Lauren Aquilana v. Estate of Judith Hill | Joseph William Singer | October 08, 2015


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Lauren Aquilana v. Estate of Judith Hill

Lauren Aquilana lived with her dear friend Judith Hill for fifty-two years in Hill's house in Poughkeepsie, New York. Despite their long cohabitation, the title to the house remained in Hill's name, and despite knowing she should do so, Hill never wrote a will. After Hill suffered a stroke in 2011, she moved to a continuing care retirement community (CCRC) in Asbury Park, New Jersey. Hill was 81 years old at the time. She used her personal savings to pay for her entrance fee to the facility, but neither she nor Aquilana had sufficient personal funds to purchase a unit in the facility for Aquilana. Approximately $50,000 is left in Hill's mutual fund account.

Aquilana remained in their New York home and put it on the market. She was 79 years old and had retired at age 72 from her position as a creative writing instructor at a community college in Poughkeepsie. The hope of both Aquilana and Hill was that the sale of their New York house would raise sufficient funds to allow Aquilana to purchase a space at the Asbury Park CCRC and join Hill there. Unfortunately, it was difficult to find a buyer for a house that had not been remodeled or updated in years during the aftermath to the subprime crisis when banks were reluctant to grant mortgages. Worse still, Hill died three months after the house went on the market. Because Hill had chosen the cheapest option for purchasing a place at the CCRC, no refund of money was to be forthcoming.

In the absence of a will, and because Hill had no surviving relatives, the New Jersey Surrogate Court appointed an executor for Hill's estate on the assumption that Hill's move had changed her domicile to New Jersey. The Surrogate Court applied the New Jersey intestacy statute to Hill's estate; because Hill did not leave a will and had no surviving relatives, all her property (including the house in Poughkeepsie) escheated to the State of New Jersey.

New Jersey does not recognize common law marriage but does recognize express written contracts between domestic partners. Before 2010, New Jersey also recognized oral agreements as well as agreements implied from a course of action to share property between the two persons in a cohabiting couple. If Aquilana and Hill had been romantic partners who had separated, New Jersey law before 2010 would have provided a remedy either through contract law or property law to divide their property equitably between them. However, they were close friends rather than a couple so New Jersey law would have provided no legal basis for dividing their property if they had separated. Moreover, in 2010, the New Jersey legislature passed a statute prohibiting recognition of "palimony" agreements unless they are in writing. Although the Supreme Court of New Jersey  ruled that the statute applies prospectively only to relationships established after 2010, Maeker v. Ross, 99 A.3d 795 (N.J. 2014), New Jersey law had never recognized a claim for property sharing between friends or persons who were not in a marriage-like relationship. Because Hill wrote neither a will nor a contract, because she has no surviving relatives, and because New Jersey law never recognized a common law right to share property between cohabiting friends, New Jersey law provides that Hill's property escheats to the state. Because Hill's property escheated to the state of New Jersey, the New Jersey Surrogate Court ordered the New Jersey executor to go to the New York Surrogate's Court to have an executor appointed for Hill's New York estate who would be empowered to sell the New York home.

Meanwhile, Aquilana hired a New York attorney and convinced the New York Surrogate's Court to appoint her as executor of Hill's New York estate. Aquilana tried to get the New York court to rule that Hill was domiciled in New York at the time of her death, but the court ruled to the contrary, agreeing with the New Jersey court that Hill had changed her domicile to New Jersey. The New York Surrogate's Court also decided to stay any rulings on property distribution until the New Jersey courts could determine the disposition of Hill's property and that the New York court would abide by those rulings, whatever they were. Although the New Jersey Surrogate Court had ordered the executor to sell the Poughkeepsie home, the New York Surrogate's Court refused to order Aquilana to comply with that ruling pending appeal of the New Jersey Surrogate Court's ruling.

Aquilana sued the New Jersey estate of Hill in the New Jersey trial court, arguing that the New Jersey courts should engage in a restrained interpretation of New Jersey law and decline to apply it to determine the distribution of Hill's property on her death. She followed the proper procedures to challenge the ruling of the New Jersey Surrogate Court. She argued that New York law should apply to the distribution of Hill's property on the ground that Hill and Aquilana had lived together in New York for more than fifty years and that, unlike New Jersey law, New York would recognize a quasi-partnership between Hill and Aquilana and treat Aquilana as their heir to Hill's estate.

Hill challenged the ruling of the New Jersey Surrogate Court by bringing an action in the New Jersey Superior Court Chancery Division. The Chancery Judge reversed the ruling of the Surrogate Court and held that New York law should apply to determine the distribution of Hill's estate. Unlike New Jersey law, New York law would impose a constructive trust on the property of one person for the benefit of another if they live together and either comingle their funds or support each other. Under New York law, proof of an interdependent relationship is sufficient to support creation of a constructive trust to ensure fair distribution of property; no evidence of a contract or reciprocal promises is required. Indeed, in this case, there was no evidence of an agreement, oral or written, between Aquilana and Hill by which they explicitly agreed to share their property with each other or to support each other. However, at trial in the New Jersey Superior Court (Chancery Division), Hill's friends and family had testified that Hill would have wanted Aquilana to get the proceeds of the sale of the Poughkeepsie house since those funds were supposed to enable Aquilana to join Hill in New Jersey. That evidence was uncontested and unrebutted; the trial court ruled that the decedent's wishes had been established by clear and convincing evidence and that this was sufficient to establish a constructive trust and constituted an exception both to the statue of frauds and the statute of wills of the state of New York. While New Jersey strictly enforces its statute of wills and its statute of frauds, New York law recognizes unwritten evidence as sufficient to establish a common law partnership between friends even if they are not a couple or in a marriage-like relationship and will honor such mutual understandings even in probate proceedings to distribute property upon death of one of the parties.

The Estate of Hill appealed to the New Jersey Superior Court Appellate Division. That court split the difference and applied New Jersey law to Hill's personal property on death but New York law to the real property located in the Poughkeepsie, New York. The Appellate Division cited the traditonal situs rule for real property and distinguished the house from the personal property governed by the law of the decedent's domicile at death. The court-appointed executor for the Estate of Hill appealed to the Supreme Court of New Jersey.

Aquilana argues that New York law should apply to the entire estate and that both the personal and real property of Hill should be distributed according to the law of New York. That law would give all the property to Aquilana because that is the only result that would respect the wishes of the decedent. Allowing the property to escheat to the state in the face of clear and convincing evidence that the decedent wanted her property to go to Aquilana arguably violates the substantive policy of both New York and New Jersey. In the alternative, Aquilana argues that the situs rule should apply to the real property in New York even if New Jersey law applies to Hill's personal property.

The Estate of Hill argues, in contrast, that New Jersey law should apply to the entire estate with all the property escheating to the state of New Jersey. The New Jersey executor argues that the Asbury Park CCRC is one of the largest in the country and houses more than 700 residents. Given the increasing popularity of CCRC's, only a strict rule applying domicile law to any person who dies while a resident of New Jersey will protect the New Jersey courts from the entanglements that would ensue because of claims based on unwritten evidence involving parties in other states. That is especially so because New Jersey policy requiring a writing to support a property claim by a domestic partner is codified in a statutory provision that was designed to overturn a contrary prior course case. While that statute does not itself contain a choice of law provision, it arguably applies to the estate of any New Jersey domiciliary.

1. Does the law of New York or the New Jersey govern the distribution of Hill's personal property?

2. Does the law of New York or the New Jersey govern the distribution of Hill's  house in Poughkeepsie, New York?

π = Lauren Aquilana

∆ = Estate of Judith Hill


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October 08, 2015

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Joseph William Singer

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