Opinion
307789.
Decided June 29, 2005.
Jerry I. Lefkowitz, Esq. — Attorney for Claimant, 3000 Marcus Avenue, Ste. 1W7, Lake Success, NY 11042.
Robert Resnick, Esq. — Interested Party, 301 Crawford Boulevard, Ste. 301, Boca Raton, Florida 33432.
In this proceeding to determine the validity of a claim (SCPA 1808), claimant Marguerite Downs Rappaport is the decedent's surviving spouse. She alleges that the estate is indebted to her in the sum of $252,562.05 by reason of various loans she made to decedent and bills paid by her for which decedent allegedly agreed to repay her. Included in the sum due is a promissory note dated June 12, 1996 in the sum of $65,000.00. The estate, represented by co-executrices Lori Rappaport La Croix, decedent's daughter, and Sylvia Rappaport, decedent's mother, has denied the claim and asserted various defenses.
Claimant and decedent married on June 23, 1990, having previously lived together in Mill Neck, New York. Claimant and decedent entered into an antenuptial agreement dated June 14, 1990 which provided, inter alia, that claimant receive the sum of $100,000.00 in the event of the decedent's death. The decedent died on December 31, 1998, with only $558 in cash. In a separate proceeding, this court determined that the antenuptial agreement was valid and binding. In a schedule annexed to the antenuptial agreement, claimant listed assets of $15,000.00 in cash, jewelry (of unknown value) and a chose in action resulting from an automobile accident in which claimant was injured. Decedent set forth assets in excess of nine million dollars ($9,000,000.00).
In support of her claim, claimant testified and produced the testimony of three other witnesses. Claimant testified that during the marriage she managed the household and paid various bills. Claimant was not otherwise employed and testified that she earned income of an indeterminate amount from investments; claimant also netted approximately seventy thousand dollars in 1992 from the negligence action referred to in the antenuptial agreement. Claimant stated that she maintained various credit cards during the marriage, including American Express Platinum, American Express Gold, American Express Optima, Diner's Club and several Visa and Master Cards. Claimant maintained in her own individual name a checking account at Fleet Bank and a stock account at Merrill Lynch. It was clamant's testimony that she paid various bills and obligations from said accounts for which she did not receive reimbursement and for which she is presently seeking to collect from the estate. Included in those payments were cell phone and telephone bills, groceries, restaurant charges, gas charges, mortgage payments, car rental expenses, insurance (home, health and auto), medical expenses, hired help and pet expenses (see Exhibits 7-25.). In all, claimant's claim totals $252,562.05, inclusive of the $65,000.00 promissory note dated June 12, 1996 (Exhibit 3), for which claimant testified that she never received payment. There was evidence, however, that for the years 1983-1995, decedent either made payments to claimant or on her behalf covering an assortment of categories totaling in excess of nine hundred thousand dollars ($900,000.00). Claimant testified that these payments were reimbursements for expenses other than the items for which reimbursement is sought herein. There was evidence that in 1996 and 1997 decedent took second and third mortgages on the Mill Neck residence. Claimant stated that in 1997 she had a conversation with decedent's daughter, Lori La Croix, wherein she allegedly advised Ms. LaCroix that decedent owed money to a variety of creditors and that she (claimant) had been paying the bills including the mortgages, which were in foreclosure. Claimant testified that her Cadillac automobile was sold to defray expenses.
Susan Cohen testified that she owned a local flower shop and that she had developed a social relationship as well as a business relationship with the claimant and decedent. Ms. Cohen testified that in 1998 the decedent had an outstanding bill with the shop in the sum of $2,500.00. At a visit she had at the residence in October 1998, Ms. Cohen stated that decedent, in a brief five minute conversation, stated that he had no money and acknowledged that he owed claimant money for various household expenses she was paying, including mortgage and insurance. Decedent further allegedly stated that he would repay the monies he owed to her (Ms. Cohen) as well as to the claimant when the residence was sold.
A contractor, Ben Thomas, testified that he was employed by the decedent to make repairs at the residence. He stated that sometimes he was paid by claimant in cash. It was also his further testimony that the decedent owed him money and decedent stated to him about two years prior to decedent's death that he would be repaid when the residence was sold. Mr. Thomas stated that he was paid after the decedent's death the monies that he was owed, apparently from the estate.
John W. Matthews, decedent's partner in an insurance business established in 1993, testified that during his years in business with the decedent he observed decedent sign his name a few hundred times and stated that he recognized decedent's signature on the $65,000.00 promissory note in issue herein. Mr. Matthews alleged that decedent had a penchant for gambling and that in 1997 decedent told him that he had to sell his cars and that in the future Mr. Matthews would have to drive to their business appointments. Mr. Matthews stated that he observed decedent use claimant's credit card for gas purchases. Mr. Matthews testified that in the fall of 1998 decedent, in a conversation in decedent's kitchen, stated that he would pay back people he owed money to, including Matthews and claimant, from money he was going to realize from the sale of the residence. This witness stated that he observed claimant write checks from her own account payable to various creditors of decedent. He also testified that he observed decedent write checks to claimant. Matthews testified that it was decedent's "general" statement that people he owed money to were going to be repaid. With regard to claimant, Matthews testified that decedent told him that claimant would be paid for her payments for the mortgage, car payments and credit cards. However, Matthews conceded that he was unaware of any specific agreement by which decedent promised to repay claimant.
In defense of the claim, Lori Rappaport La Croix, relying on certain documents of financial transactions between decedent and the surviving spouse, testified that the decedent reimbursed the claimant for expenses paid by the claimant. The claimant testified that these payments represented reimbursement for items which are not part of the within claim. In this regard, claimant stated that she was always reimbursed for household expenses she paid until such time as decedent could no longer make said payments.
As noted, claimant asserts that she is entitled to be reimbursed for expenses she paid on behalf of the decedent in the total sum of $252,262.05, inclusive of the $65,000 promissory note dated June 12, 1996. The estate asserts that the claimant failed to meet her burden of proof on her claim, that the antenuptial agreement dated June 14, 1990 bars the instant claim, that the claimant never established that she had sufficient funds to pay the expenses she claimed came from her separate funds and claimant never satisfactorily explained why assets transferred to her after the execution of the June 12, 1996 note did not constitute repayment.
The claimant has the burden of proof by clear and convincing evidence ( see Matter of Gorden, 8 NY2d 71, 76). "Because of the death of the debtor and his inability to testify, the quality of evidence required is of a high degree: the proof must be clear and convincing; and the claimant must establish (her) claim in every essential detail" ( Fiebrantz v. Estate of McCormick, 43 AD2d 794, [1973], affd 35 NY2d 888, quoting 26 Carmody-Wait, 2d, New York Practice, § 159:27). A promissory note is a valid claim if proved by clear and convincing evidence (Turano-Radigan, New York Estate Administration, § 5.07[d] [2005]). In seeking to establish the June 12, 1996 promissory note as a valid obligation against the decedent's estate, claimant must prove the note was executed and delivered for a legal consideration. The burden is met, in the first instance, by presentation and proof of the execution of the note. The signature of the decedent must be established by competent testimony. Proof of the note prima facie established the claimant's cause of action and the estate becomes bound to contravene it by evidence ( Matter of Stillman, 119 Misc 476; cf. 9 Am Jur, Proof of Facts, 573).
In the instant case, contrary to the estate's contention, claimant timely asserted her claim and satisfactorily established the signature of the decedent on the promissory note. The testimony of John Matthews was sufficient to establish decedent's signature on the note. The estate failed to prove payment on the note. The court finds, therefore, that the estate has not sufficiently controverted the claim on the note. The antenuptial agreement dated June 14, 1990 is not a bar to the claim as the estate contends. The estate cites an excerpt from paragraph 5 of the agreement, to wit, each party shall have the right to dispose of his or her property "free from any claim, domination, right, interest or other cause of action of the other party" and argues that this constitutes a waiver of the instant claim. A matrimonial settlement is a contract subject to principles of contract interpretation ( see Rainbow v. Swisher, 72 NY2d 106). Where the contract is clear and unambiguous on its face, the intent of the parties must be gleaned from within the four corners of the instrument ( Meccico v. Meccico, 76 NY2d 822; Winkler v. Nussenblatt, 14 AD3d 515). It is also well settled that a settlement should be interpreted to avoid inconsistencies ( see Mir v. Mir, 187 AD2d 690). Here, a plain reading of the entire paragraph 5 demonstrates that it governs the parties' rights with respect to the right of election and does not serve to preclude the claim asserted herein.
As to the balance of the claim, i.e., monies alleged to have been paid by the claimant on behalf of the decedent for which she claims to be entitled to be reimbursed pursuant to an agreement between decedent and herself, the court finds that claimant has failed to meet her burden of proof by clear and convincing evidence ( cf. Fiebrantz v. Estate of McCormick, 43 AD2d 794, affd 35 NY2d 888). Initially, the court notes that actions between a husband and wife to determine the intent of their financial transactions are difficult to resolve. That difficulty is exacerbated herein by the plethora of transactions between decedent and claimant during their marriage. The testimony of Ms. Cohen, the florist, and Mr. Matthews, the decedent's business partner, merely established a general statement of an intention to repay creditors from the proceeds of the sale of the residence. There was neither testimony of a specific reimbursement agreement between decedent and claimant, nor details as to what may have been due and owing at the time of the decedent's death. There simply was no credible proof of a specific reimbursement agreement. Further, it is well settled that a wife who uses her own funds to pay household expenses or to provide other necessaries may compel reimbursement from her husband only where he has promised such reimbursement, either expressly or by implication of fact or of law ( Manufacturers Trust Co v. Gray, 278 NY 390, 386 [1938]); Fisher v. Wirth, 38 AD2d 611; Matter of Gray, 37 Misc2d 584; Grishauer v. Grishauer, 225 NYS2d 924 [1961]). Here, tellingly, there was an absence of proof that the claimant had the financial wherewithal to use her own money for the totality of expenses for which she is seeking reimbursement. There is insufficient evidence that claimant had her own financial resources to make the very significant payments to decedent alleged herein. Claimant testified that she came into the marriage with assets of $15,000.00; jewelry of unassigned value; a pending negligence cause of action; was not gainfully employed during the marriage and offered no details as to her investment earnings, if any. Thus, the claimant failed to meet her burden to establish her claim for moneys allegedly advanced by her pursuant to a reimbursement agreement by clear and convincing evidence.
Accordingly, the court finds that the claimant is entitled to judgment against the estate for the sum of $65,000.00 with interest thereon from February 27, 2002, the date of the commencement of the accounting proceeding which was subsequently deemed one to determine the validity of a claim. The court notes that the estate has a pending SCPA 2103 discovery proceeding against the surviving spouse. As this court stated in its order dated November 3, 2004, "the claim of creditors may . . . be subject to set-offs the estate may have against the creditors, and the determination of that issue may be postponed until the claim of the estate against the creditor . . . can be satisfactorily proved" (citations omitted). The SCPA 2103 proceeding will appear on the court's calendar for conference on Monday, July 18, 2005 at 9:30 a.m. to schedule discovery or set a date for trial.
The foregoing constitutes the decision of this court pursuant to CPLR 4213.
Settle decree.