Opinion
2017–08617 Index No. 2992/16
06-05-2019
In the Matter of Gloria KAHN, Deceased. v. Brian KAHN, Petitioner-Appellant.
Lehrman & Maseng, PLLC, Brooklyn, N.Y. (Michael A. Lehrman of counsel), for appellant.
Lehrman & Maseng, PLLC, Brooklyn, N.Y. (Michael A. Lehrman of counsel), for appellant.
REINALDO E. RIVERA, J.P., MARK C. DILLON, SHERI S. ROMAN, COLLEEN D. DUFFY, JJ.
DECISION & ORDER ORDERED that the order is affirmed, without costs or disbursements.
The petitioner, who is the administrator of the decedent's estate, petitioned the Surrogate's Court to remove restrictions set forth in letters of administration issued to him that prohibited him from, inter alia, selling real property owned by the decedent at the time of her death. The petitioner represented that the real property was encumbered by a mortgage on which the decedent owed $ 870,000 plus interest and penalties, that the property was in foreclosure, and that it had a fair market value of only $ 325,000 and needed repairs that would cost approximately $ 133,000. Accordingly, the petitioner sought authorization to conduct a "short sale" of the premises for the total sum of $ 308,750. No opposition to the petition was filed.
Although the petitioner submitted, inter alia, the lender's letter approving the short sale, an appraisal establishing the value of the property and the cost of the repairs needed, and a waiver and consent signed by a fellow distributee of the estate, he did not submit evidence establishing, among other things, the existence of the mortgage or the sum owed thereon, the existence of the foreclosure proceedings, or that he and the individual who submitted the waiver and consent were the only distributees of the estate. The Surrogate's Court denied the petition on the ground, inter alia, that the petitioner had not made an adequate showing that a short sale was in the best interests of the estate. The petitioner appeals.
The role of the Surrogate's Court is to " ‘preserve and enhance, as far as possible, the assets of decedents' estates’ " ( Matter of Jones , 8 N.Y.2d 24, 27, 200 N.Y.S.2d 638, 167 N.E.2d 336, quoting Matter of Graves , 197 Misc. 555, 557, 95 N.Y.S.2d 809 [Sur. Ct., Erie County] ). This includes the power to authorize an executor or administrator to compromise debts which must be settled for the estate to be settled (see SCPA 1813[1] ). In fulfilling these duties, a Surrogate should be guided by the best interests of the estate (see generally SCPA 201[3], 209 ; Matter of Stortecky v. Mazzone , 85 N.Y.2d 518, 524, 626 N.Y.S.2d 733, 650 N.E.2d 391 ; Matter of Fitch , 160 N.Y. 87, 92, 54 N.E. 701 ; Matter of Beharrie , 84 A.D.3d 1227, 1228, 924 N.Y.S.2d 451 ; Matter of Lanyi , 147 A.D.2d 644, 647, 538 N.Y.S.2d 183 ).
A decedent's personal property is the primary source for the payment of the decedent's debts, and land cannot be used as a source of funds unless the personalty has been exhausted (see Equitable Life Assur. Socy. of U.S. v. Wilds , 184 App. Div. 435, 438, 171 N.Y.S. 505 ; Matter of Doyle , 180 App. Div. 398, 402, 167 N.Y.S. 827 ). However, the primary source for payment of a mortgage debt is the mortgaged premises (see Jemzura v. Jemzura , 36 N.Y.2d 496, 501, 369 N.Y.S.2d 400, 330 N.E.2d 414 ; EPTL 3–3.6 ). To obtain court authorization to sell real property to satisfy a decedent's debts, including mortgage debts, a personal representative must demonstrate that the decedent's personal property is insufficient to satisfy the debts (see SCPA 1902[3] ; Jemzura v. Jemzura , 36 N.Y.2d at 501, 369 N.Y.S.2d 400, 330 N.E.2d 414 ; Matter of Cunniff , 272 N.Y. 89, 99–100, 4 N.E.2d 946 ; Matter of Clark , 271 App. Div. 691, 695–696, 68 N.Y.S.2d 487 ; Equitable Life Assur. Socy. of U.S. v. Wilds , 184 App. Div. at 438, 171 N.Y.S. 505 ; Matter of Doyle , 180 App. Div. at 402, 167 N.Y.S. 827 ).
A Surrogate has " ‘the right to decree intelligently, and upon equitable principles, and to order [executors' and administrators'] conduct upon principles of justice and of reason,’ " and may not " ‘rubber stamp’ " an application without examining its basis ( Matter of Stortecky v. Mazzone , 85 N.Y.2d at 524, 626 N.Y.S.2d 733, 650 N.E.2d 391, quoting Matter of Wagner , 119 N.Y. 28, 31, 23 N.E. 200 ). Here, we agree with the Surrogate's Court's determination that, without other evidence, the petitioner's conclusory assertions regarding the extent of the decedent's personal property and debts, the existence and status of the mortgage, and the identities of potential distributees were insufficient to support the relief he sought. Accordingly, we agree with the Surrogate's Court's denial of the petition to remove restrictions set forth in letters of administration issued to the petitioner in his capacity as administrator of the decedent's estate prohibiting him from, inter alia, selling real property owned by the decedent at the time of her death.
RIVERA, J.P., DILLON, ROMAN and DUFFY, JJ., concur.