March 1, 2011
TINA RAIA, ADMINISTRATRIX CTA OF THE ESTATE OF EDWARD RODENBOUGH, PLAINTIFF-APPELLANT,
WILLIAM RODENBOUGH III, DEFENDANT-RESPONDENT.
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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION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 decedent's sister had standing to challenge the validity of the decedent's marriage because "[a]s an heir of his estate under the laws of intestacy, she stands to inherit from his estate should the marriage be annulled and receive nothing if the marriage is found valid").
Defendant also moved to dismiss the third complaint seeking to admit the will to probate due to the lapse in time between Edward's death and institution of the action to admit the will to probate. On September 18, 2006, the probate judge denied this motion, finding that there had been no reliance on plaintiff's decision not to seek probate for two years. He continued defendant as Administrator pending discovery and a hearing on the admission of the will to probate. That discovery took almost two years to complete. During that period, plaintiff again never sought to amend her complaint to include a claim respecting the insurance policies either as the putative administratrix CTA under Edward's 1943 will or as a person interested in the intestate estate.
On August 21, 2008, Edward's 1943 will was admitted to probate based on the testimony of the son of one of the witnesses to the will, who testified that he recognized his father's signature. Plaintiff was appointed as the Administratrix CTA, and defendant was ordered to turn over the estate assets to plaintiff. Defendant was directed to file an informal accounting, and his letters of administration were revoked effective on the turnover of the assets. Plaintiff never took exception to defendant's informal accounting and never sought to amend her third complaint in her new capacity as Administratrix CTA to seek an order compelling defendant to turn over the insurance proceeds to Edward's estate.
On May 18, 2009, more than seven years after Edward's death, plaintiff, now in her capacity as the Administratrix CTA of Edward's estate, filed a fourth complaint against defendant, this time in the Bergen County Law Division under Docket No. L-4483-09. She alleged that Edward lacked the mental capacity to make a change of beneficiary for his three life insurance policies; that Edward was dependent on defendant and maintained a confidential relationship with him; and that after Edward's death defendant collected $117,048.31 in death benefits from the three insurance policies. Plaintiff sought a declaration that the changed beneficiary designations were null and void and that Ethel's estate, not Edward's, was the proper beneficiary.*fn4
Accordingly, she sought a judgment for the amount of the proceeds plus interest. She also alleged causes of action for undue influence and an administrator's account although defendant had filed an informal accounting after he was removed as Administrator, which again disclosed the payment of the insurance proceeds to him as non-probate assets. Defendant moved for summary judgment in lieu of an answer under the entire controversy doctrine, which the Law Division judge granted on October 9, 2009.
In his written opinion, the judge explained that plaintiff had raised the issue of the life insurance policies in her first complaint filed on July 6, 2004, in her role as an interested party to Edward's estate, although she alleged that she did not know what happened to those policies at the time of filing her complaint. He found that the probate judge gave plaintiff "the opportunity to 'challenge the issuance of the [l]etters of [a]dministration' to [defendant] upon receipt of the informal accounting." He further found that defendant disclosed all three life insurance policies, their proceeds, and their payment to him as the beneficiary in his December 13, 2004, accounting.
The judge further found that plaintiff filed a second complaint on September 6, 2005, in her capacity as the Administratrix of Ethel's estate, "to set aside inter vivos transfers, including the life insurance policies, claiming undue influence," and that defendant's motion to dismiss was granted on August 31, 2006. He also found that plaintiff filed a third complaint on July 24, 2006, in her capacity as Administratrix of Ethel's estate and that she was appointed as Administratrix CTA of Edward's estate on September 3, 2008, but that she did not challenge the attorneys' fees, taxes, and life insurance policies during those proceedings.
The judge then addressed the issue of joinder of claims:
The rule as to claim joinder requires that all aspects of a controversy between parties to litigation be included in the same action, provided the claims arise outof the same transactional nexus. In [r]e Estate of Gabrellian, 372 N.J. Super. 432, 444 (App. Div. 2004)[, certif. denied, 182 N.J. 430 (2005)]. The doctrine applies to successive suits with related claims. Kaselaan & D'Angelo Assocs.[,] Inc. v. Soffian, 290 N.J. Super. 293, 299 (App. Div. 1996). It is "the factual circumstances giving rise to the controversy itself, rather than the commonality of claims, issues or parties, that triggers the requirement of joinder to create a cohesive and complete litigation." Mystic Isle Dev. Corp. v. Perskie & Nehmad, 142 N.J. 310, 322 [(1995)]. The doctrine, however, does not bar claims that were unknown during the time of the original action. Id. [at 323.]
Plaintiff now seeks to challenge the payment of attorney[s'] fees, taxes, and Edward's VA life insurance polic[ies] in another suit, five years after Judge Russell's order, and three years after receipt of the assets of the Estate. In the instant complaint, [p]laintiff alleges that she challenged the accounting by refusing to sign a refunding bond and release, yet [p]laintiff's attorney clearly stated that she refused to sign only because it was not necessary in order to effectuate a transfer of funds between successive administrators. Nowhere in the record is it indicated that [p]laintiff affirmatively challenged the payment of attorney[s'] fees, taxes, and Edward's VA life insurance polic[ies], even though as an interested party in the Estate, she had standing to do so under R. 4:28-2, which allows an interested party to sue a fiduciary both personally and as a representative of the estate.
The current cause of action clearly arises from the same transactional nexus as [p]laintiff's prior claims of 2004, 2005, and 2006, relating directly back to the factual circumstances giving rise to the claims previously asserted. Accordingly, [d]efendant's motion for [s]ummary [j]udgment based on the Entire Controversy Doctrine is hereby granted.
This appeal was timely filed after plaintiff's complaint was dismissed on summary judgment. She asserts that her complaint was not barred by the entire controversy doctrine because she did not acquire standing to file this complaint until she became the Administratrix CTA of Edward's estate; the entire controversy doctrine does not apply when there has been no adjudication on the merits; the court had jurisdiction over her claims for money damages in connection with defendant's administration of Edward's estate; and defendant's accounting was not approved and, therefore, needed to be filed formally.
Defendant responds that the entire controversy doctrine does bar this action; plaintiff's claim respecting the approval of defendant's accounting was not raised below; and the court had no jurisdiction over plaintiff's claims for money damages in connection with his administration of Edward's estate.
Our appellate review of a trial judge's fact-findings is limited by well-settled, controlling principles. Sebring Assocs. v. Coyle, 347 N.J. Super. 414, 424 (App. Div.), certif. denied, 172 N.J. 355 (2002). "We are not to review the record from the point of view of how we would have decided the matter if we were the court of first instance." Ibid. (citation omitted). "Findings by the trial judge are considered binding on appeal when supported by adequate, substantial and credible evidence." Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974) (citation omitted); see also Sager v. O.A. Peterson Constr., Co., 182 N.J. 156, 163-64 (2004). In this case, the judge's fact-findings are supported by adequate, substantial, and credible evidence in the record and will not be disturbed on appeal.
"While we will defer to the trial court's factual findings . . . , our review of the trial court's legal conclusions is de novo." 30 River Court E. Urban Renewal Co. v. Capograsso, 383 N.J. Super. 470, 476 (App. Div. 2006) (citing Rova Farms, supra, 65 N.J. at 483-84; Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995)).
Additionally, it is well-settled that "appellate courts will decline to consider questions or issues not properly presented to the trial court when an opportunity for such presentation is available 'unless the questions so raised on appeal go to the jurisdiction of the trial court or concern matters of great public interest.'" Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973) (quoting Reynolds Offset Co. v. Summer, 58 N.J. Super. 542, 548 (App. Div. 1959), certif. denied, 31 N.J. 554 (1960)). This is particularly so when the opportunity to present the question or issue to the trial court was readily available. Monek v. Borough of S. River, 354 N.J. Super. 442, 456 (App. Div. 2002).
We have examined the record in this case and are satisfied that plaintiff did not contend in this action that defendant's third and final accounting required formal filing. Rather, she urged that her refusal to sign a refunding bond and release was "tantamount" to a challenge to the accounting. However, in her counsel's letter of September 12, 2006, to the Surrogate, he stated that a refunding bond and release applied only to a devisee or distributee; defendant was not making a distribution; and plaintiff did not need to sign such a bond to have defendant's administrator's bond discharged. Thus, her refusal to sign was only because it was not necessary in order to transfer funds to a substitute administratrix. Because the contention that defendant's third and final accounting had to be formally filed was not raised below, we will not consider it on appeal.
Additionally, although the judge did not reach this issue, the Law Division in Bergen County had no jurisdiction over plaintiff's third count for an administrator's account in connection with defendant's administration of Edward's estate. This is so because Rule 4:87-1(a) clearly provides that such an action must be brought in "the county where such fiduciaries received their appointment," and Rule 4:87-1(b) empowers an interested person, here plaintiff, to there commence an action to compel a fiduciary to settle his account. In this case, that was in Sussex County, not Bergen County.
We turn to plaintiff's claims that the entire controversy doctrine does not apply because (1) she had no standing to file the fourth complaint until she became the Administratrix CTA of Edward's estate; (2) the prior proceedings were limited summary actions; and (3) there had been no adjudication on the merits of the second complaint.
The entire controversy doctrine is incorporated into our Rules of Court by Rule 4:30A, although it is of long-standing common law and constitutional dimensions. Cogdell v. Hosp. Ctr. at Orange, 116 N.J. 7, 15 (1989) (citing N.J. Const. art. VI, § 2, ¶ 4). Rule 4:30A provides:
Non-joinder of claims required to be joined by the entire controversy doctrine shall result in the preclusion of the omitted claims to the extent required by the entire controversy doctrine, except as otherwise provided by [R.] 4:64-5 (foreclosure actions) and [R.] 4:67-4(a) (leave required for counterclaims or cross-claims in summary actions).
"The entire controversy doctrine embodies the principle that the adjudication of a legal controversy should occur in one litigation in only one court . . . ." Cogdell, supra, 116 N.J. at 15. Additionally, "all parties involved in a litigation should at the very least present in that proceeding all of their claims and defenses that are related to the underlying controversy." Ibid. (citation omitted). Thus, the entire controversy doctrine "'applies not only to matters actually litigated, but to all aspects of a controversy that might have been thus litigated and determined.'" Vision Mortg. Corp. v. Patricia J. Chiapperini, Inc., 307 N.J. Super. 48, 52 (App. Div. 1998) (quoting Mori v. Hartz Mountain Dev. Corp., 193 N.J. Super. 47, 56 (App. Div. 1983)), aff'd, 156 N.J. 580 (1999).
"The purposes of the doctrine include  the needs of economy and the avoidance of waste, efficiency and the reduction of delay,  fairness to parties, and  the need for complete and final disposition through the avoidance of 'piecemeal decisions.'" Cogdell, supra, 116 N.J. at 15 (citation omitted); see also, K-Land Corp. No. 28 v. Landis Sewerage Auth., 173 N.J. 59, 70, 74 (2002). Its purpose is "to eliminate delay, prevent harassment of a party and unnecessary clogging of the judicial system, avoid wasting the time and effort of the parties, and promote fundamental fairness." Barres v. Holt, Rinehart & Winston, Inc., 74 N.J. 461, 465 (1977) (Schreiber, J., dissenting). This is so because "[f]ragmented and multiple litigation takes its toll on not only the parties but the judicial institution and thepublic." Cogdell, supra, 116 N.J. at 23.
The entire controversy doctrine does not require commonality of legal issues.
Rather, the determinative consideration is whether distinct claims are aspects of a single larger controversy because they arise from interrelated facts. . . . A plaintiff bringing an action based on two distinct legal theories is required to bring those claims together in one proceeding. [DiTrolio v. Antiles, 142 N.J. 253, 271 (1995) (citations omitted).]
"It is this commonality of facts . . . that defines the scope of the controversy and implicates the joinder requirements of the entire controversy doctrine." Id. at 272. "However, because the entire controversy doctrine is an equitable principle, its applicability is left to judicial discretion based on the particular circumstances inherent in a given case." Mystic Isle, supra, 142 N.J. at 323 (citations omitted). It does not "'apply to bar component claims either unknown, unarisen[,] or unaccrued at the time of the original action.'" K-Land, supra, 173 N.J. at 70 (emphasis removed) (quoting Pressler & Verniero, Current N.J. Court Rules, comment 2 on R. 4:30A (2002)).
Clearly, the facts alleged in plaintiff's second and fourth complaints are virtually identical. The fact that the second proceeding was a summary action under Rule 4:67 does not per se relieve the fourth complaint from the requirements of the entire controversy doctrine.*fn5 Indeed, it makes clear the summary nature of the fourth proceeding itself. We have had two occasions to consider the application of the entire controversy doctrine based on a prior summary probate action.
In Perry v. Tuzzio, 288 N.J. Super. 223, 229 (App. Div. 1996), we considered the preclusive effect of an exception to a probate accounting, a summary proceeding, on a subsequent plenary action against nonparties to the accounting who had a transactional relationship to the subject of the exception. We noted that application of the doctrine requires equality of forum, that is, the first forum must have been able to provide all parties with the same full and fair opportunity to litigate the issues and with the same remedial opportunities as the second forum. Thornton v. Potamkin Chevrolet, 94 N.J. 1, 5 (1983); Cafferata v. Peyser, 251 N.J. Super. 256, 261 (App. Div. 1991). The limited nature of the accounting procedure in general and the hearing on exceptions in particular readily indicates that that was neither the forum nor the procedure for litigating a professional malpractice claim against persons not in interest in the estate. [Id. at 230.]
Certainly, such is not the case here because the first forum was "able to provide all parties with the same full and fair oppor-tunity to litigate the issues and with the same remedial opportunities as the second forum." Ibid. (citations omitted).
In Gabrellian, supra, 372 N.J. Super. 432, we considered the application of the entire controversy doctrine in a summary probate action. The decedent's son Mark sought a declaration of the testator's probable intent respecting continued operation "of the testator's substantial real estate development business." Id. at 437. Mark and his mother Siran were co-executors; the testator's wife was the primary beneficiary. Ibid.
There had been a prior action brought by Mark to probate his father's 1983 will together with a separate "Writing" that "indicated that certain payments were to be made to a number of charitable beneficiaries and to his two grandchildren." Ibid. "A dispute arose over the funding of these gifts," which was settled with the entry of three separate orders. Ibid. The last order was entered on September 18, 2002, and dismissed the probate action with prejudice, admitted the 1983 will and writing to probate, and confirmed the appointments of Mark and Siran as co-executors. Ibid.
On October 4, 2002, Mark instituted the second probate action. Ibid. Mark sought a declaration that the co-executors were to continue to operate the testator's businesses until they mutually agreed to sell them. Id. at 437-38. He also sought a declaration that, when Siran died, the ownership of any remaining businesses would be transferred to him. Id. at 438. In the interim, Mark sought a declaration that he "had continuing authority to do whatever was necessary in the operation of the testator's businesses and that the Will was intended to create a trust." Ibid.
The second probate action was dismissed on Siran's motion for summary judgment. Ibid. Among other grounds for dismissal, the judge determined that the second probate action was barred by the entire controversy doctrine. Ibid. The Chancery judge held "that all issues in the second cause of action should have been raised in the first probate action, and therefore, a number of preclusion doctrines required dismissal of the complaint." Id. at 440.
We concluded that the Chancery judge "correctly applied the entire controversy doctrine to preclude [Mark's] claims." Id. at 444. We noted that the doctrine "require[d] the assertion of all claims arising from a single controversy in a single action at the risk of being precluded from asserting them in the future." Ibid. (citing R. 4:30A; Prevratil v. Mohr, 145 N.J. 180, 190 (1996)). After discussing the holdings in DiTrulio, supra, 142 N.J. at 267-68; Mystic Isle, supra, 142 N.J. at 322; and Prevratil, supra, 145 N.J. at 187-90, we observed that: the claims in the second probate action filed by [the son] in 2002 were based on facts not only known to him at the time he filed the 1999 litigation, but which arise from a single controversy regarding the testator's probable intent with respect to the disposition of his businesses. The very issue of probable intent was referred to in [Mark's] 1999 verified complaint . . . . [Gabrellian, supra, 372 N.J. Super. at 444.] Additionally, the first complaint also raised issues regarding the continuation of the testator's businesses. Id. at 445.
We rejected Mark's claim that the first action had not been dismissed when he filed the second action because it had no support in the record. Ibid. Furthermore, Mark was on notice of a potential sale of the businesses, even if Siran had not notified him of her intent to liquidate them, because the writing admitted to probate stated that all holdings should be sold immediately. Ibid. Additionally, the son advised the limited partners in an April 3, 2000, letter that Siran was thinking of selling the businesses. Ibid. We concluded that the statements in the letter "reveal[ed] his full awareness that the issues raised in [the second action] . . . existed during the first action[ and] in fact caused him concern." Id. at 446.
We also concluded that the "'particularized facts' of th[e] action and the equities at stake" did not bar the application of the doctrine. Ibid. We determined that the judge's decision "was correct and promoted the three-fold purpose of the entire controversy doctrine" because the two actions were "intertwined." Ibid. We also found that the judge correctly applied the doctrine of res judicata to bar the second action to "prevent re-litigation of the same controversy between the same parties." Ibid. (citing Brookshire Equities, LLC v. Montaquiza, 346 N.J. Super. 310, 318 (App. Div.), certif. denied, 172 N.J. 179 (2002)). This was so because there had been a final judgment, an identity of parties, an identity of issues, and an identity of causes of action. Ibid. The settlement of the first action was an adjudication on the merits despite the son's claim to the contrary. Id. at 447. Also, "[b]oth actions sought determinations of the effect to be given to the Will and the Writing." Ibid. Thus, res judicata barred the second action. Ibid.
We find Gabrellian determinative of the issues before us. The parties are the same. Plaintiff had multiple opportunities in prior actions to raise her claims to the insurance policy proceeds as an interested party in Edward's Estate, as a putative Administratrix CTA of Edward's Estate, and as an appointedAdministratrix CTA. In fact, the issues here are identical to the second and third complaints, the only difference being the capacity in which plaintiff sued. Finally, the disputes arise out of the same identical operative facts, and the causes of action are identical.
Both parties have extensively discussed Levchuk v. Jovich, 372 N.J. Super. 149, 151 (Law Div. 2004), where the court considered "the novel issue of whether an executor is barred by the entire controversy doctrine from pursuing an action against a recipient of inter vivos monetary transfers from a decedent, if the claim was not included in a prior probate proceeding involving both parties." The first action was a summary action in 1999 to admit a copy of the testator's 1995 will to probate, the original will having been lost. Id. at 151-52. The defendant filed an answer and counterclaim, seeking to probate a purported 1998 will and seeking damages for alleged defamation by plaintiff. Id. at 152. That first action was resolved on March 27, 2001, when a Chancery judge found that the defendant had a confidential relationship with the testator when the 1998 will was drawn, and he could not overcome the presumption of undue influence. Ibid. As a consequence, the judge declined to admit the 1998 will, admitted the 1995 will, and transferred the defamation action to the Law Division. Ibid.
While those cross-petitions were pending, a second complaint was filed in the Chancery Division by the plaintiff, the proposed executor. Ibid. The complaint asserted that the defendant had "insidiously obtained substantial monies" from the testator and sought their return. Ibid. The defendant again filed a counterclaim, contending that the inter vivos transfers were either gifts or payment for services. Id. at 153. In October 2001, the second complaint was transferred to the Law Division where it was consolidated with the defamation action. Ibid.
The defendant moved for summary judgment dismissing the second, now consolidated, action under the entire controversy doctrine. Ibid. He alleged that the inter vivos transfers were apparent to the plaintiff at the time of the first probate matter because those claims were made in the second action, which was filed while the first probate matter was still pending. Ibid.
The judge concluded that dismissal of the second complaint under the entire controversy doctrine was not appropriate because the first action was a summary proceeding, which did not permit the inclusion of issues that required plenary consideration. Id. at 158. He also concluded that the first summary action fell within the exclusionary language of Rule 4:30A, which "underscore[d] judicial acceptance of the principle that the constrictive procedure does not necessarily lend itself to resolution of all issues between the involved parties." Ibid. He found that application of the doctrine would constitute a "'trap for the unwary.'" Ibid. (quoting Perry, supra, 288 N.J. Super. at 231).
We are not persuaded that Levchuk resolves the issue before us. Plaintiff's claims in this action did not require plenary consideration because defendant, as Edward's custodian-in-fact, had a confidential relationship with him, giving rise to a presumption of undue influence. Even if these were disputed facts, the proofs required to establish them would have been limited in scope as would the proofs to refute a presumption of undue influence. There was no claim here respecting wide-ranging transfers of extensive estate assets and a counterclaim that at least some of those assets were transferred in payment for services rendered. The assets here at issue had all been identified by defendant when he filed his first administrator's account. Thus, the claim against the non-probate assets was suitable for a summary proceeding. Additionally, exceptions to defendant's informal accounting were also suitable for a summary proceeding. Thus, this action is distinguishable from theaction in Levchuk, where the claims could not be determined in a summary proceeding.
Plaintiff seeks shelter in an exception to the bar of the entire controversy doctrine for dismissals based on a lack of standing to sue, citing Watkins v. Resorts International Hotel & Casino, Inc., 124 N.J. 398, 416-20 (1991). That exception provides no safe harbor for two reasons. First, her complaint in this action alleges that Ethel's, not Edward's, estate was the proper beneficiary of the life insurance policies. That claim was made in the second action and was dismissed, not on standing grounds, but on the ground that Ethel's interest in the life insurance policies was extinguished when she predeceased him, a substantive determination. The fourth complaint filed in plain-tiff's capacity as the Administratrix CTA of Edward's estate is actually barred by the doctrine of res judicata in this respect, not the entire controversy doctrine, because the issue was litigated and determined in the second action. The interest of Ethel's estate in the insurance proceeds remained extinguished because Ethel predeceased Edward and, thus, Edward's estate cannot make a claim on behalf of Ethel's estate that has already been barred.
Second, even if plaintiff intended in this action to claim that the proceeds of the life insurance policies belonged toEdward's estate, plaintiff personally at all times prior to the filing of the fourth complaint had standing to sue, first as an interested party in Edward's intestate estate, and then as the sole beneficiary of Edward's estate after the will was admitted to probate. That claim was never an "unknown or unaccrued claim" exempt from the bar of the entire controversy doctrine. DiTrolio, supra, 142 N.J. at 273-74 (citations omitted).
"[T]he application of the doctrine requires that a party who has elected to hold back from the first proceeding a related component of the controversy be barred from thereafter raising it in a subsequent proceeding." William Blanchard Co. v. Beach Concrete Co.[,] 150 N.J. Super. 277, 292-93 (App. Div.), certif. denied, 75 N.J. 528 (1977). Therefore, if a party withholds a constituent claim or fails to join a party and the case is tried to judgment or settled, that party "risks losing the right to bring that claim later." Mystic Isle[, supra, 142 N.J. at 324.] [Kaselaan, supra, 290 N.J. Super. at 299.]
Of course, the second complaint was not tried to judgment on all claims, but it was dismissed in part on the merits, and a judgment was entered on the third complaint on August 21, 2008, more than a year before this fourth complaint was filed. Plaintiff should have included her personal claim at the very latest as a component of the third complaint, which sought an accounting and turnover of all assets. Because she withheld that claim, she may not assert it in this action. This is so eventhough she sues in her capacity as Administratrix CTA of Edward's Estate because she had the opportunity to make that claim as Administratrix in the form of an objection to the accounting ordered by the judge.
In that respect, N.J.S.A. 3B:2-4 provides that, "in any proceeding by or against fiduciaries or other persons," the Superior Court may proceed in a summary manner. When a fiduciary has been removed or discharged, as defendant was here, the "fiduciary shall, within 60 days after removal or discharge or within a shorter or longer period as the court may direct, state and settle his account before the Superior Court for all the assets of the estate in his charge." N.J.S.A. 3B:14-7. Discharge or removal is not a release of liability. N.J.S.A. 3B:14-22. Further, "[i]ssues of liability as between the estate and the fiduciary individually may be determined in a proceeding for accounting, surcharge or indemnification or other appropriate proceeding." N.J.S.A. 3B:14-34. Here, plaintiff included an action for accounting in her third complaint, but did not pursue the issue of the insurance policies after her second complaint was dismissed. In fact, she did not take exception to the accounting defendant provided after she had been appointed the Administratrix CTA.
Accordingly, we examine the three factors Cogdell requires us to consider. Clearly, "the needs of economy and the avoidance of waste, efficiency and the reduction of delay," Cogdell, supra, 116 N.J. at 15 (citation omitted), demanded that the claim to set aside the designation of beneficiary be set forth in the second, or at the very latest, the third complaint. This factor weighs in favor of the application of the entire controversy doctrine.
Turning to "fairness to parties," ibid. (citation omitted), plaintiff has had at least two prior fair opportunities to contest the change in beneficiary as an interested party in Edward's estate and one prior fair opportunity to do so as the Administratrix CTA of his estate when she became the sole beneficiary. Defendant had been sued three times before the institution of this action and now is unfairly subjected to a fourth complaint despite the fact that the claims made here could have been asserted in at least two prior proceedings. This, too, calls for application of the entire controversy doctrine.
As to "the need for complete and final disposition through the avoidance of 'piecemeal decisions,'" ibid. (citation omitted), this is certainly a case where seriatim litigation is inconsistent with judicial economy. All of the mechanisms for determining the matter at issue here existed in the actions on the second and third complaints where they could be finally disposed. Thus, piecemeal decisions could have been avoided with timely presentation of plaintiff's claims in her capacity as an interested party and later as the Administratrix CTA. Thus, the third Cogdell factor supports application of the entire controversy doctrine.
We are mindful "that the capacity of an executor to initiate a lawsuit is dependent upon and subject to the admission of a document for probate, and his or her status as the real party in interest in litigation involving the estate does not mature until probate is accomplished." Levchuk, supra, 372 N.J. Super. at 159 (citations omitted). But that principle does not remedy plaintiff's failure to advance this claim during the third lawsuit.
We are cognizant "that 'equitable considerations can relax mandatory-joinder requirements when joinder would be unfair.'" Joel v. Morrocco, 147 N.J. 546, 555 (1997) (quoting Prevratil, supra, 145 N.J. at 190). There is no occasion for such relaxation here where plaintiff has had multiple opportunities to challenge the changes in beneficiary.