The following papers were considered on this motion: 1. The Notice of Motion, dated April 5, 2021, and all exhibits and papers submitted in support thereof; 2. The Affirmation of Alexandra Gallo-Cook, Esq., dated April 30, 2021, in Opposition to the Motion, and all exhibits and papers submitted in support thereof; 3. The Reply Affirmation of James G. Striar, Esq., dated May 11, 2021. DECISION and ORDER In a turnover proceeding pursuant to SCPA 2103: (1) respondent Lenore Seliger moves, in effect, pursuant to CPLR 3212 for summary judgment dismissing the proceeding and for a determination that the Charles M. Seliger Trust is invalid and null and void. The petitioners oppose the motion. On October 1, 2009, decedent Charles M. Seliger died testate, survived by his spouse, respondent Lenore Seliger (“Lenore”); two children from a prior marriage, petitioners Robert Seliger and Mark Seliger; four grandchildren, including petitioner David Seliger; and two great-grandchildren. By decree dated September 20, 2011, this court admitted the decedent’s will, dated July 28, 2005 (“the Will”), to probate. Letters testamentary issued to Lenore, and letters of trusteeship issued to Lenore and Michael Rosenfeld for the marital trust created for the benefit of Lenore under Article ONE (D) of the Will (“the Marital Trust”). Insofar as is relevant here, the Will provides for the creation of the Marital Trust, which was to be funded by “all of the works of fine art created by” the decedent (hereinafter the “subject artwork”). Lenore is to receive all net income therefrom. Also, the trustees possess “absolute discretion for any reason whatsoever” to invade the principal of this trust for Lenore’s benefit, even if such invasion(s) result in its termination. It also provides that if the trustees sell any of the subject artwork, they shall distribute the net proceeds of such sale to Lenore (Motion, Exhib. A). Article FOUR (N) of the Will provides that no trustee of any trust “shall be entitled to exercise any discretionary power to distribute income or principal of such trust (i) to himself or herself as a beneficiary of such trust…” (id.). The Marital Trust terminates upon the earlier to occur of: (1) Lenore’s death; or (2) such time as Michael Rosenfeld no longer serves as trustee of this trust1. If Lenore is living when the Marital Trust terminates, the remaining principal is to be distributed to her outright. If Lenore is not then living, and Mr. Rosenfeld is not willing to serve as trustee of a further trust, or if he is not then alive, the remainder is to be distributed to the decedent’s issue, per stirpes. If Mr. Rosenfeld is alive and willing to serve as trustee of a further trust, the remainder is to be held in further trust pursuant to Article ONE (E) of the Will (“the Article ONE (E) Trust”) (id.). Insofar as is relevant here, the Article ONE (E) Trust provides that the trust remainder is to be distributed to the decedent’s then-living issue, per stirpes, when it terminates. In the absence of such issue, it names the Seliger Family Foundation, a private charitable foundation to be created by the trustee(s), as remainder beneficiary (id). After the court admitted the Will to probate, Lenore came into (or retained) possession of all of the subject artwork, which were or should have been used to fund the Marital Trust. Allegedly, all communication between Lenore and Mr. Rosenfeld broke down, and Mr. Rosenfeld became frustrated with the situation. As a result, he decided to invade the principal of the Marital Trust and to distribute it to the Charles M. Seliger Trust (hereinafter the “Appointed Trust”), an inter vivos trust which the petitioners had created only three days earlier and which is described in detail below. On May 31, 2019, Mr. Rosenfeld executed a document pursuant to which he purportedly invaded the principal of the Marital Trust and distributed it to the Appointed Trust (Robert Seliger Affidavit in Opposition to Motion, Exhib. H). On or about May 28, 2019, the petitioners executed the Appointed Trust, in anticipation of receiving all of the assets of the Marital Trust. They named themselves as trustees thereof. In relevant part, the Appointed Trust expressly states that it is a marital trust for Lenore’s benefit. More specifically, Section 2.1 provides as follows: The Trustees shall, during the life of [Lenore], pay to LENORE all of the income of the Trust Fund, annually or at more frequent intervals; and, in addition, the Trustees may distribute to LENORE, from the principal of the Trust Fund, from time to time, such amounts as the Trustees, in their uncontrolled discretion, may determine. So far as the Trustees are directed or permitted to pay income or principal to LENORE, they may make payments for the use or benefit of LENORE. (Motion to Dismiss, Exhib. B). The Appointed Trust requires the trustees: (1) to manage the principal “so that there shall be produced for LENORE, during her lifetime, such periodically distributable income as is consistent with the value of the Trust Fund,” and (2) to convert any unproductive property in the trust to income-producing property, upon Lenore’s written direction to do so (id.). However, it does not require the trustees to distribute to Lenore the net proceeds from the sale of any of the subject artwork, if they exercise their discretion to sell any such artwork. Article 3 of the Appointed Trust provides that upon Lenore’s death, the principal of the Appointed Trust is to be held in further trust for the benefit of the decedent’s issue, who are also the remainder beneficiaries. Subject to other provisions not relevant here, it names the Seliger Family Foundation as the remainder beneficiary if no descendants of the decedent are living when the trust is to terminate (id.). By letter dated June 20, 2019, Lenore was informed that Mr. Rosenfeld had invaded the principal assets of the Marital Trust (i.e., the subject artwork) and distributed those assets to the petitioners, as trustees of the Appointed Trust (Gallo-Cook Affirmation in Opposition to Motion, Exhib. 1). By letter dated July 17, 2019, Lenore informed Mr. Rosenfeld that she objected to that action (Motion to Dismiss, Exhib. C). All attempts by the petitioners to obtain the subject artwork from Lenore have failed. The petitioners, as trustees of the Appointed Trust, have filed this proceeding pursuant to SCPA 2103 against Lenore. In their Amended Petition, they seek an order directing her to turn over to them, in their capacity as trustees, the subject artwork allegedly belonging to the Appointed Trust and which she allegedly wrongfully possesses. Lenore has filed a Verified Answer to the Amended Petition. Therein, she alleges that the attempt by Mr. Rosenfeld and the decedent’s sons to decant the Marital Trust to the Appointed Trust was null and void ab initio because it failed to comply with EPTL §10-6.6. She alleges that the decanting was not in her best interests; that Mr. Rosenfeld did not act as a prudent person would under the prevailing circumstances; that substantial evidence exists of a contrary intent by the decedent; and that it cannot be established that the decedent likely would have changed his contrary intention. Lenore further alleges that Mr. Rosenfeld should be prohibited from unilaterally decanting the Marital Trust into the Appointed Trust without seeking judicial approval thereof. Now, Lenore purports to move pursuant to CPLR 3211 to dismiss the petition. Essentially, she raises all of the same arguments as she raises in her Verified Answer. The petitioners oppose the motion. First, the court must address a procedural issue related to this motion. Because Lenore has filed an Answer to the Petition, the court considers her motion to be a motion for summary judgment pursuant to CPLR 3212 (see DeSanctis v. Laudeman, 169 AD2d 1026 [3d Dept., 1991]; Matter of Firestone, 113 AD2d 750 [2d Dept, 1985]). And, while generally the court is required to provide the parties with adequate notice that it intends to treat their motion as such (see Rich v. Lefkovits, 56 NY2d 276), “this rule is inapplicable when it appears from a reading of the parties’ papers that they deliberately are charting a summary judgment course by laying bare their proof” (O’Dette v. Guzzardi, 204 AD2d 291, 292 [1994]). Here, the parties have laid bare their proof in support of and in opposition to the motion. Therefore, the court need not notify the parties that it is treating the motion as a motion for summary judgment. On a motion for summary judgment, the moving party must establish a prima facie case of its entitlement to judgment as a matter of law by submitting admissible evidence demonstrating the absence of any triable issue of fact (see Erikson v. J.I.B. Realty Corp., 12 AD3d 344 [2004]; Taub v. Balkany, 286 AD2d 491 [2001]). “Failure to make such a showing requires denial of the motion regardless of the sufficiency of the opposing papers. Moreover, since summary judgment is the procedural equivalent of a trial, any doubt as to the existence of a triable issue, or where the material issue of fact is arguable, the motion should be denied” (Peerless Ins. Co. v. Allied Building Prods. Corp., 15 AD3d 373, 374 [2005] [internal quotes and citations omitted]). Once the moving party makes the required showing, the burden shifts to the party opposing the motion to produce evidentiary proof to establish the existence of material issues of fact which require a trial (see Alvarez v. Prospect Hosp., 68 NY2d 320; Boz v. Berger, 268 AD2d 453). Initially, the court interprets the basis of Lenore’s motion to be that the Invaded Trust does not own the subject artwork because: (1) Mr. Rosenfeld could not decant the Marital Trust to the Invaded Trust, or (2) he decanted the Marital Trust to the Invaded Trust in violation of EPTL §10-6.6 (h). Therefore, according to Lenore, the petitioners cannot recover the subject artwork from her. Insofar as is relevant to this proceeding, EPTL §10-6.6 authorizes a trustee who has the authority to invade the principal of a trust to appoint the assets of the original, or invaded, trust, to a new, or appointed, trust. This process is commonly referred to as decanting (see Matter of Kroll v. New York State Dept. of Health, 143 AD3d 716, 718-719 [2d Dept., 2016]). Decanting by a trustee who has absolute discretion to invade the principal of a trust is governed by EPTL §10-6.6 (b), while decanting by a trustee with limited discretion to invade the principal of a trust is governed by EPTL §10-6.6 (c). A trustee’s exercise of the power to invade trust principal under either section is “considered the exercise of a special power of appointment as defined in [EPTL §10-3.2]” (EPTL §10-6.6 [d]). EPTL §10-6.6 (b) provides, in relevant part, as follows: (b) An authorized trustee with unlimited discretion to invade trust principal may appoint part or all of such principal to a trustee of an appointed trust for, and only for the benefit of, one, more than one or all of the current beneficiaries of the invaded trust (to the exclusion of any one or more of such current beneficiaries). The successor and remainder beneficiaries of such appointed trust may be one, more than one or all of the successor and remainder beneficiaries of such invaded trust (to the exclusion of any one, more than one or all of such successor and remainder beneficiaries). First, Lenore argues that because the petitioners have deadlock-breaking powers under the Marital Trust, they are fiduciaries of that trust, and they have a duty to avoid conflicts of interest with other beneficiaries of the trust. She claims that they should have recused themselves from trying to break the stalemate between Mr. Rosenfeld and Lenore over the decanting of the Marital Trust, and therefore, that their attempt to decant the Marital Trust was void ab initio. Lenore’s claim is without merit and rests upon an incorrect assumption. Mr. Rosenfeld and the petitioners did not decant the Marital Trust together. Although the petitioners created the Appointed Trust, they played no role in decanting the Marital Trust. Mr. Rosenfeld was the sole independent trustee of the Marital Trust, and he alone decanted the Marital Trust to the Appointed Trust. Because Lenore lacks authority under Article FOUR (N) of the Will, and under law (see EPTL §10-10.1), to make discretionary distributions of principal to herself, no deadlock could exist between Lenore and Mr. Rosenfeld on the issue of whether to make a discretionary distribution of principal from the Marital Trust. Consequently, the petitioners were not necessary to break a deadlock on this issue. Next, Lenore claims that Mr. Rosenfeld breached his fiduciary duty to her by decanting the Marital Trust to the Appointed Trust: (1) to terminate her right to receive all net proceeds of any sales of the subject artwork; (2) to allow Mr. Rosenfeld to resign as trustee as trustee without court approval; (3) to involuntarily remove Lenore as trustee and substitute the petitioners as co-trustees; and (4) to alter the interests and rights of a charitable remainder beneficiary. She further asserts that the Marital Trust does not give Mr. Rosenfeld unlimited or absolute discretion to make distributions of principal from the Marital Trust. Lenore claims that the provision of the Marital Trust which requires the trustees to distribute to her the net proceeds from the sale of any of the subject artwork (i.e., the principal) limits Mr. Rosenfeld’s discretion to distribute principal. Thus, she contends, Mr. Rosenfeld’s ability to decant is governed by EPTL §10-6.6 (c), which requires the Appointed Trust to contain the same language as the Marital Trust. And, since the Appointed Trust does not require that Lenore receive the net proceeds from the sale of any of the subject artwork, his attempt to decant to the Appointed Trust is void. EPTL §10-6.6 (s)(9) defines “unlimited discretion” as “the unlimited right to distribute principal that is not modified in any manner. A power to pay principal that includes words such as best interests, welfare, comfort, or happiness shall not be considered a limitation or modification of the right to distribute principal.” The court rejects Lenore’s claim that the Marital Trust limited Mr. Rosenfeld’s discretion to invade trust principal. To the contrary, the Marital Trust gives him absolute discretion to invade the trust principal for Lenore’s benefit. Part ONE, Section D (2) expressly states that Mr. Rosenfeld has “absolute discretion for any reason whatsoever” to invade the Marital Trust principal for Lenore’s benefit (Motion to Dismiss, Exhib. A, p. 3). The requirement that he distribute to Lenore the net proceeds from the sale of any of the subject artwork in no way limits Mr. Rosenfeld’s discretion to invade the trust principal for Lenore’s benefit. Therefore, Mr. Rosenfeld’s authority to decant the Marital Trust to the Appointed Trust is governed by EPTL §10-6.6 (b), not EPTL §10-6.6 (c). As such, he is not required to decant to a trust which includes the same language as the Marital Trust. Nothing in EPTL §10-6.6 requires the trustees of an appointed trust to be the same as the trustees of the invaded trust (see EPTL §10-6.6 [s][1]). Therefore, the court rejects Lenore’s claims that Mr. Rosenfeld’s decision to decant the Marital Trust into the Appointed Trust constituted an impermissible attempt by Mr. Rosenfeld to resign as trustee of the Marital Trust without court approval (cf. SCPA 715), and/or an impermissible attempt by him, instead of the court, to remove Lenore as trustee of the Marital Trust over her objection (cf. SCPA 711). Nevertheless, the court concludes that these are factors which the court should consider in determining whether Mr. Rosenfeld decanted the Marital Trust in violation of EPTL §10-6.6 (h). Additionally, Lenore’s argument that the Appointed Trust effectively “eliminates or omits” the Seliger Family Foundation as a beneficiary of the decedent’s residuary estate is simply incorrect. Under the Will, Lenore is the beneficiary of the residuary estate. She receives it outright. Thus, Mr. Rosenfeld could not affect the Seliger Family Foundation’s interest in the residuary estate because it has no interest in the residuary estate. Moreover, the Appointed Trust makes the Seliger Family Foundation a remainder beneficiary under effectively the same circumstances as it would be a under the Marital Trust. Next, Lenore asserts that Mr. Rosenfeld’s purported decanting of the Marital Trust into the Appointed Trust violated the requirements of EPTL §10-6.6 (h). EPTL §10-6.6 (h) provides as follows: (h) An authorized trustee exercising the power under this section has a fiduciary duty to exercise the power in the best interests of one or more proper objects of the exercise of the power and as a prudent person would exercise the power under the prevailing circumstances. The authorized trustee may not exercise the power under this section if there is substantial evidence of a contrary intent of the creator and it cannot be established that the creator would be likely to have changed such intention under the circumstances existing at the time of the exercise of the power. The provisions of the invaded trust alone are not to be viewed as substantial existence of a contrary intent of the creator unless the invaded trust expressly prohibits the exercise of the power in the manner intended by the authorized trustee. Simply stated, Lenore has failed to establish a prima facie case that Mr. Rosenfeld violated EPTL §10-6.6 (h). Triable questions of fact exist as to whether or not Mr. Rosenfeld purported decanting of the Marital Trust violated that section. The summary of Lenore’s final argument is as follows: “Although there is a split of authority and expert opinion nationally on the issue of whether trust decanting statutes like EPTL §10-6.6 require a trustee to obtain judicial approval of a proposed decanting of a trust if a beneficiary and/or co-trustee objects to decanting the trust into a new trust, the better rule would be to prohibit Mr. Rosenfeld and [the decedent's] sons from unilaterally decanting [the decedent's] testamentary trust into a new trust over [Lenore's] objection to the decanting without seeking judicial approval thereof” (Lenore’s Memo of Law in Support of Motion, p 36, Headnote IV). The court rejects Lenore’s position. First, on this motion, this court is not concerned with the requirements of any other decanting statute other than EPTL §10-6.6. Further, as Lenore points out, EPTL §10-6.6 (j)(1) expressly provides as follows: “(1) An authorized trustee may exercise the power authorized by [EPTL §10-6.6 (b) and (c)] without the consent of the creator, or of the persons interested in the invaded trust, and without court approval, provided that the authorized trustee may seek court approval for the exercise with notice to all persons interested in the invaded trust. The statute could not be more clear that the authorized trustee need not seek judicial approval of the decanting. Rather, it is permissive. This court will not read into the statute requirements which the Legislature chose not to include. However, Lenore is not without recourse. Pursuant to EPTL §10-6.6 (j)(5), she (or any other person interested in the Invaded Trust) may bring a proceeding “to compel the authorized trustee to who exercised the power [to decant] to account for such exercise…” Because the court cannot determine whether the Appointed Trust owns the subject artwork until it determines whether Mr. Rosenfeld permissibly decanted the Marital Trust and/or whether he did not violate EPTL §10-6.6 (h) in doing so, the court directs Lenore to file a proceeding compelling Mr. Rosenfeld to account for the exercise of his power to decant. Pending the resolution of that proceeding, Lenore’s motion is held in abeyance. Counsel for the parties are directed to appear at the court’s November 3, 2021 calendar for a conference on the matter. Counsel may appear remotely. This constitutes the Decision and Order of the Court. Dated: October 14, 2021
