State of New York

Supreme Court, Appellate Division

Third Judicial Department

Decided and Entered: March 3, 2016 521492 

________________________________

CHARLES T. DWYER et al.,

Appellants,

v MEMORANDUM AND ORDER

PATRICIA VALACHOVIC,

Respondent.

________________________________

Calendar Date: January 8, 2016

Before: Peters, P.J., Garry, Egan Jr., Devine and Clark, JJ.

__________

Richard P. Weinheimer, Fort Plain, for appellants.

Thomas C. Walsh, Johnstown, for respondent.

__________

Garry, J.

Appeal from an order of the Surrogate's Court of Fulton

County (Hoye, S.), entered December 23, 2014, which dismissed

petitioner's application, in a proceeding pursuant to SCPA 2103,

to, among other things, direct respondent to deliver certain

property to decedent's estate.

Decedent died in December 2012, and in her will she left

her property to her five children in equal shares. Petitioners

are three of her children; respondent is the child with whom she

was living for a period of time prior to her death. Decedent's

will was admitted to probate, and petitioner Charles T. Dwyer was

granted letters testamentary for the limited purpose of

discovering any assets owned by decedent at the time of her

death. Petitioners commenced this proceeding pursuant to SCPA

2103 against respondent, seeking information about a vehicle,

bank deposits and rental income alleged to be assets of the
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estate.1 Respondent denied that she possessed any estate assets,

and petitioners submitted a reply. Surrogate's Court determined

that petitioners had neither demonstrated that respondent was in

possession of estate assets nor shown reasonable grounds for

further inquiry, and, accordingly, denied the request for a

hearing and dismissed the petition. Petitioners appeal.

SCPA 2103 establishes a discovery procedure by which a

fiduciary can identify and recover estate assets held by a third

party (see Matter of Van Patten, 190 AD2d 322, 326 [1993];

Margaret Valentine Turano, Practice Commentaries, McKinney's Cons

Laws of NY, Book 58A, SCPA 2103 at 295). The fiduciary bears the

burden to prove that property held by a respondent is an estate

asset; only when that obligation has been satisfied does the

burden shift to the respondent to prove the proper disposition of

the disputed property (see Matter of Voyiatgis, 110 AD3d 911, 912

[2013]; Matter of Rappaport, 66 AD3d 1032, 1032-1033 [2009]). We

agree with Surrogate's Court that petitioners did not satisfy

this initial burden and failed to establish grounds for further

inquiry. 

First, petitioners submitted no proof whatsoever to support

their claim that decedent owned or had an interest in bank

deposits totaling approximately $90,000. The only substantial

financial asset in which decedent was shown to have an interest

was a sum of $9,000 that respondent was holding for decedent's

benefit at the time of her death. Petitioners acknowledge that

these funds were duly distributed following decedent's death.2

This sum originated from a savings account that decedent closed

in September 2009. Respondent placed these funds in her own name

to protect them in the event that decedent needed long-term care,

1 Petitioners also sought information about the contents of

decedent's house, but, upon appeal, raise no challenge to

respondent's assertion that the property was divided among

decedent's children. We thus deem any related claims to be

abandoned (see Matter of Van Patten, 190 AD2d 322, 325 [1993]).

2 Certain estate-related expenses were deducted before the

distribution.
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and she testified that she held them solely for decedent's

benefit. Petitioners contend that the fact that respondent

admittedly placed these funds in her own name indicates that she

may have also done so with other funds and used them for her own

benefit. Specifically, petitioners rely upon a bank record

revealing that the balance in decedent's savings account when it

was closed was approximately $14,000, and they assert that the

difference of approximately $5,000 between this sum and the

amount that respondent admittedly received has not been accounted

for. Respondent denies that the remainder of the balance ever

came into her possession or that she has any knowledge of how

decedent disposed of it, and petitioners proffer no contrary

evidence. 

We reject petitioners' contention that respondent is

obliged to account for the remainder of the account balance on

the ground that she held a power of attorney for decedent and

therefore had a confidential relationship with her. When there

are allegations of undue influence or constructive fraud, the

existence of a confidential relationship in which the parties

dealt on unequal terms shifts the burden to the more powerful

individual to show that there was no deception or undue influence 

exercised (see Matter of Nealon, 104 AD3d 1088, 1088-1089 [2013],

affd 22 NY3d 1045 [2014]; Oakes v Muka, 69 AD3d 1139, 1140-1141

[2010], appeal dismissed 15 NY3d 867 [2010]). Critically,

however, in this matter, petitioners do not make any claim that

decedent suffered from any physical or mental incapacity, or that

she lacked the ability to manage her own affairs and exercise her

own free will, and they have neither claimed nor shown any

exercise of undue influence. Respondent asserts that decedent

was fully financially independent and managed all of her own

banking at the time that she closed the savings account; this is

wholly undisputed by petitioners. There is no evidence that

respondent used the power of attorney in connection with the

savings account, or that it was ever used at all. In these

circumstances, the mere existence of the power of attorney

neither establishes that there was a confidential relationship

nor shifts the burden of proof to respondent (see Matter of

Bonczyk v Williams, 119 AD3d 1124, 1127 [2014]; compare Matter of

Nealon, 104 AD3d at 1089). Further, decedent's September 2009

savings account balance is not subject to discovery, as the
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three-year limitations period applicable to any conversion claim

pertaining to these funds expired before decedent died (see CPLR

201, 214 [3]; Matter of Perelman, 123 AD3d 436, 436-437 [2014],

lvs denied 25 NY3d 905 [2015]; Margaret Valentine Turano,

Practice Commentaries, McKinney's Cons Laws of NY, Book 58A, SCPA

2103 at 300). Accordingly, petitioners established no reasonable

basis for further inquiry on this ground.

Likewise, petitioners established no grounds for inquiry

related to decedent's joint checking account with respondent. 

This account was opened in August 2010 with a balance of roughly

$1,500; it was funded by decedent's Social Security payments and

held approximately $600 at the time of her death. Petitioners

make no claim that this balance was improperly withheld by

respondent. Instead, they assert that respondent could have

taken advantage of the fact that she was named on the account to

divert other account funds to herself. The only proof offered to

support this speculative claim, however, is monthly account

statements, which reveal that several small checks were written

each month without indicating the names of the check payees, or

whether they were endorsed by decedent or respondent. Respondent

asserts that these payments covered decedent's routine expenses;

there is no evidence that any such payments were made improperly,

or made either to or by respondent. The fact that respondent was

the only one of decedent's children listed on the account, while

others had also been listed on previous joint accounts, does not

shift the burden of proof in the absence of any showing that

respondent exerted undue influence or transferred funds to

herself (see Matter of Graeve, 113 AD3d 983, 984-985 [2014]). 

Next, petitioners assert that respondent should account for

rental income due to decedent under a September 2010 lease that

decedent entered into with her grandson – respondent's son – and

his wife.3 Decedent's bank records fail to reveal that she ever

received these rent payments. However, as previously noted,

petitioners have neither claimed nor shown that decedent lacked

3 Decedent had life use of the leased premises, which she

and her now-deceased husband had previously conveyed to their

children.
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capacity to handle her financial affairs, and the record does not

reveal that respondent handled any transactions relative to this

lease on decedent's behalf, nor that she was responsible for

collecting the rent. Decedent signed the lease with the tenants,

in which the tenants agreed to make monthly rent payments to

decedent. Decedent thereafter executed lease extensions in 2011

and 2012, and, again, respondent was not a signatory. Whether

decedent forgave the rent payments, or whether she collected them

and made some disposition that is not reflected in her bank

records, is irrelevant in the absence of any evidence that

respondent ever possessed the payments or was in any manner

responsible for collecting and accounting for them. 

Finally, petitioners argue that further inquiry is required

regarding decedent's 2003 Buick Century automobile, which

respondent asserts that decedent transferred to her as a gift in

September 2009. As petitioners contend, a respondent's claim of

title in SCPA 2103 proceedings to an asset that was previously

owned by a decedent ordinarily gives rise to a triable issue of

fact (see Matter of Luttrell, 99 AD2d 603, 603 [1984]). Here,

however, in view of the vehicle's age and limited value and the

remoteness in time of petitioners' claim, Surrogate's Court

elected to exercise its discretion to deny petitioners' request

for a hearing on this issue. We note that any claim for recovery

of the vehicle accrued in September 2009, more than three years

before decedent's death, and is therefore time-barred (see CPLR

214 [3]; Matter of Perelman, 123 AD3d at 436-437). As such, and

in view of all the circumstances, we find no abuse of the court's

"broad discretion in discovery proceedings to accomplish justice"

(Margaret Valentine Turano, Practice Commentaries, McKinney's

Cons Laws of NY, Book 58A, SCPA 2103 at 301). Given petitioners'

failure to meet their burden to establish on a prima facie basis

that any of the disputed property belonged to the estate, the

petition was properly dismissed (see Matter of Perelman, 123 AD3d

at 436-437; Matter of Rappaport, 66 AD3d at 1033; see also Matter

of Fishman, 134 AD3d 1110, 1112 [2015]).

Peters, P.J., Egan Jr., Devine and Clark, JJ., concur.
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ORDERED that the order is affirmed, with costs.

ENTER:

Robert D. Mayberger

Clerk of the Court