| Oakes v Muka |
| 2010 NY Slip Op 00416 [69 AD3d 1139] |
| January 21, 2010 |
| Appellate Division, Third Department |
| Natalia Cokinos Oakes, Individually and as Successor Trustee ofthe Herbert C. Oakes Living Trust, as Assignee of Herbert C. Oakes, Jr. and Another, and asGuardian of Leopold V. Oakes, an Infant, Respondent, v Betty O. Muka,Appellant. |
—[*1] Holmberg, Galbraith, Van Houten & Miller, Ithaca (Anna K. Holmberg of counsel), forrespondent.
Per Curiam. Appeals (1) from a judgment of the Supreme Court (Garry, J.), entered June 24,2008 in Tompkins County, upon a verdict rendered in favor of plaintiff, and (2) from an order ofsaid court, entered August 11, 2008 in Tompkins County, which denied defendant's motion to setaside the verdict.
In this action, which has been before us on two previous occasions (Oakes v Muka, 56 AD3d 1057[2008]; Oakes v Muka, 31 AD3d834 [2006]), plaintiff sought a declaration that the Herbert C. Oakes Living Trust, asamended in September 2000, is in full force and that all subsequent appointments, amendmentsand affidavits are of no effect because defendant used fraud, duress and undue influence uponHerbert C. Oakes (hereinafter decedent) to make those changes. The matter proceeded to trial, atthe conclusion of which the jury rendered a special verdict in favor of plaintiff, finding thatdecedent was in a weakened physical and mental condition during the time period that he madethe changes and that defendant failed to prove that no undue influence was perpetrated upondecedent. Accordingly, Supreme Court entered judgment invalidating the several changes,imposing a constructive trust over the trust assets and enjoining defendant from conducting anyfurther transactions with respect to any of the assets. Defendant thereafter unsuccessfully movedto set aside the verdict. She now appeals, and we affirm.
We reject defendant's contention that the jury's verdict is against the weight of the evidence."Under the doctrine of constructive fraud, where a fiduciary relationship existed between twoparties such that they were dealing on unequal terms due to one party's weakness, dependence ortrust justifiably reposed upon the other and unfair advantage is rendered probable, the burden isshifted, the transaction is presumed void, and it is incumbent upon the stronger party to showaffirmatively that no deception was practiced, no undue influence was used, and that all was fair,open, voluntary and well understood" (Mazza v Fleet Bank, 16 AD3d 761, 762 [2005] [internal quotationmarks and citations omitted]; see Matter of Mazak [Nauholnyk], 288 AD2d 682, 684[2001]).
Here, the existence of a confidential relationship between defendant and decedent wasclearly established. In June 2001, at defendant's urging, decedent moved from his home in Texasto live with defendant in New York. Decedent had no friends or other family in the area andrelied entirely on defendant for his day-to-day care. At the time of his move, decedent washaving trouble ambulating as a result of suffering from Parkinson's disease and, according tocorrespondence authored by defendant, he also displayed symptoms of Alzheimer's disease.Between January and February 2002, decedent fell three times requiring hospitalization. His careproviders opined that he was suffering from Alzheimer's disease. Medical records and letterswritten by defendant during the months that followed, when decedent made a number of changesto his will and trust, described decedent as, among other things, consistently confused, "notoriented to time [or] place," suffering from hallucinations and delusional. By the time decedentexecuted the affidavit—prepared by defendant—naming defendant as the solebeneficiary under the trust, decedent was in a nursing home and in a "rapidly deteriorat[ing]"mental condition. Given decedent's weakened condition, his reliance on defendant anddefendant's admitted position of trust and confidence regarding his care and finances,[FN*]a fiduciary relationship existed between the parties (see Mazza v Fleet Bank, 16 AD3d at762; Matter of Connelly, 193 AD2d 602, 603 [1993], lv denied 82 NY2d 656[1993]).
As plaintiff made such a showing, the burden shifted to defendant to come forward withclear proof that the execution of the various documents was fair, well understood and free fromfraud, deception or undue influence (see Matter of Gordon v Bialystoker Ctr. & BikurCholim, 45 NY2d 692, 699 [1978]; Mazza v Fleet Bank, 16 AD3d at 762; Matterof Connelly, 193 AD2d at 603). Defendant failed to do so. She presented no testimony fromthe witnesses to the execution of the various documents or persons who cared for decedent whilehe was hospitalized or in a nursing home. Rather, she proffered only her own self-servingtestimony and that of her son, which fell far short of demonstrating that no deception, undueinfluence or fraud was perpetrated upon decedent. Simply put, the evidence did not sopreponderate in defendant's favor that the jury's verdict could not have been reached on any fairinterpretation of the evidence (see Lolik v Big V Supermarkets, 86 NY2d 744, 746[1995]; Strader v Ashley, 61 AD3d1244, 1245 [2009], lv denied 13 NY3d 756 [2009]).
Nor are we persuaded by defendant's challenges to Supreme Court's use of the specialverdict form or the questions contained therein. Whether to ask the jury for a general or specialverdict is a matter left to the sound discretion of the trial court (see CPLR 4111 [a]; Matter of National Equip. Corp. vRuiz, 19 AD3d 5, 11 [2005]). Here, the questions asked in the special verdict sheet wereconsistent with the court's instructions (see Powell v Sodus Cold Stor. Co., 289 AD2d1000, 1002 [2001]), as well as the elements of constructive fraud (see generally Matter ofGordon v Bialystoker Ctr. & Bikur Cholim, 45 NY2d at 699). By failing to request theinclusion of any other factual questions in the special verdict form, defendant is deemed to havewaived her right to a trial by jury of the omitted issues (see CPLR 4111 [b]; Loughryv Lincoln First Bank, 67 NY2d 369, 380 [1986]; Sorrentino v Bohbot Entertainment &Media, 265 AD2d 245, 245 [1999]).
Finally, Supreme Court's imposition of a constructive trust is amply supported by the record.As a " 'fraud-rectifying' remedy" (Bankers Sec. Life Ins. Socy. v Shakerdge, 49 NY2d939, 940 [1980]), the "ultimate purpose of a constructive trust is to prevent unjust enrichmentand . . . it may be imposed whenever necessary in order to satisfy the demands ofjustice" (Matter of Knappen, 237 AD2d 677, 679 [1997], lv denied 90 NY2d 802[1997] [internal quotation marks and citations omitted]; see Simonds v Simonds, 45NY2d 233, 241 [1978]; Gaglio v Molnar-Gaglio, 300 AD2d 934, 938 [2002]). Given thejury's findings, the confidential relationship that existed between decedent and defendant and thecircumstances under which the changes to decedent's will and trust were effectuated, defendant'sretention of the trust funds would be unjust (see Sharp v Kosmalski, 40 NY2d 119, 123[1976]; Johnson v Lih, 216 AD2d 821, 823 [1995]). Thus, we find that equitableconsiderations support the granting of a constructive trust.
Defendant's remaining contentions, to the extent that they are properly before us, have beenreviewed and found to be lacking in merit.
Peters, J.P., Lahtinen, Malone Jr., Kavanagh and Stein, JJ., concur. Ordered that thejudgment and order are affirmed, without costs.
Footnote *: Notably, in her answer,defendant admitted the allegation in the complaint that decedent placed great trust andconfidence in her on account of their brother/sister relationship during the relevant time periodwhen the numerous changes to his will and trust were made.