The following papers were considered by the court (CPLR 2219 [a]) in determining competing dispositive motions in the above-entitled matter: Papers Considered: Numbered Petitioners’ Notice of Motion, dated August 23, 2022, for Summary Judgment; Affidavit of Gary B. Freidman, Esq., in Support, dated August 23, 2022, with Exhibits 1, 2 Petitioners’ Memorandum of Law in Support of Motion for Summary Judgment 3 Respondents’ Notice of Cross-Motion, dated September 23, 2022, to Dismiss Proceeding; Affidavit of John D. Winter, Esq., dated September 23, 2022, in Opposition to Motion and in Support of Cross Motion with Exhibits 4, 5 Respondents’ Memorandum of Law in Opposition to Motion for Summary Judgment and in Support of Cross-Motion to Dismiss Proceeding 6 Petitioners’ Memorandum of Law in Further Support of Motion for Summary Judgment and in Opposition to Cross-Motion to Dismiss Proceeding 7 Respondents’ Reply Memorandum of Law in Support of Cross-Motion to Dismiss Proceeding1 8 Petitioners’ Supplemental Memorandum of Law in Further Support of Motion for Summary Judgment and in Opposition to Cross-Motion to Dismiss Proceeding 9 Respondents’ Supplemental Memorandum of Law in Opposition to Motion for Summary Judgment and in Support of Cross-Motion to Dismiss Proceeding 10 DECISION and ORDER This is a proceeding by two of three co-trustees of an inter vivos trust established by Mamdouha S. Bobst to compel the four charitable remainder beneficiaries of that trust, to comply with a refunding agreement contained in the receipt and release they executed jointly in April 2018 upon the informal settlement of the trustees’ final account. Pending before the court are Petitioners’ motion for summary judgment (CPLR 3212) and the charitable remainder beneficiaries’ unlabeled cross-motion to dismiss the petition, which the court will also treat as a motion for summary judgment.2 Undisputed Facts Mamdouha S. Bobst (Decedent), a primary beneficiary of the estate of her predeceased husband, Elmer Bobst, died on September 10, 2015. Her will, as amended by codicil, was admitted to probate in this court and letters testamentary issued to the nominated executors, Patricia Nixon Cox (Cox), Carlton Rochell, Jr. (Rochell), and BNY Mellon, N.A. (BNY Mellon). Under her will, Decedent bequeathed her residuary estate to the trust she had established on November 9, 1988 and restated and amended thereafter (the Mamdouha Bobst Trust or Trust). In addition to serving as executors of Decedent’s estate, Cox, Rochell, and BNY Mellon also serve as successor trustees (Trustees) of the Trust. As pertinent here, the Trust provides that upon the grantor’s death, four charities, Memorial Sloan Kettering, New York University, Princeton University, and the American University of Beirut (Charitable Beneficiaries), shall receive the Trust’s remainder in equal shares. The Trust also provides the following in Article 3A: “Upon the Grantor’s death and to the extent that the assets of the Grantor’s residuary probate estate (excluding income thereof) are not sufficient, the Trustees shall pay over to the Grantor’s legal representatives out of the trust estate such amounts as such legal representatives shall certify to the Trustees as the amounts required to provide full payment of (i) all debts of the Grantor…and all administration expenses of her estate.” In April 2018, the Trustees concluded their administration of the Trust and obtained receipts and releases from the Charitable Beneficiaries after providing them with their informal final account (Trustees’ Receipt and Release). Each of the Charitable Beneficiaries received more than $25 million subject to Paragraph ELEVENTH of the Trustees’ Receipt and Release, which provides that each of the Charitable Beneficiaries agrees: “to refund to the Trustees any part of the distributions received by it from the Trust, the Trustees may require to meet claims, charges, taxes, expenses, commissions, legal fees and demands of any kind or nature whatsoever (together with all legal and other expenses of defending or adjusting the same) which may at any time accrue or be asserted against the Trust or the Trustees…and shall be properly payable by the Trust.” More than three years later, Melinda Rockwell (Rockwell), Elmer Bobst’s great-grandchild, commenced an action on August 12, 2021 in New York County Supreme Court (Supreme Court Action), pursuant to the Child Victim’s Act, alleging that Elmer Bobst, who died on August 2, 1978, had sexually abused her. Among the multiple defendants Rockwell named were Cox, Rochell, and BNY Mellon, as the executors of Decedent’s estate (Executors). Because the Executors had fully distributed the estate’s assets in accordance with Decedent’s will several years before the commencement of the Supreme Court Action, the estate had no funds on hand to cover the cost of the estate’s defense in the Supreme Court Action. To pay for such defense, Rochell, as a co-trustee of the Mamdouha Bobst Trust, requested in a letter dated March 1, 2022, that each of the Charitable Beneficiaries contribute $100,000 to a litigation defense fund in order to defend Decedent’s estate in the Supreme Court Action. The basis for this request was the above-quoted Paragraph ELEVENTH of the Trustees’ Receipt and Release.3 The record reflects that, the same month, Rochell filed a motion to dismiss the Supreme Court complaint. Cox and Rochell, as two of the co-trustees of the Mamdouha Bobst Trust, commenced the instant proceeding seeking an order compelling the Charitable Beneficiaries to comply with the Trustees’ Receipt and Release by refunding the Mamdouha Bobst Trust at least $100,000 each and “such other assets as may be needed to defend against the [Supreme Court Action].” In their Answer, the Charitable Beneficiaries objected to the relief sought on a variety of grounds, including that the refunding language in Paragraph ELEVENTH of the Trustees’ Receipt and Release is inapplicable in the circumstances here and that, in any event, even if the Trustees are entitled to a “refund” to pay the cost of the Executors’ legal defense in the Supreme Court Action, their demand that the Charitable Beneficiaries contribute $400,000 to a “legal defense fund” is premature “without that amount, in fact, having been spent.” The instant cross-motions followed. After hearing the parties’ oral arguments in support of the motions, the court requested supplemental submissions addressed to the following questions: (1) Why do the legal fees incurred by Petitioners as co-executors of the will of Mamdouha S Bobst in the Supreme Court action constitute a claim against Petitioners as trustees of [the Mamdouha Bobst Trust], such that the trustees would be entitled to payment from the charities under the refunding agreement? (2) Assuming that: (a) the legal fees incurred by Petitioners as co-executors constitute a claim against themselves as trustees of [the Mamdouha Bobst Trust], and that (b) Petitioners are entitled to a refund from each of the four charities, pursuant to the refunding agreement, to what extent, if any, is the reasonableness of the sum requested — “at least $100,000 [from] each” charity — subject to court review at this juncture? Having received the parties’ supplemental submissions, the court decides the motion and cross-motion, as indicated below. Discussion It is well settled that “the proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact” (Alvarez v. Prospect Hospital, 68 NY2d 320, 324 [1986] [citations omitted]). A movant’s “[f]ailure to make such a showing requires denial of the motion, regardless of the sufficiency of the opposition papers” (Winegrad v. New York Univ. Med. Center, 64 NY2d 851, 853 [1985]). However, once the movant has made such showing, “the burden shifts to the party opposing the motion for summary judgment to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action” (Alvarez v. Prospect Hospital, at 324; see also Zuckerman v. City of New York, 49 NY2d 557, 562 [1980]). On this record, Petitioners have established, prima facie, their entitlement to a direction to the Charitable Beneficiaries that they refund to the Trustees a portion of the trust funds they received so that the Trust may meet its obligation to Decedent’s estate to pay its administration expenses. It is undisputed that the Executors are defendants in the Supreme Court Action and that Decedent’s estate is currently insolvent because all of the estate’s assets were distributed to the Trust and then to the Charitable Beneficiaries. Notwithstanding the estate’s insolvency, however, the Executors remained authorized and, in fact, obligated as fiduciaries to defend the estate and protect its beneficiaries from a potential judgment (see EPTL 11-1.1[b][13]; Matter of Dutcher, 251 App Div 184, 186 [2d Dept 1937]; see also Matter of Thomas, 74 Misc 3d 891 [Sur Ct, Monroe County 2022]). That the estate may not have sufficient assets to satisfy a potential judgment does not absolve the estate of potential liability (see EPTL 11-4.5). Any legal fees thus incurred in defending the estate constitute administration expenses that are presumptively payable with estate assets (see EPTL 11-1.1[b][22]; see Matter of Stanley, 240 AD2d 268 [1st Dept 1997]). Petitioners correctly rely on Article 3A of the Mamdouha Bobst Trust, which clearly provides that where, as here, the estate’s assets are insufficient to pay administration expenses, the Executors may look to the Trust to pay “amounts required to provide full payment of (i) all debts of the Grantor…and all administration expenses of her estate.”4 Further, under circumstances where the Trust, in turn, has no assets, Petitioners may avail themselves of Paragraph ELEVENTH of the Trustees’ Receipt and Release, which obligates the Charitable Beneficiaries to refund to the Trust any part of the distributions that they received that the Trustees may need to pay “claims, charges, taxes expenses, commissions, legal fees and demands of any kind…which may at any time accrue…against the Trust or the Trustees and shall be payable by the Trust.” Here, given the estate’s insolvency, the administration expenses of the estate incurred in defending against the Supreme Court Action necessarily “accrue…against the Trust” within the meaning of Paragraph ELEVENTH and therefore trigger the Charitable Beneficiaries’ obligation to refund to the Trust those funds needed to pay such expenses. In response, the Charitable Beneficiaries have failed to raise a material issue of fact requiring a trial. For example, their argument that Article 3A of the Trust was intended to apply only to the “period immediately following [Grantor's] death and before the trust assets are distributed” is without merit. The provision is necessarily triggered by Grantor’s death but contains no other temporal limitation and explicitly contemplates payment from the Trust of “all the administration expenses of Grantor’s estate” if required. Thus, Article 3A does not “limit the types of debts for which the Trustees can provide payment” as the Charitable Beneficiaries argue. To the contrary, Article 3 A expressly provides for the use of Trust assets to pay estate administration expenses, which necessarily includes the payment of reasonable legal fees (see EPTL 11-1.1][b][22]). Likewise, Paragraph ELEVENTH of the Trustees’ Receipt and Release does not support the Charitable Beneficiaries’ contention that they have no obligation to pay any of the estate’s legal fees resulting from the Supreme Court Action because the Executors and not the Trustees were named as defendants. The plain language of Paragraph ELEVENTH makes clear that the Trustees may require the Charitable Beneficiaries to refund amounts needed to pay for legal expenses that “accrue…against the Trust.” Here, the Executor’s have necessarily incurred administration expenses defending the estate (and protecting the interests of the Charitable Beneficiaries) in the Supreme Court Action under circumstances where the estate is indisputably insolvent. Article 3 A of the Trust contemplates such a possibility and provides that the Executors may look to the Trust to pay these expenses. The Charitable Beneficiaries’ other arguments fare no better. They either mischaracterize Petitioners’ arguments or raise irrelevant issues that ignore that the Trust itself (Article 3A) and Paragraph ELEVENTH of the Trustees’ Receipt and Relief were intended to ensure that, if necessary, the Trustees would be able to pay the estate’s administration expenses either with funds in the Trust or with funds recovered from the Charitable Beneficiaries. Neither the plain language of these provisions nor common sense supports the Charitable Beneficiaries’ contention that the Executors should be exposed to personal liability for carrying out the fiduciary obligations attendant to their roles simply because the estate required further administration after the settlement of their final account. Indeed, such an argument runs counter to the statutory framework in New York which provides that beneficiaries who have received estate assets are liable for the payment of, among other things, the expenses of administration even after the executors have administered the estate (see, e.g., EPTL 12-1.1; cf SCPA 2215[3]). The Charitable Beneficiaries also ignore that had the Supreme Court Action been commenced prior to final settlement of the Executors’ and Trustees’ accounts, the Executors, in due course, would have done what they did here — hire counsel to defend the claims against the estate and use estate funds to pay such counsel (see EPTL 11-1.1 [b] [22]). If, for any reason, the estate did not have sufficient funds at the time to cover such administration expenses, the Trustees would have paid those expenses pursuant to Article 3 A of the Trust. Upon the presentation of the Executors’ and Trustees’ final accounts, the Charitable Beneficiaries would have had an opportunity to challenge any administration expenses related thereto on whatever grounds they wished. What the Charitable Beneficiaries would not have been able to do in the first instance is what they seek to do now, that is, to transfer the liability for administration expenses incurred in defending the estate’s (and thus their own) interests in the Supreme Court Action to one or more of the Executors personally.5 Nonetheless, although Petitioners have established their entitlement to a direction that the Charitable Beneficiaries refund to the Trustees a portion of the Trust funds they received so that the Trust may meet its obligation to decedent’s estate to pay its administration expenses, they have not, on this record, established their entitlement to a direction that the Charitable Beneficiaries refund a specific amount. Article 3 A of the Mamdouha Bobst Trust requires the Trustees to pay to the estate only those amounts that the Executors may need “to provide full payment of debts and expenses.” Similarly, Article ELEVENTH of the Trustees’ Receipt and Release obligations the Charitable Beneficiaries to refund only those funds “require[d] to meet the claims…and expenses” of the Trust that have “accrued.” In asking that the court direct the Charitable Beneficiaries contribute $100,000 each to a “legal defense fund,” Petitioners have not sufficiently established that such expenses have, in fact, accrued. Under the circumstances, however, the court will allow Petitioners to supplement the record, as indicated below, to establish the amount of administration expenses, i. e., legal fees, that have accrued against the Trust, subject to the Charitable Beneficiaries’ right to challenge them on reasonableness or other grounds. Finally, the Charitable Beneficiaries also purport to seek, in the alternative, a “stay” of this court’s ruling on the instant motions until the court in the Supreme Court Action decides the Petitioners’ pending motion to dismiss. However, the Charitable Beneficiaries ignore their failure to include such relief in their notice of cross-motion as required (see CPLR 2214[a]; CPLR 2215), which is a sufficient basis for this court, in its discretion, to deny that part of the motion (see, e.g., Onofre v. 243 Riverside Dr. Corp, __ AD3d __, 2024 NY Slip Op 05543 [1st Dept 2024], citing Abizadeh v. Abizadeh, 159 AD3d 856 [2d Dept 2018]). Moreover, even if the court were to consider the request, the Charitable Beneficiaries offer no reason to stay a determination of the motions here. The record shows that Rochell, as co-Executor, has appeared in the Supreme Court Action to defend the estate and necessarily incurred administration expenses, i.e., legal fees, on the estate’s behalf. As a result, even if the Supreme Court Action were dismissed as against the Executors, it would not obviate the need to determine whether the Charitable Beneficiaries should be compelled, pursuant to Article 3 A of the Trust, to comply with the refunding agreement in the Trustees’ Receipt and Release so that the Trust can pay the estate’s administration expenses already incurred. Based on the foregoing, Petitioners’ motion for summary judgment is granted to the extent that Petitioners have established their entitlement to a direction that the Charitable Beneficiaries refund to the Trustees a portion of the Trust funds they received so that the Trust may meet its obligation to decedent’s estate to pay administration expenses that have accrued as a result of the Supreme Court Action. For the same reasons, the Charitable Beneficiaries’ cross-motion for summary dismissal of the petition is denied. Petitioners shall serve and file an affidavit/affirmation of legal services (22 NYCRR 207.45 [a]), along with any exhibits, which detail the expenses incurred in defending the estate in the Supreme Court Action, on or before January 30, 2025. The Charitable Beneficiaries shall serve and file any affidavit/affirmation in opposition to the fees requested, if any, by Petitioners/Movants on or before February 19, 2025. The Clerk of the Court shall email this decision, which constitutes an order of the court, to the lawyers whose names and email addresses appear at the foot of this order. Dated: January 6, 2025
