| Matter of Nealon |
| 2013 NY Slip Op 02121 [104 AD3d 1088] |
| March 28, 2013 |
| Appellate Division, Third Department |
| In the Matter of the Estate of Muriel M. Nealon, Deceased.Christopher J. Nealon, as Executor of Muriel M. Nealon, Deceased, Respondent; Peter J.Nealon, Respondent, and Tracey McGann, Now Known as Tracey Nealon,Appellant. |
—[*1] Parisi, Coan & Saccocio, PLLC, Schenectady (Nicholas E. Tishler, Niskayuna, ofcounsel), for Christopher J. Nealon, respondent.
Spain, J. Appeal from a judgment of the Surrogate's Court of Schenectady County(Versaci, S.), entered January 7, 2011, upon a verdict rendered in favor of petitioner.
Decedent passed away in 2004, leaving three living sons, including petitioner who,as the executor of decedent's estate, commenced this proceeding seeking to recoverproperty allegedly belonging to the estate from his brother, respondent Peter J. Nealon,and Nealon's then wife, respondent Tracey McGann[FN*] (see SCPA 2103 [1]). Decedent moved in with respondents in [*2]2002, after being diagnosed with Alzheimer's disease, andresided with them until her death. During that time, decedent contributed significantfinancial support to an addition to respondents' home, which included a bedroom fordecedent. In this proceeding, petitioner challenges approximately $127,000 in transfersmade by decedent to or for the benefit of respondents, alleging lack of capacity andundue influence.
Surrogate's Court (Kramer, S.) granted respondents' motion for summary judgmentdismissing the petition. On appeal, we reversed, finding that although respondents wereentitled to summary judgment on the issue of capacity, triable issues of fact existed withrespect to petitioner's claim of undue influence (57 AD3d 1325, 1328 [2008]). Thematter proceeded to trial and, after finding, as a matter of law, that a confidentialrelationship existed between respondents and decedent, Surrogate's Court (Versaci, S.)sent the question of undue influence to the jury, which rendered a verdict againstrespondents in the amount of $123,751.95. Judgment was entered, upon which onlyMcGann now appeals.
We must reverse. Under the doctrine of "constructive fraud," where a confidentialrelationship exists between two parties to a transaction "such that they were dealing onunequal terms due to one party's weakness, dependence or trust justifiably reposed uponthe other and unfair advantage is rendered probable," the burden of proof with respect toallegations of undue influence will be shifted to the stronger party to show, by clear andconvincing evidence, that no undue influence was used (Oakes v Muka, 69 AD3d1139, 1140-1141 [2010], appeal dismissed 15 NY3d 867 [2010], quoting Mazza v Fleet Bank, 16 AD3d761, 762 [2005] [internal quotation marks and citations omitted]; see Matter ofGordon v Bialystoker Ctr. & Bikur Cholim, 45 NY2d 692, 695, 698-699 [1978]). Indetermining whether a confidential relationship exists, "the existence of a familyrelationship does not, per se, create a presumption of undue influence; there must beevidence of other facts or circumstances showing inequality or controlling influence"(Feiden v Feiden, 151 AD2d 889, 891 [1989]). The existence of such arelationship will ordinarily be a question of fact (see Matter of Prievo v Urbaniak, 64 AD3d 1240, 1241[2009]; see e.g. Matter of Gordon v Bialystoker Ctr. & Bikur Cholim, 45 NY2dat 698-699; Oakes v Muka, 69 AD3d at 1140-1141; Mazza v Fleet Bank,16 AD3d at 762; Matter of Mazak [Nauholnyk], 288 AD2d 682, 684 [2001];Matter of Antoinette, 238 AD2d 762, 764 [1997]; Feiden v Feiden, 151AD2d 889, 891 [1989]; compare Matter of Jacobs, 93 AD3d 917, 918 [2012]).
Here, following his case-in-chief, petitioner requested Surrogate's Court to find, as amatter of law, that a confidential relationship had been established. The court reserveddecision and, following the close of proof, granted the motion, ruling that a confidentialrelationship existed as a matter of law, thereby shifting the burden of proof torespondents to establish, by clear and convincing evidence, that the questionedtransactions were each made free of any undue influence. Although petitioner introducedevidence that might support a factual determination that a confidential relationshipexisted, such as decedent's complete dependence on respondents due to her combinedmental and physical deterioration, respondents were entitled to have the jury consider allthe evidence regarding decedent's relationship with respondents and to determine as afactual matter whether decedent maintained the ability to exercise free will (seeMatter of Antoinette, 238 AD2d at 764; Feiden v Feiden, 151 AD2d at 891).Accordingly, a new trial is necessary (see Imbierowicz v A.O. Fox Mem. Hosp., 43 AD3d 503,504 [2007]).
In so holding, we reject McGann's argument that she was entitled to a directedverdict because petitioner failed to establish a prima facie case of undue influence. In ourview, the record evidence of numerous checks (written by McGann or Nealon and signedby decedent), [*3]ATM withdrawals and electronictransfers from decedent's account for the benefit of respondents during a time whendecedent was unquestionably vulnerable, in amounts significant enough to entirelydeplete decedent's checking accounts, was sufficient proof of undue influence to survivesummary disposition (see Matter of Antoinette, 238 AD2d at 763).
Given that this matter must be remitted for a new trial, for the purpose of guidancewe will briefly address McGann's contentions that certain evidentiary errors were made attrial in the application of the Dead Man's Statute (see CPLR 4519). The statuteprecludes an interested party from being "examined as a witness in his [or her] ownbehalf or interest . . . concerning a personal transaction or communicationbetween the witness and the deceased person" (CPLR 4519; see Miller v Lu-Whitney, 61AD3d 1043, 1045 [2009]). Given that the "purpose of the rule is 'to protect theestate of the deceased from claims of the living who, through their own perjury, couldmake factual assertions which the decedent could not refute in court' " (Poslock vTeachers' Retirement Bd. of Teachers' Retirement Sys., 88 NY2d 146, 151 [1996],quoting Matter of Wood, 52 NY2d 139, 144 [1981]; see ROI, Inc. v Hidden Val. RealtyCorp., 45 AD3d 1010, 1011 [2007]), it will not preclude any testimony elicitedby the representative of the estate, nor does it preclude testimony of transactions betweendecedent and a non-interested third party (see Durazinski v Chandler, 41 AD3d 918, 920 [2007]).Further, the statute's protections with regard to a particular transaction may be waivedwhere the representative "testifies in his [or her] own behalf concerning a personaltransaction of his adversary with the deceased" or when he or she "elicit[s] testimonyfrom an interested party on the personal transaction in issue" (Matter of Wood,52 NY2d at 145; see Matter ofBreistol, 64 AD3d 1122, 1123-1124 [2009]).
Here, had petitioner limited his proof to documentary evidence of decedent's bankingtransactions and not introduced any testimony regarding transactions between decedentand respondents, the door would not have been opened to respondents' testimonyconcerning decedent's intentions with respect to those transfers (see Matter ofWood, 52 NY2d at 145-146; see also CPLR 4519; Miller vLu-Whitney, 61 AD3d at 1045). However, in his direct case, petitioner alsointroduced respondents' deposition testimony wherein respondents explained that theywould write checks covering expenses related to home improvements and decedentwould sign them, and that decedent frequently gave respondents money to coverhousehold expenses, groceries and other personal expenses. This testimonial evidenceabout specific transactions between respondents and decedent, introduced by petitioner,opened the door to respondents' testimony at trial regarding those specific transactions,thus rendering erroneous some of Surrogate's Court's later rulings sustaining objectionsbased on CPLR 4519 (see Matter of Breistol, 64 AD3d at 1123-1124;compare Matter of Wood, 52 NY2d at 145-147).
Peters, P.J., Garry and Egan Jr., JJ., concur. Ordered that the judgment is reversed, onthe law, with costs, and matter remitted to the Surrogate's Court of Schenectady Countyfor a new trial.[*4]
Footnote *: Respondents weremarried in 2004 and divorced in 2008.