In Re a Trust Created by Gurney

2017 NY Slip Op 5902, 152 A.D.3d 1122, 59 N.Y.S.3d 587

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: July 27, 2017
• Docket: 524003
• Status: Published

Opinions

Devine, J.

Appeal from an order of the Surrogate’s Court of Otsego County (Lambert, S.), entered August 8, 2016, which, in a proceeding pursuant to EPTL articles 2 and 8, among other things, granted petitioner’s cross motion to distribute a certain residuary share of a revocable trust pursuant to the antilapse statute.

Petitioner assumed her duties as successor trustee of a revocable living trust established by Margaret E. Gurney (hereinafter decedent) when decedent became unable to manage her affairs. The trust agreement directed that, upon decedent’s death, the trust assets be applied toward her debts and gifts to various individuals and organizations. The trustee would then distribute percentages of the residuary trust corpus to three institutions including, as is relevant here, 20% to St. Mary’s Roman Catholic School (hereinafter the school).

Decedent died in 2015, after which petitioner found herself unable to make the distribution to the school given that it had been closed in 2011 and its grounds sold to an unrelated entity.¹ Petitioner commenced this proceeding seeking permission to distribute the school’s share equally between the other two institutions named in the residuary clause (see EPTL 2-1.15). Respondents St. Mary’s Roman Catholic Church, New York and Roman Catholic Diocese of Albany, New York (hereinafter collectively referred to as respondents) — the parish and diocese, respectively, under whose auspices the school operated— answered and argued that the school’s share should be distributed to the parish’s faith formation ministry and a diocesan scholarship fund pursuant to the cy pres doctrine (see EPTL 8-1.1 [c]). Respondents also moved for that relief, with petitioner cross-moving for the relief sought in her petition. Surrogate’s Court declined to apply the cy pres doctrine and granted petitioner’s cross motion. Respondents now appeal.

We affirm. The gift to the school was “charitable in nature and, for cy pres relief [to be appropriate], it was further necessary that the instrument [ ] establishing the gift[ ] revealed a general charitable intent and that circumstances had changed rendering impracticable or impossible strict compliance with the terms of the gift instrument! ]” (Matter of Lally, 112 AD3d 1099, 1100 [2013]; see Matter of Wilson, 59 NY2d 461, 472 [1983]). Strict compliance with the terms of the trust agreement was impossible due to the closure of the school. We accordingly turn to whether the evidence evinces a general charitable intent on the part of decedent, defined “as a desire to give to charity generally, rather than merely to give to a particular object or institution” (5-8 New York Civil Practice: EPTL ¶ 8-1.1 [3] [d]; see Matter of Syracuse Univ. [Heffron], 3 NY2d 665, 668 [1958]). In answering that question, we will read the trust agreement in its entirety and afford its words “their ordinary and natural meaning” (Matter of Lanza, 307 AD2d 265, 266 [2003]; see Winter v American Parkinsons Disease Assn., 85 NY2d 715, 719 [1995]).

Turning to that agreement, all of the institutions to which decedent made gifts are in the City of Oneonta, Otsego County, suggesting an intent to limit her largesse to organizations in that area. When viewed in that context, a direction to distribute part of the residuary trust corpus “to the [school at] 5588 State Route 7, Oneonta, New York 13820” indicates a desire to support a school at that location rather than religious education projects in general. This reading is bolstered by the silence of the trust agreement as to decedent’s Catholic faith and the absence of gifts to the parish or other Roman Catholic institutions. Moreover, to the extent that the language of the trust agreement is unclear, petitioner gave deposition testimony-revealing that decedent was aiming to support institutions in her adoptive hometown and had fond memories of volunteering at the school. Petitioner further stated that decedent, although a regular churchgoer who financially supported the parish, had no interest in Roman Catholic education per se and had “satisfied” what she saw as a duty to give to the parish during her lifetime.² The case might be different if the school had been merged into, or if there even was, another parochial school in the Oneonta area. As things stand, however, “there is no direction which could be made by the Court which would accomplish [decedent’s intent], [and] the legacy cannot be made effective” (Matter of Aker, 21 AD2d 935, 936 [1964]; see Saltsman v Greene, 136 Misc 497, 498-499 [1930], affd 231 App Div 781 [1930], affd 256 NY 636 [1931]; cf. Matter of Lally, 112 AD3d at 1101; Matter of Hummel, 30 AD3d 802, 804 [2006], lv denied 7 NY3d 713 [2006]). Thus, it was proper for Surrogate’s Court to decline to apply the cy pres doctrine and distribute the residuary assets pursuant to EPTL 2-1.15.

Respondents’ remaining arguments have been considered and lack merit.

McCarthy, J.P., Garry and Rose, JJ., concur.

1 . Petitioner asserted that, by the time it was known that the school would close, decedent did not have the mental capacity to revisit questions regarding the disposition of the trust assets upon her demise.

2 . Petitioner testified, in fact, that decedent preplanned her funeral and burial arrangements to avoid the trappings of Catholicism and did not make a bequest to the parish in her will.