Estate of Christopher M. Walsh v. Ryan Walsh

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited . R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-3225-24

ESTATE OF CHRISTOPHER M. WALSH and NANCY J. RICANY, individually,

Plaintiffs-Respondents,

v.

RYAN WALSH, individually,

Defendant-Appellant,

and

RICHARD S. GEBBIA II, individually, MICHAEL RUVO, individually, and T.E. CAPITAL HOLDINGS, LLC,

Defendants,

ESTATE OF MAUREEN WALSH,

Defendant/Third-Party Plaintiff,

v. PAUL O'BRIEN and NANCY J. RICANY,

Third-Party Defendants- Respondents. ________________________________

Submitted April 21, 2026 – Decided July 28, 2026

Before Judges Gooden Brown and Rose.

On appeal from the Superior Court of New Jersey, Chancery Division, Ocean County, Docket No. C-000091-23.

McCarter & English, LLP, attorneys for appellant (Christopher D. Adams, of counsel and on the briefs; Marjan Moussavian, Taylor A. Collins and Esther Hwang, on the briefs).

Montenegro Thompson Montenegro & Genz, attorneys for respondents (Sebastian Ferrantell, on the brief).

PER CURIAM

Defendant Ryan Walsh appeals from an April 30, 2025 Chancery Division

order, made final by a June 13, 2025 order, see R. 4:42-2, denying his request

for frivolous litigation sanctions and counsel fees against plaintiffs/third-party

defendants, the Estate of Christopher M. Walsh, Paul O'Brien, and Nancy J.

Ricany (collectively, plaintiffs). Because we conclude the denial of sanctions

and fees was a proper exercise of the Chancery judge's discretion, see Bove v.

AkPharma Inc., 460 N.J Super. 123, 146 (App. Div. 2019), we affirm.

A-3225-24 2 I.

The underlying litigation between the parties was nothing short of

contentious, triggering a protracted procedural history. Their bitter dispute over

the family residence is well known to the parties, exhaustively described in their

briefs, and need not be recited here in the same level of detail. We summarize

instead the relevant facts and events pertinent to the issue raised on appeal.

The crux of the dispute concerned multiple conveyances of the Walsh

family home in Beachwood (the Property). Edward Walsh and Maureen Walsh,

husband and wife, purchased the Property in 1974. Three children were born of

the marriage, including Christopher Walsh; Christopher's son, Ryan was their

only grandchild.1 In 1993, Christopher divorced Ryan's biological mother,

Tammy L. Ellis, and Ryan lived with Christopher, Edward, and Maureen.

Around 2012, Christopher allegedly began a relationship with Ricany, who was

married to O'Brien.

Shortly after Edward's death in June 2013, Maureen executed a quit claim

deed conveying the jointly-owned Property to herself. Thereafter, the Property

was transferred multiple times among various individuals and entities:

1 Because some of the parties share the same surname, following the initial mention of their names, we use first names for ease of reference. No disrespect is intended. A-3225-24 3 • January 2014 - Maureen to Christopher;

• January 2015 - Christopher to Ricany and himself as joint tenants;

• July 2016 - Christopher and Ricany to Christopher;

• June 2017 - Christopher to Ryan;

• December 2017 - Ryan to his limited liability company (Ryan's LLC); and

• May 2018 - Ryan's LLC to Christopher.

We glean from the record, the May 2018 transfer to Christopher was made

pursuant to an April 2018 stipulation of settlement among the parties in

Christopher's and Maureen's order to show cause application against Ryan and

his LLC following eviction proceedings instituted by Ryan against his father

and grandmother in landlord tenant court.

In March 2019, Christopher executed his last will and testament (LW&T),

granting Maureen a life estate in the Property and providing, "[s]he will be

responsible for the taxes, mortgage, utilities until the time of her death or at

which time she moves out of the property." Christopher bequeathed the

remainder of his estate to Ricany, appointed O'Brien executor, and

"intentionally" excluded Ryan "for reasons best known to him." One month

after he executed the LW&T, Christopher died, survived by Maureen and Ryan.

A-3225-24 4 In November 2019, Ryan filed a self-represented complaint in the Probate

Part, challenging the validity of Christopher's LW&T. In his complaint, Ryan

alleged the LW&T was the product of O'Brien's and Ricany's undue influence

over Christopher. In June 2020, the probate court dismissed the complaint on

O'Brien's and Ricany's motion for failure to timely file the caveat to probate the

will within the time prescribed by Rule 4:85-1.

Thereafter, the taxes were not paid on the Property. T.E. Capital

Holdings, LLC (T.E. Capital) purchased the tax lien and, in August 2022, filed

a complaint to foreclose on the tax sale certificate.2 In support of the application,

Michael Ruvo, a Beachwood code enforcer, certified the property was

abandoned (abandoned property certification). See N.J.S.A. 54:5-86. That same

day, T.E. Capital filed a notice of lis pendens with the Ocean County Clerk.

After O'Brien redeemed the tax lien, T.E. Capital dismissed the foreclosure

complaint and discharged the lis pendens.

2 In an ensuing certification to quash O'Brien's and Ricany's subpoena for T.E. Capital's litigation file, Ryan certified the company was owned by his mother, Ellis. Ryan further certified he held power of attorney for Ellis from 2019 until her death in November 2021, and was T.E. Capital's "principal point of contact." We glean from the record, Richard S. Gebbia II was T.E. Capital's registered agent and managing member. A-3225-24 5 In June 2023, O'Brien, as executor of Christopher's estate, filed a

declaratory judgment action against Maureen, seeking to terminate her life estate

in the Property. In the complaint, O'Brien asserted, as the life tenant, Maureen

"[wa]s solely responsible for the payment of real estate taxes," failed to do so,

committed waste, failed to maintain the property, and did not live in the home.

O'Brien further asserted he was Ricany's substitute guardian.

In August 2023, Maureen answered the complaint and asserted affirmative

defenses and counterclaims against Christopher's estate and O'Brien. Maureen

also filed a third-party complaint against O'Brien and Ricany. In her

counterclaims and third-party complaint, Maureen alleged various causes of

action, including two fraud counts. In essence, Maureen alleged O'Brien's and

Ricany's fraudulent acts caused her to lose the Property.

In September 2023, Ruvo was charged in a complaint-summons with

official misconduct for, among other things, submitting the abandoned property

certification "in a court proceeding to foreclose on the [P]roperty," knowing the

Property was not abandoned. According to the complaint, Ruvo knew the

A-3225-24 6 abandoned property certification "would have assisted R.W. and a closely

related entity with securing the [P]roperty through the foreclosure proceeding." 3

Motion practice ensued. In October 2023, plaintiffs applied for an order

to show cause, requesting the court terminate Maureen's life estate. In his

supporting certification, O'Brien asserted Maureen "failed to make the taxes and

sewer payments as a sham to cause the tax sale and allow Tammy and Ryan to

obtain title to the premises through the LLC, formed for this purpose." In March

2024, Maureen moved for a preliminary injunction preventing plaintiffs "from

executing a deed vesting ownership of the [P]roperty . . . pending the conclusion

of this proceeding" and "attempting to access the Property pending such

[o]rder."

In April 2024, plaintiffs opposed Maureen's motion and cross-moved for

leave to amend their complaint to add Ryan as a defendant. Maureen opposed

plaintiffs' motion; the Chancery judge denied Maureen's motion; and plaintiffs

thereafter withdrew their cross-motion.

3 In February 2025, Ruvo waived his right to indictment and, relevant here, pled guilty to an accusation charging him with one count of third-degree theft by deception. In his factual basis, Ruvo admitted, when he executed the abandoned property certification, he knew the Property was not abandoned and he "essentially lie[d] on the certification for the purposes of assisting under the foreclosure proceeding on the Property." A-3225-24 7 In June 2024, plaintiffs again moved to amend the complaint. This time,

they sought to add Ryan, Gebbia, Ruvo, and T.E. Capital as defendants.

Relevant here, in their proposed amended complaint, plaintiffs alleged Ryan

committed common law fraud, frivolous litigation, and tortious interference.

In his certification in support of the motion, O'Brien alleged the proposed

defendants participated in a common scheme to defraud Christopher's estate.

During extensive oral argument before the same Chancery judge, plaintiffs'

counsel detailed the scheme, explaining how it became known over the course

of discovery.

At the conclusion of arguments on four motions, the Chancery judge

issued an oral decision and an August 2, 2024 order, granting plaintiffs' motion

to amend the complaint. Pertinent to this appeal, the judge squarely addressed

the liberal pleading standard, see Zacharias v. Whatman PLC, 345 N.J. Super.

218, 226 (App. Div. 2001), in view of the court's discretionary standard, see

Kernan v. One Washington Park Urb. Renewal Assocs., 154 N.J. 437, 457

(1998). Crediting plaintiffs' argument that the culpability of Ryan, Gebbia, and

Ruvo "was only determined as a result of ongoing discovery," the judge found

these defendants "should be added in the interest of justice."

A-3225-24 8 Addressing the elements of a common law fraud claim, see Gennari v.

Weichert Co. Realtors, 148 N.J. 582, 610 (1997), the judge was satisfied the

proposed amended complaint asserted "sufficient allegations to satisfy all those

elements . . . such that the complaints can be maintained." The judge elaborated:

"As we go forward with discovery obviously they would be subject to motion.

But it's not sufficient for me to deny the ability to make these claims, as I'm

required to do, assuming that all the allegations are correct at this point."

Three months later, on November 4, 2024, Ryan moved to dismiss the

amended complaint under Rule 4:6-2(e). In his moving brief, Ryan asserted

plaintiffs' fraud claim was not pled with specificity because: the claim

"combine[d] all defendants without explanation for what each party did";

plaintiffs "did not suffer damages"; and plaintiffs did "not rely on any statement,

false or otherwise made by Ryan . . . to their detriment." Ryan also argued

plaintiffs failed to sufficiently assert a tortious interference claim and all claims

against him were barred under the entire controversy doctrine.

On November 14, 2024, Ryan served plaintiffs a frivolous litigation letter,

echoing the contentions raised in his motion, thereby placing plaintiffs on notice

they knew or should have known their complaint had no reasonable basis in law.

A-3225-24 9 Ryan requested plaintiffs withdraw their claims against him. Plaintiffs did not

withdraw their claims, or otherwise respond to Ryan's safe harbor letter.

Following arguments on January 6, 2025, the present Chancery judge

dismissed with prejudice plaintiffs' amended complaint against Ryan. Pertinent

to this appeal, the judge recognized plaintiffs were permitted to amend their

complaint pursuant to their fraudulent transfer theory and noted plaintiffs

essentially alleged "a conspiracy to start this tax foreclosure under an

abandonment theory." But the judge found plaintiffs later paid the taxes due

"without any penalty and suffer[ed] no harm" because the tax foreclosure action

was dismissed. Accordingly, the judge dismissed plaintiffs' fraud claims against

Ryan, Maureen, Gebbia, and Ruvo, finding plaintiffs did not rely upon a

misrepresentation to their motions or suffer damages.4

Ryan thereafter moved for frivolous litigation sanctions and counsel fees

pursuant to N.J.S.A. 2A:15-59.1 and Rule 1:4-8. During oral argument before

the present Chancery judge, Ryan's counsel argued plaintiffs "were put on notice

4 In his decision, the Chancery judge left intact plaintiffs' tortious interference claim against Maureen, permitting plaintiffs "to litigate any issues of interference with [their] property rights, if it is ultimately determined that the obligation to pay the taxes was on Maureen rather than on the executor [,]" O'Brien. A-3225-24 10 very early on in this case that they knew or should have known that the complaint

was without any reasonable basis in law."

At the conclusion of arguments, on April 30, 2025, the Chancery judge

issued an oral decision, denying Ryan's motion. The judge reasoned, in pertinent

part:

Under [Rule] 1:4-8, the court looks to the rule, looks to the purpose of joinder. And . . . I think it's fair to say, in anyone's estimation, that this is a tortured procedure where there were many people who were brought into relationships that otherwise, I think most observers would consider to be uncommon. There were difficult relationships, there were different interests that were being exchanged.

[P]laintiffs took the position that they wanted to amend the complaint. That application went before [the previous Chancery judge]. He reviewed the application, determined that there was a prima facie case of fraud, allowed the complaint to be amended, and then litigation proceeded. Ultimately, it came before this court, and it was dismissed on a [Rule] 4:6-2[(e)] application . . . .

But the court is well satisfied that this is not a situation where this was an application that was punitive in nature; that the court understood that there, at least on its face, was an application to be made to pursue fraudulent dealings.

The court will compel each party to pay its own attorneys' fees under the American rule. The court doesn't find anything egregious about the litigation. I think the parties in this case have a great deal of

A-3225-24 11 explaining to do as to how they got to their relative positions and whether or not they can support their interests in the property that is now under dispute.

The court is not going to grant the application for the attorneys' fees and deny it. The court finds that the parties did not violate their obligations under Rule 1:4- 8.

On appeal, Ryan maintains frivolous litigation sanctions and counsel fees

were warranted, arguing the Chancery judge "failed to consider the relevant

factors set forth in [N.J.S.A. 2A:15-59.1] and Rule 1:4-8 in reaching [his]

decision." Citing our decisions in Bove and DeBrango v. Summit Bancorp, 328

N.J. Super. 219 (App. Div. 2000), Ryan argues a claim filed in good faith is

subject to sanctions if "it becomes known . . . over the course of litigation that

the litigation is frivolous." Ryan asserts plaintiffs' complaint "was initiated and

pursued in bad faith as there was no basis in law or equity to support" their claim

Maureen was obligated to pay taxes. Reiterating the contentions supporting his

successful dismissal motion, Ryan claims the duty to pay taxes lay with O'Brien,

as executor of Chrisopher's estate, not Maureen.

II.

Rule 1:4-8 authorizes sanctions against attorneys and pro se parties for

frivolous litigation. The Rule supplements N.J.S.A. 2A:15-59.1, which permits

the trial court to award to a prevailing party in a civil action "all reasonable

A-3225-24 12 litigation costs and reasonable attorney fees, if the judge finds at any time during

the proceedings or upon judgment that a complaint, counterclaim, cross -claim

or defense of the non[-]prevailing person was frivolous." N.J.S.A. 2A:15-

59.1(a)(1); see also Toll Bros., Inc. v. Twp. of W. Windsor, 190 N.J. 61, 69-73

(2007). To find a pleading was frivolous, the trial court must conclude the filing

was made "in bad faith solely for the purpose of harassment, delay or malicious

injury," N.J.S.A. 2A:15-59.1(b)(1), or "[t]he non[-]prevailing party knew, or

should have known" the filing "was without any reasonable basis in law o r

equity," N.J.S.A. 2A:15-59.1(b)(2).

"Sanctions are not to be issued lightly; they are reserved for particular

instances where a party's pleading is found to be 'completely untenable,' or

where 'no rational argument can be advanced in its support.'" McDaniel v. Man

Wai Lee, 419 N.J. Super. 482, 499 (App. Div. 2011) (quoting United Hearts,

L.L.C. v. Zahabian, 407 N.J. Super. 379, 389 (App. Div. 2009)); see also Bove,

460 N.J. Super. at 151 (noting sanctions under Rule 1:4-8 and N.J.S.A. 2A:15-

59.1 are "awarded only in exceptional cases"). Indeed, we have long recognized

a consideration of Rule 1:4-8 sanctions requires that judges "give a 'restrictive

interpretation' to the term 'frivolous' in order to avoid limiting access to the court

system." United Hearts, 407 N.J. Super. at 390 (quoting First Atl. Fed. Credit

A-3225-24 13 Union v. Perez, 391 N.J. Super. 419, 433 (App. Div. 2007)); see also McKeown-

Brand v. Trump Castle Hotel & Casino, 132 N.J. 546, 561-62 (1993).

Accordingly, "[w]hen the [non-prevailing party's] conduct bespeaks an

honest attempt to press a perceived, though ill-founded and perhaps misguided,

claim, he or she should not be found to have acted in bad faith." Bove, 460 N.J.

Super. at 151 (second alteration in original) (quoting Belfer v. Merling, 322 N.J.

Super. 124, 144-45 (App. Div. 1999)). Simply because "some of the allegations

made at the outset of litigation later prove[] to be unfounded does not render

[the complaint] frivolous." Id. at 148 (quoting Iannone v. McHale, 245 N.J.

Super. 17, 32 (App. Div. 1990)). We have nonetheless recognized "litigation

may become frivolous, and therefore sanctionable, by continued litigation over

a meritless claim, even if the initial pleading was not frivolous or brought in bad

faith." Id. at 152. "This is because the 'requisite bad faith or knowledge of lack

of well-groundedness may arise during the conduct of the litigation.'" Ibid.

(quoting United Hearts, 407 N.J. Super. at 390); see also DeBrango, 328 N.J.

Super. at 226.

In view of these governing principles, and our discretionary standard of

review on a sanctions motion, we decline to disturb the April 30, 2025 order.

As the judge recognized, plaintiffs filed their amended complaint on leave

A-3225-24 14 granted by the prior Chancery judge, who had found "a prima facie case of

fraud" and "allowed the complaint to be amended." The present judge ultimately

found plaintiffs' application to amend their complaint was not "punitive in

nature" because "on its face," the amended complaint asserted "fraudulent

dealings." Essentially, the judge concluded plaintiffs did not act in bad faith.

The record supports the judge's determination. On this record, we cannot

conclude this was an "exceptional case," see Bove, 460 N.J. Super. at 151,

warranting Ryan's application for frivolous litigation sanctions and counsel fees.

To the extent not addressed, Ryan's remaining arguments lack sufficient

merit to warrant further discussion in a written opinion. R. 2:11-3(e)(1)(E).

Affirmed.

A-3225-24 15