In re the Accounting of Polsky

19 A.D.2d 413, 244 N.Y.S.2d 22, 1963 N.Y. App. Div. LEXIS 2986
CourtAppellate Division of the Supreme Court of the State of New York
DecidedNovember 7, 1963
StatusPublished
Cited by7 cases

This text of 19 A.D.2d 413 (In re the Accounting of Polsky) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re the Accounting of Polsky, 19 A.D.2d 413, 244 N.Y.S.2d 22, 1963 N.Y. App. Div. LEXIS 2986 (N.Y. Ct. App. 1963).

Opinion

Brbitel, J. P.

Patricia Levy appeals from orders denying her applications to reopen final accountings in a decedent’s estate and in a guardianship on the grounds of fraud and “ collusion In connection with both accountings appellant had signed waivers of citation shortly after reaching her majority in 1959. [414]*414The present proceedings were initiated more than three years later.

It is very rare that circumstances suffice to permit the reopening of final decrees, especially when the decrees are supported by waivers of citation executed by a competent person. Here there are circumstances, however, which warrant at least a hearing. This is because of the multiple fiduciary relationships among appellant, her aunt, and the lawyer for the aunt, the events in obtaining of the waivers of citation, the obvious errors, and the disproportionate cost of administration in both accountings. Consequéntly, the orders should be reversed and the proceedings remanded to the Surrogate for the taking of appropriate proof, and determining whether any relief is warranted.

Taking the basic and thus far uncontradicted facts in the petition, the following occurred: Miss Levy’s mother died November 25, 1958. Decedent’s daughter was not to be 21 until September 8,1959,10 months later. In round figures, the mother left assets of $45,000, only $19,000 of which belonged properly to her estate. There were $26,000 in savings bank accounts in the name of the mother and daughter jointly, with right of survivorship in the daughter. There were, among the $19,000, savings bonds of just under $7,000 and New York Stock Exchange listed stocks of $12,000. The only debts, which were paid without difficulty or dispute, totalled approximately $600. Estate taxes of $352 were paid. Despite the simplicity and liquidity of the decedent’s estate, the immediately available status of the joint bank accounts, and the impending majority of the sole distributee, legal fees of $2,500 were incurred, together with inaccurate and double commissions for the estate (erroneously including the joint bank accounts) and the guardianship. The commissions aggregated $2,338.95, of which $1,298.61 were for commissions as executrix and $1,040.34 were for commissions as guardian.

Seven days before the daughter reached her 21st birthday, namely, on September 1, 1959, the joint bank accounts were transferred into the name of the aunt as testamentary guardian. Immediately after the daughter’s birthday the assets in the decedent’s estate were also transferred to the aunt as testamentary guardian. The transfer of the joint accounts was hardly necessary in view of the impending majority of the decedent’s daughter. The transfer of the assets in the decedent’s estate would seem to have even less justification since it occurred after the daughter’s majority (see Surrogate’s Ct. Act, § 179).

It was on November 9, 1959, two months after decedent’s daughter reached majority, that she signed the waivers of citation in both accountings for her aunt and the aunt’s lawyer. This [415]*415was done while she was alone with them in the lawyer’s office. She avers that she was told that this was the proper procedure, that the lawyer was entitled to legal fees of $2,500, and that the aunt was entitled, by virtue of the statute, to the commissions both as executrix and as guardian. Decedent’s daughter was also assured that the entire procedure was subject to approval by the court which would supervise the fixing of commissions and legal fees. She also says that shortly after her mother’s death she was told by the lawyer that he would handle all the legal affairs, look out for her interests, and that she would receive the assets promptly after becoming 21.

Decedent’s daughter waited three years before instituting proceedings. She explains this on the grounds of her innocence in legal matters, and reliance upon her aunt and the lawyer’s advice. It was only after she had occasion to relate to others what had happened with her mother’s assets that it was brought home to her that there may have been overreaching.

In this simple sequence there are some stark facts not adequately explained.

First, the joint bank accounts were erroneously included in decedent’s estate; the executrix had no right or title to them (Matter of Juedel, 280 N. Y. 37; Matter of Porianda, 256 N. Y. 423; Moskowitz v. Marrow, 251 N. Y. 380; Matter of Schwarts, 30 Misc 2d 814; 3 Warren’s Heaton, Surrogates’ Courts, § 230, par. 8, subpar. [c]; 12 Carmody-Wait, N. Y. Practice, Surrogate’s Practice, § 1223). Consequently, there was no right to impose executrix commissions based on the $26,000 of joint bank accounts, but only on the assets proper of the estate in the sum of $19,000.

Second, there was no apparent reason for shunting the assets from the estate into the guardianship after decedent’s daughter had attained her majority. The only seeming purpose this could serve, in the absence of explanation, was to support double commissions.

Third, there is almost as much difficulty in understanding the earlier creation of a guardianship by transferring the joint bank accounts to the testamentary guardian. A delay of a few days would have permitted direct formal transcription of the accounts into the sole name of the joint survivor. Even this was not necessary, since decedent’s daughter was a fully empowered joint owner. There has been no suggestion that the accounts were in any danger requiring the interposition of the guardianship for the seven-day interval.

Fourth, the difficulties are aggravated when the charges for legal services in the handling of this estate and guardianship [416]*416aggregate $2,500. The attempt to justify the fee by reference to Bar Association fee schedules is not impressive in view of the fact that even the application of schedules is not mechanical but requires discriminating judgment. Moreover, the application is even less impressive when the assets of both the decedent’s estate and the guardianship are raised to their ultimate máximums only by the erroneous inclusion of the joint bank accounts and the doubtful transfers into the guardianship.

Respondents on the appeal make some argument about the right to double commissions and argue some issues of law with respect to that. Actually, it is not clear that there was a right to such double commissions on the $19,000 or any commissions on the $26,000 of joint bank accounts. They wholly fail to explain the seemingly contrived inflation of the decedent’s estate. It is difficult to understand how a fiduciary obligation was being fulfilled in this case even if, as respondents contend, it were true that double commissions could sometimes be justifiably based on transfers from a general estate into a guardianship.

In the ordinary case involving no fiduciary obligations there might not be any relief from a decree entered on a waiver of citation in the absence of fraud in law or duress. The final decrees of the court, the signing of the waivers by a competent person, and the passage of time would separately or collectively suffice to prevent a reopening of the matter. In this case, however, there were fiduciary obligations and they were compound. There were the relationships of niece and aunt, of legatee and executrix, of ward and guardian, and of layman relying upon a lawyer’s advice. In such case, the courts will grant relief against advantage taken and undue influence exerted by the fiduciary of the one who is a beneficiary or reposes confidence in the fiduciary. In Fisher v.

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Bluebook (online)
19 A.D.2d 413, 244 N.Y.S.2d 22, 1963 N.Y. App. Div. LEXIS 2986, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-the-accounting-of-polsky-nyappdiv-1963.