Tamposi v. Stephanie Denby, Esq., Burke Warren Mackay & Serritella, P.C.

974 F.Supp.2d 51

Elizabeth M. TAMPOSI, Plaintiff,

v.Stephanie DENBY, Esq., Burke Warren MacKay & Serritella, P.C., Michael Weisman, Esq., Rebecca McIntyre, Esq., Weisman & McIntyre, P.C., Julie Shelton, Esq., individually and in her capacities as Trustee of the Elizabeth M. Tamposi GST Exempt Trust and the Elizabeth M. Tamposi Trust, both created under the Samuel A. Tamposi Sr. 1992 Trust, and in her capacity as Trustee of the Elizabeth A. Tamposi Trust, created under the Samuel A. Tamposi Sr. 1994 Irrevocable Trust; Butler, Rubin Saltarelli & Boyd, LLP, Baker & Daniels, LLP, Defendants.

Civil Action No. 10–12283–RBC.¹

United States District Court, D. Massachusetts.

Sept. 30, 2013.

Charles P. Kazarian, Christopher S. Malloy, Law Office of Charles P. Kazarian, Boston, MA, for Plaintiff.

Susan E. Cohen, George A. Berman, Sarah–Elizabeth Cloutier, Timothy M. Pomarole, Peabody & Arnold LLP, Camille F. Sarrouf, Sarrouf Law, LLP, Joan A. Lukey, Matthew L. McGinnis, Ropes & Gray, Michael R. Dube, Robert M. Buchanan, Jr., Choate, Hall & Stewart, Boston, MA, David A. Axelrod, Robert A. Cohen, David A. Axelrod & Associates P.C., Chicago, IL, for Defendants.

MEMORANDUM AND ORDER ON MOTION TO DISMISS COUNT I THROUGH IV AND IX OF PLAINTIFF'S VERIFIED COMPLAINT OF DEFENDANTS STEPHANIE DENBY, ESQ., AND BURKE WARREN McKAY & SERRITELLA, P.C. (# 50)

COLLINGS, United States Magistrate Judge.

I. Introduction

This matter is before the Court on a motion to dismiss Counts I, II, III, IV, and IX ² of the verified complaint by defendants Stephanie Denby, Esq. (“Attorney Denby”) and Burke Warren MacKay & Serritella, P.C. (“Burke Warren”). The complaint was filed by plaintiff Elizabeth M. “Betty” Tamposi (“Ms. Tamposi”) to recover damages allegedly caused by the defendants' legal malpractice. Jurisdiction is based on diversity, and New Hampshire law is applicable.³

II. Factual Background

This brief factual recitation is gleaned from the allegations of the verified complaint and a 2010 decision of the New Hampshire Hillsborough County Superior Court (herein “the New Hampshire Action”), i.e., Shelton v. Tamposi, 2010 N.H.Super. LEXIS 78 (N.H.Sup.Ct.2010), aff'd in part and remanded,164 N.H. 490, 62 A.3d 741 (2013).⁴

Samuel A. Tamposi (“Sam, Sr.”), a successful real estate developer based out of New Hampshire, established a number of trusts to pass on his substantial wealth to his six children and their issue.⁵ (# 1 ¶ 13) The joint assets of the trusts were placed in the hands of two of Sam, Sr.'s sons, Sam, Jr. and Stephen, who were explicitly named “investment directors” and empowered to make all decisions as to investments, purchases, and sales of assets. (# 1 ¶ 15) A trustee was named to handle a number of other duties, including issuing disbursements to beneficiaries. (# 1 ¶ 15)

Sam, Sr. placed within the trust documents an in terrorem clause, also known as a “no contest” clause. (# 1 ¶ 16) The clause stated that if a beneficiary initiated litigation to alter or invalidate provisions of the trust, he or she automatically forfeited all interest in the assets, and must return all funds received since the litigation was filed. (# 1 ¶ 16) It explicitly exempted suits to enforce the trustee's duties from this penalty. (# 1 ¶ 16) The plaintiff was aware of the in terrorem clause in the trust documents. (# 1 ¶¶ 26, 35)

Ms. Tamposi, one of Samuel's children and the plaintiff in this case, sought to gain more direct control over the trust assets of which she was a beneficiary. (# 1 ¶ 18) As the result of a 2006 settlement among the siblings, Ms. Tamposi was given the right to obtain a trustee of her own choosing for the two trusts of which she and her issue were beneficiaries, while the assets remained under the control of the investment directors. (# 1 ¶ 18)

Initially, Ms. Tamposi asked her attorney and friend, Julie Shelton (“Attorney Shelton”), to act as trustee, but Attorney Shelton declined, and instead recommended Attorney Denby, a partner at Burke Warren. (# 1 ¶¶ 19–20) Allegedly, Attorney Denby proposed an alternative plan in which Attorney Shelton would act as trustee, but Attorney Denby would in fact make the decisions and represent her in court regarding issues surrounding the trust. (# 1 ¶¶ 22–23)

Attorney Shelton, presumably under Attorney Denby's direction, took a number of actions, including working with Ms. Tamposi to interview attorneys for any potential trust litigation, demanding a payment of “$2,000,000 within 7 days” for Ms. Tamposi's “immediate cash needs” from the investment directors, demanding that the trust's assets in the Boston Red Sox baseball club “be sold with the resulting cash distributed immediately,” and eventually initiating the New Hampshire Action alleging a breach of fiduciary duty by the investment directors and demanding that her share of the assets be sold. (# 1 ¶¶ 25–27, 30); Shelton v. Tamposi, 2010 N.H.Super. LEXIS 78, at *21.

That suit was ultimately unsuccessful, and the New Hampshire Hillsborough County Superior Court ruled that the action violated the in terrorem clause. (# 1 ¶¶ 36, 41) As a result, Ms. Tamposi forfeited her interest in the trusts and was required to reimburse the trust for any money dispersed to her after the suit was initiated. (# 1 ¶ 41) Additionally, she was required to pay the investment directors' attorneys' fees, as well as her own. (# 1 ¶ 41); Shelton v. Tamposi, 2010 N.H.Super. LEXIS 78, at **80–81.

Ms. Tamposi now brings suit against Attorney Shelton, Attorney Denby and Burke Warren as well as other attorneys who advised her in the New Hampshire action, alleging that their misconduct led to the forfeiture of her interest in the trust assets.

III. Standard of Review

A Rule 12(b)(6) motion to dismiss challenges a party's complaint for failing to state a claim. In deciding such a motion, a court must “ ‘accept as true all well-pleaded facts set forth in the complaint and draw all reasonable inferences therefrom in the pleader's favor.’ ” Haley v. City of Boston, 657 F.3d 39, 46 (1st Cir.2011) (quoting Artuso v. Vertex Pharm., Inc., 637 F.3d 1, 5 (1st Cir.2011)). When considering a motion to dismiss, a court “may augment these facts and inferences with data points gleaned from documents incorporated by reference into the complaint, matters of public record, and facts susceptible to judicial notice.” Haley, 657 F.3d at 46 (citing In re Colonial Mortg. Bankers Corp., 324 F.3d 12, 15 (1st Cir.2003)).

In order to survive a motion to dismiss under Rule 12(b)(6), the plaintiff must provide “enough facts to state a claim to relief that is plausible on its face.” See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). The “obligation to provide the grounds of [the plaintiff's] entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id. at 555, 127 S.Ct. 1955 (quotation marks and alteration omitted). The “[f]actual allegations must be enough to raise a right to relief above the speculative level,” and to cross the “line from conceivable to plausible.” Id. at 555, 570, 127 S.Ct. 1955.

“A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955). However, the court is “ ‘not bound to accept as true a legal conclusion couched as a factual allegation.’ ” Id. at 678, 129 S.Ct. 1937(quoting Twombly, 550 U.S. at 555, 127 S.Ct. 1955). Simply, the court should assume that well-pleaded facts are genuine and then determine whether such facts state a plausible claim for relief. Id. at 679, 129 S.Ct. 1937.

IV. Discussion

A. In Pari Delicto

As a preliminary matter, Attorney Denby and Burke Warren argue that Ms. Tamposi cannot recover damages in this lawsuit under the doctrine of in pari delicto. This doctrine, in pari delicto potior est conditio defendentis,⁶ is an “ill-defined group of doctrines that prevents courts from finding for a plaintiff equally at fault as the defendant.” Official Comm. of Unsecured Creditors of Allegheny Health, Education and Research Foundation v. PricewaterhouseCoopers, LLP, 607 F.3d 346, 350 n. 2 (3d Cir.2010); see also Bateman Eichler, Hill Richards, Inc. v. Berner, 472 U.S. 299, 306–07, 105 S.Ct. 2622, 86 L.Ed.2d 215 (1985). “New Hampshire has recognized the in pari delicto doctrine.” In re Felt Mfg. Co., Inc., 371 B.R. 589, 609 (Bkrtcy.D.N.H.2007) ( citing Witte v. Desmarais, 136 N.H. 178, 187, 614 A.2d 116, 120 (1992) and Belisle v. Belisle, 88 N.H. 459, 461, 191 A. 273, 274 (1937)).

In pari delicto is an affirmative defense to the plaintiff's claims. Gray v. Evercore Restructuring L.L.C., 544 F.3d 320, 324 (1st Cir.2008). “Where a court grants a Rule 12(b)(6) or Rule 12(c) motion based on an affirmative defense, the facts establishing that defense must: (1) be ‘definitively ascertainable from the complaint and other allowable sources of information,’ and (2) ‘suffice to establish the affirmative defense with certitude.’ Nisselson v. Lernout, 469 F.3d 143, 150 (1st Cir.2006).” Gray, 544 F.3d at 324.

Addressing the doctrine of in pari delecto, the First Circuit has noted that

The defense has two components. It applies where (i) the plaintiff, as compared to the defendant, bears at least substantially equal responsibility for the wrong he seeks to address and (ii) preclusion of the suit would not interfere with the purposes of the underlying law or otherwise contravene the public interest. We refer to these parts as the ‘responsibility’ and ‘public policy’ components.

Gray, 544 F.3d at 324 (internal citation and quotation marks omitted). As explained by the Supreme Court:

In its classic formulation, the in pari delicto defense was narrowly limited to situations where the...