Estate of Dominguez, Matter of

• Decision Date: 11 May 1989
• Citation: 143 Misc.2d 1010,541 N.Y.S.2d 934
• Parties: In the Matter of the ESTATE OF Pedro A. DOMINGUEZ, Deceased. Surrogate's Court, Kings County
• Court: New York Surrogate Court

Page 934

541 N.Y.S.2d 934

143 Misc.2d 1010

In the Matter of the ESTATE OF Pedro A. DOMINGUEZ, Deceased.

Surrogate's Court, Kings County.

May 11, 1989.

Edelman, Schoenfeld & Weinberg, New York City, by Jerry Weinberg, for petitioner, Rosemary Morales.

Moe Zucker, Brooklyn, guardian ad litem for infant, Distributees--Yoraidly Dominguez and Steven Dominguez.

Department of Social Services, New York City by Thomas Bergdall and Christine Misurelli.

BERNARD M. BLOOM, Surrogate.

In her petition to compromise a cause of action for wrongful death and to judicially settle her account, the administratrix requests that the court give effect to the decedent's surviving spouse's waiver of her share of the wrongful death proceeds that she may otherwise be entitled to under EPTL § 5-4.4. Objections to the attempted waiver or renunciation have been filed by the Commissioner of Social Services who intends to submit a claim against the spouse for public assistance in the form of Aid to Dependent Children, rendered to her and her child since 1982. The Commissioner contends that EPTL § 2-1.11, the statute governing renunciations, does not include within its ambit wrongful death proceeds. The validity of the claim against the spouse is not in issue herein.

FACTS

The decedent died on March 16, 1987, intestate, as a result of injuries sustained as a passenger in a motor vehicle accident on March 11, 1987. He remained comatose from the time of the accident until his death. His distributees are a spouse, Evelyn Dominguez and two infant children, Yoraidly Jennifer Dominguez and Steven Anthony Dominguez. Steven Anthony Dominguez was born of the marriage between the decedent and Evelyn Dominguez. Yoraidly Jennifer Dominguez is a non-marital child of the decedent, and the administratix, Rosemary Morales.

Limited letters of administration issued to Rosemary Morales on June 19, 1987. The decedent has no assets other than a cause of action for wrongful death. The administratrix filed a wrongful death and conscious pain and suffering and an arbitration demand against the decedent's insurer which resulted in a settlement of $50,000 for wrongful death. The petitioner requests amongst other items of relief that the net amount be distributed to the decedent's two children. Annexed to the petition is a document entitled "Affidavit of Waiver," dated April 21, 1988, signed by Evelyn Dominguez and two witnesses wherein the spouse expressly waives any claim she may have to the proceeds of the settlement in favor of the two children.

By order dated March 15, 1989, this court approved the settlement, authorized the administratrix to consent to the settlement and directed the payment of $50,000 to the petitioner's attorneys to be held in escrow. The items of relief which remain to be determined before the account may be settled are allocation of the recovery to wrongful death, the fixation of attorneys' fees, fixation of the compensation of the guardian ad litem and the distribution of the balance of the proceeds. It is noted that the final report of the guardian ad litem appointed for the two children makes reference to an order of support of the Family Court entered against the decedent on behalf of the child, Yoraidly Jennifer Dominguez. He requests that the child's share be credited with any outstanding sums due pursuant to said order. The guardian ad litem's request is summarily denied since wrongful death proceeds vest in the distributees, not the estate and are, therefore, not subject to the debts of the decedent such as arrears on a support order. EPTL 5-4.4(a); Matter of Rios, 84 Misc.2d 437, 375 N.Y.S.2d 269 (Surr.Ct. Kings Co.1975).

The major issue presented is the proper distribution of the balance of the proceeds. Resolution of this issue is dependent upon a determination of the validity of the renunciation filed by the spouse.

LAW: Right to Renounce Wrongful Death Proceeds

Initially, it is observed that the Department of Social Services, as a creditor of the beneficiary/distributee, has been held to have standing in an accounting proceeding to contest the validity of a renunciation where the effect of the renunciation would be to frustrate the department's claim. Matter of Vizzie, 120 Misc.2d 161, 465 N.Y.S.2d 677 (Surr.Ct. Greene Co.1983); Matter of Rogers, 120 Misc.2d 161, 465 N.Y.S.2d 677 (Surr.Ct. Greene Co.1983). This is so, despite the absence of an assignment of the beneficiary's interest to his or her creditor. Matter of Vizzie, supra.

Generally, the law in New York is that any "disposition" of property, as the term is defined in EPTL 2-1.11, subd. (a), may be renounced. Additionally, it has been held that those interests which could have been renounced under common law but are not included within the statutory definition of "disposition" may still be renounced. EPTL 2-1.11, subd. (h), Matter of Heffner, 132 Misc.2d 361, 503 N.Y.S.2d 669 (Surr.Ct. Nassau Co.1986); Matter of Von Ripper, 95 Misc.2d 952, 408 N.Y.S.2d 686 (Surr.Ct. New York Co.1978).

Prior to 1980, EPTL 2-1.11 provided that only dispositions "created under a will or trust agreement * * * created by the exercise of a power of appointment, [or] a distributive share under 4-1.1" could be renounced. EPTL 2-1.11 subd. (a), para. (1). Since the statute listed the types of interests, it was believed that only those interests specifically mentioned could be renounced. Matter of De Domenico, 100 Misc.2d 446, 418 N.Y.S.2d 1012 (Surr.Ct. Nassau Co.1979) (renunciation of Totten trust accounts not permissible under EPTL 2-1.11). In 1980, EPTL 2-1.11 subd. (a), para. (1) was amended on the recommendation of the Law Revision Commission that the definition of the term "disposition" be expanded to include "all types of 'interests in property' " and thereby eliminate the restrictiveness of the then existing statute. (Report of the Law Revision Commission, McKinney's 1980 Session Laws of N.Y. pp. 1647, 1648). Effective June 26, 1980, the types of interests which could be renounced include, "without limitation", Totten trust accounts, life insurance, annuities, employee benefit plans, and any other disposition or transfer created by any testamentary or nontestamentary instrument or by operation of law. The reason for expanding the list of renounceable interests was the recognition that renunciations serve as an invaluable post mortem estate planning device for tax and creditor avoidance. (Report of Law Revision Commission p. 1647). The policy reason for enacting the renunciation statutes is based upon the concept that no one should be forced to accept an inheritance or a gift, whether the inheritance or gift comes about by will, inter vivos gift, or operation of a statute. (Third Report of the Temporary Commission on the Law of N.Y. Estates, Leg.Doc. (1964), No. 19, pp. 240, 261). Albany Hospital v. Albany Guardian Soc'y, 214 N.Y. 435, 108 N.E. 812 (1915); Burritt v. Silliman, 13 N.Y. 93 (1855).

The only reported case which considered whether EPTL 2-1.11 applied to a wrongful death recovery predated the 1980 amendment to the statute. In Matter of Summrall, 93 Misc.2d 420, 402 N.Y.S.2d 770 (Surr.Ct. Bronx Co.1978), the surviving spouse of the decedent sought to renounce her interest in the proceeds of a wrongful death action in favor of her two children. The attempted renunciation was filed more than eight years after the decedent's death. Citation in the accounting proceeding issued to the Department of Social Services, a creditor of the spouse, who did not appear in the proceeding.

The court concluded that the renunciation statutes, EPTL 2-1.11 as it then existed, and the predecessor statute, EPTL 4-1.3, did not apply to a wrongful death recovery. Its conclusion was premised upon the fact that a wrongful death recovery could not fit into the statutory definition of the term "disposition" which limited the scope of the statute to distributions created under a will, trust agreement, intestacy or the exercise of a power of appointment.

Having concluded that the statute did not apply, another court might have found the attempted renunciation impermissible. Matter of DeDomenico, supra. However, in Matter of Summrall, the court permitted the spouse to renounce her share of the wrongful death recovery because the only party who would have been adversely affected by the proposed distribution, namely, the Department of Social Services, had defaulted and was deemed to have consented to the relief sought.

By virtue of the 1980 amendment to EPTL 2-1.11, subd. (a), para. (1), Matter of Summrall is no longer controlling on this issue. The term "disposition" now includes "without limitation," a disposition created by "operation of law." Initially, it is observed that the presence of the words "without limitation" which precede the list of dispositions clearly indicates that the list is not exhaustive. Accordingly, the mere fact that a property interest is not specifically referred to in the statute no longer can be held to mean that it is to be excluded.

Of significance is the fact that the term "disposition" now includes those interests created by "operation of law", which must be held to include a wrongful death recovery. Under the statutes governing wrongful death, a distributee of the decedent who has sustained pecuniary loss by virtue of the decedent's death has a statutory right to recover damages for the wrongful death of the decedent. EPTL 5-4.1, 5-4.4; Matter of Kaiser, 198 Misc. 582, 100 N.Y.S.2d 218 (Surr.Ct. Kings Co.1950). This right of recovery and the recovery itself devolves upon the distributees by operation of law, through no act of their own. EPTL 5-4.4. Black's Law Dictionary, 5th Edition. (1979) p. 985.

A recovery of wrongful death proceeds, bestowed upon a distributee by operation of EPTL 5-4.4, is in effect a forced recovery, and in that respect is no different than an intestate share, a testamentary bequest, or a bequest under a trust. Accordingly,...