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Pecuniary Loss Defined

In a wrongful death action, the Fourth Department determined that plaintiff, decedent’s brother, was entitled only to pecuniary loss for funeral expenses.  In explaining pecuniary loss, the court wrote:

Damages in a wrongful death action are limited to “fair and just compensation for the pecuniary injuries resulting from the decedent’s death to the persons for whose benefit the action is brought” (EPTL 5-4.3 [a]).  “Pecuniary loss” is defined as “the economic value of the decedent to each distributee at the time decedent died” and includes loss of income and financial support, loss of household services, loss of parental guidance, as well as funeral expenses and medical expenses incidental to death….  Generally, because it is difficult to provide direct evidence of wrongful death damages, the calculation of pecuniary loss “is a matter resting squarely within the province of the jury”… .  On this record, we conclude that there are issues of fact with respect to whether plaintiff, as decedent’s brother, suffered pecuniary loss in the form of funeral expenses and whether decedent’s brother Matthew suffered pecuniary loss given the evidence of their longstanding close and interdependent relationship.  Milczarski … v Walaszek…, 656, 4th Dept 7-19-13

 

Criteria for Denial of Trustee Commissions Based On Misconduct, Including Post-Commission-Period Misconduct, Explained

The First Department discussed when a trustee can be denied commissions for misconduct, including misconduct after the commission period (a post-commission-period penalty is rare and none was imposed here):

We conclude that courts have the discretion to take into consideration all of a trustee’s misconduct in determining the grant of annual commission, even conduct that occurred after the period applicable to the commission. Although there are no appellate cases on point, no New York case holds otherwise. As a basic principle, the Surrogate has broad discretion to deny commission to a trustee if the trustee has engaged in misconduct… .. In determining if a commission should be denied, misconduct that is not directly related to the commission being sought may be taken into consideration … . The Restatement (Second) of Trusts § 243 supports this conclusion with a multi-factor analysis (Comment c). Among the factors to be considered under the Restatement in determining if a commission should be denied are whether the trustee acted in good faith, whether the misconduct related to management of the whole trust and whether the trustee completed services of value to the trust (id.). We conclude, therefore, it is within the court’s discretion to determine whether the trustee’s later misconduct bars her from receiving commission.

Trustees can be denied commission “where their acts involve bad faith, a complete indifference to their fiduciary obligations or some other act that constitutes malfeasance or significant misfeasance” … The denial of a commission, however, should not be “in the nature of an additional penalty” (Restatement (Second) of Trusts § 243, Comment a). Rather, it should be based on the trustee’s failure to properly serve the trust (see id.). Matter of Gregory Stewart Trust, 2013 NY Slip Op 05290, 1st Dept 7-16-13

 

Criteria for Constructive Trust Not Met

In affirming Supreme Court’s ruling that plaintiff had failed to establish money given to the defendant (plaintiff’s son) by the plaintiff, originally for the purchase of a lake house, was held by the defendant as a constructive trust, the Third Department explained:

Plaintiff failed to establish the necessary elements of a constructive trust, which include a confidential or fiduciary relationship, a promise, a transfer in reliance thereon and  unjust enrichment….    Although plaintiff contends that there was a relationship of trust at the time the money was given to defendant based on the familial relationship and plaintiff’s belief that, despite his criminal history, defendant had  turned his life around,  this argument  is contradicted  by plaintiff’s own testimony that he and defendant were “never too friendly,” his relationship with defendant was  “at arm’s length” and he felt defendant was “always . . . hiding something from me.”    Furthermore, there was no indication that defendant attempted to take advantage of plaintiff’s trust by encouraging the transfer or that plaintiff was under defendant’s influence in any way.    The record supports Supreme Court’s finding that the idea of buying a lake house was eventually abandoned and the money was given to defendant for placement in a mutual fund account in his name alone by plaintiff, who had significantly more education, business and  financial experience  than  defendant.  Garcia v Garcia, 515582, 3rd Dept 7-11-13

 

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Executor’s Motion to Be Substituted for Decedent in Negligence Action Too Late

In affirming the dismissal of an executor’s motion to be substituted as a party in a negligence action (on behalf of the decedent), the Second Department explained:

CPLR 1021 provides, in pertinent part, “[i]f the event requiring substitution occurs before final judgment and substitution is not made within a reasonable time, the action may be dismissed as to the party for whom substitution should have been made, however, such dismissal shall not be on the merits unless the court shall so indicate.” CPLR 1021 requires a motion for substitution to be made within a reasonable time … . The determination of reasonableness requires consideration of several factors, including the diligence of the party seeking substitution, the prejudice to the other parties, and whether the party to be substituted has shown that the action or the defense has potential merit….

The Supreme Court providently exercised its discretion in denying the appellant’s motion pursuant to CPLR 1015 for leave to substitute himself as a party plaintiff and granting the defendant’s cross motion pursuant to CPLR 1021 to dismiss the complaint, in light of the 21-month delay in obtaining preliminary letters testamentary, the further one-year delay in seeking substitution, the failure to demonstrate a reasonable excuse for the delays, the absence of any affidavit of merit, and the prejudice to the defendant… .  Terpis v Regal Hgts Rehabilitation & Health Care Ctr Inc, 2013 NY Slip Op 05200, 2nd Dept 7-10-13

 

Criteria for Domicile Explained

In upholding Surrogate Court’s determination decedent’s domicile was New York, the First Department explained the relevant criteria as follows:

The Surrogate’s Court Procedure Act defines domicile as “[a] fixed, permanent and principal home to which a person wherever temporarily located always intends to return” (SCPA 103[15]). “The determination of an individual’s domicile is ordinarily based on conduct manifesting an intent to establish a permanent home with permanent associations in a given location”…. A person’s domicile is generally a mixed question of fact and law, which the court must determine after reviewing the pertinent evidence…. No single factor is dispositive…, and the unique facts and circumstances of each case must be considered…. A party alleging a change of domicile has the burden of proving that change by clear and convincing evidence … .  Matter of Ranftle, 2013 NY Slip Op 05006, 1st Dept 7-2-13

 

Late Notice of Election, Caused by Law Office Failure, Should Have Been Allowed

The Second Department determined Surrogate’s Court should have granted decedent’s surviving spouse’s petition for leave to file a late notice of election against the decedent’s estate.  The spouse executed a notice of election which was served on the attorney for the executor, but, because of law office failure, was never filed with Surrogate’s Court:

EPTL 5-1.1-A(d)(1) sets forth the specific procedures to be followed in exercising a right of election. “If the spouse defaults in filing such election within the time provided in subparagraph (d)(1) of this paragraph, the surrogate’s court may relieve the spouse from such default and authorize the making of an election . . . provided that no decree settling the account of the personal representative has been made and that twelve months have not elapsed since the issuance of the letters” (EPTL 5-1.1-A[d][2]). “An application for relief from the default and for an extension of time to elect shall be made upon a petition showing reasonable cause and on notice to such persons and in such manner as the surrogate may direct” (id.). Here, the surviving spouse demonstrated “reasonable cause” for her failure to timely file her notice of election by establishing, inter alia, that the delay was caused by law office failure, and she further established the absence of prejudice to any party (EPTL 5-1.1-A[d][2] … .  Matter of Sylvester, 2013 NY Slip Op 04613, 2nd Dept, 6-19-13

 

Undue Influence Criteria Explained

The Fourth Department affirmed Surrogate’s Court’s determination that the decedent was not subjected to undue influence in making a will.  The Court explained the legal principles at work as follows:

It is well settled that a will contestant seeking to prove undue influence must show the “exercise [of] a moral coercion, which restrained independent action and destroyed free agency, or which, by importunity [that] could not be resisted, constrained the testator to do that which was against [his or] h[er] free will” …. “Undue influence must be proved by evidence of a substantial nature . . . , e.g., by evidence identifying the motive, opportunity and acts allegedly constituting the influence, as well as when and where such acts occurred” …. “Mere speculation and conclusory allegations, without specificity as to precisely where and when the influence was actually exerted, are insufficient to raise an issue of fact” … .  Matter of Lee, 235, 4th Dept, 6-7-13

 

Respondent Failed to Demonstrate Insertion of Feeding Tube Would Impose an “Extraordinary Burden” Upon the Petitioner​

The Fourth Department reversed Supreme Court and ordered insertion of a feeding tube under general anesthesia for petitioner, Joseph P.  The Fourth Department noted there was evidence Joseph P. was “alert, awake, and communicative, … enjoys social interaction and activities” and, with a feeding tube, has “an excellent prognosis with many years of life.”  The Fourth Department wrote:

It is undisputed that the “threshold requirement” under [Surrogate’s Court Procedure Act] section 1750-b for allowing Joseph P.’s guardians to make the decision to withhold life-sustaining treatment has been met … . Joseph P.’s attending physician also fulfilled the requirements of section 1750-b (4) (a) of “confirm[ing] to a reasonable degree of medical certainty” that Joseph P. “lacks capacity to make health care decisions,” and of consulting with another physician “to further confirm” that lack of capacity …. There is also no dispute that Joseph P. has “a medical condition other than . .. mental retardation which requires life-sustaining treatment, is irreversible and . . . will continue indefinitely” (SCPA 1750-b [4] [b] [i] [C]), and that, without such treatment, he “will die within a relatively short time period” (SCPA 1750-b [1]). The sole issue before us is whether, in view of Joseph P.’s medical condition and the expected outcome of the life-sustaining treatment, i.e., the surgical insertion of the feeding tube artificially providing nutrition or hydration, imposes an “extraordinary burden” on him (SCPA 1750-b [4] [b] [iii] [B]).
Upon our review of the record, we conclude that respondent failed to establish by the requisite clear and convincing evidence that providing nutrition and hydration to Joseph P. by means of medical treatment would impose an extraordinary burden on him (see SCPA 1750-b [1]; [4] [b] [iii] [B…).  Matter of Joseph P. …, CA 13-00798, 4th Dept, 5-24-13

 

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Appropriate Surcharge and Interest Imposed for Breach of Fiduciary Duty

In determining the appropriate surcharge to be imposed upon an executor which breached its duty to preserve decedent’s tangible property, as well as the appropriate interest rate to impose with respect to a delay in distributing assets, the Second Department wrote:

“[A] nominated executor has the duty to preserve estate assets for the protection of those persons eventually entitled to receive them” … . * * * [W]e find no reason to disturb the Surrogate’s finding that the petitioner breached its duty, thereby warranting the imposition of a surcharge. * * *

Where a surcharge is imposed for a breach of fiduciary duty, it is a matter within the discretion of the trial court whether to award interest upon the surcharge, and at what rate (see CPLR 5001[a]; 5004;…). While the highest rate of interest might be appropriate where the trustee’s breach of duty is willful or characterized by bad faith…, here, the record reflects that the petitioner’s failure in its duty to secure the decedent’s tangible personal property constituted an honest mistake. …

As a general matter, legacies are payable seven months after issuance of letters testamentary unless otherwise directed by the testator or required by the circumstances of the estate, including the executor’s need to retain sufficient funds to cover administrative costs and debts of the decedent (see EPTL 11-1.5[a]…). Under certain circumstances, an executor may retain a disposition as a setoff for a debt owed by the beneficiary to the decedent or the estate …. In a proceeding to compel payment of a disposition or distributive share, “[t]he rate of interest to be paid on a pecuniary bequest is governed by EPTL 11-1.5” …. The court may fix interest on any disposition awarded at the rate of 6% (see EPTL 11-1.5[d]), or, upon the court’s additional finding that the fiduciary’s “delay in payment was unreasonable” (EPTL 11-1.5[e]), the court may fix interest at the annual rate of 9% set forth in CPLR 5004 …. Matter of Marsh, 2013 NY Slip Op 03679, 2nd Dept, 5-22-13

 

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Will Provisions Can Not Be “Re-Written” by Court Even If Intestacy Results

In determining Surrogate’s Court properly determined mortgages secured by notes represented personal property and not “interests in real property” within the meaning of the will, the Second Department wrote:

Here, as the Surrogate’s Court properly recognized, notes secured by mortgages are generally construed to be personal property…, and there is nothing in the language of the decedent’s will that manifests an intent to include the subject notes within the clause devising his “interests in real property” to the petitioner. The construction suggested by the petitioner cannot be accepted since the court should not rewrite a will or supply an omission not necessarily implied by the language used, even though intestacy with respect to a particular asset results … . Matter of Cincotta, 2013 NY Slip Op 03671, 2nd Dept, 5-22-13

 

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