Phillips v. Kantor & Co., 31 N.Y.2d 307 (1972)
Evidence that would be excluded at trial under the Dead Man’s Statute (CPLR 4519) should be considered when determining whether a triable issue of fact exists to defeat a motion for summary judgment.
Summary
This case addresses whether evidence, otherwise relevant but excludable under New York’s Dead Man’s Statute, can be considered to defeat a summary judgment motion. Phillips, a lender, sued Kantor & Co., accountants, alleging reliance on false financial statements provided by the deceased senior partner, Kantor, regarding two companies. The Court of Appeals held that such evidence should be considered to determine if a triable issue of fact exists. The court reasoned that asserting rights under the Dead Man’s Statute prior to trial is premature and prevents aggrieved parties from assembling evidence. The existence of some admissible evidence also factored into the decision.
Facts
Phillips loaned money to Russell Springs Manufacturing Corporation and Townley Shirts, Inc., based on financial information provided by Joseph Kantor, the senior partner of Kantor & Co. Phillips claimed Kantor misrepresented the financial health of these companies. Kantor died before his deposition could be completed. Phillips relied on private conversations with the deceased Kantor to establish the malpractice claim. A letter from Kantor to Phillips stated Russell Springs had a positive net worth. Kantor’s testimony in a bankruptcy proceeding indicated a later deficiency in Russell Springs’ capital.
Procedural History
Phillips sued Kantor & Co. for malpractice after the companies defaulted on the loans and filed for bankruptcy. The defendants moved for summary judgment, arguing that Phillips’ testimony regarding conversations with the deceased Kantor was inadmissible under the Dead Man’s Statute. Special Term initially granted Phillips a continuance to obtain affidavits. Subsequently, Special Term granted summary judgment for the defendants, and the Appellate Division affirmed. Phillips appealed to the New York Court of Appeals.
Issue(s)
Whether evidence, otherwise relevant and competent, but subject to exclusion under the Dead Man’s Statute (CPLR 4519), can be considered to defeat a motion for summary judgment.
Holding
Yes, because evidence excludable under the Dead Man’s Statute should not predetermine the result on summary judgment in anticipation of the objection, especially when there is some other admissible evidence suggesting a likelihood of establishing the plaintiff’s prima facie case.
Court’s Reasoning
The Court of Appeals emphasized that summary judgment should be denied if there is any significant doubt about the existence of a material, triable issue of fact. The court noted a split among the Appellate Divisions regarding the admissibility of evidence under the Dead Man’s Statute in summary judgment proceedings. The court aligned itself with the First Department’s view, stating that evidence excludable under the Dead Man’s Statute can be considered to determine whether a triable issue exists. The court reasoned that the Dead Man’s Statute, by its terms, applies “upon the trial of an action or the hearing upon the merits of a special proceeding” (CPLR 4519). Therefore, asserting rights under the statute prior to trial is premature. The court also pointed to the possibility of waiver of the statute at trial. Additionally, the court emphasized that other admissible evidence, such as the letter from Kantor and his bankruptcy testimony, might contribute to establishing a prima facie case. The court stated, “Before that time, under the letter of the statute evidence not otherwise infirm suffices to determine whether an issue of fact exists, without being overly concerned with how the parties will or may prevail on that issue.”