Justia New York Court of Appeals Opinion Summaries
Articles Posted in Trusts & Estates
Carlson v Colangelo
Plaintiff, a beneficiary of a revocable trust, claimed entitlement to certain real property and income. The trust included an in terrorem clause, which disinherits any beneficiary who contests the trust. Plaintiff argued that she did not trigger this clause by seeking to enforce the trust's provisions as intended by the grantor, rather than challenging the trust itself. The key issue was whether her actions constituted a violation of the in terrorem clause, thereby forfeiting her bequests.The Supreme Court initially denied defendants' motion to dismiss, citing unresolved factual issues. Defendants later moved for partial summary judgment, which the court granted, determining that plaintiff had no ownership interest in Dempsaco LLC. Plaintiff's cross-motion for partial summary judgment regarding her entitlement to the real property was denied. Defendants then moved for summary judgment, arguing that plaintiff's claim to a 50% interest in Dempsaco triggered the in terrorem clause. The Supreme Court agreed, granting defendants' motion and awarding attorney's fees. The Appellate Division modified the order by denying attorney's fees but otherwise affirmed the decision, concluding that plaintiff's actions violated the in terrorem clause.The New York Court of Appeals reviewed the case and concluded that plaintiff did not violate the in terrorem clause because her lawsuit sought to enforce the trust's provisions as written and intended by the grantor. The court held that plaintiff was entitled to summary judgment on her claim to the real property, as the trust explicitly directed the trustee to transfer the property to her. However, the court found that triable issues of fact remained regarding the income stream and unjust enrichment claims. The order of the Appellate Division was modified accordingly. View "Carlson v Colangelo" on Justia Law
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Trusts & Estates
Golobe v Mielnicki
Dorothy Golobe died in 1992, leaving behind a three-story building in New York. Her nephew, John Golobe, became the estate's administrator, believing his father, Zangwill Golobe, was Dorothy's only surviving heir. An attorney testified that Dorothy's other brother, Yale Golobe, had predeceased her. Surrogate's Court found Zangwill to be the sole distributee, and he renounced his interest in favor of John, who maintained the property. However, Yale was actually alive at Dorothy's death and should have inherited half of the estate. John discovered this error in 2018 and claimed sole ownership through adverse possession. Yale's successor, the Emil Kraus Revocable Trust, counterclaimed for fraud and breach of fiduciary duty.Supreme Court granted summary judgment to John, declaring him the sole owner and dismissing the Trust's counterclaims. The Appellate Division affirmed, holding that John had established adverse possession and dismissing the fraud and fiduciary duty claims due to lack of evidence of scienter or reliance and no extraordinary duty to confirm a distributee's death.The New York Court of Appeals affirmed the Appellate Division's decision. The court held that John had acquired sole ownership through adverse possession, as his possession was hostile, under a claim of right, and open and notorious. The court also affirmed the dismissal of the Trust's counterclaims, finding no triable issue of fact regarding fraud or breach of fiduciary duty. The court emphasized that a cotenant may obtain full ownership even when neither party is aware of the co-tenancy, provided the statutory period and other adverse possession requirements are met. View "Golobe v Mielnicki" on Justia Law
U.S. Bank National Ass’n v DLJ Mortgage Capital, Inc.
The Court of Appeals affirmed the order of the Appellate Division affirming Supreme Court’s dismissal of the complaint filed by the trustee (Trustee) of the ABSHE 2006 residential mortgage-backed securities (RMBS) trust, without prejudice to refiling, holding that N.Y. C.P.L.R. 205(a) applies to an RMBS trustee’s second action when its timely first action is dismissed for failure to comply with a contractual condition precedent.The Trustee first filed an action against Defendant, the sponsor and seller of the trust securitization, and the action was dismissed for failure to comply with a contractual condition precedent, without prejudice to refiling. The Trustee then filed this action against Defendant claiming violations of representations and warranties regarding the quality of the loans contained in the trust. On appeal, Defendant argued that the first action should have been dismissed with prejudice. The Court of Appeals disagreed, holding that the Trustee’s failure to comply with a contractual condition precedent did not foreclose refiling of its action for alleged breach of RMBS representations and warranties pursuant to N.Y. C.P.L.R. 205(a). View "U.S. Bank National Ass’n v DLJ Mortgage Capital, Inc." on Justia Law
In re Hennel
The Court of Appeals reversed the order of the Appellate Division affirming Surrogate’s Court’s grant of summary judgment to Petitioners, holding that Petitioners’ claim against the decedent’s estate seeking to enforce an oral promise was barred by the statute of frauds.Surrogate’s Court concluded that promissory estoppel should be applied to Petitioners’ claim to remedy a potential injustice. The Appellate Division affirmed, concluding that the elements of promissory estoppel were met and that application of the statute of frauds would be unconscionable under the circumstances. The Court of Appeals reversed, holding that Petitioners could not invoke the doctrine of promissory estoppel because application of the statute of frauds would not inflict an unconscionable injury upon Petitioners. View "In re Hennel" on Justia Law
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Contracts, Trusts & Estates
Aoki v. Aoki
Hiroaki (Rocky) Aoki, the founder of the Benihana restaurant chain, formed the Benihana Protective Trust (BPT) in 1998 to hold stock and assets relating to Benihana. In 2002, Rocky married Keiko Aoki. In September 2002, Rocky executed a partial release of his testamentary power of appointment whereby Rocky could appoint only his descendants at the time of his death. In December 2002, Rocky executed a second release further restricting his power to appoint by excluding any descendants who were non-resident aliens. After Rocky’s death, the BPT trustees commenced this proceeding seeking a determination as to the validity of the September and December releases. The Surrogate Court decreed the September and December Releases invalid on the grounds that Rocky was not aware that the Releases were irrevocable and that Rocky’s execution of the Releases was not voluntary. The Appellate Division reversed. The Court of Appeals affirmed, holding that Keiko failed to raise a triable issue of fact that the Releases were signed as a result of fraud or other wrongful conduct. View "Aoki v. Aoki" on Justia Law
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Trusts & Estates
Ministers & Missionaries Benefit Bd. v. Snow
In IRB-Brasil Resseguros, S.A. v. Inepar Invs., S.A., the Court of Appeals held that, where parties include a New York choice-of-law clause in a contract, such a provision demonstrates the parties’ intent that courts not conduct a conflict-of-laws analysis. In the instant case, Plaintiff was a New York not-for-profit corporation that administered a retirement plan and a death benefit plan. Decedent was enrolled in both plans. Decedent named Appellants as beneficiaries. Both plans stated that they shall be governed by and construed in accordance with New York law. After Decedent died, a Colorado court admitted his will to probate. Plaintiff was unsure to whom the plan benefits should be paid after Decedent’s death and commenced a federal interpleader action against Decedent’s Estate, the personal representative (PR) of the Estate, and Appellants. A federal district court directed Plaintiff to pay the disputed funds to the PR, concluding that Colorado’s revocation law terminated any claims to the plans by Appellants. On appeal, the Second Circuit Court of Appeals certified questions to the Court of Appeals. The Court of Appeals answered by extending the holding in IRB to contracts that do not fall under Gen. Oblig. Law 5-1401 and clarifying that this rule obviates the application and both common-law and conflict-of-laws principles and statutory choice-of-law directives, unless the parties expressly indicate otherwise. View "Ministers & Missionaries Benefit Bd. v. Snow" on Justia Law
In re Shannon
Eastchester Rehabilitation & Health Care Center cared for Edna Shannon for four years. During the fourth year, Family Service Society of Yonkers (FSS Yonkers) was appointed as guardian of Shannon’s person and property. Eastchester later made a claim with FSS Yonkers seeking compensation for services it rendered to Shannon that were not covered by Medicaid. Thereafter, Westchester County Department of Social Services (DSS) advised FSS Yonkers that Shannon was indebted to DSS for medical assistance paid on her behalf. After Shannon died, FSS Yonkers commenced this proceeding to settle its final account and seeking a determination as to how it should disburse Shannon’s remaining property. Supreme Court held that the balance of Shannon’s remaining property should be paid to DSS. The Appellate Division reversed. The Supreme Court reversed, holding (1) N.Y. Ment. Hyg. Law 81.44 does not permit a guardian to retain property of an incapacitated person after the incapacitated person has died for the purpose of paying a claim against the incapacitated person that arose before that person’s death; and (2) inasmuch as Eastchester’s claim for medical services rendered to Shannon was unrelated to the administration of her guardianship, section 81.44 does not allow FSS Yonkers to withhold from Shannon’s estate funds to pay Shannon’s debt to Eastchester. View "In re Shannon" on Justia Law
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Health Law, Trusts & Estates
In re Lewis
When decedent Robyn R. Lewis died in 2010, a will was admitted to probate that was executed by Decedent in Texas in 1996. Objections to probate were filed by various members of Decedent’s family. The Surrogate dismissed the objections to the 1996 will and admitted it to probate. The Appellate Division affirmed the Surrogate’s decision and decree. The Court of Appeals modified the orders of the Appellate Division by remitting to Surrogate’s Court for further proceedings, holding that crucial issues remained sufficient to raise the presumption that Decedent revoked her 1996 will. View "In re Lewis" on Justia Law
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Trusts & Estates
Matter of Lawrence
Beginning in 1983, Defendant law firm represented Alice Lawrence and her three children in litigation arising from the death of her husband and their father, a real estate developer. For over three decades, Lawrence and Seymour Cohn, the decedent’s brother and business partner, litigated issues surrounding the sale of the decedent’s properties and the distribution of the proceeds. After Cohn and Lawrence settled the matter, this dispute followed between Lawrence and Defendant with respect to the law firm’s fee and the validity of gifts made by Lawrence to three law firm partners. Lawrence died in 2008. Thereafter, the Lawrence estate argued that a revised retainer agreement between the parties was void procedurally and substantively and made claims for refund of the gifts. The Court of Appeals held (1) the revised retainer agreement was neither procedurally nor substantively unconscionable and was therefore enforceable; and (2) the Lawrence estate’s claim for return of the gifts was time-barred. View "Matter of Lawrence" on Justia Law
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Contracts, Trusts & Estates
N.J.R. Assocs. v. Tausend
Nicole Tausend, the beneficiary of a trust together with her father, Ronald, commenced a N.Y.C.P.L.R. 78 proceeding against Ronald and the partnership (NJR) formed by Ronald for the purpose of acquiring and selling property. Nicole commenced the proceeding in order to obtain access to the partnership documents and an accounting of its finances. In response, NJR issued a demand for arbitration. Supreme Court ordered the parties to arbitration, and the appellate division affirmed. Nicole appeared in the arbitration and asserted several counterclaims, which lead to NJR's commencement of this court proceeding seeking to stay arbitration of the counterclaims on the basis of the expiration of the statute of limitations. Supreme Court granted the petition and stayed arbitration of the counterclaims. The appellate division modified by dismissing NJR's petition to stay arbitration of the counterclaims, reasoning that the partnership was precluded from obtaining a stay because it had initiated and participated in the arbitration. The Court of Appeals affirmed, holding that because NJR initiated and participated in the arbitration of issues stemming from the dispute, its timeliness challenge to the counterclaims must be decided by an arbitrator. View "N.J.R. Assocs. v. Tausend" on Justia Law