Opinion
No. 2009–1398/B.
11-02-2015
In the Matter of the Accounting of Carl J. PERNICONE, as the Executor of the Estate of Maria V. Pernicone, a/k/a Maria Pernicone, Deceased.
Ferguson Cohen LLP, White Plains. Feureusen & Bartels, White Plains.
Ferguson Cohen LLP, White Plains.
Feureusen & Bartels, White Plains.
BRANDON R. SALL, J.
In this accounting proceeding in the estate of Maria V. Pernicone, the executor Carl J. Pernicone ("Carl"), moves to dismiss objections filed by Cynthia Cestone ("Cynthia") and Lisa Cofini ("Lisa"). Cynthia and Lisa oppose the motion. The motion is decided as set forth below.
On November 1, 2005, the decedent executed an instrument purporting to be her last will and testament. The instrument provided that all of the decedent's personalty would go to Carl, and her residuary estate would be distributed to the Maria V. Pernicone Revocable Trust (the "trust").
Contemporaneously with the execution of the instrument, the decedent signed the trust. The trust provided that, after distribution of 16% to various Catholic charities, the remainder would be distributed to her nieces and nephews as follows: Carl (18%), Carmela Vuto (18%); Teresa Padilla (18%), Peter J. Pernicone (10%); Vita Cofini (10%), and Teresa Amanti (10%). Cynthia and Lisa are the children of Vita Confini. With regard to successor trustees, the trust provided:
Upon the incapacity or death of either initial trustee hereunder, PAUL VUTO, is hereby appointed as co-trustee.
* * *
Any successor shall indicate his ... acceptance of the duties as Trustee by delivering a duly acknowledged instrument of acceptance to each then acting trustee and each then living adult and competent beneficiary of any trust hereunder then in existence.
On December 30, 2007, the decedent died, leaving 30 distributees. On September 24, 2009, the instrument was admitted to probate, and letters testamentary issued to Carl. Carl was also the trustee of the trust.
On December 27, 2012, Cynthia filed a petition to compel Carl to account as trustee of the trust. The petition is silent as to named successor co-trustee Paul Vuto ("Paul"). On August 5, 2013, the court granted the relief requested in the petition, issuing an order compelling Carl to account as trustee within 60 days.
On April 24, 2013, Carl filed his account as executor together with a petition for judicial settlement thereon. The petition and account were amended three times. Initially listed as interested parties were all beneficiaries, Paul, the Attorney General and a service provider. By attorney affidavit sworn to on January 30, 2015, Carl amended his petition to remove all interested party beneficiaries. By attorney affidavit sworn to on February 9, 2015, Carl amended his petition to remove the Attorney General and the service provider. When citation issued on February 13, 2015, it was addressed to only Carl individually and Carl and Paul as co-trustees of the trust, returnable on March 18, 2015. On April 10, 2015, Cynthia and Lisa filed objections to the accounting. To date, Paul has neither appeared in the proceeding nor filed a waiver and consent to the relief requested in the petition.
As noted in the preceding paragraph, the decision and order required a trustee's accounting.
On August 25, 2014, Cynthia and Lisa filed a petition in accordance with SCPA 2102 to compel Carl to produce certain documentation. On November 24, 2014, by attorney's affirmation, that proceeding was withdrawn, and an order dated December 3, 2014 issued thereafter removing the proceeding from the court's list of active matters.
As stated above, Carl now moves to dismiss the objections in accordance with CPLR 3211[a][3] based on a lack of standing to assert them. In support of his motion, Carl argues that only individuals cited on the citation (he and Paul) have standing to appear in the proceeding, and that, since Cynthia and Lisa were not named on the citation, in accordance with SCPA 2210[10], Carl, as executor, may account only to Paul.
In opposition to the motion, the attorneys for Cynthia and Lisa argue that SCPA 2210[10] should not be applied because Paul has never acted as a trustee.
SCPA 2210[10] states:
Where an accounting fiduciary accounts to himself in a separate capacity ... as trustee ... it shall not be sufficient to issue process to or obtain the appearance of the accounting party in such separate capacity only, but in addition process shall issue to all persons interested in the ... trust of which the accounting party is the trustee. The provisions of the subdivision shall not apply where the accounting fiduciary has in said capacity one or more co-fiduciaries who are not his co-fiduciaries in his accounting capacity.
SCPA 2210[10] was designed to avoid the necessity (and hence the expense) of citing numerous beneficiaries in an accounting proceeding when their interests could be protected by the citing of an independent fiduciary (see Matter of Knauf, 145 Misc.2d 749, 547 N.Y.S.2d 803 [Sur Ct Albany Co.1989] ; Matter of Parkinson, 134 Misc.2d 565, 511 N.Y.S.2d 539 [Sur Ct Albany Co.1989] ; Matter of Hammond, 94 Misc.2d 760, 405 N.Y.S.2d 594 [Sur Ct Dutchess Co 1978] ).
Based on the plain language of SCPA 2210[10], Carl's accounting as executor to himself and Paul as trustees, would satisfy the letter of the statute. However, it does not satisfy the spirit of the statute, and therefore, the court declines to apply the statute in this proceeding. Here, there is no indication that Paul has qualified to act at all, let alone independently. Paul was not named as a fiduciary in the compel petition. The omission of an allegation that Paul was serving as a co-trustee in the compel proceeding begs the question as to whether he ever qualified by serving the notice on the beneficiaries as required by the terms of the trust. Furthermore, assuming Paul has qualified as trustee, his failure to appear in this proceeding renders completely ineffective any representation by an independent trustee. He has defaulted when there was every reason to appear.
Given these facts, Cynthia and Lisa and the other trust beneficiaries have an interest in objecting to the trust principal and the expenses which are associated with administering the estate (see Matter of Drago, NYLJ, Nov. 28, 2012 [Sur Ct Bronx Co] ).
Other courts have declined to apply SCPA 2210[10] (see Matter of Knauf, 145 Misc.2d 749, 547 N.Y.S.2d 803 [SCPA 2210[1] not applied where citation of only co-trustee husband would not provide beneficiaries with proper protection]; Matter of Parkinson, 134 Misc.2d 565, 511 N.Y.S.2d 539 [although the facts permitted a literal application of SCPA 2210[10], the "mischief to be avoided by the statute [was] nevertheless under these circumstances still present", which circumstances presented possibility of divided loyalty regarding independent trustee]; Matter of Seidman, 124 Misc.2d 1053, 478 N.Y.S.2d 798 [Sur Ct Nassau Co 1984] [examination of accounting petition demonstrated that purpose of statute could not be met where proposed independent trustee was seeking discharge for aspect of trust administration]; Matter of Hammond, 94 Misc.2d 760, 405 N.Y.S.2d 594 [executor directed to amend the petition to include remainderman and to cite them where independent trustee was the attorney for the accounting party] ).
Based on the above, the motion is denied in all respects. Within 20 days of this decision and order, Carl shall amend his petition and Schedule H of his account to provide that all trust beneficiaries and the Attorney General are interested parties to this accounting proceeding, and a supplemental citation shall issue from the court to all of these interested parties.
Finally, the court notes that the filing of this petition and account does not constitute compliance with the court's decision and order dated August 5, 2013 which compelled a trustee's accounting.
THIS IS THE DECISION AND ORDER OF THIS COURT
The papers relied on are as follows:
1. Notice of motion dated July 15, 2015;
2. Affidavit of Sheila Murphy, Esq., sworn to on July 15, 2015, with exhibits annexed;
3. Affirmation of Suzanne B. Kohn, Esq. dated August 4, 2015, with exhibits annexed; and
4. Undated affidavit of Sheila Murphy, Esq.