Opinion
2006-2422/A
04-17-2012
In the Matter of the Petition of Betty Kheng Ngoh Phillips, Petitioner, Pursuant to SCPA 1809 to Determine the Validity and Enforceability of a Claim v. the Estate of Cheng Ching Wang, Deceased.
Andrew W. Heymann, Esq. Solomon Blum Heymann & Stich LLP Attorneys for Petitioner Beth Weinman, Esq. Leslie Gordon Fagan, Esq. Paul, Weiss, Rifkind, Wharton & Garrision LLP Attorneys for Respondents
Andrew W. Heymann, Esq. Solomon Blum Heymann & Stich LLP Attorneys for Petitioner
Beth Weinman, Esq. Leslie Gordon Fagan, Esq. Paul, Weiss, Rifkind, Wharton & Garrision LLP Attorneys for Respondents
Anthony A. Scarpino Jr., J.
This is a proceeding to determine the validity of a claim filed by Betty Kheng Ngoh Phillips (petitioner) against the estate of Cheng Ching Wang (decedent). Petitioner maintains that during decedent's lifetime, he agreed to establish funding sources (the fund) to provide her with an outright distribution of $10 million and $150,000 per year for her life. Oded Aboodi, Kenneth Wang and Vera Wang Becker, the executors (collectively referred to as the respondents), rejected the claim. Discovery is complete. Respondents have moved for summary judgment and petitioner has crossed-moved for summary judgment.
Decedent died testate on September 14, 2006 survived by two children, Kenneth Wang and Vera Wang Becker. His wife, Florence Wu, predeceased him on January 17, 2004. Decedent's will dated January 25, 2005 was admitted to probate and letters testamentary issued to respondents. Under his will, decedent disposed of his estate to his children.
Decedent was a businessman. He maintained offices in New York, Singapore, Hong Kong and China. Petitioner resides in Singapore. She contends that she and decedent were domestic partners for over thirty years. It is undisputed that decedent and petitioner shared an intimate relationship.
Petitioner asserts that early in their relationship, decedent requested and insisted that she agree to a "domestic partnership and cohabitation agreement" (the agreement). The agreement is not in writing. Decedent allegedly agreed that during his lifetime he would establish a fund which consisted of assets sufficient to provide her with an outright distribution of $10 million and $150,000 annually for her life. Petitioner alleges that pursuant to the agreement, she quit her job, did not pursue a career, and provided decedent with homemaking and full-time support while he was in Asia. She contends that decedent partially performed the agreement during his lifetime by making lump sum and annual payments to her, by paying her expenses and by providing her with a black American Express card. She contends that decedent utilized assets from his business interests to fund the agreement.
The claim is predicated on several grounds, the primary ground being breach of contract. In addition, petitioner asserts the following claims against respondents: 1) promissory estoppel arising out of decedent's insistence that she terminate her employment which she did; and 2) quantum meruit for her services including valuable personal skills and efforts and work in support of their domestic partnership. Petitioner also asserts claims against decedent's children as follows: 1) interference with contract; 2) unjust enrichment; 3) intentional infliction of emotional distress; and 4) tortious interference with her prospective inheritance. In addition to performance of the agreement, petitioner seeks the value of an apartment decedent owned at 820 Park Avenue, which she contends was purchased for her benefit plus punitive damages, costs and attorneys fees.
Respondents rejected the claim on August 2, 2007, and as noted have moved for summary judgment. They contend that petitioner's claims fail for the following reasons: 1) petitioner released any claim by a letter agreement dated July 15, 2004; 2) CPLR 4519 (the Dead Man's Statute) bars the claim because the only evidence offered in opposition to their motion is petitioner's testimony; 3) the statute of frauds; and 4) lack of sufficiency.
Summary judgment is appropriate where a party has made a prima facie case and the respondent, after having had the opportunity of full disclosure, has failed to raise any triable issue of fact or made only bald, conclusory assertions. (Alvarez v Prospect Hosp., 68 NY2d 320 [1986]; Zarr v Riccio, 180 AD2d 734 [2d Dept 1992]; Matter of Tuccio, 38 AD3d 791 (2d Dept 2007), leave to app den, 9 NY3d 802 (2007); Matter of Parravani, 211 AD2d 965 (3d Dept 1995); Matter of Jurgens, NYLJ, June 26, 2003, at 27, col 6). The court's burden on a summary judgment motion is not to resolve issues of fact but merely to determine whether such issues exist (Dyckman v Barrett, 187 AD2d 553 [1992]). Where no factual issues exist, summary judgment may be granted (Matter of Cioffi, 117 AD2d 860 [3d Dept 1986]). Mere conclusions, expressions of hope or unsupported allegations or assertions are insufficient to defeat the motion (Gilbert Frank Corp. v. Federal Ins. Co., 70 NY2d 966 [1988]).
Petitioner has the burden to establish her claim by clear and convincing evidence (Jemzura v Jemzura, 36 NY2d 496 [1975]; Matter of Schinasi, 139 Misc. 459 (1931), affd 233 A.D. 738 [1931]; Matter of Casessa, NYLJ, June 22, 2001, at 24, col 5). In that regard, petitioner must prove that a contract was made and that its terms are definite (Muhlstock v Cole, 245 AD2d 55 [1997]). As this court stated in Edelman v Hatami, 19 Misc 3d 1105(A)(2008), summary judgment is appropriate where the moving party establishes that the terms of the oral contract are not definite. Such result is particularly appropriate where the contract is of the magnitude that a court would ordinarily expect the parties to embody it in a formal writing.
We turn first to petitioner's cross-motion for summary judgment.
Petitioner seeks to establish the terms of the alleged express oral agreement by her own statements referenced in an affidavit from her attorney. Counsel's affidavit is replete with statements petitioner made at her examination before trial. Statements from an interested witness, who may be barred from testifying at trial under CPLR 4519 (the Dead Man's Statute), may not be offered in support of a motion for summary judgment (Phillips v Kantor & Co., 31 NY2d 307 [1972]; Marszal v Anderson, 9 AD3d 711 (3d Dept 2004); Matter of Lubin, NYLJ, March 18, 2011, at 27, col; Matter of Penn, NYLJ, Jan 4, 2007, at 31, col 3). Evidence excludable by CPLR 4519, may however be used in opposition to a motion for summary judgment (Matter of Vetri, NYLJ, Feb. 26, 1999 at 32). For purposes of determining petitioner's cross-motion, her statements have been disregarded.
Additionally, in support of her cross-motion, petitioner submits the testimony of employees who worked for decedent and documents related to business entities in which decedent held an interest or utilized the business's assets.
To establish the agreement, petitioner relies heavily on the testimony of Rebecca Ann Polstra who is described as decedent's stockbroker. Ms. Polstra is an intimate friend of petitioner's daughter Jennifer. She and Jennifer met in college in the late 80s.
Ms. Polstra met decedent through Jennifer. She testified that in the late 90s she began working as a securities broker with Smith Barney. Following a medical leave of absence, Ms. Polstra returned to Smith Barney around 2002. Ms. Polstra testified that she assisted decedent in opening two accounts at Smith Barney, one in his name and the other in petitioner's name. Ms. Polstra believed that the accounts held between $650,000 and $750,000 when she retired from Smith Barney. She stated that decedent established the account for petitioner to help teach her how to invest. Ms. Polstra testified that in "2000ish" she, Jennifer, decedent and petitioner were in Las Vegas. While sitting in a café and/or a room at a hotel in Las Vegas, Ms. Polstra and decedent talked about petitioner. Decedent told Ms. Polstra that he was afraid that when he died his estate would be "pieced out" and that his family would not accept petitioner and that he had put aside a fund for her "that he wanted to give to her before he passed away." She continues:
However he said — I don't know if this is just what I was getting out of it or if he actually said it. I believe he was making payments from the fund, I don't know, but there was a fund he had put aside for her and I knew it was $10 million. And the reason was is because he felt that when he died — he wanted this to go to her before he died.Thus we put together a plan to teach her to invest. ..."
He felt that when he died that nobody would carry through with his wishes, and he really didn't want the family to be involved. He didn't want to cause any pain any hardship. And he told me she will get this before I die, that was the whole thing. However with all these fears he was scared to death that even if she got the money people would take advantage of her — that she had no financial knowledge, people would take advantage of her.
When asked whether decedent told her where he had put the fund, Ms. Polstra responded that "He didn't. In his speaking to me, he didn't say this is the fund no. But I believe it was not in the United States." And, when asked if decedent told her about discussions he had with petitioner concerning the fund, Ms. Polstra stated: "He didn't tell me anything about the discussions with Betty."
Respondents question Ms. Polstra's credibility in light of her relationship with Jennifer and given her selected recollection of events and dates. Ms. Polstra's testimony is replete with conjecture. Even when viewing Ms. Polstra's testimony in a light most favorable to petitioner, she has not established the existence of an express oral contract between petitioner and decedent.
In addition, petitioner offers documents related to decedent's business interests and the testimony of his employees. Petitioner deposed: 1) Josephine Donato, decedent's former secretary; 2) Richard Chan, a managing director of US Summit Hong Kong; 3) JH Chang, a financial manager and director of US Summit Hong Kong; and 4) Li-Sheng Huang, decedent's driver and personal assistant during the last two years of his life.
Petitioner contends that the fund was comprised of an offshore group of companies centered in Panama and Hong Kong. None of the witnesses were familiar with any purpose behind the structure of the various business entities, some of which served as the repository of assets held by another entity. Decedent did not own all of the entities that were examined by petitioner.
Among the entities is a company by the name of An Cheng Group, Inc. (An Cheng) which was incorporated in Panama. Decedent's sister, Elizabeth Chang, owned the company. In April, 1998, Ms. Chang established a trust which was funded with 100% of the issued and paid capital of An Cheng. The trust beneficiaries are identified as Kenneth Wang and Vera Wang Becker. The records differ whether An Cheng was capitalized with $1 million or $10 million. An Cheng was dissolved in September, 2007. Petitioner traces the flow of assets from one entity to another, with a focus on An Cheng, and from such examination speculates that this complex structure of business entities was a "paper-shell" established by decedent.
Decedent's employees confirmed that on many occasions he directed them to arrange for and send money to petitioner. It is undisputed that during their relationship, petitioner directed that millions be paid to her. None of the witnesses testified to any knowledge of an express oral agreement between decedent and petitioner.
The documents and testimony of the witnesses confirm that decedent utilized the assets of the these entities for his own purposes, including as a source of some of the money he gave petitioner. With respect to those entitles that decedent did not own, it appears that monies paid out at his direction were treated as loans against the entity. Petitioner has traced some $53 million as passing through An Cheng's accounts, which she asserts was more than sufficient to fund the agreement. In effect, petitioner asks the court to make a quantum leap to conclude that the flow of millions through these multiple business entities establishes decedent's alleged express oral agreement to create a fund for her benefit. However, the purpose underlying this complex structure of business entities has not been established. It is more probable that the structure of the business entities was intended to reduce taxes and protect against personal liability. Regardless, petitioner has not proven that the structure relates to her claim.
While it is clear that decedent was very generous to petitioner, a fact which is undisputed, she has not proven by clear and convincing evidence that he was obligated to provide a fund for her support pursuant to an express oral agreement. Decedent's largess is consistent with their intimate relationship. Given the innumerable issues of fact, and questions concerning Ms. Polstra's credibility, petitioner's cross-motion for summary judgment is denied.
Petitioner's claim for summary judgment on the ground of quantum meruit also fails because she has not established any of the following elements: 1) performance of services; 2) acceptance of services; 3) an expectation of compensation and 4) the reasonable value of such services (Atlas Refrigeration-Air Conditioning, Inc. v Lo Pinto, 33 AD3d 639 [2d Dept 2006]; Matter of Alu, 302 AD2d 520 [2d Dept 2003]). Equally unavailing is her claim in promissory estoppel which requires the following proof: 1) a clear an unambiguous promise; 2) a reasonable and foreseeable reliance by the party to whom the promise was made; and 3) injury sustained by the party asserting the estoppel (Edelman v Hatami, 19 Misc 3d 1105[A][2008]). Petitioner has not demonstrated a clear and unambiguous promise, reliance or injury. She has shown only that decedent was generous to her. Accordingly, petitioner's cross-motion for summary judgment on the grounds of quantum meruit and promissory estoppel is denied.
As noted, respondents' have moved for summary judgment on several grounds.
Respondents first ground for summary judgment is based upon a release signed by petitioner. They argue that even if an agreement exists, a fact they do not concede, petitioner released any potential claim against decedent's estate when she executed a letter dated July 15, 2004. The letter, signed by decedent and petitioner, is as follows:
Dear Betty:
Thank you for your visit. As you know, my health and physical condition is not what it used to be. Under the present circumstances, I thought it best that I set forth for you my understanding of our relationship. I am hopeful that you will find the nature of this straightforward letter to be a way of clarifying our long term relationship.
I have told my children and by this letter I am making it absolutely clear to you as I did in the past, that I have no intention of marrying you and that under no circumstance whatsoever will we ever be married to each other. Further, I have already adequately provided for you financially and there will be no further financial transfers from me to you. Please confirm that you waive any claim of any kind or nature against me, my family or my estate.
I have decided to spend the rest of my life surrounded by my children and grandchildren and I have no desire to upset that situation in any way. My children have more than adequately provided for my health care and I do not want you to interfere with those arrangements in any way. Please also instruct your daughter Jennifer not to visit or contact me or any of my children as this disturbs the balance of my family life. In essence, our relationship can no longer be what it used to be and, consequently, it is my wish for you to not visit me in the United States. Please do not take the formality of this letter as an affront to you but only as a way of preserving the memories we have of our friendship over the past years.
I would appreciate your signing the copy of this letter indicating your agreement to the foregoing.
Sincerely
C.C. Wang
Agreed To:
Betty Phillips 15th July, 2004
The letter was drafted by Kenneth Wang with the assistance of an attorney. At no time did the attorney speak with decedent concerning the letter. It is undisputed that at the time the letter was prepared decedent was ill, having suffered another stroke.
Thereafter, petitioner sent decedent three letters dated January 23, 2005, June 2, 2005, and September 17, 2005. In each letter, petitioner expresses anguish over the circumstances surrounding the termination of their relationship. In this correspondence, petitioner also references the July 15, 2004 letter, a copy of which she attached to two of the letters. The January 23, 2005, provides in part, as follows:
Dear CCBy the June 2, 2005 letter petitioner expresses her belief that decedent lied to her when he promised they would marry, quotes from the July 15th letter and acknowledges her signature on it, and states as follows:
...
The ultimate distress that struck me beyond redemption was when you presented me with your letter for my signature in the presence of your family and nurse. (A copy of THAT' letter is attached for your easy reference) Later, your apology and explanation were most unnecessary as it confirmed the class of man you are that do not deserve my respect. ...
...
You deserve the happiness to be surrounded by your loving children and grandchildren as you so desired and expressed in your letter.
...
Kindest Regards,
Betty Phillips
Attn: Mr CC WangOn September 17, 2005, petitioner wrote decedent wherein she states:
... This final decision is inevitable and long overdue, I wish to be true to myself being a Honorable Chinese Lady, I cannot carry on with this charade any further but to honor the intend (sic) of your letter duly signed by both of us.
...
Ps: Your letter dated 15th July 2004 is enclosed for your easy reference.
Our relationship ended when you made be (sic) sign that letter' that fateful day (15th July 2004)
Petitioner counters that the July 15th letter was wrongfully procured by respondents, that decedent lacked capacity at the time it was executed, and that she signed it under duress. Thus, petitioner argues, the release is not binding.
General Obligations Law §§ 15-303, 5-1103 provide that a release, or agreement to discharge a contract, is valid notwithstanding the absence of consideration (see Matter of O'Hara, 85 AD2d 669 [2d Dept 1981]). The July 15th letter is unambiguous and as stated therein, straightforward. It clearly states that decedent gave petitioner money and that he did not plan on making any further transfers to her. Following that statement, the letter provides: "[p]lease confirm that you waive any claim of any kind or nature against me, my family or my estate."
Generally, a valid release which is clear and unambiguous on its face constitutes a complete bar to an action on a claim which is the subject of the release (Centro Empresarial Cempresa S.A. v América Móvil, 17 NY3d 269 [2011]; see also, Matter of Schaefer, 18 NY2d 314 [1966 ]; Appel v Ford Motor Company, 111 AD2d 731 [2d Dept 1985]). However, a release may be invalidated for any of the traditional bases for setting aside written agreements, e.g., duress, illegality, fraud, or mutual mistake (Centro Empresarial Cempresa S.A. v América Móvil). Once the release is established, the burden shifts to the releasor to prove fraud, duress or some other factor sufficient to void it (Fleming v Ponziani, 24 NY2d 105 [1969]; Centro Empresarial Cempresa S.A. v América Móvil).
Petitioner states that she returned to the United States on July 15, 2004 after learning that decedent suffered a stroke. She was picked up at the airport by decedent's driver, Li-Sheng Huang and taken to decedent's home in Southampton. Kenneth Wang was also at the house. Petitioner states that upon seeing decedent, she was shocked and scared. The letter was given to petitioner, who admits signing it.
Mr. Huang, decedent's driver and personal assistant was deposed. He was hired by decedent in 2003. Mr. Huang's parents had worked for both Vera Wang Becker and decedent. He first met petitioner in March, 2004 while she was in the United States. Mr. Huang stated that during that visit, petitioner stayed with decedent in his Pound Ridge home except for weekends when Kenneth Wang and/or Vera Wang Becker were visiting.
Following decedent's second stroke in May, 2004, Mr. Huang arranged for petitioner to return to New York. Mr. Huang confirms that he picked petitioner up at the airport and that he drove her to the Southampton house. A couple of days after the July 15th meeting, decedent gave Mr. Huang the letter. Decedent told Mr. Huang "that they asked [petitioner] to sign the paper." Mr. Huang put the letter in decedent's briefcase and kept a copy in a safe.
Following the July, 2004 visit, Mr. Huang traveled to Asia with decedent on several occasions. In October, 2004, they were in Asia for three weeks. Decedent returned to Asia in January, 2005, September, 2005, and in May or June, 2006. During each visit, decedent spent time with petitioner. Mr. Huang recalled that during the final trip, decedent told him he was trying to cool down the relationship, "[decedent] said he want to finish the relationship, and [petitioner] asked for like $4 million. [Decedent] said he was going to give her the money too. ... [Decedent] gave her two million." Mr. Huang called Mr. Chan and instructed him to wire petitioner $2 million. Mr. Chan testified that he spoke with decedent, confirmed the instructions and transferred $2 million to petitioner. According to the records, the transfer was made in July, 2005.
Petitioner's claims that decedent lacked capacity to understand the July 15th letter and that she was under duress when she signed it, are refuted by her own actions following its execution. While petitioner's distress is understandable given the change in her relationship with decedent, there is no proof that she was forced to sign the letter. No threats were made to her. According to petitioner, no one said anything to her before she signed the letter. Petitioner then sent three separate letters to decedent wherein she acknowledged and ratified the terms of the July 15th letter.
Mr. Huang's testimony is contrary to petitioner's allegation that decedent lacked capacity. After the letter was signed, Mr. Huang confirms that decedent was aware of it. Mr. Huang testified that decedent entrusted the letter to him. He was present during subsequent visits between decedent and petitioner in Asia, he knew about petitioner's request for money and assisted in the transfer of $2 million to her. Petitioner does not question decedent's capacity with regard to this transfer.
The proof establishes that petitioner released any claim she might have against decedent's estate which arose out of her relationship with him. Accordingly, respondents are granted summary judgment. In light of this determination, the court need not address the remaining defenses.
Finally, petitioner's claims against Kenneth Wang and Vera Wang Becker, individually, constitute disputes between living parties over which this court lacks subject matter jurisdiction (Matter of Lainez, 79 AD2d 78 [2d Dept 1981], affd 55 NY2d 657 [1981]). Accordingly, petitioner's claims for 1) interference with contract, 2) unjust enrichment, 3) intentional infliction of emotional distress, and 4) tortious interference with her prospective inheritance are dismissed without prejudice to seeking such relief in the appropriate forum.
Submit decree.
Dated: White Plains, NY
April 17, 2012
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