| Matter of Oestrich |
| 2009 NY Slip Op 03435 [61 AD3d 1317] |
| April 30, 2009 |
| Appellate Division, Third Department |
| In the Matter of the Estate of William L. Oestrich, Deceased. HelenMay Oestrich, Appellant; Christopher J. Moran, as Guardian ad Litem of Laurel McEnaney andAnother, Respondent. Stephanie G. Beck, as Executor of William L. Oestrich, Deceased,Appellant. |
—[*1] Paniccia & Beck, L.L.P., Binghamton (Alfred Paniccia Jr. of counsel), for Stephanie G.Beck, appellant. Christopher J. Moran, Binghamton, respondent pro se.
Lahtinen, J. Appeals (1) from two orders of the Surrogate's Court of Broome County(Peckham, S.), [*2]entered July 31, 2008 and September 15,2008, which, among other things, denied petitioner's application to cancel her surviving spouseelection against decedent's will, and (2) from an order of said court, entered December 18, 2008,which denied a motion by the executor of decedent's estate for reconsideration.
Decedent executed a will in November 2004 in which he bequeathed his estate in equalshares to 13 beneficiaries, including petitioner (his spouse). He died in April 2006, his will wasadmitted to probate in July 2006 and later that month petitioner filed a notice of election. In earlyMarch 2008, the executor of decedent's estate (an attorney) notified petitioner's attorney that, inpreparing to close the estate, she had calculated that the testamentary substitutes received bypetitioner—including the $223,434.28 value of one half of decedent's pension (seeEPTL 5-1.1-A [b] [1] [G])—exceeded the value of petitioner's elective share and, thus, theexecutor inquired whether petitioner wished to withdraw her right of election.
On March 16, 2008, petitioner executed and forwarded to the executor a documentpurporting to withdraw her previously filed notice of election. In a letter dated March 19, 2008,the executor notified the 13 beneficiaries named in the will (including petitioner and the fivetrustees named in the will for the five infant beneficiaries) that, upon receipt of duly executedreleases from all of them, she would then forward to each a one-thirteenth share.
By application dated April 2, 2008, petitioner commenced this proceeding seeking approvalfrom Surrogate's Court of the cancellation of her prior election (see EPTL 5-1.1-A [c][5]). Also in April 2008, the executor—having received all 13 executed release and receiptforms—distributed the estate assets to the 13 beneficiaries. On May 12, 2008, Surrogate'sCourt appointed respondent as the guardian ad litem for the five infant beneficiaries and laterthat month respondent filed objections to petitioner's application to withdraw her election.Petitioner moved for summary judgment dismissing respondent's objections and granting herapplication to withdraw her election. Surrogate's Court denied petitioner's application, findingthat the 12 other beneficiaries would be prejudiced if the withdrawal of election was permittedsince they would each lose about $2,113. The court directed petitioner to return herone-thirteenth share of $25,355, plus interest. The court further determined that the executor hadmade an improper distribution and the court assessed a conditional surcharge against her for theamount of the share paid to petitioner under the will. The executor's motion to reargue wasdenied. Petitioner and the executor appeal.[FN1]
Since 1929, New York has statutorily protected a spouse from being disinherited byproviding for a right of election (see former Decedent Estate Law § 18, added byL 1929, ch 229, § 4; see generally Matter of Allan, 5 NY2d 333 [1959]). Thestatutes governing that right have [*3]undergone occasionalrevision, with the most recent statute—and the one controlling here—enacted in1992 (see L 1992, ch 595, § 10; see also L 1993, ch 515, § 3[making several changes to the statute]). The overriding purpose of the right to elect is to protectthe survival rights of a spouse (see Matter of Reynolds, 87 NY2d 633, 637 [1996];Matter of Agioritis, 40 NY2d 646, 650-651 [1976]; Matter of Niedelman, 6AD2d 291, 295 [1958], affd 5 NY2d 1043 [1959]), and it has been aptly observed that"[t]he common thread that runs through each and every change in the law is that the rights of thesurviving spouse expanded with each modification" (Matter of Solomon, 163 Misc 2d805, 808 [1994]). The interpretation and application of the statute must be made consistent withthe purpose for which it was enacted (see e.g. Matter of Yolanda D., 88 NY2d 790, 795[1996]).
The decision to elect is not irrevocable. Even before the most recent statute was enacted, itwas recognized that in some circumstances withdrawing an election would be permitted (seeMatter of Allan, 5 NY2d at 343). The matter is now controlled by EPTL 5-1.1-A (c) (5),which accords discretion to Surrogate's Court in determining whether to permit withdrawal ofthe election so long as "no prejudice is shown to creditors of such spouse or other personsinterested in the estate."
Here, creditors are not an issue. Surrogate's Court, however, determined that the 12 otherbeneficiaries would be prejudiced by petitioner's withdrawal of her election. Although allowingpetitioner to withdraw her election will result in the share under the will of the remainingbeneficiaries being one-thirteenth rather than one-twelfth, the net effect of such withdrawal is toput the beneficiaries in exactly the same position they were in under the terms of the will asintended by decedent. Significantly, there is no showing that any of the other 12 beneficiarieschanged their position in any fashion in reliance upon the result of the election. Nothing of valuehad yet been advanced to any of the 12 beneficiaries before petitioner's withdrawal applicationand, hence, they will not be required to return any funds. Under such circumstances, we areunpersuaded that prejudice has been established.[FN2]Moreover, permitting petitioner to withdraw her election is consistent with the statutory intent ofproviding the fullest measure of protection to the spouse (see e.g. Matter of Reynolds, 87NY2d at 637) as well as the general policy favoring carrying out the intent of the decedent(see Matter of Jones, 38 NY2d 189, 193 [1975]; Matter of Maliszewski, 42 AD3d 737, 738 [2007]). Upon ourreview of the [*4]record, we conclude that petitioner should havebeen permitted to withdraw her election.
The remaining arguments are either academic or unavailing. We note, however, that weagree with Surrogate's Court that the attorney/executor acted imprudently in disbursing funds onthe apparent assumption that Surrogate's Court would rule a particular way on a pending petition,a factor that may be relevant in establishing fees or commissions.
Peters, J.P., Rose, Malone Jr. and Garry, JJ., concur. Ordered that the orders entered July 31,2008 and September 15, 2008 are reversed, on the law and the facts, without costs, and petitionto approve cancellation of the surviving spouse election granted.
Ordered that the appeal from the order entered December 18, 2008 is dismissed, withoutcosts.
Footnote 1: The executor also filed a noticeof appeal from the order denying reargument, but no appeal lies from such an order (see Aultv Richman, 299 AD2d 613, 615 [2002]).
Footnote 2: While the term prejudice is notdefined in the statute, we note that such term is often construed in civil cases to require an actualdetriment that puts a party in a worse position than before the challenged act or omission, such asoccurs as a result of a change of position made in reliance on the act, or an added expense orburden (see generally Resk v City of New York, 293 AD2d 661, 662 [2002], lvdenied 99 NY2d 507 [2003]; Busler v Corbett, 259 AD2d 13, 16 [1999]; Smith vIndustrial Leasing Corp., 124 AD2d 413, 414 [1986]).