Posts Tagged: litigation update

T&E Litigation Update – Cheney v. Flood; Johnson v. Kindred Healthcare; Rockingham County Nursing Home v. Harnois

Author: Mark E. Swirbalus, Esq., Goulston & Storrs, P.C.

Cheney v. Flood

In the recent Rule 1:28 decision Cheney v. Flood, 2014 Mass. App. Unpub. LEXIS 154 (February 7, 2014), the Appeals Court reviewed the dismissal of a malpractice claim brought against an attorney on the grounds that the attorney should have known that the decedent – the attorney’s former client and plaintiff’s stepfather – wanted the plaintiff and her children to be his only beneficiaries.

Although the plaintiff did not properly appeal the dismissal of the malpractice claim, the Appeals Court noted that had she done so, the decision in Miller v. Mooney, 431 Mass. 57, 61 (2000), would have been dispositive of her claim.  In Miller, the Supreme Judicial Court held that the surviving relatives of a decedent could not bring claims against a lawyer based on allegedly erroneous statements the lawyer made to one of the relatives concerning the terms of the decedent’s will because they could not establish that they had an attorney-client relationship with the lawyer. Miller, 431 Mass. at 61 (holding that the duty of care owed by an attorney arises only from an attorney-client relationship).

The complaint also asserted a claim for quantum meruit seeking payment from the decedent’s estate for services that the plaintiff and her family provided during the last years of his life.  However, the plaintiff could not establish any express agreement with the decedent for such payment and instead only offered evidence that she assumed she would be a beneficiary of the estate because she “always hoped that he would eventually have a little bit to pay [her] back.”

The Appeals Court distinguished the plaintiff’s case from situations in which a decedent had expressly agreed to make someone a beneficiary in exchange for the performance of services prior to the decedent’s death (e.g., a wealthy bachelor who promised to leave a plaintiff one-half of his estate in exchange for services).  In affirming the lower court’s dismissal of the plaintiff’s claim, the Court quoted Congregation Kadimah Toras-Moshe v. DeLeo, 405 Mass. 365, 366-367 (1989) for the proposition that “moral obligation is not legal obligation [and a] hope or expectation, even though well founded, is not equivalent to either legal detriment or reliance.”

Johnson v. Kindred Healthcare

In Johnson v. Kindred Healthcare, Inc., Case No. SJC-11335, 2014 Mass. LEXIS 7 (January 13, 2014), the Supreme Judicial Court answered the question of first impression in Massachusetts of whether a health care agent’s agreement with a health care facility to arbitrate disputes arising from the principal’s stay at the facility constitutes a “health care decision” binding on the principal pursuant to the health care proxy statute, G.L. c. 201D, § 5.

The brief background is that the administrators of the decedent’s estate brought a wrongful death action in Superior Court against a nursing home and related entities and individuals.  In response, the defendants sought to enforce the mandatory arbitration provision in the nursing home agreement.  The decedent’s health care agent (his wife) had signed the agreement on his behalf.

The estate argued that the health care agent’s entering into the agreement, and specifically the mandatory arbitration provision, was not binding because it was not a “health care decision” as that term is defined and used in the health care proxy statute.  The Court agreed, explaining that the Massachusetts Legislature intended to distinguish between a health care proxy, which limits an agent’s decision-making authority on behalf of an incapacitated person to health care decisions, and a durable power of attorney, guardianship or conservatorship, each of which authorizes much broader decision-making power on behalf of an incompetent person.  “Unlike a health care proxy, a durable power of attorney can authorize an agent to make decisions affecting the principal’s business, estate, finances, and legal relationships in a variety of contexts unrelated to health care.”

In support of this conclusion, which comports with the majority view in other jurisdictions that have considered similar issues, the Court pointed to the history of the health care proxy statute, where the Legislature considered but rejected an alternative bill that would have combined the roles of health care agent and attorney-in-fact, and noted that the statutory scheme ultimately enacted by the Legislature maintains a distinction between these fiduciary roles.  The Court also reasoned that if it were to define “health care decisions” more broadly, then many decisions made by a health care agent would override the more expansive powers allocated to an attorney-in-fact, guardian or conservator.

Rockingham County Nursing Home v. Harnois

In Rockingham County Nursing Home v. Harnois, Civil Action No. 11-11057-JGD, 2014 U.S. Dist. LEXIS 3042 (January 10, 2014), the United States District Court for the District of Massachusetts addressed a nursing home’s fraudulent transfer claim against the trustee of an irrevocable trust.  The nursing home alleged that the settlor transferred to the trust her primary residence, which was also her primary asset, with the intent of avoiding her payment obligation to the nursing home, and that she did not receive equivalent value in return.  The nursing home also claimed that the trust would be unjustly enriched if it were permitted to keep the property.

The Court’s decision includes a lengthy discussion of the facts and certain procedural matters arising from the nursing home’s motion for partial summary judgment and the trust’s motion for leave to amend its answer to assert the statute of limitations as an affirmative defense.  Of particular note is the Court’s finding that the nursing home’s fraudulent conveyance claim is barred by the statute of limitations.  The Court explained that the Massachusetts Uniform Fraudulent Transfers Act (G.L. c. 109A, §§ 1, et seq.) provides that a claim must be brought within four years following the transfer or obligation, or within one year after the transfer or obligation was or could have been reasonably discovered by the claimant, and that a claim based on constructive fraud must be brought within four years after the transfer or obligation, regardless of the claimant’s knowledge.  Here, the Court found the nursing home’s claim to be time-barred, because the claim was based on constructive fraud and more than four years had passed.  Accordingly, the Court did not address the substance of the allegedly fraudulent transfer to the trust.

The Boston Bar Association Trusts & Estates Section Blog provides information as a service to its users and BBA members. Neither the Trusts & Estates Section nor the Boston Bar Association are a law firm and do not represent clients in any way. Although the information on this site is about legal issues and informational services it is not legal advice. Use of this blog does not in any way create a lawyer-client relationship. If you need a lawyer, the Boston Bar Association Lawyer Referral Service can refer you to a qualified attorney. http://www.bostonbarlawyer.org/ or call 617-742-0625.

T&E Litigation Update – Estate of Elizabeth B. Lacey; Surabian v. Billings; Stevens v. Stevens

Author: Mark E. Swirbalus, Esq., Goulston & Storrs, P.C.

In three recent decisions, the Appeals Court affirmed a judgment on undue influence grounds in a “classic will contest” with some procedural twists, addressed statute of limitations questions, and restored a beneficiary’s interest in a realty trust.

Estate of Elizabeth B. Lacey

In Estate of Elizabeth B. Lacey, Case No. 12-P-357, 2013 Mass. App. Unpub. LEXIS 865 (August 29, 2013) (Rule 1:28), the Appeals Court affirmed the judgment in what it described as a “classic will contest.” The beneficiaries of a prior will successfully contested a subsequent will – under which the contestants would receive nothing – as the product of undue influence. The facts are not remarkable, but three aspects of the decision are noteworthy.

First, the proponent of the subsequent will argued on appeal that the trial judge improperly adopted verbatim many of the findings of fact proposed by the contestants. The Court rejected this argument, explaining that although the practice of adopting a party’s proposed findings of fact verbatim has been criticized, it is not fatal if the adopted findings are supported by the evidence. Here, the trial judge did not adopt all of the contestants’ proposed findings (83 out of 225 proposed findings), and provided her own conclusions of law and reasoning, which served as the judge’s “badge of personal analysis.”

Second, in noting that the judgment was not clearly erroneous, the Court pointed to the proponent’s broader scheme of misappropriating the decedent’s assets, including his endorsing and cashing her pensions checks, forging her name on checks after her death, and invoking the privilege against self-incrimination when asked about these checks. “That choice permitted the judge to draw any reasonable adverse inferences in this civil litigation.”

Third, the Court rejected as “meritless” the proponent’s argument that he was deprived of due process by the two-year delay between the trial and the judge’s decision. The proponent had not indicated how he was prejudiced by this delay. Because he possessed no lawful interest in the estate, “he therefore suffered no deprivation of any kind, let alone a deprivation of a due process interest.”

Surabian v. Billings

In Surabian v. Billings, Case No. 12-P-1287, 2013 Mass. App. Unpub. LEXIS 870 (August 29, 2013) (Rule 1:28), the Appeals Court reversed the allowance of a motion to dismiss the plaintiff’s claim against the defendants for conversion on statute of limitations grounds. The complaint was filed three years and forty days after the plaintiff’s daughter’s death, who apparently – the facts recited in the decision are sparse – was in possession of the plaintiff’s property at her death.

The Court explained that a three-year limitations period applies to the conversion claim against the defendants in their individual capacities, that the claim would have accrued when the defendants refused the plaintiff’s demand for the property, and that the plaintiff had pled sufficient facts, which are assumed to be true on a motion to dismiss, that the claim did not accrue – i.e., that the defendants did not refuse to return the property – until the date the complaint was actually filed. At the very least, “nothing in the complaint asserts with sufficient clarity that any cause of action for conversion had accrued on the date of the daughter’s death.”

The Court affirmed the trial judge’s dismissal of the plaintiff’s claim for conversion against one of the defendants in her capacity as administrator of the daughter’s estate because the claim was not brought within the applicable one-year limitations period. The Court also seemed to suggest, however, that the claim against the administrator was not yet ripe because the administrator had not listed the property as part of the daughter’s estate in the voluntary administration statement, and that, if this property were later claimed to be part of the estate, then the statute of limitations would be no bar and the plaintiff could amend his complaint on remand or assert a new action against the administrator.

Stevens v. Stevens

In Stevens v. Stevens, Case No. 12-P-773, 2013 Mass. App. Unpub. LEXIS 883 (September 3, 2013) (Rule 1:28), the Appeals Court affirmed a judgment for the plaintiff Christopher against his brother David and mother Esther on Christopher’s claim for wrongful deprivation of his share of a family trust, awarding him damages in the amount of $918,546. Esther established the trust in July 1983 to hold certain property in Marshfield, naming herself as trustee and executing a schedule of beneficiaries giving Christopher and David equal interests of 50% each. The terms of the trust prohibited any change in the beneficial interests without Christopher’s and David’s authorization.

In 1984, David asked Esther to change the beneficial interests such that he would be given a 51% interest and Christopher a 49% interest. Esther rejected this change, crossing out the percentages proposed on the new schedule and writing 50% next each son’s name. Esther then signed this schedule as trustee as of July 10, 1983, the date when she established the trust. Some years later, however, Esther conveyed the Marshfield property to herself and David as tenants in common, without informing Christopher, and when Christopher eventually learned of this conveyance, he was assured by Esther and David that they would make things “right.” They subsequently acted on this promise by making equal distributions to Christopher, but when the property was later sold to a third party, Esther and David denied that Christopher held any interest.

After a lengthy bench trial, the judge found that the schedule Esther signed as of July 10, 1983 (where she crossed out David’s proposed change in percentage interests and wrote 50% next to each son’s name) was controlling, even though no original schedule could be found. In affirming the judgment, the Appeals Court upheld the trial judge’s validation of this document as a copy of the controlling schedule and rejection of another document showing Esther and David as the sole beneficiaries. The Appeals Court also rejected Esther and David’s argument that Christopher’s claims were barred by the statute of limitations, because Christopher’s promissory estoppel claim was brought within six years of Esther and David’s promise to honor and restore Christopher’s 50% interest in the trust, and Christopher had reasonably relied on this promise, which Esther and David actually fulfilled for some time before finally reneging.

The Boston Bar Association Trusts & Estates Section Blog provides information as a service to its users and BBA members. Neither the Trusts & Estates Section nor the Boston Bar Association are a law firm and do not represent clients in any way. Although the information on this site is about legal issues and informational services it is not legal advice. Use of this blog does not in any way create a lawyer-client relationship. If you need a lawyer, the Boston Bar Association Lawyer Referral Service can refer you to a qualified attorney. http://www.bostonbarlawyer.org/ or call 617-742-0625.