Opinion
15-P-99
04-14-2017
Dwight NEVES & others v. Manuel NEVES, Jr.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
Anna Curtin, Lily Mayer, and Dwight Neves, three of the four children of the late Ligaya O. Neves and Manuel Neves, Sr., commenced this twelve-count complaint on October 7, 2008, against their brother, Manuel Neves, Jr. (Manny, Jr.), and his wife, Sheila Neves. The plaintiffs claimed that Manny, Jr., by fraud, deceit, or breach of fiduciary or contractual duties, took ownership of the income from certain property once owned by the parties' parents and intended by the parents to be shared by all four siblings. Concluding that the plaintiffs knew or should have known of their injury more than three years before this action was commenced, the trial judge granted Manny, Jr.'s, motion for a directed verdict (made at the close of the plaintiffs' case) on all of the plaintiffs' tort claims on statute of limitation grounds. The judge also granted a directed verdict on the plaintiffs' contract claim on the ground that no evidence of an agreement had been admitted. The judge denied a motion for reconsideration of the statute of limitations ruling in which the plaintiffs argued that, because Manny, Jr., owed them fiduciary duties, the statute of limitations did not begin until sometime in 2006 when they possessed actual knowledge of the harm. The judge also denied the plaintiffs' day-of-trial and midtrial motions to amend the complaint to add a count of interference with an inheritance.
The claims included: breach of fiduciary duty, breach of confidential relationship, misrepresentation, fraudulent inducement, deceit, fraud, conversion, breach of contract, promissory estoppel, undue influence, intentional infliction of emotional distress, and a demand for an accounting.
Sheila was dismissed by stipulation in March, 2011. We refer to Manny, Jr., as the sole defendant.
On appeal, the plaintiffs do not claim error in the dismissal of their breach of contract claim.
The judge permitted the plaintiffs' promissory estoppel claim to be submitted to the jury. The jury found for the plaintiffs and awarded $200,000 in damages; judgment entered for the plaintiffs. However, the judge allowed Manny, Jr.'s, motion for judgment notwithstanding the verdict (n.o.v.) because no evidence of an unambiguous promise had been admitted. The plaintiffs appeal.
Background. On appeal, Manny, Jr., argues that the plaintiffs' recitation of facts is argumentative and conclusory, but he does not dispute the references to the factual record set out in the plaintiffs' brief and did not include his own version of the facts in his brief. We, therefore, accept the plaintiffs' version and summarize them here, supplemented from the record as needed. It is our duty to examine the facts to determine whether "anywhere in the evidence, from whatever source derived, any combination of circumstances could be found from which a reasonable inference could be drawn in favor of the plaintiff[s]" on the promissory estoppel claim or the statute of limitations issue. Zaniboni v. Massachusetts Trial Ct., 81 Mass. App. Ct. 216, 217 (2012), S.C C., 465 Mass. 1013 (2013), quoting from Doe v. Senechal, 66 Mass. App. Ct. 68, 76 (2006). See Doe, supra, citing Raunela v. Hertz Corp., 361 Mass. 341, 343 (1972) (standard of review of motion for judgment n.o.v. is same as motion for directed verdict). "We do not weigh the evidence or consider the credibility of witnesses." Doe, supra, quoting from Conway v. Smerling, 37 Mass. App. Ct. 1, 3 (1994).
Viewed in the light most favorable to the plaintiffs, the jury could have found that the parties' parents expressed an intent for their four children to share equally in property they owned in Carver (town). Although Manny, Sr., and Ligaya made some initial efforts to accomplish their shared intent, they did not complete an estate plan that conformed with their express desires.
Manny, Sr., died in 1997 and the fee to the Carver property vested solely in Ligaya, either individually or as trustee of the Man-Ike Realty Trust, over which she had a right of revocation. Shortly after Manny, Sr.'s, death, Ligaya asked the siblings to contribute to the maintenance of the property but none of the plaintiffs volunteered. Rather, they suggested that a portion of the property be sold to pay the expenses. Manny, Jr., rejected this proposal. Then, in October of 1998, Ligaya, individually, transferred a portion of the Carver property, i.e., lot 7, to Manny, Jr., for a stated consideration of $2,000.
Because the plaintiffs do not distinguish the property Ligaya held individually from the property she held as trustee in terms of potential duties owed to the plaintiffs, they have waived any argument that Ligaya owed them duties as a trustee and that Manny, Jr., owed them duties as a cobeneficiary. Accordingly, we generally refer to the property as owned by Ligaya individually.
In December of 1998, Manny, Jr., commissioned an attorney to create the Ligaya Realty Trust to hold the Carver property, with all four children as beneficiaries, and also had the beneficiaries sign a schedule of beneficiaries, ensuring that they each knew about the trust. The plaintiffs suggest that the trust was created for the purpose of developing the property. For tax billing purposes, Manny, Jr., notified the town that Ligaya was transferring the Carver property into the trust, such that the tax bills were thereafter sent to the trust. However, Ligaya did not transfer the property and the trust remained unfunded. Neither Ligaya nor Manny, Jr., disclosed to the plaintiffs that the property had not been transferred to the trust. Furthermore, Anna observed a copy of a property tax bill with the trust designated as the owner of the property and, therefore, had no concern that the Carver property had not been transferred into the trust or that the trust was unfunded.
Then, on January 16, 2002, Ligaya transferred the remainder of the Carver property to Manny, Jr., by two separate deeds for a stated total consideration of $20,000. Thereafter, Manny, Jr., did not inform the plaintiffs that he held the property in fee. Rather, he continued to insist, even as late as August of 2004, that the plaintiffs had an ongoing obligation to share in the maintenance costs and responsibilities associated with the property and, furthermore, that he was working to keep the property in the family. He told the plaintiffs that he would let them know if "anything big" happened with the property.
Anna and Lily did not trust Manny, Jr., and suspected that he might attempt to obtain exclusive ownership of all of the property for his sole benefit. In May of 2005, Anna wrote a letter directed to the Probate and Family Court regarding Manny, Jr.'s, efforts to become Ligaya's guardian. She stated that "Manny, Jr. has convinced [Ligaya] to sign over control of the entire estate to him alone" but, in Anna's opinion, it likely was done "only after Manny[, Jr.] convinced her that she, (and all of her heirs), would be financially well taken care of" by Manny, Jr. Anna expressed fear that Manny, Jr., would not keep his promises. Both Anna and Lily testified to not knowing before 2006 that the Ligaya Realty Trust did not hold the Carver property. Dwight did not testify.
Discussion. Statute of limitations. Largely, but not exclusively, based upon Anna's May, 2005, letter to the Probate and Family Court, the trial judge determined that the plaintiffs were alerted by at least May of 2005 that Manny, Jr., had done "something wrong" and, therefore, that they knew or, at a minimum, should have known, that he had taken control of the property to their exclusion, barring, in the judge's view, the tort claims the plaintiffs filed in October of 2008. See Koe v. Mercer, 450 Mass. 97, 101 (2007), quoting from Bowen v. Eli Lilly & Co., 408 Mass. 204, 205-206 (1990) ("[T]he statute of limitations starts when the plaintiff discovers, or reasonably should have discovered, 'that [he] has been harmed or may have been harmed by the defendant's conduct' ").
The plaintiffs concede that they did not file their claims within the three years of the actual transfer of the properties to Manny, Jr. They contend, nevertheless, that the judge erred in concluding that they knew or should have known in 2005 about Ligaya's transfer of the property to Manny, Jr. Alternatively, the plaintiffs argue, as they did in their motion for reconsideration, that because Manny, Jr., owed them a fiduciary duty, the period of limitations on their tort claims did not commence until 2006 when they gained actual knowledge of his having taken title to the Carver property. We disagree.
In 2004, Anna sent Manny, Jr., an electronic mail message questioning the status of the property and, in 2005, she directed a letter to the Probate and Family Court in which she stated: "Manny, Jr. has convinced [Ligaya] to sign over control of the entire estate to him alone." In addition, there was evidence that one of the siblings met with a lawyer regarding the status of the property around that same time. This evidence supports the judge's finding that the plaintiffs knew or should have known in 2005 about Manny, Jr.'s, exclusive control over the Carver property. See ibid. (to survive statute of limitations challenge, plaintiffs "must demonstrate a reasonable expectation of proving that the claim was timely filed").
The judge also properly concluded that there was insufficient evidence of a fiduciary relationship between Manny, Jr., and his siblings so as to toll the statute of limitations until 2006 when they gained actual knowledge of Manny, Jr.'s, ownership of the property.
"[W]here a fiduciary relationship exists, G. L. c. 260, § 12, tolls the applicable statute of limitations until the plaintiff has actual knowledge of either the harm or the fiduciary's implicit or explicit repudiation of his or her obligations." Passatempo v. McMenimen, 461 Mass. 279, 295 (2012). Furthermore, in such circumstances, "the failure adequately to disclose the facts that would give rise to knowledge of a cause of action constitutes fraudulent conduct and is equivalent to fraudulent concealment for purposes of applying" G. L. c. 260, § 12. Demoulas v. Demoulas Super Mkts., Inc., 424 Mass. 501, 519 (1997). "Mere suspicion or mere knowledge that the fiduciary has acted improperly does not amount to actual knowledge that the plaintiff has suffered harm." Doe v. Harbor Schs., Inc., 446 Mass. 245, 255 (2006).
"[T]he law recognizes the existence of fiduciary responsibilities arising out of ... relationships of trust and confidence and provides a remedy against one who abuses the confidence reposed in him by another, turning it to his own advantage." Michaud v. Forcier, 78 Mass. App. Ct. 11, 15 (2010), quoting from Markell v. Sidney B. Pfeifer Foundation, Inc., 9 Mass. App. Ct. 412, 443 (1980). Fiduciary duties may be found "on evidence indicating that one person is in fact dependent on another's judgment in business affairs or property matters." Michaud, supra, quoting from Markell, supra at 444. As the plaintiffs quote from Warsofsky v. Sherman, 326 Mass. 290, 292 (1950), the "circumstances which may create a fiduciary relationship are so varied that it would be unwise to attempt the formulation of any comprehensive definition that could be uniformly applied in every case."
The plaintiffs insist that these general elements of a fiduciary relationship are met here because the plaintiffs reasonably placed their trust in Manny, Jr., to manage the Carver property. It is well settled, however, that family members are not fiduciaries to one another by virtue simply of their familial status. See Ranicar v. Goodwin, 326 Mass. 710, 713 (1951) ; Cleary v. Cleary, 427 Mass. 286, 292-293 (1998). The Supreme Judicial Court has said that our cases have never recognized a confidential relationship arising simply because a conveyance is made between members of a family. Ranicar, supra.
Certainly it is true that "some family relationships may involve a heightened duty to disclose," but here, "the plaintiffs were all independent adults ... who did not depend on [Manny, Jr.'s,] advice in real estate, financial or business matters." Collins v. Huculak, 57 Mass. App. Ct. 387, 394, 395 (2003). See Bruno v. Bruno, 384 Mass. 31, 33 (1981). The plaintiffs have cited to no case (and we are aware of none) where one sibling owes fiduciary duties to his other siblings with regard to property that the parents have expressed only a desire and intention that they all share in one day. The plaintiffs' belief that Manny, Jr., was to manage the property for the benefit of all the siblings, even if reasonably drawn from Ligaya's trust in him, does not by itself give rise to a fiduciary duty. Accordingly, we see no error in the judge's ruling dismissing the plaintiffs' tort claims on statute of limitations grounds.
Concluding as we do, we need not address the subsidiary question whether the statement contained in the 2005 letter also evidences the plaintiffs' actual knowledge of Manny, Jr.'s, ownership of the property.
Promissory estoppel. The plaintiffs' promissory estoppel claim was subject to a six-year statute of limitations. Therefore, the judge sent that claim to the jury and, with plaintiffs' counsel's agreement, the judge charged the jury that the "only monetary damages being sought by the Plaintiffs in this case pertain to the lease payments and the easement payments received by [Manny, Jr.,] and not the monetary value of any of the properties transferred." The jury found in the plaintiffs' favor and awarded damages in the sum of $200,000. However, concluding there was no evidence of a clear and unambiguous promise to support a claim of promissory estoppel, the judge granted Manny, Jr.'s, posttrial motion for judgment n.o.v.
The judge ruled the evidence insufficient to support a finding that Manny, Jr., promised to transfer the property to the plaintiffs. The plaintiffs appear to assert on appeal that the judge focused on the wrong promise. While not clearly advanced, the promise under which the plaintiffs apparently seek recovery is Manny, Jr.'s, promise to maintain the property on their behalf essentially as a quasi trustee.
The plaintiffs correctly do not purport to claim entitlement to share in the property income as beneficiaries, as they recognize that the Ligaya Realty Trust was never funded. Having waived any right to recover the value of the property, it is apparent they also do not purport to have a fee interest in the property. They assert simply that Manny, Jr.'s, purported promise to "maintain" the property for all of them entitles them to share in the property income even though the property was transferred exclusively to Manny, Jr., and they have no fee interest in the property.
While we could see how Manny, Jr.'s, conduct might lead the plaintiffs reasonably to conclude that he promised to maintain the property for the family, Manny Jr., did not renege on that promise. Manny, Jr., did not fail to pay the taxes or otherwise neglect the property. Even if we were to conclude that Manny, Jr.'s, words suggested not merely that he maintained the property but that he more specifically maintained it for the economic benefit of all the siblings, there is no evidence that they detrimentally relied on such assurances (misleading as they were).
"Reduced to basic terms, promissory estoppel 'consists simply of a promise that becomes enforceable because of the promisee's reasonable and detrimental reliance.' " Suominen v. Goodman Indus. Equities Mgmt. Group, LLC, 78 Mass. App. Ct. 723, 731 (2011). See Rhode Island Hosp. Trust Natl. Bank v. Varadian, 419 Mass. 841, 848 (1995) (essential elements of promissory estoppel claim include unambiguous promise and reasonable reliance on promise). "Frequently, when [promissory estoppel] has been applied, there has been a pattern of conduct by one side which has dangled the other side on a string." Pappas Indus. Parks, Inc. v. Psarros, 24 Mass. App. Ct. 596, 598 (1987), and cases cited. Our review of the record, including the closing argument, fails to reveal that the plaintiffs changed their position or refrained from taking action in reliance on Manny, Jr.'s, purported promise.
Lily consistently asserted that she was in no position to contribute to the maintenance of the property, and there is no evidence that any other plaintiff contributed either to its maintenance or tax liability. Furthermore, to the extent the plaintiffs contend that Manny, Jr.'s, conduct interfered with their ability to intervene with Ligaya on his or her own behalf, Anna's 2005 letter to the Probate and Family Court suggests otherwise. In it, Anna relates that she had tried rather unsuccessfully to convince her mother that turning control of her estate over to Manny, Jr., was unwise. Moreover, Ligaya was alive when the plaintiffs learned of the deeds in Manny, Jr.'s, name. If the deeding of the property to Manny, Jr., was inconsistent with an enforceable promise Ligaya had made to the plaintiffs, they could have pursued an action against her while she was alive. And, to the extent they contend Manny, Jr., acquired the property from Ligaya through fraud, deceit, or undue influence and Ligaya lacked capacity to bring an action against Manny, Jr., they could have sought a new guardian for Ligaya and pursued an action against Manny, Jr., on Ligaya's behalf. For these reasons, like the judge below, on this record, we too can discern no promise from Manny, Jr., that would allow the plaintiffs to share in the profits generated by the property. In our view, the judge reasonably rejected the plaintiffs' efforts to recast as a promissory estoppel claim what in essence would have been a breach of fiduciary duty claim had the Ligaya Realty Trust been funded.
Even where Manny, Jr., was appointed her guardian, the plaintiffs could have brought the appropriate motions in the Probate and Family Court necessary to pursue Ligaya's rights.
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The plaintiffs seek to transform a gratuitous promise to maintain or to manage the property into a full trustee/beneficiary relationship and to impose liability on Manny, Jr., for breaching his fiduciary duty to the beneficiaries of a trust by self-dealing in taking title to the trust property. In the absence of an actual trust, no such duties arose and there was no error in granting Manny, Jr.'s, motion for judgment n.o.v. on the promissory estoppel claim.
Motion to amend to add interference with inheritance count. On the morning of trial, January 13, 2014, the plaintiffs made an oral motion to amend their amended complaint to add a count for interference with an inheritance. They argued that it encompassed many of the same claims of fraud, deceit, and breach of fiduciary duty, and required no additional discovery but had not ripened until the death of Ligaya in April of 2011. The judge denied the motion, noting that the complaint was filed in 2008 and that if an additional claim arose when Ligaya died in 2011, "the complaint could have been, should have been amended well prior to the date of trial." The motion was renewed, and again denied, when Manny, Jr., filed his motion for a directed verdict. We discern no error.
A trial judge enjoys broad discretion in determining whether to allow a motion to amend at such a late stage in the litigation. "Among the good reasons ... for which a motion to amend may be denied are that no justification for the lateness of the motion is apparent (beyond counsel for the moving party having had a late dawning idea) and that one or more of the nonmoving parties would be caught off balance by the proffered amendment." DiVenuti v. Reardon, 37 Mass. App. Ct. 73, 77 (1994). Futility is also a reason to deny a motion to amend. Mathis v. Massachusetts Elec. Co., 409 Mass. 256, 265 (1991). In order to succeed on a claim of tortious interference with the expectancy of receiving a gift, the plaintiffs must show that (i) they have a legally protected interest; (ii) Manny, Jr., intentionally interfered with the plaintiffs' expectancy in an unlawful way; and (iii) Manny, Jr.'s, "interference acted continuously on the donor until the time the expectancy would have been realized." Labonte v. Giordano, 426 Mass. 319, 320-321 (1997). Here, the plaintiffs have failed to demonstrate they have a legally protected interest to the property Ligaya held individually. They do not contend Ligaya had a will of which they were the beneficiaries. "The right of a person to receive property by gift in accordance with an orally expressed intention of the owner thereof to make such a gift is, at least, no more definite than the right of a person named as legatee in an invalid will to receive a legacy." Ross v. Wright, 286 Mass. 269, 275 (1934). Moreover, evidence of interference in an unlawful way is largely absent here. We conclude, therefore, that the judge did not abuse his discretion in denying the plaintiffs' motion to amend.
The order allowing judgment n.o.v. is affirmed. A new judgment shall enter in favor of Manny, Jr.
So ordered.
Affirmed.