TD Bank, N.A. v. Miller

Background

TD Bank sought to collect $1,847,304.63 under a guaranty that Michael Miller signed in 2014. The guaranty covered up to $3.5 million related to two mortgage loans made to Woodbridge Center Realty Partners. Michael Miller died on December 17, 2016, and Barbara Miller, his widow, served as executrix of his estate.

The estate tax return listed estate assets of $12,209,765 and debts of $15,665,461. It also listed three UBS accounts jointly owned by Michael and Barbara Miller, collectively holding approximately $20.5 million. The opinion states that the accounts passed to Barbara outside the estate when Michael died. As of December 30, 2016, the accounts held $20,482,689.70, and the UBS loan had a balance of $17,004,619.18, leaving an excess of $3,478,070.52.

The court had previously granted TD Bank’s first summary-judgment motion in part. It ruled that foreclosure proceeds did not reduce Michael Miller’s liability under the guaranty and that, under New Jersey law, TD Bank could reach the joint UBS accounts. Barbara Miller appealed. The Second Circuit remanded for the district court to reconsider whether the relevant New Jersey statute applied, consider other potentially applicable law if necessary, and address any motions to supplement the record.

Issues on Remand

The court first declined to address Barbara Miller’s argument that it should abstain—that is, stop deciding the federal case because a parallel proceeding in New York Surrogate’s Court could resolve the matter. The court held that this argument exceeded the Second Circuit’s limited remand instructions and retained jurisdiction.

The court then reconsidered the choice of law. The guaranty stated that it and the parties’ rights and obligations would be governed by, and construed and enforced under, New Jersey law. Applying New York’s choice-of-law rules, the court held that this language covered TD Bank’s claim to collect the debt. The court rejected TD Bank’s argument that collection was separate from enforcement of the guaranty or that the law where the property was located should govern.

New Jersey Law

The court considered New Jersey common law, the Multiple-Party Deposit Account Act (MPDAA), and the Uniform Transfer on Death Security Registration Act (TOD). It rejected TD Bank’s reliance on New Jersey common-law decisions because those cases did not establish that a creditor could reach a joint brokerage account after one joint owner died. The court also found that the cited trust case involved materially different facts.

The court held that the TOD did not apply to this situation. In its view, the TOD addresses what happens to a security account after the death of the sole owner or the last surviving joint owner when a beneficiary has been designated. Barbara Miller was not a beneficiary or transferee; she was the surviving joint owner. Michael’s death alone therefore did not trigger the TOD’s transfer provisions.

The court also reconsidered its earlier reliance on MPDAA § 16I-7, New Jersey Statutes § 17:16I-7. That provision addresses creditor claims against funds transferred from a multiple-party account when the decedent’s estate lacks sufficient assets. The court concluded that the provision did not apply because the record did not show that Barbara Miller, as personal representative, invoked it; TD Bank had not shown that it made the required written demand to her as executrix; and the requested recovery would benefit TD Bank rather than be administered as part of Michael Miller’s estate.

The court instead applied MPDAA § 16I-5, New Jersey Statutes § 17:16I-5, which provides that money remaining in a joint account at one owner’s death belongs to the surviving owner or owners as against the decedent’s estate unless there is clear and convincing evidence of a different intention when the account was created. The court found that TD Bank had not presented evidence meeting that standard. It therefore held that TD Bank had not established a right to reach the UBS accounts under either the TOD or the MPDAA.

Disposition

Judge Marrero denied TD Bank’s second motion for summary judgment on Count One. The court vacated, in part, its September 9, 2020 Decision and Order, specifically vacating the declarations that the UBS funds were subject to TD Bank’s guaranty claim, the order setting aside the transfer of $3,478,070.52 to Barbara Miller, and the permission for TD Bank to attach or levy on her UBS accounts or other property to satisfy the judgment. The clerk was directed to terminate any pending motions.