Opinion
No. 21–A–2006/A.
2012-10-4
In the Matter of the ESTATE OF Juan GUADALUPE, Deceased.
Michael M. Lippman, Esq., for Irma Ramos, petitioner-movant. Paul W. Frieary, PLLC (Paul W. Frieary, Esq., of counsel) for Margarita Pacheco, respondent-cross movant.
Michael M. Lippman, Esq., for Irma Ramos, petitioner-movant. Paul W. Frieary, PLLC (Paul W. Frieary, Esq., of counsel) for Margarita Pacheco, respondent-cross movant.
LEE HOLZMAN, J.
In this SCPA 2103 proceeding commenced by the administrator, one of the decedent's daughters, against the decedent's other daughter and her attorney, the administrator moves for an order compelling the other daughter to appear for a deposition and answer all questions concerning financial transactions relating to certain real property located in the Bronx. The other daughter and her attorney oppose the motion, cross-move to dismiss the proceeding and seek an award of all costs, attorneys' fees and disbursements, contending the discovery sought and the underlying proceeding against them are barred by the doctrines of ratification and res judicata.
The decedent died intestate on July 26, 2004 at the age of 74. His distributees are the movant, the cross movant, and a son who is not a party to this proceeding. Letters of administration limited to the institution of a proceeding to discover assets belonging to the estate issued to the movant by decree dated July 5, 2006. Almost four years later, in November 2010, the movant commenced the underlying SCPA 2103 proceeding against the cross movant and her attorney, individually, alleging that the decedent, while incapacitated, executed a deed conveying to the cross movant real property located on Heath Avenue in the Bronx, and the cross movant then sold the realty after the decedent's spouse predeceased him. According to the movant, in connection with that sale an excessive fee of $24,164.26 was paid to the cross movant's attorney without judicial approval. As a result, the petitioner seeks a turnover of those proceeds and, presumably, the return of the value of the realty to the estate. The attorney and the cross movant filed combined objections alleging that the doctrines of res judicata and ratification bar the proceeding. Specifically, they contend that the issues raised in this proceeding were litigated previously in the final accounting proceeding commenced by the cross movant as the Mental Hygiene Law article 81 guardian of the decedent's predeceased spouse, and in any event, the movant and the decedent's son entered into a written stipulation in that article 81 proceeding with the cross movant pursuant to which they were paid $10,000 in exchange for their agreeing not to pursue any of the issues raised in their objections, including those relating to the transactions at issue in this proceeding. When the movant served a notice of deposition on the cross movant, the cross movant's attorney responded that he would not permit his client to answer any questions concerning the sales of the realty absent a court determination on the propriety of such questioning. This motion and cross motion ensued.
On the return date of the motion and cross motion, the parties agreed to submit a copy of the objections interposed against the final account in the article 81 proceeding; however, counsel to the cross movant subsequently advised the court and all parties that no such objections could be found, despite diligent searches of his files and supreme court records. Instead, the cross movant submitted additional related documents which, along with the documents submitted in connection with the motion and cross motion, reveal the following undisputed time line and background facts:
(1) on February 28, 1973, the decedent and his predeceased spouse obtained title to the realty as tenants by the entirety;
(2) on April 12, 1999, the cross movant was appointed by the Supreme Court, Bronx County as article 81 guardian of the spouse's person and property;
(3) on July 21, 1999, while the cross movant served as article 81 guardian, the decedent deeded to the cross movant, individually, all of his right, title and interest in the Bronx realty;
(4) on November 9, 2002 the decedent's spouse predeceased him and, on July 26, 2004, the decedent died;
(5) on March 2, 2005, a title insurance agency issued an opinion stating that the decedent could not, as a tenant by the entirety, independently destroy the right of survivorship but, when his spouse predeceased him in 2002, the cross movant, individually, became the fee owner of the Bronx realty due to the 1999 deed from the decedent;
(6) by decision and order dated July 1, 2005 in the article 81 proceeding, the Supreme Court, Bronx County (Katz, J.) granted the movant's application, in her individual capacity, to stay the sale and closing of the property, vacate a contract of sale dated September 23, 2004, enjoin the cross movant, as article 81 guardian, from marketing the premises for sale without prior leave of court, and directed her to file her final account as guardian and seek judicial settlement thereof within 30 days of the date of the order;
(7) on October 3, 2005, the same court issued a “refuse to sign” order noting that the cross movant, as article 81 guardian, continued to attempt to litigate in the supreme court title to real property in which the predeceased wife may have had an interest instead of proceeding in the surrogate's court;
(8) on January 27, 2006 the cross movant, in her individual capacity, sold the realty;
(9) on December 16, 2006 the cross movant, as article 81 guardian, filed a final account which did not include the realty as an asset of the estate of the predeceased spouse, and in Schedule C thereof, recited that the predeceased spouse “lost all interest in the premises instantly on her death” on November 9, 2002, and that the cross movant, individually, held all right, title and interest in the premises by virtue of the 1999 deed;
(10) in an undated memorandum of law apparently submitted in 2010 as it makes reference to affidavits from 2009 and 2010, the movant and the son as objectants to the article 81 final account, asserted that: (a) at the time of the 1999 deed, the decedent was incapacitated and suffering from a mental disease and defect and the cross movant, as article 81 guardian of the predeceased spouse, violated her fiduciary duty by transferring the realty as part of a scheme to acquire the property for herself to the exclusion of her siblings; (b) a hearing was required to determine the surcharge to be imposed against the cross movant as guardian and the bonding company, and the cross movant should be ordered to pay the estate of the predeceased spouse the monies of which it was deprived; and, (c) the property was sold by the cross movant individually in 2006 for $315,000, but there were questionable fees divided between two entities and other individuals involved in the sale, without any distribution to distributees of the predeceased spouse;
(11) at all times in the article 81 proceeding the movant and cross movant were represented by the same attorneys that represent them in this proceeding;
(12) the parties entered into a July 14, 2010 stipulation of settlement whereby all objectants, including the movant individually and the decedent's son, withdrew their objections without any reservation of rights, approved the final account of the cross movant as guardian, and consented to an order approving that final account;
(13) by order dated July 16, 2010, the article 81 court settled and approved the final account on the consent of the parties in accordance with the terms of their stipulation; and,
(14) pursuant to the same stipulation, the movant's attorney received a $10,000 settlement check.
The cross movant argues that: (1) at the time the decedent conveyed the realty to her the decedent was competent and, when his spouse predeceased him, the premises immediately passed to the cross movant as a result of the 1999 deed; (2) although the movant may seek to rely on annexed nursing home records for the decedent, the earliest such record is dated September 3, 2002, three years after the decedent executed the July 21, 1999 deed; and, (3) as the issue of the decedent's July 21, 1999 deed to her was raised and settled in the article 81 proceeding pursuant to a stipulation entered into by the movant and the decedent's son, they are bound by the article 81 order approving the final account and the terms of the stipulation.
“In New York, res judicata, or claim preclusion, bars successive litigation based upon the same transaction or series of connected transactions' ... if: (i) there is a judgment on the merits rendered by a court of competent jurisdiction, and (ii) the party against whom the doctrine is invoked was a party to the previous action, or in privity with a party who was”
(Matter of People v. Applied Card Sys., Inc., 11 NY3d 105, 122 [2008], cert. denied sub nom. Cross County Bank Inc. v. New York, 555 U.S. 1136 [2009], quoting Siegel, N.Y. Prac § 447 [4th ed], citing Gramatan Home Invs. Corp. v. Lopez, 46 N.Y.2d 481, 485 [1979]; Weinstein–Korn–Miller, N.Y. Civ Prac P 5011.08 [2d ed.]; see also Matter of Hunter, 4 NY3d 260 [2005] ). The related doctrine of collateral estoppel or “issue preclusion” applies where it is demonstrated that: (1) the issue on which preclusion is sought is identical to the issue litigated in the prior proceeding and that the issue was necessarily determined in the prior proceeding; and, (2) the litigating party who will be held precluded in the present proceeding had a full and fair opportunity to litigate the issue (see Matter of Rosen, 17 Misc.3d 1103[A], 2007 N.Y. Slip Op 51818[U] [2007], citing Continental Cas. Co. v. Rapid–American Corp., 80 N.Y.2d 640 [1993];Shanley v. Callanan Indus., Inc., 54 N.Y.2d 52, 55 [1981];Gilberg v. Barbieri, 53 N.Y.2d 285 [1981] ).
Here, it is clear that the parties to the prior proceeding and in this proceeding were and remain represented by the same attorneys, and they, through their attorneys, controlled the course of the article 81 litigation and the issues raised or not raised therein. The accounting filed by the cross movant as article 81 guardian specifically sets forth transactions involving the realty at issue in Schedule C, and asserts that the cross movant was the sole owner of the realty. Despite this court's request for a complete set of objections filed in the article 81 accounting proceeding, no party was able to produce those objections in connection with the motion and cross motion at issue. Nonetheless, the memorandum of law prepared by counsel to the movant and the decedent's son and the affidavits filed in the article 81 proceeding clearly indicate that the objectants in that proceeding specifically raised the issue that the decedent was not competent when he purportedly executed the 1999 deed, and consequently, the cross movant did not obtain any interest in the realty. As part of the prior article 81 proceeding, the movant also obtained some discovery on the cross movant's January 27, 2006 sale of the realty for $315,000, at which time, the $24,164 .24 legal fee sought in this proceeding was paid.
It does not appear that the article 81 court ever directly addressed issues relating to the competency of the decedent or the validity of the 1999 deed; however, it is also clear that the movant and cross movant both raised issues with regard to the validity of the cross movant's claim to be the sole owner of the realty, and subsequently entered into a stipulation in which the objections to the accounting in the article 81 proceeding were withdrawn, including those objections relating to the realty as set forth in Schedule C of that account. The July 16, 2010 order of the supreme court settling the account of the cross movant as the article 81 guardian specifically stated “all objections to the final account having been withdrawn and resolved pursuant to the stipulation of the parties dated July 14, 2010 conditioned on the terms and conditions set forth therein.” Thus, the movant and the decedent's son approved the final account in the article 81 proceeding in exchange for a settlement of $10,000 paid to their attorney. Despite accepting that sum, the movant shortly thereafter raised in this forum the same issues concerning the realty that she raised previously. As the movant fails to proffer any theory as to why she should be relieved of the terms of the stipulation she entered into previously, the court will not address the cross movant's ratification theory.
“Stipulations of settlement are favored by the courts and not lightly cast aside” (Hallock v. State of New York, 64 N.Y.2d 224 [1984] ). In the absence of cause sufficient to invalidate a contract, such as fraud, collusion, mistake or accident, stipulations of settlement are strictly enforced (see Hallock v. State of New York, 64 N.Y.2d at 230;Singh v. North Shore Univ. Hosp., 76 AD3d 1004 [2010];Rose BB v. Louis BB., 300 A.D.2d 868, 869 [2002] ). Here, the stipulation in the article 81 proceeding was a complete agreement, definite and certain and intended to be binding, and there was no reservation of issues for future negotiation (see Rivercross Tenants' Corp. v. Tsao, 2 Misc.3d 137[A], 2004 N.Y. Slip Op 50254[U] [2004] ). As the issue of who owned the realty was raised in the article 81 proceeding and the objections to the cross movant's ownership of the realty were withdrawn in exchange for a $10,000 payment, issues now raised by the movant as to the transfer of the realty may not be litigated in this court due to the terms of the stipulation entered into in the article 81 proceeding by the parties thereto including the movant, the decedent's son and the cross movant, the only parties who have an interest in this estate (see Matter of Wallis, NYLJ, July 9, 2008, at 32, col 2). As the movant and the decedent's son are precluded from attacking the transfer of the realty, they have no standing to pursue any issues with regard to the amount that the cross movant paid to her attorney for representing her in that transaction.
Accordingly, the motion to compel the deposition of the cross movant on all transfers of the realty is denied, and the cross motion to dismiss the proceeding is granted; however, the cross movant has not established a basis to charge her attorney's fees to the movant, and that branch of the cross motion is denied.
This decision constitutes the order of the court. The Chief Clerk shall mail a copy of this decision and order to all counsel.