In the Matter of the Trusts Created by the Will of Jennifer Damiano, Deceased
Attorneys and Parties
Brief Summary
Trusts and estates — removal of trustee; sanctions and fee-shifting for alleged frivolous conduct.
Surrogate's Court denied the removal petition, found it unsupported and not brought in good faith, ordered petitioner to personally pay respondent's counsel fees, and then awarded those fees in full upon respondent's affirmation.
Only the subsequent fee award order was reversed for failure to provide a reasonable opportunity to be heard under 22 NYCRR 130-1.1(d) [authorizes sanctions for frivolous conduct and requires a reasonable opportunity to be heard].
Petitioner failed to show grounds for removal under SCPA 711(10) [permits removal of a trustee who violates or threatens to violate the trust, is insolvent, or is otherwise unsuitable]. The trustee acted within her broad discretionary authority, reasonably funded and invested trust assets, sought invoices before making distributions, and incurred legal fees in good faith in response to petitioner's escalating communications. However, the fee award imposed as a sanction proceeded without affording petitioner a reasonable opportunity to be heard as required by 22 NYCRR 130-1.1(d).
Background
Decedent and petitioner were domestic partners with two children. Decedent's will created separate trusts for each child until age 25 and named a longtime friend, respondent, as trustee with 'complete discretion' to retain or invest property, make distributions, and employ counsel. After decedent died in 2020, petitioner became estate administrator and guardian; respondent became trustee in 2023, retained counsel, funded the trusts, and split funds between checking (expenses) and interest-bearing savings (August 2023). Disputes arose when respondent requested invoices before making distributions and petitioner objected to perceived delays and legal fees, leading petitioner to seek removal, reimbursement of 'excessive' fees, and her own counsel fees.
Lower Court Decision
Surrogate's Court found the petition factually unsupported, lacking good faith, and without legal basis; denied all requested relief; imposed sanctions by directing petitioner to pay respondent's counsel fees; and, upon an affirmation of legal services submitted on notice, awarded the full amount requested.
Appellate Division Reversal
The Appellate Division affirmed the denial of removal and concluded the trustee's legal fees were not excessive given the circumstances, but reversed the subsequent fee award order because petitioner was not afforded a reasonable opportunity to be heard under 22 NYCRR 130-1.1(d). The matter was remitted for further proceedings on the fee application consistent with that procedural requirement.
Legal Significance
Reaffirms the high bar for removing a testamentary trustee under SCPA 711(10) where the trustee has broad discretionary authority and there is no clear showing of serious misconduct endangering the trust. Confirms that disputes or acrimony alone do not warrant removal absent harm to administration or trust purposes. Clarifies that while sanctions and fee-shifting for frivolous conduct may be imposed, courts must provide the sanctioned party a reasonable opportunity to be heard under 22 NYCRR 130-1.1(d).
Trustee removal requires a clear showing of serious misconduct affecting the trust; fee sanctions for frivolous petitions are permissible but must follow 22 NYCRR 130-1.1(d)’s notice-and-opportunity-to-be-heard requirement.