Lopez v Fenn

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Lopez v Fenn 2011 NY Slip Op 33189(U) December 8, 2011 Sup Ct, NY County Docket Number: 603781/09 Judge: Eileen A. Rakower Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. SCANNEDON 1211312011 [* 1] SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PART PRESENT: K Justice INDEX NO. Index Number : 603781/2009 MOTION DATE LOPEZ, WILFRED0 MOTION SEQ. NO. vs. FENN, RICHARD A. SEQUENCE NUMBER : 004 II - $tiontonor SUMMARY JUDGMENT (No(s). 1, e IWd. )NO(~). K6 UI E 7 I CHECK ONE: . ..................................................................... 0 CASE DISPOSED NON-FINAL DISPOSITION GRANTED IN PART 0OTHER ...........................~OllON 0GRANTED a DENIED IS: 0SUBMIT ORDER 3. CHECK IF APPROPRIATE: ................................................ 0SEmLE ORDER 0DO NOT POST 0FIDUCIARY APPOINTMENT 0REFERENCE 2. CHECK AS APPROPRIATE: [* 2] SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW Y O N : PART 15 ------- ___- -------------------------------------~--------- ---X WILFRED0 LOPEZ, Index No. 60378 1/09 Plaintiff, DECISION and ORDER - against RICHARD A. FENN, J.P. MORGAN CHASE & CO., MERRILL LYNCH, PIERCE, FENNER & SMITH ,P? INC., and REDDEN S FUNERAL HOME, Mot. Seq. 004 d ? Defendants. 7: .; $ --------<t 3, $9 1 --,--------------------------~~---------- HON. EILEEN A. RAKOWER, J.S.C. kf, ,) - ./4 , ? 1 + + Plaintiff Wilfred0 Lopez ( Lopez ) claims to ktfksurviving domestic partner of the Reverend Charles E. Whipple ( Whipple ) fr0&$87 until Whipple s death on February 20, 2009. Lopez claims that the two cohz&tated with one another throughout their 22-year relationship. On February 20,2009, Whipple died at the age of 95 and left behind an estate worth over $10 million. Lopez alleges in his complaint that, since Lopez was of lesser means, Whipple sought to provide for Lopez in the event that Whipple predeceased him. For example, Lopez states that Whipple established bank accounts with Lopez in which the two were j oint tenants with rights of survivorship. Subsequent to the signing of the 2005 Will, Whipple executed a power of attorney to Defendant Richard Fenn ( Fenn ). The complaint states that Fenn became acquainted with Whipple approximately ten years earlier, and was aware of the domestic partnership between Lopez and Whipple. Lopez claims that Fenn resented Lopez, and consistently sought to denigrate, disparage and intimidate him. The complaint alleges that because Fenn felt that Lopez was not deserving of the benefits of Whipple s estate plan, Fenn took, and continues to take deliberate measures to harm Lopez s personal and economic interests. Lopez alleges that Fern acted to deprive Lopez of the benefit of a bank account 1 [* 3] maintained by Whipple at J.P. Morgan Chase in which Whipple a n i Lopez were joint tenants with a right of survivorship ( the Chase Account ). Lopez claims that, in February 2007, Fenn, through his authority under the power of attorney and/or confidential relationship with Whipple, withdrew $565,907.86, leaving Lopez with a balance of $3.48. Lopez maintains that Fenn transferred the funds to an account which was not in whole or part in Plaintiffs name. Lopez states that in June 2008, Fenn caused approximately $300,000 to be withdrawn from it from the Chase Account. Lopez s complaint alleged that Fenn took numerous other measures to thwart Whipple s intention of providing for Lopez upon his death. These included wrongfully withdrawing funds from a joint Merrill Lynch account with right of survivorship between Whipple and Lopez; falsely asserting the right to possess and determine the interment of Whipple s remains; wrongfully locking Lopez out of his home at 8 Perry Street in Manhattan on June 3,2009; wrongfully locking Lopez out of the Cherry Grove house; and seeking to have Whipple s remains interred in a Philadelphia crypt, contrary to Lopez s wishes. Lopez s complaint asserted a total of twenty causes of action. By order dated July 7,20 10,the court granted Fenn s motion to dismiss the complaint with respect to nineteen causes of action, but denied Fenn s motion to dismiss with respect the Chase Account (Lopez s fifth cause of action). Fenn now moves for summary judgment on Lopez s remaining cause of action. Fenn provides his own affidavit; an affidavit from Alexander N: Constantine, a Senior Financial Advisor at Chase; and a memorandum of law in support of his motion. Fenn refers the court to Chase Account (account number EBH-156368) records for the month of February 2007. These records indicate the account had a portfolio value of $566,013.02 in cash and cash equivalents. Fenn states that, on February 12, 2007, Whipple bought more than 566,000 shares, at $1.00 per share, of a Chase money market fund. This purchase is documented in the February 2007 records for the Chase Account. Fenn also provides the Chase Account records for the month of March 2007. These records indicate that the Chase Account had a total portfolio value of $563,914.68, which constituted $541,193.37 insecurities, and$22,721.31 incashand cash equivalents. Fenn states that [tlhe slight decrease in total portfolio value resulted from unrealized losses on the mutual funds purchased by Mr. Whipple. With respect to the allegation that Fenn wrongfully converted $300,000 from the Chase Account in June 2008, Fern states that $322,000 was transferred out of 2 [* 4] the Chase Account to anGther account, account no. EBH-147559, held at Chase by h4r. Whipple, individually (the Individual Account ). This is evidenced by Chase Account records and Individual Account records for the month of June 2008. Fenn states that all of the transactions at issue herein were made at the direction and authorization of Mr. Whipple. Moreover, he argues that he is entitled to judgment as a matter of law because (1) his actions were taken pursuant to a valid power of attorney ( POA ) to act on Whipple s behalf; and (2) because Fenn never exercised control over the subject funds. Lopez opposes the motion and cross-moves for summary judgment. Lopez submits his own affidavit; an attorney s affirmation; and a memorandum of law in support. In his affidavit, Lopez states that he and Whipple maintained joint checking accounts with rights of survivorship with Chase since 1990. For years prior to Whipple s passing, 2005-07, the balance at Chase in the joint account was approximately $550,000. Lopez states that neither he nor Whipple made any substantial withdrawals from these joint accounts, and that they drew on other accounts for their sustenance. He alleges that all of the withdrawals and transfers from the subject Chase Account were made solely and exclusively by Defendant Fenn, and were made against the will and wishes of ... Whipple through his abuse of the power of attorney that Whipple had given him. Lopez claims that, contrary to Fenn s assertions, the subject transfers and withdrawals were not made at Whipple s direction. In fact, Whipple repeatedly directed Fenn not to remove money from joint accounts of which [Lopez] was the beneficiary. Lopez argues that Fenn s motion must be denied, and Lopez s cross-motion granted, because the undisputed facts establish that Fern deprived Lopez of both his moiety interest and his survivorship interest in the Chase Account. Fenn submits a memorandum of law in hrther support of his motion for summary judgment and in opposition to Lopez s cross-motion. Chase also submits an affirmation in opposition to the cross-motion for summary judgment. The proponent of a motion for summary judgment must make a prima facie showing of entitlement to judgment as a matter of law. That party must produce sufficient evidence in admissible form to eliminate any material issue of fact from the case. Where the proponent makes such a showing, the burden shifts to the party 3 [* 5] opposing the motion to demonstrate by admissible evidence that a factual iszue remains requiring the trier of fact to determine the issue. The affirmation of counsel alone is not sufficient to satisfy this requirement. ( Zuckerman v. City of New York, 49 N.Y.2d 557 [ 19801). In addition, bald, conclusory allegations, even if believable, are not enough, (Ehrlich v. American Moninger Greenhouse Mfg. Corp., 26 N.Y.2d 255 [1970]). ( Edison Stone Corp. v. 42nd Street Development Corp.,145 A.D.2d 249,25 1-252 [ 1st Dept. 19891). Banking Law §675(a) provides that When a deposit of cash ... has been made ,.. with any banking organization ... in the name of such depositor ... and another person and in form to be paid or delivered to either, or the survivor of them, such deposit ... and any additions ... by either of such persons, after the making thereof, shall become the property o f such persons as joint tenants and the same, together with all additions and accruals thereon, shall be held for the exclusive use of the persons so named, and may be paid or delivered to either during the lifetime of both or to the survivor after the death of one of them.. ,. It is well settled that a joint tenant has the right to withdraw and use his or her onehalf interest, or moiety, in the account; however, [w]ithdrawal of more than that amount subjects the excess to suit for its recovery by the other joint ten& .... (Mullen v. Linnane, 218 A.D.2d 50, 55 [lst Dept. 19961). A conversion occurs when one intentionally and without authority, assumes or exercises control over personal property belonging to someone else, interfering with that person s right of possession (Dsmry v. Wind, 201 1 NY Slip Op 2535, * 1 [ 1st Dept. 20 113, quoting Colavito v. New York Organ Donor Network, Inc., 8 N.Y.3d 43,49-50 [2007]). Conversion causes of action have been unhesitatingly recognized in cases involving the unauthorized withdrawal of more than his share of the funds from a joint account by a cotenant (Puyne v. White, 10 1 A.D.2d 975,976 [3rd Dept. 19841). Here, the court finds that issues of fact preclude the awarding of summary judgment to either Lopez or Fenn. Even if Fenn s account of the facts is credited, and he acted pursuant to Whipple s direction, [a] party acting as an agent on behalf of 4 [* 6] a principal may not escape liability simply because the agent was acting at the time at the behest of the principal (N.Y. Jur. 2d Agency $3 5 1, citing Zampatori v. United ParceZService, 125 Misc.2d 405 [Sup. Ct., Monroe Co. 19841). It is undisputed that the Chase Account was a joint account between Whipple and Lopez to which the presumption of joint tenancy with rights of survivorship attached. Fenn does not dispute that the Chase Account was a joint account with right of survivorship, nor does the record contain any evidence, much less clear and convincing proof, rebutting the presumption (see Pinasco v. Ara, 2 19 AD2d 540[ 1st Dept. 19951). Lopez alleges in his affidavit that Fenn was the individual who withdrew the $322,000 from the subject Chase Account and placed it in Whipple s Individual Account. Moreover, records from the Individual Account document the transfer of the $322,000, and contain a handwritten note: Whipple individual 322,000 came from EBH - 156868 at the request of Fern However, there is no proof in the record in admissible form that demonstrates who authorized the transfer. Contrary to Lopez s allegations that Fenn withdrew $565,907.86 from the Chase Account in February 2007, the record reveals that no funds were withdrawn by Fenn at that time. Rather, the proceeds therein were used to purchase securities, which remained in the Chase Account: However, it is undisputed that in June 2008, a sum of $322,000 was transferred out of the Chase Account and placed into the Individual Account, out of Lopez s reach. The June 2008 statement for the subject Chase Account indicates a total portfolio of $245,487.66 after the transfer of $322,000. Without the transfer, the Chase Account would have had a total portfolio value of $567,487.66. Accordingly, Lopez s moiety (i-e,,one-half ofthe account) was $283,743.83. Accordingly, the withdrawal of the $322,000 and transferring of said amount into Whipple s Individual Account deprived Lopez of $38,256.17 of his moiety. In addition, an issue of fact remains as to whether Fern was authorized to make the disputed withdrawal from the Chase Account at all. Fern states in his affidavit that he acted at all times with the direction and authorization of Mr. Whipple, and pursuant to the Chase POA. Lopez, on the other hand, states in his affidavit that Whipple repeatedly directed Fenn not to remove money fromjoint accounts of which 5 [* 7] The] was the beneficiary. A power of attorney . . . is clearly given with the intent that the attorneyin-fact will utilize that power for the benefit of the principal .... Because the relationship of an attorney-in-fact to his principal is that of agent and principal . . . ,the attorney-in-fact must act in the utmost good faith and undivided loyalty toward the principal, and must act in accordance with the highest principles of morality, fidelity, loyalty and fair dealing (Matter o Ferrara, 2006 NY Slip Op 5 156, 8 [2006]) (citations and f internal quotes omitted). An attorney-in-fact thus has a duty to comply with all lawful instructions received from the principal ... concerning the agent s actions on behalf of the principal (Restatement, Agency 3d, §8.09(2)). Based upon the record before the court, a jury could find that Fern was specifically instructed not to transfer the $322,000 from the Chase Account to the Individual Account, and thus lacked the authority to do so; OF that Chase was without authority to release the funds. Wherefore it is hereby ORDERED that Fern s motion for summary judgment is denied; and it is . . further ORDERED that Lopez s cross-motion for summary judgment is denied. This constitutes the decision and order of the court. All other relief requested is denied. DATED: December 8,201 1 6

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