Estate of Fox

• Decision Date: 21 May 1981
• Citation: 109 Misc.2d 634,440 N.Y.S.2d 811
• Parties: ESTATE OF Seymour FOX. Surrogate's Court, New York County
• Court: New York Surrogate Court

Page 811

440 N.Y.S.2d 811

109 Misc.2d 634

ESTATE OF Seymour FOX.

Surrogate's Court, New York County.

May 21, 1981.

Michael S. Kraft, New York City, for escrowee-petitioner.

McGovern, Connelly & Davidson, New Rochelle (Frank H. Connelly, Jr., John A. Vasile, New Rochelle, of counsel), for Patricia Fox.

Thomas C. Lambert, New York City, for Bernice G. Fox.

MILLARD L. MIDONICK, Surrogate.

This proceeding was brought by the escrow agent for the property deposited to secure the decedent's performance under a separation agreement with his former wife. The escrowed property originally consisted of the shares of stock and the lease representing the decedent's ownership interest in his cooperative apartment (together with the relevant stock power and assignment executed in blank). Pursuant to an earlier decision of this court, the agent was authorized to sell the apartment and now holds the proceeds of such sale. He seeks a direction from the court permitting him to transfer these proceeds, on account of past due alimony payments, to the former wife. The decedent's widow opposes the proposed distribution and contests the former wife's right to the escrowed property. The estate apparently has no significant assets other than any interest it may have in the apartment proceeds.

The decedent and his former wife, Bernice, were married on January 18, 1941. Thereafter, they separated, and entered into a separation agreement dated January 1, 1970. This agreement provided that the decedent was to pay to Bernice a gross annual figure of $36,000, or $3,000 per month, or such sums as required to provide her an annual income of $20,000 net of taxes, disregarding all her other income for purposes of this computation. The agreement provided that upon the death of either party, or the wife's remarriage, "the Husband's obligations hereunder shall cease and shall not constitute a charge on his estate except as to arrears and except as to moneys owing under sub-divisions (b) and (d)" (which provided the mechanics of adjustment to achieve the annual $20,000 net of taxes standard). In addition, the agreement required the decedent to make a will bequeathing to Bernice the greater of $100,000 or one-third of his net estate, if she survives him and has not remarried. The terms of the separation agreement were incorporated, but not merged, in a valid divorce decree dated February 28, 1980.

The agreement further provides that "In order to secure to the Wife the due performance by the Husband of all his obligations hereunder," the decedent must deposit the documents referred to above, representing his ownership of the cooperative apartment, with an escrowee. Under the terms of the agreement, the former wife has the right to proceed against the security if the decedent does not perform any of the obligations set forth in the separation agreement. She is required to serve notice in writing by registered mail upon the escrowee and her former husband if she intends to so proceed. Once notice is served, the decedent has 30 days to remedy the default, or, if he does not, the escrowee is authorized to sell the security and deliver the proceeds, up to the amount of the default, to the wife. The wife is not required to resort to the security in the event of any default, and may pursue other remedies if she desires.

In conformance with the provisions of the separation agreement, the decedent made the required bequest in his will, and, in 1970, paid alimony of $36,000 to Bernice. Bernice asserts that in 1971, the decedent paid only $12,500 in alimony, that he paid even smaller sums in succeeding years, and that by 1978, he had ceased payments altogether. Nevertheless, Bernice did not contemporaneously attempt to proceed against the security, or otherwise protest the non-payment of alimony. The decedent continued to live in the apartment whose ownership was in escrow. The decedent also remarried, and remained married to his second wife, Patricia, until his death.

By letter dated January 2, 1980, Bernice gave notice, in the required form, of her intention to proceed against the security under the agreement. The decedent died on January 17, 1980, before the 30 days allotted to him under the agreement to remedy the default had expired.

The widow argues that any amount of alimony found to be due should be offset by $68,750, the value of several paintings the decedent gave his former wife in 1966. There is no showing that any such offset was contemplated by the parties, especially as the gift occurred four years before the separation agreement was executed. Also, in 1970, the first year the separation agreement was in force, the decedent paid the entire alimony due under the agreement. The argument that the transfer of the paintings was intended to be in lieu of payment of a portion of the alimony claim cannot be maintained in light of the date of the transfer and the fact that this transfer was not reflected in the 1970 payments.

The widow opposes the distribution of the proceeds of the apartment to the former wife on several grounds. She alleges that the escrow agreement terminated at the decedent's death because he was not afforded the full 30 days specified in the separation agreement to respond to Bernice's claim. She also argues that Bernice's failure to proceed against the security at any time during the nine years the decedent was in default constitutes a waiver of her right to enforce her claim for alimony. The court finds against the widow on both grounds, there being no laches nor statute of limitations obstacles under the judgment of divorce, nor any...