INTRODUCTION

When dealing with contested estate accounting proceedings in New York's Surrogate's Court, it's important to understand the unique discovery procedure that governs these cases. The Surrogate's Court Procedure Act (SCPA) and the New York Civil Practice Law and Rules (CPLR) outline the process, which requires an understanding of the nuances involved to effectively navigate the court system. In this blog, we will delve into the specifics of the discovery procedure in contested estate accounting proceedings and provide insights to help you better comprehend this complex area of law.

1. Initial Petition for Compulsory Accounting

The process often begins when an interested party, such as a beneficiary or a creditor, files a petition for compulsory accounting with the Surrogate's Court. This petition compels the fiduciary (executor, administrator, or trustee) to file an account of their administration of the estate. The fiduciary has a specific time period (usually 60 days) to file an account or request an extension. Failing to do so may result in the court taking action against them.

2.  Objections and Responses

Once the fiduciary files the accounting, interested parties have the opportunity to file objections to the accounting, detailing any issues or discrepancies they may have identified. The fiduciary must then respond to these objections, either by amending the accounting or by addressing the concerns raised in the objections.

3. The Unique Discovery Process

Unlike typical civil litigation, the discovery process in contested estate accounting proceedings is governed by SCPA Article 22, which provides a more streamlined approach. This unique process consists of two stages:

a.  Discovery Concerning Objections

In the first stage, the petitioning party and any other person or entity with an interest in the estate has an opportunity to make demands for the fiduciary to produce documents related to the accounting proceeding, including financial records, bank statements, tax returns, receipts, invoices and other records maintained by the fiduciary in connection with the administration of the estate.   Interested parties may also (with the Court's consent) take the deposition (i.e., conduct an oral examination of the fiduciary under oath) concerning the accounting and administration of the estate.    This discovery is intended to give the interested party sufficient information to determine if the interested party has a bona fide basis for objecting to the accounting submitted by the fiduciary.  This discovery process during this first phase is limited in scope and is intended to narrow the issues that the interested parties may raise in objections to the fiduciary's accounting.   After the initial phase of discovery is completed, the court will fix a date for interested to file objections to the accounting.   If objections are filed, the fiduciary will have an opportunity to respond to those objections and, if appropriate, move to dismiss those objections.   

b.  General Discovery

After the fiduciary files his or her response to the objections (or makes a motion with respect to those objections), the court will enter a scheduling order for general discovery in the contested accounting proceeding.  At this point, the discovery process more closely resembles that of standard civil litigation, as parties can use all available discovery tools, including depositions. However, even during general discovery, the court may limit the scope to ensure the process remains efficient and focused.   During this second phase of discovery, the fiduciary will finally have an opportunity to take discovery from the objecting party(ies).

4.  Settlement and Trial

After the discovery process concludes, the parties often attempt to reach a settlement through negotiation or mediation. If a settlement cannot be reached, the case proceeds to trial, where the Surrogate's Court will ultimately determine the validity of the objections and the proper distribution of the estate's assets.

CONCLUSION

The unique discovery procedure in contested estate accounting proceedings in New York's Surrogate's Court is designed to facilitate a more efficient resolution of disputes. By understanding the steps involved, from the initial petition for compulsory accounting to the potential trial, interested parties can better navigate this complex process and ensure their rights are protected. It is always recommended to consult with an attorney experienced in estate litigation to guide you through this intricate area of law.