In re Estate of Thomas

• Decision Date: 02 January 2015
• Citation: 1 N.Y.S.3d 598,124 A.D.3d 1235
• Parties: In the Matter of the ESTATE OF Anthony J. THOMAS, Deceased. In the Matter of the Estate of Dorothy Thomas, Deceased. Joseph M. Thomas and Gloria M. Borrelli, Petitioners–Appellants; Tom J. Thomas, Respondent–Respondent. (Appeal No. 1.)
• Court: New York Supreme Court — Appellate Division

124 A.D.3d 1235
1 N.Y.S.3d 598

In the Matter of the ESTATE OF Anthony J. THOMAS, Deceased.

In the Matter of the Estate of Dorothy Thomas, Deceased.

Joseph M. Thomas and Gloria M. Borrelli, Petitioners–Appellants;

Tom J. Thomas, Respondent–Respondent. (Appeal No. 1.)

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

Jan. 2, 2015.

1 N.Y.S.3d 600

Bond, Schoeneck & King, PLLC, Rochester (Jonathan B. Fellows of Counsel), for Petitioners–Appellants.

Adams Bell Adams, P.C., Rochester (Anthony J. Adams, Jr., of Counsel), for Respondent–Respondent.

PRESENT: SCUDDER, P.J., FAHEY, CARNI, AND LINDLEY, JJ.

MEMORANDUM:

124 A.D.3d 1235

Petitioners, nonparty Daniel J. Thomas (Daniel), and respondent are the four children of Anthony J.

124 A.D.3d 1236

Thomas and Dorothy Thomas (collectively, decedents), who died in April 2012 and August 2012, respectively. Petitioners, Daniel and respondent are named in decedents' wills as, inter alia, beneficiaries of either their residuary estates or a trust that is itself a beneficiary of the residuary estate. Respondent was the named executor under both wills, and he was also appointed as trustee to numerous trusts created by decedents' wills. The wills were admitted to probate and letters testamentary were issued to respondent.

In March 2013, petitioners commenced this proceeding challenging numerous real estate transactions between respondent and decedents. According to petitioners, respondent "exploited his close relationship with [decedents] by inducing them to transfer to him certain properties they owned, with the promise of payment for, and/or re-conveyance of, the parcels to [decedents] and/or his siblings." Inasmuch as respondent never paid for the parcels or reconveyed them to decedents or his siblings, petitioners sought to impose a constructive trust, inter alia, on monies received by respondent or entities controlled by him related to the sale of property on North Greece Road (NGR property), and on the Manitou Road property and any monies received by respondent or entities controlled by him related to a lease on that property.

Petitioners also challenged respondent's failure to identify any shares of New York State Fence Company (NYSFC) as being included within the assets of decedents' estates. According to respondent, he was the sole shareholder of NYSFC, a company founded by decedent Anthony J. Thomas in 1958 and incorporated in 1977. Due to the fact that respondent had failed to produce any records reflecting the transfer of NYSFC stock from Anthony to respondent or any records reflecting respondent's payments for the stock, petitioners contended that a constructive trust should be imposed on "all stock certificates in NYSFC owned by Anthony."

In addition to seeking the imposition of a constructive trust, petitioners also sought, inter alia, a partial distribution pursuant to SCPA 2102(5), information pursuant to SCPA 2102(1), an accounting pursuant to SCPA 2205 and revocation of letters granted to respondent pursuant to

1 N.Y.S.3d 601

SCPA 711(1) and (2). After filing his answer, respondent moved pursuant to CPLR 3211(a)(5) and (7) to dismiss the petition insofar as it sought relief pertaining to the real property and respondent's ownership of stock in NYSFC. Respondent contended that any claims for relief pertaining to the real property and corporate stock of NYSFC were time-barred and that the petition failed to state a cause of action for relief related thereto.

124 A.D.3d 1237

In appeal No. 1, petitioners appeal from the order of Surrogate's Court (Calvaruso, S.) granting that motion. In appeal No. 2, petitioners appeal from a subsequent order of Surrogate's Court (Owens, A.S.) directing that they may not inquire of the executor or otherwise obtain disclosure concerning the NYSFC stock or the finances or affairs of that company. We now modify the order in appeal No. 1 by denying respondent's motion in part, and we reverse the order in appeal No. 2.

We agree with petitioners that the petition sufficiently states a cause of action for a constructive trust with respect to the NGR property, the Manitou Road property and NYSFC stock. "On a motion to dismiss pursuant to CPLR 3211, the pleading is to be afforded a liberal construction ... We accept the facts as alleged in the [petition] as true, accord [the petitioners] the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory ... In assessing a motion under CPLR 3211(a)(7), ... a court may freely consider affidavits submitted by the [petitioner] to remedy any defects in the [petition] ... and ‘the criterion is whether the proponent of the pleading has a cause of action, not whether he has stated one’ " ( Leon v. Martinez, 84 N.Y.2d 83, 87–88, 614 N.Y.S.2d 972, 638 N.E.2d 511 ; see Lawrence v. Graubard Miller, 11 N.Y.3d 588, 595, 873 N.Y.S.2d 517, 901 N.E.2d 1268 ).

"[I]t is well settled that [a] constructive trust may be imposed when property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest ... In order to invoke the court's equity powers, [a petitioner] must show a confidential or fiduciary relationship, a promise, a transfer in reliance thereon, a breach of the promise, and [the respondent's] unjust enrichment ... Inasmuch as a constructive trust is an equitable remedy, however, courts do not rigidly apply the elements but use them as flexible guidelines ... In this flexible spirit, the promise need not be express, but may be implied based on the circumstances of the relationship and the nature of the transaction" ( Beason v. Kleine, 96 A.D.3d 1611, 1613, 947 N.Y.S.2d 275 [internal quotation marks omitted]; see generally Sharp v. Kosmalski, 40 N.Y.2d 119, 121–122, 386 N.Y.S.2d 72, 351 N.E.2d 721 ; Moak v. Raynor, 28 A.D.3d 900, 902, 814 N.Y.S.2d 289 ).

The facts as alleged in the petition and set forth in the corresponding affidavits establish the existence of a confidential and fiduciary relationship between respondent and decedents. The facts with respect to the NGR and Manitou Road properties establish that respondent promised to pay decedents for the NGR property and to reconvey the...