| Matter of Jacobs |
| 2012 NY Slip Op 01535 [93 AD3d 917] |
| March 1, 2012 |
| Appellate Division, Third Department |
| In the Matter of the Estate of George W. Jacobs, Jr., Deceased.Margaret Mary Bradwell, as Executor of George W. Jacobs, Jr., Deceased, Respondent; RichardC. Jacobs, Appellant. |
—[*1] Cooper, Erving & Savage, L.L.P., Albany (Dennis W. Habel of counsel), forrespondent.
Kavanagh, J. Appeal from an order of the Surrogate's Court of Rensselaer County (Hummel,S.), entered November 10, 2010, which granted petitioner's motion for summary judgmentdismissing respondent's objections to petitioner's accounting.
In July 2002, decedent named petitioner—his sister—as the executor of his willand gave her a power of attorney.[FN*] The will designated petitioner, respondent—decedent's brother—and two otherindividuals—decedent's nephew and cousin—as residual legatees of decedent's[*2]residuary estate. When decedent died in 2007, petitionersubmitted a final accounting of the estate, indicating that the assets subject to probate consistedprimarily of real property valued at approximately $93,000. The accounting also identifiedcertain non-testamentary assets in decedent's estate—bank accounts and a life insurancepolicy—that passed to petitioner by operation of law and were valued in excess of $1.3million. Respondent filed objections to this accounting claiming that a constructive trust existedin connection with these nontestamentary assets, and that the funds in these bank accounts andthe proceeds from the life insurance policy should be subject to the provisions of decedent's willand be included in the probate estate. Surrogate's Court subsequently granted petitioner's motionfor summary judgment dismissing respondent's objections, and this appeal ensued.
Respondent argues that a confidential relationship existed between petitioner and decedentthat resulted in the creation of these financial instruments, and that promises made by petitionerto decedent as to the disposition of the funds contained in these accounts after his death have notbeen kept. As a result, respondent maintains that a constructive trust should be imposed on theseassets and that they should be included in the probate estate. We disagree. "A constructive trust isa fraud-rectifying remedy which may be imposed where a party, because of a confidentialrelationship, transfers property in reliance upon a promise of another which is later breached,resulting in unjust enrichment" (Matterof Grancaric, 91 AD3d 1104, 1107 [2012] [internal quotation marks, citations andemphasis omitted]; see Salatino vSalatino, 64 AD3d 923, 924 [2009], lv denied 13 NY3d 710 [2009]; Matter of Almasy v Ward, 53 AD3d946, 947 [2008]; Cinquemani vLazio, 37 AD3d 882, 882-883 [2007]; Matter of Urdang, 304 AD2d 586, 586[2003]). To prove the existence of a constructive trust, respondent must present evidence that aconfidential relationship existed between petitioner and decedent that resulted in petitioner beingdesignated as the beneficiary of both the funds in these bank accounts and the proceeds of thislife insurance policy.
Here, all agree that decedent routinely handled his finances and independently decided howthey would be maintained and administered. No evidence has been presented that decedent reliedon petitioner's counsel when he decided to fund these bank accounts and take out this lifeinsurance policy. While respondent argues that decedent's decision to give petitioner a power ofattorney is indicia of the existence of such a relationship, this instrument was only used bypetitioner to pay bills incurred by decedent in the time period immediately prior to his death.Also, simply because decedent and petitioner were related does not, absent more, serve to createa question of fact as to whether such a confidential relationship did indeed exist (see Matterof Almasy v Ward, 53 AD3d at 947).
Furthermore, even if one were to assume that such a relationship existed, a constructive trustwill only be imposed if decedent had created these financial instruments in reliance uponrepresentations and promises made by petitioner in the context of that relationship, and thoserepresentations and promises have since been breached. In that regard, respondent refers tostatements attributed to petitioner indicating that these bank accounts were created by decedentso that funds would be available for nursing home care if he needed it. However, decedent didnot enter a nursing home prior to his death, and the need to use these funds for this purpose neverarose. More importantly, none of the funds in question were transferred to petitioner prior todecedent's death, nor has any evidence been presented that petitioner made promises orcommitments to decedent regarding these funds and how they would be dispersed after his death.
Finally, no argument has been made that decedent lacked the mental capacity to make [*3]decisions regarding his finances at any time prior to his death, norhas it been shown that he was subject to undue influence or duress when he decided to designatepetitioner as the beneficiary of this life insurance policy and the trustee of these bank accounts(compare Oakes v Muka, 69 AD3d1139, 1141-1142 [2010], appeal dismissed 15 NY3d 867 [2010]; seeCinquemani v Lazio, 37 AD3d at 882). Also, since the proceeds from these assets passed topetitioner by operation of law upon decedent's death, respondent's claims regarding conversionand breach of fiduciary duty were properly dismissed (see EPTL 7-5.2 [4]).
Mercure, A.P.J., Spain, Stein and Egan Jr., JJ., concur. Ordered that the order is affirmed,with costs.
Footnote *: A prior will also designatedpetitioner as executor of decedent's estate.