NJ Appellate Division Affirms Counsel Fee Award Of Over $10 Million

Cohen v. Perelman, et al., Nos. A-3275-14T4 and A-3286-14T4, 2018 WL 6034978 (N.J. Super. Ct. App. Div. Nov. 19, 2018).

This decision is the latest in a series involving the same family dispute. This ruling involved an appeal of the trial court’s finding that the decedent’s July 2009 will was valid and enforceable.  The appeals court also affirmed the lower court’s dismissal of the granddaughter’s complaint alleging all of the decedent’s wills after 2004 were the result of undue influence.  The Appellate Division further confirmed an award of legal fees and costs to the granddaughter in the amount of $10,578,101.

As to the undue influence claim, the trial court determined there was ample evidence in the record to show that the decedent was not unduly influenced at the time of the July 2009 will’s execution. Id. at *26-27.  Moreover, the court found the decedent was functionally competent at the time he executed the 2009 will and the granddaughter failed to prove that he made an enforceable promise to divide his estate equally among his children.  Although the trial court found a confidential relationship existed between the decedent and his son, the son rebutted the presumption of undue influence by clearly and convincingly showing the decedent wanted to pass the family business to him and the 2009 Will fulfilled that objective.  Additionally, the decedent’s response to prior litigation was a factor in his decision to change his will.

The Appellate Division also rejected the son’s argument that legal fees ought not to be reimbursed because those sums would go to the granddaughter’s father, who was not a party to the litigation. The court stated, “there was a reasonable basis for this litigation and awarding fees to contestants whose good faith litigation is funded by third parties does not encourage interlopers to disturb the orderly administration of estates”, rather it “simply enables those who have colorable claims to litigation in good faith.” Id. at *56.  The court relied on R. 4:42-9(a)(3), which entitles a party to receive an allowance for fees and costs regardless of whether they prevail. Id. at *57.