In Re the Estate of Stockdale

Rule of Law:

In a probate proceeding, an award of punitive damages for undue influence is permissible only when it is supported by a predicate award of compensatory damages for actual financial harm to the estate. The claim must satisfy the requirements of the Punitive Damages Act, including a showing of actual malice or wanton and willful disregard.

Facts:

• Madeleine Stockdale, an elderly, wealthy, and reclusive woman, became acquainted with her neighbor, Ronald Sollitto, in 1997.
• In March 1998, Stockdale executed a will ('1998 Will') prepared by her long-time attorney, William Soons, which named the Spring Lake First Aid Squad as the residuary beneficiary.
• Sollitto befriended the increasingly frail Stockdale and began negotiating to buy her valuable home on terms highly unfavorable to her, circumventing her attorney, Soons.
• In December 1999, after Stockdale fell and her health rapidly declined, Sollitto introduced her to his own close personal friend and long-time attorney, Michael Casale, to represent her in the real estate transaction and to draft a new will.
• Casale, without fully disclosing his significant conflict of interest, prepared a new will ('2000 Will') and a deed for Stockdale to sign.
• On January 3, 2000, while in a rehabilitation facility, confused, and on pain medication, Stockdale executed the 2000 Will naming Sollitto as the sole residuary beneficiary and Casale as the executor. She also executed a deed transferring her home to Sollitto for a fraction of its value, financed almost entirely by a loan from herself at a below-market interest rate.
• After the transfer, Sollitto moved Stockdale into a rented apartment, took some of her furniture, and used her funds via a power of attorney to pay utility bills on the house he now owned.

Procedural Posture:

• After Madeleine Stockdale’s death, Michael Casale offered the 2000 Will for probate.
• The Spring Lake First Aid Squad, the residuary beneficiary under the 1998 Will, lodged a caveat against the 2000 Will and filed a third-party complaint in the Probate Part against Ronald Sollitto and Casale.
• The First Aid Squad's complaint alleged undue influence and sought to void the 2000 Will and the real estate transfer, and also requested compensatory and punitive damages.
• The Probate Part trial court found undue influence, invalidated the 2000 Will and the deed, admitted the 1998 Will to probate, and awarded the First Aid Squad its attorneys' fees as a form of punitive damages.
• Sollitto and Casale, as appellants, appealed to the Appellate Division; the First Aid Squad was the appellee.
• The Appellate Division affirmed the trial court's undue influence finding but reversed the award of attorneys' fees, remanding the case for consideration of a punitive damages award based on the facts.
• Sollitto, as petitioner, sought and was granted certification by the Supreme Court of New Jersey solely on the issue of the propriety of the remand for a punitive damages award.