APPLICATION OF HÖRLER

• Decision Date: 07 July 1992
• Docket Number: No. M19-84.,M19-84.
• Citation: 799 F. Supp. 1457
• Parties: In re Application of Adolf HÖRLER to take the testimony of certain persons for use in a probate proceeding pending in Oberengadin, Switzerland, pursuant to 28 U.S.C. § 1782.
• Court: U.S. District Court — Southern District of New York

799 F. Supp. 1457

In re Application of Adolf HÖRLER to take the testimony of certain persons for use in a probate proceeding pending in Oberengadin, Switzerland, pursuant to 28 U.S.C. § 1782.

No. M19-84.

United States District Court, S.D. New York.

July 7, 1992.

COPYRIGHT MATERIAL OMITTED

William Schurtman, New York City, for applicant.

Fred I. Sonnenfeld, Tammy Bigelow, Sullivan & Cromwell, New York City, for respondent.

Julius Kaplan, Washington, D.C., for intervenor Francesca Agusta.

MEMORANDUM & ORDER

BRIEANT, Chief Judge.

By motion fully submitted on April 21, 1992, applicant Adolf Hörler moves to compel two New York attorneys to produce certain documents in connection with a foreign probate proceeding. The Court will briefly summarize the tangled history of this litigation, which, the reader is warned, in some respects resembles the plot of a "Dynasty" episode; in others, regrettably, it recalls the infamous case of Jarndyce v. Jarndyce, first reported in the pages of Charles Dickens' Bleak House.

On June 14, 1989, Count Corrado Agusta died at the age of sixty-five. From 1971 to 1983, the Count had served as chairman of Gruppa Agusta, a successful helicopter construction company started by his grandfather. At the time of his death, the Count was an Italian citizen domiciled in St. Moritz, Switzerland. The Count was survived by his second wife, Countess Francesca Vacca Agusta-Grafagni, from whom he had received a separation decree in Italy in 1985, and by his son by his first marriage, Riccardo Agusta. Countess Agusta is also a citizen of Italy, but resides in Mexico, while Riccardo Agusta is an Italian citizen currently residing in Monte Carlo.

The Count's last Will and Testament, executed on November 11, 1988, appoints Dr. Hans Jurgi Zinsli of St. Moritz as executor of his estate, and specifically recites that it is subject to Swiss law. The Will bequeaths the Count's entire estate to his son, Riccardo Agusta. The state of relations between the Count and his estranged second wife can be gathered from the second paragraph of that instrument:

"I also dispose that my wife, FRANCESCA VACCA AGUSTA-GRAFAGNI, born October 29th, 1942, Italian citizen, resident in Mexico, and from whom I am legally separated, be disinherited in the event that at the time of my death, she be my heir.

This disinheritance is motivated by the fact that the said person named above has circulated numerous defamatory and slanderous statements about me, particularly in Italy, in Switzerland and in the United States of America and that she is looking for and threatening new ways to harass me and cause me prejudice with a view to collecting monies that are not due to her". Ex. 1 to April 21 Sonnenfeld Affidavit.

The Count and Countess were, apparently, no strangers to the courtroom. Before the Count's death, the Countess had sued in Supreme Court, New York County, in 1988 to impress a trust on a Fifth Avenue apartment owned by a Panamanian corporation allegedly controlled by the Count. The Court infers from counsel's statement at the argument of this motion that this litigation was resolved in the Count's favor; the Countess has apparently appealed, but that appeal has been automatically stayed due to the Count's death, and failure to appoint a representative to defend for his estate. See April 21 Tr. at 19.

Not surprisingly, the Count's death and the appearance of this Will escalated the family dispute to a new level—to the detriment of the dockets of at least nine courts in six nations. The Countess first elected to contest the Will in Italy; she avers that Italian law grants her some interest in the Estate of her deceased husband, irrespective of the decedent's wishes, and similar, perhaps, to an elective share in New York. Riccardo Agusta claims, by contrast, that the 1985 Italian separation decree extinguishes any rights the Countess may have had in the Count's Estate. The current status of this litigation is unclear.

The Countess has also contested the Will in Switzerland, where it has apparently been offered for probate. Counsel were unable entirely to clarify how a Will could be offered for probate in one country while it is being "contested" in another, but inform the Court that there is a treaty between Switzerland and Italy permitting this procedure.

In any event, the Countess also moved successfully in the Swiss probate court to suspend Dr. Zinsli as executor. Although this suspension seems to have been reversed, on July 20, 1989, Judge Lazzarini of the Probate Court of Oberengadin, Switzerland ("Kreisamt Oberengadin") appointed the applicant, Mr. Adolf Hörler, to inventory the assets of the Count's estate. Mr. Hörler is an attorney and Notary in St. Moritz. Mr. Hörler's attorneys describe his role as follows:

"Under Swiss law, a Notary who is appointed to inventory the assets of an estate has the right and duty to locate and collect such assets on a worldwide basis and must file a report with the Probate Court which appointed him". November 1 Schurtman Declaration at ¶ 4.

Mr. Hörler was subsequently appointed by the same court, on August 23, 1989, as the Official Administrator of the Estate. November 1 Schurtman Declaration at ¶ 5. That designation, of course, has been appealed in the Swiss courts by Riccardo Agusta, and the resolution of this appeal appears nowhere in the record.

To complete the description of what might be termed the eastern front of this litigation, the Swiss courts have, on the Countess' application, sealed access to the Count's villa in Switzerland, and the French and German courts have restrained the movement of the Count's airplane.

The first—but, as will appear, by no means the last—proceeding in the United States relating to the Count's Estate was instituted in the Surrogate's Court of New York County on July 31, 1989. In that proceeding, which is still pending and remains undecided, Countess Agusta sought the appointment of Citibank, N.A., as Temporary Administrator of the Estate, pursuant to New York Surrogate's Court Procedure Act § 901 (McKinney Supp.1992). This statute essentially permits a potential beneficiary of an estate to petition for the appointment of a disinterested party to locate and preserve the assets of an estate pending probate. N.Y.Surr.Cts.Proc. § 902(7) (McKinney 1992). Just such a temporary administrator has already been appointed in the Bahamas.

After the filing of the Surrogate's Court action, Countess Agusta sought discovery in that proceeding of inter alia Mr. Herbert Grossman, since deceased. Mr. Grossman was a New York attorney who served as an advisor to Count Agusta, and who was instrumental in establishing and maintaining certain Panamanian, Bahamian, Cayman Islands and Netherlands Antilles corporations and partnerships. These entities were allegedly controlled by, or related to, the Count. Both Riccardo Agusta and Mr. Grossman moved to quash the subpoenas and notices of depositions. In an opinion dated October 6, 1989, Surrogate Lambert granted the Countess discovery of Mr. Grossman, reasoning that that court had the power to determine whether the Estate contained New York-based assets, and thus whether the Surrogate's Court could properly appoint a Temporary Administrator.¹

In a subsequent opinion dated January 24, 1990, Surrogate Lambert also permitted the Countess to depose the Countess' stepson, Riccardo Agusta. Upon the inevitable appeal, this order was reversed by the Appellate Division, on the grounds that Riccardo Agusta, who is a citizen of Monaco, could only be deposed using the procedures set forth in the Hague Convention. Matter of Agusta, 171 A.D.2d 595, 567 N.Y.S.2d 664 (1st Dep't 1991). Though it appears that certain restraining orders have been entered with respect to entities which may be controlled, or have some connection with, the Count's Estate, as of this date no final determination regarding the appointment of a Temporary Administrator has been reached by the Surrogate's Court.

Mr. Hörler, in the meantime, has been engaged in a parallel investigation with respect to the Count's assets. On February 14, 1991, Mr. Hörler filed an application in this Court for judicial assistance, pursuant to 28 U.S.C. § 1782(a). This statute provides that "The district court of the district in which a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal." 28 U.S.C. § 1782(a) (West 1966). Mr. Hörler presumably sought the assistance of the federal courts because persons with interests in, or knowledge of, the location of the Estate's assets in the Americas had refused to cooperate with his investigation, which relates to a proceeding in a foreign tribunal, that is, the Probate Court of Oberengadin, Switzerland.

On February 15, 1991, Judge Sprizzo of this Court, presiding in Part I of this Court, issued an ex parte order allowing Mr. Hörler to take the depositions of certain witnesses. Of particular importance to this motion is that portion of Judge Sprizzo's Order granting the applicant the right to depose Ms. Gloria Neuwirth and the law firm of Sonnenfeld & Richman. Ms. Neuwirth, who is an attorney, became involved in this matter because Mr. Grossman, the Count's New York attorney and adviser, died in September 1990. Ms. Neuwirth apparently worked with Mr. Grossman, and currently represents the executors of his estate. Likewise, the law firm of Sonnenfeld & Richman worked with Mr. Grossman on some matters relating to Count Agusta, including, significantly, the defense of both the Supreme Court and Surrogate's Court actions.

Both Ms. Neuwirth and Sonnenfeld & Richman then moved to quash the subpoenas, arguing inter alia that Mr. Hörler was not an "interested person" within the meaning of the statute and that the probate proceeding in Oberengadin did not qualify as a "foreign tribunal". By endorsement Order dated ...