Opinion
File Nos. 2021-1552, 2021-1552/A, 2021-1552/B, 2021-1552/C, 2021-1552/D, 2021-1552/E
04-03-2023
In the MATTER OF the Judicial Settlement of the Account of JPMORGAN CHASE BANK, N.A., AS TRUSTEE OF the TRUST UNDER AGREEMENT DATED MARCH 7, 1996 BY DAVID MINKIN for the benefit of Robert Thall. In the Matter of the Judicial Settlement of the Account of JPMorgan Chase Bank, N.A., as Trustee of the Trust Under Agreement dated March 7, 1996 by David Minkin for the benefit of Howard Lester. In the Matter of the Judicial Settlement of the Account of JPMorgan Chase Bank, N.A., as Trustee of the Trust Under Agreement dated March 7, 1996 by David Minkin for the benefit of Patricia B. Lester. In the Matter of the Judicial Settlement of the Account of JPMorgan Chase Bank, N.A., as Trustee of the Trust Under Agreement dated March 7, 1996 by David Minkin for the benefit of Paul H. Briger (Trust No. 1). In the Matter of the Judicial Settlement of the Account of JPMorgan Chase Bank, N.A., as Trustee of the Trust Under Agreement dated March 7, 1996 by David Minkin for the benefit of Paul H. Briger (Trust No. 2). In the Matter of the Judicial Settlement of the Account of JPMorgan Chase Bank, N.A., as Trustee of the Trust Under Agreement dated March 7, 1996 by David Minkin for the benefit of Peter L. Briger.
This Decision supplements what was placed on the record at a motion argument/court appearance on March 7, 2023.
Prescott Lester ("Prescott"), a co-trustee of the above-captioned trusts, has moved by Notice of Moton dated September 14, 2021, to change the venue of a proceeding brought by co-trustee JP Morgan Chase Bank, N.A. ("JP Morgan") to judicially settle its account relative to each of the trusts from Monroe County to Queens County,
For the reasons below, the motion to change venue is denied.
FACTS
The following facts material to the resolution of the motions are not disputed and have been set forth in the papers supporting the motion to change venue and in JP Morgan's response to the motion.
The court disregards facts and issues raised in Reply papers not raised in the initial filing, as discussed below
Since its appointment in November of 2003 JP Morgan has served as a co-trustee of an irrevocable trust created in 1996 by David Minkin. The trust was divided into nine equal shares, held in trust, and which now are represented by the six trusts referenced in the caption (collectively referred to as "the Trust").
Or its predecessor. Chemical Bank was named as a co-trustee initially, and was later taken over by JP Morgan.
David Minkin died in in 2003, and eventually Peter B. Lester (in 2018) and Prescott E. Lester (2017) accepted appointment as co-trustees.
It is a matter of record—at least in Queens County Surrogate's Court—that the management of the assets of the David Minkin Estate have been the subject of contentious and protracted litigation that has been going on, in one manner or another, for over ten years. JP Morgan has also been the co-executor of the David Minkin Estate. Multiple proceedings, either on behalf of JP Morgan as co-executor or against it, have been filed since its appointment.
As of 2021, there were three proceedings pending in Queens, all involving and naming JP Morgan as co-executor of the Estate of David Minkin. They are:
-In the Matter of the Account of JPMorgan Chase, N.A., Howard Lester, and Patricia Lester, as Executors of the Estate of David Minkin, File No. 2003-4438/C ("Queens County Action No. 1");
-In the Matter of the Petition for Successor Letters Testamentary in the Estate of David Minkin, File No. 2003-4438/G ("Queens County Action No. 2"); and
-In the Matter of the Petition of Peter Briger to Remove Prescott Lester and Peter Lester as Co-Trustees of the David Minkin 1996 Trust u/a/d March 7, 1996, File No. 2003-4438/H/I ("Queens County Action No. 3").
It has been asserted, and the court has no reason to doubt, that issues concerning the management of the trust were discussed at various stages of the litigation relating to the Estate, especially during attempts to reach a global settlement mediated by a private mediator hired by the parties and by the Queens County Surrogate Judge, Peter Kelly. The Trust was not named as a party to any of the above-named proceedings or to any other proceeding filed in Queens County Surrogate's court concerning the Estate of David Minkin.
It is believed that Judge Kelly was successful at settling many of the issues and reducing the value of the remaining claims to a fraction of the estate assets.
The trust assets are believed to have a value of several hundred million dollars. Most of the Trust assets consist of real property located in Queens. None of the trust assets are in Monroe County.
The six trusts named above and created by the David Minkin Trust have been managed since November 2019 by employees of JP Morgan working out of their offices in Rochester, NY, in Monroe County. The bank officers currently primarily responsible for administration of all the Trusts under the Trust Agreement dated March 7, 1996 are in Rochester.
On October 28, 2019, JPMorgan, pursuant to the Trust Agreement, sent a formal "Resignation of Trustee" to be effective upon the appointment and qualification of a successor corporate trustee.
In June 2021 JPMorgan commenced proceedings (Monroe County Surrogate's Court File Nos. 2021-1552, 2021-1552/A, 2021-1552/B, 2021-1552/C, 2021-1552/D and 2021-1552/E) ("Proceedings") to judicially settle its accounts for each of the Trusts and to compel Prescott and Peter Lester to appoint a successor corporate trustee, as the Trust Agreement requires.
The individual co-trustees and many if not all of the beneficiaries moved for a change of venue. Argument was held and the court reserved.
On July 27, 2021, Peter Briger Sr. (a beneficiary of the David Minkin Trust and referred to as "Trust No. 2") filed a proposed Order To Show Cause to commence a proceeding in Queens County seeking removal of the individual co-trustees, and an accounting by the individual co-trustees ("Briger Removal and Accounting Proceeding"). Surrogate Kelly signed that Order in October 2021, which suspended the individual co-trustees. Upon information and belief, the individual co-trustees were later reinstated.
Apparently more than 200 documents were filed in Queens County relating to that proceeding, including an appeal to the Appellate Division.
As of this writing the status of the Queens proceedings — removal of the individual co-trustees and a motion to dismiss that petition—is not known.
In September 2022 JP Morgan moved by Order To Show Cause in this court with respect to each trust for an order allowing JP Morgan to resign and for the immediate appointment of a successor trustee. Alternatively, JP Morgan requested an Order suspending the individual co-trustees until JP Morgan could be removed, thus moving for similar relief as was requested by Peter Briger in Queens County.
Prescott again moved for a change of venue of that proceeding and opposed the removal of the co-trustees. The motion was denied by decision issued from the bench on December 16, 2022. Venue remained in Monroe County, JP Morgan was allowed to resign and upon the consent of Prescott Lester and Peter Lester, a new corporate trustee was named.
The prior venue motion, directed at the proceedings commenced by JP Morgan's petition for judicial settlement, is still pending and is the subject of this Decision.
ANALYSIS
Pursuant to SCPA 207(1), proper venue for this proceeding for judicial settlement of the account of co-trustee JP Morgan relating to the lifetime trust created by David Minkin lies in both Queens County and Monroe County. No one disputes that assets of the trust are located in Queens ( SCPA 207 [1][a] ) nor has any issue been raised as to whether or not that the corporate co-trustee JPMorgan has its "principal office" for the management of the trusts in Monroe County ( SCPA 207[1][c] ); (see In re Keybank Nat. Ass'n , 58 Misc 3d 235, 243 [Sur Ct Saratoga Cnty 2017] ).
Except in the Reply submissions, which have not been considered by the court, see discussion below.
Rather, the respondents first argue that Monroe County is "improper" because the decedent, the grantor, was domiciled in Queens County at the time of his death. Not so. The relevant consideration as to venue of a proceeding concerning a lifetime trust is the domicile of the grantor at the time the proceeding is commenced (see Matter of Morten Rubin Family Tr. , 72 Misc 3d 1078, 1081 [Sur Ct Kings Cnty 2021] ["Further, where a grantor is deceased, his domicile prior to death is of no relevance"]).
However, since under SCPA 207(1) venue is proper in two counties, SCPA 207(2) determines venue. That section provides that "where venue may lie in more than one county.... the court where a proceeding is first commenced with proper venue shall retain jurisdiction ..." ( SCPA 207[2] ).
Prescott argues that Queens should retain jurisdiction because a proceeding involving the estate of David Minkin was commenced in 2010, and that because the trusts were a "part" of David Minkins's "estate plan" (see letter of Edward Radin and Brian Laudadio to the Court, dated October 4, 2022) the Court should grant the motion to change venue.
However, he cites no authority to support the argument that any proceeding in which the management of the trust assets arises as an issue, such as in settlement discussions, qualifies as a prior proceeding for the purposes of SCPA 207. The phrase "proceedings relating to such lifetime trusts" ( SCPA 207[1] ) is taken by the Court to mean a proceeding, commenced by the filing of a petition, in which the lifetime trust is named as a party. To this court's knowledge, no such proceeding was ever commenced until JP Morgan brought its petition for judicial settlement here. Thus, pursuant to the clear mandate of SCPA207(2), this court "shall" retain jurisdiction, and any matter pending in Queens County Surrogate's Court "relating to the estate of the lifetime trust shall" (SCPA [2]) be transferred here.
The Queens proceeding relating to the lifetime trusts and filed in July 2021 bears the same index number as the estate proceedings. This, Prescott argues, means that the prior estate proceedings are "proceedings relating to such lifetime trusts" and having been filed long before the Monroe County proceeding, venue lies in Queens.
However, it is well-settled, if not well-known, that proceedings that arise involving the same decedent—whether a proceeding involving a lifetime or testamentary trust, or the estate—are usually (but not always) given the same index number and differentiated by letters after the index number. Having the same index number does not negate the fact that a new proceeding has been commenced, been assigned a new letter, and relating to the lifetime trusts, that it is the only proceeding commenced with the David Minkin trusts as parties, and it was commenced after the Monroe County proceeding.
Prescot argues for a change of venue pursuant to CPLR 510. In describing JP Morgan's filing here as a "blatant effort to end run the Queens County Surrogate" there is an implied reference to CPLR 510(2), but why JP Morgan would want to "end run" the very experienced (and esteemed) and knowledgeable Judge Kelly is a mystery to this court. Nothing has happened in Queens—to my knowledge nor has anything been alleged to the contrary—to prejudice any right of JP Morgan. No allegation has been made that JP Morgan has suffered litigation setbacks because of decisions by the Queens County Surrogate.
More explicit is Prescot's appeal to CPLR 510(3), that "the convenience of material witnesses and the ends of justice will be promoted by the change" ( CPLR 510[3] ), and arguing that it would be "(i)n the clear interest of judicial economy (and) to avoid litigating disputes relating to the 1996 Trust in multiple forums, which could result in inconsistent results and ineffective remedies," that the accounting of the 1996 Trust should be venued in Queens County, "along with other proceedings relating to the 1996 Trust and David Minkin's estate."
However, it is well-settled that for a moving party to be entitled to relief under CPLR 510(3), "The party moving for a change of venue pursuant to CPLR 510(3) has the burden of demonstrating that the convenience of material witnesses would be better served by the change" (Rochester Drug Co-operative., Inc. v Marcott Pharm. N. Corp. , 15 AD3d 899779 [4th Dept 2005]).
The Appellate Division, Second Department has delineated four requirements which must be satisfied to justify a change of venue:
"1. The movant's affidavit must list the names, addresses and occupations of the witnesses who are expected to be called.
2. The movant must disclose the facts to which such witnesses will testify so that the court may determine whether the testimony of the proposed witnesses is "necessary and material."
3. The movant must demonstrate that the witnesses are actually willing to testify.
4. The movant must show that the witnesses would in fact be inconvenienced in the absence of a change of venue."
(Practice Commentaries to CPLR 510 (Vincent C. Alexander), citing O'Brien v Vassar Bros. Hosp. , 207 AD2d 169, 622 NYS2d 284 [2d Dept 1995] )
The Appellate Division, Fourth Department requires a similar showing by the party seeking a change of venue (see Rochester Drug Co-operative., Inc. v Marcott Pharm. N. Corp. , 15 AD3d 899 [4th Dept 2005] ).
Here Prescot has failed to sustain his burden, having made only generalized and unsupported allegations regarding the presence of assets and the residence of witnesses. On that basis alone, the failure to meet his burden under CPLR 510(3), the motion to change venue is denied.
Even if the respondent's recitation of facts and circumstances of what would be relevant evidence at a trial is deemed sufficient to satisfy the above-stated requirements, the motion would be denied, as venue Monroe County would be a minor inconvenience to all the parties and would promote the ends of justice equally if not more so than Queens County.
Monroe County is far smaller and has far fewer filings than Queens, and likely can schedule the matter for trial—if it comes to that—far more quickly, even as soon as this year. There are no trials on the Surrogate court docket scheduled for 2023. Or in 2024.
Prescott concedes that material witnesses are apparently located in multiple states, not just Queens, making Monroe County as convenient a destination as Queens. The key witnesses who need to testify to the accounting are here in Monroe County. Also, now that virtual appearances are commonplace, the managers of the real estate located in Queens can testify virtually and would not be inconvenienced. Nor would the accountant who prepared the tax returns for the Trust.
It may come as a surprise but there is an international airport in Rochester, which while maybe 1/10th the size of LaGuardia, is a ten-minute drive to the courthouse.
The benefits and efficiencies of the use of virtual technology for litigation is discussed extensively in the report of the New York Court of Appeals Chief Judge's "Commission to Reimagine the Future of NY Courts."
The court is well aware that Judge Kelly knows more about the issues relating to the family dynamics at play here. Given that the Estate matters are largely settled, it does not seem that litigation here will duplicate what is being done in Queens or result in inconsistent results. No one has demonstrated or even suggested that the Estate trial (if it comes to that) and the trial involving JP Morgan's accounting, will be joined, thus judicial economy is not impaired by having the Trust trial take place here. Thus, this court, in the exercise of its discretion, and in consideration of the "convenience of material witnesses and the ends of justice will be promoted" ( CPLR 510[3] ) shall retain jurisdiction over the trust matters.
Finally, it is noted that Prescott submitted Reply papers, including his affidavit, arguing that JP Morgan's "principal office" for the management of the trusts is not in Monroe County.
JP Morgan moved to strike the Reply, arguing that the issue of the location of JP Morgan's principal office was not raised in the initial papers in support of the motion to change venue. That motion is granted.
It is well-settled that courts, including the Appellate Division, Fourth Department, have generally not permitted a moving party to introduce new arguments in support of, or new grounds [or evidence] for the motion" ( Matter of Dusch v Erie County Med. Ctr. , 184 AD3d 1168, 1170 [4th Dept 2020] ; see also Jackson v Vatter , 121 AD3d 1588, 1589 [4th Dept 2014] [holding that arguments raised for the first time in reply before the motion court were not proper]; Citibank, N.A. v Brooks , 180 AD3d 865, 866 [2d Dept 2020] [holding arguments regarding the Truth in Lending Act raised for the first time in defendant's reply to plaintiff's opposition papers were not properly before the court]).
Accordingly, the motion to strike the Reply is granted and the issue raised as to the location of the principal office of JP Morgan's trust administration is not considered by the court.
Even if the Reply were to be considered, Prescot has not established entitlement to change venue on the basis that JP Morgan does not have its principal office in Monroe County.
He avers that he has only "communicated" with individuals from the Rochester office of JP Morgan responsible for the Trust "in the last year and a half or so." Also, over the years, including when his parents were co-trustees, he "dealt with" persons from the JP Morgan "Global Head of Trusts and Estates," located in New York City, and other individuals not even located in New York State.
This falls short of establishing that JP Morgan does not have its principal office for the administration of the Trust here in Monroe County and thus fails to entitle him to relief requested as a matter of law on this issue. By his own statement, he concedes that people in Rochester manage the trust and have done so for "a year and a half." The fact that Prescott "dealt with" certain people in New York city in no way establishes that those people were primarily responsible for the day-to-day management of the trust. And, whether it was for a "year and a half" or for the entire time that that the Trust has been in existence is irrelevant under the statute.
What is relevant is the location of the "principal office" at the time the proceeding is commenced. JP Morgan's unrebutted allegation is that it manages the Trust out of its Rochester office, an allegation well-supported by the affidavit of Nadja C. Steve, a JP Morgan Executive Director and the "Regional Team Leader with business and oversight responsibilities with respect to these Trusts," who names the team members in Rochester that manage the Trust.
CONCLUSION
Accordingly, the motion for a change of venue under SCPA 207 and CPLR 510(3) is denied.