Pending before the Court is respondent Donna Savino's motion for summary judgment to dismiss the petition seeking a determination that the second and third amendments to the Kosmo Family Trust (hereinafter trust) are void due to decedent's lack of requisite mental capacity, or due to the exercise of undue influence or fraud by respondent upon Janet D. Kosmo (hereinafter decedent).^[FN1] In the alternative, the petition requests an order imposing a constructive trust on the remainder of the trust as a result of the respondent's confidential relationship with decedent and her alleged misrepresentations to decedent. Respondent denies the allegations and now moves for summary judgment arguing that there is no proof of decedent's lack of capacity or proof of [*2]fraud or undue influence, that petitioners lack standing and capacity to challenge the trust amendments, and that the claims asserted by petitioners are barred by the statute of limitations. Petitioners oppose the motion.

By way of background, decedent died in December 2017, a resident of Orange County, California. She was survived by two of her three children, Laura E. Knipe Wieland and Richard X. Knipe. Her third child, Claudia Knipe, had Down Syndrome and resided in a group home in New York until her death in 2006. Decedent was also survived by two adult grandsons, Brent Knipe and Steven Knipe (hereinafter petitioners). Respondent, a resident of Albany County, came to know decedent due to her employment for a time in the group home in which Claudia resided.

In 1994, decedent and her spouse, Joseph Kosmo (hereinafter Kosmo), created the Kosmo Family Trust, naming themselves as the trustees of the trust upon its creation. Under the 1994 trust, after the death of Kosmo and decedent, the trust was to be split in two shares and decedent's share was to be distributed in general bequests to decedent's family, with the remainder to Laura Knipe Wieland. In 2008, decedent and Kosmo executed the Amendment and Restatement of the Kosmo Family Trust dated August 25, 2008. Pursuant to the terms of the 2008 trust, after the death of Kosmo and decedent, decedent's one-half share would be distributed 90% to Richard X. Knipe and 10% to decedent's nephew, Charles Wendel. Kosmo died a resident of California in January 2013, predeceasing decedent. Thereafter, decedent executed three amendments to the trust, in 2013 (first amendment), 2015 (second amendment) and 2016 (third amendment). Pursuant to the first amendment, the residue of decedent's share was left in equal shares to decedent's grandchildren, petitioners Steven Knipe and Brent Knipe, after a $25,000 gift to respondent and a $25,000 gift to decedent's friends, Jens and Sybille Gramer. The second amendment retained the cash gift of $25,000 to decedent's friends and left the remainder of decedent's share to respondent. Finally, the third amendment removed the bequest to decedent's friends, and left decedent's entire share to respondent. The trust contains a choice of law provision, which provides that California law shall apply to the validity of the trust and the construction of its beneficial provisions, regardless of any change in the residence of the trustee.

In March 2018, Laura Knipe Wieland commenced a proceeding to invalidate the first, second and third amendments to the 2008 trust alleging that respondent exercised undue influence over decedent which resulted in decedent executing the amendments to the 2008 trust, ultimately removing her family and friends as beneficiaries and leaving the entirety of the trust assets to respondent. Respondent answered the petition, raising several affirmative defenses including inconvenient forum, and contemporaneously moved to dismiss the petition pursuant to CPLR 327. By decision and order of this Court dated May 29, 2018, respondent's motion to dismiss for inconvenient forum was denied.^[FN2]

Petitioners brought the current proceeding by petition dated December 6, 2018, now seeking to invalidate only the second and third amendments to the 2008 trust. Respondent's summary judgment motion has been submitted for decision.

On a motion for summary judgment, the proponent bears the initial burden of making "a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact" (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]). "Once such a showing has been made, the burden shifts to the party opposing the motion to produce admissible evidence sufficient to establish the existence of material issues of fact which require a trial" (Matter of Panebianco, 50 Misc 3d 1203[A], 2015 NY Slip Op 51903[U], *9 [Sur Ct, Westchester County 2015]; see Zuckerman v City of New York, 49 NY2d 557, 562 [1980]).

To determine whether petitioners have the legal authority to challenge the second and third amendments to the 2008 amended and restated trust, it must be found by the Court that petitioners have both legal capacity and standing to bring this proceeding. Capacity and standing are related, but distinguishable, legal concepts. Capacity is a threshold matter that seeks to determine whether "the legislature invested [petitioners] with authority to seek relief in court," whereas standing relates to "whether a party has suffered an injury in fact conferring a concrete interest in prosecuting the action" (Matter of World Trade Ctr. Lower Manhattan Disaster Site Litig., 30 NY3d 377, 384 [2017] [internal quotation marks omitted]; see also Community Bd. 7 of Borough of Manhattan v Schaffer, 84 NY2d 148, 155 [1994]; Socy. of Plastics Indus. v County of Suffolk, 77 NY2d 761, 772-773 [1991]).

The choice of law provisions in Article VIII (E) and (F) of the Declaration of Trust dated July 18, 1994, as well as the restated trust and amendments, contain a choice of law provision which states that "[t]he validity of this trust and the construction of its beneficial provisions shall be covered by the laws of the State of California in force on the date of execution of this instrument." A choice of law provision such as this one operates to apply California law to substantive issues; however, procedural matters are left to the forum state (see Tanges v Heidelberg N. Am., Inc., 93 NY2d 48, 54 [1999]; Kilberg v Northeast Airlines Inc., 9 NY2d 34, 41 [1961]). In determining whether an issue is substantive or procedural, the law of the forum applies (see Tanges, 93 NY2d at 54; see also Nestor v Putney Twombly Hall & Hirson, LLP, 153 AD3d 840, 842 [2d Dept 2017], lv denied, 30 NY3d 907 [2017]).

Under New York law, capacity is a substantive issue to be determined by California law (see World Trade Ctr., 30 NY3d at 384). Respondent argues that petitioners lack capacity to bring this proceeding, citing Cal Prob Code § 17200 (a). Cal Prob Code § 17200 (a) provides [*3]that "a trustee or beneficiary of a trust may petition the court . . . concerning the internal affairs of the trust or to determine the existence of the trust." The Supreme Court of California has recently interpreted Cal Prob Code § 17200 (a) to include not only present beneficiaries or trustees of a trust, but also a person who "claims to be a rightful beneficiary of a trust if challenged amendments are deemed invalid" (Barefoot v Jennings, (8 Cal 5th 822, 828, 257 Cal Rptr 3d 629 [2020]). The Court also held that "[c]laims that trust provisions or amendments are the product of incompetence, undue influence, or fraud . . . should be decided by the probate court, if the invalidity of those provisions or amendments would render the challenger a beneficiary of the trust" (id.)

In Barefoot, the settlor's daughter filed a petition to challenge the validity of trust amendments and restatements based on undue influence, fraud and capacity, which specifically eliminated her share of the trust, expressly disinherited her and removed her as a successor trustee. The Court of Appeal of California agreed with the lower court in dismissing the petition, holding that only a current named beneficiary had standing to petition the court (Barefoot v Jennings, 27 Cal App 5th 1, 6, 237 Cal Rptr 3d 750, 753 [2018]). It further concluded because plaintiff was no longer a named beneficiary, she lacked standing to challenge the validity of the amendment that eliminated her interest (Barefoot, 27 Cal App 5th at 6). Supreme Court of California reversed and remanded, holding that if the daughter's allegations are true, she has a present or future interest rendering her a beneficiary under Cal Prob Code § 24, who is permitted to contest the trust amendments under Cal Prob Code § 17200 (see Barefoot v Jennings, 8 Cal 5th 822, 827). The Court stated that "[t]o hold other than we do today would be to insulate those persons who improperly manipulate a trust settlor to benefit themselves" (id. at 829).

In the present case, the first amendment to the trust provided for two general bequests in the amount of $25,000, with the remainder of the trust to be paid outright to petitioners (decedent's grandsons) in equal shares. The second and third amendments disinherit petitioners entirely and name respondent as the remainder beneficiary. As beneficiaries of the trust as first amended, petitioners have the requisite capacity to bring this proceeding challenging the second and third amendments to the trust under Cal Prob Code § 17200.

Whether petitioner has the legal authority to bring this proceeding also requires a determination that petitioners have standing. Under conflicts of law principles, standing "goes to the jurisdiction of the court" and is a procedural matter to be determined by New York law (see World Trade Ctr., 30 NY3d at 384, quoting City of NY v State, 86 NY2d 286, 292 [1995]). To establish standing, New York courts require that a "litigant have something truly at stake in a genuine controversy" (Saratoga County Chamber of Commerce, Inc. v Pataki, 100 NY2d 801, 812 [2003]; see also Socy. of Plastics Indus., 77 NY2d at 772).

To determine whether petitioners have standing to contest the second and third amendments to the trust, they must have an interest in the proceeding. Under New York's Surrogate's Court Procedure Act, a "person interested" includes "[a]ny person entitled or allegedly entitled to share as a beneficiary in the estate" (SCPA 103 [39]). The definition of "estate" under SCPA 103 (19) includes the property of a trust (see Matter of Stephen Dehimer Irrevocable Trust, 52 Misc 3d 1203[A] [Sur Ct, Oneida County 2016], affd 155 AD3d 1600 [4th Dept 2017]). The beneficiaries of a trust are defined as "the persons or classes of persons, or the successors in interest of persons . . . upon whom the settlor manifested an intention to confer [*4]beneficial interests (vested or contingent) under the trust, . . . [including] persons who have succeeded to interests of beneficiaries by assignment, inheritance or otherwise" (Matter of Wells Fargo Bank, 2018 NY Slip Op 31883[U] [Sup Ct, NY County 2018], citing Restatement [Third] of Trusts § 48, Comment a]). Here, petitioners are remainder beneficiaries of the first amended trust, which gives them a pecuniary interest in the outcome of this contested litigation. If successful, they would each be entitled to half of the decedent's trust residue and, therefore, have standing to bring this proceeding.

The Court determines that petitioners have legal capacity and standing in this proceeding. Respondent's motion, to the extent it requests dismissal on such basis, is denied.

Respondent contends that the statute of limitations to contest the trust amendments has expired and the petition should be dismissed. Under conflict of law principles, statutes of limitations are procedural matters to be determined by the law of the forum because they are considered "as pertaining to the remedy rather than the right" (Portfolio Recovery Assoc., LLC v King, 14 NY3d 410, 416 [210], quoting Tanges, 93 NY2d at 54-55). In New York, the statute of limitations to challenge a revocable trust on the basis of undue influence and fraud is six years from the date of the settlor's death (see Tilimbo v Posimato, 20 Misc 3d 1116[A], 2008 NY Slip Op 51366[U] [Sur Ct, Bronx County 2008]; CPLR 213). Decedent died on December 1, 2017 and petitioners brought this action to challenge the trust in December 2018. Thus, under the application of New York law petitioners' claims are well within the six-year statutory period and not barred under CPLR 213.

Respondent argues that even if the statute of limitation were to be determined under New York law, the Court must apply the shorter of the two time periods provided under New York and California law pursuant to CPLR 202. CPLR 202 states that, "[a]n action based upon a cause of action accruing without the state cannot be commenced after the expiration of the time limited by the laws of either the state or the place without the state where the cause of action accrued" (CPLR 202). Thus, when a nonresident petitioner brings a claim based on a cause of action accruing outside of New York, CPLR 202 requires application of the statute of limitations applicable in the state where the cause of action accrued, if such statutory period is shorter than that applicable in New York (see CPLR 202). Respondent argues that because petitioners are residents of California and the cause of action accrued in California, the limitations period under California law should control, if shorter than that of New York, pursuant to CPLR 202.

Respondent contends that the applicable statutory period controlling this matter is 120 days under Cal Prob Code §§ 16061.7 and 16061.8. These sections provide, in relevant part, that a trustee shall serve a notification on the beneficiaries of the trust or the heirs of the deceased settlor when a revocable trust becomes irrevocable and that petitioners must make a claim within 120 days of such notice. Respondent has provided no evidence of service of this notice upon petitioners, and therefore they are not bound by the 120-day period.

Under California law, actions for relief on the ground of fraud or mistake are governed by a three-year statute of limitations established under Cal Civ Proc Code § 338 (d). While not explicitly stated in the statute, actions for relief on the ground of undue influence are also subject to the three-year limitations period (see Triplett v Williams, 269 Cal App 2d 135, 137, 74 Cal [*5]Rptr 594, 595 [1969]; Gross v Needham, 184 Cal App 2d 446, 454 [1960]).^[FN3] In Triplett the plaintiff's cause of action seeking relief for trust property wrongly obtained by means of undue influence exercised by defendant was governed by the three-year statutory period under Cal Civ Proc Code § 338 (d) (see Triplett, 269 Cal App 2d at 137). In Gross, the plaintiff's cause of action seeking relief to invalidate the conveyance of property held in decedent's estate on grounds of fraud, duress, and undue influence was subject to the three-year limitations period in Cal Civ Proc Code § 338 (d) (see Gross, 184 Cal App 2d at 454).

A cause of action for fraud or undue influence under California law does not accrue until the aggrieved party discovers, or should discover, the existence of the cause of action. This is to protect aggrieved parties who, with justification, are ignorant of their right to sue (see Seelenfreund v Terminix of Northern Cal Inc., 84 Cal App 3d 133, 136, 148 Cal Rptr 307, 309 [1978]; Cal Civ Proc Code § 338 [d]). Thus, the statutory period commences at the time of the discovery of the fraud or from such time as it could have been discovered had the injured party exercised reasonable diligence, and the statutory period expires three (or possibly four) years from that date of discovery (see Rubinstein v Minchin, 46 Cal App 2d 115, 119, 115 P2d 537, 538 [1941]; Twining v Thompson, 68 Cal App 2d 104, 112, 156 P2d 29, 34 [1945]).

There is no evidence demonstrating that petitioners were provided notice of the second or third amendment, or that petitioners were made aware of facts that reasonably permitted discovery that decedent had amended the trust to completely disinherit petitioners prior to her death. By petitioner Brent Knipe's own account, decedent first told him that he was in decedent's estate plan on Memorial Day 2016 (Affidavit of Brent Knipe, ¶¶ 32, 34). In petitioner Steven Knipe's deposition testimony on September 8, 2020, he testified that, right before decedent's passing in 2017, decedent told him that there was nothing to worry about when she passed and that he would be taken care of. He also testified that "[n]ever in any way did she ever mention that my brother and I were not going to be included in her will."

Petitioners initiated this proceeding in December 2018, one year after decedent's death and well within the statutes of limitations for fraud or undue influence under both California and New York law. Furthermore, respondent has not provided any documentation that notice of the trust terms and amendments was served on petitioners when the trust became irrevocable on decedent's death in December 2017. Therefore the 120 day period to contest under Cal Prob Code §§ 16061.7 and 16061.8 does not apply to petitioners. Respondent's motion, to the extent it requests dismissal of the petition on the basis of the statute of limitations, is denied.

Decedent's Mental Capacity

The petition alleges that decedent lacked capacity to execute the trust amendments. Under California law, "[a] person challenging the validity of a trust instrument on the grounds that the trustor lacked capacity to execute the document . . . carries the heavy burden of proving such allegations" (Doolittle v Exch. Bank, 241 Cal App 4th 529, 545, 193 Cal Rptr 3d 818, 830 [2015]; Cal Prob Code § 810). There is a rebuttable presumption that all persons have the [*6]capacity to make decisions and be responsible for their actions and decisions (Cal Prob Code § 810 [a]). Cal Prob Code § 810 also provides that persons who suffer from a mental or physical disorder may still be capable to, among other things, execute a trust document. A determination that a person lacks capacity to execute a trust must be supported by evidence of a deficit in one of the enumerated mental functions in Cal Prob Code § 811 (a), and by evidence of a correlation between the mental deficit and the trust document in question (see Cal Prob Code § 811 [b]). Cal Prob Code § 812 further provides that a person lacks the capacity to execute a trust document unless the person can communicate the decision and understand and appreciate "(a) the rights, duties, and responsibilities created by, or affected by the decision; (b) the probable consequences for the decisionmaker and . . . the persons affected by the decision; [and] (c) the significant risks, benefits, and reasonable alternatives involved in the decision."

When determining whether a settlor had capacity to execute a trust amendment that closely resembles a will or codicil, the courts have applied a significantly lesser standard of mental capacity, outlined in Cal Prob Code § 6100.5 (see Eyford v Nord, 62 Cal App 5th 112, 122, 276 Cal Rptr 3d 309 [2021], Doolittle, at 545; Anderson v Hunt, 196 Cal App 4th 722, 731, 126 Cal Rptr 3d 736, 742 [2011]). Cal Prob Code § 6100.5 provides that a person need only demonstrate an understanding of (a) the nature of the testamentary act; (b) the nature and situation of the property in question; and (c) the person's relationship to those whose interests are affected by the act, including, but not limited to, descendants. While Cal Prob Code § 6100.5 is not directly applicable to determine competency to amend a trust, it is applicable through Cal Prob Code § 811 to trust amendments that are analogous to wills (see Eyford, at 122; Lintz v Lintz, 222 Cal App 4th 1346, 1352, 167 Cal Rptr 3d 50, 55 [2014]; Anderson, at 730).

Respondent argues that there is no evidence that decedent lacked testamentary capacity at the time she executed the second and third amendments to the trust. Respondent bases this argument on affidavits of respondent and decedent's estate planning attorney, and on medical records obtained throughout the course of this litigation. Specifically, respondent states that decedent was asked various questions regarding her health in July 2015 and July 2016 in connection with her yearly wellness visits. These records indicate that decedent lived alone, was in good health and managed her own finances, food preparation and housekeeping.

Respondent also argues that petitioners' allegation that decedent lacked testamentary capacity is not supported by the deposition testimony of decedent's own children and grandchildren. Specifically, respondent refers to the deposition testimony of petitioner Brent Knipe wherein he stated that he could not remember any times when decedent could not recall anything factually and that the only time she started acting differently was around the time of her passing. Respondent argues that petitioner Brent Knipe believed that decedent was confused at the end of her life because she did not think that her family loved her, but he acknowledged that she was still sharp and recognized his children. Petitioner Steven Knipe testified that he did not have medical records to support the allegation that decedent had been diagnosed with obsessive compulsive disorder, but reached that conclusion because decedent called him frequently and asked detailed questions about his life.

The Court finds that petitioner's claim that decedent lacked testamentary capacity at the time the second and third amendments were executed is not supported by the factual evidence. Accordingly, respondent's motion for summary judgment dismissing petitioner's allegation as to lack of mental capacity to execute the trust amendments is hereby granted.

Undue Influence

With respect to petitioners' claim that the second and third amendments to the trust were made due to the exercise of undue influence and fraud upon decedent by respondent, petitioners are required to show that "pressure brought to bear directly on the testamentary act, sufficient to overcome the testator's free will, amounting in effect to coercion destroying the testator's free agency" (Lintz, at 1354, quoting Rice v Clark, 28 Cal 4th 89, 96, 120 Cal Rptr 2d 522, 527, 47 P3d 300, [2002]; see Hagen v Hickenbottom, 41 Cal App 4th 168, 182, 48 Cal Rptr 2d 197, 205 [1997]). "Direct evidence as to undue influence is rarely obtainable and hence a court or jury must determine the issue of undue influence by inferences drawn from all the facts and circumstances" (Lintz, at 1355, quoting Estate of Hannam, 106 Cal App 2d 782, 786, 236 P2d 208 [1951]). A presumption of undue influence arises upon a petitioner's showing: (1) the existence of a confidential relationship with decedent; (2) active participation in procurement of the testamentary instrument by the respondent; and (3) that the respondent would benefit unduly by the testamentary instrument (see Rice, at 97). If the facts of the matter do not create a presumption of undue influence, the court may consider general factors to determine whether the grounds for relief for undue influence exist, including that: (1) respondent would personally benefit from the testamentary act in question; (2) the provisions of the act are unnatural; (3) the testamentary dispositions are at variance with intentions of the decedent; (3) circumstances provided respondent with an opportunity to control the decedent; (4) the decedent's mental and physical health was deteriorated such as to permit a subversion of the testator's free will and (5) the chief beneficiaries were active in procuring the instrument to be executed (see Matter of Lingenfelter, 38 Cal 2d 571, 585, 241 P2d 990, 999 [1952]).

Respondent argues that there is no evidence of undue influence exerted upon decedent by the respondent. Respondent contends that the second and third amendments to the trust were a product of decedent's own estate plan, the product of a personal friendship between respondent and decedent and reflected an estranged relationship between respondent and petitioners.

Petitioners have submitted numerous affidavits from family and friends supporting their claims of undue influence by respondent. Petitioners allege that respondent took advantage of the emotional weakness of decedent after the death of her daughter Claudia, by convincing decedent that she had given her daughter extra care and attention, and then used that trust to drive a wedge in the relationship between decedent and her daughter, Laura. Petitioners further allege that respondent convinced decedent that she was the only one who cared about her and that respondent made decedent "feel like she's going to look out for all my antiques, crystals and my cat especially" (Affidavit of Annette Knipe, ¶ 24). It is alleged that respondent called decedent daily, despite their remote locations and relatively short-term relationship, telling her that she would take care of her because she loved and cared about her. Respondent visited decedent in California a few times and flew out to California and accompanied decedent to her attorney's office when decedent executed the second amendment, which made respondent the only residuary beneficiary of decedent's trust, subject to a $25,000 bequest to decedent's friends.

Respondent's own affidavit and deposition testimony raise questions of fact regarding her influence over decedent and whether she had a confidential relationship with her. She gave conflicting statements regarding her knowledge of decedent's planning documents and assets and her visit to decedent's estate planning attorney (who also represented respondent as trustee after decedent's death). Furthermore, the friends who were still given a bequest in the second amendment, but removed from the third amendment, were notified by respondent, not decedent, [*7]that decedent wanted them to return her keys by mail, without explanation or the opportunity to speak with decedent. There are undoubtedly material questions of fact as to whether the second and third amendments to the trust were a product of undue influence exercised upon decedent by the respondent which need to be determined at trial. Accordingly, respondent's motion to dismiss petitioner's claim of undue influence is hereby denied.

Fraud

Undue influence and fraud are comprised of a similar factual basis since contestants relying on a theory of undue influence may claim that the accused employed misrepresentations to pressure a decedent-settlor (see David v Herman, 129 Cal App 4th 672, 685, 28 Cal Rptr 3d 622, 632 [2005]). They are distinct grounds for contest, however. One of the necessary elements of fraud is an intent to deceive the decedent or an intent to induce decedent to execute a testamentary instrument (see Matter of Newhall, 190 Cal 709, 719, 214 P 231, 235 [1923]). Establishing a fraud cause of action relies upon a similar fact basis as establishing a cause of action for undue influence, and because this Court found that a material question of fact exists as to whether undue influence was exerted by respondent, it is similarly determined that material questions of fact exist as to whether the second and third amendments to the trust were a product of fraud by the respondent. Accordingly, the respondent's motion for summary judgement to dismiss petitioners' claim of fraud is hereby denied.

Any remaining contentions, to the extent not specifically addressed, have been considered and found to be lacking in merit or not ripe for determination.

Accordingly, it is

ORDERED that respondent's motion for an order granting summary judgment dismissing the claims of Laura E. Wieland Knipe and Richard X. Knipe is granted, due to the withdrawal of their objections to the validity of the first amendment to the trust and their resulting lack of standing; and it is further

ORDERED that respondent's motion for an order granting summary judgment as to the claims of Brent Knipe and Steven Knipe is granted, in part, with respect to the allegation that decedent lacked mental capacity to execute the contested amendments; and it is further

ORDERED that respondent's motion for an order granting summary judgment to dismiss the petition as to the claims of Brent Knipe and Steven Knipe is denied in all other respects.

This constitutes the Decision and Order of the Court.