IN THE MATTER OF THE ESTATE OF RUDOLPH HAUKE (P-000323-16 AND P-000324-16, MONMOUTH COUNTY AND STATEWIDE) ( 2022 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-4528-19
IN THE MATTER OF THE
ESTATE OF RUDOLPH HAUKE,
deceased, AND OF THE RUDOLPH
HAUKE FAMILY REMAINDER
TRUST AND MARITAL TRUST,
and
IN THE MATTER OF THE
ESTATE OF HELEN HAUKE,
deceased, AND OF THE
RUDOLPH HAUKE FAMILY
REMAINDER TRUST AND
MARITAL TRUST.
______________________________
Argued January 18, 2022 – Decided January 31, 2022
Before Judges Fasciale and Vernoia.
On appeal from the Superior Court of New Jersey,
Chancery Division, Monmouth County, Docket Nos.
P-000323-16 and P-000324-16.
Marco A. Laracca argued the cause for appellants
Thomas Hauke and Gregory Hauke (Bio & Laracca,
PC, attorneys; Marco A. Laracca, of counsel and on the
briefs; Kristen L. Laracca, on the briefs).
Joel A. Davies argued the cause for respondent Paul
Hauke (Taff, Davies & Kalwinsky, attorneys; Joel A.
Davies, of counsel and on the brief).
PER CURIAM
This probate matter returns before us for a second time. In our prior
decision we affirmed a May 23, 2018 Chancery Division final judgment
approving formal accountings for the estates and trusts of decedents Rudolph B.
Hauke and Helen P. Hauke. In the Matter of the Estate of Rudolph Hauke, No.
A-5200-17 (App. Div. Mar. 25, 2020) (slip op. at 18). The judgment imposed
substantial surcharges on Gregory Hauke (Gregory) and Thomas Hauke
(Thomas), the estates' former co-executors (the co-executors).1 Id. at 2. We
remanded for the court to determine whether, under the circumstances presented,
a mutual release executed by Gregory, Thomas, and their brother Paul Hauke
(Paul) in connection with their settlement of a prior Chancery Division litigation
barred the court's imposition of the surcharges. The co-executors appeal from
the remand court's order determining the release did not bar imposition of the
surcharges, and, even if it did, the co-executors' waived their right to rely on the
1
Because they share a surname, we refer to the decedents' children by their first
names for clarity and to avoid confusion. We intend no disrespect in doing so.
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release as a bar to the imposition of the surcharges. Unpersuaded by the co-
executors' arguments, we affirm.
I.
The pertinent facts are well-known to the parties, are summarized in our
prior opinion, id. at 2-4, and need not be repeated at length. We provide only
those facts pertinent to our discussion of the issues presented.
Following the deaths of their parents in 2011 and 2012, Gregory and
Thomas initially served as co-executors of their parents' estates, but they were
removed as co-executors by court order in 2014, id. at 2-3, and replaced by
administrator John G. Hoyle, III (Hoyle). The co-executors filed a Chancery
Division action against Paul involving "non-probate assets and change of
beneficiary claims."2 Id. at 3. The co-executors averred that Paul exerted undue
influence over Helen Hauke resulting in the wrongful transfer of monies to him
and changes of her beneficiary designations on certain life insurance policies.
On the second day of trial in that matter, the parties reached a settlement.
They agreed to a Consent Judgment and Stipulation of Settlement (the consent
2
A fourth brother, Richard Hauke (Richard), was also a plaintiff in the
Chancery Division action filed against Paul. Richard is not a participant in this
appeal.
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judgement), which was entered by the court. Ibid. They also executed a
document titled "Mutual General Releases" (the release).
In pertinent part, the consent order required that Hoyle file his final
accountings and proposed distribution schedule with the Monmouth County
Surrogate's Office for the estates and trusts of Rudolph and Helen Hauke. As
part of the consent order, the co-executors and Paul "STIPULATED AND
AGREED . . . the parties shall be permitted to file exceptions to the accountings
pursuant to the New Jersey Court Rules and the parties further agree[d] they will
not appeal the [c]ourt's ruling on the accountings and exceptions."
The release provided that Paul released the co-executors from any and all
claims he might have against them, including "those of which [he] is not aware
and those not specifically mentioned in [the] release." 3 The release also covered
any claim Paul could have asserted against the co-executors in the settled
litigation or "as [the claim] relates to the subject of the Estate of Helen Hauke
or the Estate of Rudolph Hauke or [their] respective trusts." The release further
included a covenant not to sue.
3
The release included an identical release of claims from the co-executors to
Paul. The co-executors' release of claims against Paul was not an issue before
the Chancery Division and is not an issue on appeal.
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4
The release of claims is not without limitation. It provides that "[t]he
parties retain the right to file exceptions to the Estate/Trust accountings pursuant
to [the] New Jersey Court Rules and as provided in the" consent judgment.
In the release, the "parties agree[d] . . . they will not seek anything further
from each other, including attorney's fees, costs or any other payments."
However, the release includes an express and plainly stated exception to that
covenant. In the release, the parties agree not to seek anything further from each
other "except as permitted in [the consent judgment]." And, as noted, in the
consent judgment the parties stipulated and agreed "the parties shall be
permitted to file exceptions to the accountings pursuant to the New Jersey Court
Rules."
As we explained in our prior opinion, Hoyle filed two separate formal
accountings for the estates. Id. at 4. Paul filed exceptions to the accountings,
and the co-executors filed a response to the exceptions. Id. at 4.
The court conducted a hearing over five days to address Hoyle's final
accountings and Paul's exceptions. Ibid. During the hearing, the co-executors
did not introduce the release in evidence. They instead waited until closing
arguments, and then asserted for the first time that the release barred any relief
based on Paul's exceptions. Paul's counsel objected to the argument, noting it
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was not supported by any record evidence. The court sustained the objection,
rejecting the co-executors' efforts to rely on a release that was not in evidence
and was referenced for the first time during their counsel's summation.
In its final decision on the accountings, the court made detailed findings
of fact and conclusions of law as to each of Paul's exceptions, accepting some
and rejecting others. As a result of its acceptance of the exceptions, the court
ordered surcharges against the co-executors.
The court entered the May 23, 2018 final judgment, which in pertinent
part ordered Gregory to pay a $157,533.47 surcharge and Thomas to pay a
$160,817.86 surcharge. The final judgment included a "JUDGMENT
WORKSHEET," which listed, by numerical designation, each of the exceptions
filed to the various schedules in Hoyle's accountings. The worksheet also
identified which exceptions had been withdrawn by Paul. For the exceptions
that were not withdrawn, the court separately listed the amount, if any, of the
surcharges awarded against the co-executors based on the court's detailed
findings in its bench opinion.4
4
The court ordered the imposition of a single surcharge in the amount of
$333.75 against Richard. One surcharge, in the amount of $2,831.91, was
imposed on Gregory only. All the remaining surcharges ordered by the court
were imposed against the co-executors.
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The court's final judgment on the accountings awarded Hoyle $41,748.09
in attorney's fees from the estates and trusts. The judgment also made provision
for a future attorney's fee award to Hoyle based on the continuation of his duties
as a fiduciary.
In addition, the court further awarded the estate a surcharge for attorney's
fees incurred by Hoyle during his administration of the estates and trusts. As
reflected in the worksheet attached to the final judgment, the court imposed the
surcharge against the co-executors for an amount "to be awarded upon
submission of [a] fee application." 5 In the court's final decision on the
accountings, it explained that it imposed the surcharge for attorney's fees
incurred by Hoyle because the "fees would not have been incurred by the estate
but for the deliberate failures of [the co-executors] and the dereliction of their
fiduciary duties." The court noted there was "no set amount" of the fees in the
accountings, but the court "award[ed] that surcharge against [the co-executors],"
and determined "the fees incurred by . . . Hoyle are to be surcharged against [the
co-executors]." Pertinent to this appeal, neither the court's final judgment, nor
5
In its decision from the bench and the worksheet annexed to its final judgment,
the court referred to exception number "61" as the basis for the surcharge
imposed for the attorney's fees incurred by Hoyle.
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any part of its determination of the exceptions filed by Paul, reflects an award
of attorney's fees in Paul's favor against the co-executors.
On the co-executors' appeal from the final judgment, we affirmed the
court's decision on the merits. That is, we rejected the co-executors' challenges
to the court's final judgement approving the final judgment and determining the
exceptions and the amounts of the surcharges. In fact, we affirmed the court's
findings and legal conclusions on the accountings and the exceptions,
"substantially for the reasons expressed by the judge." Id. at 2.
We remanded the matter for limited issues unrelated to the court's
determinations concerning the exceptions and approval of the accountings. We
noted the "co-executors mainly contend[ed] that the [r]elease should have barred
any surcharges against them," id. at 7, and we remanded for the trial court to
consider whether the release barred Paul's filing of the exceptions that resulted
in the surcharges, as well as Paul's argument the court correctly determined the
co-executors waived their right to rely on the release. Id. at 10. We also noted
"the co-executors let approximately twenty-three months elapse before their
counsel brought the [r]elease to the [court's] attention." Id. at 9. And we
explained "[t]he parties completely prepared themselves for trial," and the co -
executors waited until closing argument to raise the release as an issue, and
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"[e]ven then . . . did not provide the actual [r]elease agreement to the [court]."
Ibid.
We also explained the parties made various arguments concerning
whether the co-executors' delay in raising the release resulted in a waiver of
their right to rely on it, and whether the release barred reliance on Paul's
exceptions in imposing the surcharges. Id. at 10. We then found that based on
the record presented, "we [were] unable to resolve all arguments as to the
release," and we remanded "on [that] issue, and if appropriate, the determination
whether sanctions for the co-executors delay in raising the issue are
appropriate." Ibid.
On remand, the court accepted written submissions from the parties, heard
argument, and, in a detailed and thorough opinion from the bench, determined
the release did not bar Paul's filing of exceptions or the resultant surcharges
imposed on the co-executors. The court also determined that even if the release
otherwise barred the imposition of the surcharges, the release did not impact the
court's final judgment approving the final accountings and surcharges because
the co-executors waived their right to rely on the release by not raising it as a
defense to the exceptions to the final accountings until their closing argument.
The court entered an order finding the release "has no impact" on the final
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judgment approving the final accountings and imposing the surcharges against
the co-executors.
II.
In their appeal from the court's order, the co-executors do not challenge
the court's determination the release did not bar, and therefore did not have any
impact on, Paul's filing of exceptions to the final accountings, the surcharges
imposed, and the court's final judgment. At oral argument, the co-executors
conceded the court correctly determined the release did not bar Paul's filing of
the exceptions and the imposition of the surcharges as set forth in the final
judgment and as reflected on the worksheet annexed to the judgment.
The co-executors' concession is not surprising. Based on our review of
the record, there are no grounds supporting a reversal of the court's order, and
we affirm it substantially for the reasons explained in the court's thorough and
thoughtful opinion. To the extent the co-executors' brief on appeal argues the
court erred in finding the release did not bar Paul's filing of exceptions or the
imposition of the surcharges, it is without sufficient merit to warrant discussion
in this opinion. R. 2:11-3(e)(1)(E).
As their counsel explained during oral argument, the co-executors' claim
on appeal is limited to the contention that the release barred an order directing
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that they pay Paul's attorney's fees. The same argument was made in the co-
executors' brief on appeal. They contend the release did not permit Paul to make
a claim against them for attorney's fees. They claim the final judgment order ed
they pay Paul's attorney's fees, and they argue that directive violates the terms
of the release. The co-executor's contend the remand court erred by not
addressing whether the release barred Paul's claim for, and receipt of a judgment
against them for, his attorney's fees.
The co-executors present an argument in search of a factual basis. The
final judgment does not include an attorney's fee award in Paul's favor against
the co-executors. In the co-executors' brief on appeal, they make frequent
reference to a purported attorney's fee award in Paul's favor, but they do not cite
to an order directing such an award. See R. 2:6-2(a)(5) (requiring an appellant's
brief to include "[a] concise statement of the facts material to the issues on
appeal supported by references to the appendix and transcript"); see also Walters
v. YMCA, 437 N.J. Super. 111, 120-21 (App. Div. 2014).
When asked during oral argument for a citation to the record for the
purported attorney's fee award, co-executors' counsel could not provide one.
Additionally, our independent review of the record does not reveal an order
directing that co-executors pay Paul's attorney's fees. Indeed, in our decision on
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their initial appeal, we summarized the co-executors' arguments challenging the
court's approval of the final accountings, and the co-executors did not claim any
error related to a purported award of attorney's fees to Paul.6
When asked during oral argument if there was any order for attorney's fees
included with the court's final judgment, Paul's counsel pointed only to the final
judgment's order awarding attorney's fees to Hoyle from the estate, and the
surcharge the court imposed under the exception designated on the worksheet as
"61." As we have explained, the court imposed that surcharge against the co -
executors for attorney's fees due to Hoyle. Thus, it could not be properly
construed as an attorney's fee award to Paul. However, even if it could, the co-
executors conceded the release did not bar Paul from filling exceptions to the
accountings, and the co-executors further conceded they do not challenge the
validity of any of the imposed surcharges.
6
The co-executors' notice of appeal in their initial appeal refers only to the May
23, 2018 final judgment, and their notice of appeal in this matter refers only to
the remand court's August 13, 2020 order finding the release had no impact on
the final judgment. Neither order includes an award of attorney's fees in Paul's
favor against the co-executors. Thus, to the extent there exists a separate order
awarding attorney's fees in Paul's favor against the co-executors, we may not
properly review it. See Kornbleuth v. Westover, 241 N.J. 289, 298-99 (2020)
(explaining an appellate court "review[s] 'only the judgment or orders
designated in the notice of appeal" (quoting 1266 Apartment Corp. v. New
Horizon Deli, Inc., 368 N.J. Super. 456, 459 (App. Div. 2004))).
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In sum, we discern no basis to reverse the remand court's order based on
its alleged failure to consider if the release barred an award of attorney's fees to
Paul. The co-executors failed to demonstrate any such order was entered, and
the court did not err by failing to consider an issue lacking any support in the
record. We therefore affirm the remand court's order.
For purposes of completeness, we note the co-executors also argue the
remand court erred by finding they waived the right to rely on release because
they raised the issue of the release—which was never admitted in evidence
during the trial on the final accountings—for the first time in their closing
arguments at trial. They contend that in our initial decision we reversed the trial
court's decision sustaining Paul's objection to the co-executors' closing
arguments based on the release, and that our remand therefore did not permit the
court to address the waiver issue.
We disagree with the co-executors' interpretation of our remand order. As
the court correctly recognized, our remand permitted consideration of both the
waiver issue and whether the release barred Paul's filing of exceptions to the
accountings and the resultant surcharges. In our prior decision, we noted the
parties made various arguments—including whether the delay in raising the
release resulted in a waiver and whether the release barred the filing of the
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exceptions—and we found we were unable to resolve the arguments presented
related to the release. We then remanded for the court to address "that issue ,"
which included the parties' arguments concerning waiver. Thus, the remand
court properly considered the waiver issue, and we affirm the court's
determination the co-executors waived their right to rely on the settlement
agreement during their closing argument for the reasons set forth in the court's
opinion. The co-executors' arguments to the contrary are without sufficient
merit to warrant any further discussion. R. 2:11-3(e)(1)(E).
We last address an issue raised during oral argument. Counsel for Paul
asserted that pending before the trial court is a motion for the attorney's fees
awarded to Hoyle as a surcharge against the co-executors in the final judgment
under exception "61." Paul further asserts the remand court erred by failing to
address the issue of sanctions as permitted in our remand order. Counsel argued
the final judgment from which the initial appeal was taken, and the remand
court's order, are therefore not final orders under R. 2:2-3(a)(1), and the matter
should be remanded to the trial court to address those issues.
With regard to the remand court's alleged failure to address the issue of
sanctions, Paul did not make an application for sanctions to the remand court.
And we did not order the court to impose sanctions; our remand permitted the
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court to address the issue and determine if sanctions were appropriate based on
the co-executors' delay in raising the release issue at the trial on the final
accountings. Estate of Rudolph Hauke, slip op. at 10. The court was not
required to impose sanctions for which no request was made, and we therefore
construe the remand order as final because no application for sanctions was
presented. We also note Paul never sought a remand to the court to allow for
the filing of a motion for sanctions, never moved to dismiss this appeal as
interlocutory, and did not cross-appeal from the court's order based on a claim
the court erred by failing to address the sanctions issue.
We are also not convinced any alleged issues related to the filing of a
motion for Hoyle's attorney's fees pursuant to the surcharge imposed under
exception "61" render the current appeal interlocutory. We reject the argument
because the record is bereft of any evidence there are any open issues before the
trial court concerning the final accountings, including issues related to the
payment of Hoyle's attorney's fees as permitted by the trial court's ruling on
exception "61."
We have noted that "if an appeal is improvidently filed before resolution
of [an attorney's fees issue], the party seeking fees should move before this court
for a limited remand, or for dismissal of the appeal as interlocutory." N.J. Mfrs.
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Ins. Co. v. Prestige Health Grp., LLC, 406 N.J. Super. 354, 358 (App. Div.
2009). A failure to do so, results in that party losing their right to a review of
the outstanding issue. See Shimm v. Toys from the Attic, Inc., 375 N.J. Super.
300, 304 (App. Div. 2005) (explaining that where a party perceives an order to
be interlocutory and that party fails to "move for either for dismissal of the
appeal or, in the alternative, for a temporary remand to the Law Division,
pursuant to Rule 2:9-1(a), to have the undecided issues resolved" that party loses
"its right to our review of its post appellate judgment motion" (citation
omitted)).
We approved the final accountings in our initial decision, and there is no
evidence Paul asserted the initial appeal was from an interlocutory order or
moved to dismiss that appeal as interlocutory. Neither Paul nor the co-executors
appealed from our initial decision. Our affirmance of the court's judgment
approving the accountings is final, and, in our view, it is simply too late for Paul
to argue our prior affirmance of the final accountings should be subject to a
remand because there is an open issue as to the attorney's fees due Hoyle
pursuant to the surcharge imposed under exception "61." Any such issues
should have been raised in the prior appeal and will not be considered for the
first time long after our decision affirming the court's final judgment.
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Our remand order does not require a different result. The remand was for
the singular purpose of determining whether the release should be applied to bar
the challenged surcharges. The remand was not for the purpose of revisiting the
court's determination of the exceptions and amount of the surcharges. Paul's
belated assertion there is an open issue related to the amount of a surcharge
should have been asserted in the initial appeal, in a motion to dismiss the initial
appeal as interlocutory, or in an appeal from our initial decision. Our initial
decision affirming the accountings renders moot any purported issues related to
the merits of the accountings and the amount of any surcharges. Thus, there
cannot be any open issues in the trial court related to the amount of a surcharge
because all the issues related to the surcharges that were properly presented, or
that could have been properly presented, were encompassed by our initial
decision.
Affirmed.
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