Opinion
No. 96323/D.
06-09-2016
In the Matter of the Application for a Judgment Declaring The J. STEVEN DEHIMER IRREVOCABLE TRUST, successor to the Marion A. Sears Trusts, Void. In the Matter of the Application for a Judgment Declaring The Lorie Dehimer Irrevocable Trust, successor to the Marion A. Sears Trusts, Void. In the Matter of the Application for a Judgment Declaring The Lorie Dehimer Irrevocable Trust, successor to the Marion A. Sears Trusts, Void.
Michael E. O'Connor, Esq., Costello Cooney & Fearon, PLLC, for the Movants (Petitioners–Grantors). Cecilia R.S. Cannon, Esq., Bousquet Holstein PLLC, for the Cross–Movants (Respondents–Trustees).
Michael E. O'Connor, Esq., Costello Cooney & Fearon, PLLC, for the Movants (Petitioners–Grantors).
Cecilia R.S. Cannon, Esq., Bousquet Holstein PLLC, for the Cross–Movants (Respondents–Trustees).
LOUIS P. GIGLIOTTI, J.
This case returns to the Court's docket as Petitioners–Grantors J. Steven DeHimer and Lorie DeHimer allege new grounds upon which to dismantle their inter vivos irrevocable trusts, this time claiming that no beneficiary exists to enforce the terms of said trusts and as such, the trusts fail as a matter of law. Petitioners–Grantors have moved for an order granting summary judgment in their favor, declaring The J. Steven DeHimer Irrevocable Trust, Successor to the Marion A. Sears Trusts (hereinafter “Steven's Trust”), and The Lorie DeHimer Irrevocable Trust, Successor to the Marion A. Sears Trusts (hereinafter “Lorie's Trust”) to be void, directing Respondents–Trustees Howard P. Sears, Jr., Thomas A. Sears and David H. Wood to account for property held in Steven's Trust and Lorie's Trust, and directing the Respondents–Trustees to transfer immediately the property within each trust to each respective Petitioner–Grantor. Respondents–Trustees in turn cross-moved for summary judgment to dismiss the petitions filed by Petitioner–Grantors.
Context for these proceedings is detailed in an earlier decision rendered in this case, dated November 8, 2012. In sum, Steven's Trust and Lorie's Trust were funded with monies received by Petitioners–Grantors from trusts created by their grandmother. The decision to transfer funds out of the trusts in 2010 was precipitated by the suspension of the federal generation-skipping transfer tax that year. Petitioners–Grantors each retained 45% of their respective shares of these trusts, with the balance used to fund the irrevocable trusts now at issue, which were created on December 7, 2010.
Less than a year later, on September 21, 2011, Petitioners–Grantors filed petitions seeking to have Steven's Trust and Lorie's Trust declared invalid as being void ab initio. Respondents–Trustees moved to dismiss the petitions, which relief this Court granted. The Appellate Division, Fourth Department modified the order to the extent that it reinstated the claims of breach of fiduciary duty by Respondents–Trustees. (See Matter of Lorie DeHimer Irrevocable Trust, 122 AD3d 1352 [4th Dept 2014] ). Following the appellate court's decision, Respondents–Trustees filed verified answers with affirmative defenses on March 13, 2015.
By letter dated September 14, 2015, counsel for Petitioners–Grantors simultaneously submitted new petitions and the present summary judgment motions. These papers assert the trusts are void because under the terms of the trust agreements as written, no current or remainder beneficiary of the trust has ever existed or will ever exist. Copies of Steven's Trust and Lorie's Trust are attached as Exhibit A to each respective petition, and they are substantively identical. Respondents–Trustees filed cross-motions for summary judgment, without filing separate answers to the newer petitions. Counsel for each side engaged in extensive briefing prior to and following oral argument held October 19, 2015, including answering a series of substantive questions raised by the Court in a letter dated April 4, 2016.
In addition to the substantive issues raised in the motion papers, the procedural posture of the case presented another layer of issues for consideration. In particular, Petitioners–Grantors moved for summary judgment prior to issue being joined, as is required by CPLR 3212(a), and neither side included a copy of the pleadings with the summary judgment papers, as is required by CPLR 3212(b). In the above-referenced letter to counsel dated April 4, 2016, the Court proposed a means by which to allow Respondents–Trustees an opportunity to submit answers in opposition to the petitions, permit the parties to re-notice their motions so as to include copies of the pleadings for both sides, and proceed on the motions using the supporting documents previously submitted.
Counsel for Petitioners–Grantors consented to this proposal by letter dated April 12, 2016. Counsel for both sides subsequently contacted the Principal Court Attorney via telephone on April 19, 2016, seeking clarification as to whether Respondents–Trustees could include an additional supporting affidavit with their re-noticed motions. In particular, the affidavit is signed by Ronald Francis, sworn to on November 30, 2011, and was previously submitted by the Respondents–Trustees in support of their motions to dismiss the original petitions filed in 2011. Counsel for Respondents–Trustees had asked the Court to take judicial notice of this affidavit in a letter dated November 10, 2015 (after oral argument was concluded), and counsel for Petitioners–Grantors had opposed this request in a letter dated November 17, 2015. The Principal Court Attorney advised counsel for Respondents–Trustees that when writing its April 4, 2016 letter, the Court was not intending to create an opportunity for motion papers to be supplemented and as such, counsel could object to the procedure as presented in said letter. The Principal Court Attorney further advised that if objections were raised to the Court's proposal, counsel for Petitioners–Grantors could modify the position taken in his April 12th correspondence.
By way of letter dated April 21, 2016, counsel for Respondents–Trustees set forth an alternative proposal to address the Court's concerns, which included withdrawing the cross-motions for summary judgment, filing answers to the petitions, and bringing new motions for summary judgment with a revised briefing schedule. Counsel for Petitioners–Grantors objected to this proposal in a letter dated April 26, 2016, reasoning that issue had been joined when the Respondents–Trustees cross-moved for summary judgment, that filing answers would serve no further purpose because all pertinent issues had been briefed in the motion papers, and that the time to file answers had expired in any event because the return date on the citation for the petitions was October 19, 2015.
In light of this correspondence, the Court sent a letter dated May 2, 2016 with a series of follow-up questions generated by counsels' letters of April 21st and April 26th. Timely responses were received, and the Court addresses the procedural and substantive issues as follows.
LEGAL ANALYSIS
CPLR 3212 sets forth certain procedural requirements for summary judgment motions. Pursuant to CPLR 3212(a), a party may move for summary judgment only “after issue has been joined.” The Fourth Department has reversed orders granting summary judgment motions brought prior to an answer being filed, on the basis that the trial court rendered its decision without an opportunity to consider the claims asserted, the responses to said claims, and any affirmative defenses raised. (See, e.g., Rine v. Higgins, 244 A.D.2d 963, 964 [4th Dept 1997] ; Miller v. Nationwide Mut. Fire Ins. Co., 92 A.D.2d 723, 724 [4th Dept 1983] ); cf. Duell v. Hancock, 83 A.D.2d 762, 762–63 [4th Dept 1981] [finding harmless error where summary judgment motion was filed before issue was joined, but where trial court had opportunity to consider the contents of a subsequently-filed answer when granting the relief sought] ). Likewise, the Fourth Department has reversed orders granting summary judgment when the motion papers failed to include a copy of the pleadings as required by CPLR 3212(b). (See Kyung Mi Lee v. Musso, 30 AD3d 1089, 1039 [4th Dept 2006] [reversing grant of summary judgment motion because movant failed to attached a copy of the complaint, independent and regardless of the merits of the underlying motion]; Gallagher v. TDS Telecom, 280 A.D.2d 991, 991 [4th Dept 2001] [reinstating complaint where cross-motions for summary judgment failed to include a copy of the pleadings in support of the requested relief] ).
Analyzing first the timing of the summary judgment motions, it turns out this issue was resolved at oral argument when counsel for Respondents–Trustees acknowledged issue had not yet been joined, waived any argument as to same, and explained that she decided to file cross-motions for summary judgment instead of answers because she had no reason to contest the factual representations made in the petitions relative to each petitioners' family circumstances. These admissions were not remembered by the Court until after the last of counsels' submissions were received in May 2016, when the Court reviewed the tape recording of oral argument from October 19, 2015 in anticipation of writing this decision. Nor, evidently, did counsel for either side recall this exchange. Moreover, with Respondents–Trustees having chosen to respond to Petitioners–Grantors' summary judgment motions with their own cross-motions for summary judgment, as opposed to filing a pre-answer motion to dismiss, or filing answers to the petitions, or opposing the motions on procedural grounds, the Court finds the “parties charted their own procedural course and treated [Petitioners–Grantors'] summary judgment motion as if issue had indeed been joined.” (Ryan v. Bettiol, 211 A.D.2d 844, 845 [3d Dept 1995] ). For all of these reasons, the Court refrains from denying any of the motions under CPLR 3212(a).
Stenographers are not made available for Surrogate's Court proceedings, and thus all communications in the courtroom are captured on a digital recording.
The Principal Court Attorney who assisted the Court with its April 4, 2016 and May 2, 2016 correspondence was not yet employed at the time of oral argument and thus had no first-hand knowledge of what was discussed. When attempting to set up a telephone conference on April 1, 2016 to address the CPLR 3212 procedural concerns, she was advised that Ms. Cannon, the attorney for Respondents–Trustees who appeared at oral argument, was on maternity leave as of mid-March. With no other attorney readily available to participate in the conference on Ms. Cannon's behalf, the Court instead issued its letter of April 4, 2016. Counsel responding to the written inquiries from both sides are not the same who appeared at oral argument and presumably also lacked first-hand knowledge as to what was said. The Court includes this footnote for purposes of setting forth its belief as to why no one in good faith mentioned Ms. Cannon's admission and waiver at oral argument prior to the Court refreshing its recollection when listening to the recording of oral argument.
Regarding the Court's concerns relative to CPLR 3212(b), the Fourth Department has recognized that the merits of a summary judgment motion can be reviewed, even when the pleadings are not attached, if denial will still result. (See, e.g., Perez v. Wickman, 298 A.D.2d 873, 874 [4th Dept 2002] [reversing lower court's decision on both procedural and substantive grounds]; Husted v.Vermilyea, 291 A.D.2d 825 [4th Dept 2002] [affirming lower court's decision to deny summary judgment for failure to attach the pleadings, as well as concluding the motion lacked merit] ). The Third Department has also considered the merits of a summary judgment motion where the opposing party did not raise CPLR 3212(b) as a bar to doing so and where the record was “sufficiently complete” so as to allow for such review. (See Matter of Dietrich, 271 A.D.2d 894, 895 [3d Dept 2000] ). Although Respondents–Trustees have indicated CPLR 3212(b) provides a basis for denying all of the pending motions, their counsel did so only after the Court raised the issue sua sponte. Moreover, both sides contend these motions can be decided as a matter of law. As previously noted, Ms. Cannon on behalf of Respondents–Trustees acknowledged she did not intend to file answers to the petitions because no one contested the factual (as opposed to legal) assertions contained therein. Since no answers were anticipated for purposes of attaching to the summary judgment motions, and since the motions were fully briefed, orally argued, and further discussed in multiple written submissions after oral argument, the Court finds no reason to delay a decision on the substance of Petitioners–Grantors' motion papers, especially since the Court finds they lack merit.
The Court reconciles the failure of Respondents–Trustees to attach the petitions to their summary judgment papers later in this Decision.
Petitioners–Grantors' primary substantive argument is based upon language found in Holland v. Alcock, 108 N.Y. 312, 318 [1888], which states that “[t]he absence of a defined beneficiary is, as a general rule, a fatal objection to any attempt to create a valid trust.” Petitioners–Grantors point to Article FIRST, Subdivision A of their respective trusts, which provides as follows:
During the life of the Grantor, the Trustees shall hold, manage, invest and reinvest the trust estate, shall collect the income thereof and shall pay over or apply so much of the net income and principal thereof, to such extent, including the whole thereof at such time or times, as the Trustees in the exercise of their sole and absolute discretion, shall determine, to or for the benefit of the Grantor's then living issue. Any net income not so paid over or applied shall be accumulated and added to the principal of the trust at least annually and thereafter shall be held, administered and disposed of as a part thereof.
(emphasis added). Petitioners–Grantors represent, without contention, that neither of them has any living issue at present. Petitioners–Grantors further represent that it is unlikely they will ever have issue based upon the improbability of conceiving a child at their ages (or, in the case of J. Steven DeHimer, his wife's age) and their lack of intent to adopt any children. If they were to die without issue, Petitioners–Grantors reason that pursuant to the provisions of Article FIRST, Subdivision B of their respective trusts, there would be no “child of the Grantor who is then living” for whom to create a separate trust under Article SECOND. As such, the authority of Article SECOND would never be invoked and therefore no remainder beneficiaries exist. With no present or remainder beneficiary, Petitioners–Grantors argue their trusts should be declared void. (See Holland, 108 N.Y. at 321 [“[T]he designation of a beneficiary entitled to enforce its execution, is essential to the validity of a trust.”] ).
Respondents–Trustees acknowledge Petitioners–Grantors presently have no issue, but argue ruling out this possibility is premature. Respondents–Trustees further contend Petitioners–Grantors are construing Article SECOND too narrowly and as such, overlook the Sears Family Foundation as a contingent remainder beneficiary. As noted, Article SECOND directs how trust monies are to be managed for each child of the Petitioner–Grantor then living at the time of the death of the Petitioner–Grantor, or if a child predeceases the Petitioner–Grantor, each descendent of said predeceased child (with each such beneficiary referred to as a “Primary Beneficiary”). Article SECOND also directs what can happen to trust funds upon the death of a Primary Beneficiary, depending upon whether the Primary Beneficiary is survived by descendants and/or whether the Primary Beneficiary has exercised a power of appointment granted within this Article. Included within Subdivision D of Article SECOND is the following language:
If no other trust is then being held pursuant to this Agreement, for the benefit of a descendant of the Grantor and if no descendant of the Grantor is then living, the principal of the trust, as it is then constituted, shall be transferred, conveyed and paid over to The Sears Family Foundation....
Respondents–Trustees point to these provisions of Article SECOND and claim the Sears Family Foundation has standing currently to enforce the trust.
These particular competing positions create an awkward environment for deciding Petitioners–Grantors' motions. Typically, trust language is the primary source for understanding the grantor's intentions. (See Matter of Chase Manhattan Bank, 6 NY3d 456, 460 [2006] ). Where a trust agreement is inartfully drafted, reformation can be sought to conform the trust to the grantor's original intent. (See, e.g., Matter of Leondis, 2011 N.Y. Slip Op 32424[U] [Sup Ct, Nassau County 2011] [permitting reformation of a trust to add future offspring, as-yet unborn, as residuary trust beneficiaries so as to conform with co-settlors' intent]; Matter of Scheib, 14 Misc.3d 1222[A], 2007 N.Y. Slip Op 50122[U] [Sup Ct, Nassau County 2007] [permitting reformation where proof of grantor's intent was shown and proposed change conformed to stated intent]; Matter of Spillane, NYLJ, Nov 21, 2007 at 39, col 5 [Sur Ct, Westchester County 2007] [“Reformation of an inter vivos trust is allowed upon clear proof of a mistake and the grantor's intent.”]; Estate of Nelson, NYLJ, May 2, 2001 at 23, col 3 [Sur Ct, Nassau County 2001] [permitting reformation where “inartful draftsmanship” may frustrate the creators' intent and stating “[i]t has long been recognized that where errors of draftsmanship have occurred, courts may save trusts which are contrary to technical requirements of law.”] ). Based upon language contained within Steven's Trust and Lorie's Trust, such as that found in Article SECOND, Subsection I, “Precatory Expression of Grantor's Wishes,” the priority would seem to be to bring clarity to the trusts to ensure the funds are preserved for younger generations of the Sears family, regardless whether they are direct descendants of the Petitioners–Grantors. For example, in Estate of Nelson, the trust agreement was drafted in such a way that there could be no one to accept the disposition of the trust corpus at termination. The Surrogate's Court in that case did not void the trust, but rather construed a Petition for Construction of Trust and Will as a petition for reformation and permitted the trust language to be reformed so as to be in keeping with the grantors' intent.
Within these proceedings however, the Petitioners–Grantors have expressed an intent very different from the wishes stated within the trust agreements. In particular, they want to void each trust as a legal entity they insist they never meant to create and receive for themselves the monies used to fund each trust. (See reply affirmation of Petitioners–Grantors' counsel, dated October 16, 2015, ¶ 7; see also letter of Petitioners–Grantors' counsel, April 12, 2016). The Court asked counsel in its April 4, 2016 letter whether a fact question is created by the Petitioners–Grantors' claim that they had no input when the trust agreements were drafted and signed. Both sides responded in the negative, stating that the motions can be decided based solely upon the language of the agreements.
As such, the Court first focuses on whether the absence of living issue at present, combined with the Petitioners–Grantors' representations that they foresee having no issue during their lifetimes, defeats the trust agreements pursuant to the principle articulated in Holland. In this regard, Demund v. LaPoint, 169 Misc.2d 1020 [Sup Ct, Tompkins County 1996], lends insight from a procedural perspective because it teaches that a final determination as to whether a party is survived by issue cannot be made until the time of that party's death. In Demund, the plaintiffs sought declaratory relief as to whether they were entitled to receive real property for which their aunt had been given life use through her father's Will. (See id. at 1022 ). The Will provided the real property would pass to the children of this aunt at the time of her death, but that if she died leaving no children or grandchildren, the property would pass to the plaintiffs. (See id. at 1021 ). At the time the litigation commenced, the aunt was 86 years old and had adopted one of the siblings of the plaintiffs when she was 80 years old and he was 61 years old. The court held that, based on a (since repealed) statute in effect at the time the decedent's Will was probated, any adopted child of the aunt would be barred from inheriting because doing so would defeat the rights of the remaindermen. Significant to the case before this Court, Demund declared the rights of the plaintiffs to take possession of the real property “at the time of [the aunt's] death without issue.” (Id. at 1025 ). In other words, despite the aunt's advanced age and the statutory prohibition against inheritance on the part of any individual she may adopt as her child, the court determined the rights of the remaindermen contingent upon the predicate act of their aunt dying without issue. Even counsel for Petitioners–Grantors recognizes that Demund involved a declaration of rights contingent upon future events and subject to divestiture. (See reply affirmation of Petitioners–Grantors' counsel, ¶ 9). Consequently, the Court does not see how it can declare there will be no issue who can benefit from Steven's Trust or Lorie's Trust at some point in the future.
Nor has the Court been provided with any legal basis for accepting at face value the representations by Petitioners–Grantors that they do not intend to have biological or adopted children. Although EPTL § 9–1.3(e) is not directly on point, as the parties have not raised a perpetuities question, the Court finds its language is instructive in evaluating the reliability of Petitioners–Grantors' statements about having biological children. The statute presumes males can have children at any age over 14, thus suggesting Steven DeHimer cannot definitively know whether he will be survived by issue until the time of his death. The statute presumes females can have children between the ages of 12 and 55. Lorie DeHimer is 50 years old, although as Demund makes clear, a female can be presumed to have a child at any age outside the context of a perpetuities question. (See 169 Misc.2d at 1024 & n. 3 ). Neither Petitioner–Grantor submitted medical evidence to prove they are incapable of conceiving a child; the Court is asked to rely only on their self-serving statements.
Moreover, as illustrated in Demund, adoption at any age is within the realm of possibility notwithstanding the language in EPTL § 9–1.3(e)(3) disregarding adoptions in a perpetuities analysis. Just because the Petitioners–Grantors had not adopted children at the time they signed their trust agreements, and despite their protestations of having no intent to adopt, this option is not foreclosed down the road and could have an effect on the administration of their trusts. As made clear in Matter of Simpson (Matter of Chemical Bank), 90 Misc.2d 727 [Sup Ct, N.Y. County 1977], the fact that an individual may not have foreseen an adoption at the time of creating a trust or engaging in estate planning is not necessarily definitive when interpreting the trust. In Simpson, the decedent's widow argued that her husband's adopted son, whom decedent adopted as an adult when the adoptee was 30 years old, did not qualify as a “child” referenced within decedent's trust as a potential beneficiary upon his death. (See id. at 732 ). She pointed to what would have been the decedent's intent at the time he created the trust, when adult adoptions were not then permitted under applicable law, and when the decedent was a young newlywed unlikely envisioning the adoption of an adult child who would benefit from the trust. (See id. ). The Court held that “what may have been in the donor's mind, and what the state of the law was at the time the [trust] agreement was executed is, in this instance, not critical.” (Id. ). The Court looked to the law as it existed at the time of the adoption, which permitted the adult child to be treated as if he were the biological child of the decedent.
Since the foregoing authorities preclude the Court from determining whether the Petitioners–Grantors will forever fail to have issue who can benefit from the trusts, the next question becomes whether the trusts can be enforced in the absence of any present living issue. Petitioners–Grantors attempt to distinguish the authorities upon which Respondents–Trustees rely by pointing out that the cases cited by counsel for Respondents–Trustees, like Demund, had a living beneficiary who could at that time seek enforcement of the terms of the trust. With respect to Steven's Trust and Lorie's Trust, Article FIRST governs trust administration while the Petitioners–Grantors are alive and provides for the accumulation of income to be added to the principal balance as long as each respective Petitioner–Grantor is alive. SCPA article 9, part 2, sets forth rules regarding accumulations, and Petitioners–Grantors make no claim that their trusts violate these rules. As such, since the current work of the trustees pursuant to Article FIRST is to “hold, manage, invest and reinvest the trust estate,” an accounting would reveal whether they are acting prudently. The Court turns to the SCPA to determine whether anyone can presently seek such an accounting.
A “person interested” has standing to petition for a compulsory account under SCPA § 2205(b). A “person interested” is defined by SCPA § 103(39) to include “[a]ny person entitled or allegedly entitled to share as beneficiary in the estate.” SCPA § 103(19) includes the property of a trust within the definition of “estate.” If a “person interested” applies for relief, pursuant to SCPA § 103(39), a verified allegation as to the nature of the interest will suffice, even if the interest is disputed, “unless or until the fact of interest has been judicially determined and no appeal is pending therefrom.” A “person interested” is not limited to present beneficiaries, but also includes beneficiaries of a future estate. (See Matter of Vincent J. Castellucci Trust, NYLJ, Jul. 18, 2014 at 37, col 2 [Sur Ct, Westchester County 2014] [“The holder of a future interest, whether vested subject to complete defeasance or subject to a condition precedent, has standing to compel an accounting.”] ). A future estate vested subject to complete defeasance “is an estate created in favor of one or more ascertained persons in being, which would become an estate in possession upon the expiration of the preceding estates, but may end or may be terminated as provided by the creator at, before or after the expiration of such preceding estates.” (EPTL § 6–4.9 ). As explained in the statutory practice commentaries, “[t]he identity of the person is definite, but whether his interest will become an estate in possession or will remain an estate in possession is uncertain.” (Margaret Valentine Turano, Practice Commentaries, McKinney's Cons Laws of NY, EPTL § 6–4.9 [citing and quoting Restatement of Property § 157(p) as follows: “When a remainder interest is vested subject to complete defeasance it is possible to point to a person and to say that such person would take, if all interests including a prior right to a present interest should now end.... [T]he person thus clearly identified has no certainty of retaining such present interest as he may acquire and commonly has no certainty of ever acquiring any present interest in the affected thing.”] ). A future estate subject to a condition precedent “is an estate created in favor of ... one or more presently ascertainable persons upon the occurrence of an uncertain event.” (EPTL § 6–4.10 ).
Relying upon these authorities, the Court finds the Sears Family Foundation is a recognizable contingent beneficiary with present enforcement powers. The Sears Family Foundation has a definite and presently ascertainable identity. It is clearly identified within Steven's Trust and Lorie's Trust as the recipient of the principal of the trust “[i]f no other trust is then being held pursuant to this Agreement, for the benefit of a descendant of the Grantor and if no descendant of the Grantor is then living.” The Petitioners–Grantors have recognized same. (See petition of J. Steven DeHimer, verified August 25, 2011, ¶ 18(f) and petition of Lorie DeHimer, verified August 30, 2011, ¶ 18(f) [acknowledging in both petitions that “[i]f there are no descendants of the petitioner living at some point, then the remainder of the trust may pass to the Sears Family Foundation”] ). Regardless whether this language is construed as creating a future estate vested subject to complete defeasance or a future estate subject to a condition precedent, under either scenario, Castellucci Trust makes clear the Sears Family Foundation would have standing to compel an accounting. (See also Matter of Dean, NYLJ, Dec. 8, 2010 at 36, col 2 [Sur Ct, Kings County 2010] [finding remainder beneficiaries with a vested interest had standing to object to an accounting]; Matter of Epstein, 277 A.D.2d 452, 453 [2d Dept 2000] [acknowledging that a contingent remainderman with an interest subject to a condition precedent has standing to object to an accounting] ).
The remote possibility of the Sears Family Foundation receiving the principal of each trust, as contended by the Petitioners–Grantors, does not appear to have any bearing as no statute or caselaw has been presented to suggest that same is relevant to an analysis of who may compel an account under SCPA § 2205. To the contrary, pursuant to SCPA § 103(39), all that is needed from the Sears Family Foundation within a petition to compel an accounting is “a verified allegation of an interest in fact” for purposes of making an application as a “person interested.” Unless and until there is a final judicial determination (to include the expiration or exhaustion of all avenues of appeal) negating any interest of the Sears Family Foundation in Steven's Trust or Lorie's Trust, its governing board can seek to enforce the terms of the trusts. Therefore, the summary judgment motions of Petitioners–Grantors must be denied.
Turning now to the cross-motions of Respondents–Trustees, the Court is asked to dismiss the petitions filed in September 2015 on the grounds that Steven's Trust and Lorie's Trust do not violate the principle set forth in Holland. While the Court was inclined to deny relief without prejudice to Respondents–Trustees for failure to abide by the technical requirements of CPLR 3212, Petitioners–Grantors have insisted that no procedural bar exists. (See letter of Petitioners–Grantors' counsel, Apr. 26, 2016, at 3[“[I]t is proper for the Court to make a decision on the motions at this time.”]; letter of Petitioners–Grantors' counsel, May 2, 2016 [outlining multiple reasons as to why the Court may consider on the merits the motions and cross-motions for summary judgment] ). While counsel for Respondents–Trustees concedes the existence of procedural error under CPLR 3212, the driving force behind counsel's position appears to be the desire to add the Ronald Francis affidavit to its notice of cross-motion. Indeed, the request to include this affidavit is what caused discord between the parties relative to the Court's proposal in its April 4, 2016 letter. Since the affidavit was of no effect in the Court's analysis of the matters presented by the motions or cross-motions, since Petitioners–Grantors have otherwise insisted the cross-motions may be decided on the merits, and since the foregoing legal analysis utilized in deciding Petitioners–Grantors' motions can be used to decide the cross-motions as well, the Court will consider the cross-motions on the merits and grant the relief sought by Respondents–Trustees.
For all of the reasons set forth in this decision, it is hereby
ORDERED, that the motion of J. Steven DeHimer in File No. 96323/D, seeking summary judgment (1) declaring void “The J. Steven DeHimer Irrevocable Trust, successor to the Marion A. Sears Trusts,” created by an agreement entered into on or around December 7, 2010, and (2) directing the Trustees of said Trust to account to J. Steven DeHimer for all trust property and immediately transfer same to him, is DENIED; and it is further
ORDERED, that the motion of Lorie DeHimer in File No. 96323/E, seeking summary judgment (1) declaring void “The Lorie DeHimer Irrevocable Trust, successor to the Marion A. Sears Trusts,” created by an agreement entered into on or around December 7, 2010, and (2) directing the Trustees of said Trust to account to Lorie DeHimer for all trust property and immediately transfer same to her, is DENIED; and it is further
ORDERED, that the cross-motion of the Respondents–Trustees in File No. 96323/D, seeking summary judgment dismissing the petition of J. Steven DeHimer filed September 16, 2015, is GRANTED; and it is further
ORDERED, that the cross-motion of the Respondents–Trustees in File No. 96323/E, seeking summary judgment dismissing the petition of Lorie DeHimer filed September 16, 2015, is GRANTED; and it is further
DECREED, that the petition of J. Steven DeHimer in File No. 96323/D is DISMISSED in its entirety; and it is further
DECREED, that the petition of Lorie DeHimer in File No. 96323/E is DISMISSED in its entirety.
This constitutes the Decision, Order and Decree of the Court.