Fiumara v. Galvin

Rosemarie A. Fiumara et al. as Executrixes of the Estate of Peter J. Fiumara v. Dolores M. Galvin et al. as Beneficiaries of the Hyde Avenue Realty Trust

No. 115894

No. ESCV200800827A

Superior Court of Massachusetts, Essex

April 13, 2011

Caption Date: April 13, 2011

Judge (with first initial, no space for Sullivan, Dorsey, and Walsh): Feeley, Timothy Q., J.

FINDINGS OF FACT, RULINGS OF LAW, AND ORDER FOR JUDGMENT

Timothy Q. Feeley, Associate Justice of the Superior Court

This is an action for declaratory judgment brought by the Executrixes of the Estate of Peter J. Fiumara ("Fiumara"). The defendants are the five surviving children of Fiumara and three of Fiumara's grandchildren (the "grandchildren") who survived Fiumara's sixth child at the time of Fiumara's death. The executrixes, who are also two of the surviving children and are named as defendants in their personal capacities, have attempted to marshal the assets of the estate and distribute those assets in accordance with Fiumara's will.^[1] This action, by means of plaintiffs' first amended complaint [D. 39], seeks a declaration, in part, that certain properties that were placed in a particular trust by Fiumara are actually part of Fiumara's estate and are not validly held by and in the trust.

In more detail, the executrixes ask this court to declare:

(1) the Hyde Avenue Realty Trust void as it was a "sham" designed merely to shield Fiumara's assets from creditors and never actually functioned as a trust;

(2) that certain Trust Property was at all times under the exclusive control and for the exclusive benefit of Fiumara, and not the Life Beneficiary nor any of the other beneficiaries identified in the Trust documents;

(3) each deed conveying the Trust Property to the Trust is null and void and of no legal effect;

(4) each of certain parcels of real property constituting the Trust Property is property of the Estate;

(5) the conveyances of certain real property (condominium units) were gifts and are not part of the Estate or the Trust.

To accomplish their purpose in this action, the executrixes have named as defendants all of the remainder beneficiaries of the trust. None of the five surviving children of Fiumara contest the declaration sought by the executrixes. It is only the grandchildren, who take nothing under the will but are one-sixth beneficiaries under the trust, who contest the requested declaration. This case also involves an unjust enrichment claim by the executrixes against the grandchildren, and claims by the grandchildren against the trustee of the trust (who is also one of the two plaintiff executrixes) and two of the grandchildren's co-defendants. [D. 39, 40, 42.] By order of this court, separate trials of the various claims were ordered, with the first trial limited to the executrixes' declaratory judgment action, with the trial of any claims brought by the executrixes and the grandchildren to be scheduled thereafter, if those claims survive the plaintiffs' declaratory judgment action.^[2] [D. 37.] A non-jury trial was conducted by the court between February 1 and February 8, 2011. Post-trial briefing was scheduled, and memoranda were received by the court on March 17, 2011. [D. 58, 59.] Closing arguments were heard by the court on March 30, 2011.

The determinative issue for this court to decide is whether Fiumara created and established a valid trust in 1986, so that properties thereafter transferred into and held by the trust at the time of Fiumara's death remain subject to distribution to the defendant remainder beneficiaries in accordance with the terms of the trust. If that is not the case, then the properties held in and by the trust at the time of Fiumara's death (with an agreed-upon exception) are properly part of Fiumara's estate, to be distributed in accordance with the terms of Fiumara's will. The issue is vigorously contested, but ultimately is controlled by whether it was Fiumara's intention in 1986 to create and establish a valid trust that would separate legal and equitable interests in the properties deeded into the trust between the trustee (legal interest) and the beneficiaries (equitable interest). As is clear from the facts found by the court, and the discussion below that follows the factual findings, the issue of Fiumara's intention is not close. Fiumara never intended to establish a trust that deprived him of full control of the legal and equitable interests of the properties deeded into the trust. Accordingly, this court finds in favor of the executrixes in their declaratory judgment action and declares, in part, that certain properties in the trust at the time of Fiumara's death are part of the estate of Peter J. Fiumara.

BACKGROUND

Grace Fiumara ("Grace") was born on November 23, 1921, in New York. She relocated with her family to Boston when she was seven or eight years old. She went as far as the seventh or eighth grade in school before marrying Peter J. Fiumara Sr. ("Fiumara") when she was fifteen years old. Children quickly followed, six in all. Dolores was born in 1938, Peter J. Fiumara, Jr. ("Peter") in 1940, Joanne in 1942, Rosemarie in 1944, Joseph in 1947, and Nina in 1950.^[3] Grace was a stay-at-home mother and wife. She was never employed outside the home. She had no independent income outside her marriage to Fiumara. She died on October 23, 2000, at the age of seventy-eight.

Fiumara was born in Boston on September 25, 1918. His father died in the influenza epidemic of 1918-1919, five days after Fiumara was born. Fiumara left school in or after the eighth grade to help his mother support the family with her push cart fruit business in Boston. Fiumara stayed in the food business for nearly thirty years, until 1951-1952, establishing his business as a food broker under the name South Shore Fruit. In 1951, Fiumara and Grace purchased 35 Hyde Avenue, Newton, Massachusetts ("35 Hyde Avenue"), as their family home, where they lived throughout the remainder of their respective lives. Starting in the early 1950s and continuing until his death in 2005, Fiumara became engaged in a number of diverse business and property ventures.

In the early 1960s, Fiumara owned a bar/nightclub on Stuart Street in Boston called The Living Room, which his sons Peter and Joseph ran. The property was taken by eminent domain in 1973-1974. Thereafter, Fiumara operated another bar/nightclub in Boston called The Sugar Shack. That business lasted only a couple of years. In the mid to late 1970s, Fiumara bought the property at 604 Squire Road, Revere, and the Squire Lounge, a nude dancing club that operated at that location. The business itself was (and still is) owned and operated by Charger Investments, Inc. ("Charger"), of which Fiumara was the principal owner until his death. Fiumara's son Joseph has been employed at the Squire Lounge for over thirty years, as the night manager. Also in the 1970s, Fiumara bought the building and restaurant at 75 Chestnut Street, in the Beacon Hill section of Boston. He owned the property and operated the restaurant until 1986. Prior to that date, he mortgaged the property in order to help finance his ventures in the food business. When those ventures went bad in 1986, the bank took 75 Chestnut Street under the terms of the mortgage. From 1997 or 1998 until his death in 2005, Fiumara was at least a part owner of D&B, Inc., which operated the Golden Banana on Route 1 North in Peabody.

From the early 1950s until at least the late 1980s, Fiumara was involved in loaning money through Brunswick Finance Corp. In the 1970s he was a partner in an oil heating business on the North Shore. From a date that was not clear in the record until the early 1980s, Fiumara had an interest in a sign company in Chelsea.

Fiumara also started accumulating real estate. He bought the property at 604 Squire Road where the Squire was located, and an adjacent property at 770 Washington Street, Revere. He bought land at 571 Revere Street, Revere, and formed 571 Revere Street, Inc. to hold liquor and innkeeper's licenses, and to collect and receive any rents for the property. For a period in the late 1970s and early 1980s, Peter operated a club called Key Largo at 571 Revere Street. However, it provided live entertainment that was losing popularity at that time, and Key Largo closed after a few years. Eventually, Fiumara rented/leased 571 Revere Street (and the liquor/innkeeper's licenses) to a bar/club called The Cove, which still operates at that location. Fiumara bought commercial property in the produce section of Chelsea at 85 Market Street. During the 1980s, he was also involved in the development of the Sheffield Heights Condominiums in Saugus and received two condominium units for his investment/development activity. He also bought a vacant parcel of property at 239 Oakwood Avenue in Revere.

A. The Origins of the Hyde Avenue Trust

It was the food business that led Fiumara to the brink of financial ruin in the mid-1980s. J&R Veal Company was a family-run meat business which distributed cut veal to restaurant customers. At various times, Rosemarie, Nina, Joseph, and one of Dolores's sons worked at the company. Grace never worked outside the house, and never had a role of any sort at any time in any of Fiumara's businesses. In 1981, Fiumara became a 50% partner in Fulton Meat Packing Company. One or both meat companies tried to expand and became badly overextended. Fiumara was forced to mortgage his Beacon Hill property to help his food businesses. In the late summer or early fall of 1986, all of Fiumara's food businesses collapsed and closed. Rosemarie estimated that Fiumara might have lost as much as $5 million, maybe more.

The financial set-backs of 1986 had a profound effect on Fiumara. He became distraught at the...