Appeals Court Affirms Summary Judgment In Favor Of Plaintiffs In Will Contest Alleging Undue Influence

Renee Halpecka died in 2005 when she was 84 years old. Before her death, Renee had been very ill for many years and was cared for by her husband. After her husband died in 2001, Rosemary Walsh, a neighbor, became Renee’s caretaker and served as her agent under a financial power of attorney and medical proxy. Walsh managed Renee’s financial affairs and attended her appointments with doctors and meetings with an attorney and bank staff, among many other duties she performed for Renee. Upon her death, Renee left her estate, in equal shares, to three “friends” — Rosemary Walsh, her former power of attorney and executrix, Andrea Price, alternate executor, and Brenda Hedrick. However, most of the estate consisted of non-probate assets which passed to Walsh outside of the decedent’s will. About one year after Renee’s death, two of the three “friends”, Price and Hedrick, filed a lawsuit against Walsh and her husband.

Before trial, plaintiffs filed a motion for summary judgment, alleging that there was no fact dispute in the case, and therefore no need for a trial, and that plaintiffs were entitled to a judgment in their favor as a matter of law. The trial judge agreed and granted plaintiffs’ motion, entering a judgment in excess of $500,000 plus counsel fees against defendants and in favor of the estate. The trial judge found that Walsh had a confidential relationship with the decedent and exercised undue influence by converting probate assets into non-probate assets, which Walsh accomplished through a series of gifts and other transactions made during Renee’s life, leaving nearly all of Renee’s assets, other than her real estate, payable to Walsh on decedent’s death. The court also found that Walsh’s husband was complicit in and unjustly enriched by Walsh’s conduct. Notwithstanding the ruling, however, the court denied plaintiffs’ claim for punitive damages.

Defendants appealed, contending that the trial judge erred by, among other things, resolving the questions of a confidential relationship and undue influence on summary judgment, and awarding counsel fees. Plaintiffs cross-appealed, contending the denial of their claim for punitive damages was incorrect.

The appeals court affirmed the trial court’s decision. The appellate court held, first, that “the evidential materials submitted on the motion for summary judgment were so one-sided as to permit a determination that plaintiffs were entitled to judgment as a matter of law on the question of a confidential relationship…We are satisfied that the record includes clear and convincing evidence of undue influence amounting to fraud…”

Second, the court affirmed the award of counsel fees based upon the holding in In re Niles, 176 N.J. 282 (2003), as follows:

We hold that when, as in this case, an executor or trustee reaps a substantial economic or financial benefit from undue influence, the fiduciary may be assessed counsel fees incurred by plaintiffs and third parties in litigation to restore the estate’s assets to what they would have been had the undue influence not occurred.

Finally, the appeals court also affirmed the denial of punitive damages, agreeing with the trial judge that “the remedies awarded in the probate action, which included an award of counsel fees …, were adequate to address the wrong, making a punitive damage award inappropriate.”

The case is annexed here –Matter of the Estate of Halpecka