Piccione's Estate, Matter of

• Decision Date: 11 November 1982
• Citation: 442 N.E.2d 1180,456 N.Y.S.2d 669,57 N.Y.2d 278
• Parties: , 442 N.E.2d 1180 In the Matter of the ESTATE OF Nicholas A. PICCIONE, Deceased. Jean M. Piccione et al., as Coexecutors of Nicholas A. Piccione, Deceased, Appellants; All Craft Finishing, Inc., et al., Respondents. In the Matter of Nicholas A. PICCIONE, Deceased. Jean M. Piccione et al., as Coexecutors of Nicholas A. Piccione, Deceased, et al., Appellants; All Craft Finishing, Inc., et al., Respondents; All Craft Metals, Inc., Intervenor-Appellant. FIRE BURGLARY INSTRUMENTS, INC., et al., Respondents, v. Jean M. PICCIONE et al., as Coexecutors of Nicholas A. Piccione, Deceased, Appellants.
• Court: New York Court of Appeals Court of Appeals

Page 669

456 N.Y.S.2d 669

57 N.Y.2d 278, 442 N.E.2d 1180

In the Matter of the ESTATE OF Nicholas A. PICCIONE, Deceased.

Jean M. Piccione et al., as Coexecutors of Nicholas A.

Piccione, Deceased, Appellants;

All Craft Finishing, Inc., et al., Respondents.

In the Matter of Nicholas A. PICCIONE, Deceased.

Jean M. Piccione et al., as Coexecutors of Nicholas A.

Piccione, Deceased, et al., Appellants;

All Craft Finishing, Inc., et al., Respondents;

All Craft Metals, Inc., Intervenor-Appellant.

FIRE BURGLARY INSTRUMENTS, INC., et al., Respondents, v. Jean M. PICCIONE et al., as Coexecutors of Nicholas A.

Piccione, Deceased, Appellants.

Court of Appeals of New York.

Nov. 11, 1982.

Edward P. Schroeder, Garden City, for appellant in the first above-entitled matter.

A. Thomas Levin, Garden City, for respondents in the first above-entitled matter.

Edward P. Schroeder and E. Scott Schroeder, Garden City, for Jean M. Piccione and another, appellants in the second above-entitled matter.

Christopher S. Rooney, New York City, for Data Control Systems, Inc., appellant, and for intervenor-appellant in the second above-entitled matter.

A. Thomas Levin, Garden City, for respondents in the second above-entitled matter.

Edward P. Schroeder and E. Scott Schroeder, Garden City, for appellants in the third above-entitled matter.

A. Thomas Levin, Garden City, for respondents in the third above-entitled matter.

OPINION OF THE COURT

FUCHSBERG, Judge.

These three appeals, in separate but interrelated cases, require us to probe the scope of the jurisdiction conferred on our Surrogate's Court. In particular, we are called upon to treat with article VI ( § 12, subd. d) of our State Constitution and SCPA 201 (subds. 1, 3) and SCPA 202. At issue too is the impact, if any, of RPAPL 701 on the power of the Surrogate's Court to entertain a dispute over the possession of real estate.

The three cases arise out of the administration of a parcel of improved realty held by Jean M. Piccione and Bernard Grossman as executors of the estate of Nicholas Piccione. When the executors received the property it was burdened by a lease which the decedent in his lifetime had entered into with All Craft Metals, Inc. (ACM), which later had assigned the lease to Fire Burglary Instruments, Inc. (FBI), and its subsidiary, All Craft Finishing, Inc. (ACF).

Shortly before the lease by its terms was to expire, the executors, to facilitate the winding up of the estate, entered into what they regarded as an advantageous contract for the sale of the property to a third party. The sale, conditioned on the awaited vacating of the premises, was set for a date subsequent to the one on which the lease to terminate. However, though the executors wrote the tenants to remind them that they would be expected to leave at the expiration date, when the time to do so arrived, the tenants found it more convenient not to do so. After many weeks of unsuccessful efforts to get their tenants to depart, the executors brought a summary proceeding in the District Court of Nassau County to recover possession. The petition was dismissed when the court held that the letter in which they attempted to notify the tenants of their intention to terminate the lease was technically deficient (Real Property Law, § 232-b).

At this juncture, the executors, apprehensive over a matured mortgage on the premises and the imminent exercise of the purchaser's right to cancel, brought on a proceeding in Surrogate's Court, Nassau County, to direct FBI and ACI to "vacate and surrender the premises". The main thrust of the tenants' opposition, premised on the fact that the Surrogate's Court is not one of the courts mentioned in RPAPL 701 (subd. 1) ¹ was that the court was without subject matter jurisdiction. But the Surrogate, of the view that the proceeding "relate[d] to the affairs of a decedent", concluded that the breadth of the constitutional delineation of his court's jurisdiction rendered its nonlisting in section 701 a matter of "no consequence". Reaching the merits, he ordered the tenants to vacate the premises (106 Misc.2d 898, 902, 432 N.Y.S.2d 840). For its part, the Appellate Division joined in the Surrogate's rejection of the tenants' section 701 argument, but, citing to Matter of Lainez, 79 A.D.2d 78, 80, 435 N.Y.S.2d 798, affd. 55 N.Y.2d 657, 446 N.Y.S.2d 942, 431 N.E.2d 303, ruled the proceeding an "independent controversy * * * outside of the subject matter jurisdiction of the Surrogate's Court". Accordingly, it reversed on the law and dismissed the proceeding (85 A.D.2d 604, 605, 444 N.Y.S.2d 689, 687). The executors now appeal.

Soon after they repossessed the property, the executors commenced a second Surrogate's Court proceeding against FBI, ACF "and/or Data Control Systems, Inc" (Data), the last a guarantor of ACM's obligations under the lease. Entitled "petition to recover assets of the estate", and treated by the Surrogate as a discovery proceeding brou under SCPA 2103, its prayer demanded damages because the executors (1) had been "forced to renegotiate the mortgage at a higher interest rate in order to prevent foreclosure", (2) during the holdover period advanced real estate and school taxes payable by ACF under the lease, (3) incurred expenses to repair damage to the premises and replace fixtures and equipment, each the responsibility of the tenants and (4) incurred consequent legal fees and court costs.

In their answer, FBI and ACF, aside from denying the executor's material allegations, again challenged subject matter jurisdiction. Data, arguing that its guarantee was not in effect after the expiration of the original lease, moved to dismiss. ACM, who had not been joined as a party, moved to intervene in order to move for summary judgment on a proposed counterclaim and cross claim for return of the security deposited when it executed the original lease, entitlement to which ACF was laying claim. Except to grant ACM's motion, the applications were denied.

In the same decision, the Surrogate's Court rejected FBI and ACF's jurisdictional attack. Relying in the main on a 1966 report of the Temporary State Commission on Modernization, Revision and Simplification of Law of Estates, ² the Surrogate ruled that constitutional and legislative expansion of Surrogate's Court jurisdiction since 1962 sanctioned a Surrogate's Court proceeding for "damages arising out of a contract to lease real property, which later becomes an asset of the decedent's estate" (108 Misc.2d 255, 258, 437 N.Y.S.2d 546). With this the Appellate Division took issue. Opining that section 2103's reference to "money or other personal property or the proceeds or value thereof" now embraces such property as "a fund of indeterminate amount (see, e.g., Matter of Young, 80 Misc.2d 937, 365 N.Y.S.2d 695), a determinate amount of money transferred by a decedent as the result of fraud or undue influence (see Matter of Reiner, 86 Misc.2d 511, 383 N.Y.S.2d 504) and rents and profits already collected where * * * ownership of the demised premises [is contested] (see Matter of Hall, 54 Misc.2d 923, 283 N.Y.S.2d 540)" is within the reach of such a discovery proceeding, it thought the l should be drawn at "contingent, unliquidated damages resulting from tortious acts or breaches of contract". Finding that the executors' claim fell within the latter class, and citing again to Matter of Lainez (supra ), it reversed on the law and dismissed in this case too (85 A.D.2d, supra, at pp. 605, 606, 444 N.Y.S.2d 689). From the order entered on this decision, the executors take their second appeal.

The third case in this trilogy finds the litigants exchanging roles. This time the tenants, FBI and ACF, were the suitors and the executors defendants. Alleging that the prosecution of the eviction proceeding was malicious and an abuse of process, the plaintiffs lodged their action in Supreme Court. On motion of the executors, that court removed the action to the Surrogate's Court. In so ordering, the Supreme Court stated that, while "[a] suit for malicious prosecution or other tortious act of an executor is against the executor in his individual rather than representative capacity" and that "a substantial relationship between this matter and the affairs of a decedent" in the end might not be found, it was not prepared to say that the conduct on which the complaint was based was not in furtherance of the administration of the decedent's estate. But the Appellate Division, still citing to Matter of Lainez (supra ), reversed, this time because "[t]his action is an independent matter involving living persons" (Fire Burglary Instruments v. Piccione, 85 A.D.2d 594, 444 N.Y.S.2d 707). The executors now appeal to this court by leave of the Appellate Division, which certified the following question "Was the order of this court dated December 7, 1981, properly made?"

This as background, we first observe that at this stage we cannot reach the merits of the second appeal, i.e., the one from the order dismissing the discovery proceeding. ACM's counterclaim and cross claim, which are still pending, relate to the transaction encompassed by the order dismissing the petition. In consequence, the appeal is from an order which does not determine the proceeding within the meaning of the State Constitution (see N.Y. Const. art. VI, § 3). It follows that this appeal must be dismissed. (See Lizza Inds. v. Long Is. Light. Co., 36 N.Y.2d 754, 368 N.Y.S.2d 830, 329 N.E.2d 664; Walker v. Sears, Roebuck & Co., 36 N.Y.2d 695, 366 N.Y.S.2d 412, 325 N.E.2d 872; Behren v. Papworth, 30 N.Y.2d 532, 330 N.Y.S.2d 381, 281 N.E.2d 178; Cohen and Karger, Powers the New York Court of Appeals [rev. ed.], pp. 81, 84-93; cf. Ratka v. St. Francis Hosp., 44 N.Y.2d 604, 609, 407 N.Y.S.2d 458, 378 N.E.2d 1027.)

Concentrating then on the other two appeals, it is self-evident that their determination requires definition of the subject matter jurisdiction of the Surrogate's Court. S...