In re the Estate of Smithers

195 Misc. 2d 510, 760 N.Y.S.2d 304, 2003 N.Y. Misc. LEXIS 284
CourtNew York Surrogate's Court
DecidedApril 1, 2003
StatusPublished

This text of 195 Misc. 2d 510 (In re the Estate of Smithers) is published on Counsel Stack Legal Research, covering New York Surrogate's Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re the Estate of Smithers, 195 Misc. 2d 510, 760 N.Y.S.2d 304, 2003 N.Y. Misc. LEXIS 284 (N.Y. Super. Ct. 2003).

Opinion

[511]*511OPINION OF THE COURT

John B. Riordan, S.

This year marks the 75th anniversary of Judge Cardozo’s seminal decision in Meinhard v Salmon (249 NY 458 [1928]). The event is brought to mind because landmark decisions are rare in the trusts and estates field. The common law of this area of the law is a well settled one. It is a field where names like Cardozo and Sobel are still revered and where cases of ancient vintage are still capable of bearing the freight of modem mores and manners. That is not to say that there is no innovation to be had, as the recent decision from the First Department, Smithers v St. Luke’s-Roosevelt Hosp. Ctr. (281 AD2d 127 [2001]), illustrates. Meinhard v Salmon defined the scope of a fiduciary’s duty to his or her estate. The Smithers case makes new law, allowing a private cause of action to enforce the terms of a charitable gift. To the uninitiated, this may appear to be an insignificant development, but the holding has the potential for broad application and its implications remain to be worked out. One of those implications must be decided in this motion.

The Smithers decision in the First Department was made possible by this court’s order of December 26, 1995. Pursuant to that order, letters were issued to Adele Smithers-Fomaci as special administratrix c.t.a. of the estate of her late husband, R. Brinkley Smithers. She requested these limited letters solely to enable her to prosecute actions against St. Luke’s-Roosevelt Hospital arising from its alleged breach of its duties to the gifts made by the decedent. A conflict of interest precluded the executor of Mr. Smithers’ estate from bringing such a suit. The novelty of the application was recognized by Surrogate Radigan when he wrote:

“The court takes no position with regard to the advisability of any contemplated litigation and provided further, as the petition indicates, all funds necessary to pursue the estate’s claim against the hospital are to be advanced by the petitioner without any recompense by the estate without further order of the court.” (Smithers, Sur Ct, NY County, Decision No. 1172, Dec. 11, 1995.)

When Ms. Smithers-Fornaci commenced suit in Supreme Court, New York County, the first obstacle she encountered was a motion to dismiss her complaint, alleging that she lacked standing to enforce the terms of her husband’s gift to the hospital. The hospital and the Attorney General both took the [512]*512position that EPTL 8-1.1 (f) gave the Attorney General exclusive jurisdiction to enforce the terms of charitable gifts. The hospital moved to dismiss the complaint. The Supreme Court granted the motion and Ms. Smithers-Fornaci appealed. In the opinion that is now recognized as a landmark, the First Department reversed and remanded the matter to the trial court for a hearing on the merits. In so doing, the court wrote:

“The issue before us is whether the estate of the donor of a charitable gift has standing to sue the donee to enforce the terms of the gift. We conclude that in the circumstances here present plaintiff estate does have the necessary standing. * * *
“She [Ms. Smithers-Fornaci] brought [the action] as the court-appointed special administratrix of the estate of her late husband to enforce his rights under his agreement with the Hospital through specific performance of that agreement. Therefore, the general rule barring beneficiaries from suing charitable corporations has no application to Mrs. Smithers. Moreover, the desire to prevent vexatious litigation by ‘irresponsible parties who do not have a tangible stake in the matter and have not conducted appropriate investigations’ has no application to Mrs. Smithers either. Without possibility of pecuniary gain for himself or herself, only a plaintiff with a genuine interest in enforcing the terms of a gift will trouble to investigate and bring this type of action. Indeed, it was Mrs. Smithers’s accountants who discovered and informed the Attorney General of the Hospital’s misdirection of Gift funds, and it was only after Mrs. Smithers brought her suit that the Attorney General acted to prevent the Hospital from diverting the entire proceeds of the sale of the building away from the Gift fund and into its general fund. * * *
“The donor of a charitable gift is in a better position than the Attorney General to be vigilant and, if he or she is so inclined, to enforce his or her own intent. * * *
“Moreover, the circumstances of this case demonstrate the need for co-existent standing for the Attorney General and the donor. * * *” (Smithers v St. Luke’s-Roosevelt Hosp., 281 AD2d at 128, 138-139, 140.)

Having won her initial battle in the First Department, Ms. Smithers-Fornaci now returns to this court and requests the [513]*513restrictions in her letters be removed so that she can be compensated for her efforts. Her application was made by order to show cause, which included a stay of the signing of a proposed decree of the executor of Mr. Smithers’ estate in his accounting. The executor does not oppose this application, nor do the trustees of a marital trust (established with a one-third share of the residuary) or the Christopher D. Smithers Foundation (also a one-third share of the residuary). The only opposition comes from the beneficiaries of the remaining one third of the residuary and the Attorney General. The following facts are relevant to this decision.

The decedent, R. Brinkley Smithers, died on January 11, 1994, a resident of Nassau County. His will was admitted to probate and letters testamentary issued to Henry S. Ziegler on May 31, 1994. While Mr. Smithers was a man of great wealth, he was better known for his enormous dedication to charitable causes. His life’s work was focused on the study and treatment of alcoholism as a disease. To that end, he established a self-endowed fund at St. Luke’s-Roosevelt Hospital to establish an alcoholism treatment facility. The gift to the hospital came with certain restrictions. For example, Mr. Smithers believed that the treatment of alcoholism required a tranquil setting far removed from the traditional detoxification wards of a hospital. A total of $10 million was given to the fund during Mr. Smithers’ lifetime. In 1973, the Smithers Alcoholism Treatment and Training Center opened at 56 East 93rd Street in Manhattan. The center became a world famous facility for the treatment of this disease. A dispute arose between Mr. Smithers and, later, his widow over the hospital’s administration of the gift.

Mr. Smithers’ will displayed an equally charitable concern. Several substantial bequests were made to various alcoholism-related charities. The probate estate was valued in schedule A of the executor’s account at approximately $35,000,000. The residuary estate amounted to approximately $14,000,000. It was divided into the following parts. One third of the residuary estate was used to fund the marital trust for the benefit of Adele Smithers-Fornaci. A remote contingent remainder beneficiary of this trust is the Christopher D. Smithers Foundation, a charitable concern dedicated to the study and treatment of alcoholism. Another third of the residuary was given outright to the Smithers Foundation. Two ninths of the residuary was divided equally over seven charitable remainder annuity trusts for the life income benefit of members of the decedent’s family. The remainder interest of each trust is the Smithers [514]*514Foundation.

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126 A.D.2d 809 (Appellate Division of the Supreme Court of New York, 1987)
In re the Estate of Driscoll
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In re the Estate of Gibson
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Bluebook (online)
195 Misc. 2d 510, 760 N.Y.S.2d 304, 2003 N.Y. Misc. LEXIS 284, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-the-estate-of-smithers-nysurct-2003.