Matter of Spector-Marx

[*1] Matter of Spector-Marx 2013 NY Slip Op 51626(U) Decided on August 20, 2013 Sur Ct, Nassau County McCarty III, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 August 20, 2013
Sur Ct, Nassau County

In the Matter of the Construction of a Marital Agreement between David Marx and Selma Spector-Marx, Deceased.



356539/A



Elizabeth Donlon, Esq.

99 Tulip Avenue, Suite 404

Floral Park, NY 11001

(for Estate)

David Smith, Esq.

500 Old Country Road

Suite 109

Garden City, NY 11530

(for Howard Evan Spector, decedent's son)

Henry Klosowski, Esq.

400 Garden City Plaza

Suite 202

Garden City, NY 11530

(for Ellen Beth Galkin, decedent's daughter)

Edward W. McCarty III, J.

In this estate, a question has arisen concerning the construction of a pre-nuptial agreement and amendment as it pertains to the purchase of real property.

Decedent died on February 16, 2009 survived by a spouse and two adult children. Her last will and testament dated July 19, 2004 was admitted to probate by a decree of this court dated June 25, 2009, and letters testamentary issued to the children, the nominated executors.

Decedent and her spouse each owned a one-half interest in the marital residence as tenants in common. They executed a pre-nuptial agreement in which they waived their marital statutory rights. An amendment to the agreement required the parties to execute a last will and testament which would provide the surviving spouse with an option to purchase the decedent's share of the residence at fair market value. The decedent's last will and testament only provided the spouse with a life estate. The executors do not dispute that the marital agreement is [*2]enforceable independent of the last will and testament.

The surviving spouse commenced a proceeding in 2011, which requested an order directing that upon the purchase of the real property, he receive a credit for his life estate. In a decision dated March 30, 2012, the court determined that, as a matter of law, he was not entitled to a credit for the value of his life estate.

Thereafter, in several conferences with the court, a question was raised as to whether the spouse was required to exercise the option to purchase the real property within a "reasonable time." In a subsequent decision, the court stated that a construction of the agreement would be

submitted for decision.

The first issue to be determined, though not raised by the parties, is whether the provisions relating to the option are void as being in violation of the rule against perpetuities (EPTL 9-1.l[b]). The holder of an option has an interest which vests at a future time. The rule against perpetuities is therefore applicable to an option which vests beyond the permissible period (Symphony Space v Pergola Prop., 88 NY2d 466 [1996]).

The original agreement provides in part:

"This agreement shall enure to the benefit of, and shall be binding upon the heirs executors and administrators of the parties."

A provision in the amendment to the agreement provides in part:

" Whereas, the parties are concerned that the surviving spouse be able to remain in the house after the other spouse's death and they desire to amend the antenuptial agreement to provide for the surviving spouse to remain in the marital residence...

If either party dies, the surviving spouse shall be entitled to remain in their house at 17 Whitewood Drive, Roslyn, New York 11756, and have exclusive possession of the house as long as he or she wishes to remain there, or until the surviving spouse remarries or resides with an unrelated person of the opposite sex for a period of six months... In addition, the surviving party has the first option to purchase the other spouse's share of the residence at its fair market value."

A marital agreement is subject to the ordinary principles of contract interpretation

(Whitmore v Whitmore, 8 AD3d 371 [2d Dept 2004]; Cappelli v Cappelli, 286 AD2d 359 [2d

Dept 2001]).

Generally, an option in a contract is invalid where it is extended to heirs and fiduciaries of an estate (Harrington v Gage, 43 AD3d 1393 [4th Dept 2007]; Barnes v Oceanus Navigation Corp, 21 AD3d 975 [2d Dept 2005]; c.f. Reynolds v Gagen, 292 AD2d 310 [lst Dept 2002]; Omar v Rozen 2007 WL 2236318 [Sup Ct, New York County 2007] [where successors are bound by but not granted the benefit of the option]).

In this case, the language which violates the rule appears in the original contract along with equivalent boilerplate language stating that the agreement expresses the entire understanding of the parties and is not the product of duress. In contrast, the language of the amendment specifically addresses the purchase of the residence.

The amendment prevails over the original contract, with respect to the duration of the [*3]right to purchase. Where there is an inconsistency between a specific provision and a general provision of a contract, the court will give effect to the purpose of the specific provision (Andersen v Andersen, 69 AD3d 773 [2d Dept 2010]). The express purpose of the amendment in this contract is to permit the surviving spouse to remain in possession and acquire title to the property. It is a personal right measured by the life of the surviving spouse and therefore does not violate the rule against perpetuities.

The executors seeks a construction of the contract to the effect that the option must be exercised within a reasonable period of time. Where a contract grants an option to purchase real property, without specifying a time limitation, the parties are given a reasonable time to tender performance (Meccariello v DiPasquale, 35 AD3d 678 [2d Dept 2006]).

Whether or not the surviving spouse failed to exercise the option within a reasonable time is not an issue currently before the court. No petition has been filed for specific performance nor is there any other proceeding for a determination that the time to exercise the option has lapsed.

This decision is limited to the construction of the agreement as set forth above.

Settle decree.

Dated: August 20, 2013

EDWARD W. McCARTY III

Judge of the

Surrogate's Court