Rosner v. Caplow

• Decision Date: 15 September 1980
• Citation: Rosner v. Caplow, 432 N.Y.S.2d 577, 105 Misc.2d 592 (N.Y. Sup. Ct. 1980)
• Parties: June ROSNER, Petitioner, v. Mildred CAPLOW and Anna Rosner, Respondents.
• Court: New York Supreme Court

Page 577

432 N.Y.S.2d 577

105 Misc.2d 592

June ROSNER, Petitioner, v. Mildred CAPLOW and Anna Rosner, Respondents.

Supreme Court, Special Term, New York County, Part I.

Sept. 15, 1980.

Hawkins, Delafield & Wood, New York City (Philip R. Forlenza, New York City, of counsel), for petitioner.

Blum, Haimoff, Gersen, Lipson, Slavin & Garley, New York City (Maurice M. McDermott, New York City, of counsel), for Jeffrey Wachtel, and others, respondents.

Stacy Caplow, Brooklyn, and Amy Caplow, pro se.

MARTIN B. STECHER, Justice:

This is a petition made by June Rosner "for instructions and directions of the Court as to the status of petitioner and respondents as Trustees and as to petitioner's duty to seek an accounting" and for other and collateral relief, including the removal of respondents as Trustees. The respondents cross-move for summary judgment dismissing the petition (CPLR 404(a) and CPLR 3212(b)) on the grounds that all of the claims set forth in the petition have been settled, discharged and released.

By memorandum decision dated December 13, 1979, I directed the joinder of the remaindermen, the children of income beneficiaries, petitioner and respondent Mildred Rosner, respectively. Income beneficiaries and remaindermen having a conflict of interest as a matter of law, no representation was possible. I declined to join the children of the remaindermen, as those interests were adequately represented by their parents (CPLR 7703(b)). Joinder has been effected and the remaindermen, all of whom are of age, have now appeared in this proceeding. I also denied respondents' cross-motion to dismiss the petition.

A petition for "instructions and directions" partakes of the nature of an action for a declaratory judgment in which the rights and obligations of the parties are set forth (Lynch v. Bailey, 279 A.D. 650, 108 N.Y.S.2d 134, aff'd 304 N.Y. 669, 107 N.E.2d 591). Just as it is inappropriate except in the unusual case, to dismiss an action for a declaratory judgment (see: Lanza v. Wagner, 11 N.Y.2d 317, 229 N.Y.S.2d 380, 183 N.E.2d 670, app. dism d. 371 U.S. 74, 83 S.Ct. 177, 9 L.Ed.2d 163), it would appear equally inappropriate to dismiss the petition of a purported trustee for instructions and directions concerning the status of the parties as trustees where a real dispute exists. A real dispute does exist.

On June 1, 1947, Anna and Leo Rosner, as settlors created in one instrument three separate trusts, one for the benefit of Anna and one for each of the settlors' two daughters, petitioner June and respondent Mildred, respectively. Leo was sole trustee and the income beneficiaries of the three funds were Anna, Mildred and June respectively. The term of each trust was to be measured by the lives of both Mildred and June. The issue of Mildred and June were to be the remaindermen.

As indicated above, Leo was the sole trustee. The indenture provided, however, that on Leo's death, resignation or other failure or refusal to serve, Jacob Fisher and Samuel Ecker would be substituted as trustees in Leo's place; and upon Ecker's death, failure to qualify, or refusal to serve, Frances Ecker was to serve in Samuel's place. On the resignation, death, etc. of the surviving Ecker or of Fisher, the other was to serve as sole trustee. There was no provision in the trust for the further designation of trustees and the trust was, by its terms, declared irrevocable.

On May 29, 1951, Leo, Anna, June and Mildred entered into an agreement purportedly modifying the trust. At the same time, Fisher and both Eckers renounced their rights to be trustees. Leo, Mildred, June and Anna agreed in writing: (1) to the appointment of Jacob Fisher, Philip Robbins and Manufacturers Trust Company as successor trustees should Leo die, resign, be incapacitated or otherwise refuse or be unable to serve; and (2) granted to Leo the right to make "any other substitutions or changes in the naming of substitute trustees during the life of Leo Rosner" without requiring the acquiescence or consent of Anna, Mildred or June.

It is undisputed that on May 29, 1951, the date of the execution of this agreement, June was under the age of 21 and Mildred had a two-year-old daughter, Stacey, the then sole remainderman. (Although under 21 years of age, June apparently was married at the time of the execution of this agreement having signed the agreement as June Wachtel). It is based on these interests of minors (EPTL § 7-1.9) that petitioner attacks the 1951 agreement.

By document dated November 12, 1963, Leo Rosner resigned as trustee, removed all of the substitute trustees and appointed as trustees in his place his wife Anna and his daughter Mildred. It appears that his failure to appoint June resulted, at least in part, from his dissatisfaction with June's personal life. June had been married to a Dr. Wachtel (apparently with the family's approval) and had three children with him. She divorced Dr. Wachtel and was about to marry a Mr. Cleanthes, a person of a different faith and nationality who was 20 years June's senior and the father of four children by a prior marriage. One week later June married Cleanthes.

On December 16, 1963, by written agreement with her father, June "renounced" any interest in the trusts and accepted in its place the shares and proprietory lease of a cooperative apartment at 17 East 84th Street. (Respondents estimate this to have been then worth $150,000. It is a 7-room apartment in one of the most desirable areas of Manhattan.) On the same day, Leo, Anna, Mildred and June entered into an agreement revoking June's trust, recognizing Anna and Mildred as successor trustees, releasing all trustees for all acts to that date and ratifying each such act.

On February 10, 1966, Leo, the father and settlor, apparently relented to some extent and he and his wife and two daughters entered into an agreement which recited the modification of May 29, 1951; rescinded the agreement of December 16, 1963; had June "renounce" all of her rights under the 1947 trust effective December 16, 1963; and, effective December 16, 1963, divided what had been June's trust interest into separate trust interests for June's three children, all of whom were minors. ^*

On March 27, 1973, Leo and Anna as "grantors," Mildred and Anna as "successor co-trustees" and June as "beneficiary" again entered into an agreement, this time "rescinding" the agreement of December 16, 1963 and February 10, 1966 and reinstating June as a beneficiary of the trust. (By this time, June apparently was divorced from Cleanthes having resumed the name June Rosner.)

On August 20, 1977, Leo died.

In 1978, June had prepared, but apparently did not serve, a petition challenging the administration of the trusts. That petition challenged the trustees both as to authority and as to management. She was given access to certain books and records of the trusts which were examined by her accountant who apparently found them to be deficient. Nonetheless, and acting with the advice of two law firms, June, on November 1, 1978, entered into written agreements with her mother, her sister, her sister's husband Alvin Caplow and with Cen-Par Operating Corp., ^** pursuant to which June agreed "not to institute the proposed proceeding against the trustees, the Estate of Leo Rosner and Alvin (Caplow), and agrees to and hereby does waive, remand and release all of her rights to a judicial accounting" subject to certain rights not here relevant. June also "waive(d) and release(d) all claims, demands, actions and causes of action, accounts and reckonings ... on every matter and account whatsoever arising out of (the Respondents') management and administration of the Trusts and Hotel ....

In return June was "hereby ... designated as a third Trustee of the Trusts" to act with her mother and sister and provision was made for "an appropriate instrument modifying the Trust agreement" to accomplish this designation of a third trustee. Substantial sums of money were paid to June; her mother agreed to make and keep in force a will appointing June to one-half the residue of a testamentary trust created by Leo's will; and June was "appointed ... to participate in the operation of the Hotel" at $18,000 per annum without obligation to provide services.

The effective date of the release of June's right to a judicial accounting was December 1, 1978. Less than six months later, June instituted this action seeking, among other relief, an accounting by her mother and sister, their removal as trustees and designating June the "Successor Trustee or Co-Trustee."

In their papers and memoranda, the remaindermen, in general, support the positions taken by their respective mothers. The Wachtel children reiterate their mother's charges against their aunt and grandmother; seek, conditionally, their aunt's and grandmother's removal as trustees and the appointment of their mother (and perhaps themselves) to that office; and demand of their aunt and grandmother an accounting. The Caplow children seek the removal of the petitioner as a trustee and waive their right to an accounting. Additionally, and significantly, Stacey Caplow ratifies the 1951 agreement.

In their answer to the Wachtel remaindermen's cross-petition the respondents-trustees also assert against the petitioner an affirmative defense and a counterclaim. The affirmative defense asserts that these respondents accounted to the petitioner in 1978 and that the accounting was accepted and settled among them. By way of counterclaim it is alleged, in considerable detail, that the petitioner, a putative trustee since 1978, by refusing to join in various acts required for investment of the trust, has caused the trust damage "in excess of $500,000." In her reply the petitioner denies the material allegations of this counterclaim.

We turn to the first of the controversial documents, the agreement dated May 29, 1951, which granted to Leo Rosner, one of the two settlors, the...