Skolnick v. Goldberg

Decision Date22 August 2002
PartiesALLEN SKOLNICK, Appellant,<BR>v.<BR>HARVEY GOLDBERG, Respondent.<BR>STEPHEN W. SCHLISSEL, Nonparty Appellant.
CourtNew York Supreme Court — Appellate Division

Bernard S. Meyer of counsel (Meyer, Suozzi, English & Klein, P.C., attorneys), for appellant and nonparty appellant.

Eli Uncyk of counsel (Jeffrey S. Kofsky on the brief; Uncyk, Borenkind & Nadler, L.L.P., attorneys), for respondent.

SULLIVAN, J.P., ROSENBERGER, RUBIN, FRIEDMAN and MARLOW, JJ., concur.

OPINION OF THE COURT

Per Curiam.

Central to this dispute is the propriety of the sale of business interests, purportedly valued at some $50,000,000, for the nominal sum of $2,000,000. It is alleged by the estate of Nathaniel Colby that appellant Allen Skolnick abused his personal relationship with decedent, taking advantage of Colby's diminished mental capacity to obtain his signature on a 1990 purchase agreement, by which appellant acquired more than one half of Colby's interest in the various entities comprising the Solgar vitamin enterprise. Counsel for the administrator of the estate informs the Court that appellant subsequently sold Solgar to American Home Products for $425,000,000, receiving some $221,000,000 for his personal holdings.

At issue on this appeal was an order dismissing the complaint in this declaratory judgment action brought by appellant against Ruth Goldberg, the preliminary executrix of the Nathaniel Colby estate, in her individual capacity. This Court affirmed the order of dismissal and awarded costs to respondent. The declaratory judgment action was based on a clause in the purchase agreement that provides indemnification to appellant by Colby or his "estate, executors, representatives and assigns" for any expenses incurred in defending a lawsuit (including any resulting judgment) claiming that the value of the interest purchased exceeds the $2,000,000 sale price. The question remaining is whether the appeal from the order of dismissal is frivolous within the meaning of Rules of the Chief Administrator of the Courts part 130 (22 NYCRR part 130). To that end, this Court, sua sponte, requested the parties to address whether sanctions should be imposed against appellant Skolnick and his counsel pursuant to the provisions of 22 NYCRR 130-1.1.

Respondent executor of the estate of Ruth Goldberg argues that the appeal is frivolous within the meaning of 22 NYCRR 130-1.1 (c) (1) and (2) that, respectively, provide for the imposition of sanctions where conduct is "completely without merit in law" and "undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another." In response, appellant Skolnick argues that, Estates, Powers and Trusts Law § 11-4.1 notwithstanding, an executor or personal representative is individually liable for misconduct in the discharge of official duties and, therefore, the prosecution of the action against the former preliminary executrix of the estate, in her personal capacity, finds support in law (see, Estates, Powers and Trusts Law § 11-4.7 [b]). Therefore, he argues, the declaratory judgment action was not undertaken solely for purposes of harassment and delay.

It should be immediately apparent that the indemnification provision relied upon as the predicate for the declaratory judgment action is unenforceable. Particularly, it is unenforceable against the named defendant because she is not a signatory to the agreement (General Obligations Law § 5-701 [a] [2]).

A party to a contract cannot, merely by manipulation of its terms, deprive the courts of the powers derived from common law to exercise oversight for the purpose of preventing abuse. In the application of their equitable powers, the courts may rectify any detriment that results from a party's material change of position as the consequence of fraud, mutual mistake, incapacity, overreaching or similar grounds by restoring the parties to the status quo ante. Central considerations to the issue of overreaching are the nature of the relationship between the parties, the disparity between the consideration received and the fair value of the contract and any knowledge by the overreaching party of the incapacity of the party who sustains detriment (see, Ortelere v Teachers' Retirement Bd., 25 NY2d 196, 204-205; Cundick v Broadbent, 383 F2d 157, 163-164, cert denied 390 US 948).

Without passing on the merits of the Colby estate's claims, prosecuted in a...

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4 cases
  • 150 Centreville, LLC v. Lin Assocs. Architects, PC
    • United States
    • New York Supreme Court
    • February 6, 2013
    ...Estate, 299 A.D.2d 201, 750 N.Y.S.2d 271,lv. to appeal dismissed,99 N.Y.2d 610, 757 N.Y.S.2d 820, 787 N.E.2d 1166;Skolnick v. Goldberg, 297 A.D.2d 18, 746 N.Y.S.2d 296 [per curiam]; Matter of Rose BB., 262 A.D.2d 805, 692 N.Y.S.2d 237lv. to appeal dismissed,93 N.Y.2d 1039, 697 N.Y.S.2d 560,......
  • Shyer v. Shyer
    • United States
    • New York Supreme Court
    • July 18, 2019
    ...v. Estate of Castellotti, No. 17CIV1512NGPK, 2019 WL 1778148, at *3 (E.D.N.Y. Apr. 22, 2019) (same); see also Skolnick v. Goldberg, 297 A.D.2d 18, 21 (1st Dep't 2002) ("The action was commenced against the wrong party; that is, it was directed at the executrix, individually, rather than in ......
  • Paulino v. Braun, 8706
    • United States
    • New York Supreme Court — Appellate Division
    • March 14, 2019
    ...between the consideration received and the fair value" of plaintiff's claim weigh in plaintiff's favor (see Skolnick v. Goldberg , 297 A.D.2d 18, 20, 746 N.Y.S.2d 296 [1st Dept. 2002] ).Defendant's contention that plaintiff ratified the release is unpreserved and does not present a pure que......
  • Westphal v. Real Estate Int'l, Ltd.
    • United States
    • New York Supreme Court — Appellate Division
    • January 16, 2018
    ...decedent and inducing her to execute an unfavorable contract, warranting rescission of the contract (see generally Skolnick v. Goldberg, 297 A.D.2d 18, 20, 746 N.Y.S.2d 296 [1st Dept. 2002] ).The order entered November 18, 2015 is not void. Decedent's sister had been appointed administrator......

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