Anderson v. BNY Mellon, N.A.

• Decision Date: 28 August 2012
• Docket Number: SJC–11122.
• Citation: 974 N.E.2d 21,463 Mass. 299
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: Rachel A. BIRD ANDERSON v. BNY MELLON, N.A., trustee, & others.

463 Mass. 299
974 N.E.2d 21

Rachel A. BIRD ANDERSON
v.
BNY MELLON, N.A., trustee,¹ & others.²

SJC–11122.

Supreme Judicial Court of Massachusetts,
Norfolk.

Submitted May 7, 2012.
Decided Aug. 28, 2012.

[974 N.E.2d 23]

Wilbur A. Glahn, III, Manchester, NH (Kimberly Ryan Torrisi with him) for Rachel A. Bird Anderson.

Maria L. Rockwell, Franklin, for John G. Dugan.

Steven B. Rosenthal for Michael Podolski.

Kevin J. Willis, Boston, for BNY Mellon, N.A., was present but did not argue.

The following submitted briefs for amici curiae:

David S. Weiss, Laura E. D'Amato, & Brian P. Thurber, Boston, for Douglas D. Lee.

Martha Coakley, Attorney General, & Tori T. Kim, Assistant Attorney General, for Attorney General.

Lisa C. Goodheart, Boston, for Boston Bar Association.

Benjamin G. Robbins & Martin J. Newhouse, Boston, for New England Legal Foundation.

Paul F. Donovan for Joseph Lee, IV, & others.

Present: IRELAND, C.J., SPINA, CORDY, BOTSFORD, GANTS, & DUFFLY, JJ.

BOTSFORD, J.

[463 Mass. 300]In 1941, Anna Child Bird (Anna ³) executed a will with a testamentary trust that benefited her son, her grandsons, and their issue; Anna died in 1942. At the time the will was executed, G.L. c. 210, § 8( § 8), a statute prescribing a rule of construction for certain types of instruments relating to inheritance, provided that unless the contrary “plainly appear[ed] by the terms of the instrument,” an adopted child was excluded from the definition of “ ‘child,’ or its equivalent” unless the child had been adopted by the person creating the testamentary instrument. In 1958, § 8 was amended (1958 amendment) in a way that effectively reversed the presumption concerning adopted children and issue: the term

[974 N.E.2d 24]

“child” or its equivalent was redefined to include an adopted child generally (i.e., not only where the settlor, grantor, or testator was the adopting parent), unless a contrary intent “plainly appear[ed]” in the instrument. By its terms, however, the 1958 amendment applied only to wills, trusts, and the like executed after its effective date, August 26, 1958. See St.1958, c. 121, § 3. In 2009, the Legislature enacted another amendment to § 8 (2009 amendment), that was effective July 1, 2010, and that made the 1958 amendment applicable to all testamentary instruments regardless of when executed.⁴

[463 Mass. 301]Rachel A. Bird Anderson (plaintiff) is the biological great-grandchild of Anna, and she has two adopted brothers, Marten F. Bird (Marten) and Matthew G. Bird (Matthew).⁵ Since the death in 2007 of her father David Bird (David)—who was one of three biological grandsons of Anna—the plaintiff has been receiving income distributions from the testamentary trust established by Anna in her will; as adopted great-grandchildren of Anna, Marten and Matthew have not. The question presented is whether the 2009 amendment constitutionally may be applied retroactively to Anna's trust, with the effect that the plaintiff's interest in the trust would be divided into three parts to cover her and her two adopted brothers. We conclude that it may not.⁶

1. Background.⁷ a. Anna Child Bird trust. Anna executed her will on December 31, 1941. The will created, on her death, a trust (ACB trust) benefiting her son, Charles Sumner Bird, Jr. (Charles Jr.); Charles Jr.'s wife, Julia Bird (Julia); her grandsons, Charles Sumner Bird, III (Charles III), David, and Christopher Bird (Christopher); and the issue of her son and grandsons.⁸

The provisions of the ACB trust pertinent to this case concern Anna's three grandsons and their issue. Under those provisions, while Charles III, David, and Christopher were all living, Charles III was to receive one-half of the balance ⁹ of the trust income, and David and Christopher were each to receive one-quarter; if [463 Mass. 302]either David or Christopher were to die leaving issue during Charles III's lifetime, then his issue would take his share of the income. After Charles III died, the income was to be paid to the issue of Anna's son, Charles Jr., by right of representation

[974 N.E.2d 25]

—i.e., the three grandsons and their issue. The ACB trust provides that it is to terminate twenty-one years after the death of the last survivor of Charles Jr., Julia, and the children and grandchildren of Charles Jr. living at Anna's death; and on termination, the principal is to be paid to the then income beneficiaries in the same proportions as they are entitled to receive income distributions. Neither the ACB trust nor Anna's will defines the term “issue.”

On November 19, 1942, Anna died, and the ACB trust became irrevocable. At the time of her death, there were no adopted children in any generation of the Bird family. Marten was born in 1965, and Matthew in 1970; the record does not indicate when they were adopted by David. The plaintiff was born in 1967. David died on October 28, 2007, and at the time of his death, Charles III was still living. Accordingly, under the terms of the ACB trust, David's issue then assumed his one-quarter interest in the trust income at his death, and the plaintiff, as David's only biological child, began to receive a distribution of twenty-five per cent of the trust income quarterly. Marten and Matthew did not receive any income distribution because the ACB trust, having been created before 1958, was interpreted in accordance with the presumptive rule of construction in § 8 prior to the 1958 amendment, and as adopted children of a grandson who was not the testator, Marten and Matthew were not considered to come within the definition of “child” or its equivalent, “issue.” Charles III died on April 20, 2010, and we infer that he was the last of Anna's grandsons to die. After his death, under the terms of the ACB trust, the trust income was distributed to the issue of Charles Jr. by right of representation. The plaintiff began receiving a distribution of fifty per cent of the trust income, while Marten and Matthew continued to receive nothing.¹⁰

[463 Mass. 303]On July 19, 2010, a few weeks after the effective date of the 2009 amendment, the plaintiff received a notice from the defendant, BNY Mellon, N.A., the trustee of the ACB trust (trustee). The notice informed her that in light of the 2009 amendment, Marten and Matthew were now considered “issue” of Charles Jr. for purposes of the ACB trust and were therefore income beneficiaries under the trust. Accordingly, the notice stated, in the future, the plaintiff, Marten, and Matthew would split the fifty per cent income interest three ways, meaning that the plaintiff's share of the income would be reduced from fifty per cent to sixteen and two-thirds per cent, and Marten and Matthew would each begin receiving an equivalent share.¹¹

b. Julia Bird trust. Julia, the grandmother of the plaintiff, Marten, and Matthew, established a charitable lead trust (JB trust) on April 9, 1981. The JB trust terminated in February, 2008, twenty-five

[974 N.E.2d 26]

years after Julia's death in 1983, and the trust principal was paid as follows: one eighth each to Marten and Matthew, and the remainder in equal shares to Julia's then-living great-grandchildren, specifically including the children of Marten and Matthew. The plaintiff was not a beneficiary of the JB trust. Julia did not explain in the trust instrument why she chose this distribution scheme, nor does an explanation appear anywhere in the record.

c. Procedural history. On September 30, 2010, the plaintiff filed a complaint in the Probate and Family Court, seeking a judgment declaring that the 2009 amendment is unconstitutional, at least as applied to the ACB trust; the complaint names the trustee, Marten, and Matthew as defendants, and the four biological daughters of Christopher as “interested parties.” On the plaintiff's motion, two guardians ad litem were appointed, one to represent the interests of Anna's unborn and unascertained [463 Mass. 304]biological descendants, and one the interests of Anna's unborn and unascertained adopted descendants. On October 6, 2011, the motion judge allowed the plaintiff's assented-to motion to report the case to the Appeals Court. We granted the plaintiff's application for direct appellate review.

2. Discussion. We first explore the history of the amendments to § 8 in greater detail. We next address the question whether § 8 is merely an evidentiary rule and therefore raises no constitutional concerns when applied retroactively. Because we conclude that constitutional questions are implicated, we then turn to an analysis whether the 2009 amendment may be applied retroactively in this case.

a. History of amendments to G.L. c. 210, § 8. As mentioned, the 1958 amendment prospectively reversed the presumption applicable at Anna's death, such that in post–1958 testamentary instruments, the word “child,” or its equivalent, was defined to include an adopted child regardless whether adopted by the settlor, grantor, or testator, unless the instrument indicated otherwise. See Watson v. Baker, 444 Mass. 487, 492, 829 N.E.2d 648 (2005). Section 8 was rewritten by St.1969, c. 27 (1969 amendment), which expanded the statute's application to include expressly the terms “grandchild,” “issue,” “heir,” “heir-at-law,” and their equivalents. More importantly, it provided that the presumption of inclusion of adopted persons in the definition of these terms “shall be applicable to all [instruments] whether the same were executed or effective before or after the effective date of this act,” except that the presumption would not apply to any pre–1958 instrument “with respect to any interests or right therein which had vested prior to the effective date of this act.” St.1969, c. 27, §§ 1, 2. ¹²

In a series of cases, this court interpreted the term “vested” [463 Mass. 305]in § 2 of the 1969

[974 N.E.2d 27]

amendment to mean the point at which “the interest is sufficiently established to constitute an interest or right which had accrued to its holder” and “subject only to total or partial defeat...