Opinion
4995/68.
Decided February 23, 2000.
Incident to their final accounting, the successor trustees of the trust established for the benefit of Lydia Heimlich under the will of Edward Rudin seek summary judgment dismissing objections filed by testator's nephew, Donald Heimlich, one of three remaindermen. Of the two other remaindermen of the trust, one is a petitioning trustee and the other has filed a waiver and consent.
Mr. Rudin died on July 24, 1968, survived by two brothers and three sisters. His will, dated January 19, 1968, was admitted to probate and letters testamentary and of trusteeship issued to four of his siblings, namely Samuel Rudin, Henry Rudin, Helen Rudin and Lydia Heimlich. All of the original trustees eventually died and were succeeded by petitioners.
Testator directed in Article SEVENTH of his will that his residuary estate be divided into Fund A and Fund B as follows:
Fund A shall consist of two-thirds of my shares of capital stock of 945 Fifth Avenue, Inc., Pierpont Estates, Inc. and Rudin Estates, Inc. and all of my shares of capital stock of all other Rudin Family Corporations (as hereinafter defined) excepting and excluding Rudin Management Co., Inc.
Fund B shall consist of the balance of my Residuary Estate. . . .
Fund A was left to a charitable corporation to be known as The Louis and Rachel Rudin Foundation Inc. Fund B was to be divided into three equal shares to be held in separate trusts for each of testator's sisters, Lydia Heimlich, Mary Steinman and Helen Rudin, and their respective children. Upon the death of any sister, her trust was to terminate, with principal distributable equally to Lydia's son, Donald Heimlich, and Mary Steinman's children, Lewis Steinman and Natalie Lewin.
The term "Rudin Family Corporations" referred to Article SEVENTH is defined in Article TENTH (A) of the will as comprising the corporations in which testator, his brothers, sisters and certain nephews collectively had controlling interest.
The four executors (including Lydia) filed their final accounting covering the period from testator's death on July 24, 1968, to March 10, 1972. They thereafter filed a supplemental account covering the period from March 11, 1972, to December 1, 1972. No objections were filed and the executors' account was judicially settled on January 11, 1973. The decree authorized the executors to distribute to themselves as trustees of the trust for the benefit of Lydia (the "Lydia Trust") one-third of the remaining principal on hand, which included 1.583333 shares of 945 Fifth Avenue, Inc., 5.0 shares of Rudin Estates, Inc., .5 shares of Pierpont Estates, Inc., and 6.66667 shares of Rudin Management Co., Inc. The decree also noted that Donald Heimlich "appeared in this proceeding and waived the issuance and service of Citation and consented that a decree be made settling the account of the Executors."
The executors funded the Lydia Trust on January 19, 1973, with the above-mentioned shares, valued at $532,181.90, plus $10,641.76 in cash. In February 1973, the executors also distributed to Lydia, as income beneficiary of the Lydia Trust, all accumulated income to which she was entitled at the date the trust was funded. In connection with such distribution, Lydia released the executors from all liability in connection with the income accumulated from July 24, 1968, through February 10, 1973.
With respect to the appointment of successor trustees when fiduciaries died, testator's will provided that petitioner Jack Rudin was to succeed his father Samuel (which occurred in 1975); petitioner Lewis Rudin was to succeed his uncle Henry (which occurred in 1976); and petitioner Lewis Steinman was to succeed his aunt Helen (which occurred in 1978). Lydia continued to serve as trustee until her death on January 13, 1992. No-one was appointed to succeed her for purposes of winding up the Lydia Trust.
The successor trustees filed their final account for the Lydia Trust, on April 15, 1996, in two parts: Part I, which covers the period from the date the Lydia Trust was funded (January 19, 1973) to the date of Lydia's death (January 13, 1992); and Part II, which covers the period from the latter date to December 31, 1995.
Since the fiduciaries of the estates of the original trustees did not file accounts for their decedents' actions as trustees, such fiduciaries were made parties to this proceeding. Donald Heimlich ("objectant"), who appeared in his individual capacity, was thus also brought into the proceeding as executor of his mother's estate. Following the death of petitioner Lewis Steinman, the executrix of his estate was substituted for him in this proceeding.
Shortly after the accounting was filed, the first of objectant's attorneys served document demands and, in response, petitioners produced documents totalling over 22,500 pages. A few months later, objectant served separate notices (pursuant to BCL 624) upon sixteen Rudin family corporations in which he claims a direct or indirect interest through his mother, seeking production of stock books, stockholder ledgers and corporate minute books. He also attempted to serve two additional such corporations that were no longer in existence. Objectant reviewed the records produced by the sixteen extant corporations at the offices of Milton N. Hoffman Co., accountants for the Rudin family corporations, over the course of seven days and selected more than 1000 additional pages for photocopying. In addition, objectant's counsel deposed petitioners as well as the accountant for the Lydia Trust and one of the lawyers who had represented the trustees in connection with their administration of the trust. On June 1, 1998, objectant filed objections to the trustees' account in his individual capacity and as the executor of his mother's estate. Objectant was himself subsequently deposed (represented by new counsel) and required to furnish a Bill of Particulars.
Of the fifty-six numbered objections addressed to Part I and Part II of the trustees' account, about half relate directly to objectant's claim that certain assets (as well as income derived from those assets) should have been included in testator's estate and thus in the Lydia Trust (the "Missing Asset Objections"). To the extent that these objections can be understood (with the limited assistance of objectant's Bill of Particulars), they appear to allege that petitioners have breached a duty to recover assets that testator should have acquired 1) on the distribution of the estate of his mother Rachel in 1945, but that were instead misappropriated by some of his siblings, and 2) as his fair share of family money and opportunities, but that were instead diverted by his brother Samuel during some undefined period. It is noted that, over the course of the many years following the commission of such alleged wrongs, testator, who himself was a lawyer and apparently involved in the family's businesses, never made the claims that objectant is making today, decades after the fact.
The remaining objections charge petitioners with having improperly administered the assets of the Lydia Trust in various ways. These objections include, inter alia, allegations relating to petitioners' purported 1) delay in funding the Lydia Trust, 2) conflicts of interest, 3) misallocation of income and expenses to trust entities, 4) diversion of assets from entities in which the Lydia Trust had an interest, and 5) improper lending to certain other entities.
Objectant seeks the following relief: 1) that petitioners be surcharged for violating their fiduciary obligations, 2) that petitioners be directed to restore to the Lydia Trust assets properly includible in the trust, 3) that the legal fees and disbursement of Goldfarb Fleece in the amount of $10,657.83 be disallowed (with the portion already paid to such firm restored to the trust), and 4) that accounting fees of Milton N. Hoffman Co. in the amount of $17,650.00 be disallowed (with the portion already paid to such firm restored to the trust).
The Summary Judgment Motion
After discovery was completed, petitioners moved for summary judgment dismissing all of the objections. Petitioners make several distinct arguments in support of their motion. With respect to the Missing Asset Objections, they contend inter alia that, in light of (a) Lydia's endorsement of the executors' final account in testator's estate and (b) the decree judicially settling the executors' account in 1973, as well as objectant's own consent to the settlement of his uncle's estate, such objections are barred by the principles of res judicata and judicial estoppel; and that, objectant's extensive discovery notwithstanding, he submits no evidence to support such objections.
According to petitioners, most of the remaining objections are reducible to the proposition that petitioners breached their fiduciary duty by conspiring with their agents to withhold information from objectant and his mother. Petitioners argue that such objections fail because they do not state a claim of pecuniary harm and, like the Missing Asset Objections, in any event lack evidentiary support.
It is noted that objectant's papers on this motion appear to address only the Missing Asset Objections. It is further noted that his submissions introduce a theory that is to some extent inconsistent with such objections and also clearly runs counter to objectant's interests in this proceeding, namely, that the assets of the Lydia Trust have been overstated to the extent that testator received (at his sisters' expense) more than his fair share of his mother's estate. Clearly, such theory is not a basis for complaint by objectant in this proceeding.
It is well established that summary judgment is a drastic remedy and should be granted only when it is clear that no material issues of fact exist ( Rotuba Extruders v. Ceppos, 46 NY2d 223; Andre v. Pomeroy, 35 NY2d 361). The party seeking summary judgment must present sufficient evidence in admissible form to demonstrate the absence of any material issue of fact ( Alvarez v. Prospect Hosp., 68 NY2d 320; Winegrad v. New York Univ. Med. Ctr., 64 NY2d 851). However, once the requisite proof has been submitted, the party opposing summary judgment must come forward with proof, in admissible form, establishing a genuine and material issue of fact for trial and thus preventing summary judgment as a matter of law ( Capelin Assoc. v. Globe Mfg. Corp., 34 NY2d 338). In other words, "mere conclusions, expressions of hope or unsubstantiated allegations or assertions are insufficient" to raise a triable issue of fact ( Zuckerman v. City of New York, 49 NY2d 557, 562).
The Missing Asset Objections
We address first petitioners' contention that the 1973 decree bars the Missing Asset Objections under the doctrines of res judicata and judicial estoppel. As a general rule, an accounting decree binds all parties to the proceeding and "is conclusive not only as to issues which were actively presented and determined, but as to those which could have been raised" with respect to matters embraced in the accounting ( Matter of Ziegler, 161 Misc 2d 203, 204-05, affd 213 AD2d 280). The accounting is deemed to embrace only such matters as are "clearly and specifically set out and which can be definitely ascertained from a reading of the account and the decree." ( Matter of Seaman, 275 AD 484, 490, affd 300 NY 756). Moreover, the "usual and general statement in an account that it contains all of decedent's property does not per se amount to a renunciation of responsibility as to specific assets which are not set forth," ( Matter of Lewin, 41 Misc 2d 72, 75) and thus does not render the decree conclusive with respect to such unspecified assets ( Matter of Williams, 1 AD2d 1022).
In his Bill of Particulars, objectant has identified eight Rudin family entities as the subjects of his Missing Asset Objections. Of these entities, testator's interests in four of them (945 Fifth Avenue, Inc.; Rudin Estates, Inc.; Pierpont Estates, Inc.; and Rudin Management Co., Inc.) were specifically identified in the 1973 decree settling the executors' account as the assets to be used to fund the Lydia Trust. With regard to all of the Rudin family entities identified in the executors' account, the issue is whether the disclosure of testator's interests in those entities bars objectant from now complaining that the trust had been underfunded with respect to them. As a corollary, if there was such disclosure, the positions assumed by objectant and his mother in the earlier proceeding would point to the fairness of barring objectant from taking an inconsistent position here.
In this regard, Matter of Zilkha ( 174 AD2d 331) is instructive. In that case, the testator had died in 1956 leaving one half of his estate in trust for his wife for life. The widow and two of their sons were appointed executors and trustees. The trustees had the power to invade the trust for the benefit of the widow, who had a general testamentary power of appointment over the remainder.
The executors' account was judicially settled in 1962 and the widow in 1973 executed a receipt and release with respect to an informal intermediate accounting of the trust through August 1973. The widow died in 1985, having exercised the power of appointment in favor of her residuary estate. However, by the time she died, the trustees' invasions of principal for her benefit had left the trust without assets. In 1987, two of the residuary beneficiaries of her estate sought to compel an accounting of the marital trust and to discover assets owned by the testator at his death or held by his fiduciaries thereafter. The court held inter alia that the petitioners were "precluded from questioning any of the assets listed as the closing balance for the prior accounting. . . ." ( Matter of Zilkha, NYLJ, August 3, 1989, at p 18, col 4).
The First Department unanimously affirmed, ruling that the 1962 decree on the executors' accounting was res judicata as to the funding of the trust. The court further held that the petitioners were in any event estopped from questioning such funding since their predecessor-in-interest (the widow) had been a proponent of the executors' account as well as a consenting beneficiary in relation to the decree settling such account ( Matter of Zilkha, 174 AD2d at 334).
As in Zilkha, the executors' proceedings in this estate were settled by a decree. Moreover, as in Zilkha, the earlier accounting afforded objectant and his mother opportunity to raise objections concerning the composition of the Lydia Trust, but neither chose to object. Indeed, Lydia, as a proponent of the executors' account, swore to its accuracy (and received from the decree the benefit of a release) and the objectant here, in his individual capacity, filed a waiver and consent. In this connection, it is noted that the executors' account specified the holdings in Rudin family enterprises that comprised Fund A and Fund B of testator's residuary estate. Furthermore, the decree itself set forth the exact number of shares of 945 Fifth Avenue, Inc., Pierpont Estates, Inc., Rudin Estates, Inc., and Rudin Management Co., Inc., that were to be used to fund the Lydia Trust and directed the executors to transfer those shares to themselves in their capacity as trustees. In other words, the account and decree furnished all of the information that objectant and his mother required to determine 1) whether additional shares of these four Rudin family entities were missing from Fund B and ultimately from the Lydia Trust and 2) whether any Rudin Family entities that passed to the Louis and Rachel Rudin Foundation as part of Fund A should have passed instead to the Lydia Trust.
Moreover, apart from vague and unsubstantiated assertions that objectant and his mother were then unaware of the events giving rise to the Missing Asset Objections, there is nothing in the record to suggest that the 1973 decree was a product of fraud or misrepresentation. Accordingly, as a matter of res judicata and judicial estoppel, objectant is barred from claiming that the closing balance of the executors' account understated testator's interest in 945 Fifth Avenue, Inc., Pierpont Estates, Inc., Rudin Estates, Inc. and Rudin Management Co., Inc., the four Rudin Family entities that testator specifically allocated in part to the fund (Fund B) in which the Lydia Trust shared. Similarly, objectant is also barred from asserting claims that testator's interest in other Rudin Family entities was understated to the extent that those interests were set forth in the executors' account and the 1973 decree ( see, e.g., Matter of Zilkha, supra; Matter of Williams, supra; Matter of Seamen, supra).
Although his papers are not clear on the point, objectant's missing-asset theory may be understood to extend to other Rudin Family entities not disclosed in the 1973 accounting proceeding and thus arguably not barred by res judicata. If so, it is noted that objectant's standing with respect to such "family" entities would necessarily be limited to those outside the definition of "Rudin Family Corporations," i.e., entities allocated to Fund A, in which objectant has no interest.
Whether all or only part of the Missing Asset Objections are foreclosed by res judicata and judicial estoppel, they in any event fall in the wake of objectant's failure to come forward with evidentiary support for his allegations.
In a contested accounting proceeding, the accounting fiduciary has the burden of proving that he or she has fully accounted for all the assets of the estate and that the accounting itself is complete and accurate ( see, Matter of Schnare, 191 AD2d 859). As a rule, the fiduciary makes a prima facie showing by filing an account supported by an affidavit attesting to its accuracy. The objectant then bears the burden of coming forward with sufficient evidence to put the completeness and accuracy of the accounting into question. If the objectant submits such evidence, the burden of going forward then shifts back to the accounting fiduciary to prove by a fair preponderance of credible evidence that the account is accurate and complete ( see, Matter of Schnare, supra).
Here, petitioners have met their initial burden by attesting to the accuracy of their account. In addition, the executors of testator's estate (including Lydia) attested to the accuracy of the account from which the Lydia Trust was funded. Thus, in order to avoid summary judgment, objectant must come forward with more than conjecture and suspicion to support his allegation that there are more assets than accounted for ( see, Matter of Mann, 41 AD2d 861; Matter of Antoniades, 43 Misc 2d 782). Moreover, he must come forward with proof in evidentiary form ( Capelin Assoc. v. Globe Mfg. Corp., supra, 34 NY2d 338).
Objectant, however, offers conclusory and inconsistent assertions to the effect that (1) the estate of testator's mother, Rachel, was not properly distributed and (2) testator's brother Samuel diverted assets and opportunities that should have enured to the ultimate benefit of those interested in the Lydia Trust.
With respect to the assets allegedly diverted from Rachel's estate, the Missing Asset Objections are heavy on theory, but light on logic and evidence. As purported proof that Rachel's assets were misallocated at the ultimate expense of the Lydia Trust, objectant offers to show that at various times the Rudin siblings held differing interests in many of the Rudin family entities. Such inequality, however, even if shown by competent evidence (which is not the case here) does not in turn support objectant's thesis that testator, his estate and ultimately the Lydia Trust were deprived of rightful interests in Rudin family entities.
With respect to objectant's theory that Samuel Rudin cheated testator out of family funds and opportunities that should have enured to the benefit of the Lydia Trust, such proposition rests essentially on the "inexplicable fact" that Samuel left an estate worth $19,000,000, including a "corporate empire" consisting of entities in which only he had an interest. As proof of such assertion, objectant offers a document, entitled "Corporate and Partnership Interests," listing what appears to be Rudin family entities, the number of shares outstanding for each entity and the names of Rudin family members having an interest in each of the entities. What this document is, when it was prepared, who prepared it and the source of the information contained in it are left a mystery. In short, such purported documentation cannot be considered on this motion ( see, Capelin Assoc. v. Globe Mfg. Corp., supra), and even if it could, the document does not help objectant. The fact that Samuel Rudin at his death was wealthier than some of his siblings does not prove that there are assets missing from the Lydia Trust.
It is noted that much of objectant's "proof" tends only to show that testator and his brothers received more, not less, than their fair share of family holdings.
Typical of objectant's submissions in support of his arguments is a page of handwritten notes offered as "proof" that Lydia was misled to the belief that an un-probated instrument purporting to have been Rachel's "will" controlled the disposition of her mother's assets in her brothers' favor. These notes prove nothing. They are barely legible and someone has clearly altered the notes by tracing over some of the words, placing their authenticity and accuracy in question. In addition, objectant never states that his mother authored the notes or when the notes were prepared.
Despite two years of discovery, multiple depositions and the exchange of thousands of pages of documents, objectant has failed to come forward with evidence that is sufficient to create an issue of fact concerning his Missing Asset Objections and summary judgment is therefore granted dismissing those objections.
The Remaining Objections
Petitioners' papers address each of objectant's other objections with specificity. Objectant for his part, however, fails to mention, much less to support with evidence, any of these objections. Thus, the only issue is whether petitioners have met their initial burden of establishing that no material issue of fact exists to preclude summary judgment.
Objection number two relates to the failure of petitioners to fund the Lydia Trust for five years after testator's death. In February 1973, the executors of testator's estate distributed to Lydia the accumulated income to which she was entitled from the date of testator's death up to and including the date the trust was funded as required by EPTL 11-2.1(c)(1). In connection with that payment, Lydia in her individual capacity executed an instrument releasing the executors in relation to any issue that might arise with respect to such distribution, which release thus precludes objectant as her successor-in-interest from raising objection number two ( see, Matter of Zilkha, supra, 174 AD2d 331; Matter of Allen, 280 AD 868, affd 306 NY 720). In this connection, objectant fares no better in his individual capacity. His status as a remainderman of the trust does not entitle him to enforce the rights of the deceased income beneficiary. Accordingly, objection number 2 is dismissed.
Objections number 3 and 31 relate to objectant's contention that petitioners' administration of the trust was pervaded by conflicts of interest arising from their duties to the beneficiaries of the Lydia Trust, on the one hand, and, on the other, their duties to the corporate entities which form the principal assets of the Lydia Trust. Express provisions of the will, however, make it clear that testator recognized the potential conflict of interest between his designees' role as trust fiduciaries and as officers or directors of the corporations in which the Lydia Trust would have an interest. In Article TENTH of the will, he authorized the trustees to deal with themselves or any entity in which they had an interest as freely as they might deal with an independent third party and directed that they were not to be held liable for their acts except if they were committed in bad faith or fraudulently. Given such provision and the fact that objectant has not come forward with any evidence to support these objections, there is no material issue of fact. Objections number 3 and 31 are therefore dismissed ( see, Matter of Foss, 282 AD 509).
Objections number 9 and 36 relate to objectant's contention that petitioners "failed to take action with respect to significant contributions of Lydia Trust funds to charitable foundations in which the trust had no interest but which are controlled, upon information and belief, by Samuel Rudin and/or members of his family." Petitioners cannot be expected to produce evidence to prove a negative, i.e., that they made no such contributions. Accordingly, it was objectant's burden to come forward if he could with affirmative evidence tending to show that there were such contributions. Objectant has failed to do so. Accordingly, objections number 9 and 36 are dismissed.
Objections number 10 and 37 charge that, for personal gain, petitioners (in managing Rudin family real estate holdings through Rudin Management Co., Inc.) took certain accounting steps that favored entities in which the Lydia Trust had no interest and disadvantaged entities in which the trust had an interest. In this connection, petitioners have submitted deposition testimony tending to show that the family's real estate holdings are managed in accordance with industry norms and consistently with business judgment aimed at benefiting the family enterprises as a whole. In the absence of any evidence from objectant creating a genuine issue as to such norms ( e.g., in relation to management fees for commercial and residential realty), objections number 10 and 37 are dismissed.
Objections number 11 and 38 charge that petitioners allowed assets owned by the Lydia Trust to be diverted to entities in which the Lydia Trust had no interest for "the purpose, upon information and belief, of developing entities in which the Petitioners are principal owners, all to the personal financial benefit of the Petitioners and to the detriment of the Trust." Petitioners have attested that no funds were thus diverted. Here too objectant comes forward with no proof. Accordingly, objections number 11 and 38 are dismissed.
Objections number 12 and 39 charge that petitioners failed to take action to prevent payment of excessive salaries to their relatives as corporate officers and employees of entities in which the Lydia Trust had an interest. Petitioners argue that there is no evidence to suggest that the salaries paid to such persons were excessive when compared to the salaries being offered by similar companies. Petitioners' assertion is supported by objectant's own deposition, at which, in relation to one of the salaries in question, he testified that people in comparable positions elsewhere "probably earn a lot more." Again, in the absence of any evidence from objectant in support of these objections, they are dismissed.
Objections number 13, 14, 15, 40, 41, and 42 charge petitioners with failing to take action to prevent the making of loans from corporate entities in which the Lydia Trust had an interest to corporate entities in which it did not, failing to charge reasonable rates of interest for such loans and failing to secure repayment of such loans. Rather than identifying such loans with particularity, objectant has (in his Bill of Particulars) merely averred that, upon information and belief, the general ledger statements for each of the entities in which the Lydia Trust has an interest reflect that these loans were made and that such loans were made at a less than adequate interest rate. Petitioners cannot be expected to prove a negative, i.e., that no such loans were ever made. The burden instead is on objectant to come forward with evidence of such transactions and the financial loss they caused the Lydia Trust ( see, Matter of Donner, 82 NY2d 574; Matter of Bank of NY, 35 NY2d 512). Since he has not submitted any such evidence, objections number 13, 14, 15, 40, 41 and 42 are dismissed.
Objections number 17 and 44 relate to loans totaling $16,899.87 to the Lydia Trust from the trusts for the respective benefit of Helen Rudin and Mary Steinman and from Rudin Estates Co., Inc., as reflected in Schedules C and C-1 of the account. Objection number 43 challenges Schedule A-1 of the account to the extent that it reflects monies withheld from income in order to repay these loans. The thrust of these objections is that the loans would not have been required if petitioners had administered the trust properly. Objectant, however, presents no evidence to support these objections. Petitioners point to deposition testimony to the effect that the loans were necessary because the Lydia Trust did not have sufficient cash to pay taxes. The fact that these loans were made per se is insufficient to create an issue of fact. Accordingly, objections number 17, 43 and 44 are dismissed.
Objection number 19 relates to the claim that, on the liquidation of Rudin Estates, Inc., in 1986, the Lydia Trust's interests in the entities received in the liquidation were understated due to misconduct and self-dealing by petitioners. At their depositions, petitioners testified that the company was liquidated for tax saving purposes and that there was "no change to anybody's stock interest." This statement is supported by the trustees' account, which indicates no net cost to the Lydia Trust as a result of the liquidation. Accordingly, objection number 19 is dismissed.
Objections number 24 and 45 relate to the claim that the firm of Goldfarb Fleece, the attorneys for petitioners, are not entitled to receive fees for their services because such services benefited petitioners and not the Lydia Trust. The total amount of legal fees and disbursements requested is $10,657.83 of which $1,506.45 has been paid. A related objection, number 23, concerns $1,506.45 in legal fees that were charged to income rather than to principal.
With respect to objections number 24 and 45, petitioners note that the legal fees requested represent fees incurred over the 22-year period from the funding of the Lydia Trust to the date of the trustees' account. In addition, petitioners submit an affidavit of services that details the legal services performed. Based on such documentation, petitioners submit that they have met their burden of establishing that the fees requested ($10,657.83) are reasonable and arose from services that benefited the Lydia Trust. Objectant has not submitted any evidence directed toward these objections and they therefore are dismissed.
With regard to objection number 23, petitioners assert that the trustees charged $1,506.45 in legal fees against income because principal was illiquid at the time the charge was incurred. The governing statute (EPTL 11-2.1[l]) addresses what charges should be made against income and principal and specifically provides that attorneys' fees are properly charged to principal. Liquidity at the time an expense arises or is paid is not a factor in determining whether, as an accounting matter, such expense is chargeable to income or principal. An exception to the general rule is made when counsel fees are incurred in a proceeding which "primarily concerns income" (EPTL 11-2.1[l][2]), but in attempting to support the charges in question petitioners do not suggest that it had such a basis. Since petitioners themselves do not raise a material question of fact in this regard, summary judgment on this objection is granted to objectant (CPLR 3212[b]) and petitioners shall amend their account accordingly.
Objections number 25, 26, 48 and 49 charge that Milton N. Hoffman Co., the accounting firm that provided services to the fiduciaries, should not be compensated for its services, first, because they did not benefit the Lydia Trust and, second, because the services performed by the accountants should have been performed by attorneys or petitioners. The total amount charged for accounting services is $17,650.00, of which $10,150.00 has been paid from the Lydia Trust.
The accounting services in question were rendered during the course of the twenty-two-year period covered by the trust account and include the preparation of twenty-two fiduciary income tax returns and the services performed in connection with preparing the account itself. Given the length of the trust's administration and the fact that trust principal is valued at over $530,000.00 from which income totaling $1,665,992.70 has been distributed, petitioners submit that they have met their burden of establishing that the fees requested ($17,650.00) are reasonable. Again, objectant has come forward with no evidence to the contrary. Moreover, it is noted that Article ELEVENTH of testator's will authorized the fiduciaries to retain accountants, among other professionals, "as they m[ight] deem necessary" and to "make any payment therefor as they m[ight] deem advisable." It is further noted that the fees in question were likely much more modest than the legal fees that would have been incurred had the fiduciaries turned to counsel rather than an accountant to handle the estate's tax and accounting needs. Accordingly, objections number 25, 26, 48 and 49 are dismissed.
Objection number 55 challenges Schedule I of the account to the extent that it reports cash on hand ($15,467.01) in a non-interest-bearing account. According to petitioners, that amount consists of the December 1994 distribution from the Lydia Trust's interest in 945 Fifth Avenue, Inc., which would have been payable to the three remaindermen of the Lydia Trust, but which was withheld as a convenient reserve for the payment of taxes and administrative expenses in anticipation of the final trust accounting. Objectant has presented no evidence to suggest that such a deposit for the purposes indicated was under these circumstances improper. Accordingly, objection number 55 is dismissed.
Finally, objection number 56 challenges Schedule G to the extent that it lists petitioner Lewis Steinman, now deceased, as an interested party, rather than the fiduciary of his estate. However, as petitioners point out, Lewis Steinman died after the trustees' account was filed and thereafter Joan Steinman, the executrix of his estate, appeared in this proceeding. Accordingly, objection number 56 is dismissed.
Petitioners seek sanctions under NYCRR 130-1.1. Although objectant's papers in opposition to summary judgment are markedly deficient, failing to address some of the objections and failing to offer evidence sufficient to create an issue of fact with respect to the rest, his position here is not so "frivolous" as to warrant the imposition of sanctions. Accordingly, the relief requested is denied.
Based upon the foregoing, petitioners' motion for summary judgment is in all respects granted, except for objection number 23, as to which summary judgment is granted to objectant.
Settle decree accordingly.