Matter of Berg
Decided on April 28, 2009
Sur Ct, Nassau County
In the Matter of the Application of GORDON BERG as Temporary Administrator of the Estate of Barbara Berg, Deceased, to Discover Personal Property Withheld and Belonging to the Decedent.
The appearances of counsel are as follows:
Farrell Fritz(for Respondent)
1320 RexCorp. Plaza
Uniondale, NY 11556
Gary S. Josephs, Esq.(for Petitioner)
60 Route 25A
Setauket, NY 11733
John B. Riordan, J.
In this SCPA 2103 discovery proceeding, the petitioner and respondent have moved and cross moved, respectively, for summary judgment. For the reasons that follow, both motions are denied.
The decedent Barbara Berg died intestate on August 27, 2003 survived by her son Gordon and her daughter Sharon as her only distributees. At issue are two transfers, one in December 1999 and one in March 2000, from decedent's securities accounts at Paine Webber to Sharon's Paine Webber account. The two transfers total more than $530,000.00 and appear to represent all of the assets the decedent owned at the time. Sharon contends that the transfers of assets were gifts to her from her mother. Limited letters of administration issued to Gordon on January 20, 2006; the instant discovery proceeding was commenced February 8, 2006.
Gordon correctly contends that Sharon, as the donee of the purported gifts, has the burden of establishing all the elements of a valid gift, including donative intent, delivery, and acceptance (5 Warren's Heaton on Surrogate's Court Practice, § 62.08[f][i], 7th ed). Gordon contends that the decedent lacked the requisite mental capacity to form the intent to make the purported gifts. Gordon also asserts that Sharon and the decedent were in a confidential relationship, thus increasing Sharon's burden to prove that the subject transfers were made freely and voluntarily and were not the result of undue influence or restraint (Gordon v Bialystoker Ctr., 45 NY2d 692, 698 ). Finally, Gordon asserts that the decedent was unduly influenced or tricked into making the subject transfers. While Gordon has not conceded on the separate issues of delivery and acceptance, it is clear that the primary focus of the inquiry is whether the decedent had the requisite mental capacity to form the intent to make the purported gifts, and if so, whether she, in [*2]fact, had that intent. Sharon counters that while she and her mother had a very close and loving mother-daughter relationship, that relationship itself negates any possible finding of a confidential relationship. Furthermore, Sharon asserts that the evidence is clear that the decedent had the capacity to make the purported gifts and that she did so freely and voluntarily.
The proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact (Alvarez v Prospect Hosp., 68 NY2d 320, 324 ). Failure to make such prima facie showing requires a denial of the motion, regardless of the sufficiency of the opposing papers (Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 ). Once this showing has been made, the burden shifts to the party opposing the motion for summary judgment to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action (Zuckerman v City of New York, 49 NY2d 557, 562 ). On a motion for summary judgment, the facts are always viewed in the light most favorable to the non-moving party (Fundamental Portfolio Advisors, Inc. v Tocqueville Asset Mgt., LP, 7 NY3d 96, 105 ). Because the court is presented with a motion and a cross-motion on the same issues, the facts will be viewed in the light most favorable to Sharon on Gordon's motion and in the light most favorable to Gordon on Sharon's cross-motion.
On the question of the decedent's mental capacity, Sharon relies on the deposition testimony of herself and her husband, as well as the affidavits of certain individuals who are related to Sharon's husband, either by blood or by marriage. The affidavits of an accountant and an employee at Paine Webber are also attached to Sharon's papers, but they are of little value on the issue of decedent's mental capacity. Both Sharon and Gordon rely on the medical records to support their positions.
A Neuropsychological Consultation Report prepared by a Dr. Barr indicates that he examined the decedent on April 16 and April 19, 1999, about eight months prior to the first of the subject transfers. Although he concludes that "the diagnosis of dementia is unlikely at this time," the report also relays that decedent was having difficulty with her memory, was having black-outs in the middle of emotional experiences and forgetting where she was. The report also indicates that Sharon, who evidently did most of the talking at the interview, took the decedent's car away from her out of fear for her safety.
A report from a gastroenterologist to a referring physician thanks the recipient of the letter for the referral and opens with the statement "Barbara Berg was evaluated in office revisit on 5/3/00. As you know, she has Alzheimer's..." The May 3, 2000 date referred to in the letter is less than six weeks after the last of the two subject transfers and plainly indicates that both doctors believed that decedent was afflicted with Alzheimer's Disease.
A letter from a Dr.Gordon again to a referring physician indicates that the decedent had a four-year history of progressive memory loss, had difficulty finding her way home when she went out, and that she recently was unable to locate the bathroom in her daughter's home, a home Sharon had lived in for the past 27 years. The letter also provides, "In summary, Ms. Berg has a history of senile dementia..." This letter is dated in November 2000, nearly a year after the first of the subject transfers and approximately 8 months after the second transfer. Thus, the evidence presented thus far includes medical reports which indicate that the decedent was suffering from [*3]some type of dementia at or around the time of the subject transfers. The affidavits submitted in support of Sharon's cross-motion dispute that suggestion and the medical report of Dr. Barr conducted about 8 months prior to the earliest transfer concluded that a diagnosis of dementia did not seem appropriate.
"To grant summary judgment it must clearly appear that no material and triable issue of fact is presented. This drastic remedy should not be granted where there is any doubt as to the existence of these issues, or where the issue is arguable; issue-finding, rather than issue determination is the key to the procedure" (Sillman v Twentieth Century-Fox Film Corp., 3 NY2d 395, 404 [internal citations omitted]). On this record the court finds that there are clearly questions of fact regarding the decedent's mental capacity at the time of the subject transfers. Furthermore, although Sharon's burden of proof on the issue of donative intent is somewhat alleviated by the presumption that all people have capacity, there are a number of decisions emanating from the Second Department holding that where there is evidence of mental illness or defect, the burden shifts to the party claiming capacity to show such by clear and satisfactory proof (Hubbard v Gatz, 130 AD3d 552 [2d Dept 1987]; Jordan v Clinton, 18 AD3d 817 [2d Dept 2005]; Weber v Burman, 22 Misc 3d 1104A [Sup Ct, Nassau County 2008]). Finally, while a close family relationship will often counterbalance evidence of a confidential relationship (see Matter of Zirinsky, 43 AD3d 946 [2d Dept 2007], that does not preclude a finding that there was, in fact, the kind of confidential or controlling relationship which shifts the burden to the donee of the gift to establish by clear and convincing evidence that the gift was not the result of undue influence or restraint upon the donor (Feiden v Feiden, 151 AD2d 889 [3d Dept. 1989]; see also Matter of Bassin, NYLJ, May 2, 2002, at 27, col 1 [Sur Ct, Nassau County]); Matter of Buxton-Sinclair, 1 Misc 3d 903A [Sur Ct, Westchester County 2003]).
Accordingly, both the motion and cross-motion are denied in all respects; the matter will proceed to trial as scheduled on May 7, 2009.
This decision constitutes the order of the court and no additional order need be submitted.
Dated: April 28, 2009
John B. Riordan
Judge of the