Appellate Division Finds that Will Provisions Trump Property Settlement Agreement Where Conditions for Sale and Division of Real Property Interest Under the PSA Were Not Met
In re Estate of Canova, Docket No. A-1696-23, 2026 WL 305263 (N.J. Super. App. Div. Feb. 5, 2026)
Marianne Canova (“Decedent”) and Lawrence Cinelli were married in 1970 and had two sons, Mario and Genio. Thereafter, in 1976, the Decedent and Lawrence entered into a property settlement agreement (“PSA”), which was incorporated into their 1978 divorce judgment. The PSA required Lawrence to convey the marital home to the Decedent and provided that if the Decedent remarried, she would sell the home and distribute net proceeds one-half to herself and one-half in trust for the two sons. Otherwise, the PSA required that if the home was sold at any time the proceeds would be distributed as if the Decedent remarried.
In 2019, the Decedent executed a Last Will and Testament disinheriting Mario, Genio, and her brother for personal reasons, and leaving her entire estate to St. Jude Children’s Research Hospital. The Decedent never remarried and lived in the home until she died on August 12, 2022. The Decedent’s will was probated on August 25, 2022.
Mario filed a complaint to reform the Decedent’s will to comply with the PSA, asserting mistakes in contents and inducement.
The executor of the Decedent’s estate sold the home on February 24, 2023, for $355,000, with $148,098.72 held in escrow. The parties cross-moved for summary judgment, and Mario sought fees under Rule 4:42-9(a)(2). After hearing argument, the trial court granted Mario’s summary judgment motion, and found the PSA unambiguous, held its plain language required distribution of one-half of sale proceeds to the sons upon any sale, including post-death, deemed the Decedent’s testamentary intent irrelevant. The court reformed the Decedent’s will, directed disbursements of $74,049.36 to each son, awarded Mario $21,593.46 in fees, and granted a stay pending appeal.
On appeal, the Decedent’s estate and Attorney General argued the trial court misinterpreted the PSA by ignoring equitable principles, erred by reforming the Decedent’s will, and erred by awarding fees, with the Attorney General additionally challenging Mario’s proof of mistake in the inducement.
Applying summary judgment standards, will-construction and reformation principles, along with equitable enforcement of property settlement agreements, the Appellate Division adopted Restatement guidance addressing conflicts between contractual obligations and donative transfers and the treatment of ambiguity.
The Appellate Division found no patent ambiguity in the Decedent’s will expressly disinheriting her sons and brother, and it rejected the trial court’s conclusion that the PSA limited the Decedent to a fifty percent ownership interest. The Appellate Division held paragraph six of the PSA created two conditions for sequestering one-half of sale proceeds: (1) remarriage requiring pre-remarriage sale with a trust for the sons; and (2) a sale “at any time” incorporating the same distribution language. The Appellate Division stated neither condition occurred because the Decedent neither remarried nor sold the home during her lifetime. The court concluded that: Lawrence’s interest was conveyed to the Decedent, giving her fee simple ownership; the sons’ interest was only in proceeds upon a qualifying sale which never occurred; the Decedent’s will was unambiguous, and there was no basis to reform it. The Appellate Division therefore reversed the grant of summary judgment and fee award to Mario and remanded for entry of summary judgment for the Decedent’s estate and the Attorney General.