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New York Estate Discovery Cases Require That Facts Support The Claim

One of the statutes that is most commonly utilized by an estate executor or administrator is Surrogate’s Court Procedure Act (SCPA) Section 2103 entitled “Proceeding by fiduciary to discover property withheld or obtain information.” This provision allows the estate fiduciary to commence a proceeding in the Surrogate’s Court whereby information can be obtained from a third party that is suspected of withholding property belonging to a decedent.

The more common name for this type of matter is a “turnover proceeding”. The third party is being asked to turn over to the fiduciary certain property that the decedent owned. There have been a number of articles concerning this process in the New York Probate Lawyer Blog.

A turnover proceeding is generally comprised of two stages. In the first stage, which is known as the inquisitional stage, the administrator or executor can obtain testimony and documents from the alleged wrongdoers to determine if, in fact, any estate assets are being withheld. If it is established on a reasonable basis that the alleged wrongdoer is withholding assets, the second stage provides for a full determination as to whether the estate or the third party is the rightful owner of the property.

A recent case decided by Manhattan Surrogate Rita Mella dated July 21, 2017 entitled, Matter of Salz, provides an interesting and informative discussion regarding these types of discovery proceedings. I was one of the attorneys involved in this case representing Bellagio LLC, MGM Resorts, International and Mirage Resorts (the “Bellagio Respondents”).

In Salz a Limited Administrator commenced a number of turnover proceedings that sought to recover artwork that was allegedly owned by a decedent. The decedent had died in 1981. The current proceedings were not started until 2016 when the decedent’s son was appointed as Limited Administrator for the purpose of investigating these claimed assets. With regard to my client, the Bellagio Respondents, a claim was made by the Limited Administrator concerning proceeds of a sale from a Renoir painting.

As more fully explained in the Surrogate’s decision, the proceeding against the estate’s former (now deceased) fiduciary was dismissed for a number of reasons. Among the bases for dismissal was that the Limited Administrator did not provide sufficient facts to support its request to move forward to obtain discovery. The proceeding against the former estate fiduciary was dismissed in the inquisitorial stage.

As to the Bellagio Respondents, the Surrogate also dismissed the case. While the Bellagio proceeding was filed under the second stage which seeks a determination of ownership, the Court found that the facts set forth by the Limited Administrator also failed to adequately state a claim. The Limited Administrator was unable to provide sufficient factual proof to demonstrate that the Renoir painting was owned by the decedent at the time of his death.

I have assisted clients with many discovery proceedings. There have been a number of instances where I represented an executor or administrator who filed a turnover proceeding in Surrogate’s Court and was able to recover property that belonged to an estate. These matters involve Estate Litigation and can be quite complex. The assistance of an experienced New York Estate Lawyer can be helpful.

Call me now if you have any questions or issues regarding a discovery case or other estate administration matter for a free discussion.  New York City Trusts and Estates Attorney Jules Martin Haas has helped many clients over the past 30 years resolve issues relating to probate and estate litigation throughout New York City including Manhattan and Brooklyn. If you or someone you know has any questions regarding these matters, please contact me at (212) 355-2575 for an initial consultation.

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