In the Matter of the Estate of Edmund Felix Hennel, Also Known as Edmund Hennel, Deceased. Gregory Hennel et al., Respondents; Hazel Hennel, as Executor of the Estate of Edmund Felix Hennel, Deceased, Appellant.
V. Coffey, for appellant.
L. Adams, for respondents.
seek to enforce an oral promise that would otherwise be void
under the statute of frauds. They rely on the theories of
promissory estoppel and unconscionability. We agree, as a
general matter, that where the elements of promissory
estoppel are satisfied and enforcement of the statute of
frauds would inflict such an unjust and egregious result upon
the party who detrimentally relied on the oral promise that
the resulting injury would be unconscionable, the opposing
party may be estopped from relying on the statute of frauds.
Nevertheless, we conclude that petitioners cannot invoke that
doctrine here because application of the statute of frauds
would not inflict an unconscionable injury upon petitioners.
Although the result may be unfair, it is not unconscionable.
Edmund Felix Hennel was the owner of a four-unit apartment
building (the property) located in Schenectady. Petitioners,
decedent's grandsons,  assert that prior to 2006, they had
assisted decedent with maintenance of the grounds and snow
removal at the property, but had no responsibility for other
maintenance duties or rental management. In the summer of
2006, decedent approached petitioners about taking ownership
of the property and assuming all management and maintenance
property was subject to a mortgage. In 2001, decedent had
obtained a $100, 000 loan, secured by a mortgage on the
property. Decedent used the loan proceeds to make cash gifts
to six of his family members, including the two petitioners,
all of whom were shareholders in the family-owned golf course
business. These six shareholders in turn loaned their cash
gifts to the golf course business to assist it with
operations and provide it with additional working capital.
After subsequent disagreements regarding business operations,
the shareholders agreed that the company would redeem the
shares of the four shareholders other than petitioners. The
golf course business repaid those four shareholders for their
loans in an amount totaling $63, 619.64, leaving petitioners
as the sole shareholders of the business by May 2006.
Petitioners assert that they explained to decedent that they
did not wish to take ownership of the property subject to the
mortgage because they believed they would be subsidizing the
gifts to the four other former shareholders.
to petitioners, decedent, in response to their concerns,
stated that it was not his intention that petitioners would
become responsible for the mortgage. Specifically, decedent
orally promised that he would direct his estate to satisfy
the balance of the mortgage upon his death from the assets of
effectuate this oral bargain, petitioners and decedent met on
September 22, 2006 in the office of a family attorney. They
executed several documents at that meeting. One of those
documents was a warranty deed, in which decedent granted
ownership of the property to petitioners. The deed did not
mention the mortgage, and it stated that the consideration
for the transaction was one dollar. Decedent reserved to
himself a life estate in the property. The deed further
reserved to decedent the power to appoint the remainder
interest to any of his issue other than petitioners during
his lifetime. Decedent never exercised that power.
same meeting, decedent also executed a will (the 2006 will).
As relevant here, the 2006 will provided that the mortgage on
the property, if any in existence at the time of
decedent's death, be paid from the assets of his estate.
the September 2006 meeting, petitioners assumed all
management and maintenance duties for the property. They
managed income and expenses, handled tenant relations, and
made improvements and necessary repairs. Petitioners assert
that these activities occupied a significant amount of their
time. Petitioners also began making the mortgage payments,
which they were able to do entirely with the rental income
generated by the property.
2008, decedent executed a new will (the 2008 will), which
revoked all prior wills and codicils. The 2008 will made no
mention of satisfaction of the mortgage on the property upon
decedent's death. Petitioners assert that decedent
informed them that he had executed a new will but assured
them that there had been "no change" in their
agreement with respect to the property. Based on that
assertion, petitioners continued to carry out their
management and maintenance responsibilities at the property.
died on December 1, 2010. Decedent's widow, respondent
Hazel Hennel, was named as the executor of his estate in the
2008 will and sought probate. In anticipation of a contest,
the 2008 will was admitted to probate and letters
testamentary were issued to respondent with the limitation
that no assets of the estate could be distributed absent a
court order. After filing a claim pursuant to SCPA 1803,
which respondent rejected, petitioners commenced the present
proceeding pursuant to SCPA 1809 to determine the validity of
their claim against decedent's estate. Their petition
included four causes of action: breach of contract, breach of
title warranty, promissory estoppel, and unjust enrichment.
Respondent objected, asserting, as relevant here, that
petitioners' claim was barred by the statute of frauds.
parties subsequently moved for summary judgment. Petitioners
supported their motion with, among other things, the
deposition testimony of the family attorney, who confirmed
the details of the meeting at his office on September 22,
2006, including decedent's execution of the 2006 will.
The attorney testified that it was his understanding that the
relevant provision in the 2006 will was designed to ensure
that petitioners would own the property free of any mortgage
upon decedent's death.
cross motion for summary judgment, respondent did not dispute
petitioners' factual allegations. In support of her cross
motion, however, she relied in part upon a residential
appraisal report of the property assessing market value for
the property at the time of decedent's death at $235,
000. Petitioners stated in their notice of claim that the
unpaid principal and interest on the mortgage was $88,
394.91. At the time of petitioners' summary judgment
motion, their continued payments had reduced that balance to
Court granted petitioners' motion for summary judgment
and directed respondent to satisfy the outstanding balance of
the mortgage and reimburse petitioners for the payments made
since decedent's death. The court reasoned that
petitioners' claim fell "squarely within that
limited class of cases where promissory estoppel should be
applied to remedy a ...