The following papers having been read on this motion: Order to Show Cause (Trustee) 1 Order to Show Cause (Successor Guardian) 2 Opposition (to Order to Show Cause by Successor Guardian) 3 Reply (to Order to Show Cause by By Successor Guardian 4 The Trustee of the Serena Maraya Wright Supplemental Needs Trust #3 has moved this Court for an order, pursuant to CPLR §5014(a)(4), to vacate this Court’s Order Confirming Report of Court Examiner for the period of February 21, 2018, through December 31, 2019, dated October 15, 2020. The Successor Guardian has opposed this application and has cross-moved to hold the Trustee in contempt, pursuant to Judiciary Law §753 and §756, for her failure to comply with various court orders and for removal of the Trustee in such role. After review and consideration, the order to show cause by the Trustee is hereby denied in its entirety, whereas the order to show cause by the Successor Guardian is hereby granted to the following extent. This Court has been closely involved in the instant guardianship proceeding since its inception in March 2016 and is very familiar with the parties involved to the instant application, as well as the Incapacitated Person herself. By way of background, it is important to note that the guardianship was necessitated by the death of the Incapacitated Person’s adoptive mother when she was approximately twenty-two (22) years of age. Before her mother passed away, the Incapacitated Person was living alone with her mother at the family home in Westbury, with her adoptive father having passed away two years earlier. She remained in the home for a time until the guardianship was established. The Incapacitated Person is learning disabled, autistic, and has some functional disabilities which added to the need for a guardian to be appointed on her behalf. Needless to say, when this Court first met the Incapacitated Person, she was suffering through a very traumatic and emotionally stressful time in her life. The Court hosted several conferences in this matter from the time the Trustee, a close friend of the mother who resided in Manhattan, New York, was initially appointed as guardian for the Incapacitated Person, checking in on her progress as an independent young adult as well as discussing the various issues she was facing with her new life following the passing of her mother. At each such conference, the Incapacitated Person was represented by counsel, as was the Trustee. From the time the Trustee was appointed as temporary guardian for the Incapacitated Person through her resignation in February 2018, the relationship between the two was more often than not adversarial, and the progress by the Incapacitated Person was sluggish. There then came a time when, apparently due to the difficulties the Trustee experienced as guardian, their age difference, and the physical distance between the two, the Trustee sought permission from this court to resign her position as guardian, asking that an independent person be appointed. The court granted her request and endeavored to find a replacement who would hopefully be able to better relate to the Incapacitated Person while providing the assistance she would continue to need as she navigated through her life as an incapacitated person, who was essentially learning to live and function on her own for the first time, without any family or support group behind her except for this new guardian. Fortunately, for the Court and the Incapacitated Person, an attorney accepted the case and the Incapacitated Person has, in the opinion of the Court, made tremendous progress over the past several years, largely with the support and guidance of the Successor Guardian. While these relationships are never perfect, and the Incapacitated Person often finds herself in a two-steps forward, one-step back scenario, she is clearly on the right path in her life on many levels. Importantly, she has made known to the court that she greatly values the Successor Guardian’s role in her life. It is also significant to this Court that after her resignation as guardian, the Trustee has consistently failed to cooperate with her replacement. The moving papers are replete with correspondence between the guardian and the trustee which were necessitated because the trustee would not timely honor requests for funds for the Incapacitated Person’s ordinary and necessary living expenses. Simple requests for items, such as payment of car insurance, gasoline charges, cable and internet charges, and book and school fees are alleged to require repeated requests on behalf of the Incapacitated Person by the Successor Guardian, which do not accomplish anything but generate needless guardianship fees. The Court takes note that the Successor Guardian has been very prudent with her billing, failing to seek compensation for many of these accrued fees, as it would not do anything but deplete the funds ultimately available for her ward’s future. The initial order to show cause filed by the Trustee seeks an order vacating this Court’s order dated October 15, 2020, which approved the annual accounting of the Successor Trustee for the period of February 2018 through December 2019. The Trustee, through her counsel’s affirmation only, argues that she was denied her due process rights as she was given an order that required compliance from her in her role as Trustee, yet she was never served with the underlying annual accounting by the Successor Guardian. Furthermore, she argues that the subject trust is outside the guardianship proceeding and that there is not any jurisdiction over her as Trustee or the subject trust itself. The Trustee also asserts that, pursuant to the terms of the subject trust, only the Nassau County Surrogate’s Court has jurisdiction over her as Trustee and the subject trust. As such, she seeks relief pursuant to CPLR §5015(a)(4), vacating the order dated October 15, 2020. The Trustee also seeks a directive from this Court that the Successor Guardian be required to serve a duplicate copy upon her for all future annual accountings, so that she may file objections to any requests for fees by the Successor Guardian, amongst other things. Pursuant to CPLR §5015(a)(4), the court which entered an order may relieve a party from it upon such terms as may be just, on motion of any interested person with such notice as the court may direct, upon the ground of lack of jurisdiction to render the order, Under this section of the statute, once the movant meets his or her burden demonstrating the lack of jurisdiction, the court must vacate the subject order. See generally Greenwood Realty Co. v. Katz, 187 AD3d 1153,131 NYS3d 225 (Mem) (2nd Dept., 2020). In the instant case, this Court finds that it had the requisite jurisdiction over both the Trustee and the subject trust. First, the Trustee was the original petitioner in this guardianship proceeding, was initially the temporary guardian, and was also the original guardian appointed by the Court for the Incapacitated Person. The notion that, after submitting to the jurisdiction of this Court from the time the initial petition was filed in March 2016 through the approval of her final account November 2018, this Court no longer has jurisdiction over her is severely misplaced, as she is far more than an interested party in this proceeding. Second, the belief by the Trustee that this Court does not have jurisdiction over the trust is also misplaced. The Supreme Court and Surrogate’s Court have concurrent jurisdiction, except where Supreme Court has retained exclusive jurisdiction in certain matters. See NY Constitution, Article VI, §12. The terms of the subject trust itself, while stating in Article VIII, page 13, subparagraph 3, that “the Nassau County Surrogate’s Court shall have jurisdiction over the performance of the duties of the Trustee, the interpretation, administration, and operation of this Trust and all other related matters,” no where in the trust document does it state that Surrogate’s Court will have exclusive jurisdiction over it. Coinciding with this, there is not any evidence before the Court that the Surrogate’s Court has already acted in any way in connection with the subject trust such that this Court should refrain from exercising its concurrent jurisdiction. See McCoy v. Bankers Federal Savings & Loan Association, 131 AD2d 646, 516 NYS2d 728 (2nd Dept., 1987). Third, pursuant to Mental Hygiene Law §81.31 (c), a guardian is required to send a copy of the annual report to an incapacitated person and the court examiner always; in addition, a duplicate copy must be provided to the chief executive officer of the facility if the incapacitated person resides in a facility and to mental hygiene legal service if at any point they were involved in the guardianship as a court evaluator or counsel to the incapacitated person. Nowhere in this statute is there a requirement that a guardian serve a copy of the annual report upon a trustee of a supplemental needs trust whatsoever. Therefore, any argument by the Trustee that she is entitled to a copy of the Successor Guardian’s annual report is completely erroneous. Therefore, for all the foregoing reasons, the application by the Trustee to vacate this Court’s Order Confirming Report of Court Examiner for the period of February 21,2018, through December 31, 2019, dated October 15,2020, pursuant to CPLR §5015(a)(4) for lack of jurisdiction is hereby denied in its entirety, as she has not met her burden. Additionally, given the circumstances surrounding this case as well as the above described obstructive behavior of the Trustee throughout this guardianship proceeding, this Court declines the request by the Trustee to direct the Successor Guardian to serve a copy of her annual accounts upon her, and the remaining portions of the order to show cause by the Trustee seek such directive is hereby denied as well. The order to show cause filed by the Successor Guardian seeks multiple findings of contempt for the actions of the Trustee, as well as a request to surcharge the Trustee for funds expended by her from the subject trust and a request to remove the Trustee from her role altogether. The basis of these requests comes not only from the Trustee’s actions in managing the trust funds for the Incapacitated Person, but the alleged several instances in which the Trustee has put forth barriers to both the Incapacitated Person and the Successor Guardian in financially assisting certain developmental goals for the Incapacitated Person. While the Successor Guardian has cited several such instances that she believes are worthy of contempt, removal, or both, the record before the Court contains some specific issues that are particularly noteworthy. The terms of the subject trust contain several clauses that are significant to the instant application. For example, Article II, subparagraph I, found on page 7 of the original trust document states: “It is the Grantor’s desire that [the Incapacitated Person] enjoy the therapeutic benefits of education, vocational training, hobbies, vacation, modes of transportation, equipment, recreation, visitation with family and friends and other needs and/or luxuries [the Incapacitated Person] may have to enjoy life to the fullest. … Subject to the restrictions and limitations set forth in the preceding paragraphs of this Trust, my Trustees may use the principal and income of this Trust for these types of purposes to benefit [the Incapacitated Person].” Another important clause found in the trust document contained in Article VI, subparagraph 2, page 11, “The Trustee may use these resources to aid [the Incapacitated Person's] guardian, if any, as appropriate, in identifying programs that may be of social, financial, developmental, or other assistance to [the Incapacitated Person]“. Also found in Article VI, subparagraph 3, page 11, “The Trustee shall render to the then current income beneficiary statements of account of receipts and disbursements at least annually. With respect to the primary beneficiary, the Trustee shall account to the [Incapacitated Person's] legal guardian.” Furthermore, following the appointment of the Successor Guardian and after approximately three separate conferences to discuss the Incapacitated Person’s progress, a so-ordered stipulation was entered into between the Trustee, who was represented by counsel, the Successor Guardian, and the Incapacitated Person by her court-appointed counsel, dated February 13, 2019. The catalyst for those conferences was not only this Court’s attempt in keeping the Incapacitated Person accountable in her efforts for more independence, but also the ongoing concern about the Trustee declining or refusing basic expenditures intended to enrich the Incapacitated Person’s life. Ultimately, the stipulation that was entered into was an attempt to resolve those ongoing issues and contained certain language relevant to the instant application. Page 3, subparagraph 2 of the stipulation states, “Eugenia Wiltshire, as Trustee, will continue to pay from [the Incapacitated Person's] SNT, [her] regular expenses under the terms of the SNT and state and federal statutes and regulations governing same…and any other additional extraordinary expenses…”. Page 3, subparagraph 3, contains a cause in which the Trustee would provide to the Successor Guardian the original SNT documents as well as an accounting of the funds from the creation of the SNT through the date of the stipulation, and would continue to provide these accountings on an annual basis in May of each year. Finally, and most salient to the instant application, the stipulation contained the following provision, found on Pages 3 and 4, subparagraph 4: “While it is the intent that the terms of this Stipulation will satisfy all parties’ concerns, the parties reserve the right to seek a modification of this So-Ordered Stipulation at any time they deem appropriate, either based upon a concern for the depletion of the SNT or based upon [the Incapacitated Person's] new or unmet financial needs, or other reasons unspecified herein or unknown at this time. The parties acknowledge that the funds in the SNT can be used solely for [the Incapacitated Person's] benefit and for those items not provided for by the government benefits that she presently receives or may receive in the future.” Despite the foregoing agreement, the Successor Guardian reports that she did not receive the accountings of the subject trust until well past the deadline agreed upon; more importantly, the accountings did not include any bank statements or tax returns. Instead, the guardian received spreadsheets created by the Trustee and/or her counsel without any supporting documentation. In addition, the Successor Guardian reports that the Trustee, as noted above was uncooperative in providing funds to the Successor Guardian and/or the Incapacitated Person for items such as utility bills, vehicle insurance, and college tuition. Certainly, a narrow interpretation of the trust document and behavior such as this is contrary not only to the terms of the subject trust, but also the terms of the so-ordered stipulation. The Successor Guardian further alleges that the Trustee has interpreted other portions of the subject trust quite broadly; specifically, she has paid her attorneys over one hundred thousand dollars in legal fees in connection with this guardianship proceeding, despite the trust language contained in Article VI, subparagraph 2, on page 11 that allows the Trustee to only pay legal fees from the trust assets for an attorney consulting about maintaining eligibility for the Incapacitated Person’s public benefits. Yet, while Article VI, subparagraph 1, section G, permits the Trustee to pay for professionals required for the benefit of the trust and/or any beneficiary, including the Incapacitated Person, the Trustee has elected not to pay the Successor Guardian her court-awarded fee, Once again, the Trustee has failed to submit an affidavit from herself on these situations, instead relying upon her attorney’s affirmation only. A motion to punish a party for civil contempt is addressed to the sound discretion of the motion court. Shemtov v. Shemtov, 153 AD3d 1295, 61 NYS3d 278 (2nd Dept., 2017). To prevail on a motion to hold a party in civil contempt, the movant must establish by clear and convincing evidence that a lawful order of the court was in effect, clearly expressing an unequivocal mandate; the appearance, with reasonable certainty, that the order was disobeyed; that the party to be held in contempt had knowledge of the court’s order; and prejudice to the right of a party to the litigation. Id at 1296, 280. Once the moving party makes this showing, the burden shifts to the alleged contemnor to refute the movant’s showing, or to offer evidence of a defense, such as an inability to comply with the order. Id at 1296,280. One seeking the removal of a trustee, must meet the statutory requirements of the Estate, Powers, and Trust Law (hereinafter “EPTL”), Section 7-2.6. This section reads, in relevant part, that the “Supreme Court has power to…(2) on application of any person interested in the trust estate, to suspend or remove a trustee who has violated or threatens to violate his trust, who is insolvent or whose insolvency is imminent or apprehended, or who for any reason is a person unsuitable to execute the trust.” In order to remove a trustee, the petitioner must establish that the trustee they are seeking to remove has breached a fiduciary duty or is otherwise unfit to hold the position. “Estate of Gloria M. Smith Grantor Ten Year Retained Income Trust”, New York Law Journal, page 34, April 14, 2016. If the personal interests of a trustee conflict with his interest as a trustee, that person may not serve as a trustee or may be removed by the Court from that position. In re Hall, 275 AD2d 979,713 NYS2d 622 (4th Dept., 2000). Here, the Court is greatly concerned with the actions of the Trustee, both in her role as trustee of the subject trust and in her former role as a guardian for the Incapacitated Person. This Court recalls the initial hearing phase of this proceeding, in which a relative of the Incapacitated Person appeared and expressed a concern then that the Trustee may abuse and/or misuse the trust funds set aside for the Incapacitated Person and, unfortunately, it appears that those fears have come to fruition. The record before the Court indicates that the Trustee has managed the subject trust and the funds allocated therein for the benefit of the Incapacitated Person improperly, interpreting certain provisions of the subject trust broadly when it suited her and narrowly in other instances, all to the determinant of the Incapacitated Person. The express language of the subject trust is clear that the purpose is to supplement the financial needs of the Incapacitated Person, so that she may have as fulfilling a life as possible, while still maintaining her eligibility for all public benefits she would otherwise be entitled to. While the original grantor of the trust, the adoptive mother of the Incapacitated Person, conferred great powers upon herself when she served as the trustee of the subject trustee, none of those powers were curtailed or restricted in any way when she executed amendments naming Ms, Wiltshire as Trustee merely five (5) days before her passing. What has now become evident to this Court is that Ms. Wiltshire’s service as Trustee of the Serena Maraya Wright Supplemental Needs Trust #3 cannot continue, as she is unable to execute her duties without abusing the powers conferred upon her or acting in a manner shrouded in her own self-interest as a contingent beneficiary of the trust. Accordingly, it is hereby ORDERED, that EUGENIA WILTSHIRE is hereby removed as Trustee of the Serena Maraya Wright Supplemental Needs Trust #3; and it is further ORDERED, that pursuant to the Amendment to the Serena Maraya Wright Supplemental Needs Trust #3, dated March 22, 2016, NASSAU COUNTY AHRC FOUNDATION COMMUNITY TRUST #1 is hereby appointed as Successor Trustee; and it is further ORDERED, that Nassau County AHRC Foundation as Successor Trustee shall submit annual accountings for review by this Court and shall serve a duplicate copy upon Lisa Daniels, Esq., as Successor Guardian of the Incapacitated Person, Larry Weiss, Esq., as the court-appointed Court Examiner, and upon Mental Hygiene Legal Services, as court-appointed counsel to the Incapacitated Person. Turning next to the request by the Successor Guardian to hold the Trustee in contempt personally for her failure to pay the court-awarded fee of the Successor Guardian as stated in the Court’s Order Confirming Report of Court Examiner for the period of February 21, 2018, through December 31, 2019, dated October 15, 2020, as well as for her failure to comply with the terms of the so-order stipulation dated February 13, 2019, that application is also granted. See Barclays Bank v. Hughes, 306 AD2d 406, 761 NYS2d 278 (2nd Dept., 2003). Upon the submission of an affirmation of services by the Successor Guardian for her fees incurred for work performed by her surrounding the instant motion practice, this Court will set an appropriate title, The Successor Guardian shall have thirty (30) days from the date of this order to submit an affirmation of services, … The Successor Guardian shall file and serve a copy of the within order with notice of entry upon the Trustee and her counsel by overnight mail, signature waived, within twenty (20) days from the date of this order, The Successor Guardian shall also file and serve a copy of the within order with notice of entry upon the Incapacitated Person, the Court Examiner, court-appointed Counsel to the Incapacitated Person, and Nassau County AHRC by regular first-class mail within thirty (30) days from the date of this order. All other relief requested in the moving papers not specifically addressed in the foregoing shall be deemed denied herein. This hereby constitutes the decision and order of this Court. Dated: March 1, 2021
