In this proceeding pursuant to SCPA 2103 to compel the turnover of property, before the court is a motion by Leslie Modell and Shawn Modell for permission to intervene.

The decedent William D. Modell was survived by his wife Shelby Modell, a son Mitchell, a daughter Leslie, and three grandchildren, the issue of a predeceased son Michael. The decedent's will was admitted to probate on April 4, 2008 and letters testamentary issued to Shelby Modell and petitioner Charles A. Lubitz on that same day. The will leaves the decedent's tangible personal property to Shelby and the entire residuary estate to trusts for Shelby's lifetime benefit. Of these, there is a credit shelter trust which provides for income payments to Shelby at least quarter annually. The decedent's issue are all permissive sprinkle beneficiaries of the principal of the trust. Leslie is the presumptive remainder beneficiary and Shawn is the contingent remainder beneficiary. There is also a generation-skipping transfer tax trust which [*2]also provides for income payments to Shelby at least quarter annually. After Shelby's death, the trust continues for the lifetime benefit of Leslie, with the remainder payable to her issue, Shawn being the only member of that class at present. A remainder trust also provides for Shelby's lifetime benefit, then for Leslie's lifetime benefit, with the remainder payable to Leslie's issue. Thus, the decedent's will provides for Shelby during her lifetime and Leslie and her family after Shelby's death, to the exclusion of the decedent's son Mitchell and the issue of decedent's predeceased son Michael.

The instant proceeding was commenced by Lubitz against, among others, the Leslie Modell Family Trust, referred to in the papers as "the Leslie trust." Lubitz alleges that Shelby Modell, as trustee of the Leslie trust, defaulted on a loan to the trust by Sterling National Bank which resulted in a loss to the decedent's estate of approximately $1.75 million as a consequence of the decedent's having guaranteed the loan from Sterling National Bank to the Leslie trust. Lubitz argues, essentially, that it is his obligation as executor of the decedent's estate to recover that loss because the money used to satisfy the bank's loan was never intended to benefit Leslie or her trust, but rather to benefit the decedent's wife Shelby. The court notes that Shelby is the trustee of the Leslie trust, that it was in that capacity that she defaulted on the loan which resulted in the estate's liability for the loan, and she has filed her answer to the petition in which she opposes the relief sought. In his affirmation in support of the motion, Lubitz's attorney asserts that it is Lubitz's "strong belief" that Shelby only defaulted on the loan "as a direct result of pressure exerted upon her by Leslie."

The Leslie trust was created on December 26, 1968 and Leslie is the sole lifetime income beneficiary of the trust. Upon her death, the remainder is to be paid to Leslie's surviving issue or if she has none, then one-half thereof will pass to the Michael S. Modell Family Trust and the other half to the Mitchell B. Modell Family Trust. Leslie, as the sole lifetime income beneficiary, and Shawn, as the presumptive remainder beneficiary, clearly then have an interest in the outcome of the SCPA 2103 discovery proceeding which seeks to recoup approximately $1.75 million from the trust of which they are the beneficiaries. The opposition to the motion to intervene is, essentially, that the motion is not timely as petitioner's motion for summary judgment is already sub judice and that the interests of the movants are adequately represented by Shelby in her capacity as the trustee of the trust.

A motion for leave to intervene may be brought under either CPLR 1012, which is intervention as of right, or under CPLR 1013, which is intervention by permission of the court.

"However, it has been held under liberal rules of construction that whether intervention is sought as a matter of right under CPLR 1012(a), or as a matter of discretion under CPLR 1013 is of little practical significance (Matter of Norstar Apts. Town of Clay, 112 AD2D 750; Plantech Hous. v Conlan, 74 AD2d 920, 921, appeal dismissed 51 NY2d 862). Thus, intervention should be permitted where the intervenor has a real and substantial interest in the outcome of the proceedings" (Perl v Aspromonte Realty Corp., 143 AD2d 824, 825 [2d Dept 1988], appeal dismissed 74 NY2d 649 [1989] accord Global Team Vernon, LLC v Vernon Realty Holding, LLC, 93 AD3d 819 [2d Dept 2012]). Intervention may be granted upon a timely motion and "[w]hat is timely' depends upon the particular circumstances and is determined on grounds whether late intervention will confuse the issues and unduly delay the litigation to the serious detriment of other parties" (Weinstein-Korn-Miller, NY Civ Prac ¶ 1013.00 at 10-194). Here, [*3]although there will of necessity be some delay as a result of granting the motion, it cannot be said that the delay would be "undue" considering the delay in petitioner's own actions in bringing the proceeding in the first place. Furthermore, the issues will not be confused and Lubitz cannot convincingly argue that the delay will be to the serious detriment of other parties where the only parties with a beneficial interest in the outcome of the proceeding are in favor of the motion.

As to the argument that the movants' interests are being adequately protected by Shelby as the trustee of the Leslie trust, while it is true that Shelby has taken a position akin to that of the movants, there is nothing to prevent her from changing that position, a change which would clearly leave the interests of the movants unrepresented and unprotected. Also, despite Shelby's apparent alliance with the movants in this proceeding, it is undeniable that Shelby has an inherent conflict in representing the movants' interests because her own pecuniary self-interest would best be served by withdrawing the opposition she filed as trustee of the Leslie trust to Lubitz's discovery proceeding.

Accordingly, the motion to intervene is granted. Movants are directed to serve and file their answer or answers to the petition within 20 days of service upon them of a copy of this decision and order.

This decision constitutes the order of the court and no additional order need be submitted.

Dated: March 31, 2014

EDWARD W. McCARTY III

Judge of the

Surrogate's Court