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Surrogate's Court Litigation - Representative Cases

Property Turnover Proceedings - Motion for Summary Judgment/Dismissal

McCarthy Fingar often represents executors/administrators in SCPA 2103 proceedings. In these proceedings, an executor/administrator sometimes seeks to recover assets that were the alleged subject of a lifetime gift or a lifetime beneficiary designation. In one such case, Matter of Lyon, 9/28/2009 N.Y.L.J. 22 (col. 3) (Surr. Ct., Westchester County), Frank W. Streng and Katherine Sohr Jedlicka represented familiy members, appointed as limited administrators, seeking to rescind a transfer of real estate on the grounds, amongst others, that the agent under a power of attorney form improperlly gifted the property to himself. In Lyon, the estate of the donee made a motion to dismiss our case, primarily citing the alleged failure of our clients to commence their proceeding within the applicable statute of limitations. The Court denied the motion, finding, among other things, that the statute of limitations never started, since our clients had no notification of the existence of the power of attorney, which power of attorney form was used to make the gift in question.

Will Contests - Summary Judgment Motions

Many Will contests are won and lost by summary judgment motions. Often, but not always, after pre-trial discovery is concluded, the petitioner - the individual seeking to probate a Will - makes a motion for summary judgment to dismiss the objections to probate. In one such case, Matter of Correa (Surr. Ct., Westchester County 5-20-2008), the firm, representing a beneficiary under the Will, successfuly moved to dismiss objections to probate, despite allegations that the beneficiary had acted improperly in the management of the decedent's assets when the beneficiary had acted as a guardian for the decedent during the decedent's lifetime. Holding that such allegations were wholly unrelated to the otherwise unsubstantiated proof submitted to set aside the dededent's Will, the Surrogate's Court, Westchester County, granted the joint motion made by Frank W. Streng and the attorney representinng the nominated executor under the Will and dismissed the objections to probate.

Business Assets

Business and real estate estate are often a source of controversy in estates and trusts. In Matter of Zacharakis (Surr. Ct., Rockland County 3-12-2009), control of shopping centers in Rockland County was in controversy: the fiduciary of the estate had maintained legal control and the management of the corporations that owned the shopping centers by voting the estate's shares in the corporations to continue that control. Representing a beneficiary desiring to end the fiduciary's control over such shopping centers, Frank W. Streng and Gail M. Boggio successfully moved in Surrogate's Court to compel the distributions of shares of stock in the corporations in order to permit the majority of the beneficiaries (which included the firm's client) to control the management of the shopping centers.

Contested Trust Accountings – Representation of Trustees

McCarthy Fingar often represents corporate and individual fiduciaries in contested accounting proceedings. In one such case, we sought, through a summary judgment motion in the Surrogate’s Court, to dismiss objections asserted to an accounting of our client, a co-trustee, by the remaindermen of the trust. The remaindermen filed objections to the accounting, alleging violation of the diversification requirement of the Prudent Investor Act, even though they were aware of the challenged transactions and even though they later became co-trustees and continued to hold the same challenged investments. The Surrogate dismissed the objections as to the original co-trustee, who had previously resigned as co-trustee, but basically denied our motion to dismiss the objections to the accounting of our client. In Matter of Bloomingdale, 48 A.D.3d 559, 853 N.Y.S.2d 92 (2d Dep’t 2008), the Appellate Division partially reversed the Surrogate, holding that because co-fiduciaries are one entity, the remaindermen could not maintain objections for the period in which they served as co-trustees.

Will Contests

The firm has large experiences in Will Contests. In Will contests, the firm represents clients on both sides of the issue – both the named executors seeking to validate a Decedent’s Will and family members seeking to invalidate a Decedent’s Will. For example, in representing the Decedent’s brother, nephews and nieces in a Will contest, our attorneys successfully settled our clients’ challenge to changes in both a Will and a Trust Agreement which were executed by the Decedent very close in time to when proceedings for the appointment of a guardian in the Supreme Court [on the grounds of the Decedent’s inability to manage his property] had been brought.

In another matter, our firm was counsel to a named executor in which, at the trial level, a jury upheld a Codicil to the Decedent’s Will and threw out objections made to such Codicil by one family member. On appeal, the trial judge’s refusal to set aside the jury verdict was upheld by the appellate court. Matter of Marsh, 236 A.D.2d 404 (2d Dep’t 1997)

Trust Contests - "Probate" Proceedings

With the increased popularity of revocable trusts, "Will Contests" are often being litigated in the form of the alleged execution and funding of a revocable trust. In a relatively novel case, Matter of Hoffman, 6 Misc. 3d 1011A, 800 N.Y.S.2d 342 (Surr. Ct., Westchester 2004), the firm represented a client that was a beneficiary under her husband's Will of a membership in the New York Stock Exchange. However, even before the execution of his Will, the decedent allegedly created a revocable trust agreement for the benefit of a child of a prior marriage and allegedly transferred his NYSE seat to the trust. The NYSE seat had not been transferred to the trust through any assignment process but had been listed on a list of assets of the trust, with the following notation: "1. Membership in the New York Stock Exchange. The NY Stock Exchange does not permit registration of memberships in the name of trustees. Grantor and Trustees recognize this to be the case." Citing the provisions of a relatively new statute, EPTL 7-1.18, lawyers at the firm sought summary judgment against the trustees strictly on the question of the effectiveness of the transfer, arguing, among other things, that the recital of the NYSE seat as an asset of the trust in a schedule was not enough to consummate the transfer. The Cour agreed and dismissed this portion of the trustees' case.

Removal Proceedings – Contested Accounting Proceedings

The firm has had broad experience in the area of proceedings for the removal of fiduciaries, both in defending fiduciaries and in seeking such removal. For example, in Surrogate’s Court, New York County [Manhattan], the firm, at the trial and appellate levels, successfully represented a beneficiary seeking the removal of a preliminary executor who had acted improperly in the administration of the estate. Ultimately, the successor fiduciary, in properly administering the estate, uncovered substantial assets not previously disclosed by the former preliminary executor. Matter of Marsh, 173 A.D.2d 336 (1st Dep't 1991), app. dismissed, 78 N.Y.2d 990, mot. for lv. to appeal denied, 79 N.Y.2d 751. Later on, in this same estate, we successfully represented the successor executor at both the trial and appellate levels in contesting the former preliminary executor’s accounting and obtaining, amongst other things, surcharges/damages against that former fiduciary in excess of $1,600,000 for such fiduciary’s improper disbursement of estate assets. Matter of Marsh, 265 A.D.2d 253 (1st Dep’t 1999) (unanimous affirmance of surcharge in excess of $1,600,000 and award of attorneys fees against former fiduciary in the amount of $250,000), app. denied, 95 N.Y.2d 755 (2000); app. dismissed, 95 N.Y.2d 956 (2000) writ of certiorari denied, 532 U.S. 1038, 121 S. Ct. 1999, 149 L.Ed.2d 1002 (2001).

Trust Contests - Invalidation of Trust Amendment

In Matter of Goetz, 8 Misc. 3d 200 ( Surr. Ct., Westchester 2005), the Surrogate's Court faced the fairly novel issue of whether an attorney-in-fact could use the authority conferred on her in a power of attorney form to amend a trust created by another person to grant to herself a limited power of appointment over the trust remainder. Pursuant to the terms of the trust in question, the grantor reserved to himself the right to amend or revoke its terms during his lifetime. Representing a client that was adversely affected by the trust amendment, several lawyers at the firm successfully argued that the attorney-in-fact had no authority to make the trust amendment and that the trust amendment was invalid. The Surrogate held, among other things, that although the terms of the subject trust gave the grantor himself the right to revoke the trust or amend its terms, it did not confer the same authority upon the grantor's agent or upon any other person.

DNA Issues - Proving Inheritance Rights of Nonmarital Children

In our representation of children who were born out of wedlock, the firm, as part of discovery, sought a court order directing DNA testing of the post-humously produced blood serum of the decedent. In an evolving area of the law, the Surrogate's Court conditionally permitted such testing, provided that proof existed of the decedent's "open and notorious" acknowledgement by the decedent of his children. Matter of Seekins, 194 Misc. 2d 42 (Surr. Ct., Westchester 2002). Later on in the case, a settlement was reached in which a DNA test was conducted and the firm's clients received their fair share of their father's estate.

Recovery of Assets – Discovery Proceedings

Acting either for fiduciaries or for claimants, the firm sometimes represents a client in a discovery proceeding, for which the issue is typically whether a particular item is an asset of the estate or belongs to the person in possession of that property. For example, in Surrogate’s Court, Westchester County, a discovery proceeding was commenced on behalf of a family member in order to recover important artwork that the client, during his mother’s lifetime, had permitted his mother’s caretaker to use. After the caretaker’s death, the caretaker’s family did not return the artwork to the owner’s family. This matter has been successfully settled.

Challenge of Beneficiary Designation – Qualified Plan

In Federal district (Southern District of New York) and appellate courts (Second Circuit), our attorneys represented a surviving spouse’s estate and successfully persuaded the court to invalidate a beneficiary designation on a qualified plan for the decedent’s child (to the exclusion of the decedent’s spouse) on the grounds that the beneficiary designation violated the spousal consent rules under ERISA. Lefkowitz v. The Bank of New York as Preliminary Executor of Estate of Irene B. Marsh et al., 996 F.2d 600 (2d Cir. 1993)

Interpretation of Decedent’s Will and Accounting Matters

In Surrogate’s Court, Orange County, and on appeal, we successfully represented the Decedent’s children from his first marriage in litigation with the Decedent’s surviving spouse in relation to the surviving spouse’s efforts to obtain an interpretation of the Decedent’s Will that would have effectively excluded the Decedent’s children as beneficiaries under their father’s Will. Matter of Hickok, 140 Misc. 2d 650 (Surr. Ct., Orange 1989), affirmed, 158 A.D.2d 690 (2nd Dep't 1990), mot. for lv. to appeal denied, 76 N.Y.2d 712.

Allocation of Medical Malpractice Award

In Surrogate’s Court, Westchester County, our attorneys represented a surviving spouse in litigation on the allocation of a settlement award of over $3 million. The settlement was made before commencing the trial of a medical malpractice cause of action. Our client’s wife had died in childbirth, survived by children of her first marriage and the only child of her marriage to our client. The executor of the estate, who was our client’s wife’s first husband, took the position that, for various reasons, no part of the settlement proceeds should be paid to our client. This matter has been successfully settled.

Interpretation of Decedent’s Will – Allocation of Estate Taxes

In representing a major health care institution, as a beneficiary under a Will, our attorneys, in Surrogate’s Court, Westchester County, and on appeal, successfully challenged the Executors’ interpretation of the Decedent’s tax apportionment clause in her Will, which interpretation would have deprived the charitable beneficiary of hundreds of thousands of dollars of its proper share of a multi-million dollar estate. Matter of McKinney, 117 Misc. 2d 173 (Surr. Ct., Westchester 1982), affirmed, 101 A.D.2d 477 (2nd Dep't 1984), mot. for lv. to appeal denied, 63 N.Y.2d 607.

If you think you may require the assistance of McCarthy Fingar's Surrogate’s Court Litigation group, contact Frank W. Streng by email (fstreng@mccarthyfingar.com) or by phone (914-385-1022) with any question you may have.