Surrogate TorresESTATE OF DAVID EISDORFER, Deceased (84/5565/B/C);ESTATE OF DAVID EISDORFER, Deceased (84/5565/D/E) — Before the court are the motions of four of the decedent’s children, Leah Heller (Heller), Irene Felbrand (Felbrand), Frances Fisch (Fisch) and Herman Eisdorfer (Herman), to dismiss two petitions brought by the decedent’s grandchildren, namely Chaiya Ginsberg (Ginsberg), Elky Eisdorfer Paneth (Paneth) and Sara Weiss (Weiss) (collectively “the petitioners”), who are the children of the decedent’s post-deceased son, Samuel Eisdorfer (Samuel). The petitioners seek to compel the judicial settlement of the account of the executors appointed under the last will and testament dated January 24, 1984 (will) of the decedent David Eisdorfer (decedent), and the account of the testamentary trustees.1Heller, Felbrand, Fisch and Herman, the appearing respondents, submit several affirmations with exhibits in support of their motions, as well as memoranda of law. Petitioners submit their affidavits and affirmations in opposition, and memoranda of law.The two motions, based on identical grounds, are consolidated for decision.For the reasons set forth below and all arguments being considered, the petitions to compel the executors and trustees to account are dismissed.BackgroundThe decedent died on May 26, 1984, survived by his wife, Blanka, and five children, namely Heller, Felbrand, Fisch, Herman and Samuel. His will was offered for probate in the Kings County Surrogate’s Court on October 1, 1984. Each of the decedent’s children executed Waivers and Consents and the will was admitted to probate by the court’s decree dated December 13, 1984. Letters Testamentary and Letters of Trusteeship were granted to Heller, Blanka and Zalman Meisels (Meisels), the nominated co-executors and co-trustees under Article IV of the will.Pursuant to the terms of the will, the residue of the decedent’s estate was left in trust for the benefit of Blanka to be administered pursuant to Article IV as follows:1. My Trustees (other than my wife, BLANKA EISDORFER) shall pay the net income from such trust to my wife, BLANKA EISDORFER, at least quarter-annually.2. My Trustees (other than my wife, BLANKA EISDORFER) shall pay to my wife, BLANKA EISDORFER, such amounts from such trust as they, in their sole and absolute discretion may deem advisable for her health, education, maintenance and support.3. Upon the death of my wife, BLANKA EISDORFER, my Trustees shall pay the then principal of such trust to my lawful issue, per stirpes, determined as of the date of death of my wife, BLANKA EISDORFER, but in each case subject to the provisions of Paragraph V.The named fiduciaries retained counsel, Arnold Eiger, Esq., who assisted with the estate’s administration and filed estate tax returns on their behalf. An application to determine the estate’s tax liability was filed with this court on October 6, 1986, and an Order Fixing Tax was issued on November 13, 1986. Pursuant to the estate tax return, $1,903,749.00 was applied to the marital deduction.Notwithstanding the terms of the marital trust, over a two year period commencing prior to the will’s probate in 1984, Blanka (the sole income beneficiary and discretionary principal beneficiary of the trust) and the decedent’s five children agreed not to fund the marital trust. Instead, all parties negotiated and entered into eight separate agreements governing the global distribution of all of the decedent’s personal and real property. Blanka and all of the decedent’s children performed an “Agav Suder,” “in accordance with the Torah Law/Halakhah,” in the presence of Meisels, a rabbi and co-fiduciary, who acted as their advisor.2 The global Agav Suder agreement states:Our hand signatures below shall serve as proof upon us like hundred qualified witnesses, whereas that we have agreed wholeheartedly and with goodwill and with a complete acknowledgment, like one who makes an acknowledgment before a distinguished and appropriate rabbinical court, that the entire estate of our late father, Mr. Jacob David Eisdorfer, whether chattel or real property, assets that do have and that do not have security, loan agreements, and partnership agreements, literally all and everything, shall be divided between us into 6 portions, i.e. a third for our mother, the widow Brana [Blanka]; and of the remaining two thirds, one fifth goes to Leah Rivkeh Heller; one fifth goes to Shmuel Kalmen Eisdorfer; one fifth goes to Chana Elke Feldbrand; one fifth goes to Feige Sarah Fisch; one fifth goes to Yitzchok Zvi Eisdorfer.3Aside from the global Agav Suder agreement set forth above, other Agav Suder agreements were executed among the parties which focused on the distribution of particular property, to wit, two Agav Suder agreements set forth the manner of distribution of the business known as “Famous Bow Ties,” which was distributed to Samuel and Herman. Another Agav Suder agreement governed an asset known as “Dawa,” which was distributed one-third to Blanka and two-thirds to the decedent’s children. Other agreements disposed of real property in Brooklyn and the decedent’s business interests in “BLVD.”After the Agav Suder agreements were finalized, the executors and trustees did not retain control of any of the decedent’s assets in their fiduciary capacities. The marital trust was never funded, as all assets of the decedent’s were distributed pursuant to the Agav Suder agreements. The attorney assisting the fiduciaries in 1984 has since disposed of his file. Thirty-three years later, the petitioners, Samuel’s children and the grandchildren of the decedent and Blanka, petition to compel the judicial settlement of account by Heller and Meisels.4 Petitioners also filed a petition for the issuance of limited letters of administration to the Public Administrator of Kings County for Blanka’s estate who died on August 6, 2011.5 Samuel, the petitioners’ father, died almost 14 years ago on October 8, 2004. While Samuel predeceased Blanka, he survived the decedent and was a participant in the eight Agav Suder agreements entered into by the parties.MotionThe respondents move to dismiss both petitions to compel an account by the co-executors and the co-trustees pursuant to CPLR Rule 3211 (a) (1), (5), and (7). The respondents rely on the eight Agav Suder agreements negotiated and entered into by Blanka and all her children as evidence of the distribution of the decedent’s assets thirty-three years ago. Respondents assert that the eight Agav Suder agreements preclude the petitioners from compelling an account. The respondents also argue that the petitions are barred by the statute of limitations and the doctrine of laches. The respondents maintain that the Agav Suder agreements constitute “a clear repudiation of the Executors’ and Trustees’ obligations under the Will and Trust,” and thus the statute of limitations to compel an account, which is six years pursuant to CPLR 213(1), has expired. In support of their laches defense, respondents annex the affidavit of Arnold Eiger, Esq., sworn to on November 15, 2017 (the Eiger Affidavit), the attorney who represented the executors and trustees with the estate’s administration. The Eiger Affidavit states:During the time of my practice, the two areas in which my work was primarily concentrated were real estate and estates. With respect to the estate work, it was always my practice to obtain general releases from the beneficiaries after the conclusion of the administration of an estate. That being said, I do not specifically recall having done so with respect to the instant estate, inasmuch as the administration concluded approximately thirty years ago. I do not have any documents relating to the estate, because I destroy all documents relating to any matter seven years after the conclusion therefor.The respondents argue that this loss of evidence is prejudicial. They contend that an accounting cannot be prepared, and that determining the value of the decedent’s assets which were distributed over 30 years ago would be “impossible.” The respondents argue they could not have anticipated that the petitioners, Samuel’s children, would after three decades take exception to their father’s agreement to the distribution of the decedent’s property three decades after such distribution and fourteen years after their father’s death.The petitioners oppose the motions to dismiss and raise a multitude of arguments. The petitioners have attached affidavits, the crux of which aver that there was no repudiation by the fiduciaries of their duties under either the Will and the Trust. The petitioners state that the Agav Suder agreements, of which they assert they had no knowledge, do not deprive them of standing to demand an accounting. The petitioners argue that the executors ignored the decedent’s testamentary intent, which was that a trust qualifying for the marital deduction was to be created for the purpose of reducing estate taxes. Moreover, they contend that, pursuant to the terms of the Will, the class of decedent’s issue who would vest as remainder beneficiaries of the trust could only be determined upon Blanka’s death.The petitioners argue that the executors did not seek court approval for the method of distribution, and that they as contingent remainder beneficiaries, were not represented when the executors and family members agreed to divide the estate.6 They aver that for the purposes of the marital trust, virtual representation did not apply, and that their father could not have represented their interests. They aver that their interest conflicted with Samuel’s, as he obtained a premature distribution of the remainder of the trust attributable to his line of descent, to their prejudice. They argue that the provision of the decedent’s will that the remainder beneficiaries of the marital trust would be determined as of the date of Blanka’s death is crucial, because until then, all remainder interests were contingent. The petitioners also maintain that respondents are judicially estopped from denying the marital trust, because the executors took the position on the estate tax return that the trust was to be funded.DiscussionOn a motion to dismiss a proceeding in accordance with CPLR 3211, a court must take the allegations in the petition as true and resolve all inferences in favor of the petitioner. Matter of Hiletzaris, 105 AD3d 740 (2d Dep’t 2013). With respect to a defense founded upon documentary evidence pursuant to CPLR 3211(a)(1), a paper qualifies as “documentary evidence” if it satisfies the following criteria: (1) it is unambiguous; (2) it is of undeniable authenticity; and (3) its contents are essentially undeniable. Fontanetta v. John Doe 1, 73 A.D.3d 78, 84 (2d Dep’t 2010). Contracts or agreements fall in the range of acceptable documentary evidence. Fontanetta at 85, citing its decision in Matter of Casamassima v. Casamassima, 30 A.D.3d 596 (2d Dep’t 2006).Meisels, one of the executors and trustees, has authenticated the eight Agav Suder agreements. He also states that he drafted each one and that he witnessed the decedent’s spouse and each of the five children (Heller, Felbrand, Fisch, Herman and Samuel) sign them. He further states that the parties “performed the Agav Suder complete binding acknowledgment procedure in accordance with Torah Law/Halakhah.”The eight Agav Suder agreements are unambiguous; they dispose of all of the decedent’s property and the manner of its distribution, i.e., one agreement specifically provides that the agreements embrace “the entire estate of our late father, Mr. Jacob David Eisdorfer, whether chattel or real property, assets that do have and that do not have security, loan agreements, partnership agreements, literally all and everything.” The scope and intent of the Agav Suder agreements is undeniable. While petitioners do not concede the Agav Suder agreements’ authenticity, they do not raise any meaningful objections that the agreements are ambiguous, unauthentic or that their intentions are deniable. Accordingly, the court finds the agreements to be authentic, unambiguous and their contents undeniable.When dismissal is sought pursuant to CPLR 3211 [a][5] on the ground that it is barred by the statute of limitations, the respondent bears the burden of establishing prima facie that the time in which to sue has expired. Savarese v. Shatz, 273 A.D.2d 219 (2d Dep’t 2009). If the burden is satisfied, the burden shifts to the petitioner to raise a question of fact as to whether the statute of limitations is inapplicable. Leace v. Kohlroser, 151 A.D. 3d 707 (2nd Dep’t 2017).Here, the respondents contend that the agreements were entered into and observed for over thirty-three years, and that the decedent’s will and estate tax return and related documents were on file with the court and available to the public since 1984. The petitioners, on the other hand, aver that they only learned of the decedent’s Will and the marital trust in November 2016. The petitioners do not state how they learned of the decedent’s Will, which has been on file with the Surrogate’s Court since 1984, but aver only that they learned of it in November 2016. Further, with respect to the Agav Suder agreements, the petitioners argue that they are “patently insufficient to overcome the decedent’s Will or the obligations of respondents Heller and Meisels to account.”Generally, accounting proceedings against trustees are rooted in equity and governed by the six-year limitations period of CPLR 213(1). In Tydings v. Greenfield, Stein & Senior, LLP, 11 N.Y.3d 195 (2008), the Court of Appeals ruled that “[T]he running of the statute of limitations on a proceeding to compel an accounting, [in the absence of fraud,] begins when ‘the trust relation is at an end, and the trustee has yielded the estate to a successor.” Id. at 202. The executors and trustees in these proceedings yielded complete control of the decedent’s property to the decedent’s spouse and his five children, who at that time were his sole distributees pursuant to eight Agav Suder agreements. The terms of the Agav Suder agreements, and the ownership and control of the distributed property, appear to have been observed without question or controversy for thirty-three years. Thus, the issue before the court is whether the executors and trustees sufficiently repudiated their fiduciary roles to trigger the commencement of the statute of limitations.It is when a fiduciary’s repudiation is less than unequivocal that a mere lapse of time is insufficient to trigger the statute of limitations. For instance, in Matter of Behr, 191 A.D. 2d 431 (2d Dep’t 1993), as the trustee claimed that he “knew nothing of the existence of the trust,” the Appellate Division found that it was not established as a matter of law that the fiduciary openly repudiated his fiduciary obligations or that the beneficiary was or should have been aware of the repudiation. Id at 432. In Matter of Barabash, 31 N.Y. 2d 76 (1972), the Court of Appeals held that ongoing offers of settlement after the fiduciary had initially written a letter stating that an informal accounting would not be forthcoming was insufficient to trigger the statute of limitations, because the act of offering settlement belied the act of repudiation. In Matter of Meyer, 303 A.D.2d 682 (2nd Dep’t 2003), the Second Department ruled that the appellant failed to establish that the filing of a tax return which stated that the estate had no assets, without more, constituted a repudiation of her fiduciary obligation.In the instant matters, the executors and trustees cannot be said to have acted in a manner that was anything less than unequivocal. They affirmatively, over a two year period, negotiated eight agreements whereby they, as such fiduciaries, abdicated all control of the decedent’s property to all of the persons who would be entitled to such a distribution at that time.7While petitioners aver that neither “BLANKA, HELLER or MEISELS” directly advised them of their repudiation, it does not mean that they were not, or should not have been aware of the estate’s distribution. In this regard, the petitioners’ affidavits are devoid of any factual information. For instance, the petitioners fail to address whether their father’s death over fourteen years ago raised any questions or interest in the decedent’s estate. Petitioners fail to explain how decades have passed without having undertaken any investigation concerning their grandfather’s estate when reasonable persons may have taken such action. Indeed, through the exercise of reasonable diligence, the petitioners could have discovered that their grandfather’s estate had been distributed, particularly when their own father passed fourteen years ago. The court notes that the petitioners rely heavily on the information contained in the court’s public file, which contains the decedent’s estate tax return, to support their claim that the marital trust was required to be funded. However, in order to sustain their assertion of failure of repudiation, the petitioners also aver the seemingly contradictory position that knowledge of the contents of the public file should not be imputed to them.Under the unique facts presented, the court is satisfied that the respondents have established that the statute of limitations bars the petitions to compel an account. Their conduct in distributing the decedent’s property constituted a repudiation. Under the circumstances of the case, the petitioners knew, or should have known, of the estate’s distribution.The petitions to account are also barred by the doctrine of laches. The essential element of the equitable defense of laches is delay which is prejudicial to the opposing party. To establish laches, a party must show, (1) conduct by an offending party giving rise to the situation complained of, (2) delay by the complainant in asserting her or his claim for relief despite the opportunity to do so, (3) lack of knowledge or notice on the part of the offending party that the complainant would assert her or his claim for relief, and (4) injury or prejudice to the offending party in the event that relief is accorded the complainant. Wilds v. Heckstall, 93 A.D. 3d 661 (2nd Dep’t 2012). Laches is defined as “such neglect or omission to assert a right as, taken in conjunction with the lapse of time, more or less great, and other circumstances causing prejudice to an adverse party, operates as a bar in a court of equity.” Barabash at 80.Without doubt, there has been a significant delay by the petitioners in asserting their claims for an accounting when they have had decades to inquire. The respondents aver that in the decades since the Agav Suder agreements, they had no indication that the petitioners were unaware of the distribution to their father, or any suggestion of dissatisfaction concerning the distribution. As a result, an accounting is now impossible, when all of the decedent’s property has been distributed, when the attorney representing the fiduciaries has destroyed his file in the ordinary course of his business, and significantly, when important witnesses to the repudiation and distribution have died, to wit, Blanka and Samuel. Accordingly, the respondents have demonstrated that the petitions are barred by the doctrine of laches.Therefore, on the facts presented and all arguments having been considered, the respondents’ motions are granted in their entirety, and it is thereforeORDERED that both the petition to compel the judicial settlement of the account of the executors in the estate of the decedent and the petition to compel the judicial settlement of the account of the trustees under the decedent’s will are dismissed.Dated: June 26, 2018
