In the Matter of Frank A. Lee, deceased. Brenda Van der Mije, et al., appellants; Bank of New York Mellon, et al., respondents. (Proceeding No. 1) File No. 137494/I In the Matter of Jane E. Lee, deceased. Brenda Van der Mije, et al., appellants; Bank of New York Mellon, et al., respondents. (Proceeding Nos. 2-4) File Nos. 211180/F, 341112/B, 341113/B
Argued-May 25, 2017
Lawrence J. Koncelik, Jr., East Hampton, NY, for appellants.
Ledyard & Milburn LLP, New York, NY (Alexander G.
Malyshev of counsel), for respondent Bank of New York Mellon.
Smith LLP, New York, NY (Seth M. Kean of counsel), for
respondent Merrill Lynch Trust Company.
RANDALL T. ENG, P.J. JOHN M. LEVENTHAL SANDRA L. SGROI JOSEPH
J. MALTESE, JJ.
DECISION & ORDER
appeals from three decrees of the Surrogate's Court,
Nassau County (Edward W. McCarty III, S.), each dated
December 19, 2014, and one decree of that court dated
December 24, 2014. The decrees, upon an order of that court
dated June 30, 2014, granting the separate motions of Bank of
New York Mellon and Merrill Lynch Trust Company to dismiss
the petitions for judicial accountings of four separate
trusts insofar as asserted against each of them, dismissed
that the decrees are affirmed, with one bill of costs payable
by the appellants individually.
decedent Frank A. Lee, who died in 1968, and the decedent
Jane E. Lee, who died in 1981, each established a
testamentary trust through their respective wills. In
addition, Jane E. Lee established inter vivos trusts in 1970
and 1976. The petitioner Brenda Van der Mije is the
decedents' granddaughter, and the petitioners Alberto van
der Mije, Peter van der Mije, and Alexis van der Mije are
Brenda's children and the decedents'
great-grandchildren. The petitioners were beneficiaries of
each of the four trusts. The respondent Bank of New York
Mellon (hereinafter BNY) served as the trustee or cotrustee
of the trusts from the time each was established until the
respondent Merrill Lynch Trust Company (hereinafter Merrill
Lynch) succeeded it as trustee or cotrustee on December 13,
2001, for the inter vivos trusts, and on January 3, 2002, for
the testamentary trusts. When BNY resigned, the petitioners
each executed a release in favor of BNY regarding its
management of the trusts. All four trusts terminated upon the
death of the decedents' son, Frank A. Lee, Jr., on May
22, 2008. In 2009, the petitioners each executed releases in
favor of Merrill Lynch releasing it from claims based on its
management of the trusts since the time it succeeded BNY as
trustee or cotrustee.
December 2013, the petitioners commenced these four
proceedings, seeking to compel judicial accountings of the
trusts by BNY and Merrill Lynch. BNY and Merrill Lynch
separately moved to dismiss the four petitions insofar as
asserted against each of them, citing the respective releases
and the statute of limitations. In an order dated June 30,
2014, the Surrogate's Court granted the motions, and, in
four separate decrees, dismissed the petitions. The
petitioners appeal from the decrees.
fiduciary, as an executor or trustee, is obligated to account
for his or her decisions and actions in administering an
estate or trust" (Matter of Lifgren, 36 A.D.3d
1042, 1044; see SCPA art 22; see also Matter of
Hunter, 4 N.Y.3d 260, 267). While formal accountings are
done in the context of a judicial proceeding, "[a]
fiduciary may settle [its] account... by an out-of-court
informal accounting and 'such an informal accounting is
as effectual for all purposes as a settlement pursuant to a
judicial decree'" (Matter of LeoGrande, 13
Misc.3d 1070, 1076 [Sur Ct, Nassau County], quoting
Matter of Kahn, 144 N.Y.S.2d 253, 255 [Sur Ct,
Westchester County], affd 2 A.D.2d 893; see
generally Matter of Wagner, 119 NY 28, 34-35).
"'[I]f a fiduciary gives full disclosure in [its]
accounting, to which the beneficiaries are parties . . . they
should have to object at that time or be barred from doing so
after the settlement of the account'" (Matter of
Lifgren, 36 A.D.3d at 1044, quoting Matter of
Hunter, 4 N.Y.3d at 271). Where the validity of a
release is challenged, "the fiduciary must affirmatively
demonstrate that the beneficiaries were made aware of the
nature and legal effect of the transaction in all its
particulars" (Matter of Birnbaum v Birnbaum,
117 A.D.2d 409, 416).
the Surrogate's Court should not have dismissed the
petitions insofar as asserted against BNY on the basis that
the claims were barred by the releases. BNY did not
affirmatively demonstrate that all of the petitioners, who at
the time of execution were not represented by counsel, were
fully aware of the nature and legal effect of the releases at
that time (see id. at 416; Matter of
Hunter, 190 Misc.2d 593, 600 [Sur Ct, Westchester
County]). Nevertheless, the court properly determined, in the
alternative, that the claims against BNY for an accounting
were time-barred. Claims for an accounting are subj ect to a
six-year statute of limitations (see CPLR 213; Tydings
v Greenfield, Stein & Senior, LLP, 11 N.Y.3d 195,
201). The claims against BNY accrued when Merrill Lynch
succeeded it as trustee or cotrustee on December 13, 2001,
and January 3, 2002. Accordingly, those claims expired before
the petitioners commenced these proceedings (see Tydings
v Greenfield, Stein & Senior, LLP, 11 N.Y.3d at 202;
Spallholz v Sheldon, 216 NY 205, 209). In addition,
the court properly concluded that the claims against BNY were
not tolled by fraud, and, contrary to the petitioners'
contention, the doctrine of equitable estoppel does not apply
(see Zumpano v Quinn, 6 N.Y.3d 666, 675;
Cusimano v Schnurr, 137 A.D.3d 527, 532). Therefore,
the court properly dismissed the petitions insofar as
asserted against BNY.
respect to Merrill Lynch, the Surrogate's Court properly
determined that the releases executed by the petitioners in
connection with the informal settlement of the trusts were
valid. The petitioners executed these releases, confirming
receipt of an informal accounting and discharging Merrill
Lynch from all liability and any claim for a formal judicial
accounting, upon the advice of legal counsel and after
negotiations (see generally Centro Empresarial Cempresa
S.A. v America Movil, S.A.B. de C.V., 17NY3d269, 278;
Matter of James, 287NY645). The petitioners'
contentions that Merrill Lynch did not provide them with full
disclosure and that the terms of the releases were improper
are without merit (see ...