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New York Decisions Utilize Equitable Estoppel to Prevent Abusers of the Elderly From Profiting From Their Wrongs

Jennifer F. Hillman, is a Partner at Ruskin Moscou Faltischek, P.C., in New York, who focuses in the area of trust and estate litigation, and shares a mutual interest in the development of the law of predatory marriages.

We met a few weeks ago and she kindly provided me with some interesting New York State cases, as well as information on some initiatives that she is working on together with some of her colleagues on statutory amendments.

Predatory marriages are occurring in increasing frequency. My updated paper linked above was the subject of discussion this past week in a session led by myself and Anna Laing of the Fasken Martineau DuMoulin LLP Vancouver office.

Jennifer kindly agreed to contribute to WEL’s Newsletter this month and her article appears below. She can be reached at jhillman@rmfpc.com

Kim

New York Decisions Utilize Equitable Estoppel to Prevent Abusers of the Elderly From Profiting From Their Wrongs

by Jennifer F. Hillman, Partner, Ruskin Moscou Faltischek, P.C.

“Elder abuse, including the financial exploitation of elderly individuals who have become mentally incapacitated is an often well-hidden problem.”1  This quote prominently appeared in a 2010 New York appellate level decision which highlighted a specific type of elder abuse where a person takes unfair advantage of an individual who lacks the capacity to enter into a marriage or otherwise utilizes fraud and undue influence to secretly marry the individual.  Because of the language of the New York Estate Powers and Trust Law (EPTL), these alleged surviving spouses could take a significant portion of a decedent’s estate at the expense of the intended heirs.  Fortunately, in the decision discussed below, the New York appellate courts found that equity may prevent an inequitable result in these cases.

The Statutes

EPTL 5-1.1-A allows a surviving spouse a personal “right of election” to take a share of a decedent’s estate when the parties are in fact married on the date of the decedent’s death.  A husband or wife is a surviving spouse within the meaning of EPTL 5-1.1-A unless it can be established satisfactorily to the court that any of the grounds for disqualification contained in EPTL 5-1.2 exist.

Currently, New York is one of the few American states where after-death challenges to the validity of a marriage are permitted under the Domestic Relations law.  Yet, this status change has no effect on property rights to the decedent’s estate because of the explicit requirement within the disqualification statute that an annulment or declaration that the marriage was a nullity must have been in effect when the deceased died.  Thus, a voidable marriage due to force, duress, or incompetence may be annulled after death, but a so-called scoundrel spouse or death-bed bride or groom will still be able to take an elective share of the decedent’s estate because the marriage was not determined to be void prior to the decedent’s death.

The Cases

In Campbell v. Thomas,2 while the decedent’s primary caretaker was away on a one week vacation, the defendant, the alleged surviving spouse, married the decedent in a secret ceremony and subsequently proceeded to transfer the decedent’s assets into her own name or their joint name.

After the decedent passed away, the intended beneficiaries of his estate commenced an action in the Supreme Court, Putnam County, seeking a judgment declaring the marriage between the defendant and the decedent null and void because the decedent lacked the capacity to enter into the marriage due to his severe dementia.  The intended beneficiaries also sought a judgment declaring that the various account changes were null and void for the same reasons.

Despite the substantial evidence of the decedent’s lack of capacity, the Supreme Court denied summary judgment for both sides finding there were triable issues of fact.  However the Second Department concluded on this same evidence that the plaintiffs had made a prima facie showing of their entitlement to judgment as a matter of law.

The Second Department reversed, and remitted the matter to the Supreme Court for entry of a judgment declaring the marriage null and void, as well as certain other transfers.

Upon remittance, the Supreme Court directed entry of a judgment declaring, among other things, that the alleged surviving spouse “shall have no legal rights and can claim no legal interest as a spouse…”  The spouse subsequently appealed to the Second Department arguing that under EPTL 5-1.2, she is considered a surviving spouse even if the marriage is subsequently annulled or voided because of the literal language of the statute which looks at whether a decree declaring a marriage void was in effect at the time the spouse died.  The surviving spouse concluded that she was still entitled to an elective share of the estate, even though the marriage was subsequently deemed void.

Upon review, the Second Department found that the literal terms of the statute should not be “rigidly applied if to do so ‘would be to ordain the statute as an instrument for the protection of fraud.'”  Id. at 469.  The court cited to the well-known equitable principle that “no 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.”  Id. at 469-470.4  Indeed, the wrongdoer is deemed to have forfeited the benefit that would flow from his or her wrongdoing.

Looking to the case therein, the Second Department found that the foregoing facts provided ample support for an inference that the defendant procured the marriage through overreaching and undue influence.  The Court concluded that the Supreme Court properly directed the entry of a judgment declaring that the defendant had no legal rights and can claim no legal interest as a spouse, and that in light of the defendant’s lack of any legal right or interest as a spouse of the deceased, she did not have standing to challenge the Supreme Court’s directive concerning the distribution of the estate.

Matter of Berk,4 20 Misc.3d 691 (Surr Ct Kings Co 2008) rev’d 71 AD3d 883 (2d Dept 2010), decided the same day as Campbell, had similar issues.  The petitioner had served as the elderly decedent’s caretaker for the last ten years of his life and secretly married him one year before he died.  After his death, the alleged surviving spouse sought her 1/3 elective share of the estate.  The appellate court found that if the trier of fact found that the surviving spouse knowingly took unfair advantage of a person who was incapable of consenting to a marriage, for the purpose of obtaining pecuniary benefits as a surviving spouse, equity would intervene to prevent the petitioner from becoming unjustly enriched from her wrongdoing.

Conclusion

The New York appellate court saw fit to utilize its equitable powers in the circumstances set forth above.  However, other New York courts have been reluctant to invoke their equitable powers in light of the unambiguous statutory language – although those courts have acknowledged the need for, and have recommended statutory amendments.

These cases certainly represent an extreme set of facts.  However, the financial exploitation of the elderly can take many forms.  Often, elder abuse is hidden and the perpetrators may be family members.  We should all be alert to this important issue.


[1] Campbell v. Thomas, 897 NYS2d 460 (2010) quoting Bailly, Supp Practice Commentaries, McKinney’s Cons Laws of NY, Book 34A, Mental Hygiene Law §81.14 , 2010 Pocket Part, at 36.
[2] Campbell v. Thomas, 73 AD3d 103 (2010).
[3] See also Riggs v. Palmer, 115 NY 506 (1889); Matter of Covert, 97 NY2d 68 (2001); In re Lonergan’s Estate, 63 NYS2d 307 (1946); Barker v. Kallash, 63 NY2d 19 (1984); Carr v. Hoy, 2 NY2d 185 (1957).
[4] Berk Estate, 29 Misc. 3d 691, 864 N.Y.S. 2d 710, 2008 N.Y. Slip Op. 28247 (cited as 20 Misc.3d 691, 864 N.Y.S. 2d 710)

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