In the Matter of the Estate of Eitan Haber, Deceased.
SURROGATE'S COURT OF NEW YORK, BRONX COUNTY
August 21, 2009, Decided
Lee L. Holzman 
, J.
In this probate proceeding, the proponent, the decedent's eldest son and the nominated executor under the propounded instrument dated January 20, 2009, seeks the revocation of the letters of temporary administration previously issued to the respondent, one of the decedent's daughters, and the issuance of preliminary letters testamentary to himself. The proponent also seeks permission to continue to operate real property in its present corporate form. The respondent opposes the application, and requested various other relief in an order to show cause, including that the company that she employed as the temporary administrator be allowed to continue to manage the property.
The decedent died on March 7, 2009, survived by four children as his distributees. The proponent, a child of the decedent's first marriage, is bequeathed 70% of the residuary estate under the propounded instrument, and 10% of the residuary [***2] estate is bequeathed to each of the other children, who are children of the decedent's second marriage which ended in divorce. The respondent, with the consent of her two full siblings, obtained letters of temporary administration based upon a representation that the decedent left no will and that an apartment building held by a real estate holding corporation wholly owned by the decedent required the immediate appointment of a fiduciary. However, shortly after the required bond was filed and letters of temporary administration issued to the respondent, the proponent commenced the probate proceeding. The other children have now filed objections to probate.
In an order to show cause dated April 23, 2009, the respondent's letters of temporary administration were suspended pending the further order of the court. Both sides have filed various proceedings relating to the management of the apartment building. Although the respondent requested that process issue in a SCPA 2103 proceeding against the proponent and a third party and to compel an accounting, process was not issued for that relief due to the suspension of her letters and for the reasons set forth below.
In support of his application [***3] for preliminary letters testamentary, the proponent alleges that the decedent managed his own properties during his lifetime, did not rely on outside paid management, and groomed him to take over the management of the property with the assistance of Jay Rand, the decedent's friend, an experienced property manager. The proponent further alleges that the respondent, in applying for letters of administration, deliberately misled the court that the decedent did not have a will, and now seeks to flout the decedent's testamentary scheme. The proponent submits an affidavit of the apartment building's superintendent describing: 1) the estrangement of the decedent from the three children of his second marriage following a bitter divorce from their mother; 2) the decedent's continued closeness to the proponent and his increasing reliance upon him and Jay Rand to assume the management of that property; 3) the failure of the respondent, while acting as temporary administratrix, to make necessary repairs at the property and the confusion she and the company that she retained to manage the property created as to the collection of rent; and, 4) the decedent's rationale for his testamentary scheme; [***4] to wit, he bequeathed the bulk of his estate to the proponent because he believed that his other children would receive the property that his divorced wife had obtained from him. The proponent also submitted an affidavit from Jay Rand reviewing his many years' experience in real estate management and stating that he never received compensation from the decedent for his building management assistance. In further support of the proponent's claim that the respondent's application for letters of administration constitutes a knowing misrepresentation to the court, he submits the affirmation of Paul Gottlieb, Esq., stating that the respondent saw a copy of the decedent's will at a family meeting held on March 11, 2009.
By order to show cause entered on June 12, 2009 the respondent seeks an order 1) granting her designee, a property management company, the authority to manage the realty; 2) authorizing access to post office boxes in Westchester and Bronx counties where the rents for the premises are allegedly being held; and, 3) directing the proponent to reimburse the estate for the legal fees and costs incurred in bringing the application. The respondent alleges that the mortgage, property [***5] taxes and property insurance are in arrears and income from the property's laundry room, a significant source of income for the building, is not being properly collected and may be misappropriated from the estate. She contends that the proponent is ineligible to serve as fiduciary because, inter alia, he improperly utilized a power of attorney to remove the contents of the decedent's safe deposit box after death and converted other assets, and he is involved in other improprieties in connection with the estates of the decedent's parents in Israel.
Preliminary letters testamentary are issued prior to probate to provide for the immediate administration and protection of the assets of the decedent by the nominated executor in instances where there may be a delay in probate (see Matter of Bayley, 72 Misc 2d 312, 339 N.Y.S.2d 129 [1972], affd 40 AD2d 843, 337 N.Y.S.2d 500 [1972], lv denied 31 NY2d 1025, 294 N.E.2d 658, 341 N.Y.S.2d 898 [1973]; see also Matter of Smith, 71 Misc 2d 248, 336 N.Y.S.2d 68 [1972]). The clear thrust of SCPA 1412 is to honor the testator's wishes with regard to the appointment of a fiduciary for the estate, even on a temporary basis, and to reduce the possibility of spurious pre-probate contests (see Turano, Practice Commentaries, McKinney's Cons [***6] Laws of NY, Book 58A, SCPA 1412, at 344). In the same way that courts are required to exercise the power of removal of a fiduciary sparingly, courts should nullify a testator's choice of executor "only upon a clear showing of serious misconduct that endangers the safety of the estate" (see Matter of Duke, 87 NY2d 465, 473, 663 N.E.2d 602, 640 N.Y.S.2d 446 [1996] [internal citations omitted]; Matter of Horton, 255 AD2d 642, 679 N.Y.S.2d 467 [1998]; Matter of Elkan, NYLJ, Aug. 14, 2002, at 20, col 1). In the absence of a strong showing of a likelihood of harm to the assets of the estate, courts are reluctant to allow opposition to the issuance of preliminary letters testamentary to generate a "contest within a contest" (see Matter of Vermilye, 101 AD2d 865, 475 N.Y.S.2d 888 [1984]). Only where fraud or undue influence rises to the level of dishonesty, which constitutes grounds for disqualification under SCPA 707, will the court deny preliminary letters to the executor selected by the decedent (see Matter of Horton, 255 AD2d at 642; Matter of Vermilye, 101 AD2d at 866).
Here, although the record reveals bad relations among the decedent's children, it falls far short of establishing the ineligibility of the proponent to serve as preliminary executor. Furthermore, [***7] and regardless of whether or not the respondent intentionally misrepresented that the decedent died without a will in her petition for letters of temporary administration, she may not be placed in a better position with respect to the pending applications as a result of the issuance of letters of temporary administration to her as the letters would not have issued but for this inaccurate statement. Of course, should the propounded instrument be denied probate, the court will then consider who should receive letters of administration. In the meantime, it is undisputed that immediate action must be taken with regard to the real property, as rents are not being collected, necessary repairs are not being made, and bills must be paid.
To a significant extent, the concerns expressed by the respondent will be addressed by the following limitations bing placed upon the proponent's preliminary letters testamentary and his authority to continue to operate the business in its present corporate form: 1) if the proponent or any other member of his family is to receive compensation for acting on behalf of the corporation owned by the decedent, no compensation shall be paid absent at least two weeks' [***8] written notice to all parties who appeared in the pending probate proceeding, to ensure they have an opportunity to present an appropriate application to the court should they be of the opinion that such compensation is not reasonable for the services rendered; 2) if any new person is to be hired as a manager or a present employee is to perform management services for additional compensation, at least two weeks' written notice as to who will be hired for that management position and the additional compensation to be received shall be given to all parties who appeared in the probate proceeding; 3) if a present employee of the corporation is to receive compensation in excess of ten percent above the compensation paid as of the date of the decedent's death, the same parties are to receive two weeks' written notice of such increased compensation; 4) as a condition precedent to receipt of preliminary letters testamentary, the proponent is to submit an affidavit setting forth the contents of the decedent's safe deposit box(es) listing any contents he removed therefrom and the current location within New York State of such property; 5) the preliminary letters testamentary to be issued to [***9] the proponent shall be subject to SCPA 805 (3) limitations, and such limitations shall also apply to real estate owned by the corporation; and, 6) there shall be no disposition of the real property unless at least two weeks' written notice is provided to all parties who appeared in the probate proceeding and the court issues an order granting the authority to dispose of or encumber the realty. Upon the grant of preliminary letters to the proponent, he will be allowed to continue to operate the real property in its present corporate form.
Accordingly, the proponent's application for preliminary letters is granted, subject to the above restrictions, and the respondent's letters of temporary administration shall be revoked. In view of this determination, the respondent's order to show cause seeking reinstatement of her letters of temporary administration and various other relief is denied. Upon the issuance of preliminary letters testamentary to the petitioner, the respondent shall turn over to him any remaining estate assets or documents in her possession, including those relating to the corporation.
The granting of preliminary letters testamentary eliminates any need to consider other [***10] applications by the proponent with respect to the real estate. The court has not issued process with respect to the respondent's SCPA 2103 proceeding and for a compulsory accounting, because she now lacks the status to commence an SCPA 2103 proceeding and her request for a compulsory accounting is premature.
Settle order(s) and proceed accordingly.