In the Matter of the Estate of Aurelia Defrank , 433 N.J. Super. 258 ( 2013 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-4622-11T2
APPROVED FOR PUBLICATION
November 15, 2013
IN THE MATTER OF THE
APPELLATE DIVISION
ESTATE OF AURELIA DEFRANK,
DECEASED.
Submitted October 15, 2013 – Decided November 15, 2013
Before Judges Parrillo, Harris and Guadagno.
On appeal from the Superior Court of New
Jersey, Chancery Division, Probate Part,
Mercer County, Docket No. 09-01870.
Hinkle, Fingles & Prior, P.C., attorneys for
appellant Lorraine Rubaltelli (Eileen W.
Siegeltuch, of counsel and on the briefs).
Wells & Singer, LLC, attorneys for respondent
Diane DiDonato (Jonas Singer, of counsel and
on the brief).
The opinion of the court was delivered by
PARRILLO, P.J.A.D.
Plaintiff Lorraine Rubaltelli appeals from the April 12,
2012 grant of summary judgment in favor of defendant Diane
DiDonato, the executor of the estate of their mother, Aurelia
DeFrank, holding that certain joint accounts in the names of
decedent and defendant are non-probate assets governed by the
Multiple-Party Deposit Account Act (MPDA), N.J.S.A. 17:16I-1 to
-17, and that upon decedent's death, the accounts passed outside
of probate by survivorship to defendant. That same order denied
plaintiff's cross-motion for summary judgment claiming the
existence of a confidential relationship between decedent and
defendant, and that at the time she established the joint
accounts, decedent did not intend to create survivorship rights
in defendant. For the following reasons, we reverse and remand.
Because this matter comes to us essentially from the motion
court's grant of summary judgment in favor of defendant (the
prevailing moving party), we view the evidence in the light most
favorable to plaintiff. Polzo v. Cnty. of Essex, 209 N.J. 51,
56 n.1 (2012).
The parties are sisters and decedent's only children.
Aurelia DeFrank died on August 18, 2009, her husband having
predeceased her in 1987. Decedent's last Will dated March 21,
2002, and admitted to probate on December 28, 2009, named
defendant as executor of her estate. Like her previous wills,
decedent distributed her estate between her daughters and
grandchildren, making specific provisions for the two
grandchildren and, with the exception of her personal property
devised to defendant, dividing the rest of her assets equally
between her daughters.
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It is estimated that the parties will each inherit
approximately $700,000 from their mother's estate. That amount
does not include the monies in twelve multi-party bank accounts
titled jointly in the names of Aurelia DeFrank and defendant,
totaling $259,407, which are the subject of this litigation.
The funds in these joint accounts, if included in decedent's
estate, would constitute about sixteen percent of its total
value.
These accounts were created by decedent between 1980 and
2001. Although jointly titled, decedent alone contributed funds
to the accounts during her lifetime and all of the account
statements were mailed only to her. Decedent paid the taxes on
all income earned on the accounts and had the right at any time
to withdraw the funds or change the designation.
The accounts were created generally as either checking,
savings, money market or certificates of deposit. Of the
thirteen bank accounts, it appears decedent primarily used a
checking account at Roma Bank to pay bills and for other
purposes. Funds from other accounts were at times transferred
into the Roma Bank checking account. Sometime after 2000, when
decedent's vision began to deteriorate, defendant would write
out checks from the Roma account for decedent to sign.
According to plaintiff, pursuant to a Power of Attorney (POA)
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decedent executed in 1991 and again in 2002 naming defendant as
her attorney-in-fact, defendant would from time to time from
June 2005 up to decedent's death, either assist her mother with
banking transactions, or directly withdraw, transfer, deposit or
gift funds from the joint accounts.
At the time of decedent's death, plaintiff was living in a
separate apartment in her mother's two-family residence, having
returned with her son to New Jersey in 1993 from Italy, where
she had earned a medical degree and had been living with her
husband until their divorce. Plaintiff, however, did not pay
rent to her mother. Defendant, on the other hand, settled in
the same area as decedent upon her graduation from an out-of-
state college, married and had a daughter.
After decedent's Will was probated on December 28, 2009, a
dispute arose between the sisters prompting plaintiff to file a
complaint in the Chancery Division, Probate Part, to compel an
accounting of their mother's estate. As executor of the estate,
defendant provided an informal accounting. During the ensuing
discovery, plaintiff learned, supposedly for the first time, of
the joint bank accounts upon receipt of the estate tax returns,
although later in depositions, she states that decedent had told
her about the accounts. In any event, following discovery, the
parties filed cross-motions for summary judgment.
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In her summary judgment motion, defendant contended that
the joint accounts in the names of decedent and defendant are
non-probate assets subject to the MPDA, and that upon decedent's
death, the accounts became defendant's sole property and not
part of decedent's estate. As proof of decedent's intent,
defendant pointed to the fact that plaintiff had lived rent-free
in decedent's home for a substantial amount of time and upon
their father's death, had alone received joint bank accounts
that passed outside of his Will.1
In her cross-motion for summary judgment, plaintiff
disputed decedent's intent and maintained that she created the
joint bank accounts solely for convenience purposes, namely
to have someone else on the accounts in the event decedent could
not access them due to medical or other issues, and in fact, had
used these accounts during her lifetime to pay routine expenses
as well as make gifts equally to both parties for tax purposes.
In further support of her position, plaintiff pointed to
decedent's history of equal treatment of both daughters during
her lifetime. Furthermore, plaintiff maintained that defendant
shared a confidential relationship with decedent and that,
1
Plaintiff denies receipt of funds in an amount comparable to
that of the accounts titled in the names of decedent and
defendant, but admits receiving at least one Vanguard joint
money market account established by her father.
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because defendant has not rebutted the presumption of undue
influence, the MPDA does not control and the accounts belong to
the estate.
Following argument, the probate judge denied plaintiff's
motion for summary judgment and granted defendant's. The judge
found that decedent intended to create survivorship rights in
defendant to the disputed bank accounts, which are governed by
the MPDA and therefore pass outside of probate to defendant.
Additionally, the judge determined that no confidential
relationship existed between decedent and defendant at the time
the accounts were created.
This appeal follows, in which plaintiff argues that the
court erred in granting defendant's motion for summary judgment
and in denying hers because she proved by clear and convincing
evidence that decedent did not intend to create a right of
survivorship in the joint bank accounts in issue. We conclude
that neither plaintiff nor defendant was entitled to summary
judgment on account of disputed facts concerning decedent's
state of mind and the nature of her relationship with the
parties.
On appeal, we review the matter de novo and apply the same
standard as the trial court in determining whether summary
judgment is appropriate. Khadelwal v. Zurich Ins. Co., 427 N.J.
6 A-4622-11T2
Super. 577, 585 (App. Div.), certif. denied, 212 N.J. 430
(2012); Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J.
Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608
(1998). Summary judgment must be granted if "the pleadings,
depositions, answers to interrogatories and admissions on file,
together with the affidavits, if any, show that there is no
genuine issue as to any material fact challenged and that the
moving party is entitled to a judgment or order as a matter of
law." R. 4:46-2(c); Brill v. Guardian Life Ins. Co. of Am., 142
N.J. 520, 540 (1995). The "essence of the inquiry" is "'whether
the evidence presents a sufficient disagreement to require
submission to a jury or whether it is so one-sided that one
party must prevail as a matter of law.'" Brill, supra, 142 N.J.
at 536 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242
251-52, 106 S. Ct. 2505, 2512, 91 L. Ed. 2d 202, 214 (1986)).
There is a genuine issue of material fact only if the evidence
presented "when viewed in the light most favorable to the non-
moving party, [is] sufficient to permit a rational factfinder to
resolve the alleged disputed issue in favor of the non-moving
party." Brill, supra, 142 N.J. at 540. The Brill Court
explained the process:
Of course, there is in this process a kind
of weighing that involves a type of
evaluation, analysis and sifting of
evidential materials. This process,
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however, is not the same kind of weighing
that a factfinder (judge or jury) engages in
when assessing the preponderance or
credibility of evidence. On a motion for
summary judgment the court must grant all
the favorable inferences to the non-movant.
But the ultimate factfinder may pick and
choose inferences from the evidence to the
extent that "a miscarriage of justice under
the law" is not created.
[Id. at 536.]
Apropos here, "[c]ross motions for summary judgment do not
preclude the existence of issues of fact." O'Keeffe v. Snyder,
83 N.J. 478, 487 (1980). Thus, generally, cross motions do not
"'obviate a plenary trial of disputed issues of fact, where such
exists; nor do cross-motions constitute a waiver by the
litigants to such a trial.'" Ibid. (quoting Rotwein v. Gen.
Accident Grp., 103 N.J. Super. 406, 425 (Law Div. 1968)).
It is ordinarily improper to grant summary judgment when a
party's state of mind, intent, motive or credibility is in
issue. Mayo, Lynch & Assocs., Inc. v. Pollack, 351 N.J. Super.
486, 500 (App. Div. 2002); G & W, Inc. v. Bor. of E. Rutherford,
280 N.J. Super. 507, 514 (App. Div. 1995); Valley Nat'l Bank v.
P.A.Y. Check Cashing, 378 N.J. Super. 406, 421 (Law Div. 2004),
aff'd o.b., 378 N.J. Super. 234 (App. Div. 2005); Pressler,
Current N.J. Court Rules, comment on 2.3.4 on R. 4:46-2 (2014).
In Shebar v. Sanyo Bus. Sys. Corp., 111 N.J. 276, 290-92 (1988),
the Court reversed a summary judgment order when the issue was
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whether plaintiff had waived his claims; the Court reasoned that
whether plaintiff intended a waiver was a genuine fact issue.
In G & W, supra, 280 N.J. Super. at 514, an anti-trust case, we
said that summary judgment was not appropriate because motive
and intent were in issue. In Duerlein v. N.J. Auto. Full Ins.
Underwriting Ass'n, 261 N.J. Super. 634, 642 (App. Div. 1993),
an insurance case, this court concluded that the trial judge
erred in "summarily conclud[ing] that [the defendant-insurance
company] was guilty of bad faith."
Indeed, "[t]he cases are legion that caution against the
use of summary judgment to decide a case that turns on the
intent and credibility of the parties." McBarron v. Kipling
Woods, L.L.C., 365 N.J. Super. 114, 117 (App. Div. 2004). In
Judson v. Peoples Bank & Trust Co., 17 N.J. 67, 76 (1954), the
Court set a high standard for summary judgment where intent is
involved, noting
Where, as here, the opposing party
charges the moving party with willful fraud
and must probe the conscience of the moving
party (or its officers, when, as here, a
corporation) to prove his case, or in any
case where the subjective elements of
willfulness, intent or good faith of the
moving party are material to the claim or
defense of the opposing party, a conclusion
from papers alone that palpably there exists
no genuine issue of material fact will
ordinarily be very difficult to sustain.
[Ibid.].
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Thus, it is clear that questions of a party's state of mind,
knowledge, intent or motive should not generally be decided on a
summary judgment motion. Garden St. Bldgs. v. First Fid. Bank,
305 N.J. Super. 510, 527 (App. Div. 1997), certif. denied, 153
N.J. 50 (1998).
And lastly, where there is no dispute of material fact, we
must then look to the motion court's ruling on the law.
Walker v. Atl. Chrysler Plymouth, 216 N.J. Super. 255, 258 (App.
Div. 1987). Of course, the "'trial court's interpretation of
the law and the legal consequences that flow from established
facts are not entitled to any special deference[.]'" McDade v.
Siazon, 208 N.J. 463, 473 (2011) (quoting Estate of Hanges v.
Metro. Prop. & Cas. Ins. Co., 202 N.J. 369, 382 (2010));
Manalapan Realty v. Manalapan Twp. Comm., 140 N.J. 366, 378
(1995).
Governed by these standards, we turn first to the
applicable law. Under the MPDA, during the lifetime of all
parties, a joint account belongs to the parties "in proportion
to the net contributions by each to the sums on deposit," unless
the terms of the contract indicate a contrary intent or there is
clear and convincing evidence of a different intent at the time
the account was created. N.J.S.A. 17:16I-4(a). During her
lifetime Aurelia DeFrank owned all of the money in the accounts
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at issue because she deposited all of the money contributed to
them.
However, when a party to a joint account dies, there is a
rebuttable presumption that a right of survivorship was created.
N.J.S.A. 17:16I-5(a) provides:
Sums remaining on deposit at the death of a
party to a joint account belong to the
surviving party or parties as against the
estate of the decedent unless there is clear
and convincing evidence of a different
intention at the time the account is
created.
[(Emphasis added).]
As noted, the statutory presumption is rebuttable, and may
be overcome with evidence showing that undue influence was used
in the creation of the joint accounts, or that the accounts were
solely for the convenience of the depositor. See Sadofski v.
Williams, 60 N.J. 385 (1972) (holding that the accounts had been
created for convenience purposes, to enable decedent's daughter
to help manage her financial affairs, and that there was no
intent to create survivorship rights); In re Estate of Penna,
322 N.J. Super. 417, 428-29 (App. Div. 1999) (finding no intent
to create survivorship rights when one of the children handled
financial transactions for the decedent, who had been living in
another state, and decedent had shown "evenhanded" treatment of
her children both during her life and in her Will); Bronson v.
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Bronson, 218 N.J. Super. 389, 394 (App. Div. 1987) ("[J]oint
accounts are also sometimes used as 'convenience accounts,' so
that another party may more easily handle the financial affairs
of the true owner of the [account].").
A challenge based on undue influence may be made by showing
that the survivor had a confidential relationship with the party
who established the account. Under this approach,
[I]f the challenger can prove by a
preponderance of the evidence that the
survivor had a confidential relationship
with the donor who established the account,
there is a presumption of undue influence
which the surviving donee must rebut by
clear and convincing evidence.
[Estate of Ostlund v. Ostlund, 391 N.J.
Super. 390, 401 (App. Div. 2007).]
Although perhaps difficult to define, the concept "encompasses
all relationships 'whether legal, natural or conventional in
their origin, in which confidence is naturally inspired, or, in
fact, reasonably exists.'" Pascale v. Pascale, 113 N.J. 20, 34
(1988) (internal citation omitted). And while family ties alone
may not qualify, parent-child relationships have been found to
be among the most typical of confidential relationships.
Ostlund, supra, 391 N.J. Super. at 401. "Where parties enjoy a
relationship in which confidence is naturally inspired or
reasonably exists, the person who has gained an advantage due to
that confidence has the burden of proving that no undue
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influence was used to gain that advantage[,]" In re Estate of
Penna, supra, 322 N.J. Super. at 423, and that the depositor-
decedent understood the consequences of the transaction.
Bronson, supra, 218 N.J. Super. at 392.
Thus, where a confidential relationship exists between a
defendant and her mother, a defendant has the burden of showing
that she did not use undue influence and that her mother
understood the legal effect of the transfer of assets into joint
accounts, namely that her assets would pass to defendant rather
than in accordance with the terms of her Will. Undue influence
has been described as "that sort of influence that prevents the
person over whom it is exerted 'from following the dictates of
his own mind and will and accepting instead the domination and
influence of another.'" Pascale, supra, 113 N.J. at 30
(internal citations omitted). "Even if no undue influence is
found, a trial judge should still be free to look at all the
direct and circumstantial evidence available to determine
whether the depositor intended to create survivorship rights."
Penna, supra, 322 N.J. Super. at 427.
Governed by these principles, we are convinced that the
motion judge's dismissal of plaintiff's case must be reversed.
Despite the dearth of proof as to the actual creation of the
accounts, there is circumstantial evidence from which a
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factfinder could reasonably find that the joint accounts were
established for decedent's convenience during her lifetime and
that she shared a confidential relationship with defendant,
sufficient at the very least to raise genuine issues of fact as
to both.
As to the former, plaintiff asserts her mother included
defendant on the accounts out of an abundance of caution to
ensure access to funds during her lifetime. While plaintiff's
self-serving representation may be insufficient in itself to
raise a factual dispute as to decedent's true intention, the
actual use of these accounts by decedent and defendant tends to
support plaintiff's claim. There is evidence — much of it in
fact undisputed — that decedent used the funds in these joint
accounts to pay her own expenses and to make gifts to both her
daughters and grandchildren, a pattern and practice continued by
defendant when she began handling her mother's financial
affairs. There is further evidence that these inter vivos gifts
to the parties and their children were in equal amounts as were,
for the most part, decedent's testamentary dispositions2 —
circumstantial proof from which decedent's intention to provide
for her daughters equally upon her death may be inferred. Of
2
The residuary clause of decedent's Will provides: "I give the
residue of my estate, whether real, personal or mixed, in equal
shares to my children."
14 A-4622-11T2
course, such an established pattern of equal treatment to the
two children runs counter to the assumption that decedent
intended to give one daughter well over $250,000 more than the
other, representing sixteen percent of her overall estate.
There is also evidence that defendant and her mother shared
a confidential relationship. By all accounts, defendant had
more in common with decedent than did plaintiff. Defendant
herself describes her relationship with her mother as "very
close" and states it "became even closer" after her father's
death. Defendant transported her mother to doctor's visits, the
supermarket and social outings on weekends, and visited with her
on a daily basis.
More significantly, there is evidence suggesting decedent
trusted defendant with her financial affairs, having named
defendant as her attorney-in-fact in two POAs executed in 1991
and 2002, and as executor of her Will. In fact, defendant
acknowledged often driving her mother to the bank and assisting
her in financial transactions, and further explained that she
regularly transferred funds from decedent's bank accounts and
wrote out checks for her mother to sign. In this regard, there
is documentary proof of at least twelve incidents from June 2005
through decedent's date of death wherein defendant either
assisted decedent or herself withdrew, deposited, transferred or
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gifted funds from the disputed joint bank accounts on behalf of
her mother. Such a delegation of responsibility for one's
financial affairs via the creation of joint accounts is
certainly evidential of a confidential relationship between
those in whose names the accounts are titled. See, e.g., Penna,
supra, 322 N.J. Super. at 424; Bronson, supra, 218 N.J. Super.
at 395.
We are persuaded, therefore, that the motion judge should
not have dismissed plaintiff's action on summary judgment
because, viewing the evidence and inferences therefrom most
favorably to her, a rational factfinder could find a
confidential relationship existed between defendant and her
mother, or that the accounts were created for decedent's
convenience only, or both. In reaching a contrary result, the
motion judge looked only at the facts and circumstances extant
at the time the joint accounts were established and therefore
ignored what transpired after 2000, holding that timeframe to be
the only relevant one.3
We disagree with the motion judge's reasoning. We have
found no law in this State that restricts evidence of intent to
3
In her opinion, the motion judge held that the evidence of
defendant's role in managing decedent's financial affairs after
the joint accounts were created was "not probative of whether a
confidential relationship existed at the time when the joint
accounts were created."
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the point at which the joint bank account is created. In fact,
in Penna, supra, we explicitly rejected such a rigid approach to
establishing intent under the MPDA, 322 N.J. Super. at 426-27,
noting that "it makes it extremely difficult for the estate to
rebut the presumption of survivorship." Ibid. Instead, we
adopted a more flexible approach, first looking to whether the
accounts were "validly created," i.e., whether undue influence
was exerted over the decedent, id. at 427, and even if not,
looking at "all direct and circumstantial evidence available
. . .[]" to determine whether the decedent intended to create a
survivorship right. Ibid.
Thus, in Penna, we looked at the circumstances extant at
the time the accounts were created, as well as later gifts made
by the decedent. Id. at 428-29. In doing so, we rejected the
contrary view espoused in In re Estate of Cullmann, 426 N.W.2d
811, 815 (Mich. Ct. App. 1988), "that evidence of depositor's
intent or state of mind after she had created the joint account
was irrelevant to her state of mind or intent at the time the
account was opened . . . ." Id. at 426.
Similarly, in Ostlund, supra, 391 N.J. Super. at 399-400,
we considered evidence of estate distribution plans made by the
decedent after he had opened up the joint account. Although we
ultimately credited the defendant's testimony that the account
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was intended to go to him after decedent's death, we did not
exclude evidence of decedent's intentions for the account, even
when that evidence arose four years after the account was
created. Id. at 398-400.
Indeed, even the motion judge acknowledged that evidence of
such post-formation events could "support an inference that if a
confidential relationship existed during the final years of
[d]ecedent's life, it is likely that it existed earlier" when
the accounts were created.
Viewing the evidence as well as all of the legitimate
inferences that can be deduced from those proofs most favorably
to plaintiff, as we must on a grant of summary judgment to
defendant, we are satisfied that the motion judge was mistaken
in holding there was no evidence tending to rebut the statutory
presumption of survivorship.
Reversed and remanded.
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