New York

Warning: The following opinion is provided for purposes of discussion only. We have not Shepardized™ this opinion, and do not know the subsequent disposition of this case nor whether the effect of the opinion has been overruled or superceded by other law.

United Presbyterian House at Syosset, Inc. v. Lincks,
2003.NY.0011791 (N.Y.Sup. 02/11/2003)

SUPREME COURT - STATE OF NEW YORK TRIAL / IAS PART 43 NASSAU COUNTY

Index No. 14242/01

2003 NY Slip Op 50774(U), 2003.NY.0011791
February 11, 2003

UNITED PRESBYTERIAN HOUSE AT SYOSSET, INC. D/B/A UNITED PRESBYTERIAL RESIDENCE, PLAINTIFF,
v.
JULIE LINCKS, JOSEPH IANNOTTI, JOHN IANNOTTI, ANTHONY IANNOTTI, EDWARD IANNOTTI, MARC IANNOTTI, JULIE LINCKS, -ADMINISTRATRIX OF THE ESTATE OF PELEGRINA IANNOTTI A/K/A FANNIE IANNOTTI, AND JULIE LINCKS, TRUSTEE OF THE TRUST AGREEMENT OF FANNIE IANNOTTI A/K/A PELEGRINA IANNOTTI, DEFENDANTS.

The opinion of the court was delivered by: Present: Antonio I. Brandveen, J. S. C.

This opinion is uncorrected and will not be published in the Official Reports.

Trusts--Spendthrift Trusts

(*1)

(*2)

(*3)

Motion Sequence No. 05

The following papers having been read on this motion:

Notice of Motion, Affidavits, & Exhibits 1

Answering Affidavits........ 2

Replying Affidavits......... 3

Briefs: Plaintiff's / Petitioner's

Defendant's / Respondent's

The plaintiff moves for an order to strike the defendants' answer and to direct (*4)summary judgment in favor of the plaintiff for the relief demanded in the complaint. The plaintiff asserts there is no meritorious defense to the cause of action alleged in the complaint. The defendants oppose the motion.

On January 9, 2002, Justice Bernard F. McCaffrey directed the parties to complete discovery by May 1, 2002 under a preliminary conference stipulation and order. The Court set the matter down for a May 8, 2002 compliance conference. The Court also directed any dispositive motion under CPLR 3211 and 3212 be made on or before 90 days from filing of a note of issue. Justice McCaffrey directed October 19, 2002 as the end date for all disclosure.

On May 2, 2002, Justice McCaffrey denied the defense application to compel further responses to interrogatories and a request for production of documents with leave to renew upon a specific showing of the inadequacies of the plaintiffs' objections. Also, Justice McCaffrey denied the plaintiffs' cross motion to strike the defendants' pleading, but directed the defendants, John and Joseph Iannotti, to serve separate verifications formally adopting responses from April 12, 2002. In the Court's written decision, Justice McCaffrey cited Ashley v. City of New York (240 AD2d 352) for the public policy position that CPLR 3122 was intended to encourage litigants to settle clashes over discovery without the judicial interference to diminish the mass of motion practice. Justice McCaffrey concluded, under the prevailing circumstances, that the parties discovery demands and responses spawned motion practice rather than ebbed it.

On July 17, 2002, the defendants moved to renew Justice McCaffrey's prior determination on disclosure. On September 19, 2002, the plaintiffs filed a notice of (*5)motion for summary judgment. On October 21, 2002, Justice McCaffrey stayed disclosure until a determination of that summary judgment motion. On December 31, 2002, Justice McCaffrey retired from the bench and subsequently the matter was assigned here for disposition.

On October 2, 1991, Pelegrina Iannotti, also known as Fannie Iannotti, established a trust with her daughter, the defendant Julie Lincks, named as the trustee and her son, the defendant John Lincks, named as the successor trustee. The trust was for the benefit of Fannie Iannotti, Frank Iannotti, Julie Lincks also known as Angela Lincks, John Iannotti and Joseph Iannotti. The trust, real property with improvements located at 75 South Grand Street, Westbury, New York, permitted the daughter to pay one-half of the net distributable income from the trust for the benefit and maintenance of the mother. The trust also allowed the daughter, as trust protector, to alter, amend or annul the trust.

The plaintiff is a duly licensed skilled nursing home facility in Woodbury, New York. From August 26, 1998 until February 1, 2000 when she died, Pelegrina Iannotti was a resident at the plaintiff's nursing home facility. On October 27, 1998, the defendant Julie Lincks executed an admissions agreement which provided that the mother and daughter would pay the $225.00 daily rate at the nursing home facility for the care received by the mother. Under that admissions agreement, the daughter agreed to apply funds and assets toward the care of the mother, including the payment of legal costs for the failure to pay any charge.

On February 17, 1999, the Nassau County Department of Social Services denied (*6)an application on behalf of the mother for Medicaid benefits. On March 8, 1999, the New York State Department of Social Services notified the plaintiff that Medicaid benefits had been denied to the mother. On July 22, 1999, a fair hearing was requested from the New York State Department of Health seeking to overturn the denial by the Nassau County Department of Social Services. On August 23, 1999, the Commissioner of the New York State Department of Health, after a fair hearing, denied the mother's application for Medicaid Assistance on the ground that the mother had excess available resources in an inter vivos trust. The mother started an Article 78 proceeding to review the Health Department Commissioner's determination. On May 29, 2001, the Appellate Division, Second Department confirmed the Health Department Commissioner's determination and dismissed the Article 78 proceeding. The Second Department held there was substantial evidence in the record to support the determination. The Second Department also found "the determination that the appointed "trust protector" had been given discretionary power to distribute the trust's assets for purposes of medical assistance had a rational basis in the record." Neither trustee, at any period during the mother's life, requested alteration, amendment or annulment of the trust, so the corpus could be used to pay the outstanding balance owed to the plaintiff.

On November 29, 2001, the trust principal was transferred pursuant to a July 2001 contract of sale. The defense attorney is presently holding the sale proceeds of $140,000 in an escrow account pursuant to an escrow agreement dated November 29, 2001.

The trustee claims the admission agreement was signed by her in a representative (*7)capacity only and created no legal obligation for the trustee nor Joseph Iannotti, John Iannotti, Anthony Iannotti, Edward Iannotti or Mark Iannotti. The trustee contends the Second Department did not direct the trustees to invade the trust principle. The trustee asserts the Second Department holding was limited to an affirmation of the agency denial of Medicaid reimbursement for trust grantor, Pelegrina Iannotti. The trustee alleges that where the trust is discretionary, a creditor of one of the beneficiaries cannot compel the trustee to pay any part of the income or principal to the beneficiary or the creditor. The trustee maintains the Court cannot interfere with the exercise of discretion by the trustee. The trustee asserts the plaintiff failed to comply with the defendants discovery demands, so summary judgment is inappropriate now. The trustee claims there are questions of fact presented in the denials by the defendants and the affirmative defenses raised. The trustee contends the Second Department decision affirming the Health Department Commissioner's determination has no res judicata effect precluding litigation on the issues raised.

Under CPLR 3212(b), a motion for summary judgment "shall show that there is no defense to the cause of action or that the cause of action or defense has no merit. The motion shall be granted if, upon all the papers and proof submitted, the cause of action or defense shall be established sufficiently to warrant the court as a matter of law in directing judgment in favor of any party." "The motion shall be denied if any party shall show facts sufficient to require a trial of any issue of fact."

Summary judgment is a drastic remedy that is awarded only when it is clear that no (*8)triable issue of fact exists (Alvarez v. Prospect Hosp., 68 N.Y.2d 320, 325; Andre v. Pomeroy, 35 N.Y.2d 361). Summary judgment is the procedural equivalent of a trial (Museums at Stony Brook v. Village of Patchogue Fire Dept., 146 A.D. 2d 572). Thus the burden falls upon the moving party to demonstrate that, on the facts, it is entitled to judgment as a matter of law (see, Whelen v. G.T.E. Sylvania Inc., 182 A.D. 2d 446).

The court's role is issue finding rather than issue determination (see, e.g., Sillman v. Twentieth Century-Fox Film Corp., 3 N.Y.2d 395; Gervasio v. Di Napoli, 134 A.D.2d 235, 236; Assing v. United Rubber Supply Co., 126 A.D.2d 590). Nevertheless, "the court must evaluate whether the alleged factual issues presented are genuine or unsubstantiated" (Gervasio v. Di Napoli, supra, 134 A.D.2d at 236, quoting from Assing v. United Rubber Supply Co., supra; see, Columbus Trust Co. v. Campolo, 110 A.D.2d 616, aff'd 66 N.Y.2d 701). If the issue claimed to exist is not genuine, and, therefore, there is nothing to be resolved at the trial, the case should be summarily decided (see, Andre v. Pomeroy, 35 N.Y.2d at 364; Assing v. United Rubber Supply Co., supra ). A careful review of the papers submitted demonstrates there are no questions of fact raised. The only question in dispute is a legal interpretation of the Second Department's ruling in the instant matter.

The nursing home admissions agreement obligated both mother and daughter to pay for the care received by the mother. Under its terms, the nursing home admissions agreement also bound any heirs and others receiving benefits from the mother. The defendant Julie Lincks executed that nursing home admissions agreement only as the (*9)daughter to the nursing home resident. When the beneficiary of a spendthrift trust is not the settlor, the beneficiary's creditors ordinarily cannot compel the trustee to pay any part of the income or principal to the beneficiary of a discretionary trust or to a creditor of the beneficiary. However, when the beneficiary is the settlor, his creditors, present and future, can reach the maximum amount which the trustee under the terms of the trust could pay to him or apply to his benefit even though the trustee in the exercise of discretion wishes to pay nothing to the beneficiary or to his creditors and even though the beneficiary himself could not compel the trustee to pay him anything. This result occurs regardless of the fact that the settlor created the trust with no intent to defraud creditors or that the settlor was solvent at the time of the creation of the trust (see, N.Y. Estates, Powers and Trusts Law § 7-3.1; Vanderbilt Credit Corporation v. Chase Manhattan Bank, 100 A.D.2d 544, [2d Dept., 1984]; Matter of Tutino v Perales, 153 A.D. 2d 181 2nd Dept., 1990]). Here, the mother was one of the beneficiaries of the trust.

Accordingly, the plaintiff's motion is granted in all respects. Submit judgment.

The legal opinions are a matter of public record (that's how we got them), and as such there can be no defamation for republishing them. Sometimes, however, legal opinions are reversed, vacated, or significantly modified, etc., and we do not discover this fact until somebody points it out to us. As we do not desire to publish inaccurate or outdated information, if a legal opinion has been reversed, vacated, or significantly modified, please advise us of this fact immediately, by fax to (877) 698-0678 or you may also send regular postal correspondence to Riser Adkisson LLP at 1827 Powers Ferry Road, Building One, Suite 200, Atlanta GA 30339.