RICHARD J. KORN, Plaintiff,
SYLVIA KORN, Defendant.
Submitted: January 30, 2015
Richard J. Korn, Pro Se Plaintiff.
David J. Ferry, Jr. and Brian J. Ferry, of FERRY JOSEPH, P.A., Wilmington, Delaware; OF COUNSEL: Ronald D. Ashby, of RONALD DAVID ASHBY & ASSOCIATES, P.C., Media, Pennsylvania, Attorneys for Defendant Sylvia Korn.
GLASSCOCK, Vice Chancellor
It is hard to imagine equitable litigation more unpleasant than a dispute- over money and property-between a middle-aged child and his nonagenarian mother. In this lawsuit between son-the Plaintiff, Richard J. Korn ("Richard")- and mother-the Defendant, Sylvia Korn ("Mrs. Korn")-I must determine the parties' ownership rights in regard to certain real and personal property, specifically: (1) $200, 000 in cash transferred from Mrs. Korn to Richard in 2007; (2)eight cemetery plots at Beth Emeth Memorial Park in Wilmington, Delaware; (3)a condominium, Unit 4-E, Building B, in Coffee Run Condominium, located at 614 Loveville Rd., Hockessin, Delaware 19707 (the "Condominium"), in which the elderly Mrs. Korn previously resided and for which Richard initially sought a partition sale; and (4) the past and residual assets of a joint Morgan Stanley bank account (the "Joint Account") (together, the "Assets"). Generally, Richard argues, and Mrs. Korn denies, that Mrs. Korn made gifts of the Assets to him. Those issues turn on whether, as of the time of delivery, Mrs. Korn possessed the donative intent necessary to make an irrevocable gift to Richard of the Assets. That, in turn, rests largely on the self-interested testimony of the two principals; thus, the burden of proof assumes importance here. This post-trial Memorandum Opinion sets forth my findings of fact and law in that regard.
I. BACKGROUND FACTS
A. The Korn Family
Mrs. Korn is 95 years old. She and her late husband, Phillip Korn ("Mr. Korn"), moved to Delaware and purchased the Condominium in 1977. Mr. and Mrs. Korn had two children-a son, Richard, and a daughter, Naomi. Mr. Korn, a successful lawyer in New York during his time, passed away in 2004, leaving Mrs. Korn an estate that, while not opulent, was sufficient for her remaining needs, including the Condominium and a Morgan Stanley investment account with holdings of over $1 million.
Richard has largely made his career in politics. Although he received a law degree from Hofstra Law School in 1978 and appeared pro se in this matter, he is not a practicing attorney. Over the past two decades, Richard has regularly relied on his parents for financial assistance to support his political career and family. With the passing of Mr. Korn, Richard became very close to his mother, visiting Mrs. Korn in her home several times per week and calling her on the telephone multiple times per day. Also during that time, Richard has been estranged from his sister, Naomi. For reasons not pertinent here, that family dynamic has changed in part; Richard is now divorced from his wife and no longer close to his mother, who is now close to Naomi.
B. Transfer of the Assets from Mrs. Korn to Richard
In November 2007, Mrs. Korn provided Richard with $200, 000, which she obtained as a margin loan on her Morgan Stanley investment account, so that Richard could close on the purchase of a house in Wilmington. Neither Mrs. Korn nor Richard prepared paperwork to accompany the $200, 000 transfer. Mrs. Korn testified that she had discussions with Richard following the transfer regarding his obligation to repay the $200, 000, but Richard denies ever promising to repay the money. Richard notes that his mother once made a gift of money to Naomi so that Naomi could purchase her first house.
In early 2010, around the time of her 90th birthday, according to Mrs. Korn, she and Richard decided that Richard would take a more active role in helping Mrs. Korn manage her affairs. During this same period, Mrs. Korn took several steps in quick succession affecting the disposition of her assets, which at the time consisted mainly of the Condominium and her Morgan Stanley investment account.
On March 2, 2010, Mrs. Korn executed a will devising her estate in equal parts to her son and daughter, Richard and Naomi, pursuant to Mr. and Mrs. Korn's wishes that each child "get half of whatever would be left." On March 6, only days after Mrs. Korn executed the will, however, she purportedly sent two letters to her attorney, both in reference to her children's potential inheritance.
In the first letter, Mrs. Korn requests several revisions directly to her will, all having the effect of reducing Naomi's share and increasing Richard's share. It is unclear from the record whether these revisions were ever executed.
In the second letter, Mrs. Korn requests that Mr. Korn's name be removed from the deed to the Condominium, and that Richard's name be added. A revised deed drafted in response to this request and conveying the Condominium from Mrs. Korn as sole owner to Mrs. Korn and Richard as "joint tenants with the right of survivorship" was executed on March 25, 2010.
Meanwhile, on March 9, 2010, Mrs. Korn wrote a check to Richard in the amount of $4, 000 and directed Richard to use it to purchase eight cemetery plots at Beth Emeth Memorial Park in Wilmington, Delaware: three to allow for the reinterment of Mrs. Korn's husband, mother, and brother; one for Mrs. Korn herself; and four for Richard and his then-wife and children. Richard purchased the eight plots as requested on March 10, placing the deed to the plots in his own name.
On April 19, 2010, Mrs. Korn closed her individual investment account at Morgan Stanley and used the proceeds-approximately $1, 187, 000-to open a new investment account at the same bank in both her and Richard's names, the Joint Account. A letter dated April 15, 2010, purportedly written by Mrs. Korn but addressed to no one in particular, supposedly indicates that Mrs. Korn created the Joint Account after being upset by a letter she received from Naomi in which Naomi spoke ill of Richard:
After reading her letter-I haven't slept or eaten. I have decided today to have Richard added to my Morgan Stanley Brokerage account so that when I pass on, the account will pass to him.
[T]he final straw is this letter my daughter sent me filled with lies and more lies, just showing her mental illness and sickness and I will not have my son's reputation or his family smeared or hurt by anything she says or her daughters say . . . .
The only bank paperwork in the record regarding the creation of the Joint Account is a direct deposit authorization and a form authorizing the bank to transfer the funds from Mrs. Korn's individual investment account to the new account, both of which are signed by Richard and Mrs. Korn and state the name of the new account as "Sylvia Korn [and] Richard J. Korn JTWROS;" these forms do not otherwise explain the parties' rights in connection with the Joint Account.
Following the creation of the Joint Account, Mrs. Korn continued to make gifts to Richard by writing checks to him. At the same time, however, over a period of nearly two years, Richard paid himself hundreds of thousands of dollars from the assets of the Joint Account, by using his position as a joint holder to write himself checks. The record reflects that Richard wrote over twenty checks from the Joint Account to himself (or entities connected with him) from September 2010 to July 2012, totaling approximately $600, 000, as well as received an additional $50, 000 transfer in November 2011. Mrs. Korn did not write or sign any of these checks. Her testimony reflects that she received monthly statements of account activity ...