Superior Court of Massachusetts, Suffolk, Business Litigation Session
Jennifer BRINING, Individually and as Trustee of the Jennifer Brining Living Trust and for the Benefit of Sendlater, Inc. in a Derivative Capacity
John J. DONOVAN et al.
MEMORANDUM OF DECISION AND ORDER ON DEFENDANTâS
MOTION TO DISSOLVE PLAINTIFFâS TRUSTEE PROCESS
Mitchell H. Kaplan, Justice of the Superior Court
case is before the Court on the trustee process defendants,
William T. Hurley, Jr. ("Hurley") and Miranda P.
Gooding, Esq. ("Gooding"), motion to dissolve
plaintiffâs attachments on trustee process. On December 13,
2016, this court entered orders authorizing $1 million
attachments on trustee process against both William T.
Hurley, as Trustee of the Trust One JJD, and Miranda Gooding,
as Trustee with respect to an escrow account held by her law
firm, Glovsky & Glovsky, LLC (the Escrow and, collectively
the Attachments and the Trustees). The Attachments attached
any goods, effects or credits of the defendant John J.
Donovan, Sr. (Donovan, Sr.) held by each Trustee to secure a
judgment that the plaintiff Jennifer Brining sought to
recover against John J. Donovan, Sr. in this
litigation. In the principal action, Brining now
asserts claims derivatively on behalf of Sendlater, Inc. for
approximately $2.5 million which she maintains Donovan, Sr.
misappropriated from Sendlater during the period that he
controlled its accounts and operations. See Motion to Dismiss
Decision. After Donovan, Sr.âs motion to dismiss was denied,
the Trustees filed this motion to vacate the Attachments
(Motion to Vacate).
Motion to Vacate turns on the issue of whether the assets
attached in Trust One JJD and the Escrow are "due
absolutely and without contingency" to Donovan, Sr. and,
therefore, subject to attachment under G.L.c. 246, § 20.
As will be apparent. neither of the Trustees possess credits
absolutely due and owing to Donovan, Sr. and therefore the
Motion to Vacate must be ALLOWED.
noted above, there are two attachments on trustee process at
issue: one attaching assets in Trust One JJD, where Hurley is
trustee, and the other attaching credits held in the Escrow
by Glovsky & Glovsky, LLC, where Gooding is the Escrow Agent
(for simplicity, also referred to as a Trustee).
One JJD was created as part of a court approved settlement
agreement ("Final Settlement Agreement") between
Donovan, Sr. and his children that resolved two civil
litigations between them, one of which is still pending in
this court for the purpose of confirming orders entered in
arbitrations that have been convened, on and off, over a
period of thirteen years under the terms of the settlements.
See Rebecca M. Brown & others v. Linda Donovan,
Suffolk Superior Court CA No. 03-4247 and No.
06-4149. The Final Settlement Agreement is
dated March 3, 2007. Pursuant to its terms, former United
States District Court Judge John S. Martin, Jr. ("Judge
Martin") was appointed as arbitrator to resolve
continuing disputes between the parties. The Final Settlement
Agreement also established Trust One JJD in which real
property and other assets that were the subject of the
partiesâ disputes was deposited. Trust One JJD was initially
intended to restrict Donovan, Sr.âs ability to control the
trust assets for a period of ten years (until 2017), after
which, Donovan, Sr. would have had "full power,
authority and discretion to manage and administer [Trust One
JJD]." Final Settlement Agreement § 2.1. During
that ten-year period, the Trustee was prohibited from making
"any distributions of Trust principal to any
beneficiary" without Judge Martinâs approval. Trust One
JJD Agreement, Â¶ 2.1. The Final Settlement Agreement only
permitted Trust assets to be used to pay real estate taxes
and municipal assessments. Sullivan Aff., Â¶ 31.
December 2014, Donovan, Sr. and his children amended the
Final Settlement Agreement, and on January 13, 2015, Judge
Martin approved the amendment. The amendment extended the
term of the restricted period during which no distributions
could be made from the Trust from ten years to Donovan, Sr.âs
lifetime or his incapacity, effectively preventing any
distribution to Donovan, Sr. of principal from the Trust
during his life. More specifically, the Amendment provided
that the Trustee "shall not, without [Judge Martinâs]
express prior approval, disburse, expand, transfer, convey,
or alienate any Trust One JJDâs assets." January 13,
2015 Order, Â¶ 2-3. The court intuits that the reason for the
extension was the assertion of additional claims against
Donovan, Sr. for alleged wrong doing. It is the courtâs
understanding that there are presently still claims asserted
against Donovan, Sr. by his children that, if allowed by
Judge Martin, would be paid from the corpus of the Trust or
result in other disposition of Trust assets.
One JJD also contains a "spendthrift provision"
that prevents Donovan, Sr. from alienating his beneficial
interest to creditors: "The interest of a beneficiary in
their Trust shall not be subject to [or] be taken by his
creditors by any process." Trust One JJD Trust Agreement
& Glovsky, LLC
is a lawyer with Glovsky & Glovsky, LLC. That firm is holding
proceeds from real estate transactions in the Escrow pursuant
to an order issued by Judge Martin on November 29, 2016 and
agreements between Donovan, Sr. and his children. The real
estate transactions involved the sale of undeveloped land
owned by Donovan Conservation and the Essex Land Realty
Trust. Sullivan Aff., Â¶ 44. Glovsky & Glovsky, LLC apparently
provided legal services in connection with these
transactions. Under the terms of the Escrow funds are to be
"used to pay all other reasonable fees and expenses
incurred [in connection with the transaction]." Gooding
Answer, Â¶ 14. The remainder is to be donated to a mutually
agreed upon charity. Amendment of Agreement Regarding Essex
Land Realty Trust Mortgage, Â¶ 3. Donovan, Sr. submitted a
list of expenses owed or paid to vendors to Gooding to be
paid from part of the balance of the real estate transaction
proceeds. Gooding Answer, Â¶ 16. Gooding objected to the list
of expenses. Judge Martin ordered the proceeds to be retained
in the Escrow pending the resolution of the objections.
Gooding Answer, Â¶ 18.