Appellate Division Cites Equitable Factors In Denying Entitlement to Elective Share
This month, the Second Department has issued two important decisions on entitlement to an elective share when a marriage occurred while the decedent lacked the requisite mental capacity to enter into a marital contract. Matter of Berk and Campbell v Thomas were both cases in which a caregiver secretly married the incapacitated individual for whom she worked, in an effort to manipulate a testamentary scheme for her own financial gain. Although the statutory limitations on disqualification from the right of election did not infringe upon the “surviving spouses’” rights to inherit from their respective “husbands” (see EPTL §5-1.2), the Appellate Division followed equitable principles in determining the parties’ respective rights.
In Matter of Berk, 20 Misc 3d 691 (Sur Ct, Kings County 2008), summary judgment was granted to the “surviving spouse” on the issue of her entitlement to an elective share, despite the suspicious circumstances surrounding her marriage to the decedent. A discussion of the lower court’s decision can be found in a prior entry. To briefly recap, the decedent’s “spouse” had been the decedent’s live-in caretaker since 1997. By the time the two secretly married in 2005, he had become completely dependent upon her. In fact, the marriage occurred almost exactly one year prior to his death, when he was 99 years old (she was 47), was suffering from dementia, and had been deemed by a physician to be incapable of entering into binding contracts or managing his social affairs. The lower court dismissed these facts as irrelevant for purposes of determining entitlement to the right of election. Rather, it limited its inquiry to (1) whether the petitioner was the decedent’s surviving spouse upon his death, i.e., whether the marriage was void under the circumstances; and (2) whether any of the disqualifying factors of EPTL §5-1.2 had been met. Because the petitioner demonstrated that she was the surviving spouse at the time of the decedent’s death, as the marriage was potentially voidable but not void according to DRL §7, the Surrogate held that she was entitled to judgment as a matter of law. Indeed, the result of the determination that the marriage was voidable, not void, foreclosed inquiry into the validity of the marriage because no steps were taken to void the marriage during the decedent’s lifetime. But under the circumstances, where the marriage in issue had been kept a secret by the petitioner while the decedent was alive, no such steps could possibly have been taken.
In overturning the Surrogate’s decision, the Second Department recognized the existence of “a triable issue of fact as to whether the petitioner had forfeited the statutory right of election” on equitable grounds. In particular, relying on Campell v Thomas (2010 NY Slip Op 02082 [2d Dept 2010]), the Court stated that the estate had presented evidence that could prove the petitioner was aware of the decedent’s incapacity and inability to consent to marriage, and deliberately took “unfair advantage . . . by marrying that person for the purpose of obtaining pecuniary benefits that becomes available by virtue of being that person’s spouse, at the expense of that person’s intended beneficiaries" (Matter of Berk, 2010 NY Slip Op 02139 [2d Dept 2010]). Thus, the order was modified, denying the petitioner’s motion for summary judgment, and reinstating counterclaims.
In sum, while the lower court’s holding was based upon statutory authority, equity was the cause for its reversal. The Appellate Division explained its rationale for this determination in further detail in its simultaneous decision in the very similar case of Campbell v Thomas.
In Campbell, the decedent was suffering from severe dementia and terminal cancer when he and his short-term caregiver, Nidia, who stayed with the decedent while his daughter went on vacation, were married. Immediately thereafter, while the decedent’s daughter was still away, Nidia transferred the decedent’s Citibank account from the decedent’s name to the couple jointly, and named herself the sole beneficiary of his retirement account.
The decedent died in August 2001, less than two years after the purported marriage. Unlike the situation in Berk, however, the decedent’s daughter learned of the marriage prior to his death, and the decedent had allegedly had a prior romantic relationship with his new spouse. But when his daughter confronted him about getting married, it was clear that the decedent had no understanding of what had occurred.
Soon after the his death, the decedent’s children commenced an action against Nidia in Supreme Court, seeking a judgment declaring the marriage, as well as the subsequent asset transfers, to be null and void. Their argument was that the decedent lacked the capacity to marry or make the subject conveyances due to his severe dementia, the progression of his cancer, and the effects of powerful medications that he had been taking. Following some motion practice and a subsequent appeal, in 2007 the Second Department remitted of the matter to the Supreme Court for the entry of a judgment declaring the marriage, the beneficiary change on the retirement account, and the transfer of the Citibank account, all null and void for the decedent’s inability to consent for want of understanding (see DRL §7[2]). The Supreme Court, Putnam County then issued an order consistent with Appellant Division’s ruling. It directed, among other things, that the decedent’s estate was to receive ownership of all property in his name as of October 1, 2000, and that the estate was to distribute those funds to the decedent’s children and grandson. Thereafter, Nidia moved to modify or vacate the order, claiming entitlement to an elective share. The Supreme Court denied the motion, and Nidia appealed.
On appeal, Nidia contended that pursuant to the relevant statutes, she was to be considered the surviving spouse even after the marriage was voided. In addressing this claim, the Court explained that the marriage in issue was considered voidable, which meant that it was “void from the time its nullity [was] declared by a court of competent jurisdiction” [DRL §7]. Voidable marriages are distinct from marriages that are void, and therefore deemed nonexistent from the beginning; the latter falling within the categories of EPTL §5-1.2, enumerating those circumstances under which the right of election is extinguished. As we learned from the lower court’s decision in Matter of Berk, a voidable marriage is not within the realm of the disqualification statute (see also Bennett v Thomas, 38 AD2d 682 [4th Dept 1971]).
Unlike the Surrogate’s Court that decided Berk, the Second Department did not end its inquiry at the statutory level. Instead, the Court acknowledged that “[t]he literal terms of a statute should not be rigidly applied if to do so ‘would be to ordain the statute as an instrument for the protection of fraud’” (Campbell v Thomas, quoting Citizens Util. Co. v. American Locomotive Co., 11 NY2d 409, 420 [1962]).
Acknowledging the equitable authority of the Supreme Court pursuant to the New York State Constitution, the Second Department stated that it “was empowered to grant relief consistent with the equitable principle that ‘[n]o one shall be permitted to profit by his own fraud, or to take advantage of his own wrong, or to found any claim upon his own iniquity, or to acquire property by his own crime’” (Campbell v Thomas, citing Riggs v Palmer, 115 NY 506, 511 [1889]). It is this notion that formed the basis for the now well-known rule that a murderer cannot inherit from the victim of his crime (see id.). While the Court recognized that the conduct in issue was much less severe than the aforementioned, the evidence revealed that Nidia had been aware of the decedent’s mental incapacity, had been in a position of trust, and abused that trust to wrongfully alter the decedent’s testamentary plan in her favor. Accordingly, the Court held that she was not entitled to benefit from her own misconduct, and therefore was not entitled to an elective share. However, it should be noted that Nidia’s actions did bar her from inheriting that portion of the decedent’s retirement account that had originally been designated by the decedent for her benefit, as her receipt of that particular share was not a product of her wrongdoing (Campbell v Thomas, relying on Matter of Covert, 97 NY2d 68, 74 [2001]). This serves to further differentiate this particular line of cases from those considered to be more egregious (see e.g., Riggs v Palmer, supra).
Interestingly enough, despite the clear parameters of spousal disqualification pursuant to EPTL §5-1.2, the Court deemed its determination to be complementary, not contrary, to statutory authority, finding that “the Legislature did not contemplate the circumstances presented by this case” when enacting the law. To support its conclusion, the Court explained that in many voidable marriages in which the deceased spouse may have lacked the capacity to marry, the surviving spouse may have been unaware of the disability; or alternatively, where the surviving spouse may have perpetrated a fraud upon the decedent, the deceased spouse may have ratified the marriage prior to his or her death. But in Campbell, neither of those scenarios was applicable. By virtue of this fact, and the Court’s confidence that the legislature intended EPTL §5-1.2 to protect a surviving spouse but never to “provide refuge for a person seeking to profit by means of a nonconsensual marriage”, the decisions of both Campbell and Berk have established new standards in the area of estate law.
It is likely that the impact of these decisions will not be limited to circumstances in which a decedent was incapacitated upon entering into a marriage. The equitable principles applied by the Second Department should transcend to situations in which a decedent may have had diminished capacity, or was simply unduly influenced into entering into the marital contract. In all cases, the rules set forth in both decisions should serve to curb some of the unfortunate abuses of the elderly, and will protect families from the injustices that could have previously followed such misconduct.
Posthumously Voided Marriage Negates Right of Election
Last year, we posted an entry on Matter of Berk, 20 Misc 3d 691 (Sur Ct, Kings County 2008), a decision in which the court granted an elective share to a surviving spouse notwithstanding evidence that the marriage to the decedent, who was 99 years old at the time, occurred under highly questionable circumstances. The court’s rationale was that the marriage was voidable, not void. The Surrogate held that because the marriage was not invalidated prior to the decedent’s death, the right of election could not be disturbed.
In Matter of Kaminester, 2009 NY Slip Op 29429 (Sur Ct, New York County), the court addressed a similar set of facts, but with one distinguishing factor: prior to his death, the decedent had been adjudicated incapacitated in an Article 81 proceeding. This fact allowed for an entirely different result than that reached in Berk.
In Kaminester, the decedent’s estate sought a determination as to the validity of the elective share pursuant to SCPA §1421. As in Berk, the marriage remained a secret until the decedent’s death, and occurred mere months prior thereto. But in this case, the marriage also occurred two and a half months after a Texas court appointed a temporary guardian for the decedent, and during the pendency of an Article 81 proceeding in New York. Within the context of the Article 81, a temporary restraining order had been imposed with respect to removing the decedent from the State, among other things. The Article 81 proceeding resulted in the appointment of a temporary guardian, and a stipulation on the record that the decedent lacked capacity to marry. The decedent’s new “wife” was in the courtroom with her attorney at the time of the stipulation, but neither one revealed the existence of the couple’s recent marriage.
Notably, during this time period, the beneficiary designation on the decedent’s life insurance policy, worth over $1 million, was changed to favor his new “wife.” In addition, a deed was executed transferring the decedent’s Westhampton property to the couple as joint tenants with right of survivorship.
The “wife” filed a notice of election within weeks of the decedent’s death. Thereafter, the executor of his estate sought an order from the Article 81 court to hold her in contempt for violating its TRO. In response, the court invoked Section 81.29(d) of the Mental Hygiene Law, and “revoked and voided” the marriage, the designation of the “wife” as beneficiary on the decedent’s life insurance, and the deed that transferred to her a joint tenancy interest in his Westhampton property. The First Department affirmed these portions of the Article 81 court’s decision, accepting the posthumous voidance of the decedent’s marriage.
Surrogate Glen of New York County subsequently addressed the issue of the elective share, and thus the validity of the marriage, in light of these events. She discussed Section 7 of the Domestic Relations Law (“DRL”), the statute that had been relied upon in Berk, and compared it to Section 81.29(d) of the Mental Hygiene Law (“MHL”). DRL §7 provides that a marriage involving an individual “incapable of consenting to a marriage for want of understanding” is voidable, and becomes a nullity as of the date it is annulled. In contrast, Section 81.29(d) of the MHL “permits the court that appoints an article 81 guardian for an incapacitated person to “’revoke any previously executed . . . contract. . . . made by the incapacitated person prior to the appointment of the guardian if the court finds that the previously executed . . . contract. . . was made by the person was incapacitated’” (Matter of Kaminester, 2009 NY Slip Op 29429 at *5). Thus, the Article 81 adjudication was the lynchpin of the Kaminester decision.
In her decision, the Surrogate questioned whether the legislature had intended MHL §81.29(d) to override DRL §7. She also recognized that while she was bound by the First Department’s determination, the Second Department had previously taken the position that it had inherent power to override DRL § 7 by posthumously voiding a marriage due to the decedent’s mental incapacity (see Campbell v Thomas,36 AD3d 576 [2d Dept 2007]). Nonetheless, because of the First Department’s determination that the decedent’s marriage had been void ab initio as a result of his incapacity, the Surrogate opined that there existed no right to an elective share.
Notably, the result in Kaminester rendered the marriage in issue void, as opposed to voidable, which was the characterization in Berk. A voidable marriage is a nullity upon the court’s declaration, whereas a void marriage is deemed to never have existed. This distinction was based upon the fact that there had been an Article 81 adjudication in Kaminester, allowing for the application of MHL §81.29(d) after the decedent’s death.
Right of Election Granted Despite Evidence of a Voidable Marriage
Should a surviving spouse remain entitled to an elective share even if the marriage was procured by fraud or undue influence exercised upon the decedent, or if the decedent was incapacitated at the time of the marriage? In a recent case, Matter of Berk (20 Misc 3d 691 [Sur Ct, Kings County 2008]), the decedent’s estate opposed his widow’s notice of election alleging that circumstances of the marriage rendered it null and void ab initio, thereby eliminating her rights pursuant to EPTL 5-1.1-A. She moved for summary judgment.
The decedent died in 2006, leaving a will dated
The Court explained that Domestic Relations Law Section 7 renders a marriage voidable, not void, when one of the parties was incapable of consenting for want of understanding, or consented by force, duress or fraud. Consequently, the Court noted that the decedent’s marriage was valid at the time of his death because a voidable marriage only becomes void upon a court’s declaration of its nullity. In light of these facts, the Court stated that “a surviving spouse’s right to elect against a will is not disturbed even if the marriage is annulled post-death,” and rendered summary relief considering only the terms of EPTL 5-1.1-A and 5-1.2 (id.).
Here, the widow was granted an elective share of an estate valued at over $5 million despite the Court’s recognition of the extremely suspicious facts surrounding the validity of her marriage. While the decision clearly adheres to well-established law, the result does not seem equitable.
It will be interesting to see what happens if the estate chooses to appeal. The Surrogate’s determination was not only in accordance with statute, but was also in compliance with a longstanding opinion rendered by the Fourth Department (see Bennett v Thomas, 38 AD2d 682 [4th Dept 1971]). Perhaps a spotlight on a decision such as this can prompt an amendment to EPTL 5-1.2, or direction from the Appellate Division or Court of Appeals granting trial courts discretion to disqualify a “surviving spouse” from a right of election when presented with clear evidence of fraud, undue influence, duress, or lack of capacity, even if the marriage was technically “valid” at the time of death.
