In re 17 Albion St. Trust

100 Mass.App.Ct. 873

187 N.E.3d 427

In the MATTER OF 17 ALBION STREET TRUST.

No. 21-P-660

Appeals Court of Massachusetts, Middlesex.

Argued February 2, 2022.

Decided April 20, 2022.

Michael D. Tauer, for Lauren Chertow & another.

Marlee S. Cowan (William D. Black also present) Boston, for Daniel Kresicki-Bloom.

Present: Milkey, Desmond, & Lemire, JJ.

MILKEY, J.

In 1981, Richard Bloom created an irrevocable trust for the benefit of his children. Specifically, the trust document identified the beneficiaries as his then-living children, Jeffrey Bloom and Lauren Chertow, "plus such additional children of [Richard] born thereafter." Richard subsequently separated from the mother of Jeffrey and Lauren (collectively, the older children).¹ In 1985, Richard had another child, Daniel Kresicki-Bloom, with Catherine Kresicki. After Richard died, the older children sought a declaration that their half-brother, Daniel, was not a beneficiary of the trust after all. On cross motions for summary judgment, a Probate and Family Court judge rejected their argument, ruling that Richard unambiguously intended that his after-born children become full beneficiaries. On the older children's appeal, we affirm.

Background. 1. Overview of the summary judgment record. The parties presented to the judge a joint appendix consisting of sixteen exhibits. Included among these were various uncontested documents, including the "agreement of trust" that created the trust (trust agreement). Also included were affidavits from Daniel, Lauren, and Donna Leeds (Richard's first wife, and the mother of the older children). Among the remaining exhibits was exhibit 7, which is comprised of what appears to be a hand-written ledger and other accounting documents related to the trust. As required by Rule 27C of the Supplemental Rules of the Probate and Family Court (2012) (supplemental rule 27C), the analog to Superior Court Rule 9A, the parties submitted a statement of material facts with their cross motions for summary judgment. Details of that statement are reserved for later discussion.

2. The trust agreement. Under the trust agreement, Richard's father was designated as the initial trustee. As noted, the beneficiaries were identified as the older children "plus such additional children of [Richard] born thereafter." The trust agreement also recognized the existence of individual subtrusts for each beneficiary: "[a] separate and distinct trust is hereby created for each of the beneficiaries referred to herein above." For administrative convenience, the trustee could commingle the assets of the various subtrusts, but he was supposed to "keep such records as shall fully indicate each beneficiary's share of the trust estate." The trustee was required to pay the income from the subtrusts to the respective beneficiaries on an annual basis. In addition, each beneficiary could demand up to $5,000 per year from the trust's assets, and the trustee was authorized to make further distributions of principal to the beneficiaries of trust assets if, in his "sole discretion," the trustee determined "that such payment or application was reasonably necessary to enable the beneficiary or his issue to be maintained in accordance with the station in life which such beneficiary has established." Section 5 of the trust agreement detailed the trustee's powers. Included among them is the authority set forth in section 5(m)

"[t]o make any division or distribution required under the terms of this Agreement in kind or in money, or partly in kind and partly in money, and to that end to allot to any trust hereunder such corporate shares, securities, or other property, real or personal, as to the Trustee seems proper in his absolute discretion and judgment."

3. Other background facts. While acknowledging that the language of the trust agreement itself provides the principal evidence of Richard's intent, both sides sought to support their respective positions by reference to various other facts. They now dispute the extent to which such facts were properly before the judge as part of the summary judgment record.

The parties appear to agree that consistent with the trust's formal name, the "primary asset" of the trust is the real estate at 17 Albion Street in Wakefield (Wakefield property).² Although both sides recognize that there may be other assets in the trust, the record does not establish what those assets might be, with one exception noted infra.

Without qualification, the older children assert that "[n]o additional assets were contributed to the [t]rust after its initial funding in 1981." However, their underlying record appendix citation for that statement fails to substantiate it.³ In addition, an undisputed document in the record appendix appears to contradict the claim that no assets were added after 1981. That document, included in the joint appendix as exhibit 4, is a 2017 check from the Lincoln National Life Insurance Company made out to the trust in the amount of $176,871.41 for a "death benefit" (from which an unpaid loan had been deducted). The context indicates that the check was for the net proceeds of a life insurance policy that Richard had obtained for the benefit of the trust.⁴

In his affidavit, Daniel averred that, since the age of three, he regularly has received distributions from the trust as a beneficiary. Nothing in the summary judgment record contradicts that claim. To the contrary, the hand-written ledger and other financial records that were included as exhibit 7 appear to corroborate Daniel's claim that he regularly received distributions from the trust, at least with respect to the specific years that such records covered. Nevertheless, as is discussed infra, the older children argue that the judge erred in considering such evidence, because Daniel failed to include the point in the statement of material facts.

4. Successor trustees. By the time that Richard died, his father, the original trustee, himself long since had died. Although there is some confusion in the record regarding who succeeded Richard's father as trustee, it appears uncontested that at the time of Richard's death, there was no trustee in place, and there had not been one for a considerable period of time. According to the older children, Richard had been operating the Wakefield property as his own, even though it was owned by an irrevocable trust of which he was neither trustee nor beneficiary.

5. Proceedings. After Richard died, Lauren filed a petition in the Probate and Family Court seeking appointment of a successor trustee. That petition stated, without qualification, that "[t]he beneficiaries of the trust are Richard Bloom's three children, the Petitioner, Lauren Chertow, Jeffrey R. Bloom and Daniel Bloom." At Lauren's request, Jeffrey and Daniel assented to Lauren's petition. The petition was allowed, and Attorney Janice Nigro was appointed as the successor trustee.

After assuming control of the trust, Nigro filed an action in Superior Court against both Richard's estate and Catherine Kresicki (Richard's second wife and Daniel's mother). The complaint, which was based on theories of conversion, constructive trust, and unjust enrichment, alleged that Richard and Catherine improperly had used the trust as their own property to the detriment of the beneficiaries. Nigro also filed in the Probate and Family Court a petition for instructions related to the Superior Court litigation.⁵ According to Nigro's petition, Lauren was insisting that the costs of prosecuting the Superior Court litigation be borne equally by the three beneficiaries, including Daniel.

On December 18, 2018, the older children filed a general trust petition through which they sought to negate Daniel's status as beneficiary. They argued, for the first time, that Richard intended his after-born children to acquire a beneficial interest only with respect to any property added to the trust after such children were born. According to the older children, any property in the trust at the time after-born children were born already had been committed to subtrusts created for the children living at the time the trust was created. Based on their claim that no property in fact had been added to the trust after Daniel was born, and their argument that someone cannot be +a beneficiary without a res,⁶ they argued that Daniel was not in fact a beneficiary, only a potential one.⁷

As noted, the judge rejected the older children's argument, concluding instead that the trust agreement evinced an unambiguous intent to treat afterborn children as full beneficiaries. The judge additionally observed that this interpretation is supported by the actions of all involved, including not only Richard and Nigro, but also the older children themselves. Invoking Mass. R. Civ. P. 54 (b), 365 Mass. 820 (1974), the judge entered a separate and final judgment declaring that Daniel was a beneficiary of the trust "for the reasons set forth in [the judge's] Memorandum of Decision."⁸

Discussion. We begin by noting that there is some confusion as to what is properly before us. Read literally, the judgment declared only that Daniel was a beneficiary of the trust, without any specification of the scope of his rights as such. As noted, the older children's theory that Daniel was not a beneficiary was premised in part on their factual claim that Richard added no assets to the trust after Daniel's birth. However, the older children failed to substantiate that factual premise, and the summary judgment record appears to contradict it. If Richard in fact added assets to the trust after Daniel was born, then even under the older children's own theory of the case, Daniel would be a beneficiary. Hence, if the only issue before us is whether Daniel is a beneficiary, then the judgment plainly is correct.

At the same time, however, the judgment specifically states that the judge was determining that Daniel was a beneficiary "for the reasons" explained in the judge's...