Branson v. Louttit
Decision Date | 02 August 2012 |
Docket Number | C.A. PC-2009-5006 |
Parties | WENDA BRANSON v. MARION P. LOUTTIT, INDIVIDUALLY, AND IN HER CAPACITIES AS TRUSTEE OF THE AUGUSTA P. HATHAWAY LIVING TRUST, AND AS CUSTODIAN FOR JONATHAN H. LOUTTIT, II AND CAROLINE HATHAWAY LOUTTIT MINOR CHILDREN v. JOAN PROUT-OSCARSSON f/k/a JOAN PROUT and KRISTAL OSBORN f/k/a KRISTAL A. FAHEY |
Court | Rhode Island Superior Court |
DECISION
Defendant Marion P. Louttit ("Louttit") moves for Summary Judgment against Plaintiff Wenda Branson ("Branson"). Louttit contends that Branson's claims are untimely under the laches doctrine and/or the applicable statute of limitations. Branson objects. Jurisdiction is pursuant to Super. R. Civ. P. 56. For the reasons stated herein, Louttit's Motion for Summary Judgment is granted in part and denied in part.
This controversy arises from changes to the estate plan of Augusta P. Hathaway ("Hathaway"). On October 19, 1992 Hathaway established a revocable living trust ("Trust"), naming herself beneficiary for life and Rhode Island Hospital Trust National Bank as trustee. On November 21, 1997, she amended the Trust to designate her three daughters, Louttit, Branson, and Third Party Defendant Joan Prout-Oscarsson ("Prout-Oscarsson") as remainder beneficiaries. The daughters would share whatever remained of the Trust's corpus upon Hathaway's passing. On December 19, 2000, Hathaway again amended the trust and named Loutitt as trustee and Branson as contingent trustee.[1]
In addition to the Trust, Hathaway's estate plan focused on her home at 49 Mathewson Road in Barrington, Rhode Island. Hathaway resided at 49 Mathewson Road for most of her adult life, raised her daughters there, and wanted the home to remain in her family. Accordingly, on November 21, 1997 Hathaway established the Augusta P. Hathaway Family Limited Partnership ("the FLP") as a mechanism to transfer 49 Mathewson Road within her family with minimal tax consequences. Shortly thereafter, she conveyed 49 Mathewson Road to the FLP. The home was the FLP's only asset.
The FLP Agreement ("Agreement") designated Hathaway as the FLP's sole general partner and granted her majority ownership of the FLP's limited partnership interest. The Agreement also named four additional limited partners Louttit; Louttit's minor son, Defendant Jonathan H. Louttit, II; Branson; and Branson's minor daughter, Third Party Defendant Kristal Osborn ("Osborn"). On December 19, 1997, the FLP added Louttit's newborn daughter, Defendant Caroline Hathaway Louttit, as a limited partner.
Over the course of the 1990s and 2000s, Hathaway's health gradually declined and ultimately required her to end her residence at 49 Mathewson Road. She relocated to an assisted living facility in November 2000 and then a skilled-care facility in October 2004.
Following Hathaway's move to an assisted living facility, several amendments to the Trust and gifts of FLP ownership interest occurred. Amendments to the Trust from February and August 2001 ("Trust Amendments") and FLP gifts from December 2000 and January 2001 ("FLP Gifts") are at the root of this litigation.[2] Through the Trust Amendments, Hathaway retained Louttit as trustee, but substituted Louttit's husband for Branson as contingent trustee. Hathaway also designated Louttit as recipient of the entirety of the remaining Trust corpus, minus payments of $ 2000 each to Branson, Prout-Oscarsson, and Osborn. With respect to the FLP Gifts, Hathaway completely divested herself of her general and limited partnership interests. Louttit became sole general partner in Hathaway's stead and also acquired the vast majority of the FLP's limited partnership interest.
Branson and Prout-Oscarsson objected to the Trust Amendments and the FLP Gifts. They retained counsel and engaged in correspondence with Counsel for Hathaway and Louttit regarding the shifts in Hathaway's estate plan.[3] Branson and Prout-Oscarsson threatened to invoke the FLP's dispute resolution procedures on July 27, 2001, but did not act on this threat. The last communication between Counsel for Louttit and Hathaway and Counsel for Branson and Prout-Oscarsson occurred on November 25, 2003. The controversy then apparently fell silent for roughly five years. Hathaway passed away on November 5, 2008.
On August 31, 2009, Branson filed the instant action. She challenges the validity of the Trust Amendments and the FLP Gifts and asks this Court to void both the Trust Amendments and the FLP Gifts pursuant to its equitable authority. Branson argues that such a remedy is appropriate because Hathaway (1) lacked capacity to amend the Trust and make the FLP Gifts and/or (2) only took those actions as a result of Louttit's undue influence. Branson also alleges that Louttit breached her fiduciary duty as trustee and seeks an accounting of the Trust's assets. Finally, Branson asks this Court to award her compensatory damages, punitive damages, and attorney's fees.
On April 15, 2011, Louttit filed the instant Motion for Summary Judgment on all of Branson's claims. Louttit contends that Branson's claims are untimely and barred by the doctrine of laches and/or the applicable statute of limitations. Louttit also challenges Branson's request for damages.
When a hearing justice is ruling on a Motion for Summary Judgment, the preliminary question before the court is whether there is a genuine issue as to any material fact which must be resolved. Haffenreffer v. Haffenreffer, 994 A.2d 1226, 1231 (R.I. 2010). The party seeking Summary Judgment has the initial burden to show the absence of a material fact. Santiago ex rel. Martinez v. First Student, Inc., 839 A.2d 550, 552 (R.I. 2004). If an examination of the pleadings, affidavits, admissions, answers to interrogatories, and other similar materials, viewed in the light most favorable to the opposing party, reveals no such issue, then the suit is ripe for Summary Judgment. Capital Props., Inc. v. State, 749 A.2d 1069, 1080 (R.I. 1999).
In the face of a Motion for Summary Judgment, the opposing party "carries the burden of proving by competent evidence the existence of a disputed material issue of fact and cannot rest on allegations or denials in the pleadings or on conclusions or legal opinions." Accent Store Design, Inc. v. Marathon House, Inc., 674 A.2d 1223, 1225 (R.I. 1996); see McAdam v. Grzelczyk, 911 A.2d 255, 259 (R.I. 2006). It is not sufficient "simply [to] show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Rather, Rule 56 "requires the nonmoving party to go beyond the pleadings" and present some type of evidentiary material in support of its position. Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). Although inferences may be drawn from underlying facts contained in material before the trial court, neither vague allegations and conclusory statements nor assertions of inferences not based on underlying facts will suffice. First Nat'l Bank of Boston v. Slade, 399 N.E.2d 1047, 1050 (Mass. 1979).
Branson challenges the validity of the Trust Amendments and the FLP Gifts and also argues that Louttit breached her fiduciary duties as trustee. Louttit contends that all of Branson's claims are improper for lack of timeliness and argues that Branson's request for damages is improper. The laches doctrine governs inquiries into the timeliness of equitable claims like Branson's efforts to void the Trust Amendments and the FLP Gifts. Conversely, the statute of limitations set forth in G.L. 1956 § 9-1-13 (2012) controls the timeliness analysis relative to Branson's breach of fiduciary duty claim. This Court will discuss allegations implicating laches before turning to claims covered by the statute of limitations. It shall then address matters of damages. [4]
Laches is an equitable defense that "precludes a lawsuit by a plaintiff who has negligently sat on his or her rights to the detriment of a defendant." O'Reilly v. Town of Glocester, 621 A.2d 697, 702 (R.I. 1993) (citing Fitzgerald v. O'Connell, 120 R.I. 240, 245, 386 A.2d 1384, 1387 (1978)). It is, in other words, the practical application of the maxim that "those who sleep on their rights must awaken to the consequence that they have disappeared." Kern v. Kern, 892 A.2d 1, 9 (Pa Super. Ct. 2005).
Unlike the operation of a statute of limitations, the application of the doctrine of laches does not depend on a mechanical passage of time. Id. Rather, when considering the laches doctrine's applicability in a particular case, a court must determine (1) whether there was negligence on the part of the plaintiff that led to an unreasonable delay in the prosecution of the case and, if so, (2) whether the delay prejudiced the defendant. O'Reilly, 621 A.2d at 702. The party claiming laches must demonstrate both elements. Rodriques v. Santos, 466 A.2d 306, 311 (R.I. 1983).
Laches then, "is not mere delay, but delay that works a disadvantage to another." Chase v. Chase, 20 R.I. 202, 203-04, 37 A. 804, 805 (1897). As our Supreme Court has repeatedly stated:
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