Matter of Magnor

[*1] Matter of Magnor 2006 NY Slip Op 50291(U) [11 Misc 3d 1060(A)] Decided on March 7, 2006 Supreme Court, Nassau County Phelan, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on March 7, 2006
Supreme Court, Nassau County

In the Matter of the Estate of James B. Magnor, Deceased.



14926/05



Farrell Fritz, P.C.

Attorneys for Petitioner

1320 EAB Plaza

Uniondale, NY 11556

James M. Maloney, Esq.

33 Bayview Avenue

Port Washington, NY

Forchelli, Curto, Schwartz, et al.

Attorneys for Carolyn Magnor and Jamie Magnor

330 Old Country Road

P. O. Box 31

Mineola, NY 11501

Thomas P. Phelan, J.

Petitioner commenced the within special proceeding as Successor Trustee of the Magnor, Sr. Testamentary Trust to enforce a judgment against James B. Magnor, Jr. (Magnor, Jr.). This proceeding is brought against respondents Carolyn Magnor and Jamie Magnor as the distributees and beneficiaries by operation of law of the assets of deceased judgment debtor Magnor, Jr., who died on April 20, 2002.

Carolyn Magnor is the widow of Magnor, Jr. Jamie Magnor is the daughter of Carolyn Magnor and Magnor, Jr. Both respondents are out-of-state residents.

Magnor, Jr., together with his brother Robert Magnor, were co-executors of the estate of their father Robert B. Magnor (Magnor, Sr.) and co-trustees of the testamentary trust created by his Last Will and Testament. Magnor, Sr. died on October 24, 1976.

The Will of Magnor, Sr. was probated in Nassau County Surrogate's Court. No Will of Magnor, Jr. has ever been probated.

A successful proceeding brought by petitioner to revoke the Letters of Trusteeship of Magnor, Jr. and Robert Magnor resulted in petitioner's appointment as successor trustee on October 15, 2002. Among other things, Surrogate Riordan noted that Magnor, Jr. had died, Robert Magnor had disappeared, and a large surcharge had previously been assessed against the co-trustees.

On March 31, 2003, the Surrogate's Court judgment was entered in favor of the Trust of Magnor, Sr. against Magnor, Jr. deceased, and Robert Magnor, premised upon the Surrogate's interim decision dated April 18, 2002 which assessed the surcharge.

Pursuant to CPLR 5208, where, as here, a judgment debtor dies and Letters Testamentary or Letters of Administration have not been issued within 18 months of judgment debtor's death, "leave to issue [any] execution or undertake [any] enforcement procedure may thereafter be granted, upon motion of the judgment creditor upon such notice as the court may require, by any court from which the execution could issue or in which the enforcement procedure could be commenced."

Pursuant to CPLR 5221(4) enforcement proceedings on a judgment entered in Surrogate's Court are to be brought in Supreme Court or County Court. Petitioner seeks leave of this court pursuant to CPLR 5208 to pursue enforcement proceedings authorized by CPLR 5225(b) as well as EPTL 13-3.6.

Petitioner contends respondent Carolyn Magnor was the defacto trustee of Magnor Sr.'s estate since Magnor, Jr. was ill and Robert Magnor took no action regarding his role as trustee. Petitioner further alleges respondents are the recipients of funds or assets or both which Magnor, Jr. misappropriated.

In response, Carolyn Magnor and Jamie Magnor move for an order pursuant to CPLR 3211(a)(8) dismissing the petition for lack of jurisdiction.

For the reasons which follow, respondents' motion is denied without prejudice to renewal upon the completion of disclosure.

Petitioneer, as Successor Trustee, alleges that Carolyn Magnor was and is a defacto fiduciary, thereby affording this court jurisdiction over her under CPLR 302(a)(1) as well as SCPA § 208 since, as a defacto fiduciary of a New York Trust, she allegedly performed acts to satisfy the "transaction of business in New York", CPLR § 302(a)(1). In support thereof, petitioner cites discovery gleaned in the prior Surrogate's Court proceeding against Magnor, Jr. and Robert resulting in their removal as co-executors and trustees and the judgments against them.

Respondents do not dispute that a defacto fiduciary would be subject to jurisdiction in New York (see, Mayer v. Goldhaber, 63 Misc 2d 605). Rather, they contend there is no evidence of such [*2]status and an insufficient basis to permit discovery on this issue.

Respondents argue that Successor Trustee was permitted discovery in the prior related Surrogate's Court proceeding against Magnor, Jr. and Robert Magnor as co-trustees which failed to yield meaningful evidence in this regard and that further discovery in this proceeding should be barred.

Disclosure cited by petitioner from the Surrogate's Court action constitutes tangible evidence and provides a sufficient start in showing that jurisdiction may exist and that petitioner's allegation of a jurisdictional predicate against respondent Carolyn Magnor is not frivolous (Mandel v Busch Entertainment Corporation, 215 AD2d 455). Petitioner is not attempting, at this juncture, to use the deposition testimony of the unavailable prior trustees at trial and the court finds respondents' reliance on Young v Valentine, 177 NY 347, to argue the inadmissability at trial of such evidence, to be unavailing.

Additional discovery is warranted on the issue of the court's long arm jurisdiction under these circumstances (Peterson v Spartan Industries, Inc., 33 NY2d 463). Petitioner has demonstrated that facts may exist to exercise personal jurisdiction over respondents so that petitioner may properly oppose respondents' motion to dismiss (Ying Jun Chen v Lei Shi, 19 AD3d 407) and petitioner, based on her sufficient start is entitled to disclosure as set forth by CPLR 3211(d) (see Mandrel v Busch Entertainment Corp., supra).

A party may be liable for damages based on actions allegedly taken either as a defacto executor of an estate or in furtherance of assisting a named executor of an estate to breach his or her fiduciary obligations (Accounting of Sakow v Sakow, 219 AD2d 479). Clearly, petitioner as successor trustee has an obligation to pursue such claims as to Carolyn Magnor.

Separate and apart from the jurisdictional predicates recognized by CPLR §302, Surrogate's Court Procedure Act [SCPA] § 210(2)(b) provides that "receipt and acceptance of any property paid or distributed out of and as part of the administration of an estate subject to the jurisdiction of the court ... shall constitute a submission by such recipient to the jurisdiction of the court as to any matter concerning the payment or distribution, including proceedings for the recovery thereof."

SCPA § 210(2)(b) confers in personam jurisdiction in all cases in which a non-domiciliary has received estate or trust property with regard to all matters relating to such payment (In re Schreiter, 169 Misc 2d 706). Respondents' objections notwithstanding, petitioner alleges that both respondents received property from the estate of Magnor, Jr. which had its genesis in misappropriated trust funds or property from Magnor Sr.'s estate.

Respondents' reliance on Independence Savings Bank v Freed, 154 Misc 2d 472 to argue the inapplicability of SCPA § 210(2)(b) as a jurisdictional predicate for a Supreme Court proceeding [*3]such as this, is unavailing. In Independence Savings Bank v Freed, supra, a Civil Court of the City of New York held it was without authority to premise an exercise of jurisdiction upon SCPA §210 as said provision is applicable to the Surrogate's Court. This court is not so encumbered as are the courts of limited jurisdiction such as New York City Civil Court or Nassau County District Court.

The New York State Constitution at Article VI §7(a) provides that "[t]he Supreme Court shall have general original jurisdiction in law and equity ... ." By contrast, at Article VI §12(d) and (e), the Constitution provides that "The Surrogate's Court shall have jurisdiction over all actions and proceedings relating to the affairs of decedents, probate of wills, administration of estates and actions and proceedings arising thereunder or pertaining thereto, guardianship of the property of minors, and such other actions and proceedings, not within the exclusive jurisdiction of the Supreme Court, as may be provided by law.""The Surrogate's Court shall exercise such equity jurisdiction as may be provided by law."

Notably, subparagraph (f) of Article VI §12 provides that "[t]he provisions of this section shall in no way limit or impair the jurisdiction of the Supreme Court as set forth in section seven of this article."

It is "well settled that the Supreme Court and the Surrogate's Court have concurrent jurisdiction over decedent's estates (citations omitted)" (Ruiz v. Ruiz, 262 AD2d 392).

Accordingly, this court can utilize the provisions of SCPA § 210(2)(b) as a predicate to long-arm jurisdiction.

Petitioner's allegations that respondents received funds or property or both from Magnor, Jr.'s misappropriation of funds, if otherwise established after disclosure, will afford this court jurisdiction over respondents pursuant to SCPA §210 (2)(b).

Lastly, the informal application by James M. Maloney, former counsel to Jamie Magnor, to vacate that portion of this court's Order to Show Cause that provided that service of the order upon Mr. Maloney was deemed good and sufficient service upon respondent, Jamie Magnor, as well as costs and sanctions for frivolous conduct is denied. As noted by petitioner, the substituted service was effective in that notice was afforded to Jamie Magnor and she appeared by other counsel. The conduct by petitioner cannot be, in any way, deemed frivolous. The prior determination of this court was valid and correct. Costs to Mr. Maloney are not warranted. [*4]

Respondents are directed to answer the petition within ten days of service of notice of entry of this order (CPLR 3211(f)). Upon the completion of disclosure, respondents may renew their motion (Ying Jun Chen v. Lei Shi, supra).

To insure the expeditious completion of disclosure in this action, a Preliminary Conference shall be held.

Counsel are directed to appear on April 3, 2006 at 9:30 A.M. before the undersigned to obtain and fill out a Preliminary Conference Order.

This decision constitutes the order of the court.

Dated: March 7, 2006 THOMAS P. PHELAN

J.S.C.