In re the Estate of Klenk

151 Misc. 2d 863
CourtNew York Surrogate's Court
DecidedJune 6, 1991
StatusPublished
Cited by5 cases

This text of 151 Misc. 2d 863 (In re the Estate of Klenk) is published on Counsel Stack Legal Research, covering New York Surrogate's Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re the Estate of Klenk, 151 Misc. 2d 863 (N.Y. Super. Ct. 1991).

Opinion

OPINION OF THE COURT

Ernest L. Signorelli, S.

Following the death of the decedent and for a period of eight years, the administration of this estate has been plagued by the many conflicts of interest of the attorney-draftsman serving as cofiduciary and counsel for the estate. Objections to the attorney-draftsman’s and corporate fiduciary’s accounting have been filed by the decedent’s spouse, a cofiduciary, and her son.

The decedent died, on the 11th day of November 1983, survived by her spouse and three children from a prior marriage. Her estate, at death, was valued at $4,000,000, and consisted primarily of cash, jewelry, tangible personalty, realty, and appointive trust property.

Pursuant to the pertinent provisions of her last will and testament, dated September 5, 1978, the decedent specifically devised and bequeathed her realty, tangible personal property, and the residue of her estate to her spouse. Additionally, the decedent exercised powers of appointment that she held under a 1941 inter vivas trust instrument, and two testamentary trusts created under the wills of her predeceased parents and grandmother.

In article eleventh of the instrument, the decedent nominated and appointed her spouse, her attorney, and Morgan Guaranty Trust Company of New York as the executors of her estate, and further provided that they should receive commissions for their services as follows: "I direct that my Executors shall be entitled to receive executors’ commissions with re[865]*865spect to (a) all real estate specifically devised by me in this Will, (b) all tangible personal property specifically bequeathed by me in this Will, and (c) all appointive property disposed of hereinabove as if I had owned all of the same in my own right and the same had been disposed of by residuary disposition.”

On the 21st day of May 1984, the last will and testament of the decedent was admitted to probate, and letters testamentary issued to said fiduciaries. Thereafter, the instant accounting proceeding was filed with the court by the attorney-draftsman and the corporate cofiduciary. The decedent’s spouse refused to endorse said accounting, and, in fact, filed objections relating to the validity of the attorney-draftsman’s appointment as coexecutor of the decedent’s estate, as well as the commissions clause under article eleventh of her will, and the reasonableness of the legal fees sought by counsel for the fiduciaries.

The decedent’s son, a claimant of the estate, also objected to the petitioners’ account requesting that the court award him interest for moneys advanced to the decedent. The moneys were borrowed from an inter vivas trust created for the benefit of the son whose trustees were the son and the attorney-draftsman. Additionally, in support of said claim, the decedent’s son, individually, and as cotrustee of the aforesaid trust, commenced an action at law in this court to recover the interest on said loan, reimbursement for income taxes assessed against him and for restitution. Subsequently, the court issued an order consolidating the issues raised in the contested accounting and action at law.

Prior to the conclusion of this trial, and upon the court’s recommendation, the litigation relating to the decedent’s son was settled pursuant to the terms of a stipulation placed on the record. Additionally, the objection relating to legal fees was submitted to the court, in lieu of an evidentiary hearing, predicated upon counsel’s affidavits of legal services, and answering papers filed by the objectant in opposition thereto.

The remaining issues for trial were as follows:

As To The Accounting Proceeding

"Issue #1:

"Should Donald Vail, Esq., the attorney-cofiduciary, be denied commissions on the ground that his nomination as a co-executor of this estate was the result of overreaching and fraud on his part?

[866]*866 "Issue #11:

"Was Article Eleventh of the decedent’s will, that permits the executors of this estate to include in the computation of their commissions property that was specifically bequeathed and devised, as well as property over which the decedent had a power of appointment, the product of overreaching and fraud on the part of the said attorney-fiduciary-draftsman?

"Issue #111:

"Is the insertion of such a provision in a will against public policy?

"Issue #IV:

"If issues numbered II and/or III are decided in the affirmative, how should commissions be computed with regard to:

"a. attorney-fiduciary

"b. corporate-fiduciary.

"Issue #V:

"Is the objectant, Klenk, barred by the doctrine of estoppel from raising Issues I through III?”

The petitioners contend that the objectant spouse should be estopped from raising the issues numbered I through III pertaining to counsel’s nomination as an executor and the inclusion of article eleventh in the decedent’s will. Petitioners argue that almost at the inception of the administration of the estate, the objectant spouse was represented by separate counsel.

The reported cases on this subject do not support petitioners’ reliance on the doctrine of estoppel. The fact that the objectant spouse did not initially object to the attorney-draftsman’s nomination at the probate stage will not preclude him from raising the issue of constructive fraud and overreaching as to his nomination at the accounting stage. In Matter of Laflin (111 AD2d 924 [2d Dept 1985]), and Matter of Harris (123 Misc 2d 247 [1984]), both courts, in dealing with an executor’s accounting proceeding, refused to dismiss objections raised to the commissions requested by the attorney-fiduciarles on the ground that their appointment was procured by overreaching and constructive fraud. The court in Matter of Harris (supra), stated that only a countermanding compelling equitable reason would warrant foreclosing such an inquiry at the accounting stage of an estate administration. Moreover, and, in any event, the court on its own initiative, may inquire [867]*867into the circumstances surrounding an attorney-fiduciary’s nomination to satisfy itself that such nomination was not the product of overreaching or fraud.

Consequently, the decedent’s spouse is not barred by the doctrine of estoppel herein, and issue No. V is resolved in favor of the objectant spouse.

The attorney-draftsman initially met the decedent in the 1950’s when she retained his former law firm to prosecute a right of election which she exercised in connection with her late husband’s estate. Thereafter, over the years, counsel’s law firm sporadically represented the decedent, as well as her second husband, with regard to various business and personal legal matters.

Commencing in May 1958, counsel prepared 10 wills for the decedent. In nine of these instruments, he, as well as Morgan Guaranty Trust Company of New York, were nominated as cofiduciaries of her estate, and, in 1976 and 1978, the decedent’s husband was nominated as a third cofiduciary.

The record reveals that counsel did not enjoy a close relationship with the decedent. He testified that he had last seen the decedent some 5 to 6 years prior to her death. On one occasion, the decedent became irate concerning a bill presented to her by counsel’s law firm.

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Bluebook (online)
151 Misc. 2d 863, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-the-estate-of-klenk-nysurct-1991.