The terrorist attacks of September 11th have begun to impact our legal system as various cases dealing with claims of survivors of victims have been wending their way through the courts. In a matter of first impression, the Second Department of New York’s Appellate Division has upheld a lower court determination which denied the summary judgment motion of a personal representative in the matter of Cruz v. McAneney 816 N.Y.S. 2d 486.


Patricia McAneney perished  intestate  in the 9/11 attacks leaving behind her  brother James and her domestic partner Margaret Cruz. Her brother, as her personal representative  filed a claim with the September 11th Victim Compensation Fund.  The Special Master awarded the sum of $278,087.42 based upon Ms. McAneney constituting a one person household.


Ultimately, the Special Master’s award was increased by an additional $253,454 by taking into account the fact that the decedent had been in a domestic partnership when she was killed. While the fund initially refused to distribute the award to the defendant fiduciary unless he agreed that the sum of $253,454 be paid directly to Ms. Cruz, a breakdown in negotiations between the parties resulted in the entire award being paid over to the fiduciary who then distributed all of it to himself upon the grounds that he was the decedent’s only blood relative.


In denying the motion of the decedent’s personal representative , the court opined that it was the obligation of Mr. McAneney to distribute the award pursuant to the laws of the state of decedent’s residence which was New York. Based upon federal statute, is was noted that a state’s intestacy laws , while relevant , did not solely determine the identity of the beneficiaries of the award. Notwithstanding the absence of a valid will, a domestic partner not married to the decedent may share in any award made by the fund, especially in light of the fact that the existence of the domestic partnership led to the increase of the award upon the application of the plaintiff to the Special Master.


Invoking the principles of equity, the court has imposed a constructive trust for the purpose of preventing the unjust enrichment of the trustee —Ms. McAneney’s brother James. Plaintiff’s complaint having been left standing by the decision, the matter will remain in the trial court for an ultimate determination as to how the Special Master’s award shall be divided between the parties.


Usually it is at this point in litigation that cooler and more sensible heads prevail and there is a settlement (remember that old legal maxim that “a bad settlement is better than a good lawsuit”). Should that not be the case here, I will try to report on this action when a final determination on all issues is reached.