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Curran v. Berkshire Hills Bancorp.

Superior Court of Massachusetts, Suffolk

May 24, 2018

Cathleen CURRAN et al.
v.
BERKSHIRE HILLS BANCORP

          File Date: May 25, 2018

          OPINION

          Kenneth W. Salinger, Justice Superior Court

          Plaintiffs are beneficiaries of the Phyllis G. Agan Trust. They seek monetary compensation for alleged mismanagement of the Trust by its trustee, Berkshire Bank. Plaintiffs allege that the Bank should have liquidated the various securities owned by the Trust immediately after Ms. Agan died, which was on May 5, 2008; that the Bank instead sold the Trust’s assets between May 23 and July 1, 2008; that this was an unreasonable delay; and that the value of the Trust’s assets fell by hundreds of thousands of dollars as a result of this delay. Plaintiffs claim that Defendant breached its fiduciary duty by delaying liquidation of the Trust’s assets, and that it violated G.L. 93A by failing to communicate with Plaintiffs and by asking them to sign waivers of accounting releases.

         Defendant Berkshire Hills Bancorp argues that: (1) this case should be dismissed for lack of subject matter jurisdiction under Mass.R.Civ.P. 12(b)(1), because the case involves administration of a Vermont trust and thus can only be heard in Vermont; (2) the case should be dismissed for misnomer of party under Rule 12(b)(8), because the Trust was administered by Berkshire Bank, not by its parent Berkshire Hills Bancorp; and (3) the case should either be dismissed under the doctrine of forum non conveniens so that it may be refiled in Vermont, or transferred under that doctrine to Berkshire County.

         The Court will deny the motion to dismiss, but in the exercise of its discretion will order that any deposition of a witness who lives or works in Berkshire County shall be taken in Berkshire County.

         1. Subject Matter Jurisdiction

         Defendant offers two related arguments as to why the Court purportedly lacks subject matter jurisdiction to hear this case. Neither has merit.

         1.1. Jurisdiction over the Trust

         Defendant first argues that the Court may not consider any claim concerning administration of the Trust because the Trust was registered in Vermont and was primarily administered in Vermont.

         The legal basis for this argument is sound. As a general matter Massachusetts courts may not "entertain proceedings" asking the court to intervene in the administration of a trust that is registered in or has its principal place of administration in another state. See G.L.c. 203E, § 203.

         But neither of the claims asserted in this action seek to involve Massachusetts courts in the ongoing administration of the Trust. Instead, Plaintiffs seek compensation for damages caused by Berkshire Bank’s alleged breach of fiduciary and alleged violation of G.L.c. 93A during the course of its past administration of the Trust. Chapter 203E is not implicated here.

         1.2. Quasi In Rem Jurisdiction over Trust Assets

         Defendant then argues that subject matter jurisdiction lies exclusively in Vermont because this suit is purportedly a quasi in rem action concerning Trust assets and litigation concerning the Trust has already occurred in Vermont.

         If this were a quasi in rem action seeking to compel a distribution of trust assets or even an accounting of trust assets, and if Vermont courts were already exercising jurisdiction over the Trust and its assets, then it would make sense for this Court to decline to exercise jurisdiction to hear a separate case seeking relief against or with respect to the Trust assets. Cf. Princess Lida of Thurn and Taxis v. Thompson,305 U.S. 456, 459 & 466-67 (1939) (federal action seeking accounting of trust assets was quasi in rem and could not proceed where state court had already exercised jurisdiction over trust); Straus v. Straus,987 F.Supp. 52, 53 (D.Mass. 1997) (Stearns, J.) (Princess Lida doctrine applied where subsequent federal action claimed that trustees failed to make appropriate distributions of principal). The Court agrees with Plaintiffs that Princess Lida did not concern subject matter jurisdiction[1] and is not binding in state court proceedings.[2] As a matter of interstate ...


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