Jensen v. Daniels

• Citation: 786 N.E.2d 1225
• Decision Date: 23 April 2003
• Docket Number: No. 00-P-0566.,00-P-0566.
• Parties: JiGermania M. JENSEN, executrix,<SMALL><SUP>1</SUP></SMALL> v. William M. DANIELS & others.<SMALL><SUP>2</SUP></SMALL>
• Court: Appeals Court of Massachusetts

786 N.E.2d 1225

JiGermania M. JENSEN, executrix,¹ v. William M. DANIELS & others.²

No. 00-P-0566.

Appeals Court of Massachusetts, Barnstable.

Argued May 13, 2002.

Decided April 23, 2003.

COPYRIGHT MATERIAL OMITTED

James B. Krasnoo, Andover (Paul J. Klehm with him) for William M. Daniels & another.

Michael A. Murphy, Boston, for the plaintiff.

Present: KANTROWITZ, KASS, & McHUGH, JJ.

McHUGH, J.

Within days of Maurice Lopes's death, his nephew, the defendant William Daniels (William), removed approximately $235,000 from four bank accounts then standing in their joint names. The plaintiff, Germania Jensen, Lopes's sister and the executrix of his estate, commenced an action against William and his wife, Olivia, in the Probate and Family Court in which she sought an order requiring William to turn over to the estate the funds he had taken from the accounts.³ In addition, she sought an order requiring William and Olivia to turn over the proceeds of two $10,000 checks Lopes had given them before he died. After a bench trial, the judge ordered both William and Olivia to pay the estate the amount William had taken from the bank accounts but allowed them to keep the check proceeds. From that judgment, William and Olivia have appealed. We conclude that there was no basis for the judgment against Olivia but otherwise affirm.

The unchallenged findings of fact material to appellate issues begin with Lopes's death from congestive heart failure on November 30, 1996, at the age of seventyeight. In September of 1974, a little over twenty-two years earlier, Lopes had made a will in which he left all of his property to his two sisters, the plaintiff and Theodora Daniels, William's mother. The record does not disclose the nature of Lopes's assets at the time he made his will. About two years later, however, his mother conveyed to him the Provincetown house in which he and his two sisters had been born and raised. Lopes subsequently lived in the house until May, 1996,⁴ and it was by then one of his principal assets.⁵

By May of 1996, Lopes was afflicted with an array of ailments and was gravely ill. Toward the end of that month, with the advice and assistance of his own attorney,⁶ he sold the house for $235,000 and began living with William and Olivia at their home in Mashpee. From the sale proceeds, he gave William a check for $10,000 and gave Olivia a check in like amount. Then, with William's assistance, he opened two accounts (Cape Cod accounts), one at the Cape Cod Bank and Trust Company and the other at the Cape Cod Five Cents Savings Bank. He opened each account in his name and William's and, in each, he deposited $94,986.99 from the sale proceeds. Although William had been a frequent customer of both banks, Lopes had never before done business with either.

At the time Lopes opened the Cape Cod accounts, he had two additional accounts in his own name at Fleet Bank.⁷ One was a checking account holding approximately $9,800 and the other was a money market account that ultimately held approximately $39,000.⁸ Lopes's monthly Social Security checks were routinely deposited in the checking account and he generally used that account for living expenses. About the time William assisted Lopes in opening the Cape Cod accounts, Lopes added William's name to the two Fleet accounts.

Within days of Lopes's death on November 30, 1996, William had extracted all of the money from the Cape Cod Five Cents Savings Bank account and from the Fleet Bank money market account. By February 24, 1997, William had taken all of the money from the other two accounts and had closed all four. The money William took from the four accounts totaled $238,538.16, and he used it for such things as enhancing his retirement account, paying portions of a mortgage loan, and buying a new car.

In the complaint she filed to obtain return of Lopes's money, the plaintiff contended that William had used undue influence on the ailing Lopes in order to get him to deposit substantial portions of the sale proceeds in the joint Cape Cod accounts and to place William's name on the accounts at the Fleet bank. She also claimed that William and Olivia obtained the $10,000 checks through undue influence. William responded by asserting that Lopes wanted him to have the money and, for that reason, had placed his name on all four accounts. He and Olivia maintained that the checks were gifts Lopes had given them with a full understanding of what he was doing and an unencumbered intention to do so.

The judge found that none of Lopes's actions was the product of undue influence.⁹ The checks, he concluded, were gifts Lopes freely and knowingly intended to make. The judge rejected, however, William's contention that Lopes wanted him to have the money in the four bank accounts. Instead, in findings that are challenged for reasons that will soon appear, he found that Lopes wanted his sisters to have the money in those accounts, had opened the two Cape Cod accounts to "protect" them for "FDIC purposes,"¹⁰ and had placed all four accounts in his name and William's simply as a matter of convenience. See, e.g., Burns v. Paquin, 345 Mass. 329, 331, 187 N.E.2d 139 (1963). On that basis, the judge ordered William and Olivia to turn over to the estate the $238,538.16 William had removed from the accounts.

1. Unfair surprise. On this appeal, William and Olivia first claim that they were prejudicially surprised by two aspects of the judge's decision. The first is the judge's finding that William's name was on the disputed accounts simply for convenience. William and Olivia assert that the convenience theory had neither been pleaded nor otherwise injected into the case at any time before the judgment. "Undue influence," they contend, was the only theory of recovery the plaintiff had advanced. The second allegedly surprising aspect of the judgment was the requirement that Olivia turn over to the estate all of the funds William had removed. William and Olivia contend that the plaintiff only sought to recover from Olivia the proceeds of the $10,000 check. Never, they claim, had anyone asserted under any theory that Olivia was liable for the full amount William had withdrawn from the four accounts.

Neither the convenience theory nor an assertion that Olivia was liable for the full amount of William's withdrawals appears in the pleadings, the usual place where one looks for notice of the claims the litigation entails. See Berish v. Bornstein, 437 Mass. 252, 269, 770 N.E.2d 961 (2002). See generally Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957).¹¹ If not remedied, such an omission is serious, for timely notice of the claims one faces is an essential ingredient of the fairness due process requires. See Jimenez v. Tuna Vessel "Granada': 652 F.2d 415, 422 (5th Cir.1981). See also National Med. Care, Inc. v. Zigelbaum, 18 Mass.App.Ct. 570, 578-579, 468 N.E.2d 868 (1984); Messina v. Scheft, 20 Mass.App.Ct. 945, 946, 480 N.E.2d 53 (1985). But notice in fact, and not notice delivered in a particular fashion or in a particular place, is ultimately what counts. See generally Clark v. Greenhalge, 411 Mass. 410, 413 n. 6, 582 N.E.2d 949 (1991); Ciccone v. Smith, 3 Mass.App.Ct. 733, 734, 325 N.E.2d 292 (1975); Wolfe v. Ford Motor Co., 6 Mass.App.Ct. 346, 354-355, 376 N.E.2d 143 (1978); Smith & Zobel, Rules Practice § 15.7 (1974).

In many cases, the record may not clearly reveal whether and how notice of an unpleaded issue was delivered. But, in an adversary system, the parties themselves are in the best position to determine whether they received sufficient notice of an issue. Therefore, even on an opaque record, we view a party's consent_Loto trial of an unpleaded issue as a sure indication that the consenting party had sufficient notice of it. Consequently, when "issues not raised by the pleadings are tried by express or implied consent of the parties, [we treat them] in all respects as if they have been raised in the pleadings." Mass.R.Civ.P. 15(b), 365 Mass. 761 (1974).¹²

Express consent is easy to see. Detection of implied consent is often more difficult. Because of the nexus between consent and a proceeding's fundamental fairness, careful examination of the entire record is required before one reaches a conclusion that an issue was tried by implied consent."¹³ Moreover, to warrant such a conclusion, the record must, at a minimum, show that the parties knew the evidence bearing on the unpleaded issue was in fact aimed at that issue and not some other issue the case involved. Harrington-McGill v. Old Mother Hubbard Dog Food Co., 22 Mass.App.Ct. 966, 968, 494 N.E.2d 1043 (1986). See National Med. Care, Inc. v. Zigelbaum, 18 Mass. App.Ct. at 579, 468 N.E.2d 868; Mauser v. Raytheon Co. Pension Plan for Salaried Employees, 239 F.3d 51, 58 (1st Cir.2001).

a. Convenience theory. Insofar as the "convenience" theory is concerned, the record meets that test, for it reveals that the defendants were fully aware of the issue's presence and actually dealt with it at various times. True, the plaintiffs counsel stated in the opening statement that the case simply involved "undue influence."¹⁴ When the plaintiff called William as her first witness, however, counsel examined William at some length about whether the Cape Cod accounts had been opened for Lopes's convenience. At the close of the plaintiff's case, the defendant moved for dismissal of all claims, see Mass.R.Civ.P. 41(b)(2), 365 Mass. 804 (1974), and argued, in part, that although a claim of "convenience" could be made with respect to one checking account, the evidence would not support a conclusion that "convenience" was a motivating force in creating or changing the others.

After the judge denied the dismissal motion, the plaintiff pressed the convenience issue in cross-examining one of William's business associates and a Cape Cod Bank and Trust officer whom William had called. Then, in his direct examination of an officer...