Opinion
No. 15–P–1094.
10-26-2016
Irma TEVES, personal representative, v. Lisa A. COSTA& another.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
This case is centered around allegations of undue influence and financial exploitation.
Richard T. Teves passed away, at age eighty-eight, on September 16, 2014. He had worked for more than thirty years for Lucent Technology (Lucent), had earned a pension from Lucent, had owned real estate in the Commonwealth, and had once held more than $500,000 in AT & T common stock. At death, Richard was destitute.
The decedent's date of birth was December 29, 1925.
For ease of reference, we refer to some of the parties by their first names.
In 2009, upon discovering that Richard was a pauper, his youngest daughter, the plaintiff, Irma Teves, filed an action in the Superior Court alleging that the defendants, Bruce A. Costa and Lisa A. Costa (husband and wife), had exercised undue influence over her frail, elderly father; isolated him from his family; exerted control over his bank accounts and property; and benefited from a lopsided transaction, in which Richard put up $500,000 for the purchase of a $695,000 Westport home in July of 2002, and received nothing in return. His name was not on the deed to the Westport home; rather, the defendants took title to the property along with Richard's then longtime companion, June Feitelberg, the mother of Lisa. The defendants repudiated a verbal agreement, formed with Richard, to repay him for the monies he had provided to them for the home purchase. This was, in sum and substance, the plaintiff's case, viewed in the light most favorable to her, at the summary judgment stage, in opposition to the defendants' rule 56 motion.
See Mass.R.Civ.P. 56(c), as amended, 436 Mass. 1404 (2002).
A judge granted the defendants' summary judgment motion, ruling that there was no evidence that the defendants either stood as fiduciaries for Richard, agreed to repay him for his contribution toward the Westport home transaction, or exerted undue influence over him. Appealing from the summary judgment, the plaintiff contends that the record evidence raises triable issues of material fact on each issue. We agree and, therefore, vacate the judgment in favor of the defendants.
1. Facts. A brief outline of the record facts provides the backdrop to the parties' legal contentions. We reserve certain other details for our discussion of the law governing this case.
Richard and his wife raised four children: Richard Jr., Vivian, Jeanne–Marie, and Irma. The family resided in Fall River. Divorced from his wife in 1977, Richard was awarded custody of his three daughters. He is credited for his protective nature and diligence in attending to the needs of his children.
a. His companion. Richard had a long relationship with June. They first met in 1966; at the time both were married to other individuals. They ultimately came to live together, and remained living together for approximately twenty-five years until the death of June in December of 2008. This time period included six years at the Westport home upon which this litigation centers.
In 1998, Richard formally appointed June as his attorney-in-fact and Lisa as June's successor. Upon June's passing in 2008, Lisa's name was added as a signatory to Richard's bank accounts. After June's passing, Richard lived with the defendants at the Westport residence for several more months until April, 2009, when he was admitted to a local hospital. At all material times, from 1998 to 2009, Richard was isolated from his children and extended family.
b. His declining health. In January of 2002, at the age of seventy-seven, Richard suffered a major stroke, causing speech and physical deficits. Richard became wheelchair-bound and dependent on others for companionship and caregiving.
In April of 2009, Richard was hospitalized with an infection and fever. He did not return to the Westport home upon his release, and the plaintiff took charge of her father's care in the remaining years of his life. She also assumed responsibility over his financial affairs. Richard revoked his prior pour-over wills, which had left virtually all of his property to June, through an inter vivos revocable trust. He made a new will leaving the entirety of his estate to his four children equally. In the wake of this testamentary plan, Lisa filed a complaint in the Probate and Family Court.
2. Prior proceedings. a. Probate action. In 2012, appearing as trustee of the Richard T. Teves revocable trust, Lisa filed a complaint for instructions in the Probate and Family Court. By an order of the Chief Justice of the Trial Court, the Probate and Family Court action was consolidated with the pending Superior Court action.
Even though Richard was then living in the Fall River Jewish Home, Lisa filed the complaint in her individual capacity, as trustee, and in her fiduciary capacity as executrix of Richard's estate.
The Probate and Family Court action is notable for the fact that, included with her complaint, Lisa attached an affidavit that Richard had previously made under the penalties of perjury. In his affidavit, Richard described an agreement that he had reached with Lisa and Bruce respecting the purchase of the Westport home in 2002. Richard attested: “in return for [his] supplying the majority of the funds for the purchase of the [Westport] house,” Lisa and Bruce agreed they “would give [him] the funds from the sale of their house at 512 Rockdale Avenue, New Bedford.” He also averred: “The deal was always that they were supposed to give me the money they got for selling [Lisa's] home in New Bedford.”
b. Summary judgment ruling. The judge noted that it “would be out of character for Richard ... to pay money for the benefit of Lisa and Bruce Costa”; he ruled that there was “no admissible evidence” that the defendants “made such a promise” to repay Richard for having supplied the great majority of the funds to purchase the Westport home. The judge also ruled that the plaintiff's deposition testimony that such an agreement existed was inadmissible hearsay because it was based on out-of-court statements Richard made in the plaintiff's presence.
3. Discussion. We review de novo the grant of summary judgment, see Surabian Realty Co. v. NGM Ins. Co., 462 Mass. 715, 718 (2012), and conclude it was improvidently granted here for two fundamental reasons. First, in the circumstances presented here, the judge misallocated the burden of proof. He placed the burden on the plaintiff to affirmatively prove that the defendants had exerted undue influence over Richard, where the fiduciary relationship created between Lisa and Richard dictated otherwise. Cleary v. Cleary, 427 Mass. 286, 290 (1998).
Summary judgment is appropriate only “if the pleadings, depositions, answers to interrogatories, and responses to requests for admissions ... together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Mass.R.Civ.P. 56(c), as amended, 436 Mass. 1404 (2002).
Ordinarily, a plaintiff seeking equitable relief, as is the case here, must carry the burden of proving the alleged undue influence of another. See, e.g., Tarricone v. Cummings, 340 Mass. 758, 762 (1960). “[W]hen a fiduciary benefits from a transaction with his principal,” however, the burden of proving the absence of undue influence falls on the fiduciary. Cleary, supra. See Rempelakis v. Russell, 65 Mass.App.Ct. 557, 563–567 (2006) ; Matter of Estate of Moretti, 69 Mass.App.Ct. 642, 651–653 (2007) ; Michaud v. Forcier, 78 Mass.App.Ct. 11, 16 (2010). The judge concluded that there was no evidence from which to infer that Lisa or Bruce were in a fiduciary relationship with Richard when they engaged in the purchase of the Westport property. The record evidence can be read to support the opposite conclusion and, at the very least, created triable issues as to when Lisa took on the duties of a fiduciary to Richard.
As of 1998, Lisa was successor attorney-in-fact for Richard, having been appointed by a durable power of attorney. In this secondary role, Lisa assumed a fiduciary duty of loyalty and good faith to Richard. At the summary judgment stage of the proceeding, this evidence created a triable question whether she breached the duty of loyalty with respect to the purchase of Westport property, especially where the transaction appeared to disfavor Richard's financial interest while favoring hers. See Cleary, supra at 291, quoting from Witherington v. Nickerson, 256 Mass. 351, 356 (1926) (“[T]he general rule is that one acting in a fiduciary capacity for another has the burden of proving that a transaction with himself was advantageous for the person for whom he was acting”). In these circumstances, the burden of proof to affirmatively prove that the defendants had exerted undue influence over Richard was improperly allocated to the plaintiff.
Second, contrary to the judge's ruling, Richard's out-of-court statement describing the Costas' agreement to reimburse him the monies he advanced them for purchase of the Westport property with the monies they would obtain from the sale of the Fall River home, as recounted by the plaintiff in her deposition testimony, would be admissible under G.L. c. 233, § 65, provided the judge makes a preliminary finding that the decedent's declaration was made in good faith and upon the personal knowledge of the declarant. See Mass. G. Evid. § 804(b)(5) (2016). See also Mitchell v. Hastings & Koch Enterprises, Inc., 38 Mass. 271, 274 (1995). To that end, Richard's affidavit, which was part of the probate matter, would, if credited, support the preliminary findings required by G.L. c. 233, § 65, so as to render admissible Richard's out-of-court declarations and the entry of summary judgment in favor of the defendants improper. Accordingly, we vacate the summary judgment.