IN RE: the ESTATE OF Gerald R. CLIFFORD (2022)

MEMORANDUM AND ORDER

It is hereby ORDERED that the decree so appealed from is unanimously affirmed without costs.

Memorandum: On appeal from a final decree judicially settling the amended account of the executors of the Estate of Gerald R. Clifford (Estate), respondent contends that Surrogate's Court erred in concluding that he lacked standing to seek an accounting of the Estate. We conclude that the final decree should be affirmed.

When Gerald R. Clifford (decedent) passed away, he left behind a spouse and three children, including respondent. Pursuant to the terms of the will filed with the Surrogate, which are undisputed and of which we take judicial notice via NYSCEF (see 1591 Second Ave. LLC v. Metropolitan Transp. Auth., 202 A.D.3d 582, 583, 163 N.Y.S.3d 56 [1st Dept. 2022]; Samuels v. Montefiore Med. Ctr., 49 A.D.3d 268, 268, 852 N.Y.S.2d 121 [1st Dept. 2008]; cf. Matter of Carano, 96 A.D.3d 1556, 1556, 946 N.Y.S.2d 755 [4th Dept. 2012]; see generally Kingsbrook Jewish Med. Ctr. v. Allstate Ins. Co., 61 A.D.3d 13, 19-21, 871 N.Y.S.2d 680 [2d Dept. 2009]), decedent left all of his tangible personal property to his spouse. With respect to everything else, decedent made a “ ‘Formula Gift’ ” to a “By-Pass Trust,” giving “a fractional share equal to [his] Estate Tax Exemption to the Trustees of the By-Pass Trust.” Pursuant to the terms of the By-Pass Trust, decedent's spouse and descendants were income beneficiaries of the trust and, upon the spouse's death, the property in the By-Pass Trust was to be distributed to decedent's descendants.

Respondent sought to compel an accounting of the Estate and filed voluminous discovery demands on the Estate. For several months, the Estate indicated an intent to respond to the demands, but it thereafter objected to the demands as “overly broad, unduly burdensome, and/or designed solely to harass.” The Estate then filed a motion seeking, inter alia, to vacate respondent's discovery demands, contending that respondent lacked standing to proceed against the Estate inasmuch as he was merely a trust beneficiary, not an actual beneficiary or executor of the Estate. The Surrogate concluded that respondent lacked standing and that the Estate had not waived its right to assert standing as a defense to the discovery demands. Based on that determination, the Surrogate dismissed respondent's discovery demands and issued its final decree.

On this appeal, respondent contends that, as a remainderperson and permissible recipient of income and principal of the By-Pass Trust, he had standing as a “person interested” in the Estate to compel an accounting of the Estate under SCPA 2205 (2) (b). We reject that contention.

Unlike SCPA 1410, only certain parties may seek a compulsory accounting of an estate under SCPA 2205 (2). One of them is a “person interested” in the estate (SCPA 2205 [2] [b]). Pursuant to SCPA 103 (39), a “person interested” in an estate is “[a]ny person entitled or allegedly entitled to share as beneficiary in the estate or the trustee in bankruptcy or receiver of such person” (emphasis added). In our view, the By-Pass Trust, and not respondent, is the entity that is “entitled to share as beneficiary in the estate” (id.; cf. Benjamin v. Morgan Guar. Trust Co. of N.Y., 163 A.D.2d 135, 136-137, 557 N.Y.S.2d 360 [1st Dept. 1990]).

Subject to certain exceptions not relevant here, “the beneficiaries of bequests in trust such as [respondent] do not normally need to be made parties [to an accounting under SCPA 2210] due to the fact that they are represented by their trustee (SCPA 2210 [7]). That trustee actually represents the persons interested in the trust and remains accountable to them on the trustee's accounting if there is a failure to properly protect their interest” (Matter of Ziegler, 157 Misc. 2d 423, 427, 596 N.Y.S.2d 963 [Sur. Ct., N.Y. County 1993]; see Matter of Hunter, 6 A.D.3d 117, 123, 775 N.Y.S.2d 42 [2d Dept. 2004], affd 4 N.Y.3d 260, 794 N.Y.S.2d 286, 827 N.E.2d 269 [2005]). Inasmuch as the trustees are the real parties interested in the administration of the estate, and there is a well-recognized need to avoid “vexatious litigation” (Alco Gravure, Inc. v. Knapp Found., 64 N.Y.2d 458, 466, 490 N.Y.S.2d 116, 479 N.E.2d 752 [1985]), we conclude that the Surrogate properly determined that respondent lacked standing to seek an accounting from the Estate.

Contrary to respondent's further contention, we conclude that the Estate did not waive its right to assert the issue of standing inasmuch as it has not yet filed a responsive pleading or a preanswer motion to dismiss (see CPLR 3211 [e]; cf. Matter of Santoro v. Schreiber, 263 A.D.2d 953, 953, 695 N.Y.S.2d 443 [4th Dept. 1999], appeal dismissed 94 N.Y.2d 817, 701 N.Y.S.2d 708, 723 N.E.2d 564 [1999]; see generally US Bank N.A. v. Nelson, 36 N.Y.3d 998, 999, 139 N.Y.S.3d 118, 163 N.E.3d 49 [2020]). Respondent further contends that the Estate is estopped from claiming that it should be relieved of its obligation to produce requested documents. Inasmuch as that contention is raised for the first time on appeal, we conclude that the contention is not preserved for our review (see Earley v. Town of Allegany, 298 A.D.2d 906, 907, 748 N.Y.S.2d 197 [4th Dept. 2002], lv denied 7 N.Y.3d 713, 824 N.Y.S.2d 605, 857 N.E.2d 1136 [2006]). In any event, we further conclude that the contention lacks merit inasmuch as respondent failed to establish that he changed his position in reliance on the Estate's representations (see Wilson v. City of Buffalo, 298 A.D.2d 994, 995-996, 747 N.Y.S.2d 657 [4th Dept. 2002], lv denied 99 N.Y.2d 505, 755 N.Y.S.2d 712, 785 N.E.2d 734 [2003]; see generally Rich v. Orlando, 128 A.D.3d 1330, 1331, 7 N.Y.S.3d 754 [4th Dept. 2015]).

In light of our determination, respondent's remaining contention is moot.