Trusts and Estates – Page 5 – New York Appellate Digest

THE TRANSFER OF REAL PROPERTY TO DECEDENT’S CHILDREN WAS A VALID EXERCISE OF THE POWER OF ATTORNEY; THE TRANSFER WAS COMPENSATION FOR CARE, NOT A GIFT; THE DISSENT ARGUED THERE WAS A QUESTION OF FACT WHETHER THE TRANSFER WAS A GIFT AND THE POWER OF ATTORNEY DID NOT AUTHORIZE GIFTS (CT APP).

The Court of Appeals, over a dissent, determined that the transfer of real property to decedent’s children as compensation for the care given decedent was allowed under the operative power of attorney. The power of attorney did not include the power to make gifts. The dissent argued there was a question of fact whether the property transfer was a gift. Matter of Maika, 2023 NY Slip Op 02092, CtApp 4-25-23

Practice Point: The question here was whether the transfer of decedent’s property to his children was compensation for care, which was authorized by the power of attorney, or, as argued by the dissent, a gift, which was not authorized by the power of attorney.

April 25, 2023

Civil Procedure, Employment Law, Federal Employers' Liability Act (FELA), Maritime Law, Toxic Torts, Trusts and Estates

UNDER THE JONES ACT OHIO HAD JURISDICTION TO APPOINT ADMINSTRATORS OF THE ESTATE OF DECEDENT WHO ALLEGEDLY DIED OF EXPOSURE TO ASBESTOS ON MERCHANT MARINE SHIPS; THE NEW YORK EXECUTOR OF THE ESTATE WAS TIMELY AND PROPERLY SUBSTITUTED FOR THE OHIO ADMINISTRATORS (FIRST DEPT).

The First Department, over a dissent, in a complex decision which cannot be fairly summarized here, determined: (1) under the Jones Act Ohio had jurisdiction to appoint administrators for decedent who allegedly died from asbestos exposure on merchant marine ships where he was employed; and (2) substitution of a New York personal representative, executor of the estate, was proper and timely:

… [T]he Jones Act provides that when a seaman dies from an employment injury “the personal representative of the seaman may elect to bring a civil action at law, with the right of trial by jury, against the employer” (46 USC § 30104).

The Jones Act grants a right of action to the personal representative “without other description” … . The Act does not require that the personal representative be either “a domiciliary or ancillary administrator” … . A domiciliary administrator has standing to file a Jones Act or FELA [Federal Employers’ Liability Act] lawsuit in another state … . However, nothing “explicitly clothes a domiciliary administrator with the exclusive right to maintain such an action” because such a requirement is inconsistent with “the remedial nature” of FELA and the “representative character” of such a suit … .

Notably, the personal representative’s authority under the Jones Act derives from “a federal statutory right and power given to carry out the policy of the federal statutes” and “is not limited to the confines of the State where he was appointed but is co-extensive with general federal jurisdiction” … . Bartel v Maersk Line, Ltd., 2023 NY Slip Op 02058, First Dept 4-20-23

Practice Point: Under the Jones Act, the estate of a merchant-marine employee who died from exposure to asbestos on the employer’s ships may sue the employer. Here the suit was deemed properly started by administrators appointed by an Ohio court and the New York executor was properly and timely substituted for the Ohio administrators.

See also the companion decision: Bartel v Farrell Lines, 2023 NY Slip Op 02057, First Dept 4-20-23

April 20, 2023

Civil Procedure, Trusts and Estates

THE PLAINTIFFS IN THIS SUIT AMONG BROTHERS ABOUT THE FATHER’S ESTATE DID NOT HAVE THE AUTHORITY TO ACT ON BEHALF OF THE ESTATE OR TO SUE AS BENEFICIARIES OF THE ESTATE; THE ACTION SHOULD HAVE BEEN DISMISSED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the plaintiffs in this dispute among brothers about the father’s estate did not have the authority to act on behalf of the estate or to sue as beneficiaries of the estate. Therefore the action should have been dismissed:

“It is elementary that the executors or administrators represent the legatees, creditors and distributees in the administration of the estate; that their duty is to recover the property of the estate; and that the legatees and next of kin are concluded by their determination in respect to actions therefor and have no independent cause of action, either in their own right or the right of the estate” … . Here, the plaintiffs did not purport to commence this action as personal representatives of the decedent’s estate. The plaintiffs lacked “letters of administration authorizing [them] to act at the key points when this action was commenced and an amended complaint . . . was served” … . Absent extraordinary circumstances which are not present here, a beneficiary has no authority to act on behalf of an estate or to exercise a fiduciary’s rights with respect to estate property … . Accordingly, the Supreme Court should have granted that branch of the defendants’ motion which was pursuant to CPLR 3211(a)(3) to dismiss, insofar as asserted against them, the causes of action in the amended complaint asserted by the plaintiffs in their derivative capacity on behalf of the decedent’s estate, as well as the causes of action asserted by the plaintiffs in their individual capacity as beneficiaries of the estate to recover assets of the estate … . Levy v Levy, 2023 NY Slip Op 01892, Second Dept 4-12-23

Practice Point: Absent the authority to act on behalf of an estate, the beneficiaries cannot sue each other claiming rights to estate assets.

April 12, 2023

Attorneys, Legal Malpractice, Negligence, Trusts and Estates

ABSENT FRAUD OR COLLUSION, STRICT PRIVITY PRECLUDES THE PROSPECTIVE BENEFICIARIES OF AN ESTATE FROM BRINGING A LEGAL MALPRACTICE ACTION AGAINST THE ATTORNEY WHO PLANNED THE ESTATE; THE ATTORNEY OWED NO DUTY TO THE BENEFICIARIES (FIRST DEPT).

The First Department, reversing Supreme Court, determined the malpractice action by the prospective beneficiaries of an estate against the attorney who planned the estate should have been dismissed because there was no privity between the beneficiaries and the attorney:

In the context of estate planning malpractice actions, strict privity applies to preclude a third party, such as beneficiaries or prospective beneficiaries like plaintiffs, from asserting a claim against an attorney for professional negligence in the planning of an estate, absent fraud, collusion, malicious acts or other special circumstances … . While plaintiffs argue their claim against defendant attorneys is couched as one for simple negligence, as opposed to legal malpractice, plaintiffs have not pleaded facts to show that defendant attorneys owed plaintiffs a duty of care in the drafting of their client’s will and trust agreement. The strict privity requirement here protects estate planning attorneys against uncertainty and limitless liability in their practice … . Thus, plaintiffs’ negligence claim is unavailing for lack of factual allegations to demonstrate that defendants owed plaintiffs a duty.

Plaintiffs have not pleaded sufficient factual allegations in their amended complaint to indicate that circumstances of fraud, collusion and/or aiding and abetting exist in this case to override the strict privity rule. Plaintiffs have not alleged fraud with requisite specificity as, inter alia, there are no allegations defendants knowingly made material misrepresentations in the will and trust for the purpose of inducing justifiable reliance by their client (since deceased) upon such misrepresentations, and moreover the allegations made do not support favorable inferences in that regard … . Phillips v Murtha, 2023 NY Slip Op 01767, First Dept 4-4-23

Practice Point: Absent fraud or collusion, strict privity precludes a legal malpractice action by prospective beneficiaries of an estate against the attorney who planned the estate. Here the attorney owed no duty to the prospective beneficiaries.

April 4, 2023

Conversion, Trusts and Estates

THE COMPLAINT STATED CAUSES OF ACTION FOR UNDUE INFLUENCE, CONVERSION AND UNJUST ENRICHMENT (FIRST DEPT).

The First Department, reversing Supreme Court, determined plaintiff stated causes of action for conversion, unjust enrichment and undue influence exercised by the defendant with regard to changing the beneficiary on a $6 million account:

… [T]he circumstances requiring scrutiny include the alleged facts that plaintiff was decedent’s closest living relative, that they had a continuing close relationship, and that he had been the designated beneficiary for 10 years, while defendant was a neighbor and relatively recent friend … . Moreover, plaintiff sufficiently alleges defendant’s financial motive (the $6 million-plus value of the account), opportunity (that his aunt and defendant were neighbors, and his aunt’s advanced age, fragile physical health, and inability to print the change of beneficiary form independently), and actual exercise of undue influence (the execution and mailing of the change of beneficiary form and the suspicious circumstances surrounding the writing of a $15,000 check to defendant weeks later) … . Furthermore, accepting the pleadings as true, the allegations that plaintiff’s aunt attempted to stop payment on the $15,000 check and that she complained to others that defendant had tricked her into writing the check, and changed her will to remove defendant as her executor, but did not change or revoke the beneficiary form, together support an inference that the aunt either was not aware of the form or was not aware of its effect. Salitsky v D’Attanasio, 2023 NY Slip Op 01597, First Dept 3-23-23

Practice Point: The allegation that plaintiff’s aunt changed the beneficiary on a $6 million account from plaintiff to defendant, coupled with the allegations of the aunt’s fragile health and advanced age, stated causes of action for undue influence, conversion and unjust enrichment.

March 23, 2023

Attorneys, Civil Procedure, Insurance Law, Judges, Negligence, Trusts and Estates

SUPREME COURT HAD THE POWER TO APPOINT THE PUBLIC ADMINISTRATOR TO REPRESENT THE ESTATE IN THIS TRAFFIC ACCIDENT CASE; DEFENSE COUNSEL REPRESENTED THE INSURER, NOT THE DEFENDANT ESTATE (SECOND DEPT).

The Second Department, reversing Supreme Court, determined Supreme Court should have granted plaintiff’s motion to appoint the Public Administrator to represent the defendant estate in this traffic accident case. Defense counsel represented the insurance company, not the estate:

… [C]ounsel’s affirmation stated that he “was retained by Truck Insurance Exchange to represent the interests of their insured Arthur Ketterer herein.” Under these circumstances, moving counsel lacked authority to represent the defendant estate … . …

In appropriate circumstances, the Supreme Court is empowered to appoint a temporary administrator, in order to “avoid delay and prejudice in a pending action” … . Such a determination is addressed to the broad discretion of the court … . Here, a Surrogate’s Court decree appointed the Public Administrator to represent the estate of Arthur C. Ketterer in a related prior action. That decree did not expressly grant to the Public Administrator the authority to represent the defendant estate in this action. Under these circumstances, the plaintiff’s cross-motion should have been granted, and we remit the matter to the Supreme Court, Kings County, for the appointment of a temporary administrator to represent the defendant in the instant action … . Franco v Estate of Arthur C. Ketterer, 2023 NY Slip Op 00988, Second Dept 2-22-23

Practice Point: Here in this traffic accident case, defense counsel represented the insurer, not the defendant estate. Therefore Supreme Court had the authority, upon plaintiff’s motion, to appoint the Public Administrator to represent the estate.

February 22, 2023

Civil Procedure, Foreclosure, Trusts and Estates

DEFENDANT WAS IMPROPERLY SUBSTITUTED AS A JOHN DOE IN THIS FORECLOSURE ACTION AND BECAUSE HE WAS SUED AS AN HEIR TO THE MORTGAGEE, AND NOT AS A REPRESENTATIVE OF THE MORTGAGEE’S ESTATE, THE ACTION WAS TIME BARRED (FOURTH DEPT).

The Fourth Department, reversing Supreme Court in this foreclosure action, determined defendant was not properly substituted in the amended complaint for a John Doe in the original complaint and, because defendant was sued in his capacity as the heir of the decedent, and not as a representative of the decedent’s estate, the action was time-barred:

Plaintiff commenced this mortgage foreclosure action … against … the mortgagee, David B. Bailey (decedent), and certain “John Does” and “Jane Does” defined in the complaint as “the tenants, occupants, persons or corporations, if any, having or claiming an interest in or lien upon the premises, described in the complaint.” Plaintiff subsequently discovered that decedent had died in 2018 and made an ex parte application seeking … to substitute Arthur Bailey, in his capacity as heir to decedent’s estate (defendant), as a John Doe defendant and for leave to file an amended complaint. …

We agree with defendant that his motion should be granted insofar as it seeks dismissal of the amended complaint against him. Defendant correctly contends that he was improperly substituted as John Doe #1 pursuant to CPLR 1024. Inasmuch as the original complaint “fail[ed] to mention decedent’s death” and defendant is being sued in the amended complaint in his capacity as an heir to decedent’s estate, defendant does not fit within the categories of John and Jane Does set forth in the original complaint and thus cannot be substituted therefor … . Further, although here plaintiff also filed and served an amended complaint on defendant solely in his capacity as heir to decedent’s estate and not as a representative thereof (… see generally EPTL 3-3.6 [a], [b] …), … the relevant statute of limitations expired prior to the order granting plaintiff’s ex parte application for leave to file the amended complaint (see generally CPLR 213 [4]). Citibank, N.A. v Bailey, 2023 NY Slip Op 00777, Fourth Dept 2-10-23

Practice Point: If a defendant does not fit any of the “John Doe” categories described in the original complaint, he cannot be added as a John Doe in an amended complaint.

February 10, 2023

Trusts and Estates

THE INSTRUMENT SHOULD HAVE BEEN ADMITTED TO PROBATE AS A LOST WILL (SECOND DEPT).

The Second Department, reversing Surrogate’s Court, determined the will should have admitted an instrument to probate as a lost will. It was shown the will was never in decedent’s possession which negated the presumption the will had been revoked:

A lost or destroyed will may be admitted to probate if (1) it is shown that the will has not been revoked, (2) execution of the will is proved in the manner required for probate of an existing will, and (3) “[a]ll of the provisions of the will are clearly and distinctly proved by each of at least two credible witnesses or by a copy or draft of the will proved to be true and complete” … . “When a will, although once possessed by a testator, cannot be found after the death of the testator, a strong presumption arises that the testator revoked the will by destruction” … . “The presumption may be overcome, and the lost will admitted to probate, if the proponent establishes that the will was not revoked by the testator during his or her lifetime” … .

Here, in support of the petition, the petitioners submitted, among other things, the affirmation of the attorney-draftsperson, the affidavit of an attesting witness, and the unsigned copy of the decedent’s lost will. The petitioners’ submissions established that the will was never in the decedent’s possession, that the will had not been revoked, and that the will was duly executed … . Matter of McKenna, 2023 NY Slip Op 00664, Second Dept 2-8-23

Practice Point: Here there was unsigned, undated copy of the will, proof the will was never in the decedent’s possession and that it had been duly executed. The instrument should have been admitted to probate as a lost will.

February 8, 2023

Evidence, Trusts and Estates

CONFLICTING EVIDENCE OF DECEDENT’S TESTAMENTARY CAPACITY AND PETITIONER’S UNDUE INFLUENCE PRECLUDED SUMMARY DISMISSAL OF RESPONDENT’S OBJECTIONS TO THE WILL SUBMITTED FOR PROBATE BY PETITIONER (THIRD DEPT).

The Third Department, reversing Surrogate’s Court, in a full-fledged opinion by Justice Reynolds Fitzgerald, determined the respondent’s (decedent’s niece’s) objections to the probate of the will submitted by petitioner (decedent’s agent) should not have been dismissed. Decedent, in a 2011 will, made respondent the sole beneficiary of his estate. Subsequently decedent executed a 2015 will making petitioner the sole beneficiary of his estate. The Third Department found summary judgment dismissing respondent’s objections was inappropriate because there was conflicting evidence of decedent’s testamentary capacity and petitioner’s undue influence:

… [T]he witnesses affirmed that beginning in late 2014, decedent’s personal hygiene declined, he acted unusual, was confused and forgetful. The medical records, spanning from the fall of 2014, including a contemporaneous record four days subsequent to the execution of the 2015 will, are replete with observations that decedent refused to care for himself resulting in numerous hospitalizations for hyperglycemia, hypoglycemia and urinary tract infections. The records contain multiple entries that decedent suffered from an altered mental state, confusion and was incoherent. This evidence is sufficient to raise an issue of fact regarding decedent’s testamentary capacity … . * * *

Much of the evidence submitted by respondent on the issue of testamentary capacity is also relevant to the issue of undue influence … . Respondent’s witnesses all affirm that while residing at the assisted living facility, decedent was lethargic, frequently complained of being ill, slept a good deal, was unresponsive and was in a weakened state. Decedent’s closest friend described him as being easily manipulated, and stated that he was especially vulnerable to petitioner, with whom he was infatuated. In presenting evidence demonstrating decedent’s physical decline, coupled with his increasing confusion and personality changes, respondent has raised an issue as to whether decedent was unduly influenced by petitioner … . Matter of Linich, 2023 NY Slip Op 00250, Third Dept 1-19-23

Practice Point: Summary judgment is rarely appropriate in a contested probate proceeding. Here conflicting evidence of decedent’s testamentary capacity and petitioner’s undue influence precluded summary judgment dismissing respondent’s objections to probate.

January 19, 2023

Civil Procedure, Medical Malpractice, Negligence, Trusts and Estates

ALTHOUGH THE MEDICAL MALPRACTICE ACTIONS WERE TIME-BARRED, THE RELATED WRONGFUL DEATH ACTION, BROUGHT WITHIN TWO YEARS OF DEATH, WAS NOT (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined that, although the medical malpractice actions were time-barred, the related wrongful death action, brought within two years of death, was not:

Although the plaintiff denominated the second cause of action as one for “loss of services,” she alleged all the elements necessary to plead a cause of action for wrongful death, including “(1) the death of a human being, (2) the wrongful act, neglect or default of the defendant by which the decedent’s death was caused, (3) the survival of distributees who suffered pecuniary loss by reason of the death of decedent, and (4) the appointment of a personal representative of the decedent” … . … [T]he wrongful death cause of action was timely. EPTL 5-4.1 provides that an action for wrongful death “must be commenced within two years after the decedent’s death.” Here, the decedent died on November 9, 2013, and this action was commenced on November 9, 2015. Thus, “the cause of action alleging wrongful death was timely commenced within two years of the decedent’s death, since, at the time of [his] death, [the] cause of action sounding in medical malpractice was not time-barred” … .Proano v Gutman, 2022 NY Slip Op 07253, Second Dept 12-21-22

Practice Point: Here the medical malpractice actions were time-barred, but the related wrongful death actions, brought within two years of death, were not.

December 21, 2022