NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court."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-0258-16T4
IN THE MATTER OF THE ESTATE OF EDWARD WLODARCZYK,
Deceased. —————————————————————————————————— Argued May 21, 2018 – Decided July 17, 2018
Before Judges Ostrer, Rose, and Firko.
On appeal from Superior Court of New Jersey, Chancery Division, Probate Part, Camden County, Docket No. CP-0037-2015.
John E. Lanza argued the cause for appellant Anna Wlodarczyk (Lanza & Lanza, LLP, attorneys; John E. Lanza, of counsel and on the briefs; Christopher J. Trofimov, on the briefs).
David A. Thatcher argued the cause for respondent Trinity Evangelical Church (Thatcher Passarella, PC, attorneys; David A. Thatcher, of counsel and on the brief).
Marc A. Krefetz, Deputy Attorney General, argued the cause for respondent State of New Jersey (Gurbir S. Grewal, Attorney General, attorney; Melissa H. Raksa, Assistant Attorney General, of counsel; Marc A. Krefetz, on the brief).
PER CURIAM In this probate matter, plaintiff Anna Wlodarczyk appeals
from a July 5, 2016 order granting Trinity Evangelical Lutheran
Church's ("Trinity Church") motion for involuntary dismissal at
the close of plaintiff's case. The Attorney General of New Jersey
("AG") in his parens patriae capacity, joined in the motion.
Plaintiff also appeals from an August 31, 2016 order granting her
counsel fees, arguing the amount awarded was less than the amount
sought. For the reasons that follow, we affirm the July 5, 2016
order, and vacate the August 31, 2016 order.
I.
This appeal has its genesis in a "pour-over" will and
revocable living trust made by testator Edward Wlodarczyk, at the
age of sixty one. Unmarried and childless when testator executed
the will and trust, plaintiff was his mother and sole heir.
Pursuant to the terms of the will, testator divided his $2.1
million estate between plaintiff and Trinity Church in equal
shares. He also provided that, if plaintiff predeceased him, her
fifty percent share would be divided equally between his cousins,
Richard Robinson and Joan Dufner. If the named beneficiaries
predeceased testator, their shares would be distributed according
to intestacy laws. As a pour-over will, testator devised his
entire estate, including personal and household effects, to the
trust.
2 A-0258-16T4 According to the trust agreement, testator designated himself
as the sole trustee until his death. After his death, the trust
income and principal distribution would be divided equally between
plaintiff and Trinity Church. The trust also directed that if
plaintiff predeceased testator, her share of the trust estate
would be divided equally among Robinson, Dufner, Dr. Christine
Newman and Jeanne Perch. Further, if Trinity Church were not in
existence at the time of testator's death, its share would be
distributed to plaintiff.
Testator's will and trust were prepared by David A. Faloni,
Esq., pursuant to a referral from Kaehall Estate Planning
Coordinators ("Kaehall"). Because Kaehall referred a large volume
of clients to his firm, Faloni agreed to accept a flat fee of $375
to draft "any or all" documents listed in a Kaehall form ("referral
form"), including the documents executed by testator. Pursuant
to the terms of the referral form, testator was not required to
retain Faloni, but testator checked the box indicating his desire
to do so.
The referral form had been provided to testator by Kaehall's
representative, Bernice Folcher, during their meeting at
plaintiff's home on April 20, 2007. Earlier that day, Folcher had
met with plaintiff to review potential changes to her existing
3 A-0258-16T4 trust. Plaintiff told Folcher her son was interested in
establishing a living trust agreement.
Folcher memorialized information she received from testator
about his assets, beneficiaries, and special directives and
instructions, on an intake form. Folcher did not suggest to
testator how to distribute his assets. Rather, testator was "very
opinionated, and he told [her] exactly what he wanted." Plaintiff
was present during Folcher's meeting with testator. Plaintiff did
not object to testator's disposition of his assets.
Testator issued a check to Faloni for $375, and a check to
Kaehall for $1620. Folcher sent both checks and the intake form
to Kaehall, which in turn contacted testator, verified his
information, and forwarded the paperwork to Faloni.
Following receipt of the paperwork by his office, Faloni's
paralegal contacted testator and also confirmed his information,
including the names and addresses of his intended beneficiaries
and the shares of his estate he wished to bequeath. Faloni did
not personally meet testator, but spoke with him telephonically
for approximately thirty-five to forty minutes before drafting his
will and trust.1
1 In addition to the will and trust at issue in this appeal, Faloni drafted a living will, a general power of attorney, and a power of attorney for health care.
4 A-0258-16T4 During their conversation, Faloni explained the distinction
between wills and trusts, and reviewed Medicaid planning and estate
taxation. They discussed testator's intentions, and testator
indicated his "mother[] wants to make sure she's taken care of."
Testator told Faloni he would do so through Medicaid planning, to
avoid depleting his estate if he were hospitalized for an extended
period of time. Faloni believed testator procured insurance to
provide additional protection for his mother. Faloni did not
suggest that testator should devise part of his estate to Trinity
Church.
Pursuant to testator's instructions, Faloni forwarded the
completed documents to Kaehall for delivery to testator for
execution. Faloni included correspondence, explaining the process
to execute each document properly. According to Folcher, testator
read the documents, which she then notarized in the presence of
witnesses.
Testator died on November 21, 2012. After his will was
admitted to probate, plaintiff filed a verified complaint,2
challenging the validity of the will and trust. In particular,
plaintiff claimed the documents were unenforceable because they
2 Plaintiff did not personally verify the complaint. Rather, the verification is signed by Dufner as plaintiff's "Attorney in Fact" pursuant to a power of attorney executed by plaintiff on November 21, 2012, the same day testator died.
5 A-0258-16T4 were the product of a consumer fraud scheme. She also alleged the
documents were the result of "mistake by way of a scrivener's
error" because they did not evince her son's intention to provide
for her.
Trial was held on two non-consecutive days in June 2016.
Following oral argument but prior to the commencement of testimony,
the judge denied plaintiff's motions to disqualify the AG, and
permit Dufner to testify about plaintiff's state of mind.
The judge granted plaintiff's motion to read portions of the
deposition of Kaehall's former Vice President, Keith Ervin,
because he could not be served with process. Apparently, Ervin
had been deposed in a separate legal malpractice and tort action,
filed by testator's executor, pertaining to a "multi-state trust
marketing scheme." Among other things, Ervin testified generally
that Kaehall had employed "unlicensed[] insurance or annuity
salepersons to solicit potential customers who required estate
planning services."
Ninety-five years old at the time of trial, plaintiff did not
testify because she did not have the "capacity or the strength."
Plaintiff presented the testimony of Folcher and Faloni. In doing
6 A-0258-16T4 so, the trial judge denied her application to treat both as
"hostile witnesses."3
Following the conclusion of oral argument on June 22, 2016,
the trial judge dismissed plaintiff's complaint, rendering a
cogent oral opinion. Initially, the court recognized testator's
capacity was not in issue. Nor was testimony adduced that testator
did not understand English or otherwise "had any trouble
understanding what he was doing and voicing his opinion."
Relevant to plaintiff's claims, the judge found Faloni's use
of a template to prepare the will and trust was not fatal,
reasoning "[l]awyers do it all the time, and they trade documents
and update them[.]" Nor did she find any issue with the amount
of time Faloni spent with testator during their telephone
conference, following his paralegal's initial contact and
verification of testator's information. Rather, the judge found
Faloni "explain[ed] what the document accomplishes."
Specifically, the judge observed testator's wishes were
simple and the resulting documents were simple:
The result is this. I, as the decedent, when I die, I want to do this. I want half of my money to go here, and I want half of my money to go here. And if my mother's not alive, these are the people I want as substitutes. If the church no longer exists, this is where
3 During her testimony, Folcher admitted she had twice been convicted of fraud.
7 A-0258-16T4 I want it[s money] to go. How much . . . clear[er] could it be than that?
The judge also discounted the mistakes recorded by Folcher
in Kaehall's intake sheets as immaterial because they had no
bearing on how testator's assets would be distributed at the time
of his death.4 Rather, the court found "other than . . . try[ing]
to sell him another product, exactly what he owned" was not
relevant. Whether Folcher "was hoping to parlay that into some
kind of estate planning, like an annuity . . . [is not] part of
this case."
Determining there was no indication Folcher did anything
wrong by performing the intake and referral in the present case,
the judge recognized Folcher "[was not] even trying, at the time
she met [testator] to solicit him to sell him a product." On the
contrary, Folcher spoke with testator at plaintiff's suggestion.
For the sake of argument, the judge assumed Folcher was not
a credible witness and had in fact solicited testator directly.
Nevertheless, the judge recognized she still could not conclude
there was any connection between Folcher and Trinity Church.
4 The intake form contained some obvious errors. For example, Folcher listed assets in the space reserved for his spouse, but he was unmarried. The judge attributed that mistake to lack of space on the form.
8 A-0258-16T4 Folcher was not a member of the church, and she would not derive
any benefit by testator's bequest to the church.
The judge further recognized an "undue influence theory" was
not at issue here. Because the contact between Folcher and
testator was "so limited, she [did not] have time to unduly
influence [testator]." Rather, Folcher was similar to "a data
processor" taking information from testator and putting that
information on a form that is sent to Kaehall, which in turn sent
it to Faloni.
Ultimately, the judge recognized the process of executing the
testamentary documents was "streamlined," and not characterized
by a typical in-person meeting at a lawyer's office. Nevertheless,
she found there was no evidence in the record to prove "what he
intended or what he told [Folcher and Faloni] to do was not
ultimately incorporated into those documents that he signed."
Following a subsequent hearing, the trial court granted, in
part, plaintiff's motion for counsel fees, finding she had
reasonable cause to challenge the will. However, the judge reduced
plaintiff's fee application from $89,000 to $10,000. This appeal
followed.
On appeal, plaintiff contends: (1) the trial court should
have shifted the burden to Trinity Church to prove the will and
trust were valid because the existence of a trust marketing scheme
9 A-0258-16T4 created a conflict of interest for Faloni; (2) the existence of a
consumer fraud scheme rendered both documents voidable; (3) the
testimony of Folcher and Faloni was not credible; (4) the trial
court erred in reducing plaintiff's fee award without evaluating
the requisite factors for assessing counsel fees; and (5) the AG
should be disqualified from participating on behalf of the charity
church in any future hearings because plaintiff has alleged
misconduct in the drafting of the will and trust.
II.
A.
"A motion for involuntary dismissal is premised 'on the ground
that upon the facts and upon the law the plaintiff has shown no
right to relief.'" ADS Assocs. v. Oritani Sav. Bank, 219 N.J.
496, 510 (2014) (quoting R. 4:37-2(b)). The "motion shall be
denied if the evidence, together with legitimate inferences
therefrom, could sustain a judgment in plaintiff's favor." R.
4:37-2(b). "If the court, accepting as true all the evidence
which supports the position of the party defending against the
motion and according him the benefit of all inferences which can
reasonably and legitimately be deduced therefrom, finds that
reasonable minds could differ, then the motion must be denied."
Id. at 510-11 (citations omitted). "Stated differently, dismissal
10 A-0258-16T4 is appropriate when no rational [factfinder] could conclude from
the evidence that an essential element of the plaintiff's case is
present." Pressler & Verniero, Current N.J. Court Rules, cmt. 2.1
on R. 4:37-2(b) (2018); see also Pitts v. Newark Bd. of Educ., 337
N.J. Super. 331, 340 (App. Div. 2001). "An appellate court applies
the same standard when it reviews a trial court's grant or denial
of a Rule 4:37-2(b) motion for involuntary dismissal." ADS
Assocs., 219 N.J. at 511 (citing Fox v. Millman, 210 N.J. 401, 428
(2012)).
"A trial court's interpretation of the law and the legal
consequences that flow from established facts are not entitled to
any special deference." Manalapan Realty, L.P. v. Twp. Comm. of
Manalapan, 140 N.J. 366, 378 (1995). We review a trial court's
interpretation and application of the law de novo. ADS Assocs.,
219 N.J. at 511. Because plaintiff presented insufficient evidence
to sustain her burden of proof on her causes of action, here, the
trial judge's granting of defendant's motion for an involuntary
dismissal was appropriate.
We are guided by well-established principles in will
disputes. We are "enjoined to strain toward effectuating the
testator's probable intent to accomplish what he would have done
had he envisioned the present inquiry." In re Estate of Payne,
11 A-0258-16T4 186 N.J. 324, 335 (2006) (citing In re Estate of Branigan, 129
N.J. 324, 332 (1992)). "In any attack upon the validity of a
will, it is generally presumed that 'the testator was of sound
mind and competent when he executed the will.'" Haynes v. First
Nat'l State Bank, 87 N.J. 163, 175-76 (1981) (quoting Gellert v.
Livingston, 5 N.J. 65, 71 (1950)).
"If a will is tainted, however, by 'undue influence,' it may
be overturned." Id. at 176. So too, "A trust is void to the
extent its creation was induced by fraud, duress, or undue
influence." N.J.S.A. 3B:31-23. Ordinarily, the opponent of a
will bears the burden to prove undue influence. In re
Rittenhouse's Will, 19 N.J. 376, 378-79 (1955). However, certain
circumstances may create a presumption of undue influence,
shifting the burden of proof to the will's proponent. Ibid. Two
conditions must be satisfied as a condition precedent to this
burden-shifting: (1) a confidential relationship between the
testator and a beneficiary; and (2) the presence of suspicious
circumstances requiring an explanation. Ibid.
In the present action, plaintiff has not alleged an undue
influence theory. Nevertheless, she argues, without any binding
legal support, that the same burden-shifting should occur here
because the alleged fraudulent scheme by Kaehall created a conflict
of interest for Faloni. However, the authority she cites from two
12 A-0258-16T4 other jurisdictions is distinguishable from the present action
where Folcher merely gathered information which was intended for
use in a legal document.5 Folcher did not render advice to testator
or plaintiff about creating a will or revocable trust, which were
both drafted by Faloni.
Our independent review of the record leads us to the same
conclusion as the trial judge. We agree there was no evidence of
fraudulent conduct in the procuring of testator's will and trust
here. We further agree that the propriety of Kaehall's
solicitation was not relevant to the judge's determination.
Rather, testator's intention was clearly expressed in the
testamentary documents, which provide for an equal division of his
estate between plaintiff and Trinity Church. As the trial judge
aptly observed, there has been no showing that Folcher or Faloni
is affiliated with Trinity Church, which could implicate a conflict
of interest. By contrast, testator was a member of the church,
and his bequest is logical where, as here, it did not interfere
5 Comm. on Prof'l Ethics & Conduct v. Baker, 492 N.W.2d 695, 702- 03 (Iowa 1992) (reprimanding an attorney for allowing a trust marketing company "to exercise the professional judgment [he] should have exercised"); In re Mid-America Living Tr. Assocs., 927 S.W.2d 855, 863 (Mo. 1996)(finding the trust marketing companies engaged in the unauthorized practice of law because they "were not merely collecting information to fill in standardized forms" but "they also were giving legal advice to their clients about choices to be made and the legal effects of those choices").
13 A-0258-16T4 with his intention to provide for his elderly mother from the
assets of his substantial estate.
We also are not persuaded by plaintiff's arguments that the
trial judge improperly credited the testimony of Folcher and
Faloni, who plaintiff claims were hostile witnesses. 6
"[C]redibility findings need not be explicitly enunciated if the
record as a whole makes the findings clear." In re Taylor, 158
N.J. 644, 659 (1999) (citing State v. Locurto, 157 N.J. 463, 474
(1999)). Further, we are not free to make our own credibility
determination. Locurto, 157 N.J. at 472-75. Although the trial
judge did not make specific detailed findings of credibility
regarding Faloni, she stated directly that Folcher's criminal
history did not affect her credibility in the present case because
Folcher did not gain anything from testator's designating Trinity
Church as a beneficiary.
We, thus, discern no reason to disturb the trial court's
factual and credibility findings. Those findings are entitled to
6 Prior to their testimony, the trial court denied plaintiff's application to treat Folcher and Faloni as hostile witness, pending responses that appeared to be hostile. Plaintiff did not renew her application as to either witness. See N.J.R.E. 611(c) (permitting leading questions "when a witness demonstrates hostility or unresponsiveness").
14 A-0258-16T4 our deference. See e.g., N.J. Div. of Youth & Family Servs. v.
E.P., 196 N.J. 88, 104 (2008).
Because we find the trial judge properly dismissed
plaintiff's complaint, we need not reach her argument that the AG
should be disqualified in future proceedings. See Greenfield v.
N.J. Dep't of Corr., 382 N.J. Super. 254, 257-58 (App. Div. 2006)
("An issue is moot when the decision sought in a matter, when
rendered, can have no practical effect on the existing
controversy." (Citation omitted)).
B.
We part company, however, with the trial court's award of
counsel fees. Ordinarily, "fee determinations by trial courts
will be disturbed only on the rarest occasions, and then only
because of a clear abuse of discretion." Rendine v. Pantzer, 141
N.J. 292, 317 (1995); see also Packard-Bamberger & Co. v. Collier,
167 N.J. 427, 444 (2001) (citation omitted).
Pursuant to Rule 4:42-9(a)(3), a trial court may grant
attorney's fees in probate actions. "When, as here, there is
explicit legal authority for the court to award counsel fees, the
court calculates the award of counsel fees by determining the
'lodestar,' i.e. a reasonable hourly charge multiplied by the
number of hours expended." In re Probate of Will & Codicil of
Macool, 416 N.J. Super. 298, 313 (App. Div. 2010) (citing Rendine,
15 A-0258-16T4 141 N.J. at 334-35)). "If probate is granted, and it shall appear
that the contestant had reasonable cause for contesting the
validity of the will or codicil, the court may make an allowance
to the proponent and the contestant, to be paid out of the estate."
R. 4:42-9(a)(3).
Initially, although plaintiff did not succeed in challenging
the will and trust, the court properly found she was entitled to
a fee award. Plaintiff had "reasonable cause for contesting the
validity of the will" pursuant to Rule 4:42-9(a)(3), because she
claimed testator was the victim of a scam or fraud, and filed a
complaint to challenge legal documents drafted as a result of that
purported scheme.
The court did not, however, conduct the proper analysis of
the fee submitted. In considering the rate submitted, the court
should have considered the prevailing market rate in the community
and ensured the rate is "fair, realistic, and accurate, or should
make appropriate adjustments." Rendine, 141 N.J. at 337; Macool,
416 N.J. Super. at 314 (citation omitted). Pursuant to the New
Jersey Rules of Professional Conduct ("RPC"), "[a] lawyer's fee
shall be reasonable," and shall be determined by the consideration
of a number of factors. RPC 1.5(a); see also R. 4:42-9(b). These
factors "must inform the calculation of the reasonableness of a
fee award in . . . every case." City of Englewood v. Exxon Mobile
16 A-0258-16T4 Corp., 406 N.J. Super. 110, 125 (App. Div. 2009) (quoting Furst
v. Einstein Moomjy, Inc., 182 N.J. 1, 22 (2004)).
Moreover, "a trial court must analyze [the RPC] factors in
determining an award of reasonable counsel fees and then must
state its reasons on the record for awarding a particular fee."
Furst, 182 N.J. at 21; R. 1:7-4(a) (requiring a trial court to
"find the facts and state its conclusions of law thereon in all
actions tried without a jury."). "Without the benefit of [such]
findings and conclusions, we can only speculate about the reasons
for a trial court's decision." S.N. Golden Estates, Inc. v. Cont'l
Cas. Co., 293 N.J. Super. 395, 409 (App. Div. 1996) (quoting
Rosenberg v. Bunce, 214 N.J. Super. 300, 304 (App. Div. 1986)).
Here, plaintiff sought reimbursement of $89,000 for 243 hours
billed at a rate of $350 per hour. In awarding a blanket fee of
$10,000, the trial court did not determine the lodestar rate, nor
the reasonable amount of hours spent under the circumstances of
this action. While the AG argues that award represents forty
hours at $250 per hour, there is no indication in the record that
the court adopted that rationale.
We recognize in reducing plaintiff's fee award that the court
clearly disagreed with the number of hours billed as "more than
what would have been required[,]" and determined counsel should
have advised plaintiff to cease pursuing the litigation when it
17 A-0258-16T4 became apparent the testamentary documents evinced her son's
intent. Arguably, however, the court only considered two of the
eight RPC factors. See RPC 1.5(a)(1) and (4).
Based on the foregoing, we are constrained to vacate the
August 31, 2016 order awarding counsel fees because of these lack
of findings. We remand this issue to the trial court to conduct
the required analysis pursuant to RPC 1.5(a), and make the required
findings of fact and conclusions of law pursuant to RPC 1:7-4.
See Loro v. Colliano, 354 N.J. Super. 212, 227 (App. Div. 2002).
We express no opinion about the appropriate fee award.
Affirmed in part, vacated in part, and remanded for further
proceedings consistent with this opinion. We do not retain
jurisdiction.
18 A-0258-16T4