Matter of Saviano

[*1] Matter of Saviano 2006 NY Slip Op 52511(U) [14 Misc 3d 1212(A)] Decided on December 29, 2006 Sur Ct, Kings County L¢pez Torres, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. As corrected in part through January 5, 2007; it will not be published in the printed Official Reports.

Decided on December 29, 2006
Sur Ct, Kings County

Petition of Lena Calogero Saviano, Petitioner, against the Estate of Paul Saviano, Deceased.



3273/94



For the Executrix (Leonarda Saviano)

Donald Olman, Esq.

Rassner, Rassner & Olman

225 Broadway

New York, New York 10007

For the Claimant (Paul Saviano, Jr.)

Saul Edelstein, Esq.

The Edelsteins, Faegenburg & Brown

26 Court Street, suite 1503

Brooklyn, New York 11242

GAL (Natalie Saviano)

Ira Green, Esq.

26 Court Street

Brooklyn, New York 11242

Margarita L¢pez Torres, J.

In this proceeding, Leonarda Saviano ("Leonarda"), the executor of the estate of Paul Saviano,Sr., moves to vacate a stipulation entered into on November 12, 2002, as modified June 14, 2005 that settled a claim filed by the decedent's ex-wife, Lena Calogero Saviano ("Lena").

FACTS

Paul Saviano, Sr. ("Paul, Sr") died on March 3, 1994. He was survived by his ex-wife and their four children: Paul Saviano, Jr. ("Paul"), Robert Saviano ("Robert"), Richard Saviano ("Richard") and Frances Saviano Sagistriano. Paul, Sr's will, dated August 3, 1988, left his estate to Natalie Saviano ("Natalie"), the daughter of Richard and Leonarda. The will was admitted to probate on November 3, 1994 and letters testamentary were issued to Leonarda, the nominated executor.

The primary asset of the estate was his one-half interest in his former marital home, located at 4 Greenleaf Road, Hampton Bays, New York (the "Hampton Bays property"). The other one-half interest was owned by Lena. Lena died testate on October 18, 1995 and her will was admitted to probate in Suffolk County. Lena's will left her one-half interest in the Hampton Bays property in trust for the benefit of her son, Robert, who is a person under a disability. Upon Robert's death, the property passes equally among the three remaining children. Paul was named executor and trustee. In addition, he has been appointed guardian for his brother, Robert. Since Lena's death, Paul and Robert have resided in the house. They have not paid any rent for the occupancy, although they paid the current charges.

THE CLAIM PROCEEDING

Paul, Sr and Lena were married twice. They were first divorced on August 8, 1985. In the divorce decree, Paul Sr was ordered to pay Lena $100 per week maintenance, beginning May 10, 1983. On August 8, 1984, Lena obtained a judgment against Paul, Sr in the amount of $7,000 for arrears for the period from May 10, 1983 to August 7, 1984. Paul, Sr and Lena remarried on February 10, 1986. They were divorced for the second time on July 7, 1988. The second divorce decree required Paul, Sr to pay Lena maintenance of $60 per week, beginning one week after the judgment of divorce. The divorce decree provided that Lena was to have exclusive use and occupancy of the Hampton Bays property for herself and their son Robert, as well as custody of Robert.

In April, 1995, Lena filed a claim against the estate for $143,684.63. Included in the claim were $7,000 owed under the judgment, an additional $7,800 unpaid maintenance under the first divorce decree, $14,406 in unpaid maintenance under the second divorce decree, $44,014.32 [*2]for Paul, Sr's one-half of the real estate taxes, mortgage payments, insurance and capital improvements Lena paid on the Hampton Bays property, $10,000 for her share of refunds on joint tax returns Paul, Sr allegedly received and $23,000 for her share of the settlement proceeds of a personal injury action Paul, Sr allegedly received.

By petition verified September 10, 1996, and filed October 2, 1996, Paul, as executor of Lena's estate, brought a proceeding to determine the validity of the claim. The petition sought payment of Lena's claim, with a number of modifications. The claim for back maintenance sought interest at the legal rate. The claim for contribution for expenses was increased to $47,067.57 and Paul asked for reimbursement of $2,580 allegedly paid for funeral expenses of the decedent. The total claimed was $111,853.57.

Leonarda filed objections to the petition. Leonarda denied that the estate owed Lena's estate for the claims arising from the judgment and first divorce decree, on the ground that the re-marriage negated any alimony arrears. Leonarda denied that the $14,400 alimony, due as a result of the second divorce, was not paid. She denied any knowledge of the facts on which the claims for one-half of income tax refunds and personal injury settlements were based. She denied that Lena's estate was owed any monies for the expenses on the Hampton Bays property, on the ground that Lena had been living in the residence and receiving alimony. Finally, Leonarda alleged that if Lena's estate did have the right to reimbursement for one-half of Lena's expenses, Paul, Sr's estate was entitled to one-half of the fair market rental value of the property, alleged to be $126,000, as an offset. Natalie was cited in the proceeding. She was a minor and a guardian ad litem was appointed to represent her.

In December, 1997, Leonarda moved for summary judgment denying Lena's claim and granting Leonarda's counter-claim for $126,000. For the first time, Leonarda asked that the Court authorize her to bring a partition action to sell the property and receive 50% of the proceeds, as executor of the Paul, Sr's estate. Paul opposed the motion. There were a number of court conferences to settle the proceeding. As part of the settlement negotiations, an appraisal was made of the Hampton Bays property, which showed that the fair market value of the property, as of January 10, 2000, was $155,000. After it became clear that the parties would not be able to settle their differences, the parties agreed to forego a decision on the motion for summary judgment and to have the claims and counter-claim adjudicated before a court attorney-referee. The matter was then set down for a hearing on November 12, 2002.

THE NOVEMBER 12, 2002 STIPULATION

On the day scheduled for the hearing, the parties entered into a stipulation in settling the claim and counterclaim (the "2002 Stipulation"). Pursuant to the stipulation, Paul agreed to pay Leonarda, as executor of Paul, Sr's estate, $70,000 to purchase Paul Sr's interest in the Hampton Bay property. The claim and counter-claim would be withdrawn. The $70,000 was to be paid to Leonarda's attorney within sixty days. After the stipulation was read into the record, the court conducted an allocution of the parties to assure that the agreement was entered into voluntarily and that the parties understood its terms. The court inquired as follows from Leonarda:

THE COURT: You have heard the terms of the stipulation.

MS. SAVIANO: Yes.

THE COURT: DO you agree with them?

MS. SAVIANO: Yes.

THE COURT: DO you agree with them of your own free will? [*3]

MS. SAVIANO: Yes.

THE COURT: There has been no force or duress to require you to consent?

MS. SAVIANO: No.

The guardian ad litem filed a report recommending the settlement and a decision was entered dismissing the proceeding and fixing the fee of the guardian ad litem (Matter of Saviano, NYLJ, December 26, 2002 [Sur Ct, Kings County]). The guardian ad litem prepared a decree incorporating the stipulation. The decree was signed on January 16, 2003.

The GUARDIAN AD LITEM'S MOTIONS FOR CONTEMPT

Paul arranged to obtain the $70,000.00 due under the settlement from his brother, Richard. Richard gave Paul a cashier's check for the amount due, payable to Leonarda. Paul then forwarded the cashier's check to his attorney for transmittal to Leonarda's attorney. The cashier's check, however, was payable to the Leonarda, personally and Leonarda's attorney refused to accept the check. He agreed to accept a replacement check, payable to him, as provided in the stipulation. The replacement check, however, was never sent. Instead, Paul sent the cashier's check to Leonarda.

When the guardian ad litem tried to confirm the receipt of the settlement proceeds, Leonarda claimed to have returned the check to the maker. The guardian ad litem then brought a motion to hold Paul in contempt. Paul's attorney filed an affidavit in opposition, stating that he sent the $70,000 check to Leonarda directly and that she had cashed it. Subsequently, Paul filed a copy of the $70,000 check showing that it had been negotiated by Leonarda.

The guardian ad litem then moved to hold Leonarda in contempt for refusing to place the funds in the estate account. Leonarda appeared by a new attorney. The matter was set down for a hearing on the two motions on June 14, 2005. At the hearing, Leonarda was represented by a third attorney. Richard testified that he provided the $70,000 check paid to Leonarda pursuant to the settlement. Richard Saviano testified that Paul asked him to provide the money to purchase Paul, Sr's interest in the Hampton Bays property pursuant to the stipulation and that he agreed to do so, in the belief that he was purchasing Paul, Sr's one-half interest. Later, after he realized that he was only advancing the funds for the benefit of the trust under Lena's will, and that he would receive only his pro rata share of the Hampton Bays property when the trust terminated, Richard changed his mind. Richard testified that he told Paul that he was not going to provide the $70,000 under those circumstances. He then told Leonarda that she should consider the $70,000 check already received as a gift from him to her for her and their daughter's benefit.

At the conclusion of the hearing, Paul stated that he did not realize that Richard had reneged on his agreement and that he was willing to pay the $70,000. A stipulation was placed on the record, requiring Paul to pay the $70,000 previously agreed to, plus interest at the legal rate, from the original date of the stipulation until the funds were delivered. Leonarda agreed to this but insisted on preserving her right to challenge the original stipulation. The parties agreed to allow her to challenge the stipulation, on the proviso that the motion be made within sixty days. Leonarda then made the instant motion to set aside the 2002 stipulation, the decree entered on January 16, 2003, based upon the 2002 stipulation, and the 2005 modification of the 2002 stipulation entered into in open court on June 14, 2005. Paul's attorney has submitted an affirmation in opposition to the motion as has the guardian ad litem.

DISCUSSION

Leonarda challenges the 2002 stipulation, as modified by the 2005 stipulation [*4](hereinafter referred to collectively as the "stipulation") on a number of grounds. Leonarda first argues that the 2005 stipulation gave her the unilateral right to void the earlier stipulation. Such a construction would give Leonarda the option of agreeing to the stipulation (or not), depriving the stipulation of any binding force.

A stipulation is a contract (Hallock v State, 64 NY2d 224 [1974]). As such it is subject to the rules governing the construction of contracts for its interpretation and effect (see Keith v Keith, 241 AD2d 820 [3d Dept 1997]; Kraker v Roll, 100 AD2d 424 [2d Dept 1984]). The court's task, as in the interpretation of any contract, is to determine the intent and purposes of the stipulation (Matter of O'Brien v Assessor of Town of Mamaroneck, 20 NY2d 587 [1967]). To glean the intent, the court must examine the record as a whole (Matter of Way v Town of Poughkeepsie, 75 AD2d 601 [2d Dept 1980]). Whether an agreement is a binding contract or an option is to be determined, like any other issue of contract interpretation, from the four corners of the agreement (Interactive Properties Corp. v Blue Cross, 114 Misc 2d 252 [Sup Ct, NY County 1982]).

There is nothing in the 2005 stipulation that indicates an option-a bargain to merely give Leonarda time to decide whether to agree to the stipulation or not. If the parties truly intended to grant Leonarda such an option, there would have been no need to provide for interest until the time for Leonarda to exercise her option and disavow the settlement had elapsed. There would have been provision for what was to happen if Leonarda did disavow the stipulation. The only reasonable construction of the stipulation is that the parties were modifying the original stipulation solely to provide for interest so as to make the estate of Paul, Sr whole for the unintentional delay in receiving the settlement proceeds. The record shows that Leanarda agreed to the stipulation but wished to preserve her right to move to vacate it. Accordingly, her motion to construe the 2005 settlement as giving her the unilateral right to disavow the settlement is denied.

Leonarda next argues that the stipulation is void because Paul never furnished a check payable to her attorney, in breach of the stipulation. Instead, Paul delivered the check to her, payable to her. The provision for payment to Leonarda's attorney and deliver it to her attorney, this was primarily for the benefit of her attorney, to ensure that he was paid. There is no basis for Leonarda to complain if she received the check directly.

When Leonarda received the check, however, she did not return it to Paul or protest that it was payable to the wrong payee. Instead, she deposited the check into her personal account. As a party and a fiduciary, Leonarda had an obligation to either accept the check in settlement and deposit it into an estate account or to inform Paul why she was not accepting it. Instead, she deposited it into her personal account on the advice of Richard without informing Paul Jr.

Leonarda's act of cashing the check without informing Paul that she was not crediting the payment to the settlement led to the confusion. Her failure to be candid to the guardian ad litem compounded the confusion. This was a breach of her duty to act in good faith as a party to the contract. As with all contracts, there is an implied covenant of fair dealing and good faith between the parties (Rowe v Great A&P Tea Co., 46 NY2d 62,68 [1978]).

A party cannot use her own breach of contract as a basis for cancelling the contract (see Marvel Entertainment Grp., Inc. v ARP Films, 684 F Supp 818, 819 -820 [SDNY 1988]). A party in breach of her duty under a contract cannot complain of breach by the other side, especially where the other side had no knowledge, or reason to know of the original breach. [*5]Where a party breaches an executory contract, the other party to the agreement has the choice of treating the contract as breached and to immediately sue for breach of contract or to continue to treat the contract as valid (see Emigrant Indus. Sav. Bank v Willow Builders, Inc., 290 NY 133 [1943]; Inter-Power of New York, Inc. v Niagara Mohawk Power Corp., 259 AD2d 932 [3d Dept 1999]).

Once it was established at the June, 2005, hearing that Richard had disavowed funding the settlement, Paul agreed to provide a new check for the settlement proceeds, with interest from the date of the first settlement. The provision for interest was intended to protected the estate of Paul, Sr for the loss of income until payment was received. Based on the above, Leonarda's claim that the stipulation is void because of the breach of Paul Jr is denied.

Leonarda next argues that the stipulation should be vacated because the consideration was grossly unfair. This is not one of the usual grounds to vacate the settlement. As with any contract, a stipulation of settlement should not be set aside absent fraud, collusion, mistake or duress (Hallock v State of NY, 64 NY2d 224, 230 [1984]; Matter of Gelasso, 35 NY2d 319 [1974]; Matter of Frutiger, 29 NY2d 143 [1971]). The burden is on the party challenging the stipulation.

Leonarda does not allege that she entered into the stipulation by mistake (see Lowe v Steinman, 284 AD2d 506 [2d Dept 2001]; Kaplan v Goldbaum, 258 AD2d 620 [2d Dept 1999]). This would be hard for her to claim, since she does not argue that she believed that the property was worth less than $400,000. Indeed, the value of the property is listed in the probate petition that she filed in 1994 as worth this amount. While an appraisal was submitted in 2002 indicating that the property was worth substantially less, Leonarda does not allege that she relied on this in agreeing to the stipulation. In Weissman v Bondy & Schloss (230 AD2d 465 [1st Dept 1997], lv denied 91 NY2d 887 [1998]), the court held that a stipulation should not be set aside even if one of the parties misunderstands the consequences of the stipulation. There is even less reason to set aside a stipulation when a party agrees to it knowing of its consequences.

Nor is this a case where it can be argued that the consideration was insufficient. Leonarda claims that the property was worth $400,000, making Paul, Sr's one-half interest worth $200,000.00. This is denied by Paul and the guardian ad litem. The only evidence she offers is an unsworn letter from an appraiser. On the other hand, there is an appraisal in the record which values the property at $155,000, making Paul, Sr's half worth $77,500.

Even if the property was worth $400,000, this value must be discounted for the fact that it was subject to a life estate on one-half of the fee and, possibly, the entire fee. Moreover, Leonarda valuation fails to factor in the fact that Lena's executor was giving up his claim for over $110,000. Leonarda attempts to justify this by claiming that Lena's claim was barred by the statute of limitations or was otherwise worthless. Yet the facts do not bear support this.

The judgment of approximately $7,000 in Lena's favor was a valid judgment and was fully enforceable. Leonarda's claim that the judgment became community property upon the couple's remarriage is without any basis in law. Leonarda's claim that the balance of Lena's claim for back maintenance was barred by the statute of limitations was never raised in either her answer or her motion for summary judgment, resulting in a waiver of this affirmative defense.

Nor does Leonarda provide any facts to support her allegation that the rest of Lena's claims were worthless. Lena claimed that the divorce decree awarded her and her son sole right to occupy and use the premises. Paul claimed that the decree required Paul, Sr to pay his share [*6]of the maintenance and improvements on the Hampton Bays property. Paul also claimed that the divorce decree gave Robert a life estate on the entire property. While this court never determined the merits of these claims, it cannot be said that they were without any basis.

Even if Lena's claim were ultimately determined to be valueless, this would not be a grounds for vacating the stipulation. In Matter of Drossos (26 AD3d 602 [3d Dept 2006]), the Appellate Division reversed the decision of the Surrogate of Broome County finding that the claimant had no cause of action for the repayment of principal of a loan. Nonetheless, the Appellate Division reversed the dismissal of the claim, on the ground that the parties had entered into a stipulation agreeing to repay the principal and submit only the issue of whether interest was due to the Surrogate for decision.

Nor is there any reason to conclude that the settlement was unjust. Even without this discount, Paul, Sr's estate would receive an amount that was approximately 50% of the fair market value. In agreeing to the stipulation, the parties were acting in an adversarial relationship, settling a dispute where both sides were represented by counsel and both sides were aware of the alleged value of the property. The fact that real estate values have increased since the stipulation was entered should not a factor in evaluating whether the stipulation was binding. Moreover, one seeking equitable relief on the ground of unjust enrichment must act equitably.

In this case, the record shows that Leonarda has not acted in good faith in this matter. When the guardian ad litem sought to ensure that the settlement proceeds were received, Leonarda denied that she received the settlement check and later claimed that she returned the check to the maker. Not until the hearing on the motion for contempt did she admit that she received the check and deposited it in her personal account. Finally, Leonarda had no objection to her ex-husband purchasing Paul, Sr's share for $70,000. Only when it was clear that the $70,000 was to be used for all of Lena's children did she claim that the stipulation was unjust. For the above reasons, Leonarda has failed to establish a claim for unjust enrichment.

Leonarda next alleges that the equitable doctrine of laches acts as a bar to enforcing the stipulation. The only element of laches she alleges is the passage of time. The mere passage of time is insufficient to establish laches (see Marine Midland Bank v Worldwide Indus. Corp., 307 AD2d 221 [1st Dept 2003]).

Finally, Leonarda claims that the settlement should be vacated because her daughter had become of age by the time the stipulation had been entered into, so that the guardian ad litem was without authority to agree to it. Paul argues that Natalie has never objected to the settlement or to her representation by the guardian ad litem. Paul further argues that even if Natalie had filed objections to the settlement now, her objections, over three years after the stipulation was executed and a judgment on it was entered, would be barred by the doctrine of laches, citing C.S.D. No. 2 of Town of Coeymans v NYS Teachers Retirement System, 27 AD2d 265 [3d Dept 1967]). The guardian ad litem has filed an affidavit stating that even if he was without authority to agree to the stipulation, the executor agreed to the stipulation and his consent was not necessary for it to be binding.

It would have been preferable for the court to have received notice that Natalie had reached the age of majority by the time of the original hearing so that the court could have relieved the guardian ad litem of his duties and given Natalie notice of her right to obtain counsel [*7]to represent her (see Matter of Fassig, 58 Misc 2d 252, 253 [Sur Ct, Nassau County 1968]).[FN1] There was no indication in the current proceeding that Natalie was no longer a minor when the 2002 stipulation was placed on the record.[FN2]

The law is not clear whether the guardian ad litem's authority ceases once the ward reaches eighteen years of age (3 Weinstein-Korn-Miller, NY Civ Prac ¶ 1202.03; (Preminger, Thomas, Franzi & Hilker, Trusts & Estates Practice in New York § 14.63). As Surrogate Bennett noted, "The Bennett Commission conducted a comprehensive study of the functions of a guardian ad litem, but its report and recommendations to the Governor and Legislature did not touch upon this specific question." (Matter of Fassig, 58 Misc 2d 252, 253 [Sur Ct, Nassau County 1968]).

One line of cases hold that the guardian ad litem continues to have standing so long as the order of appointment remains outstanding (Sande Rocke & Co. v Rosen (23 AD2d 648 [1st Dept 1965], motion to dismiss appeal granted 16 NY2d 615; McCarthy v Anable (169 Misc 595 [Sup Ct, Greene County 1938]).

The rule adducible from these authorities is that where no suggestion or motion is made during the pendency of the action the validity of the proceedings or the judgment entered will not usually be affected by the failure to strike out a guardian for an infant party who has become of age. (McCarthy v Anable, supra at 598).

In Matter of D. Children (90 AD2d 348 [4th Dept 1982], affd 60 NY2d 838 [1983]), the court held that the authority of a guardian ad litem was restricted to the proceeding in which he is appointed and so continued until the proceeding was completed.

Finally, in Matter of Fassig, supra, Surrogate Bennett held that, in his opinion, "the term of office of the guardian ad litem expires when the infant attains his majority, as in the case of a regular guardian (SCPA 1707(2)." (Matter of Fassig, 58 Misc 2d 252, 254 [Sur Ct, Nassau County 1968]). The Surrogate reasoned that since the guardian's term of office has expired, he is disabled' within the meaning of CPLR 321, subdivision (c), which provides that where the attorney for a party dies or is otherwise disabled no further proceeding shall be taken in the action (proceeding, in this case) against the party for whom he appeared, without leave of the court, until thirty days after notice to appoint another attorney has been served upon the party, either personally or in such manner as the court directs. (id.).

In Matter of Fassig, an affidavit was filed during an accounting that one of the beneficiaries of the estate, a minor, had become of age. The Surrogate directed that the proceeding be stayed [*8]until notice was given the former infant.

In Matter of Naima, NYLJ, November 2, 1990, at 29, col 1 [Sur Ct, Nassau County], the court determined that the decedent's sister, the sole beneficiary under the will, held her devise of a one-half interest in the decedent's home as constructive trustee for the decedent's son, a minor. The guardian ad litem attempted to obtain a deed transferring the interest to the child. The guardian ad litem brought a proceeding to hold the sister in contempt and impose sanctions. The court denied the motion for contempt (the sister eventually executed the deed) but granted that part of the motion that requested sanctions. However, the minor reached minority prior to the bringing of the motion. The court held that the guardian ad litem properly brought the motion for sanctions but that his authority to represent the infant terminated when the child reached eighteen, citing Matter of Fassig. The court directed the former guardian ad litem to show the court that his continued representation was either authorized by the former minor or ratified or approved by him. The proof was to be filed with the court prior to the hearing on the amount of the sanction.

Treating the authority of the guardian ad litem as terminating automatically upon the ward's coming of age may be appropriate when the court is notified of the ward's majority. Where the court is informed of the former minor's attainment of majority, the court may then relieve the guardian ad litem of his duties and to give the former minor a thirty day notice of the right to obtain counsel to represent him or her (see Matter of Fassig, supra; Matter of Fantauzzi, NYLJ, June 24, 2004, at 33, col 45 [Sur Ct, Richmond County]); Matter of Mulosmanaj, NYLJ, November 12, 2002, at 27, col 4 [Sur Ct, Westchester County]; Matter of Appelbaum, NYLJ, September 25, 2001, at 27 col 5 [Sur Ct, Richmond County]).

An automatic rule is less appropriate where the court is not so formally informed.

When an attorney becomes disabled, the fact is usually apparent to the court. It is not so apparent when a minor becomes of age (and even less apparent when an incompetent regains his or her competency). Automatic termination of authority pursuant to Fassig may subject proceedings in which guardians ad litem appear to collateral attack years after the proceeding is concluded.[FN3] Even Surrogate Bennett in his decision recognized that circumstances may require the court to hold that the acts of the guardian ad litem are binding, even if taken after the ward becomes of age (Matter of Fassig, supra, at 253-254 [citing with approval McCarthy v Anable, supra).

The court need not reach a determination of which rule to apply in this motion because, on the facts of the case, the validity of the stipulation does not depend solely on the authority of [*9]the guardian ad litem, for a number of reasons. First, it is not Natalie who has moved to set aside the stipulation, but Leonarda. There is no basis to allow the fiduciary to try to nullify her own actions by asserting the rights of the former minor.

Second, even if the guardian ad litem lacked authority to represent his or her ward, the stipulation is not void. It is at most voidable, subject to the election of the former infant (McMurray v McMurry, 66 NY 175 [1876]). This election must be seasonably made (Malicky v Rosenberg, 152 Misc 197 [Sup Ct, Erie County 1937]). In the instant case, the first challenge to the stipulation on this ground has been made over three years after the stipulation was entered into. It is not believable that the daughter did not know of the stipulation, given the relationship between Leonarda, her ex-husband and her daughter. Richard's alleged gift to her mother of $70,000, a significant sum at the time, could not have been a secret. Nor could she be unaware of her father's attempt to purchase the Hampton Bays property pursuant to the stipulation. Even at this late date, her only action has been to file an affidavit saying she opposes the stipulation. Given the years that have elapsed since the settlement and entry of the .decree in this proceeding, the settlement should not be subject to attack on such a record (see Malicky v Rosenberg, supra [passage of two years foreclosed challenge to a judgment]). At the least, there should be a proper motion explaining why Natalie should not be bound by application of the equitable doctrine of laches (see C.S.D. No. 2 of Town of Coeymans v NYS Teachers Retirement System, 27 AD2d 265 [3d Dept 1967]).

Finally, the stipulation is not subject to attack by Natalie because her consent was not required. This was, after all, a proceeding to determine the validity of the claim,[FN4] which was settled. Leonarda, as executor of the estate of Paul, Sr, had full authority to settle the claim. Under the common law, an executor or administrator had the power to compromise disputed claims without court approval (Matter of Albright, 309 NY 126 [1955]; Matter of Leopold, 259 NY 274 [1932]; Chouteau v Suydan, 21 NY 179 [1860]). This authority was codified in EPTL 11-1.1[b][13], which clothes the fiduciary with the power to "contest, compromise or otherwise settle any claim in favor of the estate . . . and against the estate." As a result, the executor does not normally need court approval to settle a claim (Rohen, NYCiv Pract EPTL 11-1.1, ¶ 11-1.1[25][a]). The executor may settle claims even if the beneficiaries object (see Matter of Rosen, 129 Misc 2d 753 [Sur Ct, Westchester County 1985]; Matter of Rappaport, 102 Misc 2d 910 [Sur Ct, Nassau County 1980]; 3d Report, Temporary Comm on Estates, Leg Doc [1964] No 19, App M, rep No 6.4C at 499-500).

Leonarda claims that her authority is limited by the fact that legal title to the decedent's interest in the Hampton Bays property devolved to Natalie as a matter of law upon the death of the decedent. This is not determinative of the authority of the fiduciary. While the court agrees that title to real property is deemed to pass to the devisee as a matter of law, such devolution is always subject to the right of the executor to sell real property to pay debts, funeral expenses and [*10]administrative expenses. EPTL 11-1.1[b][5]pB] expressly authorizes an executor to sell real property on such terms as the fiduciary deems beneficial to the estate [see Matter of Southwick, 127 AD2d 662 [2d Dept 1987]; 6 Tohan, NY Civ Prac EPTL 11-1.1, ¶ 11-1.1[12][9]), even if the beneficiary objects (see Matter of Hulme, NYLJ, March 26, 2001 at 32, col 1[Sur Ct, Westchester County]; Matter of Wheeler, NYLJ, May 11, 1999, at 37, col 6 [Sur Ct, Westchester County]).

The question of whether the realty should be sold and under what terms is a matter of business judgment [Matter of Birnbaum, 168 AD2d 933 [4th Dept 1990]). Every fiduciary has the obligation to pay expenses of administration (SCPA 1811).

It is not disputed that the only funds to pay administration expenses and claims was from the sale of the property. Therefore, even if the guardian ad litem was without authority to bring the motions for contempt, Leonarda still had full authority to agree to the stipulation to settle the claim and pay the administration expenses, including the fee of the guardian ad litem.

Stipulations are favored by the courts and not lightly case aside (Matter of Galasso, 320 NE2d 618 [1974]) especially where the stipulation was agreed to in open court (Matter of Dolgin Eldert Corp., 31 NY2d 1 [1972]). Stipulations are especially favored by the courts when counsel represented the party seeking to vacate the stipulation (Town of Clarkstown v M.R.O. Pump & Tank, Inc., 287 AD 497 [2d Dept 2001]).

Stipulations not only provide litigants with predictability and assurance that courts will honor their agreements, but also promote judicial economy by narrowing the scope of issues for trial. To achieve these policy objections, a stipulation is generally binding on parties that have legal capacity to negotiate, do in fact freely negotiate their agreement and either reduce their stipulation to a properly subscribed writing or enter the stipulation orally on the record in open court (McCoy v Feinman, 99 NY2d 295, 302 [2002][citations omitted]).

Based on the above, the motions of the guardian ad litem for contempt are denied and the Leonarda's motion to vacate the stipulation is denied.

Settle decree.

________________________________

Hon. Margarita L¢pez Torres

S u r r o g a t e

Dated: December 29 , 2006 Footnotes

Footnote 1: The probate petition, verified by Leonarda on July 22, 1994, listed Natalie as a minor who was seven. The petition to determine the validity of the claim merely listed Natalie as a minor. In fact, Natalie was born on August 12, 1982, so that she became of age on August 12, 2000.

Footnote 2: While Leonarda complains that the guardian ad litem did not inform the court, Leonarda, as Natalie's mother and the executor of the estate, could have informed the court. She chose not to do so.

Footnote 3: In his reply, Leonarda's attorney alleges that the guardian ad litem's advocacy of the stipulation is motivated by his desire to be paid the fee awarded to him in 2002, which is to be paid out of the proceeds. There is no basis for this slur. The fee of the guardian ad litem was set in 2002 and he has not asked for any additional fees for his work in attempting to secure the proceeds for his ward. Equally baseless is his allegation that the guardian ad litem misled the court into believing that Natalie was still a minor, so that she did not receive process and appear on her own behalf or by counsel of her own choosing.

Footnote 4: Leonarda alleges that the underlying proceeding was to sell the real property, which would have required personal jurisdiction over Natalie. However, the record establishes that the proceeding was to determine the validity of Lena's claim. Leonarda only requested partition of the property in connection with her claim that Lena owed Paul Sr's estate $126,000.