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confidential relationship" &
"suspicious circumstances." examined BUSCAVAGE LIVING TRUST
IN RE THE JOSEPH BUSCAVAGE and
HELEN A. BUSCAVAGE LIVING TRUST N
SUPERIOR COURT OF NEW JERSEY
APPELLATE
DIVISION
DOCKET
NO. A-6041-08T3
________________________________
Argued May 4, 2010 - Decided
Before Judges Skillman, Fuentes, and Simonelli.
On appeal from Superior Court of New Jersey,
Chancery Division, Probate Part, Somerset County,
Docket No. 07-01452.
Paul R. Rizzo argued the cause for appellant
(DiFrancesco, Bateman, Coley, Yospin, Kunzman,
Davis & Lehrer, attorneys; Mr. Rizzo, on
the brief).
Stephen M. Offen argued the cause for respondents
(Norris, McLaughlin & Marcus, attorneys; Mr.
Offen,
of counsel, Mr. Offen and Christine D. Socha,
on the brief).
PER CURIAM
In
this appeal, certain members of the late Joseph Buscavages family challenge
the validity of amendments decedent made to his living trust in the last year
of his life. After conducting an evidentiary hearing, the trial
court found the amendments valid. We now reverse and remand for
further proceedings.
Before
addressing the legal question raised here, we will first describe, in some
detail, the parties who make up decedents family, the attorneys retained by
decedent to carry out his wishes as to the disposition of his property, and
the documents prepared by these lawyers that allegedly reflected decedents
wishes.
I
Joseph Buscavage (Joseph) died a widower without issue. His
closest family members were two sisters: Violet Kubilus (Violet) and a
half-sister Margaret Falzone (Margaret). Violet was closer to
Joseph in age and resided approximately three hundred miles away from him in
Pennsylvania. Margaret was eighteen years younger than Joseph,
lived with her mother in Josephs home until she was eighteen years-old, and
currently lives in Somerville, New Jersey.
Josephs wife Helen Buscavage had three
sisters. One sister had a son, Thomas Matalenas (Thomas), who is married
to Marian Matalenas (Marian). Thomas and Marian lived four houses
away from Joseph in Bound Brook. Helen Buscavages other sister had
a daughter, Mary Ann Wagner (Mary Ann). She lived approximately fifty
minutes from Joseph in Pennsylvania and has two daughters, Michelle and
Patricia. Helen Buscavages third sister had a daughter Helen
Goodrich, who is married to Henry Goodrich, Sr. They also live in
Bound Brook and have four children: Amy, Linda, Pam, and Henry, Jr. Robert
Sadukas [1] was Josephs great-nephew, his grandmother was Helens sister.
On May 1, 1998, Joseph and Helen executed the Joseph
Buscavage and Helen A. Buscavage Revocable Living Trust. They
named each other as co-trustees, appointed Mary Ann as first successor
trustee, and named Helen Goodrich as second successor
trustee. Their original distribution of the trust was as follows:
Helen
Goodrich 25%
Mary Ann
Wagner 25%
Thomas
Matalenas 25%
Violet
Kubilus 10%
Pam
Goodrich 2.5%
Henry Goodrich,
Jr. 2.5%
Linda
Goodrich 2.5%
Amy
Goodrich 2.5%
Patricia
Wagner 2.5%
Michelle
Wagner 2.5%
They also executed pour-over wills naming Mary Ann
as first alternate executrix and Helen Goodrich as second alternate
executrix. Through durable power of attorney documents, Joseph and
Helen also named Helen Goodrich as first alternate and Mary Ann as second
alternate attorneys-in-fact. Attorney G. Jeffrey Moeller prepared
all of these documents.
After Helen died in 2001, Joseph made two
unchallenged amendments to his trust: one in 2001 and a second in
2003. On October 2, 2001, Joseph amended the distributions of the trust
in the following manner:
Helen
Goodrich 7%
Mary Ann
Wagner 8%
Thomas
Matalenas 24%
Violet
Kubilus 12%
Pam
Nilsen[2] 7%
Linda
Goodrich 7%
Amy
Goodrich 7%
Patricia
Wagner 8%
Michelle
Wagner 8%
Margaret
Falzone 12%
These changes gave each of Helens sisters children
and their children seventy-six percent of the estate collectively and divided
the remaining twenty-four percent between Josephs two
sisters. Joseph also reversed the order of the trustees, naming
Helen Goodrich as first successor and Mary Ann as second successor.
On September 29, 2003, Joseph executed another
amendment to the trust in which he conveyed his home in equal shares to his
sisters, Violet and Margaret, and his car to his sister Violet; the
distribution percentages remained unchanged. Attorney Robert D.
Spengler drafted these amendments which are not at issue in this appeal.
On
January 25, 2007, Joseph retained attorney Martin A. Gleason to draft and
execute the amendments challenged in this appeal. In the first
amendment, Joseph made the following changes to the trusts distribution
scheme:
Helen Goodrich 25%
Thomas
Matalenas 25%
Violet
Kubilus 13.5%
Pam
Nilsen 6%
Linda
Goodrich 6%
Amy
Goodrich 6%
Robert
Sadukas 7%
Margaret
Falzone 13.5%
This amendment also conveyed Josephs fishing and
hunting equipment to Robert Sadukas. This distribution scheme
eliminated Mary Anns and her two daughters shares of the trust entirely and
included Helen Goodrichs nephew as a beneficiary. Of note, the
distributions here erroneously total 102 percent.
The
circumstances surrounding the execution of this amendment are at the core of
the issues raised by appellants. According to Gleason, Helen
Goodrich contacted him by phone regarding the need to amend Josephs
trust. Joseph and Helen Goodrich attended a meeting at Gleasons
office at which Joseph allegedly brought a handwritten paper reflecting the
changes he wanted Gleason to implement. This note was not produced
at trial.
According to Gleason, Joseph seemed "absolutely
fine" and Helen Goodrich, who was seated "about ten feet
away," did not speak. Gleason testified that he drafted the
amendment as directed. On January 25, 2007, Gleason went to the hospital
where Joseph was scheduled for surgery and witnessed Joseph sign the
amendment. Although Helen Goodrich was present at the time Joseph
executed the documents, he was able to sign them without physical
assistance. By this time, Joseph had been in the hospital for
approximately ten days; he had surgery to correct certain respiratory
problems on the same day he signed the amendment.
On
June 28, 2007, Joseph made a second amendment to the trust, which is also
contested in this appeal. This amendment changed the distribution
amounts as follows:
Helen
Goodrich 34%
Thomas
Matalenas 6%
Violet
Kubilus 6%
Pam
Nilsen 8%
Linda
Goodrich 8%
Amy
Goodrich 8%
Robert
Sadukas 8%
Margaret
Falzone 12%
Henry
Goodrich 10%
As compared to the previous distribution scheme, the
second amendment reduced Thomass share from twenty-five percent to six
percent, reduced Violets share from thirteen-and-a-half percent to six
percent, and added Henry Goodrich, Sr. as a beneficiary who was to receive
ten percent. This amendment also changed the disposition of
Josephs home. Originally, the house was to be equally divided
between Violet and Margaret, but the amendment gave Margaret one hundred
percent of the house outright. Lastly, this amendment directed
that Josephs vehicle be conveyed to Henry Goodrich, Sr. instead of Violet. In
essence, Violet, who under the previous scheme received half of the home and
Josephs car, would now receive neither the home nor the car.
As the one who drafted this amendment, Gleason
testified that Joseph communicated his desired changes directly to him by telephone. After
he drafted the document, Gleason met with Joseph at his home in the presence
of Gleasons assistant, a notary public, and Helen
Goodrich. According to Gleason, although Joseph was "more
[physically] sick," "mentally . . . he was
fine." Gleason testified that he had known Helen Goodrich
before drafting these amendments. Specifically, he represented
Helen Goodrich in her capacity as co-executor in the sale of a home; he also
represented her daughter Pam in the purchase and sale of her home.
Joseph also owned four Certificates of Deposit
(CDs). Originally, these CDs were payable upon Josephs death to
Violet and Margaret in equal shares. In July 2007, Joseph changed
the beneficiaries of these CDs to Henry, Amy, Helen, and Margaret; thus excluding
Violet.
Joseph died on September 11, 2007; he was eighty-two
years old. Thomas, Mary Ann, and Violet challenged the validity of
the 2007 amendments that decreased or eliminated their dispositions and
favored Margaret, Helen Goodrich, Henry Goodrich, Sr., the Goodrich children
and Robert Sadukas. These individuals claim that Joseph was unduly
influenced by Helen Goodrich when he made these dispositions. They also
argue that Gleason, as the attorney who drafted the amendments, had a conflict
of interest between Joseph and the Goodrich family. Accordingly,
they argue that this alleged conflict impaired Gleasons ability to
independently represent Joseph in these transactions.
II
In order to assess the veracity of these allegations
and determine the legal viability of these claims, the trial court conducted
a five-day bench trial during which fifteen witnesses
testified. The following facts are derived from such testimony.
Joseph was an independent and active man until the
last years of his life. After his wifes death, however, Joseph
became despondent and generally kept to himself. Several of his
family members would check on him regularly, including Helen Goodrich and her
family as well as Thomas and his family. Mary Ann would see Joseph
every month and would call him every other week. Although Mary Ann
offered to assist Joseph at his home in New Jersey, he
declined. From October 2006 through December 2006, Helen Goodrich
visited Joseph more often after she discovered that he was having problems
breathing. During this time, Helen also began running errands and
cleaning Josephs house; she testified that he paid her $20 a week for her
assistance. In January 2007, Amy began stopping by Josephs home
several days a week to keep him company.
After his surgery in January 2007, Joseph remained
in a rehabilitation center until February. Although he was still
relatively self-sufficient when he returned home, his family members began to
visit him more often. At this time he also had a home health aide
who assisted him with home cleaning.
In addition to the visits from Helen Goodrich and
her family, Joseph also began to reconnect with his estranged sister
Margaret. In turn, she started visiting him several days a
week. In the spring of 2007, Mary Ann called Joseph and noticed
that his breathing was strained and labored. Although she offered
to call him back when he felt better, she never did. That was the
last contact that Mary Ann had with her uncle.
Thomas also visited Joseph on a weekly basis after
Joseph returned home from his surgery. According to Thomas, he had been
visiting with Joseph on a weekly basis for over a decade. Sometime
in April or May 2007, Thomas stopped visiting Joseph because he developed an
infection and did not want to risk spreading it to
Joseph. However, Thomass wife Marian and their children continued
to see Joseph regularly. According to Helen Goodrich, when Joseph
inquired about Thomas absence, she told him why Thomas was staying
away. Thomas never saw Joseph again before his death.
Violet and her family visited Joseph in June 2007
after she received a call from him during which he sounded disoriented and
confused as to his whereabouts. Violet was prepared to
stay with Joseph for an extended time, until Helen Goodrich
advised her that the Goodrich family would be there to assist him. That
was the last time she saw her brother. During this same time,
Helen moved in with Joseph to provide him with around-the-clock
assistance. By this time, Josephs health was quickly deteriorating. According
to Helen Goodrich, Joseph specifically requested that she move in with
him. Helen Goodrich lived with Joseph until September 4, 2007,
when he was readmitted to the hospital. Joseph died one week
later.
III
The
trial judge issued her ruling in a nineteen-page memorandum of
opinion. In that opinion, the trial court found that appellants
had not demonstrated that decedent lacked testamentary capacity at the time
he executed the amendments at issue. The court also did not find
that decedents will had been overcome by undue influence or that Gleasons
former representation of certain Goodrich family members created a material
conflict of interest which compromised his subsequent representation of
decedent in connection with the amendments at issue.
Appellants
argue that although the trial court discussed the burdens of proof concerning
undue influence, it never applied that analysis. Specifically,
appellants argue that the courts conclusion that undue influence was not
established is tantamount to a net opinion. Appellants also
contend that, although the court indicated orally that a confidential
relationship and suspicious circumstances existed, it did not address this
issue in its written opinion. They also maintain that the court
did not address whether respondents rebutted the presumption of undue
influence nor did the court state which standard respondents had to satisfy.
Finally,
appellants argue that the trial courts written opinion mistakenly identifies
testamentary capacity as the driving issue. According to
appellants, although the trial court concluded that they had not proven that
Joseph lacked testamentary capacity to execute the amendments, their
challenge was predicated upon alleged undue influence, not testamentary
incapacity.
IV
We start our analysis by setting forth the relevant
legal principles that will govern our discussion. Here, the trial courts
decision is predicated upon determinations of undue influence and
testamentary capacity. Logically, testamentary capacity must be
addressed first because in the absence of testamentary capacity, the issue of
undue influence is rendered moot. However, appellants
contend that they did not raise the issue of testamentary capacity before the
trial court. Thus, testamentary capacity is not an issue in this
case.
We will thus focus our attention on the question of
undue influence. Specifically, we will examine the role played by
Helen Goodrich and other members of her family during the time the two
amendments in question were executed by Joseph, and whether there is any
evidence of impropriety during the period of time when Josephs health was
waning. We also review whether Gleasons representation of Helen
Goodrich created an independent ground for vitiating the two
amendments. Finally, we will determine whether the trial courts
opinion properly addressed these concerns.
"If a will is tainted by undue influence, it
may be overturned." Haynes, 87 N.J. 163, 176 (1981)
(quotations omitted). Our Supreme Court has defined undue
influence as "a mental, moral, or physical exertion of a kind and
quality that destroys the free will of the testator by preventing that person
from following the dictates of his or her own mind as it relates to the
disposition of assets." In re Estate of Stockdale,
196 N.J. 275, 302-03 (2008). Undue influence
"denotes conduct that causes the testator to accept the domination and
influence of another rather than follow his or her own
wishes." Id. at 303 (quotations omitted).
As the ones alleging undue influence, appellants
carry the burden of proof. Id. at 303. That being
said, certain circumstances can create a presumption of undue influence,
shifting the burden of proof to those defending the validity of a will. Ibid. "[W]e
have long held that if the will benefits one who stood in a confidential
relationship to the testator and if there are additional suspicious
circumstances, the burden shifts to the party who stood in that relationship
to the testator." Ibid.
We next define the term "confidential
relationship," the first of two elements necessary to create the
presumption of undue influence. A "confidential relationship
between the testator and a beneficiary, arises where trust is reposed by
reason of the testators weakness or dependence or where the parties occupied
relations in which reliance is naturally inspired or in fact
exists." Haynes, supra, 87 N.J. at 176
(quoting In re the Estate of Hopper, 9 N.J. 280, 282 (1952)).
The second factor required to create a presumption
of undue influence is the presence of suspicious circumstances, which
"for purposes of this burden shifting, need only be
slight." Stockdale,supra, 196 N.J. at
303. "When there is a confidential relationship coupled with
suspicious circumstances, undue influence is presumed and the burden of proof
shifts to the will proponent to overcome the
presumption." Ibid. Ordinarily, those defending the will
must "overcome that presumption by a preponderance of the
evidence." Haynes, supra, 87 N.J. at 178.
Our Supreme Court has recognized, however, that
certain situations are so problematic that they call "for a stronger
presumption of undue influence and a commensurately heavier burden of proof
to rebut the presumption." Ibid. The Court noted
that "a conflict on the part of an attorney in a testimonial situation
is fraught with a high potential for undue influence, generating a strong
presumption that there was such improper influence and warranting a greater
quantum of proof to dispel the presumption." Ibid. Accordingly,
"if the presumption arises from a professional conflict of interest on
the part of an attorney, coupled with confidential relationships between a
testator and the beneficiary as well as the attorney, the presumption must
instead be rebutted by clear and convincing
evidence." Stockdale, supra, 196 N.J. at 303
(quotations omitted). An example of such a conflict can be found
when "there is dual representation" between the testator
and the beneficiary who is alleged to have applied undue influence. Haynes, supra,
87 N.J. at 181-82 (finding that the testators attorney had a
conflict of interest because he was both the beneficiarys family lawyer and
the lawyer who effectuated the contested will changes).
We emphasize that "a conflict of interest . . .
need not be obvious or actual to create an ethical
impropriety. The mere possibility of such a conflict at the outset
of the relationship is sufficient to establish an ethical breach on the part
of the attorney." Id. at 181 (emphasis
added). The rationale for such a high standard of conduct by
attorneys is rooted in the role lawyers play in this most intimate and
personal of decisions by the client. As the court noted
in Haynes, the reason behind "imposing the higher burden of proof .
. . [is] the need for a lawyer of independence and undivided loyalty, owing
professional allegiance to no one but the
testator." Id. at 179.
Appellants argue that they met their burden of proof
by presenting evidence of a confidential relationship and suspicious circumstances
involving Helen Goodrich and Amy Goodrich, thereby creating the presumption
of undue influence. As such, they argue that the burden of proof then shifted
to respondents to rebut this presumption.
The record supports appellants
assertion. At the conclusion of appellants case in chief,
respondents counsel moved to dismiss appellants complaint based on their
failure to establish both a confidential relationship and suspicious
circumstances. After hearing argument from the attorneys for both
parties, the trial judge denied the motion. Specifically, the
judge found that "there has been a prima facie showing [of undue
influence] by the [appellants] in this matter, and therefore Im going to deny
the motion and the burden will now shift to the [respondents] in this
matter." (Emphasis added).
Inexplicably, the courts written decision omits any
reference to this material factual finding and highly significant legal
conclusion. The court also failed to identify with particularity
what facts supported its key finding of undue influence, and did not mention
"suspicious circumstances," the second element necessary to shift
the burden of proof to respondents. Such omissions are in clear
derogation of the courts duty under Rule 1:7-4(a).
In the interest of completeness, we all address
appellants arguments concerning the role of attorney Martin
Gleason. The record shows that Helen Goodrich and at least one
other member of her family had a prior relationship with
Gleason. Indeed, Helen recommended that Joseph retain Gleason to
draft the contested amendments despite his otherwise satisfactory
relationship with his former counsel who drafted the
initial documents.
Appellants argue that the trial court erred in
failing to address the issue of Gleasons potential conflict of interest or
his conduct as the drafter of the contested amendments. According
to appellants, there are a number of factors that the court should have
considered, including but not limited to: (1) Gleasons testimony concerning
an appointment in his office with Helen Goodrich and Joseph in early January
2007; (2) Gleasons failure to ascertain the reasons for Josephs alleged
decision to eliminate beneficiaries; (3) Gleasons confusion over
circumstances surrounding the executions of the amendments; (4) mistakes in
the documents themselves; and (5) Helen Goodrichs presence at the executions
of the amendments.
Appellants argue that when considered together, this
evidence constitutes suspicious circumstances and undue
influence. They thus maintain that the trial courts failure to
address this evidence compels us to remand this matter for further
analysis. In response, respondents argue that in finding no undue
influence the trial court implicitly rejected appellants argument concerning
Gleason. As a fall back position, respondents maintain that even
if it was error for the court not to have directly reviewed this evidence,
the facts alleged do not trigger the concerns articulated in Haynes.
The only reference to Gleason in the courts written
decision is found in the following statements:
While the Petitioners argue that this case
significantly resembles In Re Hale, there are major distinctions to be
drawn. In Hale, it appeared that (1) the Will was drawn by an
attorney of proponents selection who had never met decedent and whose
identity was not even known to decedent; (2) the provisions of the Will were
transmitted to the attorney by the sole residuary beneficiary; (3) the
attorney, without direct instructions from decedent, prepared revocation of caveators
power of attorney and a new power in favor of proponent, who attended to
execution of both documents. Here, Mr. Gleason had in fact met Joseph
Buscavage weeks prior to the date of execution in February of
2007[3] Further, Helen Goodrich was not the sole residuary
beneficiary. Lastly, Joseph Buscavage, of his own volition,
contacted Mr. Gleason to make the amendment. While Joseph Buscavage may have
formerly retained Mr. Spengler as his attorney, it seems likely that he saw
no reason in being mandated to procure the same attorney to make these
subsequent amendments.
Further, the prior business relationship between
Helen Goodrich and Mr. Gleason may have been such that Ms. Goodrich highly
recommended Mr. Gleason as to her satisfaction with his legal
services. As evidenced by prior testimony, it appears that Mr.
Buscavage liked to keep to himself and may have been less inclined to share
the personal information of his impending hospitalization with Mr. Gleason,
to whom he had no prior relationship.
Attorneys
engaged to perform this highly personal and sensitive task for a client are
held to an extremely high standard of professional conduct. In
this context, "a conflict of interest . . . need not be obvious or
actual to create an ethical impropriety. The mere possibility of
such a conflict at the outset of the relationship is sufficient to establish
an ethical breach on the part of the
attorney." Haynes, supra, 87N.J. at
181. From the statements given by the trial court, we are unable
to ascertain whether the court determined if Gleasons conduct presented the
possibility of a conflict. We are thus compelled to remand this
issue for further analysis.
We
emphasize that our decision to reverse is not predicated upon an assessment
of the merits of appellants argument. We reverse because we
are unable to discern, from the courts written opinion, what particular
factual findings the court relied on to support its ultimate judgment in
respondents favor. Equally vexing, in terms of appellate review, is our
inability to glean from the courts written opinion how the court determined
the two elements necessary to shift the burden of proof to respondents,
specifically, that a "confidential relationship" existed between
respondents and decedent and that decedents last two amendments to the trust
involved "suspicious circumstances."
Thus, in addition to addressing Gleasons conduct,
the trial court on remand must also make detailed findings of facts
concerning respondents relationship to decedent at and around the time the
two amendments in question were drafted and executed. The court
must then apply these findings to the legal principles governing the
existence of a "confidential relationship" and "suspicious
circumstances" to ascertain whether appellants met their burden of proof
on the question of undue influence. Only if the court holds in
appellants favor at this critical juncture will the burden then shift to
respondents to rebut the presumption of undue influence.
Reversed and remanded. We do not retain
jurisdiction.
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[1] Robert Sadukas died on November 25, 2009.
[2] Formerly Pam Goodrich.
[3] The correct month was January 2007.
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