May 6, 2011
IN THE MATTER OF THE ESTATE OF IGNAZIO DEL BAGNO, DECEASED.
On appeal from the Superior Court of New Jersey, Chancery Division, Monmouth County, Docket No. P-89-09.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted January 20, 2011
Before Judges R. B. Coleman, Lihotz and J. N. Harris.
Ignazio Del Bagno (decedent) died intestate on December 4, 2007, survived by three daughters: plaintiff Antoinette Early, who qualified as the administrator of decedent's estate; defendant Phyllis Rizzuto, formerly Phyllis Del Bagno; and Rose Tittle, who is not a party to the action. In administering the estate, plaintiff filed an action seeking defendant's informal accounting regarding the disposition of decedent's bank depository accounts. The complaint also alleged decedent's transfer of monies to defendant was not voluntary but a result of defendant's undue influence. Following discovery, defendant moved for summary judgment, which was granted.
Plaintiff appeals from the March 12, 2010 summary judgment and dismissal of the complaint. Following our review, we reverse that order because factual disputes, which turn on the parties' credibility, necessitate a full evidentiary hearing.
The facts, viewed in a light most favorable to plaintiff, are taken from the summary judgment record. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). Decedent died on December 4, 2007, at the age of ninety. His wife predeceased him but he was survived by his three daughters. From approximately 1970, decedent had lived with defendant. On October 7, 1999, decedent underwent heart surgery and later, on March 30, 2000, suffered a disabling stroke that impeded his ability to properly care for himself. From that time until 2003, decedent's three daughters rotated the provision of his weekly care. Thereafter, decedent returned to defendant's home under the supervision of live-in caretakers who provided round-the-clock care, until his death.
Both parties agree decedent did not hold assets solely in his name, but titled realty in the names of family members and created joint depository accounts. For example, decedent transferred the title of a St. Lucie County, Florida condominium to his three daughters as joint tenants with rights of survivorship. Also, he opened depository accounts at Hudson City Savings Bank (Hudson City) that were held jointly with or designated as payable on death (POD) to Tittle or defendant. Decedent also had a joint checking account with his friend, Anthony Yurksha and other accounts titled jointly with each of his daughters.
Throughout the period when decedent resided with her, defendant aided him in managing his financial affairs. Several depository accounts were created jointly with or POD to defendant at Hudson City, Valley National Bank and Clifton Savings Bank. Plaintiff identifies two accounts that she alleges decedent added defendant's name for convenience and not because he intended to gift the monies to her.
The first was decedent's primary savings account (account number ending in 0818), opened at Hudson City on May 31, 1996. When decedent opened the savings account, it was titled in his name and payable to defendant on his death. Additionally, decedent executed a power of attorney, naming defendant his attorney-in-fact in respect of the account.
The second account identified by plaintiff was a checking account (account number ending in 6646) at the same bank. The checking account was opened in 1996 at the same time as the savings account and titled jointly with defendant. Defendant regularly moved money from decedent's savings account to the joint checking account, from which she paid decedent's ongoing expenses.
The controversy can be narrowed even further, as plaintiff's predominate challenge centers on the deposit and use of the proceeds from the sale of decedent's investment property. On October 25, 2004, decedent sold a rental property in Sewaren realizing net proceeds of $216,173.59. When questioned about the deposit of the proceeds, defendant testified her father would have said, "do what you think is best." Thus, without obtaining specific direction from decedent, defendant deposited the proceeds into the Hudson City savings account then transferred money from the savings account to the checking account. Upon decedent's death, the Hudson City savings account contained a balance of $33,509.55 and the checking account a balance of $8,660.91. Quite simply, plaintiff contends defendant utilized some of the Sewaren proceeds for her own benefit, not for decedent's care, and that decedent would have wanted all of his daughters to share in the proceeds of the investment realty.
In support of this position, plaintiff identified two checks, drawn on the joint Hudson City checking account, which were used to pay defendant's obligations. During the first day of defendant's deposition, she was questioned regarding the management of decedent's accounts and the payment of her personal expenses using decedent's funds.
When first asked, defendant denied she ever used decedent's assets, including joint depository accounts, to satisfy the expenses incurred for her home. Then, when presented with two checks drawn on the Hudson City joint checking account -- one in the amount of $2,895, for her house repairs, and the other in the amount of $2,094.44, for her February 2007 mortgage payment -- defendant stated:
A: Well, I wrote that, so I must have saw [sic] it some time or another. But I did, at one time, . . . I deposited my own money in 'cause I was writing out some checks and I didn't want to go crazy. And I wrote a few checks out. But my own money was deposited into my father's checking account. Yes, it was deposited in there.
Q: Would it be the case that what you're referring to is depositing your own money into a joint account with your father and then writing a check on that account to someone else?
A: That's the only way I would do that. I always deposited my own money. I would never, ever -- in a few instances, I do remember, I was very busy, and I . . . had to make checks out.
Q: Okay. Now, earlier today, do you recall me asking you a question as to whether or not any assets from your father's account, including funds, including any joint account, were ever used to pay for expenses for your Wildwood property?
Q: And what was your response earlier today?
A: I said, "no," because that wasn't his expense; that was my money, not his.
A: That was for Wildwood. That was for -- my own money was put in there. It wasn't my father's money, no.
When defendant's deposition was resumed, this additional colloquy regarding the use of decedent's money took place:
Q: Now in the previous day's deposition, you described that you had paid for some things out of the [Hudson] checking account for yourself, but you had deposited money that was your money into that account, is that right?
A: Yes, yes.
Q: Were there ever deposits made into that account from the Hudson City savings account?
A: For my father there was. Not for me. For my father.
Q: Okay. Now with respect to what you say were your deposits that went into the Hudson City joint checking account, do you have any paper evidence that would support that?
A: What would paper evidence be? Q: Deposit slips?
A: Oh, God. I may have some.
A: I have to go look.
No additional documents were sought by plaintiff or provided by defendant. Plaintiff, however, did match up the deposits made to the Hudson City joint checking account with corresponding withdrawals made from decedent's Hudson City savings account. No other deposits, presumably from defendant's separate funds, were identified.
During summary judgment proceedings, the motion judge noted there was no challenge to the assertion that decedent used joint ownership as an estate planning tool. Finding no material facts in dispute, the motion judge determined:
Upon the death of a joint [account] owner, . . . the sums remaining in the account upon the death of either party belong to the surviving party, unless there is clear and convincing evidence of a different intention at the time the account is created.
Here[,] the plaintiff admits that the decedent created these joint accounts frequently to manage his financial affairs and that he was aware at his death that the proceeds would go to the remaining party on the account. I find that the plaintiff has not produced any clear and convincing evidence of any different intention by the decedent.
Also as to the issue of a sale of the [Sewaren] home, . . . it has been shown that the decedent reviewed the agreement of sale for the [Sewaren] property and there's been statements by two people involved with the property that the decedent was alert of mind. So here the evidence presented only affirms that the decedent knew what he was doing, knew what would happen with the accounts upon his death, and no contrary evidence has been presented by the plaintiff.
So I found that . . . the presumption of undue influence has been rebutted. I will grant summary judgment in this entire matter.
This appeal ensued.
It is well-established that we review the motion court's conclusions de novo, Estate of Hanges, 202 N.J. 369, 382 (2010), without giving deference to the legal conclusions reached. City of Atl. City v. Trupos, 201 N.J. 447, 463 (2010). In our review, we use the same standard as the trial court. Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.) (citing Antheunisse v. Tiffany & Co., 229 N.J. Super. 399, 402 (App. Div. 1988), certif. denied, 115 N.J. 59 (1989)), certif. denied, 154 N.J. 608 (1998). The "essence of the inquiry" is "'whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.'" Brill, supra, 142 N.J. at 536 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 106 S. Ct. 2505, 2512, 91 L. Ed. 2d 202, 214 (1986)). Accordingly, after viewing the facts in the light most favorable to the non-moving party, Hodges v. Sasil Corp., 189 N.J. 210, 215 (2007), summary judgment must be granted if "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." R. 4:46-2(c); Brill, supra, 142 N.J. at 528-29.
In determining whether there is a genuine issue of material fact for summary judgment purposes, the trial court, after considering the burden of persuasion at trial, must ascertain "what reasonable conclusions a rational jury can draw from the evidence[.]" Id. at 535. See also R. 4:46-2(c). The judge "'must accept as true all the evidence which supports the position of the party defending against the motion and accord him [or her] the benefit of all legitimate inferences which can be deduced therefrom[.]'" Ibid. (quoting Pressler, Current N.J. Court Rules, comment 1 on R. 4:40-2 (1991)). If reasonable minds could differ, the motion must be denied. Ibid.
"[A] non-moving party cannot defeat a motion for summary judgment merely by pointing to any fact in dispute." Id. at 523 (emphasis in original). A party opposing the motion must offer facts that are substantial or material in order to defeat the grant of summary judgment. Judson v. Peoples Bank & Trust Co. of Westfield, 17 N.J. 67, 75 (1954). "Bare conclusions in the pleadings, without factual support in tendered affidavits, will not defeat a meritorious application for summary judgment." U.S. Pipe & Foundry Co. v. Am. Arb. Ass'n, 67 N.J. Super. 384, 399-400 (App. Div. 1961) (citing Gherardi v. Bd. of Educ. of the City of Trenton, 53 N.J. Super. 349, 358 (App. Div. 1958)). Furthermore, disputed issues "of an insubstantial nature" cannot overcome a motion for summary judgment. Brill, supra, 142 N.J. at 530 (citing Judson, supra, 17 N.J. at 75). Therefore, "when the evidence 'is so one-sided that one party must prevail as a matter of law,' the trial court should not hesitate to grant summary judgment." Id. at 540 (citation omitted).
On appeal, plaintiff argues the summary dismissal of her complaint was error because genuine issues of material fact existed regarding whether defendant had authority to control decedent's Sewaren proceeds, whether decedent was a victim of undue influence and whether defendant converted decedent's money. Plaintiff generally asserts that when decedent designated defendant as the joint owner or recipient upon his death of the Hudson City savings and checking accounts, he did so merely as an accommodation.
More specifically, plaintiff challenges whether defendant had actual or apparent authority to deposit the proceeds from the Sewaren realty sale into the Hudson City savings account, rather than into a different account owned by decedent. Also, she argues defendant's authority to manage decedent's funds did not include utilizing the realty proceeds. Finally, plaintiff contests defendant's unsupported statements that she deposited her own money into the joint account to cover checks written for her individual expenses, claiming that assertion alone is insufficient to grant summary judgment on her cause of action for conversion. Plaintiff argues each of these questions must be determined by the factfinder when discerning whether the use of the funds was a result of undue influence because of the "confidential relationship" between decedent and defendant.
On the other hand, defendant notes decedent's practice of using joint accounts was uncontroverted and the Hudson City accounts were established long before decedent's debilitating stroke. The decedent's intent that defendant retain the Hudson City accounts upon his death was clearly and convincingly established when they were opened, validating the presumption of her ownership upon his death as the surviving joint owner. Further, the Sewaren proceeds were deposited into decedent's savings account and used for his health, maintenance and support as he intended. Although her accounting is informal, defendant believes she has explained ninety percent of the funds, showing they were used for decedent.
When examining accounts jointly titled or payable to another on the death of the initial depositor, the presumption of legal entitlement by the surviving joint account holder is rebuttable. In re Estate of Penna, 322 N.J. Super. 417, 422 (App. Div. 1999). The sums on deposit are assumed to be the property of the surviving joint account holder "unless there is clear and convincing evidence of a different intention at the time the account is created." N.J.S.A. 17:16I-5(a).*fn1 This burden of proof is modified, however, when the moving party "can prove by a preponderance of the evidence that the survivor had a confidential relationship with the donor who established the account[.]" Estate of Ostland v. Ostland, 391 N.J. Super. 390, 401 (2007). In that event, "there is a presumption of undue influence," such that the burden of persuasion shifts, and "the survivor donee must rebut [the presumption] by clear and convincing evidence." Ibid. If the surviving account holder carries the burden of proof, then N.J.S.A. 17:16I-5(a) controls disposition of the account, however, the party challenging the joint account designation may further introduce additional evidence of undue influence to defeat the statutory presumption of survivorship. Penna, supra, 322 N.J. Super. at 426.
As applied here, once plaintiff proves a confidential relationship existed between defendant and decedent, the burden shifts to defendant to show the Hudson City savings and checking accounts were not merely "convenience accounts" so that she could "more easily handle the financial affairs of [decedent,] the true owner of the asset." Bronson v. Bronson, 218 N.J. Super. 389, 393 (App. Div. 1987). Defendant must show the joint designations were intended as a voluntarily gift to her and, further, that decedent "understood the legal effect of the transfer of assets into joint accounts." Penna, supra, 322 N.J. Super. at 423. If she cannot, "a joint survivorship account has not been validly created" and the statutory presumption is inapplicable. Id. at 419. If defendant presents those proofs, plaintiff may then offer additional evidence of undue influence over the Sewaren proceeds or conversion of decedent's assets prior to his death.
The facts in Penna closely parallel those at hand. In Penna, a mother gave her daughter control of her bank account, even though her son also helped her with other matters. Id. at 424. In the final stage of her life, the mother moved into the home of her daughter and continued to spend time with both of her children. Ibid. The trial court found the "mother-daughter relationship, as well as the trust [the mother] placed in her [daughter], lead to the conclusion that a confidential relationship existed[.]" Ibid. The mother's son challenged his mother's intention to transfer her joint account to her daughter under N.J.S.A. 17:16I-5(a). Penna, supra, 322 N.J. Super. at 422. We concluded the trial court erred because it "should have shifted the burden of proof to [the daughter] once "[it] concluded that a confidential relationship existed between" the daughter and the mother. Id. at 424-25. Instead, the trial judge placed the burden on the challenger to prove the daughter exercised undue influence over her mother in creating the joint accounts. Id. at 422. We stated that once a confidential relationship is proven, the putative joint owner has the burden to prove that joint survivorship was the voluntary knowing intention of the decedent. Ibid.
Here, plaintiff satisfactorily proved a confidential relationship existed between decedent and defendant. Decedent lived with defendant for over thirty years before suffering a stroke in 2000. Defendant had always assisted decedent with his personal and financial affairs. Decedent returned to defendant's home in 2003, physically dependent on round-the-clock caregivers, where he stayed until his death in 2007.
Plaintiff believed defendant's undue influence was evinced with respect to the disposition of the Sewaren proceeds. In 2004, when decedent was very ill, he sold his home in Sewaren. Defendant transported him to the closing on two separate occasions. Decedent was too sick to travel on the first date; when he returned on the second, he could not exit the car, so the documents were brought to him for his signature. Defendant took custody of the proceeds check and deposited it into the Hudson City savings account, without seeking direction from decedent. Plaintiff argues the confidential relationship created a "presumption of undue influence" regarding this transaction, shifting the burden of persuasion to defendant to prove by clear and convincing evidence that decedent intended to deposit the Sewaren proceeds into the Hudson City savings account, which defendant would receive upon his death. Ostland, supra, 391 N.J. Super. at 401.
Defendant contends it is clear that decedent intended to pass the asset through his Hudson City accounts. She dispels a claim of undue influence along with the notion that decedent intended the Hudson City accounts be divided equally among his three daughters, stating: "decedent's undisputed longstanding practice of using joint accounts for estate planning purposes, his failure to leave a will together with defendant's long stewardship of this power of attorney/POD account for decedent's own benefit."
Our assessment reveals errors requiring reversal of summary judgment. Not only are there contrary factual assertions and other proofs identifying material factual disputes that must be tested by an evidentiary hearing, but also the motion judge misstated the burden of proof. Additionally, the motion judge dismissed the claim of conversion without making findings.
First, the proofs regarding circumstances surrounding the deposit of the Sewaren funds and the actual disposition of the monies rest almost entirely upon defendant's otherwise unsupported statements. Defendant's undocumented explanation of the disposition of the Sewaren proceeds, as well as her exclusive use of monies for her benefit during decedent's life without evidence of her claimed offsetting personal deposits to cover the expenses, are disputed necessitating a credibility determination.
Credibility must be determined by the finder of fact, making it inappropriate to formulate such findings from a summary judgment record. Brill, supra, 142 N.J. at 540; D'Amato v. D'Amato, 305 N.J. Super. 109, 114-15 (App. Div. 1997). A trier of fact must be "free to weigh the evidence and to reject the testimony of a witness, even though not directly contradicted, when it . . . contains inherent improbabilities and contradictions which alone or in connection with other circumstances in evidence excite suspicion as to its truth." D'Amato, supra, 305 N.J. Super. at 115 (internal quotations and citations omitted).
Second, in her findings and conclusions, the motion judge did not mention the confidential relationship between defendant and decedent or articulate the burden shifting analysis discussed in Penna. Also, her findings incorrectly suggest plaintiff had the burden to rebut the statutory presumption of joint ownership, as the judge stated, "I find . . . plaintiff has not produced any clear and convincing evidence of [decedent's] different intention" at the time the Hudson City accounts were created.
Third, on the issue of conversion, the motion judge misinterpreted plaintiff's challenge regarding the Sewaren proceeds. The court ignored plaintiff's position that defendant could not show permission to deposit the check into the Hudson City account -- an asset defendant believed she would eventually own. Instead, the judge focused on whether decedent knowingly sold the property, stating: "the evidence presented only affirms that the decedent knew what he was doing, knew what would happen with the accounts upon his death, and no contrary evidence has been presented by the plaintiff." We disagree.
The record includes defendant's admission that she never asked her father what to do with the check and simply assumed she should do what she thought best. Plaintiff should be granted an opportunity to test at trial the question of whether defendant abused her position as fiduciary because she believed the account would be hers upon her father's death. From this record, it is unclear if plaintiff will introduce additional evidence; nevertheless, the determination requires an assessment of defendant's credibility, which must be made after hearing all of the evidence presented as a "case may present credibility issues requiring resolution by a trier of fact even though a party's allegations are uncontradicted." D'Amato, supra, 305 N.J. Super. at 115.
The judge, however, made no factual findings on plaintiff's proofs; she simply dismissed the claim of conversion. The record contains defendant's broad assertion that she deposited her own funds into the joint checking account to pay her bills, which is refuted by plaintiff's documentary evidence. We do recognize that if defendant successfully rebuts the presumption of undue influence arising from her confidential relationship with decedent, and defendant has no additional proofs, then the determination regarding the disposition of the checking account may be moot because the account will inure to defendant. This possible eventuality, however, will not obviate factual findings supporting such determination, which includes the assessment of the parties' credibility. Therefore, these additional factual disputes must abide a hearing.
For the reasons set forth in this opinion, we find there are disputed material facts and conclude the motion judge erred in granting defendant's motion for summary judgment. Accordingly, the March 12, 2010 order is reversed and the matter remanded for trial.
Reversed and remanded.