UBS FINANCIAL SERVICES, INC.
DONNA M. ALIBERTI.
Heard: May 7, 2018.
action commenced in the Superior Court Department on August
case was heard by Karen F. Green, J., on a motion for
judgment on the pleadings.
A. Frattaroli for the defendant.
K. Wells for the plaintiff.
Present: Trainor, Ditkoff, & Wendlandt, JJ.
defendant and plaintiff in counterclaim, Donna M. Aliberti,
alleges that she was the sole properly designated beneficiary
of three individual retirement accounts (IRAs) owned by
Patrick Kenney (Kenney), her former romantic partner, and
held by the plaintiff, UBS Financial Services, Inc. (UBS).
She alleges that, after Kenney died, UBS distributed funds
from two of the IRAs to improper claimants, while ignoring
her claims. Even after the only other claimant dropped his
claim to the largest IRA, UBS waited more than three months
before distributing the uncontested proceeds to Aliberti. She
now appeals from a judgment on the pleadings by a Superior
Court judge dismissing her amended counterclaim against UBS
as to all three IRAs. Concluding that a custodian holding an
IRA has duties under New York law, both as a fiduciary and in
contract, to a beneficiary of the account, we reverse the
judgment for UBS on Aliberti's claims of breach of
contract, breach of fiduciary duty, and violation of G. L. c.
93A, § 2. We otherwise affirm the judgment for UBS on
Aliberti's amended counterclaim.
essential facts are drawn from the pleadings and the
documents attached to the pleadings or incorporated by
reference, see State Room, Inc. v.
MA-60 State Assocs., L.L.C., 84 Mass.App.Ct. 244,
245, 248 (2013), and we assume the allegations pleaded by
Aliberti, as the party opposing judgment on the pleadings,
are true. See Merriam v. Demoulas Super
Mkts., Inc., 464 Mass. 721, 723 (2013).
to his death, Kenney owned three IRAs held by UBS: (1) one
with an approximate value of $31, 000; (2) one with an
approximate value of $18, 000; and (3) one with an
approximate value of $276, 000. The IRAs were maintained
pursuant to a "UBS Client Relationship Agreement"
(client agreement), a contract between UBS and Kenney
designating UBS as custodian of the IRAs without
discretionary authority. Under the client agreement, UBS
obligated itself to transfer any funds to the beneficiary or
beneficiaries previously named by Kenney upon Kenney's
death.When he opened them in 2008, Kenney named
Aliberti the sole beneficiary for all three IRAs. Margaret
Kenney,  a financial adviser at UBS and the former
sister-in-law of Kenney, managed Kenney's IRAs.
November, 2013, after Kenney expressed a desire to name
additional beneficiaries, UBS sent Kenney beneficiary
designation update forms (update forms) for the IRAs. Kenney
returned update forms for the two smaller IRAs, but not for
the largest. The update forms named Craig Gillespie as the
primary beneficiary with Aliberti, Aliberti's son, and
Kenney's niece as contingent beneficiaries. Inconsistent
with these designations, the forms also dictated that all
four beneficiaries were each to receive a twenty-five per
cent share of the proceeds. (The update form instructions
required that the primary beneficiary shares total one
hundred per cent and that the contingent beneficiary shares
total one hundred per cent.) UBS requested that Kenney
clarify whether all four individuals were intended as primary
beneficiaries and sent him another set of update forms to
fill out correctly. UBS never received properly completed
update forms for the two smaller IRAs. Kenney unexpectedly
died on December 2, 2013.
December 17, 2013, Aliberti contacted Margaret Kenney
concerning the IRAs and requested that all funds be
distributed to her as the sole beneficiary. Instead, Margaret
Kenney responded with a series of text messages, including,
"How big of a whore are you," "You are the
most worst piece of filth I have ever encountered," and,
"Are you so eager to grab the money. Did you even notice
his death certificate is wrong? Oh no you were too busy
December 23, 2013, UBS received a letter from Gillespie's
attorney stating that Gillespie was an intended beneficiary
of the largest IRA and that he intended to take legal action
to determine the matter. The letter also advised UBS not to
make any distribution from that IRA pending resolution of the
dispute. Meanwhile, on January 9, 2014, Aliberti complained
to UBS about the text messages she received from Margaret
Kenney. UBS responded on February 4, 2014, to inform Aliberti
her concerns were being reviewed and UBS would follow up with
her. When no update came, Aliberti complained again on
February 24, 2014, and was assured by UBS an update would be
forthcoming. Although Margaret Kenney was removed from the
management of the IRAs, Aliberti received no further
communication or information from UBS concerning her
complaints or the IRAs.
March and April of 2014, UBS distributed the proceeds from
the two smaller IRAs equally among the four beneficiaries
named on the incorrectly completed update forms (including
Aliberti). Beyond that, UBS continued to ignore
Aliberti's claims to all three IRAs and, in particular,
provided no information on the status of the largest IRA
where she remained the sole designated beneficiary.
2, 2014, Aliberti's attorney sent UBS a letter requesting
documents related to the disposition of the three IRAs. UBS
did not respond at first and produced the requested materials
only after a subpoena was issued. Further communications from
Aliberti's attorney and Kenney's estate went unheeded
by UBS for over one year, until UBS responded on June 15,
2015, to a demand letter from Aliberti's attorney
outlining claims against UBS under G. L. c. 93A.
eventually filed suit in the Superior Court on August 4,
2015, to determine the beneficiaries of the largest IRA by
interpleading Gillespie and Aliberti. Gillespie and Aliberti
filed answers and asserted counterclaims against UBS.
Aliberti also asserted a cross claim against Gillespie. The
three-party dispute continued until March 10, 2016, when all
claims brought by Gillespie were dismissed with prejudice by
agreement of the parties. No competing claims remained on the
largest IRA, yet UBS did not distribute the funds to Aliberti
until more than three months later, on July 1,
filed an amended counterclaim against UBS on July 21, 2016.
The amended counterclaim alleges multiple counts of breach of
contract (counts one, four, and seven), breach of fiduciary
duty (counts two, five, and eight), intentional infliction of
emotional distress (counts three, six, and nine), and
violation of G. L. c. 93A, § 2, against UBS for its
conduct in connection with all three IRAs (count
ten). UBS filed an amended complaint on
September 1, 2016, arguing the distribution mooted
Aliberti's claims on the largest IRA and alleging abuse
of process and malicious prosecution, based both on
Aliberti's initial and amended counterclaim. Then, on
October 25, 2016, UBS moved for judgment on the pleadings on
Aliberti's amended counterclaim, which was duly opposed
by Aliberti. A Superior Court judge granted judgment on the
pleadings for UBS on all counts of the amended counterclaim
on June 26, 2017, and Aliberti filed a notice of