In re Estate of Alfieri

IN THE MATTER OF THE ESTATE OF VICTOR VINCENT ALFIERI, Deceased.

IN THE MATTER OF THE ESTATE OF ANTOINETTE ALFIERI, Deceased.

DOCKET NO. A-2847-16T4

DOCKET NO. A-3044-16T4

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION

Argued November 26, 2018

October 3, 2019

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

Before Judges Fasciale, Gooden Brown and Rose.

On appeal from the Superior Court of New Jersey, Chancery Division, Morris County, Docket Nos. P-002363-2011 and P-000377-2013.

Meredith Leigh Grocott argued the cause for appellants/cross-respondents Barbara Stella and Matthew Stella (Schenck, Price, Smith & King, LLP, attorneys; Meredith Leigh Grocott, of counsel and on the briefs).

Donald M. McHugh and Cathyanne A. Pisciotta argued the cause for respondent/cross-appellant Estate of Victor Alfieri and respondent Estate of Antoinette Alfieri (McHugh & Macri, and Pisciotta & Menasha, LLC, attorneys; Donald M. McHugh and Cathyanne A. Pisciotta, on the joint briefs).

John L. Pritchard argued the cause for respondent/cross-appellant Charles Bradley Morton III.

The opinion of the court was delivered by

GOODEN BROWN, J.A.D.

These consolidated appeals and cross-appeals challenge several Chancery Division orders in a probate matter involving bequests in wills executed by Victor and Antoinette Alfieri. Victor and Antoinette¹ were two of seven siblings.² They were unmarried and lived together in East Hanover (the East Hanover property) until Victor died in 2011. Antoinette died two years later in 2013. Having no children of their own, in wills that mirrored each other, each had bequeathed his or her entire estate to the surviving sibling, and, upon that sibling's death, to specified siblings as well as nieces, nephews, grandnieces, and grandnephews. Because Victor predeceased Antoinette, Antoinette's will,bequeathing sizeable assets, is at the core of these appeals. These assets included bequests of $40,000 each to seven specified nieces and nephews, and Victor's brokerage account worth over $600,000 to six grandnieces and grandnephews.

The central issues raised in these appeals are whether the brokerage account, which was transferred from one firm to another prior to Victor's death, adeemed and should thereby pass to the residuary as claimed by the co-executors; whether the co-executors mishandled the East Hanover property; and whether one of the nephews omitted from Antoinette's will was entitled to a $40,000 bequest. The trial court determined that the brokerage account adeemed, that the omitted nephew was not entitled to the bequest, and that the co-executors did not mishandle the East Hanover property. Other related issues include the denial of the co-executors' motion for sanctions under the frivolous litigation statute, N.J.S.A. 2A:15-59.1; the denial of a motion to intervene filed by one of the grandnephews; and the award and denial of counsel fees.

Specifically, Barbara Morton Stella, a niece of Victor and Antoinette, appeals from the February 2, 2016 orders, denying her motion for a declaratory judgment and granting summary judgment to the Estates; the May 6, 2016 order, denying reconsideration of the summary judgment order, which determined thatthe brokerage account adeemed; the June 27, 2016 order, awarding counsel fees to the Estates' attorneys; and the January 26, 2017 order, approving the final accounting of the Estate of Victor Alfieri (Victor Estate) and the Estate of Antoinette Alfieri (Antoinette Estate) (collectively, the Estates). Barbara's son, Matthew Stella, a grandnephew of Victor and Antoinette, cross-appeals from the January 26, 2017 order, denying his motion to intervene. Barbara's brother, Charles Bradley Morton III, a nephew of Victor and Antoinette, appeals from the February 2, 2016 order, denying him a $40,000 bequest from the Antoinette Estate; and the June 27, 2016 order, denying him counsel fees. Finally, the Victor Estate cross-appeals from the May 6, 2016 order, denying its motion for sanctions against Barbara pursuant to the frivolous litigation statute. Having considered the arguments and applicable law, we reverse the provision of the February 2, 2016 summary judgment order, determining that the brokerage account adeemed. In all other respects, we affirm.

I.

We derive the following facts from the record. Victor and Antoinette's long-time neighbor, friend, and attorney, Donald McHugh, drafted both of their wills. Victor executed his will on July 20, 2006, and Antoinette executed hers on July 20, 2007. Both wills named Joanne Cannici and Felicia Feldman, twoof their nieces, as co-executors.³ In the second article of both wills, the surviving sibling inherited the deceased sibling's entire estate. However, if the surviving sibling was disabled or unable to live independently and manage his or her own affairs, then all the assets of the estate would pass to a testamentary trust established to support the disabled or dependent sibling.

The third article of both wills bequeathed certain assets to Victor and Antoinette's nieces, nephews, grandnieces, and grandnephews upon the death of the surviving sibling and the termination of the testamentary trust, if one had been established. Pertinent to this appeal, article three of Antoinette's will specifically provided:

If my beloved brother shall not survive me or upon his demise during the trust term, then I bequeath and appoint the residue of my estate, real and personal, as follows:

A. The balance of the pre-death shareholdings of VICTOR VINCENT ALFIERI in his brokerage account at Smith Barney, in equal shares, to each of my grandnephews and grandnieces, who are the grandchildren of my siblings, ELIZABETH JANE CANNICI, JOHN CHARLES ALFIERI[,] and ANNAMARIE ALFIERI MORTON,⁴ per capita and not per stirpes.

B. The sum of Forty Thousand . . . Dollars to each of my following nieces and nephews, JOANNE CANNICI, JOHN CANNICI, STEPHEN CANNICI, FELICIA ALFIERI FELDMAN, LINDA ALFIERI WILLMAN, BRENDA ANN MORTON[,] and BARBARA ANN MORTON STELLA, per stirpes and not per capita.

C. The rest, residue and remainder of my estate to my siblings, ELIZABETH JANE CANNICI, JOHN CHARLES ALFIERI[,] and ANNA MARIE ALFIERI MORTON, per stirpes and not per capita.

The fourth article expressly exempted Antoinette's brother, Ralph Louis Alfieri, and his family from any bequests because she had "no contact with him for many years." Additionally, the seventh article appointed as trustee "the surviving parent of [any] beneficiary" who was under twenty-five years of age when the estate became payable, "to have and to hold . . . in trust," "for the health and education of such beneficiary . . . until such beneficiary attains the age of [twenty-five] years."

In July 2011, Victor and Antoinette executed substantively identical codicils. Antoinette's codicil amended paragraph B of the third article andclarified that "should STEPHEN CANNICI predecease me, his share shall pass to his natural born children and not to COURTNEY CANNICI. She is the child of LORI CANNICI and was adopted by STEPHEN CANNICI." Other than this amendment, the codicil "ratif[ied] and republish[ed]" Antoinette's July 20, 2007 will.

By 2011, Victor and Antoinette were in their eighties and experiencing failing health. Prior to his death, with the assistance of McHugh, Victor took various steps for healthcare and estate planning purposes. Among them, on August 30, 2011, Victor executed a deed giving himself a life estate in the East Hanover property he shared with Antoinette, and transferred the remainder interests to designated siblings and nieces as tenants in common. Specifically, one-third was transferred to each of his siblings, Elizabeth Jane Cannici and John Charles Alfieri, and the remaining one-third was divided equally between his nieces, Brenda Ann Morton and Barbara Morton Stella.

On the same date, Victor transferred the assets in his Morgan Stanley Smith Barney brokerage account to Oppenheimer & Co., another brokerage firm. The brokerage account had substantially increased in value from approximately $10,000 in 2006 to over $600,000 in 2011. During his deposition, when questioned about the testamentary intent of the parties inrelation to the brokerage account, McHugh testified he had no discussion with Victor or Antoinette about transferring the assets in the brokerage account. However, McHugh acknowledged that in 2011, when he "specifically asked [Victor]" whether he "want[ed] 600 and some-odd thousand dollars to go to [his] grandnieces and [grand]nephews[,] . . . his answer was, '[n]o, I do not.'" Additionally, during their respective depositions, both Felicia and Joanne denied ever having any discussion with Victor regarding the Smith Barney account. Victor Puglio, an Oppenheimer broker, was one of three financial advisors recommended to Victor by McHugh. Puglio testified during his deposition that Victor transferred the assets from Smith Barney to Oppenheimer for "[a] consolidation and review." Puglio denied ever meeting or even speaking with Antoinette.

In addition, on August 30, 2011, Joanne and Felicia established the "Antoinette E. Alfieri Supplemental Benefits Trust" (the SBT), "an [i]rrevocable [t]hird-[p]arty [t]rust" established for "the sole benefit of and for the limited purposes" of "supplement[ing] the personal needs, medical care and general well-being of [the] [l]ifetime [b]eneficiary," Antoinette. "[S]ubject to prior payment of the bequests set forth in [Antoinette's] [w]ill[,]" the remainder beneficiaries of the SBT were Antoinette's siblings, Elizabeth Jane Cannici andJohn Charles Alfieri, and the children of Antoinette's deceased sibling, Anna Marie Alfieri Morton, which included Barbara. Joanne and Felicia were appointed co-trustees of the SBT, and...