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COURT ORDER WAS AMBIGUOUS AND ERRONEOUS AND COULD NOT THEREFORE BE THE BASIS OF A CONTEMPT FINDING AND SANCTIONS (THIRD DEPT). ​

The Third Department, reversing Supreme Court, in a proceeding concerning the guardianship and trust assets of a disabled person, determined the trustee should not have been held in contempt based upon an ambiguous and erroneous court order and sanctions against the trustee were not justified in light of the ambiguity of and error in the order:

… [W]e find that, however uncooperative and dilatory the trustee was, [the court evaluator] did not demonstrate by clear and convincing evidence that the trustee violated a “lawful, clear and unequivocal order” when he did not pay the fee award from the unfunded, unexecuted 2006 SNT [supplemental needs trust] as directed in the ex parte order and when he instead cross-moved to vacate that order … . Moreover, given that the ex parte order referred to an incorrect SNT, which was not funded or executed, an error of which Supreme Court was made aware, the court should have granted the trustee’s motion to vacate the ex parte order … . …

A court may, in its discretion, award any party or counsel in a civil matter “costs in the form of reimbursement for actual expenses reasonably incurred and reasonable [counsel] fees, resulting from frivolous conduct” and “may impose financial sanctions upon any party or attorney” for frivolous conduct … . … However, such sanctions and costs may be imposed “only upon a written decision setting forth the conduct on which the award or imposition is based, the reasons why the court found the conduct to be frivolous, and the reasons why the court found the amount awarded or imposed to be appropriate” … . …  [G]iven … the fact that the court orders were ambiguous or directed payment out of an incorrect, unfunded SNT, the trustee’s conduct in response to those orders, much of it based upon the advice of counsel, was not shown to be frivolous … . Matter of James H., 2019 NY Slip Op 00170, Second Dept 1-10-19

 

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