| Lewis v DiMaggio |
| 2014 NY Slip Op 01493 [115 AD3d 1042] |
| March 6, 2014 |
| Appellate Division, Third Department |
| Elliot M. Lewis et al., Respondents, v VioletDiMaggio, Also Known as Ann Violet DiMaggio, Individually and as Executor of theEstate of Nancy M. |
—[*1] Smith, Sovik, Kendrick & Sugnet, PC, Syracuse (Kevin E. Huslander of counsel),for Mary Iocovozzi, appellant. Murphy & Lambiase, Goshen (George A. Smith of counsel), forrespondents.
Lahtinen, J.P. Appeal from an order of the Supreme Court (O'Shea, J.), entered July25, 2012 in Chemung County, which denied defendants' motions to dismiss the amendedcomplaint.
Nancy M. Christofaro (hereinafter decedent) died at age 90 in October 2009.Plaintiffs are decedent's children and grandchildren, and they are beneficiaries under herAugust 2007 will. That will was prepared by defendant Mary Iocovozzi, an attorney whois decedent's niece, and it named as executor defendant Violet DiMaggio, who isdecedent's sister. Although an estate proceeding was pending in Surrogate's Court,plaintiffs commenced this action in Supreme Court in February 2012 allegingmisappropriation of decedent's assets by, among other things, deceit, fraud and undueinfluence by both defendants, and a separate cause of action for breach of [*2]fiduciary duty by DiMaggio.[FN1] In essence, plaintiffs claim that defendants improperly influenced and misled decedent tomake a series of financial transactions between about August 2007 and November 2008that benefitted defendants (and their immediate families) financially by nearly $600,000,thus depleting much of decedent's estate to the detriment of plaintiffs. Defendants eachmade pre-answer motions to dismiss the complaint. Supreme Court denied the motionsand defendants appeal.
Defendants argue that the amended complaint[FN2] fails to state a cause of action. "Courts considering a motion to dismiss a complaint forfailure to state a cause of action must liberally construe the pleadings, accept the factsalleged in the complaint as true, give plaintiffs the benefit of every possible favorableinference, and determine whether the alleged facts fit within any cognizable legal theory"(ARB Upstate CommunicationsLLC v R.J. Reuter, L.L.C., 93 AD3d 929, 930 [2012] [citation omitted]; see ABN AMRO Bank, N.V. vMBIA Inc., 17 NY3d 208, 227 [2011]). Initially, we note that, absentextraordinary circumstances, beneficiaries of an estate generally do not have a right tobring an action seeking to recoup property for the estate since that role belongs to theexecutor (see McQuaide v Perot, 223 NY 75, 79-80 [1918]; Schoeps v Andrew Lloyd WebberArt Found., 66 AD3d 137, 140-141 [2009]). However, such extraordinarycircumstances may be implicated where the executor is allegedly directly involved inpurported egregious conduct and self-dealing that negatively impacts the potential assetsof the estate (see McQuaide v Perot, 223 NY at 79-80; Inman v Inman,97 AD2d 864, 864 [1983]; see generally Matter of Van Patten, 190 AD2d 322,326 [1993]; Lefkowitz v Bank of New York, 2003 WL 22480049, *6, 2003 USDist LEXIS 19520, *20 [SDNY 2003], affd in part, revd in part 528 F3d 102[2007]). When asserting conduct involving fraud or undue influence, the complaint mustset forth in detail the circumstances constituting the wrong (see CPLR 3016 [b];Sargiss v Magarelli, 12NY3d 527, 530 [2009]).
Plaintiffs' amended complaint sets forth a series of purported acts by defendantsoccurring during the last two years of decedent's life when she was allegedly sufferingfrom cancer and depression. Among other things, defendants allegedly induced decedentto give DiMaggio power of attorney by telling decedent that she would retain controlover her accounts, but then used the power of attorney to withdraw funds, modifyownership interest, and change beneficiaries on accounts. Plaintiffs contend thatdefendants convinced decedent to cash about $360,000 in United States savings bondsby informing her it was illegal to continue to hold the bonds and that the governmentwould take all her money. Most of that money was moved into a trust that defendantsallegedly falsely informed decedent would benefit her descendants when proceeds of thetrust actually went to defendants and their families. Plaintiffs further assert thatDiMaggio, who was substituted for decedent's daughter as executor when decedentexecuted a [*3]new will in 2007, neglected to make aneffort to recover funds inappropriately diverted from the estate.
As noted by Supreme Court, plaintiffs may face significant challenges in producingadmissible proof supporting their various allegations; nonetheless, whether "plaintiff[s]can ultimately establish [their] allegations is not part of the calculus in determining amotion to dismiss" (EBC I, Inc.v Goldman, Sachs & Co., 5 NY3d 11, 19 [2005]; see Mason v First Cent. Natl. LifeIns. Co. of N.Y., 86 AD3d 854, 855 [2011]). According the benefit of everypossible favorable inference to plaintiffs, their pleadings set forth a claim that may fallwithin the extraordinary circumstances necessary for beneficiaries to bring an action thatgenerally can only be brought by the executor. And, in such capacity, their allegations inthe first cause of action include sufficient detail to state a cognizable claim as to bothdefendants for the narrow purpose of defeating the motion to dismiss for failure to state acause of action. Similarly, the allegations are sufficient regarding the second cause ofaction, which are alleged solely as to DiMaggio. The remaining arguments have beenconsidered and are unpersuasive.
McCarthy, Garry and Rose, JJ., concur. Ordered that the order is affirmed, withcosts.
Footnote 1: While Supreme Courtlisted in its decision some of the various proceedings that have occurred before it andSurrogate's Court, the record provides little other information about such matters. Issues,if any, regarding pursuing litigation in both courts is not before us in this appeal, whichinvolves the narrow issue of whether plaintiffs have stated a cause of action.
Footnote 2: The amendedcomplaint, which was filed after the motion and superceded the original complaint, wasaddressed jointly with the original complaint by Supreme Court.