Matter of Efros

[*1] Matter of Efros 2008 NY Slip Op 50678(U) [19 Misc 3d 1113(A)] Decided on March 18, 2008 Sur Ct, New York County Glen, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on March 18, 2008
Sur Ct, New York County

In the Matter of the Application to Vacate the Decree Admitting to Probate the Last Will and Testament, of Romaine Efros, Deceased.



4036-2005

Kristin Booth Glen, J.

JPMorgan Chase Bank, N.A.(JPMorgan), co-executor, has moved pursuant to CPLR §5015(a)(2) to vacate the decree admitting to probate decedent's will dated June 24, 2005 (2005 Will) due to newly discovered evidence. The United Jewish Appeal - Federation of Jewish Philanthropies of New York, Inc., American Society for Yad Vashem, Congregation Shearith Israel, and American Friends of Magen David Adom (Charities), residuary legatees under a prior instrument that are adversely affected by the 2005 Will, join in the application. Movants also seek removal of JPMorgan's co-executors and appointment of JPMorgan as sole preliminary executor.

Decedent died on September 12, 2005 at the age of 93, survived by two nephews, Martin Feldman (Martin) and Stephen Feldman (Stephen), and the issue of a predeceased nephew. The 2005 Will was admitted to probate by decree dated February 21, 2006, and letters testamentary thereupon issued to JPMorgan, Martin and Magdalena Efros (Magdalena).[FN1]

In August 2006, Alan Lotito (Lotito), a legatee of a small bequest, discovered that decedent's testamentary plan had been revised significantly from her penultimate will [FN2] and, [*2]further, that decedent's long-time attorney, Lee A. Snow (Snow), had not supervised the 2005 Will's execution. As decedent's friend and investment advisor, Lotito had almost daily conversations with decedent and her home attendants in the months preceding execution of the 2005 Will. As he worked on an active trading floor, these telephone calls were recorded. Lotito recalled having had several conversations between March 2005 and May 2005, in the months after decedent had suffered a stroke and preceding execution of the 2005 Will, in which it seemed Martin and Stephen were assuming increased control over decedent's finances and were pressuring decedent to change her will. Lotito requisitioned the tapes of those calls and brought the transcripts to the attention of JPMorgan. The transcripts, including conversations directly with decedent, depict behavior by Martin and Stephen that supports an allegation of undue influence.[FN3] [*3]

Upon reviewing the transcripts, in November, 2006, JPMorgan interviewed Snow, who revealed that he too had concerns about family members' undue influence; in fact, Snow revealed, he had consulted outside counsel after meetings with Martin and Stephen led him to believe that they were unduly pressuring decedent to change her 2001 Will, which Snow had drafted and which decedent had executed under his supervision. Snow's files, thereafter produced, provide some of the strongest evidence of undue influence and corroborate the transcripts provided by Lotito.[FN4]

In January 2005, decedent suffered a stroke that affected her physical, but allegedly not her mental, faculties. Around this time, according to Snow, he began to receive repeated calls from Martin and Stephen, who suggested that decedent wanted to modify her will to increase dispositions to them and to Magdalena. Snow made four separate visits to decedent to discuss potential changes, but each time she stated unequivocally that she had no intention of changing her will.[FN5] It was during this time that Snow, concerned that decedent's nephews had been [*4]"browbeating" her to make changes she did not desire, cautioned Martin and Stephen that their actions might constitute undue influence. Indeed, in a letter to Martin dated March 17, 2005, Snow wrote:

"Your aunt quite clearly indicated to me when we were alone and when you were present in the room that she did not wish to revise her Will. This is despite your urging that she do so. In my opinion, your aunt was quite lucid this week. However, I believe, and I told you explicitly, that your pressing her to revise her Will when she indicates that she does not want to do so could be viewed as undue influence and I cautioned you strongly in this regard."

On May 23, 2005, Snow again visited decedent. On this, Snow's fifth visit to decedent to discuss the subject, decedent indicated that she now wanted to change her will. Despite his grave concern about the issue of undue influence, Snow drafted a new will and mailed a copy to decedent. However, when Snow visited decedent on three subsequent occasions between May 23, 2005 and June 24, 2005, he determined that decedent was not able to freely execute the will. In a letter to Martin and Stephen on June 6, 2005, Snow wrote:

"After having met with and spoken to your aunt, I felt that I could not in good conscience act as a witness to your aunt's signing the new Will I had prepared for her because I did not believe that she was at that time able to freely make a Will."

Apparently anxious to have the new will executed, Martin and Stephen contacted a new attorney, Jill Kupferberg (Kupferberg), and arranged to have her preside over execution of the will drafted by Snow. Kupferberg supervised the will execution on June 24, 2005; decedent died, less than three months later, September 12, 2005.

Based on the evidence provided in the taped phone conversations and the statements by Snow, JPMorgan filed the instant application seeking to vacate the probate decree. As stated above, the Charities have joined in this application. Martin, Stephen and Magdalena have filed papers in opposition. Included in the responsive papers are Snow's files and an affidavit dated August 16, 2007, filed by Martin, in which he acknowledges his attempts to influence decedent's testamentary plan. Stating that he felt "insulted" by the bequest to him under the 2001 Will, [*5]Martin concedes his repeated entreaties that decedent increase his share.

STANDING

Respondents argue that JPMorgan does not have standing to seek vacatur as it would not be entitled to file objections to probate under SCPA 1410. JPMorgan asserts that as fiduciary, it has the obligation to ensure that only valid wills are offered for probate.

The Charities, as residuary beneficiaries of the 2001 Will adversely affected (SCPA 1410) by the probate of the 2005 Will, have subsequently joined in as co-movants in this proceeding;[FN6] thus, the issue of standing is moot.

APPLICATION TO VACATE PROBATE DECREE

An application to vacate a probate decree must present a satisfactory showing of a substantial basis for contesting the will and a reasonable probability of success (Matter of American Committee for the Weizmann Institute of Science v. Weingarten, ___NE2d___, 2008 NY Slip Op 01257 [Feb. 14, 2008]).

SUBSTANTIAL BASIS FOR CONTESTING WILL

Movants contend that the basis for contesting the will is the discovery of new evidence, pursuant to CPLR 5015(a)(2), which suggests a strong probability that the respondents exerted undue influence on decedent, causing her to change her will. Movants further assert that such evidence could not have been found with due diligence prior to the will being admitted to probate (Matter of Andrasko, 13 Misc 3d 1245(A)[Sur Ct, Rockland County 2006, Berliner, S.]).

Respondents argue as a threshold matter that the recorded phone conversations with Lotito do not constitute newly discovered evidence because Lotito's knowledge of the recorded telephone conversations suggesting undue influence should be imputed to JPMorgan. Second, they contend both JPMorgan and Lotito failed to act in a timely manner in seeking vacatur. Finally, respondents argue that inasmuch as the Charities possessed information alleging a pattern of misbehavior, as described in their supporting affidavits, and failed to file timely objections to probate, they are precluded from challenging the probate decree at this late date.

Knowledge acquired by an agent acting within the scope of his agency is imputed to his principal, and the latter is bound thereby, even though the information is never actually communicated to it (Seward Park Housing Corp v Cohen, 287 AD2d 157 [1st Dept 2001]). Applying this standard, JPMorgan is not charged with knowledge of the nephews' alleged undue influence for two reasons. First, J.P. Morgan Securities, Inc. and JPMorgan are separate corporate entities; no evidence has been presented to suggest that an agency relationship exists between Lotito, an investment advisor for J.P. Morgan Securities, Inc. and JPMorgan. Second, even were Lotito an agent of JPMorgan, the relevant conversations between Lotito and decedent [*6]and her health care providers were clearly personal in nature and did not relate in any way to the investment services offered by the securities arm of the bank. At the time the 2005 Will was offered for probate, there was nothing to suggest that JPMorgan, as nominated executor, knew or should have known about the special relationship that had developed over time between decedent and her broker, or the existence of the recorded conversations that catalog the deeply personal concerns of decedent and her attendants about the pressure being brought to bear on decedent by her nephews. In short, the knowledge gained by Lotito falls outside the scope of his agency as an investment advisor for J.P. Morgan Securities, Inc. (See Credit Alliance Corp v Sheridan Theatre Co, 241 NY 216 [1925]).

Moreover, JPMorgan was not dilatory in bringing the new evidence to the Court's attention. It was only after the transcripts of the phone conversations came to light that JPMorgan had reason to question the attorney-draftsman, Snow, who confirmed his suspicions of undue influence. Within days after Snow filed the 2001 Will, when JPMorgan verified the dramatic changes in decedent's testamentary dispositions, it sought the drastic remedy of vacating the probate decree.[FN7]

Nor were the Charities dilatory in failing to file objections when the 2005 Will was offered for probate. At that time, the 2001 Will, under which they received significantly larger bequests, had not been filed with the Court. Only after Snow filed the 2001 Will on June 1, 2007, a year after letters testamentary were issued, were the Charities aware of the extent to which their bequests had been reduced by the 2005 Will. See Matter of Musso, 227 AD2d 404 [2d Dept 1996]. In Musso, several charities had been notified only days before a will was admitted to probate that a penultimate will provided them substantially larger bequests. Eight months later, they moved to vacate the probate decree, alleging undue influence and lack of testamentary capacity. In granting the motion, the court observed that "while vacatur disrupts the orderly process of administration and creates... uncertainty and nonfinality... the Court should also be slow to say that an injustice may not be corrected" (id. at 405; internal citations omitted).

PROBABILITY OF SUCCESS

JPMorgan and the Charities bear the burden of proving a probability that undue influence can be established by a preponderance of the evidence (see PJI2d 7:55 [2006]). Proof of undue influence requires (1) motive, (2) opportunity and (3) actual undue influence (Estate of Bacon, 169 Misc 2d 858 [Sur Ct, Westchester County 1996, Emanuelli, S.]) such that the testator acts contrary to her wishes because she cannot refuse or is too weak to resist (Matter of Fellows, 16 AD3d 995 [3d Dept 2005], quoting Children's Aid Soc'y of City of NY v Loveridge, 70 NY 387 [1877]). The mere fact that a new will alters the testamentary scheme contained in a prior will does not by itself raise a presumption of invalidity (Matter of Herzenberg, NYLJ, Aug. 1, 1994, [*7]at 34, col 5 [Sur Ct, Nassau County, Radigan, S.]); however, a departure from a previously expressed intention along with other suspicious facts may raise an inference of moral coercion that amounts to undue influence (Estate of Weingarten, NYLJ, Dec. 23, 2005, at 28, col 2 [Sur Ct, New York County, Preminger, S.]); Matter of Anna, 248 NY 421 [1928]).

The taped conversations, along with the corroborating notes by Snow, provide sufficient evidence of motive, opportunity and actual undue influence to suggest a probability of success.[FN8] Sadly, the facts presented here paint a picture of a 93 year old woman who believed she "had no choice"[FN9] but to change her will to accord with the unremitting demands of her closest family members.

Despite respondents' claims to the contrary, the fact that the will was executed under the supervision of an attorney who affirmed the decedent's capacity does not overcome the evidence [*8]presented of undue influence. See Matter of Kaufmann, 20 AD2d 464, 485 [1st Dept 1964] (fact that instrument was prepared and the execution supervised by reputable attorneys, although relevant, does not preclude finding of undue influence).

While Kupferberg, the presiding attorney, memorialized her June 24, 2005 meeting with decedent in a memorandum concluding that decedent possessed the requisite testamentary competency, Kupferberg possessed few facts that would have caused her to question whether decedent was making a new will of her own volition. Indeed, she may not have known of the nature and extent of changes to the 2001 Will, including the significant reduction of bequests made to the Charities. Nor could she have known of the multiple visits by Snow in which decedent declined to make further changes to her 2001 Will, or of Snow's conclusion that decedent's nephews had sought to unduly pressure decedent to do so. Ms. Kupferberg may have been confident as to decedent's testamentary capacity, but the inquiry does not end there (In re Whitmarsh's Estate, 133 Misc 858 [Sur Ct, Albany County 1929, Schenck, S.]). A determination of testamentary capacity should not preclude an independent determination that a testator succumbed to undue influence (Estate of Donovan, 47 AD2d 923 [2d Dept 1975]). In sum, there is a reasonable probability that had the evidence now before this Court been produced in the form of objections to the probate of the 2005 Will, it would have resulted in a finding of undue influence.

COURT'S INHERENT ABILITY TO VACATE ITS OWN DECREE

Even were the parties unable to show compliance with CPLR 5105(a)(2), a determination to grant a motion to vacate a probate decree rests in the sound discretion of the court. "It is well established that, independent of statutory provisions, the court rendering a judgment, in its inherent power and control over its own proceedings, may vacate that judgment where it appears that substantial justice will be served and injustice prevented thereby" (F & C General Contractors Corp v Atlantic Mutual Mortgage Corp, 202 AD2d 629 [2d Dept 1994]).

Accordingly, under both the Weingarten [FN10]standard and the court's inherent power, the decree dated February 21, 2006 admitting the will of Romaine Efros to probate is vacated. Objections to probate of the 2005 instrument, if any, shall be filed within thirty days of notice of entry of this order.

REVOCATION OF LETTERS TESTAMENTARY

Upon vacatur of the probate decree, letters testamentary issued to JPMorgan, Martin and Magdalena are ipso facto revoked (SCPA 703). As the probate proceeding is to be reopened, the question arises as to which parties might be eligible for preliminary letters testamentary.

Based upon a bona fide allegation of undue influence or other wrongdoing, the court may deny the issuance of preliminary letters pursuant to SCPA 707 (Matter of Jurzykowski, 36 AD2d [*9]488 [1st Dept 1971]; Matter of Pullman, 89 AD2d 608 [2d Dept 1982]). The allegations against Martin are sufficient to deny him preliminary letters testamentary. There is, however, little evidence to support an allegation of undue influence by Magdalena. Although Magdalena may very well have acted to thwart efforts of co-executor JPMorgan by refusing to consent to the release of Snow's files, this does not in and of itself meet the standard required to deny preliminary letters. The courts should nullify a testator's choice of executor only upon a "clear showing of serious misconduct that endangers the safety of the estate" (Estate of Feelus, NYLJ, June 24, 1997, at 28, col 4 [Sur Ct, Bronx County, Holzman, S.]; quoting Matter of Israel, 64 Misc 2d 1035 [Sur Ct, Nassau County 1970, Bennett, S.]; see also Matter of Farber, 98 AD2d 720 [2d Dept 1983]).

Accordingly, preliminary letters testamentary shall issue to JPMorgan Chase Bank, N.A. and Magdalena Efros upon duly qualifying.

This decision constitutes an order of the court.

______KBG_______________

S U R R O G A T E

Dated: March 18, 2008 Footnotes

Footnote 1: Magdalena Efros was the wife of a predeceased nephew of decedent.

Footnote 2:The 2005 Will significantly altered certain testamentary dispositions contained in a prior will dated July 18, 2001 (2001 Will), increasing the bequests to Martin, Stephen and Magdalena and substantially reducing the bequests to the Charities.

In the 2001 Will decedent made preresiduary bequests of approximately $350,000, $400,000 and $25,000, respectively, to Martin, Stephen and Magdalena, and the residue, valued at over $6 million, was to be divided among the Charities.

The 2005 Will modified various preresiduary bequests and the residue was to be divided 25% each to Martin, Stephen and Magdalena, with the Charities splitting the remaining 25%. Under this testamentary plan, Martin and Stephen would each net over $1.165 million, and Magdalena over $975,000. The Charities' bequests were reduced from approximately $1.6 million each to approximately $500,000 each.

Footnote 3:Excerpts from the tapes include several conversations with decedent's home attendant Angela Davis (Angela). On March 21, 2005 Angela described actions of decedent's family members as "it's cruelty, it's abuse" and asserted that Martin was trying to change decedent's will and gain access to her safe deposit box. She further contended that Martin was pressuring decedent to give him money. As stated by Angela: "She's getting confused, and they're working her hard everyday to sign, to sign, to sign, to sign."

In a conversation on March 22, 2005, decedent herself warned Lotito to watch Martin "very carefully, because he lies, he want[s] to take advantage of me." Decedent described her family members as a "bunch of crooks" and concluded with apparent resignation, "I don't know how to stop" the harassment.

On the same day, Angela relayed to Lotito that Martin brought roses for decedent because "when he wants her to sign something he always brings roses for her." According to Angela, when decedent refused to sign, Martin became very angry. During this same conversation, Angela reported that Martin had been searching decedent's apartment "like crazy" to locate a will.

In a May 2, 2005 conversation, home attendant Ludmilla Nikonchuk (Lucy) informed Lotito that Stephen had asked decedent to give him $3 million. Indicating that decedent did not wish to do so, Lucy reported, "Mrs. Efros don't want to change her last will." However, Lucy, apparently worried about Martin, noted, "Martin [has a] power of attorney. He pays me my salary." In an affidavit, Lucy later recanted her statements, stating that due to a language barrier, she did not know what she was saying.

Footnote 4: Snow initially refused to turn over his files. Expressing concern that they were privileged, he insisted that two of the three executors agree to disclosure, and neither Martin nor Magdalena would consent. The files were finally turned over after JPMorgan commenced this proceeding.

Footnote 5: Snow's files contain memoranda prepared after each visit. On March 8, 2005 he reported meeting with decedent and Martin. When Martin left the room, decedent stated she did not want to change the will. Again on April 29, 2005 Snow met with decedent. When Martin suggested to decedent during that meeting that she wanted to divide the residue among the Charities, himself, Steven and Magdalena, decedent did not respond. When Martin left the room, however, decedent reiterated that the amounts she was leaving Steven and Martin under the 2001 will were sufficient. On May 16, 2005, Snow met with decedent for a third time and asked her whether she wanted to make changes to the will. Once again, she declined.

Nevertheless, Snow came again the next day, May 17, 2005. His notes from that meeting are telling:

"Steven then repeated what he had said before, that...[decedent] had told him she wanted to leave 25% to himself, 25% to Martin, 25% to Magdalena and 25% to charity. He asked her to tell Mr. Snow that this was what she wanted. She did not respond and he said Aunt Romaine, you have to make a decision, do you want to make the change or not.' At this point, Romaine responded weakly, Make the change.' Steven then immediately turned to me and said, Did you hear that? She said make the change'.... I asked Steven to move aside and I told him that I thought he was browbeating his aunt and I did not view her repetition of his words as an indication of her wishes. At this point we returned to her bedside and Romaine said that she was tired and confused. I then said to Steven this is enough, she has said she is tired and confused and we should not pursue this. Steven did not seem happy with this and he again told Romaine that she had to make a decision, one way or the other.... I was very troubled by Steven's speaking to his aunt. I thought that he was pressuring her to make a change that, in my opinion, she did not want to make."

Decedent did consent to two minor changes to the will, a small bequest to Martin's son, Alan Feldman and a bequest to Lucy. These changes were effectuated through codicils prepared by Snow and executed by decedent.

Footnote 6: Each of the Charities has filed affidavits describing the close relationship decedent had with their respective organizations, her long history of support, visits between members and decedent in the months following her stroke and evidence of her declining health. The Charities expressed disbelief that after years of commitment decedent would suddenly change her testamentary provisions in the last few months of her life.

Footnote 7: The respondents argue that Lotito was also dilatory in bringing the evidence of undue influence to the attention of JPMorgan, pointing out that he received notice of probate and nonetheless waited six months before bringing the taped conversations to the attention of JPMorgan. Here, however, the timeliness argument against Lotito fails, as he is not the movant.

Footnote 8: Moreover, the Court notes that due to the existence of a confidential relationship between decedent and Martin, who acted as her attorney-in-fact under a power of attorney executed on or around May 13, 1994, the burden may ultimately shift to Martin to establish that, in fact, no undue influence was practiced here. As this court has previously explained:

"The combination of a confidential relationship plus evidence of its exploitation, such as: the legatee's assumption of an active role in obtaining execution of the will, testator's failure to obtain independent advice, testator's mental and emotional condition, and the magnitude of the bequest, permits an inference of undue influence, which obligates proponent to explain the bequest." (Matter of Katz, 15 Misc 3d 1104(A)[Sur Ct, New York County 2007, Glen, S.])

Absent such evidence, of course, the inference does not arise and the burden never shifts to the beneficiary (26A Carmody-Wait 2d, NY Prac §152:267 at 130). Although such evidence has not yet been fully developed, the record developed to date suggests the possibility that Martin may be called upon to overcome an inference of undue influence. Inasmuch as JPMorgan and the Charities have established a reasonable probability of success even without the benefit of such inference, the Court need not decide this burden of proof issue at the present time.

Footnote 9: In a memorandum dated June 6, 2005, Snow described his meeting with decedent, asking her whether she wanted to execute the new will. "During most of this conversation, Romaine's eyes remained closed. I then asked Romaine whether she wanted to sign the Will and she said to me I have no choice. I then said to her, what do you mean you have no choice and she replied I have no choice. I told her yes you do have a choice, you can choose to sign the Will or not sign the Will. She did not reply. We then sat quietly for a few more minutes."

Footnote 10: Matter of American Committee for the Weizmann Institute of Science v. Weingarten, supra.