Court Opinion

ID: 2716815
Source: CourtListenerOpinion
Date Created: 2014-08-08 19:05:52.968861+00
Date Added: 2024-06-11T09:15:53.776267
License: Public Domain

SUPREME COURT OF THE STATE OF NEW YORK
              Appellate Division, Fourth Judicial Department

614
CA 13-01772
PRESENT: SMITH, J.P., PERADOTTO, LINDLEY, SCONIERS, AND WHALEN, JJ.

IN THE MATTER OF THE ESTATE OF JOHN WAGNER,
DECEASED.
--------------------------------------------
CANANDAIGUA NATIONAL BANK AND TRUST COMPANY,
PETITIONER-RESPONDENT;
                                                     MEMORANDUM AND ORDER
SALLY BAUMANN, OBJECTANT-RESPONDENT;

COLIN DESROSIERS AND MICHELLE DESROSIERS,
OBJECTANTS-APPELLANTS.
(APPEAL NO. 2.)

LACY KATZEN LLP, ROCHESTER (RACHELLE H. NUHFER OF COUNSEL), FOR
OBJECTANTS-APPELLANTS.

LAW OFFICE OF HEIDI W. FEINBERG, ROCHESTER (HEIDI W. FEINBERG OF COUNSEL),
FOR PETITIONER-RESPONDENT.

WOODS OVIATT GILMAN LLP, ROCHESTER (RENÉ H. REIXACH OF COUNSEL), FOR
OBJECTANT-RESPONDENT.

     Appeal from a decree of the Surrogate=s Court, Monroe County (Edmund
A. Calvaruso, S.), entered September 3, 2013. The decree granted the
petition to terminate a testamentary trust and ordered that the remaining
balance of the trust be delivered to Sally Baumann.

     It is hereby ORDERED that the decree so appealed from is modified
on the law by vacating the third decretal paragraph and as modified the
decree is affirmed without costs, and the matter is remitted to Surrogate=s
Court, Monroe County, for further proceedings in accordance with the
following Memorandum: Petitioner and trustee Canandaigua National Bank
and Trust Company (CNB) commenced this proceeding in Surrogate=s Court
to terminate the testamentary trust of decedent John Wagner pursuant to
EPTL 7-1.19 as uneconomical. Decedent=s grandchildren, i.e., the
objectants-appellants herein (hereafter, grandchildren), moved for
summary judgment seeking the principal of the trust, and Sally Baumann
cross-moved for the same relief. Article V (B) of decedent=s will
established a trust for Baumann=s benefit during her lifetime, permitting
Baumann to live in decedent=s residence and to receive the net income from
the trust, and authorizing CNB, in its discretion, to use the principal
for capital improvements to the residence. Decedent granted Baumann no
right to the trust principal, but provided that, upon Baumann=s death,
the remaining trust principal, i.e., the property funding the trust, would
be distributed to decedent=s grandchildren, per stirpes.
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     Article VII (E) of decedent=s will provided that, if Aany trust@ were
terminated as uneconomical, the trust assets would be distributed to the
Aincome beneficiary or beneficiaries@ at the time of termination. It is
undisputed on appeal that the subject trust was terminated as uneconomical
pursuant to EPTL 7-1.19 because the costs of administering the trust
exceeded the income generated by the trust.

      In appeal No. 1, the grandchildren appeal from an order granting
CNB=s petition to terminate the trust and directing that the trust principal
be distributed to Baumann and, in appeal No. 2, they appeal from the decree
entered upon that order. As a preliminary matter, we note that, inasmuch
as the order in appeal No. 1 is subsumed in the decree in appeal No. 2,
we dismiss the appeal from the order in appeal No. 1 (see CPLR 5501 [a]
[1]; SCPA 2701 [1] [b]; Matter of Kalkman [Coulter], 77 AD3d 1287, 1289).

     We agree with the grandchildren that the Surrogate erred in granting
Baumann=s cross motion for summary judgment and in directing that the trust
principal be distributed to her. In determining the distribution of
assets upon termination of an uneconomical trust, we must Aeffectuate
the intention of the creator@ of the trust (EPTL 7-1.19). In determining
decedent=s intention, we must engage in Aa sympathetic reading of the will
as an entirety and in view of all the facts and circumstances under which
the provisions of the will were framed@ (Matter of Fabbri, 2 NY2d 236,
240; see Matter of Sawyer, 4 AD3d 800, 801-802). If a Adominant purpose@
can be discerned from reading the will, the individual provisions of the
will must be read and given effect in light of that purpose (see Fabbri,
2 NY2d at 240). A >[W]here a will is capable of two interpretations, the
one should be adopted which prefers persons of the testator=s blood= @
(Matter of Symonds, 79 AD2d 24, 26).

     Here, there are two provisions in the will regarding the distribution
of the trust principal. Article V (B) (4) provides that, upon the
beneficiary=s death, the property of the trust is to be distributed equally
to the grandchildren. Article VII (E), however, states that the trustee
may terminate any uneconomical trust and distribute the assets of the
trust to the current income beneficiary, i.e., Baumann. We conclude that
decedent intended to benefit both Baumann and the grandchildren and, thus,
that the Surrogate erred in awarding the entire trust principal to Baumann.
 We also recognize, however, that decedent intended the trust to benefit
Baumann during her lifetime and, thus, that the trust principal cannot
be awarded entirely to the grandchildren. In light of those competing
interests, we remit the matter to Surrogate=s Court to determine A[t]he
distribution of the trust assets . . . in such manner, proportions and
shares as in the judgment of the court will effectuate the intention of
the creator@ (EPTL 7-1.19 [a] [2]).

     All concur except PERADOTTO and LINDLEY, JJ., who dissent and vote to
affirm in the following Memorandum: We respectfully dissent. In our
view, Surrogate=s Court properly determined that the language of decedent=s
will is clear and unambiguous, and that the will must therefore be enforced
according to its terms. We would thus affirm the decree in appeal No.
2. It is well settled that Atestamentary instruments are strictly
construed so as to give full effect to the testator=s clear intent@ (Matter
of Covert, 97 NY2d 68, 74; see Matter of Murray, 84 AD3d 106, 113, lv
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                                                               CA 13-01772

denied 18 NY3d 874), and that the best evidence of the testator=s intent
is found in the clear and unambiguous language of the will itself (see
Matter of Walker, 64 NY2d 354, 357-358; Matter of Cord, 58 NY2d 539, 544,
rearg denied 60 NY2d 586). Although the testator=s intent Amust be gleaned
not from a single word or phrase but from a sympathetic reading of the
will as an entirety and in view of all the facts and circumstances under
which the provisions of the will were framed@ (Matter of Fabbri, 2 NY2d
236, 240; see Matter of Brignole, 32 AD3d 538, 538-539), a court Amay
not rewrite a will >in order to give effect to an intention which possibly
the testator may have had but which is not revealed by the language used
in the will= @ (Matter of Rutherford, 125 AD2d 312, 313, quoting Matter
of Nelson, 268 NY 255, 258; see Matter of Cincotta, 106 AD3d 998, 998,
lv denied 22 NY3d 857).

     Here, unlike the majority, we perceive no conflict between article
V (B) of decedent=s will and article VII (E). Article V (B) provides,
inter alia, that the trust Abeneficiary[, i.e., Sally Baumann,] shall
retain no right to receive the trust principal or to have my Trustee
distribute the trust principal to the beneficiary for her benefit or her
estate,@ and that, upon Baumann=s death, the Aremaining trust property@
shall be distributed in equal shares to decedent=s grandchildren, i.e.,
the objectants-appellants herein (hereafter, grandchildren). Article
VII (E) provides that, if the Trustee terminates the trust because it
is uneconomical, the assets of the trust shall be given to Athe current
income beneficiary[, i.e., Baumann,] or beneficiaries in the proportions
in which they are entitled to the income therefrom.@

     The two articles may be read in harmony as providing that, if the
trust exists upon Baumann=s death, the trust principal shall go to the
grandchildren, but that the principal shall go to Baumann if the trust
is terminated as uneconomical while Baumann is still alive. We thus agree
with the Surrogate that a Aplain reading of the Will compels a logical
progression that once the Trust is collapsed, the prohibition against
principal distributions is no longer operable and the corpus on hand is
payable to the Beneficiary.@

     In our view, the conclusion reached by the majority is premised on
the unstated assumption that decedent made a mistake in his will, and
that he did not intend for Baumann to receive the trust proceeds upon
termination of the trust as uneconomical, as clearly and unambiguously
provided for in article VII (E). We agree with the Surrogate that the
principles set forth in Wright v Wright (118 NYS 994, 996, affd 140 AD
634) apply to this case, i.e., that a A >court should not read into a man=s
will language which he did not use, or so construe it that his intention,
as expressed in the will, will be thwarted, and the court cannot devise
a new scheme for a testator or
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                                             CA 13-01772

make a new will.= @

Entered:   August 8, 2014         Frances E. Cafarell
                                  Clerk of the Court