Court Opinion

ID: 2753551
Source: CourtListenerOpinion
Date Created: 2014-11-20 16:07:44.548666+00
Date Added: 2024-06-11T11:26:29.271684
License: Public Domain

State of New York
                    Supreme Court, Appellate Division
                       Third Judicial Department
Decided and Entered: November 20, 2014                    518364
________________________________

In the Matter of the Estate of
   RAYMOND C. HAMMOND JR.,
   Deceased.

JEFFREY S. HAMMOND et al.,
   as Executors of the Estate
   of RAYMOND C. HAMMOND JR.,
   Deceased,                                 OPINION AND ORDER
                    Appellants;

KEVIN M. HAMMOND,
                    Respondent,
                    et al.,
                    Respondent.
________________________________

Calendar Date:   October 14, 2014

Before:   Peters, P.J., Stein, Rose, Egan Jr. and Clark, JJ.

                              __________

      Slye & Burrows, Watertown (Robert J. Slye of counsel), for
appellants.

      Conboy, McKay, Bachman & Kendall, LLP, Watertown (Peter L.
Walton of counsel), for Kevin M. Hammond, respondent.

                              __________

Clark, J.

      Appeal from an order of the Surrogate's Court of St.
Lawrence County (Rogers, S.), entered April 19, 2013, which,
among other things, partially granted respondents' motion for
summary judgment sustaining one of their objections to
petitioners' accounting.
                              -2-                518364

      Petitioners are the executors of the estate of Raymond C.
Hammond Jr. (hereinafter decedent), who died in 2005. Decedent's
will, among other things, left his residuary estate to his three
sons, petitioner Brian K. Hammond, petitioner Jeffrey S. Hammond
and respondent Kevin M. Hammond, as well as his two stepsons,
George Beaulieu and respondent Paul A. Beaulieu (hereinafter
collectively referred to as the beneficiaries). At the time of
his death, decedent operated a solely-owned business that
petitioners subsequently continued to operate for several years,
allegedly with the consent of the beneficiaries, including
respondents.

      In 2010, petitioners sought the judicial settlement of the
estate and submitted their final accounting. Respondents
individually objected and thereafter moved for summary judgment
on the grounds that (1) petitioners should have included certain
bank accounts in the accounting for the estate, and (2) because
petitioners continued to operate decedent's solely-owned retail
business without authorization in the will or the court's
approval, they were, as a matter of law, individually liable for
the losses thereafter sustained by the business. Following
petitioners' opposition, Surrogate's Court denied respondents'
motion, finding that material issues of fact existed with regard
to both grounds, but nonetheless determined that petitioners
would be individually liable for any losses sustained by the
business that could be proven at trial. Thus, for purposes of
our review, we will deem respondents' motion to have been
partially granted. Petitioners now appeal.

      Petitioners' only contention on this appeal is that
Surrogate's Court erred in partially granting respondents' motion
for summary judgment with respect to their liability for losses
incurred by decedent's sole proprietorship. We agree.

           "The general rule is that death terminates
           any trade or business which the deceased
           was engaged in at the time of his [or her]
           death, and that an executor, absent any
           authorization or direction in the
           testator's will, has no authority to
           continue such trade or business except for
                              -3-                  518364

           the temporary purpose of converting the
           assets into money, and a debt contracted
           by the executor does not bind the estate
           which he [or she] represents even though
           contracted for the benefit of the estate"
           (Matter of Begent, 37 AD2d 310, 311 [1971]
           [citations omitted]; see Willis v Sharp,
           113 NY 586, 589-590 [1889]; see also SCPA
           2108).

However, inasmuch as the alleged consent of the beneficiaries
here may be deemed to be equivalent "to the authorization by a
testator in his [or her] will for the purpose of fixing
responsibility for debts subsequently incurred" (Philco Radio &
Tel. Corp. of N.Y. v Damsky, 250 App Div 485, 487 [1937]; see
Matter of Blaszkiewicz, 33 Misc 2d 884, 885 [Sur Ct 1962]), an
issue of fact exists and summary judgment should have been denied
in its entirety.

     Peters, P.J., Stein, Rose and Egan Jr., JJ., concur.

      ORDERED that the order is modified, on the law, without
costs, by reversing so much thereof as partially granted
respondents' motion; motion denied in its entirety; and, as so
modified, affirmed.

                             ENTER:

                             Robert D. Mayberger
                             Clerk of the Court