Court Listens to Hearing For Bank to Recover Monies Via Default Judgment

July 21, 2015,

A New York Probate Lawyer said in this action by plaintiff JP Bank, to recover monies based upon the default of defendants S.I. Wood Furniture Corp. (Wood), Ikram Said, and Amal Said, a/k/a Amal E. Said, defendants, under a commercial line of credit and a concurrently executed personal guaranty, JP Bank moves, pursuant to CPLR 3212, for summary judgment in its favor as against defendants in the amount of $249,770, with accrued interest in the sum of $5,049.94, interest on $249,770 at its prime rate plus .50%, plus late fees in the sum of $1,935.25, and reasonable attorneys' fees and expenses.

By a Business Credit Application dated October 17, 2005, Wood applied to JP Bank for a Business Revolving Credit Line in the sum of $250,000. The Business Credit Application set forth the business information of Wood and the personal financial information of Ikram and Amal, as Wood's president and vice-president, respectively.

A New York Estate Lawyer said that under the section, entitled Authorizing Resolution, Ikram, as the president of Wood, stated that at a corporate meeting. it was resolved that Wood could complete the Business Credit Application and that Wood would then "be obliged to fulfill all of the terms and conditions of the respective note and Credit Account Agreement which it shall thereafter receive. This section of the Business Credit Application was executed by both Ikram and Amal on October 17, 2005.

Queens Probate Lawyers said on or about December 1, 2005, Wood's application was approved by JP Bank for a line of credit in the sum of $250,000. The terms and conditions of the Business Revolving Credit Line are set forth in the Business Revolving Credit Account Agreement (Credit Account Agreement).
In addition, paragraph 3 of the Credit Account Agreement provided for the recovery of attorneys' fees and expenses by stating: In addition to all principal, interest and fees owing under this Agreement, [Wood] and each guarantor agrees to pay upon demand (a) all reasonable costs and expenses incurred by [Chase] and all owners and holders of the indebtedness evidenced by this Agreement in collecting the amount owing under this Agreement through probate, reorganization, bankruptcy or any other proceeding, and (b) costs, expenses and reasonable attorneys' fees if and when this Agreement is placed in the hands of an attorney for collection or enforcement.

Long Island Probate Lawyers said that mood made all payments due through August 1, 2010. It is undisputed that Wood then failed to make the payment due on September 1, 2010, or to pay any subsequent installments that have now become due, and that such failure of Wood to make such payment due on September 1, 2010 constituted an act of default under the Credit Account Agreement. As a result, JP Bank, pursuant to paragraph 7 of the Credit Account Agreement, elected to accelerate the balance due and to declare all amounts due immediately due and payable to it. JP Bank also demanded that Ikram and Amal honor the guarantees given by them under the Personal Guarantee and Collateral Agreement section of the Business Credit Application (the Guaranties) and perform the obligations of Wood, but they ignored this demand and refused to do so.

Consequently, on February 8, 2011, JP Bank filed this action against defendants. JP Bank's complaint seeks recovery from Wood for the accelerated balance due, plus interest, late fees, and reasonable attorneys' fees based on the Credit Account Agreement, and also seeks to recover this sum from Ikram and Amal, individually, based on the Guaranties. Defendants interposed a verified answer, which contains general denials and 22 affirmative defenses.
In support of its instant motion for summary judgment, JP Bank has annexed the Business Credit Application, the Credit Account Agreement, and the sworn affidavit of Karl Reed, an assistant vice-president of its Portfolio Management Center. Mr. Reed, in his affidavit, attests that he has access to JP Bank's business records, maintained in the ordinary course of regularly conducted business activity, including the business records for and relating to Wood. He asserts that he has made his affidavit based upon his review of those records relating to Wood's loan and from his own personal knowledge of how they are kept and maintained. He explains that the loan records for Wood are maintained by JP Bank in the course of its regularly conducted business activities and are made at or near the time of the event, by or from information transmitted by a person with knowledge. He further sets forth that as to JP Bank's business records that consist of documents created by third parties, JP Bank relies on the accuracy of such records in conducting its business and collecting loans.

Mr. Reed recounts Wood's entry into the Credit Account Agreement and Ikram and Amal's execution of the Guaranties on October 17, 2005. He attests that Wood has failed to pay the sums due under the terms of the Credit Account Agreement and is in default. He annexes a copy of the payment history for the Credit Account Agreement, confirming that Wood has not made any payments on the Credit Account Agreement since August 1, 2010. The attached payment history reflects payments made, advances taken under the Credit Account Agreement, and the assessment of fees. He asserts that Ikram and Amal have failed to cure the default of Wood pursuant to the Guaranties and that they are in default under the Guaranties.

Mr. Reed sets forth that as of January 25, 2011, there is due and owing from Wood to JP Bank the principal balance of $249,770, interest of $5,049.94, which continues to accrue at the annual rate of JP Bank's prime rate plus .50%, and late fees and costs of $1,935.25. He further asserts that JP Bank has incurred attorneys' fees and legal expenses to enforce the terms of the Credit Account Agreement.

On a motion for summary judgment, the movant must make a prima facie showing, by tendering evidentiary proof in admissible form, of its entitlement to judgment as a matter of law. After the movant has made this prima facie showing, the burden shifts to the opposing party to demonstrate the existence of a genuine material triable issue of fact.

In opposition to JP Bank's motion, defendants argue that JP Bank, by its submissions, has failed to make a prima facie showing of entitlement to judgment as a matter of law, and that they also have raised defenses which give rise to material issues of disputed facts, making summary judgment inappropriate.

Defendants assert that Mr. Reed's affidavit may not be admitted into evidence because the certificate of conformity by Ms. Medina, Esq. is defective. Specifically, they maintain that the certificate of conformity failed to state the qualification of C. Hake, and show whether he/she is qualified and authorized to make such certification. They also state that JP Bank has not established that Ms. Medina, Esq. is qualified to make a certificate pursuant to Real Property Law § 239 and that she is fully acquainted with the laws of Arizona. They argue that Mr. Reed's affidavit is, therefore, inadmissible into evidence, and the remaining evidence is insufficient to establish that there is no triable issue of material fact or that JP Bank is entitled to summary judgment as a matter of law.

Defendants' argument is without merit. It is well established that an affidavit which lacks the certificate authenticating the authority of the notary who administered the oath, as required by CPLR 2309 (c), may be considered on a summary judgment motion despite this technical defect since it is not a fatal defect, but a mere defect in form which can be given nunc pro tunc effect once properly acknowledged. Moreover, it has been specifically held that when the person administering the oath for an out-of state affidavit is a notary, the affidavit does not require a certificate authenticating the notary's authority.

Here, as noted above, Mr. Reed's affidavit was, in fact, notarized, and it contains the signature and stamp of the notary public. Furthermore, the certificate of conformity by Ms. Medina, Esq. substantially complies with the requirements of CPLR 2309 (c).

In any event, defendants have not disputed the authority of the notary public or the truthfulness and accuracy of any of the statements made in Mr. Reed's affidavit, nor have they demonstrated any prejudice whatsoever resulting from the purported technical defect alleged by them.

Moreover, inasmuch as the content of the documents submitted, as opposed to their form, is what is critical to the determination of this motion, defendants cannot be permitted to seize upon any technical requirement of CPLR 2309 (c) to create delay and avoid summary judgment.
Defendants also argue that Mr. Reed's affidavit does not demonstrate his personal knowledge of the matters asserted. Defendants state that Mr. Reed does not state that he has such personal knowledge. Defendants also claim that JP Bank should have produced Shirley Herring's affidavit since she signed the Credit Account Agreement. They also state that Mr. Reed's affidavit is deficient because he has not attached or described any of the books and records that he may have reviewed, or rendered any such books and records which he may have reviewed admissible as evidence.

Defendants' argument is rejected. The affidavit of a custodian of the records based on records maintained by a corporation in the ordinary course of business may constitute admissible evidence. Furthermore, it is well settled that a business entity may admit a business record through a person without personal knowledge of the document, its history or its specific contents where that person is sufficiently familiar with the corporate records to aver that the record is what it purports to be and that it came out of the entity's files.

Here, as discussed above, Mr. Reed, is the assistant vice-president of the Portfolio Management Center of JP Bank, and he attests that he has personal knowledge of how JP Bank's business records are kept, and that his affidavit is based upon his review of JP Bank's business records which are maintained in the ordinary course of its business. He, thus, has demonstrated that he is sufficiently familiar with the business records submitted to aver that they are what they purport to be and that they came out of JP Bank's files, thereby supporting the validity and authenticity of these documents.

While defendants rely upon the case of JP Morgan JP Bank Bank, N.A. v Moto-Tex, Inc. in support of their assertion that Mr. Reed's affidavit should be rejected, such reliance is misplaced. Unlike in that case, where the affiant did not even refer to the transaction history or attach any of the records reviewed, Mr. Reed refers to the attached payment history and the attached Business Credit Application, Credit Account Agreement, and Guaranties.

Defendants additionally argue that the Business Credit Application, the Credit Account Agreement, and the Guarantee provision contained within the body of the Credit Account Agreement are not authenticated and cannot be rendered admissible as evidence. Defendants contend that they fail to contain a certificate of acknowledgment that raise a presumption of due execution. Defendants further state that CPLR 3015 (d), which provides that unless specifically denied in the pleadings each signature on a negotiable instrument is admitted, does not allow the admission of the signatures of Ikram and Amal on the Guaranties and also does not establish their signatures as that of the borrower, Wood.

This argument is unavailing. No certificate of acknowledgment is necessary to authenticate Ikram and Amal's signatures or their signatures on behalf of Wood. Neither Ikram or Amal deny signing the Business Credit Application or that they were authorized to execute it on behalf of Wood. Moreover, it has been held that even a naked denial of execution of a guarantee is insufficient to raise an issue of fact.

Therefore, defendants have failed to raise any genuine issue of fact with respect to the authenticity of the documents submitted.

Consequently, since the court thus finds that JP Bank, by its submissions, has made a prima facie showing of its entitlement to judgment as a matter of law, the burden shifted to defendants to raise a triable issue of fact with respect to their alleged defenses. A party opposing a motion for summary judgment must assemble, lay bare, and reveal its proof, and demonstrate the existence of a genuine issue of fact that requires a trial of the action. In doing so, the party must produce evidentiary proof in admissible form sufficient to require a trial of material questions of fact on which it rests its defense or it must demonstrate an acceptable excuse for its failure to meet this requirement. Mere conclusions, expressions of hope or unsubstantiated allegations or assertions are insufficient for this purpose. Bare unsupported denials or averments merely stating conclusions of fact or law are insufficient to defeat a motion for summary judgment.
In attempting to raise a triable issue of fact, Ikram and Amal have submitted their own affidavits, in which they each claim that they, on behalf of Wood, completed the Business Credit Application only for the purpose of determining Wood's eligibility for a loan, but that they never agreed to personally guarantee any corporate loan. They state that they chose the loan in question on the understanding that a personal guarantee was not involved. They further state that the Business Credit Application was typed in fine print, and contained complex terms which they did not fully understand, and that they, therefore, relied on JP Bank to properly administer any resulting loan.

Such a claim by Ikram and Amal, however, is specifically belied by the express terms of the Business Credit Application, which explicitly stated that they individually and personally unconditionally guaranteed the loan to Wood by JP Bank, and that this personal guarantee was an individual personal liability.

While Ikram and Amal claim that the terms of the Business Credit Application were in fine print, this does not provide an excuse for them not to read it prior to signing it and agreeing to be bound by its terms. A defendant cannot invalidate a contract based merely on his or her failure to accurately, sufficiently, or comprehensively read its terms. Thus, any negligence by Ikram and Amal in failing to read the Business Credit Application does not relieve them of the obligations which they undertook in signing the Guaranties, which induced JP Bank to advance the sums loaned

Notably, the Court of Appeals has observed that where individual responsibility is demanded the nearly universal practice is that the officer signs twice- once as an officer and again as an individual. Here, Ikram and Amal executed the Business Credit Application twice, once in their corporate capacity and again in their individual capacities. This is consistent with their intention to be held liable as guarantors in their personal capacities as set forth in the explicit terms of the Business Credit Application. Moreover, as set forth above, and Ikram and Amal's two signatures are contained in different sections of the Business Credit Application, differentiating the corporate and individual capacities in which they signed.

While Ikram and Amal claim that they believed that they were signing the Guaranties contained in the Business Credit Applications as officers of Wood, in PNC Capital Recovery v Mechanical Parking Sys., the court noted that an interpretation that [an individual defendant] signed the Guaranty solely in his capacity as president of the corporation would compel the illogical conclusion that the purpose of the Guaranty was to provide that in case of the corporate defendant's default, the company would guaranty its own indebtedness, rendering the entire Guaranty meaningless. Such reasoning applies equally to the case here.

Moreover, Ikram and Amal's actual intent is irrelevant to the manifestation of their objective intent to enter into the Guaranties, which their signatures evidenced. A profession of contradictory personal intent is insufficient to override a physical manifestation of assent. Thus, Ikram and Amal's claim that they thought they were was signing in their corporate capacity is without effect because their signatures are sufficient manifestation of their assent to the provisions of the Guaranties. Ikram and Amal's assertion that they did not intend to personally guarantee the loan to Wood contradicts the explicit provisions of the Guaranties to which they agreed and cannot prevail over such express written agreement. Any other conclusion would countenance the retrospective invalidation of duly-executed agreements, thus undermining the integrity of all contractual agreements.

Upon executing the written Business Credit Application, defendants became conclusively bound by its terms and the terms of the Credit Account Agreement incorporated therein. Where the intention of the parties is fully determinable from the language of the agreement and an agreement is unambiguous, extrinsic evidence is inadmissible to vary its terms.

Defendants also argue that they should not be bound by the Credit Account Agreement because when they completed the Business Credit Application, it did not contain all of the terms as expected by them, and that after its submission, JP Bank supplemented it with the terms set forth within the Credit Account Agreement which was not signed by them. They point out that the Credit Account Agreement is only signed on behalf of JP Bank by the Shirley Herring, in her capacity as a first vice-president.

Defendants' argument must be rejected since the Business Credit Application expressly provided that use of the proceeds of the loan constituted full acceptance of the terms specified in the Credit Account Agreement which they would receive, and it is undisputed that Wood used the proceeds of the loan pursuant to the Credit Account Agreement for nearly five years prior to its default. Thus, the fact that the Credit Account Agreement does not contain defendants' signatures is of no moment since the Business Credit Application, which expressly incorporated and assented to the terms of the Credit Account Agreement, does contain their signatures.
Ikram and Amal further assert that they never received a letter from JP Bank notifying them in their alleged capacity as guarantors of any alleged defaults and that it would be accelerating the loan. They argue that they did not have a meaningful opportunity to cure Wood's default. This argument is unavailing. As discussed above, Ikram and Amal, in the Business Credit Application, specifically agreed that upon Wood's breach of any terms of the Credit Account Agreement, all obligations would become immediately due without notice or demand by JP Bank.

Defendants additionally argue that they never agreed that in the event of a default, JP Bank could accelerate the maturity of the loan. They assert that this was not a term within the Business Credit Application, and that even if this term was in the Credit Account Agreement, they never signed the Credit Account Agreement and were not bound by it.

This argument is rejected. As set forth above, paragraph 7 of the Credit Account Agreement specifically gave JP Bank the right to accelerate the loans without notice of acceleration and defendants expressly waived the right to such notice. While defendants claim that this right to accelerate was not contained in the Business Credit Application, as previously noted, the Business Credit Application expressly incorporated and assented to the terms of the Credit Account Agreement, does contain their signatures.

Ikram and Amal also assert that JP Bank extended credit to Wood even though Wood's finances would render it unable to repay the loan. They state that JP Bank was not concerned about Wood's financial ability to repay the loan since it intended to hold them liable as personal guarantors even though their intentions were clear that they did not desire to be guarantors. They contend that JP Bank knew or should have known that Wood was not financially sound. They argue that under these circumstances, Wood had an obligation not to extend the credit, and by extending such credit, it breached this obligation.

This argument is unavailing. Wood applied for and accepted the benefits of the loan by JP Bank for nearly five years. A challenge by defendants of their own creditworthiness is thus an improper basis for denial of JP Bank's motion for summary judgment.

Thus, defendants, in response to JP Bank's motion, have submitted no evidence to dispute their entry into the Credit Account Agreement and the Guaranties, the validity of the documents submitted, the amount of the debt owed, and their failure to make payment of the amount claimed to be due. Facts appearing in the movant's papers which the opposing party does not controvert, may be deemed to be admitted. No admissible competent evidence is submitted by defendants indicating that the allegations set forth in the verified complaint and Mr. Reed's affidavit are incorrect.

Therefore, the court concludes that defendants have failed to raise any triable issue of fact refuting JP Bank's prima facie showing of Wood's default under the Credit Account Agreement and Ikram and Amal's obligation to perform pursuant to the Guaranties. Defendants have completely failed to come forward with a single competent or admissible fact to support their conclusory denial that they are in default of the line of credit extended to JP Bank by Wood. Furthermore, while defendants' answer alleges 22 affirmative defenses, defendant, in their opposition papers, do not attempt to support any of these alleged defenses other than the defenses discussed above, which the court has found to be completely lacking in merit.
Defendants do not dispute that Wood has defaulted under the terms of the Credit Account Agreement, which renders it liable to JP Bank for all amount due thereunder. In addition, where a creditor seeks summary judgment upon a written guaranty, the creditor need prove no more than an absolute and unconditional guaranty, the underlying debt, and the guarantor's failure to perform under the guarantee. Here, the Guaranties are unconditional and explicit in their terms providing that Ikram and Amal are absolutely liable for the full performance of all monetary obligations incurred by Wood.

Thus, JP Bank is entitled to recover as against Wood, as the obligor, and Ikram and Amal, as guarantors, the amount of $249,770, plus accrued interest, late fees in the amount of $1,935.25, and its reasonable attorneys' fees and expenses pursuant to paragraph 3 of the Credit Account Agreement. Summary judgment in JP Bank's favor is, therefore, mandated.

The court notes that defendants also contend that JP Bank's motion for summary judgment is premature because discovery is necessary to determine what financial documentation JP Bank demanded to determine whether to extend the loan and what JP Bank's process was in monitoring and administering the loan. Defendants claim that discovery is also necessary to determine which books and records Mr. Reed may have reviewed and to determine which loan terms were agreed upon by the parties upon the execution of the Business Credit Application. They state that documents, such as statements, payment history, and recorded conversations should be produced by JP Bank. There is no claim, however, that JP Bank's records are inaccurate or that defendants have made payments that are not accounted for.

CPLR 3212 (f) provides that if it appears from affidavits submitted in opposition to the motion for summary judgment that facts essential to justify opposition may exist but cannot be stated, the court may deny the motion or may order a continuance to permit affidavits to be obtained or disclosure to be had and may make such other order as may be just. However, mere hope and speculation that additional discovery might uncover evidence sufficient to raise a triable issue of fact is not sufficient to warrant denial of a motion for summary judgment. The granting of a summary judgment motion should not be postponed to allow for discovery where the proponent of the additional discovery has failed to demonstrate that the discovery sought would produce relevant evidence.

A grant of summary judgment cannot be avoided by a claimed need for discovery unless some evidentiary basis is offered to suggest that discovery may lead to relevant evidence. A party's mere hope that further discovery will reveal the existence of triable issues of fact is insufficient to delay determination on the issue of summary judgment.

Here, defendants have failed to show how any such discovery could provide evidence relevant to any viable defense. Thus, postponement of JP Bank's motion, pending discovery pursuant to CPLR 3212 (f) is not warranted.

Finally, defendants argue that JP Bank failed to serve them with the Request for Judicial Intervention along with its motion and that this warrants denial of JP Bank's motion. While pursuant to Uniform Rules for Trial Courts (22 NYCRR) 202.6 (a), a request for judicial intervention must be submitted, in duplicate, on a form authorized by the Chief Administrator of the Courts, with proof of service on the other parties to the action except where the application is ex parte, such a technical defect, which has not prejudiced defendants in any way, does not preclude the granting of JP Bank's motion for summary judgment.

Accordingly, JP Bank's motion for summary judgment in its favor is granted for the principal amount of $249,770 and late fees in the amount of $1,935.25, plus accrued interest and reasonable attorneys' fees and expenses incurred in this litigation, which amounts shall be determined by the court upon further affidavits and documentation, which are to be submitted by JP Bank on notice together with a proposed judgment.

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This Case Involves the Enforcement of a Sister State Divorce Judgement

July 19, 2015,

A New York Probate Lawyer said this case involves the enforcement of a sister-state divorce judgment, with respect to arrears in alimony and support payments, pursuant to the Uniform Enforcement of Foreign Judgments Act (article 54 of the CPLR).

In Junuary 1973, the plaintiff-wife commenced an action for divorce in the Superior Court of the State of Connecticut where she was then living and has continued to reside with her two minor children. While the action was pending, the parties executed a separation agreement on April 16, 1973. The agreement provided, Inter alia, for semimonthly payments to the plaintiff for alimony and child support. Thereafter on August 16, 1973, the plaintiff was granted a judgment of absolute divorce by the Connecticut court, specifically incorporating the terms of the separation agreement, the agreement surviving and not merging into the decree.

From the papers it appears that the defendant resided in Manhattan when the separation agreement was executed, and in Brooklyn when the divorce judgment was granted. There is no question of the defendant appearing in and being represented by counsel in the divorce action. Defendant currently lives in Brooklyn and is a practicing veterinarian. Plaintiff alleges that she is a housewife with part-time employment as a teacher in Stamford, Connecticut where her gross annual pay is $3,000.

The New York Estate Lawyer said the initial task of this court is to determine the applicability of the Uniform Enforcement of Foreign Judgments Act, for if article 54 has been improperly invoked, the plaintiff's motion must be denied in its entirety and the second branch of defendant's cross motion granted.

Nassau County Probate Lawyers said that the court will therefore first consider these two questions: 1. May article 54 be used to enforce the financial provisions of a matrimonial judgment or decree of a sister state? 2. If so, was article 54 properly availed of under the facts in this case, both as to the divorce and as to the contempt judgments?

If the answers to '1' and '2' are both yes, then the court will deal with the multiple relief requested by the plaintiff and the objections raised thereto by the defendant.

1. Article 54 applies to 'foreign judgments' as defined in CPLR 5401. With three exceptions, as hereafter discussed, the term foreign judgment refers to 'Any judgment, decree or order' of a sister state The quoted language appears to be clear and unambiguous and perhaps leads to the conclusion that article 54 is intended to cover All judgments, and that it makes no difference whether the foreign judgment requires the payment of money, or orders or restrains the doing as an act, or declares rights or duties of any other character in law or quoted, in probate, guardianship, receivership or any other type of proceedings. However, it is not necessary for the court to rule whether article 54 applies to All judgments, but within the confines of this case it suffices for this court to find that article 54 may be used to enforce the financial provisions of a sister-state divorce judgment or decree, provided none of the exceptions set forth in CPLR 5401 apply.

A Staten Island Probate Lawyer said the first exception, as stated in the affirmative, is that the sister-state judgment, decree or order must be 'entitled to full faith and credit in this state within the meaning of Article IV, Section 1 of the United States Constitution which mandates that Full Faith and Credit shall be given in each State to the judicial proceedings of every other State. The second and third exceptions exclude judgments 'obtained by default in appearance, or by confession of judgment.

2. (a) There being no question as to the applicability of the second and third exceptions above to plaintiff's Connecticut divorce judgment, the court will focus on whether the alimony and support arrears resulting therefrom are entitled to enforcement in this state under the full faith and credit clause. The law is well settled that a sister-state decree for alimony and support will be accredited full faith and credit as to any arrears if the right to the unpaid installments becomes absolute and 'vested' as they become due, provided no modification of the decree has been made prior to the maturity of the installments. But where the foreign court which rendered the divorce judgment has the discretion to modify outstanding arrears retrospectively, then such arrears are not considered absolute and vested and the decree for alimony and support is therefore not entitled to full faith and credit with respect thereto.

Which of these principles apply in the State of Connecticut? The court is empowered by the provisions of CPLR 4511 to take judicial notice of any statute or law of a sister state and pass upon its validity and effect. The parties have sought to aid the court in this regard by citing authorities in their accompanying affidavits. The defendant relies on Connecticut General Statutes Annotated (C.G.S.A.), section 46--54 and on Connecticut Practice Book Annotated, Superior Court Rules, section 381 in support of its position that alimony awards are subject to modification in Connecticut.

While there is some question as to whether this provision is even applicable here in view of the section's effective date being subsequent to the date of the divorce decree, nevertheless the court concludes that this statute as well as its predecessor which provides: Any order for the payment of alimony from income may, at any time thereafter, be set aside or altered by such court, does not on its face empower the Connecticut courts to modify Accrued unpaid installments of alimony or support. The same conclusion is reached as to section 381 of the Rules for the Superior Court as this section merely gives the court discretion to determine whether a modification of future payments should be ordered prior to the defendant's payment of any arrears.

The statutes being of no assistance, the court must turn to Connecticut case law. The plaintiff cites but one Connecticut decision--and research has failed to reveal any others--DeGolyer v. DeGolyer which held at page 342 that: 'Under the law of New York, As under our own law, a decree providing for periodic alimony payments is subject to modification as to future payments. Past due payments, on the other hand constitute vested property rights not subject to modification, and it is only such payments which are enforceable in another jurisdiction. While the reference to New York law is erroneous as to arrears, this court, in the absence of any authority to the contrary, accepts the case as expressing the law of the State of Connecticut. It is so cited in the Annotations following C.G.S.A., section 46--21 and was relied upon in the New York case, Rosmini v. Rosmini.

Consequently, the court holds that the plaintiff's rights to the unpaid installments of alimony and support become vested as they become due and a Fortiori that the Connecticut divorce judgment must be given full faith and credit as to any arrears. Accordingly, the court finds that the Connecticut divorce decree meets the definition of a 'foreign judgment' entitled to be filed in this state pursuant to article 54. There being no procedural objections by defendant as to the filing, and the court being presumptively satisfied that the requirements of CPLR 5402(a), 5403 and 5405 have been met, the Connecticut divorce decree has been validly filed and the court will thereby regard it and enforce it as though it were a judgment of this court (CPLR 5402(b)).
(b) The court is unable to reach the same conclusion with respect to the Connecticut contempt judgment. Defendant claims that this judgment cannot be registered pursuant to article 54 as it was obtained by defendant's 'default in appearance.

Although the plaintiff, in her affidavit accompanying the filing, stated perfunctorily that the judgment was not so obtained, the defendant has established to the satisfaction of the court that he did not appear in the contempt proceeding, to wit, he did not serve an answer or a notice of appearance. The allegation that he may have had notice of the proceeding is of no import if in fact the defendant did not 'appear.'

Thus, unlike the divorce decree, the Connecticut contempt order does not constitute a foreign judgment subject to enforcement under article 54 and plaintiff's attempt to file this judgment in New York pursuant to CPLR 5402 is invalid.

3. Having concluded that the Connecticut divorce judgment was properly filed under article 54, the court will new examine the relief requested by the plaintiff.

A. Section 244 of the Domestic Relations Law provides that where the husband in an action for divorce, etc., makes default in paying any sum of money as required by the judgment or order directing the payment thereof, the court, in its discretion may make an order directing the entry of judgment in the amount of such arrears. Plaintiff seeks this relief with respect to the $3,165 in alimony and support arrears owing by defendant for the period November 1, 1975 through January 16, 1976.

Section 244 is deemed the exclusive remedy for the entry of such a judgment and that section require only an application to the court and not an independent action as suggested by the defendant. Since the Connecticut divorce judgment is now to be regarded as a domestic judgment, plaintiff has properly applied for this relief.

There being no other defense or objections raised by the defendant, the court grants this part of plaintiff's motion in the full amount requested of $3,165.

B. Plaintiff also seeks entry of judgment as to arrears in the sum of $3,493 covering the period July 16, 1975 through October 16, 1975, and as to the $350 counsel fees awarded by the Connecticut court in the contempt judgment. Since plaintiff bases this relief solely on the filing of the Connecticut contempt judgment pursuant to article 54, which filing this court has already held invalid, the court must now decide whether to dismiss this branch of plaintiff's motion pursuant to defendant's cross motion or grant the relief on some other ground.

The court is not disposed to deny plaintiff this relief, inasmuch as the fact and the amount of these arrears are not in dispute and the underlying divorce judgment has been validly filed in accordance with the provisions of the Uniform Enforcement of Foreign Judgments Act. If the plaintiff's affidavit accompanying this filing had made reference to the unpaid amount of $3,493, in addition to the $3,165 in arrears already set forth therein, the court would readily have granted entry of judgment as to both sums and the aborted filing of the contempt judgment would have been of no consequence except as to the counsel fees. Should the omission from the affidavit of the $3,493 in arrears be fatal on this motion to plaintiff's request for relief as to same?
Under the circumstances of this case, the court thinks not. The court sees no need of subjecting the parties or the court to the burden and expense of a second proceeding at this time whereunder the plaintiff files a new affidavit, making reference to the already filed contempt judgment and setting forth the arrears of $3,493, and thereafter brings on another petition for entry of judgment as to this amount.

Rather, the court finds that there has been substantial compliance with article 54 as regards the arrears of $3,493. The underlying foreign judgment has been filed, the accompanying affidavit is in proper form except for the amount of the arrears and this minor defect has been cured, in the court's opinion, by virtue of the notice otherwise given to the difendant as to these arrears. Accordingly, the court directs entry of judgment as to an additional $3,493 in arrears, but denies the relief as to the $350 counsel fees which award was not granted in the divorce judgment.
C. Plaintiff's next two requests for relief--wage attachment and posting of security--appear to be sought only as to future payments of alimony and support and not as to the arrears. The court observes, however, that both remedies would be available, if plaintiff had so requested them, in enforcing the payment of arrears. The Connecticut divorce decree, having been properly filed pursuant to article 54 of the CPLR, is now to be considered as a domestic judgment for all purposes and may be enforced in the same manner as a domestic judgment.

Wage deduction pursuant to Personal Property Law, Section 49--b and posting of security pursuant to DRL Section 243 are two such enforcement devices. Both remedies are, however, discretionary with the court, whether being imposed as to arrears or as to future payments.
In view of the fact that defendant had been making full payments for over two years, that his reduced one-half payments are of recent origin albeit continuous, that defendant is a professional man with an alleged substantial practice and that this matter is before this or any New York court for the first time, the court, in its discretion, is not convinced that resort to wage deduction or posting of security is now necessary.

Accordingly, the court denies these branches of plaintiff's motion, conditioned, however, upon (1) immediate resumption by defendant of full payments of alimony and support and (2) payment of all arrears involved in this motion, including counsel fees awarded in the Connecticut contempt judgment and which may be awarded on this motion, within sixty (60) days after service of a copy of the order to be settled herein. In the event the defendant fails to honor either or both of these conditions, the plaintiff is granted leave to renew her motion for a wage deduction and the posting of security.

D. For like reasons, and because of the relief granted above as to the arrears, the court in its discretion also denies that branch of the order to show cause seeking to hold the defendant in contempt, but without prejudice to its renewal by the plaintiff in the event the other relief proves unavailing.

None of the constitutional infirmities denying the debtor-husband his due process rights in Darbonne were present in Walker. Quoting from the last paragraph in Walker: Here, the appellant received all of the due process rights which were denied to the plaintiff in Vail. He had been previously imprisoned for violation of the alimony judgment, he was served with proper process bringing on this proceeding and he was represented by counsel who appeared and argued on his behalf. Thus, all of the alleged infirmities in the statutes held unconstitutional in Vail are not here applicable. The court there was dealing with a defaulting, impecunious debtor who did not appear at the statutorily guaranteed hearing, who was without any knowledge of the possible consequences to him and who had no counsel. The facts here are the opposite.'
By way of contrast, the debtor-husband in Darbonne was not represented by counsel and defaulted in appearing in the contempt action so the court was unable to determine from the order to show cause whether he had been previously imprisoned for violation of a prior court order and divorce judgment, or whether he had been served with proper process, or whether he had adequate notice that the proceeding might result in possible imprisonment, or whether he had adequate notice that he could perhaps avoid incarceration by asserting, pursuant to DRL section 246, his financial inability to pay as a defense. Thus in Darbonn, as in many of the contempt proceedings which have come before me, the court was dealing with a defaulting, possibly impecunious debtor who did not appear at the statutorily guaranteed hearing, who was without any knowledge of the possible consequences to him and who had no counsel.
The clear implication of Walker is that a debtor-husband in a Darbonne type of situation would be denied his due process rights in a contempt proceeding pursuant to DRL section 245. Consequently, while this court will no longer regard DRL section 245 as constitutionally invalid, it will, nevertheless, refuse to grant a motion for contempt pursuant thereto where the due process rights of the debtor-husband are found wanting. There must be full compliance with the requirements discussed in Walker and set out in Darbonne and reiterated above.

As an aid to the bar in meeting these requirements, it may be wise to conspicuously include the following statements on the face of the order to show cause to punish the husband for contempt for non-payment of alimony, support, maintenance or counsel fees.

To avoid the possibility that the defendant may evade or delay the consequences of a motion to punish for contempt by his non-appearance, it may also be wise for the petitioner to serve the defendant with a subpoena simultaneously with the order to show cause.

E. The last branch of plaintiff's relief concerns a request for counsel fees in connection with the instant application. Defendant argues that this proceeding is not one of the enumerated instances in DRL section 237 in which counsel fees may be awarded. The court disagrees.
Section 237(b) specifically provides that counsel fees are available upon any application by order to show cause concerning custody, visitation or Maintenance of a child. Clearly, the instant motion to enforce the payment of arrears, relating in part to child support, concerns the 'maintenance of a child.

Furthermore, DRL section 238 provides that in any proceeding pursuant to DRL 244, Inter alia, the court may in its discretion require the husband to pay the wife's expenses in bringing, carrying on or defending such action or proceeding. The Appellate Division, Second Department, cited this section as supporting an award of counsel fees in a proceeding by a wife to enter judgment for alimony arrears which is precisely the case here.

Accordingly, the court grants the plaintiff reasonable counsel fees in the sum of $850.In view of the above disposition of plaintiff's various claims for relief, the defendant's cross-motion for dismissal of this proceeding for lack of jurisdiction over the subject matter is denied. This proceeding is properly before the court pursuant to article 54 of the CPLR.

Dealing with a probate of a last will and testament is a difficult task for it involves the application of laws, rules and procedure. At Stephen Bilkis and Associates you can be assured of guaranteed help, we render legal advice for free. Our seasoned Kings County Probate Lawyers works hand in hand with Kings County Estate Administration Attorneys to help you the best way possible. Visit our offices in New York Metropolitan for help.

Court Hears Motion by Executrix Requesting Surrogate to Fix Estate Tax

July 18, 2015,

New York Probate Lawyers said this is a motion by the executrix requesting the Surrogate to fix the New York estate tax (Tax Law § 249--w).

The papers allege that the executrix made a motion to fix the tax returnable on March 16, 1972. Although the State Tax Commission (Commission) was duly served, no order fixing the tax has, 2 years and 9 months later, been submitted to the Surrogate. The executrix requests the Surrogate to act in his judicial, rather than administrative capacity, and to fix the tax (Tax Law § 249--w).

A New York Estate Lawyer said the Commission has appeared but has made no response, formal or informal, to the relief requested by the taxpayer. For the nature of the Commission's objections, the Court must rely on the information imparted to it by the moving papers. It is there stated that the taxpayer was informed by the Commission that its decision in this and other cases is awaiting determination of pending appeals on related issues.

A Westchester Count Probate Lawyer said this Court is sympathetic with the Commission's desire to protect state revenues. However, none of the case in which appeals are pending are relevant to the issue in this case.

This tax problem, like so many in other areas of the law, is created by a joint will. The Commission, depending on the outcome of some pending appeals, purposes to deny to the taxpayer a marital deduction of $60,800 on the ground that under the terms of the will the interest passing to the surviving spouse is a terminable interest. In simple terms, the Commission contends that although the disposition to Mrs. Tatkow, the surviving spouse, is of all property absolutely and forever, an interest which concededly would be entitled to the marital deduction, a later disposition passes such property contractually and irrevocably on Mrs. Tatkow's death to the couple's children. Since the children will possess or enjoy such interest in property upon Mrs. Tatkow's death, it is contended by the Commission that the interest passing to her from the decedent, Mr. Tatkow, is terminable.

To establish its contention that Mr. Tatkow's will contractually and irrevocably disposes of the same interest passing absolutely to Mrs. Tatkow to third party beneficiaries, the Commission relies on a few decisions of our Appellate Courts construing joint wills on issues which have no relation to the availability of the marital deduction, and where equitable rather than legal principles control the conclusion. This same mistake is evident elsewhere.

Preliminarily we mention briefly the pending appeals referred to in the moving papers. It is observed with regard to the appeals in Matter of Tricarico and Matter of Kahn that both Surrogate Laurino and this Court agreed with the Commission that the wills there in issue were contractual in nature. We both allowed the marital deduction on alternative grounds not relevant to the issue in this proceeding. In the third case this Court did find the will to be non-contractual. However, it is axiomatic that no two wills are alike: the will here under consideration is distinguishable from the Gold will. And, parenthetically, it is observed that even when there are similarities in the dispositive language employed, extrinsic circumstances surrounding execution of a joint will are as often determinative as the provisions of the will itself. Otherwise it would be impossible to reconcile many of our high court decisions. The point made is that nothing in the pending appeals will be dispositive of the issue raised in this proceeding.

Because the tax issue raised by the Commission has been raised in other cases, some general principles are mentioned.

As observed, the I.R.S. has allowed the marital deduction tothe taxpayer. Indeed where there is a federal disallowance, the issue is invariably determined administratively or judicially under Federal jurisdiction. It is only when there has been a final federal determination in favor of the taxpayer that a State judicial determination may be required. However, our Tax Law, section 961(a)(3) provides that a final federal determination determines the same issue for purposes of the tax under this article unless such final federal determination is shown by a preponderance of the evidence to be erroneous.

When the federal tax authorities have allowed a deduction, the statute places the burden of proof and the burden of producing evidence on the Commission. As this Court observed in Matter of Kahn Supra the Surrogate is often required to rule for the taxpayer when in a first instance submission it might very well rule for the Commission. This was a consequence of the enactment of section 961 recognized by the Commission yet recommended as desirable to assure conformity with federal law in the estate tax area where conformity was deemed essential. It is pointless after a final federal determination for the Commission to rest its contention on the provisions of a will such as is in issue in this case without offering extrinsic evidence to establish the federal determination to be erroneous.

The I.R.S. very properly regards the marital deduction as merely a postponement of the tax. The general policy, as expressed by Congress, is to allow the deduction in the estate of the first spouse to die when the same interest in property, if unconsumed, will be taxable in the estate of the surviving spouse. Thus if the interest is in trust or legal life estate with remainder over to designated remaindermen, the marital deduction will be disallowed because the interest in property will escape taxation in the estate of the surviving spouse. Where, however, as in the instant case, the interest in property passing to the surviving spouse is of all property absolutely and forever, to deny the marital deduction in the estate of the first to die will result in double taxation for inevitably the same interest will be taxed in the estate of the surviving spouse.
Congress has also expressed its concern that the marital deduction will not be lost to a taxpayer because of inept will draftsmanship. The marital deduction statute makes provision for disclaimers by third party beneficiaries when a disposition over to such beneficiaries upon the death of the surviving spouse, places the availability of the marital deduction in question.
With respect, it is observed that the Commission has failed to consider a basic distinction between a tax issue and other issues arising from joint wills. Tax issues are rare--indeed none in this State appears to have reached an Appellate Court. Other issues recur with greater frequency and many--some 40 odd--have been decided by our Appellate Courts. The Commission seeks to apply the legal principles applicable to the latter class of cases, to a tax issue.

A tax issue, one almost invariably involving the availability of the marital deduction, can arise only in the estate of the First of the joint will makers to die.

Other issues in joint will cases, those which recur frequently, almost invariably arise in the estate of the Last survivor of the joint will makers to die. And, these will arise only if and when the survivor has in his lifetime, made a new and different will contrary to a binding contract between the spouses. A few decisions consider also the right of the survivor to make inter vivos gifts contrary to the agreement. In determining in such joint will cases whether a survivor is contractually and irrevocably bound with respect to the gift over to third party beneficiaries, the Courts have applied equitable principles not at all applicable to tax issues.

A first equitable principle is that the survivor having made a contract with the first to die not to revoke the joint will, And having gained the benefit of such a contract, may not contrary to such an agreement, divert the property to others than the intended third party beneficiaries. The Courts must therefore determine in the first instance whether or not the spouses are contractually bound Inter se. However, in a tax issue, it does not matter in the least whether the spouses, as between themselves, are contractually bound or not contractually bound. Whether the interest in property passes to the survivor voluntarily or pursuant to a contract, the estate of the first to die is entitled to the marital deduction.

A second principle applied is to determine whether the survivor has breached the contract by failing to perform. The Courts search the provisions of the will to determine whether the survivor was contractually bound to leave the property to the third party beneficiaries--and if found to be so, will compel his executors to perform. A decision whether to specifically enforce the contract turns on the existence of an intention of the joint will makers at the time of execution to contractually bind the survivor. However, in a tax issue, there is no need to search for the intention of the joint will makers. It may be presumed that when the spouses leave all property to the survivor absolutely and forever they do intent to obtain the benefit of the marital deduction. Nor do the third party beneficiaries ever contest the right of the estate of the first to die to obtain the benefit of the marital deduction--there is no decision on record where this has been done.
The point is that in a tax case, where the issue is the availability of the marital deduction to the estate of the first to die, there has been no breach of a contract, no unjust enrichment, no division of assets and no 'mockery of justice' to require the intervention of a Court of equity or the application of equitable principles.

The distinction here made, while not articulated, is evident from the few cases which have considered the marital deduction problem arising from joint wills.

That such distinction exists may reasonably be inferred from the decisions which hold that a tax decision allowing the marital deduction would not be Res judicata in any subsequent proceeding by the third party beneficiaries to compel performance of the contract by the executors of the last of the spouses to die.

Some practical considerations are mentioned. Whenever articulated to their draftsmen, the reasons most often expressed by the spouses for making a joint will, is to save the survivor the trouble and expense of making a new will.

No doubt, at least at the time of execution, they have the then intention of leaving to the survivor of them their individually owned property. Often this will be expressed by the use of the words agree or agreement. Whether they intend the joint will to be irrevocable inter se depends on whether the terms used represent their actual intention or merely the draftsman's mannerisms. But as discussed, when the issue is the availability of the marital deduction it does not matter in the least whether the spouses intended that they would be contractually bound Inter se or not so bound.

When the joint will contains also a further disposition over to third party beneficiaries, there is also little question but that at the time of execution they intend that their property upon the death of the survivor shall pass to these intended beneficiaries.

Whether or not they also intend irrevocably to bind the survivor to the ultimate disposition over is rarely expressed in explicit terms in the will itself although occasionally it is so expressed by separate written agreement outside the will.

In those cases where the third party beneficiaries seek the intervention of a Court of equity to compel the executor of the survivor to perform the contract, the issues for the Court are: Did the joint makers intend that the disposition over should be contractually and irrevocably binding upon the survivor? Or were the joint makers merely expressing their present, and therefore revocable, intention ultimately to pass their property to the objects of their mutual concern and bounty?
A will is by nature ambulatory and to remain so must of necessity be revocable. Social events such as death or marriages or economic changes in the circumstances of the survivor or the intended third party beneficiaries will often require changes in the will. As the decisions, discussed Infra, hold, the presumption is that revocability was intended unless irrevocability is clearly and convincingly expressed in unambiguous terms.

Suffolk County Probate Lawyers said we put aside the distinction discussed between tax cases and those in which the equitable intervention of the court is sought by the beneficiaries to enforce a contract. Apart from the provision of paragraph Fourth which cuts down the absolute interest given to the survivor under paragraph Third, the only evidence of an enforcible contract is in the provision of the exordium expressing an intention to make an agreement for the distribution of our property after the death of either of us and After the death of our survivor.

The quality of proof required to establish a contract enforcible in equity is discussed in: As a will an instrument is revocable at pleasure, but as a contract, if supported by adequate consideration, it is enforcible in equity. The evidence required to show a contract by one deceased, to dispose of his property in a certain manner after his death, must be clear and convincing, or it will not be regarded as sufficient. The agreement depended upon for the award of the relief demanded must be clearly and definitely established by full and satisfactory proof. To attribute to a will the quality of irrevocability demands the most indisputable evidence of the agreement, which is relied upon to change its ambulatory nature, and that presumptions will not, and should not, take the place of proof.

In cases, other than above cited, the courts have determined that the quality of proof viz. clear, convincing, indisputable, to establish that irrevocability was intended was lacking.
To put it another way, there is simply no decision on record in this State, in which a court has specifically enforced a disposition over to third party beneficiaries in a joint will, where the disposition between the joint makers was in terms of all property absolutely and forever.

The same general principle is expressed in single will cases in Matter of Ithaca Trust Co.,: A remainder cannot be limited upon an absolute estate in fee. Where a gift is provided by will and such gift is intended to be Absolute, a gift over is repugnant to such absolute gift and void, and the purported gift over must be treated as a mere expression of a wish or desire regarding the distribution of such part of the gift as may remain undisposed of at the death of the donee.

As discussed, none of these decisions upon which the Commission relies are at all applicable to a tax issue.

The Court determines: (1) That the taxpayer is entitled to the marital deduction, the Commission having failed by a preponderance of evidence to establish that the final federal determination is erroneous. (2) That the taxpayer is entitled to the marital deduction since the interest passing to the surviving spouse is absolute and not terminable. The proof before the Court does not establish either an express or implied promise between the spouses to make their joint will irrevocable. 3) The taxpayer would be entitled to the marital deduction, even if the disposition to the surviving spouse was terminable, under the exception to the terminable interest rule since the surviving spouse receives under the joint will a beneficial power to consume and dispose of the interest in property received without restriction of any kind. The fact that the taxpayer is contractually bound under the terms of a will to leave whatever remains to third party beneficiaries does not disqualify the interest received by him from being allowed the marital deduction.

An order has been signed fixing the New York net estate tax at $584.61 without interest or penalties since the delay in payment is the fault of the Commission.

If you have any problems regarding estate tax, contact Stephen Bilkis and Associates. Our experts Kings County Estate Lawyer in coordination with Kings County Estate Administration Attorney will help you resolve issues regarding estates left by the decedent.

Courts Discuss Notice of Pendency

July 17, 2015,

New York Probate Lawyers said that upon the foregoing papers, nonparty Geneva Alston, Administrator of the Estate of Mattie Dickens, moves by way of order to show cause for an order 1) cancelling the notice of pendency filed against the subject property on May 19, 2008 by plaintiff Citimortgage, Inc, successor in interest by merger to ABN AMRO Mortgage Group, Inc. and 2) permanently barring as a lien and discharging of record a certain mortgage on the property dated August 22, 2007 given to plaintiff's predecessor-in-interest by defendant TM, notwithstanding a recorded satisfaction of same dated December 4, 2007.

New York Estate Lawyers said Hattie Dickens was the owner of the subject property located at 748 Decatur Street in Brooklyn, having taken sole title as tenant by the entirety following the death of her husband, Pearlie Dickens. On February 9, 2006, Mattie Dickens died. The following day, TM executed a deed whereby she purportedly conveyed, as the executor of the Estate of Mattie Dickens, title to the property to herself as grantee. On July 10, 2006, TM executed a mortgage on the property in favor of Fremont Investment & Loan (Fremont) to secure a loan in the amount of $250,000.00. On August 22, 2007, TM executed a mortgage on the property in favor of plaintiff's predecessor, ABN AMRO Mortgage Group, Inc. to secure a loan in the amount of $340,000.00. According to the settlement statement for the August 22, 2007 mortgage transaction, proceeds totaling $251,237.66 were used to pay off the prior Fremont mortgage. On September 6, 2007, Mortgage Electronic Registration Systems, as nominee for Fremont, issued a satisfaction of the prior $250,000.00 mortgage. The satisfaction of the Fremont mortgage was recorded on September 17, 2007.

Nassau County Probate Lawyers said that on December 4, 2007, plaintiff issued a satisfaction of its $340,000.00 mortgage, apparently in error. The satisfaction of plaintiff's mortgage was recorded on December 11, 2007. On May 19, 2008, plaintiff filed a notice of pendency on the subject property and commenced the instant action pursuant to Article 15 of the Real Property Actions and Proceedings Law (RPAPL) to vacate the December 4, 2007 satisfaction of mortgage and to restore its mortgage lien to its priority position nunc pro tunc.
On September 8, 2008, Alston commenced an action against TM pursuant to RPAPL article 15 to vacate and discharge of record the February 10, 2006 deed purportedly conveying title to TM. In her complaint, Alston alleged that she is the sister and next of kin of Mattie Dickens, that her interest in the property accrued upon the death of Mattie Dickens and that no will of Mattie Dickens has been probated in Kings County or elsewhere. Alston alleged that in light of the foregoing, TM had no power to convey the property as executor of Mattie Dickens' estate and the February 10, 2006 deed should therefore be nullified and discharged of record. Despite the fact that it had previously filed a notice of pendency against the property, plaintiff was not named as a defendant in Alston's action. On November 14, 2008, TM filed an answer to Alston's complaint which contained general denials and no affirmative defenses. By judgment dated April 7, 2009, Alston was granted summary judgment on her complaint, the February 10, 2006 deed to TM was adjudged to be null and void, and the City Register was directed, upon presentation of a certified copy of the judgment, to cancel and discharge of record the February 10, 2006 deed.
That part of Alston's motion for cancellation of the notice of pendency filed by plaintiff in this action is denied. Under CPLR 6501, a notice of pendency may be filed where "the judgment demanded would affect the title to, or the possession, use or enjoyment of, real property, except in a summary proceeding brought to recover the possession of real property. When the court entertains a motion to cancel a notice of pendency in its inherent power to analyze whether the pleading complies with CPLR 6501, it neither assesses the likelihood of success on the merits nor considers material beyond the pleading itself; the court's analysis is to be limited to the pleading's face. Generally, a lien affecting real estate, satisfied through mistake, may be restored to its original status and priority as a lien, provided that no one innocently relied upon the discharge and either purchased the property or made a loan thereon in reliance upon the validity of that satisfaction. In this matter, the ultimate relief demanded by plaintiff, to wit, the cancellation of the satisfaction and the resuscitation of its mortgage lien as of record, clearly would affect the title to the subject property. Indeed, absent the filing of a notice of pendency, plaintiff would run the risk of losing its potential mortgage lien to a bona fide purchaser. It was therefore proper for plaintiff to file the notice of pendency in this matter.

Under CPLR 6514, a motion by a defendant to cancel a properly filed notice of pendency may be granted under the following circumstances: (a) Mandatory cancellation. The court, upon motion of any person aggrieved and upon such notice as it may require, shall direct any county clerk to cancel a notice of pendency, if service of a summons has not been completed within the time limited by section 6512; or if the action has been settled, discontinued or abated; or if the time to appeal from a final judgment against the plaintiff has expired; or if enforcement of a final judgment against the plaintiff has not been stayed pursuant to section 5519.

(b) Discretionary cancellation. The court, upon motion of any person aggrieved and upon such notice as it may require, may direct any county clerk to cancel a notice of pendency, if the plaintiff has not commenced or prosecuted the action in good faith.

Alston does not demonstrate that any of the above grounds are presently applicable to this matter.

Staten Island Probate Lawyers said that Alston further seeks to bar plaintiff from asserting any mortgage lien against the property based on the April 7, 2009 judgment nullifying the deed to TM. Alston argues, in essence, that since TM was adjudged thereby to have never had a valid interest in the property, she had no power to execute the mortgage in favor of plaintiff's predecessor. However, there is no dispute that Alston commenced her action subsequent to plaintiff's filing of the notice of pendency in this action, yet failed to join plaintiff as a party defendant. Considerations of due process prohibit personally binding a party by the results of an action in which that party has never been afforded an opportunity to be heard. As plaintiff was not named as party in Alston's action, plaintiff is not, as matter of due process, affected by the judgment rendered therein, and any mortgage it may have acquired cannot be voided as a lien against the property solely by reason of the judgment against TM.

There are several issues which, if presented in the Alston litigation, could have led to a finding that the mortgage signed by TM on August 22, 2007 constitutes a valid lien on the subject property. A putative mortgagor must have a mortgageable interest in the property sought to be charged as security (Boyarsky v Froccaro, 125 Misc 2d 352 [1984]). Therefore, any mortgage based on a deed which is forged or made under false pretenses is void ab initio as the purported grantee under the void deed was never vested with a mortgagable interest in the property (First Nat. Bank of Nevada v Williams, 74 AD3d 740 [2010];Filowick v Long, 201 AD2d 893 [1994]). The gravamen of Alston's complaint is that TM had no authority as an executor to issue the February 10, 2006 deed to herself nor did TM have any other interest in the subject property as a relative or heir of Mattie Dickens. However, 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 (Matter of Seviroli, 31 AD3d 452, 454 [2006];DiSanto v Wellcraft Mar. Corp., 149 AD2d 560, 562 [1989], appeal denied 75 NY2d 703 [1990]).

In opposition to Alston's motion, plaintiff submits a copy of a purported last will and testament of Mattie Dickens, dated February 16, 2004, which provides, in part: THIRD: I direct my Executor to pay out of my estate as an expense of administration, without apportionment, all estate, death, transfer, succession, inheritance, legacy and similar taxes by whatever name called, including interest and penalties thereon, which may be assessed or imposed under the laws of any jurisdiction by reason of my death, upon or with respect to any property passing under this my last will and testament.

fourth: All the rest, residue and remainder of my property and estate, real, personal or mixed of whatever kind and nature, wherever the same may be situated or located, of which I may die seized or possessed or to which I may in any way be entitled at the time of my death, I give, devise and bequeath to my granddaughter Tameeka D. TM, residing at 748 Decatur Street, Brooklyn, New York.

Thus, there is a possible issue as to whether TM, despite any impropriety in her issuing an executor's deed to herself, nonetheless acquired a mortgageable interest in the property as the testamentary beneficiary following the death of Mattie Dickens.

Moreover, there is no dispute that the funds secured by plaintiff's mortgage were used to satisfy the prior Fremont mortgage in full. As it appears from the records of the City Register, the subject property was encumbered by a $40,000.00 mortgage in favor of Elsie B. Reznick at the time of Mattie Dickens' death. This mortgage was satisfied as evidenced by satisfaction of mortgage dated July 15, 2006 and recorded September 12, 2006. According to the HUD-1 settlement statement generated for the Fremont mortgage transaction, the sum of $112,597.00 from the Fremont loan was disbursed to Bruce S. Reznick, P.C. The satisfaction of mortgage dated July 15, 2006 was issued by Merle L. Rickles and Bruce S. Reznick as the sole heirs at law of Elsie B. Reznick. Thus, an additional question exists as to whether, notwithstanding any infirmities in the title of TM, plaintiff's lien may be equitably subrogated to the lien of Elsie B. Reznick to the extent of the amount of funds from the Fremont loan which were used to satisfy and discharge her mortgage (Surace v Stewart, 58 AD3d 715 [2009];LaSalle Bank Nat. Assn. v Ally, 39 AD3d 597 [2007]).

Accordingly, that part of Alston's motion for an order discharging, cancelling or barring the assertion of any mortgage lien in favor of plaintiff is denied.

For legal concerns on estate left by the decedent, contact Stephen Bilkis and Associates. Our Kings County Estate Attorney works hand in hand with Kings County Probate Lawyer who are experts and experienced in the field estate laws and probate proceedings. Visit our offices located around New York Metropolitan for free legal consultation.

Probate Court Discusses Recent Bequests of Stock

July 15, 2015,

New York Probate Lawyers said this is the first New York decision to consider the effect of the recent AT & T divestiture on a bequest of AT & T stock. This is a proceeding brought by GB, co-administratrix c.t.a., for a construction of article "SECOND" of the testatrix's last will and testament. The testatrix died on September 13, 1985 at the approximate age of 89. The last will and testament of the testatrix, dated February 6, 1982 and a codicil thereto, dated September 27, 1984, were admitted to probate by this court on December 2, 1986. Letters of administration c.t.a. were issued to the petitioner and LP, the respondent.

Under the aforementioned codicil, the testatrix deleted CD as a residuary legatee, she having died, and in her place named LP, the respondent who was a friend of the testatrix. This replacement was the only change made, and in all other respects, the will was approved, ratified and confirmed.

New York Estate Lawyers said the value of the testatrix's gross estate is approximately $600,000 comprised primarily of stocks, valued at approximately $350,000.00, a house and property, valued between $175,000 to $225,000, jewelry and miscellaneous items, valued at approximately $9,500.00 and two bank accounts, in the amount of approximately $15,000. The testatrix's closest relatives are four first cousins, once removed, of which only one receives a bequest under the will.

The need for a construction arises as a result of the reorganization of AT & T, which occurred between the date of the execution of the will, February 6, 1982, and the date of the testatrix's death, September 13, 1985.

A Westchester County Probate Lawyer said until 1982, AT & T had a monopoly over the U.S. telecommunications industry, providing both local and long distance telephone service and severely curtailing competition in this industry. As a result, the U.S. Government instituted two antitrust actions against AT & T and Western Electric Co. Inc., requesting, amongst other relief, the divestiture from AT & T of its holdings in twenty-two operating companies, i.e. subsidiaries, and thereby stripping AT & T of its local telephone functions. As of 1980 AT & T owned all of the outstanding stock of the operating companies, with minor exceptions. Under the terms of a judicially approved consent decree, and a judicially implemented plan of reorganization incorporated thereto, AT & T agreed to combine its twenty-two operating companies into seven regional holding companies (hereinafter referred to as RHCs), and AT & T was to divest itself of its holdings therein. Under the terms of the plan of reorganization, AT & T would transfer to each RHC, in exchange for the latter's voting stock, the stock of the appropriate operating company and other assets. In turn, AT & T would distribute to its stockholders, one share of each of the seven RHC's for every ten shares of AT & T stock owned by AT & T stockholders. Fractional shares would not be issued but would be aggregated and sold and the cash proceeds distributed to the stockholders. The divestiture was effective as of January 1, 1984, and according to the petitioner, shareholders were issued stock certificates for the seven RHCs on February 15, 1984.

Suffolk County Probate Lawyers said as previously mentioned, the testatrix owned 2,262 shares of AT & T stock at the time of her death, which had a date of death value of $47,366.00. Further, at the time of her death, the testatrix owned 226 shares of stock in six of the RHCs and 678 shares in Bell South, an RHC which split three for one on May 7, 1984. The total date of death value of the shares held in the seven RHCs was $115,697.00.

On the date the will was executed, February 5, 1982, AT & T stock was listed on the NYSE at 57 3/4. On the date the codicil was executed, September 27, 1984, AT & T was listed at 20, and the shares in the seven RHCs ranged between 63 3/8 to 77 1/8, with the exception of Bell South, listed at 32 3/8 because of the three-for-one split. On the date of death, September 13, 1985, AT & T was listed at 20 7/8. Therefore, as a result of the divestiture, the value of AT & T stock was significantly diminished.

The issue before the court is whether the preresiduary legatees of the AT & T shares under Article "SECOND" are entitled to a proportionate interest in the additional shares in the RHCs or whether those additional shares pass under the residuary clause. The petitioner, who receives 350 shares of AT & T stock, in addition to a 1/5 share in the residue, argues that the legatees under Article SECOND are entitled to a proportionate interest in the shares of the seven RHCs in light of the diminished value of the AT & T stock between the date of execution and the date of death. The respondent, a residuary legatee, contends that the language of Article SECOND, wherein the decedent disposed of her AT & T stock owned by her "at the time of her death", reveals an intent to limit the disposition to only the AT & T stock owned at the time of her death, and does not include the shares of stock in the RHCs.

As a result of the divestiture and the issuance of additional shares, the subject matter of the stock bequests has become ambiguous. Where a latent ambiguity exists, the general rule is to ascertain the testator's intent. Although the courts uniformly state that intent controls, where a stock bequest is involved, they differ as to the appropriate principles to apply in ascertaining the testator's intent. Specifically, the decisions suggest that the courts have been applying ademption or abatement principles or labels where in strictness there is no ademption or abatement issue present. The problem is exacerbated by another general rule that the utilization of ademption principles has nothing to do with intent, and often works to frustrate the testator's intent. Under ademption principles, the court first defines the bequest as specific or general, and generally, if specific, the bequest is said to have adeemed unless the additional stocks are the result of a mere change in form rather than substance. Where stock splits or stock rights are involved, the courts generally hold that if the bequest is specific, there is no ademption since the additional stocks represent a change in form, not substance. Recognizing that ademption principles often produce a result contrary to the testator's intent, the courts, under the guise of applying these principles, come to result-oriented constructions, based on the testator's intent, and, in effect, disregard these principles. Therefore, this court would be inclined to peremptorily disregard ademption principles and resolve the instant matter by ascertaining the testatrix's intent, if it were not for the fact that the only New York case which has considered the effect of a divestiture on a stock bequest in the context of a will construction proceeding was decided by the Court of Appeals in Matter of Brann, supra, wherein Justice Cardozo resorted to ademption principles where admittedly there was no ademption issue present.

In Matter of Brann, the testatrix bequeathed the 30 shares of stock of the Standard Oil Co. owned by me, to a brother and upon his death to two charities, with the remainder of the estate to a friend. Three years after execution the brother died and in the same year Standard Oil was judicially compelled to divest itself of its holdings in 39 subsidiary companies. As a consequence of this mandate, Standard Oil opted to distribute its holdings among its stockholders by issuing to them its shares in the subsidiaries. Subsequently, the testatrix executed a codicil wherein she made additional monetary bequests totaling $1700, but in all other respects, the will was ratified and confirmed.

At the time of her death, the testatrix still owned the original shares in Standard Oil but in addition, she owned shares in the 39 subsidiaries which had a date of death value exceeding the value of the shares in the parent company. Justice Cardozo conceded that in strictness there was no ademption issue since the original thirty-shares existed, but determined that the principles of ademption would be useful since the subsidiary shares, while held by the parent company, helped to give the primary shares their value. Under the theory of ademption, only specific bequests adeem, and the test utilized in Brann, the so called identity doctrine, is whether there is a substantial identity between the additional shares and the original shares from which they came. Although a mere change in form rather than substance would not result in ademption, such as where Standard Oil would have reorganized and issued shares in lieu of the original shares, here, the court determined, that to permit these additional shares to pass with the original shares would have constituted a change in substance, so as to result in ademption. Justice Cardozo concluded that the additional shares were nothing more than extraordinary dividends, independent from the original shares, and therefore pass to the residuary legatees.

Despite Justice Cardozo's apparent reliance on ademption principles, a careful reading of the decision reveals that the Justice's conclusion was based on the testatrix's intent as derived from the provisions of the will and codicil, and the circumstances then known to her, prompted by a desire to avoid an inequitable result. The court deemed significant the fact that the value of the original shares had not drastically declined after the divestiture. Moreover, the court concluded that since the testatrix's brother had died, she may have felt that the primary shares would be sufficient for the charities. Further, the monetary bequests added under the codicil would have failed if the additional shares passed to the original stock legatees. Significantly, since the court deemed the additional shares to be independent from the original shares, the court concluded that the testatrix must also have considered them to be separate from the original shares, and, therefore, the failure of the testatrix to mention the additional shares in the codicil evidenced an intent to exclude the shares from the stock bequests. The effect of the court's decision was to benefit the testatrix's friends over two charities.

This court is of the opinion that where there is no ademption issue, as in the instant case, there is no need to rely on the ademption principles referred to in Matter of Brann, supra, where the testator's intent is manifested by the langua of the will itself and the circumstances surrounding the execution of the will and the codicil. Further, upon review of the facts presented, the distinctions with Brann will become evident and significant, rendering Brann inapplicable here. It should be noted that at least one court has expressly determined the Brann substantial identity test to be of doubtful assistance in resolving a matter almost identical to the instant case.

The court, therefore, must determine the testatrix's intent from the language of the will and the circumstances surrounding execution of the will and codicil.

Under the terms of her will, the testatrix bequeathed 1,625 shares of AT & T stock owned by me at the time of my death. The respondent argues that the above quoted language somehow should operate as to limit the bequest to only the shares of AT & T stock. The court determines that the only significance to be placed on that language would be in determining whether the bequest was specific or general, were the court to resort to such labels. As stated in Matter of Volckening, where the court addressed the issue of stock splits in an abatement matter: The theory is that if the disposition is general, testator is expressing his intention as of the date of death; the disposition therefore carries with it only the number of shares specified in the will. On the other hand, if the disposition is specific, testator is expressing his intention as of the date of execution of the will, it therefore carries with it all stock splits occurring thereafter. For the aforementioned reasons and specifically, those stated by Surrogate Sobel in Matter of Kotcher, namely, that these labels are only applicable in ademption cases or where statutorily prescribed, the court holds that this language has no relevance in determining the testatrix's intent.

Of significance, however, is the fact that the bequeathed AT & T stock was valued at 57 3/4 a share on the date of execution, decreasing to 17 3/4 (when issued) on the date of the divestiture, and only 20 7/8 on the date of death. This suggests that AT & T's holdings in the subsidiaries formed an inherent part of the value of the AT & T shares. Further, the stockholders were entitled to the additional shares solely by virtue of their ownership of AT & T stock. The additional shares in the seven RHCs represented AT & T holdings, and the shares were given to AT & T and distributed by AT & T. Cf. duPont v. duPont, supra, 208 A.2d at 512.

Additionally, the IRS and the U.S. Tax Court have ruled that AT & T did not recognize a gain or loss when it acquired the additional shares in the RHCs, nor did the stockholders recognize income, a gain or a loss. Therefore, at least for tax purposes, the additional shares were not treated as extraordinary dividends. Where additional shares combined with the original shares are deemed to be equivalent in value to the original shares alone, the courts determine that the original stock legatee is entitled to the additional shares. Such is the underlying rationale for holding the stock legatee entitled to the benefit of stock splits.

Under the terms of the will, there are 17 stock legatees who share 1,625 shares of AT & T stock and only 5 residuary legatees, who share 617 shares of AT & T stock. It cannot be convincingly argued that the testatrix intended to give these five legatees an additional $115,697.00 worth of stock where they were to receive significantly less AT & T stock than the preresiduary stock legatees. Further, the residuary legatees share a substantial estate exclusive of the AT & T stock and the shares in the RHCs. The court is not confronted with the situation that existed in Matter of Brann, where there was no residuary estate and therefore no funds from which to pay the monetary bequests, had the court found that the additional shares were not to pass under the residuary clause.

The fact that the testatrix executed a codicil subsequent to the issuance of the additional shares does not dictate a contrary result. The only clear purpose of the codicil was to replace a deceased residuary legatee. The testatrix did not add any additional bequests where as in Brann, the testatrix added bequests which could not have been satisfied unless the additional shares were deemed part of the residuary.

The court, therefore, holds that the testatrix intended the seventeen preresiduary legatees of AT & T stock to have a proportionate amount of the shares in the seven Regional Holding Companies.

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Estate Alleges Undue Influence in Will Signing

July 14, 2015,

New York Probate Lawyers said that an RN (Decedent) died on January 22, 2008 survived by a son, EN, a daughter, CS, and six grandchildren. The Decedent's Last Will and Testament, dated June 27, 2000 was admitted to probate, and Letters Testamentary were issued to his two children on March 3, 2008. The Will left each of the Decedent's six grandchildren $25,000.00, and named his two children equal residuary beneficiaries. Due to the Decedent's Alzheimer's disease and advanced dementia that ultimately caused his death, CS was appointed Guardian of the person and property pursuant to Mental Hygiene Law Article 81 in New York State Supreme Court in the Fall of 2007. The Decedent had been a successful business man during his life, operating a sole proprietorship known as RN, Inc. until May 1, 2006. SS was his long time secretary and bookkeeper. Mrs. SS retired from RN, Inc. on June 25, 2005, but continued to assist the Decedent with business and personal affairs.

A New York Estate Lawyer said that on February 26, 2009, the Estate commenced a discovery proceeding against Mrs. SS alleging that she used her relationship as the Decedent's long time companion and secretary to unduly influence a series of pre-death non-probate transfers and business decisions in her favor, contrary to the Decedent's estate plan. On December 18, 2009, counsel for Mrs. SS filed an Answer. The parties thereafter conducted discovery. After a number of court conferences, the parties ultimately failed to reach a settlement, and a hearing pursuant to SCPA 2103 and 2104 was held in May, 2011 relative to Mrs. SS's undue influence upon the Decedent, and the Decedent's capacity to make the non-probate transfers and decisions in dispute.

The disputed transfers occurred between 2005 and 2008, and consisted of the following: loans made to an individual named JT which were assigned to Mrs. SS pursuant to a Memorandum of Understanding dated July 1, 2005; loans to JT which were conditionally assigned to Mrs. SS, CS and EN by Agreement and Memorandum of Understanding dated May 11, 2006; various corporate debts assigned to Mrs. SS commencing May 1, 2006; accounts and an annuity naming Mrs. SS a 1/3 transfer-on-death beneficiary along with the Decedent's two children; a Prudential Whole Life Insurance Policy for which Mrs. SS was made the designated beneficiary as a result of a corporate resolution signed by Mrs. SS as Secretary of the Decedent's corporation on January 7, 2008; corporate checks made payable to cash signed by Mrs. SS; and bank accounts of the Decedent held jointly with Mrs. SS. It is alleged that the value of the disputed transactions had a value of approximately $195,000.00 on the date of the Decedent's death.

Manhattan Probate Lawyers said that throughout the pendency of this proceeding, including the hearing, both Petitioner and Respondent largely dealt with the various disputed transfers as one central dispute. However, different law and burdens of proof apply, and therefore they must be evaluated separately in three groups: (1) the loan and debt assignments, and account beneficiary designation; (2) the life insurance beneficiary designation and corporate checks signed by Mrs. SS; and (3) the joint bank accounts.

New York City Probate Lawyers said that at the hearing, two of the Decedent's physicians testified as to the Decedent's capacity: CD, M.D., and JV, M.D. Dr. CD stated that the Decedent had been diagnosed with Mild Cognitive Impairment, and that he was unable to state with a reasonable degree of medical certainty that the Decedent would have been unable to understand the nature of the transactions in question at the time of his signing of the documents. However, medical records were introduced into evidence that showed that on October 22, 2003, Dr. CD recommended that the Decedent contact an elder care attorney, about dissolving his business and settling his affairs appropriately, based on ongoing complaints of the Decedent regarding his memory issues and confusion.

Dr. JV testified that he had personally witnessed the rapid deterioration of the Decedent's condition. A letter from Dr. JV dated November 9, 2007 was admitted into evidence in which Dr. JV voiced his support for CS's petition for Article 81 guardianship due to the Decedent's incapacity to make financial and medical decisions himself.

A report was also submitted from Dr. RM, the Co-Director of the TAUB Institute of Research on Alzheimer's Disease and the Aging Brain at Columbia University. Dr. RM evaluated the Decedent as part of a 2004 study, and found the Decedent to have trouble handling money, and that his ability to recall information was significantly impaired, and that he had difficult performing even simple calculations.

The Court Evaluator appointed during the Article 81 Guardianship proceeding in 2007, Cynthia Snodgrass, Esq. stated that she could not testify as to the Decedent's capacity prior to December 19, 2007, but when she met with the Decedent on that date, she found him to be incapable of putting together a coherent sentence.

The Decedent's business associate, JT testified that the purpose of the 2005 agreement assigning the payments on existing notes held by the Decedent to Mrs. SS was to augment Mrs. SS's compensation due to a lack of cash flow in the business. Mr. JT also hypothesized that this arrangement also may have been motivated by a desire on the Decedent's part to evade employment taxes. Mr. JT's testimony regarding the 2006 agreement assigning loans to Mrs. SS and the Decedent's children was less direct, but he did state that Mrs. SS was against it. Mr. JT stated that he only noticed the Decedent ever appearing confused after his wife's death in 2005 and after a knee replacement surgery, but did not notice major confusion or the Decedent acting in an unusual way.

SS testified as well. She stated that the Decedent continued to live alone at his home until his final hospitalization on October 16, 2007. She acknowledged that the Decedent's driver's license was revoked in September, 2006, but insisted that he continued to be involved in his business and personal affairs. She testified that she and the Decedent were close, but insisted that she was just his secretary, and that the Decedent had always taken good care of her.

Generally, SCPA 2104 places the burden of proving the estate's right to disputed property upon the estate. It is undisputed that the Decedent was diagnosed with Alzheimer's disease and dementia, and that at some point between 2001 and his death, the Decedent became incapacitated. He first reported concerns of memory loss and confusion in 2001, and ultimately died of complications relating to his advanced dementia in early 2008. However, there is no presumption that a person suffering from Alzheimer's disease and dementia is wholly incompetent. Rather, it must be demonstrated that, because of the affliction, the individual was incompetent at the time of the challenged transaction.
In order for a transaction to be set aside due to a person's mental incompetence, it must be shown that the person's mind was, so affected as to render him wholly and absolutely incompetent to comprehend and understand the nature of the transaction.

When the issue of undue influence based upon a confidential relationship is raised, the initial burden is on the party seeking to invalidate the disputed transaction to make the requisite showing that a confidential relationship existed between the transferor and beneficiary.If a confidential relationship is found to have existed, the burden then shifts to the beneficiary to establish that the transaction was fair and free from undue influence.

Some relationships, such as attorney and client or parent and child, are deemed confidential as a matter of law. Where, as here, the relationship is not confidential as a matter of law, the party seeking to set aside the transfer must prove that a fiduciary relationship existed between the parties, giving one a controlling influence over the conduct and interests of the other. For a relationship to be deemed confidential, the proof must show that the decedent was dependent on the beneficiary of the transfer, and that the beneficiary intruded upon the decedent's freedom of action. A confidential relationship exists when one person is dependent on and subject to the control of the other . Such a relationship exists where one party reasonably relies on the other's superior expertise or knowledge.

While the existence of a confidential relationship increases the possibility that the grantor was unduly influenced by that relationship, much more must still be shown. It must be shown that the beneficiary had motive, an opportunity, and that undue influence was actually exercised. No inference of undue influence may be drawn from the fact that proponents had the opportunity and motive, absent evidence that such influence was actually utilized.

The Court of Appeals has defined undue influence as: influence exercised that amounted to a moral coercion, which restrained independent action and destroyed free agency, or which, by importunity which could not be resisted, constrained the testator to do that which was against his free will and desire, but which he was unable to refuse or too weak to resist. It must not be the promptings of affection; the desire of gratifying the wishes of another; the ties of attachment arising from consanguinity, or the memory of kind acts and friendly offices, but a coercion produced by importunity, or by a silent resistless power which the strong will often exercises over the weak and infirm, and which could not be resisted, so that the motive was tantamount to force or fear.

Mrs. SS was a close friend of the Decedent; the medical records reflecting the Decedent's visits to Dr. JV are replete with mentions of his girl friend, long time friend, secretary, and partner. SS accompanied the Decedent to his appointments and provided him with assistance at home and with remembering his medication. On November 18, 2004, the Decedent confessed to Dr. JV that he was becoming more dependent on another person. On September 30, 2005, the Decedent told his doctor that he had a girlfriend. However, based on the evidence presented, it is the opinion of this Court that Mrs. SS's relationship with the Decedent cannot be deemed confidential as it is defined by case law. The two had worked and spent time together for years, and the Decedent presumably trusted her a great deal. However, there is no evidence that she possessed the requisite level of control and dominion over his will and conduct.

Mrs. SS was the Decedent's long-time employee and partner, and at least in later life, his companion, but there is no indication that the Decedent trusted her above himself with respect to business and financial decisions. To the contrary, he was a successful business man who continued to express confidence in his remaining business dealings to his doctor even while complaining of trouble remembering how to drive to the doctor's office.

Further, even assuming arguendo, that the relationship could be deemed confidential, there is insufficient evidence that undue influence was exercised by Ms. SS at the time of the execution of the disputed transactions. There was no testimony by the physicians or court evaluator as to the Decedent's mental condition at the time any of the disputed transactions took place. As there is no direct proof that the Decedent was not lucid at the time of the transactions, the dual burdens of assuming capacity and against the use of undue influence have not been overcome.

Circumstantial evidence can be used to find that undue influence was exercised. However, there is no such evidence in this case. The Decedent was in a pattern of giving Mrs. SS money, and compensating her in non-traditional ways for her work for the corporation. It is reasonable to assume that he thought of her as something like a business partner, to be included in both the work and the profits of his business. The disputed assignments that the Decedent was involved in do not mark a significant departure in his behavior. Influence arising from gratitude, affection or esteem is not undue influence.

Therefore, the proceeds of the loan and debt assignments and account beneficiary designations challenged by the Estate shall remain in the possession of Mrs. SS. The Court finds that insufficient evidence exists to invalidate these transactions on the basis of capacity or undue influence.

With regard to the joint accounts held by the Decedent and Mrs. SS, it is well settled that the establishment of a joint bank account creates a presumption that the depositors intended to create a joint tenancy with rights of survivorship. This presumption places the burden on the party challenging the title of the survivor to establish fraud, undue influence, or lack of capacity. As specified in Banking Law Section 675, the disputed accounts did provide for a right of survivorship. Therefore, for the reasons discussed above, the Estate's burden with regard to undue influence has not been met, and title to the funds in the joint accounts held by Mrs. SS and the Decedent shall remain with Mrs. SS.

Regarding the actions taken by Mrs. SS alone, the Court must come to a different conclusion. Mrs. SS made no claim and submitted no evidence suggesting that the corporate checks written to cash and signed by Mrs. SS were intended as gifts from the Decedent, and therefore, the issue of the Decedent's capacity to make such gifts is irrelevant. Mrs. SS claims that she cashed these checks and gave the money to the Decedent, as was their customary practice. While this seems feasible, there is absolutely no evidence that this took place. It is unknown to the Court what the purpose or ultimate disposition of the funds negotiated by those checks was, and therefore, the amount must be charged against Mrs. SS.

Similarly, the death benefit proceeds of the Prudential Whole Life Insurance Policy transferred to Mrs. SS by corporate resolution dated January 7, 2008 must be invalidated. The Decedent was in the hospital at the time, and there is no evidence that he was present at the alleged Board of Directors meeting, or involved in the Request for Ownership Change paperwork completed on that day. Further, as the Decedent did take a previous loan from the policy, and pay the proceeds to Mrs. SS in 2001, it can be assumed that he was familiar with the terms of the policy and would have elected to cash out the policy or change the beneficiary or ownership as of that date had he intended to. The Decedent's capacity to gift is not relevant to this transaction, as there is insufficient evidence that the Decedent was involved in the transfer. Mrs. SS did not meet her burden to establish that the Decedent has the requisite donative intent to make a gift of the policy, or that he was involved in its delivery to Mrs. SS.

Therefore, in accordance with the above decision, it is hereby ordered, adjudged and decreed, that SS is directed to deliver to EN and CS, as executors of the Last Will and Testament of RN, the following property: the proceeds of identified checks drawn from the accounts of RN, Inc. made payable to cash, and signed by SS, alleged to be valued at approximately $9,400.00 as of the date of the hearing; and the death benefit proceeds of Prudential Whole Life Insurance Policy Number 74551334, valued at approximately $34,952.57 as of January 31, 2008; it is further ordered, adjudged and decreed that SS, Respondent herein, is the owner and entitled to possession of all other property described in the Petition.
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Law Firm Brings Action for Charging Liens

July 13, 2015,

A New York Probate Lawyer said the law firm of RA and Moss (the RA Firm) and the Law Offices of CA PC (CA) (together, the Firms) seek to determine and enforce charging liens pursuant to section 475 of the Judiciary Law. The liens would secure fees claimed by the Firms for legal services to WK under a retainer agreement dated July 10, 2006 (the 2006 Retainer). The Firms represented WK in a decade-long dispute among several WK family members, involving various real estate holdings and family trusts. The dispute had been punctuated by at least two abortive settlements, the latter one in 2004. On January 3, 2008, however, the WK's internecine battles ended in a global settlement placed on the record in open court and then further memorialized in a written stipulation implemented by a closing on August 27-29, 2008. The liens now claimed by the Firms relate to William's share of the proceeds of that settlement.

Discovery having concluded, the Firms and WK have cross-moved for partial summary judgment. The issues raised on these motions involve the validity of the 2006 Retainer, its allegedly wrongful procurement, and, if it is valid, the meaning of several of its terms and the extent to which William's obligations under it are subject to conditions that have not been satisfied. The Firms acknowledge that the sums to which they are entitled for work resulting in the 2008 settlement cannot be fully determined without a hearing. WK for his part asserts that a hearing is needed to determine the Firms' fees for hourly services in the litigation preceding that settlement.

A New York Estate Lawyer said that in dissension among three generations of WK over the considerable family wealth is at the root of the present proceeding. In the first generation were Harry, who died in March 1983, and his wife Ruth, who died in November 2000. In the second generation were the couple's two children, Robert, who died in October 1996 and Nancy, who is still living.

Harry's will divided his estate between a trust (Harry's Marital Trust) and an outright disposition to Ruth. Ruth in turn placed the assets that she had received outright from Harry's estate, including interests in various real estate entities, into successive grantor trusts. Until 1998, the trusts operated under provisions paralleling the provisions of Harry's Marital Trust, with the remainders evenly divided between the issue of Robert and Nancy.

A Brooklyn Probate Lawyer said Robert left a large estate, including interests in the thirteen closely held companies in which the WK real estate was held. Under Robert's will, probated on November 13, 1996, these interests passed to a marital trust for the lifetime benefit of his widow, Roberta (Robert's Marital Trust). The portion of the remainder that included majority interests in 11 of the closely held companies was to pass to William, with Robert's interests in the two additional family businesses to be divided between Alexandra and Caroline.

A Bronx Probate Lawyer said that WK had a strained relationship with his father and continues to have a strained relationship with Roberta. She, however, serves with Alexandra as co-executor and co-trustee under Robert's will. The intra-family litigation began after Robert's death when WK sued his mother and sister as executors of Robert's estate, asserting, inter alia, claims of ownership to Robert's interests in the family businesses. Those claims went to trial before then Surrogate Preminger and were resolved in a decision rendered in early 2001. Shortly thereafter, the executors petitioned to settle an interim accounting, in which WK filed objections.

Additional issues arose with respect to Ruth's grantor trust, first established in 1983 and then replaced in 1993 (the 1993 Grantor Trust). After Robert died, Ruth began to have more contact with Nancy, from whom she had been estranged for many years. By February 1998, Ruth had moved into Nancy's home in Florida, and two weeks after Ruth's relocation Ruth executed instruments revoking the 1993 Grantor Trust and replacing it with another trust (the 1998 Grantor Trust). The dispositive provisions of the 1998 Grantor Trust differed dramatically from those of the 1983 and 1993 trusts. Rather than benefiting the issue of both of Ruth's children, the 1998 trust instrument instead left one half of the remainder at Ruth's death to Nancy outright and the balance in further trust for Nancy's primary benefit, giving Nancy the right to appoint the principal by her will. The 1998 trust instrument named Nancy and her son David as trustees.

Shortly after the 1998 trust instrument was executed, Nancy and David as fiduciaries sought an accounting by Alexandra as trustee under the 1993 Grantor Trust and an order directing that she turn over the principal of that trust to them as trustees of the 1998 Grantor Trust. Alexandra responded by challenging the validity of the purported revocation and replacement of the 1993 Grantor Trust, maintaining that Ruth had lacked capacity to take such steps and that, in the alternative, she had been unduly influenced to do so.

At or about the same time as the 1998 trust instrument was drafted, Ruth changed her will and also purportedly tried to install Nancy and David as successor trustees of Harry's Marital Trust. After Ruth's death almost three years later, Nancy offered Ruth's will for probate in Florida, over Alexandra's objections.

Various proceedings, involving numerous motions, followed. Thus, after Nancy and David petitioned to compel an accounting for Harry's Marital Trust, Roberta and Alexandra voluntarily accounted for that trust as well as for the 1993 Grantor Trust, in proceedings in which Nancy and David filed objections. The issues in these accountings were referred to the Hon. Alice Daniels to hear and report. Nancy challenged, inter alia, the validity of a 1994 transfer to Robert of Ruth's 55% interest in a property known as Clypeta; questioned the trustees' valuations in relation to the real estate entities; objected to the size of management fees paid by the trustees in connection with the real estate interests held in the trusts; and further objected to the trustees' failure to turn over assets to Nancy, individually, and to her and David as trustees of the 1998 Grantor Trust.

During the hearing before Special Referee Daniels, the fiduciaries of Robert's and Ruth’s respective estates entered into a settlement term sheet dated October 16, 2001, which purported to embody a global settlement of issues regarding those estates, including a Federal RICO action commenced by Nancy in the Federal District Court for the Southern District of New York and the Florida proceeding for probte of Ruth's 1998 will. Eventually, however, the term sheet, expressly conditioned upon court approval, itself became a subject of litigation, Nancy unsuccessfully seeking its approval in this court, in the Florida probate court, and in federal courts in Florida and New York.

In August 2002, Roberta and Alexandra filed an Intermediate Accounting as executors of Robert's estate. WK filed objections in that proceeding, claiming, inter alia, that the fiduciaries had inflated estate income to benefit Roberta individually, leaving his remainder interest so encumbered as to be essentially worthless. In a separate proceeding against Robert's executors, WK also sought to enforce certain rights arising from his 30.98% interest in one of the real estate entities, Whitehouse Estates, Inc., as well as his alleged ownership of other property that the executors claimed were part of Robert's estate.

In November 2003, the issues raised in the executors' Intermediate Accounting, as well as those raised in William's proceeding against Robert's executors, were referred to the Hon. Israel Rubin to hear and report, the most significant of which were (1) whether the 2001 Term Sheet should be approved; (2) the proper characterization and treatment of the challenged inter-company balances; and (3) the ownership of the Clypeta entity. The 2001 Term Sheet had allocated Clypeta to Nancy or to entities under her control, a position that WK vigorously opposed.

Special Referee Rubin took testimony and evidence over twenty-four days from July 2004 through April 2005. His report, which this court confirmed in its entirety, recommended that the 2001 Term Sheet not be approved, that the Clypeta entity be ruled an asset wholly owned by Robert's estate, and that the inter-company balance issues be resolved by an independent accountant.

On December 1, 2004, while the evidence was still being taken by Special Referee Rubin, the parties reached a tentative global settlement. William's share in the 2004 tentative settlement is the basis for the $43 million "Trigger Amount" to which the 2006 Retainer refers. The 2004 tentative settlement, which called for acceleration of William's remainder interest in Robert's Marital Trust, was never consummated. Instead, in the wake of Referee Rubin's confirmed rulings, litigation among the various family members continued. By the spring of 2006, however, WK apparently had decided that his fee arrangements with his lawyers could not also continue.

Summary determination of a claim or defense is appropriate only where the party seeking it makes a prima facie showing of entitlement to such determination as a matter of law. If such showing is made, the burden shifts to the opposing party to produce admissible evidence establishing that a material issue of fact nevertheless remains open, requiring trial.

In addressing the particular claims, defenses, and counterclaim raised here, the court must be cognizant of certain general principles that underlie the attorney-client relationship. Given the fiduciary nature of that relationship, fee agreements between attorney and client are affected by lofty principles different from those applicable to commonplace commercial contracts. Accordingly, as a matter of public policy, courts must carefully scrutinize such fee arrangements. A client must be fully informed of all relevant facts and the basis of the fee charges, especially in contingent fee arrangements. The burden is on the attorneys who drafted the fee agreement to show that it is "fair, reasonable, and fully known and understood by their clients. Moreover, as a general contract principle, where a term of the agreement is ambiguous, that is, reasonably susceptible of more than one interpretation, that term must be construed in favor of the non-drafting client. Where there is no ambiguity, however, the client does not have such an advantage; the instrument must simply be read in accordance with its plain terms. Furthermore, in a dispute between lawyer and client, the latter is not to be perceived as always the former's victim. Indeed, the charging lien itself is the law's device for shielding a lawyer from the possible knavery or overreaching of the client

WK argues that Avedesian's compensation must be limited to quantum meruit in that the 2006 Retainer was with the RAFirm, and that law partnership dissolved by operation of law upon the death of partner Arthur Richenthal, on October 11, 2007. WKpoints out that the Retainer does not contain provisions for its continued effectiveness post-dissolution or for any assignability to another firm. Indeed, WK maintains that, as a personal services contract, the Retainer could not have been made assignable and that it therefore cannot now serve as the basis for CA's claim to a charging lien. Instead, according to William, CA could not purport to represent WK under the 2006 Retainer after the RAFirm dissolved or, at the latest, after February 2008, when CA filed a change of attorneys from the Richtenthal Firm to his own. According to William, in the absence of his own separate retainer, CA has no basis for his claim to a performance fee.

While WKis technically correct as to provisions of partnership law, the enforceability of an attorney retainer, including its transfer to another law firm or entity, does not depend on partnership law. The case of Goldston v Bandwidth Tech. Corp. makes the point. There the Appellate Division addressed a claim that the dissolution of the by operation of law upon the departure of constituted a breach of the retainer agreement, making it unenforceable. The court emphasized that a change in the organization of a business does not, without more, give rise to a claim by a party contracting with that business even if the reorganization adversely affects the party's interest. The question there, as here, is whether the client clearly recognized that the attorney was continuing the prior representation. Here, the evidence is indisputable that WK considered Avedesian his attorney in these proceedings, and he was not discharged by WK until well after this charging lien proceeding was commenced.

A similar rule has been recognized even in the matrimonial context where the policing of retainer agreements by regulation is more stringent. The defenses that the 2006 Retainer was not assignable to Avedesian and that the settlement did not occur while the retainer was still in effect are dismissed.

As yet another defense, WK contends that his obligation to pay fees under the 2006 Retainer was subject to preconditions that have not been satisfied. In this connection, he argues that the Retainer required (1) that his remainder interest in Robert's Marital Trust be accelerated and the trust assets be disbursed, as contemplated in principle under the 2004 agreement; (2) that he receive in settlement the specific properties whose values were the basis of the Trigger Amount; and (3) that there be a closing, which WK contends has not yet occurred.

None of these conditions is found in the text of the 2006 Retainer; moreover, as to the purported failure to close, this court has previously found to the contrary. The Retainer expressly contemplates a (1) contingency arrangement for a settlement among substantially all of the descendants of Ruth and Harry WK and the trusts and the estates thereof; (2) fees for litigation work; (3) out of pocket expenses; and (4) security in respect of your fees and expenses. There is nothing in the instrument that expressly or impliedly conditions the contingency fee on any specific settlement result. Although WK claims to have understood that there was such a condition, the court cannot accept his invitation to import into the agreement terms that were not there when the parties executed it. This is not to overlook that the Retainer's performance fee provisions refer to four specified real estate entities and arrive at the Trigger Amount by adding the total values of such entities. But it is clear that such provisions merely establish a baseline against which to measure the increase in gross value that is one of the two factors in the fee calculation. The provisions not only are bare of language to suggest the purported condition, but also, are expressed in terms that affirmatively suggest quite the contrary. Thus, if the Retainer had contemplated a performance fee only on condition that WK receive the four specified properties as part of the settlement ultimately secured for him by the Firms, the appraised values of those properties would have been irrelevant: the performance fee would simply have been calculable as a percentage of the value of any additional interest that was ultimately secured for him in settlement.

As for William's contention that the closing has not occurred, that proposition was resolved against WK in a decision of this court addressing the enforcement of William's side agreement with CA on August 20, 2008, concerning a monthly escrow payment to secure the Firms' respective charging liens. In that decision, this court ruled that the closing had in fact occurred and had thus triggered William's obligation to begin the payments provided for under the side agreement. There is certainly no legal basis to reargue that decision in the context of this one.

For the foregoing reasons, William's defenses alleging unsatisfied conditions are dismissed. Each party's motion for partial summary judgment is granted in part and denied in part as set forth in the foregoing discussion. As is indicated by the foregoing, and as is acknowledged by the Firms' request for only partial summary judgment, the precise value of what WK received in settlement cannot be calculated on this record and is accordingly an issue to be resolved at a hearing.

Legal issues similar to the above involves the application of different laws, rules and procedure. If you have legal problems involving estate left by the decedent remember that Stephen Bilkis and Associates offers free legal consultation. We have experts and experienced Kings County Estate Lawyers and Kings County Probate Attorneys who are willing to help you during the entire case, visit our offices in New York City for more information.

Court Listens to Construction Proceeding Regarding Tax Returns

July 12, 2015,

New York City Probate Lawyers said the executors have instituted this construction proceeding, prior to the filing of Federal and New York estate tax returns, to determine the effect of a tax exoneration clause, paragraph second and request a reformation or interpretation of paragraph eleventh, which creates a pre 1969 residuary, multiple, split-income, charitable remainder trust so as to qualify it for a charitable deduction under U.S.Code, tit. 26, § 2055 as amended by the Tax Reform Act of 1969 (TRA).

A New York Estate Lawyer said the testator died on September 9, 1973, age 92, leaving a daughter, age 64, as his sole distributee, and a granddaughter and three great-grandsons. His will, executed on December 19, 1967 was admitted to probate and letters testamentary issued to petitioners on October 1, 1973.

Paragraph second of the will provides: I direct that all my funeral, administration expenses, just debts, and all estate and inheritance or succession taxes be paid as soon after my death as may be practicable. After several outright and in trust cash bequests to his daughter, granddaughter, great-grandsons and friends totalling $38,050, testator gave his residuary estate to his trustees in trust.

The income of any part which shall remain undisposed because of the death prior to the termination of the trust of the persons hereinabove named to receive the same shall be distributed ratably among the beneficiaries of the remaining parts in the proportion that their respective income interests bear to the aggregate of the income interests of all the remaining parts.

Upon the death of the testator's daughter the trust remainder is payable in the same proportions as the excess income. Though the petition does not set forth the assets comprising the testator's estate, petitioners' attorney has informed the court that the assets and deductions for estate tax purposes

The residuary probate estate, after deducting the preresiduary outright and in trust bequests, but before estate taxes, is $845,580. Petitioners allege that the loss of the charitable deduction because the trust is not a charitable annuity trust under TRA would increase the estate tax by $163,000. It should be noted that prior to December 31, 1969, the estate would be entitled to a charitable deduction since the amounts payable to the charities could be readily determined.

Before proceeding with the construction of paragraphs second and eleventh of the will, the court is called upon to determine a question of jurisdiction, which appears to be of first impression.

Petitioners named and cited as interested parties, in addition to the charitable and noncharitable residuary legatees, the Attorney General of the State of New York (AG), the United States Treasury Department--Internal Revenue Service (IRS), and the New York State Tax Commission (Commission). With the exception of the IRS all of the cited parties have duly filed notices of appearances.

A Queens Probate Lawyer said the decedent's daughter Mary Simms denies any consent to acceleration of the charities' remainder interests and filed an answer opposing the relief requested by the petition.

Both the United States Department of Justice and the United States Attorney for the Eastern District filed written objections to the IRS being made a party. They contend that IRS is not a legal entity which can be sued; that if the real party in interest is the United States, it has not waived its sovereign immunity. Because of the opposition of the United States, the IRS cannot be deemed a party.

Long Island Probate Lawyers said that as a result of the answer, court personnel have had several conferences with the attorneys for all of the parties in an attempt to dispose of the issues amicably. The Commission's attorney participated in such conferences. While the petitioners and all the residuary legatees have filed memoranda of law in support of their respective positions, neither the attorney for the Commission nor AG has submitted a memoranda of law. Following the submission of the proceeding for decision, the Commission moved for an order dismissing the proceeding as to it, or in the alternative, dropping it as a party.

In his supporting affidavit the attorney for the Commission alleges that the allowance of the charitable deduction is a matter for the IRS, which determination, under Article 26 of the Tax Law is binding upon the Commission in the absence of fraud or palpable error. Since the IRS is not a party to this proceeding and in any event would not be bound by any determination of this court under Commissioner v. Estate of Bosch, supra, the Commission contends that it should not be bound by this court's determination, but only by the determination of the IRS.

As to the tax exoneration clause, the Commission admits that under SCPA 1420(4) all parties to the proceeding are bound by the decree of a court unless modified or reversed on appeal. Nevertheless, the Commission argues that an interpretation of the exoneration clause can affect the extent of the charitable deduction, if any, for estate tax purposes, which would not be binding upon the IRS under Bosch, supra, and likewise would not be binding upon the Commission.
No claim is made that the Commission is not a proper party to this proceeding, nor that the appearance by its attorney was in any way unauthorized or improper. Research by the court fails to reveal any reported case in which the Commission has sought relief similar to that requested here.

In the Estate of Ella M. Stalp a recent case involving a will construction under TRA similar to the instant case the court has been advised that the Commission was cited, appeared but did not file a brief or otherwise participate in the proceeding. Discussing the problems resulting from the judicial construction of the will under TRA and the estate tax implications of his determination, Surrogate Sobel said: In the light of local law, as discussed earlier in this decision, and without regard to present or future transitional provisions, this Court is satisfied that the Treasury will accept the ruling of this Court directing minor reformation of the trust in issue. The section 664 Regulations do not require a ruling of the State's highest court in such circumstances
TRA as originally enacted provided for a saving or transitional period (IRC 2055(4)(B)(i)(ii)(iii); Reg. 3664--1(g)(1)(i)(ii)(iii)) which is inapplicable to testator, who, petitioners allege at all times was under no mental disability. In his learned analysis of the TRA as it affects charitable trusts under both the old and new law, Surrogate Sobel in the Stalp case, supra, called attention to the need for statutory relief by Congress. Prophetically, on October 26, 1974, Congress amended section 2055(e) of the IRC by the addition of subparagraph (3), Public Law 93--483, 93rd Congress, H.R. 12035, effective as to the estates of decedents dying after December 31, 1969.

This amendment permits estates of decedents dying after December 31, 1969, with wills executed prior to September 31, 1974, creating old law charitable remainder trusts, which do not qualify as a charitable remainder annuity or unitrust to qualify for a charitable deduction in the following language: if the governing instrument is amended or conformed on or before December 31, 1975, or, if later, on or before the 30th day after the date on which judicial proceedings begun on or before December 31, 1975, become final, so that the interest is in a trust which is a charitable remainder annuity trust, or a charitable remainder unitrust, or a pooled income fund, a deduction shall nevertheless be allowed.

In the case of wills of decedents which come within the purview of the 1974 amendment to IRC § 2055, it is obvious that they can only be amended or conformed by a local court such as this court. Any other interpretation of the new transitional amendment would render it meaningless. This has been the interpretation given by the courts to the original saving provisions contained in the TRA and the administrative provisions in income tax Regs. 1–664. The Legislature enacted EPTL 8--1.8 which the Practice Commentary in McKinney's indicates was passed to conform New York law with the restrictions imposed upon charitable trusts by the TRA.

All of the above cited cases involved post TRA executed wills. The courts have uniformly permitted a construction or reformation of wills to enable estates to claim a charitable deduction pursuant to section 2055 IRC as amended by the Tax Reform Act of 1969. An appearance once served can only be withdrawn with the permission of the court. Accordingly, in light of the 1974 amendment to IRC § 2055 and in the exercise of its discretion, the motion of the State Tax Commission to dismiss the proceeding as to it, or in the alternative, to withdraw its appearance, is denied. Testator, by grouping the payment of taxes with the payment of debts, funeral and administration expenses in paragraph second, indicated an intent to pay estate taxes on the gifts passing under his will as an expense of administration.

Accordingly, pursuant to the provisions of EPTL 2--1.8 estate taxes will be apportioned against non-testamentary gifts and the taxes attributable to gifts passing under the will are to be paid as an expense of administration to be deducted before division of the residuary estate. Lastly, the court is called upon to determine testator's intent with regard to paragraph eleventh of his will so that, if it is at all possible, the estate will be entitled to a deduction for the gifts to charity.

That testator intended to benefit the three charitable remaindermen named in his will is obvious. As Surrogate Sobel stated in Matter of Stalp, supra, This court finds that Miss Stalp's honest and straightforward charitable motive, one devoid of any purpose of tax avoidance has been frustrated by an unintended mistake in will draftsmanship, justifying the Court in allowing reformation of Article 32 of her will by minor judicial surgery as hereinafter directed.

The sum of $8,000 which decedent directed to be paid in quarterly instalments to his daughter for life, first from income and so much of the principal as may be necessary created an annuity.

The court has computed the present value of the annuity, based upon a female age 64, as of the date of the decedent's death to be $79,318.42. After inquiry, the court has been informed that petitioners can purchase a similar commercial annuity from an insurance company for $86,811.93 without any refund, and with a refund feature for $91,463.40. Under the 1974 amendment to the TRA, the court will amend or conform the decedent's will by the use of the doctrine of segregation as did Surrogate Sobel in the Stalp case, supra, so that the indefeasibly vested income and principal payable to the charities qualifies as a deduction under IRC § 2055.

Rather than create six separate trusts as requested by petitioners in their brief and accelerate payment of one-half of the residue to the charities, which is opposed by decedent's daughter, the court will create four separate trusts as set forth below.

The residuary estate will be ascertained after deducting from the gross probate estate, debts, funeral, administration expenses, estate taxes, and the cash bequests, both outright and in trust pursuant to paragraphs third through tenth inclusive, from which a charitable annuity remainder trust of $80,000 will be created. Pursuant to EPTL 8--1.8 this trust will be held by the trustees pursuant to all the income and estate provisions of the Internal Revernue Code and regulations relating to charitable annuity trusts from which an annuity of $4,000 per annum (5% Of the principal), will be paid in quarterly instalments first from income and then from principal to the decedent's daughter for life. The annual excess income, if any, and principal upon death to be paid to the three designated charities in accordance with the proportions designated in paragraph eleventh (a) 4, 5 and 6 of the decedent's will.
A second private non-charitable remainder trust found of $80,000 is to be created to be held by the trustees from which an annuity of $4,000 per annum (5% Of the principal in quarterly instalments, is to be paid to the decendent's daughter for life, first from income and then from principal, excess annual income and the principal upon her death to be paid to the persons designated in the proportions set forth in paragraph eleventh (a) 1, 2 and 3 of the provisions of the decedent's will.

The balance of the residuary estate after the funding of the two $80,000 trust funds to be divided into two equal trusts both to be held during the life of the decedent's daughter, one for the benefit of the charitable remaindermen and the other for the other noncharitable remaindermen pursuant to the provisions of subparagraph (b) 1, 2, 3, 4, 5 and 6 of paragraph eleventh of the decedent's will. The charitable trust in accordance with the provisions of EPTL 8--1.8 shall be held by the trustees subject to all of the income and estate tax provisions of the IRC and regulations relating to charitable foundations.

Since the noncharitable income and remainder interests are not indefeasibly vested, the court cannot commute the annuity payable to the decedent's daughter without affecting the rights of the noncharitable remaindermen who can only be ascertained upon the death of the annuitant.

The aggregate value of the charitable annuity and noncharitable trusts ($160,000) will fully assure the payment of the $8,000 annuity payable to the decedent's daughter during her life.
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Petitioner Seeks to Reform Residuary Clause

July 11, 2015,

New York City Probate Lawyers said this is a proceeding to construe and reform Article III, the residuary clause, of the last will and testament of BO, so as to enable the estate to qualify for an unlimited New York estate tax marital deduction. While an application to reform a will to enable the estate to qualify for a deduction for New York estate tax purposes and not federal may be uncommon, it is permissible. Matter of Glick, N.Y.L.J. Feb. 17, 1989, p. 22, col. 6 (Surr.Ct. New York Co.).

A New York Estate Lawyer said the decedent died on July 21, 1988 survived by a spouse and three children. His will, dated December 14, 1979, was duly admitted to probate on December 19, 1988.

Nassau County Probate Lawyers said under Article III of the will the residuary estate, which comprises the entire estate with the exception of some personalty previously bequeathed to his wife, is divided into two trusts, Trust A and Trust B. Under Trust A, the decedent bequeathed in trust for his wife the following: A pecuniary amount equal to the maximum marital deduction allowable to my estate for Federal estate tax purposes ($250,000 or 50% of my adjusted gross estate, as the case may be, less any adjustment required for marital deduction gifts made by me during my lifetime), less the aggregate amount of marital deductions, if any, allowed for interests in property passing or which have passed to my wife otherwise than by the terms of this Article, and less also the amount if any, required to increase my taxable estate to the maximum amount as to which, considering all deductions and credits allowable to my estate, there will be no federal estate tax payable by reason of my death.

A Staten Island Probate Lawyer said that under the terms of Trust A, his wife receives the entire income for life, to be made at least quarter-annually, and an unrestricted right to invade principal. The wife has a testamentary power of appointment over the corpus and in default thereof, the corpus is to be added to the principal of Trust B. Under the terms of Trust B, the income is to be distributed at least quarter-annually to the spouse for life, subject to her need for the same, with power in the trustee to distribute income amongst the decedent's descendants and their spouses. The trustee has discretion to invade principal for the benefit of the spouse. Upon the wife's death, the principal passes equally to the decedent's children, then living, or their descendants.

Of further significance to the instant application is the following provision, set forth in Article III (D)(2)(b): With respect to Trust A, notwithstanding any contrary provision the trustee shall have no power or discretion which would deprive my estate of the marital deduction under the law and the rulings and regulations with respect thereto in force at the time of the determination of said marital deduction.

Decedent's wife, who is also the executrix of the estate, as well as the decedent's three children and their spouses request and/or consent to a construction of the will which would allocate the entire residuary to Trust A, thereby eliminating Trust B.

By virtue of the unified credit under Internal Revenue Code § 2010(c) the estate will be shielded from Federal estate tax liability, irrespective of whether the unlimited marital deduction is available. However, the comparatively lower New York unified credit equivalent of $108,333.00 will not exempt the estate from New York estate tax liability. Accordingly, reformation herein is sought for the purpose of avoiding New York estate taxes only.

At the time the will was executed, the maximum marital deduction allowable for both Federal and New York estate tax purposes was equal to the greater of $250,000 or one-half the adjusted gross estate as provided by the Tax Reform Act of 1976 (TRA: 90 U.S.Stat. 1525). The monetary limitation on the federal estate tax marital deduction was eliminated and made unlimited by the Economic Recovery Tax Act for decedent's dying after 1981. Subsequently, New York followed suit and eliminated the monetary limitation on the New York estate tax marital deduction for decedent's dying after September 30, 1983. McKinney's Session Laws of N.Y.1982, C. 916, § 83.

Despite the fact that many provisions of a will are tax motivated, many persons fail to revise their wills to reflect these changes in the tax laws. Consequently, courts are repeatedly requested to reform wills so that an intention to minimize taxes will not be defeated. Matter of Lepore, 128 Misc.2d 250, 492 N.Y.S.2d 689 (Surr.Ct. Kings Co.1985); Matter of Otto, 89 Misc.2d 672, 392 N.Y.S.2d 371 (Surr.Ct. Nassau Co.1977); Matter of Newell, 81 Misc.2d 1050, 367 N.Y.S.2d 703 (Surr.Ct. Erie Co.1975); Matter of Danforth, 81 Misc.2d 452, 366 N.Y.S.2d 329 (Surr.Ct. Erie Co.1975); Matter of Stalp, 79 Misc.2d 412, 359 N.Y.S.2d 749 (Surr.Ct. Kings Co.1974). Where, as here, revision is sought for the purpose of receiving the benefit of the unlimited marital deduction not available at the time the will was executed, such relief has been held to be warranted where an intention to minimize taxes is coupled with a primary intention to benefit the spouse. Matter of Khadad, 135 Misc.2d 67, 514 N.Y.S.2d 625 (Surr.Ct. Nassau Co.1987); Matter of Lepore, supra. Evidence of such intent has been found to exist where the will contains a maximum marital deduction formula provision and a provision directing the executor to compute the marital deduction in accordance with the laws in effect at the time of the decedent's death. Matter of Khadad, supra. It is observed that the ERTA does not define what is meant by a maximum marital deduction formula provision. As to this point, courts and treatises have classified a provision which refers to the maximum marital deduction as defined by the TRA or a provision which bequeaths to the spouse one-half the adjusted gross estate as maximum marital deduction formula provisions. Matter of Khadad, supra; Matter of Lepore, supra; Fiore, Modern Estate Planning, Vol. 3 § 13.02, p. 13-10.

The decedent's will contains both a maximum marital deduction formula provision and a provision expressly requiring the executor to compute the marital deduction in accordance with the laws in effect at the time of the decedent's death. The wife's unlimited right to the income and the principal of Trust A as well as her entitlement to discretionary payments of the income and principal of Trust B reveals that the decedent considered her welfare to be of primary importance. While the wife's entitlement to the income of Trust B was not hers exclusively, the trustee had no discretion to distribute income to others unless the wife did not need the additional income for her care. Further, the trustee's power to invade the principal was exercisable only for the benefit of the wife.

On the basis of the above, the entire residuary estate is allocated to Trust A, thereby eliminating Trust B. Accordingly, the estate may now qualify for the unlimited marital deduction
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Probate Court Rules on Property Dispute

July 10, 2015,

This is an application by the Public Administrator of the County of Kings for a construction of testatrix' will and other relief.

New York Probate Lawyers said the testatrix died on December 27, 1919 leaving a will dated February 11, 1905 which was duly admitted to probate in this Court on June 18, 1920. Except for the printed portions of the form used, the instrument was entirely written by pen and ink. After providing for the payment of her lawful debts, testatrix devised all her property, real and personal, to her friend, Mr. BNFCRY, who was also named sole executrix with the further proviso as follows: 'after BNFCRY Death the Balance what is left go to my Brothers or their heirs (naming them) To be Equally divided Between my Brothers or heirs of my Brothers' (italics, capitalization and spelling as in original).

A New York Estate Lawyer said it appears that upon testatrix's death Mr. BNFCRY took possession of real and personal property of testatrix and by conveyances, transfers, assignments, sales, and alienations, by said BNFCRY, individually and as executrix, the assets of the estate were disposed of among the several persons named in the petition herein. The question posed is whether by testatrix' will BNFCRY took a fee or a life estate with or without power of alienation or disposition.

According to a Westchester County Probate Lawyer, a will drawn by a layman must be construed with that fact in mind. The testatrix' intention must be gathered from the instrument as a whole, and when such intention is ascertained, it controls. The handwritten portion of the instrument is contained in a single long paragraph, devoid of proper sentence structure, capitalization or spelling. Although the testatrix lacked knowledge of legal terminology used in testamentary instruments, her intentions may be gleaned from a careful reading and analysis of her will.

Suffolk County Probate Lawyers said it is apparent testatrix had her brothers in mind as well as her friend, Mr. BNFCRY, as objects of her bounty. The testatrix' intention to devise and bequeath to BNFCRY a life estate with the remainder, which she called the 'Balance', to her brothers is apparent from the fact that she used the following language: 'After the death of BNFCRY I appoint as Executor for my Brothers as named above Mr. TH'. There would have been no purpose in naming a successor executor unless testatrix expected that there would be a remainder left after BNFCRY's death which would require its administration by a successor executor. What may appear to be an absolute gift expressed in an anterior clause of a will may be cut down by a posterior provision which is generally deemed to be a subsequent intention.

A Kings County Probate Lawyer explained that, however inartistically expressed, testatrix' intention to give her friend a life estate and the remainder or residuary estate to her brothers or their heirs after the death of her friend, is further revealed by the following provisions in her will: (1) payment of the balance over; (2) naming of her brothers and their heirs as recipients of such balance; (3) specifying the shares each of such remainder men were to receive; and (4) naming of a successor executor to protect her brothers' interests in the estate after the death of the primary beneficiary. Where the language used points to more than one possible interpretation of testator's intent that one should be adopted which prefers those of the blood over strangers. In the absence of clear and unequivocal language to the contrary, the Court is justified in adopting a construction in favor of blood relatives.

The Court determines that testatrix devised and bequeathed a life estate to her friend, Mr. BNFCRY, without power to encumber or alienate the principal thereof.

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Petitioner Appeals a Surrogate Court Decree

July 9, 2015,

A New York Probate Lawyer said in a probate proceeding, the Petitioner appeals from so much of a decree of the Surrogate's Court, Kings County dated July 1, 2004, as denied that branch of her cross motion which was for the issuance of preliminary letters testamentary to her for the estate of an immediate relative and granted those branches of the motion of the objectant, Mr. HP, which were to deny the issuance of preliminary letters testamentary to the petitioner for that estate, to disqualify the petitioner from service as executrix, and to issue letters of administration to Mr. HP.

A New York Estate Lawyer said in this Court now ordered that the decree is reversed insofar as appealed from and the matter is remitted to the Surrogate's Court for an evidentiary hearing, and thereafter, a new determination on that branch of the cross motion which was for the issuance of preliminary letters testamentary to the appellant, and those branches of the motion which were to deny the issuance of preliminary letters testamentary to the appellant, to disqualify the petitioner (appellant herein) from service as executrix, and to issue letters of administration to Mr. HP.

According to a Kings County Probate Attorney, a testator or testatrix has the right to determine who is most suitable among those legally qualified to settle his or her affairs, and that selection is not to be lightly discarded. While the Surrogate may disqualify a person from receiving letters of administration where the friction between such person and a beneficiary interferes with the proper administration of the estate, mere friction or hostility between such person and a beneficiary is not sufficient grounds for removal.

Brooklyn Probate Lawyers explained by a Kings County Probate Lawyer, here, the testatrix, in her last will and testament, expressly nominated and appointed the petitioner as the executrix of her estate. Thus, her intent as to this appointment was clear. The Surrogate's Court denied that branch of the petitioner's cross motion which was for the issuance of preliminary letters testamentary and granted that branch of the motion of the objectant, Mr. HP, which was to deny the issuance of preliminary letters testamentary to her. Based upon the motion papers alone, the Surrogate's Court concluded that the relationship between the petitioner and her attorneys, and the objectant, was "palpably poisoned," and that the papers submitted by the objectant evidenced a "rational hostility toward the petitioner and her counsel." We further note that the Surrogate's Court, in rendering its decision, deemed it unnecessary, in light of its conclusion, to reach the issue of whether the petitioner's appointment under the will as the executrix was procured by undue influence.

Bronx Probate Lawyers said notwithstanding the evidence demonstrating that there was friction and hostility in the relationship between the petitioner and her counsel, and the objectant, an evidentiary hearing should have been held to determine whether such friction and hostility would interfere with the proper administration of the estate and whether the petitioner's appointment as executrix under the will was procured by undue influence, thereby warranting a departure from the express intent of the testatrix. Thus, we remit the matter to the Surrogate's Court, for an evidentiary hearing on those issues and thereafter, a new determination on that branch of the cross motion which was for the issuance of preliminary letters testamentary to the appellant, and those branches of the motion which were to deny the issuance of preliminary letters testamentary to the appellant, to disqualify the appellant from service as executrix, and to issue letters of administration to Mr. HP. The petitioner's remaining contentions are without merit.
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Plaintiff Brings an Action to Recover Damages

July 8, 2015,

A New York Probate Lawyers said, in an action to recover damages for personal injuries and for wrongful death, the defendant X. Co. appeals from so much of an order of the Supreme Court, Kings County, dated December 16, 1985, as, inter alia, denied its cross motion to dismiss the complaint as against it. This Court now ORDERED that the order is affirmed insofar as appealed from, with costs.

A New York Estate Lawyer said that as stated by a Kings County Probate Attorney, the decedent Mr. A.B initially commenced this action for personal injuries against the defendant X. Co., claiming that he was injured by the inhalation of asbestos. Special Term granted the motion of the decedent's daughter, Ms. M, to be substituted as the plaintiff in place and stead of her father in her capacity as the executrix of his estate and to amend the original complaint to include a cause of action for her father's alleged wrongful death. Special Term denied Standard's cross motion to dismiss the complaint as against it, rejecting Standard's argument that the Surrogate's Court, Kings County did not have the power to declare Ms. M the executrix of her father's estate and probate his will since he was a domiciliary of Florida at the time of his death.

A Manhattan Probate Lawyer said it is explained pursuant to SCPA 204, when the jurisdiction of a court is called into question in a collateral proceeding, the jurisdiction is presumptively, and in the absence of fraud or collusion, conclusively established by an allegation of the jursidictional facts contained in a verified pleading. Contrary to Standard's assertion, there were no fraudulent statements in the petition. While the petition alleged that the decedent was a domiciliary of Kings County, it also indicated that decedent had died in a Florida nursing home. In addition, annexed to the petition were papers intended to inform the Surrogate of the decedent's connection with Florida. Thus, the Surrogate was supplied with all of the relevant facts, and in the absence of fraud, the defendant has no standing in a collateral proceeding to have the determination overturned, this was further illustrated in the case of Stolz v. New York (Cent. R.R. Co., 7 N.Y.2d 269, 196 N.Y.S.2d 969, 164 N.E.2d 849).

A New York City Probate Lawyer said that, X. Co.'s alternative argument for dismissal of the action is equally unavailing. The proposed amended complaint sets out a sufficient cause of action for wrongful death as illustrated in the case of Chong v. New York City (Tr. Auth., 83 A.D.2d 546, 547, 441 N.Y.S.2d 24). In any event, X. Co. advances arguments more appropriately considered on a motion for summary judgment. If this is indeed what Standard was seeking, its cross motion was premature as issue had not yet been joined, see CPLR 3212[a].

A Kings County Estate Administration Lawyer further held that, Special Term properly retained jurisdiction over the action to recover damages for personal injury and wrongful death, as the instant lawsuit involves independent matters involving controversies between living persons and not matters affecting the estate of the decedent as illustrated in the case of Matter of Lainez (79 A.D.2d 78, 435 N.Y.S.2d 798, affd. 55 N.Y.2d 657, 446 N.Y.S.2d 942, 431 N.E.2d 303; SCPA § 201).

If your deceased loved one has a claim for damages in connection with his or her death, seek the assistance of Kings County Estate Attorney at Stephen Bilkis & Associates. We may be saddened by the loss of our loved one, but we must always remember that the law has set out remedies to compensate us from the sufferings and wounded feelings we experienced.
Our Kings County Estate Attorneys and Kings County Probate Lawyers will stand by you in all these situations. Allow us to assist you in claiming damages on your behalf before the courts.
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