In re Proceeding Pursuant to SCPA 2102 for Relief Against a Fiduciary for Estate of Spiro, 2021-51104

CourtNew York Surrogate Court
Writing for the CourtStacy L. Pettit, J.
PartiesIn the Matter of the Proceeding Pursuant to SCPA 2102 for Relief Against a Fiduciary for the Estate of Joel M. Spiro, Deceased. KIRA SPIRO, Petitioner, SCOTT A. SPIRO, Individually and as Trustee of Joel M. Spiro Revocable Trust, as Trustee of the Qualified Personal Residence Trust One, as Trustee of the Qualified Personal Residence Trust Two, and as Preliminary Executor of the Estate of JOEL M. SPIRO, Deceased, KEVIN MCCOY, Individually and as Trustee of the Joel M. Spiro Revocable Trust and as Trustee of the Joel M. Spiro Irrevocable Trust F/B/O Jason Spiro and JASON SPIRO, Individually and as Trustee of the Joel M. Spiro Revocable Trust., Respondents.
Decision Date17 November 2021
Docket Number2021-545/C,2021-51104

In the Matter of the Proceeding Pursuant to SCPA 2102 for Relief Against a Fiduciary for the Estate of Joel M. Spiro, Deceased. KIRA SPIRO, Petitioner, SCOTT A. SPIRO, Individually and as Trustee of Joel M. Spiro Revocable Trust, as Trustee of the Qualified Personal Residence Trust One, as Trustee of the Qualified Personal Residence Trust Two, and as Preliminary Executor of the Estate of JOEL M. SPIRO, Deceased, KEVIN MCCOY, Individually and as Trustee of the Joel M. Spiro Revocable Trust and as Trustee of the Joel M. Spiro Irrevocable Trust F/B/O Jason Spiro and JASON SPIRO, Individually and as Trustee of the Joel M. Spiro Revocable Trust., Respondents.

No. 2021-51104

No. 2021-545/C

Surrogate's Court, Albany County

November 17, 2021


Unpublished Opinion

Paul DerOhannesian II, Attorney for Petitioner, DerOhannesian and DerOhannesian, Albany

Lucy Kats, Attorney for Respondents, Whiteman Osterman and Hanna LLP, Albany

Stacy L. Pettit, J.

Decedent Joel M. Spiro died testate on April 27, 2021 in Albany County, where he resided with petitioner Kira Spiro, his spouse of 10 years, at 16 Devonshire Drive, Town of Bethlehem ("the residence") and where petitioner continues to reside. Decedent is survived by petitioner and his two sons, respondents Scott Spiro and Jason Spiro.

On May 5, 2021, Scott Spiro filed a petition for probate of decedent's will dated January 18, 2013. The Court issued preliminary letters to Scott Spiro on May 12, 2021. Thereafter, Scott Spiro, in his capacity as preliminary executor of decedent's estate, filed a proposed order to show cause with temporary restraining orders and a petition pursuant to SCPA 2103 for an order compelling petitioner to attend an inquiry, to deliver property and to compensate the estate. The Court issued the order to show cause, as revised to remove certain portions of the proposed order which included the proposed eviction of petitioner from the residence.

Petitioner filed a claim against the estate on June 14, 2021 in the amount of $1.5 million and opposition to the preliminary executor's request for injunctive relief. The Court so ordered two stipulations on June 15, 2021 and July 27, 2021 regarding the turnover and preservation of decedent's electronic devices, access to decedent's financial assets including, among other things, joint accounts held in decedent's and petitioner's names, and access to the residence by third parties for the purposes of inspection, inventory and making repairs, thereby resolving the preliminary executor's request for a preliminary injunction.

On July 9, 2021, petitioner commenced this proceeding pursuant to SCPA 2102 by filing a petition for declaratory judgment, specific performance, promissory estoppel and injunctive relief seeking to enforce an option to purchase the residence for $300, 000 pursuant to changes made to amendments to a prenuptial agreement between petitioner and decedent. She also sought by order to show cause temporary injunctive relief restraining the preliminary executor from, among other things, interfering with her quiet enjoyment of the residence. Petitioner named as respondents to this proceeding Scott Spiro, individually and as preliminary executor and trustee of the Joel M. Spiro Revocable Trust ("Revocable Trust"), the Qualified Personal Residence Trust One ("QPRT1") and the Qualified Personal Residence Trust Two ("QPRT2"), Kevin McCoy, individually and as co-trustee of the Revocable Trust and the Joel M. Spiro Irrevocable Trust for the benefit of Jason Spiro, and Jason Spiro, individually and as co-trustee of the Revocable Trust (collectively, "respondents"). On that same day, the Court signed petitioner's order to show cause granting her requests for temporary injunctive relief with respect to the residence.

On August 3, 2021, respondents filed their answer to the petition, a motion seeking a preliminary injunction and a motion to vacate the temporary restraining order ("TRO") issued by the Court on July 9, 2021. In their answer respondents assert, among several other affirmative defenses, that the Court lacks jurisdiction over certain unnamed necessary parties to the proceeding, namely, Sarah Spiro, daughter of Scott Spiro, and the unborn descendants of Jason Spiro. Respondents also seek preliminary injunctive relief (1) authorizing Scott Spiro, upon 48-hour notice to petitioner to vacate, to enter the residence once per week for a period of two hours to conduct inventory/appraisal, remove decedent's assets and protect or repair the home as needed; (2) ordering petitioner, upon 48-hour notice to her, to allow appraisers, contractors, inspectors, and movers sent by Scott Spiro to enter the residence; (3) authorizing Scott Spiro to change the lock on decedent's wine cellar and ordering Scott Spiro to surrender to petitioner the key to the wine cellar following removal of the wine collection; (4) ordering petitioner to provide the preliminary executor with a list of her tangible property; and (5) authorizing Jason Spiro to enter the residence during two of Scott Spiro's weekly visits to identify and remove Jason Spiro's personal property except for items that Jason and petitioner claim common ownership which will remain in the residence until ownership is agreed upon by the parties or determined by the court. Petitioner opposes respondents' motions, and the motions have been submitted for decision.

As an initial matter, the Court addresses respondents' assertion that it lacks jurisdiction because the petition does not name Sarah Spiro and the unborn descendants of Jason Spiro, who are necessary parties to this proceeding. After the filing of respondents' answering papers, Sarah Spiro appeared in this proceeding by counsel. Respondents now suggest that Sarah Spiro may virtually represent the unborn descendants of Scott Spiro; however, she is unable to represent the unborn descendants of Jason Spiro, whose interests differ from her own. With respect to the use of virtual representation, respondents have not complied with SCPA 315 and 22 NYCRR 207.18.

"'[T]he absence of a necessary party may be raised at any stage of the proceedings, by any party or by the court on its own motion'" (Matter of Hudson Riv. Sloop Clearwater, Inc. v Town Bd. of the Town of Coeymans, 144 A.D.3d 1274, 1275 [3d Dept 2016], quoting Bayview Loan Servicing, LLC v Sulyman, 130 A.D.3d 1197, 1198 [3d Dept 2015]). Here, Scott Spiro and Jason Spiro's unborn descendants are necessary parties to this proceeding because they are remainder beneficiaries pursuant to the terms of decedent's trusts and are therefore "persons interested in the estate" (SCPA 315). On December 20, 2012, decedent executed two qualified personal residence trusts ("QPRT1" and "QPRT2" and collectively, "the trusts"). Each trust was allocated a 50% interest in the residence and decedent, as grantor, retained the option to rent the residence. Both trusts provided that if the term of the trusts expired upon decedent's death, then the trust property will be distributed to decedent's Revocable Trust dated December 7, 2012, [1] but if the term of the trusts expired during decedent's lifetime, then the trust property will be distributed to Scott Spiro as trustee of descendants' separate trusts under QPRT1 and QPRT2. [2] QPRT1 expired in January 2021, prior to decedent's death, and 50% of the interest in the residence was distributed to Scott Spiro as trustee under the terms of QPRT1. QPRT2 expired upon decedent's death and, accordingly, the remaining 50% interest in the residence was distributed to decedent's Revocable Trust where it was divided equally between trusts for Scott and Jason Spiro. QPRT1 further provides that upon respondent Scott Spiro's death, the remainder of QPRT1 is to be distributed in accordance with his general power of appointment or, in lieu thereof, to his descendants. Pursuant to the terms of the Revocable Trust, upon the death of respondent Scott Spiro, his equal share in the remaining 50% interest in the residence is to be distributed to his spouse and descendants, here Sarah Spiro, on such terms as he shall appoint, otherwise to his descendants or, if none, then to decedent's descendants. Upon the death of Jason Spiro, the remainder of his equal share in the remaining 50% interest in the residence is to be distributed to his descendants yet unborn or, if none, then to decedent's descendants.

SCPA 315 (2) (a) (iii) provides that it shall not be necessary to serve process on any "unborn or unascertained persons... [unless]... it appears that there is no person in being or ascertained, having the same interest, [then] the court shall appoint a guardian ad litem to represent or protect the persons who eventually may become entitled to the interest." If virtual representation is to occur in a proceeding, it must be determined as a threshold issue at the outset of the proceeding, or jurisdiction is not obtained by that method (see SCPA 315 [7]). "In any proceeding where the petitioner wants to use virtual representation for some parties, the petition must give information justifying it" (Turano & Radigan, New York Estate Administration § 2.11 [g] [2020 ed]; see SCPA 315 [7]). The petition before the Court does not include any of the information required pursuant to SCPA 315 and 22 NYCRR 207.18; accordingly, a supplemental citation will be needed and guardians ad litem will be appointed to represent the interests of each of the sons' unborn descendants, unless respondents submit information sufficient to permit Sarah Spiro to virtually represent the unborn descendants of Scott Spiro, in which case only one guardian ad litem will be appointed for the unborn descendants of Jason Spiro.

Regarding the merits of respondents' motion for injunctive relief, it is well settled that "[a] preliminary injunction constitutes 'drastic relief'" (Rural Community Coalition, Inc. v Village of Bloomingburg, 118 A.D.3d 1092,...

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