Opinion
No. CV16–0257.
04-11-2017
ESTATE Of Susan A. TERRY, Plaintiff, v. Raymond Charles WEISS, Defendant.
Niles & Bracy, PLLC, (John M. Crotty, Esq.), Plattsburgh, Attorneys for Plaintiff. O'Connell & Aronowitz, P.C., (Donald W. Briggs, Esq.), Plattsburgh, Attorneys for Defendant.
Niles & Bracy, PLLC, (John M. Crotty, Esq.), Plattsburgh, Attorneys for Plaintiff.
O'Connell & Aronowitz, P.C., (Donald W. Briggs, Esq.), Plattsburgh, Attorneys for Defendant.
GLEN T. BRUENING, J.
Plaintiff, the Estate of Susan A. Terry (Estate), commenced this action in 2016 seeking, among other things, a money judgment against Defendant Raymond Charles Weiss (Defendant) in the amount of $75,000.
Plaintiff alleges that Raymond John Weiss (RJW), by his 2003 Last Will and Testament (Will), devised to his son—Defendant—certain real property located in Clinton County, New York. As is relevant to this action, paragraph III of the Will also provided that
if said premises ever by sold by said RAYMOND CHARLES WEISS, his heirs, or assigns the proceeds of any sale shall be divided as follows:
(a) The first $75,000.00 from the proceeds of the sale of the aforementioned premises to SUSAN ANN TERRY of AuSable Forks, New York, absolutely and forever.
(b) I further direct that the balance of the proceeds from the sale of the aforementioned premises go to my beloved son, RAYMOND CHARLES WEISS, of Cairo, New York, absolutely and forever.
It is undisputed that, in 2005, RJW died. In 2007, Defendant deeded the property to himself and his spouse and also obtained a mortgage in the amount of $208,000, secured by the property. In 2008, Susan A. Terry died, and Tina Preston was named Executrix and sole beneficiary of the Estate. In 2009, RJW's Estate made an application to Clinton County Surrogate's Court for an Order dismissing a money claim and distributing RJW Estate's remaining cash. On September 4, 2009, the Clinton County Surrogate's Court issued an Order dismissing certain money claims, and distributing the remaining portions of RJW's Estate. As is relevant to Plaintiff's motion, that Order provided that "the proceeds of any future sale of the property owned by the deceased ... be distributed as set forth in Paragraph III of the deceased's Will" (Crotty Affirmation, Exhibit H).
In 2006, Susan A. Terry filed an affidavit with the Clinton County Clerk's office, in which she attests that, pursuant to RJW's Will, she has been granted an interest in the first $75,000 from the proceeds of the sale of the Clinton County real property.
Plaintiff's submission identifies Tina Preston as Susan A. Terry's daughter. In a colloquy before the Clinton County Surrogate's Court with respect to RJW's probate proceeding, Tina Preston advised that she is Susan A. Terry's sister (Briggs Affidavit, Exhibit C),
Defendant sold the property in September 2012 for the sum of $226,082. After Defendant rejected Plaintiff's demand for payment, Plaintiff commenced this action. Plaintiff now moves for summary judgment on its fourth cause of action—seeking enforcement of an Order of the Clinton County Surrogate's Court, dated September 4, 2009—contending that Defendant has ratified, waived, and is collaterally estopped from challenging the 2009 Order. Defendant opposes Plaintiff's motion and cross-moves seeking summary judgment dismissing the action, contending that the bequest to Susan A. Terry lapsed since she died before the property was sold. Defendant also references the affirmative defense, raised in his answer, that the bequest violates the Rule Against Perpetuities (RAP).
Plaintiff's first three causes of action allege that the Estate has a vested interest in the proceeds of the sale of the property, that Defendant was unjustly enriched, and that Defendant's conduct wrongfully deprived the Estate of its assets.
A movant for summary judgment bears the initial burden of establishing his or her right to summary judgment as a matter of law by tendering sufficient evidence, in admissible form, to eliminate any material issues of fact from the case (see Alvarez v. Prospect Hosp., 68 N.Y.2d 320, 324 [1986] ). In this regard, "conclusory assertions are insufficient to demonstrate the absence of any material issues of fact" ( Ayotte v. Gervasio, 81 N.Y.2d 1062, 1063 [1993] ), and the failure to make the initial prima facie showing requires the denial of the motion, "regardless of the sufficiency of the opposing papers" ( Winegrad v. New York Univ. Med. Ctr., 64 N.Y.2d 851, 853 [1985] ). "Once this showing has been made, however, the burden shifts to the party opposing the motion for summary judgment to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action" ( Alvarez v. Prospect Hosp., 68 N.Y.2d at 324 [internal citation omitted] ). "Something more than speculation is needed to defeat a motion for summary judgment" ( Oliveira v. County of Broome, 5 AD3d 898, 899 [3d Dept 2004] ). Although only collaterally raised by the parties, the critical issue in dispute is whether Paragraph III of RJW's Will violates the RAP.
Plaintiff contends that the RAP is not applicable to this action based on collateral estoppel, ratification, and waiver.
The Court is unpersuaded that Defendant is barred by the doctrine of collateral estoppel, waiver, or ratification. While the doctrine of collateral estoppel bars re-litigation of an issue which has been fully litigated and decided in a prior action and is determinative of the issues disputed in the present action (see Kaufman v. Eli Lilly & Co., 65 N.Y.2d 449, 455 [1985] ), the issue of perpetuities was neither raised nor addressed in the Surrogate Court proceeding. A review of the transcript of proceedings before the Surrogate's Court reveals the following colloquy between Tina Preston and the Court regarding Paragraph III of the Will:
Ms. Preston: In the will, also, it was if Ray Junior was to sell the camp out in Silver Lake, Susan was to get $75,000 on the sale of the property. Is there additional paperwork to that that has to be filled out or—
The Court: Well, that's a matter you should discuss with an attorney. That's a legal issue, and I can't give you advice.
Ms. Preston: Okay. I didn't know if that was part of everything. Thank you.
The Court: That's something you should discuss with an attorney.
Ms. Preston: Okay. Thank you.
(Briggs Affidavit, Exhibit C, page 7).
In any event, because public policy is in favor of barring perpetuities, this Court has the authority to consider and address the RAP now, even if it was not raised in the Surrogate Court matter ( Barnes v. Oceanus Nav. Corp., Ltd., 21 AD3d 975, 977 [2d Dept 2005] [the trial court has the inherent power to set aside a prior decision on public policy grounds for an overriding and persuasive reason, such as under the rule against perpetuities] ); see also Metropolitan Transp. Auth. v. Bruken Realty Corp., 67 N.Y.2d 156, 161 [1986] ["The rules are legal prohibitions, based on the public policy of the State. They may not be waived, as could rules enacted for the benefit of the parties alone] ). Thus, as a matter of law, Plaintiff has failed to establish its prima facie entitlement to summary judgment on its fourth cause of action.
In next addressing Defendant's cross-motion, since RJW predeceased Susan A. Terry, the Court is not persuaded that the bequest to Susan A. Terry lapsed (see EPTL 3–3.3 ). While the Court finds that Defendant has failed to establish its prima facie entitlement to summary judgment on this ground, the Court reaches a different conclusion with respect to the RAP—codified as EPTL 9–1.1.
As is applicable to this action, EPTL 9–1.1(b) —the vesting rule—provides that
no estate in property shall be valid unless it must vest, if at all, not later than twenty-one years after one or more lives in being at the creation of the estate and any period of gestation involved. In no case shall lives measuring the permissible period of vesting be so designated or so numerous as to make proof of their end unreasonably difficult.
Thus, any interest that may not vest within the RAP period is void. A vested interest is "an immediate, fixed right of present or future enjoyment" (Black's Law Dictionary [10th ed.2014] ). A perpetuities violation occurs if the interest may vest too remotely. However, if interests are already vested upon creation, they do not violate the RAP, even if they may not become possessory for a long time. Since the RAP only applies to property interests which are not vested, a characterization of Susan A. Terry's interest in this action is essential to this Court's analysis (see Matter of Roe, 281 N.Y. 541, 547 [1939] ).
The suspension of alienation rule operates to void an interest that suspends the power to alienate or transfer property in fee simple absolute for a period that extends beyond lives in being at the creation of the estate plus 21 years (see EPTL 9–1.1[a] ).
"In New York, an estate in property may be either an estate in possession or a future estate, depending on the time of enjoyment" ( Voght v. Voght, 64 AD3d 984, 986 [3d Dept 2009] ). In this matter, Susan A. Terry's bequest was clearly a future estate as it was "one that [was to] become [ ] possessory at a future time" (see EPTL 6–4.2 ).
The EPTL classifies three types of vested future estates created in favor of someone other than the creator, namely remainders: A) indefeasibly vested; B) vested subject to open; and C) vested subject to complete defeasance (see EPTL 6–3.2[a][2][A], [B], [C] ). The EPTL also identifies a type of non-vested future estate created in favor of remainders—one that is subject to a condition precedent (see EPTL 6–3.2[a][2][D] ). Susan A. Terry's bequest was neither an indefeasibly vested future estate, nor a vested future estate subject to open, as her interests were neither "certain when created to become an estate in possession" (EPTL 6–4 .7) or "created in favor of a class of persons .... subject to diminution by reason of another person becoming entitled to share therein" ( EPTL 6–4.8 ). Thus, pursuant to the EPTL, Susan A. Terry's bequest is either a future estate vested subject to complete defeasance or a future estate that is not vested subject to a condition precedent.
In this case, Plaintiff states, without elaboration or supporting arguments, that the bequest to Susan A. Terry is a "vested remainder interest subject to divestment" (Plaintiff's Memorandum of Law, page 1)
"A future estate vested subject to complete defeasance is an estate created in favor of one or more ascertained persons in being, which would become an estate in possession upon the expiration of the preceding estates, but may end or may be terminated as provided by the creator at, before or after the expiration of such preceding estates" ( EPTL 6–4.9 ). A future estate subject to a condition precedent, on the other hand, is an estate "created in favor of one or more unborn or unascertained persons or in favor of one or more presently ascertainable persons upon the occurrence of an uncertain event" ( EPTL 6–4.10 ). A future estate subject to a condition precedent is subject to the RAP, while a future estate vested subject to defeasance is not (see Matter of Roe, 281 N.Y. at 547 ).
By the language of the Will, upon RJW's death, Defendant was bequeathed the real property located in Clinton County, with his interest in a portion of that property being defeasible "if premises ever be sold" by either Defendant, his heirs or assigns (Crotty Affirmation, Exhibit C; see EPTL 6–1.1[a][2] ; Matter of Nelson, 154 A.D.2d 378, 378 [2d Dept 1989] ). The bequest to Susan A. Terry, on the other hand, was contingent upon the occurrence of uncertain future events—the sale of the property (see EPTL 6–4.10 ). As this contingent interest was not certain to occur, it was not vested upon its creation. Accordingly, the bequest to Susan A. Terry was a future estate subject to a condition precedent, and subject to the provisions of the RAP.
The test "by which to ascertain whether a limitation over is void for remoteness is very simple. It does not depend on the character or nature of the contingency or event on which it is to take effect, for these may be varied to any extent. But it turns on the single question, whether the prescribed contingency or event may not arise until after the time allowed by law within which the gift over must take effect" ( Matter of Roe, 281 N.Y. at 547–548 ). Defendant's option to sell the property could be exercised even after the expiration of lives in being plus twenty-one years. The contingency contains no time limitation and also binds Defendant's heirs and his assigns (see Dimon v. Starr, 299 A.D.2d 313 [2d Dept 2002], lv denied 100 N.Y.2d 501 [2003] [holding an agreement that gave plaintiff, his successors, heirs, or assigns, "a future right to receive additional compensation for the sale of his interest in certain real property" unenforceable as a violation of the prohibition against remoteness of vesting codified at EPTL 9–1.1(b) ] ). As such, the bequest to Susan A. Terry set forth paragraph III of the Will violates EPTL 9–1.1(b) as it will not necessarily occur within the RAP period, and Defendant is entitled to summary judgment dismissing this action. Accordingly, it is hereby
ORDERED that Plaintiff's motion seeking summary judgment on the issue of liability on its fourth cause of action is denied in its entirety; and it is further
ORDERED that Defendant's cross-motion seeking summary judgment dismissing the Complaint, is granted.
This constitutes the Decision and Order of the Court. The original Decision and Order is being returned to counsel for Defendant. A copy of the Decision and Order and the supporting papers have been delivered to the County Clerk for placement in the file. The signing of this Decision and Order and delivery of a copy of this Decision and Order shall not constitute entry or filing under CPLR 2220. Counsel is not relieved from the applicable provisions of that rule respecting filing, entry and notice of entry.
IT IS SO ORDERED.
The Court considered the following papers:
By Plaintiff:
Notice of Motion, dated October 24, 2016;
Affirmation of John M. Crotty, Esq., dated October 24, 2016, with Exhibits A–J;
Memorandum of Law, dated October 24, 2016;
Reply Affirmation of John M. Crotty, Esq., dated November 23, 2016.
By Defendant:
Notice of Cross–Motion, dated November 16, 2016;
Affidavit of Donald W. Briggs, Esq., sworn to on November 16, 2016, with Exhibits A–C.