Matter of Mantineo

[*1] Matter of Mantineo 2007 NY Slip Op 51399(U) [16 Misc 3d 1112(A)] Decided on July 19, 2007 Sur Ct, Nassau County Riordan, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. As corrected in part through August 1, 2007; it will not be published in the printed Official Reports.

Decided on July 19, 2007
Sur Ct, Nassau County

In the Matter of the Accounting by Pauline Mantineo, as Executor of the Estate of John Mantineo, Deceased.



316274

The appearance of counsel is as follows:

Ragano & Ragano, Esqs.

110-15 Liberty Avenue

Richmond Hill, NY 11419

(Attorneys for Petitioner)

Harrison & Rothbard, P.C.

105-15 Metropolitan Avenue

Forest Hills, NY 11375

(Attorneys for Remaindermen)

John B. Riordan, J.

This is a motion by Pauline Mantineo, the wife of the decedent, John Mantineo, and the executor of his estate, to sell a cooperative apartment in which the decedent bequeathed to her a life estate. The motion is opposed by Barbara Ismail, the daughter of the decedent, who has cross-moved pursuant to SCPA 2102 for an order directing Pauline to deliver the stock certificate and lease to the cooperative apartment and to fulfill her executorial duty to effectuate the transfer of the ownership from the decedent's name to Barbara's name, pursuant to the terms of the decedent's will.

There is a letter in the court's file dated November 2, 2006 from Barbara's attorney, which is countersigned by Pauline's attorney. It confirms, among other things, that Pauline has transferred the stock certificate and lease for the apartment to Barbara's name and that the originals of those documents were being delivered to Barbara's attorney. In the letter, the court is advised that the only outstanding issue is whether the cooperative apartment "should be sold and, if so, how the proceeds should be divided." Thus, Barbara's cross-motion is moot.

The decedent, John Mantineo, died on September 17, 2000. He was survived by his wife, Pauline, and his daughter, Barbara. Pauline is not Barbara's mother.

The decedent's will, dated April 5, 2000, provides in Article Second, the following:

I bequeath my apartment at 750 Lake Shore Road,

Apt. 5E, Long Beach, New York to my daughter

Barbara Ismail. However, my wife Pauline

Mantineo, may reside at 750 Shore Road, Long

Beach, New York for her lifetime or may rent it

in her absolute discretion during which time she shall

receive the rents and shall pay the expenses in connection

with same.

Pauline does not reside in apartment 5E. Instead, she rents it to a tenant for $1,100 per month. In the will, the decedent bequeathed to Pauline another of his cooperative apartments located at 750 Lake Shore Road (apartment 5G), where she resides, as well as a cooperative apartment in West Palm Beach, Florida.

In April 2003, Pauline commenced an accounting proceeding. Barbara filed objections to the account Pauline rendered. The matter was settled by stipulation dated May 2, 2005. The [*2]stipulation was signed by Pauline and Barbara and their respective attorneys. Pursuant to the terms of the stipulation, Pauline was to deliver the shares and lease to apartment 5E. The stipulation further provides that any lease agreement regarding apartment 5E was to provide that Pauline possessed a life estate only and that the term of the lease and the right of the tenant to occupy the apartment would terminate immediately upon Pauline's death.

Pauline seeks an order authorizing her to sell apartment 5E and, upon completion of the sale, to distribute the net proceeds to herself and Barbara in accordance with the computation by the Commissioner of Insurance. Pauline's reasons for wanting to sell apartment 5E are: (1) since she owns two other cooperative apartments, she has no need to reside in the apartment; (2) approximately one-half of the rental income is consumed by the monthly maintenance charge, and the net income is further diminished by income tax; (3) it is in her economic interest to sell now rather than risk a downturn in the market; (4) she no longer wishes to interact with Barbara with respect to the apartment because Barbara has caused the estate to incur unnecessary delay and expense; and (5) the language Barbara wanted added to future leases will deter prospective tenants. Pauline asserts that the sale of the apartment and division of the net proceeds is advantageous to Barbara because Barbara will receive her share of the proceeds now in what Pauline describes as the "current strong market."

Barbara strongly opposes the relief requested by Pauline. Barbara states that she has no interest in receiving a portion of the proceeds of sale of the apartment now. She contends that, if the apartment is sold now and the proceeds of sale are divided between her and Pauline, Pauline will receive the "lion's share." Barbara relies on the language of the will in asserting that the decedent's testamentary intent was to have Barbara own the stock in apartment 5E. She states that this is borne out by the decedent having bequeathed ownership in the other two cooperative apartments to Pauline, while giving Pauline only a life estate in apartment 5E, with the remainder to Barbara. Barbara also disputes Pauline's accusations. Instead, she asserts that Pauline had no problem with the lease language in the stipulation when she signed it and is using that argument only to justify her request to sell the apartment now. Barbara also asserts that, while Pauline greatly benefitted financially by the terms of the decedent's will, Barbara's benefit will come at the termination of Pauline's life estate when Barbara will realize the value of the stock in the apartment.

Although cooperative apartments are considered personal property and not real property, (State Tax Comm. v Shor, 43 NY2d 151, 154 [1977]; Matter of Pollack, 18 AD3d 555, 557 [2d Dept 2005]), "it is possible to devise a life estate in a cooperative apartment" (Matter of Pollack, 18 AD3d 555, 557 [2d Dept 2005] [citations omitted]; see Matter of Nowak, NYLJ, June 17, 2002, at 21, col 6 [Sur Ct, New York County] [Preminger]). The parties do not dispute that Pauline has a life estate in apartment 5E. The issue before the court is whether Pauline may force a sale of the cooperative apartment over Barbara's objection.

Pursuant to SCPA 103 [39], Pauline has standing to commence the proceeding since a life tenant is an interested person (see Matter of Bolton, 79 Misc 2d 895, 898 [Sur Ct, Tompkins County 1974] [discussing a life tenant in real property]). Historically, case law regarding the sale of life estates has been in the context of real property, governed by Article 19 of the SCPA, and the court will be guided accordingly in determining the instant motion.

Under SCPA 1918, where a party to a proceeding commenced under Article 19 of the [*3]SCPA has a life estate, the "court must determine whether the interests of all the parties will be better protected or a more advantageous disposition can be made of the real property by including the disposition of such right or interest . . ." (SCPA 1918 [1]). The court will exercise its discretion under SCPA 1902 (7) if an estate purpose is served by the sale (Matter of Bolton, 79 Misc 2d 895, 897 [Sur Ct, Tompkins County1974]; Matter of Perkins, 55 Misc 2d 834, 836-837 [Sur Ct, Albany County 1967]). The action must serve to carry out the provisions of the will or be of benefit to those interested in the estate (Matter of Bolton, 79 Misc 2d 895, 901 [Sur Ct, Tompkins County 1974]; Matter of Perkins, 55 Misc 2d 834, 837 [Sur Ct, Albany County 1967]). In Matter of Bolton (79 Misc 2d 895 [Sur Ct, Tompkins County 1974] ), the court construed the decedent's will to give the executors the power to sell the property to the life tenant (id. at 901). The court determined that a proposed sale of the property to the life tenant would serve a proper estate purpose of allocating the proceeds of sale between the life tenant and approximately twenty-five remaindermen (id.). The court reasoned that "[t]he remainder interest . . . is marked for distribution . . ., which would contemplate and require a liquidation by sale and distribution of the remainder at the termination of the life estate . . . . [T]he interest of the . . . remaindermen[ ] is financial only and their possession, title or occupancy . . . would not have been contemplated. . . by the testatrix" (id. at 898).

Pauline, as the life tenant, has the burden of showing that the proposed sale is expedient (RPAPL 1602; Matter of Gaffers, 254 AD2d 448, 450 [3d Dept 1938] ). Expediency is defined as "characterized by suitability, practicality and efficiency in achieving a particular end which is proper or advantageous under the circumstances" (Matter of Sauer, 194 Misc 2d 634, 638 [Sur Ct, Nassau County 2002], quoting Webster's Third New International Dictionary [1966]). In Matter of Gaffers (254 App Div 448 [3d Dept 1938] ), the petition was granted as expedient because (1) the purchase price was in excess of the appraised value, (2) the rent was insufficient to pay taxes, (3) the house was unoccupied, and (4) the life tenant would have to expend a considerable sum of money for taxes, insurance and maintenance.

This court, in Matter of Sauer (194 Misc 2d 634 [Sur Ct, Nassau County 2002]), addressed the question of whether a life tenant could sell a residence over the objection of the remaindermen. The court concluded that the life tenant could do so, based upon a finding that the application was both expedient and would carry out the provisions of the will, which gave the life tenant the right to sell the real property (id. at 638). In 2004, this court again faced the issue in Matter of Strohe (5 Misc 3d 1038[A] [Sur Ct, Nassau County 2004]). The life tenant, an eighty-three-year-old man who had been the decedent's companion for thirty years, asserted that he wished to sell the property because the market was strong, the upkeep of the property was burdensome to him, he was residing in an assisted-living facility where he wished to remain, and that his portion of the proceeds of sale could be used toward the cost of the assisted-living facility (id. at 6). The court granted the petition based upon a finding that the proposed sale was "expedient, as well as suitable, practical and efficient" in carrying out the decedent's purpose in providing for petitioner (id.)

In this case, however, the court finds that Pauline has failed to meet her burden of proving that the proposed sale is expedient. The decedent's testamentary intent to provide for Pauline has been effectuated; she received two cooperative apartments, a life estate in apartment 5E, and the residuary of the decedent's estate. The decedent did not grant to Pauline the right to sell [*4]apartment 5E. Rather, the decedent gave Barbara the remainder interest in apartment 5E as the principal benefit under his will. Pauline lives in another apartment on the same floor of the same the same building as apartment 5E. Thus, the burden to her of being an absentee landlord is minimal. Pauline collects rent from renting the apartment in excess of the expenses she incurs; she bears no economic burden. Pauline has not presented the court with any evidence that the market is strong now for the apartment, nor any indication of the appraised value of the apartment. Pauline's argument that there may be a downturn in the market is irrelevant to Pauline's position; it is Barbara, as the remainderperson, who bears that risk, and she has asserted that she is willing to do so. Finally, Pauline's argument that she no longer wishes to interact with Barbara with respect to the apartment is unavailing, especially in light of the stipulation Pauline signed more than two years ago wherein she agreed to deliver the "original stock certificate and lease" to apartment 5E to Barbara's attorney.

Accordingly, Pauline's motion is denied, and Barbara's cross-motion is denied as moot.

This constitutes the decision of the court.

Settle decree on notice.

Dated: July 19, 2007John B. Riordan

Judge of the

Surrogate's Court