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In re Edelen

New York Surrogate's Court, Orange County
Feb 4, 2020
67 Misc. 3d 473 (N.Y. Surr. Ct. 2020)

Opinion

2015-251/B

02-04-2020

PROCEEDING TO DETERMINE the VALIDITY AND ENFORCEABILITY OF a CLAIM UNDER SECTION 1809 OF the SCPA, in the Matter of the Estate of Robert Edelen, Jr. a/k/a Robert J. Edelen, Jr. a/k/a Robert Joseph Edelen, Jr. a/k/a Robert Edelen, Deceased.

Christopher Fanning, Esq., Fanning and Hughes, PLLC, Attorney for Petitioner Donna King-Edelen, 108-18 Queens Blvd., Suite 402, Forrest Hills, NY 11375 Neal Frishberg, Esq., Fabricant, Lipman & Frishberg, PLLC, Attorney for Respondent Kathy May Edelen, One Harriman Square, PO Box 60, Goshen, NY 10924


Christopher Fanning, Esq., Fanning and Hughes, PLLC, Attorney for Petitioner Donna King-Edelen, 108-18 Queens Blvd., Suite 402, Forrest Hills, NY 11375

Neal Frishberg, Esq., Fabricant, Lipman & Frishberg, PLLC, Attorney for Respondent Kathy May Edelen, One Harriman Square, PO Box 60, Goshen, NY 10924

Timothy P. McElduff, Jr., S. Motion by Petitioner/Claimant Donna King-Edelen for an Order pursuant to CPLR § 3212(b) awarding summary judgment determining the validity of a claim against the above-captioned Estate pursuant to SCPA § 1809 and cross motion by Respondent/Executrix Kathy May Edelen for an Order pursuant to CPLR § 3212(b) awarding summary judgment dismissing the Verified Petition herein as a matter of law, together with such other or further relief as the Court deems just and proper:

BACKGROUND

This motion and cross-motion arise from a proceeding commenced by Petitioner/Claimant, Donna King-Edelen pursuant to SCPA § 1809, in which Petitioner/Claimant seeks to establish the validity of her claim against the Estate pursuant to the terms of a Separation Agreement dated May 7, 2001 between her and the Decedent (the "Separation Agreement").

After his divorce in 2001, the Decedent married Respondent/Executrix Kathy May Edelen on February 14, 2002.

On February 2, 2015, the Decedent died a resident of the Town of Warwick, Orange County, New York, leaving as his all and only distributees, his surviving spouse, Respondent/Executrix Kathy May Edelen, and three children, to wit: Robert Joseph Edelen III, Katherine Mae Edelen and Harrison Paul Edelen. Robert Joseph Edelen III (DOB - XX/XX/1989) and Katherine Mae Edelen (DOB - XX/XX/1998) are the children of Decedent's first marriage to Petitioner/Claimant Donna King-Edelen. H.P.E. (DOB - XX/XX/2002) is the child of the Decedent and Respondent/Fiduciary Kathy May Edelen.

The Decedent left a written will dated October 27, 2003 (the "Will"), which was ultimately admitted to probate by Decree dated July 8, 2015. Pursuant to the Will, Decedent's surviving spouse, Kathy May Edelen, was duly appointed as Executrix of his estate.

Pursuant to the terms of his Will, the Decedent's entire estate was given, devised and bequeathed to his surviving spouse, the Respondent/Executrix, Kathy May Edelen.

On August 12, 2015, Petitioner/Claimant Donna King-Edelen, the Decedent's ex-wife, filed a claim against the Estate for $173,575.00 (the "Claim"). The alleged basis of the Claim was the Decedent's failure and omission to maintain and/or keep in full force and effect two life insurance policies naming his wife as Trustee for the benefit of the parties' children, to wit: (1) a Savings Bank Life Insurance (SBLI) policy for $148,575.00; and (2) a policy of $25,000.00 insured through the Knights of Columbus.

The Petitioner's claim emanates from the provisions of Section Eighteen of the Separation Agreement, which states as follows:

1. The Parties agree that each will maintain in full force and effect until such time that both children are emancipated, and shall neither pledge, hypothecate nor encumber the existing policies insuring life including:

INSURER

INSURED

FACE VALUE

Knights of Columbus

Robert

$ 25,000.00

Knights of Columbus

Donna

$ 25,000.00

SBLI

Robert

$100,000.00

SBLI

Robert

$148,575.00

2. Each shall name the beneficiary in the capacity of trustee for the benefit of the children.

3. Promptly after execution of this Stipulation, each shall deliver to the other certificates or instruments, if any, evidencing

the designation as beneficiary in the capacity as trustee for the benefit of

the children under said insurance policies, and further agrees that he or she will, at any time, upon request, execute and deliver to the other whatever instruments or documents or letter of authorization which may be required to enable the other party to document that he or she has complied with all of the provisions hereof.

4. Should either party predecease the other and should the policy or policies hereinabove described not be in effect, then the deceased parties' estate shall be liable to the other for the face amount of amount of the policy.

It is undisputed that Decedent Robert Edelson either did not have, obtain or properly maintain two of the three insurance policies that he represented and agreed to in the Separation Agreement, as discussed below.

At the time of the Separation Agreement in 2001, the Decedent did not have a $25,000.00 policy through Knights of Columbus. The Decedent later obtained that policy in 2005 (No. 02857721); however, the Decedent did not name the Petitioner as beneficiary, but rather, his new wife, Respondent Kathy May Edelen.

At the time of the Separation Agreement in 2001, the Decedent did not have a $148,575.00 policy through SBLI. In 1999, prior to the Separation Agreement, the Decedent obtained a policy through Knights of Columbus (#0EC81105), which included $15,000.00 in whole life coverage plus an income protection rider ("IPR"), which provided a guaranteed death benefit of $135,275.00 in the first policy year, which would decrease over time as the Decedent aged. At the time the Decedent negotiated the Separation Agreement, the IPR benefit was in policy year 2, which provided a guaranteed death benefit of $133,575.00. The whole life coverage of $15,000.00 plus the IPR of $133,575.00 equals $148,575.00, which is the precise amount of the $148,575.00, although it is undisputed that the policy is erroneously referred to as a policy through SBLI rather than Knights of Columbus. Significantly, the record further reveals that in 1999, prior to the Separation Agreement, the Decedent cancelled the IPR portion of his insurance coverage under policy #0EC81105, and later, in 2002, after the Separation Agreement, the Decedent changed the beneficiary of the remaining whole life coverage of $15,000.00 to his new wife, Respondent Kathy May Edelen. (Compare Exhibit A to Notice of Motion with Exhibit H). The Decedent held and maintained one policy as represented and agreed in the Separation Agreement, namely, the SBLI life insurance policy in the amount of $100,000.00, which Petitioner successfully collected upon the Decedent's death.

The Petitioner previously filed a cross-motion for summary judgment to establish the validity of her claim in this proceeding in response to Respondent's motion to compel certain discovery. By Decision and Order dated September 7, 2018, this Court (Onofry, J.) ordered that the consideration of Petitioner's cross-motion for summary judgment was stayed and held in abeyance pending the completion of discovery.

Discovery has been completed, as previously directed by this Court. The Petitioner now renews her motion for summary judgment to establish the validity of her claim, while the Respondent cross-moves for summary judgment dismissing the claim.

ANALYSIS

A. The summary judgment standard

A grant of summary judgment is appropriate only where the court determines, after a "search of the record", that there are no material triable issues of fact. It is incumbent upon the moving party to demonstrate a prima facie entitlement to judgment, as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case. Failure to do so requires denial of the motion, regardless of the sufficiency of the opposing papers. Winegrad v. New York University Center, 64 N.Y.2d 851, 487 N.Y.S.2d 316, 476 N.E.2d 642 (1985) ; Zuckerman v. City of New York, 49 N.Y.2d 557, 427 N.Y.S.2d 595, 404 N.E.2d 718 (1980).

Correspondingly, in order to defeat a motion for summary judgment, it is incumbent upon the opposing party to produce evidentiary proof, in admissible form, sufficient to rebut the movant's prima facie showing or to raise a triable issue of fact as to the same. Alvarez v. Prospect Hospital, 68 N.Y.2d 320, 508 N.Y.S.2d 923, 501 N.E.2d 572 (1986) ; City of New York v. Grosfeld Realty Company, 173 A.D.2d 436, 570 N.Y.S.2d 61 (2d Dept. 1991).

Where the intention of the parties is determinable by construction of the parties' written agreement, the question is one of law, and is therefore appropriately determined on motion for summary judgment. Hay Grp. Inv. Holding B.V. v. Saatchi & Saatchi Co. PLC , 223 A.D.2d 458, 459, 637 N.Y.S.2d 368 (1st Dept. 1996). B. Interpretation of the Separation Agreement and Plaintiff's prima facie case

In this proceeding, the Petitioner's claim is based upon Decedent's alleged breach of the Separation Agreement's terms.

"A separation agreement is a legally binding and enforceable contract, subject to ordinary principles of contract construction and interpretation". Dillon v. Dillon , 155 A.D.3d 1271, 1272–73, 64 N.Y.S.3d 755 (3d Dept. 2017). "Where a separation agreement is clear and unambiguous on its face, the parties' intent must be discerned from the four corners of the document, without resort to extrinsic evidence". Dillon , 155 A.D.3d at 1272–73, 64 N.Y.S.3d 755. "In discerning the parties' intent, courts are not limited to ‘the literal language of the agreement,’ but may consider ‘whatever may be reasonably implied from that literal language’. Id. "In doing so, however, courts must exercise caution so as to avoid creating a new contract for the parties ‘under the guise of contract construction,’ instead striving to ascertain the parties' true intentions, to the extent that they evidenced those intentions in the agreement". Id. In other words, the court's role is limited to interpretation and enforcement of the express terms agreed to by the parties — the court may not rewrite the contract or impose additional terms which the parties failed to insert themselves, nor may the court distort the meaning of those express terms used and thereby make a new contract for the parties under the guise of interpreting the writing. Maser Consulting, P.A. v. Viola Park Realty, LLC , 91 A.D.3d 836, 837, 936 N.Y.S.2d 693 (2d Dept. 2012) ; Bailey v. Fish & Neave , 8 N.Y.3d 523, 528, 837 N.Y.S.2d 600, 868 N.E.2d 956 (2007).

Here, the Separation Agreement expressly and clearly obligated the Decedent to maintain three life insurance policies, in specific amounts, for the benefit of the Decedent's children with Petitioner Donna King-Edelen, naming the Petitioner as beneficiary, until both children reached the age of emancipation. (Separation Agreement, p. 14). The Separation Agreement further provided that, "Should either party predecease the other and should the policy or policies hereinabove described not be in effect, then the deceased parties' estate shall be liable to the other for the face amount of amount of the policy." (Separation Agreement, p. 14).

It is undisputed, and undisputable, that the Decedent failed obtain or properly maintain two of the three insurance policies as required by the Separation Agreement (in the amounts of $25,000.00 and $148,575.00, respectively). The Decedent died before both children from the first marriage reached the age of emancipation, without two of the three required insurance policies in full force and effect for the benefit of his children. As a result, the Petitioner could not collect two of the three required insurance policies at the time of Decedent's death, and thus, was deprived of the benefit of her bargain. Consequently, Petitioner has demonstrated the prima facie validity of her claim against the estate for breach of the Separation Agreement and entitlement to summary judgment.

The burden now shifts to the Respondent to rebut Petitioner's prima facie case.

C. The statute of limitations defense

Respondent's first defense is that Petitioner's claim is barred by the 6-year statute of limitations for breach of contract claims, which typically accrue on the date of breach. See CPLR § 213(2). Respondent argues that the date of claim accrual was May 7, 2001, the date that the Separation Agreement was signed, in that the Separation Agreement required the Decedent to provide proof of insurance "promptly" after execution of the Separation Agreement, which he failed to do and Petitioner failed to enforce. The Respondent also argues that Petitioner had actual notice of Decedent's breach/lack of two insurance policies in two respects: (1) Respondent argues that the Petitioner lived at the marital house around the time of the Separation Agreement and could have deduced, if she received and opened Decedent's mail, what policies he had or didn't have at that time in 2001; (2) Respondent argues that Petitioner gained knowledge that the $148,575.00 policy would not be maintained after the Decedent had an alleged phone conversation with Petitioner in 2005, during which the Decedent told Respondent that he wasn't responsible to maintain the $148,575.00 policy. (See Affidavit of Kathy May Edelson).

In further support of her argument, Respondent cites DeBenedettis v. DeBenedettis [144 A.D.2d 527, 534 N.Y.S.2d 405 (2d Dept. 1988) ], which similarly concerned a separation agreement that expressly required the husband to maintain a life insurance policy. The DeBenedettis court held that the moment the husband failed to maintain his life insurance policy in 1971, he breached the separation agreement. Thus, when the wife sought to enforce the agreement 15 years later in 1986, her claim was time-barred. The DeBenedettis court noted, however, that the wife had been specifically informed of the husband's breach at the exact time the breach occurred: "Significantly, the defendant was advised in 1971 that the premiums had not been paid and that the policy had lapsed." DeBenedettis v. DeBenedettis , 144 A.D.2d 527, 527, 534 N.Y.S.2d 405 (2d Dept. 1988).

Respondent's argument that Petitioner had presumptive notice of Decedent's lack of insurance policies in 2001 from possibly inspecting Decedent's mail is without evidentiary support whatsoever. Respondent's affidavit demonstrates that she was not a witness to any such events and has no documentary evidence of such events. Instead, Respondent's allegation that Petitioner could have deduced Decedent's breach from receiving or reviewing Decedent's mail is entirely hypothetical, speculative and conclusory. Respondent's argument that Petitioner gained knowledge that the $148,575.00 policy would not be maintained after the Decedent had an alleged phone conversation with Petitioner in 2005 constitutes inadmissible hearsay and violates the "Deadman's Statute," CPLR § 4519.

Furthermore, while a breach of contract claim most often accrues upon the date of breach, the facts of this case toll the date of claim accrual to a later point in time.

"The continuing wrong doctrine ‘is usually employed where there is a series of continuing wrongs and serves to toll the running of a period of limitations to the date of the commission of the last wrongful act." Garron v. Bristol House, Inc., 162 A.D.3d 857, 858–59, 79 N.Y.S.3d 265 (2d Dept. 2018). "In contract actions, the doctrine is applied to extend the statute of limitations when the contract imposes a continuing duty on the breaching party." Garron , 162 A.D.3d at 858–59, 79 N.Y.S.3d 265. Where the sole remedy sought for the alleged continuing contractual breaches is monetary damages, the plaintiff's recovery must be limited to damages incurred within the six years prior to commencement of the action. Id. Thus, for example, when a party seeks to enforce a continuing obligation under a separation agreement, the date of claim accrual continues as well, so long as the contractual obligation continues. See e.g., Makarchuk v. Makarchuk , 59 A.D.3d 1094, 1095, 874 N.Y.S.2d 649 (4th Dept. 2009) (plaintiff's 2006 action to collect property carrying costs required to be paid under a separation agreement since 1970 was timely; plaintiff sought to enforce a continuing obligation under a contract, and she therefore may seek damages for those breaches that have occurred within the six years prior to the commencement of the action).

Here, the Decedent had a continuing obligation to maintain certain amounts of life insurance, in full force and effect, from the date of the Separation Agreement until the date that both of his children from the first marriage reached the age of emancipation, such that, if and when the Decedent died before the date of emancipation, the required amounts of insurance would be in place for the benefit of his children. When the Decedent died, two of the three life insurance policies were not in full force or effect, and Petitioner was correspondingly damaged at that time. Therefore, Plaintiff's claim, made within five months of Decedent's death, was timely.

Additionally, in a fact pattern such as this, the cause of action for breach of contract has been held to accrue, not upon the breach, but upon the occurrence of the harm engendered by the breach. Significantly, Nassau County Surrogate Judge Radigan discussed this exception to the rule and distinguished Respondent's case authority of DeBenedettis v. DeBenedettis [144 A.D.2d 527, 534 N.Y.S.2d 405 (2d Dept. 1988) ] from a fact pattern virtually identical to this case, as follows:

In Lewis v. Lewis, 59 Misc. 2d 525, 299 N.Y.S.2d 755, Justice Irving Younger, writing for the Civil Court of the City of New York, encountered a similar case and arrived at a different conclusion [than in DeBenedattis [DeBenedettis] v. DeBenedattis [DeBenedettis] ]. Alfred and Maxine, the former husband and wife, had entered into a separation agreement whereby Alfred was required to maintain a life insurance policy naming Maxine as the beneficiary. The policy on Alfred's life lapsed, unbeknownst to Maxine. After Alfred's death, Maxine sued his estate for the face amount of the policy due her under the separation agreement. Alfred's estate raised a statute of limitations defense and Maxine

moved for summary judgment, which was granted. The court held that, " ‘cause of action’ means a right to sue, to some substantial end. At its core is a grievance that is judicially cognizable, in the sense that a court can provide some remedy for it. It is, to vary the familiar phrase, damnum et injuria . A claim for breach of contract, therefore, arises not upon the breach, but upon the occurrence of the harm engendered by the breach, for it is by the harm that the remedy is measured. In most cases, breach and harm are simultaneous events. But in the rare case where they are not, the cause of action for breach of contract accrues and the period of limitations runs only from the occurrence of the harm

Ryan Ready Mixed Concrete Corp. v. Coons , 25 A.D.2d 530, 267 N.Y.S.2d 627 [2d Dept. 1966]" Lewis v. Lewis , supra at 526, 299 N.Y.S.2d 755. The Court of Claims found Justice Younger's logic persuasive and adopted it in Edwards v. State of New York , 95 Misc. 2d 516, 407 N.Y.S.2d 804.

Furthermore, in an analogous case involving a spouse's right to pension benefits, the Court of Appeals has held that the Statute of Limitations on an action as to who is entitled to receive a widow's pension accrues only when it matures, i.e. after the death of the husband. In Sorrentino v. Mierzwa, 25 N.Y.2d 62 [58] [302 N.Y.S.2d 565, 250 N.E.2d 58] [1969], the decedent had obtained an ex parte divorce from his wife in Nevada and that same day "married" his second wife. The first wife, Erminia, received a copy of both the summons and the decree and consulted with an attorney neighbor who advised her that the divorce decree was "no good." After the husband's death, both Erminia and the second wife applied for the decedent's widow's pension from his employer.

To that end, Erminia brought a declaratory judgment action for a determination that she was the surviving spouse and therefore entitled to the widow's pension. The Appellate Division held that a justiciable controversy as to the status of her marriage arose when Erminia became aware of the Nevada divorce and that the Statute of Limitations barred her declaratory judgment action which was not brought until after the husband's death, 14 years later. The Court of Appeals reversed, holding that,

[t]o hold that the statutory period commences at the time a justiciable controversy arises would allow the expiration of the statutory period on the declaratory judgment action to possibly bar the commencement of an action to enforce a right before it had ever matured. This is precisely the effect of the majority's determination below. Clearly, the more reasonable rule to adopt is that, notwithstanding the existence of a justiciable controversy which has given rise to the right to bring an action for a declaratory judgment, appellant was free to bring the instant action so long as the Statute of Limitations had not barred the enforcement of her right to the pension fund.

The appellant having initiated the present action

less than two months after the husband's death, it is clear that the present action has been brought within the time limitation set forth above ( Sorrentino v. Mierzwa , supra, at 63 [302 N.Y.S.2d 565, 250 N.E.2d 58] ).

The facts of the case before this court more closely resemble those in Lewis than those in De Benedettis [DeBenedettis] because the aggrieved former spouse was unaware of the lapse of the policy, the knowledge of which the court itself in De Benedettis [DeBenedettis] said was "significant." The court also finds the rationale in Lewis to be persuasive

and that in Sorrentino to be both persuasive and controlling. The court accordingly grants that branch of Renee's motion seeking summary judgment on the estate's obligation to pay her $45,000.00 as called for in the separation agreement, plus interest from the date of death.

In re Wachtel , No. 295399, 1999 WL 35132565 (Sur. Ct., Nassau Co., 1999).

This Court agrees with Surrogate Radigan and his holding in In re Wachtel . Here, Respondent offers no proof or admissible evidence that Petitioner was made aware that Decedent had breached his obligation to maintain life insurance at any other time than Decedent's date of death. As a result, Petitioner's claim, made five months after the date of death, was timely.

Furthermore, Surrogate Radigan added that the insurance policy requirement of a separation agreement, which virtually identical between this case and In re Wachtel , actually create two distinct causes of action for breach of contract, the latter of which accrues on the date of death:

Although not necessary to the decision in this case, it appears to the court that even Justice Younger's decision overlooks an important aspect of claims relative to the obligation of one party to a separation agreement to maintain life insurance for the benefit of the other party. The motivation behind requiring one party to maintain life insurance for the benefit of the other has two elements: first, to obtain and maintain the policy, and second and more importantly, to have the policy in effect at the death of the insured to provide the benefit to the former spouse. The real benefit is the policy proceeds. What the wife is entitled to, the entire object of the whole provision, is the policy proceeds on the former husband's death. To protect that right, she

is also given the assurance, by way of insurance, that the fund will be available to her when the former husband dies. This gives her another right, the right to see that the insurance is maintained to protect her ultimate right, the policy proceeds on death. It appears to this court that the surviving former spouse has two separate causes of action, one to see that the policy is maintained during life, and second that she receive the proceeds on death. Any failure on the part of the surviving spouse to enforce her rights on the first cause of action should not entitle the former husband to completely disregard his obligation under the separation agreement. In re Wachtel , No. 295399, 1999 WL 35132565 (Sur. Ct., Nassau Co., 1999).

The holdings in In re Wachtel are also in accordance with the well-settled law that a contract is not breached until the time set for performance has expired. Rachmani Corp. v. 9 E. 96th St. Apartment Corp., 211 A.D.2d 262, 265, 629 N.Y.S.2d 382 (1st Dept. 1995).

Thus, Respondent's argument that Petitioner's failure to check the status of Decedent's insurance at the time of the Separation Agreement, or at every point up until his death, is of no significance. As in Wachtel , Lewis and Sorrentino , supra , the Petitioner did not suffer a loss and incur damages until the conditions of the Separation Agreement were breached when Decedent died, before the age of emancipation of both children, without the required insurance in place. Under the circumstances of this case, the Petitioner's claim did not mature or accrue until Decedent's date of death, February 2, 2015. As a result, Petitioner's claim dated June 5, 2015, and petition herein dated March 3, 2016, are timely. D. The laches defense

Respondent's next defense is that Petitioner's claim should be barred by the doctrine of laches. Respondent's argument, however, is obviated by the above discussion of the Separation Agreement and claim accrual. Regardless, however, the defense of laches is inapplicable in actions at law, such as this one to recover for a breach of contract/separation agreement. Makarchuk v. Makarchuk , 59 A.D.3d 1094, 1095, 874 N.Y.S.2d 649 (4th Dept. 2009).

E. Alleged ambiguities/issues of fact

Respondent next argues that there is a triable issue of fact or ambiguity as to whether the $148,575.00 life insurance policy was intended as a "mortgage life insurance policy" to secure the mortgage on the marital home, and thus, was permissibly absent at the date of death on February 2, 2015 because the mortgage had been satisfied on September 11, 2001.

As set forth above, "Where a separation agreement is clear and unambiguous on its face, the parties' intent must be discerned from the four corners of the document, without resort to extrinsic evidence". Dillon v. Dillon , 155 A.D.3d 1271, 1272–73, 64 N.Y.S.3d 755 (3d Dept. 2017). Importantly, "... courts must exercise caution so as to avoid creating a new contract for the parties ‘under the guise of contract construction,’ instead striving to ascertain the parties' true intentions, to the extent that they evidenced those intentions in the agreement." Dillon , 155 A.D.3d at 1272–73, 64 N.Y.S.3d 755. In other words, the court's role is limited to interpretation and enforcement of the express terms agreed to by the parties — the court may not rewrite the contract or impose additional terms which the parties failed to insert themselves, nor may the court distort the meaning of those express terms used and thereby make a new contract for the parties under the guise of interpreting the writing. See Maser Consulting, P.A. v. Viola Park Realty, LLC , 91 A.D.3d 836, 837, 936 N.Y.S.2d 693 (2d Dept. 2012) ; Bailey v. Fish & Neave , 8 N.Y.3d 523, 528, 837 N.Y.S.2d 600, 868 N.E.2d 956 (2007).

Contrary to Respondent's position, the four corners of the Separation Agreement contain no such requirement or condition that the $148,575.00 be provided for the purpose of securing the mortgage. Instead, the only expressed intent and purpose of all of the life insurance policies listed in Section Eighteen is "for the benefit of the children," which is reiterated twice in Subsections 2 and 3 of Section Eighteen. (See Separation Agreement, p. 14). An examination of Section Four ("Marital Residence", discussing the outstanding mortgage) and Section Eighteen ("Life Insurance") reveals that there is no connection between the mortgage and the life insurance provisions, whatsoever, and no discussion of security. Furthermore, it should be noted that Section Twenty-Nine ("Independent Covenants") states that every right or obligation discussed in the Separation Agreement is independent of the others, and thus, not dependent on other rights or obligations. Thus, to imagine that the purpose of the life insurance provision was to secure the mortgage, and that the $148,575.00 policy could be conditional upon the mortgage's existence and terminated upon the mortgage's satisfaction, would be to "rewrite the contract" and "impose additional terms which the parties failed to insert themselves" and "distort the meaning of those express terms used and thereby make a new contract for the parties under the guise of interpreting the writing".

Furthermore, Respondent's affidavit is not competent evidence from which to interpret the Separation Agreement. The Respondent is not a witness with knowledge of the facts because she was neither a party to the agreement, a drafter, nor present at the relevant time. Sutton v. E. River Sav. Bank , 55 N.Y.2d 550, 553, 450 N.Y.S.2d 460, 435 N.E.2d 1075 (1982). In particular, Respondent's affidavit, which is extrinsic to the Separation Agreement, may not be resorted to in attempt to create an ambiguity in a contract that is otherwise clear on its face and within its four corners. Dillon v. Dillon , 155 A.D.3d 1271, 1272–73, 64 N.Y.S.3d 755 (3d Dept. 2017).

Respondent's attempt to equate the intended face amount of the life insurance policy ($148,575.00) with the amount of the mortgage ($149,000.00) is unavailing and unsupported. The Respondent failed to submit any proof that the outstanding balance of the mortgage actually equaled the amount of the life insurance to support her theory. Regardless, the Petitioner demonstrated, upon undisputed documentary evidence, that the $148,575.00 amount of insurance was a direct and precise result of the sum of the whole life portion ($15,000.00) plus the income protection rider portion ($133,575.00) of policy #0EC81105.

Furthermore, an agreement is only ambiguous when "the agreement on its face is reasonably susceptible of more than one interpretation." Nappy v. Nappy , 40 A.D.3d 825, 826, 836 N.Y.S.2d 256 (2d Dept. 2007).

Respondent's argument that the Separation Agreement is ambiguous because it does not specify which party is supposed to maintain each policy is unavailing. Respondent's argument is belied by the plain language of Section Eighteen, which unambiguously states that each party shall (1) maintain the existing policies listed in their name, (2) ensure that the other party is named as beneficiary to their policy, and (3) show the other party that they have coverage and have designated the other as beneficiary to their policy. The Separation Agreement then states that, should one party predecease the other, and should a policy not be in effect, then the deceased party's estate shall be liable to the other party for the face amount of the policy. It is not reasonable to interpret this provision in any other way. If one spouse was supposed to go purchase new insurance on the other spouse, as the Respondent suggests, the Separation Agreement could have easily stated so.

Even if there were an ambiguity, the Respondent's opposition is not sufficient to defeat the Petitioner's motion for summary judgment because the Respondent has offered nothing but the self-serving and conclusory statements as to what interpretation she would give to the words and the meaning, which she ultimately speculates that the Decedent would have intended those words to have. See, e.g., Canter v. Canter , 91 A.D.2d 1180, 1181, 459 N.Y.S.2d 153 (4th Dept. 1983) ("Defendant, in her affidavit in response to plaintiff's motion, urged that since the modifying provision is ambiguous a trial is necessary to determine what the parties intended "full time residence" to mean. However, to defeat a motion for summary judgment, it is not sufficient that defendant establish that the agreement is ambiguous, permitting the consideration of extrinsic proof; she must disclose in evidentiary form the extrinsic proof upon which she relies [citation omitted] Defendant offered none except self-serving and conclusory statements as to what interpretation she would give the words and the meaning which she intended those words to have. Accordingly, her answering papers are insufficient to defeat the motion").

Respondent's argument that the Separation Agreement is ambiguous because Section Eighteen refers to "existing" policies when two of the three policies did not exist (either at all or in the form required when the Settlement Agreement was executed) is unavailing. Here, Section Eighteen clearly states that Decedent will maintain three existing policies listed in certain amounts. Nothing about that representation is reasonably susceptible of more than one interpretation so as to constitute a legal ambiguity. The fact that the Decedent's representation turned out to be false or erroneous when the Separation Agreement was signed does not mean that it is ambiguous now. The Respondent conveniently ignores the fact that, by the Decedent's own negotiation and signature on the Separation Agreement (made with the advice and assistance of counsel) he affirmatively and expressly represented that the insurance policies listed in the Separation Agreement had existed and would be maintained through the children's age of emancipation. That representation was not unclear or "ambiguous" but false. The only remaining question is whether Decedent's false representation was (1) fraudulent or (2) a mistake.

The Respondent has not argued that a fraud occurred but has suggested that a mutual mistake occurred. An action to reform a contract based upon a mistake must be commenced within six years of the contract's execution. First Nat. Bank of Rochester v. Volpe , 217 A.D.2d 967, 967, 629 N.Y.S.2d 906 (4th Dept. 1995). A party seeking reformation due to mutual mistake must establish not only that a mistake exists, but exactly what was "really" agreed upon between the parties, by the evidentiary standard of clear and convincing evidence. La Marca v. Kissell , 269 A.D.2d 835, 835, 702 N.Y.S.2d 490 (4th Dept. 2000).

The Decedent never sought to reform the Separation Agreement within six years of its execution, and therefore, the Respondent is barred from arguing for reformation by-way-of-opposition to Petitioner's motion for summary judgment. In any event, the Respondent has failed to demonstrate, by clear and convincing evidence, that (1) a mistake exists and (2) what was really agreed upon by the parties.

Further, since the Decedent impermissibly changed the beneficiary of policy #0EC81105 from the Petitioner to the Respondent, any request for the equitable relief of reformation the Separation Agreement would be barred by the equitable defense of unclean hands. See, e.g., Judge v. Travelers Ins. Co., 262 A.D.2d 983, 983, 692 N.Y.S.2d 288 (4th Dept. 1999) ("Moreover, the proof at the hearing established that Bernadette conveyed the property to Kevin to include it as an asset in Kevin's bankruptcy proceeding commenced two days after the fire, in order to shield the property from imminent foreclosure proceedings. Thus, the court also properly concluded that plaintiffs were not entitled to equitable relief because they came to the court with unclean hands").

Finally, even assuming there could be a claim for reformation and an issue of fact therein, Respondent's claim would ultimately be barred by the doctrine of ratification, in that the Decedent ratified the Separation Agreement by receiving the benefits thereunder and failing to ever seek to rescind or reform it since it was executed in 2001. See, e.g., La Marca v. Kissell , 269 A.D.2d 835, 835, 702 N.Y.S.2d 490 (4th Dept. 2000) ("Even assuming, arguendo, that there is an issue of fact with respect to reformation, we conclude that defendant is entitled to dismissal of the amended complaint on the ground of ratification. Having accepted the benefits of the agreement for 3½ years before attacking its validity, plaintiff is deemed to have ratified it"); see also Bradley v. Bradley , 167 A.D.3d 489, 489 (2d Dept. 2018) ; Surlak v. Surlak , 95 A.D.2d 371, 388, 466 N.Y.S.2d 461 (2d Dept.1983).

Next, Respondent argues that there is an issue of fact or ambiguity with regard to a potential "windfall" to the Petitioner. However, Respondent's reliance on Hartog v. Hartog [85 N.Y.2d 36, 623 N.Y.S.2d 537, 647 N.E.2d 749 (1995) ] and Mayer v. Mayer [142 A.D.3d 691, 37 N.Y.S.3d 145 (2d Dept. 2016) ] is misplaced. Those cases examined the matrimonial court's ability to order a spouse to obtain life insurance as means to secure maintenance obligations, child support obligations or payment of a distributive award pursuant to DRL § 236(B)(8) :

8. Special relief in matrimonial actions. a. In any matrimonial action the court may order a party to purchase, maintain or assign a policy of insurance providing benefits for health and hospital care and related services for either spouse or children of the marriage not to exceed such period of time as such party shall be obligated to provide maintenance, child support or make payments of a distributive award. The court may also order a party to purchase, maintain or assign a policy of accident insurance or insurance on the life of either spouse, and to designate in the case of life insurance, either spouse or children of the marriage, or in the case of accident insurance, the insured spouse as irrevocable beneficiaries during a period of time fixed by the court. The obligation to provide such insurance shall cease upon the termination of the spouse's duty to provide maintenance, child support or a distributive award. A copy of such order shall be served, by registered mail, on the home office of the insurer specifying the name and mailing address of the spouse or children, provided that failure to so serve the insurer shall not affect the validity of the order.

In Hartog and Mayer , the court construed the purpose of DRL § 236(B)(8), stating that:

The purpose of this provision is not to provide an alternative award of maintenance or child support, but solely to ensure that the spouse or children will receive the economic support for payments that would have been due had the payor spouse survived. Accordingly, where life insurance is appropriate, it should be set in an amount sufficient to achieve that purpose. It should not be in an amount that would provide a windfall.

Mayer v. Mayer , 142 A.D.3d 691, 696, 37 N.Y.S.3d 145 (2d Dept. 2016).

Citing Hartog and Mayer , the Respondent has emphasized the court's responsibility to avoid a "windfall" to a spouse when the amount of life insurance far exceeds the actual cost of economic support of the children that has been ordered by the court. Here, however, the Decedent's life insurance obligations were the product of an agreement, not an order after adjudication. Simply stated, there is no support order for the court to construe here under the auspices of DRL § 236, nor may the court substitute a DRL § 236 analysis for the law of contract interpretation. See, e.g., Rosenberger v. Rosenberger , 63 A.D.3d 898, 899–900, 882 N.Y.S.2d 426 (2d Dept. 2009).

Regardless, Decedent's obligation to maintain life insurance policies in the aggregate amount $273,575.00 to secure the support of his then 12-year-old son and 3-year-old daughter through the age of emancipation is a modest obligation that falls far short of any cognizable definition of a "windfall". The fact that the Decedent's life insurance obligations were triggered in 2015, after the son has already been emancipated and when the daughter is within only a few years of emancipation, was a potential outcome of this agreement back when it was negotiated and signed with counsel in 2001. Happenstance, whether good or bad, is not a ground upon which a court can rewrite a contract or relieve a party from their obligations.

F. Law of the case

Finally, Respondent argues that this Court (Onofry, J.) previously made a binding determination in his Decision and Order dated September 7, 2018, to wit:

Initially, it is noted, pursuant to the express language of the Agreement, the insurance provisions were clearly intended as security for the support, education and mortgage obligations; their longevity was tied to the emancipation of the children. Separation Agreement, Section Eighteen (1); See, e.g., Mayer v. Mayer, 142 A.D.3d 691, 37 N.Y.S.3d 145 [2nd Dept. 2016].

Therefore, the Respondent argues that the Decedent only had to maintain the insurance policy with a face value of $148,575.00 until such time as the mortgage was satisfied, since it was intended as security for payment of the mortgage.

The doctrine of "law of the case" is a judicially crafted policy that expresses the practice of courts generally to refuse to reopen what has already been decided, but it is not a limit to the court's power: it directs a court's discretion but does not restrict its authority. Mazur Bros. Realty, LLC v. State , 117 A.D.3d 949, 952, 987 N.Y.S.2d 74 (2d Dept. 2014). "Law of the case" only applies to determinations that were resolved on the merits in a prior order. Hampton Valley Farms, Inc. v. Flower & Medalie , 40 A.D.3d 699, 701, 835 N.Y.S.2d 678 (2d Dept. 2007). Thus, "law of the case" does not apply to an order that fails to reach the merits because motion is premature. See, e.g., Shatzkin v. Vill. of Croton-on-Hudson , 51 A.D.3d 903, 903, 858 N.Y.S.2d 362 (2d Dept. 2008) ("The Supreme Court erred in holding that a prior order was the law of the case, as that order did not reach the merits of the defendants' motions, but rather determined that the motions were premature").

Here, the Decision and Order dated September 7, 2018 held that the circumstances warranted "deferral of Petitioner's dispositive motion" and "ORDERED, that the consideration of Petitioner/Claimant's cross-motion for summary judgment is hereby stayed and held in abeyance pending the completion of discovery ..." Thus, Petitioner's motion was not determined on the merits, but rather, undecided and deemed premature. As result, the doctrine of law of the case does not apply to the September 7, 2018 Decision and Order.

Ultimately, if the parties had intended the $148,575.00 insurance obligation to be conditional upon the existence of the mortgage, the parties could have easily and expressly provided so in the Separation Agreement. Importantly, however, the court's role is limited to interpretation and enforcement of the express terms agreed to by the parties — the court may not rewrite the contract or impose additional terms which the parties failed to insert themselves, nor may the court distort the meaning of those express terms used and thereby make a new contract for the parties under the guise of interpreting the writing. Maser Consulting, P.A. v. Viola Park Realty, LLC , 91 A.D.3d 836, 837, 936 N.Y.S.2d 693 (2d Dept. 2012) ; Bailey v. Fish & Neave , 8 N.Y.3d 523, 528, 837 N.Y.S.2d 600, 868 N.E.2d 956 (2007). As discussed supra , to suppose an intent or condition that is not contained in the Separation Agreement and is belied by other express terms would be to impermissibly "rewrite the contract" or "impose additional terms which the parties failed to insert themselves" or "distort the meaning of those express terms used and thereby make a new contract for the parties under the guise of interpreting the writing."

A review of the full record and arguments developed on this motion and cross motion only lead to one result: the Separation Agreement does not contain or contemplate life insurance obligations that are made conditional upon the existence of the mortgage, and no such provisions may be written-into the Separation Agreement by the Court now.

Since the Respondent's defenses and arguments are insufficient to rebut Petitioner's prima facie case, Petitioner's motion for summary judgment is granted and Respondent's cross motion for summary judgment to disallow Petitioner's claim is denied.

G. The amount of Petitioner's claim

The Petitioner has alleged a total claim of $173,575.00, consisting of the face values of the $25,000.00 and $148,575.00 policies, which the Decedent lacked or failed to maintain.

It is undisputed that the Decedent failed to maintain a $25,000.00 policy in favor of the Petitioner whatsoever. As a result, Petitioner's claim in the amount of $25,000.00 is valid.

The actual value of the policy with a face value of $148,575.00 (#0EC81105) is disputed, in that Respondent notes that the death benefit on that policy would decrease over time and was substantially less at the time of Decedent's death. Policy #0EC81105 was comprised of two parts: a $15,000.00 whole life policy, plus an income protection rider that would have been worth $133,575.00 at the time of the negotiation of the Separation Agreement. However, the amount of the guaranteed death benefit of the income protection rider decreases over time as the Decedent's age increases. (See Petitioner Notice of Motion, Exhibit H). As discussed supra , the Decedent cancelled the income replacement rider portion of his policy prior to entering the Separation Agreement and then, after entering the Separation Agreement, changed the beneficiary of the whole life portion of the policy from the Petitioner to the Respondent. Had the Decedent properly maintained the income protection rider portion of policy #0EC81105, Decedent's would have died within policy year 16, yielding a guaranteed death benefit of $94,375.00. Together with the $15,000.00 whole life portion, Petitioner would have stood to collect $109,375.00 under policy #0EC81105 had the Decedent fulfilled his obligations, not $148,575.00.

As a result, the $109,375.00 from policy #0EC81105 plus the $25,000.00 policy obligation that Decedent failed to maintain equals a total valid claim of $134,375.00.

H. Attorney's fees

Petitioner's Notice of Motion includes a request for attorney's fees arising out of the terms of the Separation Agreement. Section Nineteen ("Counsel Fees") provides that reasonable attorney's fees, costs and disbursement are recoverable against the defaulting party upon the enforcing party bringing suit and obtaining a judgment, decree or order in his/her favor.

Accordingly, Petitioner is hereby awarded her reasonable attorney's fees, costs and disbursements in this proceeding to be determined upon submission of an affidavit of legal services on notice to Respondent.

CONCLUSION

Petitioner's motion for summary judgment is granted in part and denied in part, as provided herein. Petitioner has presented a valid claim against the Estate of Robert Edelen in the amount of $134,375.00, plus interest from February 2, 2015 to the date of Decree in this matter pursuant to CPLR § 5001, which shall be paid from the property of the Estate in priority as specified in SCPA § 1811, and made payable to Petitioner as Trustee for Robert Joseph Edelen III and Katherine Mae Edelen.

Petitioner shall be awarded her reasonable attorney's fees, costs and disbursements incurred in this proceeding upon submission of an affidavit of legal services on notice to Respondent, which shall be paid from the property of the Estate in priority as specified in SCPA § 1811.

Respondent's cross-motion for summary judgment is denied.

Petitioner shall submit her proposed Decree together with affidavit of legal services to the Court, on notice to Respondent, within 30 days of the date of this Decision and Order.

This constitutes the Decision and Order of this Court.


Summaries of

In re Edelen

New York Surrogate's Court, Orange County
Feb 4, 2020
67 Misc. 3d 473 (N.Y. Surr. Ct. 2020)
Case details for

In re Edelen

Case Details

Full title:Proceeding to Determine the Validity and Enforceability of a Claim under…

Court:New York Surrogate's Court, Orange County

Date published: Feb 4, 2020

Citations

67 Misc. 3d 473 (N.Y. Surr. Ct. 2020)
124 N.Y.S.3d 754
2020 N.Y. Slip Op. 20054