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Ehrlich v. McInerney

United States District Court, D. New Jersey

September 30, 2019


          PETER A. OUDA PETER A. OUDA, LLC On behalf of Plaintiff

          JOHN L. SLIMM MARSHALL, DENNEHEY, WARNER, COLEMAN & GOGGIN On behalf of Defendant Dennis P. McInerney

          MICHAEL S. MIKULSKI II, PHILIP JOHN DEGNAN CONNOR WEBER & OBERLIES, P.C. On behalf of Defendants Thomas W. Sasaki, Eric Sasaki, and Re/Max World Class Realty

          ANNE M. DALENA WILSON ELSER MOSKOWITZ EDELMAN & DICKER LLP On behalf of O'Hara Appraisals and Martin T. O'Hara


          NOEL L. HILLMAN, U.S.D.J.

         This matter arises from a decades' worth of litigation regarding the Estate of Richard D. Ehrlich, who died on September 21, 2009.[1] One of the claims lodged by Plaintiff, Jonathan Ehrlich, the decedent's nephew, in his original complaint in this action was a breach of fiduciary duty claim against Defendant Dennis P. McInerney, the temporary administrator of the Estate. On December 13, 2017, this Court dismissed Plaintiff's claims against McInerney, finding that Plaintiff's claims were barred by New Jersey's entire controversy doctrine and N.J.S.A. 3B:17-8.[2]

         Currently pending before the Court is the motion of Plaintiff pursuant to Fed.R.Civ.P. 60(b) to vacate the Court's dismissal of his claims against McInerney because of evidence obtained from McInerney's deposition as a fact witness with regard to Plaintiff's claims against the other defendants. As to the other defendants, Plaintiff claims that Re/Max World Class Realty, Thomas W. Sasaki, and Eric Sasaki (“Realtor defendants”) acted negligently in the real estate listing of two of the decedent's properties. Plaintiff also claims that O'Hara Appraisals and Martin T. O'Hara (“Appraisal defendants”) negligently prepared appraisals for the two properties. Also pending before the Court are the motions of these defendants for summary judgment.

         McInerney has opposed Plaintiff's Rule 60(b) motion. Plaintiff has partially opposed the Realtor defendants' motion for summary judgment. Plaintiff has not filed an opposition to the Appraisal defendants' summary judgment motion.

         For the reasons expressed below, the Court will deny Plaintiff's motion, and grant Defendants' motions.


         The Court restates the relevant background from the Court's December 13, 2017 Opinion (Docket No. 31), which recounted the June 29, 2012 decision by the New Jersey Superior Court, Appellate Division, In re Estate of Ehrlich, 47 A.3d 12 ( N.J.Super.Ct.App.Div. 2012), certif. denied, 59 A.3d 602 (N.J. 2013), appeal dismissed, 64 A.3d 556 (N.J. 2013). Decedent was a trust and estates attorney in Burlington County, New Jersey. Id. at 13-14. He died on September 21, 2009, with his only next of kin being his nephews, Todd Ehrlich and Plaintiff, and his niece Pamela Venuto. Id. at 14. While Decedent had not had contact with Todd or Pamela for over twenty years, he maintained a close relationship with Plaintiff, who he had told friends was the person to contact if he were to die and was the person to whom he would leave his estate. Id.

         Upon learning of Decedent's death, a search for Decedent's will ensued. Id. Plaintiff located a copy of a purported will in a drawer in Decedent's home. Id. On December 17, 2009, Plaintiff filed a complaint seeking to have the purported will admitted to probate. Id. Todd and Pamela objected. Id. McInerney, who had previously been named as Trustee of Decedent's law practice, was appointed as temporary administrator. Id. While McInerney was ordered to inspect Decedent's home, no other document purporting to be Decedent's will was ever located. Id.

         The purported will that was recovered provided a specific bequest of $50, 000 to Pamela, a specific bequest of $75, 000 to Todd, twenty-five percent of the residuary to pass through a trust to a friend, and seventy-five percent of the residuary to pass to Plaintiff. Id. On April 20, 2011, the proffered will was admitted to probate. Id. at 13. The court then denied a motion for reconsideration on June 20, 2011. Id. The Appellate Division then affirmed, finding the will was properly admitted to probate. Id. at 19. While the decision was appealed to the New Jersey Supreme Court, Plaintiff's complaint provides that the matter was settled by the siblings.

         On January 18, 2013, Judge Karen L. Suter of the Superior Court of New Jersey, Chancery Division granted McInerney's motion for instructions[3] and to allow a settlement with regard to two actions pending against the Estate arising from Decedent's law practice: IMO Estate of Farias v. Estate of Ehrlich and Farias v. Estate of Ehrlich. McInerney filed the motion for instructions believing settling the matters was in the best interest of the Estate, as he believed the Estate could potentially be liable for more than the settlement amount. Plaintiff opposed the motion, arguing “more information is required before a determination of the propriety of the settlement can be made.” Judge Suter determined McInerney was “acting within his powers as temporary administrator” and thus approved the settlement. The settlement was thereafter consummated.

         On July 15, 2011, Judge Michael J. Hogan of the Superior Court of New Jersey, Chancery Division approved McInerney's first intermediate account on behalf of the Estate. By a May 23, 2012 Order, Judge Suter denied Plaintiff's motion to vacate the July 15, 2011 court order.[4] Plaintiff appealed the denial of his motion to vacate. In re Estate of Ehrlich, 2013 WL 2476490. The Appellate Division affirmed, stating:

The present case provides no basis for disturbing the July 15, 2011 order approving respondent's intermediate accounting. Appellant, by his own admission, knew the accounting to be incomplete upon his receipt of the document yet neither filed any exceptions nor voiced any objection to the accounting at the hearing on its approval. Moreover, all acknowledged that the accounting was interim in nature and that the final accounting would include the assets belatedly brought to the administrator's attention by appellant.

Id. at *1.

         In a July 25, 2014 decision, Judge Mary C. Jacobson of the Superior Court of New Jersey, Chancery Division considered exceptions to a final accounting filed for Decedent's Estate, a motion seeking removal of McInerney as temporary administrator and appointment of Plaintiff as executor, and applications by McInerney and two other attorneys for fees payable from the Estate.

         In the course of considering the exceptions to the accounting, Judge Jacobson considered Plaintiff's complaint that the sale price of Decedent's home was substantially less than its value as set forth in prior appraisals. Judge Jacobson found, while the property had originally been appraised around $350, 000 at Decedent's death and for a couple years thereafter, Defendant had only received offers well below the original appraisal value. McInerney thus sought two updated appraisals, which determined the appraisal value had dropped to somewhere around $225, 000 to $250, 000, with necessary repairs approximating over $107, 000. McInerney thus sought instructions from the court as to whether he should accept an offer of $212, 500 or make repairs to the property to try to rent it until the market improved. After hearing Plaintiff's opposition, Judge Suter approved and authorized the proposed sale.

         Judge Jacobson concluded:

The record reveals no action taken by Mr. Ehrlich to stop the sale after Judge Suter's ruling. Moreover, Mr. Ehrlich has presented no evidence that would allow this court to set aside Judge Suter's Order . . . . To allow Mr. Ehrlich to re-litigate this issue after the property has been sold in an effort to obtain a surcharge would be unjust and oppressive to the Temporary Administrator. When a fiduciary has properly applied to the probate court for advice and direction with respect to a transaction involving the administration of the estate and acts in accordance with the court's instructions, it would be inequitable to allow an exceptant who had an opportunity to be heard at the time of the application to the court for instructions to later pursue the same objection through an exception to the final accounting. By that time the Temporary Administrator's actions had been sanctioned by the court and should be given res judicata effect. To allow otherwise by an exceptant would create havoc in the administration of estates, leaving none but the foolhardy willing to serve as fiduciaries. Mr. McInerney proceeded to sell the property only after court approval and an opportunity for Mr. Ehrlich to be heard. Mr. Ehrlich's exception to the sale of the property must therefore be denied.

         The court also addressed Plaintiff's allegation that Defendant did not take adequate steps to locate Decedent's will on his computer:

Even if this claim is true, Mr. Ehrlich offers no explanation as to how this failure caused any loss to the Estate. The writing that was admitted to probate pursuant to N.J.S.A. 3B:3-3 by Judge Hogan, who issued a Judgment to this effect that was upheld by the Appellate Division, was a paper copy of a will, unsigned by the decedent and any witnesses, but which bore a notation in the handwriting of the decedent stating, “original mailed to H. W.Van Sciver 5/20/00.” . . . Because this document was admitted to probate, any failure to locate a draft of this document on the decedent's computer caused no loss to the Estate or to Mr. Ehrlich. Whether the decedent had any other draft of a different purported will on his computer and whether that different draft would have benefited Mr. Ehrlich is mere speculation. Moreover, any draft of an alleged will retrieved from the decedent's computer would lack the handwritten notation that both the chancery court and the Appellate Division relied upon in deciding that the decedent intended to constitute his will.

         Also in addressing the exceptions, the state court stated Plaintiff's “numerous allegations of duplicitous conduct” by McInerney were “factually unsupportable in the record before the court.” Rather, the court found McInerney “acted appropriately in bringing issues to the attention of the court for direction and presenting his accountings to the court for approval.” Later in the opinion, in addressing the motion to remove McInerney as temporary administrator, the court stated: “Mr. Ehrlich has not demonstrated that there has been a flagrant dereliction of duty by the Temporary Administrator . . . .” Judge Jacobson ultimately approved the account in all respects.

         In an October 30, 2015 Motion Hearing, Judge Jacobson considered a motion by McInerney seeking an order awarding attorneys' fees and costs to him, providing direction as to payment of an attorneys' fee award, and seeking direction as to the distribution of the balance of the Estate, among other requests. Plaintiff opposed the motion, largely based on the alleged failure of McInerney to pursue a particular asset of the Estate - a condominium titled in Decedent's name in the Harbour House Towers of Freeport in the Grand Bahamas.

         McInerney certified he was not made aware Decedent had an interest in property in the Bahamas, and if he had been so aware, he would have taken action to transfer the property to the Estate. Judge Jacobson concluded:

The Court is not convinced that Mr. McInerney, on the basis of the record before it, was ever informed about the Bahamas property and . . . made aware that it was something he should investigate. Jonathan Ehrlich himself had access to the decedent's files and documents. It is throughout the record of this lengthy estate litigation that he had removed documents and files prior to Mr. McInerney's appointment as administrator. . . .
. . . .
N.J.S.A. 3B:17-8 provides that a judgment allowing an account after due notice shall be res adjudicata as to all exceptions which could or might have been taken to the account and shall constitute, exonerate and discharge the fiduciary from all claims of all interested parties, and the statute was relied upon by the Appellate Division in the earlier estate litigation in refusing to allow Mr. Ehrlich to raise issues as to Mr. McInerney's performance that could have been raised in the first accounting but were not . . . .
Since Mr. Ehrlich was aware of the claim that the decedent owned a condominium in the Bahamas prior to the first and second accountings and failed to file an exception in this regard to either accounting the Court finds that the judgments approving both accountings constitute res adjudicata and eliminate any liability on the part of Mr. McInerney with regard to the Bahamas property.

         Similarly, in addressing McInerney's fee request, the court noted Plaintiff “claim[ed] that the Estate ha[d] been mishandled in many respects, ” but the ...

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