Mediation has emerged as an invaluable tool in resolving disputes in various legal contexts, particularly in contested estate matters. A compelling example of this is a recent case in Surrogate’s Court involving a contested accounting that ultimately led to a settlement of $1 million at mediation, demonstrating the efficacy of mediation in achieving equitable resolutions.
Background
In this case, the dispute arose among multiple parties, including the objectants (those challenging the accounting of the estate), the executor (the fiduciary responsible for managing the estate), and the bonding company. Such conflicts often involve significant emotional and financial stress, as they touch on deeply personal issues surrounding inheritance and family dynamics.
This case was one of the oldest on the docket in the Surrogate’s Court, pending for over four years. It involved a contested accounting in which the executor, an estate beneficiary, kept substantial estate monies in a non-interest-bearing account. The objectants, also beneficiaries, also claimed that a piece of real estate included in the estate was being sold below market value.
In many contested estate matters, bonding companies are becoming more proactive, filing notices of appearance to have a say in the proceedings. In some cases, the bonding company may see potential liability and want to be involved in conferences and settlement discussions prior to a judgment being issued. Such was the case here; although a judgment had not yet been issued, the bonding company got involved in the settlement discussions.
Typically where there is a discrepancy in accounting matters, the parties attempt to settle the case informally, without judicial intervention. Once an accounting becomes contested and there is a court filing, these cases become tedious and expensive. In this case, the Surrogate was unable to settle the case after several attempts over several years. As a result, mediation was recommended.
The Mediation Process in Contested Estate Matters
Mediation is an excellent option for these cases. The mediation process allows parties to engage in open dialogue facilitated by a neutral third-party mediator. This environment fosters communication, enabling parties to express their concerns and interests without the adversarial pressures of a courtroom. In this case, the mediator worked diligently to understand the positions of all involved parties, identifying common ground and areas of potential compromise.
It is imperative to choose a mediator with both Surrogate’s Court trial and appellate court experience who can explain to the parties what would happen if the case were to be tried in the Surrogate’s court, and what might happen on appeal. Surrogate’s Court appeals can be especially difficult in New York, particularly in the Second Department, which covers both Nassau and Suffolk Counties on Long Island. Few sitting appellate court judges currently have experience in the Surrogate’s court. In addition, litigating these cases in the trial and appellate courts takes years to resolve, as demonstrated by the case here.
Benefits of Mediation in Contested Estate Matters
1. Cost-Effectiveness: Legal battles can be financially draining. Mediation typically incurs lower costs compared to prolonged litigation, as seen in this case where the settlement was reached efficiently, saving both time and resources.
2. Confidentiality: Unlike public court proceedings, mediation offers confidentiality. This aspect is particularly important in estate disputes, where sensitive family issues are often at play.
3. Preservation of Relationships: Mediation promotes collaboration rather than confrontation. In family-related disputes, maintaining relationships can be crucial. The mediation in this case allowed the parties to reach an agreement without further damaging familial ties.
4. Control Over Outcomes: Parties in mediation have greater control over the outcomes compared to court decisions, which can be unpredictable. The $1 million settlement reflects a mutually agreeable resolution that addressed the concerns of all parties involved.
5. Faster Resolutions: Court cases can take years to resolve. Mediation can expedite the process, leading to timely resolutions that allow parties to move forward with their lives. In this case, mediation resolved the case in one session, after four years on the court’s docket.
Conclusion
The $1 million settlement in the contested accounting case in Surrogate’s Court illustrates the power of mediation in resolving complex estate disputes. By fostering communication, ensuring confidentiality, and allowing parties to collaboratively shape the outcome, mediation serves as a preferred alternative to litigation. As more individuals recognize the advantages of this approach, mediation will likely continue to gain traction as a viable option for resolving conflicts in estate matters and beyond.
This article was written by MSNY mediator Hon. A. Gail Prudenti. Learn more about Gail here.