Appellate Division Affirms Judgment in Favor of NJ Estate But Says Court Lacks Jurisdiction To Void Deed to Pennsylvania Property

Estate of Dianne Partee v. Jones, No. A-0765-19T1, 2020 WL 6688913 (N.J. Sup. Ct. App. Div. Nov. 13, 2020)

Twin sisters Dianne and Dionne owned as tenants in common the Philadelphia home in which they grew up.  On January 19, 2017, Dianne transferred her interest to Dionne, but this deed was not notarized until May 11, 2017.

On June 19, 2017, Dionne deeded the property to her daughter, Loree.

Dianne died in 2017.  The estate filed a six-count complaint against Loree and Dionne, as well as the notary who completed the attestation and affixed her seal on the deeds.  The notary never answered and default judgment was entered against her.  She did not appeal.

During a two-day bench trial, the court heard from multiple witnesses regarding whether Dianne wanted to sell or gift her interest in the property to Loree.

The Chancery Division found that Dianne did not intend to give her interest in the house to Loree.  The judge entered judgment in favor of the estate and against Loree in the amount of $100,000, representing the fair market value of Dianne’s share of the property.

The trial court also applied an equitable remedy, finding that the deeds transferring Dianne’s share of the real estate to Dianne and then to Loree would be voided if Loree did not pay the $100,000 to the estate.

The trial court noted that, under Pennsylvania law, a deed is void if not filed within ninety days.  The court also observed that if the notary had misdated her stamp and deliberately misrepresented otherwise to the Pennsylvania Recorder of Deeds, such actions would be construed as a fraud upon the state.

In the end, the court held that the deed from Dionne to Loree was invalid under Pennsylvania law.

On appeal, the court found that the factual findings of the trial court were supported by adequate, substantial, and credible evidence.  The Appellate Division also noted that, in contrast to the deference given to a trial court’s factual findings, legal determinations of a lower court are reviewed de novo.

The Appellate Division cited considerable authority regarding the broad latitude of the Chancery Division in fixing an equitable remedy.  At the same time, the Appellate Division found that a New Jersey court had no jurisdiction to void a deed to Pennsylvania property.

The Appellate Division distinguished the lack of jurisdiction regarding an out-of-state property and the in personam jurisdiction the court has over litigants:

We believe the crux of this case, however, is not whether the deed was valid, nor whether a New Jersey court has the authority to void that deed.  Nor does the outcome hinge on a finding that Loree or Dionne used wrongful tactics to trick Dianne into seeding her interest in the homestead.  We believe the critical finding is that Dianne did not intend to give away her share of the house for no value.  That conclusion is supported by adequate, substantial and credible evidence.  In those circumstances, applying equitable principles, the probate court acted appropriately and within the wide latitude of its discretion to order Loree to compensate the estate for one-half the fair market value of the house.

Id. at *4.