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Absence of Privity Between Beneficiary of an Estate and the Attorneys Who Represented the Estate in Medical Malpractice and Wrongful Death Actions Precluded Legal Malpractice Action by Beneficiary

The Third Department determined the plaintiff-beneficiary of an estate represented by defendants-attorneys in medical malpractice and wrongful death actions could not bring a legal malpractice action against the attorneys (based upon the medical malpractice and wrongful death actions) because no attorney-client relationship existed. Absent fraud or collusion, the absence of privity between the beneficiary and the attorneys precluded the legal malpractice action:

There is no question that a legal malpractice claim requires — in the first instance — “the existence of an attorney-client relationship” … . Plaintiff does not contend, and the record does not otherwise reflect, that he had a contractual relationship with defendants. Rather, plaintiff argues that because defendants represented [plaintiff’s mother] in her capacity as the administrator of decedent’s estate in both the medical malpractice and wrongful death actions and plaintiff, in turn, is a beneficiary of decedent’s estate, it necessarily follows that defendants were duty bound to represent plaintiff’s best interests in the context of those two actions. The flaw in plaintiff’s argument on this point is that “[i]n New York, a third party, without privity, cannot maintain a claim against an attorney in professional negligence, absent fraud, collusion, malicious acts or other special circumstances” … . Although a limited exception has been carved out with respect to an action brought by the personal representative of an estate, “strict privity remains a bar against beneficiaries’ and other third-party individuals’ estate planning malpractice claims absent fraud or other circumstances” … . Sutch v Sutch-Lenz, 2015 NY Slip Op 04692, 3rd Dept 6-4-15

 

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As a Contingent Remainder of the Subject Trust, the “Charitable Trust” Had the Right to Intervene in a Proceeding to Remove and Replace the Trustee of the Subject Trust

The Second Department determined that the contingent remainder, Charitable Trust, of the subject trust had standing to intervene in a proceeding which removed the father and appointed the mother trustee of the subject trust:

…[T]he Charitable Trust, as a contingent remainder of the subject trust, has standing to intervene in this proceeding …, and a real and substantial interest in the outcome of the proceeding …. Thus, the Supreme Court should have granted it leave to intervene as a party respondent (see CPLR 1012[a];[2], [3]…). Upon granting the Charitable Trust leave to intervene as a party respondent, the Supreme Court should have granted that branch of the motion which was to vacate the order …removing the father as the trustee of the subject trust and appointing the mother as successor trustee of the subject trust, and thereupon directed that the petition be amended by adding the Charitable Trust as a party respondent and that the Charitable Trust be permitted to serve a verified answer and counterclaims if it be so advised. Matter of Ramm v Allen, 2014 NY Slip Op 04015, 2nd Dept 6-4-14

 

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“Lack of Capacity to Sue” Defense Waived If Not Raised in Pleadings/Court Should Not Have Decided Summary Judgment Motion by Searching the Record and Ruling On Issues Not Raised by Anyone

In the context of a suit alleging conversion stemming from the handling of an estate, the Second Department determined the “lack of capacity to sue” defense had been waived because it was not raised by defendant in his pleadings.  The court further determined Surrogate’s Court exceeded its powers when it went beyond the issues placed before it plaintiff’s summary judgment motion, searched the record and decided the motion in defendant’s favor on grounds not raised by anyone:

[The defendant] waived the defense of lack of capacity by failing to raise such defense in a pre-answer motion to dismiss or in his answer to the amended complaint in the action (see CPLR 3211[e]…).

… [O]n a motion for summary judgment, the court is limited to the issues or defenses that are the subject of the motion before the court … . “A motion for summary judgment on one claim or defense does not provide a basis for searching the record and granting summary judgment on an unrelated claim or defense” … .

The Surrogate’s Court improperly searched the record and awarded summary judgment to [defendant] dismissing objections 1(i) and 9. [Plaintiff] moved for summary judgment on these objections solely on the grounds that he established that [defendant] converted funds from the father’s estate and failed to account for funds that the estate owed to [plaintiff]. [Defendant] did not cross-move for summary judgment dismissing those objections on the basis of the statute of limitations, nor did he argue it in opposition. In view of the limited scope of [plaintiff’s] motion, it was not appropriate to search the record and award summary judgment to [defendant] dismissing these objections upon arguments that were not raised … . Matter of Ray C., 2015 NY Slip Op 04134, 2nd Dept 5-13-15

 

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Questions of Fact Re: Whether a Deed Was Forged and Whether a Will Was Duly Executed

The Second Department determined there existed questions of fact whether a deed was a forgery and whether a will was duly executed.  In the course of the decision, the court explained: (1) there can be no bona fide purchasers or encumbrancers of real property based on a forged deed; (2) the transfer of title of real property devised under a will title vests on death not probate; (3) forged deeds are null and void ab initio; and (4) there was insufficient proof due execution of the will—no proof an attorney drafted the will or supervised its execution–no proof decedent possessed testamentary capacity:

Pursuant to Real Property Law § 266, a bona fide purchaser or encumbrancer for value is protected in his or her title unless he or she had previous notice of the alleged prior fraud by the seller … . However, a person cannot be a bona fide purchaser or encumbrancer for value through a forged deed, as it is void and conveys no title … . …

Generally, “title to real property devised under the will of a decedent vests in the beneficiary at the moment of the testator’s death and not at the time of probate” … . Here, however, since the validity of the will is being challenged by the petitioner, it was incumbent upon the respondents, as the proponents of the will, to prove due execution of the will and testamentary capacity … . …

… [T]he … evidence was insufficient to establish that the will was executed in accordance with the formalities required by law (see EPTL 3-2.1), and that the decedent was of sound mind and memory when he executed the will and understood the nature and consequences of executing the will … . While there is a presumption of regularity where the drafting attorney supervised the will’s execution …, here, there was no evidentiary support for the respondents’ conclusory contention that the will was drafted by [the attorney] or that he supervised the execution ceremony. Moreover, the respondents failed to adduce any evidence demonstrating that the decedent possessed testamentary capacity when he signed the will. Matter of Raccioppi, 2015 NY Slip Op 04135, 2nd Dept 5-13-15

 

Sole Heir Did Not Have Standing to Bring Action for Recovery of Estate Property—No Allegations of Misconduct by Personal Representative

The Fourth Department determined plaintiff the sole heir, did not have standing to bring his own action for recovery of the property of the estate because there were no allegations of misconduct on the part of the personal representative:

…[T]he estate representative is charged with the duty of recovering property of the estate, and that plaintiff, as decedent’s sole heir, has no independent cause of action, either in his own right or the right of the estate, to maintain an action for recovery of the property of the estate, absent extraordinary circumstances … . Extraordinary circumstances include collusion of the personal representative with others or an “unreasonable refusal” of the personal representative of the estate to commence an action … . Inasmuch as the extraordinary circumstances must relate directly to the actions of the personal representative of the estate, we conclude that the court erred in determining that the “unique and novel circumstances” of this case, i.e., “homicide, possible forgery, perjury, false statements, and possible conflicts of interest,” constitute the requisite extraordinary circumstances… . Castor v Pulaski, 2014 NY Slip Op 03386, 4th Dept 5-9-14

 

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Request for Petitioner’s Income Tax Records Properly Denied—Insufficient Showing the Desired Information Could Not Be Gained from Other Sources

Over a two-justice dissent, the Fourth Department determined petitioner could not be ordered to turn over his income tax records.  Petitioner claimed that he had provided the down payment and monthly mortgage payments for decedent’s home where petitioner resided. Petitioner further claimed that decedent promised the home to him in a verbal agreement (and therefore the home should not pass by the will to petitioner’s sister).  Respondent wanted access to petitioner’s tax records to see if petitioner had sufficient income to make the down payment:

We conclude that Surrogate’s Court properly denied respondent’s motion, inasmuch as respondent has not made a sufficiently strong showing that the information contained in petitioner’s income tax records “were indispensable to this litigation and unavailable from other sources” …, such as “other financial or business records” … . Indeed, respondent “failed to make any factual showing in this regard, since the hearsay affirmation[s] of [respondent’s] attorney [are] wholly conclusory” …, petitioner’s deposition testimony, the only exhibit submitted in support of the motion, accounted for petitioner’s employment history during the times in question, although in a vague manner …, and respondent did not establish that it sought the requested information from any alternate source… .  Matter of Monaco, 2014 NY Slip Op 03423, 4th Dept 5-9-14

 

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Divorce and Right to Equitable Distribution Did Not Abate Upon Husband’s Death

The Second Department determined the divorce action and the right to equitable distribution did not abate upon the husband’s death. The final adjudication of divorce had been made before the husband’s death and death did not abate a vested right to equitable distribution:

Contrary to the contention of the executor of the husband’s estate, the actions did not abate upon the death of the husband. The Supreme Court had made the final adjudication of divorce before the husband’s death, but had not performed the ” mere ministerial act of entering the final judgment'” … . Moreover, a cause of action for equitable distribution does not abate upon the death of a spouse … . ” Consequently, if a party dies in possession of a vested right to equitable distribution, and that right has been asserted during the party’s lifetime in an action in a court of this State, that right survives the party’s death and may be asserted by the estate'” … .  Charasz v Rozenblum, 2015 NY Slip Op 03798, 2nd Dept 5-6-15

 

A Party Which Is Merely a Possible Beneficiary of a Charitable Trust Does Not Have Standing to Bring an Action to Enforce the Trust

The Second Department reversed Supreme Court finding that the plaintiff Historical Society did not have standing to bring an action seeking a declaratory judgment re: the intent of the grantor of a charitable trust.  At stake are trust assets of $81 million distributed to a charitable foundation (Foundation) set up by the grantor.  The Foundation was set up to sponsor and encourage historical societies. Plaintiff Historical Society sought a declaratory judgment that it was a beneficiary of the trust. The Second Department held that Supreme Court should have dismissed the complaint, explaining that the attorney general is responsible for representing charitable trust beneficiaries and there was no indication the plaintiff Historical Society was a party with a “special interest” entitling it to sue for enforcement on its own behalf:

In an action for the enforcement of a charitable trust, EPTL 8-1.1(f) provides that “[t]he attorney general shall represent the beneficiaries of such dispositions for religious, charitable, educational or benevolent purposes and it shall be his [or her] duty to enforce the rights of such beneficiaries by appropriate proceedings in the courts.” A party with a special interest in the enforcement of the trust may have standing to commence such an action; however, “one who is merely a possible beneficiary of a charitable trust, or a member of a class of possible beneficiaries, is not entitled to sue for enforcement of the trust” … . This “special interest” is found by looking to the trust’s chartering documents to discern the purpose of the trust, and whether there is a class of intended beneficiaries that is entitled to a preference and is sharply defined and limited in number … .

In support of their motion, the appellants submitted the Foundation’s certificate of incorporation … which states that the Foundation’s purpose includes educating the public about state and local history and encouraging and sponsoring existing and future historical societies. That document does not name the Historical Society as a beneficiary, nor does it name any beneficiary. [The grantor’s] will did not mention the Historical Society. Accordingly, the Historical Society was not part of a class of potential beneficiaries of the Foundation that is sharply defined and limited in number. Therefore, it lacked standing to commence this action … . Sagtikos Manor Historical Socy., Inc. v Robert David Lion Gardiner Found., Inc., 2015 NY Slip Op 03342, 2nd Dept 4-22-15

 

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Premises Clause Prevails Over Habendum Clause in a Deed/Failure to Expressly Label Parties and Include the Parties’ Addresses Does Not Invalidate a Deed

The Third Department determined that where there is a conflict between the premises clause and the habendum clause in a deed, the premises clause prevails.  Here the premises clause clearly indicated the creation of a life estate with the remainder interest going to decedent’s only children.  The habendum clause indicated the decedent conveyed the property to “[defendant] and assigns forever.”  The court also noted that the failure to label the parties and include the parties’ addresses in a deed does not invalidate the deed, although it may preclude recording of the deed:

…[T]he rules of construction applicable to deeds provide that where there is a conflict between the provisions set forth in the premises clause and those in the habendum clause relative to the extent of the conveyance, the premises clause will control, absent a clear indication of a contrary intent elsewhere in the deed … . Here, the premises clause provides that the remainder interest in the property is conveyed to plaintiffs, and nothing in the deed other than the habendum clause suggests that decedent had a contrary intent. …

Contrary to defendant’s assertion, Real Property Law § 258 did not require the deed to expressly label plaintiffs as parties or to include their addresses. The statute does not mandate the use of the deed formats that it sets forth, but instead provides that “this section does not prevent or invalidate the use of other forms” (Real Property Law § 258). Although the failure to include a party’s address may prevent a deed from being recorded, it does not operate to invalidate the underlying conveyance … . Basile v Rose, 2015 NY Slip Op 03213, 3rd Dept 4-16-15

 

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Attesting Witnesses Did Not See Decedent’s Signature on the Will and One Attesting Witness Did Not Know the Document Was a Will—The Will Was Not Duly Executed and the Petition for Probate Was Properly Dismissed

The Third Department determined the petition seeking probate of a will was properly dismissed because the attesting witnesses did not know whether the decedent had signed the will.  One attesting witness was approached by decedent in the hallway of the assisted living facility where the witness worked and saw only the page of the document which he signed.  Another attesting witness, also approached in the hallway by the decedent, was not aware she was signing a will and did not see decedent’s signature on the document. The court explained that an attestation clause, standing alone, will not demonstrate due execution of a will. “…[T]he testator must acknowledge his or her signature to the witnesses. The testator must also declare to each witness that the document is the testator’s will (see EPTL 3-2.1 [a]).” Here, two of the three attesting witnesses did not sign the will in conformity with the statutory requirements:

To be duly executed, a will must be subscribed by the testator in the presence of at least two attesting witnesses, or the testator must acknowledge his or her signature to the witnesses. The testator must also declare to each witness that the document is the testator’s will (see EPTL 3-2.1 [a]). Here, the subject will contains an attestation clause. However, Surrogate’s Court must nonetheless examine the attendant circumstances to determine the validity of the will, and it is well established that the attestation clause standing alone will not suffice to meet the proponent’s burden of demonstrating due execution by a preponderance of the evidence if affirmative proof reveals that the required elements were lacking … . In this analysis, “the testimony of the attesting witnesses is entitled to great weight” … . Matter of Yen, 2015 NY Slip Op 03228, 3rd Dept 4-16-15

 

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