LeFebvre v. New York Life Ins. and Annuity Corp.

• Decision Date: 27 April 1995
• Citation: 214 A.D.2d 911,625 N.Y.S.2d 695
• Parties: Clark LeFEBVRE, as Administrator of the Estate of Ann E. Witbeck, Deceased, Appellant, v. NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION et al., Respondents.
• Court: New York Supreme Court — Appellate Division

Page 695

625 N.Y.S.2d 695

214 A.D.2d 911

Clark LeFEBVRE, as Administrator of the Estate of Ann E Witbeck, Deceased, Appellant, v. NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION et al., Respondents.

Supreme Court, Appellate Division Third Department.

April 27, 1995.

Arnold C. Peer (John T. Casey Jr., of counsel), Troy, for appellant.

Nixon, Hargrave, Devans & Doyle (Daniel J. Hurteau of counsel), Albany, for New York Life Ins. and Annuity Corp., respondent.

Ainsworth, Sullivan, Tracy, Knauf & Ruslander (Colleen M. O'Connell, of counsel), Albany, for Joseph Di Bella, respondent.

Before MERCURE, J.P., and CREW, YESAWICH, PETERS and SPAIN, JJ.

YESAWICH, Justice.

Appeal from an order of the Supreme Court (Hughes, J.), entered April 12, 1994 in Albany County, which granted defendants' motions to dismiss the amended complaint.

In this action, as in its companion action arising from the same facts (see, LeFebvre v. Shea, 212 A.D.2d 884, 622 N.Y.S.2d 151), plaintiff, as administrator of the estate of Ann E. Witbeck, seeks to recover funds allegedly converted or misapplied by Gale Shea, Witbeck's conservator, prior to Witbeck's death. In June 1983, Shea used $300,000 of conservatorship funds to purchase an annuity contract from defendant New York Life Insurance and Annuity Corporation (hereinafter NYLIAC) through defendant Joseph DiBella, NYLIAC's registered representative. The purpose of this purchase was to reduce the estate taxes that would be due upon Witbeck's death while keeping the funds available in the interim to pay for her nursing home care. Although she bought the annuity with conservatorship funds, Shea named herself, in her individual capacity, as sole owner and beneficiary. Shea apparently made several cash withdrawals from the annuity account over the next several years, and upon the death of the annuitant, Witbeck's son, in 1986, Shea received a sizeable death benefit, a portion of which she used to purchase other financial products from NYLIAC, again through DiBella.

Witbeck died intestate on August 27, 1990, and in June 1992 plaintiff was appointed administrator. In August 1993, plaintiff brought an action against Shea and her husband, and on September 10, 1993, he commenced this action; as amended, the complaint charges defendants with conspiring to defraud the estate, to breach Shea's fiduciary duty, to convert conservatorship funds and to commit a prima facie tort. After ordering consolidation of these actions, Supreme Court granted defendants' motions to dismiss the amended complaint, and plaintiff appeals.

We affirm. Supreme Court quite rightly concluded that the first and fourth causes of action, alleging conspiracy to defraud and conspiracy to commit a prima facie tort, fail to state a claim upon which relief can be granted. A claim of conspiracy to commit fraud may indeed be made out--as plaintiff suggests--even in the absence of allegations that defendants themselves committed every element of the fraud. But such a claim cannot stand where, as here, it is devoid of specific factual allegations that could support an inference that defendants knowingly agreed to cooperate in a fraudulent scheme, or shared a perfidious purpose, with Shea (see, National Westminster Bank v. Weksel, 124 A.D.2d 144, 147, 511 N.Y.S.2d 626, lv. denied 70 N.Y.2d 604, 519 N.Y.S.2d 1027, 513 N.E.2d 1307; Goldstein v. Siegel, 19 A.D.2d 489, 493, 244 N.Y.S.2d 378). When scienter is lacking, the mere fact that a defendant's otherwise lawful activities may have assisted another in pursuit of guileful objectives is not a sufficient basis for a finding that he or she conspired to defraud (see, Williams v. Upjohn Health Care Servs., 119 A.D.2d 817, 819-820, 501 N.Y.S.2d 884; cf., Deleskiewicz v. Pitcher, 60 A.D.2d 660, 400 N.Y.S.2d...