Chu v. Legion of Christ, Inc.

• Decision Date: 26 February 2014
• Docket Number: C.A. No. 12–814L.
• Citation: 2 F.Supp.3d 160
• Parties: Paul CHU, in his capacity as Executor of the Estate of James Boa–The Chu v. LEGION OF CHRIST, INCORPORATED, The Legion of Christ Incorporated, and the Legion of Christ North America, Incorporated.
• Court: U.S. District Court — District of Rhode Island

2 F.Supp.3d 160

Paul CHU, in his capacity as Executor of the Estate of James Boa–The Chu

v.LEGION OF CHRIST, INCORPORATED, The Legion of Christ Incorporated, and the Legion of Christ North America, Incorporated.

C.A. No. 12–814L.

United States District Court, D. Rhode Island.

Feb. 26, 2014.

John J. Flanagan, John J. Flanagan, Attorney At Law, Warwick, RI, for Paul Chu, in his capacity as Executor of the Estate of James Boa–The Chu.

Brenna Anatone Force, Joseph Avanzato, Nicole J. Benjamin, Adler, Pollock & Sheehan, PC, Providence, RI, for Legion of Christ, Incorporated, The Legion of Christ Incorporated, and the Legion of Christ North America, Incorporated.

ORDER

RONALD R. LAGUEUX, Senior District Judge.

The Report and Recommendation of U.S. Magistrate Judge Patricia A. Sullivan, dated 1/13/14, is hereby accepted and adopted. Therefore, the Defendants' Motion for Summary Judgment is denied.

The parties will consult, and present to the Court, a new schedule for complying with the various sections of the already issued Pretrial Scheduling Order.

It is so Ordered.

REPORT AND RECOMMENDATION

PATRICIA A. SULLIVAN, United States Magistrate Judge.

Plaintiff Paul Chu (“Paul” or “Plaintiff”), in his capacity as executor of the Estate of his father (“Estate”), Dr. James Boa–Teh Chu (“Dr. Chu”), has sued the Legion Of Christ, Incorporated, The Legion Of Christ Incorporated, and The Legion Of Christ North America, Incorporated (collectively, “The Legion”), ¹ claiming that it used fraudulent and deceitful tactics, including undue influence, to induce Dr. Chu to designate The Legion as his beneficiary on all of his retirement annuities, which constituted the lion share of his assets at the time of his death. The Legion's motion for summary judgment (ECF No. 30) challenges Paul's standing to prosecute this suit based on its claim that Dr. Chu's general charitable intent precludes injury to his Estate—it argues that the undisputed facts establish that Dr. Chu would have designated another Catholic charity as beneficiary of his retirement annuities, if not The Legion, so that his Estate is not injured and his executor lacks standing to pursue these claims. The motion does not challenge the merits of the claims; rather, it asks this Court to examine “whether the litigant is entitled to have the court decide the merits of the dispute.” City of Hope Nat'l Med. Ctr. v. HealthPlus, Inc., 156 F.3d 223, 228 (1st Cir.1998) (citing Warth v. Seldin, 422 U.S. 490, 498, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975)). It has been referred to me for report and recommendation. 28 U.S.C. § 636(b)(1)(B).

The undisputed facts establish that Paul, in his capacity as the executor of his father's Estate, is claiming that, during his lifetime, Dr. Chu was the victim of fraud, deceit and undue influence committed by The Legion. Applying well-settled Rhode Island law, such claims survived the death of Dr. Chu, the victim, may be pursued by Paul, acting as Dr. Chu's personal representative and are the property of Dr. Chu's estate after death. Supplementing these legal principles is the additional undisputed fact that, pursuant to the terms of the retirement annuity contracts, the owner's estate is the default beneficiary. Therefore, both as a matter of law and pursuant to the applicable contracts, Dr. Chu's retirement annuities are payable to his Estate if the designation of The Legion as beneficiary is rendered void due to fraud and undue influence. Accordingly, Plaintiff has standing to pursue these survival claims and the extent and nature of Dr. Chu's general charitable intent, whether disputed or not, is legally immaterial. On that basis, I recommend that the motion be denied.

Alternatively, if Dr. Chu's intent is deemed material to his executor's standing, I find that there is sufficient material in the record to establish a genuine dispute regarding whether Dr. Chu would have left some or all of his retirement annuities to his Estate or his son, but for the fraud allegedly committed by The Legion. SeeFed.R.Civ.P. 56(c). On that alternative ground, I also recommend that the motion be denied.

I. BACKGROUNDA. Facts²

I begin with The Legion and the scandal that enveloped it during the period from 1997 until 2009, the same period when it was actively cultivating Dr. Chu as a donor.

The Legion is a Roman Catholic congregation that was established in 1941 in Mexico by Father Marcial Maciel Degollado, who served as its General Director until 2005. Dauray v. Estate of Mee, Nos. PB 10–1195, PB 11–2640, PB 11–2757, 2012 WL 4043292, at *4 (R.I.Super.Ct. Sept. 7, 2012) (hereinafter “ Dauray ”).³ Public exposure of scandal within The Legion began with an article published in the Hartford Courant in February 1997, which described sexual abuse by Father Maciel of nine young men over a period from the 1940s to the 1960s. Id. The Legion denied the allegations but, in 1998, the Vatican initiated an investigation. Id. In 2005, Father Maciel retired from The Legion; on May 19, 2006, the Pope released a Communiqué, which revealed that allegations involving Father Maciel had been received by the Congregation for the Doctrine of the Faith since 1998 and that in 2001, then-Cardinal Joseph Ratzinger, later Pope Benedict XVI, had authorized an investigation, which resulted in an invitation to Father Maciel “to a reserved life of penitence and prayer.” Id. at *5. In 2008, Father Maciel died; following his death, additional revelations came to light, including that he had fathered children and lived with the mother of one of them. Id. On May 1, 2010, the Pope issued a new Communiqué, which acknowledged the “very grave and objectively immoral actions of Father Maciel, confirmed by incontrovertible testimonies, [that] in some cases constitute real crimes and manifest a life devoid of scruples and authentic religious meaning.” Id.

Dr. Chu's story begins in China where he was born on September 26, 1924. He immigrated to the United States where he had a distinguished academic career as a Professor of Mechanical Engineering at Brown University, the State University of New York and Yale University. DSUF ¶ 2. Paul is not only his father's executor, but also his only child and the only heir under Dr. Chu's will. P. Chu Aff. ¶ 1; Complaint ¶ 10. Dr. Chu's beloved wife and Paul's mother, Mary, died in 1993; Dr. Chu never remarried. PSDF ¶ 3. As far as the record discloses, Dr. Chu's only other family consists of a brother and sister, about whom the record reveals almost nothing, and two nieces, Doreen Carter and Miriam Bergeron. DSUF ¶¶ 1, 3; Carter Aff. ¶ 2; P. Chu Aff. ¶ 6. Because Paul was in the seminary studying for the priesthood, Ms. Bergeron cared for Dr. Chu in her home during an illness in 2008, P. Chu Aff. ¶ 8. Dr. Chu died on November 21, 2009, at the age of 85. DSUF ¶ 2; P. Chu Aff. ¶ 1; Compl. ¶ 12; Answer ¶ 12.

In the latter part of his life, Dr. Chu suffered from mental health issues, as well as increasingly serious physical ailments. P. Chu Aff. ¶¶ 5–8. Beginning some time prior to 2000, symptoms of mental degeneration began to appear, including mental inflexibility, difficulty assimilating new data, mental tics, fixations and obsessions, some of which exhibited through bizarre hoarding and collecting. P. Chu Aff. ¶ 5. By 2000, Dr. Chu himself was expressing concern over his memory; Paul observed serious memory lapses in his father. Id. With the deterioration of his physical and mental health, he stopped teaching in 2003. Id. By 2004, his capacity to care for himself had become seriously impaired. P. Chu Aff. ¶ 6. In 2007, he had one of several automobile accidents. P. Chu Aff. ¶ 7. Medical records from 2008 and 2009 reflect treatment for dementia. P. Chu Aff. ¶ 8; P. Ex. 13.⁴

Over the course of his academic career, Dr. Chu built up various retirement annuities, all of which were administered by TIAA–CREF. They were of varying sizes; the largest were the annuities funded by Yale University. In all, the annuities collectively had between $1 million to $2 million in assets. ECF No. 33 at 6–7, 11; P. Ex. 7A.⁵ Pursuant to the annuity contracts, Dr. Chu could designate a beneficiary, a contingent beneficiary or no beneficiary; in the latter event, the contracts made the estate of the owner of the annuity the default beneficiary. Thus, if the designated beneficiary predeceased, and no contingent beneficiary had been named, at the time of the owner's death, the funds would be paid to the owner's estate. See Baize Decl. I ¶ 5, Ex. D; Baize Decl. II ¶¶ 5, 6, 8, 10, Exs. B, C, D, G; ECF No. 33 at 8 (“TIAA Contract, part F entitled death benefit, ¶ 40 ‘naming your beneficiary,’ p. 13. ‘The death benefit will be paid to your estate ... if at your death you had never named a beneficiary.’ ”).⁶

As a young man, Dr. Chu took instruction in Roman Catholic theology and converted; for the balance of his life, he was a devoted Roman Catholic, which he expressed, inter alia, through many charitable donations to Catholic charities. Complaint ¶¶ 10, 12–13; P. Chu Aff. ¶ 2. However, until he came under the influence of The Legion in 1997, it is undisputed that his munificence was directed both to his family and to Catholic charities. Thus, from the establishment of the first of the annuities in 1959 through the death of his wife in 1993, Dr. Chu named both family and charities as his beneficiaries and contingent beneficiaries, including his brother, his son, Paul, and Mother Teresa's charity, the Missionaries of Charity (no relationship to The Legion). Baize Decl. I ¶¶ 2–4, Exs. A–C; DSUF ¶¶ 3–4. Shortly after his wife's death in 1993, Dr. Chu made Paul the primary beneficiary on all of his annuities, with Mother Teresa's Missionaries of Charity as the contingent beneficiary. DSUF ¶ 3; PSDF ¶ 3. In 1995, Dr. Chu made the Missionaries of Charity the primary beneficiary on “certain” ⁷ annuities, leaving Paul as primary beneficiary on others. DSUF ¶ 4; PSDF ¶ 4.

In 1997, Dr. Chu was...