Opinion
No. 32–13–0936.
09-30-2015
John C. BLASE, Plaintiff, v. Joseph C. BLASE, Defendant.
Michael Putter, Esq., for Plaintiff. Mark A. Wolber, Esq., for Defendant.
Michael Putter, Esq., for Plaintiff.
Mark A. Wolber, Esq., for Defendant.
LOUIS P. GIGLIOTTI, J.
Pending before this Court is a motion for summary judgment brought by Defendant Joseph C. Blase. The underlying action was commenced in September 2013 by his brother, the Plaintiff John C. Blase. The first cause of action alleges that the Defendant exercised undue influence and duress in obtaining a Power of Attorney from their father John V. Blase, who was allegedly suffering from dementia and not competent. Defendant allegedly utilized this Power of Attorney to change the beneficiary of certain bank accounts, formerly to be paid on death to both brothers equally, to remove the Plaintiff as a beneficiary. John V. Blase passed away on December 26, 2012, nine days after John C. Blase was removed as a beneficiary. The sum of $588,241.78 was removed from the account on December 31, 2012, by Joseph C. Blase and placed in his own account. Plaintiff seeks the sum of $294,123.37, plus accumulated earnings, which represents half the amount originally in the account.
The second cause of action seeks to establish a constructive trust upon the funds at issue which were allegedly transferred to the Defendant. The third cause of action alleges a tortious interference with the Plaintiff's right of inheritance. The fourth cause of action alleges that the Defendant breached his duty as Power of Attorney under General Obligations Law § 15–1505 to act in the best interests of his principal but rather acted in his own interest. The fifth cause of action alleges conversion of the funds.
This matter was originally commenced as a Surrogate's Court proceeding and a Restraining Order was issued for the funds involved until it became apparent that these funds were not estate assets. This Supreme Court action, which was thereafter commenced, was then transferred to this Judge, sitting as an Acting Supreme Court Justice, in the interests of judicial economy as litigation involving these parties was still ongoing in Surrogate's Court. The Will of the decedent dates from June 29, 2009, and bequeaths the house and contents to the Defendant, the sum of $25,000 each to the four children of the first marriage, and the remainder equally to all five children.
By Notice of Motion dated December 23, 2014, Defendant Joseph C. Blase moves for summary judgment. In support of the motion, the affidavit of Joseph C. Blase states that he was the child of John V. Blase by his second wife, Mary Lynne Blase, and that he lived with his parents at 6 Sycamore Drive in New Hartford. Mary Lynne Blase passed away on May 14, 2010. Plaintiff is one of four children by John V. Blase and his first wife, Nettie Brown. They were divorced in 1973.
Joseph C. Blase stated that the relationship between his father and the children by his first wife was very limited and that years would go by without contact. He stated that after his mother died, he still lived at the home and assisted his father with transportation to medical appointments, shopping and other errands. He claims that they ate at least one meal together every day after his mother passed away in May 2010. After she died, his father told him that he had named the Defendant and the Plaintiff as beneficiaries on his accounts at AmeriCU Credit Union (herein "AmeriCU"). He states that he graduated from high school in 1998, then attended Mohawk Valley Community College and graduated in 2003, then attended SUNY–IT for two years, then transferred to Albany School of Pharmacy and graduated in 2013. He stated that he finished his class work in 2012 and thereafter did clinicals, mainly in Oneida County. He stated that his parents paid for his tuition and books and that his father was proud of his academic achievement.
The affidavit of Plaintiff in opposition to the motion for summary judgment paints a different picture of the relationship between the decedent and his four children (two boys and two girls) from his first marriage. Plaintiff John C. Blase states that the decedent would visit with the two boys on alternate weekends from the two girls after the divorce from their mother. At the time of the birth of the Defendant, the youngest of these children was already twenty-six years old. Plaintiff also states that he visited his father at least three times a month after the death of his second wife in May 2010. He stated that on most of these visits his father was alone at the house. He also stated that his father told him that the Defendant was trying to get him to sign the house over to the Defendant. He also stated that his father complained about the Defendant not wanting to work.
The opposing affidavit also states that the Plaintiff traveled to South Carolina in September 2012 and stayed until early December. His other brother James moved to Colorado in the fall of 2012. Plaintiff states that the Defendant never told any of the siblings that their father had been hospitalized and placed in a nursing home. Defendant, in his rebuttal affidavit, does not deny this but complains that the Plaintiff never called him during the period to ask about their father.
In early October 2012, Defendant took his father to St. Elizabeth's Hospital at his request. Defendant claims that up to this time his father was in excellent mental health. His father was administered Haldol at the hospital and Defendant admitted that there were times that he did not appear to be "properly oriented" but claims his mental condition "improved significantly" after the medication was discontinued.
John V. Blase was transferred from the hospital to the Presbyterian Home on October 9, 2012, apparently for rehabilitation. Defendant claims that he visited his father every day at the home, and that the children from the first marriage never visited. Defendant claimed that his father's physical condition was deteriorating but claimed his mental condition remained intact other than being slower to respond and speak.
In opposition to the motion, Plaintiff points to certain parts of the medical records which were sent directly to the Court by decedent's health care providers. Portions of the medical records have been copied and organized into a binder of exhibits and submitted to the Court as part of the opposing papers. In opposition to the claim of excellent mental health, Plaintiff points to a copy of a speech and language evaluation contained in these records dated October 10, 2012, which, although it found that the patient was oriented to season and place, noted that the "family" has reported that the resident "was confused for about a year, but is progressively getting worse." (Exhibit F of the opposing papers). Plaintiff observes that, since no one else in his family was even aware of the hospitalization, these statements were made by Defendant.
In Surrogate's Court, the parties stipulated to issuance of Temporary Letters of Administration to the Chief Fiscal Officer ("CFO") of Oneida County. The Letters were limited to empowering the CFO to sign a HIPPA authorization permitting health care providers to send decedent's medical records directly to the Clerk of the Surrogate's Court.
In addition, Plaintiff points to Exhibit A, of the excerpted records, namely the transfer summary from St. Elizabeth's Hospital which notes "This is an 84 year old male, who was brought to the ER by his son, who has been his care giver. The son has noted increasing confusion and cognition, which has exacerbated significantly over the last 2 weeks. The patient is known to have dementia over the last 2 years." Exhibit C is an examination report by Jameel Arastu, M.D., dated October 4, 2012, which noted that the patient did not even know he was in a hospital and that he thought he was in some sort of restaurant. Exhibit D is a Case Management Discharge Planning document from St. Elizabeth's which notes in part:
"SON STATES THAT PATIENT LIVES ALONE, BUT SON IS THERE 5 DAYS A WEEK FOR CARE; SON STATES THAT PATIENT HAS INCREASINGLY BEEN GETTING WORSE AND THE OTHER DAY ACCUSED HIM OF POISONING HIS FOOD."
Exhibit E are progress notes from Oleg Dulkin, M.D., dated October 7, 2012, concerning the conversation with the son about Mr. Blase's sedation and the progression of his dementia. Exhibit G is from the initial evaluation from the Presbyterian Home listing Mr. Blase as having one child. Exhibit H are progress notes from St. Elizabeth's which notes that the son reports his father's mental condition has declined recently and that he responds inappropriately to questions. Exhibit I are the results of a cognitive examination dated October 16, 2012. Exhibit J are progress notes from the nursing home which notes for October 22, 2012, "Confusion is profound. Res is not oriented to person, place or time." and "Undressing in the solarium, resistive with cares [sic]. Attempting to hit care givers ." Exhibits K and L are further excerpts from cognition examinations and progress notes. Exhibit M are the progress notes which indicate that Mr. Blase fell and injured his left hand, that he was alert and confused, that he was being sent to St. Elizabeth's for his injury, and that the paperwork was completed for the Defendant to become the Power of Attorney.
Defendant states that he was named as Power of Attorney on October 26, 2012. He states that he was approached by the social worker at the Presbyterian Home and that the document was prepared and witnessed by the staff. This is the first Power of Attorney, without a major gift rider.
Plaintiff claims that the Defendant obtained a copy of his father's Will on November 6, 2012 from Ted Earl, Esq., his father's longtime attorney.
Defendant claims that his father told him that he wished to remove the Plaintiff as a beneficiary from the Totten trust accounts at AmeriCU, leaving Defendant as the sole beneficiary. Defendant claims that he went to AmeriCU and was told to provide a notarized statement from his father as to his intentions. Defendant then stated that John Raspante, an attorney, was contacted and met them both at the nursing home on November 13, 2012. Defendant claimed that he was talking to his father prior to his arrival and that his father was rational and coherent. John Raspante then notarized his father's written statement.
In opposition to Defendant's version of these events, Plaintiff cites Exhibit Q, Progress Notes from the Presbyterian Home for November 14, 2012, (one day later) which notes"Condition poor-confusion unchanged-no coherent responses" Exhibit R, the case plan notes from November 15, 2012, mention "distorted thought due to dementia". Exhibit S contains progress notes from November 19, 2012, which mention "increasing confusion" and that "verbalizations often are incomprehensible". Exhibit T is another cognition study from November 19, 2012, which notes the inability to repeat back three simple words. Exhibit U is another cognition study from December 3, 2012, with the same results noted.
Also in opposition to the motion, Plaintiff has attached the transcript of the deposition of John Raspante, the attorney who notarized the statement of Mr. Blase and later prepared the second Power of Attorney and gift rider. The transcript reveals:
• that Mr. Raspante had no prior relationship with John V. Blase;
• that the Defendant formerly dated Attorney Michele Potoczny who contacted Mr. Raspante on Defendant's behalf;
• that he met the Defendant and his father later that evening at the nursing home in the hallway;
• that he talked with the Defendant about the document to remove the other son from a bank account;
• that the document was given to him by Defendant;
• that he talked with John V. Blase for a few minutes;
• that the Defendant walked around the corner at some point;
• that he did not remember the discussion he had with Mr. Blase about the document but he believed he was familiar with it;
• that he recognized his writing on the document but did not remember seeing a crossed off acknowledgment part of the notarization as it was presented to him at the deposition;
• that he did not recall John V. Blase wearing glasses; and
• that he was paid the sum of $50 for his time.
Defendant then states that he brought this notarized statement to AmeriCU and was advised that he "could" also provide a statement from the Defendant himself as Power of Attorney with a statutory gift rider. Defendant then contacted John Raspante to prepare the second Power of Attorney. Mr. Raspante told him that his secretary, a notary, would bring the document to the nursing home and that he needed two witnesses. Defendant then arranged to have two longtime neighbors act as witnesses and the second Power of Attorney was executed on December 2, 2012. Mr. Raspante was not present.
The deposition transcript of John Raspante also confirms that Mr. Raspante prepared these documents at the direction of the Defendant and had no contact with John V. Blase aside from his initial meeting on November 13, 2012. He was paid by the Defendant but testified that he was paid a minimal amount because this was done as a "courtesy".
In December, Defendant was told that his father had pneumonia and was terminally ill. His father was transferred back to St. Elizabeth Hospital on December 10, 2012. Exhibit G is the affidavit signed on December 14, 2012 by the neighbor-witnesses as to their witnessing the signature and the signor's competence in connection with the second Power of Attorney. Plaintiff was removed as a beneficiary on the AmeriCU accounts on December 17, 2012 and John V. Blase died on December 26, 2012. Defendant then removed the money from the accounts as the sole beneficiary. Defendant claims he was present at the hospital every day in the morning and at bedtime every night. He claims that the Plaintiff never visited his father either in the hospital or in the nursing home.
Plaintiff also points to Exhibit V, the case management notes from St. Elizabeth Hospital from December 13, 2012 which referred to concerns about the Defendant's ability to care for his father at home as he was malnourished at his last admission from home and "[son] has not been around to provide care and has done most of guidance via phone". Finally, Plaintiff points to the hospital record from October 9, 2012, which lists Mr. Blase as wearing glasses and his own deposition testimony contains statements to the same effect.
In rebuttal, Defendant cites to different portions of the hospital and nursing home records containing statements concerning Mr. Blase's mental condition which are less alarming.
Discussion:
In essence, the complaint alleges that one son allegedly persuaded his father to sign a notarized statement attempting to remove the other son as a beneficiary on Totten Trust accounts at a time when the father was mentally incompetent. It is further alleged that, thereafter, the son obtained the father's signature on a second Power of Attorney with major gifts rider while the father continued to be mentally incompetent and utilized this Power of Attorney to remove the other son from the Totten Trust accounts as a beneficiary.
Defendant relies upon his claim that his father instructed him that he wished to remove the Plaintiff as a beneficiary of the trust accounts. It is well-established that evidence which would be excluded at trial by the Dead Man's Statute (CPLR 4519 ) may not be considered in support of a motion for summary judgment (Friedman v. Sills, 112 A.D.2d 343, 491 N.Y.S.2d 794 [2nd Dept 1985] ). The converse is not true however, and such evidence may be used by a party opposing a motion for summary judgment (Rosado v. Kulsakdinum, 32 A.D.3d 282, 820 N.Y.S.2d 239 [1st Dept 2006] ).
While defendant claims that the notarized statement, standing alone, would have been sufficient to remove the Totten Trust beneficiary (assuming the father was competent), this is belied by the testimony of Tina Iacovazzi, an employee of AmeriCU, taken on September 8, 2013 in the Surrogate's Court proceeding, who established that Plaintiff's name was not removed as a beneficiary until December 17, 2012 i.e. after the second Power of Attorney with major gifts rider was executed and presented. Moreover, the Court notes that the notarized statement was not legally sufficient to modify the trust accounts. Estates, Powers and Trusts Law ("EPTL") § 7–5.2(1) provides that a depositor may modify a trust account by a writing "... acknowledged or proved in the manner required to entitle conveyances of real property to be recorded ..." The decedent's signature on the statement was not acknowledged before Attorney Raspante. It was, instead, simply sworn to with a jurat.
This may explain why proper acknowledgment language was stamped on the statement, although it was crossed out and not completed. Although not made clear in the record before the Court, this may also explain why AmeriCU did not remove plaintiff as a beneficiary on the trust accounts until after receipt of the Power of Attorney containing a gift rider.
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Defendant then asserts that even if the notarized statement was not sufficient to modify the trust accounts, his presentment of the second Power of Attorney with gift rider was. Plaintiff asserts that his father was mentally incompetent to sign the second Power of Attorney. Those portions of the decedent's medical records cited by the plaintiff certainly establish that there is an issue of fact concerning the decedent's competence both at the time of the signing of the second Power of Attorney and, earlier, at the signing of the notarized statement. While defendant cites several cases in support of his contention that these records should not be considered by the Court because they are "unsworn to", the Court finds these cases distinguishable as they refer to unsworn medical reports or statements prepared by health care providers in the course of litigation, not medical records prepared solely in connection with treatment.
While Attorney Raspante apparently prepared the second Power of Attorney, it is clear that he did not speak to the decedent about, nor was he present at, its execution. Instead, he sent his secretary to attend to the execution. This is significant because the New York State Law Revision Commission Report on Powers of Attorney, January 1, 2012, commenting on the new statutory short form Power of Attorney stated:
"Whether the principal has the mental capacity to appreciate all the elements of the power of attorney is likely to emerge during the discussions about the power of attorney between the lawyer and the principal-counseling for which the statutory form is no substitute."
Report at page 28. (emphasis added)
In addition to the claim that the father was mentally incompetent to sign the second Power of Attorney, there is also the issue of whether Defendant violated his obligation to act pursuant to his father's instructions, or in his father's best interests, when he removed his brother as a beneficiary of the accounts.
The issue of which party has the burden of proof is not the determinative factor on this motion because, even if there was no presumption of overreaching due to the family relationship, that exception does not apply where the principal is not mentally competent (See, e.g., Juliano v. Juliano, 42 Misc.3d 1226 ).
Last, but certainly not least, it appears to the Court that the second Power of Attorney, as written, was legally insufficient to authorize the Defendant (and AmeriCU) to remove Plaintiff as a beneficiary of the existing Totten Trust accounts, as such authority must be expressly given in the major gifts rider. (Matter of Conklin, 48 Misc.3d 291 [Sur Ct, New York County 2015] ). The Court in Matter of Conklin ruled that the General Obligations Law ("GOL") provisions for a major gifts rider (GOL § 5–1514 ) must be construed together with EPTL § 7–5.2(1), which requires a definitive act by a depositor to close or modify a Totten Trust account. When construing these laws together the Court in Matter of Conklin found that the authority to close a totten trust account must be expressly given in a major gifts rider. It follows, therefore, that authority to modify the beneficiaries on such accounts must also be expressly given. See GOL § § 5–1514 –3.(c)(3) and 5–1514–4.(a).
The second Power of Attorney utilized by the Defendant (Exhibit 7 of Plaintiff's Answering Affidavit sworn to on January 14, 2015) reveals that such authority was not expressly given in the gift rider and, therefore, AmeriCU was not authorized to modify the beneficiaries of the decedent's Totten Trust accounts. For the above mentioned reasons, the Defendant's motion for summary judgment is DENIED. Plaintiff is DIRECTED to submit an Order on notice to Defendant.