Matter of Cresap
Annotate this CaseDecided on March 8, 2016
Surrogate's Court, Westchester County
In the Matter of a Proceeding Pursuant to SCPA 2103 Regarding the Estate of Joan Wilmarth Cresap, a/k/a JOAN W. CRESAP, a/k/a JOAN CRESAP, Deceased.
2012-1804/F
Joshua H. Klapper, Esq.
170 Hamilton Avenue
White Plains, NY 10601
Attorney for Caroline Cresap O'Malley
Nancy Cresap Higbee
7 Reynolds Place
Greenwich, CT 06831
Pro se
Baker Leshko
One North Lexington Avenue
White Plains, NY 10601
Thomas E. Walsh II, J.
In this miscellaneous proceeding, Joan Marshall Cresap ("Joan") moves for an order granting summary judgment, dismissing the petition brought by her sisters Nancy Cresap Higbee ("Nancy") and Caroline Cresap O'Malley ("Caroline") and for sanctions for violations of discovery. The motion is opposed by Nancy and Caroline and is decided as set forth below.
The decedent was born in 1926. She graduated Connecticut College and completed Yale University School of Nursing. She married Charles Nash Cresap, and together they had three daughters, Joan, Nancy and Caroline and one son, Frank Cresap ("Frank"). She and Mr. Cresap were divorced in 1970. At that time, she moved to 2 Greenacres Drive, Rye, NY (the "Rye house") where she raised her children, and she lived there in excess of 40 years until her death. She worked as a nurse. The decedent also owned a home in Cape Cod which had been gifted to her by her parents. There was no mortgage on either the Rye or Cape Cod houses.
Joan lived with the decedent in her Rye house during the course of her life except for periods in which she attended college and law school.
In 2006, according to Joan, she and the decedent entered into an oral arrangement where [*2]Joan would pay the utility bills on the Rye house and one-half of the carrying charges on the Cape Cod house as her rent. The bills included heat, electricity, telephone, cable, internet, water and gardening.
On February 22, 2009, the decedent wrote Nancy explaining that she had revoked a power of attorney and health care proxy in her favor and had so instructed her attorney, Anthony Piscionere, Esq., whose offices were in Rye, NY. At some point thereafter, in 2009, Joan became the decedent's health care proxy and attorney-in-fact.
On April 22, 2009, Caroline, Nancy and Frank sent a letter to Joan expressing their concerns about the decedent's health and well-being and about being left out of certain decision-making regarding the decedent.
On April 23, 2009, an attorney wrote to Nancy with regard to a consultation about instituting an MHL Article 81 guardianship proceeding for the decedent.
On August 18, 2009, the decedent executed a quitclaim deed on the Cape Cod home in favor of Joan which stated that the "consideration for this transfer being love and affection". The decedent's signature was notarized by Geraldine Tummolo and was recorded in Barnstable County, MA.
On August 24, 2009, the decedent executed her last will and testament which was drafted by attorney Piscionere. The instrument provided, in pertinent part, as follows:
(1) Executor to distribute personalty in accordance with a detailed list the decedent would draft;
(2) $50,000 to Joan because "Joan has taken care of me during the last years of my life and this is my way of thanking her for all of her help and assistance";
(3) Joan had the right to live in any home the decedent owned at the time of her death for an 18 month period with the taxes, insurance and repairs in excess of $200 to be paid by estate assets, and after the 18 months expired, the houses would be sold and the proceeds distributed in accordance with the residuary clause;
(4) the residuary was to be divided among her four children; and
(5) Joan was the nominated executor.
Two days after the will was executed, on August 26, 2009, the decedent went to Barton & Klieger, P.C., a law firm located in Dix Hills, NY, where she executed a codicil to her last will and testament which was drafted by that firm. The codicil provided for the revocation of Article THIRD (division of personalty) of the instrument and, in turn, the division of specific pieces of personalty to her four children and the addition of a no contest clause.
Hospital and nursing records from January 20 and 21, 2010 reflect that the decedent was forgetful; that her short term and long term memory was impaired; and that 24 hour assistance was needed for her care.
On April 1, 2010, a letter in typeface, signed by the decedent, directed to Joan, stated that she was "transferring the Rye property to [her] in consideration of [her] health and circumstances and as consideration for the help and financial assistance you have given me since the summer of 2006. This is part of my overall estate plan and also intended to protect you and my estate in the event of the need for an extended nursing home stay". The letter went on to recite, among other things, that Joan had subsidized her in the approximate amount of $280,000 for the years 2006 through 2010, that future amounts would be added to what was owed and that the transfer of the [*3]Rye house was in addition to the transfer of the Cape Cod house which transfer had already occurred; that the decedent agreed to pay 4% annually on the outstanding amounts owed; that the letter should be considered a mortgage and was to be binding "upon my estate and all of my successors and assigns". The letter was notarized by Gregory G. McBride ("Gregory").
With a quitclaim deed dated April 1, 2010, the Rye home was transferred from the decedent to Joan in consideration of the love and affection the decedent was given by Joan. It was signed by the decedent on April 1, 2010, and it appears that her signature was acknowledged to Gregory as the notary on May 20, 2010. (The deed was recorded in the Office of the County Clerk, Westchester County on May 4, 2011.)
On September 16, 2010, mental health evaluation records on the decedent reflect the following: "[mod]erate cognitive impairment, dementia noted".
On November 12, 2010, medical records reflect that the decedent's cognitive function is impaired; that she has significant memory loss; that she fails to recognize familiar persons and places; and she is unable to recall events taking place within the prior 24 hour period. She is unable to walk on her own, feed herself and answer the telephone.Checks drawn on the decedent's checking account in 2010 showed payments for landscaping, general home maintenance, home repairs, insurance, taxes, utilities and to Joan.
In the Spring of 2011, the decedent was hospitalized for five days with pneumonia.
On September 16, 2011, medial assessment forms reflect that the decedent was suffering from depression and was forgetful.
On January 12, 2012, Joan, signing as attorney in fact for the decedent, requested the surrender of a single premium whole life annuity insurance policy held by the decedent with Genworth Life & Annuity Insurance Company ("Genworth"). Genworth had earlier received a power of attorney and a declaration of attorney in fact. A 1099-R issued by Genworth to the decedent for the surrender of a policy reflecting $548,293.60. The beneficiary of the policy was Frank; it was liquidated for $113,652, and it incurred a taxable gain of $438,293.60, resulting in a tax liability of $131,500.
On May 8, 2012, the decedent died of heart failure.
On July 12, 2012, Joan sold the Rye house to a third party purchaser for $1,250.000.
Nancy petitioned the court for probate of the decedent's will and codicil, and on October 3, 2012, preliminary letters testamentary issued to Joan.
SCPA 1404 depositions were conducted. Attorney Piscionere (the drafter of the decedent's will) was deposed. His testimony relevant to this proceeding was as follows: he prepared a will for the decedent in 2006; the decedent discussed with him that she was trying to decide whether she wanted to leave her homes in Rye and Cape Cod solely to Joan; he advised her that she could accomplish the transfers by will or by deed during her lifetime and that if she wanted to do it by deed, she would have to consult another attorney because he did not do transactional work; and she ultimately decided to execute the will, leaving the residuary equally because she wanted to have the will in place.
Nancy and Caroline determined not to file objections. On June 18, 2013, the instruments (will and codicil) were admitted to probate, and letters testamentary issued to Joan.
In August 2013, Nancy and Caroline filed this petition, alleging that Joan improperly transferred assets from the decedent which property included the Rye house and various accounts [*4]of the decedent. The petition alleges that the transactions were accomplished by Joan as a result of fraud, undue influence, and duress; that the decedent lacked capacity to engage in such transactions; that since Joan has sold the Rye home to a third party purchaser, the proceeds of the sale ($1,250,000) are assets of the estate; that Joan also converted to her own use approximately $650,000 of the decedent's assets consisting of life insurance, savings accounts and annuity accounts; and that Joan be made to repay to the estate an uncertain amount for debts personal to her which she incurred in the decedent's name prior to her death.
Joan answered the petition, generally denying the allegations and asserting the following defenses (statute of limitations, res judicata, collateral estoppel, laches, quantum meruit, accord and satisfaction).
With regard to the defense of quantum meruit, Joan alleges in her answer that it was the decedent's wish to use her homes in Rye and Cape Cod until she died; that by 2006, she could no longer afford the carrying charges on the houses and the costs of her care; that she and the decedent entered into an agreement where Joan would provide the funds that the decedent needed to insure her care and keep her in the homes; that the decedent knew that Joan was not gifting her the funds; and that their agreement was initially oral but then was put in writing in the form of a promissory note which accompanied the deed to the Rye home. The answer also asserted counterclaims against the decedent's estate (for in excess of $1,000,000 for funds expended on behalf of the decedent) and Nancy (for $44,713 on an unsatisfied judgment).
Discovery was conducted, and now, Joan moves for summary judgment dismissing the petition.
In support of her motion, Joan submits numerous affidavits, portions of deposition testimony and documents to support her argument that the decedent was at all times competent and free of undue influence and was neither a victim of fraud nor duress nor socially isolated, and that the Rye house was properly gifted by the decedent to Joan.
In opposition to the motion, Caroline and Nancy argue that there are numerous issues of fact which preclude summary dismissal. Those issues include whether Joan has demonstrated donative intent by the decedent, the validity of alleged monies owed by the decedent to Joan; and whether the decedent had capacity to engage in certain transactions with Joan, and if so, whether she acted freely.
Attached to the papers filed by Caroline and Nancy were, among other things, (1) checks drawn on the decedent's account to payees for 2010 payments for landscaping, general home maintenance, home repairs, insurance, taxes, utilities and to Joan, only a few of which appear to be signed by the decedent and most of which are made out in handwriting which appears to be different than the decedent's signature; (2) $62,075 in checks written to Joan or to cash and endorsed by Joan during the years 2007 through 2009, only a few of which appear to be signed by the decedent and most of which appear to not be made out by the decedent. A few of these checks bear notations like "health aides" or "Xmas"; and (3) statements from the decedent's Citi Advantage Card which included substantial charges for, among other things, postage, office supplies, classified advertising, computers, alcohol, restaurants, home decorating, tennis, sporting goods, and jewelry. For example, the following were posted: Victoria's Secret ($165.61 on November 26, 2006), Princeton Ski Shops ($703.45 on December 10, 2006), Staples ($161.06 on January 14, 2008) and Mid Cape Racquet ($83.20 on July 8, 2008).
On a motion for summary judgment, the moving party must establish a prima facie case of its entitlement to judgment as a matter of law by submitting admissible evidence demonstrating the absence of any triable issue of fact (see Erikson v J.I.B. Realty Corp., 12 AD3d 344 [2004]; Taub v Balkany, 286 AD2d 491 [2001]). "Failure to make such a showing requires denial of the motion regardless of the sufficiency of the opposing papers.
Moreover, since summary judgment is the procedural equivalent of a trial, any doubt as to the existence of a triable issue, or where the material issue of fact is arguable, the motion should be denied" (Peerless Ins. Co. v Allied Building Prods. Corp., 15 AD3d 373, 374 [2005] [internal quotes and citations omitted]). Once the moving party makes the required showing, the burden shifts to the party opposing the motion to produce evidentiary proof to establish the existence of material issues of fact which require a trial (see Alvarez v Prospect Hosp., 68 NY2d 320; Boz v Berger, 268 AD2d 453).
As a preliminary matter, Joan alleges in her motion papers the defenses of gift and defense founded on documentary evidence (April 1, 2010 letter). Additionally, in her answer, Joan has not pleaded either defense. While there is case law authority to grant a defendant's motion for summary judgment where a defense is not pleaded in an answer if there is no surprise or prejudice to the opposing party (see Mem'l Hosp v Baumann, 100 AD2d 701 [3d Dept 1984]; Siegel, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR, p 19-21), summary judgment would be inappropriate here.
While there may be no surprise to Nancy and Caroline with respect to a defense based on documentary evidence since the allegations which support this theory are set forth in the answer, and the affidavits and memoranda of law in support of Joan's motion, there are issues of fact with regard to this defense which preclude summary judgment. These issues of fact include but are not limited to whether there was adequate consideration for the transfer of the Rye home, what the decedent's expenses actually were, whether those expenses were paid with Joan's funds or with those of the decedent, and the decedent's capacity to enter into financial transactions.
To the extent Joan also seeks to defend against this petition with the defense of gift, allegations of which are not pleaded in the answer, the court denies summary judgment on that theory too on the basis of surprise and because there are issues of fact which require a trial. These issues of fact include whether a confidential relationship existed between the decedent and Joan and whether decedent had capacity to execute such transactions.
The request for sanctions is also denied.
THIS CONSTITUTES THE DECISION AND ORDER OF THE
COURT
The following papers were considered:
1. Notice of motion dated November 12, 2014,
2. Affirmation of Frank J. Gobes dated November 10, 2014, with exhibits;
3. Affidavit of John Marshall Cresap sworn to on November 6, 2014, with exhibits annexed;
4. Affidavit of Caroline Cresap O'Malley sworn to on March 2, 2015, with exhibits annexed;
5. Affidavit of Nancy Cresap O'Malley sworn to on February 25, 2015, with exhibit annexed;
6. Affidavit of Patrick M. O'Malley sworn to on February 17, 2015;
7. Affirmation of Donald M. Matusik dated March 17, 2015;
8. Affidavit of Marion K. McBride sworn to March 15, 2015;
9. Affirmation of frank J. Gobes sworn to March 13, 2015;
10. Affidavit of Frank Cresap sworn to on March 13, 2015; and
11. Affidavit of Joan M. Cresap sworn to on March 19, 2015.
Dated: White Plains, NY
March, 2016 _________________________________
HON. Thomas E. Walsh IIActing Surrogate Westchester County
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