In the Matter of the Amended and Restated Carlos Hernandez Revocable Trust Dated October 22, 2018, as Amended on June 30, 2020

• Court: New Jersey Superior Court Appellate Division
• Decided: November 16, 2023
• Docket: A-1283-22
• Status: Unpublished

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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ."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-1283-22

IN THE MATTER OF THE AMENDED AND RESTATED CARLOS HERNANDEZ REVOCABLE TRUST DATED OCTOBER 22, 2018, AS AMENDED ON JUNE 30, 2020. _____________________________

Argued October 30, 2023 – Decided November 16, 2023

Before Judges Mawla and Chase

On appeal from the Superior Court of New Jersey, Chancery Division, Bergen County, Docket No. P- 000108-22.

Mario M. Blanch argued the cause for appellant Blanch Family Trust (Blanch Legal, attorneys; Mario M. Blanch, on the brief).

Andrew J. Cevasco argued the cause for respondent (Archer & Greiner, P.C., attorneys; Andrew J. Cevasco, of counsel and on the brief; Lilli B. Wofsy, on the brief).

Respondents Carlene Hernandez, Donna Hernandez, David Hernandez, Laura Hernandez, Carlos Hernandez Revocable Trust, and Stuart Reiser have not filed a brief. PER CURIAM

In this appeal, we are asked to deny a court-appointed trustee payment for

services rendered where a co-trustee alleged a potential conflict, and the trustee

voluntarily resigned. Following our review of the record and the applicable

legal principles, we affirm the trial court's decision to award the trustee his

earned fees.

I.

In February 2021, Carlos Hernandez ("Decedent") died testate, leaving

behind six children by three different women. With his wife Donna Hernandez,

he had David Hernandez, Carlene Hernandez, and Laura Hernandez; with Rosa

Blanch, he had Mario Blanch and Tanya Blanch; and with Esther Simancas, he

had Ramsy Hernandez. Esther1 was named as executrix of the estate.

Article III of Decedent's will directed his residuary estate to pour over into

the Carlos Hernandez Revocable Trust ("CHRT"). The CHRT trust agreement

appointed Carlene and Mario as co-trustees. After expenses were paid and

specific bequests were made, the balance of the CHRT corpus was to be paid "in

equal shares" to two sub-trusts: the Donna Hernandez Family Trust ("Donna

1 Because many of the parties and the trusts share the same or similar surnames, we use first names as identifiers throughout this opinion, intending no disrespect. A-1283-22 2 Trust") and the Blanch Family Trust ("Blanch Trust"). The CHRT trust

agreement also included a detailed in terrorem clause and related safe harbor

provision.

The CHRT trust agreement appointed Carlene trustee of the Donna Trust

and Mario trustee of the Blanch Trust. The trust agreement made a specific

bequest to the Donna Trust of a corporation, Martez, Inc., owner of three

properties in Bergen County. It also made a specific bequest to the Blanch Trust

of 1215-1217 26th Street Investment, LLC, owner of a property in North Bergen

("26th Street property").

Co-trusteeship of CHRT by Mario and Carlene proved to be contentious,

as legal disputes arose over ownership interests in the bequeathed properties.

David and Carlene filed suit ("Law Division action") against Esther as executrix

of their father's estate and the corporate entities that owned the real properties

listed in the CHRT trust agreement, including the 26th Street property. In the

Law Division action, David was represented by Bressler, Amery & Ross, PC

("Bressler"), while Carlene was represented separately by Cole Schotz, PC

("Cole"). Carlene eventually dismissed her claims in the Law Division. David,

still represented by Bressler, did not dismiss his claims in the Law Division.

A-1283-22 3 Carlene, still represented by Cole, initiated a second suit in the Probate

Part ("Probate action") against Mario as co-trustee of the CHRT via verified

complaint, alleging Mario's "actions and omissions [were] threatening the

proper administration of" the CHRT. Carlene filed an amended verified

complaint and order to show cause, asking the court to appoint an additional

trustee or special fiduciary pursuant to N.J.S.A. 3B:31-49(e). Mario answered

Carlene's amended complaint and raised a counterclaim on behalf of the trust,

invoking the in terrorem clause against Carlene for both the Probate action and

the Law Division action. Donna and David, through Bressler, answered

Carlene's amended complaint in the Probate action and raised a crossclaim

against Mario.

On June 16, 2022, the trial court entered an order which, among other

things, appointed respondent Andrew Cevasco ("Cevasco") of Archer &

Greiner, P.C. ("Archer") to serve as a third co-trustee of CHRT alongside

Carlene and Mario. The order also transferred the Law Division action to be

heard as a companion case to the Probate action.

In October 2022, Mario emailed Cevasco after discovering Archer was

represented by Bressler in an unrelated malpractice action in Atlantic County.

Mario claimed Bressler's representation of David in the Law Division action and

A-1283-22 4 both David and Donna in the crossclaims against him in the Probate action,

along with its representation of Archer in the malpractice suit, created a conflict

of interest for Cevasco. Cevasco replied that the malpractice matter had not

come up on his firm's internal conflict check and he did not believe the

malpractice suit had any "bearing on [Cevasco's] service as [t]rustee . . . ."

In his purported capacity as co-trustee of CHRT, Mario filed an order to

show cause to remove Cevasco. Mario cited the alleged conflict of interest and

enumerated several actions he believed Cevasco took in favor of Carlene and

the Donna Trust and against the Blanch Trust.

Mario and Carlene entered into a settlement agreement in which Carlene

agreed to dismiss the Probate action and Mario agreed to dismiss his

counterclaim. As part of the settlement agreement, Cevasco agreed to

voluntarily resign as trustee so the court could appoint another co-trustee. The

trial court entered a consent order approving settlement between Carlene and

Mario and appointing a new third co-trustee to replace Cevasco.

After resigning as co-trustee, Cevasco filed a certification of services

seeking fees for his work totaling $40,162.50. Cevasco detailed his work

reviewing the corporate entities' financial records, addressing and resolving

issues related to the in terrorem clause, investigating tax returns filed on behalf

A-1283-22 5 of the companies, researching and retaining local counsel to defend the trust in

a suit Esther had filed in Florida, hiring a management company for Martez,

Inc., and participating in settlement proceedings. Cevasco attached a detailed

invoice to support his certification. He also certified as to his professional skills

and experience, including having practiced in estate planning and probate

litigation for over thirty-five years, holding both a J.D. and L.L.M. in Taxation,

serving on bar association committees related to probate and estate law, and

lecturing on the same. He certified that the time spent and rates charged were

"reasonable and customary" for other Bergen County attorneys in similar

matters. Mario filed an objection to Cevasco's fees, incorporating by reference

the same factual recitations from his earlier order to show cause for Cevasco's

removal.

On December 22, 2022, the court entered an order awarding Cevasco a fee

in the amount requested. In an accompanying written opinion, the court noted

Cevasco's compensation was anticipated by the June 16, 2022 order, and under

Rendine v. Pantzer, 141 N.J. 292, 317 (1995), and Furst v. Einstein Moomjy,

182 N.J. 1 (2004), Cevasco's fees were "consistent with attorneys of comparable

experience who practice on a regular basis in Bergen County[,]" and "the time

expended . . . was reasonable." The court found Cevasco had not exceeded the

A-1283-22 6 scope of his court appointment as contemplated in the June 16 order. Further,

the court rejected Mario's argument as to the alleged conflict, finding Cevasco

was unaware of Bressler's involvement in the malpractice action and Cevasco

"acted impartially and in good faith in connection with the terms of the

Revocable Trust."

This appeal followed. Mario raises two points for our consideration:

I. AS A PUBLIC POLICY MATTER[,] A TRUSTEE SHOULD NOT EARN A LEGAL FEE WHERE THEY ENGAGED IN A CONFLICT OF INTEREST WHETHER SAME WAS KNOWN OR UNKNOWN.

II. THE FEE GRANTED BY THE TRIAL COURT, WITHOUT A HEARING, IS UNREASONABLE ON ITS FACE AND DOES NOT MEET THE LODESTAR.

II.

"[A] reviewing court will disturb a trial court's award of counsel fees 'only

on the rarest of occasions, and then only because of a clear abuse of discretion.'"

Litton Indus., Inc. v. IMO Indus., Inc., 200 N.J. 372, 386 (2009) (quoting

Packard-Bamberger & Co. v. Collier, 167 N.J. 427, 444 (2001)). Judicial

findings of fact are binding on appeal when supported by "adequate, substantial,

and credible evidence." Rova Farms Resort, Inc. v. Invs. Ins. Co., 65 N.J. 474,

483-84 (1974); see also Marino v. Marino, 200 N.J. 315, 334 (2009) (holding

A-1283-22 7 the trial court's factual findings were entitled to deference because they were

"supported by sufficient credible evidence in the record ").

Mario maintains Cevasco's purported conflict of interest requires

forfeiture or alternatively, reduction, of his fees for serving as an appointed

trustee. He argues Cevasco had a conflict of interest because: Bressler

represented David in the Law Division action; Bressler represented David and

Donna in their crossclaims in the Probate action; and also represented Archer in

the malpractice action. Mario maintains Cevasco's conduct violated the Rules

of Professional Conduct governing judicial appointments and conflicts of

interest, namely RPCs 6.2(a), 1.10, and 1.16. He acknowledges there is no

binding precedent in New Jersey to support his position but maintains the fees

should be denied "as a public policy matter" whether the conflict of interest "was

known or unknown."

A court's discretionary power to reduce or deny trustee compensation is

derived from New Jersey's Uniform Trust Code. When interpreting a statute, a

reviewing court's "paramount goal" is to give effect to the Legislature's intent.

DiProspero v. Penn, 183 N.J. 477, 492 (2005). "[G]enerally, the best indicator

of that intent is the statutory language." Ibid. (citing Frugis v. Bracigliano, 177

N.J. 250, 280 (2003)). A statutory provision should be read "in context with

A-1283-22 8 related provisions so as to give sense to the legislation as a whole . . . ." Ibid.

(citing Chasin v. Montclair State Univ., 159 N.J. 418, 426-27(1999)).

The Uniform Trust Code provides, in pertinent part: "(a) A violation by

a trustee of a duty the trustee owes to a beneficiary is a breach of trust[;] (b) To

remedy a breach of trust that has occurred or may occur, the court may . . .

reduce or deny compensation to the trustee . . . ." N.J.S.A. 3B:31-71. The

trustee's liability to the beneficiaries is limited to the greater of the loss in value

of the trust property and distributions due to the breach, or the profit the trustee

made. N.J.S.A. 3B:31-72(a). A claim for damages must be supported by

adequate proof. See Matter of Gloria T. Mann Revocable Tr., 468 N.J. Super.

160, 177 (App. Div. 2021), certif. denied, 251 N.J. 380 (2022) (upholding a trial

court's discretionary denial of damages where plaintiff's claim for consequential

damages was deemed speculative, and no clear and convincing evidence of

actual malice was presented to support punitive damages).

The Legislature enacted N.J.S.A. 3B:31-72, adopting virtually identical

language to Section 1001 of the Uniform Trust Code. The comments to Section

1001 of the Uniform Trust Code provide:

In deciding whether to reduce or deny a trustee compensation, the court may wish to consider (1) whether the trustee acted in good faith; (2) whether the breach of trust was intentional; (3) the nature of the

A-1283-22 9 breach and the extent of the loss; (4) whether the trustee has restored the loss; and (5) the value of the trustee's services to the trust.

[Unif. Tr. Code § 1001 (Unif. L. Comm'n 2000) (citing Restatement (Second) of Trusts § 243 cmt. c (Am. Law Inst. 1959)).]

Read together, these provisions indicate the court's remedial powers are

to be invoked only where it has been established that a breach has occurred or

may occur. They also indicate that reduction or denial of fees is not appropriate

where there the has been no showing of a resulting loss to the trust.

Mario asks us to expand the circumstances under which the court may

exercise its discretionary remedial powers to include those where a violation of

the Rules of Professional Conduct has been alleged but not proven. Further, he

makes this request without any evidentiary support that, in this case, CHRT

suffered any harm because of Cevasco's alleged conflict. There is nothing in the

plain text of the statute or the model legislation it incorporates to suggest the

Legislature intended to adopt a more expansive approach than what is provided

by its plain language.

III.

Mario also argues Cevasco exceeded the scope of his trusteeship by taking

ultra vires actions with respect to the management of the properties. He claims

A-1283-22 10 Cevasco improperly took "legal positions" on whether he was required to drop

the counterclaim he unilaterally brought against Carlene on behalf of CHRT.

As we noted, the trial court granted Cevasco's fees after considering his

certification, his skills and experience, the detailed billing invoice he submitted,

and the terms of his appointment. The court found the role of co-trustee required

Cevasco to "become involved in numerous matters as to which [Carlene] and

[Mario] could not reach consensus." It rejected Mario's assertion that Cevasco's

conduct was beyond the scope of his appointment. The court found Cevasco

had acted "impartially and in good faith in connection with the terms of the

Revocable Trust." As the trial court noted, the only decision Cevasco made as

trustee that affected the Bressler clients in any way was to vote against David's

interests by voting to enforce the in terrorem clause against him. Mario has

presented no evidence of Cevasco personally benefitting from the decisions he

made as trustee, of the trust's corpus being harmed by Cevasco's actions, or of

Cevasco placing self-interest ahead of the interests of the trust.

Cevasco filed a detailed certification and billing statement in support of

his application. Mario raised no factual disputes as to whether Cevasco

performed any of the work described, only legal disputes as to whether the work

was compromised by the alleged conflict of interest or otherwise beyond the

A-1283-22 11 scope of the trusteeship. Therefore, the court was within its power to render a

fair decision without conducting an evidentiary hearing.

Given the trial court's well-reasoned conclusions and the deferential

standards applying to findings of fact and the award of fees, there is no basis to

conclude the trial court abused its discretion in awarding Cevasco's fees in their

entirety. To the extent we have not specifically addressed any other contentions

raised by Mario, it is because they lack sufficient merit to warrant discussion in

a written opinion. R. 2:11-3(e)(1)(E).

Affirmed.

A-1283-22 12