Decision and Orders signed: August 22 & 23, 2024 Surrogate Mella
ESTATE OF ROBERT A. KOEPPEL, Deceased (96-4098/E/F) — In this proceeding, Petitioner William Koeppel seeks, pursuant to SCPA 711 and 719, the removal of his mother, Roberta Koeppel, and his sister, Alexandra Koeppel, as Trustees of a Trust created under Article FOURTH of the will of his father, Robert Koeppel. At the call of the June 14, 2024 calendar, the court heard oral argument on Petitioner’s motion for an order directing the immediate suspension of the Trustees. Upon the conclusion of the argument, on the record, the court denied the motion. This memorializes the court’s determination. The Court of Appeals has held that a court may suspend the letters of a fiduciary without an evidentiary hearing, “only where the misconduct is established by undisputed facts or concessions” (Matter of Duke, 87 NY2d 465, 472 [1996]). That court added that “where the facts are disputed [or] where conflicting inferences may be drawn” from those facts, removing a fiduciary summarily is an abuse of discretion (Duke, 87 NY2d at 473). On the record presented on this motion, Petitioner has failed to set forth any basis for the immediate suspension of the co-Trustees. In this removal proceeding, this is the second time that Movant has sought immediate suspension or removal of the co-Trustees. The first application was denied by a decision that this court rendered a year and a half ago. The facts that, according to Movant, now provide a basis for the co-Trustees’ immediate suspension relate to Trust financial transactions that occurred in 2014 and 2015. However, Movant has been aware of the funds related to those transactions for years because they are reflected in the Supplemental (Stated) Account of the co-Trustees filed in this court in April of 2017. That account reflects the approximately $15 million payment received by the Trust from Movant himself (as payment on a promissory note) and details how those funds have been used or allocated by the co-Trustees. The trial in that contested accounting had been scheduled for August 2024, following a long discovery period.1 Movant now seeks the immediate suspension of the co-Trustees as a result of their involvement in these transactions, alleging, in particular that: 1) the co-Trustees engaged in self-dealing by retaining, until 2014, Koeppel Management Company, LLC (KMC), a company allegedly owned by co-Trustee Roberta Koeppel, to manage the real estate properties owned by the Trust; 2) the co-Trustees commingled Trust assets by transferring $4.8 million of the $15 million that the Trust received from Movant to a bank account held by KMC; and 3) the co-Trustees are dishonest because they committed perjury during their recent depositions when explaining these transactions. In their opposition to the motion, the co-Trustees dispute every material factual allegation made by Movant. In particular, they explain their actions with respect to the use and allocation of the $15 million received from Movant and submit documents reflecting the flow of these funds, including the $4.8 million transferred to KMC’s account. As a result of these disputed allegations, summary suspension of the co-Trustees is not warranted. Simply put, the court cannot conclude from the undisputed facts on this record that funds were misappropriated or that co-Trustee Roberta Kaplan was dishonest in her deposition responses to questions about what happened with these funds, or that the co-Trustees’ continued service endangers the assets of the Trust. In any event, and without making a determination as to their propriety, the acts and activities challenged by Petitioner on this motion are no longer in practice, as a third-party management company, FirstService Residential New York, Inc. began managing the real estate properties in 2015, and KMC wound up its operations at the end of 2014. The court, accordingly, denied Petitioner’s motion for immediate suspension of the co-Trustees. In light of the denial of this aspect of the motion, the court opined that it need not determine whether Caroline Koeppel, the nominated successor trustee, is fit to serve as fiduciary. This decision, together with the transcript of the June 14, 2024 proceedings, constitutes the order of the court. Dated: August 22, 2024
