IN THE MATTER OF THE TRUST OF RAY D. POST (P-000817-2012, MORRIS COUNTY AND STATEWIDE) ( 2018 )


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  •                       NOT FOR PUBLICATION WITHOUT THE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-0929-16T1
    IN THE MATTER OF THE
    TRUST OF RAY D. POST.
    _______________________
    Argued May 3, 2018 – Decided August 15, 2018
    Before    Judges    Haas,    Rothstadt     and   Gooden
    Brown.
    On appeal from Superior Court of New Jersey,
    Chancery Division, Probate Part, Morris
    County, Docket No. P-000817-2012.
    Michael A. Saffer argued the cause for
    appellant/cross-respondent Valley National
    Bank (Mandelbaum Salsburg, PC, attorneys;
    Michael A. Saffer, of counsel and on the
    briefs; Arla D. Cahill and Brian M. Block, on
    the briefs).
    Andrew J. Cevasco argued the cause for
    respondent/cross-appellant Sarah E. Post-
    Ashby (Archer & Greiner, PC, attorneys; Andrew
    J. Cevasco, of counsel and on the briefs;
    Andrew T. Fede, on the brief).
    Deborah   Post,   respondent/cross-appellant,
    argued the cause pro se.
    PER CURIAM
    Valley National Bank (Valley), trustee for The Trust of Ray
    D. Post, appeals from a judgment awarding damages to beneficiaries,
    the   grantor/decedent's           granddaughters,        Deborah     Post    and   her
    sister, Sarah Post-Ashby.                 The trial judge held that Valley
    breached its fiduciary duty to the sisters when it diversified the
    trust's corpus, a portfolio of stock, in contravention of a
    retention provision in the trust agreement that directed the stocks
    not to be sold. Although the judge awarded damages to the sisters,
    he also awarded commissions and fees to Valley.
    On appeal, Valley asserts numerous arguments, the gist of
    which is that the judge erred in finding that Valley's actions
    were not authorized by the Prudent Investor Act (PIA), N.J.S.A.
    3B:20-11.1 to -11.12, especially since the corpus of the trust
    changed   in   nature       over    the    years    due    to   various      corporate
    reorganizations.          Deborah and Sarah1 cross-appeal, claiming that
    Valley was not entitled to certain fees and commissions the trial
    judge credited to Valley, and that he failed to correctly calculate
    damages and should have awarded counsel fees.                       For the reasons
    that follow, we affirm.
    The facts developed at the bench trial in this matter are
    summarized     as   follows.         Ray    owned   and    operated     a    fuel   oil
    distribution      business     in    Newark.        He    and   his   business      were
    customers    of     the    Peoples    National      Bank    &   Trust    Company      of
    1
    We refer to the individuals by their first names to avoid any
    confusion caused by their common surnames.
    2                                  A-0929-16T1
    Belleville (Peoples) and he was a member of its board of directors
    until the mid-1980s.        Ray created the subject irrevocable trust,
    appointing Peoples as trustee, pursuant to a trust agreement dated
    July 23, 1975.       The corpus of the trust consisted of 2550 shares
    of common stock of AT&T, 304 shares of Exxon Corporation, and a
    $4500 AT&T thirty-year bond due May 5, 2000.             The value of the
    trust assets at that time was $156,550.25.
    The trust agreement contained a retention provision that
    stated: "The Trustee shall retain, without liability for loss or
    depreciation resulting from such retention, the property received
    from the Grantor." It also provided that the trustee was "entitled
    to    compensation    for   its   services . . .   in   accordance    with    a
    separate agreement between it and [Ray], to be entered into on or
    before the execution of this Agreement."           On September 24, 1975,
    Ray and Peoples entered into a letter agreement that stated: "In
    order to induce Peoples . . . to act as Trustee . . . I hereby
    agree to pay a fee of 5% per annum on the total income collected."
    Pursuant to the trust agreement, the trust's income was paid
    to Ray in monthly or other installments during his life and, upon
    his death, the income was paid to Ray's wife, Enid Post, whom he
    had married in 1974, until her death or remarriage.2                 Upon the
    2
    Enid was not Deborah's or Sarah's grandmother.
    3                              A-0929-16T1
    occurrence of either of those two events, the trustee was directed
    to distribute the corpus to Deborah and Sarah.
    Ray died on May 5, 1989.    At the time of his death, the value
    of the trust's assets was $483,172.      The trust corpus consisted
    of 1169 shares of Bell South, 520 shares of NYNEX, 1040 shares of
    Pacific Telesis, 780 shares of South Western Bell, 1040 shares of
    U.S. West, 2432 shares of Exxon and 2200 shares of AT&T.3
    Deborah, who held a Masters of Business Administration from
    Harvard Business School, was appointed executrix of the estate
    and, in 1990, filed the first Form 706 Estate Tax Return. Deborah,
    as   executrix,   also   participated   in   a   litigation   filed    in
    approximately 1991 by Enid over Ray's estate in which the trust
    and its assets were a topic of the dispute.       See In re Estate of
    Post, 
    282 N.J. Super. 59
    , 64 (App. Div. 1995).
    In June 1993, Valley acquired Peoples and became the trustee.
    The trust assets Valley received from Peoples, according to Valley,
    totaled $157,436.86.     The stock included 2600 shares of AT&T, 2432
    shares of Exxon, and approximately 7000 shares of seven companies
    3
    To the extent the portfolio contained different stock than what
    Ray had deposited, the difference was caused by the divestiture
    of AT&T and the creation of its "spin offs" that were required by
    the 1984 anti-trust action against AT&T. See Verizon N.J., Inc.
    v. Hopewell Borough, 
    26 N.J. Tax 400
    , 408 (Tax Ct. 2012); In re
    Estate of Strauss, 
    521 N.Y.S.2d 642
    , 644 (N.Y. Sur. Ct. 1987).
    4                            A-0929-16T1
    that had also been created as part of AT&T's divestiture.                When
    Valley   became    trustee,   it   began   to   take   statutory     corpus
    commissions4 from the trust in addition to the five percent income
    commissions provided for in the fee agreement, even though Peoples
    had never done so while it was trustee.
    In May 2000, Valley's in-house counsel wrote a memo addressing
    the bank's trust investment management committee's concern about
    whether the trust was adequately diversified in light of the
    enactment of the PIA in 1997.      In response, Valley obtained advice
    from outside counsel in July 2000, who concluded that the trust's
    retention provision did not relieve Valley of its duty to diversify
    the portfolio.
    In his letter to Valley, counsel stated that he "believe[d]
    that a court would conclude that the language of [the retention
    provision]   did   not   deprive   [Valley]     of   power   to   sell   the
    stock . . . ."     Counsel advised that if Valley determined that
    "non-diversification [was] prudent," it could take no action and
    "rely" on the retention provision, or it could "develop and
    implement a plan to diversify the portfolio," if it "decide[d]
    that that is the most reasonable and prudent course of action."
    If Valley chose to diversify the portfolio,
    4
    N.J.S.A. 3B:18-14.
    5                               A-0929-16T1
    it could choose to notify [Enid] and [Deborah
    and Sarah] of its plans and seek out their
    consent or other points of view. Finally, to
    fully protect itself for its course of action,
    [Valley]    could   file    an    action . . .
    judicially . . . and . . . seek authorization
    to deviate from the language of the trust and
    diversify the portfolio.
    Valley began diversifying the trust assets on September 12,
    2000, selling 864 shares of ExxonMobil stock and purchasing other
    stocks with the proceeds without either court approval or notice
    to Enid or the sisters.5 In a follow-up letter from outside counsel
    in November 2000, Valley was advised that it not unilaterally
    deviate from the retention provision because it would then be
    "acting at its own peril" in light of recent (unpublished) case
    law.6    "Rather, to fulfill its investment responsibilities . . .,
    [Valley] should apply to [the] Court for advice and restrictions
    to   satisfy      its   obligation   to       protect   the   interests   of   the
    beneficiaries."         By so doing, it would have an "insurance policy"
    against future liability.         Despite that advice, and while Valley
    understood that the trust language severely restricted its ability
    to   sell    or    reinvest    the   trust       assets,      it   continued   the
    5
    Exxon became ExxonMobile after an intervening merger in 1999.
    See In re Exxon Mobil Corp. Sec. Litig., 
    387 F. Supp. 2d 407
    , 410
    (D.N.J. 2005), aff'd, 
    500 F.3d 189
    (3d Cir. 2007).
    6
    In re Vivos Trust of Ackerson, No. A-159-99 (App. Div. Oct. 23,
    2000).
    6                               A-0929-16T1
    diversification until shortly before Enid's death in 2008, without
    expressly notifying Enid or the sisters or seeking court approval.
    Although Valley did not seek Deborah's or Sarah's prior
    approval for not retaining the trust's stocks, or provide either
    of them with a copy of the trust agreement until Enid died, it did
    send statements and other information about the trust's holdings
    that reflected the sale of the original stocks.                       Deborah began
    receiving information about the trust after she made a request in
    March   1998    for    information.             She    started     receiving    annual
    statements from Valley in 2002 and they continued until Enid died
    in 2008 at which time Deborah began to receive monthly statements.
    In April 2004, Valley also sent Deborah and Sarah a letter
    seeking   their       approval    for   a        "30%    fixed     income    and    the
    balance . . . in equity/growth positions" asset allocation.                        They
    both gave their approval to the allocation.                   At the time, neither
    Deborah   nor   Sarah    had     seen   a       copy    of   the   trust    agreement.
    According to Deborah, Ray never showed her a copy, she did not
    recall seeing it in connection with her filing of estate tax
    returns or during the estate litigation, and she only became aware
    of the trust assets after Ray's death.
    According to Sarah, she did not read or view the trust
    agreement until she received Valley's letter in April 2004 seeking
    her approval of the trust's asset allocation.                    When Sarah approved
    7                                  A-0929-16T1
    the April 2004 proposed assets allocation, she also requested that
    she be provided the same information regarding the trust that
    Deborah had been receiving. After that time, Sarah began receiving
    annual statements.    However, according to Sarah, none of the
    ensuing letters she received from Valley contained information
    about the terms of the trust.
    Enid died on March 27, 2008, triggering Valley's obligation
    to distribute the corpus to the sisters.      Valley wrote to Deborah
    and Sarah on May 2, 2008, enclosing a copy of the trust agreement
    and setting forth the trust assets.        According to an account
    investment synopsis prepared by Valley, as of July 31, 2001, the
    value of the trust was $1,431,869.06, as of April 30, 2006;
    $1,084,988.51, as of August 2007, $1,286,678.88; and as of May 2,
    2008, $1,218,556.    Valley informed the sisters that the process
    of preparing a final accounting had begun and would take several
    months to finalize, due to the extended term of the trust.
    The first time Deborah or Sarah saw the trust agreement was
    when Valley sent it to them on May 2, 2008.    When they did, Deborah
    "probably skimmed it," and Sarah "did a casual review" of the
    document, but neither recalled reading the retention provision.
    The granddaughters only became aware of the provision when, in
    March 2012, Valley filed its complaint for approval of its final
    accounting.
    8                             A-0929-16T1
    In 2009 and 2010, Valley sent requests to Deborah and Sarah
    asking them "what type of accounting you would like us to prepare
    for your review and approval in order that we may conclude the
    administration of the Trust."       According to Deborah, she did not
    respond to these requests because Valley had been unresponsive to
    her requests for information, such as any previous accountings and
    financial statements prior to 2001.         Sarah too did not respond
    because she did not understand the requests.           The fact they did
    not respond, however, did not prevent Valley from preparing an
    interim accounting for submission to the sisters.
    On October 6, 2010, Valley's attorney sent a letter to Deborah
    and   Sarah   requesting   that   they   sign   a   waiver    of   a    formal
    accounting, and provided them with an informal accounting. Deborah
    did not sign the waiver because of Valley's failure to provide
    information she previously requested about the trust for the period
    from 1975 to 1992.     Sarah also did not respond to the attorney's
    letter because she was not provided with sufficient information
    and felt the formal accounting was "pressuring" her with more
    fees.
    Deborah met with Valley's trust officer Steven Gudelski in
    January   2011   and   complained   about   the     trust's   performance,
    Valley's failure to provide information and an accounting, and
    Valley taking what she considered to be excessive fees.                     The
    9                                  A-0929-16T1
    retention   clause   and   diversification    of    the   stock   were   not
    discussed, but Deborah asked for a copy of the fee agreement and
    was told there was no written agreement.       A month later, however,
    Gudelski provided Deborah with copies of annual statements from
    between 2002 and 2010, and a copy of the trust fee agreement,
    which Gudelski discovered after a further review of the file.              In
    June 2011, Deborah wrote to Gudelski asking that he provide her
    with   records   from   Peoples   and   Valley's    computer   records     in
    connection with the trust from June 1993 until February 2001.
    Valley eventually provided a final accounting during discovery
    after it filed its complaint.
    On March 19, 2012, Valley filed a complaint to approve a
    final trust accounting and to be discharged as trustee.           According
    to Valley, it took four years to complete the final accounting
    because it was "waiting to hear from the beneficiaries as to what
    type of accounting they wanted."
    The accounting was ultimately completed between the summer
    of 2011 and November 2011.        A vice-president and senior trust
    officer at Valley prepared the accounting covering the period from
    June 22, 1993 to November 30, 2011.        The final accounting stated
    that the trust's value was $901,578.73.            Approximately $563,000
    was in a cash management account for the period beginning June 22,
    1993 through November 30, 2011; the balance was stocks and mutual
    10                               A-0929-16T1
    funds.     Over the subject time period, $60,225.45 was added to
    principal as a result of tax refunds.             Valley took a total of
    $485,491.03    in   income   commissions    and    $96,450.51   in    corpus
    commissions, constituting .5% on the first $400,000, and .3% on
    the balance.    Valley stopped taking fees in November 2010.
    On April 12, 2012, Deborah filed an answer taking exceptions
    to the accounting.     She objected to Valley taking commissions on
    the trust's corpus, and claimed that Valley was only entitled to
    a five percent commission on trust income rather than six percent.
    The matter was referred for mediation and on the night before
    a scheduled session, Deborah read the trust document "word for
    word with complete comprehension for probably the first time."
    She was "astounded" because she "had no idea . . . that this
    retention clause existed in this document." She "suddenly realized
    [that] they weren't allowed to sell [her] grandfather's good
    stocks."      As a result, Deborah amended her answer to add a
    counterclaim for breach of fiduciary duty, negligence, conversion
    and breach of the implied duty of good faith and fair dealing, all
    arising from Valley's violation of the retention provision.               She
    claimed an over $900,000 loss as a result of Valley's failure to
    "abide by and honor Ray Post's wishes pursuant to their fiduciary
    duty of care" to the beneficiaries.        Sarah filed a similar answer
    and counterclaim.
    11                                 A-0929-16T1
    On April 15, 2015, a judge signed an order granting Valley's
    motion for summary judgment as to all counts of the sisters'
    counterclaims, except for breach of fiduciary duty and the implied
    covenant of good faith and fair dealing, and granted in part the
    sisters' motion to compel discovery and distribution of the trust
    assets.
    Trial was held before a different judge, Stephen C. Hansbury
    in   April   2016.   The   trial   initially   addressed   the   sisters'
    counterclaims and Valley's liability.      At the trial, in addition
    to Valley's representatives and the sisters, who testified about
    the history of the trust as set forth above, the parties presented
    testimony from experts.
    Richard Greenberg, a lawyer and certified public accountant,
    testified for the sisters as an expert in trust administration.
    He concluded that Valley breached its fiduciary duty as trustee
    by violating the retention clause of the trust agreement.                He
    cited the PIA, which grants the trust settlor the right to restrict
    the general duty to diversify as long as the settlor expressly
    provides for that restriction in the trust document.       As Greenberg
    explained, if a trustee believes the restriction is not in the
    best interests of the beneficiary, it should seek the consent of
    the beneficiary or apply to the court for approval to diversify.
    12                             A-0929-16T1
    John Langbein, a trust and estates law professor, who has
    trained bank trust officers and served on an advisory panel for
    the drafting of the Restatement (Third) of Trusts, testified for
    Valley as an expert in the standard of care applicable to a trustee
    and trust assets.      He stated that the trust portfolio was under-
    diversified because the stocks did not involve "a wide number of
    different   industries"       and   confining    the    portfolio    to       two
    securities was "capricious."         Valley had a "duty to diversify" in
    order to avoid the risk of "catastrophic loss." Langbein concluded
    that   Valley's   decision    to    diversify   was    "routine   good     trust
    administration."     Failure to do so, he stated, would have put
    Valley at risk of a breach of fiduciary duty by violating the duty
    to diversify.      He did not believe that a trust beneficiary was
    entitled to prior notice or to give its consent prior to the
    trustee diversifying because management of the trust lies with the
    trustee, and a beneficiary has "no voice in investment policy."
    Nor did he believe that Valley was under an obligation to seek
    court approval before diversifying because approval is for the
    trustee's   benefit,    not   the    beneficiaries'.       Nonetheless,         he
    believed it was highly likely that Valley would have received
    judicial approval.      He added that Valley's decision to seek the
    advice of outside counsel showed prudence, but that the advice
    provided was not conclusive because, as a general matter, a trustee
    13                                 A-0929-16T1
    could then "keep on shopping" until it found someone "willing to
    . . . do anything [it] wanted."
    Even if the diversification constituted a breach of fiduciary
    duty, Langbein believed that the breach was "innocuous" because
    it was done for the beneficiaries' and not Valley's, benefit.            In
    support, Langbein cited to the Restatement (Third) of Trusts § 95
    cmt. d (Am. Law Inst. 2012) "innocuous breach rule," which he
    explained was an "old principle of equity . . . that when the
    trustee has acted in a way that was not driven by trustee self
    interest [and] that was motivated by the effort to benefit the
    beneficiaries, . . . the court has the discretion not to find them
    liable. . . ."
    On April 28, 2016, Judge Hansbury issued an oral decision
    finding in favor of the sisters as to Valley's liability.              The
    judge first addressed the trust agreement and found that since its
    inception, the sisters owned the corpus. He then rejected Valley's
    contention that "because the Exxon stock and the AT&T stock
    morphed, . . . that . . . was in itself . . . a diversification
    which then permitted [Valley] to diversify as it chose. . . ."
    According to the judge, there was "not a shred of evidence" that
    the   stock   held   in   the   trust   after   the   various   corporate
    restructurings was "not substantially equivalent" to what was
    14                             A-0929-16T1
    originally held.      The judge stated while the stocks may have
    changed, it did not "trigger the right to simply diversify."
    Judge    Hansbury   turned   to    the    PIA    and   rejected      Valley's
    argument that the statute trumped the settlor's intent as expressed
    in the retention provision.            Quoting from one of our earlier
    unpublished decisions relied upon by Valley, Judge Hansbury found
    the opinion persuasive as to its statement that               "diversification
    of investments, N.J.S.A. 3B:2-11.4, . . . is a default rule that
    may be expanded, restricted, eliminated or otherwise altered by
    express provision of the trust agreement, N.J.S.A. 3B:20-11.2(b)."
    Next,    Judge   Hansbury    considered         Valley's       "standard     of
    conduct" and concluded it breached its duty to the sisters by not
    following the advice of its own attorneys to seek their approval
    or the court's approval before diversifying, and its failure to
    keep the sisters informed as to the status of the corpus.                       The
    judge relied upon the experts' testimony and the provisos of
    Restatement    (Third)   of   Trusts,     which      set    forth    a   trustee's
    obligation to keep a beneficiary reasonably informed.                    The judge
    found that "months, years went by and no information was provided"
    to the sisters.
    Judge    Hansbury    also    found       that    contrary      to    Valley's
    arguments, neither laches, equitable estoppel nor the sisters'
    conduct provided Valley with legitimate defenses to the sisters'
    15                                     A-0929-16T1
    counterclaims.     He stated that Valley unjustifiably delayed its
    preparation of the accounting and seeking court approval for four
    years following Enid's death.
    Judge Hansbury concluded that there was a breach of Valley's
    fiduciary duty, but he did not find that Valley acted in bad faith.
    The judge, therefore, found Valley liable to the sisters under
    that cause of action, but dismissed their claim for a violation
    of the covenant of good faith and fair dealing.
    The   judge   considered   counsels'    arguments   regarding   the
    valuation date to be applied in his calculation of damages based
    upon what the value of the portfolio should have been had the
    retention provision been honored compared to its actual value.
    The sisters contended the date was the day of the judge's decision.
    Valley argued it should be when the sisters knew or should have
    known about the retention provision.        It contended that the date
    Deborah filed the first estate tax return, or the commencement
    date of the estate litigation that Deborah participated in were
    appropriate dates for valuation because Deborah should have known
    about the retention clause at those times.       It also argued as an
    alternative, October 6, 2010, when Valley sent the waiver and
    release to Deborah and Sarah as the appropriate date.
    Judge Hansbury determined that the proper date for valuation
    of the stocks' value was May 2, 2008, when Valley sent the trust
    16                            A-0929-16T1
    agreement and portfolio value to the sisters.            He found that on
    that date, Deborah and Sarah had the "the trust agreement, they
    ha[d]    the    statements   that   they've   been   getting   for   several
    years[,]" and they first learned that the retention provision was
    not being followed.
    Trial on damages was held on June 13, 2016. After considering
    an in limine motion filed by Valley, Judge Hansbury granted the
    motion, barring the sisters from presenting any evidence regarding
    Valley not investing trust money held in Valley's Cash Management
    Fund.    The judge found that the sisters failed to present any
    evidence at the liability trial about Valley's failure to invest.
    At the ensuing damages trial, Michael Gould, a certified
    public accountant, testified for Valley and concluded that the
    estimated value of the trust assets, assuming that Valley had not
    diversified the portfolio, as of May 2, 2008 was $1,739,248, which
    was $520,692 more than the actual value of $1,218,556.                 Gould
    utilized the first quarter 2008 income taxes, $9606, actually paid
    by the trust in determining the hypothetical portfolio's after tax
    value.   He added:     "It's not necessarily related to any particular
    sale of securities.       It was just an estimate . . . ."       He denied
    that constituted double counting, adding for clarification:
    [W]hat   the  [$]9606   represents   are   the
    estimated income taxes for 2008 that were paid
    by the trustee in April of 2008. And we used
    17                              A-0929-16T1
    it as a reduction of the hypothetical
    portfolio on the basis that dividends . . .
    and interest would have been received by the
    trust and income taxes would have had to been
    paid   in   some     amount.      And    rather
    than . . . try    to    calculate   what    the
    hypothetical tax would have been, we just used
    the estimates that were paid. It was just an
    estimate. An imprecise estimate. . . .
    Joseph Matheson, a certified public accountant, testified on
    behalf of the sisters and concluded that the estimated value of
    the trust assets, assuming that Valley had not diversified the
    portfolio, as of May 2, 2008 was $1,833,306, which was $616,467
    more than the actual value of $1,216,839.     Matheson testified that
    he determined the share amount for the stocks by averaging the
    "daily high and the daily low on May 2nd" because the stocks
    "probably would have sold . . . sometime . . . during the day."
    Next, he stated that he "subtract[ed] the [capital gains] tax and
    then . . . added   the   net   proceeds"   that   totaled   $1,833,306.
    Matheson also admitted that Gould's report reflected $2600 of
    "dividends between Enid's death and May 2nd" that was missing from
    his calculations in his report, which increased the difference
    between the value of the hypothetical portfolio and the actual
    value by $619,897.
    On July 8, 2016, Judge Hansbury signed an order for judgment
    approving the accounting submitted by Valley through 2011, and
    entered judgment     against Valley    in favor of the sisters for
    18                            A-0929-16T1
    $520,548 based upon Gould's calculations. Attached to the judgment
    was a statement of reasons in which he identified September 2000
    as the date when Valley breached its agreement by selling trust
    assets.   He also concluded that consistent with Ray's intent as
    expressed in his agreement with Peoples, Valley was entitled to
    the income commissions expressed in the agreement as well as
    statutory corpus commissions under N.J.S.A. 3B:18-2.   Relying upon
    the court's holding in Babbitt v. Fidelity Trust Co., 
    72 N.J. Eq. 745
    (1907), he also concluded Valley was entitled to commissions
    even though it breached its fiduciary duty by diversifying because
    it did not do "anything 'willfully wrong.'"
    On August 31, 2016, Judge Hansbury signed an order awarding
    the sisters $57,423.08 in prejudgment interest from May 2, 2008,
    to July 8, 2016, denying the parties' cross-motions for counsel
    fees and Valley's application for corpus commissions from November
    1, 2010, to July 27, 2016.7   In his attached statement of reasons,
    the judge explained how he applied the Rules' provision for pre-
    judgment interest, see R. 4:42-11, for the period during which the
    sisters were deprived of their funds, which he identified as May
    7
    On September 20, 2016, Judge Hansbury signed an amended
    supplemental order of judgment reducing the amount of prejudgment
    interest awarded to $48,654.13, pursuant to N.J.S.A. 4:42-11(b).
    In support of the order, he issued a written decision, explaining
    in detail the error he made in its original calculation and showing
    how the corrected amount was calculated.
    19                          A-0929-16T1
    2, 2008 to July 8, 2016.    He turned to the parties' claims for
    counsel fees and rejected them.    As to Valley, he concluded it was
    not entitled to fees for defending itself, especially in light of
    his finding that it breached its fiduciary duty.        He rejected
    Valley's reliance upon the frivolous litigation statute, N.J.S.A.
    2A:15-59.1, and Rule 1:4-8 because the sisters prevailed on their
    claim and "frivolous litigation theories were not appropriate to
    examine . . . the basis of each claim to determine whether a
    particular claim was continued in good faith and not to harass a
    party in light of defendants' success."     Addressing the sisters'
    claim, Judge Hansbury relied upon his and the summary judgment
    motion judge's finding that Valley did not act in bad faith, and
    therefore the sisters did not "fit one of the exceptions" to the
    "American Rule which requires each party to pay its own counsel
    fees."
    The judge turned to Valley's entitlement to income and corpus
    commissions for the period from November 1, 2010 to July 26, 2016
    and rejected the claim.    The judge observed that "no management
    of the trust took place after Enid's death," citing to N.J.S.A.
    3B:17-3's requirement for the timely completion of an accounting,
    the inexplicable delay in Valley completing it by November 1,
    2010, and N.J.S.A. 3B:31-71 and N.J.S.A. 3B:31-84 for authority
    to reduce compensation due to a trustee "as a remedy for breach
    20                         A-0929-16T1
    of trust." Finally, the judge addressed claims arising from Valley
    not investing the trust corpus after November 30, 2011 and noted,
    as he had in response to Valley's motion in limine, that there was
    "[in]sufficient evidence" presented about the claim as it had not
    been "prosecuted."
    Deborah     filed   a   motion   for   reconsideration    that     Judge
    Hansbury denied on October 21, 2016.        In his written decision, the
    judge considered the applicable law, explained errors in Deborah's
    arguments regarding the effect of the summary judgment motion
    judge's order and his own order regarding commissions, and contrary
    to Deborah's arguments, that he had properly accounted for tax
    consequences in his calculation of damages.          On the same date, the
    judge signed an order discharging Valley as trustee and approved
    the final accounting.        This appeal followed.
    Our review of a trial court's fact-finding in a non-jury case
    is limited.     Seidman v. Clifton Sav. Bank, S.L.A., 
    205 N.J. 150
    ,
    169 (2011).     "The general rule is that findings by the trial court
    are binding on appeal when supported by adequate, substantial,
    credible evidence.       Deference is especially appropriate when the
    evidence   is    largely     testimonial    and   involves   questions       of
    credibility."     
    Ibid. (quoting Cesare v.
    Cesare, 
    154 N.J. 394
    , 411-
    12 (1998)).     The trial court enjoys the benefit, which we do not,
    of observing the parties' conduct and demeanor in the courtroom
    21                              A-0929-16T1
    and in testifying.       
    Ibid. Through this process,
    trial judges
    develop a feel of the case and are in the best position to make
    credibility assessments. 
    Ibid. We will defer
    to those credibility
    assessments unless they are manifestly unsupported by the record.
    Leimgruber v. Claridge Assoc., 
    73 N.J. 450
    , 456 (1977) (citing
    Fagliarone v. Twp. of N. Bergen, 
    78 N.J. Super. 154
    , 155 (App.
    Div. 1963)).      However, we owe no deference to a trial court's
    interpretation of the law, and review issues of law de novo.
    Mountain Hill, LLC v. Twp. Comm. of Middletown, 
    403 N.J. Super. 146
    , 193 (App. Div. 2008).
    On appeal, Valley first argues that Judge Hansbury did not
    satisfy    his   obligation   "to    find   the   facts   and   state     [his]
    conclusions of law" under Rule 1:7-4 because his decision was not
    based on facts in the record and his conclusions of law were
    inadequate.      Although couched in terms of the Rule, Valley's
    argument is in actuality that the judge "ignored salient facts in
    his finding of facts and issued patently erroneous conclusions of
    law."     We disagree.   As discussed infra, we conclude that Judge
    Hansbury's decision clearly set forth his reasons, was supported
    by substantial evidence in the record, and was legally correct.
    We turn to Valley's contention that Judge Hansbury misapplied
    the PIA by holding that the retention provision of the trust
    agreement took precedence over the PIA's mandate for a trustee to
    22                                 A-0929-16T1
    diversify.     We reject that contention and conclude the judge
    correctly applied the statute.
    The PIA mandates the diversification of investments.                   It
    states that "[a] fiduciary shall diversify the investments of the
    trust unless the fiduciary reasonably determines that, because of
    special circumstances, the purposes of the trust are better served
    without diversifying."      N.J.S.A. 3B:20-11.4.      Even outside of the
    PIA, "[d]iversification is a uniformally recognized characteristic
    of prudent investment and, in the absence of specific authorization
    to   do   otherwise,   a   trustee's    lack   of   diversification     would
    constitute a breach of its fiduciary obligations."           Robertson v.
    Cent. Jersey Bank & Trust Co., 
    47 F.3d 1268
    , 1274 n.4. (3rd Cir.
    1995).
    However, the PIA recognizes that despite the mandate, the
    grantor's intent controls and, if there is any doubt as to that
    intent, application should be made to the court.           It states:
    The prudent investor rule is a default rule
    that may be expanded, restricted, eliminated,
    or otherwise altered by express provisions of
    the trust instrument.     A fiduciary is not
    liable to a beneficiary to the extent that the
    fiduciary acted in reasonable reliance on
    those express provisions.      Nothing herein
    shall affect the jurisdiction of the Superior
    Court to order or authorize a fiduciary to
    deviate from the express terms or provisions
    of a trust instrument for the causes, in the
    manner, and to the extent otherwise provided
    by law.
    23                                 A-0929-16T1
    [N.J.S.A. 3B:20-11.2(b).]
    Applying to Ray's trust agreement the PIA and well settled
    requirements for ascertaining a trust's settlor's intent, see In
    re Trust of Duke, 
    305 N.J. Super. 408
    , 418 (Ch. Div. 1995), aff'd,
    
    305 N.J. Super. 407
    (App. Div. 1997),   it is beyond cavil that he
    directed Peoples, as trustee, to retain the stock he deposited and
    specifically insulated his trustee from liability against any
    claim being raised if it failed to diversify.    The provision did
    not make retention optional.   Compare 
    Robertson, 47 F.3d at 1271
    (where the trust instrument authorized but did not require the
    trustee to "retain, temporarily or permanently, any or all of the
    stock"); Americans for the Arts v. Ruth Lilly Charitable Remainder
    Annuity Trust #1, 
    855 N.E.2d 592
    , 595 (Ind. Ct. of App. 2006)
    (where the trust instrument stated "any investment made or retained
    by the trustee in good faith shall be proper despite any resulting
    risk or lack of diversification").
    Moreover, to the extent Valley believed that despite the
    retention provision, it would be better to diversify, it was
    obligated to seek authorization from the court before selling the
    trust's corpus.   N.J.S.A. 3B:20-11.2(b); Matter of Wold, 310 N.J.
    Super. 382, 387 (Ch. Div. 1998); see also Restatement (Second) of
    Trusts § 167(1) (1959) (stating that a court will deviate from the
    24                          A-0929-16T1
    express terms of the trust instrument "if owing to circumstances
    not known to the settlor and not anticipated by him compliance
    would defeat or substantially impair" the purpose of the trust).
    Notably, Valley's counsel explained these options to his client,
    but Valley chose to act at its own peril despite counsel's advice.
    Under these circumstances, we have no reason to question Judge
    Hansbury's legal conclusion regarding the impact of the PIA and
    Valley's obligation to retain the stock in Ray's trust.
    We    similarly      agree     with       Judge   Hansbury's    rejection     of
    Valley's related argument that the sisters' claims were barred by
    the     doctrine       of        laches,     equitable      estoppel,     avoidable
    consequences, or ratification because they had obtained sufficient
    knowledge by January 2001 when the 2000 statement reflecting its
    diversification was sent to Enid, and did not object to it for
    over    a    decade.        We   conclude     Valley's     arguments    are   without
    sufficient merit to warrant discussion in a written opinion.                         R.
    2:11-3(e)(1)(E).         We only observe that Judge Hansbury found that
    the sisters should have known about the retention provision in May
    2008 and his finding was based on credible evidence presented at
    the trial.        Moreover, his decision to reject defenses asserted by
    Valley were legally correct as they are "not regarded with favor
    where       the   parties    stand     in    a    confidential   relation[ship,]"
    Weisberg v. Koprowki, 
    17 N.J. 362
    , 378 (1955), and where a party's
    25                               A-0929-16T1
    actions have contributed to or caused the delay, its equitable
    claims will not be sustained.    See Rolnick v. Rolnick, 262 N.J.
    Super. 343, 364 (App. Div. 1993).
    Valley also contends that the passive changes to the trust's
    stocks that occurred as a result of the AT&T "spin offs" and the
    merger of Exxon and Mobile voided the retention provision.         We
    disagree and again conclude that Valley's contentions on appeal
    are without merit.    We agree with Judge Hansbury's finding that
    there was absolutely no evidence that the stocks that resulted
    from the spinoffs or the merger were substantially different than
    the original stocks deposited by Ray into the trust.   "[N]ew stock
    [issued] as a result of a merger, reorganization or other cause"
    is treated as the same stock as the old "if the new stock is the
    equivalent or substantially the equivalent of the old."   Fidelity
    Union Trust Co. v. Cory, 
    9 N.J. Super. 308
    , 312 (Ch. Div. 1950);
    see also Restatement (Second) of Trusts § 231 cmt. f (1959).     The
    new shares are considered substantially equivalent to the original
    shares in companies if the resulting companies are conducting
    business that is of the same nature as the original companies.
    See 
    Fidelity, 9 N.J. Super. at 313
    ; In re Estate of Riker, 
    124 N.J. Eq. 228
    , 231-32 (Prerog. Ct. 1938), aff'd o.b., 
    125 N.J. Eq. 349
    (E. & A. 1939).    There was no evidence that the Bell stocks
    26                          A-0929-16T1
    or ExxonMobile represented any substantial change in the nature
    of the portfolio.
    Contrary to Valley's contention that Judge Hansbury should
    have taken judicial notice under N.J.R.E. 201 of the fact that the
    "[n]ew [c]ompanies were wholly unrelated" to their predecessors,
    that fact, even if judicially noticeable, did not satisfy Valley's
    burden to demonstrate a substantial change in the stocks subject
    to the retention clause.   That evidence, as Valley points out in
    its discussion of Mertz v. Guaranty Trust Co. of N.Y., 
    247 N.Y. 137
    , 139-4 (N.Y. 1928), must establish that the "identity and
    substance" of the original shares were "destroyed."      Here, there
    was no such evidence.
    Next, we address Valley's contention that even if it breached
    its fiduciary duty to the sisters, it did so in good faith and
    should, therefore, be excused from paying any damages under the
    "innocuous breach" doctrine.   The doctrine is an exception to the
    general rule that a trustee shall be held liable for a loss it
    causes by failing to adhere to the trust instrument without
    judicial sanction, even if it acts in good faith.     See Conover v.
    Guarantee Trust Co., 
    88 N.J. Eq. 450
    , 458 (Ch. 1917), aff'd o.b.,
    
    89 N.J. Eq. 584
    (E. & A. 1918).      A court can invoke the doctrine
    "[i]f [it] concludes that . . . it would be unfair or unduly harsh
    to require the trustee to pay, or pay in full . . . ." Restatement
    27                           A-0929-16T1
    (Third) of Trusts § 95 cmt. d (Am. Law Inst. 2012).                     "Ordinarily,
    such relief would be based on a finding that the trustee had made
    a conscientious effort to understand and comply with applicable
    fiduciary standards and the duties of the trusteeship."                           
    Ibid. When determining whether
    to relieve the trustee of liability, a
    court    must   consider   "whether         the    trustee     was   aware      of   the
    availability      (in      an        appropriate          situation)       of     court
    instruction . . .       and,    if    so,   the    reasons     for   the    trustee's
    decision not to seek instruction."                
    Ibid. Applying these guiding
    principles here, we conclude there was
    ample evidence in the record to establish that Valley was aware
    from    its   counsel's    advice      about      the     wisdom   of   seeking      the
    beneficiaries' or the court's approval before deviating from the
    retention provision.        Yet, there was no evidence explaining why
    Valley chose to ignore that advice.                 Under these circumstances,
    we see no reason for the application of the doctrine either to
    relieve Valley from liability for damages, or, as Valley also
    argued, for pre-judgment interest.
    We also disagree with Valley's contention that Judge Hansbury
    improperly denied it additional corpus commissions for the period
    from November 2010 through July 2016.               In support of its argument,
    Valley relies upon In re Armour's Will, 
    61 N.J. Super. 50
    , 57
    (App. Div.), rev'd on other grounds, 
    33 N.J. 517
    (1960), a case
    28                                     A-0929-16T1
    that addressed commissions on income, not corpus commissions.                 We
    find its reliance inapposite.           There, in reversing our decision
    to approve an executor/trustee receiving double income commissions
    based on its dual capacity, the Supreme Court stated that in
    determining entitlement to commissions, a court should look to the
    service performed.       It stated that commissions should be paid when
    a   trustee   "h[e]ld,    manage[d]     and   invest[ed] . . . assets       and
    pa[id] over the income thereon as well as the principal to the
    specified beneficiary."        In re Armour's Will, 
    33 N.J. 517
    , 524
    (1960).    In denying commissions here, Judge Hansbury did just that
    when he determined Valley was not entitled to such commissions
    because it was "clear that no management of the trust took place
    after Enid's death."        Moreover, N.J.S.A. 3B:31-71(b)(8) permitted
    the judge to deny compensation to Valley for its "breach of trust."
    There was no error in denying the commissions.
    We   next   address    Valley's      challenge   to   Judge   Hansbury's
    finding that May 2, 2008 was the proper date for valuation of the
    trust for the purpose of calculating damages.                 We review the
    determinations for an abuse of discretion, see Musto v. Vidas, 
    333 N.J. Super. 52
    , 64 (App. Div. 2000), and find none.
    Here, Judge Hansbury rejected Valley's contention that the
    proper date should have been as early as 2000, when Valley began
    to diversify and its actions were disclosed in statements sent to
    29                               A-0929-16T1
    Enid and later to Deborah.   In his oral decision, Judge Hansbury
    explained why the earlier date was not appropriate and why he
    relied upon the May 2008 date. The judge's findings were supported
    by the record and his determination of the date was consistent
    with principles of fairness and justice.    Graziano v. Grant, 
    326 N.J. Super. 328
    , 342 (App. Div. 1999).
    In sum, as to Valley's contentions, we conclude neither the
    PIA nor any of the sisters' actions, as argued by Valley, warrant
    our interference with the outcome in this matter as to Valley's
    liability or the damages assessed against it by the judge.    To the
    extent we have not specifically addressed any of Valley's remaining
    arguments, we find them to be without sufficient merit to warrant
    discussion in a written opinion. R. 2:11-3(e)(1)(E).
    Turning to the cross-appeals filed by the sisters, we begin
    by rejecting their argument that the stock portfolio's valuation
    date should have been the date of the judge's final "decree" for
    the same reason we rejected Valley's contention about an earlier
    date being used.   We find the sisters' reliance on the opinion in
    the New York case of In the Estate of Rothko, 
    401 N.Y.S.2d 449
    ,
    455-56 (N.Y. 1977), to be inapposite.      In that case, the court
    held an executor, who ignored a testamentary direction that certain
    paintings be retained, liable for the value of paintings he sold
    as of the date of judgment to account for "appreciation damages"
    30                           A-0929-16T1
    between the date of sale and the date of judgment.                      Here, as to
    the stock portfolio, the judge's use of the May 2008 date and his
    award of pre-judgment interest fully compensated Deborah and Sarah
    for their loss, including any rise in the portfolio's value had
    the stocks been retained.           We are satisfied the court's award
    properly compensated them for loss of money that rightfully should
    have been turned over to them upon Enid's death, after taking into
    consideration their failure to take action for a period of four
    years after they learned of Valley's breach.                     Penpac, Inc. v.
    Passaic Cty. Util. Auth., 
    367 N.J. Super. 487
    , 504 (App. Div.
    2004).    Their contentions to the contrary are without any merit.
    We turn next to Sarah's argument that all or part of the
    commissions Judge Hansbury and the summary judgment motion judge
    awarded to Valley should be reversed because Valley violated the
    retention    provision   and    performed     in   a   materially         deficient
    manner.     Sarah claims that Valley was not entitled to corpus
    commissions under N.J.S.A. 3B:18-14 based upon Ray's fee agreement
    with   Peoples,   as   well    as   Peoples   choosing      to    not    take    such
    commissions.
    In granting summary judgment to Valley on the question of
    corpus    commissions,   the    motion     judge   stated    that       Valley   was
    "entitled to its corpus commissions, because in the absence of any
    expressed commission, N.J.S.A. 3B:18-2 clearly provides that those
    31                                    A-0929-16T1
    commissions be allowed."      With respect to income commissions, he
    held that Valley was bound by the five percent commission set
    forth in the fee agreement.     Later, in response to Valley's motion
    in limine to exclude evidence regarding the corpus commissions,
    Judge Hansbury granted the motion relying upon the motion judge's
    determination with which Judge Hansbury independently agreed.
    Ultimately, Judge Hansbury awarded Valley corpus commissions from
    August 13, 1993 to May 2, 2008, totaling $80,181, after concluding
    that Valley did not do anything "willfully wrong."           We agree with
    both judges.
    "The   allowance   of   corpus   commissions   is   a   discretionary
    determination which will not be disturbed unless there has been
    an abuse of discretion[,]" or "the court did not utilize 'the
    proper legal approach[.]'"      In re Estate of Summerlyn, 327 N.J.
    Super. 269, 272 (App. Div. 2000).
    N.J.S.A. 3B:18-2 provides:
    On the settlement of the account of a
    nontestamentary    trustee,   as    defined   in
    N.J.S.A. 3B:17-9, the court shall allow him
    the compensation as may have been agreed upon
    by the instrument creating the trust; and in
    the   absence   of    any   express    provision
    concerning compensation, shall allow him
    commissions in accordance with this chapter.
    [(Emphasis added).]
    32                               A-0929-16T1
    Here, it was undisputed that the fee agreement between Ray
    and Peoples was silent about the trustee's entitlement to a corpus
    commission and there was no agreement with Valley.     Both judges
    properly applied the statute and permitted Valley to recover those
    commissions.   Valley's entitlement to a corpus commission was not
    altered by Peoples' earlier decision to forgo payment of those
    commissions because Valley as successor trustee was not bound by
    Peoples' decision.   See, e.g., In re Loree's Trust Estate, 24 N.J.
    Super. 604, 607 (Ch. Div. 1953) (noting that a court must allow
    compensation to a successor trustee where there are no express
    terms regarding compensation, entitling successor trustee to the
    commissions set forth by statute).
    Finally, the sisters argue that even if Valley was entitled
    to claim a commission, its request should have been denied or at
    least reduced, due to its "materially deficient performance,"
    N.J.S.A. 3B:18-14,8 including violation of the retention clause,
    8
    The statute states in relevant part:
    Such commissions may be reduced by the court
    having jurisdiction over the estate only upon
    application    by   a   beneficiary   adversely
    affected upon an affirmative showing that the
    services rendered were materially deficient or
    that the actual pains, trouble and risk of the
    fiduciary   in    settling   the  estate   were
    substantially less than generally required for
    estates of comparable size.
    33                          A-0929-16T1
    filing improper capital gains tax returns, and holding money un-
    invested in a bank account.     We find this contention to be without
    sufficient   merit   to   warrant    further   discussion   in   a   written
    opinion. R. 2:11-3(e)(1)(E).         We only observe that there was no
    finding that while Valley acted as trustee it performed in a
    materially deficient manner.        Cf. In re Will of Landsman, 319 N.J.
    Super. 252, 275 (App. Div. 1999) (undue influence banned executor
    from receiving commissions).        To the extent it failed to honor the
    retention clause, Judge Hansbury adjusted Valley's compensation
    and awarded damages against it for its breach.
    Contrary's to Deborah's next argument, we also discern no
    abuse of the judge's discretion, see Magnet Res., Inc. v. Summit
    MRI, Inc., 
    318 N.J. Super. 275
    , 297 (App. Div. 1998), in not
    permitting the sisters to present evidence at the damages trial
    related to Valley's failure to invest the money it held in its
    Cash Management Fund.      "The evidence [they sought to introduce]
    obviously was not newly discovered" and "had been in the hands of
    the" sisters prior to the liability trial, but they did not present
    it when given the opportunity.       Henry Clay v. City of Jersey City,
    
    84 N.J. Super. 9
    , 18 (App. Div. 1964).         Under these circumstances,
    Judge Hansbury properly ruled it was too late.
    [N.J.S.A 3B:18-14].
    34                              A-0929-16T1
    Deborah also challenges the summary judgment motion judge's
    determination that the sisters' claim about Valley negligently
    utilizing a cost basis, rather than stepped-up basis, in its
    capital gains tax filings was not cognizable in the probate
    litigation.    We conclude that while Deborah correctly states the
    claim   was   cognizable    because   it   related   to   a   breach   of   the
    fiduciary's duty, see In re Estate of Lash, 
    169 N.J. 20
    , 27 (2001);
    F.G. v. MacDonell, 
    150 N.J. 550
    , 564 (1997), the motion judge's
    error was harmless.        R. 2: 10-2.     We are satisfied that9 because
    the sisters were able to cross examine Grudelski during the
    liability trial about Valley's choice of basis as part of their
    breach of fiduciary duty claim, they suffered no prejudice as a
    9
    In granting Valley summary judgment on the negligence
    counterclaim, the summary judgment motion judge stated that
    "compensatory damage-type award[s]," such as negligence, are
    usually not permitted in a Probate Part proceeding. Rather, such
    claims are encompassed in breach of fiduciary duty claims.
    Valley's "liability, if any, will be based on a breach of fiduciary
    duty and/or implied covenant of good faith and fair dealing, not
    on a theory of negligence or conversion." As noted earlier, breach
    of fiduciary duty is a tort theory. 
    Lash, 169 N.J. at 27
    . As a
    result, a fiduciary may be held liable for harm resulting from a
    breach of the duties imposed by the fiduciary relationship, and
    damages may be awarded as a result of that breach. Ibid.; 
    F.G., 150 N.J. at 564
    .    Therefore, the summary judgment judge was in
    error by concluding that a negligence claim and a breach of
    fiduciary claim were unrelated theories of recovery, and by
    dismissing defendants' negligence claim, in which they sought to
    recover for the payment of unnecessary capital gains tax, on
    summary judgment on that basis.
    35                               A-0929-16T1
    result of the judge's error, especially in light of the sisters'
    success on that claim.
    Deborah      also   maintains     that   Judge   Hansbury      erred    by
    accepting Gould's use of the trust's actual 2008 tax payments in
    determining the estimated taxes for that year in the hypothetical
    describing the result had the stock been retained.                  She claims
    that the damages award should be increased by $8024 to account for
    Gould's error.     We disagree.
    Gould included $9606 in his hypothetical as the estimated
    taxes that the trustee paid in April 2008.                  He used it as an
    estimate of income tax that would have been due on interest and
    dividends received by the trust had the stocks been retained.10
    Judge Hansbury, as the factfinder, was free to accept or reject
    Gould's   expert    testimony,    in   whole   or   part.     See   Torres    v.
    Schripps, Inc., 
    342 N.J. Super. 419
    , 430-31 (App. Div. 2001); City
    of Long Branch v. Liu, 
    203 N.J. 464
    , 491 (2010).                Moreover, we
    discern no error, as argued by Deborah, in Gould's accounting for
    the 2008 taxes actually paid on the sale of stock in his estimate.
    10
    The fact that the amount coincided with the capital gains tax
    on the early 2008 sale of Comcast and Exxon shares did not
    constitute double counting since Gould was using the figure as an
    estimate of taxes due on the interest and dividends received by
    the trust in the hypothetical scenario where the stock had been
    retained in the trust.
    36                              A-0929-16T1
    Finally,    Deborah    contends     that    Valley    should   reimburse
    Sarah's counsel fees, an argument not raised by Sarah in her cross-
    appeal.   She    argues    that   Valley's      failure   to   adhere   to   the
    retention provision and its failure to follow its attorney's advice
    established the bad faith that Judge Hansbury refused to find when
    he denied the sisters' fee application.           We disagree.
    The decision whether to award counsel fees rests within the
    sound discretion of the trial court.         Maudsley v. State, 357 N.J.
    Super. 560, 590 (App. Div. 2003). When exercising that discretion,
    courts must be cognizant of New Jersey's strong public policy
    against the shifting of counsel fees and our adherence to the
    "American Rule," which prohibits recovery of counsel fees by the
    prevailing party against the losing party,           In re Niles Trust, 
    176 N.J. 282
    , 293-94 (2003), unless authorized by statute or rule.
    See Rule 4:42-9; In re Estate of Vayda, 
    184 N.J. 115
    , 120 (2005).
    "[L]imited exceptions" have been created in the interest of equity
    in those instances involving claims against an attorney, or when
    an executor or trustee have acted in bad faith such as by acting
    in self-interest or committing "the pernicious tort of undue
    influence."     
    Id. at 122-23;
    Niles, 176 N.J. at 298
    ; see also In
    re Estate of Stockdale, 
    196 N.J. 275
    , 308 (2008) (the tort of
    undue influence is available where breach of fiduciary would be
    inadequate).
    37                                  A-0929-16T1
    Judge Hansbury properly determined that Valley did nothing
    to promote its self-interest by diversifying, and acted in what
    it believed was the beneficiaries' best interests.                    We conclude
    therefore that he properly denied the sisters' fee application and
    we reject Deborah's arguments to the contrary.
    In sum, despite the sisters' arguments to the contrary, we
    conclude   that     all   of   Judge    Hansbury's        determinations       were
    supported by credible evidence and legally correct.               To the extent
    that the summary motion judge erred, we find no harmful error.
    Finally, to the extent we have not specifically addressed any of
    their   remaining    arguments,   we        find   them   to   also   be   without
    sufficient merit to warrant discussion in a written opinion. R.
    2:11-3(e)(1)(E).
    Affirmed.
    38                                  A-0929-16T1