Malamut's testimony and finding Golden's testimony and finding the testimony of the attorney who interviewed Jewell, William Golden, to be "credible and objective."
It is the factfinder's role to make determinations of credibility. Ferdinand v. Agric. Ins. Co. of Watertown, N.Y., 22 N.J. 482, 492 (1956). An appellate court should not "disturb the factual findings and legal conclusions of the trial judge" unless it is "convinced that they are so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice." Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474, 484 (1974). The trial court's conclusions here were amply supported by competent evidence in the record.
The thrust of the arguments presented in Points II and III is that Gerald had a confidential relationship with Jewell that he exploited and that he exercised undue influence upon her to obtain an inter vivos gift, i.e., below market rent for the leases. It is argued that there was adequate proof of a confidential relationship by virtue of the "natural relationship between mother and son living together, with son caring for mother and managing her financial affairs[.]"
However, although parent-child relationships are "among the most natural of confidential relationships . . . the mere existence of family ties does not create . . . a confidential relationship." Estate of Ostlund v. Ostlund, 391 N.J. Super. 390, 401 (App. Div. 2007) (citation omitted). See also Pascale v. Pascale, 113 N.J. 20, 34 (1988). The test for measuring the existence of a confidential relationship is "whether the relations between the parties are of such a character of trust and confidence as to render it reasonably certain that the one party occupied a dominant position over the other and that consequently they did not deal on terms and conditions of equality." Ostlund, supra, 391 N.J. Super. at 402 (quoting Blake v. Brennan, 1 N.J. Super. 446, 454 (Ch. Div. 1948)). The record is devoid of evidence that Gerald occupied a position of dominance over Jewell and, indeed, Evelyn relies upon the familial relationship rather than citing any evidence on appeal to support that conclusion. Therefore, Evelyn failed to satisfy her burden of showing the existence of a confidential relationship. See ibid.
Even if the evidence were sufficient to establish a confidential relationship to warrant further scrutiny of the transactions between Gerald and Jewell, there are additional inadequacies in the evidence to support a case of undue influence. First, one of the elements of an "inter vivos gift" is "the relinquishment by the donor 'of ownership and dominion over the subject matter of the gift.'" Pascale, supra, 113 N.J. at 29 (quoting In re Dodge, 50 N.J. 192, 216 (1967)). Jewell did not make any gift to Gerald that entailed such a relinquishment. Second, even if the alleged disparity between the rent she received and purported fair market value rent could be considered such a gift, there was insufficient evidence presented to establish what the fair market value of the rentals were. These failures of proof warranted the rejection of Evelyn's claims.