NY EPTL 5-4.6 and Compromise Orders

NY EPTL 5-4.6 and Compromise Orders

Settlement of a wrongful death action can pose a challenge for the decedent's attorney. Wrongful death actions are usually a two-step process. First, the trial court handles the wrongful death action itself, and then the Surrogate's Court, which administers the decedent's estate, must deal with the allocation of the settlement among the decedent's beneficiaries and distributees, as well as the approval of any legal fees. In a recent case Matter of Stokes, 2012 N.Y. Slip Op. 22144 (Sur. Ct. Queens County) [enhanced version available to lexis.com subscribers] the court was particularly harsh to an attorney who submitted a facially and procedurally deficient compromise order which failed to comply with NY EPTL 5-4.6.

The authority of a fiduciary to settle a wrongful death case requires approval by the Surrogate's Court. As often happens in a wrongful death action, the fiduciary of the decedent's estate applies for limited letters under SCPA 702(1) seeking the authority to commence or defend a personal injury or wrongful death action. SCPA 702(1) explicitly states that a fiduciary which receives limited letters under that section is restrained from settling the action or enforcing a judgment recovered until further order of the court.

EPTL 5-4.6 addresses the application to the Surrogate's Court to approve a compromise order. The Surrogate's Court can either approve or disapprove the application, including the approval of attorney's fees and other payable expenses (although approval by a trial court is conclusive evidence of the adequacy of any compromise under EPTL 5-4.6(d)).

The Surrogate's Court is also in the best position to determine the allocation of any settlement. Proceeds of the settlement related to wrongful death are not included in the decedent's gross estate but proceeds related to personal injury or pain and suffering are includable in the decedent's gross estate. Distributees are entitled to wrongful death proceeds in proportion to their pecuniary losses, but the beneficiaries of an estate are entitled to the personal injury proceeds. The Surrogate's Court has a particular understanding of these issues and has the ability to gain jurisdiction over all interested parties including creditors and the taxing authority.

Most importantly, as provided in EPTL 5-4.6(b), the Surrogate's Court may need to appoint a guardian ad litem to represent the interests of any minor children or those under a disability. In Stokes, a guardian ad litem was not appointed prior to entry of the underlying Supreme Court order, and was not even considered as a necessity by the decedent's attorney. In its admonishing decision, the Queens County Surrogate's Court ordered the attorney for the fiduciary in the wrongful death action to return all counsel fees previously paid to the escrow account. The court then directed petitioner to amend her petition and accounting to include all necessary parties and a request for payment of the legal fees previously approved.

When dealing with compromise orders, an attorney should be mindful of EPTL 5-4.6, as well as the limits of any powers granted to a fiduciary under SCPA 702(1) in commencing a wrongful death action. The process may seem tedious, but it must be followed to assure that the rights of all of those involved are adequately protected.


Jennifer F. Hillman is an attorney at Ruskin, Moscou Faltischek, P.C., Uniondale, New York where her practice focuses in the area of trust and estate litigation. She can be reached at jhillman@rmfpc.com


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  • 07-19-2013

Is a compromise order required for settling a personal injury claim that was already in process when the plaintiff passed away?