Case Studies

Tannenbaum Helpern successfully defended two trustees against unsubstantiated claims of self-dealing, fraud and breach of fiduciary duty (among others) made by a beneficiary. After litigating for nearly nine years in Rockland County Surrogate’s Court to determine whether the trustees had an obligation to fully fund the beneficiary’s marital trust as of the decedent’s date of death, in October 2018, the Surrogate’s Court ruled in the trustees’ favor. The Surrogate Court held that the obligation to fully fund the marital trust did not arise until the estate’s taxes and administrative expenses were calculated and paid. Thereafter, the beneficiary continued to pursue her meritless claims by filing at least three subsequent petitions in the same Court seeking essentially the same relief.

In June 2020, the Surrogate’s Court granted the trustees’ motion to dismiss fully and finally disposing of the beneficiary’s claims for breach of fiduciary duty, self-dealing and fraud. Notably, the Court’s June 2020 decision also ordered the beneficiary to pay the trustees $10,000 in sanctions for continually pursuing the same meritless claims in a series of petitions. Sanctions, while generally rare, were warranted in this case because, according to the Court, the beneficiary’s “arguments raised in support of the baseless claims were totally irrelevant, and the entire proceeding served no purpose but to waste the Court’s time and harass [the trustees], most likely with the hope of eliciting additional payments to [the beneficiary] just to make her go away.” The case stands as a notable precedent and warning to litigious parties who pursue frivolous claims that New York courts will be loath to tolerate such conduct.