Court Opinion

ID: 9961090
Source: CourtListenerOpinion
Date Created: 2024-04-17 20:08:07.623159+00
Date Added: 2024-06-11T08:20:14.811982
License: Public Domain

Matter of Altman
               2024 NY Slip Op 31290(U)
                     April 11, 2024
          Surrogate's Court, New York County
        Docket Number: File No. 2022-2126/A/B
                  Judge: Hilary Gingold
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                                                                                                  New Y-0r~ Coonty Surrogate's Court
                                                                                                      DATA ENTR_.Y DEPT.

        SURROGATE'S COURT OF THE STATE OF NEW YORK
                                                                                                        APR JI ·2024
        COUNTY OF NEW YORK
        --------------------------------------------------------------------------X
        In the Matter of the Petition of William Lane and
        Daryl Simon, as Co-Trustees of the Revocable Trust of
                                                                                        DECISION and ORDER
               LOIS ALTMAN, a/k/a LOIS 8. ALTMAN,
                                                                                        File No. 2022-2126/ A/8
                                                                Deceased,

        for the Construction of the Lois Altman Trust, dated
        September 17, 1996, as Amended and Restated, and for
        Cy Pres Relief.
        --------------------------------------------------------------------------X

        GING OLD, S.

                This is an uncontested petition by the trustees of the charitable remainder trust established

        by Lois Altman on September 17, 1996, and amended thereafter (Trust), asking the court to

        construe inconsistent provisions in the Trust (SCPA 1420) and to exercise its cy pres power,

        pursuant to EPTL 8-1.1 (c ), with regard to a remainder bequest. 1 The grantor of the trust is

        deceased.

                Article 11(5)(c)(9) of the Trust provides for the following distribution upon the death of the

        grantor:

                         "9. The balance of the residue shall be equally divided among the following

                charitable organizations or their successors as follows:

                                  a. ALS ASSOCIATION, Greater New York Chapter, New York,

                         NY, or its successor, FIFTY PER CENT (50%);

        1
          Although EPTL 8-1.l(c)(l), by its terms, applies only to wills, the Surrogate's Court nonetheless has
        jurisdiction over inter vivos trusts generally and the Trust here (see SCPA 209(6) and 1509) and can
        entertain proceedings under EPTL 8-1.1 in relation to an inter vivos trust (see e.g. Matter of Isabel Scriba
        Charitable Remainder Unitrust, 222 Misc 3d 1124(A), 2009 NY Slip Op 50276[U] [Sur Ct, Nassau County
        2009]; Matter of Kramer, 20 Misc 3d 383 [Sur Ct, Nassau County 2008]).

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                               b. NATIONAL BREAST CANCER ASSOCIATION (national

                       organization) of New York, NY, or its successor, TWENTY-FIVE PER

                       CENT (25%);

                               c. DREAM STREET, of 9536 Wilshire Blvd. #300, Beverly Hills,

                       California, or its successor, TWENTY-FIVE PER CENT (25%)."

               Petitioner seeks relief because, despite the direction to divide the residue equally among

        three charities, the percentage allocated to each charity is, in fact, unequal. Further, the National

        Breast Cancer Association (NBCA) does not exist now, and likely never did exist. Thus, Petitioner

        asks the court to construe the inconsistent language to maintain the unequal distribution of the

        Trust's residue and to exercise its cy pres power under EPTL 8-1.1 (c) to substitute the Susan G.

        Komen Breast Cancer Foundation, Inc. (Susan Komen Foundation) for the NBCA.

               Regarding the construction portion of the relief requested, it is well settled that the primary

        purpose of a construction proceeding is to ascertain and give effect to the intent of the grantor (see

        e.g. Gilbert v Gilbert, 39 NY2d 663,666 [1976]). Where, as here, the words of the trust instrument

        are inconsistent or create an ambiguity, the court may properly resort to extrinsic evidence to

        determine such intent (Maner qf Malasky, 275 AD2d 500 [3d Dept 2000]; Matter qf McCabe, 269

        AD2d 727 [3d Dept 2000]; Matter of Bernstein, 185 Misc 2d 493 [Sur Ct, Bronx County 2000];

        Matter of !kenson, 2017 NY Slip Op 31647[U] [Sur Ct, Nassau County 2017]).

               Here, the petition is accompanied by an affirmation from the attorney-drafter who identifies

        the direction to divide the residue equally as a 'scrivener' s error' and confirms that the grantor

        intended for each charity to receive the percentage of the residue provided in the Trust. The

        attorney-drafter recalls a specific conversation with the grantor during which she made clear that

        she wanted an unequal distribution scheme. Accordingly, the court finds that grantor intended for

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        the residue of the Trust to be distributed among the charitable beneficiaries in the unequal

        percentages provided and construes Article II(5)(c)(9) to reflect such intent.

                Regarding the cy pres portion of the relief requested, application of the cy pres doctrine is

        intended to prevent the failure of a charitable bequest (see e.g. Matter of Bowne, 11 Misc 2d 597,

        599 [Sur Ct, NY County 1958]). EPTL 8-1.l(c) provides that "whenever it appears to such court

        that circumstances have so changed since the execution of an instrument making a disposition for

        ... charitable ... purposes as to render impracticable or impossible a literal compliance with the

        terms of such disposition,'" the court may make an order directing that such disposition be made in

        a manner which the court finds ''will most effectively accomplish its general purposes." To invoke

        the cy pres doctrine, the court must find: 1) that the gift or trust is charitable in nature, 2) that the

        language in the trust demonstrates a general, rather than specific, charitable intent, and 3) that the

        particular purpose for which the gift or trust was created has become impossible or impracticable

        to achieve (see e.g. Matter of Othmer, 185 Misc 2d 122 [Sur Ct, Kings County 2000]).

                As for the first requirement, there is no doubt that the grantor's gift to the NBCA is

        charitable in nature. Indeed, grantor specifically referred to it as a "charitable organization" in

        Article II(5)(c)(9). As for the second requirement, the grantor's general charitable intent is

        demonstrated by her disposition of the Trust's remainder exclusively to charitable organizations.

        (Kramer, 20 Misc 3d at 385; Othmer, 185 Misc 2d at 127; Bowne, 11 Misc 2d at 600). Nor did

        grantor provide a gift over in the event the gift lapsed, which also shows general charitable intent.

        (Matter of Carper, 67 AD2d 333, 337 [4th Dept 1979], affd 50 NY2d 974 [1980]); Matter c~f

        Goehringer, 69 Misc 2d 145, 149-150, [Sur Ct, Kings County 1972]; Matter c~f Wolseley, 10 Misc

        3d I 077(A), 2005 Slip Op 52251 [U] [Sur Ct, Suffolk County 2005]). The record also shows that

        grantor was charitably inclined during her lifetime, donating funds to the Susan Komen Foundation

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        and committing to future gifts to the organization as a member of its Lifetime Legal Society.

        Finally, as for the third requirement, the impossibility of the bequest to the NBCA is not in dispute.

        The entity does not exist, and it has no successor.

               The Surrogate's Court's power to prevent the failure of and give effect to charitable

        dispositions is not defeated by the fact that a beneficiary does not exist (see EPTL 8-1.1 [d]). Here,

        all the requirements for the court to invoke the cy pres doctrine under EPTL 8-1.1 ( c) have been

        met. The proposed replacement charity, the Susan Komen Foundation, is well-established and is

        devoted to advancing the research and treatment of breast cancer. The Attorney General, who is

        the sole representative of ultimate charitable beneficiaries in circumstances such as this, supports

        distribution to the Susan Komen Foundation.

               Under these circumstances, the court concludes that the grantor's charitable intent will best

        be accomplished by the distribution of the portion of the residue at issue to the Susan Komen

        Foundation.

               Accordingly, it is hereby

               ORDERED that the petition is granted and the residue of the trust established by Lois

        Altman on September 17, 1996, as amended, shall be distributed as follows: 50% to the ALS

        Association, Greater New York Chapter, New York, NY, or its successor; 25% to Dream Street,

        or its successor; and 25% to the Susan G. Komen Breast Cancer Foundation, Inc.

               The Clerk of the Court shall mail a copy of this Decision and Order to the parties whose

        names and mailing addresses appear below.

               Settle decree.

        Dated: April Jl.!:2024

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        To:

        Gregory L. Matalon, Esq.
        Capell Barnett Matalon & Schoenfeld LLP
        Attorneys.for William Lane and Daryl Simon, Petitioners
        487 Jericho Turnpike
        Syosset, NY 1 1791

        Kristen Cocoman, President & Chief Executive Officer
        The ALS Association, Greater New York Chapter
        42 Broadway, Suite 1724
        New York, NY 10004

        Kim Stillwell, Treasurer of the Board of Trustees
        Dream Street Foundation
        324 South Beverly Drive, Suite 500
        Beverly Hills, CA 90212

        Eunice Nakamura, General Counsel
        Susan G. Komen Breast Cancer Foundation Inc.
        13770 Noel Road, Suite 801889
        Dallas, TX 75380

        Rebecca Gideon, Esq.
        New York State Attorney General, Charities Bureau
        28 Liberty Street, 16 th Floor
        New York, NY 10005

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