Opinion
2016-3855/B
10-18-2019
In the MATTER OF the Application of Efthimia LEONARDI as Limited Administrator of the Estate of Georgia Kokotos, Deceased, Pursuant to SCPA § 2103 for the Discovery and Turnover of Property and Issuance of Temporary Restraining Order.
Neil J. Roher, for Petitioner Michael F. Mongelli II, for Respondents
Neil J. Roher, for Petitioner
Michael F. Mongelli II, for Respondents
Peter J. Kelly, J.
Georgia Kokotos (the decedent) passed away intestate on April 16, 2015, leaving her children, Efthimia Leonardi (Efthimia) and Steven Kokotos (Steven) as her distributees and heirs at law. This proceeding, initiated by Efthimia, seeks, inter alia, the turnover and conveyance of the real property located at 146-03 28th Avenue, Flushing, New York to the petitioner for the purposes of intestate succession.
The petitioner alleges that on December 18, 2014, the subject real property was transferred by the decedent into 146-03 28 Ave LLC., a New York Limited Liability Company (the LLC) in which the decedent was the sole member. The petitioner does not dispute the validity of this conveyance, acknowledging that decedent's long-time attorney, John Pittas (Pittas), created the LLC for decedent's benefit, and that the decedent personally executed the deed.
However, shortly thereafter, petitioner contends the decedent's interest in the LLC was improperly transferred by Steven, as agent under a power of attorney (POA) and statutory gifts rider (SGR), to his wife, respondent Catherine Kokotos (Catherine). Specifically, on December 27, 2014, Steven executed an assignment of decedent's interest in the LLC and issued a second membership certificate bearing Catherine's name as sole member of the LLC. The decedent passed away on April 15, 2015.
Nine months later, Catherine, as sole member of the LLC, executed a deed conveying the property from the LLC to herself and six months thereafter she took out a mortgage on the property in the sum of $200,000.00.
Efthimia commenced this proceeding on November 14, 2017. She now moves for summary judgment seeking a determination that the transfer of the LLC to Catherine and all subsequent transactions are invalid. Specifically, petitioner maintains that the POA and SGR were improperly and defectively executed, witnessed, and acknowledged in violation of New York General Obligations Law §§ 5-1501 and 1514. Additionally, petitioner argues that the transfer of the LLC to Catherine is invalid as it was not made in the best interests of the decedent and is "cloaked with a presumption of impropriety and self-dealing."
Respondents oppose the motion contending that the petitioner has failed to tender admissible proof inasmuch as petitioner's affidavit and that of her attorney are not based upon personal knowledge; that the deposition transcripts submitted are not executed; that the power of attorney was prepared at the decedent's behest by her attorney and was properly executed in all respects; that the transactions undertaken by Steven as the agent thereunder were all done with the decedent's knowledge and at her express direction; and that the notary's disavowment of her signatures on the POA and SGR, at most, raises material issues of fact rendering summary judgment improper.
"A party moving for summary judgment must make a prima facie showing of entitlement to judgment as a matter of law, producing sufficient evidence to demonstrate the absence of any material issue of fact. Once this showing has been made, the burden shifts to the nonmoving party to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact that require a trial for resolution" ( Giuffrida v. Citibank Corp. , 100 NY2d 72, 81 [2003] ; see also CPLR 3212 ; Alvarez v. Prospect Hosp., 68 NY2d 320, 324 [1986] ).
The party opposing summary judgment is to be afforded every favorable inference that may be drawn from the evidentiary facts alleged (see e.g. Matter of Wimpfheimer , 8 Misc 3d 538 [Sur Ct, Bronx County 2005] ), and the court is constrained to deny the motion if there is any doubt as to the existence of a triable issue (see e.g. Baker v. Briarcliff Sch. Dist., 205 AD2d 652, 653 [2d Dept 1994] ).
In support of her prima facie demonstration, petitioner submits unsigned copies of the deposition transcripts of Armen Caprielian, one of the witnesses to the SGR, and that of notary public, Rosanne Alicea. Although original duly executed transcripts have not been provided, petitioner has tendered evidence that the transcripts had been forwarded to the non-party witnesses for execution pursuant to CPLR 3116(a), and that neither witness returned the duly executed transcripts. Thus, notwithstanding the respondents' claims to the contrary, the Court can, and will consider the entirety of their contents (id. ).
As a preliminary matter, a POA is validly executed if it is signed and dated by a principal with capacity, with a signature duly acknowledged in the manner prescribed for the conveyance of real property (see General Obligations Law § 5-1501B[1][b] ). The agent must also execute the POA in the same fashion, although a lapse of time between the execution by the principal and the agent does not effect the POA's validity (id. ).
Additionally, in order for a statutory POA to be valid for the purpose of authorizing the agent to make certain gifts in excess of an annual total of $500.00, the principal must also initial the proper section of the POA and simultaneously execute a supplementary SGR (id. at 5-1501B[2][a] ). To be valid, the SGR accompanying the POA must be signed and dated by the principal with capacity, acknowledged in the manner prescribed for the conveyance of real property, and witnessed by two persons who are not named in the instrument as permissible recipients of gifts pursuant to section 3-2.1(a)(2) of the EPTL (id. at 5-1514[9] ). The subsection of the EPTL applicable to the proper execution of the SGR provides as follows:
The signature of the testator shall be affixed to the will in the presence of each of the attesting witnesses, or shall be acknowledged by the testator to each of them to have been affixed by him or by his direction. The testator may either sign in the presence of, or acknowledge his signature to each witness separately.
( EPTL 3-2.1[a][2] ).
The statutory form of the SGR includes corresponding language which precedes the signatures of the witnesses:
By signing as a witness, I acknowledge that the principal signed the Statutory Gifts Rider in my presence and the presence of the other witness, or that the principal acknowledged to me that the principal's signature was affixed by him or her at his or her direction. I also acknowledge that the principal has stated that this Statutory Gifts Rider reflects his or her wishes and that he or she has signed it voluntarily. I am not named herein as a permissible recipient of gifts.
With the requirements in mind, the Court first considers whether the POA and SGR were properly acknowledged. For a signature to be duly acknowledged in the manner required for the conveyance of real property, the signer must orally acknowledge to the notary public that he or she in fact signed the document and the notary must know or have satisfactory evidence that the person signing is the same person described in and who executed such instrument (see Matter of Batlas , 144 AD3d 791 [2d Dept 2016] ).
The purpose behind the acknowledgment requirement is three-fold: it proves the identity of the person whose name appears on the instrument, authenticates that person's signature, and "imposes upon the signer a measure of deliberation in the act of executing the document" ( Galetta v. Galetta , 21 NY3d 186, 192 [2013] ). The formalities in the acknowledgment process are intended to ensure that the signer does not casually relinquish significant rights without due consideration of the consequences (see id. ).
On the face of it, both the POA and the SGR appear to be properly acknowledged. In each instance where an acknowledgment is required, the notary's purported signature appears, as does an imprint of the notary's stamp bearing her name, license number, and the date of the commission's expiration. The acknowledgment contains the following language which comports with the model language provided in Real Property Law § 309-a :
On the 3 day of July 2014, before me, the undersigned, personally appeared GEORGIA KOKOTOS, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her capacity, and that by his/her signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.
Petitioner neither claims that the decedent lacked capacity nor that decedent's signature was a forgery. Rather, petitioner contends that the notary's signature on the acknowledgment is a forgery. In support of this allegation, petitioner submits the unsigned deposition transcript of notary public, Rosanne Alicea. Petitioner describes the notary's disavowment of her signature on the POA and SGR as unequivocal, unassailable, and, in and of itself, constitutes proof of her entitlement to a summary determination that the POA, SGR, and any document executed pursuant to its authority are null and void.
Upon reading the notary's deposition transcript in its entirety, the Court is unable to mirror the petitioner's certainty in this regard. On examination by petitioner's counsel, the notary did, indeed, deny that her signature appeared on the instrument. However, when questioned by opposing counsel, her responses became more evasive and at times, obstinate.
For example, during the deposition, opposing counsel requested that the notary furnish her driver's license or other exemplars so as to permit inspection of her signature. The notary refused, claiming that she left her driver's license at home and had nothing else bearing her signature with her at that time (see Pet. Ex. D at pp. 36-37).
Notably, not a single exemplar of the notary's undisputed signature has been provided to the Court by petitioner, including her deposition transcript which was neither signed nor returned to petitioner's counsel. It was apparent at the examination that the notary was not going to willingly provide such exemplars (see Pet. Ex. D at pp. 47-49; 59-60) and the Court has not been requested to compel her to do so.
Additionally, although the notary disavowed either signing or stamping the instrument, she also testified that she generally affixes her initials next to her notary stamp imprint, a practice that is certainly unique. In this case, the notary's initials appeared next to the stamp's imprint on both the disputed POA and SGR acknowledgments. The year of the expiration of the notary's license was also handwritten in the appropriate section.
Finally, the notary only appeared for her deposition upon being compelled to do so by way of a subpoena and her testimony suggested that she was acutely aware that the topic of the litigation concerned "inconsistencies" in a document she notarized.
Long ago, the Court of Appeals observed that a certificate of acknowledgment "makes out a prima facie case as strong as if the facts certified had been duly sworn to in open court by a witness, apparently disinterested and worthy of belief ... While the evidence is not conclusive ... it is of such a character as, standing alone, to send a case to the jury, so that they may decide between the probative force of the certificate, supported by the presumption that it states the truth, on the one hand, and the evidence produced in rebuttal, whatever it may be, on the other" ( Albany County Sav. Bank v. McCarty , 149 NY 71 [1896] ; see also Stein v. Doukas, 98 AD3d 1026 [2d Dept 2012] ). A certificate of acknowledgment should not be cast aside on the basis of "evidence of a doubtful character ... nor upon a bare preponderance of evidence, but only on proof so clear and convincing as to amount to a moral certainty" (see Albany County Sav. Bank, supra ; Kanterakis v. Minos Realty I, LLC, 151 AD3d 950 [2d Dept 2017] ; Osborne v. Zornberg , 16 AD3d 643, 644 [2d Dept 2005] ).
The Court is of the opinion that the notary's bald assertion that her signature was forged, under the circumstances, is insufficient to sustain petitioner's prima facie burden of demonstrating by clear and convincing evidence entitlement to judgment as a matter of law (see id.). Whether the POA and SGR were properly acknowledged turns on issues of credibility best determined by the discerning eyes and ears of the trier of fact (see e.g. Dart Assoc. v. Rosal Meat Market, Inc., 331 NYS2d 853 [2d Dept 1972] ; Quimby v. Bertie, 2008 NY Misc LEXIS 9821 [Sup Ct Kings County 2008]).
Accordingly, the branch of the motion which seeks as a matter of law to set aside the POA, SGR, and the transactions effectuated therewith on the basis of a defective and improper acknowledgment, is denied.
The Court now turns to the branch of the motion which seeks to invalidate the SGR and ultimately, the transfer of the LLC to Catherine, on the grounds that the SGR was improperly witnessed. Petitioner submits the deposition testimony of one of the witnesses to the execution of the SGR, Armen Caprielian (Armen), in support of this branch of the motion.
Armen, a "close" friend of Steven, testified that he came to be a witness as he was accompanying Steven and the decedent when they went to a mortgage broker's office to inquire about a home equity line of credit. At some point, Steven indicated that he needed to have a POA "notarized" and asked Armen, and the other witness, Peter Schneeberg (Peter) to sign it. Armen did not see the decedent sign the SGR, nor did he have any conversations with her about the document. However, the decedent was present in the room at the time Armen was asked to witness the document and at the time he signed it.
Despite her efforts, petitioner was unable to obtain the testimony of Peter, and elected to move for summary judgment in its absence. Predictably, respondents' opposition to the within motion included an affidavit from Peter. In contrast to Armen's testimony, Peter swore that both he and Armen were aware that the document witnessed was a POA running from decedent to Steven; that decedent voluntarily and knowingly executed the POA and SGR; and that although he did not see the decedent execute the instrument "he knew she had signed the document in the same office at that same time" before it was presented to him to signed. In closing, Peter affirmed the truth of the entirety of the language on the SGR (see discussion supra ) that appeared just before his signature.
In addition, in an attempt at rehabilitation, respondents submitted a nearly identically worded affidavit executed by Armen which, respondents maintain simply "compliments and supplements" Armen's prior testimony. However, the affidavit executed by Armen represents sworn testimony favorable to respondents partly inconsistent with the testimony provided at his deposition.
It is well-settled that a party may not submit an affidavit in opposition to a summary judgment motion that contradicts prior testimony given at an examination before trial (see Rogers v. City of New York Hous. Auth. , 298 AD2d 312 [1st Dept 2002] ).
That being said, even if the Court were to totally disregard Armen's affidavit, by virtue of Peter's sworn affidavit, the respondents have demonstrated issues of fact concerning the execution and witnessing of the SGR exist that, again, warrant careful consideration by the trier of fact, and render this issue unsuitable for a determination on papers. Accordingly, the branch of the petitioner's motion which seeks to invalidate the SGR on the basis that it was improperly witnessed is denied.
Petitioner last argues that the transfer of the LLC to Catherine by Steven as agent under the POA was not done in decedent's best interests and constitutes impermissible self-dealing. Generally speaking, a gift made that comport's with the principal's "best interests" is one that furthers the principal's "financial, estate, or tax plan" ( Matter of Ferrara, 7 NY3d 244, 254 [2006] ). Petitioner seeks to set aside the transfer on the grounds that respondents are unable to demonstrate by clear and convincing evidence that decedent intended to make a valid inter vivos gift to Catherine.
Essentially, petitioner relies upon the well-settled precedent that "an agent may not make a gift to himself or a third party of the money or property which is the subject of the agency relationship [as] [s]uch a gift carries with it a presumption of impropriety and self-dealing, a presumption which can be overcome only with the clearest showing of intent on the part of the principal to make the gift" ( Semmler v. Naples , 166 AD2d 751, 752 [3d Dept 1990] ) (internal citations omitted).
In opposition to the motion, respondents submit, inter alia, affidavits from two nonparty witnesses , attorneys Pittas and Isidoros I. Tsamblakos (Tsamblakos). Attorney Pittas, whom petitioner concedes is the decedent's personal attorney, refutes petitioner's claim that the membership certificates of the LLC were prepared by Steven. Pittas swears that it was he that prepared both certificates and the assignment to Catherine and that he did so based upon decedent's clear and voluntary directives.
Petitioner did not obtain deposition testimony of either attorney prior to moving for summary judgment.
Tsamblakos swears that he prepared the POA and SGR for the decedent. He states that the topic of the POA and SGR came up during the course of determining whether decedent had a medical malpractice action. Tsamblakos claims that he advised decedent she could execute a POA with or without a SGR and that decedent "directed me to include the Statutory Gifts Rider as she wanted Steve to be able to make gifts to himself in any amount he chose to, including the realty located at 146-03 28th Avenue, Flushing, New York." Although petitioner has long contended that Tsamblakos is, in fact, Steven's attorney, and that he is aligned in interest with Steven and therefore not worthy of belief, such determinations are not the function of the Court on a summary judgment motion (see e.g. Vega v. Restani Constr. Corp., 18 NY3d 499 [2012] ).
Additionally, respondents submit their own affidavits in opposition to petitioner's motion. Although evidence excludable pursuant to CPLR 4519 cannot be used in support of summary judgment, it can be used to oppose such a motion where, as here, it is not the only evidence submitted by the opponent (see Phillips v. Joseph Kantor & Co., 31 NY2d 307 [1972] ). This is so because, among other things, "[it] is always possible that the incompetency will be waived at the trial, or the door opened, by design, or by inadvertence" (id ).
In opposition, Steven swore, inter alia, that he has lived at the subject real property with his parents all of his life; he suffers from bipolar disorder and was rendered further disabled as a result of a pulmonary embolism and car accident; that the decedent was cognizant of Steven's limitations and wanted to ensure that he and his wife Catherine always had a place to live and a reliable source of income; and that decedent was carrying out her wishes to give the property to him by way of transferring it to his wife Catherine. Steven also testified to the preparation of the LLC membership certificates and assignment of the shares by attorney Pittas, and his execution of the documents at decedent's direction.
Similarly, Catherine swore that both decedent and Pittas told her and Steven that decedent wished to transfer ownership of the LLC to her and that she and another unnamed individual were present when decedent instructed Pittas to prepare the necessary documents and directed Steven to sign them.
Based upon the collective submissions of the respondents, as well as the gifting language in the POA and SGR (see e.g. Burgwardt v. Burgwardt , 150 AD3d 1625 [4th Dept 2017] ), respondents have submitted sufficient evidence to demonstrate the existence of triable issues of fact insofar as decedent's best interests and intent is concerned. Accordingly, the branch of petitioner's motion for summary judgment which seeks to set aside the transfer on the basis that respondents will be unable to demonstrate it was in decedent's best interests, or comparted with her intent, is denied (see e.g. id.; see also Scotti v. Barrett , 149 AD3d 998 [2d Dept 2017] ).
The parties are directed to appear for a further pre-trial conference on November 19, 2019, at 9:30 a.m.
This is the decision and order of the court.