NJ Appellate Division Addresses The Nature Of Distributions From An Estate
In the Matter of the Estate of Anna Fabics, 2017 N.J. Super. Unpub. LEXIS 1816, No. A-5576-14T2 (N.J. Super. Ct. App. Div. July 19, 2017).
This decision, rendered on July 19, 2017, deals primarily with the nature of distributions (cash versus in kind) from an estate. The opinion also affirms an award of counsel fees against a party for improper conduct.
Anna Fabics was the mother of Joseph Fabics and Laszlo Fabics. Anna died on January 7, 2015. Her last will devised her residuary estate in equal shares to her two sons. The will appointed Laszlo as executor and directed him (emphasis added):
to sell any property of which I die seized or possessed, or to which at the time of my death, I may be or thereafter become entitled, without prior approval of any person or court, at public or private sale, at such times, upon such terms, in such manner and for such prices as he deems to the best interest of my estate, or to dispose of whatever is not saleable, to execute and deliver deeds or other instruments for the transfer and conveyance thereof, and to transfer and pay over the proceeds in accordance with the instructions herein contained.
*at 2.
Anna’s home was the estate’s major asset. Joseph wanted to purchase the house, but he also claimed the house contained jewelry and other valuable personal property which Laszlo had stolen or handled. Joseph thus filed a complaint in the Chancery Division for injunctive relief against Laszlo. *at 2.
Thereafter, Joseph filed a second complaint in the Chancery Division to set aside probate of the will. *at 3. He also sought to remove Laszlo as executor. The court scheduled a hearing to determine whether to remove Laszlo as executor. The court also permitted Joseph to enter Anna’s home to conduct an inventory of Anna’s personal property.
Joseph conducted a two-day inventory. Laszlo gave Joseph an opportunity to purchase the personal property he wanted, the value of which would be deducted from Joseph’s share of the Estate’s proceeds. Laszlo told Joseph to make a valid offer and warned him that if he did not do so, the property would be sold, donated, or disposed. The court found that Joseph listed the items he wanted, but never made a valid offer. *at 4.
After a two-day bench trial, the trial court entered final judgment dismissing Joseph’s two complaints with prejudice. *at 4. Among other rulings, the judge dismissed Joseph’s request for an accounting without prejudice, as premature, finding that Laszlo was not required to provide an accounting at that time. The judge also discharged a lis pendens Joseph had filed against Anna’s home. The judge further determined that Joseph failed to substantiate his allegations of Laszlo’s waste of estate assets, misconduct, or abuse of discretion. The judge was satisfied that Laszlo had carried out his duties as executor properly.
The trial judge also determined that no authority required Laszlo to update Joseph regarding the estate’s assets and liabilities within any specific timeframe, and that Joseph failed to demonstrate special cause to warrant an accounting prior to the one-year period set forth in N.J.S.A. §3B:17-2. *at 5. The judge denied Joseph’s request for an accounting without prejudice to his right to challenge the final accounting.
Joseph filed a motion for reconsideration of the final judgment and for other relief. He also filed a petition for discovery in the Law Division requesting, in part, access to financial information regarding the Estate’s assets and liabilities. The next day, he filed a second lis pendens against Anna’s home. He also served a subpoena duces tecum on Laszlo.
The chancery judge denied Joseph’s motion for reconsideration and barred him from filing any other actions in the Chancery Division without prior leave of court. *at 6. The judge also: dismissed the petition for discovery with prejudice; discharged a second lis pendens; quashed a subpoena duces tecum; ordered Joseph to pay $3500 for Laszlo’s counsel fees; and barred Joseph from filing any other action in the Law Division. *at 6.
Joseph then filed a notice of appeal. That same day, he filed a third lis pendens against Anna’s home, which Laszlo moved to discharge. The trial court then: discharged the third lis pendens; enjoined Joseph from filing any additional lis pendens without leave of court; and ordered him to pay $1750 for Laszlo’s counsel fees for the motion.
Joseph died on December 16, 2015. Ellen Heine was the executrix of his estate and appeared in that role in the judicial proceedings.
One of the central arguments on appeal was that the trial court had abused its discretion by determining that Joseph needed to accept a cash distribution from the estate rather than an in kind distribution. The Appellate Division rejected that argument. First the appellate court explained: “In disputes over the distribution of the assets of an estate, ‘[w]e first look to the language of the will to determine if the testator expressed an intent as to how the property should be distributed.’ In re Estate of Hope, 390 N.J. Super. 533, 539 (App. Div.) (citation omitted). Here, Anna’s will directed Laszlo ‘to sell any property’ and ‘pay over the proceeds’ to the beneficiaries.” *8. Accordingly, the court found that Anna had expressed the intent that all of her property should be sold and the proceeds distributed in cash, and not in kind.
The Appellate Division also cited N.J.S.A. §3B:23-1(b), as delineating the circumstances under which in kind distributions are proper. *at 9. The court found that those circumstances were not present in this case, especially since Laszlo had demanded payment in cash but Joseph had never made a valid fair market offer.
Finally, the Appellate Division affirmed the award of counsel fees against Joseph:
[The trial court] entered a final judgment dismissing Joseph’s two complaints with prejudice and discharging the first lis pendens. Thereafter, Joseph ignored the judge’s rulings and filed a second and third lis pendens and a petition for discovery that was based on dismissed claims. Joseph’s actions required the Estate to respond and incur counsel fees. Based on Joseph’s improper conduct, [the trial judge] did not abuse his discretion in awarding the Estate counsel fees. Packard-Bamberger & Co. v. Collier, 167 N.J. 427, 443-44 (2001).
*at 10-11.