In re Pavlyak

• Decision Date: 06 May 2016
• Docket Number: 179 CA 14-02157.
• Parties: In the Matter of the Petition for Judicial Settlement of the Account of Michele M. PAVLYAK, as trustee of the Pavlyak Living Trust, Under Agreement Dated June 19, 1998. Michele M. Pavlyak, Petitioner–Appellant; George M. Pavlyak, Objectant–Respondent.
• Court: New York Supreme Court — Appellate Division

139 A.D.3d 1338

32 N.Y.S.3d 750

2016 N.Y. Slip Op. 03604

In the Matter of the Petition for Judicial Settlement of the Account of Michele M. PAVLYAK, as trustee of the Pavlyak Living Trust, Under Agreement Dated June 19, 1998. Michele M. Pavlyak, Petitioner–Appellant; George M. Pavlyak, Objectant–Respondent.

179 CA 14-02157.

Supreme Court, Appellate Division, Fourth Department, New York.

May 6, 2016.

Longstreet & Berry, LLP, Fayetteville (Michael J. Longstreet of Counsel), for Petitioner–Appellant.

George M. Pavlyak, Objectant–Respondent pro se.

PRESENT: CARNI, J.P., LINDLEY, DeJOSEPH, NEMOYER, AND TROUTMAN, JJ.

MEMORANDUM:

In a proceeding for the judicial settlement of the account of petitioner as trustee under an inter vivos trust, petitioner appeals from an order that, inter alia, granted certain objections following a hearing.

Initially, we reject petitioner's contention that objectant, in his capacity as a remainderman, lacked standing to challenge the administration of the trust from the date of the death of the first settlor. At that time, the trust became irrevocable under its express terms and objectant obtained a pecuniary interest in the trust under its express terms (see generally Matter of Malasky, 290 A.D.2d 631, 632, 736 N.Y.S.2d 151 ). Contrary to petitioner's further contention, we conclude that Surrogate's Court did not impose an improper initial burden of proof on petitioner. It is well settled that, “[i]n a proceeding to settle a fiduciary's account, ‘the party submitting the account has the burden of proving that he or she has fully accounted for all the assets of the estate, and this evidentiary burden does not change in the event the account is contested. While the party submitting objections bears the burden of coming forward with evidence to establish that the account is inaccurate or incomplete, upon satisfaction of that showing the accounting party must prove, by a fair preponderance of the evidence, that his or her account is accurate and complete’ ” (Matter of Doman, 110 A.D.3d 1073, 1074, 973 N.Y.S.2d 782, lv. denied 23 N.Y.3d 903, 2014 WL 1884886 ; see Matter of Schnare, 191 A.D.2d 859, 860, 594 N.Y.S.2d 827, lv. denied 82 N.Y.2d 653, 601 N.Y.S.2d 582, 619 N.E.2d 660 ). Here, we conclude that the record establishes that the Surrogate properly applied those standards.

We agree with petitioner, however, that the Surrogate erred in concluding that petitioner failed to account for expenses incurred in updating and preparing the trust's residential real property for sale. The record unequivocally establishes that petitioner accounted for all such expenses, that petitioner incurred them in good faith, and that they subsequently resulted in a gain, not a loss, to all interested parties (see generally Matter of Klausner,

192 Misc. 790, 793, 77 N.Y.S.2d 775 ). We therefore modify the order by dismissing objection No. 5(K).

Inasmuch as the terms of the trust provided for the reimbursement of reasonable travel expenses incurred by the trustee in administering the trust, we also agree with petitioner that the Surrogate abused her discretion in disallowing all of the listed travel expenses. Upon our review of the record, we conclude that the claimed travel expenses should have been equally apportioned by petitioner between those incurred with respect to trust obligations and those related to the personal care of petitioner's mother, which is not a trust obligation, even though petitioner's mother was one of the trust settlors. In our view, the amount of $6,934.85 reflects an appropriate allowance for reasonable and necessary travel expenses incurred for trust administration purposes, and we therefore modify the order accordingly with respect to...