On appeal from the Superior Court of New Jersey, Chancery Division, Bergen County, Docket No. P-247-08.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Skillman, Gilroy and Simonelli.
On leave granted, appellant, Deener, Hirsch & Shramenko, P.C. (the law firm), appeals from those parts of two June 12, 2009 orders that directed the law firm to pay Rule 1:4-8 counsel fee sanctions. We reverse.
Decedent Andrell Cyrano "Billy" Adams died intestate on February 11, 2008. Decedent had been married to Barbara Saunders-Adams (Saunders-Adams), but on June 30, 2006, the Chancery Division entered a judgment of divorce (JOD) dissolving their marriage. The JOD directed Saunders-Adams to transfer to decedent $900,000 of stock she then owned in United Parcel Service, Inc. (UPS).
Two children were born of the marriage: Kendrell Adams and Avent Banka Adams. Decedent had two other children, Makunda Noel and Amanda Barker, born from relationships with two other women. Amanda Barker was a minor at the time of decedent's death.
On June 9, 2008, Dourpatee Barker, the mother of Amanda Barker, filed a complaint on behalf of her daughter seeking to have Debra Myers, a friend of the Barker family, appointed administratrix of decedent's estate. Although Saunders-Adams and the decedent's three oldest daughters were served with the complaint and order to show cause, they did not appear in opposition to the application. On July 25, 2008, the court entered an order appointing Myers as administratrix. On August 12, 2008, Myers served Saunders-Adams with a copy of the order of appointment. On December 11, 2008, the Surrogate issued letters of administration to Myers.
On March 31, 2009, after Kendrell Adams, Avent Banka Adams, and Makunda Noel signed renunciations in Saunders-Adams' favor, the law firm filed a motion on behalf of Saunders-Adams seeking to reopen or vacate the July 25, 2008 order appointing Myers as the administratrix, contending that Saunders-Adams had engaged counsel to represent her in opposing Dourpatee Barker's application for the appointment of an administratrix, but counsel negligently failed to file opposition to the application. Myers opposed the motion, asserting that the court could only remove her as administratrix under N.J.S.A. 3B:14-21; and because she had been properly fulfilling her duties as the administratrix, there was no cause for her removal under that statute. Dourpatee Barker also opposed the motion, contending that Saunders-Adams could not serve as the administratrix because a conflict of interest existed between Saunders-Adams and the estate, as she had not fully transferred $900,000 of UPS stock to the decedent prior to his death.*fn1
At argument on the motion on April 24, 2009, the law firm advised the court that not only was Saunders-Adams the designee of Kendrell Adams, Avent Banka Adams, and Makunda Noel, but also that they would accept appointment as substitute administratrix if the court denied the appointment to Saunders-Adams. The law firm argued the motion under Rule 4:50-1(f), contending that Saunders-Adams' prior attorney's negligence in failing to properly represent her in opposing Dourpatee Barker's application for appointment of Myers constituted exceptional circumstances to warrant vacation of the July 25, 2008 order of appointment. The law firm requested that the court first determine whether reasons existed to vacate the order appointing Myers, and if so, then consider whether to appoint Saunders-Adams or one of decedent's daughters, other than Amanda Barker, as administratrix.
The trial court denied the motion, determining that a conflict of interest existed between Saunders-Adams and the estate because of the indebtedness owed by Saunders-Adams under the JOD. The court concluded that because of the conflict, even if Saunders-Adams' prior attorney had opposed the original application to appoint Myers and had sought to have Saunders-Adams appointed in lieu of Myers, Saunders-Adams' application for appointment would have been denied. The court also found that Myers had been properly fulfilling her duties as administratrix.
The court denied Dourpatee Barker's application for a counsel fee sanction under Rule 1:4-8, determining that the motion to vacate the order appointing Myers as administratrix had not been filed in bad faith, and was not "so meritless" as to invoke sanctions. However, the court qualified the denial of the application for counsel fees, stating that if Saunders-Adams continued in her failure to cooperate with the estate, an application for counsel fees "would be viewed in a different light or could be viewed in a different light."
On May 13, 2009, the law firm filed a motion for "reconsideration" in the name of Kendrell Adams, not in the name of Saunders-Adams. Kendrell Adams contended that the trial court had erroneously denied the original motion when it failed to "determine whether the appoint[ment] of Debra Myers as the [a]dministratrix should be set aside, before proceeding to consider the separate question of who should be [s]ubstituted [a]dministratrix." Kendrell Adams asserted that the court should not have denied the original application to vacate the July 25, 2008 order because of the conflict of interest between her mother and the estate, as the court could have appointed herself the substitute administratrix. The motion was supported by renunciations from Advent Banka Adams and Makunda Noel, favoring Kendrell Adams' appointment.
Dourpatee Barker filed a cross-motion seeking an award of counsel fees and costs from Kendrell Adams', Advent Banka Adams', and Makunda Noel Adams' shares of the estate, and an order directing partial distribution of the estate. On May 15, 2009, Myers' attorney sent the law firm a "safe harbor" letter demanding that it withdraw the motion, contending there was no basis for the motion, and that it was frivolous having been filed in the name of someone other than the original movant. On June 3, 2009, Myers filed a cross-motion seeking to compel ...