Piro v Piro

[*1] Piro v Piro 2006 NY Slip Op 50680(U) [11 Misc 3d 1083(A)] Decided on April 19, 2006 Supreme Court, Suffolk County Pines, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 April 19, 2006
Supreme Court, Suffolk County

PETER PIRO, Settlor of the Inter Vivos Trust Dated March 14, 2002, Petitioner,

against

ROBERT PIRO, Trustee, Respondent.



02519-2005



ATTORNEY for PETITIONER

William Roth, Esq.

Wechsler & Cohen, LLP

116 John Street, Suite 3300

New York, New York 10038

ATTORNEY for RESPONDENT

Donald Novick, Esq.

Schwartzapfel Nnovick Truhowsky Marcus, P.C.

202 East Main Street

Huntington, New York 11743

Emily Pines, J.

DECISION AFTER TRIAL

PETER PIRO, Settlor, commenced this proceeding against ROBERT PIRO, the Trustee, to invalidate and set aside an irrevocable inter vivos trust, signed by the Settlor on March 14, 2002. Petitioner asserts that the trust should be set aside on the grounds that 1)the settlor was mistaken in executing the trust in that its terms [*2]and conditions were never explained to him, and 2) that the terms of the trust are unconscionable. Although Petitioner does not specifically allege "undue influence" on the part of the Trustee and beneficiary, he also claims that the Trustee took advantage of his somewhat weakened position in having the document prepared and presented to him shortly after his wife's death and his admission into a local nursing facility. Respondent counters that Petitioner was completely competent and aware of his actions at the time of execution of the trust; that Petitioner was represented at the time by competent counsel who explained every aspect of the Trust document to the Settlor; and that the trust was a logical step in an estate plan commenced by the Settlor himself and his deceased wife in the prior year, when they both had become seriously ill. Respondent also assets that Petitioner's position in this litigation is directly contrary to that he posited in a prior litigation in Surrogate's Court, in which he sought to remove ROBERT PIRO as Trustee and replace him with designated alternate Trustees (his sisters).

The trial of this proceeding occurred over five days in January, 2006, during which the Court heard from eight witnesses. During the trial, the Court had the opportunity to observe each witness testifying, including his/her demeanor while on the witness stand. The determination of this case rests primarily on the issue of credibility of the parties and witnesses.

PETITIONER'S CASE

PETER PIRO was born on February 18, 1923. During his working life, he was an electrical supervisor for the Port Authority. He married, and raised, along with his wife, Marie, three sons.(Tr. At 19,20). The older sons, Daniel and Kenneth, reside in California; the youngest, ROBERT, resides in New Jersey. According to Petitioner, he first discussed his assets, estimated at approximately $1.3 million, with his son, Robert, in June of 2000. (Tr. 21). In addition to the above assets, PETER PIRO receives approximately $6,400 per month in pension and social security funds. Shortly thereafter, both he and his wife became ill, she with cancer and he with a stroke, both in August of 2000. (Tr. 22). Petitioner asserts that his son, Robert brought him to the Long Island State Veteran's Home in July, 2001, where he still resides, and that shortly thereafter, in September, 2001, his wife, Marie, died of cancer. (Tr. 24,25).

According to PETER PIRO, he met the attorney, Beth Polner, from the firm of Davidow and Davidow, for the first time in [*3]January, 2002, when his sisters brought him to her office. (Tr. 26). He asserts that he did not hire her; however, he claims that both of his sisters encouraged him to go along with the plan. (Tr. 26). During that first meeting, he alleges that his sisters sat outside, while he spoke to the attorney. The subject of the meeting was his right of election against the will of his now deceased wife, Marie. During that meeting, according to PETER PIRO, there was no discussion of any sort concerning the creation of a Trust; there was no discussion of placing his residence in such a Trust; there was no discussion of making such a Trust irrevocable, nor was there any discussion of making ROBERT the Trustee. (Tr. 27,28).

When PETER met again with Beth Polner in March 2002, he alleges that he thought he was only signing documents dealing with his right of election against the will of his wife and not creating an irrevocable inter vivos trust. He claims that Ms. Polner told him that with the money he would be receiving, he could buy a cottage or small home. (Tr. 29). He states, further, that at this time, he was depressed due to his wife's death and had not yet fully recovered from his stroke. (Tr. 30,31). Petitioner states that Ms. Polner never sent him a copy of the document he signed in March, 2002.

PETER PIRO admitted during cross examination that after his stroke and his wife's diagnosis, his son ROBERT was the one who cared for them both, while his two other sons remained mostly in California. (Tr. 51-53). He also admits that when he signed his own will in June, 2001 (Respondent's A), he gave a much larger share of his estate to his son ROBERT than the other two sons and that this was his idea. (Tr. 49). While he remembers his meeting with Beth Polner on March, 2002, he describes the attorney's description of the document as "lawyer's talk". (Tr. At 58). He states that he did not know he was signing a Trust Agreement, despite the fact that the first words of the document (Petitioner's 1) are "Piro Family Trust". (Tr. 61).

Following Petitioner's signing of the Trust Agreement in March 2002, he continued to sign documents which were consistent with the creation of the Trust. In March 2003, he signed over his stock accounts into the Trust (Tr. 63, Respondent's C). That document identifies the Piro Family Trust account. In October 2002, he designated ROBERT as beneficiary of his insurance policy (Tr. 70, Respondent's D); in March 2003, he signed a document cancelling his homeowner's insurance policy (Tr. 107, Respondent's G); and in November, 2003, he signed an acknowledgment that he inspected certain records including tax records and a copy of the Piro Family Trust (Tr. 114, [*4]Respondent's H). Petitioner's explanation for these documents is that ROBERT told him to sign them and that he trusted ROBERT. He claims not to have read a single one. (Tr. 114).

PETER asserts that he only learned that a Trust had been created and that the proceeds of his house had been placed in the Trust, after his house was sold by ROBERT, at his request, and he began asking ROBERT questions about his assets in early 2003. (Tr. 91). When he confronted ROBERT about it, he asserts that his son told him he should read before he signs documents. In June, 2003, PETER signed a new will, making ROBERT the sole beneficiary of his estate. (Tr. 87, 88). He claims he understood what he was doing and made the new will at Robert's request. (Tr. 89).

In August, 2003, according to PETER PIRO, his sisters arranged a meeting with his oldest son, Ken and with ROBERT, so they could all discuss the issue of Petitioner's assets and what had occurred. (Tr. 36). However, when ROBERT arrived at the nursing home and saw Ken, he became incensed and hit Ken. (Tr. 37). Later, the scene was re-enacted in a conference room. (Tr. 38).

PETER stated that he authorized a 2004 lawsuit commenced by his sisters, seeking to have themselves replaced as Trustees of the Piro Family Trust rather than ROBERT. (Tr. 77-79). He also acknowledges submitting an affidavit in support of his sisters' position in that proceeding, which was ultimately withdrawn.(Tr. 79, 80).

For the bulk of the time he has resided in the home, PETER has used his monthly funds to pay for his care. (Tr. 81). However, he has changed the bank where he deposits those funds, has made his son Dan the cosignatory, and has stopped paying the nursing home. (Tr. 82). He stated that he was aware that the Director of the nursing facility tried to get him to sign discharge documents due to the lack of payment, currently over $100,000, but that he refused to sign the necessary documents. (Tr. 83-86).

Jean Piro, and Yolanda Bocaccio, PETER's sisters, both testified on Petitioner's behalf. According to Jean, while she accompanied PETER to Davidow and Davidow in November 2001, she and her sister were excluded from the conference with the attorney. (Tr. 129). She asserts that when she came out of the meeting, Ms. Polner made no mention of a Trust nor of placing the house in a Trust. (Tr. 130). She asserts that she first learned of the Trust in August 2003, when Robert was driving her to a meeting with Ken and PETER to discuss the family finances. (Tr. 144). She claims that [*5]when Ken questioned ROBERT about them, he attacked him. (Tr. 134,135). According to Yolanda, ROBERT called his sisters in November 2001 and asked them to bring PETER to the Davidow law firm. (Tr. 165,166). She also states that she and her sister were excluded from the conversation. (Tr. 166). No mention was made at the time of a Trust. (Tr. 167). While she was present at the nursing home in March, 2002 when Ms. Polner had Petitioner sign the Trust document, she asserts that she arrived late and only heard Ms. Polner inform Petitioner that if he wished to leave the home, he would have sufficient funds to purchase a small cottage. (Tr. 169. 170). She confirmed the August 2003 confrontation at the nursing home where ROBERT attacked his brother Ken.(Tr. 175).

The remainder of Yolanda Bocaccio's testimony parallels that of her sister. However, she stated on cross examination that in March 2002 when she met PETER at the home after his meeting with the attorney, PETER was both competent and as alert as can be. (Tr. 184). This somewhat contradicted her direct testimony in which she described PETER in March 2002 as somewhat depressed and still recovering from his prior stroke. (Tr. 176).

Both Jean and Yolanda admitted that they had commenced a proceeding in Surrogate's Court, alleging that ROBERT had mismanaged the assets of the Trust and seeking to have themselves, as alternate Trustees, named to take ROBERT's place. (Tr.145, 193) However, when they learned during the course of that legal proceeding that the funds were in tact, they withdrew the lawsuit.(Tr. 150).

Kenneth Piro testified that his brother ROBERT had started his estate scheming with his parents' monies, when they both became ill. While the mother was still alive, he asserted that ROBERT became hostile whenever either he or his brother Dan wanted to discuss their parents' finances. (Tr. 202-205). He asserts that at his mother's request, she signed a codicil to her will, while in Memorial Sloan Kettering Hospital, replacing ROBERT as Executor and naming him. (Tr. 210). He goes on to state that as he reviewed his mother's finances, he learned that in the months preceding her death, ROBERT had transferred funds first from joint accounts of his parents to accounts in his mother's name and second, from there, to joint accounts in his mother and ROBERT's name (Tr. 212-229, Petitioner's 7). He first learned that his father's assets had been placed in a Trust in 2003, when PETER told him that his house had been sold. (Tr. 241). When he asked PETER where the money had gone and PETER did not know, he researched the local papers and found reference to the "Piro Family Trust". However, when he asked PETER [*6]about the Trust, he claimed to no nothing of it.(Id.).

According to Ken, his father expressed a desire that his sons reconcile in August 2003, and that they arranged for him to come to the home and meet ROBERT, PETER, and PETER's two sisters there. However, when he come out to the parking lot to greet his brother, he asserts that ROBERT accused him of causing problems and pushed him. Later, ROBERT joined the family in a conference room, where he became agitated and punched Ken, knocking off his glasses. (Tr. 246-248).

Although Ken Piro is the Executor of his mother's estate, he has not, as of the date of trial, accounted for nor distributed the proceeds of her estate. Although a Surrogate's Order (Respondent's L) directs him to file an accounting of the distribution of the proceeds of the estate, he claims never to have seen the order nor to have complied with its terms (Tr. 264). He argues that he is reluctant to distribute the proceeds of his mother's estate because he believes that ROBERT PIRO is somehow hiding his father's assets.

RESPONDENT'S CASE

Beth Polner testified that she has been admitted to the bar since 1982 and that she specializes in the fields of elder law and estate planning. (Tr. 303). Although she has no specific recollection of any of her meetings with PETER PIRO, ROBERT PIRO, or the Settlor's sisters, she testified concerning her general practice and she supplied the parties and the Court with her contemporaneous notes. (Tr. 305).

She asserts that when a trust is executed for a client, it is her practice to engage the client in conversation; that she reads the beginning portions of the text aloud to the client, especially (1)any reference to the fact that the instrument is irrevocable, (2)what is to occur to the principal and income; (3)who the Trustee is; and (4)what his/her powers will be. (Tr. 374,375). Her notes of the first meeting with PETER PIRO state that she met with him on November 30, 2001 for two and one half hours. (Tr. 358). According to her memo, she did at that time also speak to PETER PIRO's sisters but she spent the bulk of the time alone with Peter. (Tr. 360). Her notes indicate that the topic of the meeting was PETER PIRO's determination to exercise a right of election against his wife's will. Her notes state that at that juncture, PETER PIRO contemplated returning at some point, to his home. (Tr, 361). [*7]

Ms. Polner's notes of her meeting with PETER PIRO on March 14, 2002, show a meeting time of 1.0 hours (Petitioner's 13). They also state that he was completely competent, alert and aware. (Tr. 371). ROBERT PIRO was not present at that meeting. The notes state that Ms. Polner explained the Trust to PETER and that the significant portions of the document were read to PETER in the presence of one of his sisters, who started to cry (Tr. 372, 373, 382,Petitioner's 13). On that same date, PETER PIRO signed the deed to his house into the Trust. (Tr. 376). She testified that it was her normal practice to read that to the settlor, to explain what was being transferred to the trust and what the transfer tax implications of such a transfer were. (Tr. 378, Respondent's N). Ms. Polner's notes indicate that the executed Trust was sent to ROBERT PIRO (Petitioner's 14) but there is no evidence that a copy was sent to the Settlor.

A series of correspondence from Davidow and Davidow to the attorney who had drafted Marie Piro's codicil, which are copied to PETER PIRO, concerning the right of election, demonstrate a listing of all the joint assets of Marie and PETER PIRO and appear to demonstrate that PETER PIRO had an understanding at the time of the correspondence in August 2002 (Respondent's T) of the assets of the estate including accounts of monies in joint names.

According to Ms. Polner, she received a call from ROBERT PIRO in April, 2003, stating that his father wanted a new will. (Tr. 389). She met with PETER on April 25, 2003. Her notes of that meeting reflect PETER's expressed desire to leave his entire estate to ROBERT (Tr. 393, 394, Respondent's P). The notes reflect statements made by PETER to Ms. Polner regarding ROBERT's continuing care for his father. They quote PETER as stating "Don't mention Dan or Ken in my will. They disappointed me". (Tr. 395). PETER PIRO signed the new will in June, 2003 (Respondent's Q).

Robert Piro testified that he has resided in the New York metropolitan area for his entire life, while his two older brothers relocated in the early 1980's to California. (Tr. 536, 537). Since the early 1990's he celebrated all holidays with his parents and visited often, while his brothers remained on the West coast having little to do with either parent. (Tr. 538, 539). When Marie and PETER both became ill in 2000, he called his brother Dan for help but did not receive it. (Tr. 544, 545). Instead, he got his mother an oncologist from Memorial Sloane Kettering, and arranged for his father to be treated for his stroke at Saint Francis Hospital. After his release from the hospital and rehabilitation center, PETER returned to his home, where Marie and a home health aid cared [*8]for him for a brief period (Tr. 552); however, since Marie's condition was deteriorating and PETER could no longer care for himself physically, PETER, Marie and ROBERT decided jointly, according to ROBERT, that PETER should enter a nursing facility. (Tr. 553-558). Peter was admitted to the L.I. State Veteran's Home in July, 2001. ROBERT testified that he visited him on a regular basis; the two other sons did not. (Tr. 561).

ROBERT began an estate plan with his mother, when they went to an attorney in November, 2000. (Tr. 564). At that point, both parents signed Powers of Attorney to ROBERT. (Tr. 582). ROBERT states that at this time, he asked for help from both of his brothers and they failed and/or refused to participate. A local attorney from the Law Firm of Vincent J. Russo and Associates, met with both parents and in early June, 2001, where they both signed wills (Tr. 569, Respondent's V,W, & X). Robert demonstrated that the issue of moving the parents' assets for tax purposes from PETER to Marie came from the estate attorney (Tr. 590, 591, Respondent's X). When PETER entered the home, the same estate attorney wrote to ROBERT, suggesting that PETER's assets be transferred from his name. (Tr. 593, Respondent's Y).

Despite his brothers' lack of participation in caring for the parents, in August, 2001, ROBERT claims his brothers, Ken and Dan got his mother to sign a codicil to her will, from an attorney who had never met with her, changing the executor to Ken instead of ROBERT. (Tr. 574-576). Marie's codicil also made Ken the Trustee of a Testamentary Trust. (Tr. 596). ROBERT also claims that he learned during this period that Dan had taken the deed to his parents' home. (Tr. 587).

ROBERT asserts that when he and his father learned about Ken's actions, they consulted with the attorney who had prepared the original wills and he suggested that due to a potential conflict, they see the law firm of Davidow and Davidow. (Tr. 577). Both of his aunts were consulted about the issue and accompanied them to that office in November 2001. (Tr. 598). It was at that meeting that PETER, according to ROBERT, decided to exercise his right of election against Marie's will (Tr. 600-601, Respondent's Z). It was as a result of PETER's exercise of the right of election that the issue of the Trust emerged, as a mechanism to allow PETER to become eligible for Medicaid in a short period of time. (Tr. 604-605). According to ROBERT, he discussed this issue with PETER and then called Beth Polner to tell her about the conversation (Tr. 605-606) that lead to the preparation of the inter vivos Trust. [*9]

Robert sold Peter's house, at Peter's request and did all the work of clearing out forty years of "stuff" . (Tr. 609-610). He states that he has used the income in the Trust in the past to make up the difference between PETER's monthly income (about $6,400) and the cost of the nursing facility (about $7,500). (Tr. 611).

Long after these events, which all occurred in early 2002, PETER started asking ROBERT questions about his funds and accusing him of improper behavior. (Tr. 612). Around this time, in the Summer of 2003, ROBERT called his father and his brother Ken, who rarely visited, answered the telephone. (Tr. 614). ROBERT suspected an agenda as when Ken visited his mother covertly in the hospital shortly before her death and had the codicil to her will executed. (Tr. 615). In the interim, Ken, as executor of his mother's estate, had failed and/or refused to pay PETER's right of election. As a result of his feelings, ROBERT telephoned his two aunts and they set up a meeting with the entire family at the home.(Tr. 615-616). When he arrived at the home with his Aunt Jean, ROBERT saw his brother Ken wheeling his father off the premises and as ROBERT started to question him, he claims Ken was avoiding him. (Tr. 618). He admits he lost his temper and punched his brother. (Id.) He also stated that at the subsequent scene in the conference room, when he tried to get Ken to explain why he had not paid the father's share of his right of election, he became infuriated and punched Ken. He then left.(Tr. 619-621).

On cross examination, Robert stated that he has not distributed income to his father from the trust in 2005 because the sisters brought a lawsuit in Surrogate's Court seeking to have him removed as Trustee and he used the income to cover his legal fees. (Tr. 448). Although ROBERT claims his father did not want a copy of the Trust in the home where PETER claimed things were sometimes stolen (Tr. 465. 484), he states that his father was aware of its contents, had discussed the matter with him, and wanted mostly to keep his assets out of Ken and Dan's hands. In addition, ROBERT states that he brought PETER copies of all his bank statements and other financial documents seven or eight times to go over their contents. (Tr. 485-486).

Two employees of the Long Island State Veteran's Home testified regarding their dealings with PETER PIRO over the past four years. Fred Sgonga, Executive Director of the home, testified that he has had many conversations with the Petitioner over the years and that he finds him articulate and very cognitive. (Tr. 502, 509). He related a conversation, where PETER told him that he was no longer using his pension funds to send to the home and that he [*10]was seeking to dissolve the Piro Family Trust in order to go live with his older sons in California. (Tr. 504,505). When he recently brought a Discharge Notice to PETER (Respondent's R), he claims PETER read it and refused to sign it. (Tr. 505). He asserts that PETER's intellectual acumen existed even at the time of his entry in the musing facility. (Tr. 509). He asserts that PETER already owed the home over $90,000 in November, 2005. (Tr. 505).

Kathleen Tansey, the Director of Social Work Services for the facility, testified that she administered several cognitive tests to measure PETER PIRO's cognitive status at the time of his entry into the facility. (Tr. 516,517). According to her records, there was no noted impairment in PETER PIRO's cognitive status. The tests were administered within 72 hours after his admission into the facility. In her view, based on her frequent contacts with PETER PIRO, she finds that his long term and short term memory are intact and his cognitive ability is on the normal to higher than normal level.(Tr. 519, 526).

LEGAL FINDINGS

As stated by the Appellate Division, an irrevocable trust may be dissolved "[u]pon proof of the settlor's misunderstanding of the nature of the instrument". Kreindler v. Irving Trust Co., 26 AD2d 746, 2727 N.Y.S.2d 202 (3d Dep't 1996). The burden rests on the party seeking dissolution to prove, by a clear showing, that the Settlor was mistaken in his understanding of the instrument he was executing. Id. at 204. The basis for the heavy burden lies in the presumption that one who executes an agreement is deemed to have understood its terms. see, Pimpinello v. Swift & Company, 253 NY 159 (1930).

Counsel for both parties have cited the case of Harrison v. Grobe, 790 F. Supp. 443 (S.D.N.Y 1992) in support of their positions in this case. That case involved an attack on an inter vivos trust created by a Plaintiff one month after she had suffered a stroke. The District Court declined to rescind the trust document, finding that the settlor's behavior and the testimony of those who drafted the trust supported the finding that she knew both the purpose and implications of her actions at the time she took them.

The application of the above principles to the case at bar requires an examination of the facts and an assessment of the credibility of the various parties. A review of the heavy stream of documents signed by PETER PIRO, when accompanied by the contemporaneous notes of Beth Polner and the assessment by the [*11]nursing home employees, convinces this Court that PETER PIRO knew exactly what he was doing when he signed the Piro Family Trust in March 2002.

In June, 2001, PETER PIRO executed a will in which he left 50% of his estate to his son ROBERT (Respondent's A), knowing that he had two other sons. On March 12, 2002, Petitioner signed and executed the Piro Family Trust (Petitioner's 1) and at the same time, placed his deed to his home in the trust. On March, 2003, Petitioner signed over his stock accounts into the Trust in a document which identified the Piro Family Trust (Respondent's C). A January 10, 2002 letter from Beth Polner to Petitioner states that she met with him regarding his concerns with his other two sons (Respondent's F). On November 22, 2003, PETER PIRO signed a letter which acknowledges that he has reviewed certain documents including the Trust in issue (Respondent's H). Beth Polner's contemporaneous notes of her March 14, 2002 meeting with Petitioner set forth that she met with him for over one hour; that she explained both the trust and the reasons for setting it up (Petitioner's 13). Respondent's N demonstrates that Petitioner signed the Deed into the Trust on the same date. The attorney's notes also demonstrate that the trust terms were read in the presence of one of Petitioner's sisters, who cried (Petitioner's 13). Beth Polner's contemporaneous notes of her conversation with Petitioner in April 2003 (Respondent's P) demonstrate that he told her he wanted to leave all his assets to ROBERT in a new will. He signed such a will in June 2003 (Respondent's Q).

In addition to the above, the testimony of the Director and Social Worker at the nursing home demonstrate that PETER PIRO is both aware of what he is doing and is fully capable of refusing to sign a document, after reading its terms, when he does not care to do so (see, Respondent's R).

Finally, PETER PIRO, on the stand, appeared to this Court, to be extremely aware of his surroundings, his assets, and the tension among his sons. He knew exactly how much money he had and only became vague when it suited his purpose. He has demonstrated not only that he understands the consequences of his acts, but has quite cleverly both removed his pension funds from the reach of his son ROBERT and has refused to sign a discharge from the nursing home which he is currently refusing to pay.

Based on all of the above, the Court finds that Petitioner has simply failed to sustain its burden of demonstrating that he made a mistake and/or failed to comprehend that he was placing his assets into an irrevocable Trust in March 2002. [*12]

With regard to Petitioner's claim of "unconscionability", there was simply no evidence submitted in support of such a claim. Petitioner continues to receive his pension and social security payments, and, as set forth in the testimony of Beth Polner, he is entitled to utilize the funds from the sale of his house to purchase a new residence. Ms. Polner also explained the desirability of placing the home in the Trust as opposed to the creation of life estate, when PETER PIRO acknowledged that he would not be returning to his former residence.

Based on all of the above, the Court finds that Petitioner has failed to set forth the proof required to rescind his written word. Accordingly Petitioner's request for relief is denied. Submit Judgment in accordance with this Decision within thirty (30) days from this date.