Opinion
No. 12–P–882.
2013-07-1
Leah HARP & another v. Robert SWARTZ.
By the Court (VUONO, CARHART & AGNES, JJ.).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
Robert Swartz appeals from a Superior Court judgment removing him as a cotrustee of a trust created by Edward Swartz. We affirm.
Gordon Swartz also purports to appeal from the judgment, see discussion infra.
Background. In 1972, Edward Swartz (Edward) created a trust under his will. Edward named as beneficiaries his sister, Rosalyn Deigh; his daughters, Alma Swartz and Ella Zonis (Ella); “and any issue of [his] daughter, [Ella], living at [his] death.” Leah Harp and Nadia Zonis are Ella's daughters and were three years old and six years old, respectively, upon Edward's death.
As a number of the individuals involved share the same last names, we refer to them by their first names.
The trust established three trustees: Edward's brothers Robert Swartz (Robert) and Morris Swartz (Morris), and the First National Bank of Boston (bank). The executors were Robert, Morris, and Attorney J. Barry Morrissey. Under the trust, trustees are exempt for liability arising from “reliance on the opinion or advice of counsel,” except for “personal fraud and gross negligence.” In addition, the trust grants the trustees wide discretion to make equal or unequal distributions to the beneficiaries. The trust is comprised of real estate properties in and around Boston. While Edward specifically nominated the Codman Company, Inc., to manage the properties, the trustees determined that management was best left to Robert. Attorney Morrissey advised the trustees that Robert's compensation should be comparable to a paid professional in Boston. It is undisputed that Robert managed the properties in a professional manner and under his guidance the trust substantially increased in value. However, the evidence established that Robert's compensation greatly exceeded comparable professional management fees.
Morris served as trustee until his death in 1975; he was replaced by Rosalyn per the terms of the will; upon Rosalyn's death in 2003, she was replaced by Gordon Swartz, the son of Robert.
Through a series of mergers First National Bank of Boston became Bank of America, National Association.
From the inception of the trust, the trustees made distributions to Ella, Alma, and Rosalyn. As of 1981, the trustees distributed $79,424.14 to Ella, $58,066.52 to Alma, and $46,666.52 to Rosalyn. However, the trustees made no distributions to the plaintiffs until 1997.
The trustees provided Ella with higher distributions because she suffered from health and related problems, and was a single mother.
From 1987 to 1997, the plaintiffs made periodic inquiries to Robert in an effort to receive financial information relating to the trust. During the course of the plaintiffs' requests it came to light that the trustees had failed to file trust probate accounts for over ten years. It is also clear from the communications between the parties that Robert viewed the plaintiffs as “secondary beneficiaries” and thus not entitled to the full panoply of financial benefits as those he considered the primary beneficiaries. In 1997 and after years of extensive legal wrangling, the trustees began to make monthly distributions to the plaintiffs, albeit lower than the distributions to the other beneficiaries. Additionally, the trustees continued to withhold financial information from the plaintiffs until 2006.
In September, 2006, the plaintiffs filed a complaint in Superior Court seeking removal of all the trustees. At the time of trial, Robert was ninety-five years old; he attended trial in a wheelchair. Since the 1980's, Robert has spent significant periods of time in Florida. The trial lasted twelve days, after which the judge made detailed findings.
In their appellate brief, the plaintiffs note that Robert has moved to Florida. This is uncontested by the defendants.
The trial judge recognized that the success of the trust was largely due to Robert's prudent business judgment. However, the judge also determined that Robert's compensation was excessive and “the distinction between trustee and employee of the trust became blurred.” The judge concluded that the trustees acted patently against Edward's express intent by failing, for twenty-five years and without reason, to make distributions to the plaintiffs. Although the judge concluded that the trustees did not breach their fiduciary duties, the judge also concluded that the evidence “barely supports the trustee's exercise of discretion,” and that “Robert and the bank[ ] were neglectful in this area of trust administration.” The judge further considered other factors: the trustees failed to file probate accounts for ten years; a family division between the plaintiffs and trustees has occurred; “some obvious physical infirmity has reached a critical level[;] and Robert resides outside of Massachusetts for significant time periods .” In light of these facts, the judge ultimately removed the bank and Robert as trustees.
Discussion. Trustee removal is a matter of equity, Gorman v.. Stein, 1 Mass.App.Ct. 244, 248 (1973), and courts are vested with broad discretion in determining whether removal is appropriate. Edinburg v. Cavers, 22 Mass.App.Ct. 212, 222 n. 10 (1986). On appeal, the defendants attack the judge's decision through piecemeal arguments. It is clear, however, the judge determined that all of the circumstances favored the plaintiffs' request for trustee removal. We find no error. See Quincy Trust Co. v. Taylor, 317 Mass. 195, 196–197 (1944).
The defendants argue the following factors individually cannot sustain the judge's decision: family division; physical infirmity; residing outside of Massachusetts; overcompensation, untimely probate accounts; and trustee preference for beneficiaries other than the plaintiffs.
Additionally, the plaintiffs have filed a motion in this court to dismiss Gordon's appeal and for an order nunc pro tunc reimbursing the trust for attorney's fees paid by the trust. The plaintiffs argue that Gordon lacks standing to join Robert in this appeal, as Gordon was dismissed from this case prior to trial and he remains a trustee. Gordon has not been aggrieved by any action of the Superior Court, nor does he join this appeal as a necessary or indispensable party. See Donovan v. Donovan, 223 Mass. 6, 6 (1916) (”[w]here a finding is in a party's favor he is not a person aggrieved and cannot appeal); First Christian Church v. Brownell, 332 Mass. 143, 147 (1955) (only persons whose pecuniary interests, personal rights, or official duties have been affected can properly appeal). Therefore, we allow so much of the plaintiffs' motion that seeks the dismissal of Gordon as party to this appeal. We decline to rule on the portion of the plaintiffs' motion which asserts that Robert should bear the cost of attorney's fees for this appeal as the matter is currently pending before the Probate Court. Finally, although Robert has not prevailed on appeal, we cannot say his appeal is frivolous. We therefore deny the plaintiffs' request for attorney's fees and double costs. Avery v. Steele, 414 Mass. 450, (1993) (“unpersuasive arguments do not necessarily render an appeal frivolous”).
Judgment affirmed.