Doctrine of Laches Properly Applied Where Verified Complaint filed Over a Decade After Decedent’s Death

In re Estate of Dornic, Docket No. 2414-21 (N.J. Super. App. Div. Feb. 27, 2024)

This case concerns a complaint that was dismissed under the doctrine of laches.  The Appellate Division affirmed.

Olga Dornic (“Decedent”) died intestate on February 3, 2008.  The Decedent was never married, had no children, and left no living parents, siblings, or grandparents.  The Decedent’s cousin, Patricia DiPaolo (“DiPaolo”), applied for administration with the Bergen County Surrogate, naming herself, her mother, and three additional cousins as the Decedent’s intestate heirs.  DiPaolo received renunciations from the other heirs and was subsequently appointed Administratrix of the Decedent’s estate, subject to bond.

DiPaolo retained an attorney (“McClure”) to assist with the estate administration.  DiPaolo engaged in typical activities involved with administering an estate, such as paying bills, keeping a list of expenses, and clearing out and selling the Decedent’s residence.  On June 30, 2008 (almost five months after the Decedent’s death), the law firm of Florio & Kenny LLP (“Florio”) sent a letter to McClure containing information demonstrating that their clients were related to the Decedent.  The clients were a group of the Decedent’s cousins of varying degrees (“appellant cousins”).  Over the course of the following seven years, Florio attempted to contact McClure in an effort to obtain an informal estate accounting, refunding bonds and releases, and a general update on the status of the estate administration.  While Florio received some responses from McClure, they never received the requested documents.

DiPaolo changed counsel in 2015 and retained the Law Offices of Matthew M. McDowell (“McDowell”).  McDowell learned that refunding bonds and releases had been signed by DiPaolo and six of her “known” family members.  McDowell notified DiPaolo, McClure, and the surety of their claims against the estate as the surviving heirs-at-law.  McDowell stated in a letter to McClure that it would file an Order to Show Cause if it did not receive a response from McClure by January 2016.  McClure responded to McDowell’s letter before the stated deadline, but McDowell filed the Order to Show Cause anyway.  No action was taken for five years.

McClure died in April 2020.  McClure’s widow reviewed his files and contacted DiPaolo regarding this estate administration.  DiPaolo authorized the file be destroyed given how much time had passed.  DiPaolo also destroyed her copies of the file.

Two heirs who received distributions from the estate also died, one in 2017 and the other in 2019.

In December 2020, McDowell filed a verified complaint on behalf of the appellant cousins.  DiPaolo certified that she was unaware of these cousins, later learning they lived in Slovakia, and felt prejudiced by the passage of time.  Limited discovery was permitted, which, in relevant part, revealed documents from McClure’s computer identifying many of the appellant cousins as heirs of the estate and that $178,546.57 of estate assets were set aside for them.  No distributions were made, and DiPaolo confirmed she was unaware of McClure’s files and did not know where the funds were.  The funds could not be located during discovery.

At the close of discovery, DiPaolo made a motion to dismiss, which the trial court granted with prejudice based on the doctrine of laches.  The judge was unpersuaded that DiPaolo had an obligation to “supervise” McClure’s work and determined that the appellant cousins waited an inordinately long time after the Decedent’s death (2008) to file a complaint (2020).  The appellant cousins did not provide any reason for the delay.  Further, the judge found that DiPaolo was prejudiced by the delay because she believed the case had been abandoned and had destroyed her records in the interim.

On appeal, the appellant cousins asserted that the trial court failed to consider DiPaolo’s unclean hands.  They argued DiPaolo breached her fiduciary duty by not adequately supervising McClure and authorizing his widow to destroy his files when the $178,546.57 was set aside for relatives but was now unaccounted for.  The appellant cousins also, for the first time, argued that their reason for the delay in pursing these claims was because the relatives did not know of their rights until approximately 2017.

The Appellate Division was unpersuaded by these arguments and emphasized that over a decade had passed between the Decedent’s death and the filing of the complaint.  Moreover, it would be inequitable to force the estate to pay claims that were known and potentially enforceable by the appellant cousins much earlier.  Thus, the trial judge did not abuse his discretion in determining that DiPaolo was reasonable to conclude that the appellant cousins abandoned their claims.  The trial court had also properly applied the doctrine of laches.

Likewise, the appellate court affirmed the trial judge’s determination that DiPaolo did not act with unclean hands; the appellant cousins’ brief even acknowledged that there was no proof of blatant wrongdoing or malfeasance.