Rice v DiNapoli

[*1] Rice v DiNapoli 2009 NY Slip Op 50979(U) [23 Misc 3d 1128(A)] Decided on April 21, 2009 Supreme Court, Albany County Teresi, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. As corrected in part through May 28, 2009; it will not be published in the printed Official Reports.

Decided on April 21, 2009
Supreme Court, Albany County

Adam D. Rice, as Administrator of the Estate of Gary Rice, Plaintiffs,

against

Thomas DiNapoli, State Comptroller of the New York State and Local Retirement Systems; and Eva Rice, Defendants.



1915-09



APPEARANCES:

Criscione Law Firm, LLC

Nicholas Criscione, Esq.

Attorneys for Plaintiff

120 Broadway

Albany, New York 12204

Walter, Thayer & Mishler, PC

Anita Thayer, Esq.

Attorneys for Defendant Eva Rice

756 Madison Avenue

Albany, New York 12208

Andrew M. Cuomo, Esq.

Attorney General of the State of New York

Attorneys for Defendant Thomas DiNapoli

Susan C. von Reusner, Esq. AAG

The Capitol

Albany, New York 12224

Joseph C. Teresi, J.

On November 28, 2008, Gary Rice passed away. He was survived by three children and a wife, from whom he was separated. At the time of his death, Mr. Rice worked for the Albany Port District Commission and had approximately twenty years of service credited in the New [*2]York State Employees' Retirement System (hereinafter "Retirement System"). The last beneficiary designation he made was on April 17, 2003, naming his wife Eva Rice (hereinafter "defendant Rice") as the 100% beneficiary (hereinafter "beneficiary designation"). On September 13, 2007, however, Eva and Gary Rice entered into a "Separation and Property Settlement Agreement" (hereinafter "Separation Agreement").

Plaintiff, the administrator of the Estate of Gary Rice, acknowledges defendant Rice's designation as the named beneficiary of Mr. Rice's Retirement System death benefit. However, plaintiff claims that defendant Rice waived half of her interest in the death benefit by the Separation Agreement's terms. Plaintiff commenced this declaratory judgment action seeking a declaration that the beneficiaries of Mr. Rice's Retirement System death benefit are: 50% defendant Rice and 50% plaintiff; and for an Order directing defendant DiNapoli to correct the beneficiary designation pursuant to Retirement and Social Security Law §803-A. Plaintiff also moves for preliminary and permanent injunctions, enjoining either defendant from transferring or accepting Mr. Rice's Retirement System death benefit while this action is pending; and for the Retirement System death benefit to be paid into Court, pursuant to CPLR §2701(2). Because plaintiff demonstrated its entitlement to an Order directing that 50% of Mr. Rice's Retirement System death benefit be paid into Court, that portion of plaintiff's motion is granted, making its motion for an injunction moot.

Defendant DiNapoli answered and specifically declined to oppose plaintiff's complaint, but instead "awaits the court's order instructing payment".

Defendant Rice, prior to answering, moves to dismiss plaintiff's complaint claiming a defense based upon documentary evidence (CPLR §3211[a][1]) and that it fails to state a cause of action (CPLR §3211[a][7]). Because defendant Rice failed to demonstrate her entitlement to judgment pursuant to CPLR §3211[a][1] or [a][7] her motions to dismiss are denied.

In the context of a CPLR §3211 motion the Court must "accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory." (Leon v. Martinez, 84 NY2d 83, 87-88 [1994]).

Specifically, relative to a "motion to dismiss on the ground that the action is barred by documentary evidence (CPLR §3211[a][1]), such motion may be appropriately granted only where the documentary evidence utterly refutes plaintiff's factual allegations, conclusively establishing a defense as a matter of law". (Goshen v. Mutual Life Ins. Co. of New York, 98 NY2d 314, 326 [2002]). The documentary evidence submitted must resolve "all factual issues as a matter of law and definitively dispose.. of the plaintiff's claim". (Wallach v. Hinckley, 12 AD3d 893 [3d Dept. 2004]).

The documentary evidence in this action is undisputed and fails to demonstrate defendant Rice's entitlement to judgment as a matter of law. The parties agree that Mr. Rice's beneficiary designation names defendant Rice as the 100% beneficiary. No party disputes the fact that Mr. Rice and Eva Rice entered into the Separation Agreement, or its contents. Rather, the dispute centers upon the effect of the Separation Agreement on defendant Rice's interest in Mr. Rice's Retirement System death benefit.

According the plaintiffs every possible favorable inference, the documentary evidence does not establish a defense to plaintiff's action as a matter of law. A named beneficiary to a [*3]Retirement System death benefit may waive her rights to such benefit only by executing a waiver that is "explicit, voluntary and made in good faith." (see generally Silber v. Silber, 99 NY2d 395, 404 [2002]; Flaherty v. McCall, 262 AD2d 890 [3d Dept. 1999]). The terms of a separation agreement, if meeting the above tripartite test, may effectuate such waiver. (Kaplan v. Kaplan, 82 NY2d 300 [1993]).

On this documentary evidence, defendant Rice failed to conclusively demonstrate that the Separation Agreement was not an explicit, voluntary or a good faith waiver. The language of the Separation Agreement itself demonstrates that it was "voluntarily" entered. It states that it was not entered as a result of "fraud, duress or undue influence", after both parties consulted with their own attorneys. Similarly, the Separation Agreement's terms, by parsing each issue and dividing a large amount of property and debt, does not evidence a lack of good faith. Nor could the document itself, without extrinsic evidence, demonstrate that it was entered with a lack of good faith.

Additionally, the language of the Separation Agreement does not conclusively establish, as a matter of law, that the waiver was not "explicit". Examining the specific language of the Separation Agreement, it states, after discussing the entry of a "Majauskas Order" (i.e. Domestic Relations Order), that: "[u]ntil such time as the Domestic Relations Order is signed, and entered, the Husband agrees to keep the Wife listed as a 50% beneficiary on his in-service death benefit." (hereinafter the "Pension" portion of the Separation Agreement) The Separation Agreement also states that: Each party irrevocably waives surrenders and renounces any and all rights of election under the present or future laws of any jurisdiction regarding the estate of the other, whether heretofore or hereafter executed, as provided for in any law, now or hereafter effective, of any state or territory of the United States, or any foreign country, and relinquishes, renounces and releases all interest, right or claim of any nature whatsoever, now or hereafter acquired, including without limitation any claim of distributive share, intestate succession, dower, thirds, curtsy, statutory allowance, widow's allowance, community property, homestead, inheritance, or right to take in intestacy or against the last will and testament of the other (whether heretofore or hereafter executed) or any inter vivos transfers or testamentary substitutes made by the other party, as well as any other right or rights that he or she had, now has or might ever have against the other or the estate of the other, or the property of whatsoever nature, real or personal, of the other, under or by virtue of the laws of any state or territory or county including, without limitation, the applicable Estates, Powers, Trusts Law of such jurisdiction.

(hereinafter the "Mutual Release" portion of the Separation Agreement)

While defendant Rice demonstrated that the Pension portion of the Separation Agreement does not "explicitly" waive her right to the Retirement System death benefit, she failed to demonstrate that the Mutual Release portion does not constitute her explicit waiver. The Pension portion addresses only the "Husband's", Mr. Rice's, obligations relative to his "in service death benefit". While Mr. Rice is obligated to name defendant Rice as "a" 50% beneficiary, his naming of the other 50% beneficiary is not circumscribed in any way. By a plain reading of the provision, defendant Rice is not affirmatively obligated to act. The obligations of the provision [*4]rest solely upon Mr. Rice, and mere inferences drawn from its provisions do not constitute an "explicit" waiver. Moreover, the remaining language of the Separation Agreement's "Pension" Article applies only to the terms of a proposed "Majauskas Order". As no such order was entered, these provisions are irrelevant to defendant Rice's claimed waiver.

Defendant Rice failed to demonstrate, however, that she did not execute an explicit waiver under the Separation Agreement's Mutual Release portion. The applicable language states that "[e]ach party irrevocably waives... and releases all interest... now or hereafter acquired, including... any inter vivos transfers or testamentary substitutes made by the other party". The beneficiary designation at issue is not an inter vivos transfer, as no tangible interest or item was "transferred" by the designation. However, defendant Rice failed to demonstrate, as a matter of law, that the beneficiary designation is not a "testamentary substitute". (See generally EPTL §5-1.1A(b)(1)(G); In re Estate of Alent, 271 AD2d 73 [4th Dept. 2000]). Nor that the Separation Agreement's general waiver language does not constitutes an "explicit" waiver as a matter of law. (but see Eredics v. Chase Manhattan Bak, 100 NY2d 106 [2003]). On this record, defendant Rice has failed to conclusively establish her defense as a matter of law.

Considering next defendant Rice's motion to dismiss pursuant to CPLR §3211(a)(7), this portion of her motion focuses on "determining whether plaintiff has a cause of action... not whether he has stated one". (Haire v. Bonelli, 57 AD3d 1354 [3d Dept. 2008]). And this "court may consider affidavits submitted to remedy any defects in the complaint." (Id.)

Here, accepting plaintiff's allegations as true, plaintiff has both a declaratory judgment and a breach of contract cause of action. Plaintiff alleges the existence of the Separation Agreement, and argues that defendant Rice affirmatively waived her right to 50% of Mr. Rice's Retirement System death benefits by its terms. Defendant Rice seeks to collect 100% of Mr. Rice's Retirement System death benefit, and in the absence of a court order to the contrary, defendant DiNapoli will pay 100% of the death benefit to defendant Rice. Plaintiff duly alleged a contract, the Separation Agreement, and a breach thereof by defendant Rice's attempt to collect the Retirement System death benefit. Plaintiff also duly pled a justiciable controversy to determine the parties' "rights and legal relations" to Mr. Rice's Retirement System death benefit.Accordingly, defendant Rice's motions to dismiss are denied. Defendant Rice shall serve her answer in accord with CPLR §3211(f).

"[W]hen claims challenging the payment of death benefits by the comptroller are made, and judicial orders sought under the authority of CPLR 2701 (subd 2) are timely served on the Comptroller, funds still in his possession will be paid into the court". (Demerritt v. Levitt, 71 AD2d 757 [3d Dept. 1979]; Del Gaizo v. Del Gaizo, 125 AD2d 815 [3d Dept. 1986]). Here, plaintiff and defendant Rice only dispute the proper beneficiary of half of Mr. Rice's Retirement System death benefit. There is no dispute that half of Mr. Rice's Retirement System death benefit is properly payable to defendant Rice. Accordingly, defendant DiNapoli is hereby directed to issue payment of one half of Mr. Rice's Retirement System death benefit to defendant Rice, and pay the other half into court in accord with CPLR §2701.

Insofar as plaintiff's motion seeks a declaratory judgment correcting Mr. Rice's Retirement System beneficiary designation, as issue has not yet been joined by defendant Rice, summary judgment is not yet available. CPLR §3211(a). Also, because the monies in dispute are being paid into court, plaintiff's motions for preliminary and a permanent injunctions are [*5]moot. Finally, defendant Rice's request to submit a "reply" after her motion was returnable, is granted, in an exercise of discretion.

All papers, including this Decision and Order are being returned to the attorney for the plaintiff. The signing of this Decision and Order shall not constitute entry or filing under CPLR §2220. Counsel are not relieved from the applicable provisions of that section relating to filing, entry and notice of entry.

So Ordered.

Dated:April 21, 2009

Albany, New York

Joseph C. Teresi, J.S.C.