October 17, 2012
IN THE MATTER OF THE PROBATE OF THE ALLEGED WILL OF JOAN PENNELLA, DECEASED.
On appeal from the Superior Court, Chancery Division, Probate Part, Bergen County, Docket No. P-376-10.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued October 2, 2012 -
Before Judges Reisner, Yannotti and Hoffman.
Defendants Samuel Pennella (Sam) and Carol David appeal from a November 16, 2011 order admitting the May 24, 2010 will of decedent Joan Pennella*fn1 to probate and dismissing a caveat filed against the will.
After Joan died on July 17, 2010, her oldest son, Carl Pennella, Jr., filed a complaint seeking to probate the 2010 will, to be appointed executor pursuant to the terms of the will, and to lift a caveat that Sam had filed. Sam and Carol (defendants), two of Joan's younger children, filed a contesting answer and a counterclaim alleging that Joan lacked testamentary capacity and that Carl had exercised undue influence over her. Another child, Madeline Pennella, also filed a contesting answer, but settled her claim prior to trial. After a bench trial, Judge Harry G. arroll rejected defendants' claims.
On this appeal, defendants argue that the trial judge erred in finding
that Carl did not have a confidential relationship with Joan and that
there was no proof of suspicious circumstances. They also challenge
several of the trial judge's evidentiary rulings.
Having reviewed the record, we conclude that
defendants' arguments are without merit and we affirm, substantially
for the reasons stated in Judge Carroll's comprehensive written
opinion, issued November 16, 2011.
The evidence is summarized at length in Judge Carroll's opinion and need not be addressed in the same detail here.*fn2 Joan Pennella and her husband had seven children: Carl, Sam, Carol, Madeline, Joseph Edward Pennella (Ed), Joan M. Pennella (Joanie), and Rosanne Pennella. Joan's husband died in 1995 leaving her a multi-million dollar estate. Beginning in 1996, Joan began making substantial annual gifts to each of her children. In 1996, she also made a will leaving her estate to her children in seven equal shares.
However, in 2006, she made a new will, leaving her estate to a living trust, of which only five of her children -- Carl, Ed, Joanie, Rosanne, and Madeline -- were beneficiaries. Sam and Carol were excluded from the trust. According to the contemporaneous notes of Joan's probate attorneys, in 2006 Joan expressed concern that Carol was a spendthrift, who had depleted hundreds of thousands of dollars Joan had already gifted to her and would probably waste any further assets left to her directly. Joan also expressed resentment that Sam had borrowed huge sums of money from her, much of which he had failed to repay.
In particular, in 1997, Sam borrowed $850,000 from Joan to purchase some land. He gave Joan a first mortgage on the property and began making mortgage payments, but stopped making payments after three years. In 2001, he borrowed about $1.25 million from her to buy a jet airplane, promising to repay the money in a couple of weeks. After almost a year, he repaid one million dollars, but refused to pay the remaining $250,000. In 2001 and 2002, Sam also borrowed over $300,000 from Joan to cover margin calls on his stock investments, and failed to repay her. On May 13, 2005, Joan sent Sam a letter telling him that he had until August 15 to pay the outstanding mortgage balance, and if he failed to do so, she would not leave him an inheritance beyond the loans she had given him. Joan's 2006 will and all of her subsequent estate plans excluded Sam, except for leaving him a small bequest. She also ceased giving him any annual gifts.
After Carol developed a serious health problem, Joan amended her estate plan in 2007 to give Carol a share in the testamentary trust. However, in 2008, Joan once again removed Carol from her estate plan, other than to leave her a small bequest. That decision stemmed from the following incidents.
First, Carol borrowed a valuable tanzanite necklace from Joan, and refused to return it despite Joan's repeated requests that she do so.
Second, during a visit to Joan's house in December 2007, when Joan once again asked for the necklace, Carol directed a brutal tirade at her mother, telling Joan that she was "a horrible mother," she was "full of shit" and should "go fuck herself," and she should "shove her money up her ass." Rosanne, a witness the judge found entirely credible, was present during this incident and testified to those details. In her testimony, Carol admitted that this incident occurred.
On April 6, 2008, Joan wrote Carol a letter asking her to return the necklace by April 15, 2008. In the letter, she told Carol that if she did not return the necklace by the deadline, Joan would consider the necklace to be a gift but would give Carol no further gifts and would instruct her attorneys to amend her estate plan "accordingly." Joan's letter concluded:
I refuse to allow you to bully me. In the future you will speak to me with respect and refrain from your hostile attitude. Never scream or yell at me again in anger. This decision is clearly yours and for your sake and the sake of your children I hope that you make the correct one.
Carol did not return the necklace, and did not speak with or visit her mother again after the December 2007 incident. In her trial testimony, Carol claimed that, over the next two and one-half years, until Joan's death, she was too absorbed in therapy to contact her mother. Following the 2008 amendment to Joan's will, Carol continued to be excluded from Joan's later estate plans, except for a small bequest.
In May 2010, Joan made her final estate plan, in consultation with her probate attorneys. This will made relatively minor changes to her estate plan. Like the 2008 will, it left a $50,000 bequest to Sam and a $20,000 bequest to Carol. However, this will also substantially decreased the amount Joan left to her daughter Madeline.
As Joan explained to her attorneys, and as Rosanne explained at the trial, Madeline was developmentally disabled, and Joan had already provided for her through a special needs trust that was funded with almost three million dollars. The trust provided more than enough money for Madeline's lifetime support.
According to Joan's probate attorneys, every time they prepared a new will for her, they met with Joan privately, with no other relatives present, to be sure that she had testamentary capacity and understood the proposed estate plan, and that it represented her wishes. Additionally, on April 18, 2008, at the attorneys' advice, Joan handwrote a letter explaining why she was largely disinheriting Sam and Carol.
In a lengthy written opinion, Judge Carroll credited the testimony of Joan's probate attorneys that Joan was lucid and understood her 2010 will and trust and agreed with its provisions. The judge did not find Carol or Sam to be credible witnesses. He found that Carol's negative testimony about Carl was "motivated by a deep dislike for Carl," and that her testimony was unreliable. He also noted Carol's history of mental illness, short-term memory loss, and addictions to alcohol, drugs, and shopping.
The judge similarly concluded that Sam's "deep disdain" for Carl led him to blame Carl "for all his mother's perceived misdeeds," including largely disinheriting him and eventually foreclosing on the $850,000 mortgage. But the judge concluded "that it was Sam's conduct itself throughout the years . . . which was the motivating force behind his mother's disparate treatment of him." The judge noted Joan's May 13, 2005 letter to Sam, accusing him of taking advantage of her "over the years with [his] financial dealings," and demanding that he repay the $900,000 he owed her or face disinheritance. The judge further considered Joan's April 18, 2008 letter giving a similar explanation for leaving Sam only a small bequest.
The judge also noted the "independent credible testimony" of Joan's jeweler and friend, Nancy Schuring, to whom Joan expressed her dismay over Sam's conduct. He likewise found Joanie and Rosanne credible witnesses. Joan had confided in each of them that she was disinheriting Sam and Carol because of "Sam's unpaid loans and the incident with Carol concerning the jewelry." Rosanne, an attorney, "was emphatic in her testimony" that her mother's estate plan represented Joan's wishes "and not those of Carl or anyone else."
The judge found that Carl and Joan had a close familial relationship, and that Carl assisted her in renovating her home, paying her bills and taking her to visit her probate attorneys. However, the judge was not convinced that Joan was "weak and dependent" or that Carl undermined her free will. He credited Rosanne's testimony that Joan was a strong woman who "did what she wanted, never did what she didn't want to do, and would never allow another to impose their will on her." He further noted that, although Rosanne was Joan's closest confidant, Joan never complained to Rosanne that Carl was "imposing his will on her." Nor did Joan make any such complaints to Schuring, with whom she had a close relationship.
The judge further found no basis to conclude that Carl had stolen any of Joan's jewelry after her death. Rather, he found that Joan "had gifted away at least a portion of this jewelry during her lifetime."
The judge concluded:
Accordingly the court finds that Sam and Carol have failed to establish the presence of either a confidential relationship or suspicious circumstances sufficient to shift the burden of proof. Nonetheless, even if the court is in error and . . . the confluence of such factors were found to exist, the court further finds that plaintiff has rebutted any presumption of undue influence. Rather, the court finds a well documented and substantial basis on which to conclude that the disparate treatment of Sam was attributable to his mother's dissatisfaction regarding his repayment of the various loans, and as to Carol[,] was due to her failure to return the necklace, her disrespectful behavior toward her mother, and her failure to see or speak with her mother during the final 2 1/2 years of her life.
In reviewing Judge Carroll's decision, we do not write on a clean slate. Rather, we must defer to his factual findings so long as they are supported by sufficient credible evidence. Rova Farms Resort v. Invs. Ins. Co., 65 N.J. 474, 484 (1974). We owe particular deference to his evaluation of witness credibility, which in this case was central to his decision. See Seidman v. Clifton Sav. Bank, 205 N.J. 150, 169 (2011); Pascale v. Pascale, 113 N.J. 20, 33 (1988). Likewise, we do not evaluate the trial judge's evidentiary rulings de novo, but rather, we review those decisions for abuse of discretion. See Verdicchio v. Ricca, 179 N.J. 1, 34 (2004). We apply the same standard to a judge's ruling on a motion for a continuance. State v. Hayes, 205 N.J. 522, 537 (2011); In re Koretzky, 8 N.J. 506, 535 (1951).
The parties agree on the applicable legal principles concerning undue influence, which we briefly summarize as follows. In any attack upon the validity of a will, it is generally presumed that "the testator was of sound mind and competent when [she] executed the will." Gellert v. Livingston, 5 N.J. 65, 71 (1950). However, "[i]f a will is tainted by undue influence, it may be overturned." Haynes v. First Nat'l Bank of N.J., 87 N.J. 163, 176 (1981).
"Undue influence" has been defined as "mental, moral or physical" exertion which has destroyed the "free agency of a testator" by preventing the testator "from following the dictates of his own mind and will and accepting instead the domination and influence of another." Ibid. (quoting In re Neuman, 133 N.J. Eq. 532, 534 (E. & A. 1943)).
[T]he burden of proving undue influence lies upon the contestant unless the will benefits one who stood in a confidential relationship to the testatrix and there are additional circumstances of a suspicious character present which require explanation. In such case the law raises a presumption of undue influence and the burden of proof is shifted to the proponent. [In re Rittenhouse's Will, 19 N.J. 376, 378-79 (1955).]
The first element necessary to raise a presumption of "undue influence" is the existence of a "confidential relationship" between the testator and a beneficiary. Haynes, supra, 87 N.J. at 176. A confidential relationship exists where, the relations between the . . . parties appear to be of such a character as to render it certain that they do not deal on terms of equality, but that either on the one side from superior knowledge of the matter derived from a fiduciary relation, or from over-mastering influence; or on the other from weakness, dependence or trust justifiably reposed, unfair advantage is rendered probable. [Pascale, supra, 113 N.J. at 34.]
Although parent-child relationships are "among the most natural of confidential relationships," ibid., "the mere existence of family ties does not create . . . a confidential relationship." Vezzetti v. Shields, 22 N.J. Super. 397, 405 (App. Div. 1952).
The factors to be considered in determining whether a confidential relationship is present, . . . include whether trust and confidence between the parties actually exist, whether they are dealing on terms of equality, whether one side has superior knowledge of the details and effect of a proposed transaction based on a fiduciary relationship, whether one side has exerted over-mastering influence over the other or whether one side is weak or dependent. [Estate of Ostlund v. Ostlund, 391 N.J. Super. 390, 402 (App. Div. 2007).]
The second element necessary to create a presumption of "undue influence" is the presence of "suspicious circumstances." Haynes, supra, 87 N.J. at 176. While the contestant must prove suspicious circumstances, "[s]uch circumstances need be no more than 'slight.'" Ibid. (internal citation omitted).
"The findings of the trial court on the issues of testamentary capacity and undue influence, though not controlling, are entitled to great weight since the trial court had the opportunity of seeing and hearing the witnesses and forming an opinion as to the credibility of their testimony." Gellert, supra, 5 N.J. at 78. "Such factual findings should not be disturbed unless they are so manifestly unsupported or inconsistent with the competent, reasonably credible evidence so as to offend the interests of justice." In re Will of Liebl, 260 N.J. Super. 519, 524 (App. Div. 1992), certif. denied, 133 N.J. 432 (1993).
Judging his decision by those legal standards, we find no basis to disturb Judge Carroll's determination that defendants failed to prove the existence of a confidential relationship between Carl and Joan and failed to prove suspicious circumstances. His conclusions in that regard were largely based on his evaluation of witness credibility, and we find no basis to second-guess those findings. Defendants' arguments on this point, including their allegations that Carl isolated and dominated his mother, are based on the testimony of witnesses whom Judge Carroll did not find credible. Those allegations were thoroughly rebutted by the testimony of witnesses the judge found believable.
As significantly, Judge Carroll found that even if defendants had carried their burden to prove a confidential relationship and suspicious circumstances, Carl produced ample credible evidence that he did not exercise undue influence over Joan in the preparation of the 2010 will or any of the previous wills. Defendants' brief does not even address that aspect of the judge's opinion. Based on our review of the evidence, we find Judge Carroll's decision is amply supported by the record.
Defendants' remaining appellate arguments merit little discussion. R. 2:11-3(e)(1)(E). They contend that the judge erred in barring them from deposing their developmentally disabled sister Madeline, or from subpoenaing her as a trial witness. They contend that Madeline's deposition might have elicited evidence that Carl exercised undue influence over her, including influencing her to reach a settlement in the probate case. Judge Carrol rejected those arguments in a written statement of reasons issued August 26, 2011. We agree with the judge that such evidence would have been irrelevant to the will contest, and allowing defendants to depose Madeline would have caused her significant emotional harm.
Our conclusion is bolstered by the evidence of Sam's appalling conduct toward his sister, which led to the judge entering a protective order on April 12, 2011, precluding defendants from further contact with Madeline. The record reflects that after the judge ordered plaintiff to disclose Madeline's telephone number to the defense during discovery, Sam called her numerous times, and left threatening voicemail messages laced with obscenities. Defendants admit that Sam made those phone calls, but attempt to rationalize this behavior in their reply brief by contending that defendants were "upset" due to the loss of their inheritance.
We likewise find no abuse of discretion in the judge's handling of defendants' request, on the last scheduled day of trial, for additional time to present testimony from Joan's treating physicians. Prior to trial, defendants sought and were granted a discovery extension for the specific purpose of deposing the treating doctors, but they never took those depositions. Further, defendants knew in advance of the trial that plaintiff would challenge the admissibility of the defense medical expert, who had issued a report on the issues of Joan's testamentary capacity and Carl's alleged undue influence. Notably, in response to plaintiff's in limine motion to bar the expert, defense counsel admitted: "I cannot provide any substantive opposition to the motion."
After the judge barred the defense expert's testimony, the defense made an eleventh-hour request for more time to present testimony from Joan's physicians. The judge granted a one-day trial extension, but was unwilling to grant a further extension when the defense was still unable to produce the doctors to testify. We find no abuse of discretion in that ruling.
To summarize, defendants behaved in ways that their mother, understandably, found quite distressing. Her decision to largely exclude them from inheriting her estate should have come as no surprise to either of them. There is no credible evidence in this record that her testamentary dispositions were the result of undue influence.