In this miscellaneous proceeding commenced by order to show cause by a trust beneficiary, seeking inter alia, to stay the respondent (Trust fiduciary) from acting as a de facto trustee; removing him as a de facto fiduciary and appointing a bank or trust in his place, counsel for the Trust fiduciary moves to dismiss the proceeding on several grounds and lift the stay imposed by the court in the order to show cause. Trust beneficiary Melissa Neumann joins in support of the motion. Prior to the return date of the application, the parties entered into a written stipulation dated February 15, 2019 modifying the court’s temporary restraint whereby the Trust fiduciary would continue to administer the Trust; provide agreed-upon notice to the petitioner of his conduct and give 72 hours notice of any artwork purchase on behalf of the Trust. On the return date of the order to show cause, after a conference with a member of the court’s Law Department, the parties entered into a further stipulation which provides, inter alia, as follows: 1) supplemental process shall issue to six Trust beneficiaries who are the children of Belinda Neumann and Melissa Neumann,; 2) the branch of the motion seeking to consolidate this proceeding with an accounting proceeding to be commenced by the respondent is withdrawn without prejudice to renewal; 3) all provisions of the February 15, 2019 stipulation remain in full force and effect, except with regard to the issue of advance notice of art purchases; and 4) the branch of the motion seeking to strike prejudicial matters pursuant to CPLR 3024 (b) is withdrawn. Thus the only issue to be determined at this juncture is what notice, if any, is the Trust fiduciary to give petitioner prior to the purchase of artwork on behalf of the Trust.Although initially agreed in the prior stipulation, the Trust fiduciary now argues that requiring advance notice to the petitioner before the purchase of artwork would excessively limit his authority to act as fiduciary and potentially put the Trust in harm. He urges that since the petitioner is also a collector and owns an art gallery, providing her with advance notice would be giving a potential competitor a substantial benefit. In opposition, the petitioner avers that prior to her mother’s passing, she would search for and identify artwork worth purchasing and would recommend to the Trust fiduciary that a particular work of art be purchased without regard to any family trust purchasing the item. In the event one of the family trusts did not purchase a work she recommended, she would sometimes purchase it herself. Counsel for the petitioner indicates that the petitioner would not object to a modification of the court’s temporary restraint to permit the Trust fiduciary to sell Trust-owned artwork provided she “is given at least ten (10) days’ prior notice of any proposed sale and the ability to take any steps she believes appropriate to prevent any sales, including being given access to relevant information concerning the artwork.”It is axiomatic that the surrogate’s court has “full and complete jurisdiction to administer all matters” properly before the court (SCPA 201 [3]). The court possesses ancillary and incidental jurisdiction to resolve matters in dispute between the parties, which must be resolved in order to effect a complete disposition of a matter properly before it (Matter of Piccione, 57 NY2d 278 [1982] rearg. den. 58 NY2d 824 [1983]). In an appropriate circumstance, the surrogate may issue an injunction without notice when necessary and reasonable to protect property and when doing so would not be unreasonable or unduly burdensome to the fiduciary (Matter of Offen, 45 NYS2d 348 [Sur Ct, Bronx County 1943]).Counsel for the Trust fiduciary indicates the petitioner or someone on her behalf has commenced no less than 15 actions and proceedings in various forums against the Trust fiduciary. Even if the statement is not accurate, there is no dispute that there is a great deal of acrimony by and between the parties. This proceeding is yet another coal in the fire. Moreover, although the petitioner’s application to remove the Trust fiduciary is sub judice (supplemental process is to be issued adding the six Trust beneficiaries), the allegations contained therein have yet to be determined. As such, it is imperative that the Trust fiduciary is not so constrained in administering the Trust and equity dictates that any restriction upon him permits him to continue to act without undue restrictions until such time as the facts dictate otherwise. No real harm would inure to the petitioner if notice of purchases and sales occurred with the monthly agreed-upon reports as she may still seek relief in the context of the accounting proceeding.Accordingly, this decision constitutes the order of the court granting the motion only to the extent that paragraph 3 of the February 15, 2019 stipulation is modified to provide that the Trust fiduciary shall provide notice of art purchases and sales together with the monthly statements, as agreed. The petitioner has not demonstrated a basis for a shorter notice period and the petitioner would still nonetheless seek redress in the accounting proceeding to be commenced forthwith. The motion is in all other respects denied or rendered academic by the parties February 15, 2019 stipulation and further stipulation entered into on the return date of the application.Parenthetically, the court notes much ado was made by the parties as to whether the Trust fiduciary is a de facto or de jure trustee. At this juncture the distinction is more form over substance as the Trust fiduciary’s duties and obligations are the same regardless of what hat he wears. If necessary and appropriate that issue may be determined at an appropriate time upon proper application, absent agreement by the parties.The Chief Clerk is directed to mail a copy of this decision and order to respective counsel.Proceed accordingly.
