Matter of ScolaAnnotate this Case
Decided on May 9, 2012
Sur Ct, Queens County
In the Matter of the Petition of James N. Scola, Administrator of the Estate of Stephen J. Scola, a/k/a Stephen Scola, the Estate of Lucille Scola a/k/a LUCILLE P. SCOLA, Deceased, To Determine the Validity of the Claim of James N. Scola the Estate of Said Deceased.
Donald Novick, Esq.
Attorneys for Petitioner
Madeline S. Egelfeld, Esq.
Attorneys for Respondent
Peter Joseph Kelly, J.
In this proceeding commenced pursuant to SCPA §1809, the Petitioner, James N. Scola, the fiduciary for the Estate of Stephen J. Scola, moves for summary judgment on his petition to determine the validity of his claim and for dismissal of the Respondent's affirmative defenses. The Respondent, Kim Pepe, the fiduciary of the Estate of Lucille Scola, cross-moves for, inter alia, summary judgment dismissing the petition.
At issue in this proceeding is the ownership of an improved parcel of real property located at 50-06 64th Street, Woodside, New York. The subject property was originally held as tenants by the entirety by the Decedent Lucille Scola ("Lucille") and her husband Stephen J. Scola ("Stephen"). Lucille and Stephen were married on June 27, 1969 and acquired title to the premises on September 2, 1976. Until July 1980, the premises was the marital abode and was occupied by Stephen and Lucille along with Kim Pepe, Lucille's child from a previous marriage and James N. Scola, the only child of the marriage. In July 1980, Stephen and Lucille entered into a separation agreement which included terms for the division of the parties' property. The parties do not dispute that a matrimonial proceeding was not pending when this agreement was executed.
After entering into the agreement, Stephen apparently vacated the premises and Lucille continued to occupy the house until James, the Petitioner, turned 19 years old. [*2]Thereafter, Lucille and James vacated the premises and it was rented to a third-party who occupied the premises continually for 14 years.
It is agreed by the parties that after the tenant vacated the premises, Stephen and Lucille re-occupied the residence. In an affidavit in support of the Respondent's cross-motion, the Respondent avers that Stephen began re-occupying the premises in 2005 and that Lucille moved back in 2007. In an affidavit submitted in support of the Petitioner's motion, Alfred W. Kach, Stephen and Lucille's accountant, claims that he advised one of the parties to re-occupy the premises for two years to avoid capital gains taxes upon the sale of the property.
Before the property was sold, Stephen died on May 21, 2009. A little more than a year later, on September 19, 2010, Lucille died. The Petitioner was appointed the administrator of Stephen's estate on March 10, 2011 and the Respondent was granted Letters Testamentary in Lucille's estate on August 11, 2011. On or about March 23, 2011, the Petitioner served his claim against the Estate of Lucille Scola claiming a one-half (½) ownership interest in the premises. After not receiving a response from the Respondent within 90 days (See, SCPA §1806), the Petitioner commenced the within proceeding.
The Petitioner argues that the subject separation agreement severed the tenancy by the entirety, that Stephen and Lucille held the property as tenants-in-common when Stephen died and, therefore, each estate owns one-half of the property. Petitioner also asserts that even if the tenancy by the entirety was not severed, the separation agreement was a separate contract that can be enforced against Lucille's estate. In opposition, the Respondent asserts that the separation agreement neither altered the form of ownership of the subject premises nor is a binding contract against Lucille's estate. Respondent also charges that any claims that may have existed against Lucille's estate are barred by the statute of limitations, waiver and/or laches.
The first issue raised is whether the Stephen and Lucille transformed their tenancy by the entirety into a tenancy in common by entering into the separation agreement in 1980.As concerns the premises at issue, Paragraph 6 of Stephen and Lucille's separation agreement provides, in pertinent part, as follows:
The Husband and the Wife own, as tenants by the entirety, the marital abode and the real property located at 50-60 64th Street, Woodside, New York . . . The Wife shall have exclusive occupancy of the marital abode and may reside there until the child reaches the age of 16 years, or remarries or desires to purchase the home. In that event, the marital abode will be sold to the Wife or to another purchaser at a fair market value. If the property is sold, the parties shall share equally in the net proceeds of the sale. . .
Certain affirmative and authoritative acts taken by a husband and wife can sever a tenancy by the entirety, including "a conveyance of the property in which both spouses join; a judicial decree of separation, annulment or divorce; or execution of a written instrument that satisfies the requirements of section 3-309 of the General Obligations Law" (In re Estate of Violi, 65 NY2d 392, 395). In the instant case, the parties dispute whether the separation agreement satisfies the requisites of GOL §3-309. That section provides as follows:
Husband and wife may convey or transfer real or personal property directly, the one to [*3]the other, without the intervention of a third person; and may make partition or division of any real property held by them as tenants in common, joint tenants or tenants by the entireties. If so expressed in the instrument of partition or division, such instrument bars the wife's right to dower in such property, and also, if so expressed, the husband's tenancy by curtesy.
In accordance with the general rules concerning the alteration of title to estates in land, the Court of Appeals has interpreted this section to require "clear expressions of intent" before a tenancy by the entirety is modified by agreement of a husband and wife (See, In re Estate of Violi, supra at 396-97; see also, In re Estate of Hamilton, 234 AD2d 372; Schiller v Schiller, 80 AD2d 164). As to what constitutes a clear expression of intent, the Court of Appeals has held that a "[t]enancy by the entirety is not terminated merely by a provision in a separation agreement for the sale of a marital home at a future date" (In re Estate of Violi, supra at 395). Thus, the sixth paragraph of the separation agreement at issue plainly did not convert Stephen and Lucille's ownership of the property to a tenancy in common. The issue of whether the balance of the separation agreement contains language sufficient to accomplish this result is a thornier issue requiring a detailed analysis of applicable Appellate Division decisions.[FN1]
In Passmore v King, 186 AD2d 241, the parties entered into an agreement during a pending divorce action that provided " as and for Equitable Distribution'" the wife would pay the husband a lump sum of $40,000.00 and another $18,000.00 in installment payments in return "for which the husband agreed to convey his interest in the marital premises by bargain and sale deed". In addition, the parties executed a contract of sale for their premises, however, before the closing could be held, the husband died. The plaintiff in Passmore, the executor of the husband's estate, sought to recover the money owed under the agreement and argued that "the language conveying the husband's interest in the marital premises to the wife, together with the execution of a contract of sale, [met] the requirements of General Obligations Law § 3-309". The court, citing Violi, disagreed and held that agreement dated March 24, 1986, was not "an instrument of partition or division of any real property' under General Obligations Law § 3-309".
Four years later, the Appellate Division, Second Department affirmed a decision of this court in Estate of Hamilton, 234 AD2d 372. In that case, the court, relying on Violi, determined that the husband and wife "clearly expressed the parties' intention to terminate their tenancy by the entirety with respect to the subject premises, and transfer sole ownership of the property to the wife". Although the Appellate Division did not recount the language of the separation agreement in its decision, this court noted in its decision dated April 25, 1995 that "[a]s part of the agreement, [the husband] agreed to waive any claims to the wife's ownership of the marital abode' and to transfer said title to the wife so as to constitute her sole owner thereof'". [*4]
This issue was again addressed in Matter of Sansivero, 29 AD3d 1008. In that case, the husband and wife entered into a separation agreement which provided, as per the underlying decision of Surrogate Tomei (See, Matter of Sansivero,Misc 3d, 2005 NY Misc LEXIS 6362), that a parcel of real property owned by the parties as tenants in common would "be transferred by deed from MICHELINA SANSIVERO and JAMES SANSIVERO, as husband and wife, to JAMES SANSIVERO, sole, and the wife hereby releases all right title and interest that she has thereto". The agreement also provided that "[e]ach of the parties own have . . . as though he or she were unmarried" [sic]. While not stating so expressly in its decision, the Appellate Division, Second Department determined, again citing Violi, this was not a sufficient expression of an intent to transfer and the court stated that when the husband predeceased the wife, she "became sole owner of the premises".
While it possibly could be argued that the holdings in these decisions, particularly the latter two matters, are discrepant, reconciliation of any inconsistency is not necessary to reach a resolution of the issues raised in the case at the bar. What is common in Passmore, Hamilton and Sansivero is that the disputed portions of the separation agreements at issue all address the marital property specifically. This is not the case here.
The only language in the agreement that is possibly relevant to effect an alteration of title, other than the sixth paragraph above, is contained in Paragraph 11[b] which reads as follows:
Henceforth each party shall own and enjoy, independently of any claim or right of the other, all items of real and personal property of every kind, whether now or hereafter owned by him or her, with full power to dispose of the same as if unmarried. Each of the parties hereof, each for himself and herself, respectively, executors, administrators and assigns, hereby waives any right of election which he or she may have or hereafter acquire regarding the estate of the other, as provided for in any law, now or hereafter effective, of the State of New York or any other state or territory of the United States, or any foreign country and renounces and releases all interest, right or claim of distributive shares, of intestate succession or dower, or otherwise, that he or she now has or might hereafter have against the other or the estate of the other, of the property of whatever nature, real or personal, of the other, under or by virtue of the laws of any state or country, and each will, at the request of the other, or his or her legal representative, executors administrators and assigns, execute, acknowledge and deliver any and all deeds, releases or other instruments necessary to bar, release or extinguish such interests, rights and claims, or which may be advisable to effect any of the provisions of this agreement . . .
Despite stating that each "party shall own and enjoy, independently of any claim or right of the other, all items of real and personal property of every kind", this section of the agreement does not specifically mention the martial premises. Accordingly, even if this court were to find that Estate of Hamilton, supra was applicable and Passmore v King, supra, and Matter of Sansivero, supra, were somehow distinguishable, the Petitioner could still not rely on Hamilton as the agreement in the present case does not provide a clear expression of the parties' intent to sever their tenancy by the entirety as [*5]Paragraph 11[b] does not expressly refer to the martial property.
Therefore, based on the foregoing, the court finds that the parties' agreement did not satisfy the requisites of GOL §3-309 and that title to the premises at issue rested with Stephen and Lucille as tenants by the entirety until the time Stephen predeceased Lucille.
The Petitioner also argues that, notwithstanding the foregoing, the parties' separation agreement constituted a separate and enforceable contract that survived the death of Stephen and that his estate can enforce it against Lucille's estate (See generally, EPTL §11-3.1). In particular, the Petitioner claims that even if title to the marital premises passed to Lucille by operation of law when Stephen died, her promise in the sixth paragraph of the separation agreement is still valid.
Contrary to the Respondent's assertion, In re Estate of Violi, supra does not control or resolve this issue. That court did not consider the issue of whether the extinguishment of a spouse's co-ownership of the premises affected the viability of the parties' separation agreement as it related to the marital property (See, In re Estate of Pavese, 195 Misc 2d 1, 13). In fact, the Appellate Division, Second Department has affirmed that the legal theory posited by the Petitioner is viable in a case where a prenuptial agreement provided that the surviving spouse was obligated to return the martial residence to the decedent's estate despite obtaining title to the property "pursuant to the terms of the deed granting title to her as a tenant by the entirety with the decedent" (See, Matter of Barabash, 84 AD3d 1363) .
The Appellate Division, Third Department, in Brower v Brower, 226 AD2d 92, has also held this stratagem viable where, as here, the parties' separation agreement provided that the surviving spouse could occupy the marital residence until a particular date and, after that date, the premises would be sold. In Brower, like the present case, the appointed date for sale of the marital premises passed, the premises was not sold, one spouse died and the other obtained sole title to the premises. That court distinguished Violi and held that "a contract right . . . survived decedent's death and [could] be enforced in an action" (Brower v Brower, supra at 94).
Surrogate Riordan, in a thoughtful and scholarly decision, also acknowledged the viability of contractual claims under circumstances similar to the present case provided that it can be gleaned from the contract at issue that "the parties intended their agreement to survive death as an independent contract" as opposed to being an agreement that merely constitutes equitable distribution ancillary to a matrimonial proceeding that would abate with the death of one of the spouses (See, Estate of Pavese, supra at 12).
In this case, the parties' separation agreement provided that Lucille would have exclusive occupancy of the martial residence until the occurrence of three events: the parties' child reaching the age of 16, Lucille's remarriage, or her purchase of the home. It is undisputed that Stephen and Lucille's child, James, turned 16 years of age on April 7, 1988 and that the premises was never sold in accordance with the terms of the separation agreement. It is also apparent that the parties intended this agreement to last as an independent contract. On the first page of the agreement it specified that it "effect[ed] a full, final and complete settlement of all rights arising out of the marital relationship and settle all questions relating to their property". The agreement was not [*6]made as part of a matrimonial proceeding, indeed the parties agree that an action for divorce or separation was never commenced. In addition, the parties' submissions reveal that Stephen and Lucille, at least partly, performed their obligation under the separation agreement.
Accordingly, Stephen and Lucille's separation agreement, which contained a promise by the parties to sell the marital premises when their child reached 16 years of age, is a contractual claim that is capable of enforcement pursuant to EPTL §11-3.1.
In the cross-motion, the Respondent seeks dismissal of the aforementioned contractual claim on the basis that it is barred by the statute of limitations. To sustain dismissal on this basis, the Respondent bears the initial burden of establishing prima facie that the time in which to sue has expired (See e.g., Savarese v Shatz, 273 AD2d 219). As part of this burden, the Respondent must establish when the Petitioner's cause of action accrued (See, Matter of Schwartz, 44 AD3d 779).
In the moving papers, the Petitioner likens this proceeding to a breach of contract claim. At this point in time, however, the claim is more akin to an action for specific performance since the Petitioner's only viable claim seeks to compel the Respondent to comply with that portion of the separation agreement that required the parties to sell the premises and split the proceeds of the sale. In either case, the claim is governed by a six-year limitations period (See, CPLR §213; Tauber v Lebow, 65 NY2d 596; Feldman v Teitelbaum, 160 AD2d 832; Jacobs v Patterson, 112 AD2d 402).
By the terms of the separation agreement, the obligation to sell the marital premises arose on April 7, 1988, when James turned 16 years of age and, therefore, that is when the statute of limitations accrued (See, Matter of Ciquera,Misc 3d, 2008 NY Slip Op 51988U). The Petitioner's assertion that the claim did not accrue until the fiduciary of Lucille's estate refused to honor the claim of Stephen's estate is without merit. Nothing in the separation agreement makes demand and refusal a substantive part of any potential claim for breach or enforcement of the agreement. Since the limitations period expired on April 7, 1994, almost 17 years before the notice of claim herein was served on the Respondent, the claim is untimely (See, Matter of Ciquera, supra; see also, Dolan v Ross, 172 AD2d 1013).
Accordingly, based on all the foregoing, the Petitioner's motion for summary judgment on its claim is denied and the cross-motion for summary judgment dismissing the petition is granted.
Dated: May 9, 2012
Footnote 1:The Petitioner's reliance on Beudert-Richard v Richard, 72 AD3d 101 is misplaced as this is a decision from the Appellate Division, First Department which does not bind this court since there are decisions on the same issue from the Appellate Division, Second Department (Cf. Mountain View Coach Lines, Inc. v Storms, 102 AD2d 663.