Matter of Siegel
Annotate this CaseDecided on November 18, 2004
Surrogate's Court, Nassau County
In the Matter of the Accounting by Judy Tray as the Co-Administrator c.t.a. of the Estate of PEARL SIEGEL, Deceased.
308368
Iris Horowitz, Esq.
600 Old Country Road, Suite 410
Garden City, New York 11530
Petitioner
Anthony Altimari, Esq.
128 Front Street
Mineola, New York 11501
Respondent
John B. Riordan, J.
This is a motion by Judy Tray to vacate the stipulation of settlement entered into on September 23, 2004 between Judy Tray and Brad Guilford. For the reasons that follow, the motion is denied.
The underlying dispute involved an accounting proceeding by Ms. Tray in her capacity as co-administrator c.t.a. Judy Tray and Brad Guilford previously were appointed by the court as co-administrators c.t.a. By order of this court dated May 31, 2002, Judy Tray was directed to file her account. Ms. Tray failed to comply with the court's order, and, thereafter, Mr. Guilford petitioned for her removal. The court granted Mr. Guilford's application, and on September 24, 2002, the court revoked Ms. Tray's letters and directed her to turn over the assets and books and records of the estate to Mr. Guilford. Ms. Tray once again failed to comply with the court's decree, and an order to show cause for contempt was returnable on December 14, 2002.
Ms. Tray filed her accounting on February 26, 2003. Mr. Guilford filed objections to the account alleging, essentially, mismanagement and misappropriation of the assets by Ms. Tray. A hearing on the objections was scheduled for September 23, 2004. A week before the hearing, counsel appeared before the court for a conference to address various issues relating to the case, including a possible settlement. Counsel for both parties advised the court that they had engaged in prior unsuccessful settlement negotiations, but they were willing to continue those discussions in an effort to avoid a trial. Accordingly, respondent's counsel, Anthony Altimari, Esq., presented petitioner's counsel, Richard Reers, Esq. with a proposed settlement offer. Mr. Altimari informed Mr. Reers that he arrived at his figures based upon petitioner's testimony at her deposition and the limited records which had been provided to him. Contrary to petitioner's allegations, Mr. Reers did, in fact, assert that a number of the disputed transactions were made pursuant to a power of attorney and in accordance with the suggestions of an elder law attorney with whom the decedent had consulted. Mr. Reers also argued that many of the expenditures at issue, including, but not limited to, the lease payments for a vehicle, were essentially made on behalf of the decedent since the decedent resided with petitioner and petitioner cared for her. Petitioner's unsubstantiated claim that Mr. Reers failed to advance her interests in the settlement negotiations is unsupported. No agreement was reached at that conference; however, both counsel agreed to continue discussions with their clients regarding settlement. The matter remained on the court's calendar for trial on September 23, 2004.
On September 23, 2004, Ms. Tray and Mr. Guilford, who traveled from Florida, and their respective counsel were all present for the trial. At the request of counsel, settlement [*2]negotiations resumed prior to the trial, and after approximately two and one-half hours, a settlement was reached. The settlement was the result of extended give-and-take negotiations during which both counsel conferred continuously with their clients. The extent of the negotiations is evidenced by the detail of the stipulation, which addressed even the distribution of specific items of jewelry and furnishings.
After the court was advised that a settlement had been reached, Ms. Tray and her counsel and Mr. Guilford and his counsel appeared before the court in the courtroom, and the stipulation was read into the record by Mr. Altimari. Although it is not necessary to recite the stipulation in its entirety, the essential terms were as follows. Ms. Tray agreed to pay the sum of $75,000.00 to the estate, with $50,000.00 to be paid within ten days and the balance to be paid without interest in six months. Ms. Tray agreed to waive her interests in the estate. The stipulation provided, however, that Ms. Tray would retain certain furnishings in her possession, including an antique piece of furniture which her counsel claimed to be quite valuable. After the stipulation was read into the record, the court conducted an allocution of the parties to determine if the agreement was entered into voluntarily and to ascertain whether the parties understood the terms. The court inquired as follows as reflected on page 8 of the transcript: "THE COURT: Mr. Reers, is that the stipulation you agree to?MR. REERS: Yes, it is, your Honor, we agree to the terms thereof.THE COURT: Ms. Tray, did you hear the stipulation? You have to say a word.THE PETITIONER: Yes.THE COURT: Did you understand it?THE PETITIONER: Yes.THE COURT: Do you agree to be bound by the terms of the stipulation?THE PETITIONER: Yes."
A stipulation made in open court is binding on the parties (CPLR 2104). The Court of Appeals has interpreted "open court" to mean "a judicial proceeding in a court, whether held in public or private, and whether held in the courthouse, a courtroom, or any place else, so long as it is, in an institutional sense, a court convened with or without jury, to do judicial business" (In re Dolgin Eldert Corp., 31 NY2d 1, at 4-5 [1972]).
Open-court stipulations are favored by the courts and will not be set aside lightly (Hallock v State of New York, 64 NY2d 224 [1984]; Matter of Stark, 233 AD2d 450 [1996]), Matter of Slaughter, 206 AD2d 537 [1994]; Matter of Kaplan, 150 AD2d 687 [1989]; Matter of Hecht, 24 AD2d 1001 [1965]). Stipulations are especially favored where the parties have been represented by counsel (Matter of Stark, 233 AD2d 450 [1996]; Heimuller v Amoco Oil Corp., 92 AD2d 882 [1983]). Stipulations of settlement which put an end to litigation promote efficient dispute resolution and are essential to the litigation process (Hallock v State of New York, 64 NY2d 224 [1984]; Gage v Jay Bee Photographers, Inc., 222 AD2d 648 [1995]; Matter of Kanter, 209 AD2d 365 [1994]). Moreover, compromise agreements have consistently been approved in matters involving decedent's estates (Matter of O'Keefe, 167 Misc 148 [1938]). "Agreements of compromise in estates made in the absence of bad faith, imposition, fraud or collusion, have consistently received the approval and ratification of our courts and have been given vigorous [*3]support by them . . . . They have been sanctioned and encouraged, particularly in family controversies, in order to avoid burdensome expense, annoyance and inconvenience of litigation" (citations omitted) (Matter of O'Keefe, 167 Misc 148, 149 [1938]).
A stipulation of settlement is a contract between the parties (Gage v Jay Bee Photographers, Inc., 222 AD2d 648 [1995]; Matter of McQuade, 121 AD2d 780 [1986]). Thus, although there is a strong policy in favor of stipulations, the court may in its discretion relieve a party from a stipulation upon a showing of those grounds necessary to avoid a contract such as fraud, collusion, mistake or accident (Matter of Marquez, 299 AD2d 551 [2002]; Gage v Jay Bee Photographers, Inc., 222 AD2d 648 [1995]; Matter of Slaughter, 206 AD2d 537 [1994]).
In the instant case, petitioner argues that the stipulation should be set aside for a myriad of reasons. Specifically, petitioner maintains that she was coerced into accepting the settlement by her attorney, Mr. Reers, because he advised her that she could be liable for approximately $400,000.00 if the matter proceeded to trial. Petitioner claims that Mr. Reers advised the court fifteen minutes after the attorneys arrived at the courthouse that a settlement had been reached. Petitioner further claims that Mr. Reers was mistaken regarding her potential exposure due to his reliance upon Mr. Altimari's figures. She also maintains that Mr. Reers failed to advise her of the binding effect of the stipulation, and that she did not fully understand her obligations under the stipulation. Petitioner contends that the stipulation is unconscionable because she does not have $75,000.00 and enforcing the stipulation would unjustly enrich Mr. Guilford.
Petitioner's claim of coercion is contradicted by the extensive and lengthy settlement negotiations which took place approximately a week before the hearing and on the actual date of the hearing. The court, by virtue of its participation in those conferences, knows petitioner's claims regarding the extent of the negotiations to be untrue. In fact, both counsel advised the court at the conference that there had been prior settlement discussions. Clearly, petitioner's assertion that the first time she learned about a possible settlement was on the date of the hearing is unsupported. Similarly, her allegation that the negotiations lasted only fifteen minutes prior to the time the stipulation was put on the record is also entirely inaccurate as reflected by the transcript which shows that the stipulation was put on the record at 11:40 a.m., approximately two and one-half hours after the negotiations commenced. The length of and give and take nature of the negotiations belies petitioner's claim that the settlement was the result of coercion. Moreover, any indication by Mr. Reers to petitioner that the matter would proceed to trial if she did not settle does not amount to coercion or duress (Matter of Kanter, 209 AD2d 365 [1994]). Petitioner has failed to demonstrate any circumstances which prevented the exercise of her free will (Heimuller v Amoco Oil Corp., 92 AD2d 882 [1983]; Matter of Kanter, 209 AD2d 365 [1994]).
Petitioner's claim that she would not have entered into the agreement if Mr. Reers' had advised her of the finality of the settlement does not warrant setting aside the stipulation. A mistaken belief regarding the binding effect and the availability of an appeal and its probable success is not sufficient to vacate a stipulation of settlement (Matter of Rosenhain, 193 AD2d 903 [1993]).
Likewise, petitioner's purported mistaken belief regarding the extent of her potential liability does not warrant setting aside the stipulation. The party seeking to vacate a stipulation based upon a mistake must overcome a heavy presumption and must establish her position by [*4]clear and convincing evidence (Vermilyea v Vermilyea, 224 AD2d 759 [1996]). The law makes a distinction between a mutual mistake and a unilateral mistake (Matter of Mahonski, 195 Misc 2d 580 [2003]; Mazzola v CNA Insurance Co., 145 Misc 2d 896 [1989]). To void a contract on mutual mistake, the mistake must (i) be substantial, (ii) have existed at the time the agreement was made, and (iii) prevent a meeting of the minds (Matter of Mahonski 195 Misc 2d 580 [2003]). A contract may also be voided on a unilateral mistake, but only where (i) enforcement would be unconscionable, (ii) the mistake is material and is made despite the exercise of ordinary care by the party in error, (iii) the innocent party had no knowledge of the error, and (iv) it is possible to place the parties in status quo (Mazzola v CNA Insurance Co., 145 Misc 2d 896 [1989]). A party cannot use a mistake to escape the obligations imposed by a stipulation, however, where simple inquiry or ordinary care would have elicited the correct information and revealed the mistake (Matter of Jones, 13 Misc 2d 678 [1958]; Mazzola v CNA Insurance Co., 145 Misc 2d 896 [1989]).
In Vermilyea v Vermilyea (224 AD2d 759 [1996]), the court was faced with a situation similar to the instant case. In Vermilyea, the plaintiff-wife moved to vacate an oral stipulation which she claimed was based upon a "mutual mistake." The plaintiff claimed that the parties had mistakenly used an incorrect present value figure for the defendant-husband's pension. The court found that the only evidence of mistake was plaintiff's own counsel's conclusory affidavit that subsequent to the stipulation he was advised by the pension office that the value was incorrect. The court held that this amounted to nothing more than a unilateral mistake and that there were no facts to show fraud or overreaching on the defendant's part. There was no unfairness since both parties relied on the same information. The correct amount could easily have been ascertained. Both parties were represented by counsel and unequivocally agreed to the stipulation in open court. The court held that, "[t]he acceptance of the pension figure may have been improvident, but the fact that it may have been a bad bargain is not sufficient to overturn or set aside an otherwise valid agreement" (Vermilyea v Vermilyea, 224 AD2d 759, 761 [1996]).
Petitioner's assertions regarding Mr. Reers' statements to her concerning her potential liability are uncorroborated. In view of petitioner's prior history of failing to comply with the court's orders and her blatantly untrue statements regarding the length of the negotiations on the date of the hearing, her credibility is questionable. However, even were the court to accept petitioner's claim that Mr. Reers advised her that her potential liability could be as great as $400,000.00, such a statement is merely an opinion. Petitioner's liability, which could have included not only a surcharge but also interest, might well have been substantial since the disputed transactions occurred in 1996.
If not an opinion, the mistake alleged by petitioner is at best a unilateral mistake. Petitioner, other than by conclusory statements, has failed to show any fraud, overreaching or deceptive conduct on the part of respondent or his counsel. Mr. Altimari reviewed his figures with Mr. Reers at the conference and on the date of the hearing. Mr. Reers and petitioner had ample time to investigate and rebut those figures, and Mr. Reers did, in fact, do so. Petitioner had the opportunity to provide additional documentation and to explain the transactions in question, yet she failed to do so at the appropriate time. Clearly, any mistake regarding Mr. Altimari's figures could have been discovered by petitioner and was not the product of fraud or deceptive conduct on the part of Mr. Altimari or respondent. Petitioner cites Nachman v [*5]Nachman (274 AD2d 313 [2000]) and Matter of Cohen (18 Misc 2d 163 [1959]) in support of her position. Both of those cases involved deceptive conduct and fraud.
Furthermore, petitioner has failed to support her claim that the terms of the stipulation are unconscionable. The terms are not so unfair and one-sided that no reasonable person would agree to the stipulation (Matter of Rosenhain, 193 AD2d 903 [1993]). Unconscionability is contractual overreaching , oppressiveness and unfairness (Mazzola v CNA Insurance Co., 145 Misc 2d 896 [1989]). Unconscionability will not be found where both parties have been represented by counsel, the parties have equal bargaining power and have engaged in arms-length negotiations (Mazzola v CNA Insurance Co., 145 Misc 2d 896 [1989])
Petitioner's argument that enforcement of the stipulation will unjustly enrich Mr. Guilford is also unsupported. Petitioner's account shows there is approximately $37,500.00 on hand in the estate. According to the stipulation, an additional $75,000.00 will be paid to the estate. From that amount, cash bequests of $20,000.00 must be paid. Schedule D of the accounting shows claims presented and allowed but unpaid of approximately $23,000.00 and a possible claim of approximately $3,000.00. Mr. Guilford as the remaining administrator c.t.a. must attend to payment of the bequests, claims and other proper expenses before distribution of the residuary. Thus, the stipulation by its terms does not unjustly enrich Mr. Guilford.
Petitioner knowingly and voluntarily accepted the terms of the stipulation which was made in open court in the presence of the parties and their counsel. The stipulation was dictated into the record after full discussion and negotiations between the parties and their counsel as to every detail. During the allocution of the parties, petitioner acknowledged that she understood and voluntarily agreed to the terms of the stipulation (see Matter of Marquez, 299 AD2d 551 [2002]; Matter of DePaul, 249 AD2d 390 [1988]; Matter of Rosenhain, 193 AD2d 903 [1993]). The record establishes that petitioner and her counsel were fully aware of the terms of the stipulation which were clear and unambiguous. Petitioner's application can only be explained as resulting from a change of mind, which is an insufficient basis on which to vacate the stipulation (Thompson Medical Co., Inc. v Benjamin Pharmaceuticals, Inc., 4 AD2d 504 [1957]).
Petitioner has not shown any facts sufficient to vacate the stipulation. Accordingly, petitioner's motion is denied in its entirety.
Settle order on five days notice with five additional days if service is made by mail.
Dated: November 18, 2004
JOHN B. RIORDAN
Judge of the
Surrogate's Court
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