The following papers were considered in this motion:PAPERS NUMBEREDEugene DeLucie’s Notice of Motion and Attorney Affidavit in Support 1, 2Objectants Bernstein and Macready’s Attorney Affirmation in Opposition 3Objectants Savastano and Phares’ Attorney Affirmation in Opposition 4Executor Mary K. Powderly’s Attorney Affirmation in Response 5Executor Mary K. Powderly’s Affidavit in Response 6Distributee Eugene DeLucie’s Reply Affidavit 7DECISION & ORDER Eugene DeLucie (Eugene) moves for an order, pursuant to SCPA 2215, directing that a portion of the proceeds of a settlement in this contested accounting proceeding be distributed to him in accordance with the decedent’s Will; or in the alternative, setting aside the settlement on the grounds that it violates a stipulation previously entered amongst the parties. Objectants, who negotiated the settlement with the executor, oppose the motion on the ground that the settlement proceeds are not being “recovered by the Estate,” but rather, being paid directly to the objectants, and thus, Eugene is not entitled to a share of the settlement proceeds. For the following reasons, the court finds that Eugene is entitled to a distributive share of the settlement proceeds.BackgroundPeter A. DeLucie (the decedent) died on September 11, 2012 at the age of 100, without spouse or issue. The decedent left a Will dated April 19, 2012, and letters testamentary were granted to his niece, Mary K. Powderly (the executor), on June 14, 2013. The Will provided that the residuary estate be divided as follows: 20 percent to the executor; 20 percent to the decedent’s niece Anne G. Powderly (in trust with the executor as trustee); 30 percent to the decedent’s post-deceased brother Daniel DeLucie; 20 percent to the decedent’s brother Eugene; and 5 percent each to the decedent’s nieces Nancy E. Savastano and Diane B. Phares (Savastano and Phares).The executor filed an accounting dated July 31, 2016. Julie Bernstein and JoAnn Macready (Bernstein and Macready) filed objections as executors of Daniel’s estate, and Savastano and Phares (together with Macready and Bernstein, the objectants) filed separate objections. Both sets of objections were based on the ground that the executor wrongfully excluded a number of the decedent’s bank accounts totaling in excess of $1,200,000.00 from the estate in her accounting; and that the executor unduly influenced the decedent to obtain joint ownership of these accounts.Eugene did not initially file objections to the accounting. However, in September 2018, Eugene moved for leave to file late objections. Eugene asserted that he did not previously file objections to the accounting, as he had no personal knowledge of the decedent’s intentions regarding the disputed joint bank accounts or of any alleged undue influence by the executor. He also asserted that he had believed that if the executor were directed to return any funds to the estate, the same would be distributed according to the Will. In other words, if the objectants were to prevail, his share of the estate will also increase proportionately, even though he did not participate in this proceeding. Eugene submitted, however, that he had learned that in settlement negotiations between the executor and the objectants, the objectants were insisting that, as a term of any settlement, Eugene would receive no increase in his share from any amount which the executor agreed to return to the estate. Accordingly, given that the objectants were attempting to undermine his interests, Eugene sought to file late objections.That motion, as well as the objectants’ cross-motions to reopen discovery should Eugene be allowed to file late objections, were resolved by a stipulation dated September 6, 2018 (the 2018 stipulation) and signed by all parties that stated, in pertinent part, as follows:“Any assets which are recovered by the Estate as a result of the Objectants’ objections, including but not limited to any settlement entered into in this proceeding, shall be distributed to the residuary beneficiaries, including but not limited to Eugene DeLucie, in accordance with the provisions [of the decedent's will, including] any amount by which [the executor] agrees to reduce her residuary interest in the estate in lieu of returning funds to the estate.” [Emphasis added.]This proceeding was scheduled for trial on November 28, 2018. The parties appeared that morning and counsel requested time to attempt a settlement, since all of their clients were present and the reality of a trial could no longer be deferred. The court allowed the parties to confer throughout the morning, and after extensive negotiations, the parties announced that they reached a settlement in the amount of $275,000.00. There was no discussion or agreement at that time as to how the $275,000.00 would be divided amongst the two sets of objectants, nor whether Eugene would be entitled to any proceeds. The settlement amount was placed on the record with the proviso that the executor would pay the sum by December 20, 2018, which would be placed in an escrow account held by counsel for Bernstein and Macready. The objectants further agreed that they would not object to the executor’s attorney fees being paid from the gross estate.The Instant MotionThe objectants have now taken the position that, notwithstanding the language of the 2018 stipulation, the settlement amount should only be distributed to the objectants, and not to Eugene. In response, Eugene moves to enforce the 2018 stipulation and seeks an order for the settlement proceeds to be distributed according to the percentages provided to each distributee in the Will, with the exception of the executor individually and as trustee for her sister, per the executor’s agreement. Alternatively, Eugene requests that the settlement be set aside as violative of the terms of the 2018 stipulation.Eugene asserts that pursuant to the 2018 stipulation, any funds recovered in this accounting proceeding, whether by settlement or otherwise, must be distributed according to the percentages set forth in the Will’s residuary clause. Further, he notes that the objections filed to the accounting demand that the funds be returned to the estate, rather than paid directly to the objectants alone. Eugene also argues that, while his prior motion to file late objections was pending, his attorney spoke to counsel for Savastano and Phares, who stated that they did not intend to exclude Eugene from receiving his percentage of any settlement proceeds. Thus, Eugene argues, there is no mistaking the meaning of the 2018 stipulation, when the objectants agreed to distribute any settlement proceeds according to the Will. The objectants, however, now take the position that Eugene is not entitled to any portion of the settlement because “this matter settled with payment to be made to the objectants individually,” rather than to the estate.The objectants filed two separate opposition papers, but essentially argue the same position. They assert that the settlement proceeds are not funds “recovered” or “returned” into the estate, and thus Eugene is not entitled to any share. Objectants assert that the terms in the pertinent paragraph of the 2018 stipulation refer to “any assets which are recovered by the estate,” and since the settlement is being paid directly to the objectants through their counsel, the funds are not being recovered or returned into the estate.The executor supports Eugene’s position, agreeing that the settlement meets the criteria anticipated by the language of the 2018 stipulation, and should be distributed accordingly to Eugene and the objectants in their proportionate shares. The executor submits an affidavit stating that it was always her understanding that any settlement would be distributed to Eugene as well, even though it was not specifically discussed when placing the settlement on the record.DiscussionProcedurally, although no party objects to subject matter jurisdiction, this court finds that it has jurisdiction over the dispute since it relates to the decedent’s estate. SCPA 210(3). See e.g., In re Estate of Parrinello, 213 A.D.2d 1006, 1007 (4th Dep’t 1995) (Surrogate’s court has subject matter jurisdiction over specific performance of a decade-old stipulation entered into during a probate proceeding). Further, “the power of a trial court to exercise supervisory control over all phases of pending actions and proceedings has long been recognized,” including over disputes that arise after a stipulation had been effected during litigation. Teitelbaum Holdings, Ltd. v. Gold, 48 N.Y.2d 51, 54-55 (1979). Further, “[b]ecause of its relative simplicity and lesser burden upon the litigants and the court, the motion has proven to be the favored procedural mode” to resolve disputes that arise out of stipulations. Id.Substantively, “[a] stipulation is a contract between parties, and as such is governed by general principles for its interpretation and effect.” Nishman v. De Marco, 76 A.D.2d 360, 366 (2d Dep’t 1980). “[A] written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms.” Henrich v. Phazar Antenna Corp., 33 A.D.3d 864, 867 (2d Dep’t 2006). It is well-settled that “the construction of a plain and unambiguous contract is for the court to pass on, and that circumstances extrinsic to the agreement will not be considered when the intention of the parties can be gathered from the instrument itself.” West, Weir & Bartel, Inc. v. Mary Carter Paint Co., 25 N.Y.2d 535, 540 (1969).Here, the terms of the stipulation are unambiguous. As stated in Eugene’s motion for leave to file late objections, one reason he sought such relief was that during settlement negotiations leading up to the trial date, the objectants stated that they opposed Eugene sharing in any settlement proceeds since he did not file objections. It is patently clear, therefore, that Eugene stipulated to withdraw his motion based on his understanding that the objectants were agreeing to not exclude him from a share in any settlement proceeds. Accordingly, the only possible interpretation of the language in the 2018 stipulation that states “[a]ny assets which are recovered by the Estate as a result of the Objectants’ objections, including but not limited to any settlement entered into in this proceeding, shall be distributed to the residuary beneficiaries, including but not limited to Eugene DeLucie….” is that upon settlement of the objectants’ claims, Eugene would share in the proceeds.The objectants, however, argue that because the settlement proceeds are not being paid into the estate, i.e., not “recovered by the Estate,” but rather being paid into an escrow account of one of the objectants’ attorneys, the settlement falls outside of the 2018 stipulation. The court finds this argument to be disingenuous. A distinction based on how the settlement funds would be paid and into which account was a unilateral decision made by the objectants (albeit with the agreement of the executor) without participation by Eugene. This was a purely arbitrary decision regarding the mechanics of the settlement, not the substance of the agreement.That decision does not alter the fact that (a) there was a settlement that resolved the objections to the accounting and (b) that the parties unambiguously agreed that “any settlement entered into in this proceeding” would also enure to the benefit of Eugene as a beneficiary of the estate. Further, the objectants do not assert that in negotiating the terms of the 2018 stipulation, Eugene understood that if the objectants and the executor agreed to place any settlement proceeds into an escrow account, that settlement would fall outside of the terms of the 2018 stipulation. Moreover, none of the parties stated on the record that placement of the funds in an escrow account of counsel for objectants rendered the settlement outside the parameters of the 2018 stipulation. Indeed, the executor, one of the parties to the settlement, asserts that she did not intend for the settlement to operate outside the 2018 stipulation.Accordingly, the court finds that pursuant to the stipulation, Eugene is entitled to a proportionate share of the settlement proceeds, in accordance with the terms of the decedent’s Will.This constitutes the decision and order of the court.Dated: June 6, 2019Brooklyn, New York
