On appeal from Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-4483-09.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued: September 13, 2010 -- Decided: Before Judges A.A. Rodriguez and C.L. Miniman.
Plaintiff Tina Raia appeals the dismissal of a complaint she filed against defendant William Rodenbough III on May 18, 2009, alleging that defendant used undue influence to procure death-bed changes to the beneficiaries of decedent Edward Rodenbough's (Edward) life insurance policies. She further alleged that defendant mismanaged Edward's estate during the time that he served as its administrator. We affirm.
Plaintiff and defendant are first cousins. Plaintiff's mother, Ethel Rodenbough Belline (Ethel), was Edward's sister. Defendant's father, William Rodenbough, Jr. (William), was Edward's only brother. The mother of Ethel, William, and Edward was Mary Rodenbough (Mary), who had nine children in all.
Both Edward and William saw active military duty during World War II. Edward never recovered from what defendant described as "shell shock." After Edward was discharged from the military, he was admitted to a Veterans Administration (VA) hospital. He spent the rest of his life in institutions, halfway homes, or nursing homes operated by the VA. He never married and had no children.
Edward was about twenty-two years old when he was deployed. Before his departure, he executed four documents: an October 1, 1943, Last Will and Testament naming Mary as the beneficiary of his estate and Ethel as the contingent beneficiary; a power of attorney naming Mary as primary attorney-in-fact and Ethel as contingent attorney-in-fact; and two life insurance policies, each naming Mary as the sole beneficiary. A third life insurance policy, which also named Mary as the sole beneficiary, was procured at some unknown point in time.
Apparently, Mary possessed Edward's will at the time she predeceased him in 1968. At the time of Mary's death, Ethel acquired Edward's will and power of attorney; she then gave these documents to plaintiff for safekeeping. Plaintiff kept both documents for the next thirty-six years. She did not give them to Edward, their owner, or to William after he was appointed Edward's guardian in the mid-1970s, even though she was aware of his appointment.
Defendant grew up visiting Edward with his father every other week. They often brought Edward to their home for visits. Defendant never met any relatives of Edward on those visits, nor did he see any evidence that Edward's sisters or their children ever visited Edward or sent him cards or photographs. Mary cared for Edward until her death in 1968, and then William did so until William's death in 2001, even though Ethel was Edward's attorney-in-fact once Mary died. After William's death in February 2001, VA officials asked defendant to serve as Edward's custodian-in-fact, and he agreed to do so, continuing to visit him regularly.
On January 16, 2002, nine days before Edward's death and in the presence of two witnesses, Edward changed the beneficiary designations on his three life insurance policies to name defendant as the sole beneficiary. There is no competent evidence in the record that Edward made any changes in his beneficiary designations prior to these changes, although both parties claimed otherwise, plaintiff claiming Edward made Ethel the beneficiary and defendant claiming Edward made William the beneficiary. It is entirely possible that Mary had been the beneficiary of each policy until January 16, 2002.
Edward died on January 25, 2002, a resident of Lafayette in Sussex County. His will did not surface until 2004 when plaintiff brought it to her attorney, stating that she had just learned of her uncle's death. Plaintiff filed her first Verified Complaint for Administration on July 6, 2004, in Sussex County in a summary manner pursuant to Rules 4:67 and 4:83-1 under Docket No. P-157-04. She sought to be appointed as the administratrix of Edward's estate. Plaintiff alleged that she was attempting to locate the witnesses to the will in order to probate it, but so far had not been successful. She asserted that Mary had died, leaving Ethel as the sole beneficiary of Edward's estate. She further averred that Ethel had died as well and that she was the duly qualified and appointed Administratrix of Ethel's estate.
Plaintiff also alleged that she had been informed, through counsel, that defendant owned two life insurance policies that she believed were payable to Ethel and that benefits in excess of $56,000 had been paid by the insurance companies, although she did not know to whom the benefits had been paid. She alleged that Edward had been declared incompetent in April 1974, and she did not believe that he had the mental capacity thereafter to make a change of beneficiary. She alleged, on information and belief, that a caveat against the probate of a will had been filed by defendant. She sought a judgment granting her letters of administration for Edward's estate. A cross-petition for administration was filed by defendant.
After the petitions were argued, the judge placed her decision on the record. She found that defendant had more knowledge and information about Edward and his affairs and so appointed him the Administrator of Edward's estate. She required the filing of an informal accounting. She specifically noted that the appointment was without prejudice to plaintiff's right to challenge it later. The order granting letters of administration to defendant was entered on November 9, 2004, and plaintiff's petition was denied.
Defendant submitted his informal accounting, disclosing the receipt of a Transamerica Life Insurance Annuity payable to the estate in the amount of $107,251.04 and a Wachovia High Performance Money Market Account in the amount of $83,842.35. He also disclosed all three insurance policies as non-probate assets payable to himself as the beneficiary.
Plaintiff's counsel demanded to know how "the incapacitated [Edward] came to change the beneficiary designations [from Ethel] to your client."*fn1 Plaintiff's counsel subsequently provided the guardianship papers to defendant's counsel. Defendant's attorney responded that it was her understanding that William had been the beneficiary of all three insurance policies prior to his death and that, after defendant had been designated custodian-in-fact, Edward changed the beneficiary designation.
On September 6, 2005, plaintiff, in her capacity as Administratrix of Ethel's estate, filed a Verified Complaint to Set Aside Intervivos Transfers in the Matter of the Estate of Edward Rodenbough, Deceased, also under Docket No. P-157-04, against defendant as Administrator of Edward's estate. In this second complaint, plaintiff alleged that Edward had been declared incompetent, and the physician's 1974 affidavit stated that Edward "confused the present and the past," "was quite unaware of his surroundings," "had no concept of his real self, his relations with others," and his "memory was poor." He was diagnosed as suffering from a "chronic, progressive, severe mental disorder."
Plaintiff alleged that defendant maintained a confidential
relationship with Edward, taking care of his financial matters and
providing emotional support. She further alleged that Edward executed
a change of beneficiary designation on the life insurance policies
from Ethel to defendant just days before Edward died.*fn2
She asserted that defendant collected the proceeds of the
life insurance policies in the total amount of $117,048.31.
Plaintiff sought declarations that the designations of beneficiary were null and void ab initio and that Ethel's estate was the proper beneficiary. She also sought a judgment awarding Ethel's estate (1) damages in the amount of the policies paid to defendant, (2) interest from the date defendant received the proceeds of the policies, (3) costs of suit, (4) attorneys' fees, and (5) such other relief as the court deemed appropriate. In a separate count, plaintiff alleged that defendant had exercised undue influence over Edward and sought his removal as Administrator.
Defendant moved to dismiss the second complaint, asserting that plaintiff, as Administratrix of Ethel's estate, had no standing to sue because Ethel predeceased Edward. He also sought an approval of his earlier accounting and an order of distribution of the estate corpus to the known heirs pursuant to N.J.S.A. 3B:23-19.
While the motion to dismiss the second complaint was pending, plaintiff filed a third Verified Complaint on July 24, 2006, in the Sussex County probate action under Docket No. P-157-04, this time to probate the 1943 will. She alleged that the value of the estate was $200,000, "exclusive of assets which are the subject of a separate action against" defendant, i.e., the second complaint she filed. She sought to be appointed as the administratrix CTA and further sought an order revoking defendant's appointment as Administrator and compelling him to render a final accounting and turn over all assets to plaintiff.
In her order and written decision of August 25, 2006, respecting the motion to dismiss the second complaint, the probate judge explained that she was granting the motion because "[Ethel] predeceased [Edward], extinguishing any putative claim to the proceeds of any life insurance policy; and because the Estate of [Ethel] has no standing to seek removal of the appointment of [defendant] as the Administrator of the Estate of [Edward]." In her written decision, the judge found "that N.J.S.A. 3B:3-35 pertains to the construction of wills and the administration of estates, and has no bearing on the life insurance proceeds at issue here." Further, she found that "[i]n order to have a vested property right in a life insurance policy[,] a beneficiary must outlive the insured[;] when the beneficiary predeceases the insured[,] that property right is extinguished," citing Prudential Insurance Co. v. Deyerberg, 101 N.J. Eq. 90, 92 (Ch. 1927) ("As a general rule, the interest of an individual designated as beneficiary in a policy of insurance is a vested property right, payable to him if he outlives the insured . . . ." (emphasis added)).*fn3 Further, the judge found that Ethel could have no vested property right to the insurance proceeds because Edward retained the right to change his beneficiary designation.
Plaintiff did not appeal the dismissal of this complaint. She also did not seek to amend this complaint to sue in her capacity as a beneficiary of Edward's intestate estate, although she could have sought to set aside the 2002 beneficiary designation and compel payment of the proceeds to the intestate estate for distribution to herself and all other intestate beneficiaries. Finally, plaintiff did not seek the same relief under the 1943 will, which she was attempting to admit to probate, by either moving to amend her second complaint or seeking this relief in her third complaint. Plaintiff certainly had standing to sue in her capacity as a beneficiary, either testate or intestate. R. 4:26-1; see also In re Will of Maxson, 90 N.J. Super. 346, 348 (App. Div. 1966) (finding the petitioners to be "'parties in interest'" because "[a]s beneficiaries under a prior will of the testator they would be 'injured' by the probate of his later will which did not name them as such" (citation omitted)); In re Estate of Santolino, 384 N.J. Super. 567, 573 (Ch. Div. 2005) (finding that a ...