IN THE MATTER OF THE ESTATE OF KEITH R. O'MALLEY (P-000405-16 AND P-000280-18, MONMOUTH COUNTY AND STATEWIDE) (CONSOLIDATED)

CourtNew Jersey Superior Court Appellate Division
DecidedMarch 10, 2020
DocketA-4084-17T1 /A-1276-18T1
StatusUnpublished

This text of IN THE MATTER OF THE ESTATE OF KEITH R. O'MALLEY (P-000405-16 AND P-000280-18, MONMOUTH COUNTY AND STATEWIDE) (CONSOLIDATED) (IN THE MATTER OF THE ESTATE OF KEITH R. O'MALLEY (P-000405-16 AND P-000280-18, MONMOUTH COUNTY AND STATEWIDE) (CONSOLIDATED)) is published on Counsel Stack Legal Research, covering New Jersey Superior Court Appellate Division primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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IN THE MATTER OF THE ESTATE OF KEITH R. O'MALLEY (P-000405-16 AND P-000280-18, MONMOUTH COUNTY AND STATEWIDE) (CONSOLIDATED), (N.J. Ct. App. 2020).

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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ."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 NOS. A-4084-17T1 A-1276-18T1

IN THE MATTER OF THE ESTATE OF KEITH R. O'MALLEY, Deceased.

Argued November 21, 2019 – Decided March 10, 2020

Before Judges Alvarez and Suter.

On appeal from the Superior Court of New Jersey, Chancery Division, Monmouth County, Docket Nos. P- 000405-16 and P-000280-18.

Robert D. Borteck argued the cause for appellants/cross-respondents Barbara O'Malley, Dennis O'Malley, Jessica Shuman, Dylan Shuman, Luke Shuman, and Brooke Shuman in A-4084-17 and appellants in A-1276-18 (Borteck & Czapek, PC, attorneys; Robert D. Borteck and Christine Socha Czapek, on the briefs).

Anthony J. La Porta argued the cause for respondent/cross-appellant Michele O'Malley in A- 4084-17 and respondent Michelle O'Malley in A-1276- 18 (Connell Foley LLP, attorneys; Anthony J. La Porta and Daniel B. Kessler, on the briefs). Brian R. Selvin argued the cause for respondent/cross- appellant Michael K. Feinberg in A-4084-17 and respondent Michael K. Feinberg in A-1276-18 (Greenbaum Rowe Smith & Davis LLP, attorneys; Brian Selvin and Irene Hsieh, on the briefs).

Lauren D. Bercik argued the cause for respondent Estate of Keith O'Malley in A-1276-18.

PER CURIAM

In these two appeals, consolidated for decision, beneficiaries of certain

trusts challenge orders granting substantive relief to interested parties and

counsel fees. We affirm as to the substantive relief. We also affirm the counsel

fee awards, except that we remand for the Probate Part judge to make more

detailed findings regarding amounts.

The Estate of Keith O'Malley, who was only thirty-two at the time of his

death on June 1, 2014, consists of a $5,000,000 trust created for his minor child

(specific bequest trust). The residue of the estate is divided equally between

two trusts, a trust designated as available for the benefit of the child

(discretionary trust), and a trust for the benefit of his surviving extended family

members: mother, father, sister, and the sister's children (family residual trust).

In addition, decedent disinherited a second child, a son, which generated

litigation ultimately settled by the testamentary trustee and the child. The family

residual trust beneficiaries (beneficiaries) did not contribute to the settlement

A-4084-17T1 2 with the son. In fact, when the settlement agreement reached by the testamentary

trustee, with contribution from the child, was approved by the Probate Part, it

was over the objection of the beneficiaries.

The child, whose interests were represented by her mother, engaged in

post-death litigation regarding ongoing support payable by the estate. The

beneficiaries object that the child support settlement reached by the testamentary

trustee, approved by the judge, was improper because the judge did not review

the child's mother's budget. The beneficiaries contend that the child support

payable by the estate is excessive, and improperly depletes estate assets while

inuring to the benefit of the child's mother.

Two orders are appealed. The first is the April 3, 2018 order awarding

counsel fees and costs: the judge's award of $373,116.98 in counsel fees to the

child's mother's attorneys, Connell Foley LLP. The beneficiaries object to the

amount of fees and payment from estate funds. On cross-appeal, the child's

mother challenges the counsel fee award payable on behalf of the beneficiaries'

attorney, Borteck & Czapek, P.C., in the amount of $146,772.42. She too

contends the award should not be payable from estate funds, and is excessive.

The testamentary trustee, also by way of cross-appeal, challenges the award to

Borteck & Czapek, contending the fees are unreasonable and were accrued for

A-4084-17T1 3 the individual benefit of the beneficiaries, not the estate, and therefore should

not be paid from estate assets.

In reaching her conclusions, the judge who awarded the fees noted that

"this was not an ordinary estate. . . . The [w]ill was [thirty-nine] pages and

involved numerous trusts and other requirements." With regard to the amounts,

the judge said that she had reviewed the time records of each firm, that the time

was invested appropriately, that the fees were reasonable based on the firm's

geographical location, and that in light of the extensive years-long litigation,

"the amount of fees were necessary for the results . . . ." She further stated that

an award of counsel fees should be made from a fund in court when the party

receiving them "aided directly in creating, preserving, or protecting the fund."

The judge considered the estate assets to be a fund in court from which fees

should be paid. She opined that:

the actions taken by the attorneys in this case were designed to advance the purposes of the [e]state and the testator's estate plan.

Each party viewed its actions as promoting the testator's intent.

Since everyone engaged in litigation attempted to preserve the residuary estate,

ultimately benefitting the child as well as the beneficiaries, she was satisfied

that all "parties were bona fide in their actions," although they held "divergent

A-4084-17T1 4 views of how the testator's intent should be fulfilled." The judge made fees for

counsel for the testamentary trustee payable from estate assets because he was

a necessary party to all the litigation. Thus, she ordered $94,389.24 to be paid

to Greenbaum, Rowe, Smith & Davis LLP on behalf of the testamentary trustee.

On October 5, 2018, a different Probate Part judge approved a settlement

agreement between the child's mother and the testamentary trustee. That second

order is also appealed by the beneficiaries. Under the agreement, the prior

Family Part order for child support of $14,000 per month was reduced to

$11,000. Certain additional fluctuating payments for the child's expenses that

mirrored the Family Part order were reduced to fixed amounts.

The judge approved the settlement because it "minimizes the need for

contact between the parties and effectively eliminates potential disputes . . . by

providing a steady, consistent and clear method of compensation and payments

of [the minor child's] support." The beneficiaries objected to the settlement,

among other reasons, because the judge was not provided a monthly budget from

the child's mother. The judge rejected the argument because reviewing the

child's mother's budget "would effectively be engaging in the micromanagement

A-4084-17T1 5 [of the trustee] that our Appellate Division held that our courts cannot do in

Wiedenmayer."1

The Family Part judge had ordered the creation of a property settlement

agreement (PSA) trust in the related litigation, to be funded with $1,000,000.

The judge opined that the settlement agreement between the child's mother and

the testamentary trustee eliminated potential for future disputes, and created "a

clear path forward for these parties." Further, by virtue of the structured

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IN THE MATTER OF THE ESTATE OF KEITH R. O'MALLEY (P-000405-16 AND P-000280-18, MONMOUTH COUNTY AND STATEWIDE) (CONSOLIDATED), Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-the-matter-of-the-estate-of-keith-r-omalley-p-000405-16-and-njsuperctappdiv-2020.