Matter of Sledziona

[*1] Matter of Sledziona 2017 NY Slip Op 50889(U) Decided on June 30, 2017 Surrogate's Court, Oneida County Gigliotti, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 June 30, 2017
Surrogate's Court, Oneida County

In the Matter of the Application of Jerry R. Sledziona to Compel Delivery of Property Wrongfully held by Timothy Owens, Executor of the Estate of Joseph H. Sledziona, Jr.



2015-894/C & D



Appearances:

For the Petitioner: David C. Grow, Esq.

For the Respondent: Merritt S. Locke, Esq.
Louis P. Gigliotti, J.

INTRODUCTION

The petitioner in this proceeding, Jerry R. Sledziona (herein "Jerry"), is the brother of the decedent,Joseph H. Sledziona, Jr. (herein "decedent" or "Joseph"), who died on October 22, 2015. When Joseph died, there existed a savings and a checking accountat Rome Federal Credit Union (herein "Rome FCU"), both designated by one account number, i.e., "Member No. 337-0." It is undisputed that all of the funds in these accounts were deposited by Joseph.

A document concerning the accounts, entitled "Account Change Card", was signed by Joseph and Jerry on November 13, 2014. This card listed Joseph as "Member/Owner" and Jerry as "Joint Owner." Jerry alleges that on October 26, 2015, he sought to close the accounts and receive the monies therein as surviving joint owner. He explains however, that upon the advice of an employee of at Rome FCU, he decided to wait a couple of months, so that any checks drawn against the checking account could clear.

On December 22, 2015, Joseph's Will, dated November 22, 2006, was admitted to probate and Joseph's step-son, Timothy Owens (herein "Timothy"), was appointed as executor. On December 30, 2015, Timothy, in his capacity as executor, went to Rome FCU and withdrew all of the proceeds in the savings account totaling $130,981.81. A check for that amount was issued by Rome FCU made payable to the estate. On January 7, 2016, Timothy withdrew all of the funds in the checking account totaling $12,131.06. A check for that amount was issued by Rome FCU, also payable to the estate.

PROCEDURAL BACKGROUND

On July 12, 2016, Jerry instituted the within proceeding, pursuant to SCPA

§ 2105, seeking an Order compelling Timothy to deliver to him all of the funds withdrawn from the Rome FCU accounts, together with interest. Jerry asserts that, as "Joint Owner" of the accounts, the funds became his by operation of law upon Joseph's death. Timothy filed an "Answering Affidavit with Request for Cross Relief" dated August 8, 2016. The parties then engaged in discovery, including conducting depositions.

On February 9, 2017, Jerry filed the within motion, seeking summary judgment for the relief demanded in his petition. Jerry's notice of motion states that he is entitled to such relief "upon the ground that the decedent's accounts included the right of [*2]survivorship."[FN1]

On or about February 23, 2017, Timothy filed papers in opposition to Jerry's motion and cross-moved for summary judgment declaring that the account at Rome FCU "was not a joint account with right of survivorship under New York Banking Law § 675." Oral argument was heard on March 6, 2017, and additional written submissions were thereafter received by the Court.

HISTORICAL BACKGROUND OF THE ACCOUNTS

In March 1971, decedent made an application for membership in the Revere-Rome Division, Employee's No. 1810 Federal Credit Union (herein "Revere FCU"). A copy of his application is attached as Exhibit D to the affirmation of David C. Grow, Esq. (herein "Grow Affirmation"), submitted in support of Jerry's motion for summary judgment. The number "337-0" is inserted on this form following the pre-printed words "Book No." A joint owner was not listed on the application, although a space was provided for doing so.

On June 18, 1977, Joseph married a woman named Karen. At that time Karen had custody of her minor son, Timothy Owens (referenced above), born to her from a previous relationship.

Eventually, Revere FCU merged with , and became known as, Rome FCU. Attached as Exhibit E to the Grow Affirmation is an application Karen made to join Rome FCU. It too references "Book No. 337-0" but is undated, and nothing is entered in the space provided for designating a joint owner.

On July 3, 1995, Joseph and Karen signed a Rome FCU form entitled "Joint Share Account Agreement" (see Grow Affirmation, Exhibit F). In a space following the pre-printed words "Joint Account No." is inserted the number "337000". While the form is not labeled as a signature card, it does bear the signatures of Joseph and Karen. Moreover, it specifically states that the account "...shall be owned by them jointly, with the right of survivorship...."

Karen died on April 22, 2006. There is no evidence of any further documents being executed in connection with these accounts until over eight years later when, on November 13, 2014, Joseph and Jerry signed the above-referenced "Account Change Card" (see Grow Affirmation, Exhibit G).

FURTHER BACKGROUND

In April 2014, Joseph was diagnosed with lung cancer. In June or July 2014, he underwent surgery for this condition and entered a rehabilitation facility until his discharge in October 2014. During his illness and rehabilitation, Jerry brought Joseph to all of his medical appointments and took care of his affairs, including assisting him in the sale of his residence and moving into an apartment After Joseph was discharged from rehabilitation, and more specifically on November 13, 2014, he and Jerry went to the Rome FCU and signed the "Account Change Card." The handwriting on this card indicates that it was prepared in reference to "Member No. 337000."[FN2] The card appears [*3]to have been used for two purposes: to remove Karen as the deceased joint owner and add Jerry as a new joint owner. Two boxes appear on the front side of the card, one of which, if checked, would render the accounts joint "With Rights of Survivorship" and the other which, if checked, would render them joint "Without Rights of Survivorship." In this case, neither box was checked. (See Grow Affirmation, Exhibit G).

On the reverse side of the card, under a section entitled "Authorization," appear the signatures of Joseph and Jerry. The paragraph immediately preceding their signatures begins with the following sentence:

"I/We agree that the changes on this Card amend the previously signed Account Card and are subject to the terms and conditions of the Membership and Account Agreement...."

(Id.) Paragraph 3a of the "Membership and Account Agreement" reads, in relevant part, as follows: 3. JOINT ACCOUNTS—A joint account is an account owned by two (2) or more persons.a. Rights of Survivorship. Unless otherwise stated on the Account Card or documented through the Credit Union's online application and authentication process, a joint account includes rights of survivorship. This means that when one (1) owner dies, all sums in the account will pass to the surviving owner(s). For a joint account without rights of survivorship, the deceased owner's interest passes to his or her estate....

(Grow Affirmation, Exhibit H [emphasis added]).

When the "Account Change Card" was signed, Jerry was given his own debit card, which he apparently utilized three times, but only once for his own benefit. In a supplemental affidavit, submitted in support of his motion, Jerry alleges that he used Joseph's debit card several times, and also signed certain checks drawn on the checking account, but only to pay for items on Joseph's behalf. Following Joseph's funeral, his family held a luncheon in his memory, the bill for which Jerry paid from Joseph's funds at Rome FCU.

A week after Joseph and Jerry signed the "Account Change Card," they and Jerry's wife went to the office of Joseph's attorney and executed paperwork to transfer Joseph's ownership of a parcel of unimproved real property to Jerry and his wife for no consideration. In paragraph "9." of his petition, Jerry also represents that he was the named beneficiary of a life insurance policy, owned by Joseph, with a death benefit in the amount of $3,000.00.

BANKING LAW § 675

Jerry contends in the first instance that the accounts in question enjoy the presumption created by Banking Law § 675(b). This statute provides that if specific words of survivorship are used when a joint account is created, it is prima facie evidence that title is vested in the survivor. The statute places the burden to prove otherwise upon the party challenging the title of the survivor.

Even though Jerry was not added to the accounts until November 2014, he claims the "Joint Share Account Agreement" signed by Joseph and Karen on July 3, 1995 should be considered the pertinent signature card for purposes of invoking the statutory presumption. This agreement provided the accounts were owned jointly with rights of survivorship. Jerry describes the "Account Change Card" that he and Joseph executed as a purely ministerial form for the purpose of removing Karen's name as the existing joint owner and adding Jerry's name to accounts that otherwise remained unchanged. Jerry also cites Matter of Carlin, 134 Misc. 596 [Sur Ct, Franklin County 1929] in support of this contention.

The Court finds the facts of Carlin distinguishable. In Carlin, a father and [*4]daughter opened a joint account with rights of survivorship. Thereafter the father, who had deposited all of the monies in the account, went to the bank and instructed the teller in charge of deposits to strike the name of the original joint tenant and add the name of another joint tenant. Significant to the present matter, at all times the Carlin account remained a joint account. On the father's death, the Court awarded the monies to the new joint tenant.

In contrast to Carlin, when Karen died, Joseph benefitted from the survivorship language in the "Joint Share Account Agreement." The monies in the accounts became Joseph's alone. The accounts were no longer joint accounts but rather individual accounts, even if the member number never changed. The fact that the accounts were not re-titled in Joseph's name alone does not change their nature as individual accounts. Moreover, while Joseph granted Karen rights of survivorship via the "Joint Share Account Agreement," nothing in that Agreement bestows the same right on any future joint owner. Thus, by failing to designate whether the accounts were to be "with" or "without" rights of survivorship when they signed the "Account Change Card," Jerry does not benefit from the presumption afforded under Banking Law § 675.

Jerry then points to that portion of the "Account Change Card" stating the accounts are subject to the terms and conditions of a "Membership and Account Agreement." This agreement in turn provides that joint accounts come with rights of survivorship. However, the "Account Change Card" reference to the "Membership and Account Agreement" is not controlling. First, in her deposition, the CEO of Rome FCU, Ms. Susan Mendiola, testified that she did not provide Joseph and Jerry with a copy of the "Membership and Account Agreement" at the time the "Account Change Card" was signed. In his deposition, Jerry confirmed that he never read or saw this agreement. Although a statement in the "Authorization" section of the "Account Change Card" reads, "I/We acknowledge receipt of a copy of the agreements and disclosures applicable to the accounts and services requested," the above deposition testimony and the absence of any proof that Joseph knew or consented to the survivorship language in the agreement nullifies the effect of the acknowledgment.

Furthermore, there would be no reason to have an account holder check the box on the "Account Change Card" conveying survivorship rights if the "Membership and Account Agreement" created the default rule. Only a box specifying no survivorship rights would be necessary. Since the "Account Change Card" gave Joseph a choice as to whether to grant survivorship rights relative to the accounts, and since Jerry has not established that Joseph was made aware of the terms of the "Membership and Account Agreement," the Court will not infer that Joseph knew or intended to give Jerry survivorship rights.

Equally important, incorporating rights of survivorship by reference to a separate document will not automatically invoke the presumption created by § 675(b) of the Banking Law. (See Sweetman v. Suhr, 126 AD3d 1438, 1440 [4th Dept 2015], citing Matter of Degnan, 55 AD3d 1238 [4th Dept 2008]). Since the survivorship language of the "Membership and Account Agreement" is not contained in the "Account Change Card," the agreement does not afford Jerry the statutory protection. For the same reason, the Court will not look to Joseph and Karen's 1995 "Joint Share Account Agreement" as a basis for concluding Joseph intended to give Jerry rights of survivorship relative to the accounts. While such evidence could theoretically be relevant to a determination of Joseph's intent (see id. at 1440), Sweetman clarifies that reliance on documents separate and apart from the document used to create an account is insufficient to warrant summary judgment.

Based on all of the foregoing, the Court finds insufficient proof to warrant a summary finding that the presumption afforded by Banking Law § 675(b) applies to the Rome FCU accounts. Therefore, Jerry's motion seeking summary judgment in this [*5]regard is DENIED. In the absence of a fact question suggesting the presumption could apply, the Court GRANTS Timothy's cross motion to the extent it seeks a summary declaration that the accounts do not enjoy the presumption afforded by Banking Law § 675(b).

DECEDENT'S INTENT

Jerry argues in the alternative that he may still be granted summary judgment because no material question of fact exists relative to the issue of whether Joseph intended to convey rights of survivorship when he added Jerry as a joint owner via the "Account Change Card." In determining whether a joint tenancy with survivorship rights was intended, courts consider such factors as: 1) whether the decedent was the sole depositor; 2) whether the joint tenant withdrew funds during the decedent's lifetime; 3) the decedent's testamentary scheme; and 4) the signature card's reference to another document stating that the account is joint with right of survivorship. (See Harrington v. Brunson, 129 AD3d 1581, 1582-83 [4th Dept 2015]; Sweetman, 126 AD3d at 1439-40).

Jerry concedes Joseph made the only deposits to these accounts. Nevertheless, he points out that he held a debit card connected to the accounts, which he utilized during Joseph's lifetime. Jerry further contends that Joseph wanted Jerry to receive his assets, as evidenced by Joseph naming Jerry the beneficiary of a small life insurance policy and transferring a parcel of unimproved real property to Jerry and his wife. Jerry also points to the previously highlighted language in the "Membership and Account Agreement" providing that every joint account includes a right of survivorship. Jerry asserts that these uncontroverted facts form a basis for the Court summarily to conclude Joseph intended for Jerry to enjoy survivorship rights to the Rome FCU accounts.

On the other hand, even if the facts are not in dispute, they can be used to support a contrary conclusion. For example, even though Jerry withdrew funds from the accounts, he said he used Joseph's debit card and paid Joseph's bills. Joseph also kept possession of the account statements and the checkbook. The only time Jerry used the accounts for his own benefit was for a small charge of $25.46. As for Joseph's testamentary plan, his Will left his entire estate to Timothy and Timothy's children. Joseph signed this Will in 2006 and did not change it even after meeting with his lawyer to effectuate the real estate transfer to Jerry and his wife in 2014. As previously noted, a question also exists as to whether Joseph knew of and consented to the terms of the "Membership and Account Agreement" when he added Jerry's name to the Rome FCU accounts, and whether Joseph considered the "Joint Share Account Agreement" signed with Karen in 1995 to be controlling.

Drawing all inferences in favor of Timothy as the non-moving party, the Court cannot conclude that the only fair inference is that Joseph intended for Jerry to have rights of survivorship to the Rome FCU accounts. As such, Jerry's request for summary judgment on this point is DENIED.

THE EPTL § 6-2.2(a) ISSUE

At oral argument the parties asked to Court to rule on whether Jerry should be

summarily awarded one-half of the proceeds of the accounts pursuant to EPTL § 6-2.2(a).[FN3] This statute provides that "a disposition of property to two or more persons [*6]creates in them a tenancy in common, unless expressly declared to be a joint tenancy." Jerry asserts that the presumption arises because the Rome FCU accounts were clearly in his name and Joseph's name. He argues Timothy has failed to provide any evidence negating this presumption, citing Matter of Statler, 270 AD2d 594 [3rd Dept 2000].

Timothy counters Statler was decided after a court inquiry and not on a summary judgment motion. Moreover, Timothy asserts the record before this Court demonstrates Jerry stood in a fiduciary relationship with the decedent and, therefore, Jerry has the burden to establish that Joseph intended to gift him one-half of the accounts, citing Matter of Trombley, 137 AD3d 1641, [4th Dept 2016].

The Court finds a question of fact as to whether Jerry had a confidential relationship with Joseph.[FN4] Following Joseph's cancer diagnosis and treatment, Joseph could no longer manage his own affairs. Jerry became Joseph's means of transport to his medical appointments, helped Joseph sell his home and find an apartment, and assisted Joseph with paying his bills. (See Matter of Connelly, 193 AD2d 602, 603 [2d Dept 1993]). At the same time however, Joseph and Jerry were brothers, and Joseph never named Jerry his power of attorney. (See Jacks v. D'Ambrosio, 69 AD3d 574, 575 [2d Dept 2010]). This competing evidence precludes a summary finding as to who bears the burden of proof as to the issue of the applicability of EPTL § 6-2.2(a). (See Prievo v. Urbaniak, 64 AD3d 1240, 1241 [4th Dept 2009]).

The Court further finds, even if the presumption of EPTL § 6-2.2(a) were to apply, that the same question previously discussed relative to Joseph's intent in adding Jerry's name exists. Although Jerry points to the deposition testimony of Ms. Mendiola from Rome FCU, where she stated that Rome FCU does not maintain convenience accounts but instead encourages members to execute powers of attorney, other evidence in the record belies this representation. For example, Ms. Mendiola testified that Rome FCU has no policy prohibiting convenience accounts. Moreover, Rome FCU readily permitted Timothy as executor to withdraw the funds from the accounts, even though Jerry's name was listed as a joint owner.

Accordingly, Jerry's request for a summary award of one-half the proceeds of the accounts, pursuant to EPTL § 6-2.2(a), is also DENIED.

TIMOTHY'S CROSS-CLAIM

Lastly, and as previously indicated, Jerry's notice of motion seeks to dismiss Timothy's Cross-Claim compelling Jerry to return the decedent's motor vehicle and other personal property. Jerry alleges that Timothy agreed to gift him the vehicle (and a lawn tractor) and that, even if no gift was intended, he is now owed storage charges. Timothy asserts that the idea to give Jerry the car originated with Joseph's brother John, and that Timothy initially "indicated that would be a good idea,' he "never actually agreed to transfer the car." (Affidavit of Timothy Owens, sworn to February 23, 2017, ¶ 12). With a question of fact existing relative to Timothy's donative intent, Jerry's motion for summary dismissal of the Cross-Claim must be DENIED.

Based upon the foregoing, it is hereby

ORDERED that the Motion for Summary Judgment filed by Jerry R. Sledziona is [*7]DENIED in its entirety; and it is further

ORDERED that the Cross-Motion for Summary Judgment filed by Timothy Owens as to the applicability of Banking Law § 675 is GRANTED; and it is further

ORDERED that the Court will conduct a pretrial conference with the attorneys in this matter on August 3, 2017 at 10:00 a.m. in Utica, New York.

Dated: June 30, 2017

ENTER:

Utica, New York

HON. LOUIS P. GIGLIOTTI, SURROGATE Footnotes

Footnote 1:Jerry's notice of motion also seeks summary dismissal of Timothy's Cross-Claims. The Answering Affidavit contains only one Cross-Claim(set forth in paragraph "11." thereof) seeking an Order compelling Jerry to return Joseph's motor vehicle and other unspecified personal property to the estate.

Footnote 2:Apparently, the parties do not dispute that "Member No. 337000" was just new nomenclature for "Book No. 337-0" referenced in Exhibits D and E of the Grow Affirmation, and for "Joint Account No. 337000" referenced in Exhibit F thereto.

Footnote 3:Although, in paragraph "9." of his Answering Affidavit filed in response to the petition, Timothy states "the statutory presumption under Estates Powers and Trust Law Section 6-2.2(a)... should apply to the circumstances herein," his substitute counsel stated at oral argument that this was alleged in error by Timothy's original attorney. The parties agreed on the record that this issue could be litigated and to that end, they thereafter filed additional written submissions.

Footnote 4:Timothy uses the phrase "fiduciary relationship," which seems inapplicable in this case because Timothy did not submit evidence to show Jerry acted in a fiduciary capacity. Nevertheless, as discussed herein, evidence in the record suggests Jerry may have had a confidential relationship with Joseph, which in turn may have allowed him to exert undue influence over Joseph's decisions.