Matter of De Sanchez

[*1] Matter of De Sanchez 2008 NY Slip Op 50342(U) [18 Misc 3d 1138(A)] Decided on January 3, 2008 Supreme Court, New York County Edmead, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 January 3, 2008
Supreme Court, New York County

In the Matter of the Judicial Settlement of the First Intermediate Accounts of Proceedings of Central Hanover Bank and Trust Company, as Trustee under those six agreements of trust dated September 16, 1927, and under that certain agreement of trust dated October 5, 1927, made by Elizabeth L. De Sanchez.



In the Matter of the Judicial Settlement of the Second Intermediate Account of Proceedings of MANUFACTURERS HANOVER TRUST COMPANY, as Trustee under Trust Agreement dated September 16, 1927, made by ELIZABETH L. DE SANCHEZ, as Grantor, for the benefit of Emilio Sanchez.



In the Matter of the Judicial Settlement of the Second Intermediate Account of Proceedings of MANUFACTURERS HANOVER TRUST COMPANY, as Trustee under Trust Agreement dated October 5, 1927, made by ELIZABETH L. DE SANCHEZ, as Grantor, for the benefit of Emilio Sanchez.



In the Matter of the Judicial Settlement of the Second and Final Account of Proceedings of MANUFACTURERS HANOVER TRUST COMPANY, as Trustee under Trust Agreement dated September 16, 1927, made by ELIZABETH L. DE SANCHEZ, as Grantor, for the benefit of Jorge Sanchez and for a construction of said Agreement and a determination of the disposition of property thereunder.



In the Matter of the Judicial Settlement of the Second Intermediate Account of Proceedings of MANUFACTURERS HANOVER TRUST COMPANY, as Trustee under Trust Agreement dated September 16, 1927, made by ELIZABETH L. DE SANCHEZ, as Grantor, for the benefit of Marcelo Sanchez and for a construction of said Agreement and a determination of the disposition of property thereunder.



9650/1952

Carol Robinson Edmead, J.

In 1927, just two years before the Great Depression, Elizabeth Laurent de Sanchez, whose family owned a sugar plantation in pre-Castro Cuba, set up seven trusts to benefit her six children. After her death, in 1953, this court settled and approved the trustee's intermediate accounts for the trusts. Thereafter, Ms. Sanchez's family emigrated to the United States. In 1974 and 1975, the court settled the trustee's accounts for three of the trusts. Now, some 50 years after the first judicial settlement and 30 years after the final two judicial settlements, her many descendants seek to vacate the judgments settling these accounts.

Specifically, income beneficiaries/remainder beneficiaries Pedro and Adolfo Arellano Lamar (hereinafter referred to as the movants[FN1]) move, by order to show cause, pursuant to CPLR 5015 (a) (3) and (4), to vacate the 1953 and 1975 judgments settling these accounts. Income beneficiaries/remainder beneficiaries Eugenio J. Silva, Julieta C. Silva, Julieta Cadenas, Felipe G. Silva, Estate of Flora Lamar de Fanjul, Justo Lamar Sanchez, Emilio Jose Lamar, Peter Lamar, Diana Puccetti, Marcelo Lamar, Luis Lamar, Maria Elizabeth Lamar, Ann Maria Lamar [*2]de Cesares, Elisa Gloria Lamar, Maria Luisa Suarez Rivas, Beatriz Diego, Flora M. Suarez Fanjul, Jorge B. Fanjul, Julio A. Fanjul, Justo E. Fanjul, and Marcelo E. Fanjul (collectively referred to as the cross movants) cross-move to vacate the judicial settlements, in addition to the 1974 judicial settlement. Movants and cross movants assert that these judicial settlements should be vacated because the trustee engaged in constructive fraud on them, and because the court did not obtain personal jurisdiction over them.

FACTUAL BACKGROUND

The Trusts

On September 16, 1927, Elizabeth Laurent de Sanchez (the settlor) established six irrevocable inter vivos trusts for the benefit of each of her six children: Emilio Sanchez (Emilio), Jorge B. Sanchez (Jorge), Julio Sanchez (Julio), Marcelo Sanchez (Marcelo), Maria Sanchez de Lamar (Maria), and Gabriela Sanchez de Cadenas (Gabriela). Thereafter, on October 5, 1927, the settlor established a second trust for Emilio. The principal amount in the seven trusts was approximately $498,944.

Central Union Trust Company of New York, the predecessor in interest to petitioners and JP Morgan Chase Bank, N.A. (the Bank), was named as the trustee for all seven of the trusts. The law firm Larkin Rathbone & Perry, the predecessor to Kelley, Drye & Warren LLP (the Bank's current counsel), drafted the trust instruments.

Movants are the great-grandchildren of the settlor, the grandchildren of Maria, and the children of Elizabeth Sanchez de Lamar. Cross movants are all the descendants of Maria or Gabriela.

The 1952 Accounting Proceeding

The settlor died on March 15, 1951. By order to show cause dated July 21, 1952 and petition dated July 18, 1952, the Bank commenced an accounting proceeding in Supreme Court (Index No. 9650/1952), seeking a judicial settlement of its first intermediate accounts for the trusts, which were filed with the County Clerk. The court directed service of the order to show cause and petition on nonresident interested persons by registered mail. In addition, the court appointed Eugene J. Keefe, Esq. ("Keefe") as a guardian ad litem to receive service of the order to show cause and petition on behalf of certain infant interested persons.

An affidavit of mailing dated July 31, 1952 indicates that, on that date, the order to show cause and petition were sent via registered mail to the interested persons. All of the interested parties lived in Cuba, except for two individuals with addresses in Miami, Florida. Thereafter, on September 10, 1952, after the infants had not appeared through a guardian, the court appointed Keefe to represent the infants. The guardian ad litem appeared on behalf of the infants and filed a report with the court, in which he concluded that, after a thorough review of the proof of service, the court had proper jurisdiction over the infants that he represented. He also concluded that the seven accounts "clearly appear to [him] as being proper and correct and [he had] no objection to their judicial settlement as filed."

Having received no objections to the accounts, on February 25, 1953, the court entered a "final order" approving the Bank's first intermediate accountings with respect to the trusts. The court judicially settled the acts by the Bank for the period from September 16, 1927 through March 15, 1951 for the seven trusts, and awarded the Bank commissions for the period. The [*3]Bank was "fully and finally relieved and discharged of and from any further responsibility, liability or accountability respecting said Trusts or the administration thereof as embraced in said accounts or occurring during the periods covered by said accounts or in this proceeding."

The 1974 Accounting Proceedings

Jorge Sanchez died in 1967, survived by neither a wife nor any children. Emilio Sanchez died shortly after Jorge that same year, survived by one son, Emilio Sanchez Fonts. Marcelo Sanchez died in 1970, survived by his wife, Helen Sanchez, and no children. Elizabeth and movants each had contingent income and remainder interests in the Jorge and Marcelo trusts.

By orders to show cause dated March 27 and 29, 1974 and petitions dated March 21, 1974, the Bank commenced two accounting proceedings in Supreme Court. The first proceeding (Index No. 4574/1974) sought a judicial settlement of Emilio's September 1927 and October 1927 trusts. The second proceeding (Index No. 4573/1974) sought a judicial settlement of: (1) the Bank's second and final accounts for Jorge's trust, for the period from March 15, 1951 through December 8, 1970, as supplemented for the period from December 8, 1970 through July 25, 1972; and (2) the Bank's second and final accounts for Marcelo's trust, for the period from March 15, 1951 through December 8, 1970, as supplemented for the period from December 8, 1970 through July 25, 1972.

The court directed service of the orders to show cause and petitions on certain nonresident interested persons by registered mail, but not on certain beneficiaries who were "virtually represented" pursuant to CPLR 7703. Four affidavits of service state that, in April 1974, the interested persons were served by registered mail. A guardian ad litem appeared but withdrew after it was determined that his wards had attained the age of majority.

After receiving no objections to the accounts, on August 30, 1974, the court approved and judicially settled the Bank's accounts for the relevant period with respect to the Emilio trusts, and awarded the Bank commissions. The Bank was "fully, finally and forever released and discharged of and from any and all liability, responsibility or further accountability for each and all of its acts and proceedings as set forth in said second intermediate account and supplement thereto."

The Bank also sought a construction of provisions of the Jorge and Marcelo trusts because of a possible violation of the Rule Against Perpetuities (Personal Property Law § 11 [currently EPTL § 9-1.1]). Under the terms of the trust for Jorge, one-fifth of his trust became distributable to Marcelo's trust upon Jorge's death. After Marcelo's death, that part would violate the Rule Against Perpetuities since it would have been held for two lives in being (Jorge and Marcelo). On July 17, 1975, the court determined that the one-fifth share received from Jorge's trust rested absolutely in Marcelo's estate.

On September 11, 1975, after receiving no objections to the accounts, the court issued a judgment which judicially settled and approved the acts of the Bank with respect to the Marcelo and Jorge trusts. The judgment states, in pertinent part, that the Bank was "fully, finally and forever released and discharged of and from any and all liability, responsibility or further accountability for each and all of its acts and proceedings as set forth in said second and final account and said supplement thereto."

Procedural History [*4]

By order to show cause dated June 15, 2005, movants moved to vacate the 1953 and 1975 judicial settlements. Cross movants thereafter made a cross motion to vacate the 1953, 1974, and 1975 judicial settlements, and in the alternative, requested that the motions be transferred to Surrogate's Court, New York County, to be consolidated with pending accounting proceedings in that court under Index No. 3187/2001. On November 10, 2005, the court (Wetzel, J.) granted the cross motion to the extent of transferring the motions to Surrogate's Court. However, after the Surrogate's Court questioned its jurisdiction to vacate prior judgments of this court, the parties entered into a so-ordered stipulation dated August 28, 2006 transferring the motions back to this court. By interim decision dated September 13, 2007, the court denied the branch of cross movants' motion seeking removal pursuant to SCPA 501 to Surrogate's Court.

DISCUSSION

Lack of Personal Jurisdiction

The court may relieve an aggrieved party from a judgment "upon the ground of . . . lack of jurisdiction to render the judgment" (CPLR 5015 [a] [4]). Under this subdivision, if the court lacked jurisdiction over a defendant, vacatur is not discretionary (see Cipriano v Hank, 197 AD2d 295, 298 [1st Dept 1994]; Boorman v Deutsch, 152 AD2d 48, 51 [1st Dept 1989], appeal dismissed 76 NY2d 889 [1990]; Shaw v Shaw, 97 AD2d 403, 404 [2d Dept 1983]). A motion to vacate a judgment for lack of jurisdiction may be made at any time (Siegel, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C5015:3, at 206).

Movants and cross movants deny receiving notice for the 1952 accounting proceeding.[FN2] Movants and cross movants also claim that jurisdiction was invalid because the Bank sent notice in 1952 to incorrect addresses. For example, Pedro Arellano Lamar and Justo Lamar Sanchez, Maria's son, state that the address for Maria Calle 22, No. 67 esq. Ave., Reparto Miramar, Havana, Cuba was not her current address at the time and should have been Calle 16, No.701 Esquina a 7a Avenida, Reparto Miramar, Marianao, Havana, Cuba (Arellano Lamar 6/13/05 Aff., ¶ 10; Lamar Sanchez Aff., ¶ 7). According to Pedro Arellano Lamar, the notices should have been sent to him and his sister care of his parents at Calle 20 #515, Reparto Miramar, Marianao, Havana, Cuba, rather than Calle 20, No. 59, Miramar, Havana, Cuba (Arellano Lamar 6/13/05 Aff., ¶ 11). However, in subsequent affidavits, Arellano Lamar states that in 1951, "Elizabeth Lamar, Pedro R. Arellano, and the Arellano Lamars lived at Calle 20 #515, formerly known as Calle 20 #59" (Arellano Lamar 7/31/06 Aff., ¶ 10; Arellano Lamar 1/19/07 Aff., ¶ 20). Julieta Cadenas Silva states that the family summered primarily in Varadero Beach, Cuba from June through September each year, and occasionally traveled to Santa Cruz del Sur, near Camaguey, during these months, and did not have mail forwarded to either location (Cadenas Silva Aff., ¶ 12). [*5]

Due process does not require actual receipt of notice before issues concerning a person's property interests may be adjudicated (Orra Realty Corp. v Gillen, AD3d , 2007 WL 4328437, *2, 2007 NY App Div LEXIS 12554, **5 [2d Dept, Dec. 11, 2007]). Rather, it mandates only "notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections" (Mullane v Central Hanover Bank & Trust Co., 339 US 306, 314 [1950]). In Mullane, the Supreme Court held that notice of a settlement proceeding by publication to beneficiaries of a trust fund, whose names and addresses were "at hand," was insufficient, and that notice by ordinary mail was required (Kennedy v Mossafa, 100 NY2d 1, 9 [2003], citing Mullane, 339 US at 318).

An affidavit of service attesting to proper service creates a rebuttable presumption that process was properly mailed and received (Kihl v Pfeffer, 94 NY2d 118, 122 [1999]; News Syndicate Co. v Gatti Paper Stock Corp., 256 NY 211, 214, rearg denied 256 NY 678 [1931]; Dokoudovsky v 21043 Corp., 189 AD2d 618, 619 [1st Dept 1993]). "[S]ervice by mail is complete regardless of delivery where the mailing itself complies with all of the requisites of the rule" (Anthony v Schofeld, 265 App Div 423, 425 [4th Dept 1943]). However, the presumption can be overcome by evidence that the papers were mailed to the wrong address (Northern v Hernandez, 17 AD3d 285, 286 [1st Dept 2005]; Matter of Holland v New York City, 271 AD2d 609, 610 [2d Dept 2000]).

Here, movants and cross movants have failed to rebut the presumption of proper service. The Bank provides a properly executed affidavit of service showing that, on July 31, 1952, the interested parties, including Maria and Gabriela and their children and grandchildren, were served by registered mail for the 1952 accounting proceeding (see Lelen Aff., Exh. A). The affidavit of service shows that process was sent to Maria to "Calle 22, no. 67 esq. Ave., Reparto Miramar, Havana, Cuba," and to Gabriela at "Klo 15, Arroyo Arena, Havana, Cuba" (id.).

The Bank's records reflect that it sent correspondence to Maria at that same address in 1949, 1950, and three months before in 1952 (id., Exhs. C, D). It was not until seven years later, in 1959, that the Bank learned that her address had changed, after a 1959 statement was returned to the Bank (id., Exh. D). As conceded by Arellano Lamar in his July 2006 and January 2007 affidavits, Calle 20 #515 was formerly known as Calle 20 #59, and thus was a correct address for his family. There is also no evidence that the mailing to Calle 20 #59 was ever returned to the Bank. Further, Cadenas Silva does not deny that the family lived at the Havana address that the Bank sent process to in 1952. That the family lived away from their Havana address for four months of the year does not establish that the Bank sent process to an incorrect address (see Ortiz v Santiago, 303 AD2d 1, 5 [1st Dept 2003] [defendant, who claimed she was served at an incorrect address, failed to rebut presumption of proper service where she did not deny living at that address]). Accordingly, the proof of proper service is unrebutted[FN3] (see Mei Yun Li v Qing He Xu, 38 AD3d 731, 732 [2d Dept 2007]; General Motors Acceptance Corp. v Grade A Auto Body, Inc., 21 AD3d 447 [2d Dept 2005]; Matter of State Farm Mut. Auto Ins. Co. [Kankam], 3 [*6]AD3d 418, 419 [1st Dept 2004]). Moreover, the guardian was appointed to receive service on behalf of the infants.

Additionally, movants' assertions that they did not receive notice of the 1974 proceedings are equally without merit in view of the affidavits of service that the Bank sent process to 4259 S.W. 69th Avenue, Miami, Florida 33155 (Lelen Aff., Exh. B), which was the address that Elizabeth gave the Bank for her and her children that same year (id., Exh. C).

Movants also claim that the court improperly allowed their mother, Elizabeth Sanchez Lamar, to "virtually represent" their interests in the Jorge and Marcelo accounting proceeding in 1974.

The doctrine of "virtual representation" allows one who is a party (the representor), to represent persons or a class of persons (representees) who have future (remainder) interests in the estate (Buechel v Bain, 97 NY2d 295, 308 [2001], cert denied 535 US 1096 [2002]; Matter of Goldstick, 177 AD2d 225, 233-234 [1st Dept 1992]; Matter of Putignano, 82 Misc 2d 389, 390 [Sur Ct, Kings County 1975]). Underlying this doctrine is the theory that the representor, in pursuing his or her own economic interests, must necessarily protect the rights of representees having the same interest (Matter of Putignano, 82 Misc 2d at 391). If the doctrine applies, the representees need not be served with process or made actual parties because they are virtually represented (id. at 390). However, if virtual representation is improperly applied, the resulting judgment may be subject to direct or collateral attack (id.; Matter of Silver, 72 Misc 2d 963, 966 [Sur Ct, Kings County 1973]).

In 1974, CPLR 7703, the virtual representation statute for Article 77 proceedings, provided as follows:

(a)Potential member of class. Where an interest in the trust property has been limited in any contingency to the persons who shall compose a certain class upon the happening of a future event, it shall be sufficient to make parties to the proceeding the persons in being who would constitute such class if such event happened immediately before the commencement of the proceeding; and the final order in the proceeding shall be binding and conclusive on all present and future members of the class.

Movants cite Matter of Blake (208 Misc 22 [Sup Ct, New York County 1955]) for the proposition that only remainder interests may be virtually represented. In that case, the court considered whether persons having dual interests of presumptive income interests and remainder interests could represent subsequent contingent remainder interests (Matter of Blake, 208 Misc at 23). The court held that income beneficiaries were not permitted to represent subsequent estates, because the heading of section 1311 of the Civil Practice Act (the predecessor to CPLR 7703) only referred to remainder interests (id. at 24).

However, other courts interpreting SCPA 315 (the virtual representation statute for proceedings in Surrogate's Court, which was borrowed from section 1311) did not follow Matter of Blake'sanalysis in determining who could be virtually represented under that statute. In Matter of Schwartz (71 Misc 2d 80 [Sur Ct, Nassau County 1972]), the court followed the criterion set forth by the Commission on Estates, i.e., " whether the interests of the class to be represented are likely to be adequately safeguarded. If so, then there would be little reason for denying representation merely because the remainder interest is coupled with an income interest'" (id. at 81-82; see also Matter of Putignano, 82 Misc 2d at 392). And, in Matter of [*7]Putignano, the court noted that "[i]t is illogical to exclude from beneficial purposes of the virtual representation statute, the substantial number of estates where the potential representors and representees have in addition to remainder interests also income interests in the trust" (Matter of Putignano,82 Misc 2d at 393).

Under the "adequacy of representation" test, a secondary income beneficiary is permitted to represent a successor income beneficiary (whether or not either interest is coupled with a remainder interest) because both parties are interested in the principal of a trust, not its income (see Matter of Leyshon, 67 Misc 2d 492, 494-495 [Sur Ct, New York County 1971]). Their interests conflict with the interests of the current income beneficiary, but not with each other (id.).

The court does not find movants' focus on the label of their interests, rather than the adequacy of representation, to be persuasive. In the instant case, movants' interests in the Jorge and Marcelo trusts were through the Maria trust, and were contingent on the deaths of their grandmother, Maria Lamar, and their mother, Elizabeth Sanchez Lamar. The parties do not dispute that Elizabeth was a secondary income beneficiary and was a presumptive remainder beneficiary. Elizabeth's children, including movants, were successor income beneficiaries and contingent remainder beneficiaries. Neither Elizabeth nor movants had present interests in income. Therefore, there was no need to serve movants with process in the accounting, since Elizabeth's interests were aligned with that of her children (see id.).

The remaining arguments with respect to jurisdiction are unavailing. Cross movants' contention that the settlor's estate was a necessary party in the 1952 proceeding, so many years after the judgment, does not require that it be set aside as to them (see Herskowitz v Friedlander, 224 AD2d 305, 306 [1st Dept 1996]). Second, the petitions and orders to show cause adequately apprised the interested persons of the nature of the proceedings; they state that the Bank sought accountings for the trusts and to be relieved of any liability for its acts concerning the trusts for the periods of the accounts (cf. Brown v Giesecke, 40 AD2d 1009 [2d Dept 1972] [in mortgage foreclosure action, service on individual of advanced age and lack of experience and understanding was invalid, where it was made on a misrepresentation that it was merely to clear title]). Third, movants' claim that Pedro Arellano Lamar's parents never had an opportunity to procure a guardian in his behalf is not supported by the record.[FN4] In any case, Arellano Lamar was in fact represented by a guardian ad litem in that proceeding.

Therefore, there is no basis to vacate the judgments for jurisdictional reasons.

Constructive Fraud And Misconduct

CPLR 5015 also provides that a judgment or order may be vacated for "fraud, misrepresentation, or other misconduct of an adverse party" (CPLR 5015 [a] [3]). It is clear that [*8]the fraud referred to in CPLR 5015 (a) (3) can be "intrinsic" or "extrinsic" to the issues in controversy (Oppenheimer v Westcott, 47 NY2d 595, 603 [1979]; Avenoso v Avenoso, 266 AD2d 326, 327 [2d Dept 1999]). In the context of a motion to set aside a judgment, "extrinsic fraud" has been defined as a " fraud practiced in obtaining a judgment such that a party may have been prevented from fully and fairly litigating the matter'" (Bank of NY v Lagakos, 27 AD3d 678, 679 [2d Dept 2006], quoting Shaw v Shaw, 97 AD2d 403 [2d Dept 1983]; see also Aguirre v Aguirre, 245 AD2d 5, 7 [1st Dept 1997]).

As noted by the Court of Appeals in Oppenheimer, supra, the inclusion of "misrepresentation, or other misconduct" in paragraph (a) (3) broadened the basis for relief beyond what was previously recognized by prior case law, which required that the movant establish the commission of a fraud (Oppenheimer, 47 NY2d at 603 [citation omitted]). These factors apply to either what has occurred before the judgment or were the means by which the judgment was procured (Nachman v Nachman, 274 AD2d 313, 315 [1st Dept 2000]; Herskowitz, 224 AD2d at 306; Mizerik v Mizerik, 170 AD2d 886, 887 [3d Dept 1991]). The statute, however, does not apply when the moving party had knowledge of the fraud or misconduct before entry of the judgment (see McGovern v Getz, 193 AD2d 655, 657 [2d Dept], lv dismissed 82 NY2d 741 [1993]).

The court also has the inherent discretionary power to vacate its judgments or orders where it appears that substantial justice will be served and injustice will be prevented (see Woodson v Mendon Leasing Corp., 100 NY2d 62, 68 [2003]; Goldman v Cotter, 10 AD3d 289, 293 [1st Dept 2004]; Bronx Intl. Cable v Metropolitan Constr. Corp., 278 AD2d 131, 132 [1st Dept 2000]). However, "[a] court's inherent power to exercise control over its judgments is not plenary, and should be resorted to only to relieve a party from judgments taken through [fraud], mistake, inadvertence, surprise or excusable neglect" (Matter of McKenna v County of Nassau, Off. of County Attorney, 61 NY2d 739, 742 [1984] [internal quotation marks and citation omitted]).

The court must first consider whether movants and cross movants have unduly delayed in moving to vacate the judicial settlements. Although there is no express time limit for making a motion pursuant to CPLR 5015 (a) (3), such a motion must be made within a reasonable time (see Aames Capital Corp. v Davidsohn, 24 AD3d 474, 475 [2d Dept 2005]; Richardson v Richardson, 309 AD2d 795, 796 [2d Dept 2003]; City of Albany Indus. Dev. Agency v Garg, 250 AD2d 991, 993 [3d Dept 1998]; Siegel, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C5015:3, at 206). In making the determination of reasonableness, courts have looked to whether the movant was aware of the relevant facts (see e.g. Rizzo v St. Lawrence Univ., 24 AD3d 983, 984 [3d Dept 2005] [plaintiff's delay of two years despite awareness of all relevant facts was unreasonable]; Richardson, 309 AD2d at 796 [wife's delay in moving to vacate judgment was unreasonable where she received summons and complaint in 1989 and did not move to vacate her default until 12 years later]; Green Point Sav. Bank v Arnold, 260 AD2d 543, 543-544 [2d Dept 1999] [defendant's delay of four years after he was served with a copy of the judgment with notice of entry was unreasonable]).

Here, as noted above, the judgments that movants and cross movants are seeking to attack are dated February 25, 1953, August 30, 1974, and September 11, 1975. Movants and cross movants moved to vacate these judicial settlements in 2005, 52 years after the first judicial settlement, and 30 and 31 years after the final two judicial settlements. Pedro Arellano Lamar [*9]avers that "[i]n or about 2001," he learned that his mother, late sister, brother, and he were beneficiaries and/or remainder beneficiaries of his great-grandmother's 1927 trusts (Arellano Lamar 6/13/05 Aff., ¶ 25). Julieta Cadenas Silva admits that she knew that her grandmother had established a trust with a major banking company in New York, but was not familiar with any of the details (Cadenas Silva Aff., ¶ 8). Justo Lamar Sanchez states that he never knew that Maria, Marcelo, Emilio, Julio, Jorge, and Gabriela had a one-fifth interest in each other's trusts, although they later learned that they had remainder interests in those trusts in the event that the primary beneficiary died (Lamar Sanchez Aff., ¶ 9). However, none of these beneficiaries state when they found out about the judgments themselves. The court concludes that movants and cross movants have failed to file their motions within a reasonable period of time, given the extremely lengthy passage of time in this case. Movants and cross movants have also failed to clearly and persuasively show that they did not recently learn of the trusts and accountings, as would be required when seeking to vacate judgments so ancient.

Even assuming, arguendo, that movants and cross movants had made their motions within a reasonable time, they have not persuaded this court that the Bank procured the judgments by "fraud, misrepresentation, or other misconduct" (Woodson, 100 NY2d at 70, citing CPLR 5015 [a] [3]). Movants contend that the Bank withheld negative information from the settlor and the beneficiaries[FN5], invested trust assets without the settlor's direction or consent, and concealed that it had invested in mortgage participations[FN6] that were not current on their terms. In addition, cross movants contend that the Bank misrepresented precedent concerning the Rule Against Perpetuities to the settlor, the beneficiaries, and the court in the 1974 proceeding concerning Jorge and Marcelo's trusts, and also concealed that it had drafted the trusts.

However, none of these beneficiaries appeared in the accounting proceedings to contest the accounts, and there is no evidence that they were led to believe that they should not contest these accounts. Indeed, the record shows that, in March 1951, the Bank wrote to Emilio, Jorge and Marcelo telling them that the Bank would formally account and requested the names, addresses, and dates of birth of their children and grandchildren (Lelen Aff., Exh. C). In a letter dated April 11, 1951, Emilio, the oldest son, responded that "if it is too much work I do not see the necessity of all that accounting, unless is [sic] something you have to do by law, but do not do it on account of us" (id., Exh. D). There was also extensive correspondence with the family [*10]members to ensure that the Bank had correct addresses for the family members before the 1974 proceedings (id.). Thus, it cannot be said that, as a result of this "fraud" and "misconduct," they were deprived of the opportunity to fully and fairly contest the accounts (see Altman v Altman, 150 AD2d 304, 307 [1st Dept], appeal denied 74 NY2d 612 [1989]).

In any event, in the 1952 proceeding, the Bank filed seven full accountings with respect to each trust, which set forth in detail the opening and closing balances for each trust, each transaction in each trust, and each mortgage participation purchased for the trusts from the Bank (see e.g. Crotty 3/5/07 Affirm., Exh. A, at 1-3, Schedules A - K). The guardian ad litem reported that Russell Rutgers of The Hanover Bank informed him that he had on file written consents from the grantor for each individual transaction from September 16, 1927 through March 15, 1951 (Lelen Aff., Exh. A, Report of Guardian ad Litem, at 6). The guardian further stated that he "carefully studied and examined the deed of trust, the summaries, and the individual schedules" for each account, and that "[a]ll sums of money, cash, and securities [had] been accounted for" (id. at 11, 18, 26, 34, 43, 50, 58). The guardian concluded that the seven accounts "clearly appear[ed] to [him] as being proper and correct," and had no objections to the accounts as filed (id. at 61).

Moreover, with respect to the 1974 proceeding relating to the Jorge and Marcelo trusts, movants and cross movants have failed to establish that the court was in any way misled about who drafted the trusts. The Bank's counsel set forth its position concerning the construction of the two trusts in its brief, which the court accepted.

Finally, cross movants' contentions that the judgments should be set aside, because the Bank disregarded the court's instructions in the 1975 judgment that the funds from Jorge's trust be distributed to his beneficiaries, and also misrepresented the terms of the 1975 judgment in later settlement negotiations, are without merit. These cannot serve as bases to vacate these judgments because these acts occurred after the judgments. Thus, the judgments could not have been procured by that "misconduct" (see Nachman, 274 AD2d at 315).

CONCLUSIONBased upon the foregoing, it is

ORDERED that the motion by Pedro Arellano Lamar and Adolfo Arellano Lamar to vacate judgments settling accounts dated February 25, 1953 and September 11, 1975 is denied; and it is further

ORDERED that the cross motion by Eugenio J. Silva, Julieta C. Silva, Julieta Cadenas, Felipe G. Silva, Estate of Flora Lamar de Fanjul, Justo Lamar Sanchez, Emilio Jose Lamar, Peter Lamar, Diana Puccetti, Marcelo Lamar, Luis Lamar, Maria Elizabeth Lamar, Ann Maria Lamar de Cesares, Elisa Gloria Lamar, Maria Luisa Suarez Rivas, Beatriz Diego, Flora M. Suarez Fanjul, Jorge B. Fanjul, Julio A. Fanjul, Justo E. Fanjul, and Marcelo E. Fanjul to vacate judgments settling accounts dated February 25, 1953, August 30, 1974, and September 11, 1975

is denied; and it is further

ORDERED that counsel for Pedro Arellano Lamar shall serve a copy of this order with notice of entry upon all parties within 20 days of entry.

This constitutes the decision and order of the Court.

Dated: January 3, 2008

ENTER: [*11]

______________________________

Hon. Carol Robinson Edmead, J.S.C. Footnotes

Footnote 1: Both movants and cross movants refer to themselves as "petitioners." However, pursuant to CPLR 401, "[t]he party commencing a special proceeding shall be styled the petitioner." Movants and cross movants did not commence these special proceedings in 1952 and 1974, but rather, are seeking to vacate the judgments rendered in these proceedings.

Footnote 2:Specifically, Pedro Arellano Lamar avers that neither his "mother, father nor [he] had, or have, any recollection or record of ever having received any of the required notices" for the 1952 accounting proceeding (Arellano Lamar 6/13/05 Aff., ¶ 10). Similarly, Julieta Cadenas Silva, Gabriela's daughter, states that she has no recollection of either her mother or her receiving notice of the 1952 proceeding (Cadenas Silva Aff., ¶ 12). Justo Lamar Sanchez also submits an affidavit in which he states that he has no recollection of receiving notice of the proceeding (Lamar Sanchez Aff., ¶ 5).

Footnote 3: Notably, movants and cross movants do not argue that the Bank failed to follow proper procedures in sending notice. A denial of receipt coupled with a failure to follow proper procedure may be sufficient to rebut the presumption that notice was properly received (see Nassau Ins. Co. v Murray, 46 NY2d 828, 830 [1978]; Matter of Connolly [Allstate Ins. Co.], 213 AD2d 787, 788 [3d Dept 1995]).

Footnote 4: Section 206 of the Civil Practice Act provided that "[w]here an infant defendant resides out of the state . . . the court, in its discretion, may make an order designating a person to be his guardian ad litem unless the infant or some one in his behalf procures such a guardian to be appointed as prescribed in this article within a specified time after service of a copy of the order." As previously noted, the affidavit of service of process for the 1952 proceeding is dated July 31, 1952. The court appointed Keefe to represent the infants on September 10, 1952, after the return date of September 3rd (Lelen Aff., Exh. A).

Footnote 5: Movants and cross movants assert that this is evidenced by a memorandum dated August 3, 1931 from the Bank, which states:

Mr. Hackney:4353/58-H

I have your memorandum dated June 23, 1931, referring to the de Sanchez accounts. The situation presented therein brings about many difficulties and so we will have to move very cautiously, if at all, in endeavoring to rectify the situation. I have two things in mind:

1st, that I do not want to destroy Mrs. de Sanchez' confidence in us, and

2nd, that I do not want to embarrass our attorneys.

Assistant Secretary

(McCallion 1/19/07 Affirm., Exh. I).

Footnote 6:An investment in a participating mortgage occurs when a trustee takes a mortgage in its own name and sells shares of the mortgage to various trusts administered by it (see 2A Scott on Trusts § 179.4 [4th ed 1987]).