In re Estate of Jewett

• Decision Date: 01 December 2016
• Parties: In the Matter of the ESTATE OF Charlotte E. JEWETT, Deceased. Beth Nilan, Respondent; Charlene Tedesco, Individually and as Executor of the Estate of Charlotte E. Jewett, Deceased, Appellant. (Proceeding No. 1.) In the Matter of the Estate of Charlotte E. Jewett, Deceased. Charlene Tedesco, as Executor of the Estate of Charlotte E. Jewett, Deceased, Appellant; Beth Nilan, Respondent. (Proceeding No. 2.).
• Court: New York Supreme Court — Appellate Division

145 A.D.3d 1114
42 N.Y.S.3d 443
2016 N.Y. Slip Op. 08131

In the Matter of the ESTATE OF Charlotte E. JEWETT, Deceased.

Beth Nilan, Respondent;

Charlene Tedesco, Individually and as Executor of the Estate of Charlotte E. Jewett, Deceased, Appellant. (Proceeding No. 1.)

In the Matter of the Estate of Charlotte E. Jewett, Deceased.

Charlene Tedesco, as Executor of the Estate of Charlotte E. Jewett, Deceased, Appellant;

Beth Nilan, Respondent. (Proceeding No. 2.).

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

Dec. 1, 2016.

42 N.Y.S.3d 446

Tabner, Ryan & Keniry, LLP, Albany (Brian M. Quinn of counsel), for appellant.

Donohue, Sabo, Varley & Huttner, LLP, Albany (Kenneth G. Varley of counsel), for respondent.

Before: PETERS, P.J., GARRY, DEVINE, CLARK and AARONS, JJ.

CLARK, J.

Appeals (1) from an order of the Surrogate's Court of Albany County (Maney, S.), entered May 12, 2015, which, among other things, granted petitioner's application, in proceeding No. 1 pursuant to SCPA 2102, to, among other things, transfer certain properties that had been devised to her by decedent's will, and (2) from an order of said court, entered May 29, 2015, which granted petitioner's application, in proceeding No. 1, for an award of counsel fees.

Charlotte E. Jewett (hereinafter decedent) died testate on January 15, 2012 and was survived by her two daughters, Charlene Tedesco and Beth Nilan. On January 27, 2012, decedent's last will and testament was admitted to probate and letters testamentary were issued to Tedesco as the executor of decedent's estate. Decedent's will specifically devised to Tedesco two parcels of real property in the Town of Colonie, Albany County—namely, 133B Boght Road and 135 Boght Road (hereinafter the Boght Road properties)—and specifically devised to Nilan a condominium in Naples, Florida, the value of decedent's bank accounts and timeshares in Cancun, Mexico and Fort Lauderdale, Florida. The will further provided that any residuary be split equally between Tedesco and Nilan.

In October 2013, after Tedesco had refused to deliver to Nilan possession of the condominium and the Mexico and Florida timeshares, Nilan commenced proceeding No. 1 to, among other things, compel distribution of the timeshares and the condominium. Tedesco answered and asserted a cross claim seeking to stay distribution of the devised property until all of the estate's liabilities had been satisfied. Thereafter, pursuant to court order, Tedesco commenced proceeding No. 2 for judicial settlement of the estate and submitted a final accounting. Nilan filed numerous objections alleging that the accounting omitted certain property and contained various inaccuracies.

Following a nonjury trial, Surrogate's Court, among other things, determined that Tedesco's accounting included invalid funeral and administration expenses and creditor claims and omitted certain estate

42 N.Y.S.3d 447

property and income, directed Tedesco to deliver to Nilan executed deeds for the condominium and timeshares, imposed upon Tedesco a surcharge in the amount of $74,140.54 and awarded Nilan reasonable counsel fees and costs. Nilan subsequently submitted invoices reflecting that she had incurred $21,946.83 in counsel fees and costs, and Surrogate's Court directed Tedesco to pay that amount in full. Tedesco appeals from the order judicially settling the account, as well as the subsequent order directing payment of Nilan's counsel fees and costs.

I. The Accounting Generally

Tedesco argues, among other things, that Surrogate's Court erred in rejecting certain creditor claims, concluding that the estate had income remaining and an available residue, imposing a surcharge upon her and awarding Nilan counsel fees and costs. The executor of an estate is primarily charged with settling and distributing the estate of the decedent (see Matter of Kohler, 231 N.Y. 353, 365, 132 N.E. 114 [1921] ; Matter of Camarda, 63 A.D.2d 837, 837, 406 N.Y.S.2d 193 [1978] ), and it is incumbent upon the executor to maintain “clear and accurate accounts of the estate” (Matter of Camarda, 63 A.D.2d at 837, 406 N.Y.S.2d 193 ; see Matter of Carbone, 101 A.D.3d 866, 869, 955 N.Y.S.2d 209 [2012] ; Matter of Mink, 91 A.D.3d 1061, 1063–1064, 937 N.Y.S.2d 401 [2012] ).

In an accounting proceeding, the party submitting the account has the ultimate burden of demonstrating that all the assets of the estate have been fully accounted (see Matter of Tract, 284 A.D.2d 543, 543, 727 N.Y.S.2d 148 [2001] ; Matter of Capaldo, 263 A.D.2d 910, 912, 694 N.Y.S.2d 233 [1999] ; Matter of Schnare, 191 A.D.2d 859, 860, 594 N.Y.S.2d 827 [1993], lv. denied 82 N.Y.2d 653, 601 N.Y.S.2d 582, 619 N.E.2d 660 [1993] ). “If left uncontested, the account stands proved pro confesso[,] except in as far as it may be patently contrary to law” (Matter of Curtis, 16 A.D.3d 725, 726, 790 N.Y.S.2d 581 [2005] [internal quotation marks and citations omitted] ). Where the account is contested, the objectant bears the initial burden of proffering evidence to establish that the account is inaccurate or incomplete, and, upon satisfaction of that burden, the burden shifts to the executor to prove, by a preponderance of the evidence, that the account is accurate and complete (see Matter of Gallagher, 81 A.D.3d 825, 825, 916 N.Y.S.2d 804 [2011] ; Matter of Curtis, 16 A.D.3d at 726–727, 790 N.Y.S.2d 581 ; Matter of Robinson, 282 A.D.2d 607, 607, 724 N.Y.S.2d 424 [2001] ; Matter of Schnare, 191 A.D.2d at 860, 594 N.Y.S.2d 827 ). “In reviewing a determination made after a nonjury trial, the power of this Court is as broad as that of the trial court, and this Court may render the judgment it finds warranted by the facts, bearing in mind that in a close case, the trial judge ... had the advantage of seeing the witnesses and hearing the testimony” (Matter of Albert, 137 A.D.3d 1266, 1267, 30 N.Y.S.3d 121 [2016] [internal quotation marks and citation omitted], lv. denied 27 N.Y.3d 910, 2016 WL 3553368 [2016] ; see Matter of Hunter, 100 A.D.3d 996, 997–998, 955 N.Y.S.2d 163 [2012], lv. dismissed 21 N.Y.3d 1037, 972 N.Y.S.2d 532, 995 N.E.2d 847 [2013], lv. denied 22 N.Y.3d 860, 2014 WL 223727 [2014] ; Matter of Neustein, 97 A.D.3d 684, 685, 948 N.Y.S.2d 644 [2012], lv. denied 20 N.Y.3d 858, 2013 WL 452388 [2013] ).

At the outset, we note that, as highlighted by Nilan's many successful objections, Tedesco's accounting was markedly deficient. Nilan demonstrated, among other things, that Tedesco omitted certain principal and income received by the estate, underrepresented the date of death

42 N.Y.S.3d 448

value of decedent's bank account, included improper funeral and administration expenses, while also leaving out valid expenses, and listed numerous invalid creditor claims. Overall, Tedesco provided incomplete documentation to support her accounting, often leaving alleged expenses and creditor claims unsubstantiated, and her testimony did little to illuminate the unsubstantiated creditor claims and expenses, as she was frequently unable to explain various alleged transactions. Furthermore, when questioned, Tedesco admitted that certain alleged creditor claims were improper. Given the utter deficiency of the accounting, coupled with the incomplete supporting documentation and Tedesco's largely unhelpful testimony, “all presumptions are against her and all doubts are to be resolved adversely to her” (Matter of Camarda, 63 A.D.2d at 837, 406 N.Y.S.2d 193 ; see Matter of Carbone, 101 A.D.3d at 869, 955 N.Y.S.2d 209 ; Matter of Mink, 91 A.D.3d at 1063–1064, 937 N.Y.S.2d 401 ).

A primary point of contention in the proceeding was the inclusion in the accounting of expenses and creditor claims relating to real property that was specifically bequeathed to either Tedesco or Nilan. Title to real property that is specifically bequeathed vests at the time of a decedent's death, subject to the right of the executor to resort to it for the payment of the administration and funeral expenses and the decedent's debts (see SCPA 1902 ; Matter of Seviroli, 31 A.D.3d 452, 454–455, 818 N.Y.S.2d 249 [2006] ; Matter of Columbia Trust Co., 186 App.Div. 377, 380, 174 N.Y.S. 576 [1919] ; 7–92 Warren's Heaton on Surrogate's Court Practice § 92.05[1] [2016] ). In addition, “[a] specific legatee or devisee is entitled to the profits produced by the property after the death of the decedent and is also liable for all expenses incurred in operating and maintaining the property thereafter” (Matter of Williams, 71 Misc.2d 243, 247, 335 N.Y.S.2d 950 [Sur.Ct., N.Y. County 1972] ).

Here, the record, including the few bank statements provided by Tedesco, demonstrates that, from decedent's death in January 2012 through the end of the accounting period, March 1, 2014, Tedesco took immediate possession of the Boght Road properties, made improvements to those properties with funds from decedent's bank account or the estate bank account and collected and personally retained any rental income derived from the properties. At the same time, however, Tedesco refused to deliver to Nilan title to, and possession of, the Florida and Mexico timeshares and the condominium, claiming that she was entitled to hold them until she was certain that all of the funeral and administration expenses had been paid and all of the estate's debts had been satisfied. Tedesco paid...