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In the Matter of the Inter Vivos Trust

January 11, 2012

IN THE MATTER OF THE INTER VIVOS TRUST, JOSEPH BRANDES, GRANTOR (SEPTEMBER 12, 1994); IN THE MATTER OF THE INTER VIVOS TRUST, DOROTHY SINGER, GRANTOR (DECEMBER 23, 1999)


On appeal from the Superior Court of New Jersey, Chancery Division, Bergen County, Docket Nos. P-263-08 and P-264-08.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted November 29, 2011

Before Judges Fisher, Baxter and Nugent.

The linchpin of these three appeals, which were not consolidated but which we now resolve in a single opinion, is the Chancery judge's removal of appellant Ricki Singer as the guardian ad litem of her son, Daniel Martin Singer, the beneficiary of the 1994*fn1 and 1999*fn2 trusts in question in two probate suits commenced by Ricki. That removal was triggered by the Chancery judge's conclusion that Ricki's interests came into conflict with Daniel's when both Ricki and the trust became exposed to counsel fee claims following the entry of summary judgment on the merits in the 1999 trust suit. Because we conclude, after close review of the voluminous record, that the proffered reasons for removal did not meet the clear and convincing standard applicable in such matters, and the decision to remove Ricki as guardian ad litem constituted a mistaken exercise of the Chancery judge's discretion, we reverse that determination and, consequently, vacate the order that approved a settlement reached on the child's behalf by the substitute guardian ad litem and remand for further proceedings in the 1994 trust suit.

I

In 2006, Ricki commenced two actions in the Probate Part, seeking a judgment compelling her brother, Steven G. Singer, the trustee of the 1994 and 1999 trusts, to provide an accounting. The Chancery judge at the time entered an order on February 28, 2006, which required that Steven provide an accounting of both trusts within forty-five days; the judge also named Ricki as her son Daniel's guardian ad litem. Ricki later filed an amended complaint against Steven, and three corporations -- Romulus Holdings, Inc., Remus Holdings, Inc., and Mars Associates, Inc. -- alleging Steven's mishandling of the trust assets, self-dealing, a breach of his fiduciary duties and the terms of the trusts, and fraud, and claiming also that some or all of the three corporations conspired with Steven to defraud the 1994 and 1999 trusts. Ricki sought damages and the removal of Steven from his office as trustee.*fn3

Steven and the three corporations moved for dismissal. The judge denied Steven's motion and ordered him to file a formal accounting for both trusts within sixty days; the judge also dismissed the complaint without prejudice insofar as it sought relief from the corporations. Ricki filed an amended complaint. Steven and the corporations again moved for dismissal; those motions were denied.

Ricki served discovery demands on Steven and the corporations. When a dispute arose about the proper scope of discovery, the Chancery judge at the time appointed an attorney to "decide and determine all discovery disputes in the first instance," reserving to the parties the right to appeal any such determinations to the trial court. The record reveals that Ricki appealed some of the discovery master's determinations but the judge denied relief, concluding that Ricki's demand for documents related "to virtually every transaction spanning 13 years" and "crossed the acceptable boundaries" of our broad discovery rules.

The parties consented to a dismissal of the suits without prejudice upon receipt of Steven's anticipated formal accountings. Steven thereafter filed separate verified complaints seeking approval of his formal accountings regarding the two trusts. Ricki filed exceptions to both accountings, as well as a counterclaim and a third-party action against Steven and the corporations.*fn4 She also sought extensive discovery, only some of which was permitted by the discovery master. Ricki then appealed to the Chancery judge,*fn5 who affirmed the master's determinations by order entered on December 12, 2008.

Steven and the three corporations separately moved for summary judgment in early 2009. The Chancery judge granted summary judgment in favor of the corporations and approved Steven's accounting regarding the 1999 trust; the dispositive motions in the 1994 trust suit were denied.

In early March 2009, Romulus and Mars moved for an award of the counsel fees and costs they expended in defending against Ricki's claims in the 1999 trust suit. Steven moved for an allowance from the 1999 trust for his fees and costs and, also, sought a surcharge against Ricki, claiming she breached the fiduciary duty she owed Daniel as his guardian ad litem.

The remaining matters were scheduled for a trial to commence in late March 2009. During settlement discussions, the Chancery judge questioned whether the applications for legal fees asserted by Steven, Romulus and Mars in the 1999 trust matter created a conflict of interest that compromised Ricki's ability to continue to act as Daniel's guardian ad litem in the 1994 trust suit. The parties took the opportunity provided by the judge to brief the issue while continuing to negotiate. When their attempts to settle proved unfruitful, the judge heard argument regarding the conflict-of-interest issue and thereafter removed Ricki as guardian ad litem. By orders entered on April 15 and 16, 2009, Louis Pashman, Esq., was appointed as Daniel's guardian ad litem in the 1994 and 1999 trust matters. Pashman and the other litigants reached a settlement of the 1994 trust suit in September 2009, and the Chancery judge, over Ricki's objection, approved that settlement by order entered on October 9, 2009.

Motions for counsel fee awards were thereafter filed by Steven and the corporations, as well as Ricki, regarding the 1994 trust suit. For reasons expressed on November 13, 2009, the judge denied all these applications and memorialized her rulings in an order entered on November 17, 2009. On November 24, 2009, Steven's counsel wrote to the trial court, claiming that the November 17, 2009 order did not accurately reflect the judge's oral decision and, also, among other things, did not confirm that he had previously been allowed $172,000 in counsel fees.

In her appeal in A-1998-09, Ricki sought reversal of: (1) the discovery orders of April 30 and December 12, 2008; (2) the order of April 15, 2009, which removed Ricki as guardian ad litem in the 1994 trust action; (3) the order of October 9, 2009, which approved the settlement of the 1994 trust action; and (4) the order of November 17, 2009, which denied Ricki's fee application. Steven cross-appealed, seeking reversal of the order of November 17, 2009, which denied his application in the 1994 trust suit for fees and for a surcharge against Ricki. Romulus and Remus also cross-appealed the denial of their motion for counsel fees in the 1994 trust action.*fn6

On July 19, 2010, the judge entered orders in both suits, denying Steven's request for counsel fees and surcharges against Ricki. The judge also declared that she would not confirm Steven's belief that he had previously been allowed $172,000 in counsel fees because "no such finding was made [and] rather the [c]court refrained from making an independent determination as to whether what ...


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