Posts Tagged: Mark Swirbalus

New E-Discovery Rules Bring Changes, Challenges and Cutting Edge Discovery Issues to Trust and Estate Litigation

Authors:
Mark E. Swirbalus, Esq., Goulston & Storrs, P.C.
Marshall D. Senterfitt, Esq., Goulston & Storrs, P.C.

T&E practitioners may think that the new Massachusetts rules governing electronically stored information (“ESI”) do not apply to their practice, but they would be wrong. The new rules do apply and likely will bring big changes to T&E litigation.

As most counsel are (hopefully) well aware, the Massachusetts Rules of Civil Procedure were amended effective January 1, 2014, bringing the rules concerning electronic discovery more in line with the Federal Rules of Civil Procedure. Among the amendments are provisions that: (1) expressly allow for (and sometimes require) counsel to meet and confer about electronic discovery issues; (2) grant courts authority to manage the scope of electronic discovery; (3) place limits on what ESI must be collected and produced; (4) provide claw-back rights in the event of the inadvertent production of privileged material; and (5) eliminate sanctions for spoliation of evidence in certain circumstances. See Mass. R. Civ. P. 26(f) and 37(f).

Interestingly, the primary purpose of the amended rules – to address the “staggering growth of information in electronic form today” (see Reporter’s Notes to Mass. R. Civ. P. 26(f)) – may not be of great importance to many T&E litigators. T&E disputes often involve fewer documents and less data than most complex civil business cases. In fact, the Supreme Judicial Court’s Standing Advisory Committee on the Rules of Civil Procedure considered making the new electronic discovery rules applicable only to the Superior Court, which regularly handles large complex civil matters. The Committee ultimately determined, however, that electronic discovery impacts nearly all litigants and thus should apply to all trial courts in Massachusetts. See Reporter’s Notes to Mass. R. Civ. P. 26(f).(FN1)

Although the use of predictive coding to search for a digital smoking gun hidden amongst terabytes of data may not concern most T&E litigators, electronic discovery will become a fundamental element of many T&E disputes for at least two reasons. First, Rule 26(f) applies not only to data residing in a multinational company’s enterprise e-mail system and off-site server farm, but also to data found on an individual’s Gmail account and home computer. Second, the burgeoning use of e-mail, text messages and social media has created countless new sources of ESI that T&E litigators will and should pursue in support of their cases.

One example of a relatively new source of evidence that will play a role in T&E disputes is the now ubiquitous smartphone. Once upon a time (i.e. less than 10 years ago), when people used cell phones solely for voice calls and iPods solely to play music, neither device held evidence of much import to most cases. That is no longer true. A recent study by the Pew Research Center’s Internet & American Life Project found that in 2013, 91% of American adults owned a cell phone.(FN2) Of those phone owners, 81% sent or received text messages (including 75% of users aged 50-64 and 35% of users over age 65), 60% accessed the internet from their phones, and 52% used their phones to send and receive e-mail. Id.

A similar study in 2012 found that 82% of cell phone owners took pictures with their phones, 44% recorded videos, and 29% used their phones for online banking.(FN3) The trend is undeniable. In a telling sign of just how reliant people have become on their phones, 25% of married or partnered adults have communicated with each other by text message while they were both home together.(FN4) Given the increased reliance people place on their smartphones for all manner of everyday uses, most of which involve the capture and/or transmission of information, it is conceivable that the contents of a single smartphone could make or break an entire case.

Of course it is not just phones that hold potentially crucial ESI – old fashion desktop computers, laptop computers, tablet devices and ever more popular “wearable” devices all hold and transmit ESI. These devices also utilize a vast array of applications (aka apps) that collect and use personal information and data for everything from accessing and maintaining social media accounts and managing personal finances, to tracking the location of other devices to help people find their friends or avoid their enemies. As new technology and uses of that technology emerge, so too do new forms and formats of electronic evidence.

Although the Probate Court has not historically been a proving ground for cutting edge legal technology, the application of the new e-discovery rules to all trial courts, coupled with the expanding universe of personal digital information available to litigants in discovery, may cast T&E litigators and probate court judges as pioneers. While lawyers trying complex civil matters are at the forefront of some ESI issues, such as computer assisted document review, there are other issues that might arise in Probate Court long before they are addressed in the Business Litigation Session of the Superior Court or federal court. For example, what are the preservation obligations with respect to a minor child’s social media account? Who has possession, custody or control over such information? The child? The parent? Two parents? The social media company? These are but a few of the myriad questions that will have to be addressed in the very near future.

Further, the incredible growth of social media is more likely to impact T&E matters than many other types of cases. In 2013, 73% of all American Adults who used the internet also used at least one social networking site (with 71% of all online adults using Facebook, including 45% of all online adults aged 65 and older) and 42% used multiple social networking sites.(FN5) Although the increased use of social media may occasionally play a role in business disputes, social media content is seemingly tailor-made for many T&E disputes. For example, the video posted online of recently-deceased aunt Edie dancing at a wedding and giving a witty congratulations speech is of little use in a contract dispute, but it may prove crucial in proving that aunt Edie had testamentary capacity when she signed her will that very same afternoon. It appears a foregone conclusion that people will continue to capture and post much of their lives on line for all to see. T&E litigators should do everything possible to adapt to this brave new world of digital evidence.

Despite the fact that the new e-discovery rules are upon us and James Bond’s watch phone is now a reality, T&E litigators do not need to become technophiles overnight (although it probably would not hurt). All counsel should be familiar with the provisions and requirements of the newly amended rules, however, and be prepared to request and produce relevant ESI. Of particular importance is ensuring that clients preserve ESI to avoid any threat of sanctions or other negative consequences. And, to the extent counsel’s idea of e-discovery is scanning paper files into a PDF and then e-mailing them, he or she should make a dedicated effort to learn about the most common forms of ESI, the sources of such information, and the basics of handling ESI in discovery and subsequent phases of litigation. Fortunately, there is no shortage of educational material, both online and in books made of actual paper, that explain the past, present and future of ESI in relatively simple terms.

FN1: It is important to note that although the newly amended rules apply to equity matters pending in the Probate Court (Mass. R. Civ. P. 1) and appear to be incorporated into the Supplemental Rules of the Probate and Family Court (see Supplemental Rule 27A), the Massachusetts Rules of Domestic Relations Procedure have not been similarly amended . Accordingly, although proceedings governed by the Rules of Domestic Relations Procedure often involve e-discovery, it is unclear if, when and how the newly amended Rules of Civil Procedure will be applied to such matters.

FN2: Pew Research Center, September 2013, “Cell Phone Activities 2013,” available at http://www.pewinternet.org/2013/09/19/cell-phone-activities-2013/).

FN3: Pew Research Center, November 2012, “Cell Phone Activities 2012,” available at http://www.pewinternet.org/2012/11/25/cell-phone-activities-2012/

FN4: Pew Research Center, February 2014, “Couples, the Internet, and Social Media,” available at: http://pewinternet.org/Reports/2014/Couples-and-the-internet.aspx.

FN5: Pew Research Center, January 2014, “Social Media Update 2013,” available at: http://pewinternet.org/Reports/2013/Social-Media-Update.aspx.

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 – The FPE Foundation v. Solomon; Berkowitz v. Berkowitz

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

While the Red Sox were marching toward victory, the following decisions were reported enforcing an arbitration clause in a trust and addressing statute of frauds and statute of limitations questions in a case involving alleged breaches of an oral trust.

The FPE Foundation v. Solomon

In The FPE Foundation v. Solomon, Civil Action No. 12-11342-GAO, 2013 U.S. Dist. LEXIS 134120 (D. Mass. Sept. 19, 2013), the charitable remainder beneficiary of a QTIP trust brought suit against the trustees and the estate planning attorney for alleged mismanagement of the trust, asserting tort and contract claims in the U.S. District Court.  The Court dismissed the claims and compelled arbitration of the dispute pursuant to the arbitration clause in the trust instrument.  In doing so, the Court assumed the enforceability of the clause and focused its discussion on whether the defendants had waived their right of enforcement.

Berkowitz v. Berkowitz

In Berkowitz v. Berkowitz, Civil Action No. 11-10483-DJC, 2013 U.S. Dist. LEXIS 134791 (D. Mass. Sept. 20, 2013), Samuel Berkowitz sued his daughter Bonnie Berkowitz for breach of fiduciary duty, claiming that she was holding certain real property and securities for his benefit pursuant to an oral trust, and that she repudiated the oral trust in 2008.  Bonnie moved for summary judgment, arguing in part that Samuel’s claim is barred by the statute of frauds and the statute of limitations.  Her motion was denied.

The U.S District Court acknowledged that the statute of frauds applies to contracts for the conveyance of land, and that no trust concerning land, except a trust that may arise or result by implication of law, shall be created or declared unless by a written instrument.  The Court held, however, that one such trust that arises by implication of law (and thus does not require a written instrument) is a resulting trust, and that a genuine issue of fact exists as to whether a resulting trust was created when Samuel transferred the real property to Bonnie.

Similarly, the statute of frauds does not apply to the securities that were allegedly held pursuant to the oral trust, because it was not a contract to make or revoke a will or codicil.  Even if the oral trust were made in contemplation of Samuel’s death, and thus arguably fell within the statute of frauds, the statute of frauds would not apply to a constructive trust, and Samuel brought forth sufficient evidence to raise a genuine issue of fact as to the existence of a constructive trust.

Finally, the Court held that Samuel’s claim was not barred as a matter of law by the statute of limitations.  A claim for breach of fiduciary duty does not accrue until the trustee repudiates the trust and the beneficiary has actual knowledge of the repudiation.  Here, although there is evidence that Samuel knew he had been “swindled” as early as 2002, there was no evidence that Bonnie specifically repudiated the trust until 2008, when Samuel requested an accounting.  For the same reason the Court rejected Bonnie’s argument under the doctrine of laches.

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.