The decedent, Felix Fornaro, had two children: his daughter Linda (plaintiff) and his son Carmine (defendant).
In December 2011, the decedent executed a Last Will and Testament leaving 80% of his estate Carmine and 10% to Linda, with the remainder passing to his grandchildren. A year later, Mr. Fornaro died.
Linda challenged the 2011 will. The 2011 will revoked a prior (1999) will, which had divided Mr. Fornaro’s estate equally between his two children. The plaintiff alleged that Mr. Fornaro lacked testamentary capacity when he executed the 2011 will, and that he was unduly influenced by the defendant (Carmine) to execute it.
The trial court dismissed both claims. The plaintiff appealed, challenging the dismissal of her undue influence claim (she did not challenge the lack of capacity claim). The crux of her argument on appeal was that the trial court had erred by failing to find that her brother and the decedent had had a “confidential relationship.” Case law establishes that, if there is a confidential relationship, combined with suspicious circumstances, undue influence is presumed and the burden of proof would shift to Carmine to overcome that presumption by a preponderance of the evidence.
At the end of the trial, the trial court found that there were suspicious circumstances, but that there was no confidential relationship. Therefore, the burden of proof did not shift to Carmine.
Thereafter, plaintiff filed a motion for counsel fees, and was granted an allowance of $429,000. The defendant also filed a motion for fees, and the court awarded a total of approximately $668,000 of his legal fees (incurred by both his then-current counsel and his prior counsel) be paid by the estate. (The defendant objected to those fees, and hired new counsel to challenge the motion.) The defendant appealed the order allowing fees to the plaintiff, claiming that she lacked reasonable cause to challenge the will. He also challenged the amount of fees awarded to his former counsel.
On appeal, the Appellate Division affirmed in part, reversed in part, and remanded the case.
The court first examined the issue of undue influence. It noted that,
it is not necessary to prove that undue influence was exercised at the exact time of execution of the will… however, whenever exerted, whether months or years before, the undue influence must still be operative upon the testator’s mind in the very act of executing the instrument and be an effective cause of the disposition made therein.
A “confidential relationship” exists “when the circumstances make it certain that the parties do not deal on equal terms, but on the one side there is an overmastering influence, or, on the other, weakness, dependence or trust, justifiably reposed.” It also exists if the decedent “reposes by reason of his weakness or dependence or where the parties occupied relations in which reliance is naturally inspired or in fact exists.” Although the relationship of a parent and child is among the most natural of confidential relationships, family ties alone do not create a confidential relationship.
“Suspicious circumstances” are circumstances that “require explanation,” and need only be “slight.”
The appeals court found that the trial court’s rulings on the elements of undue influence were well-grounded in the evidence (with one exception that it found did not affect the rulings). During the last two years of his life, the decedent’s health had deteriorated, but he continued to drive, visit his rental properties, and collect rents. The defendant’s only assistance was driving him to some doctors’ appointments, and occasionally helping him with physical requirements of his business and legal affairs. Both the decedent and the defendant had “dominant” personalities, but the decedent remained the dominant of the two. Moreover, the decedent had discussed plans to minimize the plaintiff’s share of his estate for several years. In sum, “the facts do not provide a basis to conclude that either defendant dominated decedent or decedent was powerless to resist his son, or that defendant exerted influence of a nature that destroyed decedent’s free will and impaired him from following the dictates of his own mind.”
As to fees, the court agreed with the trial court’s decision not to award costs to the plaintiff. Under Rule 4:42-8(a), costs may be awarded to the prevailing party, but plaintiff did not prevail here. However, as to the plaintiff’s legal fee award, the appellate court agreed that she had reasonable cause to contest the will and was entitled to an award of fees from the estate, under Rule 4:42.9(a)(3). Here, the plaintiff’s challenge was reasonable given the decedent’s declining health and age, and the fact that a friend of the defendant’s son, rather than the decedent’s personal attorney, drafted the will. It rejected the defendant’s claim that, if a will contestant cannot marshal sufficient evidence to support a presumption of undue influence, then the contestant lacks reasonable cause to challenge the will.
However, the appeals court reversed and remanded the award of the defendant’s attorneys’ fees. It agreed that, under Rule 4:42-9(a)(3), a trial court may award fees to the proponent and the contestant of a will. However, Rule 4:42-9(b) requires that a fee application be supported by an affidavit addressing the factors set forth in R.P.C. 1.5(a), which requires the legal fees to be reasonable taking into consideration:
(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly; (2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer; (3) the fee customarily charged in the locality for similar legal services; (4) the amount involved and the results obtained; (5) the time limitations imposed by the client or by the circumstances; (6) the nature and length of the professional relationship with the client; (7) the experience, reputation, and ability of the lawyer or lawyers performing the services; (8) whether the fee is fixed or contingent.
In addition, the following factors governed by case law are to be considered in estate matters:
(1) the amount of the estate and the amount thereof in dispute or jeopardy as to which professional services were made necessary; (2) the nature and extent of the jeopardy or risk involved or incurred; (3) the nature, extent and difficulty of the services rendered; (4) the experience and legal knowledge required, and the skill, diligence, ability and judgment shown; (5) the time necessarily spent by the attorney in the performance of his services; (6) the results obtained; (7) the benefits or advantages resulting to the estate, and their importance; (8) any special circumstances, including the standing of the attorney for integrity and skill; and (8) the overhead expense to which the attorney has been put.
The court is to take these factors into consideration, establish a reasonable hourly rate, and determine the “lodestar,” or the reasonable hourly rate multiplied by the hours reasonably expended. Hours expended are not reasonable if they are “excessive, redundant or otherwise unnecessary,” or more than a competent attorney would have expended to obtain a similar result.
Because the trial court did not conduct this analysis, or expressly state its findings of facts and conclusions of law, the appeals court could only speculate as to the reasons for the fee award. The appeals court noted that it is not a party’s burden to prove his/her adversary’s fees are unreasonableness; the court must make its own determination. Consequently, the appeals court found itself “constrained to reverse” the award of counsel fees and costs for further fact-finding.
A copy of Estate of Fornaro can be found here – In the Matter of the Estate of Felix Fornaro
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