Opinion
08-2941
6-1-2009
APPLICATION OF LINDA MILEA, BENEFICIARY TO THE ALICE M. AMOS REVOCABLE TRUST UNDER AGREEMENT DATED DECEMBER 10, 2004, Petitioner, FOR THE RELIEF PURSUANT TO ARTICLE 77 OF THE CPLR, v. PETER A. HUGUNIN AND STANLEY E. HUGUNIN, INDIVIDUALLY AND AS TRUSTEES OF THE ALICE M. AMOS REVOCABLE TRUST, Respondents.
In this matter, petitioner seeks an Order from this Court demanding that the respondents re-deed the property previously deeded to them back to the Alice Amos Trust, together with an agreement terminating a Declaration of Easement placed over the petitioner's property, and a right of first refusal. Petitioner further seeks to compel the respondents to deliver to the petitioner a parcel of land equal in size to that of her late mother's, containing no easement, claiming that it was the intent of Alice Amos and the Alice Amos Trust to deed such a parcel. Petitioner also seeks attorneys fees and costs expended by the petitioner with regard to this proceeding.
Petitioner brings four separate causes of action. The First Cause of Action claims that the Trustees breached their fiduciary duty to the petitioner. The Second Cause of Action alleges wrongdoing in Gerrymandering the boundary lines and attaching an easement in a course of self-dealing that was in direct disregard of the intent of the Alice Amos Trust. The Third Cause of Action seeks to confirm the Trust construction and have the respondents reconvey the property back to the Trust, and then order the
Trustees to convey to petitioner her property without easement. The Fourth Cause of Action seeks costs and attorneys fees with regard to this matter.
A hearing was held in Supreme Court, Onondaga County on July 16, July 17, and October 14, 2008. At that time, the Court took proof with regard to all claims made by the petitioner, and all defenses set forth by the respondents. Subsequently, each of the parties had the occasion to submit post-trial memorandum and reply memorandum with regard to the issues in this case. The decision of the Court is as follows.
I — ALICE AMOS AND THE TRUST PARCEL
Alice Hugunin Amos, now deceased, resided at 5448 Route 80 in Tully, New York. At the time of her death, she was survived by three children, Peter Hugunin of North Grafton, Massachusetts, Stanley Hugunin of Morrisville, Georgia, and Linda Milea, who lived across a small pond from her mother at 5438 Route 80, Tully, New York. Linda continues to reside at that residence.
The proof elicited before this Court showed that after Alice Amos' second husband, John Amos died in the year 2000, Alice purchased an additional 17 acre undeveloped parcel of real property from his estate located on Route 80 in Tully, New York. In 2003, Alice Amos began the construction of two homes with driveways with ingress and egress from Route 80 on the trust parcel, without subdividing the trust parcel. The first home that she built was known as 5448 Route 80, and Alice Amos built this for herself and lived in that property. Because of the closeness to her daughter, Linda Milea, Alice built a second home on the west side of the trust parcel for Linda Milea (the petitioner) and that address is known as 5438 Route 80. With the exception of the two homes, the parcel has remained and continues to date to remain undeveloped and forever wild.
The proof at the hearing showed that the petitioner chose the property at 5438 Route 80 for her home because of its privacy. Both 5438 and 5448 each have their own curb cuts for access purposes, and Alice Amos and the petitioner could each reach their residences without interfering with or intruding upon the other.
II — THE ALICE AMOS LAST WILL & TESTAMENT AND TRUST
The Trust which brings the parties to Court is a Trust that was made by Alice Amos, as Settlor, on December 10, 2004. This Trust was made as part of an estate plan which comprised the Trust ("The Alice M. Amos Revocable Trust" and the "Will of Alice M. Amos"). The Trust itself named the sons, Peter Hugunin and Stanley Hugunin as Successor Trustees, and Alice Amos as initial Trustee. The two sons, Peter and Stanley Hugunin (respondents) along with the petitioner were the Trust beneficiaries, and the Will named the respondents as Executors.
The Trust comprised various assets, including cash, stocks, bonds and/or securities, the trust parcel, as well as other property owned by the deceased, Alice Amos.
The Trust, by its terms, treated both petitioner and respondents equally. The Trust set forth numerous terms with regard to the disposition of the trust property upon Alice Amos' death. The Trust directed the Successor Trustees (the respondents) to subdivide the entire trust parcel equally between Peter and Linda with "parcels equal in size", giving Peter 5448 Route 80 and Linda 5438 Route 80. The property was valued at $450,000.00 en toto.
Alice Amos remembered Stanley Hugunin by giving him $225,000.00 in cash — the apparent equivalent of one-half (½) of the value of the trust parcel.
The operative section of the Trust relevant to this Court's decision is Article 6.1 of the Trust, which provided, in pertinent part, as follows:
6.1 Upon the death of the Settlor, the Trustees shall dispose of the entire corpus of the Trust and any other property or amounts the Trustee shall receive as a result of the Settlor's death, as the case may be, in the following manner:
(a) The following specific and general bequests shall be made:
(I) The real property located at 5438 Rt. 80, Tully, New York, if owned by the Settlor at the time of her death, to her daughter, Linda Melia, if she shall survive the Settlor;
(ii) The real property located 5448 Rt. 80, Tully, New York, if owned by the Settlor at the time of her death, to her son, Peter A. Hugunin, if he shall survive the Settlor;
(iii) The sum of $225,000 to the Settlor's son, Stanley E. Hugunin, if he shall survive the Settlor.
(b) The cost of sub-dividing the property at 5448 Rt. 80 and 5438 Rt. 80, if such sub-division has not been completed at the time of the Settlor's death, shall be paid out of the Balance. Said sub-dividing shall be made to give each parcel substantially equal size.
Equally important in this Court's decision is the language in Trust Article 6.6, which reads, in pertinent part, as follows:
"...The welfare and well being of the beneficiaries designated in this Article is the Settlor's primary concern and the Trustees should be generous in dealing with their reasonable request".
Alice Amos died on June 6, 2007. At the time of her death, she was survived by her three natural children, Peter Hugunin, Stanley Hugunin and Linda Milea. Prior to her death, none of the children had an ownership interest in any portion of the Amos parcel. Because of her own ill health during the last years, the Amos parcel had not been subdivided prior to her death.
It is argued by the respondents that the Alice Amos Trust provides broad discretion to its fiduciaries, much the same as Alice Amos' Will did. They argue that the Trust did not mandate the location of any specific boundary lines, nor did it mandate a minimum acreage for any parcel to be divided. Respondents further argue that the terms of the Trust empower the Trustees with sole discretion to determine the ultimate division of land to be transferred with regard to the houses at 5448 and 5438, respectively. It is conceded that the petitioner had and has no discretion or authority to make a subdivision of the Amos property, that power being left distinctly to the Successor Trustees under the Alice Amos Trust.
III — THE TRUSTEES' ACTION AND THE DIVISION OF THE PROPERTY
Upon assuming their roles as Trustees, the respondents set out to distribute the Amos' property, allegedly in such a fashion as to be consistent with the provisions of the Alice Amos Trust. Peter Hugunin, in 2007, decided to gift the rear portion of 5448 Route 80 to Stanley, and the testimony showed that Stanley's intent was to construct a summer cottage and grow fruit trees to produce a cash crop to supplement his income upon the property.
Respondents then, as Trustees, decided to subdivide the trust parcel into four very oddly configured lots, and to burden the property at 5438 Route 80, with a two-acre easement along the western boundary line in the rear of the property leading to the rear of 5448, where Stanley would propose to build his summer cottage. The property was divided into four separate lots. The respondents divided 5448 into two lots and 5438 into two lots, with Lot 3 having an elongated "L" shape which permitted Stanley to take advantage of the easement to access Lot 3, which Peter gifted to him. Each of the respondents benefitted by virtue of the easement being on the property at 5438 Route 80.
The respondents cite topographical matters and matters dealing with an existing septic system as being the reasons why the easement was not placed on the property at 5448 Route 80. Before the division was actually made, there were numerous discussions among the parties, and numerous subdivision maps made with different options with regard to subdividing the property. In her testimony, the petitioner described the forever wild nature of her property, and the lack of control over the easement that would be placed that would concern her ongoing life at the property which she testified she so dearly loves.
Clearly, in the pre-action time period the respondents were very much aware of the petitioner's vehement objection to any easement. Nevertheless, they rejected alternative easement accesses over Peter's property at 5448 Route 80.
During the course of the hearing, there was a great deal of testimony concerning several options of placing a right-of-way over the property at 5448 that would accommodate the rear portion of the property. Andrew Pickard of Huller Enterprises, called on behalf of the petitioner, testified with regard to several separate options that could be entertained to provide for such ingress and egress to the rear property of 5448 Route 80, while not burdening the property at 5438 Route 80.
Despite the vehement objections of the petitioner, and the apparent alternative location for access driveway over the respondents' property, respondents obtained a Town of Tully approval for their subdivision, and implemented a plan to convey to Linda Lots 1 and 2 of the plan approved by the Town of Tully, subject to a two-acre easement. Lots 3 and 4 were deeded to Peter Hugunin, with the benefit of the easement over the subservient Milea property to get from Route 80 to Lot 4. Warranty Deeds were delivered on February 6, 2008, together with a document entered, "Declaration of Easements", on the same date (Exhibits "59", "61" and "56"). Simultaneously, Peter Hugunin, in his individual capacity gifted Lot 3 to Stanley Hugunin with the benefit of the easement. Proof taken during the course of the hearing showed that Stanley intended to construct a gravel access driveway in front of Linda's home for ingress and egress from Route 80 around the perimeter of Lots 1 and 2.
Petitioner objects to the property division made by the Trustees.
IV — DISCUSSION
A. Have the Trustees subdivided the property in accord with the intentions of Alice Amos, as expressed in the Trust?
The first question that this Court needs to answer is whether or not the Trustees subdivided the property in accord with the intentions of Alice Amos, as expressed in the Alice Amos Trust.
A "Trust...is to be construed as written and the Settlor's intention determined solely from the unambiguous language of the instrument itself", whenever possible. In Re Wallens, 9 NY3d 17; Mercury Bay Boating Club v. San Diego Yacht Club, 76 NY2d 256; In Re Piel, 10 NY3d 163.
At looking at the intent of the Trust, the Court must look first to the four corners of the trust instrument to determine whether the grantor's intent can be adequately gleaned from doing so. Central Union Trust Co. v. Trimble, 255 NY 88. In performing this function, the Court is to search, not for the probable intention of the Settlor merely, but for the intention which the Trust deed itself, either expressly or by implication, declares. Central Union Trust Co. V. Trimble, 255 NY 88 @ 93.
Petitioner alleges that the trust document itself clearly sets forth Alice Amos' intent. Petitioner alleges that the trust document clearly declares that Peter Hugunin was to receive 5448 Route 80, and that Linda Milea was to receive 5438 Route 80 "in substantial equal parcels". Respondents, however, argue, in great detail, that Alice Amos charged Peter Hugunin and Stanley Hugunin with the power and discretion to subdivide the Amos' parcel. They argue that Alice's grant of discretion to the Trustees was extremely broad, and as Successor Trustees, Peter and Stanley succeeded to all of the powers that Alice Amos herself had and had granted herself. Respondents further argue that the Last Will & Testament of Alice Amos empowers the Co-Executors, Peter and Stanley, to exercise all powers in the management of her estate, which any individual could exercise in the management of similar property owed in his or her own right upon the terms and conditions as the fiduciaries may seem best.
The respondents' argue, countering petitioner's claims, that petitioner seeks to elevate her own personal desires above Alice Amos' stated intent as contained in the Trust. They further suggest that the Co-Trustees are not compromised by a conflict of interest, and at the same time, they take the position that the respondents do not owe a superior loyalty to the petitioner, but loyalty is owed to all beneficiaries. Finally, they argue that a beneficiary's mere status as trustee does not disqualify that individual from fulfilling the stated obligations of a trust. In Re Knollwood Real Estate Co., Inc., 17 Misc 2d 159; In Re Cowen, 148 Misc. 35; In Re Block, 186 Misc. 945.
Respondents further argue that, in fact, Peter Hugunin received the real property at 5448 Route 80, Linda Milea received the property located at 5438 Route 80, and that Peter and Linda received acreage "substantially equal in size". Respondents argue that the Trustees made extensive efforts to address the host of issues in making the property division, hired appropriate professionals, and that the final decision was one that was thoroughly considered and researched and made for the benefit of all beneficiaries. Simply put, they argue that petitioner has failed to demonstrate negligence or abuse of discretion on behalf of the Trustees. Citing Glenn v. Chase Lincoln First Bank, 201 AD2d 908, they argue that the court must allow the proposed subdivision to stand.
This Court, in reviewing Article 6.1 of the Alice Amos Trust, finds that the Trust itself is unambiguous, plain, and simply operative. This Court finds that Alice Amos' intent was to evenly split the land between Peter Hugunin and Linda Milea, and to give money in lieu of land to Stanley Hugunin.
To effectuate that, Alice Amos' Trust gave the property at 5438 to Linda Milea, and the property at 5448 to Peter Hugunin. Article 6.1(a)(iii) gives $225,000.00 to Stanley Hugunin. Clearly, Alice Amos intended to give Peter and Linda land, and intended to have Stanley Hugunin receive $225,000.00. This equals the cash equivalent of one-half (½) of the value of the trust parcel, which the Trust divided equally between Peter Hugunin and Linda Milea.
This Court finds, from the proof submitted, that Alice Amos never intended the property division to become such an issue. It is clear to this Court that it was the intent of Alice Amos that the property at 5438 would be Linda Milea's, and the property at 5448 would be Peter Hugunin's and that the property would be subdivided at two separate parcels. It is equally clear to this Court that it was never Alice Amos' intent to divide the property into four parcels and to have Peter gift part of his parcel to Stanley Hugunin. It was never anticipated that Linda Milea's parcel would be divided into two separate parcels, with a separate easement running across both towards the property in the rear of 5448. Clearly, it was never Alice Amos' intent to have the respondents create a series of strangely shaped lots, which were "Gerrymandered" and affected by easements burdening Linda Milea's property.
This Court finds, and declares, that it was Alice Amos' intent to treat Linda, Peter and Stanley equally. Stanley was to receive money in the amount of $225,000.00, which he has already received. Linda Milea was to receive the property at 5438 Route 80, without any easements, encroachments, or other liens or limitations affecting the property. Peter was to receive the property at 5448 Route 80, likewise free of any encumbrances, liens or other restrictions of the property. The language of the Trust is simple and clear. The language of the Trust is such as to clearly identify and find that intent of Alice Amos at the time that she made the Trust. There can be no doubt that her intention was breached in this matter, and breached in a way that would benefit Peter and Stanley Hugunin to the detriment of Linda Milea.
The Court again is mindful of Article 6.6 of the Trust where the intent of Alice Amos clearly shows that the welfare and well being of the beneficiaries designated in this article is the Settlor's primary concern and the Trustees should be generous in their dealing with their reasonable request.
Linda Milea's request to the Trustees was reasonable. Clearly, that reasonable request has not been honored, but rather has been ignored in having the property subdivided in the fashion that it has been. Clearly, the Trustees have violated the intent of Alice Amos, and to the detriment of one of the beneficiaries of the Trust — Linda Milea. The clear and unequivocal language of the Trust shows that the subdivision does not, in any form or manner, abide by the intent of Alice Amos. As a result, the entire subdivision, as it currently stands and has been approved by the Town of Tully, must be nullified and set aside. In Re Chase Manhattan Bank, 6 NY3d 456; Rankine v. DeVeaux College, 41 Misc. 655.
B.Did the Successor Trustees, in subdividing the subject property parcels, violate their fiduciary duty to Linda Milea?
A fiduciary owes a duty of undivided and undiluted loyalty to those whose interest's the fiduciary is to protect. Birnbaum v. Birnbaum, 73 NY2d 461; In Re Wallens, 9 NY3d 117; Meinhard v. Salmon, 248 NY 458. This rule is sensitive and inflexible. This rule not only bars self-dealing, but further requires a fiduciary to refrain from allowing his own personal interests from possibly conflicting with the interests of those to whom a fiduciary duty is owed. Birnbaum v. Birnbaum, supra; In Re Wallens, supra. See also In Re VanSchaik, 303 NY 423. As the court in Wallens clearly stated, "the existence of a personal interest, entangled the fiduciary's private claims with those of their beneficiaries...creates the danger of biased judgments and opens the way to fraud and wrong". In Re VanSchaik, 303 NY 423 @ 432.
A trustee is under a duty to the beneficiary to administer the trust solely to the interest of the beneficiary, and cannot compete with the beneficiaries for the benefits of the trust corpus. See Wallens, supra, 9 NY3d @ 122; In Re Hubble, 302 NY 246 @ 259.
As stated In Re Mergenhagen, 50 AD3d 1486:
... if an irreconcilable conflict between self-interest and fiduciary responsibility develops, the choice of the trustee is either to subordinate the former, or resign.
In Re Hubble, 302 NY 246 @ 259; see also In Re Mergenhagen, 50 AD3d 1486 @ 1488.
Indeed, a trustee has a duty of undivided loyalty. This prohibits a trustee from even placing himself in a position of potential conflict with his or her duty to the trust. Sankel v. Spector, 33 AD3d 167.
The respondents argue that the Trust gives the Trustees broad discretion and significant powers with the way that the Trust should be managed. However, a trustee breaches his duty of loyalty by favoring one beneficiary over another, even though the trust itself may give such broad discretion. Renz v. Beeman, 589 F2d 735; Swartz v. Marien, 37 NY2d 487, cert. denied 444 U.S. 834; In Re Durston, 297 NY 64. Indeed, a trust granting the trustees broad authority to manage and control the trust property — even with all the authority and powers as the Settlor would possess if living — still subjects the trustee to the prohibitions laid upon all trustees, (1) that they cannot favor one beneficiary over the other, (2) that they should not self-deal, and (3) that they owe an undivided duty of loyalty to all beneficiaries. Flaum v. Birnbaum, 120 AD2d 183; Renz v. Beeman, 589 F2d 735; Benedict v. Amaducci, 1993 U.S. Dist. Ct., LEXIS 3556 (SDNY, 1993).
A trustee who is also a beneficiary of the trust has an inherent conflict with other trust beneficiaries. See Scott on Trusts, Section 107.1 @ 120 and Section 99.1 @ 50; see also In Re Peabody's Will, 198 Misc. 505; Clement v. Larkey, 863 SW2d 580; In Re Liebman, 56 Va.Cir. 381; Richardson v. Richardson, 1992 Conn.Super. LEXIS 3478 @ 10.
As the cases above clearly indicate, trust law generally prohibits a trustee from operating under a conflict of interest at all. Birnbaum v. Birnbaum, 73 NY2d 461 @ 466; see also In Re Mergenhagen, 50 AD3d 1488; Global Minerals and Metals Corp. v. Holm, 335 AD3d 93 @ 98. However, a court cannot and should not remove the trustee named by the Settlor merely because he is one of the beneficiaries. Restatement of Trusts §99, Cmt.(a). However, merely because a settlor is permitted to appoint a conflicted trustee/ beneficiary, does not vitiate the basic principal that the trustee/beneficiary owes a fiduciary duty and a duty of undivided loyalty to other beneficiaries. The Court of Appeals has expressly held a trustee/beneficiary owes a fiduciary duty to all trust beneficiaries, and must administer the trust fairly for all of them and may not favor himself or herself over the other beneficiaries. See In Re Watson, 213 NY 177, 183-86; see also In Re Coyle, 200 Misc. 421; Markham v. Fay, 74 F3d 1347; Alexander v. Alexander, 561 SW2d 59 @ 67.
Likewise, just because a settlor is permitted to appoint a conflicted trustee/ beneficiary does not mean that the courts may ignore the conflict. Rather, the courts must review a trustee/beneficiary's conduct and actions with strict scrutiny and with special care. In Re Heller, 6 NY3d 649 @ 656; In Re Peabody's Will, 198 Misc. 505, affirmed 277 AD 905; Restatement of Trusts, Section 50, Cmt.(b).
In short, in evaluating whether or not the fiduciary duties were breached in this case, this Court must look, with careful scrutiny and/or with scrutiny with special care to see whether or not the trustee/beneficiary's acts became infected by his or her conflict of interest with the other trust beneficiaries. Many such determinations, as a practical matter, may go unchallenged, but in situations like this, the court must police, by careful scrutiny and with special care, to make the determination whether or not the fiduciary duty owed by the trustee has been tainted, affected, controlled, initiated, or consumed by his or her own self-dealing. In Re Rogers, 111 NY @ 237; In Re Seidman, 58 AD2d 72 @ 76; In Re Peabody's Will, 277 AD @ 906; In Re Lawler, 215 AD 506 @ 509-511; Ogilby v. Hickok, 144 AD 61 @ 62-64; Armington v. Meyer, 236 A2d 450; Deal v. Huddleston, 702 SW2d 404 @ 405-406.
Respondents argue that the allegations of "improper motive" are wholly unsupported by the facts of the case. It is argued that the Trustees have not acted to further their own interests to the detriment of the Trust or the petitioner and that both Peter Hugunin and Linda Milea have received exactly what the Trust requires.
This argument misses the point. Alice Amos knew specifically what she wanted to give to the beneficiaries of her Trust. That knowledge was laid out in clear and unambiguous terms in Article 6.1 of the trust document. The valuations of the properties support those wishes that Alice Amos had, and it is clear to this Court that the only reason that those mandates from the Trust were not followed was because of self-dealing by Stanley and Peter Hugunin in total, willful, wanton, and reckless indifference to the intention of Alice Amos, as she clearly expressed them to be.
In the course of the hearing, petitioner and respondents elicited testimony with regard to Alice Amos' specific statements of intent were, both at the time that the trust document was made, as well as before and after. Each of the parties argued that such statements made during testimony should be inadmissible pursuant to the Dead Man's Statute, or §4519 of the CPLR.
CPLR §4519, the so-called Dead Man's Statute, prohibits testimony of non-written communications concerning communications and transactions between an interested witness or party and a decedent. CPLR §4519 generally prevents any person "interested in the event" from testifying about a "personal transaction or communication" with the decedent. In Re Wood, 52 NY2d 139. Clearly, each of the parties who sought to give testimony in this case of Alice Amos' intent, was a person from, through, or under whom such a party of interested person derives their interest by title or assignment or otherwise. CPLR §4519; Brundige v. Bradley, 294 NY 345; Matter of Schrutt, 206 AD2d 851. Indeed, this Court must be concerned with the reliability of such statements, and the difficulty in proving those statements either occurred or did not occur. As a result, this Court invokes the Dead Man's Statute, §4519, and declares inadmissible any testimony dealing with specific statements that Alice Amos made either to the petitioner or the respondents in this matter. CPLR §4519; Matter of Tremain, 156 AD2d 862; Brundige v. Bradley, 294 NY 345; Rubin v. Kurzman, 436 F.Supp. 1044.
The specific statements of Alice Amos, being determined by this Court to be inadmissible, the Court now decides this case based on the full record before it, and all actions and proceedings, together with the extensive hearing testimony that was had in this Court.
It is the decision of this Court that the respondents violated their fiduciary duty to the petitioner. Clearly, they had a conflict of interest, which they neither recognized or apparently understood, and as a result of that conflict, clearly set upon a course of conduct to totally frustrate the very purpose and intent of the Alice Amos Trust. Indeed, the Successor Trustees/beneficiaries have completely re-written the intent of the Trust, and they have done it in a fashion to benefit only themselves, and to the detriment of the co-beneficiary, Linda Milea. As a result, the actions of the Trustees must be set aside. Not only are the actions not in accord with Alice Amos' intent, but they violate the basic tenant of fiduciary and trust to Linda Milea, a co-beneficiary under the Trust. They have sought to do things that they were not legally allowed to do, and they have gone forward, despite vigorous objection by Linda Milea. At each step of the way they have violated specifically Article 6.1 of the Trust, and the basic precept of Article 6.6 of the Trust. They have operated purposefully, intentionally, and in reckless disregard of the tenants set forth in the Alice Amos Trust. In so doing, they have violated, to the highest extent, the intent of Alice Amos, and breached their fiduciary duty. The actions must be set aside. The Trustees must be replaced. Such a clear showing of self dealing in conflict with intent and fiduciary duty of the Trustees cannot be ignored by this Court, and will not be.
The respondents argue that the easement upon the property that they are suggesting simply preserves a preexisting access route that should prove to be underlying support for an implied resurrection of an easement or right-of-way. The respondents further argue that they meet all of the requirements needed to have an implied easement and that an easement is reasonably necessary to use the property in a manner in accord with the intent of the Alice Amos Trust. In this case, the Deed that was given to Linda Milea has a "full covenant against encumbrances", which generally bars any implied reservation of easement. Whyte v. Builders League of New York, 164 NY 429; Denman v. Mentz, 52 A. 1117.
Beyond that, there are stringent requirements necessary to be met to approve an implied reservation of an easement. For an easement by implication to arise, the proponent of the easement must show, by clear and convincing proof, three items: (1) that there was unity of ownership and then subsequent separation of title; (2) that before the split of title the use shall have been so long and continued and obvious as to show it was meant to be permanent in nature; and (3) that the easement is strictly necessary to the use and enjoyment of the land. Abbott v. Herring, 97 AD2d 870, affirmed 62 NY2d 1028; Buck v. Allied Chemical Co, 77 AD2d 782; Olney v. Culluloo Park, 182 AD 560.
The respondents in this case take the position that it is necessary to have an easement across Linda Milea's property because of certain issues with septic tanks and contour of their own. Expert testimony on their behalf sought to support the difficulties with terrain, and the limitations on septic systems of the house, not necessarily eliminating the possibility of an easement or right-of-way, simply showing the inconvenience of the property owner to such a right-of-way. Indeed, temporary or sporadic use is not enough, nor is mere inconvenience. It must be shown that the previous use was continued, obvious, and of such a nature to show that it was meant to be permanent, and that there is strict necessity on behalf of the proponent to have such an easement in place. Indeed, mere inconvenience is not enough. Such proof must be by clear and convincing evidence. Abbott v. Herring, supra; Buck v. Allied Chemical Co., supra; and Olney v. Culluloo Park, supra; see also Wells v. Courbutt, 132 NY 430. In this case, the respondents — the proponents of the alleged easement by implication — have not proven by clear and convincing evidence the type of use necessary to support such an easement, or the fact that such an easement is necessary as defined by the cases. See Abbott v. Herring, supra; Buck v. Allied Chemical Co., supra; and Olney v. Culluloo Park, supra; Wells v. Courbutt, supra; see also VanSchaak v. Torsoe, 161 AD2d 701. The respondents' proof fails to meet the clear and convincing standard that there was strict necessity and that there was any more than sporadic or temporary use of the alternative preexisting alleged right-of-way upon which they rest their claim of easement. Abbott v. Herring, supra; Buck v. Allied Chemical Co., supra; and Olney v. Culluloo Park, supra; Wells v. Courbutt, supra; VanSchaak v. Torsoe, supra; see also Hossain v. A to Z Properties, 13 Misc 3d 1225A; Pickett v. Whippel, 216 AD2d 833; Zentner v. Fiorentino, 52 AD2d 1036; Four S Realty Co. v. Dynko, 210 AD2d 622; Sadowski v. Taylor, 56 AD3d 991.
The proof elicited at the time of the hearing showed clearly that there was no absolute necessity or strict necessity as required by the relative cases. Quite the contrary, it was clear that a right-of-way or driveway could easily be placed over the respondents' property, but would have the inconvenience of limiting the septic build-out (should there need to be one in the future) and/or would have an adverse affect of their view with regard to the pond and other use of the property. Respondents have failed, totally, to submit proof that rises to the level of clear and convincing, and as a result, their claim of easement, at least on the grounds submitted as an "implied easement" or otherwise must fail.
V — PETITIONER'S REQUEST FOR REASONABLE ATTORNEYS FEES FROM RESPONDENTS PERSONALLY AND/OR FROM THE TRUST
The petitioner and respondents in this case seek to have their attorneys fees paid to them, either from the Trust or from the individual adverse party. The law is such that in an Article 77 proceeding, the Court may make an allowance for counsels fees necessarily spent in the administration of the trust. (2 Weinstein-Corn-Miller, NY Civil Practice Section 7701.07). However, where an attorney is performing services on behalf of an individual trust beneficiary, rather than for the benefit of the trust itself, the attorney generally must look to the individual beneficiary — not the trust — for compensation. Matter of Larakis, 111 AD2d 924. Petitioner asks the Court, given the circumstances of the case, to direct respondents to pay Linda Milea her reasonable attorneys fees and other necessary expenses that have been incurred because of the respondents' misconduct. It is argued that in correcting the breach of duty of undivided loyalty to Linda Milea, that significant costs and expenses have been incurred, including attorneys fees and costs for experts and other such witnesses.
The petitioner seeks fees and expenses either from the Trust or from the individual Co-Trustees, pursuant to CPLR §8303(a)(4), which permits the court, in its discretion, to award reasonable attorneys fees to any party in an action. Petitioner argues that because the respondents, as trustees/fiduciaries are guilty of misconduct, they personally should pay Linda Milea's reasonable attorneys fees and other expenses. In making this claim, they argue that the court has unquestionably broad discretion to award attorneys fees and other expenses incurred by a party in exposing a trustee's breach of fiduciary duty and misconduct. In Re Marsh, 265 AD2d 253; Birnbaum v. Birnbaum, 157 AD2d 177; In Re Estate of Rose BB, 16 AD3d 801. It is clear to this Court that, indeed, the respondents, both in their individual capacities and as trustees, have breached the moral, fiduciary, and legal duties they had to Linda Milea, the petitioner. This breach of fiduciary duty, in self-dealing, and setting about a course of conduct which would benefit them to the detriment of the co-beneficiary, Linda Milea, has, indeed, caused Linda Milea to hire attorneys, and pay additional expenses to prove her case. Additionally, their plan of self-dealing has led to a waste of trust assets via payments to professionals and others that must be repaid to the trust.
Conversely, the respondents have incurred attorneys fees, and have otherwise been subject to claims made by the petitioner, as a result of their own self-dealing in breach of fiduciary duties in this matter. As a result, the respondents should not, in any way, be entitled to recover attorneys fees from the Trust. They, and they alone, controlled whether or not they would undertake a course of conduct, given the objection of Linda Milea, which was totally adverse to her interest as a beneficiary under the Trust, which they were given authority to manage. As a result of their own breach of fiduciary duty, and their own conduct surrounding the events that occurred in this matter, this Court finds that they are not entitled to receive payment of their attorneys fees or expenses from the Trust. Each of their fees must be, as a matter of legal efficacy, be paid by them individually.
With regard to the petitioner's claim for attorneys fees, that is quite a different matter. All of her fees and expenses were generated solely and clearly as a result of the lack of fair dealing on behalf of the Trustees, and their willful, wanton and reckless disregard of the intent of Alice Amos, and their breach of fiduciary duty in undertaking their course of self-dealing.
As a result, this Court awards reasonable attorneys fees to the petitioner in this matter, and further orders a complete and full accounting of the assets of the Alice Amos Trust, to be provided by, and at the expense of the respondents in this matter. The petitioner is entitled to all attorneys fees and expenses with regard to the prosecution of this Article 77 proceeding. In this regard, the Court will order that an inquest take place with regard to determining the amount, nature and extent of attorneys fees and costs and expenses, and upon the completion of that additional hearing, this Court will issue an Order as to the amount of attorneys fees to be paid. That amount then must be paid within thirty (30) days from the date of that order.
In the meantime, the new court-ordered trustee is hereby directed to undertake immediately an accounting of the Trust of Alice Amos, and provide to this Court, no later than thirty (30) days from the date of the Order emanating from this Decision, a complete accounting showing how any assets of the Trust have been disbursed, to whom such disbursements have been made and the reason for such disbursements. If there are any additional disbursements from the Trust that otherwise would go to the respondents herein, such distributions will be held until all attorneys fees and expenses are paid to the petitioner, Linda Milea, in this matter.
CONCLUSION
In conclusion, this Court finds that the petitioner has proven her case, and that the respondents have acted both against the intent of the Alice Amos Trust, and in violation of their fiduciary duties to the petitioner herein. As a result, it is ordered as follows:
(1) That the respondents be, and the same hereby are, immediately discharged as Successor Trustees of the Alice Amos Trust. This Court, in their place and stead, does hereby appoint David Howe, Esq., to be court-appointed trustee of the Alice Amos Trust, and to take over all duties and responsibilities as may be necessary under the terms of that Trust.
(2) The subdivision, as currently improved by the Town of Tully, and all Deeds and other instruments dealing with easements, rights of first refusal, and otherwise are all hereby vacated, negated, set aside, and otherwise found null and void. The respondents are ordered immediately to re-deed the property that they have received back to the Alice Amos Trust, together with appropriate easement terminations and terminations of all other restrictions or limitations on the property, so that the court-ordered trustee can take appropriate action to exercise the intent of Alice Amos in consideration of all beneficiaries.
(3) The petitioner is entitled to attorneys fees and costs with regard to the prosecution in this matter, and a hearing will be held in Supreme Court, Onondaga County, on the 2nd day of September, 2009, starting at 10:00 a.m., to determine the full nature and extent of the damage to trust assets, waste, and reasonable attorneys fees and costs in this matter.
(4) The respondents be, and the same hereby are, immediately restrained from taking any all further actions, or otherwise acting as trustees of the Alice Amos Trust, with regard to any of the assets of Alice Amos Trust.
(5) The respondents shall reimburse the Trust for all expenses, attorney fees, and/or other costs of any type or kind expended in the previous subdivision.
(6) The court-appointed successor trustee shall immediately go about the process of redeveloping the "trust parcel" in accord with the obvious intent of Alice Amos, as best shown by Exhibit "5" in evidence from the hearing, or similar division of the property.
(7) Petitioner and petitioner's attorney shall be entitled to full and complete discovery with regard to all previous actions taken by the respondents, as Trustees, and shall be entitled to inspect and/or copy any and all documents and/or things which evidence their administration of trust assets. Respondents shall be entitled to full discovery on the issue of petitioners' attorneys fees and expenses in the prosecution of this matter.
Petitioner's attorney is to submit the appropriate Order to this Court, upon notice to the respondents' attorneys, with a copy of this Decision attached thereto and otherwise execute the provisions of the Trust as set forth by the clear wording of the trust documents.
At the hearing, appraisals were introduced into evidence, showing that the value of 5438 Route 80 had a value of $204,600.00 and 5448 Route 80 had a value of $231,500.00.