| Jacobs v Mazzei |
| 2013 NY Slip Op 08320 [112 AD3d 1115] |
| December 12, 2013 |
| Appellate Division, Third Department |
| Jean C. Jacobs, Appellant, v Stephen J. Mazzei Jr.,Respondent, and Morgan Stanley Smith Barney, LLC, Defendant and Third-PartyPlaintiff-Respondent. Florence Louise Weston, Third-Party Defendant-Respondent, etal., Third-Party Defendants. |
—[*1] Greenberg Traurig, LLP, New York City (Michael P. Manning of counsel), fordefendant and third-party plaintiff-respondent. Blatchly & Simonson, PC, New Paltz (Jon A. Simonson of counsel), for third-partydefendant-respondent.
Garry, J. Appeal from an order of the Supreme Court (Connolly, J.), entered July 16,2012 in Ulster County, which, among other things, granted defendants' motion forsummary judgment dismissing the complaint.
In 2007, Helen Van Alst (hereinafter decedent) opened an individual account and anindividual retirement account (hereinafter IRA) at defendant Morgan Stanley SmithBarney, LLC (hereinafter MSSB). Decedent named no joint owners of the individualaccount and named her estate as the sole beneficiary of the IRA. Defendant Stephen J.Mazzei Jr. was later assigned as the financial advisor for these accounts. In January 2011,plaintiff, who was decedent's longtime friend and neighbor, took decedent—then88 years old and suffering from lung cancer—to the hospital. Five days later, whilestill hospitalized, decedent executed a durable power of attorney—prepared by anattorney—that designated plaintiff as decedent's agent. Decedent initialed line (P)in the section headed "Grant of Authority," thus authorizing plaintiff to exercise all of thepowers enumerated in that section, but neither initialed the section authorizing plaintiffto make gifts pursuant to a statutory gifts rider, nor executed such a document(see General Obligations Law § 5-1513 [1] [Power of Attorney New YorkStatutory Short Form (f) (2); (h)]).
Shortly thereafter, plaintiff presented the power of attorney to defendants and askedto be added to decedent's individual account as a joint owner and to be listed as the solebeneficiary of the IRA. Based upon decedent's failure to initial the statutory gifts ridersection of the power of attorney, defendants declined to make the requested changes, andMazzei allegedly advised plaintiff that personal confirmation from decedent wasrequired. Plaintiff later presented defendants with handwritten notes, allegedly signed bydecedent, asking to have plaintiff added to the individual account as a jointowner.[FN*]However, no changes were made, and decedent passed away several days later.
Plaintiff commenced this action alleging negligence and breach of contract arisingout of defendants' failure to make the requested account changes. Defendants answered,asserting lack of standing and other affirmative defenses. MSSB brought a counterclaimagainst plaintiff, as well as a third-party complaint for interpleader against, among others,decedent's sister. Shortly thereafter, defendants moved for summary judgment dismissingthe complaint. Plaintiff opposed the motion and cross-moved for denial or a continuanceon the ground that further discovery was required. Supreme Court granted defendants'motion, denied plaintiff's cross motion and dismissed the complaint. Plaintiff appeals.[*2]
Whether a defendant owes a duty of care to aplaintiff is a threshold inquiry in a negligence action, as there can be no liability in theabsence of such a duty (see Lauer v City of New York, 95 NY2d 95, 100 [2000];Baker v Buckpitt, 99 AD3d1097, 1098 [2012]). We agree with Supreme Court that defendants did not owe aduty to plaintiff to make the requested changes in decedent's accounts. A principal whowishes to authorize an agent to make gifts other than those authorized by GeneralObligations Law § 5-1502I (14), including gifts by the agent to himself or herself,"must expressly grant such authority . . . in a statutory gifts rider" (GeneralObligations Law § 5-1514 [1]; see General Obligations Law §5-1501B [2] [a]; Matter ofCurtis, 83 AD3d 1182, 1183 [2011]; see also Marszal v Anderson, 9 AD3d 711, 712-713[2004]). Further, in the absence of a statutory gift rider, an agent may not "add, delete, orotherwise change the designation of beneficiaries in effect for any . . .retirement benefit or plan" (General Obligations Law § 5-1502L [2]). It isundisputed that decedent did not execute a statutory gifts rider or initial the pertinentsection of the power of attorney. Thus, plaintiff was without authority to make therequested changes in decedent's accounts (see General Obligations Law §5-1514 [4] [b]; see also Matterof Marriott, 86 AD3d 943, 945 [2011], lv denied 17 NY3d 717 [2011])and, as the power of attorney was not executed in accordance with the statutes applicableto plaintiff's requests, defendants owed her no duty to honor it (see GeneralObligations Law § 5-1504 [1]).
Alternatively, plaintiff contends that she was acting as a liaison between defendantsand decedent, rather than pursuant to the power of attorney. In this respect, she assertsthat decedent's hand-written notes and the forms that decedent allegedly signed to addplaintiff as joint owner of the individual account and beneficiary of the IRA create issuesof fact as to whether decedent intended to make the contested changes in her account,and whether defendants breached a duty to act according to her intent. However, evenassuming that plaintiff could act for decedent independently of the power of attorney inthis fashion, any resulting duty of defendants would necessarily be owed to decedent, notto plaintiff. Moreover, plaintiff's authority to raise any related legal claims on decedent'sbehalf under the power of attorney terminated when decedent passed away (seeGeneral Obligations Law § 5-1502H [1]; 1511 [1] [a]), and in the absence of suchauthority, she lacks standing to raise decedent's legal rights (see Society of PlasticsIndus. v County of Suffolk, 77 NY2d 761, 772-773 [1991]). Thus, "plaintiff haswholly failed to demonstrate that defendant[s] breached any legally cognizable dutyowed to her," and her negligence claims were properly dismissed (Poole vSusquehanna Motel Corp., 280 AD2d 764, 765 [2001]).
Upon this appeal, plaintiff's arguments are primarily addressed to her cause of actionfor breach of contract, as she asserts that there are material issues of fact as to whethershe was a third-party beneficiary of decedent's contracts with defendants, and whetherdefendants breached the contracts by refusing decedent's alleged request to add plaintiffto the accounts. To establish that she was an intended beneficiary, plaintiff is required toshow that there was a valid contract, that the contract was intended to provide her with abenefit, and that this benefit was "sufficiently immediate, rather than incidental, toindicate the assumption by the contracting parties of a duty to compensate [her] if thebenefit [was] lost" (Boyd v Hall, Ltd., 307 AD2d 624, 626 [2003][*3][internal quotation marks and citations omitted]; see Levine v Harriton & Furrer,LLP, 92 AD3d 1176, 1177 [2012]). The best evidence of an intent to benefit athird party "is to be found in the language of the contract itself" (BinghamtonMasonic Temple v City of Binghamton, 213 AD2d 742, 746 [1995], lvdenied 85 NY2d 811 [1995]; see IMS Engrs.-Architects, P.C. v State of New York, 51 AD3d1355, 1357 [2008], lv denied 11 NY3d 706 [2008]).
Initially, as Mazzei was not a party to the contracts between decedent and MSSB,Supreme Court properly dismissed this cause of action as to him (see Birch v McGhee, 79 AD3d1296, 1297 [2010]). As to MSSB, neither of the client agreements for the twoaccounts mentions plaintiff, and nothing in either of them indicates that they wereentered into for her benefit. Decedent designated no one but herself as an owner of theindividual account, and that account's agreement provides that "no one except thosesigning this agreement has an interest in [this] account." Similarly, the agreement for theIRA provides that the account "is established for the exclusive benefit of the IndividualParticipant and his/her Beneficiary or Beneficiaries" and lists only decedent's estate as abeneficiary. The actions that plaintiff alleges manifested decedent's intent to makeplaintiff a beneficiary of the contracts did not occur until several years later. Thus, thereis no indication that the contracts were intended for plaintiff's benefit nor that the legalstandards set forth above, including immediacy, were met, and defendants establishedtheir prima facie entitlement to summary judgment dismissing the cause of action forbreach of contract.
Plaintiff nevertheless contends that issues of fact exist as to whether she is anintended beneficiary in that decedent intended to make an inter vivos gift to her byrequesting the account changes. In this regard, she relies upon decedent's hand-writtennotes and the applications for account changes that decedent allegedly signed. However,even if these documents—viewed in the light most favorable toplaintiff—raise questions of fact regarding decedent's 2011 intent, they do notrebut MSSB's showing that plaintiff was not an intended beneficiary of the 2007contracts and, thus, that defendants owed her no contractual duty and cannot be heldliable to her for any breach of those contracts (see Zelber v Lewoc, 6 AD3d 1043, 1045 [2004]; Teachers Ins. & Annuity Assn. vTedeschi, 3 AD3d 671, 673 [2004]).
Finally, plaintiff contends that her cross motion to hold summary judgment inabeyance to allow discovery should have been granted. However, plaintiff did not makethe requisite "evidentiary showing suggesting that completion of discovery will yieldmaterial and relevant evidence" (Zinter Handling, Inc. v Britton, 46 AD3d 998, 1001[2007]; accord Saratoga Assoc.Landscape Architects, Architects, Engrs. & Planners, P.C. v Lauter Dev. Group, 77AD3d 1219, 1222 [2010]). Supreme Court had all the relevant documents before it,and plaintiff's claim that a deposition of Mazzei might yield further evidence is merespeculation. Accordingly, Supreme Court properly denied the cross motion (seeCPLR 3212 [f]; Stoian vReed, 66 AD3d 1278, 1280-1281 [2009]; Fleischman v Peacock Water Co., Inc., 51 AD3d 1203,1205 [2008]).
Rose, J.P., Lahtinen and Stein, JJ., concur. Ordered that the order is affirmed, withone bill of costs.
Footnote *: The notes did notmention the IRA.