Title: In the Matter of the Trust Created by Agreement Dated December 20, 1961 by and between John Seward Johnson, Grantor, and Philip B. Hofmann, Gustav O. Lienhard, and Kenneth Perry, Trustees

State: new-jersey

Issuer: New Jersey Supreme Court

Document:

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized). VERNIERO, J., writing for a unanimous Court. This appeal concerns an irrevocable charitable trust created on December 20, 1961 (the 1961 trust) by John Seward Johnson, Sr. (Seward Sr.). The value of the trust is estimated at $350,000,000. The primary question in the appeal is whether the parentage of Jenia Anne Josephine Johnson (Jenia) may be collaterally attacked by third parties seeking to defeat her status as an eligible beneficiary under the trust. Jenia was born on January 11, 1961, to Barbara E. Johnson, who had married John Seward Johnson, Jr. (Seward Jr.) on September 16, 1956. Seward Jr. adopted Barbara's son from a previous marriage in 1958. Seward Jr. is identified as Jenia's father on her birth certificate and on her baptismal certificate issued several months later. In 1962, Seward Jr. sued Barbara for divorce on grounds of adultery and cruelty (including desertion). Although Jenia's paternity was questioned by Seward Jr. in the divorce proceedings, at the close of the action he signed a formal acknowledgment of paternity dated March 3, 1965. The trial court granted the divorce on the ground of Barbara's desertion and made certain findings, including that Jenia was duly born of the marriage. The final judgment of June 14, 1965, contained a statement that the paternity of Seward Jr. as father of Jenia was thereby adjudicated. Although Seward Jr. testified in proceedings involving the administration of an unrelated family trust in 1968 that he did not consider Barbara's children his children because they were children of other men, there was no adjudication of his disavowal of paternity of Jenia. Also, in 1977 in an earlier stage of the administration of the 1961 trust, he represented in a document submitted to the court that he was Jenia's father. In 1963, while his son's divorce was proceeding, Seward Sr. created another trust, the language of which tracked generally that of the 1961 trust, except that it expressly excluded as distributees children born to or adopted by Seward Jr. Under the terms of the 1961 trust, after January 10, 1997, the trustees are to distribute the trust proceeds to Seward Sr.'s four children, their spouses, and their issue.... As defined in the trust, Jenia would be considered issue of Seward Jr. for purposes of distribution unless her parentage was successfully challenged. During nine intermediate accountings of the 1961 trust while the trust income was being distributed to charitable, educational or religious organizations, there was no challenge to Jenia's status under the trust; when the date for expiration of the trust approached (after which the income and corpus of the trust could be distributed to the beneficiaries), the trustees sought a judicial interpretation of the term issue as defined in the 1961 trust and an identification of who comprised that class. In this setting, Seward Jr., his second wife, their two children, and Jenia's cousins (the Ryans) challenged Jenia's inclusion as a member of the class of eligible beneficiaries. The trial court ruled in favor of Jenia, holding that her status as a child of Seward Jr. was established conclusively as a matter of law in 1965 and declaring her an eligible beneficiary under the 1961 trust. The court barred all other parties from seeking discovery on that issue. The legal basis for the court's decision was its view that the twenty-three-year limitations period in the New Jersey Parentage Act, N.J.S.A. 9:17-38 to -59 (the Act) served as a statute of repose that prohibited any challenge to the 1965 determination of Seward Jr.'s paternity. The court saw the Act as the exclusive means for determining paternity. On appeal, the Appellate Division agreed with the trial court that certain legal doctrines prohibited a challenge to Jenia's parentage but disagreed with the trial court's interpretation of the Act, concluding that the time limitations of the Act do not apply to actions seeking to construe the language of a will or trust. The court remanded the matter to the trial court to determine whether Jenia is issue of Seward Jr. and whether Seward Sr. would have intended her to benefit from the trust if she were not Seward Jr.'s child. The Supreme Court granted the petitions for certification filed by Jenia and a guardian ad litem appointed for Jenia's son, limited to the parentage issue. The Court denied cross-petitions filed by Seward Jr.s children by his second wife challenging the Appellate Division's decision barring them from contesting their father's paternity of Jenia. Held: The adjudication of paternity in the 1965 divorce proceedings bars any third-party collateral attack on Jenia's parentage. Jenia is an eligible beneficiary under the 1961 trust. 1. In enacting the Act in 1983, the Legislature intended to provide a set of clearly defined and uniform procedures for establishing parentage in disputed cases. A number of significant common-law precepts are codified in the Act, the main thrust of which is to foster the parent-child relationship. Under the Act, an adjudication of paternity is determinative for all purposes. (pp.11-17) 2. Amendments to the Act and to the New Jersey Probate Code that authorize a potential heir of a decedent to contest a will or trust in a probate proceeding unimpeded by the time limitations in the Act apply principally to persons seeking to establish or confirm their parentage, as opposed to those seeking to defeat the established parentage of others. The Act forecloses the third-party attack on Jenia's parentage. (pp. 17- 20) 3. The doctrine of probable intent is not implicated in this case; the 1961 trust document is clear on its face and Jenia's parentage has been adjudicated conclusively. The definition of issue in the trust, which includes a child by adoption, indicates Seward Sr.'s understanding that persons other than his blood relations could benefit under the trust. His specific exclusion of children born to or adopted by Seward Jr. as beneficiaries of a trust created two years after this one shows his ability to limit the classes of beneficiaries when he wanted to do so. (pp. 20-22) 4. A presumption of legitimacy existed in 1961 and exists today. Those challenging Jenia's paternity are not deprived of due process or fundamental fairness by the judicial preservation of a prior adjudication of paternity. Their interest in increasing their own economic gain does not outweigh the adjudication of Jenia's legitimacy and her right to family identification. (pp. 22-32) The JUDGMENT of the Appellate Division is REVERSED. CHIEF JUSTICE PORITZ and ASSOCIATE JUSTICES STEIN, COLEMAN, LONG, LA VECCHIA, and ZAZZALI join in JUSTICE VERNIERO's opinion. IN THE MATTER OF THE TRUST CREATED BY AGREEMENT DATED DECEMBER 20, 1961 BY AND BETWEEN JOHN SEWARD JOHNSON, GRANTOR, AND PHILIP B. HOFMANN, GUSTAV O. LIENHARD, AND KENNETH PERRY, TRUSTEES, (Known as the JOHN SEWARD JOHNSON 1961 CHARITABLE TRUST) Argued October 10, 2000 -- Decided February 15, 2001 On certification to the Superior Court, Appellate Division. Thomas J. Bitar argued the cause for appellant, pro se as Guardian Ad Litem for Henry Bruce Sheeran (Dillon, Bitar & Luther, attorneys; Mr. Bitar and Mary A. Powers, on the briefs). Robert J. Del Tufo argued the cause for appellant Jenny Anne Josephine Johnson (Skadden, Arps, Slate, Meagher & Flom, attorneys). Richard M. Altman argued the cause for respondents John Seward Johnson, III and Clelia C. Johnson (Pellettieri, Rabstein & Altman, attorneys; Mr. Altman and Elsie Elizabeth Sweetser, of counsel and on the brief). Joseph C. Mahon argued the cause for respondents Eric B. Ryan and Hillary A. Ryan (Hill Wallack, attorneys). The opinion of the Court was delivered by VERNIERO, J. We have found no case precisely analogous to this one. As a general rule, however, courts in other jurisdictions appear to agree that third-party challenges to paternity and legitimacy should be barred once those questions have been resolved by acknowledgment or agreement of the putative parents or by judicial decree. See, e.g., Jenkins v. Aetna Cas. & Sur. Co., 158 So. 217, 220 (La. Ct. App. 1935) (stating that '[i]f the husband and his heirs cannot dispute . . . legitimacy . . . , for a stronger reason the door should be closed on third parties in actions for money or property' ) (citation omitted); Deatherage v. Phipps, 441 P.2d 1020, 1023 (Okla. 1967) (concluding that, in case in which neither husband nor wife disputed legitimacy of child born in wedlock, third party was barred from doing so); Byrd v. Travelers Ins. Co., 275 S.W.2d 861, 863-64 (Tex. Civ. App. 1955) (observing that [i]f the father renounces the right to bastardize his alleged son, either expressly or tacitly, it is extinguished and can never thereafter be exercised by anyone ). The decision in Knauer v. Barnett, 360 So. 2d 399 (Fla. 1978), is particularly instructive. In that case, the trustee of an inter vivos trust sought a declaratory judgment to determine to whom he should distribute the trust's income and corpus. The trust document provided that the trustee distribute such property to the blood issue of the settlor or, if there were no such issue, to the settlor's collateral kindred. Id. at 401. Charles Barnett claimed to be the son and blood issue of the settlor, William Barnett. Ibid. Other relatives disputed that claim, asserting that the settlor had no blood issue and, consequently, that they were entitled to the entire trust distribution. Ibid. Charles was born in Paris, France, to Marcelle Perron and was identified in both the official civil and church records as Charles Perron. Ibid. Five years later, William Barnett and Marcelle appeared before the deputy mayor of Paris and declared in the presence of witnesses that they recognized Charles as their son[.] Ibid. William and Marcelle then married. Ibid. Charles's birth record was thereafter corrected by an official striking through the name Perron and writing above it the name Barnett. Id. at 402. Later, William and Marcelle swore before a notary public that a petition prepared for filing with the French government was true in stating that Charles has been acknowledged by the said William L'Engle Barnett as his son. Ibid. Several years later, after Charles and his parents became estranged, William began referring to Charles as his adopted son or step-son and purportedly stated that [t]here's not a drop of my blood in that boy. Id. at 402-03. Based on that record, the circuit court concluded that Charles was not the blood issue of William and thus, Charles was not entitled to receive any of the trust's income or corpus. The district court reversed. In affirming that reversal, the Florida Supreme Court stated: To permit the collateral kindred of William to challenge the parentage of Charles . . . is not supported by . . . policy considerations and would seriously undermine the status of every child born out of wedlock who is subsequently legitimatized by acknowledgment and intermarriage pursuant to [Florida's probate statutes]. This Court is cognizant of the well- established principle that the intent of the settlor of a trust is controlling. However, unless the trust instrument is ambiguous the intent of the settlor must be ascertained from that which lies within the four corners of the instrument itself, and no extrinsic evidence of the settlor's intent is admissible. . . . No ambiguity is created by an application of the legal definition to the term blood issue, as used in the trust instrument in question. By virtue of William's compliance with the [Florida statutes], Charles was rendered, by operation of law, the blood issue of William. The trust contains no expressed intent to exclude Charles from the definition of this term. Consequently, the district court properly concluded that Charles Barnett, as the blood issue of William Barnett, was entitled to distribution of the trust assets and that the extrinsic evidence relied upon by the circuit court below in ruling that Charles is not the blood issue of William was irrelevant to this determination. (We note for completeness that a portion of the Florida statute relied on by the court in Knauer has been revised by the Legislature of that state. See Thurston v. Thurston, No. 1D97- 692, 2 000 WL 1838640 (Fla. Dist. App. Ct. Dec. 15, 2000). The court's rationale in support of its holding, however, remains instructive.) Although not an exact analogue, Knauer resembles this case. Here, as in Knauer, third parties raise the specter of probable intent as the principal vehicle by which to reopen a prior proceeding concerning a child born in wedlock or otherwise legitimized. The Court should not invoke the doctrine of probable intent for that purpose. Our reasons are similar to those expressed by the court in Knauer. We have considered the 1961 trust against the backdrop of the presumption of legitimacy that existed when Seward Sr. executed the trust document and that exists today. In so doing, the Court finds no ambiguity within the four corners of the instrument to warrant the belated questioning of the grantor's intent almost four decades later. Finally, because they were not parties to Seward Jr.'s 1965 divorce action, the Ryans further argue that it would be fundamentally unfair for the Court to rely on that prior adjudication in resolving this dispute. They consider Seward Jr.'s 1965 acknowledgment of paternity to be false, executed solely to conclude the then-pending divorce litigation. The Ryans thus state in their brief that [n]o public purpose will be served by allowing the false acknowledgment of Jennyanne's paternity to preclude the court's determination of Mr. Johnson's intent. They also assert that their right to due process would be violated if they were denied the opportunity to contest Jenia's parentage within the context of the distribution of the 1961 trust. The doctrine of fundamental fairness 'serves to protect citizens generally against unjust and arbitrary governmental action, and specifically against governmental procedures that tend to operate arbitrarily.' Doe v. Poritz, 142 N.J. 1, 108 (1995) (citation omitted). We are satisfied that that doctrine does not alter our conclusion that the Ryans should be precluded from reopening the issue of Seward Jr.'s paternity. There is nothing unjust or arbitrary about preserving a prior adjudication of paternity. To the contrary, with its clear command that an adjudication of parentage is determinative for all purposes[,] N.J.S.A. 9:17-53a, the Parentage Act strongly favors the finality of such judgments. NO. A-69/70 IN THE MATTER OF THE TRUST CREATED BY AGREEMENT DATED DECEMBER 20, 1961 BY AND BETWEEN JOHN SEWARD JOHNSON, GRANTOR, AND PHILIP B. HOFMANN, GUSTAV O. LIENHARD, AND KENNETH PERRY, TRUSTEES, (Known as the JOHN SEWARD JOHNSON 1961 CHARITABLE TRUST) DECIDED February 15, 2001 Chief Justice Poritz