Dell'Olio v. Assistant Sec'y of the Office of Medicaid

96 Mass.App.Ct. 691

138 N.E.3d 411

Linda DELL'OLIO & others¹

v.ASSISTANT SECRETARY OF the OFFICE OF MEDICAID & others.²

No. 18-P-1489

Appeals Court of Massachusetts, Middlesex..

Argued October 2, 2019

Decided December 10, 2019

Andrew J. Haile, Assistant Attorney General, for Assistant Secretary of the Office of Medicaid.

Paul D. Silvia, Brockton, for the plaintiffs.

Jonathan A. Barnes for Karen Fuller.

Present: Milkey, Sullivan, & Ditkoff, JJ.

MILKEY, J.

When he died in 1956, Andrew Dell'Olio owned two adjacent, triple decker residences in Cambridge. His will devised the properties to various family members as life tenants, and, after their deaths, to his grandchildren. The dispute before us concerns one of those grandchildren, Emily Dell'Olio (Emily),³ who died intestate in 2008. At that time, some of the life tenants established by her grandfather's will were still alive. The question raised by this appeal is whether Emily's interest in the properties had vested by the time she died, in which case her interest would devolve to her heirs at law and be subject to claims brought by her creditors. Asserting that such vesting had occurred was the Massachusetts Office of Medicaid (MassHealth), which sought reimbursement pursuant to G. L. c. 118E, § 31, for significant medical expenses it had incurred on Emily's behalf. The six surviving grandchildren maintained that Emily's interest in the property instead was contingent on her surviving the life tenants, and thus was extinguished upon her predeceasing them. On cross motions for summary judgment, a Probate and Family Court judge ruled in favor of the surviving grandchildren and awarded them each an undivided one-sixth interest in the properties. For the reasons that follow, we reverse.

Background. The relevant facts are undisputed. When he died in 1956, Emily's grandfather left a one-page will that he had executed one week earlier. The relevant portion of the will stated as follows:

"All the real estate and more specifically number 27 Berkshire Street, Cambridge, Mass., and number 27 Plymouth Street, Cambridge, Massachusetts in the County of Middlesex, I leave to my wife Emilia Dell'Olio for the duration of her life, during which time she is to collect all rents from which she is to pay all bills for the upkeep of the buildings, except that she is not to collect from my son Richard Dell'Olio and my daughter Louise Camara, each of which is to have one flat free of rent so long as said Emilia Dell'Olio lives. Upon the death of my wife the aforementioned property is to pass to my son Richard Dell'Olio and my daughter Louise Camara for their lives and upon their death to their children in fee, each child to share and share alike. The Children are not to take by right of representation. In the event that either my son or daughter dies the widow or widower whichever the case may be is to have the same rights as their spouse until the said pro[p]erty vests in my grandchildren. I further direct that all life tenants are to keep the property in good repair at all times."

At the time of the grandfather's death, Emily was eight years old and, as such, the oldest of five grandchildren. A sixth grandchild was then in utero, born one month after the grandfather died. A seventh grandchild was born the following year.

Emily suffered from a mental disability unspecified in the record, and was institutionalized. Her care was subsidized by MassHealth, which incurred expenses on her behalf that exceeded $1.2 million.

By the time that Emily died in January of 2008, her paternal grandmother (the grandfather's widow) had died, as had Emily's father and aunt (the grandfather's two children). However, Emily's mother and her uncle by marriage (the grandfather's daughter-in-law and son-in-law respectively) remained living. The uncle died later in 2008, and Emily's mother -- the last of her generation -- died in 2013.

After the death of Emily's mother, the surviving grandchildren could not agree on how the properties should be divided.⁴ Accordingly, in 2015, three of the six surviving grandchildren (all of whom lived at the properties) filed a petition in the Probate and Family Court to partition them. Named as objectors to the petition were the other three surviving grandchildren.

In the course of the partition proceeding, a title examiner noticed that Emily's estate had a potential interest in the properties against which MassHealth might collect. The title examiner passed this information along to petitioners' counsel, who in turn notified MassHealth. With title to the properties thereby placed in some doubt, the petitioners to the partition proceeding filed a declaratory judgment action in the Probate and Family Court. MassHealth -- and the Commonwealth generally - - were named as defendants in that new action.⁵ MassHealth also moved to intervene in the related partition proceeding. The two actions effectively, if not literally, were consolidated.⁶

On cross motions for summary judgment, the judge allowed the surviving grandchildren's motions for summary judgment and entered a separate and final judgment in their favor pursuant to Mass. R. Civ. P. 54 (b), 365 Mass. 820 (1974). Although the judge issued no memorandum of decision, it appears -- and all parties contend -- that she accepted the surviving grandchildren's argument that under the grandfather's will, Emily's interest was contingent on her surviving the life tenants (and that her interest therefore lapsed upon her death). After MassHealth appealed, the judge allowed the property to be sold, with a share of the proceeds escrowed to cover MassHealth's potential interest.⁷

Discussion. This case presents a recurring issue: Do remainder interests created by a will vest when the testator dies, or do they remain contingent on the holders of those interests surviving the life tenants? A rich body of case law has developed to address this issue. We briefly review the guiding principles that emerge from the cases, and then turn to applying those principles to the facts of the case before us.

1. General principles. As the Supreme Judicial Court stated in 1861, it is "well settled, that no remainder will be construed to be contingent which may, consistently with the intention [of the testator], be deemed vested." Blanchard v. Blanchard, 1 Allen 223, 225, 83 Mass. 223 (1861). Put differently, "[t]he ordinary presumption is, that all devises and bequests vest upon the death of the testator." Pike v. Stephenson, 99 Mass. 188, 189 (1868). "[T]he presumption that [a will] was intended to give vested interests, which the law favors, is strengthened [when] the provision is for the benefit of the direct descendants of the testator." Ryan v. McManus, 323 Mass. 221, 230, 80 N.E.2d 737 (1948). The force of the presumption is especially pronounced where, as here, the descendants at issue "were alive when [the testator] made his will." Marsh v. Hoyt, 161 Mass. 459, 461, 37 N.E. 454 (1894). Thus, where a testator devised a remainder interest to a direct descendent that he knew at the time the will was drafted, courts are to apply a strong presumption that the testator intended that interest to vest upon his death.⁸

Of course, a party may overcome that presumption upon a showing that "the provisions of the will manifest an intention that vesting should be postponed until the death of the life tenant." Bamford v. Hathaway, 306 Mass. 160, 161, 27 N.E.2d 711 (1940). By 1861, "usual and proper phrases" had developed to express such an intention by adding qualifiers to the remaindermen such as: "if they shall be living at [the life tenant's] death," or "to such of them as shall be living." Blanchard, 1 Allen at 226. Ambiguous language, without more, is insufficient to overcome the presumption of early vesting. See Welch v. Colt, 228 Mass. 511, 513, 117 N.E. 834 (1917) ("in cases of doubt in the construction of wills the law favors the creation of vested rather than contingent estates" [citation omitted] ). Thus, it is not enough for a party to point to language in the will that could be interpreted as postponing vesting until the last life tenant died. See Blanchard, supra at 224, 226, (remainder interest granted to son held not to be contingent on his surviving mother, even though will referred to property at issue as "property ... that may be left at the death of [the testator's] wife" and included "a proviso containing a limitation over of the estate thus devised to the children respectively, upon the contingency of either of them dying before their mother, either with or without issue").

With the passage of time, the presumption that remainder interests were intended to vest upon the death of the testator has survived. In fact, the (relatively) more recent cases, if anything, have stated the presumption in more robust terms. For example, in 1970, the Supreme Judicial Court stated that "[i]t is a fundamental rule that a transfer of property to A for life, to B for life, and remainder to C vests upon the creation of the interest and goes to C whether or not C is living when the property vests in possession." Williams v. Welch, 358 Mass. 514, 518, 265 N.E.2d 854 (1970). "In order to change this result there must be a specific reference in the creating instrument indicating that the remainderman must survive the life tenant in order to take." Id.

One additional aspect of the case law bears noting. As one commentator has observed,

"[T]he word ‘vested’ is used in two senses. Firstly, an interest may be vested in possession, when there is a right to present enjoyment, e.g. when I own and occupy Blackacre. But an interest may be vested, even where it does not carry a right to immediate possession, if it does confer a fixed right of taking possession in the future."

G.W. Paton, Jurisprudence § 65, at 305 (G.W. Paton & D.P. Derham eds., 4th ed. 1972). Thus, if remainder interests created by a will are not made contingent on future events, they are said to vest "in...