Court Opinion

ID: 3203287
Source: CourtListenerOpinion
Date Created: 2016-05-13 14:06:20.50815+00
Date Added: 2024-06-11T14:45:41.752004
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
               APPROVAL OF THE APPELLATE DIVISION

                                  SUPERIOR COURT OF NEW JERSEY
                                  APPELLATE DIVISION
                                  DOCKET NO. A-4562-13T1

                                     APPROVED FOR PUBLICATION

                                           May 13, 2016
IN THE MATTER OF THE ESTATE OF
BYUNG-TAE OH, DECEASED.                APPELLATE DIVISION

______________________________________________________

         Argued April 26, 2016 – Decided May 13, 2016

         Before Judges Fisher, Rothstadt and Currier.

         On appeal from the Superior Court of New
         Jersey, Chancery Division, Probate Part,
         Bergen County, Docket No. P-018-13.

         William D. Grand argued the cause for
         appellant Hyung Kee Oh (Greenbaum, Rowe,
         Smith & Davis LLP, attorneys; Mr. Grand, of
         counsel; Mr. Grand and Olivier Salvagno, on
         the brief).

         Evelyn R. Storch argued the cause for
         respondent Won Ki Oh (Harwood Lloyd, LLC,
         attorneys; David M. Repetto, of counsel; Ms.
         Storch and Minjung Suh, on the brief).

    The opinion of the court was delivered by

FISHER, P.J.A.D.

    In this appeal, we consider the propriety of a summary

judgment that determined whether a money transfer — made by a

now-deceased Korean citizen to a New Jersey limited liability

company — constituted an investment and, thus, an asset of the

decedent at the time of his death, or a gift to his son, the
general    partner    of   the   limited     liability      company.   We   also

consider    whether    the   court     had   jurisdiction      to   make    that

determination, even though this argument was not asserted in the

trial court.

    The following facts are undisputed. Byung-Tae Oh, a citizen

and resident of the Republic of Korea, died in Seoul on February

6, 2012. Because he died intestate, it appears that, pursuant to

Korean law, his two sons and one daughter — Won Ki Oh, Hyung Kee

Oh, and Hyunjoo Oh — inherit equal shares of the estate and the

surviving spouse, Hyesung Lee, inherits one-and-one-half times

the share inherited by each child.1            It is also undisputed that,

in 2001, Byung-Tae Oh (hereafter "decedent") wire transferred

$900,000 from his personal bank account at Standard Chartered

Bank,   Seoul   Nonheyon     Branch,    into    the   New    Jersey    business

account of B&H Consulting and Development Company, LLC, a New

Jersey limited liability company formed by decedent's youngest

son, Hyung Kee Oh, and his son's wife, Sung Hee Park.

    In a complaint filed in the Probate Part on January 18,

2013, plaintiff Won Ki Oh (hereafter "plaintiff"), decedent's

eldest son and a resident of the Republic of Korea, alleged that

1
  General information about Korean intestacy laws was included in
a certification filed in the trial court by a Korean attorney.
The parties do not appear to dispute how Korean law requires the
division of decedent's estate.

                                       2                               A-4562-13T1
decedent owned at the time of his death various interests in

property in New Jersey, including a 40.8% interest in B&H. The

action    sought     the     appointment        of    an   administrator           for   the

purpose of marshaling decedent's New Jersey assets.2

      Decedent's other son, Hyung Kee Oh (hereafter "defendant"),

a   New   Jersey    resident       and   general      partner     of    B&H,     moved    to

dismiss this action based on his contention, among others, that

decedent owned no assets in New Jersey at the time of his death.

Contrary to plaintiff's claims, defendant asserted that in 2001

decedent    gave     him    $900,000,       which     he   used       "as   part    of   the

start[-]up money for B&H," and that "[a]t no time did [decedent]

treat     that   payment      as     entitling       him   to     a    legal   ownership

interest    in     B&H."    The    motion    to      dismiss    was     denied      without

prejudice.

      Thereafter, the parties pressed their positions as to how

the $900,000 transfer by decedent to B&H should be characterized

— defendant arguing it was a gift and plaintiff arguing it was

an investment in B&H and, therefore, part of the estate — by

cross-moving       for     summary    judgment.       Chancery        Judge    Robert      P.

Contillo    granted        plaintiff's      and      denied     defendant's        motion.

Defendant appeals, arguing the judge erred in granting summary

2
  Plaintiff alleged in his complaint that an estate tax return
filed by decedent's widow valued the gross estate at more than
33,000,000,000 South Korean Won (approximately $31,000,000).

                                            3                                      A-4562-13T1
judgment because, in his view: (1) the court lacked jurisdiction

over the dispute; (2) the chancery judge mistakenly applied New

Jersey law instead of Korean law; (3) even if New Jersey law

applies, the chancery judge erred "by refusing to apply the

presumption that a transfer from a parent to child is a gift";

(4)   the   chancery    judge   should         have   conducted   an   evidentiary

hearing to develop and resolve the parties' factual dispute; and

(5) the chancery judge erroneously provided the administrator

with greater authority than necessary in the circumstances.

       Despite defendant's failure to present his first argument —

lack of jurisdiction — to the trial court,3 we consider and

reject it on its merits.4

       Defendant's     jurisdictional          argument    presents    a   classic

chicken-and-egg problem.         Our probate courts may exert ancillary

jurisdiction over property within the State when possessed by an

intestate nonresident at the time of death. N.J.S.A. 3B:10-7.

In    determining    whether    it   has       jurisdiction   pursuant     to   this

statute, a court must necessarily determine whether the property

3
  Defendant did not signal, as he should have, that this argument
was not asserted in the trial court as required by Rule 2:6-
2(a)(1).
4
  A lack of subject matter jurisdiction may be asserted for the
first time on appeal. See Nieder v. Royal Indem. Ins. Co., 62
N.J. 229, 234 (1973); Macysyn v. Hensler, 329 N.J. Super. 476,
481 (App. Div. 2000).

                                           4                               A-4562-13T1
within    the     State       was    possessed         by   an   intestate         nonresident.

There    being     no    dispute          that    decedent       was    a     nonresident         and

intestate,       and    that        B&H    is    a    New    Jersey      limited         liability

company, the only question about the exercise of jurisdiction

over the property is whether it was owned by decedent at the

time of his death. That remaining question, however, constitutes

the     primary    dispute          between          the    parties.        Consequently,          to

determine       whether       the    court       possessed       ancillary         jurisdiction

pursuant to N.J.S.A. 3B:10-7, the judge was required to resolve

the   merits      of    the    parties'          dispute     about      the      nature     of    the

$900,000 transfer.

      As perplexing as this may initially sound, the situation is

not     uncommon;       our         Supreme       Court      has       recognized          that     a

jurisdictional          question          may    often      be     intertwined           with     the

underlying dispute and, in that instance, "the jurisdictional

determination should await a determination of the relevant facts

on either a motion going to the merits or at trial." Blakey v.

Continental Airlines, 164 N.J. 38, 71 (2000) (quoting Augustine

v. United States, 704 F.2d 1074, 1077 (9th Cir. 1983)); see also

Plume v. Howard Sav. Inst., 46 N.J.L. 211, 228 (Sup. Ct. 1884)

(observing,        in     a     similar          setting,        that       an     error     in     a

determination that the decedent was a resident of the state

might    warrant       reversal       of    the       judgment     "but       it   can     have   no

                                                  5                                        A-4562-13T1
bearing against the right of the court to adjudicate upon the

facts before it"); In re Russell's Estate, 64 N.J. Eq. 313, 317-

18   (Prerog.     Ct.    1902)      (recognizing         the   court's       authority         to

resolve     a     dispute     about       the     decedent's         residency           before

determining       whether     the    court       possessed      jurisdiction            over     a

nonresident       decedent's        New   Jersey         property).         Had    defendant

raised this jurisdictional issue when he either opposed or moved

for summary judgment,5 the chancery judge would have been in no

different       position    than     he   was     when    he    ruled    on       the    cross-

motions.    That is, the judge would have recognized he would have

to first resolve the dispute about the nature of the $900,000

transfer        before     determining          whether        the    court        possessed

ancillary        jurisdiction        over        the     property.          In     correctly

ascertaining the monetary transfer constituted an investment and

not a gift, Chancery Judge Contillo implicitly and correctly

concluded       the   court   possessed         jurisdiction         over    the    parties'

dispute.6

5
  Defendant's argument that he asserted lack of jurisdiction as
an affirmative defense in his responsive pleading does not mean
that he raised the issue in the trial court. A litigant must do
more and cannot expect that a judge who has been asked to rule
on a dispositive motion will scour the pleadings for other
arguments or defenses a party might have once contemplated but
chose not to assert in the motion.
6
  It appears that to some extent defendant argues in this same
context that the Republic of Korea offers a more convenient or
                                                    (continued)

                                             6                                          A-4562-13T1
       Our rejection of defendant's conflict-of-law argument — by

which he claims the judge should have applied Korean rather than

New Jersey law — rests on different grounds.                   First, unlike the

jurisdictional issue, the conflict-of-law issue was not raised

in     the   trial   court     and,   therefore,       we     need    not   consider

defendant's belated argument that the chancery judge should have

applied Korean law. See US Bank Nat'l Ass'n v. Guillaume, 209
N.J. 449,   483   (2012).    Second,       when   posing    a     conflict-of-law

issue, a party is required to demonstrate a difference between

the competing bodies of law. DeMarco v. Stoddard, 223 N.J. 363,

383 (2015); Cornett v. Johnson & Johnson, 211 N.J. 362, 374

(2012); P.V. ex rel. T.V. v. Camp Jaycee, 197 N.J. 132, 143

(2008). Defendant did not argue to the chancery judge, and has

not argued to us, that Korean law compels a different result

than that reached through a proper application of New Jersey

(continued)
better forum for resolution of the issues presented; plaintiff,
in fact, commenced an action there a few weeks after the matter
at hand was commenced. We find insufficient merit in defendant's
argument in this regard to warrant discussion in a written
opinion. R. 2:11-3(e)(1)(E). We do not mean to be flippant in
suggesting that the best source of information for deciding this
issue would be the decedent, but he is not available regardless
of which forum adjudicates the issue. The point is this action
was filed first, and defendant has not demonstrated how Korea
provides a better forum for a fair and complete resolution of
the issues that might warrant a disregard of the presumption in
favor of the first-filed action. See Sensient Colors, Inc. v.
Allstate Ins. Co., 193 N.J. 373, 386 (2008).

                                          7                                 A-4562-13T1
law; indeed, he has cited only New Jersey authorities in his

written submissions.             Consequently, we find insufficient merit

in   this    argument       to    warrant       further    discussion.      R.      2:11-

3(e)(1)(E).

      In his third and fourth arguments, defendant contends the

chancery    judge,    in     granting    summary         judgment    in   plaintiff's

favor, failed to apply the presumption described in Bhagat v.

Bhagat, 217 N.J. 22, 41-42 (2014), and mistakenly declined to

conduct an evidentiary hearing or otherwise recognize there were

disputed questions of material fact that required a denial of

summary judgment.

      The judge's rejection of the presumption and his grant of

summary judgment are not entitled to deference. In reviewing the

summary judgment entered in plaintiff's favor, we apply the same

standard that bound the chancery judge, see, e.g., Townsend v.

Pierre, 221 N.J. 36, 59 (2015), and we are required to reverse

when "the competent evidential materials presented, . . . viewed

in   the    light    most    favorable      to     the    non-moving       party,     are

sufficient     to    permit      a   rational      factfinder       to    resolve    the

alleged dispute in favor of the non-moving party," Brill v.

Guardian Life Ins. Co. of Am., 142 N.J. 520 (1995).                        The import

of this standard is that courts "should not hesitate to grant

summary judgment" — and appellate courts should not hesitate to

                                            8                                 A-4562-13T1
affirm those summary judgments — "when the evidence 'is so one-

sided that one party must prevail as a matter of law.'" Ibid.

(quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106
S. Ct. 2505, 2512, 91 L. Ed. 2d 202, 214 (1986)).

      We turn first to the burden of persuasion when determining

whether a transfer constitutes a gift.               As the Supreme Court has

recognized, "[t]he burden of proving an inter vivos gift is on

the party who asserts the claim." Bhagat, supra, 217 N.J. at 41

(citing Sadofski v. Williams, 60 N.J. 385, 395 n.3 (1972)).                       As

a general matter, "the recipient [of the alleged gift] must show

by   'clear,    cogent      and   persuasive'    evidence      that    the     donor

intended to make a gift." Ibid. (quoting Farris v. Farris Eng'g

Corp.,   7 N.J. 487,   501   (1951)).     The   Supreme   Court    has     also

described      the   degree       of   proof    necessary      as     "clear    and

convincing" where the claim of a gift is first asserted after

the alleged donor's death, as here. Sadofski, supra, 60 N.J. at

395 n.3.

      The Court has held, however, that when "the transfer is

from a parent to a child, the initial burden of proof on the

party claiming a gift is slight." Bhagat, supra, 217 N.J. at 41

(citing Metropolitan Life Ins. Co. v. Woolf, 136 N.J. Eq. 588,

592 (Ch. 1945), aff’d, 138 N.J. Eq. 450 (E. & A. 1946)). In

essence, it is said that "a presumption arises that the transfer

                                         9                                A-4562-13T1
is a gift," ibid. (citing numerous cases, including, Peppler v.

Roffe, 122 N.J. Eq. 510, 515 (E. & A. 1937)), because "a child

is considered a natural object of the bounty of the donor," id.

at 42 (citing Weisberg v. Koprowski, 17 N.J. 362, 373 (1955)).

        We agree with Chancery Judge Contillo that defendant was

not entitled to the presumption that might normally attach to a

transfer       from   a   parent    to   a   child    because   decedent   did   not

transfer $900,000 to defendant; he transferred those funds to

B&H.7    Without this presumption, defendant was obligated to show

by clear, cogent and persuasive evidence that decedent intended

that the transfer to B&H was a gift to him.                      We agree as well

with     the    judge     that     defendant's       factual    presentation     fell

woefully short and its inadequacy justified the entry of summary

judgment.

        Defendant     offered      no    documentation     that    would   suggest

decedent intended to make a gift; instead he largely alluded to

the absence of documentation, pointing out that plaintiff was

unable to produce either a certificate of decedent's membership

in B&H or a loan agreement between B&H and decedent.                       That is

all true, but plaintiff did provide documentation that showed

decedent annually confirmed the existence of this investment in

7
  It is noteworthy that defendant and his wife maintained a
personal bank account in New Jersey into which any monetary gift
could have been conveyed had that been decedent's intention.

                                             10                            A-4562-13T1
B&H by submitting — every year from 2001 until his death —

investment status sheets to the Export-Import Bank of Korea, a

quasi-governmental      entity,   reflecting   that   he   made   a    direct

overseas investment of $900,000 in B&H and that he held a 40.8%

interest in B&H.        Even if any substance could be found in the

only direct evidence provided by defendant — his self-serving

accounts of discussions with the decedent8 — it was incapable of

sustaining defendant's burden of proving a gift and paled in

comparison   to   the    contrary,   written   representations        made   by

decedent to the Export-Import Bank of Korea.           We agree with the

chancery judge that, as a matter of law, if the matter went to

trial, defendant would have been unable to sustain his burden of

showing by clear and convincing evidence that decedent intended

the $900,000 he wired to B&H to be a gift to defendant; the

proofs were so one-sided that plaintiff was entitled to summary

judgment.

    In his last argument, defendant contends that the judge's

grant   of   authority    to   the   administrator    exceeded    what       was

8
  See Metropolitan Life Ins. Co., supra, 136 N.J. Eq. at 592
(recognizing that "uncorroborated testimony of the donee
claiming a gift must be carefully scrutinized"). We are
cognizant that decedent's widow testified at her deposition that
decedent said the $900,000 transfer was a gift, but we are also
mindful that she filed an estate tax return that represented
decedent owned, at the time of his death, a 40.8% interest in
B&H.

                                     11                               A-4562-13T1
necessary under the circumstances.               The judge's May 8, 2014

order specifically authorized the administrator:

              to perform all acts of estate administra-
              tion, including but not limited to: marshal-
              ing the assets located in New Jersey;
              obtaining from [defendant] an accounting of
              the Estate's New Jersey assets and his
              management of B&H and its related entities;
              obtaining from [defendant and his wife] an
              accounting of all gifts they received from
              [d]ecedent;   obtaining   information   from
              [defendant] concerning the nature and extent
              of the Estate's interest in Tazz Mall, LLC,
              B&H Design and Construction Co., LLC[,] and
              any other entities; filing a lawsuit, if
              necessary . . . to compel such accountings
              and   related  discovery   and   filing  all
              necessary tax returns as required by law and
              arrange for payment of any gift taxes, New
              Jersey and federal estate taxes that may be
              due with respect to the Estate's New Jersey
              assets or any gifts or loans made by
              [d]ecedent.

    The scope of the authority granted the administrator was

not raised until defendant moved for a stay pending appeal.                The

issue   was    discussed,   but   the    judge   chose   not   to   make   any

alteration in the earlier order.           In denying the motion for a

stay, however, the judge did not preclude a future application

from defendant to modify the order. This invitation was not

accepted; defendant instead presses the point here.

    Because the chancery judge was not given the opportunity to

reconsider the scope of the authority granted the administrator,

we choose not to consider the issue in the first instance. See

                                    12                               A-4562-13T1
State v. Robinson, 200 N.J. 1, 19 (2009) (observing that "[t]he

jurisdiction   of   appellate   courts   rightly   is   bounded   by    the

proofs and objections critically explored on the record before

the trial court by the parties themselves"). In declining to

consider the issue, we do not mean to suggest defendant may not

seek or, for that matter, may not be entitled to relief from the

chancery judge following our disposition of this appeal; we hold

only that our consideration of the scope of the May 8, 2014

order is premature.9

     Affirmed.

9
  We also denied defendant's motion for a stay except that we
restrained   the   administrator   from   "disseminat[ing]  any
information" obtained from the parties pending further order.
Despite this appeal's disposition, which would ordinarily
terminate the partial stay, we nevertheless will permit the
limitations we placed on the administrator to remain in effect
for thirty days from today's date, after which it shall
automatically expire unless extended by the chancery judge. We
do this solely to allow for a prompt but unhurried motion
regarding the scope of the May 8, 2014 order that defendant may
now choose to file in the trial court.

                                  13                              A-4562-13T1