The sole surviving trustee of the Edna Block Revocable Trust created by an agreement dated December 23, 1996, executed by Edna Block both as grantor and trustee and the petitioner herein as trustee, seeks to judicially settle both Parts I and II of her account. Part I is for the period from January 8, 1997 to April 16, 2004, the date of the funding of the trust to the date of the grantor's death and Part II is for the period from April 16, 2004 to February 28, 2009. The trustee also filed a separate intermediate accounting for the one-sixth interest in the trust that was to continue to be held in trust after the grantor's death for the benefit of her brother. This accounting is for the period from November 30, 2006 to February 28, 2009.

The trustee moves pursuant to CPLR 3211 (a) (7) to dismiss the objections interposed to Parts I and II on the ground that they "are overly broad, vague, conclusory statements that fail to state a cause of action" and moves pursuant to CPLR 3211 (a) (3) to dismiss the objections to Part 1 on the additional ground that the objectants lack standing to object thereto. Specifically, the accounting trustee contends that parties with a remainder interest lack standing to object to any item listed in her account for the period during the lifetime of the grantor where the grantor/co-trustee retained the right to revoke the trust and the right to all income from the trust. Assuming that the parties with a remainder interest have standing to interpose certain objections to Part I of the account, the issue remains as to whether their objections fail to state a basis for any relief in the absence of an allegation that the alleged improper fiduciary conduct was committed solely by the accounting trustee without the approval or ratification of the now deceased grantor/co-trustee.

Upon the grantor's death, the trust corpus was to be divided into six equal shares for the benefit of five of her nieces and nephews and her brother, Sidney Brummer. The shares of the nieces [*2]and nephews were to be distributed to them outright and Sidney's share was to continue to be held in trust with the income payable to him for life and, upon his death, the principal distributed to the same five nieces and nephews. The surviving trustee is one of the nieces who is a beneficiary of the trust. The original objectants to the account were the other four nieces and nephews and Sidney; however, Sidney died on November 24, 2009. It appears that the executor of Sidney's estate is represented by the same counsel who represents the other objectants; however, it also appears that the objections have not been amended to substitute Sidney's executor as a party in place of Sidney. The same parties who filed objections to Parts I and II of the other accounting also filed objections to the intermediate accounting for the portion of the trust that continued for Sidney's benefit, and the trustee also moves pursuant to CPLR 3211 (a) (7) to dismiss these objections.

The trust agreement provides that during the grantor's life, the trustees would apply the net income for the benefit of the grantor quarterly, and were authorized to apply so much or all of the trust principal as they, in their sole discretion, deemed necessary for the health, support, maintenance and welfare of the grantor. Article SIXTH of the trust reserved to the grantor the right to alter, revoke, amend and/or modify any provision of the trust. Article TENTH (C) provides that in the event the trustees are unable to agree on any matter relating to the administration of the trust, the decision of the grantor, if she was then acting as trustee, would be controlling for all purposes. Article TENTH (F) provides that the trustees shall not be liable for any loss or damage suffered by the trust estate, except in the case of willful misconduct or gross negligence. Article ELEVENTH (C) allows the trustees to invest or reinvest any principal or accumulated income in any productive property, real or personal, that they deem advisable, and retain the property transferred to the trust in the same form they received it, "all without regard to limitations imposed by law on the investment of trust funds." On May 22, 1997, the grantor amended the trust to give herself and her attorney-in-fact full power and authority to withdraw principal from the trust for purposes including, but not limited to, making gifts.

More than two years after the grantor's death, on November 30, 2006, the trustee made a partial distribution of stock in kind valued at $130,183.44 to each of the individual beneficiaries who executed receipts and releases therefor. The trustee waives her annual commissions from 1997 through 2003; however, from April 17, 2004 forward, she seeks both annual and paying commissions. Specifically, she requests: (1) payment of $42,960.19 in annual commissions, of which $33,395.90 is from principal and $9,564.29 is from income, for the period April 17, 2004 to February 28, 2009, together with any additional amount as may be due from February 28, 2009 to the date of final distribution; (2) approval of commissions of $14,249.30, representing "principal paying out commissions" for the period April 17, 2004 to February 28, 2009, together with any sum that might be due thereafter up to final distribution; and, (3) an award of legal fees of $48,300, of which $25,927.50 has been paid, and $961.89 in disbursements.

The objectants interposed 22 objections to Part I of the account and 26 objections to Part II. They contend that notwithstanding that most of their objections are more general in nature than specific, they suffice to defeat a motion to dismiss for failure to state a claim or, in the alternative, they should be allowed both to conduct the discovery they requested prior to the instant motion and to file amended objections. The trustee asserts that she requested that the objectants file more specific objections and they failed to do so. Furthermore, the trustee contends that as the objectants failed to serve and file a cross motion seeking leave to file amended objections, and they opted to [*3]file their objections without exercising their right under SCPA 2211 (2) to examine the trustee prior to filing their objections, it would be inappropriate and unfair to permit the objectants to either amend their objections or conduct discovery and then amend their objections. The objectants counter, in essence, that the trustee's argument is disingenuous as it is clear from many of their objections that they presently lack sufficient information to make their objections more specific and it was not until they served a document demand upon the trustee and a notice for her to be deposed that she made the instant motion.

In support of her contention that the objectants lack standing to object to Part I of the account the trustee relies on Matter of Malasky (290 AD2d 631 [2002], wherein, a husband and wife created a joint revocable living trust under which, "[d]uring the lifetime of the settlors, they acted as trustees, received the income from the trust and explicitly retained the power to revoke or amend the trust at any time" (id. at 632). The court, citing Matter of Hanover Bank & Co. (176 Misc 183 [1941], affd 263 App Div 801 [1941], affd 288 NY 608 [1942]), held that the husband's children from a prior marriage, who had a remainder interest in the corpus of the trust, lacked standing to object to the wife's accounting for the period that both settlors were alive because they had "no pecuniary interest in the revocable trust" until one of the settlor's died (see Matter of Malasky, 290 AD2d at 632).

The objectants argue that Siegel v Novack (920 So 2d 89 [4th Dist Fla 2006], and not Matter of Malasky (290 AD2d at 631) controls because one of the trustees of the trust sub judice was not a settlor of the trust. In Siegel, the Florida court, applying New York law, held that where a bank was the sole trustee of a revocable lifetime trust under which the grantor retained the right to receive all of the income from the trust, the settlor's sons, who had a remainder interest in the trust, had standing to object to withdrawals from the trust prior to the death of the settlor "which were not approved or ratified by the settlor personally or through a method contemplated through the trust instrument" (920 So 2d at 95). Nonetheless, the court also noted that withdrawal of funds from a revocable trust by or at the request of a settlor during the settlor's lifetime is akin to a depositor's withdrawal of funds from a Totten Trust bank account in that such withdrawals are "tantamount to a revocation or termination of the trust with respect to the funds withdrawn" (id.).

Here, although the objectants have standing to object to the conduct of the surviving trustee during the lifetime of the settlor/trustee, such objections will only be valid as to acts or investment policies which were made or pursued solely by the surviving trustee, without approval or ratification by the settlor (Siegel v Novak, 920 So 2d at 89). Notwithstanding that the objectants have standing to make such objections, none of the objections interposed to Part I of the account specifically allege that the surviving trustee committed any act, or pursued any investment policy, without the approval or consent of the settlor. The surviving trustee alleges that the settlor controlled everything with respect to the trust during her lifetime. The objectants do not allege that they are presently aware of any actions on behalf of the trust by anyone other than the settlor/trustee; however, they do make allegations to the effect that they are unaware of who signed certain checks on behalf of the trust, including checks which were used to make gifts from the trust. It is clear that no prudent person would agree to become a co-trustee with the settlor of a revocable lifetime trust if she could be held liable to persons with a remainder interest for the acts or investment policies of the settlor/trustee who was immune from liability. Accordingly, based on the present state of the record, the motion under CPLR 3211 (a) (7) to dismiss the objections to Part I of the account for failure to state a valid objection to the account, is granted. [*4]

In order for the trustee to prevail on her CPLR 3211 (a) (7) motion to dismiss the objections to Part II of the account, she must establish that, as a matter of law, the objections do not entitle the objectants to any relief. In this application, the court presumes that the facts pleaded are true and accords every favorable inference to the allegations in the pleading provided that such allegations are not totally conclusory or the specific factual allegations are "either inherently incredible or flatly contradicted by documentary evidence . . . " (Perl v Smith Barney Inc., 230 AD2d 664, 665 [1996], lv denied 89 NY2d 803 [1996]).

Objection 23 complains that the ending balance of Part I is not the same as the opening balance of Part II. This objection is dismissed because an examination of schedule A of Part II reveals that the last six items thereon, listing tax refunds received and the proceeds from selling tangible personal property, were received by the trust after the date of the grantor's death, and that, if those six items are subtracted from the total of schedule A, the value of the assets listed in schedule A of Part II is the same as the value reported as the principal on hand for the closing date of Part I.

Objection 24 complains that Part II of the accounting cannot be a final accounting because it only covers the period until February 28, 2009 and the account must be brought down to date. Regardless of whether this objection was interposed, the court would not enter a decree judicially settling the account until it was updated. Accordingly, this objection is not dismissed to the extent that the objectants are reserving the right to object to items in the "updated" period of the account.

Notwithstanding that objection 25 contains some irrelevant statements, the objection is not dismissed to the extent that it takes issue with the commissions requested as well as the attorney and accounting fees listed in the account.

The motion to dismiss objection 27 is denied to the extent that it alleges that it was imprudent for the trustee to retain an investment in Nuveen Preferred Securities. The motion to dismiss is granted as to the other allegations in objection 27, both for lack of specificity and because, by necessary implication, it incorrectly postulates that there is a presumption that a trustee should be surcharged whenever a trust investment declines in value.

Objections 26, 28-33, 37, 39-42 and 44-48 are dismissed on one or more of the following grounds: (1) the objection is based on an argument that has no validity, for example, that a fiduciary has the burden to show that she was not imprudent with regard to any security that declines in value or that the accounting party is required to set forth more information than is required under the instructions for that schedule; (2) the objection essentially complains about the lack of information with regard to certain matters and is more in the nature of a request to permit the objectants to amend the objection in the future rather than an objection seeking a specific surcharge; and, (3) the objection is conclusory in nature, making it impossible to afford the favorable inferences that may be made with regard to factual allegations.

With regard to all of the other objections to Part II not previously discussed herein, the court cannot conclude that, after every favorable inference is afforded to the specific factual allegations contained therein, they are insufficient as a matter of law to be a valid basis to surcharge the trustee. Accordingly, the motion to dismiss is denied with regard to the following objections: (1) objection 34 alleging that the trustee should be surcharged for losses incurred during the period after which she should have made a full distribution of the trust assets; (2) objection 35 alleging that the trustee should be surcharged for paying rent on the grantor's apartment after her death and for certain legal [*5]and accounting fees charged to the estate; (3) objection 36 containing specific allegations with regard to legal fees and commissions; (4) objection 38 seeking a surcharge for payments made to an individual for unidentified tax services; and, (5) objection 43 alleging a basis to disallow all commissions to the trustee.

There still remains the question of whether the court should permit the objectants to file an amended set of objections to Parts I and II of the account after the conclusion of the discovery that they requested prior to the filing of the instant motion. Here, the trustee knew from the objections interposed that the objectants were unable to file more specific objections with respect to most aspects of the account without the requested disclosure. Nontheless, the trustee opted to make the instant motion instead of seeking any relief with regard to the disclosure requested by the objectants. Under these circumstances and in light of the fact that the objectants clearly had the right to disclosure prior to filing objections to the account (see SCPA 2211 [2]), it would be unduly harsh to grant the motion to dismiss the objections without granting the objectants the right to file amended objections after the completion of the disclosure they requested.

Accordingly, the court, in the exercise of its discretion, grants leave to the objectants to file an amended set of objections to Parts I and II of the account within 10 days of the completion of the discovery already requested by them (see CPLR 3025 [b]; Matter of Alan, 5 NY2d 333 [1959]). The court also deems the papers filed in opposition to the motion an application for leave to amend their pleadings to substitute Sidney's executor in place of Sidney as an objectant, and that application is granted. The objectants should not view this determination as a license for their amended objections to repeat allegations contained in those objections dismissed herein stating that they need more information to make more specific objections, or that the trustee should provide more information on a particular schedule than is required under the instructions for that schedule. Furthermore, any amended objections to Part I of the account should specifically allege the transaction or investment policy that was pursued by the non-settlor trustee without approval or ratification by the settlor/trustee (see Siegel v Novak, 920 So 2d at 89).

As a result of the determinations herein with regard to the Parts I and II accounting proceeding, there is no need for the court at this time to rule upon the validity of each objection interposed to the intermediate accounting for the portion of the trust that was to continue for the benefit of Sidney until his death (the Sidney trust). Ten of the twenty objections filed to the accounting for the Sidney trust are the same as the objections filed to the Parts I and II accounting proceeding, and obviously, with regard to those 10 objections the court would make the same ruling in each accounting proceeding. Moreover, for the same reasons stated hereinabove, as to the Parts I and II accounting proceeding, the court would grant leave to the objectants to file amended objections to the Sidney trust accounting after completion of the requested disclosure.

Some of the objections in the Sidney trust accounting that are different from the Parts I and II accounting arise from the fact that the accounting for the Sidney trust commences with the date of November 30, 2006 instead of April 16, 2004, the date of the grantor's death. It appears that the reason the trustee selected November 30, 2006 as the beginning date for the Sidney trust intermediate accounting proceeding is that it is the date the trustee made a partial distribution of stock in kind to beneficiaries as reported in Part II of the account, and, therefore, any objections that any party has to what transpired between April 16, 2004 and November 30, 2006 may be interposed to Part II of that accounting covering the period from the grantor's death to its closing date. [*6]

Accordingly, and in the interest of fairness and judicial economy, the court grants leave to the objectants to file an amended set of objections to the Sidney trust accounting within 10 days of the completion of the discovery already requested by the objectants. As the court is not deciding the motion to dismiss the objections to the Sidney trust accounting on the merits at this time, the trustee may make an appropriate motion after the time to file amended objections has expired. Similarly, the trustee may move to dismiss any amended objections interposed in the future to the Parts I and II accounting proceeding, or any other appropriate motion, should she be of the opinion that there are valid grounds for such an application.

The parties are directed to complete all the disclosure that has already been requested within 100 days of the date of this decision and order. The Chief Clerk shall mail a copy of this decision and order to respective counsel for the trustee and the objectants. Should the parties desire a conference with the court, they may select any calendar date of the court upon giving the court at least two weeks' written notice of the date they selected.

Proceed accordingly.

SURROGATE