Executor’s Lack of Cooperation Fell Short of Ordinary Prudence

In the Matter of the Estate of Grafer, Deceased, No. A-1096-15T3, 2017 N.J. Super. Unpub. LEXIS 159 (N.J. Super. Ct. App. Div. Jan. 24, 2017).

Appellant Robert Grafer Jr., the executor of the estate of his late mother, appealed from the Probate Part order denying his motion for attorney fees.

Alice Joyce Grafer (“Decedent”) died on January 22, 2010, survived by her two adult children Robert and his sister, Laura.  Decedent’s Will divided her estate between Robert and Laura “in equal shares.”  The probate estate consisted of a house appraised value of $190,000; a mutual fund with approximate value of $40,000; and an automobile with an approximate value of $6,900.  Decedent also held various non-probate assets, all listing Robert as joint tenant or beneficiary.  The non-probate assets totaled $183,815.

According to Robert, soon after their mother’s death, Laura expressed a desire to cash out her interest in the estate as she was not interested in maintaining any interest in the house as an investment property.  Between March and August 2010, Robert made three distributions to Laura totaling $115,000.  According to Robert, said transfers satisfied Laura’s interest in the house and the estate.

In December 2014, Laura filed a verified complaint in the Probate Part to compel Robert to provide an accounting of the estate assets.  Robert filed an answer denying all allegations of impropriety.  He also filed his own verified complaint, alleging he had an agreement with Laura to purchase her interest in their mother’s house and asserting that Laura was overpaid for her interest in the estate.  Robert also filed an accounting with the Warrant County Surrogate.

The court held a plenary hearing and approved in part and rejected in part Robert’s accounting.  The court further held that both parties could submit applications for counsel fees, which they did.  Robert’s counsel submitted a request for $15,317 and Laura’s counsel submitted a request for $7,790.

The court found both requests exceeded the value of the residual estate – which was $20,965.  Moreover, the court found both parties were responsible for the protracted litigation.  Specifically, Laura admitted that she knew all along that the house was purchased from her pursuant to an agreement with Robert, and Robert agreed that he had not been as forthcoming as he could have been in providing information to his sister.

Thus, the court held that both parties shared responsible for the litigation, and it would be unjust and unfair to award counsel fees for either party.

Robert appealed the trial court’s decision arguing the court applied its own policy considerations in denying his application.  The appellate court applied the standard in Estate of Bayles, 108 N.J. Super. 446, 453-54 (App. Div. 1970), where an executor in performing the duties assumed must generally act with the care and skill which a person of ordinary prudence would exercise under the circumstances.

In doing so, the appeals court held that Robert’s lack of cooperation – causing Laura to file a lawsuit to receive the accounting she should have received long ago – clearly fell short of the ordinary prudence standard.  The order was affirmed.