Matter of Brody
Annotate this CaseDecided on April 16, 2018
Surrogate's Court, Queens County
In the Matter of the Judicial Settlement of the Account of Paul E. Brody as Executor of the Estate of Beulah Brody a/k/a Bea Brody, Deceased.
2011-4411/E
Edward D. Baker, Esq., for Petitioner, Paul E. Brody
Joel M. Schwartz, Esq., for Objectant, Merryl Katz
Avrom R. Vann, Esq., for Objectants Diane Lichter and Sheila Langermann
Peter J. Kelly, S.
In this proceeding, objectant, Merryl Katz ("Katz") moves, inter alia, to vacate a stipulation of settlement entered into between the parties on November 28, 2017 resolving certain issues in this contested accounting proceeding, and to impose sanctions and surcharges against Paul Brody ("Brody"), the executor of the estate, and his attorneys, for "frivolous conduct and statements" and for "compelling" the making of this motion.
Brody opposes the motion, contending that there is no basis in law or fact to vacate the stipulation, and, if anything, sanctions and costs should be imposed against Katz for advancing a frivolous position and unnecessarily burdening the estate with additional legal fees in the process. Objectants, Diane K. Lichter ("Lichter") and Sheila Langermann ("Langermann"), make a similar argument by way of cross-motion, and seek reimbursement of the sum of $14,670.00 from the movant for the time spent opposing this motion.
Katz's moving papers, which include her attorney's affirmation and are devoid of any supporting legal authority, allege that the written stipulation of settlement must be vacated because there was "no meeting of the minds between the parties at the time of its execution" with respect to paragraph 4 of the agreement. The agreement, prepared and executed in court after numerous conferences and extended negotiations, expressly states that the attorneys were authorized to enter into the stipulation on behalf of their respective clients. The disputed paragraph of the agreement provides as follows:
"The executor is waiving the first $50,000.00 of the estate, which sum shall be divided equally between the 3 other residuary beneficiaries. The balance of the estate shall be divided equally among all 4 beneficiaries (emphasis added)."Notwithstanding the plain language of the paragraph, movant contends that the executor was to pay the sum of $50,000.00 from his interest in the estate, as opposed to forfeiting his right to partake in a distribution of the first $50,000.00 of the estate as provided by the stipulation. On the basis of this allegedly "divergent understanding" and the "bareboned" nature of the agreement, Katz demands that the stipulation be cast aside in its entirety, her motion for [*2]summary judgment reinstated, and sanctions imposed against Brody and his attorneys.
Brody opposes the motion, claiming that Katz is simply "dissatisfied with the bargain struck" and is seeking to impose new and different terms. Lichter and Langermann, by cross-motion, contend that there is no legal basis to vacate the agreement and further argue that Katz's refusal to withdraw the motion after being warned to do so, together with her omission of material facts and failure to cite any supporting legal authority, warrants the imposition of sanctions and/or legal fees.
Turning to Katz's motion, as a preliminary matter, courts have "long favored and encouraged the fashioning of stipulations as a means of expediting and simplifying the resolutions of disputes" (Mitchell v. NY Hosp., 61 NY2d 208, 214 [1984]). "Strict enforcement of stipulations of settlement serve the interest of efficient dispute resolution, and is essential to the management of court calendars and the integrity of the litigation process" (Hallock v. State of New York, 64 NY2d 224 [1984]). Accordingly, stipulations will not be casually disregarded, and the party seeking to set aside a settlement agreement has the burden of establishing good cause sufficient to invalidate a contract, such as duress, fraud, mistake, overreaching, or unconscionability (see Pieter v. Polinu, 148 AD3d 1191 [2d Dept 2017]).
Katz's argument of a "divergent understanding" falls within the realm of vitiating a contract on the grounds of mutual mistake. To vacate a stipulation on this basis, it must be shown "by proof of the highest order" and "clearly and beyond a doubt" (True v. True, 63 AD3d 1145 [2d Dept 2009]) that the mistake existed at the time the stipulation was entered into and that it was "so substantial that the stipulation failed to represent a true meeting of the minds" (Etzion v. Etzion, 62 AD3d 646 [2d Dept 2009]; see also Simkin v. Blank, 19 NY3d 46 [2012]).
The submissions of the movant consist primarily of a flurry of e-mail exchanges and correspondence between counsel for the parties subsequent to the stipulation's execution which then led to the making of this motion. At best, these exhibits demonstrate that it was only upon reviewing the amounts of the proposed distributions, which were calculated in accordance with the plain language of the stipulation, that Katz began to question the bargain that was made. Interestingly, despite now claiming that the mistake warranted the entire vacatur of the agreement, the written exchanges demonstrate that Katz was nevertheless apparently content to demand compliance with the terms of the stipulation of which she approved. In any event, the above evidence fails to prima facie establish the existence of a mutual mistake at the time the agreement was entered into.
Additionally, even assuming the court found the above mistake had been made, it would not be deemed so material as to warrant discarding the entire agreement. Indeed, insofar as Katz's interest is concerned, the difference between calculating the distribution pursuant to the stipulation, versus the manner Katz proposes, amounts to a mere $12,500.00. This sum is hardly consequential given the size of this estate, the time, effort, and legal fees associated with litigating this estate, or even the costs associated with the within motion practice.
Nor can the movant succeed on the basis of unilateral mistake, as courts will not vacate stipulations on the grounds of unilateral mistake in the absence of a fraudulent misrepresentation (see McClorey v. McClorey, 61 NYS 3d 290 [2d Dep't 2017]), or where the mistake was the result of negligence or the failure to exercise ordinary care (see ATS-1 Corp. V. Rodriguez, 156 AD3d 674 [2d Dep't 2017]).
During the course of this protracted litigation, when, as here, the litigants are particularly contentious, and perhaps, overly zealous, the court invariably gains great familiarity of both the substantive issues raised in the proceeding and the personalities involved. In this instance, the stipulation at issue was arrived at during a conference with the court in which the terms of the agreement were negotiated. Given its comprehension of the above, the court directed the stipulation be dictated by counsel and memorialized in writing under the supervision of a court attorney. All of the attorneys actively participated in the drafting process and upon reading the stipulation, requested additions and changes to the language of the agreement prior to signing it on behalf of their respective clients. Katz and her counsel had ample opportunity to modify paragraph 4 of the agreement to suit her purported interpretation or otherwise raise the issue at the time but failed to do so. No proof of fraud on the part of Brody's counsel or any of the parties is evident.
A written agreement that is clear and unambiguous must be enforced in accordance with its plain meaning (Brad H. v. City of NY, 17 NY3d 180 [2011]). Ambiguity is determined by examination of the document as a whole, and cannot be manufactured by movant's resort to "extrinsic evidence that the parties intended a meaning different than that expressed in the agreement" (id. at 185). Ultimately, the agreement at issue is neither ambiguous, nor contrary to the particulars of the terms that were discussed during the conference with counsel. A party who is less than diligent cannot later complain that a "supposedly unanticipated interpretation resulted in [an adversary's] unjust enrichment," where, as here, the interpretation comports with the plain meaning of the agreement (Vasbinder v. Hung, 2017 NY Misc. Lexis 2288, *28 [Sup Ct, NY County 2017]).
The court further finds no merit in Katz's claim of "fraud"on the part of Brody's counsel in the execution of the instrument, an argument raised for the first time in reply to Brody's opposition and in opposition to Lichter and Langermann's cross-motion. Therein, Katz takes a markedly different approach—perhaps in recognition of the futility of her initial arguments—unceremoniously declaring that "it was neither a mutual mistake nor a unilateral mistake as to the payment" but rather, the fraud perpetrated by Brody's counsel that warranted discarding the agreement.
Katz's counsel is a seasoned practitioner, well-versed in trust and estate matters, who routinely appears in this court. The notion that he was essentially duped by opposing counsel into executing the stipulation is not remotely supported by the record, belied by the plain language of the agreement and counsel's own claims that the agreement is "basic" and "barebones," at odds with the arms-length nature of the relationship that exists between adversaries, and again only indicates that Katz or her counsel potentially should have exercised greater care and diligence in drafting and reviewing the stipulation prior to its execution.
Moreover, the fact that the movant has elected yet again to revisit the underlying merits of the case, discussed ad nauseam during prior appearances and conferences, strongly suggests that the attempt to vacate the entire stipulation may very well be motivated by an unhappy client with so-called "buyer's remorse." The ever-changing mind of a dissatisfied litigant, however, provides no basis to set aside a clear and unambiguous agreement (see e.g., Warren v. Rabinowitz, 228 AD2d 492 [2d Dept 1996]; Etzion v. Etzion, 62 AD3d 646 [2d Dept 2009]).
Finally, inasmuch as setting aside the agreement in this instance would neither "promote [*3]justice" nor "prevent a wrong," the court declines to do so (Yonkers Fur Dressing Co. v. Royal Ins. Co., 247 NY 435 [1928]; Matter of Frutiger, 29 NY2d 143 [1971]). Any remaining contentions made by Katz are without merit. Katz's motion is denied in its entirety, including her request for sanctions.
The court now turns to Lichter and Langermann's cross-motion which seeks to impose sanctions and/or legal fees and costs against Katz and her counsel for the making of the within motion. The court has the discretion to impose financial sanctions upon any party or attorney who engages in frivolous conduct (see 22 NYCRR § 130-1.1). Frivolous conduct is statutorily defined as (1) conduct that is completely without merit in law and cannot be supported by reasonable argument for an extension, modification, or reversal of existing law; (2) conduct undertaken primarily to delay or prolong the resolution of the litigation or to harass or maliciously injure another; or (3) the assertion of material factual statements that are false (see id.).
After due consideration, while a close call, the court declines to impose sanctions against Katz or her attorney. With respect to Brody's argument, the court is mindful that there needs to be an end to the litigation surrounding this estate and it is quite likely that the legal fees associated with a hearing to determine the appropriate amount of sanctions will largely undercut any award.
As to the cross-movants' argument that Katz's motion was made without a legal basis and without citation to any legal authority, the court observes that the very same could have been said of Lichter's motion regarding apportionment (see decision of this court dated December 15, 2017). Therein, Lichter cited no legal authority in support of her position, and, as evidenced by the decision of this court, there was no conceivable merit to her argument. Lichter's own refusal to withdraw that portion of the objectants' summary judgment motion and demand a decision on a similarly baseless issue, renders the request to impose sanctions on Katz for the very same behavior less than compelling.
Additionally, the court observes from correspondence omitted by the cross-movants, but provided by both Brody and Katz's counsel, that Lichter and Langermann's attorney initially sided with Katz's argument and otherwise took a "wait and see" approach with respect to the disputed distribution, thereby sharply undermining the claim that there was absolutely no basis for the motion.
In sum, the mirror image behavior of the cross-movants effectively cancels out a strong basis to support the imposition of sanctions against Katz. Accordingly, Lichter and Langermann's cross-motion is denied.
Short form order signed simultaneously herewith.
Dated: April 16, 2018
HON. PETER J. KELLY
SURROGATE
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