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Decided on October 31, 2006
Sur Ct, Bronx County

536-P/97
Howard W. Rachlin, Esq., for Gilbert F. Rella and Marie Ann Sedacca, co-executors
Harry Amer, Esq., for Vincent Rella and Anthony Rella, objectants
Lee L. Holzman, J.
The following applications are pending in this accounting proceeding: 1) the executors' attorney seeks an order granting the payment of legal fees of $25,020 for services rendered from July 3, 2003 to January 17, 2006, plus disbursements of $130.13, and for permission to amend Schedule C of the amended accounting dated August 4, 2003 to reflect these payments; 2) the executors, Gilbert S. Rella and Marie Ann Sedacca, move pursuant to CPLR 3126 to strike the objections of Anthony Rella and Vincent Rella, based upon Anthony's failure to disclose information which allegedly this court ordered him to disclose, and seek to impose sanctions against Anthony pursuant to 22 NYCRR 130-1.1 for his behavior; and 3) the objectants move pursuant to CPLR 3124 for an order directing the production of documents and depositions of both executors. The co-executors and the objectants are four of the decedent's children.
The decedent died on April 15, 1997, and her estate has been plagued with litigation from its inception. The principal protagonists are her sons, Anthony and Gilbert. Anthony and the decedent's husband Angelo, who died in 1992, both had an interest in J.E.T. Ventures, Inc. (JET) and Gilbert and Angelo both had an interest in Coliseum Fuel Distributors, Inc. (Coliseum). The decedent acquired her interest in both JET and Coliseum from her husband's estate. In an SCPA 2103 proceeding, the executors seek a recovery against Anthony arising from the manner in which he operated JET and liquidated its assets. In this proceeding, the objectants seek to surcharge the executors for failing to account for the estate's 50% interest in Coliseum. Gilbert contends that the decedent gifted her interest in Coliseum to him. These issues were previously explored in both the probate proceeding and in a proceeding by Anthony, who had limited letters to pursue the claim against Gilbert, but the latter proceeding by Anthony was withdrawn without prejudice to the same issues being raised in the accounting proceeding. Numerous applications have been made in the various proceedings.
Counsel for the executors seeks a legal fee of $25,020 for services rendered in the accounting proceeding. Counsel states that a request for legal fees for services rendered in other proceedings will be the subject of a separate application. The affidavit of legal services reflects that most, if not all, of counsel's efforts were expended as a result of the objections filed to the account. SCPA 2307(1) provides that the executors, upon the judicial settlement of their account, will be allowed the reasonable and necessary expenses actually paid by them, including legal fees. Moreover, inasmuch as the executors are not acting as their own attorneys, they may pay counsel fees from estate assets without application to the court (SCPA 2111). However, there is a problem with fixing the legal compensation to be charged to the estate at this time. This is so because, until the issues [*2]in the accounting proceeding are tried, the court cannot determine whether the legal services rendered to the executors were in the defense of a proper account and, consequently, should be charged to the estate, or were rendered with respect to acts for which the executors should be surcharged. In the event that the executors are surcharged, the portion of the legal fee incurred for the defense of their improper acts must be paid ultimately by the fiduciary, and not by the estate (Matter of Newhoff, 107 AD2d 417, 423 [1985], lv. denied 66 NY2d 605 [1985], citing Matter of Hildreth, 274 App. Div. 611, aff'd 301 NY 705; Matter of McDowell, 202 App. Div. 568; Matter of Chiesa, 23 AD2d 562; see also Matter of Thron, 139 Misc 2d 1045 [1988]).
Here, as there has been no prima facie showing that the requested legal fee would be improper, the executors, in the exercise of their discretion, may pay the same from estate assets and reflect the payment in an amendment to their account. However, should the executors opt to make such payment at this time, they should realize that the court is not presently making a determination as to the reasonableness of the requested fee, or as to whether such fee or any portion thereof should be charged to the estate or to the executors, individually.
The executors' motion to strike the objections arises from depositions of Anthony that were conducted on January 16, 2004, May 15, 2005 and September 27, 2005. At his first deposition, Anthony took the position that he could not be more specific with respect to his "Coliseum objections" until both executors had been deposed. Gilbert was deposed prior to Anthony's second deposition. During Anthony's second deposition, he refused to answer any questions about JET, apparently taking the position that the executors had fully questioned him about these transactions in the SCPA 2103 proceeding.
The parties, purportedly to avoid unnecessary motions, requested a conference with the court to obtain guidelines with respect to whether Anthony had to answer any questions about JET. The court furnished such guidelines. Specifically, because Anthony appeared to contend the decedent lacked the capacity to make a gift of her Coliseum interest to Gilbert in November, 1996, the court stated that it was appropriate for the executors to inquire about any transactions between Anthony and the decedent during that period, including JET transactions. The conference and the court guidelines were, essentially, on an informal basis, as no party had made a motion, requested an on

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