In re Estate of Paruta

• Decision Date: 03 January 2019
• Docket Number: DOCKET NO. A-3456-17T2
• Parties: IN THE MATTER OF THE ESTATE OF ANTHONY J. PARUTA.
• Court: New Jersey Superior Court — Appellate Division

IN THE MATTER OF THE ESTATE OF ANTHONY J. PARUTA.

DOCKET NO. A-3456-17T2

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION

Submitted December 4, 2018

January 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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION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 Fisher, Suter and Firko.

On appeal from Superior Court of New Jersey, Chancery Division, Passaic County, Docket No. P211192.

Joseph C. Nuzzo, attorney for appellant Brian P. Trava.

Ofeck & Heinze, LLP attorneys for respondent Mariangely Littlejohn (Mark F. Heinze, on the brief).

Gubir S. Grewal, Attorney General, attorney for respondent Attorney General of New Jersey (Melissa H. Raksa, Assistant Attorney General, of counsel; Marc A. Krefetz, Deputy Attorney General, on the brief).

PER CURIAM

Plaintiff Estate of Anthony J. Paruta appeals from the judge's reconsideration of an order in the Estate's favor that resulted in his vacating that prior order and ruling in favor of defendant Mariangely Littlejohn (nee Torres).¹ In the prior order, the judge determined that Littlejohn was not entitled to a bequest made by the testator; in the later order, the judge concluded that she was. We affirm.

I.

Our consideration of the issues on appeal is derived from the trial court proceedings, which we briefly summarize. Paruta passed away on March 30, 2015, and his will, executed in 2014, was probated on June 1, 2015. Having no immediate family members, he made bequests to a cousin, four charities, several individuals, and two Valley National Bank (Valley) employees, Littlejohn being one of them. Valley's Employee Code of Conduct and Ethics prohibits employees from accepting gifts "valued in excess of $100." The Code further provides, "[e]mployees . . . shall not accept, directly or indirectly, any bequest or legacy from any [b]ank customer . . . unless the donor is a close family member or domestic partner." Mary Bednarz, the other Valley employee, denounced the bequest as unethical, comporting with a letter opinion from Valley, because she was still an employee. Littlejohn, on the other hand, resigned from Valley, and became employed by Kearny Bank as of April 30,2015, and chose not to renounce the bequest, claiming Valley's Code no longer applied to her. Indeed, Littlejohn did not even learn about the bequest until after she left the employ of Valley. Paruta referred to Littlejohn as "my friend" in his will.

The executor, Dr. Brian P. Trava (Trava), filed a verified complaint for summary action under Rule 4:95-2, seeking a declaratory judgment against Littlejohn and to dishonor the bequest under Paruta's will. The amount of the bequest was approximately $11,000.

In his initial decision, the judge ruled:

As you can probably tell, this [c]ourt is going to rule that the gift should not be made. That there is this entire regulatory scheme called Statutory Regulatory Code of Ethics that exists. That I do find that it is based on public policy. That's why I went into the statements of the FDIC.²

And evidently, what the federal regulatory schedule has done is cast a very, very wide net. No one is claiming that Ms. [Littlejohn] was guilty of any wrongdoing, bribery or trying to give something to Mr. Paruta that he shouldn't have. That somehow they were instrumental in getting him a loan because he was going to give them a bequest. There is nothing of that nature.

However, the court is satisfied that as a matter of public policy, the federal regulations have cast a very wide netand prohibit bank employees from accepting gifts from their customers.

And the [Valley] Code also uses the word - - specifically uses the word, bequests, in implementing the FDIC guidelines and statutory proscriptions.

And for that reason this court is going to rule that [Trava] should not fund the gift to [Littlejohn]. That the fact is I see her as falling into the same category as Ms. Bednarz in that the mischief that would be created if a bank employee could simply resign her employment upon learning that there is a bequest would circumvent the entire statutory and regulatory scheme.

The judge was alluding to FDIC Guidelines that require banks to implement policies prohibiting "self-dealing" and "include the provisions of the Federal Bank Bribery Law," 18 U.S.C. § 215 (1985). Corporate Codes of Conduct: Guidance on Implementing an Effective Ethics Program, FDIC (Dec. 17, 2018), https://fdic.gov/news/news/financial/2005/fil10505a.html.

Federal law prohibits an employee from "corruptly solicit[ing] or demand[ing] for the benefit of any person, or corruptly accept[ing] or agree[ing] to accept, anything of value from any person, intending to be influenced or rewarded in connection with any business or transaction of such institution[,]" in relation to procuring loans. 18 U.S.C. § 215(a)(2). The Guidelines were designed to assist banks in creating policies "[c]onsistent with the intent of the statute to proscribe corrupt activity within financial institutions . . . ."Guidelines for Compliance with the Federal Bank Bribery Law, FDIC (Dec. 17, 2018), https://www.fdic.gov/regulations/laws/rules/5000-2300.html. To establish a violation of 18 U.S.C. § 215(a)(2), the government is required to prove that: "1) a[n] [employee] of a bank, 2) corruptly solicited or demanded for the benefit of any person, 3) a thing of value (exceeding $100) from [the victim], 4) intending to be influenced or rewarded in connection with any business or transaction of the institution." United States v. Brunson, 882 F.2d 151, 155 (5th Cir. 1989).

Littlejohn certified that she had "no involvement in approving loans or extensions of credit, or in otherwise influencing [Valley] to do (or not do) anything for [] Paruta . . . ." She performed her duties without the "belief or expectation that [she] would receive anything." Trava contends that Littlejohn and Bednarz advised Paruta to cancel his second insurance policy because he was paying a high cost for little benefit, and they assisted him with his banking because he did not comprehend it and could not write checks. Later, Trava conceded that such functions were within their duties as bank employees. No criminal charges were pressed against Littlejohn.

Further, 18 U.S.C. § 1005 imposes a penalty and incarceration for anyone, who "with the intent defraud the United States or any agency thereof, or anyfinancial institution . . . participates or shares in or receives (directly or indirectly) any money . . . through any transaction . . . or any other act of any such financial institution." Littlejohn argues that the bequest does not violate these rules of law or public policy because no solicitation was made by her.

Littlejohn moved for reconsideration and the judge decided:

And for all the reasons that you state, I'm reading [defendant's moving papers] and I said, you know, I am going to reconsider. And I am going to reverse myself because there isn't anything in the record which indicates that this gift was connected in any way, other than the fact that [Littlejohn] was a - you know - an employee. And I think you're right.

You know, you looked at it and maybe you got a sense that there was something there and she quit and [Bednarz] stayed on and maybe, hey, you know, it's worth my while to - - you know - - to bail out so that I can get this bequest and all the rest of it because I know it violated the terms and conditions of her employment with [Valley], but there's nothing in the record which indicates - - which contradicts the statement that she didn't know that the gift was in the will.

[Littlejohn] left two or three months before the will was probated. And I have to make my decisions based upon what's in the record before me, and there is absolutely nothing in the record which indicates any kind of corruption, bribery, or fraud that would taint the bequest. And maybe you were right.

And there also really is no case or controversy. The [A]ttorney [G]eneral basically took the position because they have to look out for charitable bequests.

To the extent I don't allow the gift in question to Ms. Littlejohn, well, there's more money in the pot for [Littlejohn] now, right?

MR. HEINZE: Yes, Your Honor.

THE COURT: There's more in the pot for the charities, but for all of the reasons that have been stated in your papers, I am going to reverse the decision and allow the gift.

II.

The executor raises the following arguments on appeal:

POINT I.

THE RECONSIDERATION APPLICATION LACKED MERIT AND MUST BE REVERSED.

POINT II.

THE APPEARANCE OF A LAY EXECUTOR OF THE ESTATE TO ARGUE THE RECONSIDERATION MOTION WAS PLAIN ERROR AND CONTRARY TO R. 1:21-1(c) (NOT RAISED BELOW).

POINT III.

THERE WAS AN UTTER FAILURE TO MAKE FINDINGS OF FACT AND CONCLUSIONS OF LAW BY THE COURT BELOW.

The Attorney General raises the following arguments on its cross-appeal:

I. THE COURT ABUSED ITS DISCRETION WHEN IT COMPELLED A LAYPERSON TO

REPRESENT THE ESTATE, THE INDIVIDUAL BENEFICIARIES AND THE CHARITIES IN OPPOSITION TO THE MOTION FOR RECONSIDERATION RATHER THAN ADJOURNING THE MOTION SO NEW COUNSEL COULD BE RETAINED AND THE INDIVIDUAL BENEFICIARIES, THE CHARITIES AND THE ATTORNEY GENERAL COULD BE NOTICED OF THE ADJOURNED ARGUMENT DATE.

II. THE TRIAL COURT ABUSED ITS DISCRETION WHEN IT FAILED TO NOTIFY THE ATTORNEY GENERAL OF THE ADJOURNED ORAL ARGUMENT DATE.

III. THE COURT ABUSED ITS DISCRETION IN GRANTING RECONSIDERATION BECAUSE IT FAILED TO ADDRESS THE REQUIREMENTS FOR RECONSIDERATION.

Bearing in mind that this appeal challenges the granting of a reconsideration motion, we begin with our standard of review. "Reconsideration [of a final order] . . . is 'a matter within the sound discretion of the court, to be exercised in the interest of justice[.]'" Palombi v. Palombi, 414 N.J. Super. 274, 288 (App. Div. 2010) (quoting D'Atria v. D'Atria, 242 N.J....