Court Opinion

ID: 2642425
Source: CourtListenerOpinion
Date Created: 2013-11-15 20:17:45.667613+00
Date Added: 2024-06-11T12:53:00.765279
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE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.

                                 2                          A-4622-11T2
    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)

                                 3                            A-4622-11T2
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.

                                4                         A-4622-11T2
     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.

                                5                          A-4622-11T2
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,

                                  7                           A-4622-11T2
          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

                                8                           A-4622-11T2
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.].

                                9                           A-4622-11T2
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

                                10                         A-4622-11T2
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.

                                 11                       A-4622-11T2
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

                                12                          A-4622-11T2
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

                                13                          A-4622-11T2
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

                                15                          A-4622-11T2
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."

                                16                          A-4622-11T2
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

                                17                           A-4622-11T2
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.

                               18                           A-4622-11T2