Court Opinion

ID: 9942361
Source: CourtListenerOpinion
Date Created: 2024-02-20 21:09:52.722167+00
Date Added: 2024-06-11T13:47:59.595657
License: Public Domain

Matter of Neumann
               2024 NY Slip Op 30497(U)
                    January 10, 2024
            Surrogate's Court, Bronx County
         Docket Number: File No. 725P2003/D
             Judge: Nelida Malave-Gonzalez
Cases posted with a "30000" identifier, i.e., 2013 NY Slip
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                       publication.
                        SURROGATE’S COURT, BRONX COUNTY

                                      January 10, 2024

                     ESTATE OF ARTHUR J. NEUMANN, Deceased
                        File Nos.: 725P2003/D and 725P2003/E

                      In this bitterly contested estate, Belinda Neumann-Donnelly

        (“Belinda”), the decedent’s niece, filed a motion seeking partial summary

        judgment on the remaining branch of her petition pursuant to SCPA 711

        requesting that the court remove her father, Hubert G. Neumann (“Hubert”)

        as the de facto trustee of the Appointed Neumann Descendants’ Trust

        (ANDT), appointing a bank or trust company in his stead. She also asks that

        the court reinstate all the directives contained in an order dated February 5,

        2019, inter alia, staying him from taking any further actions as trustee, and

        vacating partial modifications to said order pursuant to a stipulation and order

        respectively dated February 15, 2019 and May 13, 2019. Hubert opposes

        removal and requests to consolidate Belinda’s motion with a pending

        proceeding seeking to judicially settle his amended intermediate account

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        (File No. 725P2003/E). After several conferences were held with counsel

        and a member of the court’s Law Department, the parties stipulated that

        Hubert is to continue overseeing and controlling all of the art wheresoever

        situated, including ANDT’s own art. Accordingly, Belinda no longer seeks to

        remove Hubert from overseeing the ANDT art and its interests in the

        Neumann Collection but wants him removed from the day-to-day trust

        administration activities and certain investment decisions concerning ANDT.

        Belinda and Melissa recently retained new counsel. A motion filed by Hubert

        seeking to consolidate Belinda’s removal motion with the trustee’s pending

        intermediate accounting proceeding has been held in abeyance (File No.

        725P2003/E) pending determination on this motion. The court declines to

        determine the summary judgment motion and directs its consolidation with

        the pending accounting proceeding for the reasons stated below.

                      Opposition to Belinda’s motion was also filed by two other

        nieces, Belinda’s sisters Melissa F. Neumann (“Melissa”) and Kristina

        Neumann, who, along with Belinda, are the lifetime ANDT income

        beneficiaries, as well as the guardian ad litem representing Melissa’s infant

        daughter Eva Neumann Crichton. Jared Donnelly, Lita N. Crichton and

        Lachlan N. Crichton, Belinda’s and Melissa’s children who were previously

        respectively represented by the guardians ad litem and have attained

        majority, and Miles Donnelly, Belinda’s other adult son, have not separately

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        appeared or taken a position in these proceedings. All of these great nieces

        and nephews are discretionary income and principal beneficiaries of ANDT

        and its presumptive remainder persons.

                      In determining this motion the court reviewed, inter alia, the

        affidavits of Belinda, her spouse, Jeffrey Donnelly, Hubert Neumann, Kristina

        Neumann, Melissa Neumann, the affirmations of Judd Bernstein, John

        Morken, Esq., Donald Novick, Esq., Steven R. Finkelstein, Esq., affidavits of

        Christopher Gaillard and Darcy Katris, Esq. and the numerous exhibits

        thereto. Oral argument was had and the motion was marked “submitted.”

        BACKGROUND

                      Arthur Neumann died on August 22, 2003 without issue. His

        spouse predeceased. His sole distributee is his brother Hubert. Arthur’s will,

        dated October 25, 2002, nominates Hubert as executor. The will was

        admitted to probate by decree and letters testamentary issued to Hubert on

        September 23, 2003.

                      Arthur’s and Hubert’s parents, Morton H. Neumann and Rose

        F. Neumann (“Morton” and “Rose”), emigrated from eastern Europe to the

        United States over a century ago and established Valmor, a personal

        products empire. During their lifetimes they purchased many paintings and

        other works or art from established and striving artists. Upon their deaths,

        Hubert assumed control of Valmor and various trusts for family members,

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        including ANDT and Hubert’s separate trust, maintained the entire art

        collection and acquired additional works of art, all of which have greatly

        appreciated in value. The aggregate “Neumann Family Collection” (”the

        Neumann Collection”), as depicted by Hubert, is a renowned privately held

        art collection of 20th century art. Its value, as well as the extent of ANDT’s

        interest in it, remains unknown. All parties herein, who have separate

        interests in Valmor and other family trusts that have a stake in the Neumann

        Collection, concede that the Neumann Collection is to remain intact and the

        art therein is not to be specifically ascribed to ANDT, which also owns

        separate artwork. Pursuant to a “so-ordered” stipulation, the identification

        and valuation details of the artwork in the proceedings have been redacted

        as potentially negatively impacting the provenance and value of the

        Neumann Collection and ANDT’s separately owned art.

                      Morton executed an inter vivos trust agreement that was

        restated on June 30, 1980 and amended multiple times, which is referred to

        in the documents as the “amended paternal 1980 trust agreement” (“the

        Morton Trust”), which became irrevocable upon Morton’s death on April 8,

        1985. At that time, certain assets held by the Morton Trust were placed in

        a trust for Arthur’s benefit, the Arthur J. Neumann Trust dated February 16,

        1987 (the “Arthur Trust”), of which Hubert is the sole trustee. Upon Rose’s

        death on May 13, 1998, a portion of the assets held during her lifetime under

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        the Morton Trust were also placed into the Arthur Trust. Arthur failed to

        exercise the power of appointment designating Hubert as trustee of the

        Arthur Trust during his lifetime.

                      However, Arthur’s will exercises a limited appointment over the

        Arthur Trust and said trust refers to ANDT and nominated Hubert as its

        trustee.   Accordingly, Arthur’s residuary estate was technically paid to

        Hubert as the de facto trustee of ANDT (hereinafter “trustee”) to be held in

        further trust for the benefit of Hubert’s descendants. Arthur’s will also

        nominates Melissa as successor trustee, with a limited power of appointment

        to designate a bank, trust company or Belinda to serve as co-trustee with

        her. Should Melissa not serve, the will nominates Belinda to serve jointly with

        a bank or trust company. An individual fiduciary is authorized to replace a

        bank or trust company serving as co-trustee with a successor corporate

        trustee upon ten days’ notice. Commissions could not be taken with respect

        to the works of art and any interest in the stock of a corporation whose

        primary assets consist of works of art. Upon the death of all three nieces,

        the remaining assets and income in ANDT are to be paid to Hubert’s then

        living grandchildren or their issue, should they fail to survive. Adopted or

        non- marital issue are excluded as beneficiaries. The final distributions of

        trust principal to Hubert’s surviving grandchildren are to be paid upon their

        attaining the age of thirty-five, although the entire net income of the trust is

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        to be distributed annually to the income beneficiaries.

        BELINDA’S ARGUMENTS

                      In support of removing Hubert as trustee of ANDT, Belinda

        notes that it is uncontroverted that Hubert controls the entire art collection for

        the Valmor entities, ANDT, Hubert’s own trust and other family trusts as one

        global unit. The [redacted] valuation of the ANDT interests therein is but an

        estimate of its approximate relation to the value of all works of art.       She

        asserts that Hubert believes that the total collection is priceless and the

        individual interests of ANDT and its beneficiaries are insignificant in

        comparison. When pressed, Hubert begrudgingly sells -art but not enough

        to retain comfortable liquidity to pay ANDT expenses or make distributions,

        and systematically siphons off ANDT funds for his personal benefit. For

        example, she alleges that he spent over $1 million of ANDT funds to acquire

        a fifty percent interest in a non income producing townhouse jointly owned

        by ANDT and the Hubert Trust and has ANDT pay half of the expenses of

        a full-time housekeeper at the townhouse who primarily performs personal

        tasks for Hubert and his present companion, Deborah Purden. Hubert pays

        Ms. Purden significant funds from ANDT accounts to accompany him to

        dinner parties and travel globally with him under the guise of promoting the

        Neumann Collection and overpays her for alleged art curatorial services. As

        an example of poor fiduciary judgment jeopardizing ANDT’s assets, Hubert

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        wilfully refused to insure the art collection for many years. It was only after

        Belinda filed the removal proceeding that he obtained insurance coverage

                      Belinda continues that, although he had his own trust and

        significant personal assets, Hubert also loaned a former girlfriend $1,225,000

        to purchase her own apartment from ANDT funds, of which $122,500 was

        interest-free. There was no promissory note evidencing the debt. The rest

        of the loan was held in a 30-year mortgage at a below-market interest rate.

        Because ANDT lacked liquidity, Hubert sold $376,058.98 in stocks held by

        ANDT at a loss to make the loan, noting that these stocks would have greatly

        appreciated in value had they continued to remain part of ANDT’s portfolio.

        Hubert also charged ANDT for petty personal expenses such as polishing

        silver and cleaning bathrooms throughout the house and the cost to buy new

        pants in Paris because he failed to adequately pack for a trip abroad. He

        misappropriated significant ANDT funds to pay his personal legal fees and

        disbursements for himself and his girlfriend in other litigations to which

        neither ANDT nor Hubert as its trustee were parties. He misused his position

        as chief operating officer of Valmor to transfer funds to himself from Valmor,

        which owns assets in excess of $500 million and is indebted to ANDT for

        over $100,000 and committed tax fraud utilizing ANDT, placing it at grave

        risk by failing to distribute shares of stock in Valmor and declaring fictitious

        debts and loans. He depleted Rose’s estate by undervaluing Valmor stock

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        and fraudulently transferring it to a marital trust, and delayed distributing it to

        Rose’s own trust. Belinda urges that all of these self-serving transactions

        were detrimental to the interests of ANDT and its beneficiaries.

                              Belinda appears to have had a good relationship with

        Hubert prior to the death of her mother Dolores, from whom Hubert was

        estranged for many years.        Belinda    was the primary beneficiary and

        nominated executor of Dolores’ last will and testament dated March 4, 2015,

        which disinherited Hubert and left modest shares to Melissa and Kristina.

        Hubert and Melissa mounted a probate contest in Dolores’ estate, also

        involving Kristina, that resulted in a jury verdict in favor of Belinda. Hubert

        unsuccessfully attempted to enjoin the sale of a valuable painting by Dolores’

        estate at Sotheby’s that was individually owned by Dolores by

        misrepresenting that it was part of the Neumann Collection. Belinda avers

        that as a result of the probate litigation, Hubert commenced retaliating

        against her in 2018, refused to make distributions from ANDT to her or for

        her children’s education and wrongly opined that they had to first deplete

        their individual trusts. In contrast, Hubert made significant distributions to

        Melissa and Melissa’s children during this time period because she sided

        with Hubert in the probate contest. He belatedly made several distributions

        for Belinda’s daughter’s private school tuition but does not pay for the

        college expenses of her two sons.

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                      Belinda concludes that, although the Morton Trust directs a

        trustee to consider all other income and resources of a beneficiary seeking

        a distribution, the ANDT instrument does not require consideration of a

        beneficiary’s financial circumstances. Significantly Article VII § 5 of the

        Morton Trust Instrument, which is incorporated by reference in the ANDT

        Instrument, directs that the use of funds for the income beneficiaries shall be

        given priority over the conservation of the trust estate for the benefit of the

        remainder beneficiaries. In contrast, Hubert is warehousing the ANDT

        assets and ignoring the income beneficiaries’ interests.

                      Belinda’s former attorneys corroborate that Hubert, acting in his

        capacity as ANDT trustee, ignored the Morton and Arthur Trust mandates

        that the use of funds for the income beneficiaries (Belinda, her two sisters

        and the grandchildren/grand nieces and nephews) should be given priority

        over the preservation of the trust estate for the benefit of the remainder

        beneficiaries. Accordingly, he is obligated to use ANDT funds for the income

        beneficiaries’ health, education, support and maintenance, which takes

        precedence to preserving the Neumann Collection for the remainder

        beneficiaries. Notwithstanding this mandate, Hubert improperly requires

        consideration of a beneficiary’s financial condition prior to making

        distributions for the purposes permitted in the ANDT instrument, but does not

        take financial wherewithal into consideration when making permissible

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         distributions to enable the purchase of art.

                       In 2010 Hubert improperly transferred undivided 50% interests

         in both the Trust art and the townhouse to ANDT and the Hubert Trust.

         These transfers gave Hubert, in his capacity as trustee and primary income

         beneficiary of the Hubert Trust, the power to veto any sales of art necessary

         to fund distributions to ANDT’s beneficiaries. By giving himself this control,

         he breached his duty of loyalty and created an inherent conflict of interest.

         Counsel urges that in the event that Hubert is removed as trustee, Melissa

         should likewise be disqualified from serving as successor trustee because

         her animus towards Belinda exceeds Hubert’s.          Moreover, Hubert has

         separately “funneled” significant sums to her in the past several years.

         Melissa is undoubtedly the successor Trustee of the Hubert Trust, and she

         and her children are beneficiaries of Hubert’s estate. Accordingly, Melissa

         is motivated to continue to preserve an intact Neuman Collection at Belinda’s

         and Belinda’s children’s expense.      In further support of allegations of

         Hubert’s retaliation against Belinda and her family, counsel annexes exhibits

         concerning New York County Family Court and Criminal Court proceedings

         resulting in the issuance of orders of protection against Hubert.

         OPPOSITION TO REMOVAL

                       Hubert counters that the Neumann Collection contains over

         2,000 works owned by various Neumann family members. Approximately 60

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         to 70 percent of the art is owned by ANDT and the Hubert Trust in equal

         shares. As trustee of both trusts, he is obligated to maintain the entire art

         collection. Hubert realizes that he must “consider family first” and has never

         lost sight of the individual interests. Hubert denies that distributions ceased

         to two of Belinda’s children as a result of the litigation in Dolores’ estate. In

         fact, he spent $800,000 of his own personal assets to fund trusts for

         Belinda’s two sons that now respectively have $324,00 and $450,000 prior

         to making distributions for their benefit from the ANDT. Commencing in

         2020, he made annual distributions for the education of Belinda’s infant

         daughter. There were additional distributions totaling $300,000 each to

         Belinda, Melissa and Kristina in 2022.

                       Hubert urges that he does not harbor hostility toward Belinda.

         While he is saddened by her rancor, his requesting financial disclosure as a

         predicate for distributions is to ascertain the beneficiaries’ wealth in

         accordance with trust mandates. The petty accusations concerning charging

         ANDT for de minimis personal expenditures pale in comparison to the fact

         that Belinda and her family lived with Hubert in the townhouse rent-free for

         over six years and were well aware that ANDT assets paid for its acquisition

         and maintenance. Hubert asserts that the First Department expressly held

         that he is permitted as a beneficiary and trustee of the Morton Trust to live

         there rent-free and doing so does not constitute a distribution of income or

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         principal to him. The townhouse is a valuable ANDT asset and, like the

         artworks, has substantially increased in value. It was expressly purchased

         to display the Neumann Collection to auction houses, artists, art critics and

         historians and it engenders relationships and viewings advantageous to the

         ANDT beneficiaries because it cultivates demand for the artwork.         His

         companion, Ms. Purden, was an art consultant for Morton and Rose in 1982,

         and has acted as a curator for Neumann Collection since the late 1990s.

         Her services have been indispensable in securing and increasing ANDT’s

         assets.

                       The original decision not to insure the art collection was made

         in consultation with Belinda and her sisters who concurred that the art was

         secured in various locations.     Instead of having to sell other rapidly

         appreciating art works, the saved premiums were used to purchase

         additional art for ANDT. In any event, all of the art is now insured. Hubert

         also avers that he never used ANDT funds to pay the legal fees in Dolores’

         probate litigation or personal legal bills. The lawsuit seeking to enjoin the

         sale of the painting in Dolores’ estate was brought on behalf of the Neuman

         Collection, which includes the ANDT art.

                       The allegations of tax fraud concerning the sale of two works

         of art by ANDT that should have been ascribed to the Hubert Trust and

         Valmor are likewise false given that Hubert has a much greater stake in his

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         own trust and Valmor. In any event, Hubert always appropriately consulted

         with counsel and accountants when making financial decisions.

                       In further opposition, Hubert’s attorney affirms that nothing

         novel has occurred since the court reinstated Hubert’s powers and authority

         as ANDT trustee. In accordance with this court’s orders, Hubert has faithfully

         submitted monthly reports to Belinda’s counsel detailing the administration

         expenses of ANDT made during the prior month and notice of legal fees and

         sale of art. Should Hubert be suspended from making business decisions

         or authority to act on the day to day trust activities, ANDT and its

         beneficiaries will be irreparably harmed. Belinda has commenced 18 actions

         against Hubert and her sisters in various forums seeking similar relief.

         Additionally, the removal of Hubert as ANDT trustee would subvert Arthur’s

         intent, as well as that of Rose and Morton, especially since there is no

         showing of misconduct that endangers ANDT. Under Hubert’s helm, the

         ANDT assets have prodigiously appreciated in value, benefitting all

         beneficiaries. The potential damage to ANDT by installing a successor

         trustee lacking Hubert’s experience and contacts would irreparably damage

         its rare, irreplaceable assets.

                       In further opposition, counsel submits an affidavit from Darcy

         Katris, Esq., one of Hubert’s estate attorneys, that there was a delay in

         distributing assets from Rose’s trust to the ANDT and Hubert trusts because

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         of tax issues. Also annexed is the affidavit of Christopher Gaillard, Chairman

         of an art appraisal and advisory company, confirming that because the ANDT

         and Hubert’s Trust have different beneficiaries, Hubert prudently distributed

         50% interests in the artwork owned by Rose’s marital trust to each trust,

         ensuring that the trusts were equal in value because artworks appreciate at

         different rates. He also opines that all art works, whether belonging to

         Valmor, ANDT or the Hubert Trust, are sold at auction as part of the

         Neumann Collection, which enhances their value by assuring potential

         bidders of their quality and provenance.

                       Counsel notes that where there is a pending accounting

         proceeding, the courts are extremely reluctant to remove a fiduciary until the

         conclusion of the proceeding to avoid multiple tracks of litigation involving the

         same subject matter. Accordingly, he requests that the removal proceeding

         be held in abeyance pending resolution of the accounting proceeding, as it

         would also offer appropriate recourse to Belinda for her numerous unjustified

         grievances.    Removal without a hearing is appropriate only when the

         fiduciary’s misconduct is established by undisputed facts or concessions.

         Here, all of the facts are disputed and it is uncontroverted that all of the

         ANDT assets are well taken care of and secured, they have appreciated over

         eight times after Rose’s death under Hubert’s stewardship and there is no

         showing of harm.

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                       Counsel also urges that there is no retaliation or animosity

         towards Belinda. In fact, she and her family occupied two floors of the

         Riverside Drive townhouse rent-free and Hubert distributed approximately

         $550,000 in cash and over $1,000,000 in art to Belinda prior to this litigation,

         greatly exceeding the amounts paid to Kristina and Melissa during this time

         period. Belinda and her husband commenced proceedings in the New York

         County Family and Criminal Courts against Hubert only after he requested

         that they leave the townhouse. In fact, Hubert had to file an eviction

         proceeding against Belinda and her family, and both the Family Court and

         Criminal Court proceedings were dismissed.

                       Counsel rebuts the assertion that reimbursement is appropriate

         only for the storage, maintenance and insurance of art. Since Arthur’s will

         is silent on that issue, the Morton Trust Agreement controls, in that in

         addition to receiving reasonable compensation for services as trustee,

         reimbursement may be made for all proper expenses incurred in the

         management, protection and distribution of the trust estate, including agents’

         and attorneys’ fees. Counsel concludes that Hubert halted distributions for

         Belinda’s adult children because ANDT distributions are not mandatory and

         depend on the financial circumstances of all of Hubert’s descendants.

         Belinda’s impending wealth from her mother’s estate was also taken into

         account, and Hubert’s repeatedly asking for financial documents was not in

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         any way related to litigation commenced by Belinda. In any event, counsel

         avers that Belinda’s claims are barred by the doctrines of estoppel,

         ratification and laches.

                       In further opposition, Melissa’s attorney notes that there is

         nothing in Belinda’s application supporting Hubert’s removal or that Melissa

         should be by-passed as successor trustee despite Arthur’s testamentary

         intent that she should serve in that capacity. Even if the application were

         granted, there is no other trustee who could effectively manage the complex

         trust assets even on a temporary basis. Should Hubert step down or be

         incapable of continuing to serve, Melissa is fully qualified by reason of her

         excellent education and experience as an active art collector and financial

         manager.

                       The guardian ad litem originally appointed for Melissa’s infant

         daughter and a son who has since attained majority, affirms that his wards

         are remainder persons and have significant interests that may be affected

         by the relief sought herein. He urges that any change of Trustee, even on an

         interim basis, would wreak havoc on the Trust and the beneficiaries and a

         corporate or individual trustee would lack the expertise, time and willingness

         to deal with such a considerable and unique trust corpus. This would

         jeopardize his wards’ substantial remainder interest in the trust and likely

         cause chaos in a market already affected by world events. Moreover, the

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         ANDT assets have grown exponentially under Hubert’s stewardship, and

         there is no showing of fact that the trust or its assets are in danger of loss or

         dissipation. Finally, there is a pending accounting proceeding and should

         Belinda prevail in any of her allegations, monetary relief is available.

         BELINDA’ S REPLY

                       Belinda’s former attorney affirms that after refusing to pay any

         distributions for years, Hubert only commenced making them in 2022 as a

         quid pro quo for Belinda’s withdrawing a motion seeking to suspend him for

         all purposes. In fact, Hubert remains hostile to her. In any event, Belinda

         does not request consolidation, and the removal and accounting proceedings

         are on different time tracks.

                       As a fiduciary is held to a much higher standard than an

         ordinary litigant, a showing of self-dealing or gross misconduct, including a

         conflict of interest, is sufficient to warrant the suspension of a fiduciary

         without any additional showing of irreparable harm. Hubert has not fully

         complied with the court’s directives. He is only permitted to pay normal trust

         administration expenses and give notice of any payment exceeding $10,000

         within seven days and of legal fees within 72 hours. Although Hubert

         furnished monthly reports, he failed to timely disclose nearly $2.8 million in

         ANDT payments during the past three years. He recently made substantial

         capital improvements to the townhouse, including creating a garden. Since

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         Hubert only sold two works of art owned by ANDT since 2019, removing him

         as trustee should not interfere with ANDT’s art “business.”

                       As for self-dealing, Hubert used ANDT funds to pay his

         girlfriend for personal tasks such as accompanying him to parties and

         vacations and for his own personal legal fees in litigating against auctioning

         art in Dolores’ estate. He also used ANDT assets to fund a loan to a former

         girlfriend, a portion of which was interest-free, and sold securities belonging

         to ANDT at a loss to fund that loan. He transferred money from Valmor to

         the Hubert trust at a time when Valmor owed ANDT $112,257. With respect

         to Melissa’s suitability as a trustee, counsel notes that, despite being

         depicted as having a solid business background, she is in fact a medical

         doctor with a busy practice and is “too busy to assume the additional

         obligations of ANDT trustee.”

         ORAL ARGUMENT

                       In addition to the arguments by counsel highlighting the

         contentions in their documents, the guardian ad litem for Melissa’s infant

         daughter notes that it is ANDT’s remainder persons who are ultimately

         bearing the cost of the multitude of litigations herein and those in New York

         County. Hubert has grown the corpus of ANDT exponentially to his ward’s

         benefit. Counsel notes that the loan to the girlfriend was paid in full with

         interest, and there was no loss to ANDT.            Because it has such a

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         sophisticated corpus, there is no bank trust department or individual who is

         going to properly manage the assets and, in any event, a replacement

         fiduciary would seek millions of dollars in compensation for trying to do so.

         The guardian ad litem avers that none of the remainder persons or other

         income beneficiaries want the court to change the fiduciary. Separate

         counsel for Melissa and Kristina urge that Hubert has credibly managed

         ANDT, and that it is Belinda who has created the alleged hostility and does

         not recognize that there are other beneficiaries. In any event, counsel for

         Hubert and the other beneficiaries concur that there are issues of fact

         precluding summary judgment and there should be a full evidentiary hearing.

         DISCUSSION AND DETERMINATION

                       Summary judgment cannot be granted unless it clearly appears

         that no material issues of fact exist (see Phillips v Joseph Kantor & Co., 31

         NY2d 307 [1972]; Glick & Dolleck, Inc. v Tri-Pac Export Corp., 22 NY2d 439

         [1968]). The movant must make a prima facie showing of entitlement to

         judgment as a matter of law, tendering sufficient evidence in admissible form

         to demonstrate the absence of any material issue of fact (see Alvarez v

         Prospect Hosp., 68 NY2d 320 [1986]; Friends of Animals, Inc. v Associated

         Fur Mfrs. Inc., 46 NY2d 1065 [1979]). When the movant has made out a

         prima facie case, the burden shifts to the party opposing the motion to

         produce evidentiary proof in admissible form sufficient to establish the

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         existence of material issues of fact (see Zuckerman v City of New York, 49

         NY2d 557 [1980]). Summary judgment is a drastic remedy which requires

         that the party opposing the motion be accorded every favorable inference

         and issues of credibility may not be determined on the motion but must await

         the trial (see F. Garofalo Elec. Co. v New York Univ., 300 AD2d 186 [1 st Dept

         2002]).

                       As a general rule, the testator’s selection of a fiduciary must be

         given deference and the power of the court to remove a fiduciary chosen by

         the testator should be exercised only upon a clear showing of serious

         misconduct that endangers the welfare of the estate; it is not every breach

         of fiduciary duty that will warrant removal (see Matter of Duke, 87 NY2d 465,

         474 [1996] citing Matter of Israel, 64 Misc 2d 1035 [Sur Ct, Nassau County

         1970]; Matter of Leland, 219 NY 387 [1916]; see also Matter of Aoki, NYLJ,

         Apr. 19, 2023 at 7, col 3 [Sur Ct, NY County 2023]; Matter of Miller, 48 Misc

         2d 815 [Sur Ct, NY County 1965]). A potential conflict of interest between

         a fiduciary and a party interested in the estate does not warrant the denial of

         letters to or removal of, a fiduciary unless it interfered with the proper

         administration of the trust (see Matter of Rothman, 183 AD3d 553 [2 nd Dept

         2020]; Matter of Rudin, 15 AD3d 199 [1 st Dept 2005]; Matter of Shaw, 186

         AD2d 809 [2nd Dept 1992]).

                       Hubert Neumann is not only the de facto trustee of ANDT but

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         trustee of the Hubert Trust, President of Valmor and the sole manager of the

         Neumann Collection.       Upon the assent of all parties, the art therein,

         estimated in excess of a billion dollars, is treated as one global unit and

         Hubert is to remain its custodian with authority to make all business

         decisions, inter alia, concerning its situs, maintenance, sale and acquire

         additional works of art. With this mandate, removal at this juncture with

         sharply disputed issues of fact and without a full evidentiary hearing is

         inappropriate (see SCPA 711, 719; Matter of Bolen, 166 AD3d 1367 [3 rd Dept

         2018]; Matter of Mercer 119 AD3d 689 [2 nd Dept 2014]) and may cause

         irreparable harm to ANDT and the other family holdings. That is not to say

         that Hubert is not accountable for his actions concerning ANDT. There is a

         pending amended accounting proceeding covering the period from August

         22, 2013 through December 31, 2018, a time line that covers many of the

         allegations raised by Belinda as to Hubert’s fitness to serve as trustee.

         Where there are common issues of law or fact, the discovery needed is

         nearly the same, the parties are identical, and the interests of judicial

         economy and litigant resources will be served, the court may consolidate

         these proceedings to avoid unnecessary cost or delay (see SCPA 501 [2] [a];

         Matter of Mercer, 119 AD3d at 689; Matter of Moran, 166 AD3d 1176 [3 rd

         Dept 2018]).

                        Accordingly, on this state of the record, this decision constitutes

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         the order of the court declining to determine that branch of Belinda’s

         summary judgment motion seeking to remove Hubert as trustee of ANDT

         and, sua sponte, consolidating said motion with Hubert’s pending amended

         intermediate accounting proceeding (File No. 725P2003/E) (see SCPA 501

         [2] [a]; Matter of Leyden, NYLJ, Apr. 15, 2019 at 22, col 6 [Sur Ct, NY County

         2019]; Matter of Tsangaris, NYLJ, Sep. 14, 2020 at 17, col 2 [Sur Ct,

         Westchester County 2020]). This will afford the parties complete discovery

         to enable determination of removal and the extent of surcharge, if any.

                       The court has concerns over the lack of distributions in the

         trust.   It was only after many conferences were held with counsel and a

         member of the court’s Law Department that Hubert made the noted

         distribution to the three nieces in 2022. However, at a recent conference

         Hubert refused to discuss distribution whatsoever despite strong requests

         from Belinda’s and Kristina’s attorneys. It is inconceivable that a trust with

         these significant assets does not generate regular distributions benefitting

         the income beneficiaries.      As counsel noted, the 2022 distributions

         represented a fraction of one percent of the value of the trust’s assets.

         Although Hubert employs the mantra that he does not want to facilitate “trust

         babies” that is not the case here. Hubert is the beneficiary of his own

         substantial trust and has diligently attended to the Neumann Collection.

         Belinda and Melissa are highly educated with gainful careers. They also

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         have six children enrolled in private schools and universities and incur

         significant tuition costs. Kristina’s attorney notes that her client is ill and

         needs assistance. Given these facts, it is demeaning to have to implore the

         trustee to make distributions. Moreover, failure to make distributions might

         give rise to an inference of hostility interfering with the administration of the

         trust (see Matter of Epstein, 202 AD3d 669 [2 nd Dept 2022]). Where a

         discretionary power involves the ongoing exercise of judgment concerning

         the needs of the beneficiaries for the distribution of income or principal, the

         courts have appointed a co-trustee to make such decisions (see Matter of

         Alpert, 129 AD2d 444 [1 st Dept 1987; Matter of Seidman, 58 AD2d 72 [2 nd

         Dept 1977]; Matter of Horner, NYLJ, Mar. 21, 1996 at 29, col 3 [Sur Ct, NY

         County 1996]).

                       Counsel for the respective parties are directed to appear for a

         virtual conference with Laura Adams, Court Attorney-Referee to be held on

         the court’s Teams platform at 3 p.m. on Wednesday, January 31, 2024 to

         address outstanding issues, schedule discovery and submissions in the

         accounting proceeding and discuss distributions. If the issue of distributions

         cannot be satisfactorily resolved, the court will consider appointing one or

         more co-trustees of ANDT with limited authority to effectuate the same, who

         may be granted additional authority to address other trust administration

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         deficiencies that might arise.            .

                       The Chief Clerk shall mail a copy of this decision and order to

         respective counsel.

                       Proceed accordingly.

                                              ______________________________
                                               HON. NELIDA MALAVÉ-GONZALEZ
                                                        SURROGATE

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