Schleifstein v. Greenstein

CourtAppeals Court of Massachusetts
Writing for the CourtPERRETTA
Citation401 N.E.2d 379,9 Mass.App.Ct. 344
PartiesPearl R. SCHLEIFSTEIN v. Minnie B. GREENSTEIN et al. 1
Decision Date07 March 1980

Page 379

401 N.E.2d 379
9 Mass.App.Ct. 344
Minnie B. GREENSTEIN et al. 1
Appeals Court of Massachusetts, Suffolk.
Argued Oct. 17, 1979.
Decided March 7, 1980.

Page 381

[9 Mass.App.Ct. 345] Benjamin Goldman, Boston (Allan G. Zelman, Boston, with him), for plaintiff.

Alfred Sigel, Boston, for Minnie B. Greenstein and another.

Before [9 Mass.App.Ct. 344] GREANEY, PERRETTA and DREBEN, JJ.

[9 Mass.App.Ct. 345] PERRETTA, Justice.

Sarah Cherry died testate on July 14, 1970, survived by her three daughters, Pearl R. Schleifstein, 2 Minnie B. Greenstein, and Doris E. Weiner, 3 Sarah had executed[9 Mass.App.Ct. 346] her

Page 382

will in 1957, directing that her estate be divided among her daughters equally, to "share and share alike." The defendant Dimmock, an attorney, was named as administrator. Pearl ordered Dimmock as administrator, to initiate a suit against Minnie and her husband Max, claiming that they had wrongfully diverted property of the estate into their own hands. Because Dimmock had represented Minnie and Doris in the past, he refused to do so. Pearl then commenced this action in the Superior Court pursuant to G.L. c. 230, § 5, 4 and it was referred to a master who was not to report the evidence. The judge modified the master's report and entered a judgment from which Pearl appeals, and Minnie and Max cross-appeal. We affirm the judgment.

It serves no purpose to recite in detail the procedural morass into which this case fell after the master filed his report in 1974. It is sufficient to note that throughout the next four years the parties filed objections to the reports, requests for summaries of the evidence, motions to recommit, and motions to confirm the report. Ultimately, in 1978, a judge was specially assigned for the specific purpose of rendering a final decision. He properly disregarded the portions of transcript which the master had appended to his summaries of the evidence, Michelson v. Aronson, 4 Mass.App. 182, 185-190, 344 N.E.2d 423 (1976), and confined his review of the report to a determination whether the master's findings were "mutually inconsistent, contradictory, plainly wrong [9 Mass.App.Ct. 347] or vitiated in view of the controlling law." Wormstead v. Town Manager of Saugus, 366 Mass. 659, 660, 322 N.E.2d 171, 172 (1975), quoting from Selectmen of Hatfield v. Garvey, 362 Mass. 821, 825, 291 N.E.2d 593 (1973). The judge made findings and rulings which we review for this same purpose as well as to determine whether they are supported by the master's report and to correct any errors of law. We relate the facts from the findings by which we are bound.

Pearl, Minnie, and Doris were born to Sarah during her first marriage. She subsequently married Israel Cherry, and she and Israel worked together in their real estate business. Pearl married and resided in New York until 1965, when her husband died and she returned to Massachusetts. Minnie married Max, an accountant, and they lived with Sarah and Israel for two years. Max assisted them in their real estate dealings, and Minnie tended the home. Israel died in 1949, and Sarah acquired three pieces of realty from Israel's estate after contesting his will. She engaged in the real estate business until her death. Sarah lived alone in an apartment which she owned, but Minnie and Max always lived near her during these years and assisted her both personally and professionally. Max handled the major repairs, leases, contracts, and insurance pertaining to her realty, which she reduced to one building in 1964. He and his partner prepared her tax returns, and Max kept her books and records, acting as her advisor, for all of which he received an annual $500 fee. In addition, he allowed Sarah the free use of his office and utilities for her business. While Max had knowledge of Sarah's business affairs, he did not control her books or money. Minnie, due to Sarah's physical condition, acted as a chauffeur for Sarah. Sarah purchased cars in Minnie's name for this express purpose. Whenever Sarah was ill or unable to go about her business, Minnie took care of her. She did Sarah's shopping, showed Sarah's apartments to prospective

Page 383

tenants, placed advertisements for her mother's rentals, and, in general, she was at Sarah's disposal.

[9 Mass.App.Ct. 348] 1. Pearl's Appeal.

The recurrent claim underlying Pearl's numerous allegations is that Minnie and Max exploited this personal relationship with Sarah for the purpose of thwarting Sarah's express intention to leave her estate to her three daughters in equal shares. She argues that Max, as Sarah's accountant, was her fiduciary as matter of law, and that Minnie too was her fiduciary "by a parity of reasoning" and the evidence presented to the master. Thus, she concludes, it was their burden to show that Sarah had made a gift of the property which she transferred to them during her lifetime. The master found that no fiduciary relationship existed between Sarah and Minnie and Max; this finding was adopted by the judge. The existence of a fiduciary relationship is generally a factual determination. Hawkes v. Lackey, 207 Mass. 424, 431-433, 93 N.E. 828 (1911). Cann v. Barry, 293 Mass. 313, 317, 199 N.E. 905 (1936). Broomfield v. Kosow, 349 Mass. 749, 755, 212 N.E.2d 556 (1965). The cases relied upon by Pearl in support of her allegation of the relationship do not hold to the contrary. 5 Such a relationship does not arise solely by virtue of close familial or amiable ties. Ranicar v. Goodwin, 326 Mass. 710, 713, 96 N.E.2d 853 (1951). Meskell v. Meskell, 355 Mass. 148, 151-152, 243 N.E.2d 804 (1969). Kelly v. Kelly, 358 Mass. 154, 156-157, 260 N.E.2d 659 (1970). Dupree v. Gipstein, 2 Mass.App. 769, 772, 321 N.E.2d 834 (1975). See Bogert, Trusts and Trustees § 482, at 300-311 (2d ed. rev. 1978). It is the function of the fact finder to examine the relative business acumens of the parties to determine if the less knowledgeable person trusted and confided in the more skilled individual. Kosow, supra, 349 Mass. at 755-757, 212 N.E.2d 556. The master made his factual determinations, and the judge examined his findings. All that remains for us to decide on this issue is whether this finding is clearly erroneous. The judge adopted the master's findings that Sarah was a competent entrepreneur who controlled the management of her several [9 Mass.App.Ct. 349] rental properties and that she was aware of the financial condition and implications of her business ventures. She was well experienced in her business, which was reduced to one property after 1964. As she advanced in age she became physically infirm due to failing eyesight and impaired mobility. Her ailments required, or allowed, Minnie and Max to perform physical services for her which facilitated her accomplishment of those financial tasks necessary to the maintenance and day-to-day functioning of her business. Minnie and Max were easily able to do her banking because of joint accounts with her. Max furnished her with free office space where she conducted her business and kept her records. Although Max did accounting work for Sarah for which he received a nominal fee, he neither did all of her accounting or bookkeeping, nor was he a conduit of her funds. Sarah signed all the checks, reviewed the bank statements, and studied the annual statements and records prepared by Max. While Minnie and Max enjoyed a close personal relationship with Sarah, they did not control or manage her finances or business. These subsidiary determinations warrant a finding that neither Minnie nor Max was Sarah's fiduciary. 6 See Cranwell v. Oglesby, 299 Mass. 148, 152-153, 12 N.E.2d 81 (1937); Snow v. Merchants Natl. Bank of New Bedford, 309 Mass. 354, 360-361, 35 N.E.2d 213 (1941); Salter v. Beal, 321 Mass. 105, 108-109, 71

Page 384

N.E.2d 872 (1947); Kosow, 349 Mass. at 755-757, 212 N.E.2d 556.

Before dealing with these contested transfers individually, we dispose of one additional general allegation which Pearl makes, and that is that over the twenty-year period during which Minnie and Max assisted Sarah they misappropriated $900,000 from her. To prove this claim before the master, Pearl elicited the testimony of an accountant who had been provided with only a limited number of [9 Mass.App.Ct. 350] Sarah's records. He did not have access to all her records and tax returns because Minnie and Max refused to comply with discovery requests. The accountant testified that based upon his study of these documents and his reliance on the "net worth method" of determining income, he was of the opinion that the books reflected a loss of nearly one million dollars from Sarah's holdings. The master considered but did not accept this testimony because it was based upon a restricted review of Sarch's records. Neither the master nor the judge ignored Minnie's and Max's refusals to produce the requested documents; rather, the master made detailed subsidiary determinations on this point, and he found that Minnie and Max eventually furnished him with all the records and tax returns necessary for a resolution of this claim of misappropriation. When Minnie and Max finally produced these documents, the master reviewed them and made subsidiary findings in support of his general determination that Sarah's entire estate consisted of all her reported assets at their listed and appraised values and that there had been no misappropriation. Pearl seeks to avoid this finding on the sole basis that Minnie's and Max's refusals were calculated attempts at deception which made them unworthy of belief and required that the master reject their testimony. However, it is settled that deliberate attempts to deceive do not force a fact finder to reject summarily the entire testimony of a recalcitrant witness. Such attempts may be the basis for permissible inferences, but they do not affirmatively prove the ultimate issue. D'Arcangelo v. Tartar, 265 Mass. 350, 352, 164...

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