Pryor Cashman Partner Must Face Claims He Misled Dying Radio Legend
Radio Drama Network claims the Pryor Cashman partner Richard Kay misled its principal funder into entrusting most of his assets to an entity that Kay controls. A judge has disagreed with most of Kay’s arguments for dismissal.
August 12, 2019 at 04:02 PM
4 minute read
The original version of this story was published on New York Law Journal
A private foundation set up by prolific radio producer Himan Brown convinced a judge in Manhattan Surrogate’s Court to sustain most of its lawsuit against Pryor Cashman partner Richard Kay over claims that he tricked Brown into adjusting his $100 million estate plan and exploited that control for his personal benefit.
Radio Drama Network, a private foundation set up by Brown in 1984 to promote radio dramas and educational initiatives, accused Kay in 2016 of coaxing an aging Brown into signing most of his $100 million over to the Himan Brown Charitable Trust, of which Kay is the sole trustee. Kay sought dismissal, but Surrogate Nora Anderson largely rejected his motion in a July 15 decision that came about three years after arguments were held.
Radio Drama, which has four board members, including Kay and two of Brown’s relatives, says Kay has used the Charitable Trust to fund his own causes—including his alma mater and the Montessori school attended by one of his grandchildren—rather than its stated purpose, which is to support radio drama or the spoken word.
The court, ruling on a motion to dismiss and a motion for a preliminary injunction, rejected Radio Drama Network’s request to remove Kay from its board and similarly declined to issue an injunction that would have capped disbursements from the Himan Brown Charitable Trust at the legal minimums.
But the court also allowed other claims—including for fraud, undue influence and unjust enrichment—to go forward.
“If petitioner can prove the allegations giving rise to its unjust enrichment claim, the imposition of a constructive trust over the assets of the Charitable Trust may be warranted,” the court said.
Radio Drama claims Kay had Brown, who was 94 years old, sign a “deceptively simple” will that led Brown to believe he was leaving his entire estate to Radio Drama Network. But Brown’s intent was effectively foiled once Kay convinced him to amend the terms of a revocable trust that assured most of the assets he controlled would flow to the Charitable Trust instead.
Brown produced some 30,000 radio shows in his lifetime, according to the Radio Hall of Fame. The Charitable Trust led by Kay held about $97 million as of March 2017, the date of its most recent public tax filing, compared with about $16 million held by Radio Drama as of June 2016. The two entities have different fiscal years, so an apples-to-apples comparison is difficult.
Kay sought dismissal of the suit, arguing that it was time-barred—Brown died in 2010 and most of the contested changes to his estate planning documents were made in 2003 and 2004. Kaye also argued that Radio Drama’s claims “essentially amount to a claim for tortious interference with prospective inheritance, which is not recognized in New York.”
Anderson disagreed with most of Kay’s arguments for dismissal.
Kay, however, won dismissal of a claim for violations of Judiciary Law Section 487, which penalizes attorney deceit. The court rejected Radio Drama’s argument that Kay’s alleged practice of serving notice of probate proceedings upon himself, as a Radio Drama board member, allegedly without alerting other board members, amounted to a Judiciary Law claim. The court said Radio Drama didn’t suffer any harm from not showing up to those proceedings.
And in declining to force Kay from Radio Drama’s board, the court said the board membership dispute was out of its bailiwick, as it was purely a dispute between living persons, and Radio Drama’s proposed fix “would virtually erase the limits on the subject matter this court can adjudicate.”
Michael B. Kramer, a lawyer for Kay who runs his own firm, declined to comment except to say that he and his co-counsel, Gary B. Freidman of Greenfield Stein & Senior, were weighing the prospect of an appeal.
Pamela Mann, a partner at Carter Ledyard & Milburn who represents Radio Drama, said she was not considering an appeal of the parts of the decision that went against her client. But she said she and her client were considering filing a suit in Manhattan Supreme Court to have Kay removed from Radio Drama’s board.
Radio Drama will move forward with discovery “as quickly and vigorously as possible,” Mann said in an interview.
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