In re Colecchia Family Irrevocable Trust
| Decision Date | 29 November 2021 |
| Docket Number | No. 20-P-224,20-P-224 |
| Parties | In the MATTER OF the COLECCHIA FAMILY IRREVOCABLE TRUST. |
| Court | Appeals Court of Massachusetts |
Brian K. Wells, for Michael Colecchia.
Gino N. Ricciardelli, Saugus, for Denise Colecchia & another.
Present: Wolohojian, Desmond, & Grant, JJ.
These consolidated appeals from the dismissal of a general trust petition (and subsequent award of attorney's fees and costs) raise three novel procedural and substantive issues. First is whether the language of the order of notice preprinted on the Probate and Family Court's "trust citation" form (MPC 584) permits notice by publication alone. We conclude, in essence, that the form's use of the term "and/or" can reasonably be read to mean that notice of the citation may be made by publication alone, which the petitioner here made. We also conclude that neither G. L. c. 190B, § 1-401, nor Rule 6 of the Supplemental Rules of the Probate Court (2012) (supplemental rule 6) requires a different reading of the form order of notice. Second is what is the point in time at which a person becomes a "qualified beneficiary" for purposes of a trustee's duty to inform under G. L. c. 203E, § 813. We conclude that, in order to determine whether a person is a "qualified beneficiary" for purposes of a trustee's duty to inform under § 813, the phrase "the date the beneficiary's qualification is determined" found in G. L. c. 203E, § 103, means the date, under the terms of the trust instrument, on which an event occurs to trigger a beneficiary's entitlement under the trust. Third is whether the requirements of the Massachusetts Uniform Probate Code, including the affidavit requirement contained in G. L. c. 190B, § 1-401 (e ), apply in a general trust petition action such as this one. We conclude that they do not.
The three matters of first impression we have just identified arise in the context of the overarching question whether the petitioner's substantive claims were properly dismissed. Those claims were disposed of in two tranches. First, the judge allowed the trustees’ motion for partial judgment on the pleadings and entered judgment on count I (breach of the duty of loyalty), count IV (improper distribution of assets), count V (quantum meruit), and count VI (undue influence), and entered partial judgment on count III (breach of the duty to inform and account). Second, the judge allowed the trustees’ motion for judgment on the pleadings on the remaining counts, which were count II (breach of the duty of care), and the remainder of count III, as well as the trustees’ motion to dismiss all counts for failure to comply with Rule 3 of the Supplemental Rules of the Probate Court (2012) (supplemental rule 3) and supplemental rule 6. We conclude that no claims should have been dismissed for failure to comply with the service requirements of supplemental rules 3 and 6. We also conclude that the claims for breach of the duty of loyalty, quantum meruit, breach of the duty to inform, and improper distribution of assets were each properly dismissed for failure, in essence, to state a viable claim. We conclude, however, that the petition adequately stated claims for breach of the duty to account (in part), breach of the duty of care (in part), and undue influence, and that those claims should not have been dismissed. Finally, in light of these conclusions, we vacate the award of attorney's fees and costs in favor of the trustees (whom we also sometimes call the respondents) without prejudice to renewal on remand.1
A procedural preamble. Michael Colecchia (Michael)2 began the underlying action by filing a general trust petition to which he attached a document that was, in form and substance, a complaint in equity that sought to "recover[ ] compensation for services performed under mistaken pretenses" or, in the alternative, to invalidate the Colecchia Family Irrevocable Trust (trust) "because it was created under undue influence." This hybrid pleading, a sort of litigation minotaur, is at the center of a procedural labyrinth through which we make our way.
Under G. L. c. 203E, § 201, which is part of the Massachusetts Uniform Trust Code, although "[a] trust shall not be subject to continuing judicial supervision unless ordered by the court," "[t]he court may intervene in the administration of a trust to the extent its jurisdiction is invoked by an interested person or as provided by law." G. L. c. 203E, § 201 (a ) & (b ). An interested person may initiate such an action by filing a general trust petition using Probate and Family Court form MPC 201. A general trust petition may "relate to any matter involving [a] trust's administration, including a request for instructions and an action to declare rights."3 G. L. c. 203E, § 201 (c ). Thus, although a general trust petition may be used to invoke the court's jurisdiction over any matter of trust administration, it cannot be used as an omnibus vehicle for every type of relief a beneficiary may seek against a trust's trustees. For example, it is not a proper mechanism by which to bring claims for monetary damages, such as (by way of example only) breach of fiduciary duty, undue enrichment, or breach of loyalty. Yet that is what Michael attempted to do here by attaching a complaint in equity to his general trust petition, and then later filing a motion to amend that attachment with a "First Amended Complaint" (FAC) also seeking monetary relief.4
We do not endorse this approach, and the judge would not have erred had she dismissed without prejudice Michael's claims that did not relate to the trust's administration. We thus caution future litigants against proceeding as Michael did here. Nonetheless, we exercise our discretion to overlook the pleading defect in the interest of judicial economy and, like the judge, take into account the allegations and claims contained in the complaint attached to the general trust petition and in the FAC.5
According to the terms of the trust, Mario and Lillian's children would receive nothing during Mario and Lillian's lifetimes. However, after Mario and Lillian both died, Michael and his brothers were each to receive ten percent of the trust res. The remaining seventy percent was to be divided equally among the three daughters. Donna and Denise were named trustees.
Michael did not know that his parents had transferred the property into the trust. Nor did he know that his parents intended to distribute the trust assets unequally among their children. Believing that all six children would inherit equally, and that his parents (rather than the trust) owned the property, from February 3, 2005 (the date on which Mario and Lillian created the trust and transferred the property to it) to February 2016 (when Lillian died),8 Michael maintained the property by landscaping the yard, removing snow from the sidewalks and driveway, renovating a bathroom, and performing general maintenance. Michael performed this work without compensation because he believed his parents continued to own the house and that all six children would inherit equally. Had he known otherwise, he would not have performed the work without compensation. After both parents died, Michael learned of the existence of the trust and of its terms.
Over Michael's objection, Donna and Denise, as trustees, sold the property to a third party for $366,000 on January 1, 2017.9 The sale proceeds were held in the Interest on Lawyers’ Trust (IOLTA) account of the attorney who represented the trust in the transaction. Michael does not quarrel with the fact that the proceeds were initially deposited into the attorney's IOLTA account. However, he does quarrel with the fact that they were held by the attorney for approximately nine months, which he avers was both without right and unreasonably delayed distribution to the beneficiaries. Michael also contends that Donna and Denise failed to take reasonable steps to get the funds released from the IOLTA account, and in addition, that once the funds were released, Donna and Denise failed to place them in an appropriate interest-bearing account and delayed distribution to the beneficiaries.
Michael filed a general trust petition on May 23, 2018, attaching a complaint and a copy of the trust. Count I of the complaint asserted that Denise and Donna breached their duty of loyalty by (1) not informing him that the trust existed, (2) not informing him that Mario and Lillian no longer owned all interest in the property, (3) not dealing with Michael on fair contractual terms, and (4) accepting, and benefiting from,...
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