Friday, April 1, 2016

Carving Up The Benihana Estate

The New York Court of Appeals decided a case involving the estate of Benihana founder Rocky Aoki.

This appeal involves a challenge to the validity of two partial releases of testamentary powers of appointment executed by the decedent Hiroaki (Rocky) Aoki, the founder of the Benihana restaurant chain. The Appellate Division's order declaring the partial releases valid should be affirmed.

The court discussed the role of attorneys in various instruments prepared before and after Rocky's marriage to his third wife. She had attacked the validity of the releases.

[Attorneys] Dornbush and Shaw were clearly Rocky's fiduciaries. But that is only one part of the equation. The critical inquiry is whether they were either parties to the Releases or stood to directly benefit from their execution, such that the burden shifted to Devon and Steven to demonstrate that the Releases were not procured by fraud.

 Here, the only individuals who stood to benefit from Rocky's execution of the Releases were his descendants. Neither Dornbush nor Shaw were parties to the Releases or stood to directly benefit from their execution (cf. Matter of Gordon, 45 NY2d at 698-700; Fisher, 108 NY at 29-30). If anything, the execution of the Releases all but ensured that Dornbush and Shaw would have no interest in, nor would receive any benefit from, the trust assets...

  Absent any evidence of fraud, one who signs a document is bound by its terms...Because Keiko failed to raise a triable issue of fact that the Releases were signed as a result of fraud or other wrongful conduct, the Appellate Division properly granted Devon and Steven summary judgment.

Justice Stein dissented

 To be sure, nothing in the record provides uncontroverted proof that the attorneys drafted, and arranged to have Rocky execute, the Releases at the behest of the children, only, and in the absence of a request by Rocky. In fact, there is some evidence to indicate that Rocky was present at all of the meetings attended by Kevin and Kana, perhaps demonstrating that the attorneys were not in an attorney-client or agency relationship with the children, but met with them only in furtherance of their professional and fiduciary obligations to Rocky. Nevertheless, all of the conflicting evidence, considered together, is sufficient to create a triable question of fact regarding whether the attorneys were acting on behalf of -- or as agents of -- the children, and not Rocky, when they drafted the Releases and supervised their execution.

Accordingly, I would reverse the Appellate Division order granting summary judgment to Devon and Steven Aoki, and remit the case to that Court...

Daughter Devon is an actress of some note. (Mike Frisch)

Clients, Professional Responsibility | Permalink


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