SYLLABUS
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the
convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the
interest of brevity, portions of any opinion may not have been summarized.)
In the Matter of the Estate of Adrian J. Folcher (A-3-14) (074590)
Argued November 9, 2015 -- Decided April 26, 2016
LaVECCHIA, J., writing for a majority of the Court.
The issue in this appeal is whether the Court should expand the narrow exception to the American Rule
created in In re Niles Trust, 176 N.J. 282 (2003), allowing attorneys’ fees to be assessed against an executor or a
trustee who “commits the pernicious tort of undue influence,” to a person who does not owe a fiduciary
responsibility to an estate or its beneficiaries.
Adrian Folcher married petitioner Bernice Tambascia-Folcher in 2002. Each had children from a prior
marriage. A post-marital agreement between Folcher and Bernice provided that their incomes would remain
separate, that they would share expenses associated with Bernice’s Cherry Hill home, where they lived since
approximately 1992, and that any real estate they owned jointly would be held in trust for the benefit of the
surviving spouse until his or her death. Folcher executed a will in November 2003 (November 2003 Will) naming
Mary Lee, his daughter, as executor. In addition, Folcher and Bernice wrote a letter to Folcher’s attorney expressing
their wishes about distribution of personal property; specifically, Folcher’s boat, pickup truck, and car were to be
bequeathed to his children. In January 2006, Folcher had his attorney revise his will (January 2006 Will). Mary Lee
remained the executor, but the revised will directed that property not distributed by an attached memorandum, which
specifically bequeathed certain items of personal property including the earlier mentioned boat and motor vehicles,
would pass to Bernice. In March 2007, Folcher had his attorney draft a deed for Bernice’s Cherry Hill home in
which Bernice transferred the home to him and Bernice as “tenants in common” (March 2007 Deed). Thus, upon
his death, Folcher’s one-half interest in the home would pass to his estate, not to Bernice.
In mid-September 2007, suffering from metastasized kidney cancer, Folcher was temporarily hospitalized.
He was discharged to return home on September 22, 2007, knowing that further treatment, other than hospice care,
was of no use. He was prescribed a combination of potent pain medications, was wheelchair-confined, needed
oxygen support, and generally relied on Bernice for his basic daily care. On September 28, Folcher purportedly
executed two codicils to his January 2006 Will. Codicil #1 stated, “I affirm my last will and testament dated
January 19, 2006, to be my wishes. I want my wife Bernice [Tambascia-]Folcher to have all personal property and
all items in our home.” Codicil #2 was a copy of Codicil #1 with the above whited-out and replaced by the
following handwritten statement: “I want my spouse Bernice Tambascia[-Folcher], to have all personal
accts./property [and] all items in our home.” Bernice testified that she prepared Codicil #2 after Folcher rejected the
first as not properly expressing his wishes.
On September 29, Bernice and her daughter, Desiree, drove Folcher to a local branch of Wachovia Bank.
According to Bernice, Mileva Boncic, a bank employee, who also was a notary, exited the bank building, went to
Folcher, and notarized documents that Folcher signed in the car. Desiree testified that the witnesses to the signing
watched through the bank’s window and that the witnesses’ signatures were affixed when the document, purportedly
a new deed to the Cherry Hill home (September 2007 Deed) was taken inside the bank. The new Deed made
Folcher and Bernice owners as “joint tenants with the right of survivorship,” instead of “tenants in common” as the
March 2007 Deed provided. Codicils #1 and #2 each contained a purported notarization by Ms. Boncic, who also
notarized the September 2007 Deed, and a purported witness attestation by Anthony Mannello, another bank
employee. At trial, Boncic and Mannello testified that they had not witnessed the signing of the codicils.
Folcher passed away on October 2, 2007. Approximately forty-five minutes after his death, Bernice went
to the Camden County Clerk’s Office to record the September 2007 Deed. Additionally, on the day of his passing,
and very shortly thereafter, Bernice withdrew a total of $25,886.41 from Folcher’s bank accounts. Further, between
September 26 and 28, 2007, inter vivos transfers of the titles to his vehicles and boat were accomplished. On
October 15, 2007, Mary Lee submitted the November 2003 Will to the Camden County Surrogate for probate. That
same day, Bernice gave the Estate’s attorney, Edward Sheehan (Sheehan), several documents, including a copy of
the November 2003 Will and Codicil #1, but failed to include Codicil #2 or the letter memorandum bequeathing
certain items of personal property. Over a year after Folcher’s death, on October 23, 2008, Bernice submitted
Codicil #2 to the Camden County Surrogate for probate and then mailed a copy to Sheehan, who testified that he
believed Codicil #2 to be fraudulent.
Litigation commenced after Mary Lee filed a final accounting of the Estate. On November 5, 2012, the
Chancery Court determined that the codicils and the September 2007 Deed executed by Folcher were the product of
undue influence by Bernice and that she had engaged in fraud and forgery. The court voided the September 2007
Deed and both codicils, and Bernice was ordered to reimburse the Estate for the money taken from the accounts and
for the value of the two vehicles and the boat that she had previously sold. On December 10, 2012, the trial court
awarded $397,309.19 in attorneys’ fees to the Estate, citing Niles, supra, 176 N.J. 282, and In re Estate of Stockdale,
196 N.J. 275 (2008). The trial court acknowledged that Bernice was neither an executor nor a trustee of the Estate.
Yet the court determined that an award of counsel fees could be founded on Bernice’s confidential relationship with
Folcher and proof of undue influence.
Bernice appealed, and the Appellate Division affirmed the fee award. Although Bernice was not a
fiduciary, the panel reasoned that she was in a confidential relationship with Folcher and exercised undue influence
to modify estate documents, obtain property through lifetime transfers, and generally expand her own beneficial
interests. The panel saw “no just reason why she, like a corrupt fiduciary, should not make the estate whole.”
The Supreme Court granted certification primarily to address the novel use of fee-shifting in this probate
matter. 219 N.J. 630 (2014).
HELD: The Court declines to expand the exception to the American Rule created in In re Niles Trust, 176 N.J. 282
(2003), to a person who does not owe a fiduciary responsibility to an estate and its beneficiaries. In this case,
because the confidential relationship endowed Bernice with an obligation to only her husband, and not the Estate, a
fee award was not the proper vehicle to do equity.
1. New Jersey is an “American Rule” jurisdiction, meaning it has a “strong public policy against shifting counsel
fees from one party to another.” Stockdale, supra, 196 N.J. at 307. The American Rule prohibits recovery of
attorneys’ fees “by the prevailing party against the losing party.” Ibid. (quoting Niles, supra, 176 N.J. at 294).
There are few authorized exceptions. R. 4:42-9. In relatively recent years, a few Court-sanctioned “exceptions to
the American Rule that are not otherwise reflected in the text of Rule 4:42-9” and that are not provided for via
statute, court rule, or contract have developed. In re Estate of Vayda, 184 N.J. 115, 121 (2005). Saffer v.
Willoughby, 143 N.J. 256, 272 (1996), recognized an exception to the American Rule in the context of successful
claims for attorney malpractice. Packard-Bamberger & Co. v. Collier, 167 N.J. 427, 443 (2001), expanded that
exception in the attorney-client-relationship setting to include claims against attorneys who intentionally violate
their fiduciary duties. Most recently, this Court expanded that exception outside of the attorney-client setting to
attorneys acting in a fiduciary capacity as escrow agents. See Innes v. Marzano-Lesnevich, ___ N.J. ___ (2015). In
Niles, the Court created an exception to the American Rule in trustee or executor undue influence cases “based on
the fiduciary’s intentional misconduct regardless of his or her professional status.” 176 N.J. at 300. In Vayda, the
Court declined to extend the exception created in Niles to a non-attorney executor of an estate found to have acted
negligently and with bad faith in his administration of the estate, but who was not found to have committed undue
influence. 184 N.J. at 124. In Stockdale, the Court reaffirmed, albeit in dicta, the narrowness of the Niles fee-
shifting exception to the American Rule. 196 N.J. at 307. (pp. 13-20)
2. Those who hold the legal title of executor or trustee plainly owe a fiduciary duty to the beneficiaries of the estate
or the trust respectively. But there is no dispute on this record that Bernice was not Folcher’s executor and that she
did not owe a formal fiduciary duty to the Estate or to its beneficiaries. Bernice was in a confidential relationship
with only her husband. The burden of establishing undue influence rests with the party contesting the will.
However, “[w]hen 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.” Stockdale, supra, 196
N.J. at 303. Bernice’s confidential relationship with Folcher did not encumber her with any special duty toward the
Estate’s beneficiaries. In addition, Bernice was a beneficiary herself. Untethered from a duty to the beneficiaries, a
fee award in this undue influence setting would be based exclusively on the egregiousness of the undue influence
conduct. That is an unwarranted expansion of Niles, which created only a narrow exception to the American Rule.
The trial court mistakenly thought that fee-shifting was available under Niles and used fee-shifting, in lieu of other
claims and remedies, to achieve equitable relief for the Estate in this matter. The Court remands the matter to the
trial court to vacate the attorney fee award and to reconsider the interwoven relief that the court has available to it to
fashion a truly equitable remedy for the circumstances here. (pp. 20-26)
The judgment of the Appellate Division is AFFIRMED IN PART and REVERSED IN PART, and the
matter is REMANDED to the trial court for further proceedings consistent with the Court’s opinion.
2
JUSTICE ALBIN, DISSENTING, would uphold the probate court’s equitable order requiring Bernice to
reimburse the reasonable attorney’s fees expended by the Folcher estate in protecting the Folcher children’s
inheritance from her fraud.
CHIEF JUSTICE RABNER, JUSTICES PATTERSON and SOLOMON, and JUDGE CUFF
(temporarily assigned) join in JUSTICE LaVECCHIA’s opinion. JUSTICE ALBIN filed a separate,
dissenting opinion. JUSTICE FERNANDEZ-VINA did not participate.
3
SUPREME COURT OF NEW JERSEY
A-3 September Term 2014
074590
IN THE MATTER OF THE ESTATE
OF ADRIAN J. FOLCHER (a/k/a
ADRIAN J. FOLCHER, JR.),
DECEASED.
Argued November 9, 2015 – Decided April 26, 2016
On certification to the Superior Court,
Appellate Division.
J. Philip Kirchner argued the cause for
appellant Bernice Tambascia-Folcher
(Flaster/Greenberg, attorneys).
George J. Singley argued the cause for
respondent Estate of Adrian Folcher (Singley
& Gindele, attorneys).
JUSTICE LaVECCHIA delivered the opinion of the Court.
In In re Niles Trust, 176 N.J. 282, 298-99 (2003), this
Court created a narrow exception to the American Rule and
allowed attorneys’ fees to be assessed against an executor or a
trustee who “commits the pernicious tort of undue influence.”
This appeal centers on challenges to several documents and
disbursements that were purportedly executed by Adrian Folcher
in the closing days of his life. Petitioner Bernice Tambascia-
Folcher, Folcher’s wife and a beneficiary in a “confidential
relationship” with her aged and vulnerable husband, used that
relationship to commit a pattern of fraud, forgery, and undue
1
influence near the end of his life. After the conclusion of a
lengthy estate contest, the trial court invoked that
relationship, coupled with its finding of undue influence, to
shift the Estate’s counsel fees to Bernice.
We, however, decline to expand the Niles exception to a
person who does not owe a fiduciary responsibility to the Estate
and its beneficiaries, no matter how repugnant the conduct.
Because that confidential relationship endowed Bernice with an
obligation to only her husband, and not the Estate, a fee award
was not the proper vehicle to do equity. The trial court had
other, unused means at its disposal for that. We remand to the
trial court to vacate the fee award and to allow the court to
consider other equitable relief that was foregone because fee-
shifting mistakenly became an integral part of the court’s
equitable remedy.
I.
This case focuses on a series of acts taken by petitioner
that expanded her beneficial interest in her husband Adrian
Folcher’s estate. Our summary of those events reflects the
facts as found by the trial court, except where direct reference
otherwise is made to the record.1
1 In setting forth the relevant background information from this
highly contested, drawn-out estate dispute between Folcher’s
children and petitioner, we refer to family members and
2
Folcher and his first wife had three children: Mary Lee,
Thomas, and Patricia. Following the death of his first wife in
mid-2002, Folcher married Bernice that same year. Folcher and
Bernice had been living together in her Cherry Hill home since
approximately 1992, although Folcher remained married in name to
his first wife. Bernice had two children from a prior marriage.
A post-marital agreement between Folcher and Bernice
provided that their incomes would remain separate, that they
would share expenses associated with Bernice’s Cherry Hill home,
and that any real estate they owned jointly would be held in
trust for the benefit of the surviving spouse until his or her
death.
With the assistance of his attorney, Folcher executed a
will in November 2003, (November 2003 Will), naming Mary Lee
executor. In conjunction with that will’s execution, Folcher
and Bernice wrote a letter to the attorney expressing their
wishes about distribution of personal property; specifically,
Folcher’s boat, pickup truck, and car were to be bequeathed to
his children.
In January 2006, Folcher had his attorney revise his will
(January 2006 Will). Mary Lee remained the executor, but
Folcher’s revised will directed that any property not
petitioner by their first names to simplify our recitation. We
intend no disrespect.
3
distributed by an attached memorandum, which specifically
bequeathed certain items of personal property including the
earlier mentioned boat and motor vehicles, would pass to
Bernice.
In March 2007, Folcher had his attorney draft a deed for
Bernice’s Cherry Hill home in which Bernice transferred the home
to him and Bernice as “tenants in common,” and not as “joint
tenants with the right of survivorship” (March 2007 Deed).2
Thus, upon his death, Folcher’s one-half interest in the home
would pass to his estate, not to Bernice. Folcher believed that
he had materially contributed to the Cherry Hill home while he
resided there and wanted his interest in the home protected for
his children’s benefit. The deed was executed and recorded in
Camden County on September 7, 2007. Shortly thereafter,
Folcher’s health rapidly deteriorated.
In mid-September 2007, suffering from metastasized kidney
cancer, Folcher was temporarily hospitalized. He was discharged
to return home on September 22, 2007, knowing that further
treatment, other than hospice care, was of no use. He was
2 Previously, in August 2003, Folcher had his attorney draft a
deed to the Cherry Hill home that would have made Bernice and
him “tenants in common,” but that deed was never signed or
recorded. The trial court determined that proceeds in the
amount of $125,000 (from Folcher’s sale of his former home with
his first wife), which were given to Bernice shortly after the
2003 deed was drafted, were in consideration of his obtaining a
one-half ownership interest in the Cherry Hill home.
4
prescribed a combination of potent pain medications whose
administration Bernice controlled and dispensed with enough
randomness that the trial court found it difficult to discern
whether Folcher was under- or over-medicated at times during the
end of his life. He was wheelchair-confined, needed oxygen
support, suffered from bed sores, and generally relied on
Bernice for his basic daily care. During the final week of his
life, his sister Rita Coghlan noted that he seemed tired and had
trouble breathing and speaking. His condition was confirmed by
the testimony of Dr. Mark Testa, whom the trial judge found
credible.
Based on the testimony of Mary Lee, the trial court found
that on Friday, September 28, Folcher told Mary Lee, by phone,
that Bernice would not allow her to visit, and he further
stated, “I can’t fight [Bernice] anymore. It’s too late for
that.” Bernice admitted that she told Folcher’s family not to
visit him on September 29, because she said she wanted private
time with him. Yet she later told Mary Lee’s husband that he
could bring the grandchildren for a visit during the afternoon
of Saturday, September 29 to watch a baseball game.
During those two pivotal days –- September 28 and 29, 2007
-- a number of actions were taken in relation to Folcher’s
estate. On September 28, Folcher purportedly executed two
codicils to his January 2006 Will. Codicil #1 stated, “I affirm
5
my last will and testament dated January 19, 2006, to be my
wishes. I want my wife Bernice [Tambascia-]Folcher to have all
personal property and all items in our home.” Codicil #2 was a
copy of Codicil #1 with the above whited-out and replaced by the
following handwritten statement: “I want my spouse Bernice
Tambascia[-Folcher], to have all personal accts./property [and]
all items in our home.” According to Bernice’s testimony
explaining the two codicils, Folcher directed the preparation of
Codicil #1 on September 28, and then she prepared Codicil #2 on
the same day after Folcher rejected the first as not properly
expressing his wishes.
On the morning of September 29, Bernice and her daughter,
Desiree, moved Folcher into a car and drove him to a local
branch of Wachovia Bank in Maple Shade. According to Bernice,
the following transpired: Bernice requested that a bank
employee, who also was a notary, exit the bank building, go to
Folcher seated in the car in the bank parking lot, and notarize
documents that Folcher would sign in the car. Bernice testified
that the employee, Mileva Boncic, came outside and notarized a
document. Desiree testified that the witnesses to the signing
remained inside the bank and observed Folcher sign the document
while watching through the bank’s window and that the witnesses’
signatures were affixed when the document was taken inside the
bank. The document that purportedly was notarized in this
6
fashion was a new deed to the Cherry Hill home (September 2007
Deed).
The trial court found that the September 2007 Deed was
drafted by Bernice using the March 2007 Deed as a template. The
September 2007 Deed made Folcher and Bernice owners as “joint
tenants with the right of survivorship,” instead of “tenants in
common” as the March 2007 Deed provided. The seller’s residency
certification was a photocopy of the one that accompanied the
March 2007 Deed; however, the date was changed to September 29,
2007, and Folcher’s name was added as a “seller.”
As for Codicils #1 and #2 dated September 28, 2007, each
contained a purported notarization by Ms. Boncic, the same bank
employee who notarized the September 2007 Deed. Each codicil
also contained a purported witness attestation by Anthony
Mannello, another bank employee. At trial, Boncic and Mannello
testified that they had not witnessed the signing of the
codicils. Boncic’s notary log referenced only the September
2007 Deed, with no reference to the September 28 codicils. She
testified that she did not notarize any documents for Folcher on
September 28, 2007 and that she would have remembered going
outside the bank building on two successive days to notarize
documents.3
3 Bernice disputed Boncic’s testimony, pointing to Mannello’s
testimony that his and Boncic’s signatures appeared to be on
7
Folcher passed away on October 2, 2007. Approximately
forty-five minutes after his death, Bernice went to the Camden
County Clerk’s Office to record the September 2007 Deed.
Additionally, on the day of his passing, and very shortly
thereafter, Bernice withdrew a total of $25,886.41 from
Folcher’s Sterling Bank account and Morgan Stanley account
funds. Further, between September 26 and 28, 2007, inter vivos
transfers of the titles to his vehicles and boat were
accomplished.
Following Folcher’s death, on October 15, 2007, Mary Lee
submitted the November 2003 Will to the Camden County Surrogate
for probate. That same day, Bernice gave the Estate’s attorney,
Edward Sheehan (Sheehan), several documents, including a copy of
the November 2003 Will4 and Codicil #1, but failed to include
Codicil #2 or the letter memorandum bequeathing certain items of
personal property. Sheehan testified that he became suspicious
of Codicil #1 because it plainly was not prepared by an
both codicils and that Boncic’s raised notary seal was on both
codicils as well. At trial, alternative possibilities as to how
those documents, in their purported notarized and witnessed
form, could have been manufactured were presented to the court.
4 The trial court’s factual findings state that Bernice initially
also gave Sheehan the January 2006 Will. However, the Appellate
Division decision states that Bernice gave Sheehan the November
2003 Will, and that the January 2006 Will was discovered later
and admitted to probate on judgment. This detail was not
integral to any of the trial court’s findings and it is not
important in the resolution of the issues before us.
8
attorney, contained errors, repeated certain bequests already in
the November 2003 Will, contained interlineations, and failed to
contain “appropriate acknowledgment paragraphs” alongside
Boncic’s signature purportedly notarizing the document.
Accordingly, Sheehan advised Mary Lee not to submit Codicil #1
for probate. Through a subsequent application to the Superior
Court, a judgment was entered on February 8, 2008, admitting the
January 2006 Will for probate.
Over a year after Folcher’s death, on October 23, 2008,
Bernice submitted Codicil #2 to the Camden County Surrogate for
probate and then mailed a copy to Sheehan. Codicil #2 had
Boncic’s signature and notary seal, but like Codicil #1 it also
lacked an “acknowledgment paragraph.” Sheehan testified that he
believed Codicil #2 to be fraudulent because it was submitted
over a year after Bernice had produced the other documents.
According to Sheehan, besides appearing to be a cut-and-paste of
Codicil #1, Codicil #2 also specifically mentioned “bank
acc[oun]ts” which he believed to have been added after he
informed Bernice that Codicil #1 would not govern bank accounts.
When examined on why she initially gave Sheehan Codicil #1 yet
waited a year to submit Codicil #2, Bernice testified that she
thought they were the same, an explanation the trial court found
not credible.
9
Litigation commenced after executor Mary Lee filed a final
accounting of the Estate, lasted over five years, and culminated
in a long bench trial in the Chancery Division. In its oral
decision announced November 5, 2012, the court determined that
the codicils and the September 2007 Deed executed by Folcher
were the product of undue influence by Bernice. Although not
required, the court emphasized that the proofs for those
findings exceeded the clear-and-convincing evidential standard,
not simply the preponderance-of-the-evidence standard required
for undue influence. First, the judge found that Folcher and
Bernice were in a “confidential relationship” due to Folcher’s
“vulnerable and fragile condition . . . at the time he allegedly
undertook the transactions at issue.” The court further found
that “suspicious circumstances” surrounded the execution of the
September 2007 Deed and Codicils #1 and #2, as well as the inter
vivos transfers of title to the motor vehicles and boat. With
the burden shifted to Bernice to demonstrate that those actions
were not the product of undue influence, the court concluded
that Bernice’s proofs did not overcome that presumption.
Indeed, the court noted that evidence adduced from Folcher’s
sister, once the burden had shifted, further cemented the
evidence of undue influence.
In addition, on the Estate’s request, the court found that
the making and execution of the September 2007 Deed and Codicils
10
#1 and #2, the inter vivos transfers of titles to the motor
vehicles and boat, and the withdrawal of $25,886.41 in total
from Folcher’s financial accounts, amounted to fraud and forgery
by Bernice. The court voided the September 2007 Deed and both
codicils, and Bernice was ordered to reimburse the Estate for
the money taken from the accounts and for the value of the two
vehicles and the boat that she had previously sold.
On December 10, 2012, the trial court awarded $397,309.19
in attorneys’ fees (plus costs and expert witness fees) to the
Estate, citing Niles, supra, 176 N.J. 282, and In re Estate of
Stockdale, 196 N.J. 275 (2008). The trial court acknowledged
that Bernice was neither an executor nor a trustee of the
Estate. Yet the court determined that an award of counsel fees
could be founded on Bernice’s confidential relationship with
Folcher and proof of undue influence. Although the Estate
requested punitive damages, and although those damages were not
unsupportable, the trial court declined to award punitive
damages because the court, through its fee award, was already
factoring in the substantial cost to the spousal beneficiary.
Bernice appealed, and the Appellate Division affirmed the
fee award. Although Bernice was not a fiduciary, the panel
reasoned that she was in a confidential relationship with
Folcher and exercised undue influence to modify estate
documents, obtain property through lifetime transfers, and
11
generally expand her own beneficial interests. According to the
panel, her fraud contributed to the erosion of the estate, and
the panel saw “no just reason why she, like a corrupt fiduciary,
should not make the estate whole.”
II.
Bernice argues that the Appellate Division erred in three
respects: (1) by expanding the narrow Niles exception to the
American Rule against fee-shifting in estate cases beyond its
explicit limits; (2) by declining to address all claims raised
in her supplemental brief, which when distilled, essentially
faulted the trial court’s fraud fact-finding on the basis that
the trial court did not expressly state the standard by which it
reached its finding of fraud; and (3) by misstating several
facts while addressing her factual arguments. On the last
point, Bernice maintains that the reliability of the Appellate
Division’s review, in its entirety, is undermined by the
asserted lack of attention to details in the record.
The Estate’s responsive arguments may be summarized as
follows. It first asserts that the Niles exception allowing
fee-shifting in estate matters is not based solely on the legal
position of the wrongdoer but the nature of the wrongful
behavior. From that, the Estate argues that fee-shifting was
appropriate here based on Bernice’s egregious conduct. Second,
the Estate contends that the Appellate Division plainly
12
considered and rejected the arguments raised in Bernice’s
supplemental brief through its discussion and affirmance of the
trial court’s legal reasoning, standards of proofs, and
findings. The panel was not required to more specifically
address arguments in order to reject them. Third, Bernice’s
harping on cherry-picked facts in an effort to mire the appeal
in nondispositive factual details that allegedly were misstated
does not provide a basis for overturning the Appellate
Division’s judgment. The details that Bernice emphasizes do not
reasonably shake confidence in the overall picture of fraud,
forgery, and undue influence painted by this record and found by
the trial court.
We granted certification primarily to address the novel use
of fee-shifting in this probate matter. 219 N.J. 630 (2014).
We first turn to that issue.
III.
New Jersey is an “American Rule” jurisdiction, meaning we
have a “strong public policy against shifting counsel fees from
one party to another.” Stockdale, supra, 196 N.J. at 307. The
American Rule prohibits recovery of attorneys’ fees “by the
prevailing party against the losing party.” Ibid. (quoting
Niles, supra, 176 N.J. at 294). Our Court Rules identify few
authorized exceptions. Rule 4:42-9(a) provides that “[n]o fee
for legal services shall be allowed in the taxed costs or
13
otherwise, except” in eight enumerated circumstances, none of
which pertain to this matter.5 This Court has interpreted Rule
4:42-9 as generally “codif[ying] those specific instances where,
in the absence of a separately enabling statute or contract, fee
shifting is permitted.” In re Estate of Vayda, 184 N.J. 115,
120 (2005).
In relatively recent years, a few Court-sanctioned
“exceptions to the American Rule that are not otherwise
reflected in the text of Rule 4:42-9” and that are not provided
for via statute, court rule, or contract have developed. Id. at
121. This category of common law fee-shifting defies any one
ready descriptor but involves fiduciary breaches in certain
settings. The original two cases involved attorney misconduct
arising out of the attorney-client relationship. Saffer v.
Willoughby, 143 N.J. 256, 272 (1996), recognized an exception to
the American Rule in the context of successful claims for
attorney malpractice. Packard-Bamberger & Co. v. Collier, 167
N.J. 427, 443 (2001), expanded that exception in the attorney-
client-relationship setting to include claims against attorneys
5 Specifically, Rule 4:42-9(a) details when an award of
attorneys’ fees is permitted in a family action, out of a fund
in court, in a probate action in certain settings when fees may
be paid out of the estate, in a mortgage foreclosure action, in
a tax certificate foreclosure action, in an action on a
liability or indemnity policy of insurance, as otherwise
expressly provided by court rule in any action, and in all cases
where attorneys’ fees are permitted by statute.
14
who intentionally violate their fiduciary duties. Most
recently, this Court expanded that exception outside of the
attorney-client setting to attorneys acting in a fiduciary
capacity as escrow agents. See Innes v. Marzano-Lesnevich, ___
N.J. ___ (2015).6
More to the point is our prior decision in Niles, on which
the trial court based its fee award in this matter. We turn
directly to Niles for purposes of our present analysis.
In Niles, supra, the Court declared that “when an executor
or trustee commits the pernicious tort of undue influence, an
exception to the American Rule is created that permits the
estate to be made whole by an assessment of all reasonable
counsel fees against the fiduciary that were incurred by the
estate.” 176 N.J. at 298-99. The Court explained that “[a]
fiduciary relationship exists between a trustee and the trust[,]
similar to the attorney-client relationship,” and that “[b]oth
the attorney and a trustee act as officers of the court when
acting on behalf of clients and beneficiaries.” Id. at 297.
The Court concluded that non-attorney status should not prevent
6 Although In re Estate of Lash, 169 N.J. 20, 32 (2001), is often
included in discussions of this Court’s case law permitting fee-
shifting, it expressly disavowed connection to the American
Rule. Lash involved an administrator malfeasance claim covered
by a surety bond and the fee issue that arose was whether the
surety was responsible for fees incurred in suing on the bond.
Id. at 24-26.
15
an award of attorneys’ fees in suits against trustees or
executors for undue influence. Id. at 299.
Thus, Niles created an exception to the American Rule in
trustee or executor undue influence cases “based on the
fiduciary’s intentional misconduct regardless of his or her
professional status.” Id. at 300.
Underscoring the foundational importance of the finding of
undue influence that supported fee-shifting to a fiduciary and
his facilitating cohort in Niles, we declined to extend that
fee-shifting exception in the circumstances presented in Vayda.
There, a non-attorney executor of an estate was found to have
acted negligently and with bad faith in his administration of
the estate, but he was not found to have committed undue
influence. Vayda, supra, 184 N.J. at 124. Reaffirming New
Jersey’s “strong public policy against” fee shifting, ibid.
(quoting Niles, supra, 176 N.J. at 293), the Court unanimously
resisted the plea to extend Niles. The Court pointed out
instead that Rule 4:42-9(a)(3) provides a specific remedy in
probate actions; attorneys’ fees could be paid from the estate.
Ibid.
Five years later, our decision in Stockdale, supra,
reaffirmed, albeit in dicta, the narrowness of our fee-shifting
exception created in Niles. 196 N.J. at 307 (emphasizing that
Niles was “directed solely to circumstances in which ‘an
16
executor or trustee commits the pernicious tort of undue
influence’” (quoting Niles, supra, 176 N.J. at 298)). The
circumstances of Stockdale provide guidance in the present
matter.
Stockdale was a wealthy, elderly, reclusive woman in
declining health, who had planned to leave much of her estate to
a local charity (the first aid squad), when her neighbor
Sollitto insinuated himself into her life. Id. at 284-86.
Through a series of orchestrated acts, Sollitto with help from
an attorney friend, Casale, had Stockdale deed her home to
Sollitto; amend her will; name Casale the executor of the
estate; make Sollitto the residual beneficiary; and forgive the
purchase-money mortgage she took when Sollitto purchased her
home that covered almost the entirety of the purchase price.
Id. at 290-94.
The trial court found that the will was unenforceable as
the product of undue influence. Id. at 297. The transfer of
Stockdale’s home, including the deed and the contract of sale,
was also found to be unenforceable. Ibid. The trial court
reinstated the original will -- the will naming the local
charity as the residual beneficiary. Ibid. Relying on Niles,
the trial court granted the charity attorneys’ fees as a form of
punitive damages, reasoning that undue influence is a form of
intentional tort that can sustain a fee award. Ibid. According
17
to the trial court, the fee award was a measure of punitive
damages that was necessary to make the estate whole. Ibid.
The Appellate Division reversed the fee award and “remanded
for consideration of an award of punitive damages.” Id. at 298.
The fee award was not supported “under Niles because Stockdale’s
estate was not financially depleted by Casale’s and Sollitto’s
conduct.” Ibid.
Sollitto, and not the first aid squad, filed a petition for
certification, arguing that Niles did not authorize a punitive
award. Id. at 299. Thus the issue before this Court was not
the reversal of the fee award but rather whether punitive
damages could be a remedy for the undue influence tort in
probate proceedings.
This Court found that punitive damages were available in
the probate part in the rare case. Id. at 304. We noted that,
in the usual undue influence case, “undue influence is not a
separately pleaded tort, but is the analytical framework within
which the decision about whether to admit a will to probate is
made.” Ibid. The main issue normally is which will to admit to
probate. Ibid. If none of the competing parties has gained
control of the estate, the estate has suffered no loss, and “the
only remedy sought is the admission of a particular will to
probate.” Ibid.
18
However, we explained that a tort-based claim for
compensatory damages can be asserted when the estate has
suffered loss, if, for example, one of the parties has depleted
the estate’s assets. Ibid. Even then, a compensatory award
will be rare because equitable relief will usually suffice. Id.
at 304-05. An executor is generally entitled to a commission
based on the value of the estate; but if an executor engages in
misconduct, his commission may be surcharged, and his monies
offset by the loss he caused the estate. Id. at 305. Further,
we explained that the surcharge “does not equate with a
compensatory award.” Ibid. When those remedies prove
inadequate, a compensatory award, and in turn a punitive award,
can be justified. Id. at 309.
In discussing the availability of punitive damages within a
probate setting, we commented on the scope of Niles and
identified three considerations that were critical to the fee
award there: (1) that “the claims in Niles were presented by
the substitute executor on behalf of the estate” after the
fiduciary had been ousted; (2) that the tortious acts were the
acts of a fiduciary and had the effect of stripping the estate
of virtually all assets, making the usual equitable remedies
inadequate; and (3) that the wrongdoing fiduciary actors were
“strangers to the natural bounty” of the testator. Id. at 306.
19
Although the fee-shifting issue was not before it, the
Court in Stockdale noted “that Niles created a specific and
rather limited exception to the American Rule” and acknowledged
that “the Appellate Division quite correctly concluded that the
[charity] was not entitled to an award of attorneys’ fees.” Id.
at 312-13.
IV.
Considered collectively, Niles, Vayda, and Stockdale
clearly make an existing fiduciary relationship a prerequisite
to an estate’s recovery of attorneys’ fees in a will contest
involving undue influence. Since a will contest is the
framework for the matter presently before us, Bernice’s legal
status is critical.
Those who hold the legal title of executor or trustee
plainly owe a fiduciary duty to the beneficiaries of the estate
or the trust respectively. But there is no dispute on this
record that Bernice was not Folcher’s executor and that she did
not owe a formal fiduciary duty to the Estate or to its
beneficiaries.7 The trial court found that Bernice was in a
confidential relationship with only her husband. The term
7 The dissent disregards that key difference between this case
and Niles. See post at __ (slip op. at 8). Niles involved the
trustee to the estate and his mother, who aided and abetted his
conduct. Contrary to the dissent’s assertion, that is a
meaningful difference.
20
“confidential relationship” has significance in the proofs
required for a showing of undue influence in a probate setting.
“[U]ndue influence is 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, generally by means of a will or inter vivos transfer . .
. .” Stockdale, supra, 196 N.J. at 302-03. A challenger can
set aside a decedent’s will or inter vivos transfer on the basis
of undue influence. Id. at 302. The burden of establishing
undue influence rests with the party contesting the will. Id.
at 303. However, “[w]hen 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. That burden can be overcome
based on proof of no undue influence by a preponderance of the
evidence. Ibid.
In prior case law, we have acknowledged the difficulty in
precisely defining a confidential relationship; however, it
generally “encompasses all relationships ‘whether legal, natural
or conventional in their origin, in which confidence is
naturally inspired, or, in fact, reasonably exists.’” Pascale
v. Pascale, 113 N.J. 20, 34 (1988) (quoting In re Estate of
Fulper, 99 N.J. Eq. 293, 314 (Prerog. Ct. 1926)).
21
There is a split of authority on whether a confidential
relationship rises to the level of a fiduciary relationship.
Some jurisdictions find that the two are essentially one and the
same. See Foster v. Ross, 804 So.2d 1018, 1023 (Miss. 2002)
(stating that confidential relationship is “fiduciary in
character”); Buxcel v. First Fid. Bank, 601 N.W.2d 593, 597
(S.D. 1999) (“A confidential relationship is generally
synonymous with a fiduciary relationship.” (quoting Crane v.
Centerre Bank of Columbia, 691 S.W.2d 423, 428 (Mo. Ct. App.
1985))). Others do not. See Restatement (Third) of Trusts § 2
cmt. b(1) (2003) (“Although the relationship between two persons
is not a fiduciary relationship, it may nevertheless be a
confidential relationship.”). New Jersey is aligned with the
latter camp in view of the holding in Pascale, supra,
recognizing that a confidential relationship does not quite rise
to the level of a fiduciary relationship. 113 N.J. at 34.
That said, no definitive parameter need be set around
confidential relationships generally in order to decide this
matter. The trial court found that a confidential relationship
existed between the married couple, Bernice and her aged and
vulnerable husband, Folcher. Bernice’s obligation was to
Folcher. Her confidential relationship with Folcher did not
encumber her with any special duty toward the Estate’s
beneficiaries. There was no special confidence reposed in
22
Bernice by the other beneficiaries of the Estate. She was a
beneficiary herself. That is a critical distinction: Unlike a
formal fiduciary setting, “the beneficiary will have no claim in
the informal or confidential relationship cases unless she in
fact reposes special confidence.” Dan B. Dobbs et al., 3 The
Law of Torts § 697 at 753 n.28 (2d ed. 2011).
The Niles Court focused on the fiduciary relationship that
the trustee or executor owed to the beneficiaries, not the
testator. That was justification, at least in part, for making
the devastated estate in that matter whole, through the award of
attorneys’ fees, for the pernicious tort of undue influence
committed by the wrongdoing fiduciary. Here, however, Bernice
owed no duty to the beneficiaries. Untethered from a duty to
the beneficiaries, a fee award in this undue influence setting
would be based exclusively on the egregiousness of the undue
influence conduct. That is an unwarranted expansion of Niles,
which created only a narrow exception to the American Rule. We
honor that and decline to expand it here. The absence of a
fiduciary relationship, taken with the absence of the Stockdale
factors -- Bernice was not a stranger to the natural bounty of
the testator -- provide the basis for rejecting the fee award in
this appeal.
The trial court mistakenly thought that fee-shifting was
available under Niles and used fee-shifting, in lieu of other
23
claims and remedies, to achieve equitable relief for the Estate
in this matter. The transcript reveals that the court was
troubled by the seeming vexatious and prolonged nature of the
litigation, which caused substantial depletion of Estate
resources. The fee award coincided with the approximate amount
by which this litigation depleted the Estate. The court had
findings of fraud and undue influence to work with in crafting
an equitable remedy. There was a claim for punitive damages
that was not unsupported but was not utilized by the court in
view of its other dispositions. We remand this matter to the
trial court to vacate the attorney fee award and to reconsider
the interwoven relief that the court has available to it to
fashion a truly equitable remedy for the circumstances here.
V.
We summarily reject the remaining arguments advanced by
petitioner in this appeal. The claim that the trial court’s
finding of fraud is unsupported, based primarily on the court’s
failure to refer to the standard of clear and convincing proof
when making its finding, is undermined by a fair reading of the
court’s decisions in their totality. The court, as noted,
rendered its finding of undue influence, which was pled as a
separate tort in this matter and was not simply background to
the will contest over which documents to submit to probate,
based on a finding of proof by a clear and convincing standard.
24
The court’s recitation of the testimony, documents, and
reasoning on which it based its determination of events and
conduct by petitioner amply satisfied its findings as to both
undue influence and fraud. The proofs overlapped and were
sufficient. The burden shifting that occurs in the undue
influence analysis did not undermine confidence in the
sufficiency of the evidence to support the fraud finding. We
think the trial court clearly used the correct standard, as did
the Appellate Division in its review. We affirm the Appellate
Division’s judgment in all respects, except for the attorneys’
fees.8 We add only that the Appellate Division’s use of the Rule
affirmance format should in no way be fairly perceived to be a
failure to consider arguments advanced. See R. 2:11-3(e)(1)(E).
Petitioner’s expectation of a more explicit explanation for
rejection of her arguments defeats the efficiency purpose to the
Rule.
VI.
8 We reject petitioner’s quarrel with discrete facts that she
would like to reargue and similarly her outlandish efforts to
cast certain testimony in a different light or give it greater
weight than that the trial court did. The trial court’s
findings have ample sufficient credible evidence in the record
to support them. Nothing about the Appellate Division decision
undermines the reliability of its judgment or that of the trial
court it was reviewing.
25
The judgment of the Appellate Division is affirmed in part
and reversed in part. This matter is remanded to the trial
court for further proceedings consistent with this opinion.
CHIEF JUSTICE RABNER, JUSTICES PATTERSON and SOLOMON, and
JUDGE CUFF (temporarily assigned) join in JUSTICE LaVECCHIA’s
opinion. JUSTICE ALBIN filed a separate, dissenting opinion.
JUSTICE FERNANDEZ-VINA did not participate.
26
SUPREME COURT OF NEW JERSEY
A-3 September Term 2014
074590
IN THE MATTER OF THE ESTATE
OF ADRIAN J. FOLCHER (a/k/a
ADRIAN J. FOLCHER, JR.),
DECEASED.
JUSTICE ALBIN, dissenting.
The majority accepts the trial court’s findings that
Bernice Tambascia-Folcher used undue influence to isolate her
infirm and dying husband from the children of his first
marriage. The majority agrees that, through that undue
influence, Bernice engaged in a pernicious scheme to make
herself the beneficiary of Folcher’s estate, that she forged
codicils to his will to advance that scheme, and that she
committed a fraud on the estate’s heirs. The majority does not
dispute that Bernice filed a fake codicil with the probate
court, gave false testimony in court, and engaged in fraudulent
and frivolous litigation that depleted nearly all the assets of
the Folcher estate.
In exercising its equitable powers, the probate court
ordered Bernice to reimburse the Folcher estate for the
attorney’s fees expended in defending against her groundless and
deceitful actions. The Appellate Division affirmed this
unremarkable decision, relying on In re Niles Trust, 176 N.J.
1
282, 298 (2003).
The majority, astonishingly, reverses this fair and just
award against the wrongdoer. The majority claims that the
general rule against fee shifting -- the American Rule --
commands the defeat of equity. However, the American Rule is
riddled with myriad exceptions based on equity and public
policy. Those exceptions are found in our statutes, our Court
Rules, and our case law. Indeed, the probate court’s ruling is
a natural extension of this Court’s fee-shifting decisions,
including Innes v. Marzano-Lesnevich, __ N.J. __ (2016), issued
today. In light of the egregious behavior of Bernice, including
her corrupt attempts to deny Mr. Folcher’s rightful heirs their
patrimony, it is hard to imagine a more justifiable scenario for
fee shifting. The majority’s remand for further proceedings on
the issue of punitive damages will needlessly continue
litigation that is sapping the estate’s limited assets.
I would uphold the probate court’s equitable order
requiring Bernice to reimburse the reasonable attorney’s fees
expended by the Folcher estate in protecting the Folcher
children’s inheritance from her fraud. I therefore respectfully
dissent.
I.
The American Rule is not a sacred creed. Fee-shifting
statutes, court rules, and case law are now a commonplace part
2
of our civil justice system’s efforts to promote equity, deter
wrongful conduct, and encourage lawyers to undertake cases that
further the public interest.
A.
The Legislature has enacted numerous statutes that allow
for fee shifting for the public good. See, e.g., N.J.S.A.
2A:15-59.1(a) (allowing attorney’s fees for prevailing party in
frivolous actions); N.J.S.A. 2A:18-61.1e (allowing attorney’s
fees for evicted tenant not given proper notice of owner’s
intention to return property to residential use); N.J.S.A.
2A:18-61.6 (allowing attorney’s fees for wrongfully evicted
tenant); N.J.S.A. 2A:23B-25 (allowing attorney’s fees at court’s
discretion to prevailing party in contested arbitration award);
N.J.S.A. 2A:34-25 (allowing attorney’s fees incurred as result
of opposing party’s failure to comply with notice provisions of
alimony-termination statute); N.J.S.A. 10:5-27.1 (allowing
attorney’s fees to prevailing party in successful Law Against
Discrimination actions and in unsuccessful Law Against
Discrimination actions brought in bad faith); N.J.S.A. 10:6-2
(allowing attorney’s fees to prevailing party in claims pursuant
to New Jersey Civil Rights Act); N.J.S.A. 17:33A-7 (allowing
attorney’s fees to insurance company damaged by violation of
Insurance Fraud Prevention Act); N.J.S.A. 19:31-29 (allowing
attorney’s fees to prevailing party where Secretary of State
3
fails to respond to alleged election violations within timeframe
designated by statute); N.J.S.A. 34:11B-12 (allowing attorney’s
fees to prevailing party in action pursuant to Family Leave
Act); N.J.S.A. 34:19-5 (allowing attorney’s fees to prevailing
plaintiff in claim under Conscientious Employee Protection Act);
N.J.S.A. 34:19-6 (allowing attorney’s fees to defendant under
Conscientious Employee Protection Act where claim is baseless
and employee does not file voluntary dismissal within reasonable
time after discovering this); N.J.S.A. 45:1-25 (allowing
attorney’s fees to State in action pursuant to Health Care
Professional Responsibility and Reporting Enhancement Act);
N.J.S.A. 52:4C-5 (allowing attorney’s fees to prevailing party
in successful action for mistaken imprisonment); N.J.S.A. 56:9-
10(b) (allowing attorney’s fees to plaintiff where court issues
permanent injunction pursuant to New Jersey Antitrust Act);
N.J.S.A. 56:12-85 (allowing attorney’s fees to consumer in
successful claim under Consumer Protection Leasing Act);
N.J.S.A. 59:9-5 (allowing attorney’s fees to successful claimant
under Tort Claims Act).
B.
Our Court Rules also permit fee shifting in a number of
defined instances. See generally R. 4:42-9; Innes, supra, __
N.J. at __ (slip op. at 12). For example, attorney’s fees are
permissible out of a decedent’s estate when “probate is refused”
4
or when a “contestant had reasonable cause for contesting the
validity of the will or codicil.” R. 4:42-9(a)(3). Admittedly,
the court rule does not provide for attorney’s fees in the
precise circumstances of this case. The logic of the rule,
however, applies perfectly here. Folcher’s heirs have
established more than a “reasonable cause for contesting the
validity of the will or codicil.” The rightful heirs have
exposed the wrongdoing of a party who presented a fraudulent
codicil -- a party whose corrupt conduct has depleted the
estate’s assets. Unless Bernice is made to reimburse the
attorney’s fees expended by the estate in this case, there may
be no assets left to distribute. Our Court Rules are “construed
to secure a just determination, simplicity in procedure,
fairness in administration and the elimination of unjustifiable
expense and delay.” R. 1:1-2(a). To the extent our current
rules do not cover the egregious wrongdoing in this case, this
Court is empowered to amend the rules and regularly does so to
further promote justice and fairness. See Pressler & Veniero,
Current N.J. Court Rules viii-xii (Gann 2016).
C.
Importantly, this Court has not hesitated to add exceptions
to the American Rule when “the interest of equity [has]
demand[ed] it.” Niles, supra, 176 N.J. at 298 (alteration in
original) (quoting In re Estate of Lash, 169 N.J. 20, 43 (2001)
5
(Verniero & LaVecchia, JJ., dissenting)). We permit fee
shifting in attorney malpractice actions to make the client
whole -- because the cost of retaining counsel constitutes
consequential damages. Saffer v. Willoughby, 143 N.J. 256, 272
(1996). We also have permitted an award of attorney’s fees in
an action against an attorney who intentionally violated his
fiduciary duty to a client, Packard-Bamberger & Co. v. Collier,
167 N.J. 427, 442-43 (2001), in an action against the
administrator of an estate who misappropriated the estate’s
funds, Lash, supra, 169 N.J. at 23, and in an action against a
trustee of an estate who exercised undue influence over a
testator, Niles, supra, 176 N.J. at 298-99. Most recently, this
Court held that a counsel-fees award can be entered against an
attorney who intentionally breaches her fiduciary duty to honor
an escrow agreement that benefits a non-client. Innes, supra,
__ N.J. at __ (slip op. at 20-21).
II.
A.
The American Rule serves the laudable purpose of promoting
access to our courts by ensuring litigants that, if they lose
their case, they will not have to pay the prevailing party’s
legal fees. See Niles, supra, 176 N.J. at 294. The prospect of
potentially ruinous legal fees, understandably, will discourage
litigation brought in good faith. On the other hand, our
6
developing common and statutory law recognize that through fee
shifting the “victims of perfidious behavior” can be made whole,
id. at 296, and that frivolous and fraudulent litigation can be
deterred, Liberty Mut. Ins. Co. v. Land, 186 N.J. 163, 172-73
(2006) (noting that statutory award of attorney’s fees, in part,
is intended to deter such conduct). In considering whether to
carve out an exception to the American Rule, we must weigh those
competing principles. The American Rule is a common-law
principle, not an unalterable commandment. The common law is an
expression of public policy and social values. See Hopkins v.
Fox & Lazo Realtors, 132 N.J. 426, 435 (1993). As our public
policy matures and our social values evolve, so must the common
law, ibid., and so must the American Rule.
In Niles, supra, the Court understood that the equitable
remedy of counsel fees might be required in “the unique
circumstances” of a case, even in the absence of an applicable
statute or court rule. 176 N.J. at 296-97. Niles, like the
present case, was litigated in the probate court -- a court of
equity. In Niles, a mother and son “unduly influenced” an
eighty-eight-year-old single woman suffering from dementia to
name the son the trustee of three inter vivos trust agreements.
Id. at 286. With the former trustee removed, the mother and son
manipulated the elderly woman “to confer upon them substantial
economic benefits under the altered trust agreements.” Ibid.
7
We held the mother-son team responsible for all reasonable
counsel fees incurred by the parties who litigated “to restore
the estate’s assets to what they would have been had the undue
influence not occurred.” Ibid.
We explained in Niles that “undue influence” is “a form of
fraud” and is “an egregious intentional tort that . . .
establishes a basis for punitive damages in a common law cause
of action.” Id. at 300. We concluded that “the undue influence
exception [to the American Rule] does not violate the purposes”
underlying the Rule. Ibid.
B.
There is no meaningful distinction between Niles and the
present case. Indeed, the fraud here exceeded the typical undue
influence scenario in which, through “mental, moral or physical
exertion,” the wrongdoers overcome “the free agency of a
testator.” See id. at 299 (quoting Haynes v. First Nat’l State
Bank of N.J., 87 N.J. 163, 176 (1981)). The probate court in
this case found that Bernice “committed acts of undue influence
when she compelled [Folcher] to transfer assets/personal
property during the last week of his life.” The court also
determined that Bernice “committed fraud and forgery in the
making and/or execution of” the two codicils and deed to the
marital home.
Unlike the present case, in Niles one of the wrongdoers --
8
the son -- wangled his way into the role of trustee to exert his
undue influence. Id. at 286. His non-trustee scheming mother,
however, was made jointly and severally liable for counsel’s
fees. Ibid.
Bernice admittedly was not the executor of her husband’s
estate. Nevertheless, as Folcher’s wife, she used her
confidential relationship to exert egregious undue influence
over her infirm and isolated husband. She also engaged in
intentional misconduct by fraudulently creating documents for
the purpose of defrauding Folcher’s rightful heirs. And, to
that end, she filed false documents with the probate court to
corrupt the civil justice system.
As in Niles, the issue here is whether “the unique
circumstances of this case” call for the equitable remedy of an
award of attorney’s fees. Id. at 296.
IV.
The majority’s inflexible approach to the American Rule in
this case is at odds with the evolving ethos of our common law.
The Folcher estate’s assets have been depleted by having to fend
off Bernice’s bogus legal claims. The attorney’s fees incurred
represent consequential damages suffered by Folcher’s rightful
heirs. Shifting attorney’s fees, moreover, advances the public
policy of deterring the type of wrongful conduct that occurred
here. This case more than qualifies as a sensible exception to
9
the American Rule.
Remanding this case for further proceedings relating to
punitive damages will lead to more wasteful litigation for an
estate with limited assets. It is pointless to award punitive
damages in place of awarding the consequential damages of
attorney’s fees suffered by the estate. To the extent that
attorney’s fees are intended to deter and punish, they serve the
purpose of punitive damages in this case. See Land, supra, 186
N.J. at 185 (Albin, J., dissenting). I cannot agree to the
majority’s exaltation of form over substance, making attorney’s
fees impermissible while allowing for punitive damages.
The majority has undone an equitable ruling that made whole
the victims of Bernice’s fraud. I would end the litigation
today and affirm the judgment of the Appellate Division,
requiring Bernice to reimburse the Folcher estate for the
attorney’s fees expended as a result of her egregious
misconduct. I therefore respectfully dissent.
10
SUPREME COURT OF NEW JERSEY
NO. A-3 SEPTEMBER TERM 2014
ON CERTIFICATION FROM Appellate Division, Superior Court
IN THE MATTER OF THE ESTATE
OF ADRIAN J. FOLCHER (a/k/a
ADRIAN J. FOLCHER, JR.),
DECEASED.
DECIDED April 26, 2016
Chief Justice Rabner PRESIDING
OPINION BY Justice LaVecchia
CONCURRING/DISSENTING OPINION BY
DISSENTING OPINION BY Justice Albin
AFFIRMED/
CHECKLIST REVERSED/ DISSENT
REMANDED
CHIEF JUSTICE RABNER X
JUSTICE LaVECCHIA X
JUSTICE ALBIN X
JUSTICE PATTERSON X
JUSTICE FERNANDEZ-VINA -----------------
JUSTICE SOLOMON X
JUDGE CUFF (t/a) X
TOTALS 5 1
Imo the Estate of Adrian J. Folcher, Jr. (074590)
Court: Supreme Court of New Jersey
Date filed: 2016-04-26
Citations: 224 N.J. 496, 135 A.3d 128, 2016 N.J. LEXIS 330
Copy CitationsCombined Opinion