DECISION/ORDER When David Tapper signed his will in 2006, he proudly described his children, his primary beneficiaries, as “decent, caring people.” He hoped that after his death they would be “supportive and loving to each other.” Sadly, the contentious 12-year history of this estate long ago proved Tapper wrong: Gwen Tapper and Seth Tapper are anything but supportive or loving to each other, nor have they proved themselves to be particularly caring when it comes to the interests of decedent’s grandchildren, the beneficiaries of his testamentary trust. Proceedings in this estate have included the removal of both co-executors (Mr. Tapper in 2012; Ms. Tapper in 2015); findings of “improvident management of property” on the part of Mr. Tapper; withdrawal of their attorneys (each of whom cited an absence of cooperation by their respective clients); a protracted dispute among the nominated testamentary co-trustees, resulting in the renunciation of two in favor of Mr. Tapper and his wife; appointment of a guardian ad litem (“GAL”) to determine Mr. Tapper’s fitness to serve as a trustee for his own children; and unanswered orders to account, culminating in a finding of civil contempt against Ms. Tapper. The decedent’s will specifically bequeathed his $395,000 Woodstock residence and 50 percent of his residuary estate to Ms. Tapper. The balance of the residuary estate was allocated as follows: 15 percent to Mr. Tapper; 10 percent to his wife, Rhoda Kanaaneh; and 12.5 percent in trust to each of their two young children, Laiali Tapper and Malaika Tapper (jointly, the “Trusts.”) Mr. Tapper refused to serve with either of the nominated co-trustees and it was only after a GAL assessed Mr. Tapper’s fitness to serve and found him to be qualified that Mr. Tapper and Ms. Kanaaneh were appointed as co-trustees for the Trusts. They have done nothing in that capacity since signing their oaths in 2013. In 2016, Ms. Tapper was removed as executrix and directed to file an accounting. Ms. Tapper was also ordered to turn over all estate documents and estate assets to the successor fiduciary, the Ulster County Commissioner of Finance. She did none of these things. The administrator cta appointed after Ms. Tapper’s removal was able to marshall a few bank records and an estate bank account with $195,108.77, the amount shown on Schedule A of his 2017 accounting. But the co-executors had reported over $720,000 in probate assets in an August 2011 inventory of assets and Ms. Tapper had never explained to her successor or to the Court how the estate assets came to be reduced from $720,000 to $195,108.77. Ultimately, it took this Court’s 2019 finding of civil contempt, issuance of an arrest warrant and the threat of a 30-day sentence of incarceration to secure Ms. Tapper’s consistent attendance and cooperation. An accounting of the finances of the estate under Ms. Tapper’s stewardship has now been filed, which serves to purge her contempt. Only with the filing of the amended accounting did the Court learn that ten years ago Ms. Tapper and Mr. Tapper transferred the bulk of the estate’s assets to themselves and Ms. Kanaaneh in amounts estimated to be their full distributions. The distributions to the co-executors and Ms. Kanaaneh in 2010 and 2011 totaled $461,854: Gwen Tapper: $305,854, consisting of $124,887.80 in cash and $180,966.20 in marketable securities Seth Tapper: $96,000 in cash Rhoda Kanaaneh: $60,000 in cash No distributions were made to Trusts for the co-trustees’ young daughters at that time — or ever, up to and including the present day. The Tappers’ distributions to themselves, coupled with their failure to fund the Trusts at that time, are the chief subjects of the objections and this decision/order.1 As an initial matter, it should be noted that Article 13 of the decedent’s will attempts to exonerate the executors and trustees from liability, by way of surcharge or otherwise, for anything other than “actual fraud.” This clause is void as against public policy under EPTL 11-1-7. It does not relieve the fiduciaries from their basic non-waivable duties of “reasonable care, diligence and prudence” (Matter of Prevratil, 121 AD3d 137, 148 [3d Dept 2014]). By their willful and prolonged inaction, Ms. Tapper, as executrix, Mr. Tapper as co-executor and then as co-trustee with Ms. Kanaaneh, breached their fiduciary duties in that they utterly failed to exercise any care, diligence or prudence for the Trusts or its beneficiaries (Matter of Donner, 82 NY2d 574, 585 [1993]). There is no evidence that either of the co-trustees set up bank accounts for the Trusts, made inquiries into how the Trusts’ funds were invested or sought a distribution from Ms. Tapper or the administrator cta. For the co-executors’ part, their inaction vis a vis the Trusts violated their duty to make distributions impartially and without favor (Estate of Muller, 24 NY2d 336, 344 [1969]). The fiduciaries favored themselves to the exclusion of decedent’s young grandchildren when they collected their full shares of the estate without regard for the Trusts. It may be that Mr. Tapper’s and Ms. Kanaaneh’s personal resources, and their ability to provide amply for their daughters, rendered them indifferent to the decedent’s generosity and the fiduciary duties they sought and assumed. Together with Ms. Tapper, their willful indifference has been detrimental to the interests of the beneficiaries and is answerable by surcharged interest on the delayed distribution. The amount of the delayed distribution is determined to be $198,351.68, which was what was left over after the fiduciaries had collected their shares in 2011. The rate of interest to be employed in calculating a surcharge in equity is within this Court’s discretion (CPLR 5001[a]). The highest rate of interest under CPLR 5004 is appropriate when a fiduciary’s breach of duty is willful (Matter of Marsh, 106 AD3d 1009, 1011 [2d Dept 2013]). Where the breach of fiduciary duty consists of an “unreasonable” delay in distributions, application of the annual rate of 9 percent established in CPRL 5004 is appropriate (Matter of Marsh, 106 AD3d at 1012). In 2011, the fiduciaries made distributions to themselves and then relegated the Trusts’ funds to a low-interest money market account. Since there were no other claims to the residuary estate, the extended delay in funding the Trusts is patently unreasonable. The Court therefore surcharges Ms. Tapper, Mr. Tapper and Ms. Kanaaneh for interest at 9 percent annually on the $198,351.68 set aside for the Trusts, beginning on April 1, 2011 (when the $461,854 in distributions to the fiduciaries were completed), and ending August 31, 2016 (when the residuary estate was turned over to the administrator cta). Total interest on the delayed distribution is determined to be $96,741.48. Reducing this amount by the interest actually earned during that period ($3,152.06) yields a surcharge of $93,589.42 (Estate of Dickman, NYLJ, Aug. 8, 2000 at 28, col. 3 [Sur Ct Nassau Cty 2000]). This amount is allocated among the surcharged fiduciaries based on their respective shares of the $461,854 they collected in 2011 and shall be paid by them to the administrator cta not later than 5:00 pm on July 12, 2021, as follows: Gwen Tapper: $61,769.02 Seth Tapper: $19,653.78 Rhoda Kanaaneh: $12,166.62 Allocation of Legal Fees under SCPA 2110(2). The allocation of an objectant’s attorneys’ fees to the share of a legatee is governed by SCPA 2110(2) and the Court of Appeals’ decision in Matter of Hyde, 15 NY3d 179 [2010]. The Hyde decision encouraged trial courts to engage in a multi-factored review of the competing equities in SCPA 2110(2) proceedings. Of the seven factors provided by way of illustration, the following are relevant here: (a) whether there was justifiable doubt regarding the fiduciary’s conduct; and (b) the portions of interest in the estate held by the non-objecting beneficiaries (the fiduciaries here) relative to the objecting beneficiary (Matter of Hyde, 15 NY3d at 186-187). There is no justifiable doubt about the fiduciaries’ utter indifference to the interests of the Trusts’ beneficiaries, which brought on a 10-year delay in distributions to the Trusts. Since virtually all of the undistributed estate funds are destined for the Trusts, the grandchildren alone will derive a benefit from the outcome of this proceeding. The fiduciaries — whose interests account for 75 percent of the residuary estate — could hardly be expected to join in objections to their own conduct. By the same token, it would be inequitable to charge the Trusts, already diminished by reason of the fiduciaries’ neglect, with the expenses associated with proceedings to compel them to act. At the urging of the objectants, the Court allocates to Ms. Tapper the GAL fees incurred since 2016 and the portions of the administrator cta’s attorney fees attributable to the civil contempt proceedings filed against her. The fees to be paid by Ms. Tapper represent the services of the GALs, Attorneys Matera and Glenn, and the services of Attorney Yastion, counsel to the administrator cta. The GAL fees of Attorney Matera are determined to be $8,250: $3,600 fixed by Judge Work in her May 31, 2016 decision and $4,650 fixed by this Court for services between June 2018 and July 2020. The legal fees incurred by the administrator cta in the 2017 proceedings on Ms. Tapper’s contempt are $2,177.50. The GAL fees for Attorney Glenn in this proceeding are determined to be $8,562.50. Payment of the foregoing fees totaling $18,990 are to made to the payees designated below not later than 5:00 pm on July 12, 2021. The co-trustees are further required to file with the Court a fiduciary bond in the principal amount of $200,000 with the payment of the surcharged interest allocated to them and thereafter to file quarterly reports of the activities of the accounts established for the Trusts, as further detailed below. Counsel to Gwen Tapper is directed to efile an affidavit bringing the accounting to date making such adjustments and amendments as are required by this decision/order and/or by the objections, together with a proposed decree approving the petition for judicial accounting, as amended no later than 5:00 pm on July 27, 2021. Counsel to the administrator cta is directed to file an affidavit bringing his client’s 2017 accounting to date, together with a proposed decree approving the petition for judicial accounting. It is, therefore, ORDERED, ADJUDGED and DECREED, the fiduciaries shall remit the following amounts to the administrator cta not later than 5:00 pm on July 12, 2021; (a) Surcharged Interest, allocated as follows: Gwen Tapper: $61,769.02 Seth Tapper: $19,653.78 Rhoda Kanaaneh: $12,166.62 (b) Legal fees of the administrator cta for services relating to the 2017 contempt proceeding ($2,177.50) to be paid by Gwen Tapper; and it is further ORDERED, ADJUDGED and DECREED, Gwen Tapper shall pay the GAL fees for services in representing the beneficiaries of the Trusts not later than 5:00 pm on July 12, 2021: Stewart P. Glenn, Esq. $8,562.00 Peter F. Matera, Esq. $8,250.00; and it is FURTHER ORDERED, ADJUDGED and DECREED, upon the issuance of a decree settling the account of Gwen Tapper, the judgment of contempt in this Court’s November 14, 2019 decision order shall be deemed purged; and it is FURTHER ORDERED, ADJUDGED and DECREED, Seth Tapper and Rhoda Kanaaneh, as co-trustees of the Trusts, shall file a fiduciary bond in the principal amount of $200,000 contemporaneously with the payment of the surcharged interest allocated to them and shall, upon the opening of bank or investment account(s) for the Trusts and the initial deposits thereto, file with the Court bank or investment statements for each such account, and thereafter shall continue to file such statements with the Court at the expiration of each calendar quarter ensuing thereafter until such time as the Court is satisfied that the co-trustees are actively and consistently engaged in managing and expending the funds as required under the terms of the Trusts; and it is FURTHER ORDERED, ADJUDGED and DECREED, counsel to Gwen Tapper is directed to file an affidavit bringing her accounting to date making such adjustments and amendments as are required by this decision/order and/or by the objections, together with a proposed decree approving her client’s petition for judicial accounting, as amended no later than 5:00 pm on July 27, 2021; and it is FURTHER ORDERED, ADJUDGED and DECREED, counsel to the administrator cta is directed to file an affidavit bringing his client’s 2017 accounting to date, together with a proposed decree approving his client’s petition for judicial accounting no later than 5:00 pm on July 27, 2021. This constitutes the decision/order of the Court. All papers, including this Decision/Order, are hereby entered and filed with the Clerk of the Surrogate’s Court. Counsel is not relieved from the applicable provisions of CPLR Section 2220 relating to service and notice of entry. Documents considered: 1. Petition for Judicial Settlement of Account, as amended, Burton Gulnick, Jr., administrator cta, filed December 19, 2017 2. Guardian ad litem Report and Recommendation by Peter F. Matera, Esq. filed August 13, 2018. 3. Amended Guardian ad litem Report and Recommendation by Peter F. Matera, Esq. filed November 9, 2018 4. Petition for Judicial Settlement of Account by Gwendolyn Tapper filed July 20, 2020, including Schedules A-E, as amended by further filings February 17, 2021. 5. Letter from guardian ad litem Stewart P. Glenn, Esq. filed February 17, 2021. 6. Interim Report of GAL by Stewart P. Glenn, Esq. filed February 26, 2021. 7. Verified Objections by administrator cta filed March 18, 2021. 8. Verified Objections by GAL, Stewart P. Glenn, Esq. filed March 18, 2021. 9. Reply to Answer/Objections of Stewart P. Glenn, Esq. by Ephie Trataros, Esq. filed April 19, 2021. 10. Reply to Answer/Objections of James Yastion, Esq. by Ephie Trataros, Esq. filed April 19, 2021. 11. Sur-reply of Stewart P. Glenn, Esq. filed April 19, 2021. 12. Second Report of GAL by Stewart P. Glenn, Esq. filed April 23, 2021. 13. Affirmation of Fees for Legal Services by Peter F. Matera, Esq. filed April 29, 2021. Dated: May 11, 2021
