N.Y. Estates, Powers & Trusts Law § 5-4.6: Application to compromise action

§ 5-4.6 Application to compromise action

(a) Within sixty days of the application of an administrator appointed

under 5-4.1 or a personal representative to the court in which an action

for wrongful act, neglect or default causing the death of a decedent is

pending, the court shall, after inquiry into the merits of the action

and the amount of damages proposed as a compromise either disapprove the

application or approve in writing a compromise for such amount as it

shall determine to be adequate including approval of attorneys fees and

other payable expenses as set forth below, and shall order the defendant

to pay all sums payable under the order of compromise, within the time

frames set forth in section five thousand three-a of the civil practice

law and rules, to the attorney for the administrator or personal

representative for placement in an interest bearing escrow account for

the benefit of the distributees. The order shall also provide for the

following:

(1) Upon collection of the settlement funds and creation of an

interest bearing escrow account, the attorney for the administrator or

personal representative shall pay from the account all due and payable

expenses, excluding attorneys fees, approved by the court, such as

medical bills, funeral costs and other liens on the estate.

(2) All attorneys fees approved by the court for the prosecution of

the action for wrongful act, neglect or default, inclusive of all

disbursements, shall be immediately payable from the escrow account upon

submission to the trial court proof of filing of a petition for

allocation and distribution in the surrogate's court on behalf of the

decedent's estate.

(3) The attorney for the administrator or personal representative in

the action for wrongful act, neglect or default who receives payment

under this section shall continue to serve as attorney for the estate

until the entry of a final decree in the surrogate's court.

(b) If any of the distributees is an infant, incompetent, person who

is incarcerated or person under disability, the court shall determine

whether a guardian ad litem is required before any payments are made, in

which case the court will seek an immediate appointment of a guardian ad

litem by the surrogate's court or, if the surrogate's court defers, the

court shall make such appointment. Any guardian appointed for this

purpose shall continue to serve as the guardian ad litem for the person

requiring same for all other purposes.

(c) The filing fee in the surrogate's court shall be computed based on

the amount of the gross estate prior to any payments made under this

paragraph.

(d) The written approval by such court of the compromise is conclusive

evidence of the adequacy of the compromise in any proceeding in the

surrogate's court for the final settlement of the account of such

administrator or personal representative.

(e) Nothing in this section shall be deemed to preclude the attorney

for the administrator or personal representative from petitioning the

surrogate's court for approval of a compromise and for allocation and

distribution thereof.

(f) No letters of administration shall be issued which will in any way

serve to abrogate the rights or obligations of an administrator or

personal representative or an attorney representing an administrator or

personal representative under this section.

(g) In the case of a recovery of an award from the September eleventh

victim compensation fund of two thousand one established pursuant to

title IV of the federal air transportation safety and system

stabilization act, public law 107-42, as amended, where the award

consists solely of non-economic losses (funeral expense reimbursement

being included as non-economic losses herein) a personal representative

may file a consent to the adequacy of the award by all interested

parties in lieu of a compromise proceeding.