United States District Court, D. New Jersey, Camden Vicinage
ESTATE OF JOSEPH P. REESE, Plaintiff,
SPEEDWAY INVESTMENTS, INC., et al., Defendants.
OPINION [Doc. No. 14]
SCHNEIDER, United States Magistrate Judge
matter is before the Court on the “Motion for Summary
Judgment” (“motion”) [Doc. No. 14] filed by
plaintiff. The Court is called upon to address whether the
decedent's son is responsible to pay a loan from his
father after his father's death. The Court received
defendants' opposition [Doc. No. 16] and plaintiff's
reply [Doc. No. 19]. The Court exercises its discretion to
decide the motion without oral argument. See Fed.R.Civ.P. 78;
L. Civ. R. 78.1. For the reasons to be discussed,
plaintiff's motion is DENIED.
Court will begin with a summary of the background facts. As
required in the present context, defendants will be given the
benefit of all reasonable inferences from the facts of record
and the evidence will be viewed in the light most favorable
to defendants. Plaintiff in this action is the executor of
the Estate of Joseph P. Reese. See Compl. [Doc. No. 1].
Joseph P. Reese (“decedent”) died on June 26,
2015. Pl.'s SOF ¶ 1. Decedent at all relevant times
was a domiciliary of the State of New Jersey. Id. On
August 18, 2015, decedent's Last Will and Testament
(“will”) was admitted to probate in Cape May
County, New Jersey. Id. at ¶ 2.
brings this action against Patrick Reese
(“Patrick”), Leslie Reese (“Leslie”)
and Speedway Investments, Inc. (“Speedway”).
Id. at ¶ 13. Patrick is the son of decedent and
Leslie is Patrick's wife. Speedway is a Pennsylvania
corporation operating as Reese's Tavern and Pizzeria in
Warminster, Pennsylvania. Id. at ¶ 3. Patrick
is the sole shareholder, president and secretary of Speedway.
Id. at ¶ 4.
complaint alleges on August 1, 2015, defendants defaulted on
loan payments due to the Estate and plaintiff now demands
payment of the entire unpaid balance in the sum of $238,
563.61 together with interest, late fees, costs of suit and
counsel fees.Compl. at ¶¶ 13, 14.
March 12, 2010, defendants executed the loan at issue in
favor of decedent in the sum of $480, 000 payable with
interest over a period of ten years. Pl.'s SOF ¶ 6.
Defendants contend the loan was a refinance of a previous
debt Patrick owed to decedent (his father) and no additional
debt was incurred through the March 12, 2010
loan. Def.'s SOF ¶ 1. Under the terms
of the loan, upon default, the entire unpaid amount of
interest and principal would become immediately due and
defendants would be liable for costs and reasonable attorney
fees. Judgment Note, Pl.'s Ex. A.
allege they were relieved of their obligation under the loan
pursuant to decedent's December 20, 2009 will and by a
separate writing dated June 8, 2005. Answer at 5-6 [Doc. No.
3]. In the will, decedent directed that five of his seven
children share equally in his estate. Last Will and
Testament, Pl.'s Ex. 1 at ¶ 2. As for his remaining
children, the third paragraph of the will states: “I
have made no provision in my Will for my daughter, Tracy
Reese Wible, or my son, Patrick Reese, as I have taken care
of them sufficiently during my lifetime.” Id.
at ¶ 3. Defendants contend this paragraph refers to
forgiveness of the subject loan and that Patrick was excluded
from taking under the will because decedent had forgiven the
loan. The June 8, 2005 writing refers to a receipt of payment
in the amount of $8, 000 “towards the purchase of 2160
Old York Rd. and Reese's Pizza/Tavern” (“2005
receipt”). See Pl.'s SOF ¶ 20; June 8, 2005
Payment Receipt, Def.'s Ex. H. The 2005 receipt included
a typed notation stating, “In the event of my death,
any and all debts owed to me by my son Patrick Reese will be
forgiven. This is for his years of service to me as an
employee for over 26 years.” June 8, 2005 Payment
Receipt. The 2005 receipt was signed at the bottom by
decedent and Patrick Reese. Id.
filed the instant motion seeking judgment in its favor,
arguing: 1) the notation on the 2005 receipt does not
constitute forgiveness of the debt because defendants are
unable to establish the elements of an inter vivos gift, and
2) the terms of decedent's will do not relieve defendants
of their obligations under the loan. Defendants contend: 1)
there remains a genuine issue of material fact as to whether
decedent forgave defendants' obligations under the loan
by way of an inter vivos gift, and 2) there exists a genuine
issue of material fact as to decedent's intent under the
will. For the reasons set forth below, although defendants
cannot show all of the elements of a valid inter vivos gift,
they have shown a genuine issue of material fact exists as to
decedent's probable intent in his will. Accordingly,
plaintiff's motion for summary judgment is denied.
Summary Judgment Standard
should grant summary judgment when the record demonstrates
“there is no genuine issue as to any material fact and
the movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a); see also Celotex Corp. v.
Catrett, 477 U.S. 317, 330, 106 S.Ct. 2548, 91 L.Ed.2d
265 (1986). A genuine issue of material fact exists if the
evidence is such that a reasonable jury could find for the
non-moving party on an issue affecting the outcome of the
litigation. See Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). To
determine if a material fact exists a court must view the
evidence in the light most favorable to the non-moving party.
“The evidence of the non-movant is to be believed, and
all justifiable inferences are to be drawn in his
favor.” Id. at 255.
moving party has the initial burden to demonstrate the
absence of a genuine issue of material fact. See
Celotex, 477 U.S. at 323. The burden then shifts to the
non-moving party to identify specific facts that contradict
those of the moving party. See Anderson, 477 U.S. at 256. If
the non-moving party comes forward with “specific facts
showing that there is a genuine issue for trial, ” such
that a verdict may be returned in his favor, summary judgment
must be denied. Matsushita Elec. Indus. Co., Ltd. v.
Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348,
89 L.Ed.2d 538 (1986). A mere “scintilla of evidence,
” without more, does not give rise to a genuine dispute
for trial. Anderson, 477 U.S. at 252.
Inter Vivos Gift
argument is straightforward. It contends there is no fact
question defendants defaulted on their March 12, 2010 debt
and therefore summary judgment should be entered in its
favor. Defendants do not deny they did not pay the debt.
However, as an affirmative defense defendants allege the debt
was forgiven by way of the notation on the 2005 receipt
indicating Patrick's debts would be forgiven on
decedent's death. See Answer at 6. In response, plaintiff
contends the 2005 receipt does not operate to forgive the
debt because defendants are unable to establish the elements
of an inter vivos gift. Pl.'s Br. at 2. Specifically,
plaintiff contends the 2005 receipt is not sufficient to
establish a gift because there was no actual or symbolic
delivery of the alleged gift and decedent never absolutely
relinquished ownership and dominion over the alleged gift.
Id. at 10. The Court rejects defendants' inter
vivos gift defense.
inter vivos gift is, as its name suggests, a gift between the
living.” In re Estate of Link, 328 N.J.Super. 600, 604
(Ch. 1999). Even assuming a valid inter vivos gift may be
effectuated by the death of the donor,  defendants fail
to establish the requisite elements of an inter vivos gift.
Three elements are required to establish a valid inter vivos
gift: 1) actual or constructive delivery; 2) donative intent;
and 3) acceptance. Bhagat v. Bhagat, 217 N.J. 22, 40
(2014) (citing Pascale v. Pascale, 113 N.J. 20, 29 (1988)).
The New Jersey Supreme Court has “also recognized that
the donor must absolutely and irrevocably relinquish
‘ownership and dominion over the subject matter of the
gift, at least to the extent practicable or possible,
considering the nature of the articles to be
given.'” Id. (quoting In re
Dodge, 50 N.J. 192, 216 (1967)). Essentially,
“[t]o constitute an inter vivos gift, not only must the
donor have a clear intention to give a gift, but the gift
must be completed.” Jennings v. Cutler, 288
N.J.Super. 553, 562 (App. Div. 1996).
burden of proving an inter vivos gift is on the party who
asserts the claim.” Bhagat, 217 N.J. at 41
(quoting Sadofski v. Williams, 60 N.J. 385,
395 n.3 (1972)). However, when “the transfer is from a
parent to a child, the initial burden of proof on the party
claiming a gift is slight, ” and such a transfer is
presumed to be a gift. Id. (citing Metropolitan
Life Ins. Co. v. Woolf, 136 N.J.Eq. 588, 592 (Ch.
1945)). Nonetheless, “[a]s the child matures and
acquires experience and independence the presumption weakens
and at last ceases.” McDermott-Guber v. Estate of
McDermott, Docket No. A-1210-15T3, 2017 N.J.Super.
Unpub. LEXIS 1240, *13 (App. Div. May 19, 2017) (quoting
Peppler v. Roffe, 122 N.J.Eq. 510, 516 (E. & A.
defendants have arguably established a genuine issue of
material fact as to the elements of donative intent,
acceptance and delivery, they cannot show that decedent
absolutely and irrevocably relinquished ownership and
dominion over the gift. This is true because it is undisputed
the decedent continued to receive the loan payments
throughout his lifetime. Accordingly, defendants have ...