Bayside Cemetery in Ozone Park, Queens (NYLJ/Rick Kopstein)
Family members of those buried in a Queens cemetery lack standing to sue a synagogue to enforce a trust established for the perpetual care of lots there, but a man who paid for the care of three plots can pursue a breach of contract claim, a unanimous Manhattan appellate court has ruled.
“Allowing relatives to bring lawsuits as to each lot, plot or grave could create endless litigation, substantially depleting the trust assets,” Justice David Saxe (See Profile) of the Appellate Division, First Department, wrote in Lucker v. Bayside Cemetery, 10245. “Enforcement of the subject charitable trusts is therefore best left to the attorney general, so as not to expose the trust funds to money-draining multiple lawsuits, and to avoid setting a precedent of allowing a broad, vague beneficiary base to commence multiple actions against a charitable trust.”
In the case of the family members, their grandparents and parents had entered into perpetual-care agreements, but the plaintiffs themselves had never donated to the trust fund. However, the panel said a separate suit brought by a man who himself paid $1,200 for the care of grave sites for his mother and other relatives could proceed.
Saxe wrote that “while [Steven] Leventhal is not entitled to the return of his payment as damages for the alleged breach of the trust terms, as the donor of the trust fund, he has sufficient standing to sue to enforce the trust, that is, to obtain an order requiring the trustee to satisfy its obligations.”
Though the lower court said Leventhal could proceed with both a breach of contract and breach of fiduciary duty claim, Saxe modified the ruling to let only the contract-breach claim survive.
At issue in Tuesday’s decision is the upkeep of Bayside Cemetery, a 149-year-old Jewish burial ground in Queens with about 34,000 graves.
Congregation Shaare Zedek, which is located in Manhattan, owns the 14-acre site. Over the years, the congregation sold the exclusive right to bury in sections of the site to various burial societies that are now defunct.
After a federal action was dismissed for lack of jurisdiction, five individuals sued Shaare Zedek and the cemetery in state court in 2009, complaining that the perpetual care their ancestors had paid for was not being provided and their graves now were inaccessible due to overgrowth.
“While headstones at Bayside Cemetery read ‘Gone but not forgotten,’ defendants have all but forgotten the cemetery and refuse to honor perpetual care or annual care contracts which were entered into in accordance with New York and Jewish law,” the families’ complaint says. “As a result, Bayside Cemetery has for years been allowed to fall into and remain in deplorable condition.”
The family members asserted breach of contract and fiduciary duty claims. They also argued the defendants violated bars against deceptive business acts and false advertising pursuant to General Business Law §§349 and 350, along with claims of conversion and unjust enrichment.
In 2011, Leventhal filed a suit against the same defendants advancing the same causes of action, noting his 1985 payment and “trust fund receipt.”
His complaint said the attorney general’s office had started a “formal investigation” and “repeatedly” told the relatives in the other suit “that while the investigation is continuing, it will end within thirty days or so. The investigation continues to this day with no clear end in sight.”
Both suits are putative class actions, but class status is not now at issue.
In October 2011, Manhattan Acting Supreme Court Justice Debra James (See Profile) granted the congregation’s dismissal motion against the relatives, who appealed.
In January 2012, she partially granted the dismissal motion in Leventhal’s case. Both Leventhal and Shaare Zedek appealed.
Both suits named the Community Association for Jewish At-Risk Cemeteries—a non-profit organization allegedly presenting itself as a steward of the cemetery—as a third defendant. James granted the organization’s own dismissal motion and none of the plaintiffs appealed the dismissal.
Saxe said that even accepting that the description of cemetery conditions are accurate, the legal question was whether the relatives could even bring the suit.
While parties have to generally show “injury in fact” for standing, “the requirements for establishing standing to enforce a charitable trust are more exacting.”
He pointed to Estates, Powers & Trusts Law §8-1.1(f), which says the attorney general “shall represent the beneficiaries” of dispositions of property in trust meant for perpetual care of graves.
The relatives argued the attorney general’s office failed to take sufficient action, forcing them to take legal action.
They argued that case law provides an exception to the general rule of attorney general representation allowing suits from particular groups who are “sharply defined and limited in number” that have a “special interest in funds held for a charitable purpose.”
‘Limiting Principle’ Missing
Saxe was not convinced.
“Aside from the use of the vague term ‘near relatives,’ plaintiffs can offer no rational limiting principle that would distinguish children from grandchildren—or, indeed, great-grandchildren—or from nieces or nephews or cousins and their children,” he said. “Over the years, each of the individuals buried in the cemetery who entered into a perpetual care arrangement potentially could have 5, 10, 20 or more relatives desirous of suing the cemetery for a failure of perpetual care.”
As for Leventhal, Saxe noted that he, unlike the plaintiffs in the separate suit, was a donor to the trust. And the judge said there are circumstances when a donor can sue for enforcement of the donation’s terms.
He noted a 1900 state Court of Appeals decision, Associate Alumni of Gen. Theological Seminary v. General Theological Seminary, 163 NY 417, which found an alumni group could sue over a professorship endowment.
The Associate Alumni court said if “trustees of a charity abused the trust, misemploy the charity fund, or commit a breach of the trust” the attorney general and the alumni group had redress.
As a result, Saxe said Leventhal had standing here on the contract-breach claim. But the judge said Leventhal failed with his other claims.
In dismissing the breach of fiduciary duty claim, Saxe observed the duty “is owed only to trust beneficiaries, not to the trust’s donor.” In cases involving charitable trusts, beneficiary representation falls to the attorney general, he said.
“The beneficial interest Leventhal identifies is merely the same interest in being able to visit and have access to the graves of his deceased family members as that of every relative of a deceased individual. …Since Leventhal has no greater beneficial interest than that of any other relative, he can have no greater entitlement to make a claim for breach of fiduciary duty than any of those relatives,” Saxe wrote.
Russell Steinthal of Axinn Veltrop & Harkrider, who represents the congregation and cemetery, said, “we’re obviously very pleased with the ruling, which adopted our position on many critical issues.”
He said he was not “overly surprised” about the court’s view on the breach of contract claim
Steinthal said the cemetery’s worsening conditions over the years was “an unfortunate problem” but the congregation recognized the “need to maintain the cemetery” and was taking steps to that end. He added that Shaare Zedek now retains a landscaping company for upkeep.
Michael Buchman of Motley Rice represents the plaintiffs and did not return a call for comment.
Both sides were represented pro bono.
@|Andrew Keshner can be contacted at firstname.lastname@example.org.