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Confidential Relationship and Suspicious Circumstances; Examined Buscavage Living Trust

confidential relationship" & "suspicious circumstances." examined BUSCAVAGE LIVING TRUST

IN RE THE JOSEPH BUSCAVAGE and

HELEN A. BUSCAVAGE LIVING TRUST N

                                                               SUPERIOR COURT OF NEW JERSEY

                                                               APPELLATE DIVISION

                                                               DOCKET NO.  A-6041-08T3


________________________________

OT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

 

August 25, 2010

 


Argued May 4, 2010 - Decided

Before Judges Skillman, Fuentes, and Simonelli.

On appeal from Superior Court of New Jersey,

Chancery Division, Probate Part, Somerset County,

Docket No. 07-01452.

Paul R. Rizzo argued the cause for appellant

(DiFrancesco, Bateman, Coley, Yospin, Kunzman,

Davis & Lehrer, attorneys; Mr. Rizzo, on

the brief).

Stephen M. Offen argued the cause for respondents

(Norris, McLaughlin & Marcus, attorneys; Mr. Offen,

of counsel, Mr. Offen and Christine D. Socha,

on the brief).

PER CURIAM

         In this appeal, certain members of the late Joseph Buscavages family challenge the validity of amendments decedent made to his living trust in the last year of his life.  After conducting an evidentiary hearing, the trial court found the amendments valid.  We now reverse and remand for further proceedings.

         Before addressing the legal question raised here, we will first describe, in some detail, the parties who make up decedents family, the attorneys retained by decedent to carry out his wishes as to the disposition of his property, and the documents prepared by these lawyers that allegedly reflected decedents wishes.

I

Joseph Buscavage (Joseph) died a widower without issue.  His closest family members were two sisters: Violet Kubilus (Violet) and a half-sister Margaret Falzone (Margaret).  Violet was closer to Joseph in age and resided approximately three hundred miles away from him in Pennsylvania.  Margaret was eighteen years younger than Joseph, lived with her mother in Josephs home until she was eighteen years-old, and currently lives in Somerville, New Jersey.

Josephs wife Helen Buscavage had three sisters.  One sister had a son, Thomas Matalenas (Thomas), who is married to Marian Matalenas (Marian).  Thomas and Marian lived four houses away from Joseph in Bound Brook.  Helen Buscavages other sister had a daughter, Mary Ann Wagner (Mary Ann). She lived approximately fifty minutes from Joseph in Pennsylvania and has two daughters, Michelle and Patricia.  Helen Buscavages third sister had a daughter Helen Goodrich, who is married to Henry Goodrich, Sr.  They also live in Bound Brook and have four children: Amy, Linda, Pam, and Henry, Jr.  Robert Sadukas [1] was Josephs great-nephew, his grandmother was Helens sister.

On May 1, 1998, Joseph and Helen executed the Joseph Buscavage and Helen A. Buscavage Revocable Living Trust.  They named each other as co-trustees, appointed Mary Ann as first successor trustee, and named Helen Goodrich as second successor trustee.  Their original distribution of the trust was as follows:

Helen Goodrich                       25%

Mary Ann Wagner                   25%

Thomas Matalenas                  25%

Violet Kubilus                         10%

Pam Goodrich                         2.5%

Henry Goodrich, Jr.                 2.5%

Linda Goodrich                        2.5%

Amy Goodrich                         2.5%

Patricia Wagner             2.5%

Michelle Wagner             2.5%

They also executed pour-over wills naming Mary Ann as first alternate executrix and Helen Goodrich as second alternate executrix.  Through durable power of attorney documents, Joseph and Helen also named Helen Goodrich as first alternate and Mary Ann as second alternate attorneys-in-fact.  Attorney G. Jeffrey Moeller prepared all of these documents.

After Helen died in 2001, Joseph made two unchallenged amendments to his trust: one in 2001 and a second in 2003.  On October 2, 2001, Joseph amended the distributions of the trust in the following manner:

Helen Goodrich                       7%

Mary Ann Wagner                   8%

Thomas Matalenas                  24%

Violet Kubilus                         12%

Pam Nilsen[2]                   7%

Linda Goodrich                        7%

Amy Goodrich                         7%

Patricia Wagner             8%

Michelle Wagner             8%

Margaret Falzone           12%

These changes gave each of Helens sisters children and their children seventy-six percent of the estate collectively and divided the remaining twenty-four percent between Josephs two sisters.  Joseph also reversed the order of the trustees, naming Helen Goodrich as first successor and Mary Ann as second successor.

On September 29, 2003, Joseph executed another amendment to the trust in which he conveyed his home in equal shares to his sisters, Violet and Margaret, and his car to his sister Violet; the distribution percentages remained unchanged.  Attorney Robert D. Spengler drafted these amendments which are not at issue in this appeal.

         On January 25, 2007, Joseph retained attorney Martin A. Gleason to draft and execute the amendments challenged in this appeal.  In the first amendment, Joseph made the following changes to the trusts distribution scheme:

Helen Goodrich                       25%

Thomas Matalenas                  25%

Violet Kubilus                         13.5%

Pam Nilsen                    6%

Linda Goodrich                        6%

Amy Goodrich                         6%

Robert Sadukas                       7%

Margaret Falzone           13.5%

This amendment also conveyed Josephs fishing and hunting equipment to Robert Sadukas.  This distribution scheme eliminated Mary Anns and her two daughters shares of the trust entirely and included Helen Goodrichs nephew as a beneficiary.  Of note, the distributions here erroneously total 102 percent.

         The circumstances surrounding the execution of this amendment are at the core of the issues raised by appellants.  According to Gleason, Helen Goodrich contacted him by phone regarding the need to amend Josephs trust.  Joseph and Helen Goodrich attended a meeting at Gleasons office at which Joseph allegedly brought a handwritten paper reflecting the changes he wanted Gleason to implement.  This note was not produced at trial.

According to Gleason, Joseph seemed "absolutely fine" and Helen Goodrich, who was seated "about ten feet away," did not speak.  Gleason testified that he drafted the amendment as directed.  On January 25, 2007, Gleason went to the hospital where Joseph was scheduled for surgery and witnessed Joseph sign the amendment.  Although Helen Goodrich was present at the time Joseph executed the documents, he was able to sign them without physical assistance.  By this time, Joseph had been in the hospital for approximately ten days; he had surgery to correct certain respiratory problems on the same day he signed the amendment.

         On June 28, 2007, Joseph made a second amendment to the trust, which is also contested in this appeal.  This amendment changed the distribution amounts as follows:

Helen Goodrich                       34%

Thomas Matalenas                  6%

Violet Kubilus                         6%

Pam Nilsen                    8%

Linda Goodrich                        8%

Amy Goodrich                         8%

Robert Sadukas                       8%

Margaret Falzone           12%

Henry Goodrich                       10%

As compared to the previous distribution scheme, the second amendment reduced Thomass share from twenty-five percent to six percent, reduced Violets share from thirteen-and-a-half percent to six percent, and added Henry Goodrich, Sr. as a beneficiary who was to receive ten percent.  This amendment also changed the disposition of Josephs home.  Originally, the house was to be equally divided between Violet and Margaret, but the amendment gave Margaret one hundred percent of the house outright.  Lastly, this amendment directed that Josephs vehicle be conveyed to Henry Goodrich, Sr. instead of Violet.  In essence, Violet, who under the previous scheme received half of the home and Josephs car, would now receive neither the home nor the car.

As the one who drafted this amendment, Gleason testified that Joseph communicated his desired changes directly to him by telephone.  After he drafted the document, Gleason met with Joseph at his home in the presence of Gleasons assistant, a notary public, and Helen Goodrich.  According to Gleason, although Joseph was "more [physically] sick," "mentally . . . he was fine."  Gleason testified that he had known Helen Goodrich before drafting these amendments.  Specifically, he represented Helen Goodrich in her capacity as co-executor in the sale of a home; he also represented her daughter Pam in the purchase and sale of her home.

Joseph also owned four Certificates of Deposit (CDs).  Originally, these CDs were payable upon Josephs death to Violet and Margaret in equal shares.  In July 2007, Joseph changed the beneficiaries of these CDs to Henry, Amy, Helen, and Margaret; thus excluding Violet.

Joseph died on September 11, 2007; he was eighty-two years old.  Thomas, Mary Ann, and Violet challenged the validity of the 2007 amendments that decreased or eliminated their dispositions and favored Margaret, Helen Goodrich, Henry Goodrich, Sr., the Goodrich children and Robert Sadukas.  These individuals claim that Joseph was unduly influenced by Helen Goodrich when he made these dispositions. They also argue that Gleason, as the attorney who drafted the amendments, had a conflict of interest between Joseph and the Goodrich family.  Accordingly, they argue that this alleged conflict impaired Gleasons ability to independently represent Joseph in these transactions.

II

In order to assess the veracity of these allegations and determine the legal viability of these claims, the trial court conducted a five-day bench trial during which fifteen witnesses testified.  The following facts are derived from such testimony.

Joseph was an independent and active man until the last years of his life.  After his wifes death, however, Joseph became despondent and generally kept to himself.  Several of his family members would check on him regularly, including Helen Goodrich and her family as well as Thomas and his family.  Mary Ann would see Joseph every month and would call him every other week.  Although Mary Ann offered to assist Joseph at his home in New Jersey, he declined.  From October 2006 through December 2006, Helen Goodrich visited Joseph more often after she discovered that he was having problems breathing.  During this time, Helen also began running errands and cleaning Josephs house; she testified that he paid her $20 a week for her assistance.  In January 2007, Amy began stopping by Josephs home several days a week to keep him company.

After his surgery in January 2007, Joseph remained in a rehabilitation center until February. Although he was still relatively self-sufficient when he returned home, his family members began to visit him more often.  At this time he also had a home health aide who assisted him with home cleaning.

In addition to the visits from Helen Goodrich and her family, Joseph also began to reconnect with his estranged sister Margaret.  In turn, she started visiting him several days a week.  In the spring of 2007, Mary Ann called Joseph and noticed that his breathing was strained and labored.  Although she offered to call him back when he felt better, she never did.  That was the last contact that Mary Ann had with her uncle.

Thomas also visited Joseph on a weekly basis after Joseph returned home from his surgery. According to Thomas, he had been visiting with Joseph on a weekly basis for over a decade.  Sometime in April or May 2007, Thomas stopped visiting Joseph because he developed an infection and did not want to risk spreading it to Joseph.  However, Thomass wife Marian and their children continued to see Joseph regularly.  According to Helen Goodrich, when Joseph inquired about Thomas absence, she told him why Thomas was staying away.  Thomas never saw Joseph again before his death.

Violet and her family visited Joseph in June 2007 after she received a call from him during which he sounded disoriented and confused as to his whereabouts.  Violet was prepared to stay  with Joseph for an extended time, until Helen Goodrich advised her that the Goodrich family would be there to assist him. That was the last time she saw her brother.  During this same time, Helen moved in with Joseph to provide him with around-the-clock assistance.  By this time, Josephs health was quickly deteriorating. According to Helen Goodrich, Joseph specifically requested that she move in with him.  Helen Goodrich lived with Joseph until September 4, 2007, when he was readmitted to the hospital.  Joseph died one week later.

III

         The trial judge issued her ruling in a nineteen-page memorandum of opinion.  In that opinion, the trial court found that appellants had not demonstrated that decedent lacked testamentary capacity at the time he executed the amendments at issue.  The court also did not find that decedents will had been overcome by undue influence or that Gleasons former representation of certain Goodrich family members created a material conflict of interest which compromised his subsequent representation of decedent in connection with the amendments at issue.

         Appellants argue that although the trial court discussed the burdens of proof concerning undue influence, it never applied that analysis.  Specifically, appellants argue that the courts conclusion that undue influence was not established is tantamount to a net opinion.  Appellants also contend that, although the court indicated orally that a confidential relationship and suspicious circumstances existed, it did not address this issue in its written opinion.  They also maintain that the court did not address whether respondents rebutted the presumption of undue influence nor did the court state which standard respondents had to satisfy.

         Finally, appellants argue that the trial courts written opinion mistakenly identifies testamentary capacity as the driving issue.  According to appellants, although the trial court concluded that they had not proven that Joseph lacked testamentary capacity to execute the amendments, their challenge was predicated upon alleged undue influence, not testamentary incapacity.

IV

We start our analysis by setting forth the relevant legal principles that will govern our discussion. Here, the trial courts decision is predicated upon determinations of undue influence and testamentary capacity.  Logically, testamentary capacity must be addressed first because in the absence of testamentary capacity, the issue of undue influence is rendered moot.   However, appellants contend that they did not raise the issue of testamentary capacity before the trial court.  Thus, testamentary capacity is not an issue in this case.

We will thus focus our attention on the question of undue influence.  Specifically, we will examine the role played by Helen Goodrich and other members of her family during the time the two amendments in question were executed by Joseph, and whether there is any evidence of impropriety during the period of time when Josephs health was waning.  We also review whether Gleasons representation of Helen Goodrich created an independent ground for vitiating the two amendments.  Finally, we will determine whether the trial courts opinion properly addressed these concerns.

"If a will is tainted by undue influence, it may be overturned."  Haynes, 87 N.J. 163, 176 (1981) (quotations omitted).  Our Supreme Court has defined undue influence as "a mental, moral, or physical exertion of a kind and quality that destroys the free will of the testator by preventing that person from following the dictates of his or her own mind as it relates to the disposition of assets."  In re Estate of Stockdale, 196 N.J. 275, 302-03 (2008).  Undue influence "denotes conduct that causes the testator to accept the domination and influence of another rather than follow his or her own wishes."  Id. at 303 (quotations omitted).

As the ones alleging undue influence, appellants carry the burden of proof.  Id. at 303.  That being said, certain circumstances can create a presumption of undue influence, shifting the burden of proof to those defending the validity of a will.  Ibid.  "[W]e have long held that if the will benefits one who stood in a confidential relationship to the testator and if there are additional suspicious circumstances, the burden shifts to the party who stood in that relationship to the testator."  Ibid.

We next define the term "confidential relationship," the first of two elements necessary to create the presumption of undue influence.  A "confidential relationship between the testator and a beneficiary, arises where trust is reposed by reason of the testators weakness or dependence or where the parties occupied relations in which reliance is naturally inspired or in fact exists."  Haynes, supra, 87 N.J. at 176 (quoting In re the Estate of Hopper, 9 N.J. 280, 282 (1952)).

The second factor required to create a presumption of undue influence is the presence of suspicious circumstances, which "for purposes of this burden shifting, need only be slight."  Stockdale,supra, 196 N.J. at 303.  "When there is a confidential relationship coupled with suspicious circumstances, undue influence is presumed and the burden of proof shifts to the will proponent to overcome the presumption." Ibid.  Ordinarily, those defending the will must "overcome that presumption by a preponderance of the evidence."  Haynes, supra, 87 N.J. at 178.

Our Supreme Court has recognized, however, that certain situations are so problematic that they call "for a stronger presumption of undue influence and a commensurately heavier burden of proof to rebut the presumption."  Ibid.  The Court noted that "a conflict on the part of an attorney in a testimonial situation is fraught with a high potential for undue influence, generating a strong presumption that there was such improper influence and warranting a greater quantum of proof to dispel the presumption."  Ibid. Accordingly, "if the presumption arises from a professional conflict of interest on the part of an attorney, coupled with confidential relationships between a testator and the beneficiary as well as the attorney, the presumption must instead be rebutted by clear and convincing evidence."  Stockdale, supra, 196 N.J. at 303 (quotations omitted).  An example of such a conflict can be found when  "there is dual representation" between the testator and the beneficiary who is alleged to have applied undue influence.  Haynes, supra, 87 N.J. at 181-82 (finding that the testators attorney had a conflict of interest because he was both the beneficiarys family lawyer and the lawyer who effectuated the contested will changes).

We emphasize that "a conflict of interest . . . need not be obvious or actual to create an ethical impropriety.  The mere possibility of such a conflict at the outset of the relationship is sufficient to establish an ethical breach on the part of the attorney."  Id. at 181 (emphasis added).  The rationale for such a high standard of conduct by attorneys is rooted in the role lawyers play in this most intimate and personal of decisions by the client.  As the court noted in Haynes, the reason behind "imposing the higher burden of proof . . . [is] the need for a lawyer of independence and undivided loyalty, owing professional allegiance to no one but the testator."  Id. at 179.

Appellants argue that they met their burden of proof by presenting evidence of a confidential relationship and suspicious circumstances involving Helen Goodrich and Amy Goodrich, thereby creating the presumption of undue influence. As such, they argue that the burden of proof then shifted to respondents to rebut this presumption.

The record supports appellants assertion.  At the conclusion of appellants case in chief, respondents counsel moved to dismiss appellants complaint based on their failure to establish both a confidential relationship and suspicious circumstances.  After hearing argument from the attorneys for both parties, the trial judge denied the motion.  Specifically, the judge found that "there has been a prima facie showing [of undue influence] by the [appellants] in this matter, and therefore Im going to deny the motion and the burden will now shift to the [respondents] in this matter."  (Emphasis added).

Inexplicably, the courts written decision omits any reference to this material factual finding and highly significant legal conclusion.  The court also failed to identify with particularity what facts supported its key finding of undue influence, and did not mention "suspicious circumstances," the second element necessary to shift the burden of proof to respondents.  Such omissions are in clear derogation of the courts duty under Rule 1:7-4(a).

In the interest of completeness, we all address appellants arguments concerning the role of attorney Martin Gleason.  The record shows that Helen Goodrich and at least one other member of her family had a prior relationship with Gleason.  Indeed, Helen recommended that Joseph retain Gleason to draft the contested amendments despite his otherwise satisfactory relationship with his former counsel who drafted the initial  documents.

Appellants argue that the trial court erred in failing to address the issue of Gleasons potential conflict of interest or his conduct as the drafter of the contested amendments.  According to appellants, there are a number of factors that the court should have considered, including but not limited to: (1) Gleasons testimony concerning an appointment in his office with Helen Goodrich and Joseph in early January 2007; (2) Gleasons failure to ascertain the reasons for Josephs alleged decision to eliminate beneficiaries; (3) Gleasons confusion over circumstances surrounding the executions of the amendments; (4) mistakes in the documents themselves; and (5) Helen Goodrichs presence at the executions of the amendments.

Appellants argue that when considered together, this evidence constitutes suspicious circumstances and undue influence.  They thus maintain that the trial courts failure to address this evidence compels us to remand this matter for further analysis.  In response, respondents argue that in finding no undue influence the trial court implicitly rejected appellants argument concerning Gleason.  As a fall back position, respondents maintain that even if it was error for the court not to have directly reviewed this evidence, the facts alleged do not trigger the concerns articulated in Haynes.

The only reference to Gleason in the courts written decision is found in the following statements:

While the Petitioners argue that this case significantly resembles In Re Hale, there are major distinctions to be drawn.  In Hale, it appeared that (1) the Will was drawn by an attorney of proponents selection who had never met decedent and whose identity was not even known to decedent; (2) the provisions of the Will were transmitted to the attorney by the sole residuary beneficiary; (3) the attorney, without direct instructions from decedent, prepared revocation of caveators power of attorney and a new power in favor of proponent, who attended to execution of both documents. Here, Mr. Gleason had in fact met Joseph Buscavage weeks prior to the date of execution in February of 2007[3]  Further, Helen Goodrich was not the sole residuary beneficiary.  Lastly, Joseph Buscavage, of his own volition, contacted Mr. Gleason to make the amendment. While Joseph Buscavage may have formerly retained Mr. Spengler as his attorney, it seems likely that he saw no reason in being mandated to procure the same attorney to make these subsequent amendments.

Further, the prior business relationship between Helen Goodrich and Mr. Gleason may have been such that Ms. Goodrich highly recommended Mr. Gleason as to her satisfaction with his legal services.  As evidenced by prior testimony, it appears that Mr. Buscavage liked to keep to himself and may have been less inclined to share the personal information of his impending hospitalization with Mr. Gleason, to whom he had no prior relationship.

         Attorneys engaged to perform this highly personal and sensitive task for a client are held to an extremely high standard of professional conduct.  In this context, "a conflict of interest . . . need not be obvious or actual to create an ethical impropriety.  The mere possibility of such a conflict at the outset of the relationship is sufficient to establish an ethical breach on the part of the attorney."  Haynes, supra, 87N.J. at 181.  From the statements given by the trial court, we are unable to ascertain whether the court determined if Gleasons conduct presented the possibility of a conflict.  We are thus compelled to remand this issue for further analysis.

         We emphasize that our decision to reverse is not predicated upon an assessment of the merits of appellants argument.   We reverse because we are unable to discern, from the courts written opinion, what particular factual findings the court relied on to support its ultimate judgment in respondents favor. Equally vexing, in terms of appellate review, is our inability to glean from the courts written opinion how the court determined the two elements necessary to shift the burden of proof to respondents, specifically, that a "confidential relationship" existed between respondents and decedent and that decedents last two amendments to the trust involved "suspicious circumstances."

Thus, in addition to addressing Gleasons conduct, the trial court on remand must also make detailed findings of facts concerning respondents relationship to decedent at and around the time the two amendments in question were drafted and executed.  The court must then apply these findings to the legal principles governing the existence of a "confidential relationship" and "suspicious circumstances" to ascertain whether appellants met their burden of proof on the question of undue influence.  Only if the court holds in appellants favor at this critical juncture will the burden then shift to respondents to rebut the presumption of undue influence.

 
Reversed and remanded.  We do not retain jurisdiction.



[1] Robert Sadukas died on November 25, 2009.

[2] Formerly Pam Goodrich.

[3] The correct month was January 2007.


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He established the NJlaws website which includes many articles on Elder Law. Mr. Vercammen received his B.S., cum laude, from the University of Scranton and his J.D. from Widener/Delaware Law School, where he was the Case Note Editor of the Delaware Law Forum, a member of the Law Review and the winner of the Delaware Trial Competition.

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