NJ Appellate Court Finds Purported Settlement Unenforceable and Proponents of Will Satisfied Their Burden of Proof
In the Matter of the Estate of Felix Braun, Deceased and In the Matter of the Probate of the Lost Will of Sylvia Braun, 2017 N.J. Super. Unpub. LEXIS 2747 (N.J. Super. Ct. App. Div. Nov. 2, 2017).
Before the Appellate Court were two appeals that concern disputes over the respective estates of Felix Braun, deceased (“Felix”) and his wife Sylvia Braun, deceased (“Sylvia”). In the first appeal, (docket number A-3816-14), Richard Belott, the executor of Felix’s estate, appealed from a March 16, 2015 order, denying his application to enforce a purported 2014 settlement of Sylvia Braun’s elective share lawsuit against Felix’s estate. Id. at *1. In the second appeal (docket number A-2861-15), the executor of the estate of the couple’s daughter, Courtney Braun Ganz, appealed from a November 16, 2015 order, entered after a plenary hearing, admitting a copy of Sylvia’s April 27, 2010 will to probate. Id. at *1.
The Appellate Division affirmed the trial judge’s ruling that the purported 2014 settlement was not enforceable because, on its face, the document indicated that the parties had not yet reached an agreement on material provisions. Id. at *1-2. With respect to the 2010 will, the appeals court found no basis to disturb the trial judge’s factual findings, based in large part on her evaluation of witness credibility. Id. Based on the facts as the trial judge found them to be, the appellate court found that there was sufficient credible evidence to support her conclusions, by clear and convincing evidence, that Sylvia did not destroy the original 2010 will and that the copy should be admitted to probate. Id. at *2.
Accordingly, the court affirmed the orders on appeal in both cases. Id.
Estate of Felix Braun
As to the dispute over Felix’s estate, the court noted the following relevant facts. In 2007, Felix executed a will that left the bulk of his estate in trust for the couple’s daughter Courtney, with the remainder to go to Courtney’s daughter Molly after Courtney’s death. Id. He left no specific bequests for Sylvia in his will. Id. However, the trust referenced in his will made a provision for Sylvia to the extent Felix’s estate exceeded $3.5 million. Id.
Felix died in February 2008. Id. at *3. In September 2008, Sylvia filed a lawsuit seeking an elective share of Felix’s estate. Id. Both Courtney and the estate counterclaimed against Sylvia for allegedly misappropriating Felix’s assets. Id. Thereafter, Courtney filed a guardianship suit seeking to have Sylvia declared mentally incapacitated. The court eventually dismissed the guardianship suit. Id. at *4.
There is no dispute that in 2010, Sylvia executed a new will that specifically disinherited Courtney. Id. at *4. Instead, the will left Sylvia’s entire estate in trust for the care of two disabled relatives – her sister Norma Bernstein and Norma’s daughter Tamara. Id. The will provided that after the deaths of Norma and Tamara, the bulk of the trust assets would go to various religious charities. Id. From the trust remainder, Sylvia also left $2000 bequests to Felix’s grandchildren by a prior marriage and $10,000 to Sylvia’s granddaughter Molly. Id.
In 2011, the parties, all of whom were represented by counsel, went to mediation. Id. The mediation resulted in a written settlement agreement signed by the parties’ attorneys, including Courtney’s counsel. Id. at *4. The 2011 agreement required Felix’s estate to put about $900,000 in a trust for Sylvia as income beneficiary, with the remainder to go to Courtney, or to Molly if Courtney predeceased Sylvia. Id. Sylvia also agreed to change her will to leave one-third of her net estate in trust to Courtney, with the remainder in trust for Molly. Id. Sylvia further agreed to give Courtney ownership of a condominium in which Courtney was then residing, and to give her title to a car and certain other items. Id. However, Courtney refused to sign the agreement, and Sylvia filed a motion to enforce the settlement. Id.
After a two-day bench trial, the trial judge issued a written opinion on May 22, 2014, declining to enforce the 2011settlement because she found that Courtney had not agreed to it. Id. at *5. The trial judge also found that schedules A and B of the settlement were never finalized. Id. Schedule A concerned the distribution of jewelry and other personal property between Courtney and Sylvia and contained hand-written notations, including “no” as to Courtney getting a gold and ruby bracelet. Id.
In early 2014, at a time when Sylvia was ninety years old and in ill health, she engaged in settlement negotiations with Courtney. Id. Belott, who was also Sylvia’s adversary in the litigation, claimed that he nonetheless undertook to assist Sylvia and Courtney to settle their differences, without directly involving attorneys in the negotiations. Id. The purported result of that process was a document which Belott contended was typed by refused to sign the agreement, and Sylvia filed a motion to enforce the settlement. Id. at *5-6.
In a verified complaint to enforce the 2014 settlement, Belott asserted that Sylvia signed the document in his presence on February 11, 2014. Id. However, her signature was not dated, nor was it witnessed by a notary, and there was no line below her signature for a notary’s signature. Id. at *6. By contrast, Belott’s signature, dated February 11, 2014, and Courtney’s signature, dated February 25, 2014, each appear above a separate line on which is affixed the signature of a notary. Id.
The trial judge found that the 2014 document on its face indicated that the parties had failed to reach agreement on material terms. In the document, the estate agreed to place $909,000 in trust for Sylvia. Id. The document then recited that on Sylvia’s death, the trust remainder would be turned over to an existing trust created by Felix’s will, or to a special needs trust for Courtney, “and/or” to a spendthrift trust for Molly’s benefit. Id. The next sentence provided: “Terms to be drafted by Attorneys.” Id. However, there was no provision indicating agreement on how the attorneys would determine which option to choose or what terms to include. Id.
The next paragraph recited that Sylvia would put “between $860,000-960,000” in a trust to generate income for her living expenses. Id. at *7. However, immediately above that sentence appears a handwritten notation “I cannot put 860,000-960,000” followed by the initials SB. Id. The next two sentences recite, “Said Trust will pass to Courtney into a Special Needs Trust upon Sylvia’s death or to be agreed upon by the parties.” Id.
Moreover, in one paragraph of the document Sylvia appeared to agree to create a trust for Molly, while in the next relevant paragraph, she did not agree. Id. at *7-8. The last paragraph of the purported agreement addressed the distribution of other estate assets. Id. at *8. After the typed provision, the following words and initials appear in handwriting: “If any assets are found Sylvia should share in them. SB”[.] Id. There was no provision defining what “any items” referred to or how the parties would divide any further assets. Id.
As Courtney drafted it, the 2014 settlement would have required Sylvia to place about $900,000 of her own money in a trust that would go to Courtney on Sylvia’s death, although Sylvia’s handwritten note indicated that she could not afford it. Id. at *9. Sylvia was also required to leave a minimum of an additional $500,000 in a trust for Courtney. Id. The terms of the latter trust were not agreed on in the 2014 document but were to be “drafted by attorneys.” Id. There was no specific agreement as to the remainder beneficiary. Id.
The Appellate Division noted that their review of legal issues, including the interpretation of settlements and other contracts, is de novo. Id. (citing Kaur v. Assured Lending Corp., 405 N.J. Super. 468, 474 (App. Div. 2009)). The court found that the circumstances surrounding the alleged negotiation of the 2014 document bore indicia of undue influence and overreaching. Id. at *10. However, the appeals court concluded that it was unnecessary to rest its decision on that basis. Id. As the 2014 document was facially and fatally deficient due to the parties’ failure to agree on multiple material provisions. Id. The court found that, at best, the purported settlement appeared to be a preliminary document containing concepts, to which the parties might or might not be able to agree in the future if they could flesh out the material terms. Id. The Court relied on the cases of Weichert Co. Realtors v. Ryan, 128 N.J. 427, 435 (1992) and Morton v. Orchard Land Trust, 180 N.J. 118, 120 (2004), stating that an agreement is unenforceable “[w]here the parties do not agree to one or more essential terms.” Id.
The Probate of the Lost Will of Sylvia Braun
As to the dispute over probating a copy of Sylvia’s 2010 will, the issue was whether Sylvia had destroyed the original will. Id. at*11. The proponents of the will produced evidence from which the trial judge found, by clear and convincing evidence, that Sylvia did not intend to die intestate, did not sign a will after 2010, did not intend to revoke the 2010 will, and did not destroy it. Id. at *11-12. After Sylvia’s death in March 2014, her estranged daughter Courtney had access to Sylvia’s house for at least two months, until the court appointed a neutral party, Elizabeth Locker, as temporary estate administrator. Id. at *12. According to Locker’s testimony, Courtney had the keys to Sylvia’s house. Id. Courtney told Locker that she had been in the house multiple times and had searched for Sylvia’s will, including allegedly breaking into her late father’s filing cabinet. Id. Courtney told Locker she did not find the will. Id. Courtney met Locker at the house to turn over the keys, but thereafter was uncooperative with Locker’s efforts to locate bank accounts and other estate assets. Id. She even directed her attorneys not to give Locker a copy of Sylvia’s death certificate. Id.
After searching Sylvia’s home, Locker could not find the original of the 2010 will. Id. at *13. Slvia’s attorney, Ellen Krevsky (“Krevsky”), testified that between April 25, 2013 and March 18, 2014, Sylvia had several conversations with Krevsky about possibly changing her will. Id. However, Sylvia always told Krevsky, “I want to make changes to my will, but I can’t do it now.” Id. Sylvia never told Krevsky that she destroyed the April 2010 will, and Krevsky never prepared a new will for her. Id. Krevsky further testified that in all of their conversations, Sylvia never wavered in her expressed desire to leave a testamentary special needs trust for her sister and niece. Id. She also never changed her expressed desire to leave the remainder of the trust to the Hadassah Hospital. Id.
In her oral opinion, the trial judge found Krevsky to be a credible witness. Id. at *14. he judge found that Belott was biased in Courtney’s favor and that his trial testimony about his alleged lack of knowledge about the 2010 will, and concerning the alleged 2014 settlement agreement, was incredible. Id. at *14-15. The judge found also noted that Courtney could have testified, either in court or by de bene esse deposition, but did not do so. Id. at *15. She assumed that, had Courtney testified, she would have denied destroying the 2010 will. Id.
Without directly finding that Courtney found and destroyed the will, the trial judge noted evidence that someone other than Locker searched through Sylvia’s house and could have found Sylvia’s original will. Id. More importantly, however, the trial judge found by clear and convincing evidence that Sylvia had no intent to revoke the 2010 will. Id. Accordingly, the judge concluded that the will’s proponents had met their burden of proof by clear and convincing evidence, and the copy of the 2010 will would be admitted to probate. Id.
The Appellate Division found no basis to disturb the trial judge’s evaluations of witness credibility or her factual findings. Id. at *16. The appellate court noted that the trial court appropriately held the will’s proponents to the clear and convincing evidence standard, most recently articulated in In re Estate of Ehrlich, 427 N.J. Super. 64, 75-76 (App. Div. 2012). Id. Based on the judge’s factual findings, which are supported by substantial credible evidence, the Appellate Division found the proponents had clearly and convincingly satisfied their proof burden. Id.