The Matter of the Estate of Maika

• Court: New York Court of Appeals
• Decided: April 25, 2023
• Docket: 26
• Status: Published

Opinion

State of New York MEMORANDUM Court of Appeals This memorandum is uncorrected and subject to revision before publication in the New York Reports.

No. 26 In the Matter of the Estate of Frank I. Maika, Deceased.

Cora A. Alsante, &c., Appellant; Anne Maika et al., Respondents.

Mary L. D'Agostino, for appellant. Daniel R. Rose, for respondents.

MEMORANDUM:

The order of the Appellate Division should be affirmed, with costs.

Decedent executed a power of attorney authorizing several of his children to act on

his behalf with respect to real estate transactions and health care expenses, but not granting

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the power to make gifts. Pursuant to the authority granted by the power of attorney,

decedent’s agents, by majority vote, transferred title to decedent’s residential property to

two of his children as compensation for caregiving services that they had provided to

decedent for over seven years. Decedent, however, retained a life estate in the property.

The determinative question presented on appeal is whether this transfer was a gift or

compensation under the terms of the power of attorney.1 There is unrebutted evidence that

the two children had repeatedly asked for compensation for their services and the request

was met with approval. However, only one child was initially able to receive nominal

payment due to decedent’s lack of liquid assets. We agree with the Appellate Division that

petitioner failed to raise a triable issue of fact in response to respondents’ prima facie

showing of entitlement to summary judgment.

1 The issue of whether the transfer was in decedent’s best interest (see dissenting op at 2) is unpreserved and, in any event, not germane to this analysis. -2- TROUTMAN, J. (dissenting):

I respectfully dissent. “Because [t]he relationship of an attorney-in-fact to [the]

principal is that of agent and principal . . . , the attorney-in-fact must act in the utmost good

faith and undivided loyalty toward the principal, and must act in accordance with the

highest principles of morality, fidelity, loyalty and fair dealing” (Matter of Ferrara, 7

NY3d 244, 254 [2006] [internal quotation marks omitted]). “Consistent with this duty, an

agent may not make a gift . . . of the money or property which is the subject of the agency

relationship” (Mantella v Mantella, 268 AD2d 852, 852 [3d Dept 2000] [internal quotation

marks omitted]). “In the event such a gift is made, there is created a presumption of

impropriety which can only be rebutted with a clear showing that the principal intended to

make the gift” (id. at 852-853).

Respondents concede that the power of attorney signed by decedent in 2010 did not

authorize his attorneys-in-fact to make gifts. They contend, however, that the 2017 transfer

of property to them was not a gift but rather compensation for years of intensive caregiving.

The power of attorney authorized decedent’s attorneys-in-fact to act in accordance with

decedent’s instructions or in his best interest. To overcome the presumption that their

caregiving services were provided out of love and affection (see id. at 853), which

presumption respondents concede applies here, and to demonstrate that the attorneys-in-

fact acted within their authority under the power of attorney, respondents were therefore

required to demonstrate that the attorneys-in-fact were compensating them for their

caregiving in accordance with decedent’s instructions or were otherwise acting in

decedent’s best interest.

I disagree with the majority that the issue whether the transfer was in decedent’s

best interest is unpreserved and “not germane” to our analysis (majority mem at 2 n). In

challenging the transfer, petitioner necessarily challenged the authority of the attorneys-in-

fact to approve the transfer under the terms of the power of attorney. In support of their

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motion for summary judgment, respondents demonstrated that a majority of the attorneys-

in-fact, which majority included respondent Philip Maika, intended to compensate

respondents for their caregiving. But respondents did not demonstrate that decedent

himself intended to compensate respondents or that such compensation was in decedent’s

best interest. In opposition to respondents’ motion for summary judgment, petitioner’s

submissions raised issues of fact regarding whether the transfer constituted self-dealing by

Philip or was otherwise inconsistent with the fiduciary obligations of the attorneys-in-fact

to act in decedent’s best interest. Respondents’ implied assertion that the power of attorney

gave the attorneys-in-fact absolute authority to make decisions on decedent’s behalf

regardless of decedent’s wishes or best interest—which the majority appears to endorse by

concluding that decedent’s best interest is “not germane”—cannot be reconciled with the

fiduciary obligations of attorneys-in-fact nor with the plain language of the power of

attorney itself.

Respondents failed to demonstrate on their motion for summary judgment that the

attorneys-in-fact were acting in accordance with decedent’s instructions to compensate

respondents. Inasmuch as Supreme Court failed to consider whether the attorneys-in-fact

were acting in decedent’s best interest, and the record reveals issues of fact on that subject,

I would modify the Appellate Division order by denying respondents’ motion for summary

judgment and remit for further proceedings.

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Order affirmed, with costs, in a memorandum. Chief Judge Wilson and Judges Garcia, Singas and Cannataro concur. Judge Troutman dissents in an opinion, in which Judge Rivera concurs. Judge Halligan took no part.

Decided April 25, 2023

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