First Nat. Bank of Boston v. Sullivan

• Decision Date: 01 July 1976
• Citation: 4 Mass.App.Ct. 414,350 N.E.2d 473
• Parties: The FIRST NATIONAL BANK OF BOSTON, executor 1 v. Mary E. SULLIVAN, executrix, et al. (and four companion cases).
• Court: Appeals Court of Massachusetts

Page 473

350 N.E.2d 473

4 Mass.App.Ct. 414

The FIRST NATIONAL BANK OF BOSTON, executor ¹

v. Mary E. SULLIVAN, executrix, et al. (and four companion cases).

Appeals Court of Massachusetts, Middlesex.

Argued April 15, 1976.

Decided July 1, 1976.

Paul J. Driscoll, Boston, for Mary E. Sullivan, executrix, and others.

Robert F. Sylvia, Boston, for Elias M. Loew.

Before HALE, C.J., and GOODMAN and GRANT, JJ.

GRANT, Justice.

At the time of his death on July 17, 1960, Paul F. Bowser was the record owner of various securities representing substantial equity and debt positions in Bay State Harness Horse Racing and Breeding Association, Inc. (Bay State), which owns and operates a race track in Foxborough, and a substantial equity position in Norfolk County Concessionaires, Inc. (Norfolk), a corporation supplying food and drink at the track. Thomas J. Colbert was appointed as the executor of Bowser's will by a decree of the Probate Court for Middlesex County entered on August 18, 1960. During the period from July 17 through August 8, 1961, fourteen separate petitions for the retention of assets were filed by or in behalf of various persons who claimed to be the equitable owners of portions of the securities standing in Bowser's name at the time of his death. Those petitions were all promptly allowed, with pertinent orders for retention. On July 23, 1962, one Elias M. Loew, who had held substantial equity and secured debt positions in Bay State and Norfolk since 1947, purchased the interests of all the residuary legatees under Bowser's will. Such purchases were subsequently confirmed by the court on January 14, 1963.

On January 16, 1969, Colbert, as the then executor, filed a petition on the equity side of the court against all those who had filed petitions for the retention of assets, against one claimant who had not filed such a petition, and against Loew, seeking declaratory relief with respect to all the claims which had been asserted against the securities of Bay State and Norfolk standing in Bowser's name. Separate petitions, similarly seeking declaratory relief with respect to their particular claims, were filed by four of the claimants. Loew was named or permitted to intervene as a respondent in those four petitions. All five petitions were heard together. The decrees (one of them as amended) entered by the judge determined, among other things, that each of certain named claimants was the equitable owner of certain securities of Bay State or Norfolk (of both) standing in Bowser's name at the time of his death. Loew appealed from all the decrees. All the decrees were affirmed (with certain modifications) by this court in FIRST NATL. BANK V. SULLIVAN, 2 MASS.APP.CT. --- , 314 N.E.2D 149 (1974)^A (the prior case).

Subsequent to the issuance of our rescript in the prior case counsel for certain of the successful claimants filed in the Probate Court petitions by which they severally sought to have the court fix and determine their compensation and expenses in connection with the entire litigation (including the appeal) and to 'direct payment thereof from the (Bowser) estate generally or as the (c)ourt may determine.' In addition, one of the claimants filed a separate motion 'under Mass.G.L. c. 215, §§ 39B and 45 that the (c)ourt provide payment to her out of the (e)state . . . for counsel fees and other expenses' incurred by her (and by her testator prior to his death) in connection with portions of the same litigation. ² Counsel for the claimants and counsel for Loew submitted somewhat conflicting forms of judgments to be entered after rescript in the prior case.

The judge held an evidentiary hearing on the question of counsel fees and expenses and conferred with counsel concerning the proposed judgments. He made findings as to the fair and reasonable value of the services rendered by each petitioning counsel and as to the expenses (if any) incurred by each such counsel in connection with the entire litigation, including the appeal in the prior case; he also made a like finding with respect to the services already paid for by the claimant who had filed a separate motion. He then (February of 1975) reported to this court the question whether he has the authority to award the requested fees and expenses out of the Bowser estate. Mass.R.Civ.P. 64, 365 Mass. 831 (1974). It is clear from the report that the judge intends to exercise his discretion in favor of making awards out of the estate if we determine that he has the power to do so. Loew, as the sole residuary legatee (by purchase) of the Bowser estate, takes the position that no such power exists. ³

THE POWER TO AWARD COUNSEL FEES AND EXPENSES OUT OF THE ESTATE.

Several considerations lead us to the conclusions (a) that the judge had the power to award the requested counsel fees and expenses out of the Bowser estate under the provisions of G.L. c. 215, § 39B, as inserted by St.1951, c. 212, ⁴ and as in effect at the time of the report in this matter, and (b) that the judge continues to have that power under the provisions of G.L. c. 215, § 39B, as appearing in St.1975, c. 400, § 70, ⁵ and as now in effect.

Our first consideration is the actual language of § 39B in its original form. The first sentence of that section set out in order at least five separate, distinct and readily recognizable categories of contested proceedings commonly encountered by probate courts in the course of exercising their jurisdiction over the administration of estates and trusts. See note 4. The present proceedings obviously did not fall within any of the categories which we have numbered as (2), (3) or (5) of that sentence. There is room for doubt whether they fell within category (4). ⁶ They did fall literally within category (1), namely, contested proceedings 'in equity'. ⁷ The record legal title to the securities in question had vested in Colbert in his capacity as the then executor of Bowser's will (Reardon v. Whalen, 306 Mass. 81, 29 N.E.2d 23 (1940); Kobrosky v. Crystal, 332 Mass. 452, 461, 125 N.E.2d 385 (1955)), and he was under a duty to obtain adjudications of the claimants' rights (if any) in and to the securities. See Hurley v. Noone, 347 Mass. 182, 190, 196 N.E.2d 905 (1964). As appears from the prior case and above, Colbert performed that duty by invoking the equity jurisdiction of the court to grant declaratory relief with respect to all claims; four of the (now successful) claimants responded by filing separate petitions in equity with respect to their particular claims. ⁸ There can be no doubt that the claimant who has now filed a separate motion for reimbursement of her counsel fees would have been a 'party' within the meaning of the first and second sentence of the original § 39B; nor can there be any doubt that each of the now petitioning counsel would have been the 'counsel of . . . (a) party' within the meaning of the fourth sentence of that section. Looking solely at the language of that section, we conclude that it would have permitted the judge, in the exercise of his sound discretion, to make appropriate awards of counsel fees and expenses to the claimants or their counsel out of the Bowser estate in the final decrees originally entered by him prior to Loew's appeals to this court.

It should be noticed, however, that the second sentence of the original § 39B contemplated that '(t)he sums awarded' out of the estate 'be specified in the decree' and that under the third sentence of that section any award of counsel fees and expenses from the same source in connection with any appeal was to be separately determined 'after the coming down of a rescript . . . unless the rescript shall specifically direct otherwise.' ⁹ The contemplated procedures were not employed in the prior case, and none of the original decrees contained any provision for an award of counsel fees from any source. ¹⁰ The judge's findings in the present proceedings as to the fair and reasonable value of the services rendered and the expenses incurred by the various counsel do not distinguish between (a) the services rendered and expenses incurred in connection with the original trial and (b) those rendered and incurred in connection with the appeal in the prior case. We do not think eithr of the failures to comply with the contemplated procedures presented any real obstacle to the exercise of the basic powers accorded the judge under the provisions of the original § 39B. Our rescript in the prior case required the taking of further evidence, certain modifications in the original decrees, and the entry of new judgments after rescript. It has been determined in substantially similar situations arising under the provisions of G.L. c. 215, § 45, that probate courts may award prevailing counsel their fees and expenses after rescript in connection with all phases of he litigation. See and compare Untersee v. Untersee, 299 Mass. 417, 423--424, 13 N.E.2d 29 (1938); Hayden v. Hayden, 326 Mass. 587, 595, 96 N.E.2d 136 (1950); New England Trust Co. v. Triggs, 339 Mass. 453, 455--456, 159 N.E.2d 415 (1959).

Looking again solely at the language of the original § 39B (note 4, supra), we conclude that the judge had the power to award counsel fees and expenses out of the Bowser estate to the successful claimants or their counsel in connection with the entire litigation at the time of his report in the present proceedings. We see nothing in the changes in that section which were effected by St.1975, c. 400, § 70 (see note 5, supra), which would prevent the judge's exercise of that same power at the present time. ¹¹

Loew's only substantial argument in opposition to the existence of the power contended for by the petitioning counsel and the successful claimant is that the prior proceedings did not result in any benefit to the Bowser estate but, on the contrary, resulted in the actual depletion of the estate. Great reliance is placed on the case of Miller v. Stern, 326 Mass. 296, 93 N.E.2d 815 ...