Murphy and Boyd Secure Summary Judgment Reforming a Trust and Removing Trustees

April 5, 2022 | Commercial Litigation

Kenneth C. Murphy and J’Naia L. Boyd successfully obtained summary judgment in Nassau County Supreme Court in a matter involving life insurance proceeds.

Our client commenced suit after she discovered that her deceased ex-husband breached their separation agreement by assigning life insurance proceeds to a trust for the benefit of their children. He also appointed his sister and brother-in-law as trustees rather than our client, as required by the separation agreement. The trust restricted the distribution of the income and principal to the payment of the children’s undergraduate educational expense, although no such restriction existed in the separation agreement.

Despite the unambiguous provision of the separation agreement requiring both parties to maintain a life insurance policy, with the children named as beneficiaries and with the other party named as trustee over the life insurance proceeds, the trustees refused to relinquish their appointments and substitute our client as trustee.

Defendants argued that the life insurance provision of the separation agreement was ambiguous as to whether the decedent could name another trustee other than his ex-spouse and also speculated as to what the decedent’s desires were. However, the Court rejected Defendants’ position and issued a decision granting our client’s motion for summary judgment on her sole cause of action seeking declaratory relief that the trust be reformed by removing the restrictions to the distribution of income and principal. The decision also removed the improperly appointed trustees and appointed our client as sole trustee.

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