Rachel Kuncman, Plaintiff, against American Portfolios Financial Services, Inc., Steven A. Sherman, the Estate of Abraham Salomon And Tobi Weinstein, individually and as the Executrix of The Estate of Abraham Salomon, Defendants.
6853/09
SUPREME COURT OF NEW YORK, NASSAU COUNTY
25 Misc. 3d 1218A; 901 N.Y.S.2d 907; 2009 N.Y. Misc. LEXIS 2931; 2009 NY Slip Op 52172U
October 8, 2009, Decided
NOTICE: THIS OPINION IS UNCORRECTED AND WILL NOT BE PUBLISHED IN THE PRINTED OFFICIAL REPORTS.
PUBLISHED IN TABLE FORMAT IN THE NEW YORK SUPPLEMENT.
[*1218A] [**907] Release--Vacatur. Banks and Banking--Joint Account--Transfer of Assets.
JUDGES: [***1] Stephen A. Bucaria 
, J.
OPINION BY: Stephen A. Bucaria
Stephen A. Bucaria 
, J.
This motion, by the attorneys for the defendants American Portfolios Financial Services and Steven A. Sherman, for an order pursuant to CPLR 3211(a)(5) dismissing this action as against American Portfolios Financial Services and Steven A. Sherman is granted; and a cross-motion, by the attorneys for the defendants Tobi Weinstein individually and as the executrix of the estate of Abraham Salomon, for an order pursuant to CPLR 3211(a)(1)(5) and (7) dismissing this action as against her and the estate of Abraham Salomon is granted.
Plaintiff alleges that she, along with her father Abraham Salomon ("Salomon") and sister Tobi Weinstein ("Weinstein") were joint tenants with rights of survivorship in a brokerage account maintained at Sandgrain Securities, Inc. The account at Sandgrain Securities was transferred to a joint account at American Portfolios Financial Services, Inc. ("American Portfolios"). Plaintiff alleges that on or about May 1, 2006, the joint account assets were transferred without her authorization to an individual account in the name of Abraham Salomon. Plaintiff contends that the joint account holders' written [***2] transfer authorization contained her forged signature. Two years later, on May 16, 2008, Abraham Salomon died. In her complaint dated April 9, 2009, plaintiff wants "to recover her lawful share of the funds" in the joint and individual accounts. (Complaint P 17). Defendant Weinstein filed a Petition in the Surrogate's Court, Nassau, for the probate of the decedent's Last Will and Testament dated August 20, 2006. Plaintiff was cited in the probate proceeding because she was adversely affected by the Will. Plaintiff took nothing under the Will. Plaintiff filed Objections to Probate of the Will in June, 2008. After conducting documentary discovery concerning the Will, Weinstein and plaintiff entered into a Settlement Agreement pursuant to which plaintiff executed a Withdrawal of Objections to Probate and Consent to Probate dated November 19, 2008. The Nassau County Surrogate's Court then issued a Decree dated January 23, 2009, admitting the Will to probate and issued Letters Testamentary to Ms. Weinstein. The consideration passing to plaintiff under the Settlement Agreement consisted of personal property with respect to which plaintiff claimed ownership. The parties agreed that the consideration [***3] referenced in the Agreement "satisfie[d] any right [Plaintiff] ha[d] to any bequest, legacy, or other entitlement to the property of the Decedent or the Estate, wherever located. (Agreement P 7). Plaintiff waived an accounting. The parties executed mutual general releases.
The general release that the plaintiff executed in favor of Weinstein (individually and in her fiduciary capacity) and the Estate provided as follows:
To all to whom these Presents shall come or may Concern, Know That Rachel Leah Kuncman, Individually and as Co-Trustee of the Abraham and Frances Salomon Irrevocable Life Insurance Trust, as Releasor, in consideration of the sum of Ten ($ 10.00) Dollars and other valuable consideration received from Tobi Weinstein, individually and as Preliminary Executrix of the Estate of Abraham Salomon, as Releasee, receipt whereof is hereby acknowledged, releases and discharges the Releasee, Releasee's heirs, executors, administrators, successors and assigns from all actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, [***4] executions, claims, and demands whatsoever, in law, admiralty or equity, which against the Releasee, the Releasor, Releasor's heirs, executors, administrators, successors and assigns ever had, now have or hereafter can, shall or may, have for, upon, or by reason of any matter, cause or thing whatsoever from the beginning of the world to the date of the date of this Release. The words "Releasor" and Releasee" include all releasors and all releasees under this Release. This Release may not be changed orally.
Weinstein--in her individual and fiduciary capacity--executed a mutual release in favor of plaintiff. The parties to the Settlement Agreement also agreed that "the Nassau County Surrogate's Court shall retain continuing jurisdiction in order to carry out, construe and enforce any of the terms of this Agreement" (Agreement P 12).
Defendants Weinstein and the Estate move to dismiss as to them based on the stipulation and the general release executed by the plaintiff. In the alternative, Weinstein and the Estate request this matter be transferred to Nassau County Surrogate's Court in the event the motion to dismiss is denied. Paragraph 12 of the Agreement provides that "the parties hereto [***5] each consent that the Nassau County Surrogate, after the execution of the release and stipulation of settlement, shall retain continuing jurisdiction in order to carry out, construe and enforce any of the terms of this Agreement." Surrogate Riordan initially recused himself from presiding over the contested probate proceeding because a member of the Court's staff (an attorney formerly in private practice) drafted a prior testamentary instrument for the decedent. The matter was assigned to a Justice of the Supreme Court, Suffolk County, as acting Nassau County Surrogate. After the execution of the release and stipulation of settlement, the decedent's will has since been admitted to probate by a decree of the Surrogate's Court, Nassau County-- not Suffolk County--and the decedent's estate has been administered in Surrogate's Court Nassau County. Plaintiff commenced the within action in Nassau County Supreme Court and asserts the action should not be transferred to Suffolk County but rather, remain in Nassau County Supreme Court since all the major parties reside in Nassau County, other than the plaintiff who resides in Florida. Neither the plaintiff nor the defendants Weinstein and the [***6] Estate object to this Court's deciding the within motions on the merits.
Plaintiff alleges in the complaint that she, together with the decedent and Weinstein, were joint tenants with right of survivorship in Account No. 5AU-010017, maintained at Sandgrain Securities, Inc., in Garden City, New York. She alleges that the account had a value in excess of $ 450,000, and that on or about March 15, 2005, the owners of the account signed an authorization instructing Sandgrain to issue a check in the amount of $ 2,492.00 to the decedent monthly.
Plaintiff further alleges that in early May 2006, the account was transferred by defendant Steven A. Sherman (a branch manager in the Rockville Centre office of American Portfolios) to American Portfolios and assigned Account No. 56V075406, after which time it was managed by Sherman. Plaintiff alleges that on or about May 1, 2006, the account was "secretly and without the authorization consent or direction of [plaintiff] transferred by Sherman and American Portfolios to an individual account in the name of Abraham Salomon, under Account No. 56V-077493. She further alleges that her signature on the letter authorizing the transfer of the Account was [***7] forged; and that the next day, on or about May 2, 2006, Sherman and American Portfolios set up the new account as a joint account in the name of both the decedent and Weinstein, and that the application for that account also contained her forged signature. Plaintiff alleges that on the date of the decedent's death, the account had a value "in excess of $ 700,000" (P 15). According to plaintiff, all of the foregoing actions were part of a "scheme to remove plaintiff from [the account] and conceal the removal from her, as part of [defendant's] scheme to defraud her and convert her property" (complaint P 16). The complaint contains five causes of action. The first, asserted against Sherman and American Portfolio, alleges that they had a duty to verify plaintiff's signature on the transfer documents in order to prevent unauthorized fund transfers, and claims that they acted negligently in failing to do so. The second cause of action asserts a purported claim for breach of contract against American Portfolios. The third cause of action, also asserted against Sherman and American Portfolios, claims that they "aided and abetted" Weinstein and the Estate in the unauthorized transfer of funds, [***8] thereby converting plaintiff's property. The fourth cause of action, asserted against Weinstein and the Estate, alleges that they "forged or caused to be forged" the unauthorized signature of plaintiff on the purported transfer letter dated May 1, 2006 and the account application form for Account No. 56V-007493, and concealed their misconduct from plaintiff, thereby converting her funds. The fifth cause of action, also asserted against Weinstein and the Estate, is for unjust enrichment and is based on the same allegations as the previous causes of action.
Plaintiff's causes of action are based on her contention that assets from the joint account, with her father Abraham Salomon and her sister Tobi Weinstein, were transferred without her authorization in May 2006. Banking Law § 675 provides that a joint account holder is permitted to transfer assets from a joint account and that the banking organization making the transfer cannot be held liable unless it had a specific direction requiring the signature of all signators not to pay. NY Banking Law § 675 states, in part:
When a deposit of cash, securities, or other property has been made or shall hereafter be made in or with any banking [***9] organization . . . in the name of such depositor . . . and another person and in form to be paid or delivered to either, or the survivor of such persons, after the making thereof, shall become the property of such persons as joint tenants and the same, together with all additions and accruals thereon, shall be held for the exclusive use of the persons so named, and may be paid or delivered to either during the lifetime of both or to the survivor after the death of one of them, and such payment or delivery and the receipt or acquittance of the one to whom such payment or delivery is made, shall be a valid and sufficient release and discharge to the banking organization . . . for all payments or deliveries made on account of such deposit . . . prior to the receipt by the banking organization . . . of notice in writing signed by any one of such joint tenants, not to pay or deliver such deposit . . . and the additions and accruals thereof. . . . (emphasis added).
In opposition to the motion by defendants American Portfolios and Sherman, the plaintiff argues that they should not be permitted to hide behind the language of Banking Law § 675 since plaintiff's signature on the transfer documents [***10] was a forgery and the bank's own internal rules and regulations required the valid signature of all three depositors on a document directing a transfer of the account. Counsel for plaintiff has cited no authority to contradict the language of Banking Law § 675. "The protection provided in prior statutes for the banking organization in paying out to either of the co-tenants has not been disturbed." (McKinney's Cons. Law of NY Books 4, 5, Banking Law § 675, Historical and statutory notes pgs. 206-207).
In interpreting the statute we are guided by a well-settled principle of statutory construction: courts normally accord statutes their plain meaning, but "will not blindly apply the words of a statute to arrive at an unreasonable or absurd result" (Williams v Williams, 23 NY2d 592, 599, 246 N.E.2d 333, 298 N.Y.S.2d 473; see also Matter of Rouss, 221 NY 81, 91, 116 N.E. 782; Holy Trinity Church v United States, 143 U.S. 457, 460, 12 S. Ct. 511, 36 L. Ed. 226; People v Santi, 3 NY3d 234, 818 N.E.2d 1146, 785 N.Y.S.2d 405). "It is equally well settled that "[i]n implementing a statute, the courts must of necessity examine the purpose of the statute and determine the intention of the Legislature" (Williams, 23 NY2d at 598). Indeed, "[t]he primary consideration of the courts in the construction of statutes [***11] is to ascertain and give effect to the intention of the Legislature" (McKinney's Cons. Laws of NY, Book 1, Statutes § 92[a], at 177). Legislative intent drives judicial interpretations in matters of statutory construction (see People v Allen, 92 NY2d 378, 383, 703 N.E.2d 1229, 681 N.Y.S.2d 216 [1998])" (People v Santi, supra).
In light of the fact that American Portfolios was not given contrary written instruction, pursuant to Banking Law § 675, American Portfolios could have closed the joint account with only the signature of defendant Weinstein and her father to the exclusion of the signature of the plaintiff. The motion by defendants American Portfolios and Sherman dismissing the complaint as to them based on Banking Law § 675 is granted.
A release "is a jural act of high significance without which the settlement of disputes would be rendered all but impossible" (see Liling v Segal, 220 AD2d 724, 725-726, 633 N.Y.S.2d 199). When a release is clear and unambiguous on its face and was knowingly and voluntarily entered into, it will be enforced as a private agreement between the parties (L & K Holding Corp. v Tropical Aquarium at Hicksville, Inc., 192 AD2d 643, 596 N.Y.S.2d 468). A release will not be treated lightly and will be set aside by a court only [***12] for duress, illegality, fraud, or mutual mistake (see also Bodisher v. Hofmann, 50 A.D.3d 720, 854 N.Y.S.2d 316; Matter of Stark, 233 A.D.2d 450, 650 N.Y.S.2d 608).
In opposition to the motion to dismiss, the plaintiff argues that the general release and Settlement Agreement be set aside or limited based on the allegation that a forgery and fraud were committed and that the general release was given under fraudulent circumstances.
"The elements of fraud include a misrepresentation, known by the defendant[s] to be false and made for the purpose of inducing the plaintiff to rely upon it, justifiable reliance and damages" (Van Kleeck v. Hammond, 25 A.D.3d 941, 811 N.Y.S.2d 452, 3rd Dept., 2006; Mora v RGB, Inc., 17 A.D.3d 849, 852, 794 N.Y.S.2d 134, 2005). To establish a cause of action alleging fraud, a plaintiff must demonstrate: "(1) that the defendant made material representations that were false, (2) that the defendant knew the representations were false and made them with the intent to deceive the plaintiff (3) that the plaintiff justifiably relied on the defendant's representations, and (4) that the plaintiff was injured as a result of the defendant's representations" (Giurdanella v Giurdanella, 226 AD2d 342, 343, 640 N.Y.S.2d 211; see Crafton Bldg. Corp. v St. James Constr. Corp., 221 AD2d 407, 408, 633 N.Y.S.2d 795; [***13] Bank of New York v Realty Group Consultants, 186 AD2d 618, 588 N.Y.S.2d 602; Blumberg v Patchogue-Medford Union Free School Dist., 18 AD3d 486, 795 N.Y.S.2d 81; Brannigan v Board of Educ. of Levittown Union Free School Dist., 18 AD3d 787, 796 N.Y.S.2d 690).
After the issue of letters testamentary (January 23, 2009), the attorneys for the estate sent a letter dated February 9, 2009, to the plaintiff's former attorney stating that a bank account in the name of Abraham Salomon had five beneficiaries: Rachel Kuncman, Matthew Kuncman, Tobi Weinstein, Carly Weinstein and Brandon Weinstein. The account had a balance of $ 450,774.27. Weinstein sought the plaintiff's consent to close the account, place $ 112,400 in the estate account to pay the estate taxes allocable to the account and distribute the balance among the beneficiaries.
Plaintiff asserts the existence of this Account was hidden from her since Weinstein did not want the plaintiff to know there was an account created by their father three months before his death that left the plaintiff $ 90,000. Further, she contends the discovery of the account goes against the decedent's last Will and contradicts a purported DVD in which he describes why he left the plaintiff only one dollar. The [***14] plaintiff states: "[i]f I had known about the account I probably would not have withdrawn my Objections to probate and the case would not have been settled. My other belief is that my sister probably thought that she could receive all of the funds in the account; she and her two children were the other beneficiaries on the account even though my son and I were named as beneficiaries. Only when she learned that the holder of the account, Bank United, insisted on my son's and my signatures was I advised of the discovery' " (Kuncman affidavit in opposition P 14).
Plaintiff alleges that this newly discovered Account led her to wonder if there were other accounts established by her father that had not been disclosed. She went through some of her old storage files and found a document from Sandgrain Securities. She contacted Sandgrain Securities and was advised the account had been transferred to American Portfolios.
A crucial element of fraud is justifiable reliance (see Shovak v Long Island Commercial Bank, 50 AD3d 1118, 1121, 858 N.Y.S.2d 660; New York City School Const. Auth. v Koren-DiResta Const. Co., Inc., 249 A.D.2d 205, 671 N.Y.S.2d 738). Plaintiff was represented by counsel. As a respondent in a probate proceeding she [***15] had the ability to discover documents regarding the decedent's assets (see SCPA § 1404; Matter of DeLisle, 149 A.D.2d 793, 539 N.Y.S.2d 588; Uniform Rules for Surrogate's Court, 22 NYCRR 202.27).
Even considering the allegations of the complaint to be true and according the plaintiff the benefit of every favorable inference, there is an absence of justifiable reliance to state a cause of action to recover for fraud or collusion against the decedent and/or Weinstein.
In P 8 of the complaint the plaintiff alleges:
On or about March 15, 2005, Abraham Salomon, Rachel Kuncman and Tobi Weinstein signed an authorization that instructed Sandgrain to issue a check in the amount of $ 2,492 to Abraham Salomon on the 25th day of each month thereafter.
Plaintiff's allegation that she, along with the defendant and decedent, signed an authorization on or about March 15, 2005, regarding the Sandgrain joint account makes her alleged reliance unreasonable and unjustifiable (the release and settlement agreement were signed in November 2008). Also, plaintiff acknowledged that prior to signing the release and settlement agreement she had documents in her possession regarding the Sandgrain account. Among those items discoverable [***16] in a contested probate proceeding are documents which contain information as to: (i) a proponent's knowledge of decedent's assets prior to the will execution; (ii) the value of decedent's estate; (iii) whether decedent divested himself of assets in the years prior to his death; and (iv) any financial records of decedent or a proponent which might reveal information of this nature (Matter of Du Bray, 132 A.D.2d 914, 518 N.Y.S.2d 245; Matter of Fox, 100 AD2d 744, 473 N.Y.S.2d 631; Matter of Schneier, 50 A.D.2d 715, 374 N.Y.S.2d 872).In Matter of Abu-Regiaba, (21 Misc 3d 1106A, 873 NYS2d 231, Surrogate's Court, Nassau County, September 30, 2008), Surrogate Riordan stated:
A party bears the risk of a mistake when he is aware, at the time a contract is made, that he has only limited knowledge with respect to the facts to which the mistake relates but treats his limited knowledge as sufficient (Restatement [Second] of Contracts § 154). A party cannot rely upon her ignorance of a condition which she could have discovered using ordinary care (P.K. Development, Inc. v Elvem Development Corp., 226 A.D.2d 200, 640 N.Y.S.2d 558, 1st Dept., 1996; Vandervort v Higginbotham, 222 A.D.2d 831, 634 N.Y.S.2d 800, 3rd Dept., 1995 ). In Matter of Ham (N.Y.L.J., May 15, 2002 at 22, col. 3) the court denied [***17] an application by the co-administrator of decedent's estate to reform a stipulation of settlement which provided for a distribution of the decedent's probate and non-probate assets after she later discovered that one of the non-probate assets was a Totten trust for her benefit, finding that her failure to ascertain the beneficiary designation on the largest of the decedent's bank accounts could only be ascribed to negligence.
The plaintiff had the opportunity to make use of any or all of the aforesaid discovery devices prior to signing the release and settlement agreement. Moreover, plaintiff had the option of waiting for the production by the estate of a copy of ET-706 Form - US Estate Tax Return prior to signing the release in order to ascertain all of the testamentary and non-testamentary assets. Plaintiff knowingly and voluntarily negotiated and entered into the Settlement Agreement with Weinstein and the Estate, the clear intent of which was to resolve all issues concerning the estate and the assets of the decedent. She expressly agreed to waive any interest in the assets of the estate. The case of Cahill v Regan, (5 NY2d 292, 157 N.E.2d 505, 184 N.Y.S.2d 348) cited by the plaintiff, is factually and legally distinguishable. [***18] In Cahill, the releases executed were solely concerned with settling the controversy being litigated--the ownership of machinery in the employer's possession, a subject having no relation to the invention or patent. In the within action plaintiff acknowledged she had records regarding the disputed account in her possession prior to signing the release. Moreover, the settlement in the context of the probate proceeding was extensive and the plaintiff had the opportunity to ascertain the existence of all testamentary and non-testamentary assets of the estate before signing the settlement agreement and release. Plaintiff's failure to make the inquiries that precipitated this action before she executed the settlement agreement render her reliance on any alleged misrepresentations unreasonable and unjustifiable as a matter of law (see KNK Enters., Inc. v Harriman Enters, Inc., 33 AD3d 872, 824 N.Y.S.2d 307).
Motion by the defendants Weinstein and the Estate dismissing the complaint as to them is granted. The court has considered the plaintiff's remaining arguments and finds them to be without merit.
This is the decision and order of the Court.
This order concludes the within matter assigned to me pursuant to [***19] the Uniform Rules for New York State Trial Courts.
DatedXXXJ.S.C.