State of New York v Korotzer

Supreme Court, Albany County

Decided on May 20, 2026

Index No. 912269-25

David A. Weinstein, J.

The State of New York, on behalf of the Office of the State Comptroller as the administrator of the New York State and Local Retirement System ("NYSLRS"), commenced this action by filing a verified complaint on January 7, 2026, pursuant to section 12-1.1 of the Estates, Powers and Trusts Law ("EPTL"). It seeks to recoup payment of eight pension disbursements to decedent Virginia M. Sleight, that were issued following her death on November 8, 2019 (Complaint ¶¶ 1-6). The complaint names as defendants two beneficiaries of [*2]the decedent's Estate: Karen Korotzer and Karl Sleight^FN1. Before me now is a motion by Mr. Sleight to dismiss the complaint.

The complaint alleges as follows:

Decedent Virginia Sleight, a former member of the NYSLRS, retired on December 31, 1995 and elected to receive monthly retirement benefits up to and including her date of death (id. ¶ 6). Her monthly pension disbursements were electronically deposited into her checking account with the Glens Falls National Bank & Trust Co. ("GFNB"). Defendant Karl Sleight received copies of the bank statements for such deposits (Complaint ¶¶ 6-7).

On December 20, 2019, approximately a month after decedent's death, GFNB petitioned the Saratoga County Surrogate Court as decedent's Executor for Letters Testamentary and Letters of Trusteeship for the Estate of Virginia M. Sleight, which were issued to GFNB on January 14, 2020 (id. ¶ 17). On or about June 17, 2020, the Executor disbursed the funds in the estate to defendants Karen Korotzer and Karl Sleight, Esq., as legatees under the Last Will and Testament of Virginia M. Sleight, and distributed the remainder to the beneficiary of a trust^FN2 (id. ¶¶ 18-20). Following these disbursements, the Estate was closed on January 19, 2022 (id. ¶ 21).

Although Ms. Sleight passed away on November 8, 2019, NYSLRS was not made aware of her passing until August 31, 2020 (id. ¶ 19). After learning of decedent's death, NYSLRS issued a reclamation request to GFNB, which resulted in GFNB paying $6,470.74 to NYSLRS, representing the pension deposits of May 2020 and June 2020 (id. ¶ 12). The State alleges, however, that the remaining balance of the NYSLRS overpayments totaling $19,409.20 could not be repaid from Ms. Sleight's GFNB checking account, because it had been closed (id. ¶ 13). NYSLRS was able to apply a prorated portion of the November 2019 pension benefit, in the amount of $966.81, to the outstanding balance, along with two checks totaling $989.09 from the Office of Unclaimed Funds, reducing the amount of pension funds to be recouped to $17,455.30 (id. ¶¶ 14-15). NYSLRS then sent demand letters to defendant Sleight, dated July 25, September 23, and November 3, 2022, seeking the balance of the overpaid pension benefits (id. ¶ 16). It did not receive a response (id.).

As a result of the foregoing, plaintiff contends that defendants Sleight and Korotzer have taken possession of $17,455.30 in overpaid pension funds to which they are not entitled, and they must repay this amount to NYSLRS, along with a collection fee of 22% of the amount owed plus interest, as provided for under Section 18 of the State Finance Law (id. ¶¶ 26-37).

The provision on which plaintiff relies, EPTL § 12-1.1, provides in pertinent part that:

"(a) [D]istributees and testamentary beneficiaries are liable, in an action, to the extent of the value of any property received by them as such, for the debts and reasonable funeral expenses of a decedent, the expenses of administering his [or her] estate and all taxes for which the estate is liable, which have not previously been recovered from the personal representative for from any other source described in paragraph (b).

(b) No liability may be imposed upon such distributees or testamentary beneficiaries, under paragraph (a), unless plaintiff establishes satisfactorily to the court that he cannot fully satisfy his claim:

(1) Because there is insufficient property of the estate available for such purpose in the hands of the personal representative;

(2) By action against persons prior in liability to the defendant, under paragraph (a) of 12-1.2, because such persons are not amenable to suit in this state, are insolvent or for any other reason cannot be made to answer for their liabilities; or

(3) By the enforcement, under 3-3.6, of any lien, security interest or other charge he holds against property of the decedent specifically disposed of by will or passing to a distributee, or against the proceeds of any policy of insurance on the life of the decedent payable to a named beneficiary" (EPTL § 12-1.1[b][1]).

In response to this suit, Ms. Korotzer filed an answer. Mr. Sleight, however, has moved to dismiss the complaint (Affirmation of Karl J. Sleight, Esq., dated January 26, 2026 ["Sleight Aff"] ¶ 3). His position is that the fault for the failure to "resolve the remaining unpaid portion of the alleged pension overpayment" lies with GFNB, and thus the action cannot proceed against him (see id. ¶ 8).

Specifically, Sleight takes the position that GFNB, as Executor of the decedent's estate, was aware of the NYSLRS monthly payments and the need to return any pension overpayments as early as June 2020, but it did not fully resolve the problem (id. ¶¶ 6-9, Ex B). As a result, it is defendant's view that "[t]he Government's sole recourse to recover the alleged pension overpayment is against the Glens Falls National Bank" (Defendant's Memorandum of Law, dated January 26, 2026 ["Def MOL"] 5).

In support of these contention, Mr. Sleight presents two emails exchanges.^FN3 The first email string begins with an email sent to Sleight from an accounting firm on June 30, 2020, asking among other things, whether he had "a summary showing the total amount [Ms. Sleight] received" from the Retirement System (Sleight Aff, Ex B). He wrote back, copying a bank [*3]representative^FN4, as follows: "Not sure I have a summary from the government, but she was direct deposit from NYS so her 2019 bank statements would have that" (id.). On this basis, he argues that this email "specifically referenc[ed] the need to address any issues related to alerting the state pension system officials to avoid any overpayment" (id. ¶ 5).

A second email from Mr. Sleight to the Bank sent July 29, 2022 refers to an appended communication from the Office of State Comptroller — although no attachment is included in defendant's submission.^FN5 Defendant's email states in relevant part:

"Please see attached a letter dated from the Office of the State Comptroller seeking a payment to $19,409.20 allegedly representing an overpayment of retirement monies to Virginia Sleight. If the OSC is correct in this overpayment, please remit the requested amount to the OSC to satisfy this issue. If they are incorrect, please advise them of their error" (id., Ex C).

In response, a bank employee answered that she would take a look and report back on next steps (id. ¶¶ 10-11 & Ex C). Sleight avers, however, that although he informed the Bank of this issue several times, it was to no avail, and neither the Executor nor the Estate's legal counsel followed up with defendant or the State (id. ¶¶ 12-13).

Mr. Sleight now argues that the pension overpayments sought by the Office of the State Comptroller are not "debts" of the Estate as that term is used under EPTL § 12-1.1, and therefore they are not recoverable from the beneficiaries of the Estate, but must be sought from GFNB as the Executor (Def Memorandum of Law 4-6). According to Sleight, GFNB had a fiduciary obligation under EPTL 11-1.1 to settle all claims against the Estate, and its failure to do so cannot be turned into the beneficiaries' obligation^FN6 (id. at 6-7).

Defendant further argues that the documentary evidence submitted with his motion demonstrates that the Executor had knowledge that NYSLRS was seeking to recoup the pension overpayments well in advance of the closing of the Estate, but did not address this issue, thus failing to properly discharge its fiduciary duties (id. at 7-8). Sleight contends that shifting the Executor's burden to the beneficiaries is "improper as a matter of law" (id. at 8). On the basis of these arguments, defendant argues that the section 12-1.1. claim must be dismissed, and the cause of action brought under State Finance Law § 18 should be dismissed as moot (id.).

By affirmation of counsel, plaintiff opposes the motion. In essence, it argues that Sleight has provided no legitimate basis as to why plaintiff cannot recoup the overpayment of pension funds from the beneficiaries of the estate pursuant to EPTL § 12-1.1 (Attorney Affirmation in Opposition to Defendant' Motion to dismiss, dated February 19, 2026 ["Metro Aff"] ¶¶ 17-19). [*4]According to the State, there is no dispute that the pension overpayments were sent to and received in the decedent's checking account at GFNB and became part of the Estate from which defendants received funds as legatees of Virginia Sleight's Will (id. ¶¶ 20-24). Plaintiff further argues that defendants have no legal right to post-death retirement payments that were inadvertently deposited with GFNB and wrongly distributed to the beneficiaries of the estate. Plaintiff argues that such recoupment is not impacted by any alleged breach of fiduciary duty by the Executor for failing to repay the pension funds prior to the closing of the Estate, since the Estate has been closed and property of the Estate — in the form of cash — was distributed to defendants pursuant to decedent's Last Will and Testament (Pl MOL 4). Thus, according to plaintiff, the Executor no longer holds any Estate assets to satisfy NYSLRS's demand for the balance of the pension overpayments, and the State may utilize EPTL § 12-1.1 to recoup the monies owed to NYSLRS (id. at 7-8).

In reply, defendant Sleight again argues that the pension overpayments deposited into the decedent's checking account are not a "debt" as that term is used under EPTL § 12-1.1, because such were incurred after the decedent's passing (Defendant's Reply Memorandum of Law in Further Support of Defendant's Pre-Answer Motion to Dismiss the Complaint, dated February 25, 2026 ["Reply MOL"] 2). He asserts that a "debt", as contemplated by the statute, can only be incurred when a person is living (id.). He further contends that, because the payments were made after his Ms. Sleight died — but were supposed to legally cease on her date of death — the overpayments cannot constitute a "retirement benefit" as a matter of law (id.). Finally, Mr. Sleight takes the position that the focus of plaintiff's recoupment efforts should be GFNB, rather than the distributees of Ms. Sleight's Will (id.). Defendant does not dispute, however, that such overpayments were made by NYSLRS prior to being notified of the death of Virginia Sleight, and were deposited in her checking account with GFNB. Nor does he dispute that GFNB, as Executor, distributed all proceeds of the Estate including the funds at issue, and arranged for it to be closed on January 19, 2022 (see id. at 3-9).

Discussion

Defendant has moved to dismiss the complaint at issue under CPLR 3211(a)(1) based on a defense founded on documentary evidence, and under 3211(a)(7) for failure to state a claim. Under the former provision, he must show that "the documentary evidence upon which the motion is predicated resolves all factual issues as a matter of law and definitively disposes of the plaintiff's claim" (Cerand v Burstein, 72 AD3d 1262, 1264 [3d Dept 2010] [citations and internal quotation marks omitted]). Under the latter, I must "accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory" (see Leon v Martinez, 84 NY2d 83, 87-88 [1994]). While I may consider evidentiary materials submitted by defendant in support of its such a motion, I may decide the motion on the basis of such materials only if they show "that a material fact as claimed by the [plaintiff] to be one [that] is not a fact at all and . . . [that] no significant dispute exists regarding it" (Mace v Tunick, 153 AD3d 689, 690 [2d Dept 2017], citing Guggenheimer v Ginzburg, 43 NY2d 268, 274-275 [1977]). Moreover, while evidence in an affidavit "will seldom if ever warrant dismissal on the pleadings," it will be sufficient for that purpose if the evidence "establish[es] conclusively that plaintiff has no cause of action" (see Basis Yield Alpha Fund (Master) v Goldman Sachs Group, Inc., 115 AD3d 128, 134 [1st Dept 2014] [emphasis in original], citing Rovello v Orofino Realty Co., 40 NY2d 633, 636 [1976]). In sum, if the evidence submitted by defendant "establishes that the plaintiff has no [*5]cause of action (i.e., that a well-pleaded cognizable claim is flatly rejected by the documentary evidence)," dismissal is appropriate (id. at 135).

Under either cited provision, defendant has not met his burden. That is because the basic premises of his complaint — that the money which the estate erroneously received from NYSLRS was not a "debt" which the Comptroller may collect from the estate's beneficiaries, and that it was plaintiff's obligation to recover the funds from the Estate's administrator — are not supportable under the law as it has been construed.

The Comptroller, as the administrator of NYSLRS, "is statutorily required to correct errors in the retirement benefit records and adjust payments accordingly to ensure the integrity of the public retirement system" (Smith v Dinapoli, 167 AD3d 1208, 1211 [3d Dept 2018] [internal quotation and citation omitted]; see also Retirement and Social Security Law § 111[c] ["[i]n the event that any change or error in any record of the retirement system causes a member or beneficiary of such system to receive more or less than he would have been entitled to receive had such record been correct, the comptroller, upon the discovery of any such change or error, shall correct such record [and a]s far as practicable, the comptroller shall adjust payments in such a manner that the actuarial equivalent of any benefit rightly due shall be paid"]). Moreover, the Comptroller cannot be compelled "to create rights to retirement benefits to which there is no entitlement . . . [and] [t]he Comptroller's duty to correct errors is ongoing, and continues even afer benefits are awarded and includes the right to recoup overpayments" (Smith, 167 AD3d at 1211).

Here, the allegations in the complaint are that NYSLRS erroneously made eight post-death overpayments to the decedent's checking account totaling $25,879.94, and a balance of $17,455.30 remains due and owing as a result (Complaint ¶¶ 6-24). Defendant's motion does not challenge these allegations, nor does he present any documentary evidence to rebut them. Thus, for the present purposes, I must deem them true. Accordingly, the Comptroller, is required to recoup such funds (Smith, 167 AD3d at 1211).

Under the situation as described in the complaint, "[s]ection 12-1.1 of the NY E.P.T.L provides for the liability of distributees of estate assets . . . which a creditor cannot collect from the estate because the assets have been distributed" (United States v Coppola, 1994 WL 665751, *10 [ED NY 1994], aff'd 85 F3d 1015 [2d Cir 1996]^FN7; see also Matter of Cipriani, 24 Misc 3d 1204[A], *5 [Sur Ct Bronx County 2009] [under EPTL 12-1.1, "claimant may trace the estate assets into the hands of beneficiaries and obtain recovery against them"]; King v Nicholson, 145 Misc 2d 977, 978 [Sup Ct App Term, Second and Eleventh Jud Dist 1990] ["obviously, if the executrix has properly distributed the assets of the estate, plaintiff may be relegated to an action against the beneficiaries," pursuant to EPTL § 12-1.1]). In other words, once the assets of an estate have been distributed, the Comptroller — like any other creditor or government agency — may utilize section 12-1.1 of the Estates, Powers and Trusts Law to recoup overpayments from estate assets received by a beneficiary (see Estate of Bailey, 147 Misc 2d 46, 49 [Sur Ct Bronx [*6]County 1990] [Commissioner of Social Services of City of New York could use EPTL § 12-1.1 to recoup medicaid benefits issued to decedent in error]). Indeed, an action brought under section 12-1.1 of the EPTL to enforce a liability of the Estate "may be maintained . . . [against] legatees of a testator to recover, to the extent of the assets paid or distributed to them, for a debt of the decedent, upon which an action might have been maintained, against the executor or administrator"^FN8 (Brooklyn Sav Bank v Joseph Wechsler Estate, 259 NY 9, 12-13 [1932]; see also Jemzura v Jemzura, 36 NY2d 496, 502 [1975] ["if there is insufficient property of the estate available in the hands of the personal representative to satisfy the deficiency judgment, then it may be collected from the distributees and testamentary beneficiaries to the extent of the value of any property received by them as such," citing, inter alia, EPTL § 12-1.1]).

Defendant's argument that the Comptroller should have sought — or should now seek — relief against the Executor has no impact on its ability to recover from the beneficiaries of the estate. Rather, "[t]he neglect of the creditor to present his claim to the executor or administrator, within the time prescribed by law for that purpose, does not impair his right to maintain such an action" (id. at 13). Since there is no dispute before me that defendants received sufficient Estate assets to cover the NYSLRS overpayments, whether some other entity could potentially be liable for the overpayments is of no moment.^FN9 Indeed, there is no evidence in the record before me that the Executor retained Estate assets that could be used to satisfy the NYSLRS demand for return of the overpayments.

To the extent defendant contends that the NYSLRS overpayments are not a "debt" of the estate as contemplated under section 12-1.1 of the EPTL, I find that contention unconvincing. In this section of the EPTL, as was the case with its predecessor DEL § 170 (see supra n 8), the term debt "is simply what one person owes or is or may be bound to pay to another, whether contingent or not" (see City of New York v Nic Homes, Inc., 44 Misc 2d 440, 444-445 [Civ Ct City of NY 1964]). Under this statute, the overpayment of government benefits has repeatedly been found to be recoverable (see id. [the term "debt" for a which a creditor may recover against a distributee includes monies received for "medical services" and "public assistance or care"]; see also Trussell v Kostiw, 35 Misc 2d 60[Sup Ct, New York County 1962] [upholding suit [*7]under predecessor to EPTL § 12-1.1 to recover costs of public hospitalization against distributee of estate]; MacLean v Edenbaum, 6 Misc 2d 933, 934 [Sup Ct New York County 1957] [denying motion to dismiss action against distrbutee of estate to recovery cost of public assistance]).

I am left, then, with defendant's argument that the pension overpayments were not debts of Ms. Sleight's estate since they not paid until after her death (see Def MOL 9 ["Upon Ms. Sleight's death as a matter of law she had no ownership interest in the monies NYSLRS sent to Glens Falls National Bank and which the bank kept[, and thus] . . . [t]his was not a "debt" under EPTL 12-1.1 and not a "retirement benefit" as the Government incorrectly suggests"]). But Sleight does not dispute the State's allegation that these moneys were made part of the Estate, and were distributed to its beneficiaries (see Complaint ¶ 22). Under these circumstances, it matters not when the moneys were received. Under the uncontested allegations before me, these payments were improper; they were given to defendants, and thus — taking the complaint as true — the State is entitled to recover them.

In this regard I find instructive the case of Hodson v Marks (165 Misc 680, 682 [Civ Ct City of NY 1937]), in which the Court was presented with the same argument made here concerning the wrongful receipt of "old age pension" payments from the City of New York, which were ultimately made part of the decedent's estate and distributed to the defendant legatee. There, as here, defendant argued that such payments were not a "debt" of the decedent, since the word "debt" as used in the parallel predecessor statute is to be understood "in its ordinary sense and not as created by statute of implication of law" (id. at 682). He asserted that the payments of the pension were "welfare funds" and did "not automatically create a debt" (id.). In rejecting this argument, the Court reasoned as follows:

"The word "debt" comes from the Latin "debere," meaning to owe; "debitum" meaning something owed. Bouvier (at p. 786) defines it as "a sum of money due by certain and express agreement; all that is due a man under any form of obligation or promise."

The distinguishing and necessary feature of a debt is that a fixed and specific amount is owing and no future valuation is required to settle it. In the instant case there can be no question that the deceased was indebted to the city of New York for the amount of money he wrongfully received for old age pension, and his debt is imputable to the defendant to the extent of moneys received by her from the original debtor's estate.

The obligation of the deceased to the City of New York represented a chose in action possessed by the City, and this chose in action should be regarded as personal property (Gen. Const. Law, §39; Surr. Ct. Act, §202, subd. 8.). In other words, the decedent was indebted to the city of New York for the personal property he took and which, under the "implied contract" provision created by section 128^FN10, he was obliged to repay. This being the case, the city was a creditor of the deceased's estate and, while not entitled to a preference, nevertheless must be regarded as a general creditor with the same rights as [*8]any other and with the privilege of suing under section 170" (Hodson, 165 Misc at 682—683).

I find this reasoning persuasive, and applicable to this case. Here too, the liability owed to NYSLRS for overpayments is a fixed and specific amount that is owing and must be collected by the Comptroller, and — taking the allegations in the complaint as true as I must on a motion to dismiss — no future valuation is required to settle the sum due and owing. Thus, the state has sufficiently alleged that the Estate was indebted to NYSLRS for the amount of pension monies wrongfully received, and such liability is imputable to the defendants (see id.).

Even if some limitation could be read into the section 12-1.1 that exempt the State's claim (and I see no language in the statute which would do so), the Comptroller's right to pursue a legatee for a liability of the Estate, as with any creditor, "exists independently of the [EPTL]" (Titus v Titus, 175 Misc 970, 971 [Sup Ct Broome County 1941]). That is because the statute "regulates the procedure, but does not create the right," and while "the action is against the legatee; in substance, it is against the property" (Brooklyn Sav Bank, 259 NY at 13 [same] [citations omitted]; see also Wicks v Carmichael, 172 Misc 924, 926 [Sup Ct Broome County 1939] ["We think the right to pursue the legatee for the debt of the testator exists independent of the statute"] [citation omitted). Indeed, "[c]ourts of law and courts of equity have from the earliest times sustained the creditor's right to satisfaction of his debt from the assets of [the] testator in the hands of the legatee," under "[t]he theory . . . that the testator cannot cut off the right of the creditor to satisfaction of the debt from testator's estate" (Wicks, 172 Misc at 926 [internal citation and quotation omitted]).

In this regard, I see nothing in defendant's submissions that rebuts, for purposes of this motion, that the beneficiaries of the Estate received the moneys at issue, that such had been paid to the Estate wrongly and contrary to law. Under these circumstances, and pursuant to the law cited above, the Retirement System is entitled to their return. While defendant makes various arguments to the effect that he bore no fault for the fact that the money was distributed, as he was not the executor, his power of attorney terminated with Ms. Sleight's death, and he told the Bank to address the issue, he makes no argument as to why he is entitled to keep the proceeds. Under these circumstances, and pursuant to the legal principles cited above, the State is not limited in its recovery to an action against the executor, and may retrieve funds wrongfully paid from the beneficiaries that received them.

Accordingly, it is hereby

ORDERED that defendant's motion to dismiss is denied in its entirety; and it is further

ORDERED that a virtual preliminary conference will be held on June 12, 2026 at 1:30 p.m., via Microsoft Teams, provided an answer has been served by that date (see CPLR 3211[f]). The purpose of the conference shall be to set a discovery schedule and address such other matters as are appropriate.

This constitutes the Decision & Order of the Court. The original Decision & Order is being filed electronically with the Court Clerk, with a copy e-mailed to counsel for the parties. The signing of this Decision and Order and e-filing on NYSCEF shall not constitute notice of entry under CPLR Rule 5513, and counsel is not relieved from the applicable provisions of the CPLR respecting to filing and service of Notice of Entry.

ENTER

Dated: May 20, 2026

Albany, New York

David A. Weinstein

Acting Supreme Court Justice

Papers Considered:

1. Summons with Notice, dated November 13, 2025 and Verified Complaint, dated January 7, 2026, along with Verified Answer of Defendant Karen Korotzer, dated January 27, 2026.

2. Notice of Motion and Affirmation of Karl J. Sleight Esq., dated January 26, 2026, with Exhibits annexed thereto, along with Memorandum of Law, dated January 26, 2026.

3. Attorney Affirmation in Opposition to Defendant's Motion to Dismiss of Stacey M. Metro, Esq., dated February 19, 2026, with Exhibits annexed thereto, along with Plaintiff's Memorandum of Law in Opposition to Defendant Karl Sleight's Motion to Dismiss Pursuant to CPLR 3211(a)(1) and CPLR 3211(a)(7), dated February 19, 2026.

4. Defendant's Reply Memorandum of Law in Further Support of Defendant's Pre-Answer Motion to Dismiss the Complaint of Karl Sleight, Esq., dated February 25, 2026.