Opinion
No. 2014–487/A.
06-30-2016
In the Matter of the Application of Anna Marie T. SOCHUREK in the estate of Robert W. Sochurek, Deceased. Pursuant to SCPA § 1420.
Nelida Lara, Esq., Delbello, Donnellan, Weingarten, Wise & Wiederkehr, LLP, White Plains, Attorneys for Petitioner. Neil G. Marantz, Esq., Edmonds & Co., P.C., New York, Attorneys for Respondents.
Nelida Lara, Esq., Delbello, Donnellan, Weingarten, Wise & Wiederkehr, LLP, White Plains, Attorneys for Petitioner.
Neil G. Marantz, Esq., Edmonds & Co., P.C., New York, Attorneys for Respondents.
JAMES D. PAGONES, S.
Petitioner commenced this proceeding to determine the validity, construction and effect of an in terrorem clause contained within Article Eighth of the Will of Robert W. Sochurek.
The Court considered the following papers:
| Notice of Motion | Certification | Affirmation | Affidavit | Exhibits A–I | 1–13 |
| Affirmation in Opposition | Affidavit of Service | Exhibits 1–8 | 14 –23 | ||
| Memorandum of Law | Affidavit of Service | 24–25 | |||
| Petition | Verification | Exhibits 1–5 | 26–33 |
Memorandum of Law
By way of background, the decedent Robert W. Sochurek died on February 14, 2014. His Last Will and Testament was admitted to probate by this Court on June 17, 2014. On June 17, 2014, Letters Testamentary were granted to the decedent's spouse, petitioner Anna Marie T. Sochurek. The respondents Lynn Ammirato and Lisa Birch are the decedent's daughters from a prior marriage.
At the time of his death the decedent owned a fifty percent (50%) membership interest in Brady Avenue Associates, LLC. The company owned a piece of property in Westchester County, known as 130 and 153 Brady Avenue, Hawthorne, New York. The business of the company was a self-storage warehouse facility.
Article Second of the Last Will and Testament of the decedent provides:
“SECOND: Notwithstanding that my wife, ANNA MARIE T. SOCHUREK, and I have entered in a pre-nuptial agreement prior to our marriage I make the following bequests to her. Should my wife survive me, I give, devise and bequeath to her an estate for life in Brady Avenue Associates LLC and to have all duties and responsibilities for the operation of said Limited Liability Company as if she was the owner and member thereof including the right to receive the income therefrom on a regular basis. Upon the death of my said wife, her life interest shall terminate and my interest in Brady Avenue Associates LLC, I give, devise and bequeath unto my daughters, LISA BIRCH and LYNN AMMIRATO and the issue of such child predeceasing me leaving issue me surviving, in equal shares per stirpes.”
Respondents allege that a little more than one year after the decedent's passing, petitioner unilaterally entered into a Purchase and Sale Agreement, dated January 8, 2015, that arranged for the sale of the property and self-storage business. Petitioner and the respondents entered into a “Standstill Agreement” on April 17, 2015. The agreement provided that the funds received by the petitioner, as a result of the Purchase and Sale Agreement, would be held in a segregated account in her name, from which no unilateral withdrawals would be made by the petitioner for a period of sixty (60) days, so that the respondents were afforded an opportunity to appraise the company assets and negotiate an accurate and reasonable treatment of the proceeds. The respondents allege that on April 22, 2015, the closing took place whereby the property and business were sold. The trust account was opened with the sale proceeds, less One Hundred Thousand Dollars ($100,000.00) taken by the petitioner, pursuant to the parties' agreement. This left a balance of approximately Two Million Two Hundred Eleven Thousand Six Hundred Dollars ($2,211,600.00). The “Standstill Agreement” was extended three times and was scheduled to expire on September 30, 2015.
Respondents herein commenced an action in Westchester County Supreme Court seeking damages in excess of One Million Dollars ($1,000,000.00) and alleging numerous causes of action; breach of fiduciary duty, an accounting, seeking the imposition of a constructive trust, etc. An order to show cause was signed by the Hon. Sam D. Walker, J.S.C. on September 22, 2015. The temporary provisions of the order to show cause enjoined and restrained the petitioner from withdrawing any funds held in “The Anna Sochurek Life Estate Account”, which was created pursuant to the parties' “Standstill Agreement”. The ultimate relief sought in the order to show cause was a temporary restraining order and an accounting. The petitioner had cross-moved to vacate the temporary restraining order, remove the action to Dutchess County Surrogate's Court and for sanctions. Based upon the information as provided by eCourts, both motions were marked submitted on October 28, 2015. On March 31, 2016, Hon. Sam D. Walker, J.S.C. issued a decision and order partially granting Lynn Ammirato and Lisa Birchs' order to show cause and denying Anna Marie T. Sochurek's cross-motion. Relevant to this proceeding, Justice Walker stated:
“The Court will not address the issue of the in terrorem clause, since that application is not being made before this Court but was made in Surrogate's Court and involves the estate.”
Accordingly, this Court will focus solely on the petition and the related motion of the respondents Lynn Ammirato and Lisa Birch as it relates to the in terrorem clause contained within the will of the decedent.
Article Eighth of the Last Will and Testament of Robert W. Sochurek states:
“If any person named in this my Last Will and Testament shall, directly or indirectly, institute or become a party to any proceedings to set aside, interfere with, or make any provision of this Will, or to offer any objections to the probate thereof, or shall in any manner, directly or indirectly, contest the probate thereof, then, and in that event, I revoke the provision of this my Will in his, or her, or their favor, and such act or proceedings shall operate and be effective as a release on the part of such heir, next of kin, legatee or devisee to any part of my property or estate, and any provision of my Will in favor of such party, I do hereby abrogate, annul and make void, and I direct and will that the person so acting, proceedings or contesting shall receive no part, or portion whatsoever, of my estate under this Will, or otherwise, and that said property that would have gone to him, her or them shall go and become a part of my residuary estate.”
The petition alleges that the respondents' lawsuit interferes with the petitioner's authority as the executrix and has prevented petitioner from accessing/managing estate assets. Thus, petitioner states that the respondents have triggered the in terrorem clause and forfeited their interest and standing in the decedent's estate. Respondents allege that they have never contested their father's will or estate plan. In fact, respondents affirm they have conceded to the validity of the will. The challenge, respondents assert, is to the petitioner's breach of the parties' standstill agreement and her alleged egregious abuse of her fiduciary duties.
In terrorem clauses, although not favored and strictly construed, are enforceable (see Matter of Ellis, 252 A.D.2d 118, 683 N.Y.S.2d 113 [2nd Dept 1998]leave to appeal denied by 93 N.Y.2d 805, 689 N.Y.S.2d 429, 711 N.E.2d 643 ). The cardinal rule of construction of a will and, concomitantly, of an in terrorem clause, is to carry out the intent of the testator (id. ). A forfeiture or in terrorem clause is a essentially a condition attached to a legacy (see Matter of Kalikow, 23 Misc.3d 1107[A] [Sur Ct, Nassau County 2009] ). There are statutory limitations imposed upon these conditions by EPTL § 3–3.5, which are inapplicable to this matter.
In connection with a broad in terrorem clause, as is set forth by Article Eighth of the decedent's will, the Court must examine whether or not the matter, which was commenced by the respondents herein, pertains to claims against the estate independent of the will. To do so, the Court must again look to the complaint filed in the Supreme Court, Westchester County. The respondents' first cause of action therein seeks damages based upon the executrix's alleged breach of fiduciary duty. The respondents allege that the executrix claimed ownership of the LLC and its assets, sold the LLC property for her personal benefit, claimed ownership of the proceeds, threatened to take possession of such proceeds and made substantial withdrawals from the LLC accounts. The second cause of action seeks damages in waste, alleging that the executrix had a duty to preserve LLC assets, but instead sold the LLC property and made substantial withdrawals from the LLC accounts. The third cause action seeks to have the executrix account to the respondents with regard to her operation of the LLC. The fourth cause of action seeks a permanent injunction restraining the executrix from withdrawing any of the funds held in the LLC accounts, classified by the respondents as “trust funds”, or otherwise disposing of estate assets. The fifth cause of action seeks an order from the Supreme Court directing the imposition of a constructive trust in favor of the respondents for all of the assets of the LLC. The sixth cause of action alleges that the executrix breached the parties “Standstill Agreement”.
To intelligently discuss whether the respondents' actions have invoked the in terrorem clause of the decedent's will, the Court must also examine Article Sixth of the will which states:
“I confer upon the Executrix, her successor or successors of this, my Will, with respect to the management and administration of any property, real or personal, including property held under a power in trust, the following discretionary powers, without limitation by reason of specification:
1. To retain any such property for such period of time as she or her successor or successors may deem advisable without liability for depreciation or loss; to deposit any monies at any time constituting a part of my estate in one or more banks, savings or commercial, in such form of account, whether or not interest bearing, and without limitation as to the amount of any such accounts or in the discretion of my Executrix, her successor or successors, to hold any such monies uninvested;
2. To lease real property for such periods, with or without an option to purchase and upon such terms as my Executrix, her successor or successors may deem advisable;
3. To borrow money for any purpose whatsoever and to mortgage real property and pledge personal property as security for such loans;
4. To sell, exchange, or otherwise dispose of any or all of my property, real or personal, at public or private sale, at any time and from time to time, for such consideration and upon such terms including terms of credit as my Executrix, her successor or successors shall deem advisable;
5. To vote, in person or by proxy, or consent for any purpose, with respect to any stocks or other securities constituting assets of my estate; to exercise or sell any rights of subscription or other rights with respect thereto;
6. In making distribution of any property to persons entitled thereto hereunder, to convey, transfer or pay over the same in kind or in any money, or partly in money, and for such purposes, to transfer and assign undivided interests in any such property;
7. To run, manage and direct any business of which I may die possessed, temporarily or permanently, or to sell or otherwise dispose of such business and all the assets thereof upon any terms which my Executrix, her successor or successors deem advisable.”
The paramount consideration in will construction proceedings is the testator's intent (see In re Estate of Singer, 13 N.Y.3d 447 [2009] ). The language of the will indicates that the testator intended that his wife receive a life estate in Brady Avenue Associates, LLC, have the ability to manage said business and receive an income therefrom. The Court further recognizes that the decedent's wife, also the executrix of the estate, received broad powers to manage the estate property, including the capacity to sell, exchange or otherwise dispose of any and all property. Additionally, the executrix was explicitly given the power, pursuant to Article Sixth, subsection seven (7), to “sell or otherwise dispose of such business and all the assets thereof upon any terms which my Executrix, her successor or successors deem advisable.” Upon reading these two Articles in conjunction, the executrix undoubtedly had the power to dispose of Brady Avenue Associates, LLC. The clear intent of the testator upon a complete reading of the will was to give the executrix of his estate the necessary and broad powers to manage the property as she saw fit. The Court finds that the respondents have violated Article Eighth of the decedent's will by commencing an action in the Supreme Court, Westchester County challenging the executrix's action with regard to the disposition of estate assets, thereby “interfer[ing] with ... any provision of this Will” (see Article Eighth of Decedent's Will). By interfering with the executrix's management and ultimate sale of Brady Avenue Associates, LLC, the respondents have violated the in terrorem clause of the will and have forfeited their legacies.
Submit decree on notice within ten (10) days from the date of this decision.
The foregoing constitutes the decision of the Court.