Matter of Koegel

Citation: 2018 NY Slip Op 833Docket: 2015-06583

Court: Appellate Division of the Supreme Court of the State of New York; February 6, 2018; New York; State Appellate Court

Original Court Document: View Document

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

Irene Lawrence Koegel appealed a decision in a probate proceeding where John B. Koegel sought to invalidate her notice of spousal election regarding the estate of the deceased, William F. Koegel. The Surrogate's Court had previously denied Irene's motion to dismiss the petition.

The court addressed the issue of whether a defective acknowledgment of a prenuptial agreement could be remedied by extrinsic proof from the notary public who witnessed the signatures. It concluded that such proof is permissible. Irene and the decedent were married for over 29 years, and prior to their marriage in 1984, they executed a prenuptial agreement that stipulated their marriage would not alter their pre-existing legal rights to their respective properties. The agreement also included mutual waivers of claims to each other's estates, including any elective or statutory shares. 

The appellate court affirmed the Surrogate's Court order, allowing the petition to proceed and denying Irene's dismissal motion.

The decedent and Irene confirmed that their agreement was not influenced by any promises regarding property settlements and acknowledged their understanding of each other's estates' value. Both signed the agreement, which included notary acknowledgments from their respective attorneys, William E. Donovan and Curtis H. Jacobsen, on July 26, 1984, and July 30, 1984, respectively. The acknowledgments did not confirm the notaries' familiarity with the signers.

In his last will and testament dated December 18, 2008, the decedent stated he was married to Irene with no children from their marriage, having two sons from a prior marriage. He referred to the antenuptial agreement from July 26, 1984, indicating that his bequests to Irene were made in recognition of it, emphasizing that the will would take precedence over any conflicting terms in the antenuptial agreement while leaving the latter otherwise intact. 

The decedent bequeathed Irene all his automobiles, interests in two condominiums (one in Vero Beach, Florida, and the other in Somers, New York), and required her to pay all carrying costs for the Somers property, which she could occupy rent-free until her remarriage or death. Upon termination of her interest, the property would be sold, with proceeds going to his surviving descendants. Additional bequests were made to others, including the Hitchcock Presbyterian Church, and the remainder of the estate was to be divided among his surviving issue. John B. Koegel, the decedent's son, was appointed executor. The will was witnessed by three individuals who confirmed the decedent’s sound mind and intention regarding the document, as affirmed in a separate affidavit sworn on the same date.

John petitioned the Surrogate's Court to probate the decedent's will, which was granted, and he received letters testamentary on March 21, 2014. Subsequently, on August 21, 2014, Irene, the decedent's surviving spouse, filed a notarized notice of election exercising her right to an elective share under Estates, Powers and Trusts Law §5-1.1-A. In December 2014, John sought to invalidate Irene's election notice, arguing that she waived her right to an elective share through a prenuptial agreement, which she signed with legal representation and full knowledge of the decedent's assets. John claimed that Irene accepted benefits from the prenuptial agreement during their marriage without contesting its validity, thus invoking the doctrine of laches against her. He detailed the significant benefits Irene received from the will, including valuable properties and accounts.

In her response, Irene acknowledged signing the prenuptial agreement but contested the acknowledgment of signatures, claiming it did not meet statutory requirements. She recognized her prior legal counsel but argued that the agreement was defective, invalid, and unenforceable based on the lack of required acknowledgment language, citing Galetta v. Galetta as precedent. Irene subsequently moved to dismiss John's petition, asserting the acknowledgment issue as the basis for her motion.

John opposed Irene’s motion by asserting that the acknowledgments from 1984 were proper and met the requirements of EPTL 5-1.1, also substantially complying with current standards by using the phrase "personally appeared," which indicated the signer was known to the notary. He emphasized that notaries Jacobsen and Donovan provided affidavits affirming their familiarity with Irene and the decedent at the time of the agreement's execution. John highlighted that Irene acknowledged her signature and her previous association with Jacobsen, who represented her in matters related to her first husband’s estate. He argued that any alleged technical defects in the acknowledgments were rectified by the notaries' affidavits.

In further support, John submitted Donovan's affidavit noting he recognized the decedent without needing identification, and Jacobsen's affidavit similarly stated he knew Irene well enough to forgo identification. The Surrogate’s Court denied Irene’s motion on June 23, 2015, determining she had not met her burden to show that John’s claims did not fit any recognized legal theory, leaving open whether a defective acknowledgment could be cured as per the precedent set in Galetta v. Galetta.

On appeal, Irene contended that the Court of Appeals in Galetta emphasized the necessity of acknowledgment language indicating a notary's knowledge of the signer, which was absent in the prenuptial agreement’s acknowledgments. She argued that this absence rendered the agreement defective, irrespective of fraud or duress. Citing Matisoff v. Dobi, she maintained that proper acknowledgment is crucial and that legislative intent did not allow exceptions. Irene underscored the necessity for uniformity in enforcing prenuptial agreements and posited that allowing cures for defective acknowledgments would undermine statutory requirements. She referenced cases where other courts similarly held that defective acknowledgments could not be remedied post-factum.

John argues that the cases of Matisoff and Galetta are not applicable to the current estate proceeding, as those involved living parties in matrimonial actions, while the present case involves a prenuptial agreement after one party's death. He asserts that the technical defects in acknowledgments can be cured and distinguishes Matisoff, where no acknowledgment existed, from this case, which has documented acknowledgments by both parties represented by counsel. John emphasizes that Galetta does not create an absolute rule against curing defective acknowledgments, noting that the notary in Galetta failed to properly identify the parties involved, unlike the notaries in this case who personally knew the parties. He argues that Irene has not proven her claims and contends public policy supports the validity of marital agreements. 

In response, Irene references the Domestic Relations Law, asserting that the enactment established stricter requirements for nuptial agreements, and argues against relaxing these standards. She believes that the distinction between the cases is irrelevant, focusing instead on whether a strict or flexible interpretation of the law applies.

The legal analysis portion references CPLR 3211(a), stating that pleadings should be liberally construed in favor of the plaintiff, who is entitled to every possible favorable inference. A motion to dismiss based on documentary evidence may only be granted if such evidence conclusively contradicts the plaintiff's allegations.

To qualify as documentary evidence, the evidence must be unambiguous and of undisputed authenticity. Judicial records and documents reflecting out-of-court transactions, such as mortgages and contracts, qualify as documentary evidence if their contents are essentially undeniable. In opposition to a motion under CPLR 3211(a), a plaintiff can submit affidavits to preserve potentially meritorious claims, even if poorly pleaded.

Under Domestic Relations Law § 236(B)(3), agreements made before or during marriage are valid in matrimonial actions if they are written, signed by the parties, and properly acknowledged. Proper acknowledgment requires an oral declaration before an authorized officer and a written certificate of acknowledgment from that officer. An instrument is not duly acknowledged without both elements, although substantial compliance with the statute is sufficient. The acknowledgment serves to verify the identity of the signer and ensure deliberation in the execution of the document. Absence of acknowledgment fails to meet this requirement.

John's argument correctly identifies that the case of Matisoff does not support Irene's position regarding the acknowledgment defect in her prenuptial agreement. Unlike Matisoff, where there was no acknowledgment at all, the current case involves certificates of acknowledgment that, although defective, do exist for Irene and the decedent's signatures. Irene's reliance on the D'Elia case is similarly misplaced since it dealt with a complete absence of acknowledgment, not a defective one. The court distinguishes this situation from other cases cited by Irene, noting that in those instances, there were no acknowledgments attached at the time of the agreements. The court references Galetta, which suggests that a defective acknowledgment may potentially be cured, highlighting that the authentic signatures and absence of claims of fraud or duress in both cases are crucial similarities. Thus, the Surrogate's Court appropriately recognized that the issue of curing a defective acknowledgment remains open per Galetta.

The certificate of acknowledgment for the wife's signature met the necessary legal requirements; however, the acknowledgment for the husband's signature was deficient as it did not confirm the notary's verification of the husband's identity. Following their respective divorce filings, the wife sought summary judgment to declare the prenuptial agreement unenforceable, arguing the husband's acknowledgment did not comply with Real Property Law. The husband countered, asserting substantial compliance and providing an affidavit from the notary, who claimed he typically confirmed the signer's identity before acknowledgment. The Supreme Court denied the wife’s motion, concluding that the acknowledgment substantially met statutory requirements. The Fourth Department affirmed this decision, stating the deficiency could be remedied post-factum, with the notary's affidavit creating a triable issue of fact.

The Court of Appeals later addressed whether the acknowledgment was defective, determining that it lacked the necessary language indicating the notary knew or verified the husband's identity. The Court noted that proper acknowledgments in 1997 typically included specific language confirming the notary's knowledge of the signer. It agreed with the Fourth Department's finding of a statutory deficiency in the husband’s acknowledgment. The Court then considered whether this deficiency could be cured by the notary's affidavit but concluded that the evidence provided by the husband was insufficient to resolve the issue, ultimately not deciding on the possibility of a cure.

The Court of Appeals evaluated a notary's affidavit presented by the husband against the wife's motion for summary judgment. The notary could only confirm his signature but lacked independent memory of notarizing the document, rendering his statements too vague to substantiate the husband's reliance on customary practices. The Court emphasized the necessity for the affidavit to detail a specific, consistent protocol used by the notary, which was absent in this case. In contrast, a previous case highlighted by the Court illustrated that when notaries recall acknowledging signatures, their affidavits can suffice to confirm a signer's identity without needing detailed explanations.

Although Irene submitted the prenuptial agreement with flawed acknowledgments to argue its invalidity, the Surrogate's Court appropriately rejected her motion to dismiss based on this documentary evidence. John's counter-submissions included affidavits asserting that witnesses observed the signing and acknowledged the signer personally, thereby curing the acknowledgment defects and supporting the prenuptial agreement's validity. Consequently, the Surrogate's Court's denial of Irene's motion under CPLR 3211(a)(1) and Domestic Relations Law 236(B)(3) was upheld, affirming the order with costs.

Irene's second affirmative defense asserts the prenuptial agreement is invalid and unenforceable due to a lack of financial disclosure regarding the decedent's net worth and the circumstances of its execution under duress shortly before the wedding. She argues that her attorney failed to adequately inform her about her right to spousal election, which she waived under the agreement, and highlights a conflict of interest since the decedent's law firm drafted the agreement. Irene claims the agreement is inequitable as the decedent's estate is valued over $5 million, yet she received minimal assets: a used car worth $10,000, a life estate in a condominium with no proceeds from its sale, and half-ownership in another condominium encumbered by an $86,000 mortgage. Furthermore, she notes that the beneficiary accounts yield only $3,700 monthly, while her total condominium expenses are $6,400.

In response, John argues that it would be unjust for Irene to challenge a 30-year-old agreement from which she has benefited, emphasizing that the decedent fulfilled his obligations and relied on the agreement's validity in his will. The relevant law, EPTL 5-1.1-A(e), states that waivers must be written and acknowledged according to state law. A dissenting opinion suggested that summary judgment should favor Irene due to a fatal defect in the acknowledgment of the agreement, which was not addressed in the lower court, concluding that such a defect could not be remedied. The Court noted the notary's failure to specify the identity verification process, indicating that various methods exist to confirm a signer’s identity, which were not employed.