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Passero v. Fitzsimmons

Appeals Court of Massachusetts, Essex

August 17, 2017

ELAINE PASSERO
v.
PAULA LIA FITZSIMMONS, trustee, [1] & another.[2]

          Heard: May 3, 2017.

         Civil action commenced in the Essex Division of the Probate and Family Court Department on August 23, 2013.

         The case was heard by Peter C. DiGangi, J.

          George P. Lordan, Jr., (Anthony S. Porcello & Dennis P. Derrick also present) for the defendants.

          Stefan L. Jouret (Rebecca Royer also present) for the plaintiff.

          Present: Massing, Shin, & Ditkoff, JJ.

          SHIN, J.

         This case involves a dispute over the administration of a share of a trust established for the benefit of the plaintiff and two of her three children. The plaintiff brought suit against the defendant trustees, claiming, among other things, that they committed a breach of trust by paying for fifteen years of storage fees out of trust assets. A judge of the Probate and Family Court agreed, ordered the defendants to repay the storage fees and other unaccounted-for sums to the trust, and removed the defendants as trustees. We discern no error in these determinations and reject the various challenges that the defendants raise on appeal.

         Nevertheless, we conclude that remand is required for two reasons. First, the judge should not have appointed the plaintiff's children as successor trustees because they are themselves beneficiaries of the trust. As such, they are interested parties and are barred by the trust document from exercising certain powers, including distributions. Second, the judge was without authority to order the successor trustees to make monthly distributions to the plaintiff in a specified amount. We therefore vacate the judgment as to the appointment of the successor trustees and the distribution of the trust's assets and remand for appointment of a disinterested successor trustee, who shall have the discretion to make distributions in accordance with the trust instrument. We affirm the judgment in all other respects.

         Background.

         We summarize the detailed findings of fact made by the judge, reserving some facts for later discussion. The settlor -- who is the father of the plaintiff and of defendant Madeline Lia, and the grandfather of defendant Paula Fitzsimmons (who is Lia's daughter) -- executed a declaration of trust in February of 1999. The trust provides for division of the settlor's estate into four equal shares upon his death. One share was to be held in a discretionary trust for the benefit of the plaintiff and two of her three children, Paul Passero and Alicia Passero, [3] with any balance remaining upon the plaintiff's death to be distributed to Paul and Alicia in equal shares.[4] The remaining three shares were to be distributed to the other beneficiaries "free of all trusts."

         After the settlor died in April of 2001, the defendants began administering the trust. By October of 2008, three-quarters of the trust assets had been distributed to the other beneficiaries, leaving the plaintiff (and Paul and Alicia) as the sole remaining beneficiaries. The defendants made no distributions to the plaintiff or her children until the judge ordered them, in May of 2016, to give the plaintiff a $25, 000 advance so that she could pay her medical bills and obtain housing.

         The primary issue at trial concerned the defendants' decision to pay storage fees out of the plaintiff's beneficial interest in the trust. Shortly after the settlor's death, the defendants identified items of the plaintiff's personal property that she had left in the settlor's home, and items of the settlor's personal property that he had allocated to the plaintiff in his will, and arranged for these items to be moved to a storage facility in Massachusetts. Subsequently, in 2003, the trust's attorney, Robert Madruga, sent the plaintiff a series of letters informing her that the property was in storage, that she needed to make arrangements to have it shipped to her, and that the trust would not pay the storage fees "for much longer." In response to at least one of those letters, the plaintiff, who lived in California, asked Madruga for the location of the storage facility. Acting on the defendants' instructions, Madruga refused to give her that information.

         The plaintiff received no further communications about the property until June of 2008. At that time Madruga sent her another letter in which he stated that she could not "cherry pick" the items, but had to accept all of them together, and refused again to provide the location of the storage facility. Madruga sent two more letters to the same effect in March and April of 2009. ...


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