Matter of Kalikow
Annotate this CaseDecided on October 13, 2006
Sur Ct, Nassau County
In the Matter of the Application of Eugene Shalik, as Preliminary Co-Executor of the Estate of Pearl B. Kalikow for a decree determining whether this Court has exclusive jurisdiction to adjudicate the claims of, Respondents Edward M. Kalikow and Laurie Platt, for damages the Estate of Pearl B. Kalikow and Respondents' Demand for arbitration of such claims.
340361
The appearance of counsel is as follows:
Charles F. Gibbs, Esq. (Attorneys for Petitioner)
Ross Katz, Esq.
Holland & Knight LLP
195 Broadway
New York, NY 10007
Stephen Breitstone, Esq. (Attorneys for Respondents)
Thomas McGowan, Esq.
Meltzer, Lippe, Goldstein & Breitstone, LLP
190 Willis Avenue
Mineola, NY 11501
Amy C. Karp, Esq.
Assistant Attorney General-Charities Bureau
120 Broadway
New York, NY 10271
John B. Riordan, J.
The court has before it a petition by the preliminary executor for a determination that a controversy is not subject to arbitration. The Attorney General of the State of New York has appeared in this proceeding.
Decedent Pearl B. Kalikow died on January 4, 2006. An instrument purported to be her last will and testament, dated July 16, 2003 and two purported codicils have been offered for probate in this court.
It is undisputed that at the time of her death, Pearl B. Kalikow owned a 1% general partnership interest and a 50% limited partnership interest in Hewlett Associates. Respondent Edward Kalikow owns a 1% general partnership interest and a 24% limited partnership interest. Respondent Laurie Platt owns a 24% limited partnership interest.
The purported will provides in part:
NINTH: If at the time of my death I own either a general partnership
interest in Hewlett Associates or stock of Kalikow Management Inc.,
I give said interest and/or stock to THE SUNSHINE FOUNDATION.
TENTH: If at the time of my death I own a limited partnership interest
in Hewlett Associates, I direct that as soon as after my death as may be
practicable, my Executors (subject to the terms and conditions of the
Partnership Agreement of Hewlett Associates) shall offer in writing
(the "Offer") to each of my children, EDWARD KALIKOW and
LAURIE KALIKOW, the option to purchase for cash up to one-half
(½) of said limited partnership interest that I may own at my death,
at its value as finally fixed and determined for federal estate tax purposes
after independent appraisal. . .)
Respondents Edward Kalikow and Laurie Platt allege in their answer that the bequest to Sunshine Foundation in the purported will violates the terms of the partnership agreement dated [*2]July 3, 1980. The agreement provides in part:
11. (a) Except as otherwise expressly purported herein, each Partner covenants
and agrees that he will not, without the prior written consent of all other Partners,
pledge, encumber, sell, mortgage, hypothecate or assign the whole or any part of
his interest in the Partnership, including, without limitation, his interest in any
distributions to be made by the Partnership. Any pledge, encumbrance,
mortgage or hypothecation or assignment in contravention of this provision
shall be of no effect and shall not bind the Partnership.
21. Any controversy or claim arising out of or relating to this Agreement or to
the interpretation, breach or enforcement thereof shall be submitted to
DENNIS A. KONNER, ESQ., or if he shall be unwilling or unable to serve,
then to three (3) arbitrators and settled by arbitration in the City of New York
in accordance with the rules, then obtaining, of the American Arbitration
Association provided, however, and notwithstanding any other provision
of such rules, if the matter submitted to arbitration shall involve a dispute as
to the fair market value of the interest of any Partner herein and if DENNIS A.
KONNER, ESQ., shall be unwilling or unable to decide such dispute, then
such arbitration shall be held before three (3) arbitrators...
On June 8, 2006, respondents served upon the preliminary executors a demand for arbitration and notice of intention to arbitrate. This proceeding was commenced by the preliminary executor by petition and order to show cause why an order should not be issued staying the arbitration. Presently, there is a temporary restraining order in effect.
The preliminary executor contends that a dispute concerning the distribution of a decedent's estate cannot be subject to arbitration. In addition, the preliminary executor alleges that (1) the partnership agreement does not prohibit transfer by a testamentary instrument and that (2) the partnership terminated upon the death of Pearl Kalikow.
When faced with a broad arbitration clause a court merely determines whether there is a reasonable relationship between the subject matter of the dispute and the general subject matter of the underlying contract. (Matter of Board of Educ. Of Watertown City School Dist. [[Watertown Edu. Ass'n]] 93 NY2d 132 [1999]). Here, the dispute concerns the construction and enforcement of the partnership agreement (see Rappaport v 55 Perry Co., 50 AD2d 54 [1975]) and therefore meets this test.
The preliminary executor contends that this dispute concerns the distribution of an estate and arbitration is therefore barred by the New York State Constitution, public policy and the Surrogate's Court Procedure Act, (citing Matter of Berger, 81 AD2d 584 [1981]; Swislocki v Spievak, 273 App Div 768 [1941]).
Historically, public policy precluded the arbitration of a dispute concerning the probate or construction of a will but this prohibition does not extend to all disputes which impact upon the distribution of a decedent's estate (Matter of Spanos, NYLJ, Sept. 23, 1992, at p. 27 at col. 1).
Where the decedent is a party to an agreement, issues concerning termination of the [*3]agreement (Matter of Cassone, 63 NY2d 756 [1984]) or its enforcement (Matter of Salaway, NYLJ, April 12, 2004, at p. 31 col. 1) are subject to arbitration.
Accordingly, the court finds that the dispute between the parties is subject to arbitration, pursuant to the terms of the agreement.
The temporary restraining order is vacated.
Settle decree.
Dated: October 13, 2006
JOHN B. RIORDAN
Judge of the
Surrogate's Court
[*4]
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