Fraud and the Time Limit for Challenging Probate

     In the Matter of the Estate of Elizabeth Tanksley, Docket No. A-1056-11T2 (Jan. 18, 2013), the Appellate Division addressed the effect of an Administrator’s fraud on the time limits of R.4:85-1.

     By way of background, the decedent died intestate on January 13, 2000. She was survived by six adult children. At the time of her death, the decedent resided in a house in Camden, New Jersey. The estate included a life insurance policy and a piece of real property. The insurance proceeds were used to pay decedent’s funeral costs. However, the estate was not otherwise administered for several years, and during that time the real property remained vacant.

     At some point during that time, one of the decedent’s daughters moved into and began to maintain the real property. Then, in 2005, she submitted an Affidavit of Heir to the Camden County Surrogate seeking title to the real property. In the portion of the affidavit requiring the listing of the names, residences, and relationships of all heirs of the decedent, she only listed herself. She also certified that she had “presented for filing the consent of all of said heirs who have capacity to consent” and was therefore entitled to the Property without Letters of Administration in accordance with N.J.S.A. 3B:10-4. After her appointment as Administratrix she executed a deed transferring the property into her name. She then renovated the property with funds obtained through a mortgage.

     Thereafter, one of the decedent’s other children (Appellant) returned to New Jersey and learned what her sister had done as the Administratrix of their mother’s estate. The Appellant went to the Surrogate’s Office and was referred to the Prosecutors Office. However, the Prosecutor declined to prosecute the Administratrix.

     In 2011, the Appellant filed a lawsuit seeking to revoke the appointment of the Administratrix and to vacate the deed, and sought to be appointed Administratrix of the estate.

     The trial court ruled that the Complaint was time-barred under R. 4:85-1, which requires any challenge to probate or to the grant of letters of appointment to be filed within six (6) months if the aggrieved person resides out of state and that the doctrine of laches applied. The Appellant argued that R. 4:50-3 applied which allows the extension of the statute of limitations where a fraud on the court has been committed; however, the Court concluded that R. 4:50-3 did not extend the statute in this circumstance.

     On appeal, the Appellate Division reversed the trial court’s dismissal of the case as time-barred. The Appellate Division found that since the Appellant sought relief under R. 4:50-1(d) (the judgment or order is void) and R. 4:50-3 (fraud upon the court), she was required to file her complaint within “a reasonable time under the circumstances.” R. 4:85-1. The court noted that when fraud is committed upon the court, R. 4:50-3 allows relief to be obtained without limitation as to time.

     The Appellate Division also held that judge’s reliance on the doctrine of laches was flawed. Laches, an affirmative defense, precludes relief when an unexplainable and inexcusable delay in exercising a right results in prejudice to another party. The court only enforces doctrine of laches when the delaying party had sufficient opportunity to assert the right in the proper forum and the prejudiced party acted in good faith believing that the right had been abandoned. In addition, under the doctrine of unclean hands a court should not grant relief to one who is a wrongdoer. Thus, as was the case in this matter, laches should never be applied in favor of a carefully designed and studied scheme of fraud.

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