Estate of Knappen, Matter of

• Decision Date: 06 March 1997
• Citation: 237 A.D.2d 677,655 N.Y.S.2d 110
• Parties: In the Matter of the ESTATE OF Nathaniel F. KNAPPEN, Deceased. Richard B. Thaler, as Executor of the Estate of Nathaniel F. Knappen, Deceased, Respondent; Debra Dennett, Appellant, and Wesley McDermott, as Guardian ad Litem of Judson Knappen, et al., Respondents.
• Court: New York Supreme Court — Appellate Division

Page 110

655 N.Y.S.2d 110

237 A.D.2d 677

In the Matter of the ESTATE OF Nathaniel F. KNAPPEN, Deceased Richard B. Thaler, as Executor of the Estate of Nathaniel F Knappen, Deceased, Respondent Debra Dennett, Appellant and Wesley McDermott, as Guardian ad Litem of Judson Knappen, et al., Respondents.

Supreme Court, Appellate Division, Third Department.

March 6, 1997.

Williamson, Clune & Stevens (Robert J. Clune, of counsel), Ithaca, for appellant.

Thaler & Thaler (Richard T. John, of counsel), Ithaca, for Richard B. Thaler, respondent.

Wesley E. McDermott, Guardian ad Litem, Ithaca, respondent in person.

Before MERCURE, J.P., and WHITE, CASEY, PETERS and SPAIN, JJ.

CASEY, Justice.

Appeal from an order of the Surrogate's Court of Tompkins County (Sherman, S.), entered April 12, 1996, which, inter alia, settled the account of petitioner as executor of the estate of Nathaniel F. Knappen.

Nathaniel F. Knappen (hereinafter decedent) died on September 28, 1990 after being shot by his wife, respondent Debra Dennett. Dennett was charged with his murder but was acquitted after trial based upon her claim that she was justified in shooting decedent in self-defense. A forfeiture proceeding was thereafter commenced by petitioner, the executor of decedent's estate, after which it was determined that Dennett was entitled to receive her share of decedent's estate despite the fact that she brought about his death.

After petitioner's forfeiture application was denied, petitioner was ordered to distribute to Dennett all assets due her from the estate as a result of her holding them jointly with decedent or having a right of survivorship in decedent's property. Dennett received over $600,000 from jointly held assets. In addition, the bulk of decedent's estate was bequeathed to Dennett by will executed December 30, 1981. It was later determined that decedent's two after-born children, Duncan and Judson, were allowed to share in the estate in equal shares, thereby reducing Dennett's share to one third.

The issues presented on this appeal, only some of which warrant discussion, arise out of petitioner's submission of a final accounting and the resolution by Surrogate's Court of objections thereto filed by Dennett and the guardians ad litem for Judson and Duncan. In its final accounting, Surrogate's Court imposed a constructive trust in the amount of $46,423.20 on the net proceeds of the sale of the marital residence. This amount represented money paid by the estate on the outstanding balance due on a bank loan to pay for cost overruns during the construction of the marital residence and on a personal note which was used to purchase the land upon which the residence was built. Dennett now criticizes the creation of this trust claiming that, since these debts were incurred solely by decedent, they were properly paid by the estate.

The factors which have been identified as relevant to the establishment of a constructive trust are "(1) a confidential or fiduciary relationship, (2) a promise, express or implied, (3) a transfer in reliance on that promise, and (4) unjust enrichment" (Matter of Wieczorek, 186 A.D.2d 204, 205, 587 N.Y.S.2d 755, lv dismissed 81 N.Y.2d 990, 599 N.Y.S.2d 798, 616 N.E.2d 153; see, Sharp v. Kosmalski, 40 N.Y.2d 119, 121, 386 N.Y.S.2d 72, 351 N.E.2d 721; Maynor v. Pelligrino, 226 A.D.2d 883, 885, 641 N.Y.S.2d 155, 157). Dennett does not dispute the existence of a confidential relationship but contends that the remaining elements are not present. These factors, however, are simply guidelines and their rigid application is not required (see, Johnson v. Lih, 216 A.D.2d 821, 823, 628 N.Y.S.2d 458; Terrille v. Terrille, 171 A.D.2d 906, 907, 566 N.Y.S.2d 780; Hornett v. Leather, 145 A.D.2d 814, 815, 535 N.Y.S.2d 799, lv denied 74 N.Y.2d 603, 543 N.Y.S.2d 396, 541 N.E.2d 425). Recognizing that "[t]he ultimate purpose of a constructive trust is to prevent unjust enrichment" (Matter of Wieczorek, supra, at 205, 587 N.Y.S.2d 755) and that it "may be imposed whenever necessary in order to 'satisfy the demands of justice' " (Booth v. Booth, 178 A.D.2d 712, 713, 576 N.Y.S.2d 686, quoting Mattera v. Mattera, 125 A.D.2d 555, 556, 509 N.Y.S.2d 831), it is our view that the imposition of this equitable remedy was appropriate.

Decedent and Dennett jointly decided to build and pay for the marital residence and both debts were incurred for the benefit of that residence. Upon application of a mortgage, title to the land was transferred from decedent alone to decedent and Dennett. Although the corresponding note for the purchase of the land was not so transferred, the debt was included as a joint liability on two financial statements signed by Dennett. Furthermore, payments for the bank loan, which was also listed as a joint debt on at least one financial statement, were made out of a joint checking account and several...