Justia Trusts & Estates Opinion Summaries

Articles Posted in US Court of Appeals for the First Circuit
by
The First Circuit affirmed in part and vacated in part the judgment of the district court discharging Guardian Life Insurance Company of America from this interpleader action and awarding the death benefit in dispute to Robyn Caplis-Sevelitte (Robyn), holding that remand was required for a determination of who was entitled to the death benefit.In this action, Renee Sevelitte, the ex-wife of Joseph Sevelitte, the decedent, and Robyn, the decedent's widow, asserted competing claims to the death benefit of a life insurance policy owned by Joseph and administered by Guardian. Renee sued Guardian asserting four claims based on Guardian's failure to pay her the proceeds from the policy and cross claimed against Robyn. Guardian asserted a counterclaim for interpleader against Renee, Robyn, and Joseph's estate under Fed. R. Civ. P. 22. The district court entered judgment on the pleadings in Guardian's and Robyn's favor and dismissed Renee's crossclaims against Robyn. The First Circuit affirmed the entry of judgment on the pleadings in favor of Guardian with respect to the death benefit from the policy but vacated and remanded as to Robyn, holding that the district court erred. View "Sevelitte v. Guardian Life Insurance Co. of America" on Justia Law

by
In this case stemming from a lengthy and acrimonious family dispute over the property of Donelson Glassie, whose estate remained in probate in Rhode Island eleven years after his death, the First Circuit reversed the judgment of the federal district court dismissing Plaintiff's claims as barred by the probate exception to federal court jurisdiction, holding that the district court erred.Plaintiff, Donelson's daughter, brought this action against several family members, including the executor of Donelson's estate, alleging that Defendants were liable to her under the federal Racketeer Influenced and Corrupt Organizations (RICO) laws, 18 U.S.C. 1962, because they formed an enterprise that engaged in a pattern of fraudulent interstate communications and that Defendants breached fiduciary duties owed to her as a minority member of an entity wholly owned by a company in which the estate held a fifty-eight percent interest, and other claims. The district court dismissed all claims. The First Circuit reversed, holding that the district court erred in finding the probate exception applicable to this case. View "Glassie v. Doucette" on Justia Law

by
The First Circuit affirmed the judgment of the district court concluding that this dispute concerning the disposition of assets once held by the uncle of the parties in this case belonged in a state court, not in a federal court, holding that the district court did not err.Plaintiff Sandra Lerner and her cousin, Defendant Stephen Colman, were both citizens of the Commonwealth of Massachusetts. Plaintiff attempted to plead claims under the federal Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1962, 1964(c), and appended state law claims for fraud and breach of fiduciary duty. The district court concluded that the complaint did not adequately state a cause of action under RICO and then dismissed the state law claims without prejudice to their being refiled in state court. The First Circuit affirmed, holding that the RICO claim failed because Plaintiff did not allege a pattern of racketeering activity. View "Lerner v. Colman" on Justia Law

by
In this appeal concerning the validity of a Transfer of Death Agreement (TOD agreement) executed by Alton L. Flanders, III, the First Circuit affirmed the judgment of the district court concluding that no reasonable jury could find that Plaintiff had met her burden of showing that Flanders lacked capacity at the time he entered into the TOD Agreement, holding that there was no reversible error.The TOD agreement in this case related to an account containing a subset of Flanders's assets for which Merrill Lynch acted as custodian. The agreement, if valid, avoided probate of an at-death transfer of the account assets to five designated beneficiaries, including Plaintiff, Flanders's daughter. After Flanders died intestate, Plaintiff claimed that Flanders lacked the mental capacity to enter into the TOD agreement. Merrill Lynch commenced this interpleader action. The district court granted summary judgment to the beneficiaries who consented to the distribution of the account assets per the terms of the TOD agreement. The First Circuit affirmed, holding that Plaintiff's claims on appeal were unavailing. View "Merrill Lynch v. Flanders-Borden" on Justia Law

by
The First Circuit reversed in part and affirmed in part the judgment of the district court dismissing Plaintiff's complaint filed in connection with mother's estate, holding that the district court erred in granting the motion to dismiss as it pertained to count two.Plaintiff brought this suit against Defendants, her two sisters, who were appointed as co-executors of the estate upon the death of the mother. Count one set forth a number of state law tort claims relating to Defendants' actions with respect to actions that Plaintiff contended should have been part of the estate. Count two set forth Massachusetts law claims relating to the discharge of a mortgage that the motion held on Plaintiff's Massachusetts condominium. Defendants and the mother were all New Jersey residents. The district court granted Defendants' motion to dismiss, finding a lack of personal jurisdiction conclusive of this case. The First Circuit reversed in part, holding (1) the district court erred in ruling that there was no federal subject matter jurisdiction over Plaintiff's count two claims; and (2) the district court properly dismissed Plaintiff's count one claims. View "Mojtabai v. Mojtabai" on Justia Law

by
The First Circuit affirmed the judgment of the district court granting the Securities and Exchange Commission's (SEC) motion to dismiss Plaintiff's complaint for lack of subject matter jurisdiction and failure to state a claim, holding that Plaintiff's claims were not entitled to judicial review.Plaintiff, in his capacity as trustee for the F2 Liquidating Trust, filed a complaint against the SEC asserting two claims under the Administrative Procedure Act (APA), 5 U.S.C. 551 et seq. The district court dismissed the case, determining (1) the right to judicial review of the SEC order at issue had been waived as part of a settlement between the SEC and F-Squared Investments, Inc., a former investment advisory firm; and (2) in any event, the court lacked subject matter jurisdiction because Congress vested the courts of appeals with exclusive jurisdiction over challenges to SEC orders. The First Circuit affirmed, holding that the district court correctly decided that the complaint failed to state a claim inasmuch as F-Squared waived judicial review by any court. View "Jalbert v. U.S. Securities & Exchange Commission" on Justia Law

by
The First Circuit certified to the Massachusetts Supreme Judicial Court (SJC) an unresolved question under both state common law and state statutes concerning whether a judgment creditor of the settlor's estate may reach and apply assets in an irrevocable spendthrift trust after the death of the self-settlor of the trust, concluding that this case posed questions better answered by the SJC.Plaintiff brought this action against a Massachusetts spendthrift trust created by his parents' murderer, Donald Belanger, to enforce an Arizona wrongful death judgment against Belanger's estate. The district court entered judgment for Plaintiff, holding (1) Plaintiff had satisfied the elements for a reach and apply action required by Massachusetts law, and (2) under Massachusetts law, a self-settled trust cannot be used to shield one's assets from creditors even where the trust has a spendthrift provision and the trustee has made no distributions to the settlor prior to his death. At issue on appeal was whether the district court erred in holding that Plaintiff was entitled under Massachusetts law to reach and apply the irrevocable trust assets to satisfy the wrongful death judgment. Because Massachusetts law does not clearly answer the question upon which the disposition of this case depends the First Circuit certified the question to the SJC. View "De Prins v. Michaeles" on Justia Law

by
The First Circuit affirmed the judgment of the district court dismissing the complaint filed by Hoff Stauffer on behalf of the estate of Carlton Stauffer, his father, against the Internal Revenue Services (IRS) alleging that the IRS improperly denied his April 2013 for his father's 2006 tax refund as untimely, holding that the Estate's arguments on appeal were unavailing.Before the district court, the Estate argued that the applicable statute of limitations for the filing of a tax refund claim was tolled due to Carlton's financial disability. The district court disagreed, concluding that because Hoff held a durable power of attorney (DPA) authorizing him to act on behalf of Carlton in financial matters the limitations period was not tolled. The First Circuit affirmed, holding (1) the DPA qualified Hoff as a person authorized to act on behalf of Carlton in financial matters for the purposes of I.R.C. 6511(h)(2)(B); and (2) there was no clear error in the court's factual finding that Hoff never renounced the DPA. View "Stauffer v. Internal Revenue Service" on Justia Law

by
The First Circuit reversed the district court’s grant of summary judgment for Plaintiffs in this alleging that certain assets should have been distributed to the estate of the decedent in this case, holding that the district court improperly granted summary judgment for Plaintiffs.In 2003, the decedent established an individual retirement account (IRA) with Mesirow Financial (Mesirow IRA) and designated Alyssa Jane D’Amore, his then-wife, as beneficiary. The couple divorced, but the decedent never revoked the beneficiary of the designation. The decedent later transferred the majority of his Mesirow IRA assets to a TD Ameritrade IRA. Upon the decedent’s death, Mesirow distributed the remaining assets in the Mesirow IRA to D’Amore. Plaintiffs, the primary beneficiary of the decedent and the executor of the decedent’s estate, filed suit against D’Amore, alleging that the Mesirow assets should have instead been distributed to the decedent’s estate. The district court granted summary judgment for Plaintiffs. The First Circuit reversed and remanded with directions to enter summary judgment for D’Amore, holding that because a request to transfer all assets was never made, the beneficiary designation was never revoked and D’Amore was entitled to the remaining assets in the account upon the decedent’s death. View "Cooper v. D'Amore" on Justia Law

by
The First Circuit reversed the district court’s grant of summary judgment for Plaintiffs in this alleging that certain assets should have been distributed to the estate of the decedent in this case, holding that the district court improperly granted summary judgment for Plaintiffs.In 2003, the decedent established an individual retirement account (IRA) with Mesirow Financial (Mesirow IRA) and designated Alyssa Jane D’Amore, his then-wife, as beneficiary. The couple divorced, but the decedent never revoked the beneficiary of the designation. The decedent later transferred the majority of his Mesirow IRA assets to a TD Ameritrade IRA. Upon the decedent’s death, Mesirow distributed the remaining assets in the Mesirow IRA to D’Amore. Plaintiffs, the primary beneficiary of the decedent and the executor of the decedent’s estate, filed suit against D’Amore, alleging that the Mesirow assets should have instead been distributed to the decedent’s estate. The district court granted summary judgment for Plaintiffs. The First Circuit reversed and remanded with directions to enter summary judgment for D’Amore, holding that because a request to transfer all assets was never made, the beneficiary designation was never revoked and D’Amore was entitled to the remaining assets in the account upon the decedent’s death. View "Cooper v. D'Amore" on Justia Law