Doris Rubin, decedent, died testate on August 29, 2007. Plaintiffs Robert Rubin ^[FN1] and Richard Rubin, her two surviving sons and executors of her will, brought an action in New York County Supreme Court against Polly Rubin, the widow of decedent's predeceased son Stephen Rubin, for a judgment declaring a certain oil painting an asset of decedent's estate. Polly opposed the action on the grounds that she is the owner of the painting, and filed counterclaims. By an order dated December 22, 2008 (Tolub, J.) the action was transferred from Supreme Court to this court. Polly has moved for partial summary judgment on the issue of the ownership of the painting. She argues that because Robert and Richard, as executors of Stephen's will, previously signed a tax return which included the painting as an asset of Stephen's estate, they are now estopped from asserting that the decedent was the owner.^[FN2]

The Rubin family members are avid collectors of art. As the family transferred and displayed art somewhat casually among the family members, it is alleged that ownership of particular pieces was sometimes based on informal swaps rather than formal transactions.

When decedent died, among the artwork displayed in her home were two paintings by the 19th century American impressionist, Theodore Robinson, both depicting a girl sitting in a hammock. The two paintings differ significantly in value, however. One Robinson painting is a larger, signed painting currently valued at approximately $1.2 million. The other painting is smaller in dimension, unsigned, and of considerably lesser value. As neither painting is named, both have [*2]similar subject matter, and each has been referred to by a variety of different titles,^[FN3] consistent with the prior Supreme Court decision in this case this court will adopt the plaintiffs' sobriquets, "large Robinson painting" and "small Robinson painting."

Polly asserts that the large Robinson painting belonged to Stephen, and upon his death ownership transferred to her under a bequest in his will, despite the fact that it (and other paintings belonging to Stephen) continued to hang in decedent's apartment. Richard Rubin, the surviving plaintiff (see fn. 1) argues that it is the smaller Robinson painting that was owned by Stephen — and inherited by Polly — and that the larger, more valuable painting was owned by decedent. Critically, Richard and Robert (now, Robert's estate) are the primary beneficiaries of decedent's estate.

Stephen died testate on October 31, 1991, survived by Polly and their daughter. Robert, Richard, and Polly all served as co-executors of his will. Stephen's estate was valued at over $22 million, including approximately 96 pieces of art and collectibles, most of which were left to Polly. The 96 pieces of art and collectibles were described in an inventory that was prepared incident to an appraisal for estate tax purposes.

It is undisputed that only one inventory was created and only one set of appraisals ^[FN4] was conducted of the artwork in Stephen's estate.^[FN5] On October 21, 1992, Grete Meilman of Masterson-Gurr-Johns appraised a painting by Theodore Robinson in connection with that estate inventory. The appraisal was arranged by Polly and allegedly supervised by decedent. It describes the painting as titled "Girl in a Hammock," signed, oil on canvas, with dimensions of 18" x 22" and valued at $850,000. Although the plaintiff makes issue of the fact that the painting is titled in the appraisal as "Girl in a Hammock," whereas he calls it "Correspondence," there is no question given its description that the appraisedpainting was the large Robinson painting.

According to Polly, the inventory and appraisal that specified the large Robinson painting were attached to the federal tax return for Stephen's estate. It is undisputed that Richard, Robert, and Polly, as fiduciaries of Stephen's estate, signed that tax return (Form 706, Rev. October 1991) on January 26, 1993, and that it was filed with the Internal Revenue Service on January 29, 1993. The October 1991 federal Form 706 utilized in Stephen's estate included instructions (on the back of Schedule F) which specifically direct the preparers as follows:

"If the decedent owned at the date of death articles with artistic or intrinsic value (e.g., jewelry, furs, silverware, books, statuary, vases, oriental rugs, coin or stamp collections), check the "Yes" box on line 1 and provide full details. If any one article is valued at more than $3,000, [*3]or any collection of similar articles is valued at more than $10,000, attach an appraisal by an expert under oath and the required statement regarding the appraiser's qualifications (see Regulations section 20.2031-6(b))" ^[FN6][emphasis added].

In listing paintings having artistic value, the regulation provides that the size, subject, and artist's name must be stated.

The box on line 1 of Schedule F was checked on the return that the Rubin brothers and Polly signed, indicating that there were articles of value in excess of $3,000; they were, accordingly, aware that appraisals were required to be submitted. The total value of art and collectibles, according to the inventory and appraisals, was $8,938,550. The total value of works of art, furniture, and jewelry, as indicated on Schedule F of the Form 706, was likewise $8,938,550. Schedule F, as furnished by the Rubin brothers, included a statement that says "See Exhibit 13." Polly received a copy of a tax return from counsel to Richard and Robert, later alleged to be a "working copy," in which Exhibit 13 was identical to the inventory and appraisals described above. There were only three items on the estate inventory that were appraised at a higher value than the large Robinson painting; its inclusion on the inventory could, therefore, hardly be accidental.

Richard later requested an "authentic IRS reproduction" of the Form 706 from the IRS and alleges that although it included summary schedules, neither an inventory nor appraisals were attached.

Motion for Summary Judgment

It is well established that on a motion for summary judgment the movant must make a prima facie showing of entitlement to judgment as a matter of law (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]; Zuckerman v City of New York, 49 NY2d 557, 562 [1980]; see CPLR 3212[b]).

In her motion for summary judgment, Polly argues that Richard is now estopped from claiming that the painting is an asset of Doris's estate because he included it in the federal tax return as an asset of Stephen's estate. In further support of her claim of estoppel, Polly points out that Richard and Robert waited 16 years to claim that the large Robinson did not belong to Stephen, until such time when Doris was unable to verify the ownership of the painting.

Richard argues that not only is estoppel inapplicable here, but that Polly is barred from asserting it because of fraud. Additionally, he claims that there is a triable issue of fact as to whether Polly is counterestopped by virtue of her failure to assert her claim of ownership of the large Robinson painting after acknowledging that Stephen owned the smaller Robinson at the time of his death, and listing only one Robinson painting on the appraisal filed with the tax return in Stephen's estate.

Estoppel and Quasi Estoppel

New York courts recognize the concept of estoppel against adopting in court a position inconsistent with that taken on a tax return, a form of quasi estoppel(Naghavi v New York Life Ins. Co., 260 AD2d 252 [1st Dept 1999]; Zemel v Horowitz, 815 NYS2d 496 [Sup Ct, New [*4]York County 2006]). The Court in Zemel wrote,

"The same policies and principles underlying classic judicial estoppel have been extended to non-judicial circumstances by courts throughout the United States, including New York, where parties have been precluded from asserting inconsistent positions in a variety of situations, including positions taken on tax returns" (id.).

Richard makes several arguments in his attempts to defeat quasi estoppel. First, he argues that there is no evidence that the appraisals were attached to the tax return, and therefore estoppel cannot apply. As discussed above, however, there was only one appraisal conducted of the large Robinson painting; Form 706 required appraisals to be attached; Form 706 references exhibits; and the fiduciaries signed the Form 706 swearing to its completeness. Further, in his arguments in support of his allegation of fraud (see below), Richard admits that the large Robinson was appraised for estate tax purposes. Therefore the argument fails.

Richard next argues that the true parties at interest here were Stephen's estate and decedent's estate and that estoppel can only apply against the taxpayer. Not only does he fail to provide authority to support this proposition, but here it is Richard and Robert themselves who signed the tax returns and it is they (or in the case of Robert, his heirs) who stand to benefit from the changed position. That the Rubin brothers were fiduciaries, both of Stephen's estate and later the decedent's estate, only makes the behavior more serious as it reflects a breach of loyalty, where they would benefit indirectly at the expense of Stephen's estate (see generally Matter of Rothko, 84 Misc 2d 830 [Sur Ct, New York County 1975]).

With regard to the 16 years that the Rubin brothers waited to assert their claim, the Court of Appeals wrote in La Porto v Village of Philmont (39 NY2d 7, 12 [1976]) that estoppel will lie where there is a "a duty to speak, a failure to speak and damage to another party directly due to this silence" (as quoted in Matter of Kaminester, NYLJ, Oct. 23, 2009, at 36, col 1 [Sur Ct, NY County]). As fiduciaries, Robert and Richard had a duty to correct the alleged mistake in the tax return, and thus to remove any expectation the beneficiary may have held. Polly had no reason to actively assert a claim for the large Robinson painting, since while Doris was still alive it was common for Stephen's paintings to hang in Doris's apartment. Instead, their failure to speak lulled her into a sense of security or inaction, during which time she could otherwise have approached decedent to confirm ownership.

Further arguments by Richard on this motion include a claim that the contents of the Form 706 filed in Stephen's estate constitute inadmissible hearsay.^[FN7] This fails as the tax return serves as an admission against interest by a party opponent, an exception to the hearsay rule. Next, he goes into great detail to show that Stephen owned the small Robinson during his lifetime. This fact, however, is hardly dispositive of ownership of the large Robinson, even [*5]assuming Polly's knowledge;^[FN8] see, however, discussion of counterestoppel below.

Thus, absent fraud or counterestoppel (see discussion below), Polly has made a prima facie showing of entitlement to judgment based on equitable estoppel and quasi estoppel.

Fraud

Another defense to equitable estoppel, one that has significantly delayed disposition of

the summary judgment motion,^[FN9] is Polly's alleged fraud, premised on the well-settled rule that, absent fraud, a person who signs a document, here the Form 706, is conclusively presumed to know its contents and to assent to it, even if he fails to read it (Metzger v Aetna Ins. Co., 227 NY 411 [1920]; Johns-Manville Sales Corp. v Stone, 5 AD2d 110 [1st Dept 1957]). To the extent that Richard argues that estoppel should not apply because he and Robert were unaware that the larger Robinson painting was included in the inventory of Stephen's estate, because of Polly's fraud, this is a potentially viable defense. Given the facts of this case and the law of fraud, however, it is unavailing.

In a post-discovery affirmation by his counsel ^[FN10] the plaintiff claims,

"Polly caused an appraisal to be made that identified

one Theodore Rubin painting - entitled Girl in a Hammock'

[referring to the small Robinson painting] — as an asset of Stephen's

estate, but substituted the dimensions of another painting

by the same artist — Correspondence' [referring to the

large Robinson painting] — which clearly did not belong to the

estate."

Assuming that this assertion makes out a cognizable claim of fraud (but see below), it is contradicted by a careful reading of uncontroverted facts in the record. The inventory, which Polly "prepared," was drawn from material supplied by Robert who gave her information about the seven works of art owned by Stephen but located in decedent's apartment. The list he gave her identified one painting, "Girl in a Hammock" by Theodore Robinson, with no additional [*6]information. This was the information Polly gave to the appraiser; it was the appraiser, Ms. Meilman, who added the dimensions (as well as the information that the painting was "signed by the artist") after measuring the large Robinson painting in decedent's presence.^[FN11] Polly was not present at the appraisal.

The best argument that can be made for plaintiff is, then, that knowing that Meilman

had measured and reported the wrong painting, Polly intentionally remained silent, thus permitting or causing constructive fraud on her co-fiduciaries (see e.g. M & T Bank Corp. v Gemstone CDO VII, Ltd., 881 NYS2d 364 [Sup Ct, Erie County 2009], affd in part and mod in part 68 AD3d 1747 [4th Dept 2009]). Fraud, constructive or otherwise,^[FN12] requires reliance, and that reliance must be reasonable. Put another way, assuming arguendo a false statement of fact, if the true fact were readily ascertainable and within the allegedly defrauded party's knowledge or experience, a claim for fraud will not lie. As the Court of Appeals has written,

"If the facts represented are not matters peculiarly within

the party's knowledge, and the other party has the means

available to him of knowing, by the exercise of ordinary

intelligence, the truth, or the real quality of the subject of

the representation, he must make use of those means, or he

will not be heard to complain that he was induced to enter

into the transaction by misrepresentation" (Danann Realty

Corp. v Harris,5 NY2d 317 [1959]).

Here the Rubin brothers not only saw the appraisal attached to the 706 which they signed, but reviewed many draft inventories prepared by Polly prior to the final filing.^[FN13] [*7]

The claim that they were justified in failing to notice (because they relied on Polly) the alleged "substitution" of the large Robinson for the small Robinson,^[FN14] while initially appealing, falls in the face of one critical fact.

Even if they somehow justifiably ignored what they describe as the minor difference in size, and relied upon a title that they claim only appertained to the small Robinson, the appraisal clearly states that the painting it includes and values at $850,000 is signed by the artist. Presumably it is Theodore Robinson's signature, and not simply the additional five inches of width, or the quality of the painting, that made and makes the large Robinson substantially more valuable. Even if not, however, the fact noted by the appraiser that the listed painting was signed clearly put them on notice, or should have put them on notice.^[FN15] Because the single unambiguous ^[FN16] descriptive fact was clearly stated on the appraisal, the claim of fraud fails either because of the Rubin brothers' failure to demonstrate reasonable reliance (see e.g. Valassis Communs., Inc. v Weimer, 304 AD2d 448, 449 [lst Dept 2003]) or by estoppel (see e.g. McPherson v Husbands, 54 AD3d 735, 736 [2d Dept 2008]).

Counterestoppel

Finally, Richard argues that, even if he is estopped from claiming that the large Robinson painting was not part of Stephen's estate, but rather belonged to Doris at her death, Polly is counterestopped from asserting her claim, through Stephen's estate, to that painting. Counterestoppel is an equitable doctrine known to and accepted by the courts of our state in which, if one party is estopped from asserting a particular position because of a prior conflicting representation, the opposing party's claim may be cancelled out if it, too, has made a prior representation relied upon by the other (Trainor v John Hancock Mut. Life Ins. Co., 54 NY2d 213, 218 ([1981]); 57 NY Jur 2d, Estoppel § 4). The claim of counterestoppel here requires a close reading of the facts as set forth in the affidavits and exhibits submitted on this motion.

According to Richard, and supported by documents produced by Polly, in October 1992, three months before the estate tax return for Stephen's estate was filed, Richard gave Polly a list of artwork given to Stephen by his father Harry. "Girl in a Hammock," the smaller Robinson [*8]painting, was one of the seven paintings on that list. Apparently at Richard's suggestion, on October 8, 1992, Polly wrote to Doris thanking her for her newly discovered bounty. Richard argues that at this point, or certainly when the appraisal was conducted and the 706 filed for Doris's estate, Polly had an obligation to inform them of her belief that she was, in fact, also the owner (through Stephen's estate) of the larger Robinson painting, since only one Robinson painting was listed on the appraisal and included in the inventory of Stephen's estate assets. By her silence, Richard argues they were lulled into believing that the appraisal and inventory contained only the smaller Robinson which they had told her — and she ratified — belonged to Stephen at his death. In support of his claim that this "silence" resulted in an estoppel, he like Polly, argues that had he and Robert known sooner of her contention that she actually inherited the larger painting they could have ascertained the true facts from their mother, Doris.^[FN17]

There is another fact that undercuts Polly's claim that she should prevail based solely by virtue of plaintiff's estoppel.^[FN18] In her affidavit in support of her motion for summary judgment, Polly states, at paragraph 7, "I do not know who owns the Small Robinson Painting" [capitalization in original]. In light of her 1992 acknowledgment of Harry's gift to Stephen,^[FN19] this statement raises issues of credibility that make summary judgment inappropriate (see Matter of Pollock, 64 NY2d 1156, 1158 [1985]). That is, the argument for counterestoppel, unlike the argument for estoppel,^[FN20] rests on an inference: because Polly apparently acknowledged Stephen's ownership of the small Robinson only months before the 706 was filed for his estate, and because [*9]the 706 included only one Robinson, the larger, she must have concealed her knowledge, either that there were two Robinsons in Stephen's estate, or that the appraisal which she organized for Doris's estate was incorrect. If the latter, then Polly's "non-disclosure of a fact known to [her] is equivalent to an assertion that the fact does not exist . . ." (Restatement [Second] of Contracts §161), provided she knew "that disclosure of the fact would correct a mistake of the other party as to the contents or effect of a writing . . ." (id. at [c]). That "assertion," assuming it was relied upon by plaintiffs, would also give rise to an estoppel, that is, "a duty to speak, a failure to speak and damage to another party directly due to this silence" (Lo Porto v Village of Philmont, 39 NY2d 7, 12 [1979], supra) or, as a matter of equity, require "[r]eturn to status quo ante" (Trainor v John Hancock Mutual Life Ins. Co., 54 NY2d at 219, supra).

Whether Polly should be equitably counterestopped thus requires a factual determination. Accordingly, a hearing will be scheduled at a phone conference with attorneys for the parties and the court. If, following that hearing, no counterestoppel lies, the motion for summary judgment will be granted. If Polly is counterestopped, trial on the issue of ownership of the large Robinson will follow immediately.

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S U R R O G A T E

Dated: October 17, 2011.