Matter of Gargani

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[*1] Matter of Gargani 2014 NY Slip Op 50577(U) Decided on March 31, 2014 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 March 31, 2014
Sur Ct, Nassau County

Accounting by Joan K. Conklin, as Attorney-in-Fact for Julius Gargani, a/k/a JULIUS J. GARGANI, Deceased.



Accounting by Joan K. Conklin, as Executor of the Estate of JULIUS GARGANI, a/k/a JULIUS J. GARGANI, Deceased.



2010-363395/E



Lawrence V. Carra, Esq.

(for Executrix, Joan Conklin)

114 Old Country Road

Suite 212

Mineola, NY 11501

Silverstein, Langer, Newburgh & McElyea

(for Objectants)

500 Fifth Avenue, Suite 1610

New York, NY 10011

Edward W. McCarty III, J.



This is a motion and cross motion for summary judgment in these accountings by an executor and attorney-in-fact. The executor and attorney-in-fact is Joan Conklin.

The decedent, Julius Gargani, died on August 30, 2010. He was survived by two children, Norman Gargani and Regina Demitrack. The decedent's last will and testament dated December 9, 2003 was admitted to probate by this court on February 10, 2011 and letters testamentary issued to Joan Conklin. The decedent's will provided, in pertinent part, for all of his personal savings accountings, including his checking account as well as his personal belongings, to go to Joan Conklin. Article Fourth provided for the bequest of "all of the sales proceeds from the sale of my ownership interest in the cooperative apartment in which I presently reside, located at 61-10 255th Street, Upper Unit, Douglaston, New York, which is to be sold by the [*2]Executrix of my estate as soon as practicable upon my demise, and to be equally divided amongst . . . my son, Norman Gargani, my daughter, Regina Demitrack and my ex-spouse Regina Gargani . . ." The residue of the estate was bequeathed to Joan Conklin. The decedent's sister, Joan Stucko, was nominated as the successor executor and beneficiary.

Joan Conklin filed her account as executor and as attorney-in-fact for the decedent. Her accountings shows the distribution of the entire estate to her. Objections were thereafter filed to the accountings by Norman Gargani, Regina Demitrack, Regina Gargani and Joan Stucko.

Depositions were taken of the parties as well as various non-parties. The deposition testimony revealed the following. Joan Conklin's daughter, Lori Conklin, contacted an attorney regarding elder planning for the decedent. The initial attorney referred her to a subsequent attorney. The attorney met with Lori Conklin and Joan Conklin and prepared a power of attorney for the decedent. The attorney testified that he discussed Medicaid planing which involved selling the cooperative apartment, liquidating the decedent's's assets and then gifting the assets with a promissory note. The attorney further testified that he met with the decedent one time in the hospital when the power of attorney was executed. The power of attorney named Joan Conklin as attorney-in-fact for the decedent and Lori Conklin as the successor attorney-in-fact. The attorney testified that in his opinion the decedent had capacity to execute the power of attorney.

In her amended attorney-in-fact accounting, Joan Conklin showed the collection of various bank accounts either by her or by her daughter, Lori Conklin. On March 15, 2010, Lori Conklin, acting under a prior power of attorney, closed an account in the decedent's name in trust for Regina Demitrack in the amount of $10,001.04. On March 27, 2010, Joan Conklin closed three accounts the decedent held in trust for Regina Gargani, which totaled $50,213.74. On the same dated she also closed one account in the decedent's name in trust for his son, Norman Gargani, in the amount of $49,880.54 and one account in the decedent's name in trust for his daughter, Regina Demitrack, in the amount of $49,880.38. The proceeds of all of these accounts were deposited into an account in the decedent's name. On April 23, 2010, Joan Conklin closed an account at Capital One Bank in the decedent's name in trust for his sister, Joan Stucko, in the amount of $5,005.52.Upon the death of the decedent, the funds passed to Joan Conklin as the residuary beneficiary of the estate.

With regard to the cooperative apartment, Joan Conklin sold it as attorney-in-fact for the decedent on August 12, 2010. The net proceeds in the amount of $125,550.51 were deposited into an account in the decedent's name. The decedent died approximately two weeks later and Joan Conklin distributed the funds to herself as the residuary beneficiary under the decedent's will.

The executor filed her accounting which shows that all of the creditors' claims were paid as well as funeral and administration expenses.

The beneficiaries of the in trust for accounts now seek recovery of those funds. Further, Regina Gargani, Norman Gargani and Regina Demitrack seek recovery of the proceeds of the sale of the cooperative apartment.

With regard to the accounts that were held in trust for the various beneficiaries, the executor argues that the matter must be dismissed as it is a dispute between living parties (see Matter of O'Connell, 98 AD3d 673 [2d Dept 2012]). In contrast to Matter of O'Connell, the [*3]funds in this matter were paid into an account in the decedent's name and distributed by the executor to herself as the beneficiary under the decedent's will. Clearly, the court has jurisdiction.

With regard to the cooperative apartment, the executor argues that the property has adeemed and as such the net proceeds of sale belong to her as the residuary beneficiary under the will. Although the property has been sold, the inquiry does not end there. An agent acting under a power of attorney has a fiduciary relationship with the principal (General Obligations Law §5-1505[2][a]). An agent must "act according to any instructions from the principal or, where there are no instructions, in the best interest of the principal and to avoid conflicts of interest (General Obligations Law §5-1501[2][a][1]). Best interest in turn "does not include such unqualified generosity to the holder of the power of attorney especially where the gift virtually impoverishes a donor whose estate plan, shown by a recent will, contradicts any desire to benefit the recipient of the gift" (Matter of Ferrera, 7 NY3d 244, 254 [2006]). Although the proceeds in the instant proceeding were deposited into an account in the decedent's name, the act caused the divestiture of the bequest and essentially benefitted the attorney-in-fact to the exclusion of the named beneficiaries under the decedent's will. The executor's actions as attorney-in-fact with regard to the in trust for accounts as well as the sale of the cooperative apartment raise questions of fact as to whether she acted either under the instruction of the decedent or whether the acts were in the best interest of the decedent and served to avoid conflicts of interest. Summary judgment is therefore denied.

The matter is set down for a hearing on Monday, June 2, 2014, at 10:00 a.m.

This constitutes the decision and order of the court.

Dated: March 31, 2014

EDWARD W. McCARTY III

Judge of the

Surrogate's Court