IN THE MATTER OF THE ESTATE OF JANE P. SOGLIUZZO
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued November 18, 2013
On appeal from the Superior Court of New Jersey, Chancery Division, Probate Part, Hudson County, Docket No. 296580.
Dennis F. Gleason argued the cause for appellant/cross-respondent Jane E. Adkins, Executrix for the Estate of Jane P. Sogliuzzo (Jardim, Meisner & Susser, PC, attorneys; Mr. Gleason, of counsel and on the brief).
John B. Sogliuzzo, respondent/cross-appellant, argued the cause pro se.
Before Judges Harris, Kennedy, and Guadagno.
This estate dispute pits a brother against a sister over the spoils of their mother's estate. Jane E. Adkins appeals from portions of the Chancery Division's February 23, 2012 final judgment, and John B. Sogliuzzo cross-appeals from the same final judgment, as well as from an August 6, 2009 interlocutory order striking Sogliuzzo's answer and suppressing his defenses. We affirm in part, and reverse and remand in part.
We glean the facts from the seven-day testimonial hearing —— referred to by the Chancery Division judge and the parties as a proof hearing —— conducted on intermittent days between February 2011 and January 2012.
Decedent Jane P. Sogliuzzo was married to Walter Sogliuzzo until his death in January 1999. They owned and resided in a three-story brownstone building in Hoboken. The couple had three children: Adkins, who lived in Virginia; Sogliuzzo, who lived in Short Hills; and Gerald Sogliuzzo, who predeceased his mother. Decedent died on February 29, 2008, at age ninety-three.
Decedent's husband handled the couple's finances until 1998, when an infirmity limited his abilities. Because Sogliuzzo lived nearby, he helped with his parents' finances, and after his father's death, he handled all of decedent's finances. Sogliuzzo regularly met with his mother at her home, reviewed her bills, wrote checks, and did her banking. According to Sogliuzzo's wife, Gaye Torrance, Sogliuzzo also took his mother shopping and helped with her meals. Decedent called upon her son (and Torrance) "all the time for everything, . . . 24/7."
In the spring of 2000, decedent fractured her shoulder. The debilitating effects of this injury remained with decedent for the rest of her life. Caretakers were eventually hired to assist decedent with household chores, and later with her personal needs. Because of decedent's limited range of motion in her right arm, Sogliuzzo regularly "assist[ed] her in executing checks." Adkins did the same, but only about twenty times.
By 2005, as she entered her tenth decade, decedent's health steadily declined. She rarely ventured anywhere alone. She suffered from chronic obstructive pulmonary disease (COPD) and was easily winded when walking. She had cataracts and glaucoma, and was unable to read anything but large print. According to Adkins, "[decedent] would mistake the dog for a coat on the sofa." Decedent placed her chair two or three feet away from the television so that she could see it. At the end of September 2007, decedent was hospitalized for complications associated with COPD. Adkins was told that decedent often could not take full breaths and therefore could not get enough oxygen to the brain, thus occasionally leaving her confused.
Adkins maintained that throughout her mother's life, it was decedent's "mission or position . . . to treat [her children] equally." Adkins acknowledged that in an early version of decedent's will, the Hoboken home was to be given to Gerald Sogliuzzo because he did not then "have a home of his own." Later, after Gerald Sogliuzzo obtained a house, and after Walter's death, decedent changed her will to direct that Gerald Sogliuzzo would receive forty percent of the proceeds from the eventual sale of the Hoboken property, with thirty percent each going to Adkins and Sogliuzzo. The remainder of the estate was to be divided equally among the children.
At some undisclosed time after her husband's death, decedent opened an individual investment account with Deutsche Bank Alex. Brown (Alex. Brown). Decedent was referred to Alex. Brown by her daughter-in-law. Hendry Thompson Rodman, an Alex. Brown certified financial planner —— who did not testify at the testimonial hearing —— explained in a deposition that he did not recall how the first contact with decedent was initiated, but he met with her at his office to open the account in the presence of either Sogliuzzo or Torrance, or both.
On October 17, 2007, Rodman met decedent for the second time, at a restaurant in Hoboken. Rodman did not recall exactly how the meeting was arranged, but Sogliuzzo picked him up at the ferry and drove him to the restaurant. Decedent told Rodman that she wanted to convert her existing individual investment account to a transfer on death (TOD) account. Rodman filled out the paperwork in the restaurant, and decedent signed it there, listing Sogliuzzo as the beneficiary, with Sogliuzzo's children as the contingent beneficiaries. Rodman also handwrote a note that decedent signed giving Rodman authorization to make the change. Rodman stated that he never before transacted such business in a restaurant, and he usually did the paperwork for all of his other accounts in his office.
Adkins was unaware of this transaction until the day after decedent's funeral, approximately four months later. Sogliuzzo mentioned his good fortune in response to Adkins's inquiry about decedent's "liquid assets." Later that day, when Adkins telephoned Sogliuzzo to ask more about the TOD account, he refused to talk about it saying, according to Adkins, "We are not going to talk about this TOD or anything more. If you have any problems, sue me for undue influence."
Adkins maintained that in October 2007, decedent would not have been able to read the small font of the TOD agreement. Adkins conceded, however, that the signature on the TOD agreement was her mother's. The TOD account's gross value on decedent's date of death was $273, 685. The net amount left to Sogliuzzo was much less because many of decedent's funeral and other end-of-life expenses were paid from the TOD account.
On March 13, 2008, pursuant to decedent's will, Sogliuzzo was appointed executor of decedent's estate. On August 22, 2008, the Chancery Division entered an order permitting Sogliuzzo to resign as executor, and appointed Adkins as the replacement executor.
Adkins enlisted her husband, Charles Adkins, to compile the paperwork concerning decedent's finances. His company, Adkins & Co., Inc. (Adkins & Co.), performed construction industry consulting and provided litigation support for companies in disputes over costs. Charles Adkins was retained "because of his expertise in the area of analysis, " but Adkins admitted her husband was an engineer, not an accountant. Initially, in March 2008, Adkins signed a contract with Adkins & Co. in her own name, but after she was appointed executor, she signed another contract on behalf of the estate. Adkins never applied to the Chancery Division for permission to retain Adkins & Co.
After alleged irregularities were discovered, Adkins hired Chris Campos, a forensic accountant, "to review documents to determine which ones were relevant to draw a conclusion with respect to potential misappropriation or unaccounted-for funds in connection with the estate of [decedent]." Campos expressed several opinions during the testimonial hearing, including that from 1999 to 2008, Sogliuzzo facilitated payments from decedent's assets to Sogliuzzo, his law firm, and his children's private school, in a net amount of $147, 952.
Campos also detected unaccounted-for (and suspicious) withdrawals of $61, 150 from decedent's Hudson United Bank savings accounts. He noted an additional unexplained withdrawal of $20, 000 from one of the accounts at a time when Walter Sogliuzzo was still alive.
Decedent also maintained a Hudson United Bank checking account from which Campos believed there was an unexplained reduction of $15, 712 that occurred sometime in the fourteen months between September 18, 1998, and November 21, 1999. Campos was unable to trace the money. Furthermore, Campos believed that there were unexplained checks written to cash, and insurance reimbursement checks from decedent's insurance company for prescription drugs were not deposited into decedent's account, which together netted $28, 726.
On September 23, 2008, Adkins —— individually and as decedent's executor —— filed a verified complaint in the Chancery Division alleging that Sogliuzzo had exercised undue influence over decedent, causing decedent to convert an ordinary investment account to a TOD account in Sogliuzzo's favor. The complaint further alleged that "checks and other transfers made from 1999 to 2008 to Sogliuzzo or for his immediate family's benefit during [d]ecedent's lifetime were not gifts, " and are "the result of undue influence and are the property of the Estate."
In January 2009, Sogliuzzo filed an answer denying the allegations of undue influence and conversion. On January 15, 2009, in response to Adkins's attorney's demand for answers to interrogatories and a response to a request to produce documents, Sogliuzzo's attorney wrote the following:
In light of the fact that your clients have filed various sworn statements with the Court alleging that my client engaged in conduct which could be construed as violations of criminal statutes, a situation has been created whereby I have a reasonable belief, [and] have so advised my client, that any responses provided could be used against him in the context of criminal proceedings.
Accordingly, pursuant to my advice, my client hereby invokes his Fifth Amendment Privilege against self-incrimination and, accordingly, will provide no other response to your discovery requests. To provide any other response may constitute a waiver of said privilege, so no other responses will be forthcoming.
Additionally, at his deposition on June 23, 2009, Sogliuzzo stated, "upon the advice of counsel I'm directed and instructed to invoke my Fifth Amendment Privilege against self-incrimination and refuse to answer . . . question[s]."
As a result of Sogliuzzo's refusal to provide discovery, Adkins moved to strike Sogliuzzo's answer and suppress his defenses. After distinguishing the circumstances of Mahne v. Mahne, 66 N.J. 53 (1974), from the present case, the Chancery Division granted Adkins's motion and signed an order to that effect on August 6, 2009. The court expressly noted that because it viewed Sogliuzzo as shouldering a burden of proof on the undue influence issue, it was equitable to limit Sogliuzzo's participation at a trial. Accordingly, the court treated the matter as if it were proceeding to a proof hearing.
As already noted, the testimonial hearing commenced seventeen months later, and then spanned more than a year. Sogliuzzo was permitted to (1) make evidentiary objections; (2) cross-examine witnesses; (3) offer a very limited number of documents into evidence, but only for credibility assessment purposes; and (4) submit proposed findings of fact and conclusions of law. He was not permitted to present his own witnesses or introduce affirmative documentary evidence.
After reviewing the record presented at the testimonial hearing, the court found prima facie evidence that Sogliuzzo had a confidential relationship with his mother and her inter vivos transfers to him were suspicious. Because this shifted the burden of proof to Sogliuzzo to demonstrate the absence of undue influence by clear and convincing evidence, "the default that was entered, " rendered Sogliuzzo unable to satisfy that high standard. On February 23, 2012, finding several, but not all, of Campos's opinions helpful, the court entered a final judgment against Sogliuzzo for $520, 414, including prejudgment interest, and ordered the estate to pay attorneys' fees and expenses of $191, 815. The appeal and cross-appeal followed.
On her appeal, Adkins presents the following points for our consideration:
POINT I: THE TRIAL COURT ACTED CONTRARY TO LAW WHEN IT WEIGHED EVIDENCE IN PROOF HEARING REJECTING TWO CLAIMS ...