Carbone v. Betz (In re Carbone)

• Decision Date: 12 December 2012
• Parties: In the Matter of Carmelo CARBONE, etc., deceased. Mike Carbone, appellant; Debra Betz, respondent.
• Court: New York Supreme Court — Appellate Division

101 A.D.3d 866

955 N.Y.S.2d 209

2012 N.Y. Slip Op. 08519

In the Matter of Carmelo CARBONE, etc., deceased. Mike Carbone, appellant; Debra Betz, respondent.

Supreme Court, Appellate Division, Second Department, New York.

Dec. 12, 2012.

Enea, Scanlan & Sirignano, LLP, White Plains, N.Y. (George A. Sirignano, Jr., of counsel), for appellant.

Bashian & Farber, LLP, White Plains, N.Y. (Andrew Frisenda and Irving O. Farber of counsel), for respondent.

PETER B. SKELOS, J.P., ANITA R. FLORIO, JOHN M. LEVENTHAL, and L. PRISCILLA HALL, JJ.

In a probate proceeding in which Mike Carbone, the executor of the estate, petitioned to judicially settle his intermediate account of the estate, Mike Carbone appeals (1), as limited by his brief, from so much of an order of the Surrogate's Court, Westchester County (Scarpino, Jr., S.), dated June 2, 2011, as, upon a decision of the same court dated April 13, 2011, granted those branches of the motion of the objectant Debra Betz which were for summary judgment granting certain objections to the intermediate account and imposing certain surcharges and interest upon Mike Carbone, (2), as limited by his brief, from so much of a second order of the same court, also dated June 2, 2011, as, upon the decision, in effect, granted that branch of the motion of the objectant Debra Betz which was for summary judgment granting certain other objections and imposing certain surcharges and interest upon Mike Carbone related to professional services allegedly rendered by Carmela Smart, and (3) from an order of the same court dated September 9, 2011, which denied his motion for leave to renew or reargue his opposition to the summary judgment motion of the objectant Debra Betz.

ORDERED that the appeal from so much of the order dated September 9, 2011, as denied that branch of the appellant's motion which was for leave to reargue is dismissed, as no appeal lies from an order denying reargument; and it is further,

ORDERED that the first order dated June 2, 2011, is affirmed insofar as appealed from; and it is further,

ORDERED that the second order dated June 2, 2011, is affirmed insofar as appealed from; and it is further, ORDERED that the order dated September 9, 2011, is affirmed insofar as reviewed; and it is further,

ORDERED that the respondent is awarded one bill of costs, payable by the appellant personally.

The petitioner, Mike Carbone, was named in the decedent's will as executor of the decedent's estate. After the decedent died, his primary beneficiaries, his daughters Debra Betz and Christina Carbone–Lopez, sought an accounting from Carbone. Carbone failed to provide an accounting until after he was held in contempt by the Surrogate's Court. When Carbone finally filed an intermediate account of the estate, along with a petition to judicially settle the account, Betz and Carbone–Lopez filed objections to the account, asserting that it was incomplete and inaccurate. The court agreed, and directed Carbone to file an amended account.

Carbone filed an addendum to his account, but Betz and Carbone–Lopez again filed objections, asserting that the amended account remained incomplete and inaccurate, and Betz additionally filed supplemental objections to the amended account. Betz moved, inter alia, for summary judgment granting her objections, contending, among other things, that Carbone had mismanaged the estate and engaged in self-dealing in breach of his fiduciary duty. The Surrogate's Court, in two orders, inter alia, granted certain branches of Betz's motion and imposed surcharges and interest upon Carbone for various undocumented administration expenses and for assets omitted from his account. Carbone moved for leave to renew or reargue his opposition to Betz's motion, and the court denied his motion.

Surrogate's Court Procedure Act § 2211 grants the Surrogate's Court broad authority to “take the account, hear the proofs of the parties respecting it and make such order or decree as justice shall require” (SCPA 2211[1]; see Matter of Gourary v. Gourary, 94 A.D.3d 672, 673, 943 N.Y.S.2d 80;Matter of Rockefeller, 44 A.D.3d 1170, 1172, 843 N.Y.S.2d 732;Matter of Acker, 128 A.D.2d 867, 513 N.Y.S.2d 786;see also Matter of Stortecky v. Mazzone, 85 N.Y.2d 518, 526, 626 N.Y.S.2d 733, 650 N.E.2d 391). “The Surrogate's Court is empowered to state the account and make such a decree as justice requires notwithstanding the failure or refusal of a fiduciary to file an amended account” (Matter of Wilkinson, 152 A.D.2d 585, 586, 543 N.Y.S.2d 163). Moreover, because the Surrogate's Court “is governed by principles of equity as well as of law, [it] is not prevented by any legal restriction from doing exact justice to any of the parties” (Matter of Schummers, 210 A.D. 296, 300, 206 N.Y.S. 113,affd.243 N.Y. 548, 154 N.E. 600).

A fiduciary acting on behalf of an estate is required to employ such diligence and prudence to the care and management of the estate assets and affairs as would prudent persons of discretion and intelligence ( see King v. Talbot, 40 N.Y. 76, 85–86), accented by “ ‘[n]ot honesty alone, but the punctilio of an honor the most sensitive’ ” (Matter of Rothko, 43 N.Y.2d 305, 320, 401 N.Y.S.2d 449, 372 N.E.2d 291, quoting Meinhard v. Salmon, 249 N.Y. 458, 464, 164 N.E. 545;see Matter of Skelly, 284 A.D.2d 336, 725 N.Y.S.2d 666;Matter of Robinson, 282 A.D.2d 607, 724 N.Y.S.2d 424;Matter of Scott, 234 A.D.2d 551, 552, 651 N.Y.S.2d 592). Where the beneficiary of an estate has demanded an accounting, “ ‘the party submitting the account has the burden of proving that he or she has fully accounted for all the assets of the estate, and this evidentiary burden does not change in the event the account is contested. While the party submitting objections bears the burden of coming forwardwith evidence to establish that the account is inaccurate or incomplete, upon satisfaction of that showing the accounting party must prove, by a fair preponderance of the evidence, that his or her account is accurate and complete’ ” (Matter of Tract, 284 A.D.2d 543, 543, 727 N.Y.S.2d 148, quoting Matter of Schnare, 191 A.D.2d 859, 860, 594 N.Y.S.2d 827 [citations omitted]; see Matter of Rubin, 30 A.D.3d 668, 669, 815 N.Y.S.2d 793;Matter of Curtis, 16 A.D.3d 725, 726–727, 790 N.Y.S.2d 581;Matter of Robinson, 282 A.D.2d at 607, 724 N.Y.S.2d 424;Matter of Anolik, 274 A.D.2d 515, 515–516, 711 N.Y.S.2d 184;see also Matter of Mink, 91 A.D.3d 1061, 1063–1064, 937 N.Y.S.2d 401). Where the objectant satisfies the prima facie burden and the fiduciary fails to rebut it, the Surrogate's Court may impose surcharges and, where appropriate, may also impose interest charges (...