Matter of Celentano

[*1] Matter of Celentano 2013 NY Slip Op 51603(U) Decided on September 30, 2013 Sur Ct, Nassau County McCarty, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 September 30, 2013
Sur Ct, Nassau County

Rose M. Celentano, a/k/a ROSE CELENTANO, Deceased.

LEONARD MARCIANTE, Plaintiff,

against

ROSEMARIE PANTANGELO, MARY BONELLI, RACHELLE BLOCH, ANNETTE BONELLI, VINCENT BONELLI, ANTHONY BONELLI, RICHARD BONELLI and VINCENT MARCIANTE, Defendants.





335284/A



The appearance of counsel are as follows:

Bruce E. Bushlow, Esq. (for petitioner)

Abbott Bushlow & Schechner, LLP

70-11 Fresh Pond Rd.

Ridgewood, NY 11385

Stephen E. Turman, Esq. (for respondents)

Moritt Hock & Hamroff, LLP

400 Garden City Plaza

Garden City, NY 11530

Vincent Marciante (respondent pro se)

2 Belvedere Dr.

Massapequa, NY 11758

Edward W. McCarty III, J.

Before the court is a miscellaneous proceeding which was transferred from Supreme Court, Nassau County. The original complaint, described more fully below, was filed on behalf of Leonard Marciante, a brother of the decedent, Rose Celentano, against Mary Bonelli, a sister [*2]of the decedent, and against all seven nieces and nephews of Rose Celentano. This court conducted a bench trial on September 13, 14 and 20, 2012. Following the trial, each side submitted a comprehensive post-trial memorandum of law.

BACKGROUND

As recited in previous decisions issued by this court, Rose Celentano ("Rose" or the "decedent") died on August 10, 2004 survived by two distributees: (1) her brother, Leonard Marciante, who has one child, decedent's nephew, Vincent Marciante ("Vincent M."); and (2) her sister, Mary Bonelli, whose six children are also decedent's nieces and nephews: Rosemarie Bonelli [FN1], Rachelle Bonelli [FN2], Anette Bonelli, Vincent Bonelli, Anthony Bonelli and Richard Bonelli.

The action in Supreme Court was brought on February 13, 2009, by Leonard Marciante ("Leonard") as plaintiff against defendants Mary Bonelli ("Mary") and decedent's nieces and nephews.[FN3] The complaint charged that decedent left a purported will dated October 9, 1993 which had never been offered for probate. The plaintiff asserted that instead, Mary's daughter, Rosemarie Bonelli ("Rosemarie"), acted without authorization as a de facto estate representative and as such collected and distributed all of the estate's assets without regard to the provisions of decedent's purported will. Leonard charged that among the assets collected and distributed by Rosemarie was a joint stock brokerage account with rights of survivorship which had been opened on January 23, 1991 with Paine-Webber, which was subsequently taken over by UBS Financial Services, Inc. ("UBS"), in the names of the decedent, Leonard and Mary ("the UBS account"). Leonard further asserted that this account, which contained $211,880.00 on decedent's date of death, did not constitute an estate asset but rather, passed to Leonard and Mary by operation of law upon decedent's death. Leonard asserted that the UBS account had been closed on July 24, 2004, less than three weeks prior to decedent's death, and a check for the full amount in the account, $211,880.04, was issued and made payable to Leonard and/or Mary. Leonard argued that someone, other than himself, endorsed the check with his name before depositing it at the Roslyn Savings Bank, now known as New York Community Bank ("Roslyn") into a new account (the "Roslyn account") in the names of Mary and Leonard on July 31, 2004, ten days prior to decedent's death. The bank records reflect that almost six months after decedent's death, the Roslyn account was closed with a check made payable to Mary in the [*3]amount of $213,160.71.[FN4]

On May 27, 2009, subsequent to Leonard's commencement of the suit in Supreme Court, Mary filed a petition to probate the purported last will and testament of decedent. The holographic will names Mary as executor and provides that decedent's "bank accounts upon my death, all monies should be distributed to my nieces and nephews in equal portions ...." The will also directs that decedent's jewelry should be divided among her nieces, and her furniture is to be divided by her survivors. There is no residuary clause. Leonard filed objections to probate on November 12, 2009. Mary subsequently moved to have Leonard's suit in Supreme Court transferred to Surrogate's Court; the matter was transferred on April 19, 2010. In August of 2010, Leonard withdrew his objections to the probate of decedent's will; the will was admitted to probate by this court on October 4, 2010. In accordance with the terms of the will, letters testamentary issued to Mary.

PRIOR MOTION FOR SUMMARY JUDGMENT

Leonard previously moved for an order granting summary judgment and finding that: (1) the UBS account was a joint tenancy with rights of survivorship and (2) the funds to which Leonard was entitled had been fraudulently diverted. By a decision issued by this court on May 2, 2012 (Decision No. 27826), the motion was denied. Although the cause of action brought in Supreme Court was based upon Leonard's claim of right of survivorship in the UBS account, the motion for summary judgment raised alternative grounds for the proceeding brought by Leonard, namely: (1) that Leonard is entitled to one-half of the funds in the Roslyn account as a joint owner of that account; or (2) the decedent lacked capacity, did not consent to the closing of the UBS account, and ownership of the funds is therefore still controlled by the form of the UBS account. In denying Leonard's motion, the court noted that "[p]laintiff cannot now obtain summary judgment based upon a new theory of recovery which is inconsistent with allegations in the complaint" (citing Rich v West 31st St. Assoc., LLC, 92 AD3d 433 [1st Dept 2012]).

STATEMENT OF ISSUES

Counsel for Leonard submitted a Statement of Issues ( "the statement") on March 7, 2012. Objections to the statement were filed, but were dismissed by the court on August 30, 2012 (Dec. No. 28020). The statement raises the following issues in connection with the disputed accounts: [*4]

1. Did Rose have the necessary mental capacity to sign the withdrawal letter for the UBS account on July 12, 2004?

2. Did Rose sign the UBS account withdrawal letter dated July 12, 2004?

3.Was the UBS account a joint account with a right of survivorship, to be paid one-half to each of Mary and Leonard upon the death of Rose?

4. Upon the death of Rose, were Mary and Leonard entitled to share equally in the proceeds of the UBS account?

5. Was the UBS account closed with the consent and authorization of Rose?

6. Did Mary or Rosemarie tell Leonard that the proceeds of the UBS account would be held in a separate bank account, with Leonard and Mary as joint owners who would share the proceeds equally upon the death of Rose?

7. Did Leonard rely upon the representations of Mary and Rosemarie?

8. Is Leonard a one-half owner of the Roslyn account under the doctrines of resulting trust or constructive trust?

9. Was the Roslyn account a co-tenancy owned by Mary and Leonard?

10. Was Leonard entitled to one-half of the Roslyn account upon the death of Rose?

11. Did Mary or Rosemarie distribute the entire proceeds of the Roslyn account to Rose's nieces and nephews?

12. Was the Roslyn account an estate asset?

13. Should a constructive trust or a resulting trust be imposed upon the funds transferred to Rose's nieces and nephews to the extent the funds distributed to them exceeded ½ of the Roslyn account?

THE UBS ACCOUNT

Counsel for Leonard maintains that the UBS account was held in the names of Rose, Mary and Leonard as joint tenants with rights of survivorship, and he further argues that the parties' attempt to close the account in July 2004, as described below, was ineffective. Counsel cites EPTL 6-2.1, which provides that "a disposition of property to two or more persons creates in them a tenancy in common, unless expressly declared to be a joint tenancy" and New York Banking Law § 675, which states that if a deposit is made in the names of a depositor and another individual, to be paid to either of them or to the survivor of them, then the two of them hold the property as joint tenants, and the property may be paid to either during their lifetimes, and to the survivor after the death of one of the them.

Mary argues that for the UBS account to fall within the guidelines of New York Banking Law § 675, Leonard must offer into evidence a signature card or equivalent document signed by the grantor which contains the requisite language, and that in the absence of a signed card or document, the petitioner bears the burden of proof to establish his survivorship rights in the account [FN5]. Mary notes that the only relevant document produced by Leonard is titled "Consumer New Account Form," which lists the three names, Rose M. Celentano, Mary M. Boneli and Leonard J. Marciante, followed by the letters JTWROS, which stand for joint owners with right [*5]of survivorship. However, the form does not bear the account number of the disputed account, and it was not signed by the decedent.

Counsel for Mary notes that Leonard also introduced into evidence the periodic statements relating to this account, which are addressed to the three parties named on the account followed by the letters JTWROS. He argues that these statements have no probative value concerning decedent' intent when the account was created. Counsel cites Matter of Camarda, 63 AD2d 837, 838 (4th Dept 1978) for the proposition that the only probative records concerning donor intent are signature cards, ledgers or other formation documents signed by the donor and which include words of survivorship.

It is further argued that even if Leonard could establish a prima facie case that Rose intended to make a gift to her siblings, Mary may still rebut the presumption by proving that the account was established as a convenience account. Counsel asserts that the factors to be considered in distinguishing a convenience account from a true joint account are whether the decedent was the only depositor to the UBS account; whether the decedent was the only party to withdraw and benefit from the UBS account during her lifetime; whether the designation of a survivorship interest would represent a substantial deviation from the decedent's testamentary plan; whether decedent had exclusive use of the UBS account during her life; whether decedent retained a right to withdraw the UBS account proceeds. An additional factor is the conduct of the other party named on the account.

However, whether the UBS account gave each named account holder a right of survivorship is largely insignificant if the account was effectively closed prior to the decedent's death. In July 2004, approximately four weeks before Rose died, Mary and Leonard, together with other family members, visited Rose and encouraged her to sign a letter of instructions to UBS directing that the account be closed, with a check issued to Mary and Leonard but mailed to Rose's home address. Based upon the testimony given at trial, it appears that the family members believed that this would provide "Medicaid" planning to protect Rose's assets in the event that she required long term care. Although Leonard participated in this meeting, and signed the letter along with Rose, he testified at trial that Rose was not competent to execute instructions to UBS on that day. Mary, who also participated in the meeting and signed the letter, now takes the same position, as expressed in her counsel's post-trial memorandum at pages 20-21.

The court heard conflicting testimony concerning Rose's mental status on the day that Rose, Mary and Leonard signed the letter authorizing the closing of the UBS account. Rosemarie and Leonard's son, Vincent M., both testified at the trial that Rose had sufficient capacity to sign the letter directing the closing of the account. However, documents before the court reflect that on July 9, 2004, just a few days prior to the date on which Rose signed the letter directing closure of the UBS account, a social worker determined that Rose was not competent to execute a HIPAA Release and health care proxy.

In the event that the court determines that the withdrawal of funds from UBS was ineffective due to Rose's lack of capacity, the ultimate distribution of the funds will be governed by the form of the account while the funds were maintained at UBS, rather than by the form of the funds as they were maintained in the subsequent account at Roslyn.

THE ROSLYN ACCOUNT

Shortly before Rose's death, Mary opened the Roslyn account by depositing the check [*6]issued by UBS pursuant to the letter of instructions signed by Rose, Mary and Leonard, payable to Mary and/or Leonard for the entire proceeds of the UBS account. This savings account was titled in the names of Mary and Leonard. Testimony was given at trial that the omission of Rose's name from the successor account at Roslyn was for the purpose of "Medicaid" planning. There was also testimony at the trial that the new account at Roslyn was intended to be a convenience account to enable Mary or Leonard to pay for Rose's care, but no evidence was presented to support this. This argument was undermined in that the account was a savings account rather than a checking account, that Rose's name was not included on the account, and that it appears, based on the testimony provided, that Leonard did not have any meaningful access to the account to pay Rose's bills. It is undisputed that this account did not include a survivorship right. Instead, it is Leonard's argument that he is entitled to his moiety in the account.

ANALYSIS

Leonard has presented the court with multiple grounds for recovery in connection with the disputed asset: (1) fraud; (2) that Rose lacked capacity to close the UBS account, which he contends was in the form of joint owners with right of survivorship; and (3) even if Rose had capacity to close the UBS account, the funds went into a joint account at Roslyn without rights of survivorship but which gave Leonard a moiety in the account, so that his half could not be withdrawn and distributed without his consent.

In addition to disputing all of the above arguments, Mary raised three affirmative defenses: (1) laches, (2) estoppel and (3) waiver.

The court must first determine whether the disputed funds are governed by the terms of the UBS account or the Roslyn account, which depends upon whether Rose had sufficient capacity to authorize closure of the UBS account when she signed the letter dated July 12, 2004. Ironically, the two parties who now argue that Rose lacked capacity are Leonard and Mary, the same two parties who co-signed, and who asked Rose to co-sign, the letter. Although the court heard opposing testimony on the issue of capacity from Rosemarie and Vincent M., the decedent's lack of capacity is supported by the medical records. The court has been presented with the picture of a decedent near death from brain cancer, who may or may not have understood that she was being asked to close the UBS account, but who was clearly under pressure from well-meaning family members to do so, based upon their mistaken belief, which they conveyed to Rose, that closing the UBS account would protect Rose's funds and enable the family members to better care for her. The record reflects that it took multiple attempts for Rose to even sign the letter. Based on all of the above, the court is not satisfied that Rose had sufficient capacity to sign the letter dated July 12, 2004 directing that the account be closed and a check issued to Leonard and Mary.

Accordingly, the disposition of the funds is governed by the form of the account at UBS. Thus, the relevant inquiry is whether the decedent intended to create a joint tenancy or a co-tenancy and confer a present beneficial interest in Leonard and Mary when she opened the account in 1991 (see Vairo v Klecar, 207 AD2d 732 [1st Dept 1994]; Matter of Friedman, 104 AD2d 366 [2d Dept 1984], affd 64 NY2d 743 [1984]). The petitioner must adduce affirmative proof of intention (Matter of Thomas, 43 AD2d 446 [3d Dept 1974]). Once the joint tenant has introduced such affirmative proof, the party contesting the title of the survivor is required to [*7]establish, by clear and convincing evidence, fraud, undue influence, lack of capacity to make a gift or that the account was opened for the convenience of the decedent (Matter of Lang, 38 NY2d 836 [1976]; Vairo v Klecar, 207 AD2d 732 [1st Dept 1994]).

Section 675 of the Banking Law provides, in pertinent part, that a deposit in the name of the depositor and another person, and in form to be paid or delivered to either or the survivor of them, shall become the property of such persons as joint tenants and may be paid or delivered to either during the lifetime of both or to the survivor after death (Banking Law § 675 [a]). The making of such deposit, in the absence of fraud or undue influence, shall be prima facie evidence of the intention of the depositor to create a joint tenancy and to vest title to the account in the survivor (Banking Law § 675 [b]). In order for the presumption set forth in Banking Law Section 675 to apply, however, the words of survivorship must appear on the signature card or ledger that creates the bank account (Matter of Camarda, 63 AD2d 837, 838 [4th Dept 1978]). Where no survivorship language is found, EPTL 6-2.2 (a) sets forth that a disposition of property to two or more persons creates a tenancy in common "unless expressly declared to be a joint tenancy." The presumption is rebuttable (Matter of Randall, 176 AD2d 1219 [4th Dept 1991] and it is incumbent upon the person claiming rights as a survivor to establish that the decedent intended to create the accounts with survivorship rights (Matter of Grancaric, 91 AD3d 1104 [3d Dept 2012]). A "correspondingly high order of evidence is required" which must demonstrate "clear and convincing intent to create a joint tenancy"(Matter of Bonanni, 250 AD2d 1022 [3d Dept 1998] quoting Matter of Vadney, 193 AD2d 994, 994-995 [3d Dept 1993], affd 83 NY2d 885 [1994]).

Counsel for Mary notes that Leonard has been unable to produce original signed signature cards with survivorship language. In fact, neither party has been able to produce a signature card in connection with the UBS account, with or without language of survivorship. In the instant proceeding, there were no signature cards or signed ledgers containing words of survivorship; thus, the presumption of Banking Law § 675 does not apply and, in the absence of other evidence, the presumption of a tenancy in common applies (EPTL 6-2.2 [a]).

The analysis does not end here, however, as Mary asserts that the UBS account was a convenience account and as such belongs to the estate. The burden is on Mary to establish by clear and convincing evidence that the account was intended solely for the convenience of the depositor (Matter of Mullen, 218 AD2d 50 [1st Dept 1996]).[FN6] Factors that are considered when determining whether an account is a convenience account are: the testamentary scheme of the decedent, whether the account comprises a major part of the estate; the actions of the co-tenants (Matter of Camarda, 63 AD2d 837 [4th Dept 1978]); who had exclusive possession of the account and who made the deposits and withdrawals (Wacikowski v Wacikowski, 93 AD2d 885 [2d Dept 1983], appeal denied 60 NY2d 553 [1983]); who reports the interest earned from the account and whether the account was established in anticipation of illness or disability (Fragetti v Fragetti, 262 AD2d 527 [2d Dept 1999]); and whether the co-tenant received copies of the [*8]account statements, considered the account to be the depositor's and did not know what would happen to the funds upon the death of the depositor (Matter of Corcoran, 63 AD3d 93 [3d Dept 2009]).

With regard to the UBS account, it is uncontroverted that the funds were the decedent's funds, that she made the deposits, that she received account statements, and that she reported the interest from the account. Despite this, Mary has introduced no evidence that Rose put Leonard's and Mary's names on the UBS investment account merely as a personal convenience to herself. Accordingly, Mary has failed to meet her burden of proving that the account at UBS in the names of Rose, Mary and Leonard was a convenience account. The court finds that the UBS account is a tenancy in common and belongs as follows: one-third to Mary, one-third to Leonard, and one-third to the estate of Rose.[FN7]

AFFIRMATIVE DEFENSES

The court has also considered the affirmative defenses raised on behalf of Mary. No testimony was provided in support of laches, except that memories have faded. Multiple parties testified, in depositions as well as in the courtroom, that Leonard tried to resolve the dispute within the family before commencing suit, which resulted in a delay in his bringing this proceeding. Leonard never waived his right to object to the distribution Mary made to the decedent's nieces and nephews. Since both Leonard and Mary now argue that Rose lacked sufficient mental capacity to close the UBS account, estoppel is inapplicable as well.

PROPERTY PASSING UNDER DECEDENT'S WILL

Leonard argues that if the UBS account is deemed to be part of Rose's estate, the account will pass to Mary and Leonard by intestacy, since Rose's will lacks a residuary clause. Mary [*9]argues that if the UBS account is to be distributed in accordance with the terms of Rose's will, it must be distributed to decedent's nieces and nephews under that portion of the handwritten will which provides "bank accounts upon my death, all monies should be distributed to my nieces and nephews in equal portions ...." Since the court has determined that the UBS account is a co-tenancy, and that one-third of the funds belongs to the estate, the court must address whether the funds will pass under the above cited language of the will, or whether they will pass by intestacy for lack of a residuary clause in the will.

"There is a strong legal presumption in favor of testate distribution and against intestacy. Moreover, where a decedent has executed a will, it is presumed that he intended to dispose of his entire estate. . . . [A] partial intestacy is to be avoided if reasonably possible" (11 Warren's Heaton, Surrogate's Court Practice § 187.04 [4] [7th ed]).

In this case, the court must determine whether the language in decedent's will disposing of her bank accounts will also serve to dispose of an interest in decedent's investment account. The general rules of will construction support a conclusion that a decedent's investment accounts fall under the term savings account as used in a bequest under a will (Matter of Crater, NYLJ May 3, 1999, at 36, col 3 [Sur Ct, Kings County]).

CONCLUSION

The court finds that Rose lacked sufficient mental capacity to close the UBS account, which means that the form of the account at UBS governs. Upon the death of Rose, the account passed to Leonard, Mary and Rose's estate in equal thirds. Accordingly, within 60 days of the date hereof, Mary is to pay one-third of the account, or $71,053.56, to each of the three co-tenants.

This constitutes the decision and order of the court.

Dated: September 30, 2013

Edward W. McCarty IIIJudge of theSurrogate's Court Footnotes

Footnote 1:Papers filed on behalf of Leonard Marciante refer to Rosemarie Pantangelo, as reflected in the caption, but an affidavit filed with the court on May 27, 2009 indicates that her proper name is Rosemarie Bonelli.

Footnote 2:Papers filed on behalf of Leonard Marciante refer to Rachelle Bloch, as reflected in the caption, but an affidavit filed with the court on May 27, 2009 indicates that her proper name is Rachelle Bonelli.

Footnote 3:All of decedent's nieces and nephews, with the exception of Leonard's son, Vincent M., are represented by the same attorney as Mary ("counsel for Mary"). Vincent M. is self-represented; he has verbally represented to the court that he supports Leonard's position in this proceeding.

Footnote 4:Leonard initially argued that on decedent's date of death, decedent had other assets totaling $209,173.00. These consisted of United States Treasury Bills (the "Treasury bills"), Oppenheimer Funds, two AIG Annuities and a Sun Life Annuity. Leonard stated that he was entitled to receive one-half of the funds from the UBS account ($105,940.00) and one-half of the decedent's other assets ($104,586), for a total of approximately $210,500.00. Leonard asserted that instead, Rosemarie distributed decedent's assets in equal shares to decedent's seven nieces and nephews, including Rosemarie. Leonard sought a judgment against Rosemarie in the sum of $210,500.00, and against each of the other nieces and nephews in the amount of $95,000.00, which is the total distribution made to each. However, in the opening statement made by Leonard's counsel at the trial, he advised the court that Leonard was limiting his claim to one-half of the amount contained in the UBS account, plus applicable interest (Transcript of Bench Trial at page 12).

Footnote 5:In support, counsel cites this court's decision in Matter of Cooper, 6 Misc 3d 1001 (A) (Sur Ct, Nassau County 2004).

Footnote 6:Although Leonard and Mary each enjoyed a confidential relationship with Rose, no one has questioned whether the original transfer into Paine-Webber was other than fair, voluntary, and knowingly made by Rose, which are additional factors that must be established when there is a confidential relationship (Matter of Timoshevich, 133 AD2d 1011 [3d Dept 1987]).

Footnote 7:Parenthetically, the court notes that although Rose lacked capacity when she signed the letter directing that the UBS account be closed, Leonard and Mary co-signed the letter, and each of them, as a co-tenant, had the same ability that Rose had to withdraw his or her one-third interest in the investment account. "It is well settled that upon creation of a . . . tenancy in common, each tenant acquires an unconditional interest in [his or her fractional share] of the money deposited" (Matter of Goldfarb, NYLJ, Jan 31, 1991, at 23, col 1 [Sur Ct, New York County], citing Matter of Lang, 38 NY2d 836 [1976] and Matter of Bobeck, 143 AD2d 90 [2d Dept 1988]). To the extent that Leonard and Mary withdrew more than their one-third share each, those excess funds have to be returned to Rose's estate to be distributed in accordance with her will. To the extent that Mary used the funds to open an account at the Roslyn Savings Bank in the names of Mary and Leonard, she created another tenancy in common, in which Mary and Leonard each have a moiety in one-half of the two-thirds of the UBS funds that they were entitled to withdraw (see id.). To the extent that Mary withdrew and distributed Leonard's moiety to the decedent's nieces and nephews without Leonard's authorization, those funds would have to be returned to Leonard. No matter which analysis is applied, the outcome is ultimately the same, namely, that the funds from UBS, which Mary distributed to decedent's nieces and nephews, are payable to Leonard, Mary and Rose's estate in equal one-third shares.