Opinion
No. 400–A–2006.
2012-06-21
In the Matter of the ESTATE OF John STANTON, Also Known as John H. Stanton, Deceased.
Oshrie Zak, Esq., for Joyce Stanton, petitioner-administrator. Lesch & Lesch, (Solomon I. Lesch, Esq., of counsel) for Samuel Stanton, respondent.
Oshrie Zak, Esq., for Joyce Stanton, petitioner-administrator. Lesch & Lesch, (Solomon I. Lesch, Esq., of counsel) for Samuel Stanton, respondent.
LEE L. HOLZMAN, J.
In this SCPA 2103 proceeding the petitioning administrator, the decedent's daughter and sole distributee seeks, inter alia, an order pursuant to CPLR 6301 enjoining the respondent and Emigrant Savings Bank (Emigrant) from transferring or utilizing any funds which the decedent deposited in two separate Emigrant joint accounts with right of survivorship in his name and that of the respondent (see Banking Law § 675). The petitioner alleges that, shortly after the decedent's death, respondent closed the two accounts and the proceeds of in excess of $167,000 remained on deposit at Emigrant in the respondent's sole name.
At the outset it is noted that although this court, in a May 6, 2011 order to show cause, granted a temporary restraining order with regard to the proceeds of the two Emigrant accounts, it declined to do so with regard to issues involving John Hancock Financial Annuities and, neither John Hancock nor other parties who appeared to have an interest in the annuities were ever served with process in that application. Accordingly, to the extent, if any, that the petitioner still seeks injunctive relief under CPLR 6301 with regard to those annuities in this application, the application is denied. Therefore, the only allegations in the SCPA 2103 petition that the court discusses in the instant application are those relating to the two Emigrant accounts.
The decedent died intestate on May 12, 2006, at the age of 84, and was predeceased by his wife who died on December 22, 2004. Prior to his wife's death, the decedent and his spouse held accounts totaling over $421,000 in three different banks, including two Emigrant accounts. The petitioner alleges that the estate is entitled to the proceeds from the two Emigrant accounts because either the decedent lacked the requisite mental capacity to open a joint bank account or because the respondent, a cousin of the decedent, exerted undue influence or perpetrated a fraud in order to be added as a joint tenant on these accounts. The respondent does not claim to have contributed any funds to the bank accounts.After the death of the decedent's wife, the petitioner claims that the respondent and his wife assisted the decedent with many activities of daily living, including providing meals, transportation and cleaning services. One month after the death of the decedent's spouse, on or about January 21, 2005, the decedent changed the two Emigrant accounts at issue so they were held jointly with the respondent. The signature cards for both Emigrant accounts are titled “John Stanton or Samuel Stanton [the respondent] or the survivor” and were signed by both of them. The accounts were opened on January 21, 2005 and closed on May 31, 2006, with the proceeds remaining on deposit at Emigrant in the respondent's sole name.
It is well established that to obtain a preliminary injunction the petitioner must demonstrate (1) a likelihood of success on the merits in the underlying SCPA 2103 proceeding; (2) irreparable injury; and, (3) a balancing of the equities in the petitioner's favor (see CPLR 6301; 6312[a]; Matter of Kalichman, 31 AD3d 1066 [2006];Terrell v. Terrell, 279 A.D.2d 301 [2001];Matter of Connelly, 193 A.D.2d 602 [1993], lv. denied 82 N.Y.2d 656 [1993] ). The petitioner contends that she established each of the three required prongs, and not surprisingly, the respondent contends that the petitioner failed to establish a single one of them.
In support, the petitioner relies, inter alia, on the decedent's hospital medical records beginning on July 1, 2003, approximately one and one-half years prior to the beneficiary changes at issue. At that time, the examination notes state that the decedent suffered from mild to moderate dementia, arterial fibrillation and diabetes, exhibited “poor short term memory,” and “dementia may play a role in noncompliance with meds.” The petitioner asserts the decedent was dependent upon the respondent for help with the activities of daily living to such an extent that they had a confidential relationship and, accordingly, the burden is on the respondent, effectively the decedent's caretaker, to show that the transfer of the assets into joint bank accounts with the respondent was not the product of undue influence. She also alleges that the respondent fraudulently induced the decedent to make the beneficiary changes by repeatedly misrepresenting to the decedent that the petitioner, his daughter, had abandoned him.
In contrast, the respondent relies on the presumption under Banking Law § 675(b), asserting that the decedent intended to create a joint tenancy with right of survivorship as indicated by the signature cards. He also annexes the affirmation of a non-treating physician who opines that as the decedent had satisfactory cognitive assessment scores on September 23, 2003 and July 20, 2004, insofar as the earlier 2003 medical reports indicate mild dementia, the condition was transient and probably not caused by dementia but by a failure to stabilize the decedent's diabetes.
The respondent and his wife also aver that: (1) although they assisted the decedent with many daily activities, the decedent took care of his own personal needs, including dressing and bathing himself with supervision, and he was able to eat and socialize with friends weekly; (2) they never requested any payment for their many services for his benefit; (3) they did not exert undue influence over him and had no knowledge that the respondent would be named as a beneficiary of the bank accounts at issue; (4) the decedent set up the annuities and bank accounts on his own initiative; and, (5) the friendship between the decedent and the respondent spanned over 80 years. The respondent also asserts that a preliminary injunction is unnecessary and the petitioner would not suffer irreparable injury because he owns a home unencumbered by a mortgage and has sufficient assets to return any sums if directed to do so by the court. On the other hand, he urges that his lifestyle might be compromised if the instant application is granted. In further support of the respondent's contention that the equities should be balanced in his favor he claims that the petitioner is guilty of laches, having failed to satisfactorily explain why she filed this motion three years after the completion of his deposition.
The petitioner replies that she does not bear the burden of proof to establish fraud and undue influence, and reiterates that the burden is on the respondent, who was in a confidential relationship with the decedent, to demonstrate that the subject accounts were not the product of undue influence and fraud and that the decedent possessed capacity. She notes that the doctor who submitted an affirmation on behalf of the respondent lacked personal knowledge about the decedent, so his opinion is insufficient to refute the decedent's own health care providers' assessment of his mental status at the time. She also contends that the respondent failed to present any documentary proof showing the present value of his assets or that they are sufficient to reimburse the estate should he ultimately be required to return the account proceeds, and notes the respondent admitted that he might need these funds to maintain his family's lifestyle.
Notwithstanding that Banking Law § 675(a) and (b) provide that opening an account in the names of two people “to be paid or delivered to either, or the survivor of them” creates a presumption the parties intended to create a joint tenancy and vest sole title to such account in the survivor, the challenger may rebut the presumption by demonstrating “fraud, undue influence or lack of capacity” (see Matter of Kleinberg v. Heller, 38 N.Y.2d 836, 840 [1976] [Fuchsberg, J. concuring] ), or upon a demonstration that the account was opened for “convenience” rather than with an intent to create a joint tenancy (see Matter of Camarda, 63 A.D.2d 837, 839 [1978] ). Similarly, where a challenger rebuts the presumption by demonstrating that there is a question concerning the mental capacity of the deceased depositor, the survivor will be required to prove more than that the decedent signed the joint account forms because, upon such a showing, the burden shifts to the survivor “to establish volition on the part of the depositor to make the deposit in the statutory form” (see Matter of Creekmore, 1 N.Y.2d 284, 291 [1956] ).
The likelihood of success on the merits does not require that the movant establish a right to summary judgment or even that there is no doubt about whether the movant will ultimately prevail (see Matter of Kalichman, 31 AD3d at 1068 n 5 citing Egan v. New York Care Plus Ins. Co., 266 A.D.2d 600, 601 [1999] ). Instead, “[A] prima facie showing of a right to relief is sufficient” even though “actual proof of the case should be left to further proceedings” (see Terrell v. Terrell, 279 A.D.2d at 303, quoting McLaughlin, Piven, Vogel v. Nolan & Co., 114 A.D.2d 165, 172–173, lv. denied 67 N.Y.2d 606).
Here, the respondent denies any knowledge of the subject beneficiary designations prior to the decedent's death; however, his signature appears on both Emigrant signature cards dated January 11, 2005, shortly after the decedent's wife's death. In contrast to the respondent's presentation of a physician's affirmation concluding, based on hospital records after July 2003, that decedent may have suffered from transitory impairment of his cognitive abilities but did not have dementia or Alzheimer's, are other notations in the hospital records after July 2003 that the decedent had low scores on those later cognitive assessments. It also appears that the decedent was dependent upon the respondent's assistance for at least some of his day-to-day activities, which may support the petitioner's allegations of either or both lack of capacity and undue influence (see Matter of Creekmore, 1 N.Y.2d at 284;Matter of Camarda, 63 A.D.2d at 837). On this state of the record, the court finds the petitioner demonstrated a sufficient likelihood of success in the SCPA 2103 proceeding to fulfill that requirement for a preliminary injunction.
The petitioner also demonstrated there might be irreparable injury absent the injunction, as the respondent's own statement that the funds at issue might be necessary to support his lifestyle, together with his failure to document that he has sufficient assets to repay the estate should that be necessary, lead to the conclusion that the respondent might have insufficient funds at the conclusion of the litigation to pay the judgment that may eventually be entered in this proceeding. Issues raised herein with respect to the elderly respondent's mental capacity, arising in part from his repeated inability to not remember events during his deposition, also raise a concern as to whether he will retain sufficient assets to satisfy any judgment that might be entered.
The court also finds that a balancing of the equities militates in the petitioner's favor. Respondent concedes that he does not need the funds at issue for necessaries; instead, he wants to maintain a certain “life style,” without providing any specifics about that life style. The respondent's argument of laches is unavailing. Laches is defined as “such neglect or omission to assert a right as, taken in conjunction with the lapse of time, ... and other circumstances causing prejudice to an adverse party, operates as a bar in a court of equity” (Matter of Barabash, 31 N.Y.2d 76, 81 [1972], rearg. denied 31 N.Y.2d 963 [1972] ). Here, it can reasonably be argued that all parties have proceeded with considerably less than all deliberate speed in moving this proceeding forward. Furthermore, the respondent failed to show how any delay by the petitioner in making the instant application prejudiced him.
Accordingly, for all of the foregoing reasons the preliminary injunction is granted provided that the petitioner, by August 20, 2012, posts an undertaking in the sum of $25,000 (see CPLR 6312[b] ).
The discovery proceeding will appear on the ready-for-trial calendar of the court upon compliance with Uniform Rules for Surrogate's Court (22 NYCRR) §§ 207.29 and 207.30.
The Chief Clerk shall mail a copy of this decision to counsel for all parties.
Settle order.