Opinion
2010-362674/B
06-28-2013
Proceeding to Determine the Validity of a Claim in the Estate of Michael Sanchez, Deceased.
Robert P. Kirk, Jr., P.C. (for petitioner) Janine T. Lynam, Esq. (for respondent) Joseph & Terracciano, LLP
Robert P. Kirk, Jr., P.C. (for petitioner)
Janine T. Lynam, Esq. (for respondent)
Joseph & Terracciano, LLP
Edward W. McCarty, J.
In this miscellaneous proceeding to determine the validity of a claim, the respondent, Katherine D'Arpa (hereinafter "Katherine"), executor of the estate of Michael Sanchez, moves for an order pursuant to CPLR § 3211 (a) (5) (res judicata) and (7) (failure to state a cause of action) dismissing the petition and imposing sanctions, attorney's fees and expenses. For the reasons that follow, the motion is denied in its entirety.
The decedent Michael Sanchez died on August 28, 2010 leaving a will dated July 19, 2006, which was admitted to probate on November 9, 2010. Letters testamentary issued to the decedent's daughter, Katherine, on November 9, 2010. At the time of his death, the decedent was married to Alice Sanchez (hereinafter "Alice") and was survived by six children. The decedent's will made no provision for Alice. Alice died on October 6, 2010. On April 7, 2011, Cheryl Cruthers and Craig Wasieleski, two of Alice's children who were appointed her co-executors, filed a right of election on Alice's behalf. The right of election was rejected by Katherine as invalid on the basis that it was not exercised by Alice during her lifetime.
A petition to determine the validity of the purported exercise of the right of election was filed by the co-executors of Alice's estate. The proceeding was opposed by Katherine as executor of the decedent's estate. By decision dated December 7, 2011 (Dec. No. 27594), this court determined that the right of election is personal to the surviving spouse and "[s]uch right of election if not previously exercised will be lost upon the death of the surviving spouse and will not pass to his or her executor or administrator" (Matter of Fellows, 16 AD3d 995, 997 [3rd Dept 2005]). Although Alice's co-executors had argued that there was substantial compliance as Alice's attorney had sent a letter to Katherine's attorneys in which he notified them of his client's choice to file her right of election, this court held that "[a] letter from an attorney sent one day after his client dies does not, under any circumstances, evidence compliance with the statute." Accordingly, the right of election was held to be invalid.
Petitioners also filed a Notice of Claim dated April 11, 2011 for the value of Alice's elective share. Annexed to the Notice of Claim is a document entitled "Right of Election Pursuant To EPTL § 5-1.1-A." By petition filed October 1, 2012, petitioners commenced a proceeding to determine the validity of the claim and Katherine filed an answer thereto. Katherine now moves to dismiss on the basis that this court determined that the elective share was invalid and of no effect in its prior decision and as such, is the law of the case. Counsel asserts that the petitioners did not reargue or appeal this court's prior decision and are simply attempting to relitigate the issue of Alice's elective share disguised as a claim.
In addition, Katherine argues that the petition fails to state a cause of action. Katherine asserts that since the verified claim against the estate is for the value equal to Alice's elective share, the petition fails to state a cause of action because the court already determined that the elective share was "invalid and of no effect." Katherine also claims that the petitioners' contentions in support of their application are without merit in any event.
The petitioners argue that the claim seeks damages based upon Katherine's breach of an oral agreement and promises made in connection therewith and is for a "turnover" of assets and accounting. Specifically, petitioners claim that:
"7. There were specific conversations and promises from Mrs. D'Arpa and her family concerning the decedent's right to her share in the estate. Mrs. D'Arpa advised the decedent that in order to save the estate time and money they would have their lawyer draw up papers saying that if she would waive process and consent to probate they would give her an amount equal to her right of election.
8. In justifiable reliance on said promise the decedent did execute said waiver of process and consent to probate. Notwithstanding said promise the said Katherine D'Arpa failed and refused to pay the decedent her share of the estate as promised.
9. In addition, the respondent, Katherine D'Arpa and other family members removed items of personal effects and furnishings from the decedent's home owned and belonging to the decedent. Further they canceled the homeowner's policy in the name of the decedent and then deposited and kept the refund check. Respondent have [sic] failed to account for and/or turnover said assets belonging to the decedent."
The petitioners contend that Katherine and her attorneys promised Alice verbally and in writing that Alice would be paid an amount equal to her elective share if she executed a waiver and consent in connection with the probate of the decedent's will. In particular, counsel notes that Katherine's attorney sent him correspondence stating:
"Please be advised that the proposed executrix, Kathy D'Arpa is in the process of gathering all necessary information so we can place a value on the Estate. I will contact you once I have this information in hand."
In response to that letter, Alice's counsel sent Katherine's attorney a letter stating:
"In accordance with your recent correspondence enclosed please find an original waiver of process which has now been executed by my client."
Thus, petitioners argue that Katherine made a "clear promise" to pay Alice an amount equal to her elective share which Alice relied upon in not filing her notice of election and signing the waiver and consent.
With respect to the issue of the "law of the case," petitioners argue that to apply res judicata there must be an identity of issues between the two matters, which they assert does not exist under these circumstances. Petitioners contend that the sole issue previously determined by this court's decision was the late filing of the notice of election and that the court merely determined that the decedent's right of election terminated upon her death. Moreover, they argue that the claim is also for a turnover of assets and accounting "which issues and claims are separate from" Alice's right of election. In addition, petitioners assert that the motion to dismiss is premature because there has been no opportunity for discovery concerning "intent and promises made by" Katherine, as well as Katherine's retention of Alice's property which is the subject of the turnover.
In response, Katherine's counsel argues that the petition is simply a "creative attempt by Petitioner's [sic] to use smoke and mirrors to circumvent the statutory requirements of EPTL §5-1.1-A." Counsel claims that petitioners have failed to set forth the necessary elements for breach of contract. Counsel states that an oral communication by Katherine to Alice that she had a potential elective share if she so desired does not create a promise to give her the amount of her elective share. Counsel argues that executing a waiver of process and consent to probate simply alleviated the estate from having to serve Alice with a citation, which does not translate into "injury" necessary for an action based on promissory estoppel.
As to the issue of an accounting and the turnover of assets, Katherine's counsel points out that the Notice of Claim merely seeks the elective share and makes no mention of personal property. In addition, counsel argues that discovery is not necessary.
Analysis
Res Judicata
The doctrine of res judicata "precludes a party from litigating a claim where a judgment on the merits exists from a prior action between the same parties involving the same subject matter. A valid final judgment bars future actions between the same parties on the same cause of action" (Liberty Assoc. v Etkin, 69 AD3d 681, 682 [2d Dept 2010] [internal quotation marks and citations omitted]). As a general rule, "once a claim is brought to a final conclusion, all other claims arising out of the same transaction or series of transactions are barred, even if based upon different theories or if seeking a different remedy" (O'Brien v City of Syracuse, 54 NY2d 353, 357 [1981). The doctrine of the law of the case is in essence a doctrine of intra-action res judicata (Siegel, NY Prac §276 at 475 [5th ed]). The doctrine seeks to prevent relitigation of issues of law that have already been determined at an earlier stage of the proceeding (Browrigg v New York City Hous. Auth., 29 AD3d 721 [2d Dept 2006]) and applies only to legal determinations that were necessarily resolved on the merits in a prior decision (Gay v Farella, 5 AD3d 540 [2d Dept 2004]). The doctrine, however, may be ignored in extraordinary circumstances such as a change in law or a showing of new evidence (Foley v Roche, 86 AD2d 887 [2d Dept 1982]).
The court's prior decision and order dated December 9, 2011 (Dec. No. 27594) determined only that the right of election exercised after Alice's death by her co-executors was invalid since the right of election is lost upon the death of the spouse. In the instant proceeding, however, the petitioners are not attempting to exercise Alice's right of election, but rather are pursuing a claim based upon a contract or promise, the value of which is equivalent to Alice's elective share. Petitioners claim that Katherine, as executor of Michael's estate, promised Alice that if she signed a waiver and consent and did not file a notice of election, the estate would pay Alice her elective share. According to petitioners, Alice relied on this promise, signed the waiver and consent, thereby foregoing her right to challenge the decedent's will. Prior to her death, Alice never received the amount allegedly promised to her. The court, in the prior proceeding, did not determine whether Katherine made such a promise to Alice, but simply held that the co-executors of Alice's estate could not exercise the right of election on her behalf. Accordingly, the instant proceeding to enforce a claim is not barred by the doctrine of law of the case.
Motion to Dismiss For Failure
To State a Cause of Action
On a motion to dismiss a complaint for failure to estate of a cause of action the complaint is to be construed in a light most favorable to the plaintiff (Cohn v Lionel Corp., 21 NY2d 559 [1968]) and deemed to allege whatever can be implied from its statements by fair intendment (Howard Stores Corp. v Pope, 1 NY2d 110 [1956]). In addition, on a motion to dismiss for failure to state a cause of action, all of the allegations in the pleading must be assumed as true, and the court must determine whether the alleged facts fail to fit within any cognizable legal theory (Morone v Morone, 50 NY2d 481 [1980]).
The elements of a breach of contract claim are formation of a contract between the parties, performance by the plaintiff, the defendant's failure to perform, and resulting damage (Clearmont Prop., LLC v Eisner, 58 AD3d 1052, 1055 [3rd Dept 2009]). For a contract to be binding and enforceable, there must be consideration (22 NY Jur 2d Contracts § 66). "Consideration may take the form of either a promise or performance, . . . [and] has been said to consist of what is actually given or suffered and accepted for a promise. It is, in effect, the price bargained and paid for a promise" (22 NY Jur 2d Contracts § 60).
In addition, it has long been recognized that, even in the absence of written or otherwise overt expression, a true, valid and enforceable implied-in-fact contract may be inferred from the conduct of the parties, although such an implied-in-fact contract still requires the elements of consideration, mutual assent, legal capacity and legal subject matter (Merkos L'Inyonei Chinuch, Inc. v United Lubavitcher Yeshivoth, 2003 NY Slip Op 51426[U] [Sup Ct, Kings County]).
Promissory estoppel, however,
"may provide a remedy in the absence of a contractual obligation based on a person's reliance on an unambiguous promise. It arises out of a breached promise in circumstances under which it is fair to hold the promisor to the terms of his or her promise. Recovery under the theory of promissory estoppel is not dependent on the existence of a contract"
(Matter of Hennel, 2013 NY Slip Op 23184 [Sur Ct, Schenectady County]; see also 5 NY Jur 2d, Estoppel, Ratification and Waiver § 51).
To establish a promissory estoppel, the person claiming estoppel must identify a clear and unambiguous promise from the person to be estopped, on which the person claiming estoppel reasonably relied to his or her detriment. The doctrine of promissory estoppel applies to a limited class of cases in which a person to whom a promise is made has "suffered unconscionable injury or has prejudicially changed his or her position as a result of his or her reliance on the promise" (57 NY Jur 2d, Estoppel, Ratification, and Waiver § 56; see also Tierney v Capricorn Investors, L.P., 189 AD2d 629 [1st Dept 1993], lv denied, 81 NY2d 710 [1993]; Ripple's of Clearview, Inc. v Le Havre Assoc., 88 AD2d 120, 122 [2d Dept 1982], lv denied, 57 NY2d 609 [1982]). "In order to state a viable cause of action for promissory estoppel, the following elements must be established: (1) an oral promise that is sufficiently clear and unambiguous; (2) reasonable reliance on the promise by the party; and (3) injury caused by the reliance" (Sinrich v Fernwood Enterprises, Inc., (2012 NY Slip Op 32676 [U] [Sup Ct, New York County]).
Katherine argues that the petition fails to state a cause of action for breach of contract or promissory estoppel. Katherine contends that there was no contract because there was no consideration since if Alice declined to sign the waiver, the estate would have just served her with a citation. Katherine ignores, however, that by signing the waiver, Alice gave up the right to challenge the decedent's will and seek her intestate share, which actually might have been greater than her elective share. Thus, construing the petition in the light most favorable to petitioners, the branch of the motion seeking dismissal for failure to state a cause of action is denied.
With respect to the petitioners' request for a "turnover of assets" and "accounting," Katherine argues that petitioners do not have standing to seek same and, therefore, such cause of action should be dismissed. She also correctly points out that there was no mention of such relief in the Notice of Claim itself. The court notes however, that, Alice, as the surviving spouse, had a right to the exemption for the benefit of family (EPTL 5-3.1) which property never becomes part of the estate but is set off for the surviving spouse. Viewing the claim for personal property as a claim under EPTL 5-3.1, the co-executors have standing to seek a turnover of such assets. With respect to the request for an accounting, the petitioners' application is more properly brought as a separate proceeding to compel an accounting.
The branch of the motion seeking attorney's fees, costs and sanctions is denied.
The matter is set down for a conference on August 8, 2013 at 9:30 a.m.
This constitute the decision and order of the court.
EDWARD W. McCARTY III
Judge of the
Surrogate's Court