Surrogate Anderson
ESTATE OF MICHAEL MODELL, Deceased (01-1730/I/J/K)ESTATE OF MICHAEL MODELL, Deceased (01-1730/L/M/N) — In these competing petitions in the estate of Michael Modell, decedent’s wife, Abby Modell, and his brother, Mitchell Modell, co-trustees of three testamentary trusts (collectively, the “Trusts”), each request the appointment of a third co¬trustee to fill a vacancy created by the April 2015 death of trustee Joel Goldberg. Abby seeks the appointment of Bert Brodsky, her long-time advisor, and Mitchell asks that Betty Ellerin, Esq., a retired Justice of the Appellate Division, First Department, be appointed. Pending are Abby’s motion for summary judgment on her petition and the subsequent motion of her children requesting the appointment of Brodsky as temporary co-trustee until the final disposition of their mother’s petition.Decedent’s will specifically provides a procedure for the appointment of a third trustee: “If at any time there are only two Trustees acting hereunder, I direct such trustees, by a duly acknowledged instrument, to nominate and appoint another individual as an additional Trustee hereunder” (emphasis added). Thus, contrary to Abby’s contention, the instant proceeding to appoint Brodsky is not an example of her “[f]ollowing the dictate” of decedent as set forth in the will. Decedent did not provide that, in the event of a vacancy, his trustees would seek to foist his or her choice for successor on the other through litigation. Rather, he counted on his trustees to come to an agreement on who the successor would be.That Abby and Mitchell have been unable to reach the agreement contemplated in the will is unfortunate, but is consistent with their propensity to litigate regarding the Trusts. Currently, Abby is seeking Mitchell’s removal as trustee of the Trusts. Also pending are separate accountings by Abby and Mitchell for all three trusts, with which the removal proceeding has been consolidated (see Matter of Modell, NYLJ, Nov. 4 2010, at 26, col 5 [Sur Ct, NY County 2010]).1The parties have engaged in substantial motion practice during the course of the consolidated proceedings. First, the court decided six discovery-related motions in the respective accountings by Abby and Mitchell for the Article SIXTH Trust (the “Marital Trust”) (see Matter of Model1, NYLJ, 1202622777524 [Sur Ct, NY County 2013]). Then the court denied Mitchell’s motion to dismiss the removal proceeding (see Matter of Modell, NYLJ, July 22, 2014, at 22, col 1 [Sur Ct, NY County 2014]). More recently, the court denied Abby’s motion to suspend Mitchell pending the determination of her removal petition (see Matter of Modell, NYLJ, Mar 11, 2016, at 25, col 4 (Sur Ct, NY County 2016]) and denied Mitchell’s motion to vacate the note of issue Abby filed in her removal proceeding and in Mitchell’s accounting for the Marital Trust (see Matter ; of Modell, NYLJ, June 26, 2018, at 23, col 3 [Sur Ct, NY County 2018]). Still pending are the instant motions, which relate only to the issue of the appointment of a third trustee, and a motion by Mitchell seeking, summary dismissal of one of Abby’s objections to his accounting, for the Marital Trust, which will be the subject of a separate decision.Summary judgment is available only where no material issues of fact exist (see e.g. Alvarez v. Prospect Hosp., 68 NY2d 320 [1986]). The party Peeking summary judgment “must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact” (id. at 324 [citations omitted]). If such a showing is made, the party opposing summary judgment must then come forward with proof establishing a genuine issue of material fact or must provide an acceptable excuse for the failure to do so (see e.g. Zuckerman v. City of New York, 49 NY2d 557 [1980]).Abby asks this court to determine as a matter of law that Brodsky should be appointed third co-trustee notwithstanding that such appointment would bypass the nomination process set forth in the will. She cites no authority for the proposition that the court can appoint a fiduciary where doing so would contravene the express language of the will. Indeed, there is case law to the contrary. In Matter of Ohrstrom (NYLJ, July 6, 2017, at p 19, col 1 [Sur Ct, NY County 2015]), for example, this court refused to appoint a third trustee nominated by a beneficiary where the trust instrument left selection of additional trustees to the trustees serving at the time.Nonetheless, on this motion, Abby argues that SCPA §706(1), SCPA §1502(1) and SCPA §2102(6), three statutory provisions to which she failed to make reference in her petition, support the summary appointment of Brodsky. Although Mitchell agrees that a third co-trustee should be appointed, he characterizes Abby’s proceeding as an “attempt at a procedural end-run around the clear provisions in the Will, which require that Mitchell and Abby jointly designate a successor to Joel.”2 Mitchell also argues that, in any event, he has raised issues of material fact concerning Brodsky’s fitness and, if not, he should be allowed the discovery relevant to that issue that Abby has thus far denied him (CPLR 3212[f]).SCPA §706(1) provides that, where a fiduciary dies or is removed, a successor fiduciary “shall not be appointed except where such appointment is necessary in order to comply with the express terms of a will….”The purpose of the statute is to ensure that the court does not appoint more trustees than explicitly contemplated by the testator (see 2 Cox-Arenson-Medina New York Civil Practice: SCPA §§706.00-.01 [Matthew Bender]). In this case, the appointment of Brodsky is not “necessary” to comply with the “express terms” of decedent’s will. In fact, his appointment would defeat them by subverting the testator’s chosen procedure for nominating successor co¬trustees by agreement (see e.g. Matter of Ohrstrom, NYLJ, July 6, 2017, at p 19, col 1, supra; Matter of Klabouch, NYLJ, Feb. 7, 2017, at 22, col 3 [Sur Ct, NY County 2017]).Abby’s reliance on SCPA §1502(1) is similarly misplaced. That provision authorizes the court to appoint a trustee where a trustee or trustees are “unable to act.” However, Abby omits any reference to SCPA §1502(2), which provides that “[t]he court shall not appoint a trustee, successor or co-trustee if the appointment would contravene the express terms of the will….” Here, as noted above, the appointment of Brodsky would do just that.The third statutory provision that Abby cites, SCPA §2102(6), authorizes a fiduciary (or other interested person) to petition to compel another fiduciary to “comply with such directions as the court may make whenever two or more fiduciaries disagree with’ respect to an issue affecting the estate” (see e.g. Matter of Stanley, 240 AD2d 268 [1st Dept 1997]). Abby, however, is not asking the court for any type of direction or order upon Mitchell. Instead, she is asking the court to bypass Mitchell altogether in the appointment process and to appoint Brodsky, relief that the statute does not contemplate.Without regard to Brodsky’s fitness to serve, about which there is a fact issue, these statutory provisions simply do not support the summary appointment of Brodsky. Because Abby has I not established a legal basis for this court to appoint Brodsky in the circumstances here, she has not made a prima facie case for summary judgment.” Denial of her motion is thus required.As for the motion of Abby’s children to appoint Brodsky as temporary co-trustee, they have not demonstrated the need for one, let alone the temporary appointment of Brodsky, whose fitness has been challenged by Mitchell. Movants’ main concern is the potential for Modell’s Sporting Goods (in which the Trusts have a 50 percent interest) to lose business opportunities in the absence of a third co-trustee. However, under Modell’s shareholders’ agreements, the management of Modell’s operations, including the identification and consideration of potential business opportunities, is vested in Mitchell, who owns the remaining 50 percent of Modell’s. This fact does not relieve Mitchell of his fiduciary obligations in his dual role, but it also does not give the trustees authority to pursue possible business opportunities on behalf of Modell’s or to involve themselves in Modell’s operations beyond what is provided in the shareholder agreements. The other issues that movants raise are either inconsequential or addressed to matters appropriately determined in the removal and accounting proceedings. For these reasons, the motion by Abby’s children is denied.The court is mindful of the continued pendency of Abby’s underlying proceeding to appoint Brodsky and Mitchell’s to appoint Ellerin. Each petitioner asks the court to appoint a fiduciary in the absence of a joint appointment as provided in the will. But the power vested in Abby and Mitchell to determine together who should serve is a joint power, requiring the “exercise of discretion,” as distinguished from a several power, which is “purely ministerial” (see Matter of Jacobs, 127 Misc 2d 1020, 1022 [Sur Ct, NY County 1985] [citations omitted]). Except in very limited circumstances not present here, “the court has no power to direct trustees in whatever manner to exercise a joint power vested in their ‘sole discretion’ by the testat[or]” (id.; see also 5 Cox-Arenson-Medina New York Civil Practice: SCPA §2102.07 [Matthew Bender]).Under the circumstances, the parties should attempt to reach an agreement on who should serve as third trustee within 45 days of the date of this decision. An agreement would render moot the pending proceedings and permit the administration of the Trusts to proceed as decedent intended. Nonetheless, as these proceedings make clear, the surviving trustees have refused or simply cannot agree on the appointment of a third trustee. Thus, the possibility remains that the impasse will continue. In such event, one or both of the trustees may seek direction from the court (SCPA §2102[6]). Such application could result in the appointment of a third trustee to serve for the limited purpose of breaking the impasse by joining with either Mitchell or Abby in designating a third co-trustee (EPTL §10-10.7; see e.g. Matter of Jacobs, 127 Misc 2d 1020, supra; Matter of Cushing, NYLJ, July 7, 2010, at 34, col 2 [Sur Ct, NY County 2010]; see also Matter of Duell, NYLJ, July 23, 1996, at 1, col 3 [Sur Ct, NY County 1996]).Finally, the court has considered that Abby and her children, the sole beneficiaries of the Trusts, wish for Brodsky to serve as the third co-trustee. However, the selection mechanism that decedent expressly provided for does not permit either of the surviving fiduciaries to make that choice unilaterally. Moreover, the irony in Abby’s pressing the appointment of her ally, Brodsky, after complaining bitterly about a purported alliance between Mitchell and now-deceased trustee Joel Goldberg, is not entirely lost on the court. In any event, under the circumstances here, the court is constrained to deny the pending motions and to encourage Abby and Mitchell to come together and exercise their joint power to appoint the third co-trustee as decedent intended they would do.Based upon the foregoing, Abby’s motion for summary judgment and her children’s motion to appoint a temporary trustee are denied. This decision constitutes the order of the court.Dated: September 27, 2018
