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NYSCEF DOC. NO. 213 RECEIVED NYSCEF: 04/28/2020
To commence the statutory time period for
appeals as of right [CPLR 5513(a)], you
are advised to serve a copy of this order,
with notice of entry upon all parties.
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF WESTCHESTER
PRESENT: HON. SAM D. WALKER, J.S.C.
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LYNN AMMIRATO and LISA BIRCH,
Plaintiff, DECISION & ORDER
Index No. 65411/2015
-against-
Sequence No. 8
ANNA MARIE T. SOCHUREK,
Defendant.
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The following papers were read on Plaintiff’s motion:
PAPERS NUMBERED
Order to Show Cause/Affirmation/Affidavit/Exhibits A-B 1-5
Memorandum of Law in Support 6
Affirmation/Exhibits 1-13 7-20
Memorandum of Law in Opposition 21
Reply Affirmation/Exhibits C 22-23
Memorandum of Law in Reply 24
FACTUAL AND PROCEDURAL BACKGROUND
Robert W. Sochurek (the "decedent") died on February 14, 2014 leaving a Last
Will and Testament. The Will was admitted to probate and on June 17, 2014, the
Surrogate's Court, Dutchess County, granted the decedent's spouse Anna Marie T.
Sochurek ("Sochurek") Letters Testamentary. The decedent's Last Will and Testament,
bequeath all of the decedent’s assets, including an estate for life in Brady Avenue
Associates, LLC (the “LLC”), to Sochurek, and for her to have all duties and
responsibilities for the operation of the LLC as if she was the owner and member thereof,
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including the right to receive income therefrom on a regular basis and upon her death,
her life interest to terminate and the decedent's interest in the LLC, to be bequeath, in
equal shares, unto his daughters, Lisa Birch ("Birch") and Lynn Ammirato ("Ammirato"),
Plaintiffs in this action.
At the time of his death Robert W. Sochurek owned a fiftypercent membership
interest in the LLC, which operated as a self-storage warehouse facility. The LLC also
owned property known as 130 and 153 Brady Avenue, Hawthorne, New York (the "LLC
Property"). The LLC also maintained at least one bank account, which Plaintiffs allege
contained close to $200,000.00 shortly after the decedent's death.
On January 8, 2015, subsequent to the probate of the Will, Sochurek, with the
other fifty percent owner of the LLC, Roberta Damato, arranged for and approved of the
sale of the LLC business, property and associated leases. In an effort to preserve their
rights, Plaintiffs, Ammirato and Birch entered into a Standstill Agreement with Sochurek
dated April 17, 2015, whereby the funds received by Sochurek from the Purchase and
Sale Agreement, would be held in a segregated account in Sochurek's name, The Anna
Sochurek Life Estate Account (the "Account"), from which no withdrawals would be made
by Sochurek for a period of sixty days, except upon notice with respect to any necessary
business expenditures, affording the plaintiffs an opportunity to appraise the LLC assets
and negotiate an accurate and reasonable treatment of the proceeds. As part of the
Standstill Agreement, Sochurek was also permitted to withdraw $100,000.00 from the
Account. Upon information and belief, the closing of the sale took place and the LLC
Property was sold and the Account opened with the Sochurek's share of the proceeds,
less the $100,000 taken by her. As per the plaintiffs, there was a balance of
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approximately $2,211,600.00 in the Account. Defendant states that the actual balance in
the Account (as of August 31, 2015) was $2,115,824.52.
Plaintiffs allege that despite the Standstill Agreement providing for them to have
an opportunity to appraise the LLC assets, Sochurek has been unwilling to provide basic
information. Plaintiffs allege that as the executrix of the Will and the person with a life
estate interest in property, Sochurek owed a fiduciary duty and obligation to the plaintiffs,
as remaindermen, to pass such property on to them. McKinney's N.Y. Surr. Ct. Proc. Act
Law § 2201. Plaintiffs allege that the Sochurek materially breached her fiduciary
obligations, in contravention of the decedent's express wishes in the Will, and invaded
the trust principal for her own benefit, looted the LLC's assets and apparently has left the
LLC as a worthless shell for the plaintiffs as remaindermen. Plaintiffs allege that
Defendant believes that she is entitled to withdraw $476,452.00 to pay capital gains taxes
on the sale of the LLC Property. Plaintiffs also allege that the bank account with
$200,000.00 in March 2014, which Plaintiffs only learned existed, in August 2015, has
been reduced to approximately $12,000.00 in July 2015. Plaintiffs assert that the bulk of
the reduction took place after the sale of the LLC Property, when the LLC was no longer
conducting business, and therefore, it is apparent that Defendant pocketed the LLC's
assets in violation of her fiduciary duties.
On September 21, 2015, Plaintiffs commenced an action by filing a summons and
complaint alleging six causes of action and an order to show cause seeking a restraining
order and an accounting. The Court heard oral arguments on the matter and signed the
order to show cause temporarily enjoining and restraining the withdrawal of the funds
being held in the Account or withdrawing any funds from the LLC Accounts maintained
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on behalf of the LLC, or otherwise taking, removing, selling or in any way encumbering,
disposing of or damaging any of the assets of the LLC. Defendant filed a cross-motion
seeking to vacate the temporary restraining order, pursuant to CPLR 6314; to remove the
action to Dutchess County Surrogate's Court, pursuant to CPLR 325(e); and for sanctions
against Plaintiffs, pursuant to 22 NYCRR § 130-1.1. Defendant also instituted a
construction proceeding in Dutchess County Surrogate's Court to determine whether the
actions taken by Plaintiffs to obtain temporary restraining order and preliminary injunction,
triggered an in terrorem clause in the Will, resulting in the forfeiture of their inheritance
and their standing to demand an accounting. The Surrogate's Court adjourned that matter
to await, a determination of this Court's Decision on the order to show cause and
Defendant’s cross-motion.
This Court issued a Decision and Order dated March 31, 2016, granting the
restraining order and denying the Defendant's cross-motion to vacate the restraining
order, to transfer the matter to Surrogate's Court, and for sanctions. Subsequently,
Defendant filed a motion seeking an Order directing a partial liftof the restraint on the
Account to allow her to pay for her living and other expenses. Plaintiffs filed a cross-
motion seeking to compel discovery and in opposition to Defendant's motion. The parties
then signed a Stipulation agreeing to Plaintiffs' withdrawal of so much of the cross-motion
which sought to compel discovery.
Upon this Court's declination to determine whether the actions taken by Plaintiffs
to obtain temporary restraining order and preliminary injunction, triggered an in terrorem
clause in the Will, resulting in the forfeiture of their inheritance and their standing to
demand an accounting, the Dutchess County Surrogate's Court issued a Decision in that
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construction proceeding, finding that Plaintiffs (the respondents in that proceeding)
violated Article Eighth of the decedent's Will by commencing an action in the Supreme
Court, to challenge Sochurek's action with regard to the disposition of the estate assets,
thereby interfering with the provision of the Will. The Surrogate’s Court found that by
interfering with Sochurek's management and ultimate sale of the LLC, Plaintiffs violated
the in terrorem clause of the Will and forfeited their legacies.
Defendant then filed an order to show cause before this Court seeking, among
other things, summary judgment and dismissal of the action against her.
This Court issued a Decision and Order dated November 10, 2016 (the “November
2016 Order”), granting Defendant’s order to show cause seeking summary judgment and
dismissal of the action and denying as moot Defendant’s motion seeking an Order
directing a partial liftof the restraint on the Account and Plaintiffs’ cross-motion, and
vacating any temporary restraint previously placed on the Account. In finding for
Defendant, this Court reasoned that the Standstill Agreement was entered into to
preserve Plaintiffs’ rights as remainderman, pursuant to the Will. However, since the
Surrogate’s Court had found that Plaintiffs were divested of such rights under the Will and
therefor have no claim to the remainderman interest in the LLC, enforcement of the
Standstill Agreement became moot. Adding, that if the Appellate Division should reverse
the Surrogate’s Court’s Decision, then Plaintiffs may seek to reinstate the action.
On July 31, 2019, the Appellate Division, Second Department issued a Decision
and Order (Appellate Division Decision) reversing the Surrogate’s Court’s Decision
holding that Plaintiffs (the appellants in that proceeding) did not lodge any contest to the
validity of the Will or otherwise interfere with its provisions granting Defendant discretion
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to dispose of estate assets in her capacity of executrix and that the claim that Defendant
violated the Standstill Agreement did not implicate any challenge to the Will.
Plaintiffs now seek an order to show cause seeking (a) pursuant to CPLR
5015(a)(5), to vacate the November 2016 Order on the grounds that (i) the Appellate
Division reversed the Surrogate’s Court’s Decision, and (ii)in furtherance of justice; (b)
pursuant to CPLR 5015(d), restitution to restore the parties to the position they were in
prior to the November 2016 Order, plus statutory interest from November 14, 2016,
representing the amount that was in the Account restrained by this Court until the
November 2016 Order lifted such restraint and Defendant removed such funds; and (c)
such other and further relief as this Court deems just and proper.
Plaintiffs argue that CPLR 5015(a)(5) confers upon this Court broad equitable
powers to restore this matter and is on point because there has a been a reversal of a
prior Order, i.e., the Surrogate’s Court’s Decision, which expressly formed the basis for
the November 2016 Order. In addition, Plaintiffs allege that on November 14, 2016, days
after issuance of the November 2016 Order, Defendant withdrew all of the money from
the Account (approximately $2,211,600.00) and Defendant has since moved to the State
of Florida. Plaintiffs argue that given this Court’s prior grant of a preliminary injunction
conferring a restraint on Defendant’s ability to withdraw funds from the Account, which
prevented Plaintiffs from being “irreparably harmed,” this Court should restore the parties
to their circumstances prior to the November 2016 Order, pursuant to CPLR 5523, by
ordering Defendant to return money she withdrew from the Account on November 14,
2016.
In opposition, Defendant argues that CPLR 5015(a)(5) is inapplicable here
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because the Appellate Division reversed a Decision in a different proceeding in a different
forum, and that Plaintiffs have not set forth any basis for this Court to use its discretion to
reinstate a dismissed action, as opposed to, for example, Plaintiffs refiling the action.
Defendant also argues that Plaintiffs chose not to perfect its appeal of the November 2016
Order and Plaintiffs have not made a substantial showing in support of a motion to disturb
a final, unappealed Order of this Court. With respect to restitution, Defendant argues that
CPLR 5015 and 5523 apply to compensation for money paid by a party as a result of a
subsequently modified or reversed Order. Defendant also argues that Plaintiffs have not
identified any loss for which they could be awarded restitution and the amount sought to
be deposited with the Court represents the net proceeds of the sale of both property in
which Plaintiffs have a remainder interest (the LLC Property) and property in which
Plaintiffs do not have an interest (property owned by Defendant and Roberta Damato).
Defendant further argues that no restitution should be ordered unless and until
expenditures by Defendant since November 2016 are properly charged to Plaintiffs’
remainder interest, that there is no legal basis for requiring the deposit of statutory
interest, that restitution is a harsh remedy for an unproven wrong, and that restitution
would destroy the main element of their father’s estate plan for his widow. Finally,
Defendant argues that Plaintiffs’ motion is premature because the Surrogate’s Court has
not entered an amended decree in response to the Appellate Division Decision and both
Plaintiffs and Defendant have submitted contrary, proposed amended decrees
highlighting substantial issues of interpretation of the Will.
In reply, Plaintiffs argue that the Court’s equitable powers to vacate its own Order
or judgment are broader than those provided in CPLR 5015 and that Defendant
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misconstrues cited case law on CPLR 5015 and erroneously asserts that this Court’s
discretion is limited with respect to review of its own Orders, when Defendant’s cited case
law supports the opposite: nothing can compel this Court not to exercise its discretion in
such reviews. Plaintiffs also argue that there is no time limit to move under CPLR 5015,
and CPLR 5015 does not distinguish between final and not final judgments, regardless of
whether or not they have been appealed. Plaintiffs further argue that regardless of which
version of the amended decree is entered in the Surrogate’s Court, each of the proposed
amended decrees provide that Plaintiffs have not been disinherited, as ordered by the
Appellate Division, and therefore the essential holding that drove the November 2016
Decision has been reversed and vacated.
DISCUSSION
As relevant here, CPLR 5015(a)(5) provides:
The court which rendered a judgment or order may relieve a
party from it upon such terms as may be just, on motion of any
interested person with such notice as the court may direct,
upon the ground of:
...
reversal, modification or vacatur of a prior judgment or order
upon which it is based.
“The grounds enumerated in CPLR 5015 (subd [a]) were not intended to limit the
traditional power of a court to grant relief from an order or judgment in the interests of
justice and the exercise of its discretion” (Government Employees Ins. Co. v Employers
Commercial Union Ins. Co., 62 AD2d 123, 127 [2d Dept 1978]; see also Nash v Port Auth.
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of NY & NJ, 22 NY3d 220, 226 [2013] [remitting to the Supreme Court for further
proceedings because the Supreme Court erroneously perceived ithad no discretion in
granting a motion to vacate pursuant to CPLR 5015(a)]). Here, the Appellate Division
Decision reversed the key holding of the Surrogate’s Court’s Decision that formed the
basis for the November 2016 Order, which dismissed this action and removed prior
restraints placed on the Account by this Court after considering an earlier motion by
Plaintiffs. As such and based on the record before the Court, Plaintiffs’ order to show
cause seeking to vacate the November 2016 Order, pursuant to CPLR 5015(a)(5) is
warranted, within the discretion of the Court, and in furtherance of justice (see
Dupkanicova v. James, 17 AD3d 627, 628 [2d Dept 2005]).
Defendant’s argument that CPLR 5015(a)(5) is inapplicable because the Appellate
Division reversed a Decision in a different proceeding in a different forum is without merit.
Although the Court of Appeals in Nash held that CPLR 5015(a)(5) is applicable where the
reversed judgment is entered in the same lawsuit (22 NY3d at 225), the Nash Court did
not hold that CPLR 5015(a)(5) is inapplicable where the reversed judgment pertained to
a different proceeding. Moreover, in Dupkanicova, the Appellate Division affirmed a
Supreme Court Decision to vacate its prior decision dismissing plaintiff’s action pursuant
to CPLR 5015(a)(5) after the Workers’ Compensation Board reversed itself (17 AD3d
627). “That decision by the [Workers’ Compensation] Board removed the foundation for
the Supreme Court's order dated June 3, 2002, granting the defendant's unopposed
motion for summary judgment dismissing the complaint on the basis that workers'
compensation benefits were the plaintiff's exclusive remedy” (id. at 628).
Plaintiffs did not perfect their appeal of the November 2016 Order, but that does
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not lead to a different result. “Notably, section 5015 does not distinguish between final
and nonfinal judgments, or those that have or have not exhausted the appeals process”
(Nash, 22 NY3d at 225).
Defendant’s argument that Plaintiffs’ motion is premature also lacks merit.
Plaintiffs and Defendant each submitted to the Surrogate’s Court a proposed amended
decree following the Appellate Division’s reversal of the Surrogate’s Court’s Decision, but
those proposed decrees do not differ in the reversal of the key holding of the initial decree
– Plaintiffs did not violate the in terrorem clause of the Will. Therefore, no matter which
of the proposed amended decrees or another decree in accordance with the Appellate
Division Decision is entered, the amended decree will include reversal of the key holding
in the Surrogate’s Court’s Decision that formed the basis for the November 2016 Order.
With respect to Plaintiff’s restitution claim, CPLR 5523 provides:
A court reversing or modifying a final judgment or order or
affirming such a reversal or modification may order restitution
of property or rights lost by the judgment or order, except that
where the title of a purchaser in good faith and for value would
be affected, the court may order the value or the purchase
price restored or deposited in court.
“This power of restitution [pursuant to CPLR 5523] is given to the appellate court,
and CPLR 5015(d) provides the court of original instance with the same powers of
restitution” (Nowitz v Fagan, 55 Misc 3d 1218[A], 2017 NY Slip Op 50647[U], *5, [Sup Ct,
Queens County 2017]). “CPLR 5015 (d) empowers a court that has set aside a judgment
or order to restore the parties to the position they were in prior to its rendition, consistent
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with the court's general equitable powers" (Gaisi v Gaisi, 108 AD3d 687, 688 [2d Dept
2013] [internal citation and quotes omitted]). “The determination whether to award
restitution is within the discretion of the trial court” (Dinizio & Cook, Inc. v Duck Cr. Mar.
at Three Mile Harbor, Ltd., 32 AD3d 989, 990 [2d Dept 2006]). Here, in previously
granting Plaintiffs’ request for a restraining order over the Account, the Court observed
that:
“While Defendant was given broad discretion in the
decedent's Will, she still has a life estate with Plaintiffs as
remaindermen and has an obligation not to dissipate such
assets. Additionally, if Defendant does dissipate the assets
Plaintiffs will be irreparably harmed as a result, and in the
balancing of equities, Defendant is not prejudiced. Plaintiff
was provided with $100,000 when the Standstill Agreement
was entered into and can use such for living expenses while
the action is pending and if such funds are depleted, may also
request a partial lift of the restraint for her immediate living
expenses, if such becomes necessary.”
(Decision and Order dated March 31, 2016, NYSCEF Doc. 53). Evidence before the
Court indicates that the value of the Account as of November 1, 2016 was $2,116,073.31
and on November 14, 2016 all funds were withdrawn from the Account. The Court’s
previous observation stillholds true – “ifDefendant does dissipate the assets Plaintiffs
will be irreparably harmed.” Therefore, in order to return the parties to positions they had
prior to the now-vacated November 2016 Order and in accordance with the general
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equitable powers of this Court, Defendant is ordered to place in an escrow account to be
maintained by Defendant’s counsel the amount of $2,116,073.31 reflecting the amount in
the Account until restraints thereon were lifted. Upon establishment of the funded escrow
account, Defendant shall be restrained from withdrawing any funds therefrom during the
pendency of this action without consent from the Court and Defendant may request a
partial lift of the restraint for her immediate living expenses, if such becomes necessary.
Plaintiffs have not established a case for imposing statutory interest and the
equitable relief granted herein is the establishment of an escrow account and not a
judgment award (cf. Gapihan v Hemmings, 2013 NY Slip Op 33844[U], *5 [Sup Ct, Kings
County 2013]).
All other arguments raised on this order to show cause and evidence submitted by
the parties in connection thereto have been considered by this Court, notwithstanding the
specific absence of reference thereto.
Accordingly, based on the foregoing, it is
ORDERED that Plaintiffs’ order to show cause is granted in part and denied in part;
and it is further
ORDERED that this Court’s November 16, 2016 Decision and Order is vacated
and the instant action is hereby reinstated; and it is further
ORDERED that Defendant shall deposit $2,116,073.31 into an escrow account to
be maintained by Defendant’s counsel and Defendant shall be restrained from
withdrawing any funds therefrom during the pendency of this action without consent from
the Court.
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The foregoing constitutes the Decision and Order of this Court.
Dated: April 24, 2020
________________________________
HON. SAM D. WALKER, J.S.C.
To: All counsel via NYSCEF
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Preview
FILED: WESTCHESTER COUNTY CLERK 04/29/2020 09:55 PM INDEX NO. 65411/2015 NYSCEF DOC. NO. 213 RECEIVED NYSCEF: 04/28/2020 To commence the statutory time period for appeals as of right [CPLR 5513(a)], you are advised to serve a copy of this order, with notice of entry upon all parties. SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF WESTCHESTER PRESENT: HON. SAM D. WALKER, J.S.C. -------------------------------------------------------------------------x LYNN AMMIRATO and LISA BIRCH, Plaintiff, DECISION & ORDER Index No. 65411/2015 -against- Sequence No. 8 ANNA MARIE T. SOCHUREK, Defendant. -------------------------------------------------------------------------x The following papers were read on Plaintiff’s motion: PAPERS NUMBERED Order to Show Cause/Affirmation/Affidavit/Exhibits A-B 1-5 Memorandum of Law in Support 6 Affirmation/Exhibits 1-13 7-20 Memorandum of Law in Opposition 21 Reply Affirmation/Exhibits C 22-23 Memorandum of Law in Reply 24 FACTUAL AND PROCEDURAL BACKGROUND Robert W. Sochurek (the "decedent") died on February 14, 2014 leaving a Last Will and Testament. The Will was admitted to probate and on June 17, 2014, the Surrogate's Court, Dutchess County, granted the decedent's spouse Anna Marie T. Sochurek ("Sochurek") Letters Testamentary. The decedent's Last Will and Testament, bequeath all of the decedent’s assets, including an estate for life in Brady Avenue Associates, LLC (the “LLC”), to Sochurek, and for her to have all duties and responsibilities for the operation of the LLC as if she was the owner and member thereof, 1 1 of 13 FILED: WESTCHESTER COUNTY CLERK 04/29/2020 09:55 PM INDEX NO. 65411/2015 NYSCEF DOC. NO. 213 RECEIVED NYSCEF: 04/28/2020 including the right to receive income therefrom on a regular basis and upon her death, her life interest to terminate and the decedent's interest in the LLC, to be bequeath, in equal shares, unto his daughters, Lisa Birch ("Birch") and Lynn Ammirato ("Ammirato"), Plaintiffs in this action. At the time of his death Robert W. Sochurek owned a fiftypercent membership interest in the LLC, which operated as a self-storage warehouse facility. The LLC also owned property known as 130 and 153 Brady Avenue, Hawthorne, New York (the "LLC Property"). The LLC also maintained at least one bank account, which Plaintiffs allege contained close to $200,000.00 shortly after the decedent's death. On January 8, 2015, subsequent to the probate of the Will, Sochurek, with the other fifty percent owner of the LLC, Roberta Damato, arranged for and approved of the sale of the LLC business, property and associated leases. In an effort to preserve their rights, Plaintiffs, Ammirato and Birch entered into a Standstill Agreement with Sochurek dated April 17, 2015, whereby the funds received by Sochurek from the Purchase and Sale Agreement, would be held in a segregated account in Sochurek's name, The Anna Sochurek Life Estate Account (the "Account"), from which no withdrawals would be made by Sochurek for a period of sixty days, except upon notice with respect to any necessary business expenditures, affording the plaintiffs an opportunity to appraise the LLC assets and negotiate an accurate and reasonable treatment of the proceeds. As part of the Standstill Agreement, Sochurek was also permitted to withdraw $100,000.00 from the Account. Upon information and belief, the closing of the sale took place and the LLC Property was sold and the Account opened with the Sochurek's share of the proceeds, less the $100,000 taken by her. As per the plaintiffs, there was a balance of 2 2 of 13 FILED: WESTCHESTER COUNTY CLERK 04/29/2020 09:55 PM INDEX NO. 65411/2015 NYSCEF DOC. NO. 213 RECEIVED NYSCEF: 04/28/2020 approximately $2,211,600.00 in the Account. Defendant states that the actual balance in the Account (as of August 31, 2015) was $2,115,824.52. Plaintiffs allege that despite the Standstill Agreement providing for them to have an opportunity to appraise the LLC assets, Sochurek has been unwilling to provide basic information. Plaintiffs allege that as the executrix of the Will and the person with a life estate interest in property, Sochurek owed a fiduciary duty and obligation to the plaintiffs, as remaindermen, to pass such property on to them. McKinney's N.Y. Surr. Ct. Proc. Act Law § 2201. Plaintiffs allege that the Sochurek materially breached her fiduciary obligations, in contravention of the decedent's express wishes in the Will, and invaded the trust principal for her own benefit, looted the LLC's assets and apparently has left the LLC as a worthless shell for the plaintiffs as remaindermen. Plaintiffs allege that Defendant believes that she is entitled to withdraw $476,452.00 to pay capital gains taxes on the sale of the LLC Property. Plaintiffs also allege that the bank account with $200,000.00 in March 2014, which Plaintiffs only learned existed, in August 2015, has been reduced to approximately $12,000.00 in July 2015. Plaintiffs assert that the bulk of the reduction took place after the sale of the LLC Property, when the LLC was no longer conducting business, and therefore, it is apparent that Defendant pocketed the LLC's assets in violation of her fiduciary duties. On September 21, 2015, Plaintiffs commenced an action by filing a summons and complaint alleging six causes of action and an order to show cause seeking a restraining order and an accounting. The Court heard oral arguments on the matter and signed the order to show cause temporarily enjoining and restraining the withdrawal of the funds being held in the Account or withdrawing any funds from the LLC Accounts maintained 3 3 of 13 FILED: WESTCHESTER COUNTY CLERK 04/29/2020 09:55 PM INDEX NO. 65411/2015 NYSCEF DOC. NO. 213 RECEIVED NYSCEF: 04/28/2020 on behalf of the LLC, or otherwise taking, removing, selling or in any way encumbering, disposing of or damaging any of the assets of the LLC. Defendant filed a cross-motion seeking to vacate the temporary restraining order, pursuant to CPLR 6314; to remove the action to Dutchess County Surrogate's Court, pursuant to CPLR 325(e); and for sanctions against Plaintiffs, pursuant to 22 NYCRR § 130-1.1. Defendant also instituted a construction proceeding in Dutchess County Surrogate's Court to determine whether the actions taken by Plaintiffs to obtain temporary restraining order and preliminary injunction, triggered an in terrorem clause in the Will, resulting in the forfeiture of their inheritance and their standing to demand an accounting. The Surrogate's Court adjourned that matter to await, a determination of this Court's Decision on the order to show cause and Defendant’s cross-motion. This Court issued a Decision and Order dated March 31, 2016, granting the restraining order and denying the Defendant's cross-motion to vacate the restraining order, to transfer the matter to Surrogate's Court, and for sanctions. Subsequently, Defendant filed a motion seeking an Order directing a partial liftof the restraint on the Account to allow her to pay for her living and other expenses. Plaintiffs filed a cross- motion seeking to compel discovery and in opposition to Defendant's motion. The parties then signed a Stipulation agreeing to Plaintiffs' withdrawal of so much of the cross-motion which sought to compel discovery. Upon this Court's declination to determine whether the actions taken by Plaintiffs to obtain temporary restraining order and preliminary injunction, triggered an in terrorem clause in the Will, resulting in the forfeiture of their inheritance and their standing to demand an accounting, the Dutchess County Surrogate's Court issued a Decision in that 4 4 of 13 FILED: WESTCHESTER COUNTY CLERK 04/29/2020 09:55 PM INDEX NO. 65411/2015 NYSCEF DOC. NO. 213 RECEIVED NYSCEF: 04/28/2020 construction proceeding, finding that Plaintiffs (the respondents in that proceeding) violated Article Eighth of the decedent's Will by commencing an action in the Supreme Court, to challenge Sochurek's action with regard to the disposition of the estate assets, thereby interfering with the provision of the Will. The Surrogate’s Court found that by interfering with Sochurek's management and ultimate sale of the LLC, Plaintiffs violated the in terrorem clause of the Will and forfeited their legacies. Defendant then filed an order to show cause before this Court seeking, among other things, summary judgment and dismissal of the action against her. This Court issued a Decision and Order dated November 10, 2016 (the “November 2016 Order”), granting Defendant’s order to show cause seeking summary judgment and dismissal of the action and denying as moot Defendant’s motion seeking an Order directing a partial liftof the restraint on the Account and Plaintiffs’ cross-motion, and vacating any temporary restraint previously placed on the Account. In finding for Defendant, this Court reasoned that the Standstill Agreement was entered into to preserve Plaintiffs’ rights as remainderman, pursuant to the Will. However, since the Surrogate’s Court had found that Plaintiffs were divested of such rights under the Will and therefor have no claim to the remainderman interest in the LLC, enforcement of the Standstill Agreement became moot. Adding, that if the Appellate Division should reverse the Surrogate’s Court’s Decision, then Plaintiffs may seek to reinstate the action. On July 31, 2019, the Appellate Division, Second Department issued a Decision and Order (Appellate Division Decision) reversing the Surrogate’s Court’s Decision holding that Plaintiffs (the appellants in that proceeding) did not lodge any contest to the validity of the Will or otherwise interfere with its provisions granting Defendant discretion 5 5 of 13 FILED: WESTCHESTER COUNTY CLERK 04/29/2020 09:55 PM INDEX NO. 65411/2015 NYSCEF DOC. NO. 213 RECEIVED NYSCEF: 04/28/2020 to dispose of estate assets in her capacity of executrix and that the claim that Defendant violated the Standstill Agreement did not implicate any challenge to the Will. Plaintiffs now seek an order to show cause seeking (a) pursuant to CPLR 5015(a)(5), to vacate the November 2016 Order on the grounds that (i) the Appellate Division reversed the Surrogate’s Court’s Decision, and (ii)in furtherance of justice; (b) pursuant to CPLR 5015(d), restitution to restore the parties to the position they were in prior to the November 2016 Order, plus statutory interest from November 14, 2016, representing the amount that was in the Account restrained by this Court until the November 2016 Order lifted such restraint and Defendant removed such funds; and (c) such other and further relief as this Court deems just and proper. Plaintiffs argue that CPLR 5015(a)(5) confers upon this Court broad equitable powers to restore this matter and is on point because there has a been a reversal of a prior Order, i.e., the Surrogate’s Court’s Decision, which expressly formed the basis for the November 2016 Order. In addition, Plaintiffs allege that on November 14, 2016, days after issuance of the November 2016 Order, Defendant withdrew all of the money from the Account (approximately $2,211,600.00) and Defendant has since moved to the State of Florida. Plaintiffs argue that given this Court’s prior grant of a preliminary injunction conferring a restraint on Defendant’s ability to withdraw funds from the Account, which prevented Plaintiffs from being “irreparably harmed,” this Court should restore the parties to their circumstances prior to the November 2016 Order, pursuant to CPLR 5523, by ordering Defendant to return money she withdrew from the Account on November 14, 2016. In opposition, Defendant argues that CPLR 5015(a)(5) is inapplicable here 6 6 of 13 FILED: WESTCHESTER COUNTY CLERK 04/29/2020 09:55 PM INDEX NO. 65411/2015 NYSCEF DOC. NO. 213 RECEIVED NYSCEF: 04/28/2020 because the Appellate Division reversed a Decision in a different proceeding in a different forum, and that Plaintiffs have not set forth any basis for this Court to use its discretion to reinstate a dismissed action, as opposed to, for example, Plaintiffs refiling the action. Defendant also argues that Plaintiffs chose not to perfect its appeal of the November 2016 Order and Plaintiffs have not made a substantial showing in support of a motion to disturb a final, unappealed Order of this Court. With respect to restitution, Defendant argues that CPLR 5015 and 5523 apply to compensation for money paid by a party as a result of a subsequently modified or reversed Order. Defendant also argues that Plaintiffs have not identified any loss for which they could be awarded restitution and the amount sought to be deposited with the Court represents the net proceeds of the sale of both property in which Plaintiffs have a remainder interest (the LLC Property) and property in which Plaintiffs do not have an interest (property owned by Defendant and Roberta Damato). Defendant further argues that no restitution should be ordered unless and until expenditures by Defendant since November 2016 are properly charged to Plaintiffs’ remainder interest, that there is no legal basis for requiring the deposit of statutory interest, that restitution is a harsh remedy for an unproven wrong, and that restitution would destroy the main element of their father’s estate plan for his widow. Finally, Defendant argues that Plaintiffs’ motion is premature because the Surrogate’s Court has not entered an amended decree in response to the Appellate Division Decision and both Plaintiffs and Defendant have submitted contrary, proposed amended decrees highlighting substantial issues of interpretation of the Will. In reply, Plaintiffs argue that the Court’s equitable powers to vacate its own Order or judgment are broader than those provided in CPLR 5015 and that Defendant 7 7 of 13 FILED: WESTCHESTER COUNTY CLERK 04/29/2020 09:55 PM INDEX NO. 65411/2015 NYSCEF DOC. NO. 213 RECEIVED NYSCEF: 04/28/2020 misconstrues cited case law on CPLR 5015 and erroneously asserts that this Court’s discretion is limited with respect to review of its own Orders, when Defendant’s cited case law supports the opposite: nothing can compel this Court not to exercise its discretion in such reviews. Plaintiffs also argue that there is no time limit to move under CPLR 5015, and CPLR 5015 does not distinguish between final and not final judgments, regardless of whether or not they have been appealed. Plaintiffs further argue that regardless of which version of the amended decree is entered in the Surrogate’s Court, each of the proposed amended decrees provide that Plaintiffs have not been disinherited, as ordered by the Appellate Division, and therefore the essential holding that drove the November 2016 Decision has been reversed and vacated. DISCUSSION As relevant here, CPLR 5015(a)(5) provides: The court which rendered a judgment or order may relieve a party from it upon such terms as may be just, on motion of any interested person with such notice as the court may direct, upon the ground of: ... reversal, modification or vacatur of a prior judgment or order upon which it is based. “The grounds enumerated in CPLR 5015 (subd [a]) were not intended to limit the traditional power of a court to grant relief from an order or judgment in the interests of justice and the exercise of its discretion” (Government Employees Ins. Co. v Employers Commercial Union Ins. Co., 62 AD2d 123, 127 [2d Dept 1978]; see also Nash v Port Auth. 8 8 of 13 FILED: WESTCHESTER COUNTY CLERK 04/29/2020 09:55 PM INDEX NO. 65411/2015 NYSCEF DOC. NO. 213 RECEIVED NYSCEF: 04/28/2020 of NY & NJ, 22 NY3d 220, 226 [2013] [remitting to the Supreme Court for further proceedings because the Supreme Court erroneously perceived ithad no discretion in granting a motion to vacate pursuant to CPLR 5015(a)]). Here, the Appellate Division Decision reversed the key holding of the Surrogate’s Court’s Decision that formed the basis for the November 2016 Order, which dismissed this action and removed prior restraints placed on the Account by this Court after considering an earlier motion by Plaintiffs. As such and based on the record before the Court, Plaintiffs’ order to show cause seeking to vacate the November 2016 Order, pursuant to CPLR 5015(a)(5) is warranted, within the discretion of the Court, and in furtherance of justice (see Dupkanicova v. James, 17 AD3d 627, 628 [2d Dept 2005]). Defendant’s argument that CPLR 5015(a)(5) is inapplicable because the Appellate Division reversed a Decision in a different proceeding in a different forum is without merit. Although the Court of Appeals in Nash held that CPLR 5015(a)(5) is applicable where the reversed judgment is entered in the same lawsuit (22 NY3d at 225), the Nash Court did not hold that CPLR 5015(a)(5) is inapplicable where the reversed judgment pertained to a different proceeding. Moreover, in Dupkanicova, the Appellate Division affirmed a Supreme Court Decision to vacate its prior decision dismissing plaintiff’s action pursuant to CPLR 5015(a)(5) after the Workers’ Compensation Board reversed itself (17 AD3d 627). “That decision by the [Workers’ Compensation] Board removed the foundation for the Supreme Court's order dated June 3, 2002, granting the defendant's unopposed motion for summary judgment dismissing the complaint on the basis that workers' compensation benefits were the plaintiff's exclusive remedy” (id. at 628). Plaintiffs did not perfect their appeal of the November 2016 Order, but that does 9 9 of 13 FILED: WESTCHESTER COUNTY CLERK 04/29/2020 09:55 PM INDEX NO. 65411/2015 NYSCEF DOC. NO. 213 RECEIVED NYSCEF: 04/28/2020 not lead to a different result. “Notably, section 5015 does not distinguish between final and nonfinal judgments, or those that have or have not exhausted the appeals process” (Nash, 22 NY3d at 225). Defendant’s argument that Plaintiffs’ motion is premature also lacks merit. Plaintiffs and Defendant each submitted to the Surrogate’s Court a proposed amended decree following the Appellate Division’s reversal of the Surrogate’s Court’s Decision, but those proposed decrees do not differ in the reversal of the key holding of the initial decree – Plaintiffs did not violate the in terrorem clause of the Will. Therefore, no matter which of the proposed amended decrees or another decree in accordance with the Appellate Division Decision is entered, the amended decree will include reversal of the key holding in the Surrogate’s Court’s Decision that formed the basis for the November 2016 Order. With respect to Plaintiff’s restitution claim, CPLR 5523 provides: A court reversing or modifying a final judgment or order or affirming such a reversal or modification may order restitution of property or rights lost by the judgment or order, except that where the title of a purchaser in good faith and for value would be affected, the court may order the value or the purchase price restored or deposited in court. “This power of restitution [pursuant to CPLR 5523] is given to the appellate court, and CPLR 5015(d) provides the court of original instance with the same powers of restitution” (Nowitz v Fagan, 55 Misc 3d 1218[A], 2017 NY Slip Op 50647[U], *5, [Sup Ct, Queens County 2017]). “CPLR 5015 (d) empowers a court that has set aside a judgment or order to restore the parties to the position they were in prior to its rendition, consistent 10 10 of 13 FILED: WESTCHESTER COUNTY CLERK 04/29/2020 09:55 PM INDEX NO. 65411/2015 NYSCEF DOC. NO. 213 RECEIVED NYSCEF: 04/28/2020 with the court's general equitable powers" (Gaisi v Gaisi, 108 AD3d 687, 688 [2d Dept 2013] [internal citation and quotes omitted]). “The determination whether to award restitution is within the discretion of the trial court” (Dinizio & Cook, Inc. v Duck Cr. Mar. at Three Mile Harbor, Ltd., 32 AD3d 989, 990 [2d Dept 2006]). Here, in previously granting Plaintiffs’ request for a restraining order over the Account, the Court observed that: “While Defendant was given broad discretion in the decedent's Will, she still has a life estate with Plaintiffs as remaindermen and has an obligation not to dissipate such assets. Additionally, if Defendant does dissipate the assets Plaintiffs will be irreparably harmed as a result, and in the balancing of equities, Defendant is not prejudiced. Plaintiff was provided with $100,000 when the Standstill Agreement was entered into and can use such for living expenses while the action is pending and if such funds are depleted, may also request a partial lift of the restraint for her immediate living expenses, if such becomes necessary.” (Decision and Order dated March 31, 2016, NYSCEF Doc. 53). Evidence before the Court indicates that the value of the Account as of November 1, 2016 was $2,116,073.31 and on November 14, 2016 all funds were withdrawn from the Account. The Court’s previous observation stillholds true – “ifDefendant does dissipate the assets Plaintiffs will be irreparably harmed.” Therefore, in order to return the parties to positions they had prior to the now-vacated November 2016 Order and in accordance with the general 11 11 of 13 FILED: WESTCHESTER COUNTY CLERK 04/29/2020 09:55 PM INDEX NO. 65411/2015 NYSCEF DOC. NO. 213 RECEIVED NYSCEF: 04/28/2020 equitable powers of this Court, Defendant is ordered to place in an escrow account to be maintained by Defendant’s counsel the amount of $2,116,073.31 reflecting the amount in the Account until restraints thereon were lifted. Upon establishment of the funded escrow account, Defendant shall be restrained from withdrawing any funds therefrom during the pendency of this action without consent from the Court and Defendant may request a partial lift of the restraint for her immediate living expenses, if such becomes necessary. Plaintiffs have not established a case for imposing statutory interest and the equitable relief granted herein is the establishment of an escrow account and not a judgment award (cf. Gapihan v Hemmings, 2013 NY Slip Op 33844[U], *5 [Sup Ct, Kings County 2013]). All other arguments raised on this order to show cause and evidence submitted by the parties in connection thereto have been considered by this Court, notwithstanding the specific absence of reference thereto. Accordingly, based on the foregoing, it is ORDERED that Plaintiffs’ order to show cause is granted in part and denied in part; and it is further ORDERED that this Court’s November 16, 2016 Decision and Order is vacated and the instant action is hereby reinstated; and it is further ORDERED that Defendant shall deposit $2,116,073.31 into an escrow account to be maintained by Defendant’s counsel and Defendant shall be restrained from withdrawing any funds therefrom during the pendency of this action without consent from the Court. 12 12 of 13 FILED: WESTCHESTER COUNTY CLERK 04/29/2020 09:55 PM INDEX NO. 65411/2015 NYSCEF DOC. NO. 213 RECEIVED NYSCEF: 04/28/2020 The foregoing constitutes the Decision and Order of this Court. Dated: April 24, 2020 ________________________________ HON. SAM D. WALKER, J.S.C. To: All counsel via NYSCEF 13 13 of 13