Cite as: Estate of Nina Courantt, 1991-1424/A, NYLJ 1202638796380, at *1 (Surr., WE, Decided December 23, 2013)

1991-1424/A

Surrogate Anthony Scarpino

Decided: December 23, 2013

ATTORNEYS

Robert C. Boneberg, Esq., Lowenstein Sandier LLP, New York, NY.

Gary E. Bashian, Esq., Bashian & Farber, LLP, White Plains, NY.

Charles T. Scott, Esq., Greenfield Stein & Senior LLP, New York, NY.

DECISION & ORDER

 

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In this turnover proceeding pursuant to SCPA 2103, respondent Lori Berkowitz Lax moves pursuant to CPLR 3212 for summary judgment dismissing the petition.

On May 6, 1991, the decedent died testate, survived by four children, including petitioner Gertrude Courant Moser (the petitioner) and respondent Lori Berkowitz Lax (Lori). By decree dated May 28, 1991, this court admitted the decedent's will to probate and appointed the petitioner and the decedent's son, Ernest Courant (Ernest), as co-executors of the estate. Insofar as is relevant to this proceeding, in Article SECOND of her will, the decedent bequeathed all musical instruments which she owned at her death to her surviving issue, "to be distributed among [her] surviving issue in such manner as they shall see fit."

In or about the 1950's Lori, with the decedent's knowledge and consent, came into exclusive possession of two musical instruments: (1) a violin "which the decedent originally obtained as a long term loan to her by a family friend" [Mrs. Hobson] (the Hobson Violin); and (2) a viola owned by the decedent (the Viola) (collectively referred to as the Instruments). Lori continues to possess the Instruments, which are the subject of this proceeding.

 

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In or about August 1989, almost two years before the decedent died, ownership of the Viola became the subject of a dispute between the petitioner and Lori. Lori claimed that she owned it, while the petitioner claimed the decedent owned it. According to the petitioner, she "concluded the conversation satisfied that Lori understood and accepted…that [the decedent] intended her instruments, including the [V]iola, to be shared by the entire family" (Petitioner's Opposition to Motion, Exhibit B, ¶9). Yet, in a letter dated September 24, 1989, Lori claimed that the decedent had gifted the Viola to her many years before ("the 1989 letter"). She also stated that the Hobson Violin was "perhaps mine by 'right of possession'…" (Lori's Motion, Exhibit D). The 1989 letter is addressed to the petitioner and to Ernest, but not the decedent. Further, Lori does not claim that she ever sent it to the decedent or that the decedent was aware of it.

In April 2012, Ernest wrote that, following their appointment as co-executors, he and the petitioner "distributed everything (furniture, pictures, silverware, etc.) according to our inclinations at the time." Musical instruments in the decedent's house, but not the Viola or the Hobson Violin, were appraised (Lori's Motion, Exhibit L). Additionally, in August 2012, he wrote, in relevant part, that he "felt no reason to include [the Viola] among the items to be assessed as part of the estate for tax purposes" (Lori's Motion, Exhibit K). According to these same communications, Mrs. Hobson died in 1982 without children. The record is devoid of any evidence with respect to any and all relevant facts concerning her estate, including whether a representative of her estate has ever sought return of the Hobson Violin from the decedent, the decedent's estate, or Lori.

 

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Sometime in 2012, the issue of ownership of the Instruments arose, with Lori asserting ownership of them. In response, the petitioner and Ernest demanded that she return the Instruments to the estate, but Lori refused to do so.

In or about February 2013, the petitioner, as co-executor, commenced this proceeding pursuant to SCPA 2103, seeking to compel Lori to turn over the Instruments to her. Essentially, the petition alleges that the decedent had loaned the Instruments to Lori, as was her common practice with her other musical instruments, and that the Instruments were not gifts to Lori. The petitioner further alleges that until 2012, the "[p]etitioner believed that [Lori's] possession of the Instruments was a continuation of the loan the Decedent made to her years earlier, and that [Lori] would return the Instruments to the estate for sale and/or distribution when they were no longer being utilized"; and that at no time prior to 2012 did Petitioner have any notice or knowledge that Lori would claim ownership of the Instruments. The petitioner states that she has demanded that Lori return the Instruments to the estate, but she has refused, asserting ownership over them. The petition sets forth causes of action for conversion and constructive trust.

Lori has filed an answer in which she basically denies the allegations in the petition, except admits that she asserts ownership of the Instruments. She also asserts four affirmative defenses: (1) failure to state a cause of action; (2) the petitioner lacks standing to bring the proceeding; (3) the claims are barred by the various equitable doctrines; and (4) the proceeding is barred by the statute of limitations.

 

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Now, prior to any discovery having taken place, Lori moves for summary judgment dismissing the petition, essentially on her affirmative defenses. The petitioner opposes the motion.

The motion is granted in part and denied in part. Specifically, and as more fully explained below, the court: (1) grants so much of the motion as seeks to dismiss as barred by the statute of limitations the causes of action to recover the Viola; and (2) denies so much of the motion which seeks summary judgment to dismiss the causes of action to recover the Hobson Violin.

On a motion for summary judgment, the moving party must establish a prima facie case of its entitlement to judgment as a matter of law by submitting admissible evidence demonstrating the absence of any triable issue of fact (see Erikson v. J.I.B. Realty Corp., 12 AD3d 344 [2004]; Taub v. Balkany, 286 AD2d 491 [2001]). "Failure to make such a showing requires denial of the motion regardless of the sufficiency of the opposing papers. Moreover, since summary judgment is the procedural equivalent of a trial, any doubt as to the existence of a triable issue, or where the material issue of fact is arguable, the motion should be denied" (Peerless Ins. Co. v. Allied Building Prods. Corp., 15 AD3d 373, 374 [2005] [internal quotes and citations omitted]). Once the moving party makes the required showing, the burden shifts to the party opposing the motion to produce evidentiary proof to establish the existence of material issues of fact which require a trial (see Alvarez v. Prospect Hosp., 68 NY2d 320; Boz v. Berger, 268 AD2d 453).

 

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Although a party may move for summary judgment at any time after issue is joined (CPLR 3212 [a]), the court should not grant the motion where "facts essential to justify opposition to the motion may exist but cannot then be stated" (CPLR 3212 [f]).

The Petitioner's Legal Capacity to Commence this Proceeding

Lori argues that the petitioner lacks the legal capacity to maintain this proceeding, and the petition should be dismissed, because she cannot commence it without the participation of Ernest, the other co-executor.

As petitioner's counsel points out in its memorandum of law, in Matter of Rutherford (161 Misc. 622 [1936]), the New York County Surrogate's Court rejected this very same argument:

"Any executor has the power to initiate a discovery proceeding and it is his duty to bring the proceeding whether his co-executor does or not whenever in his opinion the property of the estate is in the hands of third persons who refuse delivery of it."

(Id. at 624; see Matter of Levine, 189 Misc. 976, 977 [Surr. Ct., Kings County; 1947]; 5 Warren's Heaton on Surrogate's Court Practice, §61.01 [3][a]). Lori's counsel neither cites case law to the contrary, nor argues that this court should decline to adopt this line of case law. Accordingly, the court rejects Loris position.

Whether the Petition Alleges a Superior Property Interest in the Instruments

Next, Lori states that in order to support her claim for conversion and/or constructive trust, the petitioner must show an interest in the Instruments that is superior to hers, and she claims that the petition fails to sufficiently allege such a superior interest. Specifically, she asserts that there is no competent evidence of a loan agreement between either the

 

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decedent or the estate and Lori regarding the Instruments, and therefore, the petitioner cannot satisfy her burden of proof and her petition fails to state a cause of action with respect to the Instruments.

Initially, it is worth noting that although this is a motion for summary judgment under CPLR 3212, one of Loris affirmative defenses is that the petition fails to state a cause of action (see CPLR 3211 [a][7]). "Generally speaking, any of the grounds on which a CPLR 3211 motion could have been made before the service of an answer can be used as a basis for a motion for summary judgment afterwards," as long as that defense is included as an affirmative defense in the answer (Siegel, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR 3212:20, at 29).

It is well settled that on a motion to dismiss pursuant to CPLR 3211 (a)(7), the court must "accept the facts as alleged in the complaint as true, accord [petitioner] the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory" (Leon v. Martinez, 84 NY2d 83, 87-88; see 511 W. 232nd Owners Corp. v. Jennifer Realty Co., 98 NY2d 144, 152; Collins v. Telcoa Intl. Corp., 283 AD2d 128, 131).

The petitioner's first cause of action is for conversion, which "is the unauthorized assumption and exercise of the right of ownership over goods belonging to another to the exclusion of the owner's rights. [T]o establish a cause of action in conversion, the plaintiff must show legal ownership or an immediate superior right of possession to a specific identifiable thing and must show that the defendant exercised an unauthorized dominion

 

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over the thing in question…to the exclusion of the plaintiff's rights" (PDK Labs, Inc. v. G.M.G. Trans West Corp., 101 AD3d 970, 973 [internal quotes and citations omitted] [2012]).

The other cause of action is to impose a constructive trust. "In order to state a cause of action to impose a constructive trust, a plaintiff must allege (1) a confidential or fiduciary relationship, (2) a promise, (3) a transfer in reliance thereon, and (4) unjust enrichment" (Zane v. Minion, 63 AD3d 1151, 1152 [citations omitted] [2009]).

Contrary to Lori's contention, the petition sufficiently alleges causes of action for both conversion and constructive trust. With respect to the former, the petition alleges that the estate owns the Instruments; that Lori possesses them; and that she has refused demands to return them. With respect to the latter, the petition alleges the existence of a confidential relationship between Lori and the decedent (and now her estate); a promise to return the instruments; a transfer of the Instruments in reliance upon that promise; and that Lori is unjustly enriched by her retention of the Instruments.

Loris argument concerning the petitioner's lack of evidence of a loan agreement between either the decedent or the estate and Lori does not entitle her to summary judgment. "A defendant does not establish its entitlement to summary judgment merely by pointing out gaps in the plaintiff's case" (Giaquinto v. Town of Hempstead, 106 AD3d 1049 [citations omitted] [2013]), especially where, as here, no discovery has taken place. Rather, Lori was required to establish the lack of a loan agreement between her and the decedent concerning the Instruments, which she has failed to do on this motion.

 

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Pointing to the petitioner's statement that the alleged loan agreement provided that Lori could keep and use the Instruments until they were no longer being utilized, Lori asserts that because the petitioner has not alleged that she has stopped using the Instruments, Lori's obligation to return them has not yet ripened, and no cause of action for conversion may be maintained. This is absurd. While a cause of action for conversion would accrue upon Lori's retention of the Instruments in violation of an alleged loan/bailment agreement, the court should not have to point out that it also accrues upon Lori's assertion of ownership of the Instruments.

Lori also claims that the petitioner lacks standing to seek the return of the Hobson Violin because the decedent's transfer of it to her created a gratuitous bailment between Lori and Mrs. Hobson, who knew and approved of the transfer. She also claims that Mrs. Hobson abandoned the Violin by never seeking its return.

"Bailment does not necessarily and always, though generally, depend upon a contractual relation. It is the element of lawful possession, however created, and duty to account for the thing as the property of another that creates the bailment, regardless of whether such possession is based on contract in the ordinary sense or not" (Foulke v. New York Consol. R. Co., 228 NY 269, 275 [1920]; see Martin v. Briggs, 235 AD2d 192, 197 [1997] ["Taking lawful possession without present intent to appropriate creates a bailment"]).

The evidence in the record indicates that the decedent's possession of the Hobson Violin constituted a gratuitous bailment of indefinite duration, and that the decedent's

 

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entrustment of it to Lori, with Mrs. Hobson's consent, was also a gratuitous bailment. Had the decedent entrusted it to Lori without Mrs. Hobson's knowledge and consent, Lori's possession of it would have constituted an act of conversion by the decedent (see 9 NY Jur. 2d. Bailment and Chattel Leases [2013], §§25-26).

Lori's statement that "[w]hatever rights [the decedent] may have had in the [Hobson] Violin, if any, ended more than fifty years ago when the Violin was transferred with Mrs. Hobson's consent to Lori" is without merit (Lori's Memo of Law, p. 19). First, Lori cites no case law to support this position, and in fact, the law is to the contrary (see Pivar v. Graduate School of Figurative Art of the New York Academy of Art, 290 AD2d 212 [2002]; 9 NY Jur. 2d Bailments and Chattel Leases, §95 [2013] [either the bailee or the bailor may sue a third person for conversion of the bailed property]). Further, if one were to accept this argument, the next logical conclusion would be that the decedent's liability, as bailee, to Mrs. Hobson also terminated more than 50 years ago. This would be the case only if the decedent and/or Mrs. Hobson terminated the bailment relationship between them, which Lori has failed to demonstrate. Mrs. Hobson's knowledge and consent that the decedent allowed Lori to possess the Hobson Violin for some indeterminate time, pursuant to some unknown terms, is not tantamount to a termination of the bailment relationship between Mrs. Hobson and the decedent.

Whether the Claims are Barred by the Statute of Limitations

Although Lori's 1989 letter is addressed to Ernest and the petitioner, the petitioner denies having ever received it (Petitioner's Opposition to Motion, Exhibit D, ¶14). In his

 

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affidavit in opposition to Lori's motion, however, co-executor Ernest states that while he has no recollection of seeing the letter, he acknowledges that his wife found the letter "in a box of old family records" (Petitioner's Opposition to Motion, Exhibit F, ¶7).

The statute of limitations applicable to a cause of action for conversion is three years (CPLR 214 [3]), which "accrues 'when all of the facts necessary to sustain the cause of action have occurred, so that a party could obtain relief in court" (State of New York v. Seventh Regiment Fund, Inc., 98 NY2d 249, 259 [2002], quoting Vigilant Ins. Co. of Am. v. Housing Auth. of City of El Paso, Tex., 87 NY2d 36,43 [1995]). Normally, this occurs on the date that the alleged conversion takes place (see Sporn v. MCA Records, Inc., 58 NY2d 482, 488 [1983]). But, where possession is originally lawful, "a conversion does not occur until the owner of the property makes a demand for the return of the property and the person in possession of the property refuses to return it" (Matter of Rausman, 50 AD3d 909, 910 [2008], quoting Matter of King, 305 AD2d 683; see Martin v. Briggs, 235 AD2d at 198 ["In a chattel bailment of indefinite duration, the Statute of Limitations does not begin to run against a bailee in lawful possession until the bailor makes a demand for the chattel's return and the demand is refused"]). However, this latter rule regarding demand and refusal does not apply where the lawful custodian of property commits an overt and positive act of conversion (MacDonnell v. Buffalo Loan, Trust & Safe Deposit Co., 193 NY 92, 101 [1908]; see U.S. Fidelity & Guaranty Co. v. Newburger, 263 NY 16; Heffernan v. Marine Midland Bank, 283 AD2d 337 [2001]; Johnson v. Gumer, 94 AD2d 955 [1983]).

 

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Lori's claim that the absence of an agreement between her and the decedent whereby the decedent loaned the Instruments to Lori and Lori agreed to return them precludes application of the "demand and refusal" rule fails because, as stated above, Lori has failed to prove here the absence of such an agreement. Certainly, the court cannot make such a factual determination on a motion for summary judgment, especially when the petitioner has been unable to conduct any discovery.

Lori's more compelling point is that the court should dismiss the petition as time-barred because the petitioner and/or Ernest, the co-executors of the decedent's estate, knew in 1989 that Lori claimed ownership of the Instruments. She asserts that the Statute of Limitations accrued no later than May 28, 1991, when this court appointed the petitioner and Ernest as co-executors of the estate.

In her opposition, the petitioner claims that this 1989 letter was insufficient to start the statute of limitations running because she never received it, and because Ernest denies recollection of having received it. Further, she questions whether Lori's alleged notice of her claim to the petitioner and Ernest before the decedent died suffices as notice to them as co-executor's of the decedent's estate.

In addressing this issue, the court must distinguish between the Viola and the Hobson Violin.

The Viola

Because Lori presented no evidence that the decedent knew or should have known of the 1989 letter, it was insufficient to "complete" the conversion the Viola as against the

 

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decedent during her lifetime (see State of New York v. Seventh Regiment Fund, Inc., 98 NY2d at 260 ["it is also not sufficient for a defendant secretly to declare ownership, when that declaration does nothing to inform the owner or any other interested party that an interference with ownership is intended"]). Because Ernest admits that he received the 1989 letter, the determinative question is whether his receipt of the 1989 letter before the decedent died was sufficient to commence the statute of limitations running on the cause of action for conversion when Ernest and the petitioner received letters testamentary in 1991. The court concludes that it did, at least with respect to the Viola (see Matter of Bellingham, 132AD2d 973 [1987], appeal denied 70 NY2d 614 [1987]; Matter of Patane, NYLJ, April 5, 2000, p. 34, col. 5 [Surr. Ct., Westchester County] [petitioner's proceeding pursuant to SCPA 2103 dismissed as time-barred where petitioner knew that decedent had transferred subject property to respondent in 1991, four years before decedent's death, but did not commence proceeding until 1999, more than eight years after conveyance of property and more than two years after she received limited letters of administration]; of. CPLR 210 [c] [cause of action to recover property of decedent wrongfully taken after death and before the issuance of letters, the time to commence such action is computed from the time letters are issued or from three years after the decedent's death, whichever occurs first]).

Similarly, the court concludes that the cause of action which seeks to impose a constructive trust upon the Viola is time-barred. "The equitable claim for the imposition of a constructive trust is governed by a six-year statute of limitations, which begins to run

 

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upon the occurrence of the wrongful act from which a duty of restitution arises" (Quadrozzi v. Estate of Quadrozzi, 99 AD3d 688, 690 [2012]; CPLR 213 [1]). When the statute of limitations accrues depends upon whether the constructive trustee acquired the property wrongfully. If so, it commences from the date of acquisition. If the constructive trustee wrongfully withholds property acquired lawfully from the beneficiary, it commences from the date the trustee breaches or repudiates the agreement to transfer the property (Quadrozzi v. Estate of Quadrozzi, 99 AD3d at 690; Mario Piping v. Mario, 271 AD2d 507, 508 [2000]). As with the cause of action for conversion, the court concludes that the statute of limitations on the cause of action to impose a constructive trust commenced when the petitioner and Ernest were appointed co-executors of the decedent's estate in 1991. By virtue of the 1989 letter, Ernest, and therefore the decedent's estate, knew that Lori had repudiated the alleged agreement to transfer the Viola back to the decedent, and more than 20 years elapsed before the petitioner filed this proceeding.

The Hobson Violin

The court concludes, however, that a triable issue of fact exists as to whether the 1989 letter was sufficient to commence the statute of limitations running with respect to Lori's claim that she owns the Hobson Violin. The letter is equivocal with respect to Loris claim of ownership — she stated that it was "perhaps mine by 'right of possession'…" (Lori's Motion, Exhibit D). Additionally, there is no claim, much less evidence, that Lori ever "completed" her conversion of the Hobson Violin by committing some overt act inconsistent with Mrs. Hobson's ownership of it before 2012 (see State of New York v. Seventh

 

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Regiment Fund, Inc., 98 NY2d at 260).

Lori has also failed to establish a prima facie case that Mrs. Hobson abandoned the Violin as a matter of law (see Foulke v. New York Consol. R. Co., 228 NY 269). Similarly, a triable issue of fact exists as to whether Mrs. Hobson, her estate fiduciaries, the decedent or the petitioner and Ernest unreasonably delayed in demanding the return of the Hobson Violin (see Martin v. Briggs, 235 AD2d at 198).

Judicial Estoppel, Equitable Estoppel, Laches and Waiver

In light of the determination that Lori is entitled to summary judgment dismissing the causes of action with respect to the Viola as barred by the Statute of Limitations, the court need not address Lori's claims that she is entitled to summary judgment with respect thereto based upon the doctrines of judicial estoppel, equitable estoppel, laches and waiver.

With respect to the Hobson Violin, the court concludes that Lori has failed to establish a prima facie case that she is entitled to judgment as a matter of law on any of these equitable doctrines. For example, a question of fact exists as to whether the delay in seeking return of the Hobson Violin prejudiced Lori's defense of this proceeding, and therefore whether the proceeding is barred by aches cannot be determined as a matter of law (see Martin v. Briggs, 235 AD2d at 199). The doctrine of judicial estoppel does not apply to the Hobson Violin because the estate has never claimed that it owns that instrument, only that it has a superior right to possess it vis-a-vis Lori (see Rosario v. Montalvo & Son Auto Repair Ctr., Ltd., 76 AD3d 963 [2010]). Lori has failed to establish

 

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the existence of any clear and unambiguous promise upon which she detrimentally relied in retaining possession of the Hobson Violin which would warrant applying the doctrine of equitable estoppel as a matter of law (see Schwartz v. Miltz, 77 AD3d 723 [2010], lv denied 16 NY3d 701 [2011]).

The matter is restored to the court's calendar of February 5, 2014. Counsel for the parties are directed to appear in court for a conference and the issuance of a discovery order on that date.

This constitutes the decision and order of the Court.

The following papers were considered on this motion:

(1) The Notice of Motion for Summary Judgment, dated July 3, 2013, and all papers and exhibits submitted therewith; and

(2) The Affidavit of Charles Scott, Esq. in Opposition to Motion for Summary Judgment, dated September 19, 2013, and all papers and exhibits submitted therewith.

Dated: December 23, 2013

White Plains, NY

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