Appeal from an amended order of the Surrogate's Court, Erie County (Barbara Howe, S.), entered October 13, 2011.
Appellate Division, Fourth Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.
Released on March 15, 2013
PRESENT: SCUDDER, P.J., PERADOTTO, CARNI, WHALEN, AND MARTOCHE, JJ.
The amended order, insofar as appealed from, granted the motion of petitioner for summary judgment, dismissed the objections of objectant and settled the final account of petitioner.
It is hereby ORDERED that the amended order insofar as appealed from is unanimously reversed on the law without costs, the motion is denied, the objections to the account filed by objectant are reinstated, ordering paragraphs three through seven are vacated and the matter is remitted to Surrogate's Court, Erie County, for a hearing on the objections.
Memorandum: Objectant is both a beneficiary and a co-executor of the last will and testament (Will) of his mother (decedent), who was survived by six adult children. Letters testamentary were issued to objectant and petitioner, his sister, who is also both a beneficiary and a co-executor of the Will. The Will specified that, due to the fact that decedent had previously deeded real property to objectant and a third sibling, she bequeathed to them only tangible personal property, with certain exceptions. Petitioner and the three remaining siblings were the beneficiaries of decedent's residuary estate.
When informal attempts to settle the estate failed, petitioner filed a petition for judicial settlement, to which was attached her final account. Objectant filed two objections to the final account, contending first that it did not contain a statement of the tangible personal property bequeathed to him and the third sibling, and second that it did not contain a statement of all uncollected debts due to decedent. Specifically, objectant alleged that decedent had loaned the sum of $65,000 to one of the beneficiaries and that there remained a balance on that loan of approximately $50,000.
The day before the scheduled hearing on the petition, Surrogate's Court, sua sponte, canceled the hearing on the ground that objectant lacked standing to file the objections. Petitioner thereafter moved for summary judgment dismissing the objections and for judicial settlement of her final account. Objectant opposed the motion, and two of the other residuary beneficiaries cross-moved to revoke their previously executed releases and to join in the objections. In a memorandum and order, the Surrogate granted the motion and denied the cross motion. The Surrogate thereafter issued an order and an amended order that, inter alia, settled the final account but did not specifically address the cross motion. Inasmuch as a decision controls an order in the case of a discrepancy (see Utica Mut. Ins. Co. v McAteer & FitzGerald, Inc., 78 AD3d 1612, 1612-1613), we conclude that the cross motion was denied. In any event, because only objectant has filed a notice of appeal, any issue with respect to the propriety of the denial of the cross motion is not before this Court. We conclude that the Surrogate erred in granting the motion.
"Although, generally, all persons required to be served with process in an accounting proceeding may file objections, this is not always so since the court will not permit objections to be filed where the objecting party will not be benefitted by them, even if sustained" (Matter of Woods, 36 AD2d 880, 880; see Matter of Freeman, 198 AD2d 897, 898, lv denied 83 NY2d 751, cert denied 513 US 838). Were objectant not a co-executor of the Will, we would agree with the Surrogate that he lacks standing to file any objection related to petitioner's failure to include the alleged debt in the accounting; the inclusion of the debt in the estate would affect only the residuary beneficiaries and not objectant (see Freeman, 198 AD2d at 898; Woods, 36 AD2d at 880). With respect to the tangible personal property, however, resolution of that objection could inure to objectant's benefit, and objectant therefore has standing, as a beneficiary of the Will, to assert that objection (cf. Freeman, 198 AD2d at 898; Woods, 36 AD2d at 880).
Regardless of his standing as a beneficiary, we conclude that objectant has standing, as a co-executor of the Will, to file both objections. An executor is a fiduciary who owes "a duty of undivided loyalty to the decedent and ha[s] a duty to preserve the assets that [decedent] entrusted to them" (Matter of Donner, 82 NY2d 574, 584; see Matter of Carbone, 101 AD3d 866, 868), and "an executor's duties are derived from the will itself, not from the letters issued by the Surrogate" (Matter of Skelly, 284 AD2d 336, 336). "Suffice it to say, an executor who knows that his co[-]executor is committing breaches of trust and not only fails to exert efforts directed towards prevention but accedes to them is legally accountable" (Matter of Rothko, 43 NY2d 305, 320).
Relying on Matter of Miller (NYLJ, Mar. 19, 2003, at 23, col 4), the Surrogate concluded that, because there were no remaining creditors of the estate and all of the other beneficiaries had executed releases absolving objectant of liability, objectant no longer had standing as a co-executor to file any objections to petitioner's final accounting. We conclude that the Surrogate's reliance on Miller was misplaced. The issue in Miller was the management of assets that had already been identified and placed in a trust, whereas here the issue is an executor's duty to identify assets that should be included in an estate. In ...