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  • Christopher Smith, Michael Smith As Trustees, Of The Jay And Patricia Smith Irrevocable Trust v. Theodore P. Smith Income Only Irrevocable Trust, Smith J Anna AS TRUSTEE, Smith Jane Anna AS EXECUTOR, Estate Of Theodore P Smith BY EXECUTORSpecial Proceedings - Other (RPAPL Section 901 et al) document preview
  • Christopher Smith, Michael Smith As Trustees, Of The Jay And Patricia Smith Irrevocable Trust v. Theodore P. Smith Income Only Irrevocable Trust, Smith J Anna AS TRUSTEE, Smith Jane Anna AS EXECUTOR, Estate Of Theodore P Smith BY EXECUTORSpecial Proceedings - Other (RPAPL Section 901 et al) document preview
  • Christopher Smith, Michael Smith As Trustees, Of The Jay And Patricia Smith Irrevocable Trust v. Theodore P. Smith Income Only Irrevocable Trust, Smith J Anna AS TRUSTEE, Smith Jane Anna AS EXECUTOR, Estate Of Theodore P Smith BY EXECUTORSpecial Proceedings - Other (RPAPL Section 901 et al) document preview
  • Christopher Smith, Michael Smith As Trustees, Of The Jay And Patricia Smith Irrevocable Trust v. Theodore P. Smith Income Only Irrevocable Trust, Smith J Anna AS TRUSTEE, Smith Jane Anna AS EXECUTOR, Estate Of Theodore P Smith BY EXECUTORSpecial Proceedings - Other (RPAPL Section 901 et al) document preview
  • Christopher Smith, Michael Smith As Trustees, Of The Jay And Patricia Smith Irrevocable Trust v. Theodore P. Smith Income Only Irrevocable Trust, Smith J Anna AS TRUSTEE, Smith Jane Anna AS EXECUTOR, Estate Of Theodore P Smith BY EXECUTORSpecial Proceedings - Other (RPAPL Section 901 et al) document preview
  • Christopher Smith, Michael Smith As Trustees, Of The Jay And Patricia Smith Irrevocable Trust v. Theodore P. Smith Income Only Irrevocable Trust, Smith J Anna AS TRUSTEE, Smith Jane Anna AS EXECUTOR, Estate Of Theodore P Smith BY EXECUTORSpecial Proceedings - Other (RPAPL Section 901 et al) document preview
  • Christopher Smith, Michael Smith As Trustees, Of The Jay And Patricia Smith Irrevocable Trust v. Theodore P. Smith Income Only Irrevocable Trust, Smith J Anna AS TRUSTEE, Smith Jane Anna AS EXECUTOR, Estate Of Theodore P Smith BY EXECUTORSpecial Proceedings - Other (RPAPL Section 901 et al) document preview
  • Christopher Smith, Michael Smith As Trustees, Of The Jay And Patricia Smith Irrevocable Trust v. Theodore P. Smith Income Only Irrevocable Trust, Smith J Anna AS TRUSTEE, Smith Jane Anna AS EXECUTOR, Estate Of Theodore P Smith BY EXECUTORSpecial Proceedings - Other (RPAPL Section 901 et al) document preview
						
                                

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STATE OF NEW YORK SUPREME COURT COUNTY OF HERKIMER CHRISTOPHER SMITH AND MICHAEL SMITH AS TRUSTEES OF THE JAY AND PATRICIA SMITH SUMMONS IRREVOCABLE TRUST, Index No. Plaintiffs, Vv. THEODORE P. SMITH INCOME ONLY IRREVOCABLE TRUST, Defendant. TO THE ABOVE-NAMED DEFENDANTS: YOU ARE HEREBY SUMMONED to answer the attached Verified Complaint in this action and to serve a copy of your Answer within twenty (20) days after the service of this Summons, exclusive of the day of service (or within thirty [30] days after the service is complete if this Summons is not personally delivered to you within the State of New York); and in case of your failure to appear or answer, judgment will be taken against you by default for the relief demanded in the Complaint. The basis of venue as designated in the Complaint is the location of the property which Plaintiffs seek partition and sale. Dated: April 27, 2021 BOND, SCHOENECK & KING, PLLC Pra Seiko By: Brody D. Smith, Esq. Attomeys for Plaintiffs Office and P.O. Address One Lincoln Center Syracuse, New York 13202-1355 Telephone: (315) 218-8225 TO: James Lagios, Esq. Rivkin Radler LLP 66 South Pearl Street, 11th Floor Albany, New York 12207 James.Lagios@rivkin.com 12448738.1STATE OF NEW YORK SUPREME COURT COUNTY OF HERKIMER CHRISTOPHER SMITH AND MICHAEL SMITH AS TRUSTEES OF THE JAY AND PATRICIA SMITH VERIFIED COMPLAINT IRREVOCABLE TRUST, Index No. Plaintiffs, v. THEODORE P. SMITH INCOME ONLY !RREVOCABLE TRUST, Defendant. Plaintiffs Christopher Smith and Michael Smith, as Trustees of the Jay and Patricia Smith Irrevocable Trust, by their attorneys Bond, Schoeneck & King, PLLC, complaining of the Defendant, allege as follows: 1. Christopher Smith and Michael Smith are the Trustees of the Jay and Patricia Smith Irrevocable Trust (the “Trust’). 2. Christopher Smith resides at 832 Route 29, Fairfield, New York. 3. Michael Smith resides at 274 Rose Valley Road, Newport, New York. 4. The Trust and Defendant, the Theodore P. Smith Income Only Irrevocable Trust (“Defendant”), own in fee, and possess as tenants in common, certain real property, situate partly in the Village of Middleville and partly in the Town of Newport, County of Herkimer, and State of New York, known and described as 84 Herkimer Street, Middleville, New York, and recorded in the Herkimer County Clerk's Office on January 18, 2002 in Book 903 of Deeds at pages 72, 75, 78, 81, and 84 (collectively, 12421792.5the “Property”). Copies of the above-referenced pages of Book 903 of Deeds is attached hereto as Exhibit A. 5. The Trust obtained title to the Property by Warranty Deed on March 28, 2019. A copy of the Warranty Deed is attached hereto as Exhibit B. 6. The Property is also known and described as Parcels F, G, H, I, and J in the aforementioned Warranty Deed. See Exhibit B. 7. Upon information and belief, Theodore P. Smith transferred his one-third undivided interest in the Property to Defendant, and Defendant now holds and possesses the same interest as was granted to Theodore P. Smith in the above- referenced pages of Book 903 of Deeds. See Exhibit A. 8. The portions of the Property situate in the Village of Middleville are known also as Tax ID Nos. 100.58-1-33, 100.58-1-32, 100.58-1-26, 100.58-1-24, and 100.58- 1-17. 9. The Trust owns in fee and possesses a two-thirds undivided interest in the Property, and Defendant owns in fee and possesses a one-third undivided interest in the Property. 10. Upon information and belief, there are no liens on the Property and no persons other than the Trust and Defendant have any interest in the Property as owners or otherwise. 11. Plaintiffs Christopher Smith and Michael Smith are authorized by the Certification of Trust to convey real and personal property owned by the Trust. A copy of the Certification of Trust is attached hereto as Exhibit C. 12421792.512. Upon information and belief, Defendant operates a business known as Ace of Diamonds Mine & Campground, LLC (the “Ace of Diamonds”), on the Property. 13. | Upon information and belief, the Ace of Diamonds is a single member LLC with the sole member being Anna J. Smith as trustee for the Theodore P. Smith Income Only Irrevocable Trust. 14. Defendant, through the Ace of Diamonds, operates commercial and tourist mining enterprises on the Property, as well as a campground. 15. | The mining activity on the Property relates to the extraction of “Herkimer Diamonds,” which are a unique type of double-terminated quartz crystal found in Herkimer County composed of silicon dioxide and hard enough to scratch glass. The brilliant appearance, hardness, natural facets and hexagonal structuring of Herkimer Diamonds cause them to bear a striking resemblance to real diamonds. 16. Because of the unique characteristics of Herkimer Diamonds, extraction of the minerals from the Property is a highly valuable enterprise capable of yielding hundreds of thousands of dollars in revenue each year. 17. Over the years, and in connection with the business operations of the Ace of Diamonds, the Trust has provided numerous improvements to the Property based on its understanding that the Ace of Diamonds was the family business. 18. | These improvements included, inter alia, septic tank and leach field replacement, a new 200 amp service feed for campground expansion, engineering management and plan development for campground regulatory compliance, LED site lighting improvements, sluice cleaning, overburden removal, fusing and installation of 12421792.5conduit raceway for waterline improvements, transportation and set-up of trailers for “Ace” advertisement, and vinyl sign development and installation. 19. In addition to these services, the Trust also supplied materials for improvements, including, by way of example, LED lights and custom brackets for lighting improvements, 1,100 feet of 8” HDPE conduit with a value of $20 per foot, flush mount pull boxes, spray foam insulation, and miscellaneous equipment and vehicles which were conveyed at cost to the Ace of Diamonds. 20. Without accounting for the value of time and services supplied to the Ace of Diamonds, the value of the materials supplied by Plaintiffs over the years well exceeds $25,000. 21. — Plaintiffs supplied these services and materials based on their belief that the Ace of Diamonds was the family business, given that the current Ace of Diamonds operation was a continuation of the tourist mining business Plaintiffs’ grandfather, Donald Smith (“Don”), had operated under the same name since the 1970s. 22. Indeed, this understanding that mining on the property would remain the family business is why, upon information and belief, Don transferred the Property to his sons as tenants in common. 23. Defendant and the Trust were parties to a verbal lease agreement, entered into in or around 2013 after Don’s death, whereby Defendant made annual rent payments to the Trust of $21,000 in exchange for permission to operate the Ace of Diamonds on the Property. 24. In the years since this verbal agreement was entered into, the scope and intensity of the Ace of Diamonds’ business operations have increased dramatically. 12421792.525. Realizing that the lease payments made by Defendant were drastically below fair market value considering the value of minerals extracted from the Property each year, the Trust attempted to negotiate a more reasonable arrangement with Defendant under which the Trust’s compensation would be commensurate with its two- thirds ownership interest in the Property. 26. In or around October of 2020, the Trust attempted unsuccessfully for several months to establish fair terms for a tenants in common agreement with Defendant. 27. At this time, a tenants in common agreement was deemed preferable to partition of the property because of the large area of the Property currently being used in connection with the Ace of Diamonds business. Due to the nature of mining, a physical separation of the Property would likely have resulted in a massive disruption of the business and would not have guaranteed that the parties would receive mineral pockets proportionate to their respective shares. 28. During these negotiations, Defendant refused to provide the Trust an accounting of its profits or of the amount of minerals that have been extracted from the Property in connection with the operations of the Ace of Diamonds. 29. Despite the Trust’s good faith efforts to negotiate satisfactory terms with Defendant, the parties were unable to reach an agreement on terms for the continued operation of the Ace of Diamonds during the 2021 calendar year. 30. Defendant no longer has permission from the Trust to operate the Ace of Diamonds on the Property. 12421792.531. Upon information and belief, Defendant continues to operate the Ace of Diamonds on the Property without payment of rents to the Trust and mining operations for the 2021 calendar year have already begun. 32. Defendant's failure to fairly compensate the Trust for the minerals removed from the Property has resulted in a windfall for Defendant to the detriment of the Trust. 33. | Upon information and belief, Defendant will continue to increase the intensity of commercial mineral extraction on the Property in order to extract as many minerals as possible. 34. Such reckless commercial mining on the property threatens to drastically deplete the Property's most valuable pockets of minerals and cause irreparable harm to the Property. 35. Upon information and belief, if Defendant is permitted to continue its commercial mining operations on the Property during the pendency of this action, it will also cause irreparable harm to the viability of the tourist mining and campground operations of the Ace of Diamonds business. 36. The Property is so situate that physical partition thereof among the parties, according to their respective rights and interests, cannot be had without great prejudice to the owners thereof. 37. It is neither practical nor possible to partition the Property given, among other things, the extent of Defendant’s business operations on the Property despite only possessing a one-third interest in the Property. 12421792.538. In addition, the exact location and amount of minerals remaining on the Property cannot be determined with any reasonable certainty. Partition could therefore result in vastly dissimilar valuations and further injury to the Trust. 39. Accordingly, the Court must partition and sell the Property. 40. All of the parties to this action, upon information and belief, are of full age and sound mind. 41. | The Trust and the Defendant own, hold and are seized of as tenants in common in addition to the Property described in Paragraph 4 of this Complaint, certain real property situate in the County of Herkimer, State of New York, known and described as Parcels B and K in the Warranty Deed. See Exhibit B. WHEREFORE, Plaintiffs respectfully demand judgment as follows: a. That the Trust is seized and possessed as tenant in common in fee of an undivided two-thirds part of the Property; b. That the Defendant is seized and possessed as tenant in common in fee of an undivided one-third part of the Property; c. That the premises are so situate that a sale thereof is necessary, and that said premises be sold at a private sale, under the supervision and direction of a court-appointed referee, with conveyance given to the purchasers; d. That out of the moneys arising from said sale, the Trust shall be paid the costs, disbursements and fees of this action and of said sale, including attorneys’ fees; e. That out of the moneys arising from said sale, the Referee shall be paid his/her own fees and expenses, shall satisfy the fees and expenses of the 12421792.512421792.5 broker, and shall satisfy all fees and costs associated with the sale of the Property and/or its maintenance and upkeep pending sale; That there is an accounting between the Trust and Defendant of their respective expenditures for the payment of the taxes, insurance, improvements, repairs, renovations and related costs, expenses and disbursements of time, material and supplies related to the Property, and upon the completion of said accounting, there shall be paid out of the proceeds of the sale such sum or sums as shall be ascertained to be due the respective parties hereto; That there is an accounting between the Trust and Defendant of the value of minerals removed from the Property; That a receiver be appointed, with the usual powers and directions, of all the rents and profits now due and unpaid, or to become due pending this action, and issuing out of the Property; That Defendant may be compelled to pay to the said receiver for the benefit of the Trust any money, and the value of any property, which Defendant has acquired to itself, or transferred to others, or lost or wasted; That upon the completion of the accounting by Defendant, it be decreed to pay over to the Trust such sum or sums as shall be ascertained to be due to it; That that the residue of the money arising from said sale be divided and paid, two-thirds thereof to the Trust and one-third thereof to Defendant;|. That it be adjudged by said sale and conveyance pursuant thereto, that the Plaintiffs and Defendant and all persons claiming through or under them subject to the filing of the notice of the pendency of this action, be barred of all right, title and interest in said premises in possession, reversion, remainder, or otherwise; and m. For such other and further relief as the Court deems just, fair, proper and equitable. Dated: April 26, 2021 BOND, SCHOENECK & KING, PLLC By: Les Zs Brody D. Smith, Esq. Attomeys for Plaintiffs Office and P.O. Address One Lincoln Center Syracuse, New York 13202-1355 Telephone: (315) 218-8225 12421792.5VERIFICATION STATE OF NEW YORK ) )ss.: COUNTY OF HERKIMER ) Christopher Smith, being duly sworn, deposes and says that deponent is the Trustee of the Jay and Patricia Smith Irrevocable Trust, Plaintiff in this action, that deponent has read the foregoing Verified Complaint and knows the contents thereof, that the same is true to the knowledge of deponent, except as to such matters which are stated to be alleged on information and belief, and as to those matters deponent believes it to be true. Sworn to before me this Be day of _dpuk , 2021. i . hey lis echo Notary Public yr 1S No. O1GI Qualified in Herkimar County, Commission Expires May 12, 2223... 10 12421792.5VERIFICATION STATE OF NEW YORK ) )ss.: COUNTY OF HERKIMER ) Michael Smith, being duly sworn, deposes and says that deponent is the Trustee of the Jay and Patricia Smith irrevocable Trust, Plaintiff in this action, that deponent has read the foregoing Verified Complaint and knows the contents thereof, that the same is true to the knowledge of deponent, except as to such matters which are stated to be alleged on information and belief, and as to those matters deponent believes it to be true. Sworn to before me this Ay day of te , 2021. 11 12421792.5