Matter of Schunk
Annotate this CaseDecided on June 29, 2005
Surrogate's Court, Nassau County
In the Matter of the Judicial Settlement of the Account and Proceedings of Lisa A. Schunk, as co-Executrix of the Will of EDWARD W. SCHUNK, Deceased,
321397
Albanese & Albanese, Esqs. (interested party)
1050 Franklin Avenue
Garden City, NY 11530
Bondy & Schloss, Esqs. (interested party)
60 E. 42nd Street - 37th Floor
New York, NY 10017
Michele L. Gartner (Public Administrator)
262 Old Country Road
Mineola, NY 11501
Brosnan & Hegler, LLP (attorneys for Public Administrator)
1415 Kellum Place - Suite 203
Garden City, NY 11530
John B. Riordan, J.
Before the court in this contested accounting proceeding is a motion for summary judgment by the objectant Dorothy Schunk and a cross-motion by the petitioner Lisa Schunk for partial summary judgment and for dismissal of affirmative defenses raised by objectant in her answer.
The decedent, Edward W. Schunk, died on September 11, 2001 as a result of the terrorist attack on the World Trade Center. The decedent was 54 years old at the time of his death and was employed by Cantor Fitzgerald Securities.
The decedent died leaving a Will dated April 25, 1991, as amended by a First Codicil thereto dated August 29, 1996 (collectively "the Will"). By virtue of the Codicil, the decedent's Will provides that his residuary estate be divided equally between his wife Lisa Schunk and his mother Dorothy Schunk. The Will nominates both Lisa Schunk and Dorothy Schunk as co-executors, and letters testamentary issued to them on January 15, 2002. The Codicil was executed approximately five weeks prior to the decedent's marriage to Lisa Schunk.
Initially, Dorothy Schunk commenced a proceeding to compel an accounting by her co-executor Lisa Schunk. Thereafter, Lisa Schunk filed her account as co-executor, and Dorothy Schunk filed an answer to the petition and objections to account. Dorothy Schunk objected to petitioner's failure to include the full amount of the economic award paid to the co-executors by the September 11th Victim Compensation Fund (hereinafter "the Fund") and to Lisa Schunk's claim that the entire economic award is payable to her under New York's wrongful death law (EPTL 5-4.4) since the objectant did not suffer any pecuniary loss. Dorothy Schunk now moves for summary judgment on the basis that the economic award must be distributed fifty percent (50%) to her and fifty percent (50%) to Lisa Schunk in accordance with the proposed distribution plan submitted jointly by Dorothy Schunk and Lisa Schunk to the Fund. In addition, Dorothy Schunk asserts that Lisa Schunk's claim that the entire economic award is payable to Lisa Schunk is barred: (i) by the rules and regulations of the Fund, (ii) because the proposed distribution plan is equivalent to a binding stipulation (CPLR 2104) and (iii) by the doctrines of promissory, equitable, and judicial estoppel. Lisa Schunk has cross-moved for an order
[*2]
(i) dismissing the affirmative defenses of Dorothy Schunk as a matter of law, (ii) approving the distribution to Lisa Schunk of the $100,000.00 award for non-economic loss in accordance with the rules and regulations of the Fund and (iii) approving the distribution to Lisa Schunk of the full award for economic loss in accordance with the wrongful death laws of the State of New York.
On a motion for summary judgment, the moving party has the burden of proving a prima facie showing of entitlement to summary relief as a matter of law and must offer sufficient evidence to show the absence of material issues of fact (Alvarez v. Prospect Hospital, 68 NY2d 320 [1986]). If that burden is satisfied by the moving party, then the burden of going forward shifts to the opposing party who must prove the existence of issues of material fact requiring a trial (Romano v. St. Vincent's Medical Center, 178 AD2d 467 [1991]). The court's role in passing upon summary judgment motions is not to resolve issues of fact but only to determine if such issues exist (Zuckerman v. City of New York, 49 NY2d 557 [1980]).
The events of September 11, 2001 were a tragedy for the nation as a whole and in particular for the families of those who were directly affected by the loss of loved ones. In order to provide compensation to the victims of the September 11, 2001 tragedy and their families, President Bush signed into law the Air Transportation Safety and System Stabilization Act of 2001 (Pub. L. No 107-42, 115 Stat 230 [2001] [codified at 49 USC §40101]), which was amended on November 19, 2001 and January 23, 2002 (Pub. L. No. 107-71, 115 Stat. 631 [2001]; Pub. L. No. 107-134, 115 Stat. 2435 [2002]) (hereinafter referred to as "Act"). Kenneth Feinberg, Esq. was appointed as the Special Master charged with the duty of administering the Fund. The rules and regulations of the Fund codified at 28 CFR 104 [2003] provide that, by electing to file a claim with the Fund, a claimant waives all rights to bring a civil action regarding the events of September 11th, except to recover collateral source obligations (i.e. life insurance, pension funds) or to sue knowing participants in the hijacking conspiracy. The claimant must be a victim or the personal representative of the estate of a victim. The rules provide that the Special Master shall review submitted claims according to three factors: harm to the claimant, facts of the claim and the individual circumstances of the claim (Act § 405 [b][1]). The Special Master's determination is final and not subject to judicial review (Act § 405 [b][3]).
Pursuant to the rules and regulations, the presumed non-economic loss for a decedent is $250,000.00 plus an additional $100,000.00 for a spouse and each dependent of the deceased victim (28 CFR 104.44 [2003]). Claimants are offered two tracks in pursing an award. Under Track A, the evaluator notifies the claimant within 45 days of his eligibility and the amount of the presumed award (28 CFR 104.31 [b][1][2003]). The claimant may either accept the presumed award as the final determination or seek a hearing. Under Track B, the evaluator notifies the claimant about eligibility within 45 days, and the claimant then proceeds to a hearing (28 CFR 104.31[b][2][2003]).
Lisa Schunk and Dorothy Schunk, as co-executors of the estate, jointly executed and filed with the Fund a claim form seeking an award. The claim form was prepared in or about June 2003 by Charles F. Brennan, counsel for Dorothy Schunk and Lisa Schunk in connection with the estate administration, and the firm of Mayer, Brown, Rowe & Maw, LLP, which had offered its services to families of Cantor Fitzgerald employees. In connection with the claim, Lisa Schunk and Dorothy Schunk also submitted a proposed distribution plan as to the economic portion of [*3]the award. Their proposed plan called for fifty percent (50%) to be distributed to Lisa Schunk and fifty percent (50%) to be distributed to Dorothy Schunk which was in accordance with the testamentary plan of the decedent's Will. By signing the claim form, both Lisa Schunk and Dorothy Schunk acknowledged they were each waiving their rights to bring a civil action in connection with the decedent's death. The form also reflects that the co-executors opted to proceed under Track A.
On October 20, 2003, the co-executors were advised that the Special Master had made a presumed award of $956,456.93. The award was comprised of $933,646.00 for economic loss and $350,000.00 of non-economic loss ($100,000.00 for the victim's spouse and a $250,000.00 presumed non-economic loss) less collateral offsets of $327,189.07. The letter further provided that any revisions to the preliminary distribution plan had to be made on an enclosed form no later than October 30, 2003. The co-executors were also advised to contact their case manager if they intended to submit a revised plan. By letter dated October 22, 2003, Lisa Schunk's then separate counsel, Joseph W. Ryan, Jr., Esq., advised Joseph DeSimone, Esq., at Mayer, Brown, Rowe & Maw, LLP that the distribution of the award would not be made in accordance with the proposed distribution plan, but instead "in accordance with the Kaiser rule utilized by the New York Courts."
On January 23, 2004, Lisa Schunk's new attorney, Robert A. Carpentier, Esq. wrote to both Joseph DeSimone, Esq. at Mayer, Brown, Rowe & Maw, LLP and Dorothy Schunk's separate counsel confirming that the distribution would be determined either by agreement of Lisa Schunk and Dorothy Schunk or by the court in the event Lisa Schunk and Dorothy Schunk failed to agree on a distribution. In addition, Lisa Schunk's counsel asked that Joseph DeSimone, Esq. advise the Special Master of that understanding. On April 1, 2004, a final award determination letter was issued by the Fund. The amount of the final award was identical to the presumed award. By letter dated February 11, 2005, in response to an inquiry by Lisa Schunk's current counsel concerning whether the distribution plan had been approved, a representative of the Fund stated as follows: "Initially the plan was approved as submitted because it is the Special Master's practice to approve a plan if consenting adults agree to it, regardless of whether the plan is according to state law. When our office realized that there was a dispute to the originally submitted plan, we were not able to approve the plan. Therefore, there currently is not an approved plan and the adults will either have to agree to a plan or go to the Surrogate's Court to have a distribution approved."
Dorothy Schunk argues that the proposed distribution plan was approved by the Special Master and, therefore, is final and binding and not subject to judicial review. She alleges that Lisa Schunk neither advised the Fund that she opted to revise the proposed distribution plan as provided in the letter from the Fund notifying the co-executors of the presumed award nor did she contact the case manager at the Fund with respect to submitting a revised plan. Lisa Schunk, however, contends that a final distribution plan was never, in fact, approved by the Special Master as shown by the February 11, 2005 letter from the Fund. The court finds that there is an [*4]issue of fact as to whether the proposed distribution plan was approved as final by the Special Master. Although the February 11, 2005 letter indicates that the Special Master "realized that there was a dispute to the originally submitted plan," there is no evidence presented as to how and when the Special Master became aware that Lisa Schunk was no longer in agreement with the proposed plan.
In addition, the Special Master has the duty to determine the amount of compensation to which a claimant is entitled based on the harm to the claimant, the facts of the claim, and the individual circumstances of the claimant (Act §405[b][1][B][ii]). The regulations define "individual circumstances" to include the 'financial needs or financial resources of the claimant or the victim's dependents and beneficiaries" (28 CFR 104.41 [2003]). It is undisputed that Dorothy Schunk was included in the proposed distribution plan. Therefore, assuming arguendo that the distribution plan was not, in fact, actually approved by the Special Master, the court, prior to resolving the issue as to whom the ultimate economic award is to be distributed, needs clear determination as to how the Special Master calculated the award. If the Special Master took Dorothy Schunk into account and she was a factor in the calculation of the award, a determination that the entire economic award should be distributed to Lisa Schunk would unjustly enrich Lisa Schunk. In Cruz v. McAneney (NYLJ, July 16, 2004 at 18), the court required clarification from the Special Master to determine whether he took into account the decedent's domestic partner in calculating an award. There, under New York law, the domestic partner would not share in the award since she was not a distributee. Nonetheless, the court found that if the domestic partner was considered by the Special Master in computing the award, there might be an equitable basis on which she could receive a portion of the award. Therefore, this court similarly directs Dorothy Schunk to obtain a ruling from the Special Master as to how he calculated the award, as well as a chronology as to the time and manner by which the Special Master was notified that Lisa Schunk was opting to depart from the proposed distribution plan. Copies of hearing transcripts, if any, shall also be provided to the court.
Lisa Schunk's cross-motion is granted to the extent that the court approves the distribution to Lisa Schunk of the $100,000.00 non-economic award. Dorothy Schunk's motion for summary judgment and the portions of Lisa Schunk's cross-motion to dismiss Dorothy Schunk's affirmative defenses and for distribution of the economic award in accordance with the wrongful death laws of New York State are denied pending additional clarification from the Special Master on the basis of how the award was calculated and when and how the Fund was notified of the dispute concerning the proposed distribution plan. In addition, the court finds that pursuant to the rules and regulations of the Fund, the portion of the award consisting of the $250,000.00 for non-economic loss shall be distributed pursuant to the terms of the decedent's Will.
A status conference regarding the documents to be obtained from the Special Master shall be held on July 20, 2005 at 9:30 a.m. at which time the possibility of a partial distribution of the $250,000.00 non-economic loss portion of the award will also be considered.
This constitutes the decision and order of the court.
Dated: June 29, 2005
JOHN B. RIORDAN [*5]
Judge of the
Surrogate's Court
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