Litigation in Accounting Proceedings in Estates & Trusts
Westchester Women’s Bar Association
Trusts & Estates Section
November 17, 1998
Donald S. Klein, Esq.
7-11 South Broadway
White Plains, NY 10601
Tel. No. 914-686-6120
Frank W. Streng, Esq.
McCarthy, Fingar, Donovan,
Drazen & Smith, L.L.P.
11 Martine Avenue
White Plains, NY 10606
Tel. No. 914-946-3700
Litigation In Accounting Proceedings
In Estates And Trusts
I. Overview of Why Litigation Proceeds
II. Compulsory Accounting as First Step – SCPA 2205
A. Procedures
B. Service of Citation – Personal vs. Mail – changes on service by mail (SCPA 307)
C. Return Date of Citation
1. If respondent appears
a. requests for adjournments
b 30 day order
c 60 day order
d 90 day order
e other alternatives
2. If respondent fails to appear
a. 30-day order
D. Court Order
1. Personal service on respondent
2. De facto executor compelled to account (Matter of King, NYLJ 2/11/92,
p. 26, col. 2)
III. Contempt or Removal
A. Procedures for Contempt – SCPA 606, 607; Judiciary Law 750 et seq
1. Civil or criminal (Matter of Rogers, NYLJ 12/23/86, p. 13, col. 1)
2. Civil – mere act of disobedience (Torah v. Kesher International Trading
Corp., AD2d, 667 NYS2d 759)
3. Personal service of OSC
B. Personal Service of Compulsory Accounting Order
1. Generally required, but if actual knowledge of order, Court can grant
(Matter of Von Krieger, NYLJ 4/29/96, p. 29, col. 3)
C. Return Date of OSC of Contempt Application
D. Warrant of Arrest
E. Legal Fees for compulsory accounting proceedings or contempt – Court can grant “reasonable legal fees” (Matter of Weissman, NYLJ
5/12/98, p. 27, col. 4)
F. Trial for contempt
1. If no triable issue, no trial required (Guilinao v. Carlisle, 236
AD2d 364, 653 NYS2d 635)
2. Self-incrimination – not available (Matter of Ottinger, NYLJ 3/13/92,
p. 28, col. 5)
G. Removal – SCPA 711
1. Failure to comply with Court order (SCPA 711(3)
2. Procedures for removal proceedings
3. Other grounds for removal, including if a fiduciary is “otherwise unfit for the execution of the office.” (SCPA 711 (8)
4. “Entertainment” of proceedings and consideration of issues in estate looking at the “big picture”
IV. Accounting Filed
A. Format of accounting and compliance with uniform rules and local court rules
B. Duty to Obtain Jurisdiction
1. Change in Court Rules – 207.40
C. Return Date of Process
1. Time to file objections – change in Rule 207.41
D. Disclosure Before or After Objections
1. SCPA 2211 vs. CPLR Art. 31
E. Review of Accounting – what to look for
F. Objections to Accounting
1. Form
2. By whom
a. Even Court (Matter of Stortecky, 85 NY2d 518)
b. Objectant must be adversely affected (Matter of Weiss, NYLJ
12/20/91, p. 32, col. 2 citing Matter of Ayvarian, 153 Misc2d 467)
G. Procedures Thereafter
1. Disclosure
2. Conferences
3. Note of Issue/Statement of Readiness/Order framing issues
4. Trial – non-jury
a. Burden of proof
i. Accounting party has burden fully accounted, then
objectant must come forward with evidence to
establish inaccurate or incomplete (Matter of
Schnase, AD2d, 594 NYS2d 827 [3rd])
ii. Party claiming there should be more assets has burden
of proof (Matter of Castaldo, AD2d, 603 NYS2d 32,
affirming NYLJ 2/10/92, p. 30, col. 1)
H. Likelihood of Success – Potential Results
1. Surcharge
a. Single or multiple objectants and interests
b. Self-dealing (Matter of Hirschhorn, NYLJ 4/29/98, p. 30, col. 3)
c. Take and state account (Matter of Griffin, 187 AD2d 592, 489
NYS2d 933, for facts see 174 AD2d 780)
d. Investments
i. Losses (Matter of Janes, 90 NY2d 41, affirming 223
AD2d 20, 643 NYS2d 972)
2. Denial of Commissions
a. Delay in paying taxes (Matter of Scott, 234 AD2d 551, 651 NYS2d 592)
3. Attorneys’ Fees of Fiduciary
4. Attorneys’ Fees of Objectant
5. Attorney-Fiduciary – liable for accountant fees (Matter of Weisenfeld,
NYLJ 6/25/90, p. 28, col. 2; Matter of Tortora, 7/19/95, p. 26, col. 2)