Opinion
16-P-1329
06-28-2017
Allyne T. PERRY v. Rose-Ann S. LAURIA.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The parties are the sole beneficiaries of the Belknap Trust (trust), a beneficial trust created for the purpose of holding title to a two-unit property located in Arlington, Massachusetts (locus). The plaintiff filed suit in Land Court claiming that the defendant, in her role as trustee, used trust assets for improper purposes, including to pay personal expenses and as collateral to secure several mortgages without the plaintiff's knowledge or consent. After the litigation commenced, the parties represented to the judge that they intended to have the plaintiff buy out the defendant's interest in the locus and terminate the trust. The judge then conducted an accounting to determine the parties' respective interests in the locus and calculate the purchase price for the buyout. Judgment entered accordingly.
On appeal the plaintiff first argues that the judge clearly erred by finding that the defendant was owed a $198,187.50 credit for rent attributable to the lower unit of the locus. See Totman v. Molloy, 431 Mass. 143, 143 (2000) (In land disputes "[w]e accept the judge's findings of fact unless they are clearly erroneous"). In awarding the credit, the judge reasoned that each party was "entitled to the beneficial use of one of the two [units]," that the plaintiff "received 100% of the benefit of the [u]pper [u]nit (by occupying same)," and that the defendant was therefore "entitled to 100% of the rents paid" by the tenants of the lower unit. The plaintiff claims that this amounted to giving the defendant a "duplicate credit" because the rents were deposited into the trust account, which the defendant then used for nontrust purposes in breach of her fiduciary duty as trustee. We disagree. The judge already accounted for the defendant's breach by ordering her to reimburse "$24,034.10 for improper personal uses of the [t]rust [a]ccount," reducing her equitable share in the locus to account for the unauthorized mortgages, and ordering her to disgorge the tax benefits she received. Because the remaining monies were used for proper trust purposes, such as the original mortgage and other expenses, the judge did not credit the defendant twice by awarding her the value of the beneficial use of the lower unit.
Next, the plaintiff contends that the judge improperly shifted the burden of proof to her by requiring her to prove damages. According to the plaintiff, because this is a fiduciary case, the burden was on the defendant to disprove damages by establishing that all of the trust funds were used for proper purposes. Putting aside that the plaintiff cites no authority to support her argument, the judge in fact acknowledged that the defendant had a duty to account for her handling of the trust property and must "stand the loss" if she could not do so. The judge then applied this principle by ordering the defendant to reimburse any "not properly accounted for" sums to the trust account, and by declining to award her a credit for out-of-pocket expenses that she undisputedly incurred but could not support with documentation. The plaintiff fails to identify any clear error in the judge's analysis.
The case law suggests that, even in a fiduciary case, the plaintiff has some burden to prove damages proximately caused by the defendant's breach of fiduciary duty. See, e.g., O'Brien v. Pearson, 449 Mass. 377, 388 (2007).
Finally, the plaintiff argues that the judge should have used the 1999 value of the locus, rather than its current market value, in calculating the buyout price. The judge found it appropriate to use the current market value because the appreciation of the locus had no causal relation to the defendant's misfeasance but "was simply the result of the market forces in the local real estate market." Once again, we see no clear error in the judge's determination. See Estate of Moulton v. Puopolo, 467 Mass. 478, 492 (2014) (To recover for breach of fiduciary duty, "injury to the plaintiff [must be] proximately caused by the breach").
The plaintiff's request for appellate attorney's fees and costs is denied.
--------
Judgment affirmed.
Order denying motion to amend and/or alter judgment affirmed.