02.19.2024

Undue Influence Claims Fail Because Supported by “Mere Speculations”

In re Estate of Seto, 2024 WL 537811 (N.J. Super. Ct. App. Div. February 12, 2024)

This case involved an assortment of claims between siblings as to undue influence and other impropriety in both a lifetime transfer of real estate and a last will of their mother.

Ngan Lau Kwan Seto (“decedent”) had four children: Peter; Steven; Nancy; and Lisa.  The litigation arose mainly between Peter and Steven

Real Estate Transfer

In 1980, the decedent purchased real property in Woodside, New York (the “Woodside property”).  In 1985, she transferred the Woodside property from herself to herself, Peter, and Steven as joint tenants with a right of survivorship.

In 1988, the decedent, Peter, and Steven purchased real property in South Plainfield (the “South Plainfield property”) as co-owners.  In 1993, the decedent and Steven transferred their interest in the South Plainfield property to Peter and his spouse. According to Steven, the transfer to Peter was pursuant to an agreement in which he would release his interest in the South Plainfield property in exchange for Peter’s release of his interest in the Woodside property.

In 1995, as part of a refinancing transaction on the Woodside property sought by the decedent and Steven, a mortgage lender required that Peter be removed as a joint tenant with a right of survivorship. Steven conceded that unless Peter agreed to the change in ownership, he and the decedent would have been unable to refinance the mortgage.

Steven identified and retained an attorney to prepare a deed transferring ownership of the Woodside property from the decedent, Peter, and Steven to the decedent and Steven.

The decedent, Peter, Steven, the attorney retained by Steven, and a notary public were in attendance when the deed was executed by the decedent, Peter, and Steven. The face of the deed in the record plainly transfers the Woodside property to the decedent and Steven as tenants in common. The deed did not include language regarding a joint tenancy with a right of survivorship. The deed had handwriting identifying the parties to the transaction. Steven admitted that his signature on the 1995 deed was real and that he was present when the decedent signed the deed. Steven paid the attorney for preparing the deed.

The Last Will

On August 4, 2010, the decedent executed a last will and testament prepared for her by an attorney in New York City.  Article Four of the will provided that “my entire interest (that being 50% of the overall) in the [Woodside property] be devised and bequeathed to my eldest son Peter . . . .” Article Five of the will provided that if she had been predeceased by Peter, she devised and bequeathed her interest in the Woodside property to Peter’s children. The will did not address any other assets.

On May 28, 2019, the decedent died.  She was then a resident of Middlesex County, New Jersey.  She was survived by her children.

Litigation at Trial Level

After Peter submitted the will to probate, Steven filed a verified complaint in the Chancery Division.  He alleged: (1) the will was invalid because it was the product of undue influence by Peter over the decedent; and (2) the decedent’s estate did not include an interest in the Woodside property because the 1995 deed purporting to transfer the parcel to the decedent and Steven as tenants in common was fraudulent.  Steven alleged it was the intention of the decedent, Peter, and Steven that the 1995 transfer of the Woodside property would be from the decedent, Peter, and Steven as joint tenants with a right of survivorship to the decedent and Steven as joint tenants with a right of survivorship.

Steven alleged that Peter maintained a confidential relationship with the decedent, who spoke limited English and did not complete elementary school in her native China. According to the complaint, Peter convinced the decedent to meet with an attorney for the purpose of drafting the will. Steven alleged that Peter secretly communicated with the attorney and directed him to include provisions in the will transferring the decedent’s purported interest in the Woodside property to Peter or his children without the decedent’s knowledge or consent.

Steven also alleged the circumstances surrounding the execution of decedent’s will were suspicious on numerous grounds.

According to the complaint, at the time the decedent, Peter, and Steven executed the 1995 deed, it contained a typewritten passage identifying the decedent and Steven as receiving the property as joint tenants with a right of survivorship. He alleged that “[s]ometime after decedent and [Steven] executed the [1995 deed], and without providing any notice to decedent or [Steven], Peter . . . caused the [d]eed to be altered to white out the provision identifying decedent and [Steven] as ‘joint tenants with right of survivorship’ and replace it with a handwritten provision which made no[] reference to any right of survivorship.”  Steven alleged Peter thereafter caused the altered deed to be recorded.  Id. at 2.

Steven sought an order declaring the will null and void, declaring that the Woodside property was not part of decedent’s estate and belonged solely to him as the surviving joint tenant, appointing him personal representative of the estate, and awarding him attorney’s fees and costs.

Peter’s counsel sent Steven’s counsel a letter pursuant to R. 1:4-8, notifying him that Steven’s claims were frivolous and demanding withdrawal of the verified complaint.

After discovery, Peter moved for summary judgment. He denied ever having seen the decedent’s will or being aware of its contents prior to her death. Peter also denied having known of or spoken to the attorney who prepared the will. Peter certified that pursuant to Chinese tradition, which the decedent followed closely, a mother leaves her estate to her male heirs and that because he was her only child with grandsons, it would have been logical to his mother to leave her only valuable asset to him and, if he died before her, to his sons. He certified that in 2010, his mother was strong-willed, independent, and of sound mind, and could have taken a train into New York City to retain an attorney to execute her will without her children knowing or being concerned for her safety. He noted that decedent lived with Steven for approximately eight years before and nine years after the will was executed.

Peter also denied altering or causing the alteration of the 1995 deed and certified that he was not involved with its recording.  During discovery, Steven could not produce a copy of the 1995 deed that he signed. He admitted that he has never seen the 1995 deed with white-out in or on it in any form. He also admitted that he never observed anyone white-out any provision of the deed. When asked during discovery whether he claimed that the notary public whited-out the phrase “joint tenancy with right to survivorship” on the deed without Steven’s permission, he testified, “I did not say that; okay.” Steven admitted that he did “not have any proof” that the notary public applied white-out to any portion of the 1995 deed without the parties’ consent.

The notary testified at his deposition that he witnessed the decedent, Peter, and Steven sign the 1995 deed, and that handwritten notations on the deed were placed there by him at the direction of the lenders with the approval of the parties to the transaction. The notary confirmed that he maintained control of the fully-executed deed, not allowing any changes to the document, until he delivered it to the title company to be recorded.

Discovery also revealed that subsequent to the recording of the 1995 deed, Steven used the Woodside property as collateral for another loan. He did not, however, raise any concerns at that time about the terms of the 1995 deed or suggest that he and the decedent owned the property as joint tenants with a right of survivorship.

In opposition to Peter’s motion Steven relied on the allegations in the complaint with respect to the alleged confidential relationship and pointed out that the decedent’s will was discovered in Peter’s safe deposit box, even though he denied having been aware of the will. In addition, Steven argued that he would present the testimony of an expert forensic document examiner who would opine that the 1995 deed was altered with white-out. That expert, however, admitted that she never viewed the original deed and formed her opinion based on a photocopy of the deed.

The trial court granted Peter’s motion for summary judgment.  The court issued a written statement of reasons.  The court found there was no dispute of material fact with respect to the absence of a confidential relationship between the decedent and Peter. The court further found that Steven produced no evidence suggesting that in 2010 the decedent was not of sound mind, could not decide with respect to the disposition of her property, or was dependent on Peter.  The trial judge concluded that the familial relationship between Peter and the decedent was insufficient to create a confidential relationship. The court noted that the decedent lived with Steven for eight years prior and nine years after executing the will.

The court also found that Steven’s allegations with respect to Peter’s participation in the drafting of the will or the formulation of its contents was mere speculation.

The court also found no genuine issue of material fact with respect to the validity of the 1995 deed granting Steven an interest as a tenant in common in the Woodside property. In addition, the court concluded that Steven produced insufficient proof to establish that the decedent and he intended the 1995 deed to covey the property to themselves as joint tenants with the right of survivorship. The court noted that decedent’s 2010 will conveyed her interest in the Woodside property, which establishes that she believed she owned the property with Steven as tenants in common.

Peter thereafter moved for attorney’s fees and costs pursuant to R. 1:4-8 and N.J.S.A. § 2A:15-59. Steven opposed the motion.

The court denied Peter’s motion, finding it was reasonable for Steven to question the 1995 deed given the handwritten notes on the deed, the family history, and the history of the two properties. However, based on discovery, including the deposition of the notary, the court was satisfied that there were no issues of material fact as to the validity of the 1995 deed.  The court ruled instead that the estate would pay the attorney’s fees and costs incurred by both Peter and Steven.

Peter thereafter moved for partial reconsideration. He argued that the trial court erred when it ordered that the estate bear the attorney’s fees and costs incurred by Steven, as Steven did not request such relief. In addition, he argued that because the estate was of limited value, charging the estate for Steven’s attorney’s fees and costs would effectively deplete Peter’s inheritance. Steven cross-moved for an order charging the estate for his attorney’s fees and costs.

The trial court granted Peter’s motion for partial reconsideration and denied Steven’s cross-motion. The court vacated the prior order to the extent it directed the estate be charged for either party’s attorney’s fees and costs. The court stated that when it ordered Steven’s attorneys’ fees to be paid out of the estate, it did not consider that the Woodside property was essentially the estate’s sole asset, and thus, that such order would result in Peter having to pay for both his and Steven’s attorneys’ fees. The court denied Steven’s cross-motion for the same reasons.

The Appeal

Steven appealed on several grounds, arguing that the trial court erred by not viewing the evidence proffered in support of Peter’s summary judgment motion in a light most favorable to Steven.  Steven also argued that the trial court abused its discretion when it denied his application to charge the estate for the attorney’s fees and costs he incurred.

The Appellate Division began by reviewing the standards for summary judgment:

Our Supreme Court has cautioned that summary judgment ordinarily should not be granted where an action depends on a determination of a person’s state of mind, including claims of fraud or duress. Lombardi v. Masso, 207 N.J. 517, 544 (2011) (quotations omitted); see also Ruvolo v. Am. Casualty Co., 39 N.J. 490, 500 (1963) (stating that a court should hesitate to grant summary judgment when it must “resolve questions of intent and mental capacity”); Marte v. Oliveras, 378 N.J. Super. 261, 276 (App. Div. 2005) (stating that factual issues related to alleged undue influence are not susceptible to resolution on motion for judgment).

On the other hand, if the court determines there is no genuine issue of material fact, the court is not precluded from granting summary judgment, notwithstanding issues involving state of mind. Fiedler v. Stonack, 141 N.J. 101, 129 (1955); Bower v. The Estaugh, 146 N.J. Super. 116, 121 (App. Div. 1977) (affirming grant of summary judgment where court discerns “no evidence of undue influence”). Also, “when the evidence is so one-sided that one party must prevail as a matter of law, the trial court should not hesitate to grant summary judgment.” Brill v. Guardian Life Ins. Co., 142 N.J. 520, 540 (1995) (quotations omitted).

Id. at 5.

The Appellate Division also surveyed the standards for undue influence:

When the validity of a will is challenged, it is generally presumed that “the testator was of sound mind and competent when he executed the will.” Gellert v. Livingston, 5 N.J. 65, 71 (1950). However, “[i]f a will is tainted by ‘undue influence,’ it may be overturned.” Haynes v. First Nat’l Bank of N.J., 87 N.J. 163, 176 (1981). “Undue influence has been defined as mental, moral or physical exertion which has destroyed the free agency of a testator by preventing the testator from following the dictates of his own mind and will and accepting instead the domination and influence of another.” Ibid. (quotation omitted).

Ordinarily, the opponent of a will bears the burden to prove undue influence. In re Rittenhouse’s Will, 19 N.J. 375, 378 (1955). However, certain circumstances may create a presumption of undue influence, shifting the burden of proof to the will’s proponent. Id. at 379. This occurs when two conditions are met: first, “the will benefits one who stood in a confidential relationship with the testatrix”; and second, “there are additional circumstances of a suspicious character present which require explanation.” Id. at 378-79. The opponent of the will must prove a confidential relationship by a preponderance of the evidence. Est. of Ostlund v. Ostlund, 391 N.J. Super. 390, 402 (App. Div. 2007).

Id.

As to whether a confidential relationship arises between a parent and child, the appellate court notes that the courts have recognized such a relationship as among the most natural of confidential relationships; however, the mere existence of family ties does not create a confidential relationship.  The court must still examine the relationship to ascertain whether there is dominance of one party over the other, or inequality of dealing.

The Appellate Division agreed with the trial court’s conclusion that the evidence presented in support of Peter’s motion for summary judgment, even when viewed in a light most favorable to Steven, did not raise a genuine issue of material fact with respect to the validity of the will.

As to the 1995 deed, the Appellate Division also agreed with the trial court.  It noted that, by statute, a joint tenancy is created by express language in the document transferring ownership.  N.J.S.A. § 46:3-17.  For a tenancy in common, the death of one tenant does not give the other tenant the right to the whole.

The appeals court explained that Steven did not dispute these legal principles. He argued that he had raised a genuine issue of material fact regarding whether the 1995 deed contained language transferring the property to the decedent and him as joint tenants with a right of survivorship, which was nefariously removed by Peter or another unnamed person.

The Appellate Division agreed with the trial court that Steven’s position was nothing more than speculation. For example, the decedent’s will expressly bequeathed her interest in the Woodside property to Peter, establishing that she believed she owned the property with Steven as a tenant in common.

Finally, the Appellate Division addressed counsel fees and costs.  It found no abuse of discretion in the trial court’s denial of Steven’s fee application in light of his failure to secure any relief and the relatively small value of the estate.  As the trial court noted, charging the estate for the attorney fees and costs of both parties would effectively deprive Peter of his inheritance. While Steven’s claims may not have been frivolous, that alone does not mandate that he be awarded attorney’s fees and costs against the estate.