Matter of Dudley
Annotate this CaseDecided on June 1, 2007
Sur Ct, Chautauqua County
In the Matter of Proceeding by James A. Sommer, Executor of the Estate of Carol G. Dudley, Deceased, For Court Direction and Other Relief Eugene Brushaber, Judy Brushaber, James Oakes, Jr., and Judith Oakes, Petitioners To Compel Delivery and Specific Property from Fiduciary, James A. Sommer, Executor of the Estate of Carol G. Dudley, Respondent
96-0186
ALAN BOZER, ESQ.
3400 HSBC Center
Buffalo, New York 14203
For the Estate
CHARLES EDWARD FAGAN, ESQ.
P. O. Box 1382
Jamestown, New York 14702
For the Claimants
WILLIAM MALDOVAN, ESQ.
Attorney General's Office
107 Delaware Avenue, 4th Floor
Buffalo, New York 14201
Larry M. Himelein, J.
Previously, the estate brought a proceeding against Eugene Brushaber to recover money that he claim belonged to him after being in a joint account with decedent Carol Dudley. Because the estate demonstrated that there was no question of fact to be resolved at a hearing, the court found the account at issue to be a convenience account and ordered Brushaber to return the money (see In re Dudley, 13 Misc 3d 1228 [A], 2006 WL 3026685).
The court next turned to the claim of Eugene and Judy Brushaber and James and Judith Oakes. They had alleged that James Sommer, the attorney who drew Mrs. Dudley's will, had used his power of attorney to wrongfully terminate "in trust for" (ITF) accounts of which the claimants were beneficiaries. The estate submitted several uncontradicted affidavits that demonstrated that this claim was false and that Mr. Sommer had nothing to do with transferring the interest bearing accounts into investment accounts (see In re Proceeding by Sommer, 15 Misc 3d 1108 [A], 2007 WL 865902).
Because the court believed the allegations against Mr. Sommer were clearly false and the
court could see no legitimate basis for making those claims, the court indicated it was
considering sanctions under the Rules of the Chief Administrator (see 22 NYCRR §
130-1.1 [d]). The court provided claimants and their attorneys the opportunity to be heard and a
hearing was held on April 24, 2007. At the hearing, Charles E. Fagan, attorney for the claimants,
was the only witness and gave extensive testimony.
Under the rules, sanctions may be imposed for frivolous conduct (see
22 NYCRR 130-1.1 [a]). Conduct is frivolous if it is "completely without merit in law or
fact," "is undertaken ... to harass or maliciously injure another," or "asserts factual statements that
are false" (22 NYCRR 130-1.1 [c] [1-3]). The reiterates again that the claim that Mr. Sommer
used his power of attorney to terminate the ITF accounts was completely without factual merit
(see 22 NYCRR 130-1.1 [c] [1]). The evidence was clear that Mr. Sommer had nothing
to do with the termination of those accounts and he was not even aware that they had been
terminated until Mrs. Dudley came to him to draw another will (which added bequests to
claimants to replace the ITF accounts). Mr. Fagan did not satisfactorily explain to this court the
basis for making that claim against Mr. Sommer. Further, the claim was so meritless that this
court cannot conceive how it could have been made in the first place.
The court also finds that the allegations against Mr. Sommer were made maliciously in the hope that the estate would settle the case by giving Mr. Fagan's clients more than they were entitled to under the will (see 22 NYCRR 130-1.1 [c] [2]). Claimants did not attack the will because Mrs. Dudley's previous will had also left them out of the residuary clause and the new bequests had not yet been added. Thus, the effort was made to "double dip" by claiming the ITF amounts and the will bequests that were added after the ITF accounts were liquidated. As the court noted in a previous decision, Mrs. Dudley made a conscious choice to liquidate the ITF funds (with their limited return) and put the funds into investment accounts, a choice most financial planners would recommend. She then added bequests to her will in amounts approximately equal to the amounts in the ITF accounts. Claimants simply sought to obtain more than they were entitled to. [*2]
Finally, the claims against Mr. Sommer were demonstrably false (see 22 NYCRR 130-1.1 [c [3]). Mr. Fagan had ample opportunity to investigate these allegations before making them and could easily have ascertained that they were simply not true. When told of their falsity by the estate's attorney, he made no attempt to further investigate. Even after the falsity of the allegations was demonstrated, Mr. Fagan made no attempt to retract them.
This court has long respected Mr. Fagan's abilities as a trial lawyer. However, his hearsay testimony of what he was told by Mrs. Dudley's "financial advisor" stands in stark contrast to the affidavits from the people who actually handled Mrs. Dudley's financial affairs. Further, Mr. Fagan could not (to this court's satisfaction) explain away his claim that Mrs. Dudley was not competent in 2002 when she transferred the ITF accounts yet was fully competent two years later when she gifted his clients certain real property. Most importantly, however, Mr. Fagan was unable to justify his false claims against Mr. Sommer and deliberately obfuscated that fact by saying things like "it appeared, from my other investigation, that Mr. Sommer was directly involved in, and perhaps inappropriately so, the financial affairs of Carol Dudley" without ever providing specifics. That conduct, slandering another attorney, in order to force the estate to give his clients more than they were entitled to, is sanctionable. Further, the conduct was unnecessary; however weak the argument, Mr. Fagan could simply have alleged that Mrs. Dudley was incompetent when she switched the ITF accounts to investment accounts without making the false claims against Mr. Sommer.
In assessing a sanction, the court is mindful that it must address the reasons for assessing a particular amount (see Dwaileebe v Six Flags Darien Lake, 21 AD3d 1282, 801 NYS2d 172 [4th Dept 2005]; Tropeano v. Tropeano, 35 AD3d 444, 827 NYS2d 161 [2d Dept 2006]; Drummond v. Drummond, 291 AD2d 368, 737 NYS2d 628 [2d Dept 2002]). The court has no desire to unduly burden Mr. Fagan. However, a sanction must be sufficient to discourage the conduct at issue. Mr. Sommer, whom this court does not know, is elderly and apparently now retired and did not deserve to be slandered by Mr. Fagan; all Mr. Sommer did was draw Mrs. Dudley's will, one of many he drew for her. To attempt to discourage Mr. Fagan from similar conduct in the future and to punish him for the unnecessary conduct at issue here, the court believes a sanction of $1,000 should be imposed, payable to the Lawyer's Fund for Client Protection.
Counsel for the estate should prepare the appropriate order.
Dated: Little Valley, New York
June 1, 2007
_________________________
HON. LARRY M. HIMELEIN
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