Nile v. Nile

• Citation: 432 Mass. 390,734 NE 2d 1153
• Parties: ROBERT E. NILE, individually and as administrator v. DOROTHY M. NILE & another, trustees.
• Decision Date: 01 May 2000
• Court: United States State Supreme Judicial Court of Massachusetts

432 Mass. 390

734 NE 2d 1153

ROBERT E. NILE, individually and as administrator¹ v. DOROTHY M. NILE & another,² trustees.³

Supreme Judicial Court of Massachusetts, Middlesex.

May 1, 2000.

August 29, 2000.

Present: (SITTING AT WORCESTER): MARSHALL, C.J., GREANEY, IRELAND, SPINA, & COWIN, JJ.

Michael C. Harvell, of New Hampshire (David S. Rosenthal with him) for First NH Investment Services Corporation.

Robert J. McClear, of Michigan, for Dorothy M. Nile.

Ronald F. Kehoe (Robert G. Aruzese with him) for the plaintiff.

SPINA, J.

Robert Nile (Robert), individually and as administrator with the will annexed (w.w.a.) of the estate of his late father, Arthur W. Nile (Nile), brought a civil action to enforce the terms of a postdivorce settlement agreement between Nile and the guardian of Florence J. Nile (Florence), Robert's mother. Clause Five of that agreement provided that Nile would bequeath and devise at least two-thirds of his estate to his children by Florence. The defendants are the successor trustees of The Dawn Trust (trust), a revocable inter vivos trust in which Nile held and solely controlled his entire estate until his death. A Superior Court judge ordered summary judgment for Robert on counts one through four of his complaint, which sought declaratory relief and damages for breach of contract and breach of the implied covenant of good faith and fair dealing; the judge dismissed counts five and six, which alleged a fraudulent conveyance. The defendants, residents of New Hampshire, appealed, claiming that the judge erred (1) in exercising personal jurisdiction over them because our long-arm statute does not authorize jurisdiction over foreign trustees, and because Robert failed to establish they had sufficient contact with Massachusetts; (2) in exercising jurisdiction over the subject matter of this controversy, the identity of the assets of a New Hampshire estate; (3) in denying their motion to dismiss under Mass. R. Civ. P. 12 (b) (6), (7), 365 Mass. 754 (1974); (4) in ruling that Nile's estate, for purpose of the settlement agreement, included the trust assets; (5) in imposing a constructive trust pursuant to Massachusetts law where the terms of the trust provide that New Hampshire law shall govern; (6) in failing to credit assets left to Robert through the trust; and (7) in granting summary judgment where a genuine question exists as to Nile's ownership of all the assets held by the trust. We transferred the appeal to this court on our own motion. We affirm.

We summarize the salient undisputed facts, reserving others for discussion of the issues. Nile married Florence in 1940. There were three sons of the marriage. The family lived in Massachusetts. Florence developed a mental illness which necessitated the appointment of Nile by the Probate and Family Court to be her guardian. She was subsequently institutionalized. In 1964, Nile obtained a divorce in Alabama. The divorce decree made no provision for support and maintenance of Florence or the couple's three minor children. Nile married his second wife, Dorothy, that same year and they lived in the former family's residence until 1965. Thereafter the couple moved to New Hampshire. Nile continued to operate a business in Cambridge, A.W. Nile, Inc., which he had formed around 1940.

Robert, still a minor after his father's remarriage, consulted an attorney regarding support and maintenance for his mother and his oldest brother, who was mildly retarded. Consequently, Nile resigned as Florence's guardian, and a successor guardian was appointed. A sealed agreement was negotiated as to the issues left unresolved by the Alabama divorce, including support and maintenance. Clause Five of the agreement provides: "Nile agrees to keep in force and effect until his death a will under which he will bequeath and devise to the children of his marriage to Florence J. Nile not less than two-thirds of his estate." The agreement further provides that it is "subject to the approval of the Probate Court for Middlesex County." Florence's new guardian, Nile, Robert, and his oldest brother joined in a petition to the Probate Court for approval of the settlement agreement, which a judge approved on March 28, 1968. Robert's brothers died in 1966 and 1968, respectively, without issue, leaving Robert as the sole surviving child of Nile and Florence.

Nile executed a will on May 12, 1976, in which he left the bulk of his stock in A.W. Nile, Inc., to Robert. He also created the trust on May 12, 1976. Nile retained full power over all property of the trust and was its sole trustee during his lifetime. Under the terms of the trust the successor trustees were directed, on the death of Nile, to divide the trust property between a marital trust for the benefit of Dorothy, and a family trust for the benefit of Robert and his issue. The amount to be allocated to the marital trust was to be such that it would qualify for the marital deduction under the Internal Revenue Code of 1954. The balance of the trust property was to be allocated to the family trust. In September, 1976, Nile sold A.W. Nile, Inc., and retired. The proceeds of the sale were transferred to the trust.

Nile died July 12, 1994. His will, as amended by a codicil executed January 8, 1977, made no provision for Robert, and his probate estate contained no assets. His Federal gross taxable estate was $4,737,218.84, of which $4,623,191.01 was in the trust, and the balance consisted of jointly held property. The trust, as amended on January 27, 1994, and March 14, 1994, provided that the marital trust be funded with all but $600,000 of the trust property, thereby leaving $600,000 for the family trust.

Robert petitioned the Hillsborough County Probate Court in New Hampshire for appointment as administrator w.w.a. of Nile's estate after First NH Investment Services Corp., whom Nile had nominated to be executor, declined to serve. Robert made known his intentions to pursue his claim under the postdivorce settlement agreement against Nile's estate. Under N.H. Rev. Stat. Ann. § 553:2(III) (1997), a creditor may be appointed administrator of an estate. Robert was appointed administrator of his father's estate on April 3, 1996. He asserted his claim against the estate, and as administrator w.w.a. determined that the claim was valid. On April 30, 1996, Robert, in his fiduciary capacity, made demand on the successor trustees to pay two-thirds of the assets of the trust to satisfy Nile's debt to Robert under the terms of the postdivorce settlement agreement.⁴ The successor trustees declined.

Robert brought the underlying civil action in Massachusetts on May 17, 1996. On August 16, 1996, a judge in the Superior Court enjoined the successor trustees from transferring or distributing trust assets pending a decision on the merits. Dorothy moved to dismiss the action for lack of personal and subject matter jurisdiction, and for omissions covered by rule 12 (b) (6) and (7). Her motion was denied on August 16, 1996. On January 3, 1997, she petitioned the New Hampshire Probate Court for Robert's removal as administrator and for an order that he dismiss his action in Massachusetts. Her petition was denied on April 21, 1997. Robert prevailed on his motion for summary judgment, and the defendants filed a timely notice of appeal from the final judgment.

1. Personal jurisdiction. The defendants argue that the Superior Court lacked personal jurisdiction over them because (1) the Massachusetts long-arm statute, G. L. c. 223A, § 3, does not confer personal jurisdiction over foreign trustees, and (2) the evidence failed to establish sufficient contacts between the defendants and Massachusetts to warrant the exercise of personal jurisdiction.

General Laws c. 223A, § 3 (a), states:

"A court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a cause of action in law or equity arising from the person's

"(a) transacting any business in this commonwealth."

General Laws c. 223A, § 1, states:

"As used in this chapter, `person' includes an individual, his executor, administrator or other personal representative, or a corporation, partnership, association or any other legal or commercial entity, whether or not a citizen or domiciliary of this commonwealth and whether or not organized under the laws of this commonwealth" (emphasis added).

The defendants contend that they are not "personal representatives" of Nile whose conduct in Massachusetts provided the basis for the Superior Court's jurisdiction.

The term "personal representative" is not defined in G. L. c. 223A. Where the Legislature has not defined a term in a statute, we construe the term as it is commonly understood. See Westinghouse Broadcasting Co. v. Commissioner of Revenue, 382 Mass. 354, 357, appeal dismissed, 452 U.S. 933 (1981). The term, as generally understood, refers to persons appointed by courts to administer decedents' estates, namely, executors and administrators in all forms, including special administrators, public administrators, and administrators de bonis non. Our decisions consistently refer to "personal representatives" solely in the context of decedents' estates, and Robert has cited no authority to the contrary. See, e.g., Garfield v. White, 326 Mass. 20, 22 (1950); Brown v. Boston & Me. R.R., 283 Mass. 192, 195-196 (1933). This discrete use of the term distinguishes fiduciaries of decedents' estates from other fiduciaries, such as guardians or conservators, see Matter of Jones, 379 Mass. 826, 833 n.10 (1980); Old Colony Trust Co. v. Coffman, 342 Mass. 153, 154-156 (1961), and trustees. See Garfield v. White, supra.

The Legislature has defined the term "personal representative" in G. L. c. 191B, § 1 (3), the Massachusetts Statutory Will Act, as "the executor, administrator, successor personal representative, special administrator, or a person who performs substantially the same functions relating to the estate of a decedent...