This petition by Maureen Cavuoto ("petitioner") in her capacity as guardian of the person and property of Thomas Cavuoto, Samantha Cavuoto and Daniel Louis Cavuoto ("the children"), for a decree directing a compulsory accounting by Peter J. Alexander ("respondent") is granted.

Paul Cavuoto died intestate on February 1, 2004. He was survived by petitioner and the children. Thomas is presently thirteen (13), Samantha is nine (9), and Daniel Louis is six (6). Petitioner was appointed guardian of their person and property in separate decrees, all dated July 22, 2008.

The respondent was a longtime friend of the decedent. They each served as best man at their respective weddings. He organized a golf tournament in memory of the decedent, the primary purpose of which was to raise funds to assist the children with college expenses. The title of the sponsoring organization on the invitation reads "The Friends of Paul Association." Contributors are directed to make their check payable to the respondent (Reply Affirmation, Ex. "A"). The flyer also mentions the establishment of a scholarship fund at a local high school in memory of the decedent and making a donation to the local chapter of a national charity. The event was advertised as the Annual Paul Cavuoto Memorial Golf Outing. Tournaments were held in 2004, 2005 and 2007. To date, the net amount raised is $49,700.00 after deducting expenses associated with each of the events. The fund is held in an account maintained by Key Bank. The signatories are the respondent and the decedent's brother, Michael J. Cavuoto. Mr. Cavuoto was not served with a citation in this proceeding. He has not voluntarily appeared or participated in it. The respondent states the fund balance will not be disturbed until such time as the children are prepared to attend college or post secondary schooling. The respondent has not [*2]disclosed the formal name of the account. He has indicated that an attempt to create an acceptable trust instrument for the benefit of the children has so far proved unfruitful and the retention of an accountant to assist with potential filing and/or non-profit status is cost prohibitive. The respondent does not address the issues of the scholarship fund for a Carmel High School graduate or the declared intention to make a donation to a local chapter of the American Heart Association in his responsive papers.

In addition, the respondent has failed to indicate what he and Mr. Cavuoto intend to do with the funds if any or all of the children decline to go to college or if any die before attaining college age, or if any of them succeed in obtaining a full scholarship to attend college, for example. No protocol or standards have been established in that regard.

A constructive trust is an equitable remedy. (Simonds v. Simonds, 45 NY2d 233, 241 [1978].) It is the formula through which the conscience of equity finds expression. (Beatty v. Guggenheim Exploration Co., 255 NY 380, 386 [1919].) It is well settled that in order to establish a constructive trust, a petitioner must prove the existence of a confidential or fiduciary relationship; a promise, express or implied; a transfer in reliance on that promise, and unjust enrichment. (Sharp v. Kosmalski, 40 NY2d 119, 121 [1976].) The purpose of the constructive trust is prevention of unjust enrichment. (Sharp v. Kosmalski, supra, at 123.) Unjust enrichment does not require the performance of any wrongful act by the one enriched. Innocent parties may be unjustly enriched. Generally, what is required is that a party retains property "under such circumstances that in equity and good conscience he ought not to retain..." (Simonds v. Simonds, supra, at 242.)

A fiduciary relation exists where there is special confidence reposed in one who in equity and good conscience is bound to act in good faith and with due regard to the interests of the one reposing the confidence. (Neagle v. McMullen, 334 Ill. 168, 165 N.E. 605, 608 [1929].) The individuals who participated in the three golf outings over the past five years have a legitimate expectation that their funds will be used for all of the intended purposes because of the respondent's representation. Likewise, the Cavuoto children, as the primary ultimate beneficiaries, are entitled to the same assurance. The respondent voluntarily assumed the position of a fiduciary by virtue of the efforts he undertook to establish the fund. He promised to expend the money for specific benevolent and charitable purposes. The five year anniversary of the first golf tournament shall occur on July 14, 2009. To date, the record is devoid of any scholarship in the decedent's name having been established, nor is there proof of any donation to the American Heart Association. The respondent has failed to provide the criteria he and Mr. Cavuoto shall employ when disbursing funds to the children. The excuses he has offered with respect to the creation and execution of a trust instrument for the children's benefit and to achieve non-profit status are unacceptable. It appears for all intents and purposes that the respondent and Michael J. Cavuoto are custodians of an account which has an unidentified name and over which they have complete authority to manage. Equity and good conscience demand that the respondent, as the catalyst of the fund, provide a full accounting. It is for these reasons that the petitioner, as guardian of the property of the three designated beneficiaries of the fund, has standing to compel just such an accounting.

Therefore, Peter J. Alexander is directed to file an accounting with this court in [*3]acceptable form for the all of his activities relating to the subject account from 2004 forward within twenty (20) days of service of the decree to be entered in this matter.

Registration of charitable organizations is covered by Executive Law §172. Certain organizations and persons are exempted from the registration requirement as set forth in Executive Law §172-a. This includes "[p]ersons requesting any contributions for the relief of any individual specified by name at the time of the solicitation, if all of the contributions collected, without any deductions whatsoever, are paid to or for the benefit of the named beneficiary..." (Executive Law §172-a[2][c].)

The record indicates that the respondent undertook fund raising efforts to assist the children of his deceased friend to defray future college expenses and establish a scholarship fund, along with making a donation to a nationally recognized charity in memory of the decedent. He used a golf tournament to achieve that purpose. The tournament was advertised as such. Expenses were deducted from the gross proceeds derived from each of the three tournaments conducted thus far. No funds have been disbursed to any of the three children. It further appears that no scholarship has been established or donation made in the name of the decedent. The respondent, along with the decedent's brother, retain the discretionary authority to disburse funds if and when a certain contingency occurs regarding the children. These facts lead the court to conclude that Executive Law §172-a(2)(c) does not apply, and that the account established by respondent and Michel J. Cavuoto and their solicitation activities are not exempt from registering with the New York State Attorney's General's Office Charities Bureau.

Accordingly, Peter J. Alexander is directed to comply with Executive Law §172, pay all necessary fees and file annual reports nunc pro tunc for all fund raising activities from 2004 through the present within twenty (20) days of the decree to be entered in this matter.

In each of the three (3) proceedings, the Court considered the verified petition to compel accounting supported by one (1) exhibit, verified answer, affidavit in opposition with memorandum of law, and reply affirmation with two (2) exhibits.

Counsel for the petitioner is directed to submit a decree consistent with the foregoing within ten (10) days of service of a copy of this decision.

The foregoing constitutes the decision of the Court.

Dated:Poughkeepsie, New York

July 9, 2009

ENTER

HON. JAMES D. PAGONES, S.C.J.

TO: