United States District Court, D. Massachusetts
BENJAMIN H. WHITTAKER III, In his individual capacity and in his capacities as the Administrator of the Estate of Benjamin H. Whittaker, Deceased; the Administrator of the Estate of Mary S. Whittaker, Deceased; Co-Successor Trustee of the Benjamin H. Whittaker Trust u/a May 1, 1992; and Co-Successor Trustee of the Mary S. Whittaker Trust u/a May 1, 1992, and JOAN MUMMERY, In her individual capacity and in her capacities as the Co-Successor Trustee of the Benjamin H. Whittaker Trust u/a May 1, 1992; and Co-Successor Trustee of the Mary S. Whittaker Trust u/a May 1, 1992, Plaintiffs,
SUSAN B. WHITTAKER, Defendant.
A. O'TOOLE, JR. UNITED STATES DISTRICT JUDGE.
magistrate judge to whom this matter was referred filed a
Report and Recommendation (“R&R”)
recommending that the Plaintiffs' Motion for Partial
Summary Judgment (dkt. no. 73) be denied, and that the
Defendant's Motion for Summary Judgment (dkt. no. 78) be
granted. The plaintiffs timely filed an objection to the
R&R, and the defendant filed an opposition to the
objection. Having reviewed de novo the objected-to
portions of the R&R, the plaintiffs' objections are
overruled and the R&R is adopted for the reasons
articulated by the magistrate judge.
the defendant's motion for summary judgment (dkt. no. 78)
is GRANTED and the plaintiffs' motion for partial summary
judgment (dkt. no. 73) is DENIED.
shall enter for the defendant.
AND RECOMMENDATION ON PLAINTIFFS' MOTION FOR PARTIAL
SUMMARY JUDGMENT (#73) AND DEFENDANT'S MOTION FOR SUMMARY
JUDGMENT ON PLAINTIFFS' “COMPLAINT IN A CIVIL
an action to void certain allegedly fraudulent monetary
transfers. Plaintiff Benjamin H. Whittaker, III
(Ben) is the administrator of the estates of his
deceased parents, Benjamin H. Whittaker (Benjamin) and Mary
S. Whittaker (Mary). Ben and his sister, plaintiff Joan
Mummery (Joan), are co-successor trustees and beneficiaries
of Benjamin and Mary's inter vivos trusts (the trusts).
Defendant Susan B. Whittaker (Susan) is married to Ben and
Joan's brother, James B. Whittaker (Jay). Jay was trustee
of his parents' trusts before Ben and Joan succeeded him.
This case arises out of allegedly fraudulent transfers of
funds from Benjamin and Mary's trusts by Jay, when he was
trustee, to Susan, his wife.
moved for partial summary judgment (#73) and defendant
also filed a summary judgment motion (#78). The dispositive
motions have been fully briefed (##74-75, 78-79, 82, 84-87,
facts set out below are undisputed except as indicated. On
October 3, 2006, Jay became the trustee of his parents'
trusts when his sister, Carol R. Bell (Carol), resigned from
the position. (#82-1, Exh. C, D.) At the same time, Benjamin
and Mary signed durable powers of attorney to Jay. (#77
¶ 4.) Jay consolidated the trusts' portfolio from
three brokerages into a single account at Fidelity
Investments. (#77 ¶ 6.) In October 2006, the value of
the Fidelity account was slightly over one million dollars.
Id. Over a period of years, Jay departed from a
previously successful investment strategy by changing the
investments primarily to options; the account suffered
devastating losses. (#77 ¶¶ 7-8.) By September
2011, the balance of the account had diminished to $29.21.
(#77 ¶ 8.)
died in January 2011, and Mary died in June 2012. (#77
¶¶ 9, 10.) On the weekend of his mother's
funeral services, Jay advised his siblings about the
investment losses. (#77 ¶ 10; #78-2, Field Aff. ¶
4, Tab 2 ¶¶ 59-60.) On about November 5, 2012, Jay
stepped down as trustee; Ben and Joan became successor
co-trustees of the trusts. (#77 ¶ 11; 78-2, Field Aff.
¶ 4, Tab 2 ¶ 74.)
2012, the statements for the Fidelity account for 2008
through 2011 were delivered to Joan through Jay's
counsel. (#77 ¶ 12; #78-2, Field Aff. ¶ 4, Tab 2
¶ 38.) Between June 2012 and June 21, 2013, plaintiffs
sent lists to Jay questioning certain items from the Fidelity
account. (#77 ¶ 13.) One such list or spread sheet,
titled as Estate of Benjamin H. Whittaker, Fidelity
Withdrawals/Checks - Unknown Payees, was sent from Ben's
Ohio counsel to Jay's Ohio counsel no later than
June 21, 2013. Id. The spread sheet listed seven
checks totaling $149, 500.00 that were identified by check
number, amount, and date clearing account. Id.;
#78-1, Sontitch Aff. ¶ 3, Tab 3(ii), p. 2.
same figure, $149, 500.00, had been identified in
plaintiffs' complaint filed against Jay in Ohio state
court on February 15, 2013. (#77 ¶ 14.) In the Ohio
complaint,  it was alleged that “the remaining
$149, 500 in withdrawals from the Fidelity accounts (sic)
remains unaccounted for but, upon information and belief,
were used by Jay and/or transferred to Defendants John Doe,
Jane Doe and ABC Corp. for purposes that were not in keeping
with the intentions of” Benjamin and Mary.
Id.; #78-2, Field Aff. ¶ 4, Tab 2 ¶ 38.
Under a section titled “Jay's Transfer of Assets,
” plaintiffs named Susan as engaging in actions with
Jay to encumber their residence and protect it from
attachment should Jay lose that lawsuit. (#78-2, Field Aff.
¶ 4, Tab 2 ¶¶ 63-67, 69-73.) During that
litigation, on June 21 and July 24, 2013, plaintiffs were
presented with financial records showing the transfers and
investments made by Jay. (#78-1, Sontitch Aff. ¶ 3, Tab
3(ii), 3(iii), 3(v), 3(vi).) These documents included
personal checks, deposit records to a TradeStation account
and bank accounts, mortgage applications and an accounting of
transfers from the trust fund account. Id. The
checks were made out to either a TradeStation account or to
Jay, and each was dated between April 27, 2009 and February
10, 2010. Id. Susan's name appeared as a joint
owner of the TradeStation account, as well as a co-borrower
on the mortgage loan application. Id.
letter dated June 24, 2013, after having received some of the
TradeStation statements with defendant Susan Whittaker listed
as co-owner, plaintiffs' Ohio attorney wrote to Jay's
Ohio lawyer: “A partially-redacted copy of the personal
income tax would provide information as to Jay
Whittaker's reports of his income and expenses, but with
the deposit of his parents' assets into a joint account
owned by Mr. and Mrs. Whittaker (Jay and Susan), Susan
Whittaker's joint liability with her husband is an open
question.” (#78-1, Sontitch Aff. ¶ 3, Tab 3(iii).)
September 5, 2013, Jay filed a Voluntary Petition for relief
pursuant to Chapter 7 of Title 11 of the U.S. Code. (#78-2,
Field Aff. ¶ 6, Tab 4 ¶ 1.) In plaintiffs'
adversary proceeding in Jay's bankruptcy action, the same
total figure from improper withdrawals, $149, 500.00, was
alleged in the complaint filed on January 21, 2014. (#77
¶ 15; #78-2, Field Aff. ¶ 6, Tab 4 ¶ 46.) In
their complaint objecting to dischargeability in Jay's
bankruptcy, plaintiffs contended that Jay transferred the
proceeds of the mortgage refinances he and Susan had made on
their home in Wellesley, Massachusetts, to protect them from
claims by plaintiffs “or otherwise benefit personally
from the transfers by funding the down payment for the
purchase of a timeshare in Mexico.” (#78-2, Field Aff.
¶ 6, Tab 4 ¶ 79.) They alleged that Susan knew that
“the Parents' account at Fidelity had an asset
value of less than $10, 000” when she and Jay entered
into the first mortgage agreement with Rockland Trust.
Id. ¶ 77. The following specific allegation was
advanced: “To the extent that the Defendant [Jay]
commingled, misused, misappropriated, concealed, or otherwise
diverted Trust Assets for his own benefit or for the
benefit of his spouse, the Defendant did so knowingly
and willfully and with the intent to shield his own
assets.” (#78-2, Field Aff. ¶ 6, Tab 4 ¶
140.) (emphasis added.)
present action, plaintiffs allege that $107, 500.00 of
unauthorized trust transfers were used to purchase a
timeshare in Mexico owned by Jay and defendant, and that the
money has never been paid back to the trust. (#1 ¶¶
30-32, 34.) Plaintiffs further allege that $48, 000.00 was
diverted from the trusts and transferred to a TradeStation
account jointly owned by Jay and Susan. (#1 ¶¶
36-37, 39.) These transferred funds were also never repaid to
the trust. (#1 ¶ 38.) The total of the amount alleged to
have been fraudulently transferred, providing for certain
corrected calculations, is the same as the amount alleged in the
Ohio civil action and the bankruptcy adversary action. (#77
Summary Judgment Standard.
purpose of summary judgment is “to pierce the
boilerplate of the pleadings and assay the parties' proof
in order to determine whether trial is actually
required.” Rojas-Ithier v. Sociedad Espanola de
Auxilio Mutuo y Beneficiencia de Puerto Rico, 394 F.3d
40, 42 (1st Cir. 2005) (internal quotation and citation
omitted). When considering a motion for summary judgment,
“a court shall grant summary judgment if the movant
shows that there is no genuine dispute as to any material
fact and the movant is entitled to a judgment as a matter of
law.” Fed.R.Civ.P. 56(a). The moving party bears the
initial burden of averring the absence of a genuine issue of
material fact and “support[ing] that assertion by
affidavits, admissions, or other materials of evidentiary
quality.” Mulvihill v. Top-Flite Golf Co., 335
F.3d 15, 19 (1st Cir. 2003) (citations omitted). Once the
moving party asserts the absence of genuine issues of
material fact, the non-movant must demonstrate the existence
of a factual dispute with requisite sufficiency to proceed to
trial. Fontánez-Núñez v. Janssen
Ortho LLC, 447 F.3d 50, 54-55 (1st Cir. 2006). However,
“. . . improbable inferences, conclusory allegations,
or rank speculation . . .” cannot alone defeat summary
judgment. Ingram v. Brinks, Inc., 44 F.3d 222, 229
(1st Cir. 2005).
determining whether summary judgment is proper, the record
must be viewed in the light most favorable to the non-moving
party and all reasonable inferences must be drawn in the
non-movant's favor. Clifford v. Barnhart, 449
F.3d 276, 280 (1st Cir. 2006).
Where, as here, both parties have moved for summary judgment,
the standard is the same. The court must rule on each
party's motion on an individual and separate basis.
Bienkowski v. Ne. Univ., 285 F.3d 138, 140 (1st Cir.
2002). For each claim, summary judgment is warranted if the
record, viewed in the light most favorable to the non-moving
party, discloses no genuine issue of material fact.
Kunelius v. Town of Stow, 588 F.3d 1, 8-9 (1st Cir.
Hutchins v. McKay, 285 F.Supp.3d 420, 422 (D. Mass.
party's motion, Rule 56 requires the entry of summary
judgment where a party fails to establish the existence of
any one essential element on which that party will bear the
final burden of proof. Celotex Corp. v. Catrett, 477
U.S. 317, 322 (1986). “‘Where the record taken as
a whole could not lead a rational trier of fact to find for
the nonmoving party, there is no genuine issue for
trial.'” Scott v. Harris, 550 U.S. 372,
380 (2007) (quoting Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 586-87 (1986) (further
internal quotation marks omitted)).
Defendant's Motion ...