AI Evidence Requires Frye Hearing, New York Surrogate Court Judge Says

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(October 15, 2024, 1:43 PM EDT) -- BALLSTON SPA, N.Y. — Given the inherent reliability issues of any evidence created through the use of artificial intelligence, any such use requires not only court disclosure but a Frye hearing, a New York surrogate court judge said while ruling that he could not blindly accept an expert’s AI-based damages calculations.

(Matter of Weber, No. 1845-4/B, N.Y. Surrogate, Saratoga Co.)

(Opinion available.  Document #46-241113-036Z.)

“The use of artificial intelligence is a rapidly growing reality across many industries.  The mere fact that artificial intelligence has played a role, which continues to expand in our everyday lives, does not make the results generated by artificial intelligence admissible in Court,” Saratoga County Surrogate Court Judge Jonathan G. Schopf said Oct. 10.

Saratoga County resident Michael Weber died in December 2003.  Susan Weber was named as executrix of the estate and trustee.  Weber filed a petition for judicial settlement of the interim account of the trustee.  Michael Weber’s son and Susan Weber’s nephew, Owen K. Weber, objected, claiming that Weber breached her fiduciary duty in relation to the retention and use of a property in Cat Island, Bahamas.

Weber filed a supplemental accounting and was deposed in December 2023.

In January, Owen Weber moved for summary judgment.  The motion was denied in March.  Owen Weber moved for bifurcation on the issue of liabilities and damages, and both parties filed proposed findings of fact and conclusions of law.  At a hearing, the primary issue was whether holding the Cat Island property as a trust asset constituted a breach of fiduciary duty, whether Susan Weber breached her fiduciary duty by traveling to the Cat Island property while serving as trustee and whether Owen Weber suffered damages as a result of the alleged breach. 

Owen Webster produced expert Charles Ranson of Charles W. Ranson Consulting Group, an expert in trusts and estate litigation in Fort Lauderdale, Fla.

Property

Judge Schopf said Michael Weber’s will instructed his estate to transfer assets, including real property, to the trust.  The Cat Island property represented approximately 16% of the principal received by the trust.  Ranson testified that anything in excess of 10% was imprudent, Judge Schopf said.

But Judge Schopf noted that during the period in question, the trust transferred in excess of $1 million to Owen Weber despite not liquidating the Cat Island property.  It does not appear that the retention of the Cat Island property impacted the trust’s ability to make payments or cover obligations, Judge Schopf said.

Ranson testified that the Cat Island property should have been sold in 2004 rather than retained until 2022, when it was sold for $485,000, Judge Schopf said. 

Judge Schopf rejected challenges to Ranson’s testimony, saying he was not offered as an expert in real estate and offered no opinions related to Cat Island sales, rental prospects or other issues.  But Ranson’s opinion that the Cat Island property should have been sold in 2004 was “entirely speculative,” Judge Schopf said.  Ranson admitted that he did not consider any historic market data or the value of other houses on Cat Island during the period in question, which included the 2008-2009 financial crisis and the COVID-19 pandemic, Judge Schopf said.

Ranson’s familiarity with the Bahamas does not give him expertise or insight into the fundamentals of life on the island or real estate prospects there, Judge Schopf said.

Damages

Even if Susan Weber breached her fiduciary duty by holding onto the Cat Island property for sentimental reasons and used it as a vacation property during that time, Owen Weber has not demonstrated resulting damages, Judge Schopf said.  Susan Weber’s role as trustee made her yearly visits to the Cat Island property reasonable since she was responsible for its oversight, Judge Schopf said.

“Were the Court able to find that all or some of Petitioner's use of the Cat Island Property was inappropriate, the record is likewise inadequate to establish any damages.  Although Petitioner testified vaguely to a range of one thousand dollars ($1,000.00) to fifteen hundred dollars ($1,500.00), no evidence was introduced as to the actual weekly rental rate for the Cat Island Property during the periods of her use.  There was also no evidence submitted as to what dates the Cat Island Property was rented to third parties, the dates of Petitioner's time there, or even that Petitioner's peak season stays prevented income to the Trust from a potential renter.  On the record before it, the Court cannot accurately determine the scope of Petitioner's mix of personal and business use of the Cat Island Property, that the same was inappropriate, nor can it establish any accurate measure of damages to attribute to a potential finding,” Judge Schopf said.

Judge Schopf found Ranson’s opinions on Owen Weber’s damages unconvincing.  Ranson relied on outdated versions of statutes, failed to appropriately compare investments and ignored some taxation evidence, Judge Schopf said.

AI Questions

Ranson also admitted that he relied on the Microsoft Copilot artificial intelligence to cross-check some of his calculations, Judge Schopf said.  But Ranson could not recall what prompts he used or on what sources Copilot relied for its answers.  Ranson could not explain how Copilot works or how it arrived at its responses.  There was no evidence about whether Copilot considered various fees or tax implications, Judge Schopf said.

“The Court has no objective understanding as to how Copilot works, and none was elicited as part of the testimony.  To illustrate the concern with this, the Court entered the following prompt into Microsoft Copilot on its Unified Court System (UCS) issued computer:  ‘Can you calculate the value of $250,000 invested in the Vanguard Balanced Index Fund from December 31, 2004 through January 31, 2021?’ and it returned a value of $949,070.97 — a number different than Mr. Ranson's.  Upon running this same query on two (2) additional UCS computers, it returned values of $948,209.63 and a little more than $951,000.00, respectively.  While these resulting variations are not large, the fact there are variations at all calls into question the. . . reliability and accuracy of Copilot to generate evidence to be relied upon in a court proceeding,” Judge Schopf said.

Judge Schopf noted: “Interestingly, when asked the following question: ‘are you accurate’, Copilot generated the following answer: ‘I aim to be accurate within the data I've been trained on and the information I can find for you.  That said, my accuracy is only as good as my sources . . . so for critical matters, it's always wise to verify.”

Even Copilot appears to recognize the need for human oversight and analysis and to verify the accuracy of its responses, Judge Schopf said.

Reliability

While Ranson defended his use of Copilot and other AI tools in this setting, he was unable to point to any publication or source confirming that its use fell within generally accepted methodology, Judge Schopf said.

“Recent decisions show that Courts have recognized that due process issues can arise when decisions are made by a software program, rather than by, or at the direction of, the analyst, especially in the use of cutting-edge technology (People v Wakefield,175 AD3d 158[3d Dept 2019]).  The Court of Appeals has found that certain industry specific artificial intelligence technology is generally accepted (People v. Wakefield, 38 NY3d 367[2022] [allowing artificial intelligence assisted software analysis of DNA in a criminal case]). However,Wakefieldinvolved a fullFrye hearingthat included expert testimony that explained the mathematical formulas, the processes involved, and the peer-reviewed published articles in scientific journals.  In the instant case, the record is devoid of any evidence as to the reliability of Microsoft Copilot in general, let alone as it relates to how it was applied here.  Without more, the Court cannot blindly accept as accurate, calculations which are performed by artificial intelligence,” Judge Schopf said.

The evolution of AI and its “inherent reliability issues” imposes on counsel a duty to disclose its use and any resulting evidence should be the subject of a Frye v. United States, 293 F. 1013D.C. Cir. 1923, hearing, Judge Schopf said.

Counsel

Owen Weber is represented by Jennifer M. Boll and Mara D. Afzali of Bond Schoeneck & Kling LLP in Albany, N.Y.

Susan Weber is represented by Carl W. Hasselbarth in Clifton Park, N.Y.