THOMAS, JOSEPH M. v. THOMAS, TOM J. ( 2017 )

SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Fourth Judicial Department
308
CA 16-00940
PRESENT: WHALEN, P.J., SMITH, CENTRA, CURRAN, AND SCUDDER, JJ.
IN THE MATTER OF THE ESTATE OF ANTHONY J.
THOMAS, DECEASED.
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IN THE MATTER OF THE ESTATE OF DOROTHY THOMAS,
DECEASED.
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JOSEPH M. THOMAS AND GLORIA M. BORELLI,
PETITIONERS-APPELLANTS,
V MEMORANDUM AND ORDER
TOM J. THOMAS, RESPONDENT-RESPONDENT.
(APPEAL NO. 2.)
BOND, SCHOENECK & KING, PLLC, ROCHESTER (JONATHAN B. FELLOWS OF
COUNSEL), FOR PETITIONERS-APPELLANTS.
ADAMS BELL ADAMS, P.C., ROCHESTER (ANTHONY J. ADAMS, JR., OF COUNSEL),
AND LACY KATZEN (RACHELLE H. NUHFER OF COUNSEL), FOR
RESPONDENT-RESPONDENT.
Appeal from a decree of the Surrogate’s Court, Monroe County
(John M. Owens, S.), entered March 25, 2016. The decree, among other
things, denied and dismissed the petition and the supplemental
petition.
It is hereby ORDERED that said appeal from the decree insofar as
it reserved decision is unanimously dismissed, and the decree is
otherwise reversed on the law without costs, the motion for a directed
verdict is denied, the petition and supplemental petition are
reinstated, and the matter is remitted to Surrogate’s Court, Monroe
County, for further proceedings in accordance with the following
memorandum: As we explained in a prior appeal, petitioners,
respondent, and a nonparty are the four children of Anthony J. Thomas
and Dorothy Thomas (collectively, decedents), who died in April 2012
and August 2012, respectively (Matter of Thomas, 124 AD3d 1235, 1235-
1236). Respondent was the named executor under decedents’ respective
wills, and was appointed trustee to numerous trusts created by the
wills (id. at 1236). In the prior appeal, petitioners “challenged
respondent’s failure to identify any shares of New York State Fence
Company (NYSFC) as being included within the assets of decedents’
estates. According to respondent, he was the sole shareholder of
NYSFC, a company founded by Anthony J. Thomas in 1958 and incorporated
in 1977” (id.). We concluded that Surrogate’s Court erred in granting
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CA 16-00940
that part of respondent’s motion seeking to dismiss the claim for the
imposition of a constructive trust with respect to the NYSFC stock,
and we reinstated that claim.
Upon remittal, the Surrogate determined that he was “basically
. . . dealing with a miscellaneous proceeding to determine the
ownership of” the NYSFC stock. We agree with petitioners that the
Surrogate erred in denying that part of petitioners’ cross motion in
limine seeking a determination that respondent had the burden of proof
at the hearing to establish his ownership of the NYSFC stock, and in
determining that petitioners had the burden of proof to establish that
the stock had not been transferred to respondent by decedents. Where,
as here, an asset is not included in the inventory of the estate based
upon respondent fiduciary’s assertion that he is the owner of the
asset, it is respondent’s burden to “show a legal and sufficient
reason for withholding” the asset from the estate (Matter of Taber, 30
Misc 172, 181, affd 54 App Div 629). Such an assertion is “in
essence, the assertion of a personal claim by the fiduciary . . . ,
the burden of demonstration of which is upon the fiduciary who claims
adversely to the estate. Such fiduciary will not be permitted to
jeopardize the interests of [the beneficiaries] by . . . forc[ing]
them to demonstrate the substantially impossible,” i.e., that the
stock was not transferred to the fiduciary by decedents (Matter of
Greenberg, 158 Misc 446, 448; see Matter of Zuckerman, 8 Misc. 2d 57,
59; see generally Matter of Camarda, 63 AD2d 837, 839). We therefore
further conclude that the Surrogate erred in directing a verdict in
favor of respondent at the close of petitioners’ proof, and we remit
the matter to Surrogate’s Court for further proceedings on the issue
of ownership of the NYSFC stock.
We agree with respondent, however, that petitioners’ contention
that the Surrogate erred in dismissing their petition seeking an order
that attorneys’ fees related to litigation over the ownership of the
NYSFC stock should not be paid from the estate is not properly before
us, inasmuch as the Surrogate specifically reserved decision on that
issue until the estate is settled. We therefore dismiss the appeal
from the decree insofar as it reserved decision (see Kuhlman v
Westfield Mem. Hosp. [appeal No. 2], 204 AD2d 1065, 1065).
Finally, we reject petitioners’ contention that the matter should
to be heard on remittal by a different surrogate (see Matter of
Michel, 12 AD3d 1189, 1191).
Entered: March 31, 2017 Frances E. Cafarell
Clerk of the Court