Claimants' motion for an order of substitution following the death of claimant Biggi-Zweig pursuant to Court of Claims Act § 15 is granted. Following a review of the trust agreement and amendments thereto, as well as Articles of Incorporation and supporting affidavits submitted on behalf of intended beneficiary, Duke University, and supporting affidavits of claimant Alice Walsh and her attorney/husband, the Court concludes that the request to substitute Duke Gift Properties, Inc. as claimant in place of decedent must be granted.
|Claimant(s):||ALICE P. WALSH and ROSEMARY F. BIGGI-ZWEIG|
|Claimant short name:||WALSH, BIGGI-ZWEIG|
|Footnote (claimant name) :|
|Defendant(s):||STATE OF NEW YORK|
|Footnote (defendant name) :|
|Judge:||James H. Ferreira|
|Claimant's attorney:||Timothy Nugent, Esq.|
|Defendant's attorney:||Hon. Andrew M. Cuomo
Attorney General of the State of New York
By: Michael A. Sims
Assistant Attorney General
|Third-party defendant's attorney:|
|Signature date:||December 23, 2009|
|See also (multicaptioned case)|
A claim for damages for the alleged wrongful removal and barricade of a railroad crossing, resulting in the termination of access by claimants to certain river front property owned jointly by them, was filed with the Court on October 2, 2001. The property is located between the east bank of the Hudson River and Route 9J in the Town of Schodack, County of Rensselaer, and is divided into two parallel sections by a railroad line that runs in a north-south direction.
Issue was joined and, following a bifurcated trial, the Court (Sise, P.J.) issued a Decision dated January 17, 2008 wherein the Court concluded that the New York State Department of Transportation (hereinafter DOT) did not "act lawfully in approving removal of the crossing." The Court (Sise, P.J.) awarded liability in favor of claimants and directed the parties "to contact the Court to schedule a trial on the issue of damages." Thereafter, the claim was transferred to the calendar of the Hon. James H. Ferreira.
During a conference before the Court on November 6, 2008, claimants' counsel informed the Court that claimant Rosemary F. Biggi-Zweig (hereinafter "decedent") had passed away. Several conferences with the Court followed to discuss the status of the parties' appraisals and expert reports, as well as the necessity of a motion by decedent's counsel for an order of substitution. Claimant now moves the Court for an order pursuant to Court of Claims Act § 15 granting the substitution of Duke Gift Properties, Inc. (hereinafter Duke Properties) as claimant in place of decedent.
Court of Claims Act § 15 provides, in relevant part, that
"[i]n the event of the death of . . . one of the claimants named in a claim . . . and also in the event that by assignment or by operation of law, some person other than the claimant named in the claim has succeeded to the interest of one of the claimants named in such a claim, it shall be the duty of the personal representative of said claimant or of the person who succeeded claimant in interest to said claim or any interest therein within six months after he becomes invested with the title to said claim or any interest therein, to secure from the court of claims and serve upon the attorney-general an order substituting him as party to said claim instead of the party named in said claim, to whose right, title and interest he has succeeded, and in the event that he fails so to do, the court of claims on motion of the attorney-general, on such notice as the court may require, to all parties who have appeared in said action or proceeding or to the assignee or successor of the claimant may dismiss said claim."
In support of the motion, decedent's counsel, Timothy Nugent, Esq., states that on April 5, 2000, and unbeknownst to him, decedent created the Rosemary F. Biggi-Zweig Revocable Trust Agreement (hereinafter "Trust"), contemporaneously deeded her one-half interest in the subject property to the Trust and nominated and accepted herself as Trustee of said Trust (see Affidavit in Support of Motion by Timothy Nugent, Esq. sworn to on March 31, 2009; and Exhibit "A" to Affidavit in Support of Motion by Timothy Nugent, Esq. sworn to on August 4, 2009). Unbeknownst to counsel, on May 9, 2007 decedent resigned as Trustee, appointed Theodore G. Caldes as the Successor Trustee and Caldes accepted the appointment (see Exhibit "B" to Affidavit in Support of Motion by Timothy Nugent, Esq. sworn to on March 31, 2009). Following decedent's death, and pursuant to the terms of the Trust, the subject property was offered to Duke Properties by deed dated October 10, 2008 (see Exhibit "D" to Affidavit in Support of Motion by Timothy Nugent, Esq. sworn to on March 31, 2009). During February 2009, Duke Properties accepted the property and filed the deed with the Rensselaer County Clerk's Office (see id.).
In opposition to the motion, defendant argues, among other things, (1) that the copy of the Trust attached to counsel's supporting affidavit, sworn to on March 31, 2009, is not a complete and accurate copy and identifies as the intended beneficiary of the subject property "Duke University," which is different from the identity of the intended beneficiary described in the deed as "Duke Gift Properties, Inc.", exposing defendant to multiple liability; (2) that the motion is silent with respect to the conflicting rights of first refusal to purchase the subject property of Alice P. Walsh, or her distributees, as contained in the Trust, and of Alice P. Walsh and/or Donald A. Walsh, or their distributees, as contained in the deed; (3) that there is no evidence that decedent's counsel has been retained by Duke University or by Duke Properties; (4) that decedent's counsel did not disclose to the Court during the liability trial the existence of a trust, nor did he represent decedent, in her capacity as Trustee, during the trial; (5) that decedent's counsel did not disclose to the Court that he was appearing for or representing Caldes as Trustee until long after Caldes had divested himself of legal title to Duke Properties, nor is there any evidence before the Court that Caldes ever retained decedent's counsel; (6) that decedent's counsel fails to demonstrate whether decedent died testate or intestate, and with or without surviving heirs or distributees who may have an interest in this claim or in the real property that is the subject of the claim; and (7) that decedent's counsel fails to demonstrate whether a personal representative was appointed on behalf of decedent's estate following her death and, if a personal representative was appointed, fails to offer proof of his authority to represent, speak or act for or on behalf of the personal representative.
In reply, decedent's counsel offers his own affidavit, a copy of the complete trust agreement with amendments (see Exhibit "A" to Affidavit in Support of Motion by Timothy Nugent, Esq. sworn to on August 4, 2009), and the affidavits of Jeffrey H. Potter, President of Duke Gift Properties, Inc., Alice P. and Donald A. Walsh and Theodore G. Caldes.
A review of the trust agreement and amendments thereto reveals that decedent intended to deed her interest in the subject property to Duke University, "subject to the right of prompt first refusal of Alice P. Walsh, or her distributees, to purchase the interest in the Hudson River property." Potter explains that "Duke Gift Properties, Inc., is a support corporation incorporated under section 501 (c ) (3) of the Internal Revenue Code of 1996 . . . and wholly owned by Duke University." Attached as exhibit "A" to Potter's Affidavit is a copy of the Articles of Incorporation filed with the North Carolina Secretary of State. A review of the Articles of Incorporation establishes that Duke Gift Properties, Inc. was created, in part, for the purpose of "receiv[ing] gifts (directly or indirectly) . . . for the benefit of Duke University (or any of Duke University's support or affiliated corporations) . . . and to acquire, retain and operate property or properties, real or personal, tangible or intangible, to be held exclusively for the benefit or at the direction of Duke University (or any of Duke University's support or affiliated corporations)." Potter further states that, as President of Duke Properties, he has the authority to employ outside counsel for purposes of representing Duke Properties in matters relating to properties owned by Duke Properties, and that on March 5, 2009 he authorized Timothy Nugent, Esq. to represent the interests of Duke Properties in this matter.
Co-claimant Alice P. Walsh attests to her joint ownership with decedent of the subject property and states that she advised her husband and representative, Donald A.Walsh, that she did not wish to exercise her right of first refusal pursuant to the terms of the trust, and declined to purchase the other one-half interest in the property. She further states that "it was our understanding that the property would then be given to DUKE UNIVERSITY."
Donald A. Walsh states that he is an attorney duly admitted to practice law in the State of New York, and that he is the husband of Alice P. Walsh, co-claimant, and authorized to represent her. Walsh avers that his wife and decedent were joint owners of the subject property and that his wife did not wish to purchase the trust's one-half interest and understood that the property would then be given to Duke University. Walsh goes on to reaffirm, on behalf of his wife and himself, their refusal to purchase the trust's one-half interest "which [decedent] individually may have had in the property or which the . . . TRUST may have had in the property, and to "reaffirm [his] consent to allow the transfer previously made of any interest which [decedent], individually or the . . . TRUST had in the property to DUKE UNIVERSITY and/or DUKE GIFT PROPERTIES, INC."
Caldes states that he was a friend of and attorney for decedent, and that
"[o]n April 5, 2000 at the request of [decedent] I had drafted and am aware that she created the ROSEMARY F. BIGGI-ZWEIG REVOCABLE TRUST. Contemporaneously with the creation of the Trust, [decedent] executed a Deed from herself individually to herself as Trustee of the ROSEMARY F. BIGGI-ZWEIG REVOCABLE TRUST.* * * * * * * * * * * * * * *
[Decedent] continued as Trustee of the TRUST until May 9, 2007 at which time she resigned as Trustee and appointed me as Successor Trustee, which I accepted. A copy of the resignation and acceptance is included herein as EXHIBIT "B". From April 5, 2000 through May 9, 2007 I acted as [decedent's] Attorney and as Attorney for the TRUST. After May 9, 2007 I acted as Trustee of the Trust and as Attorney for [decedent] on her personal matters.
* * * * * * * * * * * * * * * *
. . . from the Summer of 2001 to date it was my understanding from my conversations with both [decedent] and MR. WALSH, that MR. NUGENT was acting on behalf of [decedent]. It was always my understanding that by MR. NUGENT's representation of [decedent] he was representing [decedent] as Trustee of the TRUST. Upon the resignation of [decedent] and my acceptance as Successor Trustee, I always viewed MR. NUGENT as acting as Attorney for the TRUST.
It is my understanding, through personal conversations with [decedent], that at all times when she was Trustee of the TRUST, MR. NUGENT was acting with her full approval and authority both, individually and as Trustee, of the TRUST.
Additionally, from the time that I accepted the assignment as Successor Trustee, it was and has been my intent that MR. NUGENT act as Attorney for the TRUST and he has always had my full approval and authority to represent the TRUST'S interest.
* * * * * * * * * * * * * * * * *
The reason that the property was deeded to DUKE GIFT PROPERTIES, INC., is that I was informed that DUKE UNIVERSITY did not receive gifts in its name and that DUKE GIFT PROPERTIES, INC., was the entity that received gifts for the benefit of DUKE UNIVERSITY. Therefore, pursuant to the authority granted to me under Paragraph 2.5 of the TRUST I used my discretion and determined that deeding the Property to DUKE GIFT PROPERTIES, INC., would fully effect intent."
Decedent's counsel explains that in preparing his reply affidavit, he discovered that he "must have had knowledge of the Trust at a much earlier time" than was represented in his original supporting affidavit, but cannot "explain why [he is] unable to recall having this knowledge earlier." Counsel goes on to argue that "regardless of the confusion [he has] at all times been viewed by [decedent] as representing any interest which she had either individually or as Trustee of the ROSEMARY B. ZWEIG REVOCABLE TRUST and, thereafter, as set forth in the Affidavit of THEODORE G. CALDES, he viewed me as representing his interest as Trustee of the ROSEMARY B. ZWEIG REVOCABLE TRUST and that as such the substitution requested herein should be permitted." Counsel further argues that "since MS. BIGGI-ZWEIG was the Trustee of the Trust up until May 9, 2007 . . . that with respect to the property, ROSEMARY F. BIGGI-ZWEIG and the ROSEMARY B. ZWEIG [sic] REVOCABLE TRUST were one and the same."
In its surreply, defendant argues, among other things, that the claim should be dismissed sua sponte for lack of jurisdiction as "[a]n interlocutory judgment was entered against the State [on] March 12, 2008 in regard to an interest in real property that . . . was not before this Court for adjudication." More specifically, defendant argues that
"to the extent that the property that is the subject of this Claim was placed in trust and title thereto was transferred or conveyed from Rosemary F. Biggi-Zweig in her individual capacity to Rosemary B. Zweig, as Trustee on or about April 5, 2000, and thereafter to Theodore G. Caldes on May 9, 2007, this Court has lacked jurisdiction over the Rosemary B. Zweig Revocable Trust, Rosemary B. Zweig as Trustee, Theodore G. Caldes as Trustee, and over that portion of the subject real property and/or real property interest held in trust that (prior to April 5, 2000) had been held by the captioned, now deceased, Rosemary F. Biggi-Zweig in her personal capacity."
The Court has considered the arguments of counsel on behalf of the respective parties, and the proof offered in support thereof, and concludes that the request for an order substituting Duke Gift Properties, Inc. as claimant in place of decedent must be granted. The copy of the complete trust agreement and amendments thereto, together with the affidavits and accompanying exhibits of Alice P. Walsh, Potter and Caldes, establish that the intended beneficiary of the trust's one-half interest in the subject property is Duke University. The proof further establishes that the receipt by Duke Properties of the trust's one-half interest in the subject property satisfies decedent's intent, as set forth in the trust, since Duke Properties is "wholly owned" by Duke University and was established for the purpose of receiving such gifts for the benefit of Duke University. Given Duke University's ownership of Duke Properties, the Court is satisfied that defendant will not be exposed to multiple liability if Duke Properties is substituted as claimant in place of decedent. Nonetheless, for purposes of clarity, an order substituting Duke Gift Properties, Inc., on behalf of Duke University, as claimant in place of decedent is granted.
The affidavits of Alice and Donald Walsh resolve any dispute regarding co-claimant Alice Walsh's right of first refusal to purchase the subject property prior to its receipt by Duke Properties. Ms. Walsh and her husband attest to co-claimant Alice Walsh's waiver of her right to first refusal. Moreover, upon a review of the affidavit of decedent's counsel, Timothy Nugent, Esq., as well as the affidavits of Caldes and Potter, the Court is satisfied that, at all times relevant to this claim, Mr. Nugent possessed the authority to represent the interests of decedent in both her individual capacity and as trustee, the interests of the trust, and the interests of Duke Properties.
Nor is the Court persuaded by defendant's argument that the judgment should be vacated and the claim dismissed for lack of jurisdiction. Defendant asserts that an interlocutory judgment was entered against the State on March 12, 2008 regarding an interest in real property that was not before the Court for adjudication. Defendant explains that the claim was commenced and maintained by decedent in her personal or individual capacity, not as trustee, nor was the claim ever amended to substitute as claimant either the trust, decedent as trustee or Caldes as trustee in spite of the creation of a trust and the designation of decedent and Caldes as trustees.
"The question of subject matter jurisdiction is a question of judicial power: whether the court has the power, conferred by the Constitution or statute, to entertain the case before it" (Matter of Fry v Village of Tarrytown, 89 NY2d 714, 718  [citation omitted]). "Standing and capacity to sue are related, but distinguishable, legal concepts" (Wells Fargo Bank Minn., N.A. v Mastropaolo, 42 AD3d 239, 242 ). "[Standing] requires an inquiry into whether the litigant has 'an interest in the claim at issue in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the litigant's request' " (id. at 242, quoting Caprer v Nussbaum, 36 AD3d 176, 182 ). "[C]apacity requires an inquiry into the litigant's status, i.e., its 'power to appear and bring its grievance before the court' " (id. at 242, quoting Community Bd. 7 of Borough of Manhattan v Schaffer, 84 NY2d 148, 155 ).
Here, decedent commenced the claim in her individual capacity when her status with respect to the subject property was that of trustee after having deeded her interest therein to the trust. Initially, the Court notes that decedent's failure to properly identify her status with respect to the subject property - that of trustee - does not divest the Court of subject matter jurisdiction over the res. "Whether the action is being pursued by the proper party is an issue separate from the subject matter of the action or proceeding, and does not affect the court's power to entertain the case before it" (id. at 243). Moreover, as trustee, decedent had both standing and capacity to commence the instant claim. Had the misidentification of the proper party claimant been addressed prior to a determination on the merits of liability, the appropriate remedy would have been to substitute as claimant decedent, in her capacity as trustee, and then again, Caldes, in his capacity as trustee (see e.g. HSBC Guyerzeller Bank AG v Chascona N.V., 42 AD3d 381 ; American Home Assur. Co. v Scanlon, 164 AD2d 751 ).(1) Notably, the misidentification of the proper party claimant during the liability phase of this matter does not bear upon the Court's (Sise, P.J.) determination with respect to the merits. To the extent that defendant raises concerns regarding its exposure to multiple liability during the pending damages phase of this matter, the Court finds that those concerns have been addressed and put to rest by the proof offered in support of this motion and as more fully discussed above.
Accordingly, it is
ORDERED that M-76471 is granted; and it is further
ORDERED that DUKE GIFT PROPERTIES, INC., on behalf of DUKE UNIVERSITY, be substituted as claimant in place of ROSEMARY F. BIGGI-ZWEIG.
December 23, 2009
Albany, New York
James H. Ferreira
Judge of the Court of Claims
1. Notice of Motion dated March 31, 2009;
2. Affidavit in Support of Motion by Timothy Nugent, Esq., sworn to on March 31, 2009 with exhibits;
3. Affirmation Opposing Motion for an Order of Substitution by Michael A. Sims, AAG dated April 6, 2009 with exhibit;
4. Affidavit in Support of Motion by Timothy Nugent, Esq. sworn to on August 4, 2009 with exhibits;
5. Affidavit in Support of Motion by Alice P. Walsh sworn to on August 4, 2009 with exhibit;
6. Affidavit in Support of Motion by Donald A. Walsh sworn to on August 4, 2009 with exhibit;
7. Affidavit in Support of Motion by Jeffrey H. Potter sworn to on August 4, 2009 with exhibits;
8. Affidavit in Support of Motion by Theodore G. Caldes sworn to on July 31, 2009 with exhibits;
9. Correspondence from Timothy Nugent, Esq. to the Court dated August 6, 2009 with exhibit; and
10. Surreply Affirmation Opposing Motion for an Order of Substitution by Michael A. Sims, AAG dated August 13, 2009 with exhibit.
1. See also HSBC Guyerzeller Bank AG v Chascona N.V., supra at 388 [concurring opinion of McGuire, J. regarding distinction between misidentification of proper party plaintiff and misidentification of proper party defendant]).