Opinion
DOCKET NO. A-5542-11T1
04-30-2014
IN THE MATTER OF THE ESTATE OF DOROTHY M. OLSEN, DECEASED.
Cornelius J. O'Reilly argued the cause for appellants/cross-respondents George A. Olsen, Jr. and Joan T. Olsen (Fox Rothschild, L.L.P., attorneys; Mr. O'Reilly, of counsel and on the briefs). Stephen M. Charme argued the cause for respondents/cross-appellants Kenneth A. Olsen, individually and as Executor of the Estate of Dorothy M. Olsen, deceased, and Dorothy Olsen Ludwig (Witman Stadtmauer P.A., attorneys; Mr. Charme and Lewis Cohn, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Parrillo, Kennedy and Guadagno.
On appeal from the Superior Court of New Jersey, Chancery Division, Probate Part, Morris County, Docket No. P-1655-2010.
Cornelius J. O'Reilly argued the cause for appellants/cross-respondents George A. Olsen, Jr. and Joan T. Olsen (Fox Rothschild, L.L.P., attorneys; Mr. O'Reilly, of counsel and on the briefs).
Stephen M. Charme argued the cause for respondents/cross-appellants Kenneth A. Olsen, individually and as Executor of the Estate of Dorothy M. Olsen, deceased, and Dorothy Olsen Ludwig (Witman Stadtmauer P.A., attorneys; Mr. Charme and Lewis Cohn, on the brief). PER CURIAM
In this probate matter, plaintiff George A. Olsen Jr., one of three beneficiaries under various Wills executed by decedent Dorothy M. Olsen, and his wife Joan T. Olsen appeal from a May 29, 2012 final order of the Probate Part following a six-day bench trial, invalidating decedent's 1999 and 2005 Wills, a 2004 codicil, and various inter vivos transfers to them from 1995 to 2005 totaling approximately $3,000,000 and admitting her 1984 Will to probate. The other two beneficiaries, plaintiff's brother Kenneth Olsen, individually and as executor of decedent's estate, and his sister, Dorothy Olsen Ludwig (Dottie), cross-appeal, contending that the amount of repayment due from plaintiff and his wife set by the trial judge was incorrect. For reasons that follow, we affirm on the appeal and remand on the cross-appeal.
According to the proofs elicited at the bench trial, decedent is the mother of George Jr., Kenneth and Dottie and the mother-in-law of Joan, George Jr.'s wife. She and her husband, George Sr., lived in their "dream" home on Old Chester Road in Chester Township from the early 1970's until their deaths. Together, they operated two family-owned businesses, George A. Olsen, P.A. (GAOPA) and Altus Freight Traffic Service, Inc. (Altus). Both of these businesses were headquartered at the Chester Road house. GAOPA was primarily concerned with representing trucking companies before the Interstate Commerce Commission (ICC), while Altus did logistical work for trucking companies. George Sr. was the head of both companies while his wife performed all of the administrative and bookkeeping tasks. Their children and Joan also were involved in these companies to various degrees. George Jr. and Joan played a major role, having both worked in the businesses for their entire married lives. They received about $7 0,000 in combined salary per year for this work. In lieu of greater compensation, George Sr. would pay some of the couple's credit card bills. Kenneth, on the other hand, had worked for the businesses before receiving his law degree in 1978 and thereafter still did legal work for the companies; until 1997, in fact, his law practice was also based out of the Chester Road house. Dottie, meanwhile, had served on the board of directors for Altus at one point.
Due to the fact that the parties share the same surname, we use first names for ease of understanding. We intend no disrespect.
Dottie married in 1966 and thereafter moved away with her husband, who was in the military, eventually settling in Virginia. George, Jr. married Joan in 1973 and thereafter they purchased his parents' old house, also on Old Chester Road, which was just down the street from decedent's new home. They have three children, Dawne, Erik and Dana. Kenneth married in 1991, and although decedent at first disapproved of the marriage, according to Kenneth, they later reconciled after the birth of his daughter.
In 1984, decedent and George Sr. created Wills, in which they allocated their estates first to each other and then, in equal shares (thirds) to their three children. George Sr. died on August 15, 1995. At that time, he left an estate valued at approximately $4,000,000, which, as noted, went to decedent.
Immediately following George Sr.'s death, decedent took over the management of both companies. Although she ceded much of the day-to-day questions to George Jr., from 1995 to 2005, she still performed the administrative and bookkeeping functions. During this time, the businesses continued operating out of an office in decedent's Chester Road house.
However, although both businesses had been successful prior to George Sr.'s death, the deregulation of the trucking industry and the elimination of the ICC in 1995 greatly damaged their ability to generate revenue. As a result, until the transfer to George Jr. in 2005, decedent took to funding GAOPA through the use of loans from her personal funds, which allowed her to continue to pay George Jr. and Joan's salaries. Moreover, between 1995 and 2005, decedent paid most of George Jr. and Joan's bills, including credit cards, landscaping services, car insurance, medical and dental expenses, and property and income taxes. She also funded a large-scale renovation of their home, which plaintiffs themselves estimated to cost $460,000 and which could have been as much as $800,000. In addition, decedent purchased automobiles for plaintiffs worth over $70,000 and also paid some of their children's expenses, including tuition for Erik and Dana, as well as wedding expenses for Erik.
During this same period, namely between 1995 and 2005, and especially once Kenneth moved his law office out of the Chester Road home in 1997, George Jr. and Joan had the most contact with decedent. George Jr. was the only sibling to continue working in the family businesses, having daily contact with decedent and spending additional time with her at family dinners and on vacations at the shore. By their own accounts, after George Sr. died and as decedent aged, George Jr. and Joan "did everything" for her, and she became more reliant upon them. In contrast, decedent did not make any trips to Virginia to see Dottie and Dottie only saw her mother every other month or so, when she would come to New Jersey. Kenneth spent time with his mother at various family events, especially for his children, but was busy with his practice and so did not see her often.
In 1999 and 2005, decedent made new Wills, both of which shifted the distribution of her estate away from equal shares to all three children to, eventually, giving the bulk to George Jr. and Joan. This was accomplished with the aid of a law firm, Herold & Haines (law firm), that did plaintiffs' own estate planning. Thus, in November 1999, decedent signed a Will dated November 17, 1999, that gave George Jr. all of her non-residuary estate, including her home, an adjoining property, and the family businesses, but still divided the residuary estate evenly among the three children. Significantly, the time billed by the law firm for preparing the document included time spent in "various discussions with [George Jr.]" concerning the execution of the Will and a Power of Attorney.
On February 26, 2004, decedent, on behalf of Altus, signed a discharge of the mortgage on the house that she had sold to George Jr. and Joan in the early 1970's, that was also prepared by the law firm. Only one month earlier, on January 27, 2004, as the renovations on his home were being completed, George Jr. wrote to a lawyer at the firm expressing concern that decedent's other beneficiaries might later question or challenge the source of monies used to fund the project. Two months later, on March 10, 2004, decedent wrote the law firm, stating that "the monies in the amount of $460,000.00 that was paid out/or given to George A. Olsen, Jr. for his renovation/alteration to his house, and anything relative to it, was and is given as a gift." In the same letter, the decedent also stated that the $460,000 amount should not "reduce what George A. Olsen, Jr. is to receive from/by my Will." Consequently, on April 2, 2004, decedent signed a gift tax return prepared by the law firm for $460,000.
A portion of the letter reads:
Due to the fact that this is still occurring, I have heard gossip through the grapevine that if and when my mother was to pass on, that this action might be questioned or negatively acted upon, against her will/estate. This is what I wish to protect or is her will, as it stands, secure and intact that there won't be any repercussions or actions against such matter?
Two months later, on June 10, 2004, decedent executed a codicil to the 1999 Will prepared by the law firm that took her non-residuary estate out of her bloodline by making Joan the next beneficiary in line after George Jr., and also made Joan the successor-in-interest to George Jr.'s share of the residuary estate. Then, on March 22, 2005, George Jr. drove decedent to the law firm to execute a new Will that gave George Jr. 100% of the non-residuary estate and 90% of the residuary estate, with just 5% each to Kenneth and Dottie. Joan was again named the successor-in-interest to George Jr.'s share. And, while George Jr. and Kenneth were joint-executors under the 1999 document, George Jr. was named the sole executor in the 2005 version.
To explain decedent's lopsided dispositions, both testamentary and inter vivos, several witnesses testified that George Jr. bullied his mother and recounted instances of him yelling at her repeatedly to pay his bills, and threatening to cut her off from his family if she did not do so. In addition to such accounts from both Kenneth and Dottie, who obviously had an interest in the matter, Alan Raff, an accountant for George Sr. and decedent, testified that when he recommended decedent stop paying George Jr.'s credit card bills through the family business, "[s]he [decedent] told me she pays them because it stops him from yelling." And, another witness, Ann Kallam, the branch manager of a bank where Kenneth had opened a trust account for his mother, testified to a telephone conversation she had with decedent in which she heard George Jr. in the background shouting at decedent to hurry up and get the information about the balance in her trust account.
As found by the trial court, "[a]round Easter, 2005, Kenneth heard George Jr. yelling that he had bills that needed to be paid and that, if [decedent] didn't pay them that she would not be part of our lives, referring to his family." Dottie testified to other incidents in which she observed George, Jr. yelling at their mother.
There was also a transcript of telephone messages that George Jr. had left with decedent in which he advised that "until my name is with Ken Olsen's name on the paper and so on I will never have any type of relationship with you anymore. I don't think you'll see me any more." When asked to confirm whether he had left that message with decedent, George Jr. begrudgingly admitted: "It's possible. I was very frustrated."
The situation changed dramatically around Easter 2005 when Kenneth and Dottie became aware of their mother's deteriorating financial condition. At that time, Kenneth noticed a "for sale" sign on decedent's Chester Road property. Upon further inquiry, he discovered that decedent had only $60,000 remaining in her checking account, and consequently reviewed her check ledgers, which showed multiple payments for the benefit of George Jr. and Joan. Kenneth contacted Dottie and together they quickly moved to gain control over decedent's finances and to end the payments to George Jr.
First, they convinced decedent to execute a living trust, naming them as co-trustees, which she did on August 12, 2005. In September 2005, with Kenneth's guidance, decedent took out a reverse mortgage on the Chester Road home, the proceeds of which ($655,987) were then put into the trust.
This reverse mortgage was later repaid on April 30, 2008, out of the trust monies, for $846,581.83. The difference was made up by the discovery and sale of about $500,000 in stock. Also in 2008, decedent executed a deed transferring title to her home to this trust.
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In March 2009, decedent made yet another Will, this time with the guidance of Kenneth and Dottie. In fact, the 2009 document was drafted by Kenneth, supposedly at decedent's request. This Will divided decedent's tangible personal property among all three children in equal shares; however, it also contained a provision requiring that George Jr.'s share be offset by "the sum of monies transferred by loan, gift, or otherwise to him and his family during the years 1995 through 2005 for payment of their health, automobile, schooling, home repair and remodeling and other expenses, in an amount exceeding $2,500,000.00, which have not been repaid or returned to [decedent] during [her] lifetime." The residue of the estate was also divided equally, with the same offsetting provision attached to George Jr.'s share. Kenneth was appointed executor. The 2009 Will was witnessed and signed at the Califon branch of Peapack-Gladstone Bank, which was also the site of the trust account.
In 2010, decedent's health deteriorated and she was hospitalized in Hackettstown. Kenneth and Dottie arranged for her care but did not inform George Jr. or his family of decedent's location. Decedent was later moved to a rehabilitation center in Clinton; again, George Jr. was not notified of her location. Finally, decedent was transferred to a rehabilitation center in Alexandria, Virginia, near Dottie. According to Kenneth and Dottie, throughout her illness, decedent asked them to keep her whereabouts a secret from George Jr. Decedent passed away on July 23, 2010 in Virginia. Dottie and Kenneth did not notify George Jr. of her death, nor did they give him notice of her burial.
Upon decedent's death, her 2009 Will, naming Kenneth executor of her estate, was admitted to probate on August 3, 2010. On August 25, 2010, George Jr. commenced this action in the Probate Part seeking to invalidate the 2009 Will, set aside the 2008 Deed and admit to probate decedent's 2005 Will. Kenneth and Dottie answered, counterclaimed against George Jr., and filed a third-party complaint against Joan, seeking to invalidate approximately $3,000,000 in inter vivos transfers that decedent made for their benefit from 1995 to 2005. Both sides alleged undue influence in the making and signing of the various documents.
The matter proceeded to a six-day bench trial at the conclusion of which the court invalidated, as the product of undue influence, the 2005 Trust, the 2008 Deed, and all testamentary documents (the 1999 and 2005 Wills and 2004 Codicil and the 2009 Will) except for decedent's 1984 Will, which divided her estate equally among Dottie, George Jr. and Kenneth. The trial court also invalidated the inter vivos transfers by decedent from 1995 to 2005 for the benefit of George Jr. and Joan.
As to the latter, the court concluded that there was a confidential relationship between George Jr. and Joan and decedent, stating "[t]here's no question about her reliance upon them. There's no question that the series of gifts or transfers that she made were improvident and left her deeply in debt and at risk of losing the house that she loved — her dream house." The court specifically found that although decedent wrote the checks, "she wrote them because George Jr. insisted that she write them."
As to the testamentary dispositions favoring plaintiffs in the 2005 and 1999 Wills, the court found a clear case of undue influence:
Both those wills were inconsistent with [decedent's] general intent. The circumstances were highly suspicious. It is evident . . . that the purpose of this 2005 Will was simply to protect the assets that George Jr. and Joan had managed to extract from [decedent].
And undue influence was used as well with respect to the [] letter claiming that the $460,000 for the house was a gift. A letter that she may have signed, but she certainly didn't write. Yes. She also signed the tax return. I think she would have signed anything that George Jr. or Joan put in front of her because they were very much in control.
. . . .
[O]nce the circumstances are shown to be such that undue influence is probably
present, then the burden transfers to them to make their case by clear and convincing evidence. They didn't even make it by a preponderance of the evidence.
The court also found undue influence as to the 2009 will and 2005 trust created by Kenneth:
With respect to the Will drawn by Kenneth, there were both a confidential relationship, obviously, a conflict of interest as an attorney, obviously, suspicious circumstances present. And, in my view, no evidence even by a preponderance and certainly not clear and convincing evidence that those documents were the free [] actions of [decedent]. And the same with respect [to] the trust.
In a subsequent written decision, the court determined the amount of the invalid inter vivos transfers was $2,731,825.13. Accordingly, the court entered judgment on May 29, 2012, holding George Jr. and his wife Joan jointly and severally liable to decedent's estate for $2,731,825.13 and invalidating all testamentary documents except for the original 1984 Will.
Plaintiff appealed, arguing that the trial court erred in finding undue influence as to the inter vivos transfers and the 1999 and 2005 Wills. Kenneth and Dottie cross-appealed, contending that the amount of repayment set by the trial court was incorrect and should have been $3,055,470.86. Specifically, on appeal, plaintiff argues:
I. THE 1999 WILL, 2004 CODICIL AND 2005 WILL ARE VALID AND NOT THE PRODUCT OF UNDUE INFLUENCE.In their cross-appeal, defendants argue:
II. THE TRIAL COURT IMPROPERLY RULED THAT [DECEDENT'S] LIFETIME GIFTS TO [PLAINTIFFS] WERE THE PRODUCT OF UNDUE INFLUENCE.
I. THIS COURT SHOULD CORRECT THE TRIAL COURT'S MATHEMATICAL ERROR IN COMPUTING THE DAMAGES TO WHICH DECEDENT'S ESTATE IS ENTITLED.
I
When considering a challenge to a Will, there is a presumption that a "testator was of sound mind and competent when he executed the [W]ill." In re Will of Livingston, 5 N.J. 65, 71 (1950). However, if the execution of the Will was tainted by "undue influence," it is invalid. Haynes v. First Nat'l St. Bank of N.J ., 87 N.J. 163, 176 (1981); In re Will of Livingston, supra, 5 N.J. at 76.
Not all influence is "undue" influence. "[U]ndue influence is a mental, moral, or physical exertion of a kind and quality that destroys the free will of the testator by preventing that person from following the dictates of his or her own mind as it relates to the disposition of assets[,]" In re Estate of Stockdale, 196 N.J. 275, 302-03 (2008), and forces the testator to "accept[] instead the domination and influence of another." Haynes, supra, 87 N.J. at 176 (quoting In re Estate of Neuman, 133 N.J. Eq. 532, 534 (E. & A. 1943)).
"Ordinarily, the burden of proving undue influence falls on the [W]ill contestant." In re Estate of Stockdale, supra, 196 N.J. at 303; see also In re Will of Rittenhouse, 19 N.J. 376, 378-79 (1955). However, certain circumstances may create a presumption of undue influence. In re Will of Rittenhouse, supra, 19 N.J. at 379. This presumption arises when two conditions are met: first, "the [W]ill benefits one who stood in a confidential relationship to the [testator]"; and, second, "there are additional circumstances of a suspicious character present which require explanation." Id. at 378-79. Once the opponent of the Will shows a "confidential relationship" that is "coupled with suspicious circumstances, undue influence is presumed and the burden of proof shifts to the [W]ill proponent to overcome the presumption." In re Estate of Stockdale, supra, 196 N.J. at 303.
As a first step, the opponent of the Will must prove a confidential relationship by a preponderance of the evidence. Estate of Ostlund v. Ostlund, 391 N.J. Super. 390, 402 (App. Div. 2007). The "preponderance of the evidence" standard requires the Will opponent to establish that the existence of a confidential relationship is "more probable than not." Id. at 403. A confidential relationship exists if the testator either "'by reason of . . . weakness or dependence,' reposes trust in the particular beneficiary, or if the parties occupied a 'relation[ship] in which reliance [was] naturally inspired or in fact exist[ed].'" In re Estate of Stockdale, supra, 196 N.J. at 303 (quoting In re Estate of Hopper, 9 N.J. 280, 282 (1952)).
Our courts have recognized that "[a]mong the most natural of confidential relationships is that of parent and child." Pascale v. Pascale, 113 N.J. 20, 34 (1988). However, "the mere existence of family ties does not create . . . a confidential relationship." Vezzetti v. Shields, 22 N.J. Super. 397, 405 (App. Div. 1952). A confidential relationship "does not exist 'where the parties deal on terms of equality,' even though they are, at the same time, family members and business associates." Estate of Ostlund, supra, 391 N.J. Super. at 402 (quoting In re Codicil of Stroming, 12 N.J. Super. 217, 224 (App. Div.), certif. denied, 8 N.J. 319 (1951)). In order for the court to find that a confidential relationship exists, "the circumstances [must] make it certain that the parties do not deal on equal terms[.]" In re Codicil of Stroming, supra, 12 N.J. Super. at 224. The test for measuring the existence of a confidential relationship is "whether the relations between the parties are of such a character of trust and confidence as to render it reasonably certain that the one party occupied a dominant position over the other and that consequently they did not deal on terms and conditions of equality." Estate of Ostlund, supra, 391 N.J. Super. at 401 (quoting Blake v. Brennan, 1 N.J. Super. 446, 453 (Ch. Div. 1948)).
Some factors to consider "include whether trust and confidence between the parties actually exist[ed], whether they [were] dealing on terms of equality, . . . whether one side [had] exerted over-mastering influence over the other or whether one side [was] weak and dependent." Id. at 402. For example, in Haynes, supra, the Court found there was a confidential relationship between a mother and daughter where the mother was "afflicted by the debilitations of advanced years, [and] was dependent upon her sole surviving child with whom she lived and upon whom she relied for companionship, care and support." 87 N.J. at 176.
As noted, the existence of a confidential relationship between the testator and the beneficiary alone does not create a "presumption of undue influence." In re Will of Livingston, supra, 5 N.J. at 71. The opponent of the Will must also establish "suspicious circumstances." Ibid.; Haynes, supra, 87 N.J. at 176; In re Will of Liebl, 260 N.J. Super. 519, 528 (App. Div. 1992), certif. denied, 133 N.J. 432 (1993). "Such circumstances [however] need be no more than 'slight.'" Haynes, supra, 87 N.J. at 176 (citation omitted). Suspicious circumstances may arise from a "drastic change in the testamentary dispositions" of the testator. Ibid.
Finally, in reviewing a trial court's determination on the existence of a confidential relationship, we may "'not disturb the factual findings and legal conclusions of the trial judge unless [we are] convinced that they are so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice.'" Pascale, supra, 113 N.J. at 33 (quoting Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474, 484 (1974)). A trial judge's findings on the issue of undue influence are "entitled to great weight [because] the trial court had the opportunity of seeing and hearing the witnesses and forming an opinion as to the credibility of their testimony." In re Will of Livingston, supra, 5 N.J. at 78.
Here, ample competent evidence supports the court's dual determination of a confidential relationship between plaintiff and decedent and suspicious circumstances, giving rise to its further finding of undue influence that plaintiff failed to credibly rebut. In the first place, there was much more than George Jr.'s kinship with decedent that establishes a confidential relationship between the two. George Jr. was the only sibling to have remained in the family business; to have lived in very close proximity to their mother; to have had daily contact with her; and, as found by the trial judge, to have "provided extensive care for [her]" to the extent that as she aged, decedent became "thoroughly reliant" on both George Jr. and his wife not only for her own personal needs, but as well those of the family businesses. It was, in other words, "a relations[hip] in which reliance . . . in fact exist[ed][,]" and trust was reposed. In re Estate of Hopper, supra, 9 N.J. at 282. Indeed, plaintiff acknowledges the closeness of the relationship.
There was also ample proof of "suspicious circumstances," including decedent's pattern of dispositions following her husband's death in 1995 and lasting the next decade, incrementally benefitting plaintiff and his wife, to the exclusion of all others and to the detriment of her own financial condition. These consisted of increasingly generous lifetime transfers as well as changes to her Wills, evidencing a decided break with her long-held general intent to treat all three children equally. Adding to these suspicious circumstances is the fact that the law firm assisting in the effectuation of this course of action was also retained by plaintiff and his wife for their own estate planning and in fact assisted plaintiff in 2004 in his obvious effort to protect the assets he had managed to acquire from decedent to date by having her file a gift tax return on the $460,000 in decedent's funds used to renovate his residence. George Jr. not only drove his mother to the law firm on at least one of these occasions, but was present and engaged in preliminary discussions with the lawyers responsible for drafting the relevant documents.
Last, but not least, is the proof of George Jr.'s bullying, haranguing behavior toward decedent, strongly suggesting that decedent, in her testamentary dispositions, followed not the dictates of her own mind and will, but rather submitted to the domination and influence of her controlling son. As the trial judge found, between 1995 and 2005, George Jr. "was very busy getting a hold of as much [of] his mother's money as he could get a hold of and controlling her estate to benefit himself."
Plaintiff, on the other hand, proffered no credible evidence to rebut the presumption that he exerted undue influence over decedent arising from his confidential relationship with her and the suspicious circumstances surrounding her 1999, 2004 and 2005 testamentary dispositions. On the contrary, the judge discredited much of George Jr.'s testimony. Specifically, the judge found that, contrary to his denial, George Jr. had been aware of the 2005 Will's provisions, which strongly favored him, because he had received a copy from the law firm. Also, in finding a pattern of behavior by George Jr. designed to influence decedent into paying his bills, the judge dismissed as unbelievable his testimony that he had no idea about either his own or the companies' finances. Furthermore, the court concluded that "the last thing he wanted was to have his siblings around."
Accordingly, we are satisfied there is sufficient credible evidence supporting the trial judge's finding of undue influence in decedent's testamentary dispositions to warrant the invalidation of the 1999 and 2005 Wills and 2004 Codicil.
II
This same finding applies with equal force to invalidate decedent's inter vivos transfers to plaintiff and his wife from 1995 to 2005.
In the context of inter vivos gifts, a presumption of undue influence arises either when the opponent "proves that the donee dominated the will of the donor . . . or when a confidential relationship exists between donor and donee." Pascale, supra, 113 N.J. at 30 (internal citations omitted). If the opponent "can prove by a preponderance of the evidence that the [donee] had a confidential relationship with the donor . . ., then there is a presumption of undue influence which the [donee] must rebut by clear and convincing evidence." Estate of Ostlund, supra, 391 N.J. Super. at 401.
The undue influence test for inter vivos transfers, unlike that for testamentary transfers, requires only that the opponent prove "that the survivor had a confidential relationship with the donor who established the account[.]" Ibid.; In Re Estate of Penna, 322 N.J. Super. 417, 424 (App. Div. 1999) ("In inter vivos transfer cases, where one is giving away what one can still enjoy, the presumption of undue influence is raised more easily than in cases involving [W]ills. All that is needed is a confidential relationship."). "Underlying the absence of a requirement of showing suspicious circumstances with an inter vivos gift is the belief that a living donor is not likely to give to another something that he or she can still enjoy." Pascale, supra, 113 N.J. at 31.
Thus, by comparison, the undue influence presumption in the context of inter vivos transfers is both more easily found and more difficult to overcome. The presumption's "'purpose is not so much to afford protection to the donor against the consequences of undue influence exercised over him by the donee, as it is to afford him protection against the consequences of voluntary action on his part, induced by the existence of the relationship between them, the effect of which upon his own interests he may only partially understand or appreciate.'" Pascale, supra, 113 N.J. at 30 (quoting In re Dodge, 50 N.J. 192, 228 (1972)). Finally, once the presumption arises, the donee must then prove "by clear and convincing evidence not only that 'no deception was practiced therein, no undue influence used, and that all was fair, open and voluntary, but that it was well understood.'" Id. at 31 (quoting In re Dodge, supra, 50 N.J. at 227).
Here again, the trial judge applied the correct legal standard and, for the very same reasons cited with regard to decedent's testamentary dispositions, properly determined that a confidential relationship existed between George Jr. and his wife, on the one hand, and his mother, on the other hand, giving rise to the presumption of undue influence. To reiterate, the court concluded: "[t]here's no question about [decedent's] reliance upon [them]. There's no question that the series of gifts or transfers that she made were improvident and left her deeply in debt and at risk of losing the house that she loved[.]" The court specifically found that although decedent wrote the checks, "she wrote them because George Jr. insisted that she write them[,]" and that, through emotional manipulation, "[plaintiff and his wife] had set out on a course of action designed to get them all or almost all of [decedent's] assets."
Because the credible evidence of a confidential relationship among plaintiff, his wife and decedent gives rise to a presumption of undue influence that has not been rebutted, the court properly invalidated the inter vivos transfers from 1995 to 2005.
III
The only remaining issue concerns the amount of inter vivos transfers due the estate from plaintiffs. In their cross-appeal, defendants maintain that the trial judge made a mathematical error in his calculation, having taken the total of only one of the spreadsheets prepared by defendants ($2,731,825.13), instead of all four ($3,055,470.86). They request we exercise original jurisdiction to fix the correct amount, pursuant to Rule 2:10-5.
In his written opinion, the trial judge noted that he had "compared the summaries [of the check registers on the spreadsheets prepared by defendants] to the check registers and found the summaries to be accurate." He found that "decedent's meticulously kept check registers show a total of $2,731,825.13[,]" and fixed this amount as the "amount wrongly taken," and thus as the final judgment.
We discern some problems with this approach. First, although the court correctly determined that the entries on the spreadsheets were substantively accurate in terms of recording those transactions in which decedent expended money for the benefit of the plaintiff and his family, the spreadsheets nevertheless contain a moderate number of entries in which the dollar amount of the check had been incorrectly entered. These mistakes range from minimal (i.e. check #162 should be listed as $2173.72 not $2173.00) to more significant (i.e. check #457 should be listed as $3000 not $1505.96).
Second, as defendants complain, the judge simply took the total from only one of four spreadsheets. Each spreadsheet represented a different set of checks. Spreadsheet one (S1), which forms the entire basis for the judgment entered, contains all the amounts from a Valley National Bank account (#5544). By contrast, spreadsheets two to four (S2-S4) contain entries from a different Valley National Bank account (#5839). Comparing entries from the two different accounts and among spreadsheets, it appears that the registers are, in fact, different and that the spreadsheets do not double-count entries (i.e. check #423 on S1 is to GAOPA for $3000 while check #423 on S2 is to Dr. William R. Wallace for $1420). Moreover, some of the entries on S2 to S4 are of the same type as those on S1 and therefore most likely should have been included in the judgment as well (i.e. check #426 on S2 (excluded) is written to Morris County College for Dana Olsen's (plaintiffs' daughter and decedent's granddaughter) book expenses; similarly check #596 on S1 (included) is written to Dana with the notation "college food."). Other entries on S2-S4, however, record gifts to other persons, including defendants (i.e. check #1144 written to Dottie), that should not properly be included in the total.
Additional analysis and factfinding therefore is indicated, rendering it inappropriate for us to exercise our original jurisdiction. R. 2:10-5; State v. Santos, 210 N.J. 129, 142 (2012); Tomaino v. Burman, 364 N.J. Super. 224, 234-35 (App. Div. 2003), certif. denied, 179 N.J. 310 (2004). We therefore remand to the Probate Part to consider which checks from S2, S3 and S4 (Account #5839) should be included in the Judgment and to correct mathematical errors in the totaling of Account #5544.
Affirmed on the appeal; remanded on the cross-appeal.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION