MORTON v. Gerald Berger, et al., Defendants. (2000)

Order, Supreme Court, New York County (Carol Huff, J.), entered January 11, 1999, which, in an action commenced by plaintiff's decedent and several of his solely owned corporations against defendant-appellant accountant and his firm for conversion and professional malpractice, among other causes of action, denied defendant's motion to dismiss the claims of the corporate plaintiffs for failure to state a cause of action and lack of standing, unanimously affirmed, without costs.

Plaintiff estate's decedent, and then the estate itself upon succeeding the decedent, did not list the decedent's interest in plaintiff corporations in either the bankruptcy proceeding initiated by the decedent, or in the probate proceeding.   The estate, however, is not judicially estopped from claiming an interest in the corporations since the bankruptcy proceeding was dismissed without a final determination (see, Koch v. National Basketball Assn., 245 A.D.2d 230, 666 N.Y.S.2d 630;  McIntosh Bldrs. v. Ball, 264 A.D.2d 869, 870, 695 N.Y.S.2d 196).   Instead, the bankruptcy proceeding here “was dismissed to be continued in another setting, i.e., the probate proceeding”, and the bankruptcy court's approval of this “transfer” did not endorse, or otherwise address, the estate's position regarding the decedent's assets (see, Manhattan Ave. Dev. Corp. v. Meit, 224 A.D.2d 191, 637 N.Y.S.2d 134, lv. denied 88 N.Y.2d 803, 645 N.Y.S.2d 445, 668 N.E.2d 416).

Here, the decedent's creditors were aware of the instant lawsuit which is the sole asset of plaintiff's corporations, so they were not prejudiced by this failure to list this asset (see, Guarino v. Guarino, 211 A.D.2d 463, 620 N.Y.S.2d 394).

MEMORANDUM DECISION.