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Jennings v. Jennings

COMMONWEALTH OF MASSACHUSETTS APPEALS COURT
Sep 8, 2011
No. 10-P-937 (Mass. Sep. 8, 2011)

Opinion

10-P-937

09-08-2011

FREDERIC BEACH JENNINGS, JR. v. LUCILLE CANDACE JENNINGS.


NOTICE: Decisions issued by the Appeals Court pursuant to its rule 1:28 are primarily addressed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, rule 1:28 decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 1:28, issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent.

MEMORANDUM AND ORDER PURSUANT TO RULE 1:28

Frederick Jennings, the former husband of Lucille Jennings, appeals from so much of a judgment of divorce dated October 14, 2009, as divides the parties' assets and orders him to reimburse the wife for attorney's fees in the amount of $100,362.11. We affirm the judgment.

1. Background. The husband was sixty-three years of age at the time of trial and in good health. The husband worked at various positions between 1985 (when he received his Ph.D.) and 1992. In 1992, he left his employment with a large company and started his own economic consulting firm, EconoLogistics. From 1995 through 2007, EconoLogistics reported total gross income of $469,259, and gross expenses in the amount of $687,456, resulting in a net loss of $218,197. The husband's business has improved substantially in the past few years and, during the last seven months of 2008, the husband had at least $108,000 in gross income from EconoLogistics alone. The husband also owns and operates a fly fishing business which had a total net loss of $57,154 for the period 1995 through 2007. In addition, and as we shall discuss more fully, infra, the husband has invested in a business called Artfully African.

The husband also does academic work at the Center for Ecological Economic and Ethical Education but does not earn any income therefrom.

The wife, a medical doctor by training, was sixty years old at the time of trial. Although she practiced as an orthopedic oncology surgeon from 1990 until 1997, she has been unable to work as a surgeon since 1997 as a result of a medical diagnosis and the subsequent treatment for her condition. The wife presently works as a medical editor and writer at a cancer center and earns $1,475 per week from that position. In addition, she receives approximately $1,715 per week in long-term disability benefits. The judge found that the husband has a much greater likelihood than the wife to acquire assets and income in the future.

The wife's eligibility to receive the disability benefits is reviewed annually. The benefits will terminate when the wife attains the age of sixty-four.

The judge made extensive findings concerning the parties' 'estate,' many of which concerned the 'marital home.' The husband's mother, a woman of substantial wealth, owned property on Argilla Road in Ipswich -- a 'big house' at 261 Argilla Road and a 'small house' at 263 Argilla Road. The parties lived at the small house from about 1979 to 1989; the husband's mother lived at the big house during that period. In 1989, the parties and the husband's mother traded houses and the parties lived continuously in the big house until their separation. (The wife continued to reside there at the time of trial.) Although legal title to the property remained primarily in the name of the husband's mother during the parties' marriage, the judge found that the parties, relying upon statements of the husband's mother, anticipated that the property would be theirs and treated it as such. In the judge's view, the gifts from the husband's mother (see note 3, supra) and 'the expectancy of the acquisition of title to the marital home, were all 'woven into the fabric of the marriage.''

Although the judge did not make a finding on the point, there was evidence that in August, 2002, the husband's mother transferred to the husband a five percent undivided interest in the 261 Argilla Road property.
Other acts of kindness and generosity by the husband's mother were noted by the judge. Among other things, the husband's mother paid for the wife's medical school tuition, gave the parties cash gifts (including one gift of $50,000), allowed the parties to live essentially rent free in the Argilla Road houses, and usually paid the property taxes on the properties. The judge found that the wife and the husband's mother enjoyed a very friendly relationship throughout the marriage.

The judge found that during the marriage the wife used all of her income from employment and disability insurance to support the needs of the family and to maintain the house and the property. Indeed, the wife testified that since moving to the big house in 1989 she had renovated the kitchen, improved the porch by replacing all the windows and doors, added a computer unit, restored gardens, and generally maintained the house and the grounds. The wife testified that she continued to maintain the property through the time of trial and listed on her financial statement (which the judge found to be credible and accurate) maintenance expenses of $325 per week. The husband currently pays the homeowner's insurance (approximately $5,000 per year) and the property taxes (approximately $15,000 per year) associated with the marital home. He also repairs the 'boardwalk' on the property every spring and fall although, the judge found, the husband appears to claim these expenses as business deductions.

On October 1, 2005, the husband's mother died, leaving a last will which 'confirmed' a devise of the 261 Argilla Road property into the husband's name. The judge found that the property was a marital asset subject to division and would likely obtain a sales price of between $2 million and $5 million, and possibly more.

There was evidence that the small house at 263 Argilla Road was sold for $1.65 million and the proceeds used to pay estate taxes.

The judge indicated that other assets subject to equitable division included property in New Hampshire in the husband's name (worth $132,300), a Winslow Homer sketch (worth $125,000), the wife's retirement fund (worth $361,386), the husband's interest in the Frederic B. Jennings, III, 1973 Trust (worth $96,900), the husband's interest in the Jennings Children's Trust--Frederic (worth $125,000), the husband's fifty percent interest in Artfully African (worth approximately $257,500), and the husband's interests in his other businesses.

During the marriage the parties enjoyed an upper middle class lifestyle. The judge found that throughout the last ten to fifteen years of the marriage the husband, using marital assets traveled (not accompanied by the wife) extensively throughout Europe, Mexico, Canada, New Zealand, and Africa, with little or no resulting benefit to the family.

On these findings and others, which we shall discuss, infra, the judge fashioned an equitable division under which the 261 Argilla Road property was to be presented for sale with a specialized marketing plan. At the time of the closing and sale of the property, sixty percent of the net proceeds from the sale were to be paid to the wife and the remaining forty percent paid to the husband. The husband was allowed to retain ownership of the New Hampshire property provided that he pay the wife $33,075 (representing twenty-five percent of the value of the property) by a specified date. In addition, the husband was assigned the Winslow Homer sketch, his interests in his businesses (including his fifty percent interest in Artfully African), his interests in the various trusts, and other assets of more modest value. The wife was assigned her retirement plan and certain other assets. Neither party was ordered to pay alimony to the other. The husband was also directed to reimburse the wife the sum of $100,362.11 -- representing approximately two-thirds of the total attorney's fees incurred by the wife in the amount of $150,538.11.

The parties were further ordered to comply with the terms of a stipulation regarding payment of educational expenses for the younger child.

2. Discussion. (a) The Frederic B. Jennings, III, 1973 Trust. The husband argues initially that there was 'no evidence to support the judge's finding that the [Frederic B. Jennings, III, 1973 Trust (FBJ 1973 Trust)] was [his] asset.' The husband appears to suggest, although he does not state so specifically, that the trust should not have been included as an asset within the estate subject to division. See D.L. v. G.L., 61 Mass. App. Ct. 488, 495- 498 (2004).

The trust instrument was not an exhibit at trial. Much of the evidence concerning the trust came from Robert Irwin, the vice president at Fiduciary Trust Company. Irwin's testimony indicates that the trust had characteristics of a so-called discretionary trust.

The husband's argument overlooks the fact, as the wife points out, that it was the husband himself who identified and valued the FBJ 1973 Trust as an asset. Indeed, it is difficult to perceive how the husband properly may press his claim of error having (1) listed the FBJ 1973 Trust as an asset on his January 12, 2009, March 23, 2009, and April 28, 2009, financial statements, which were exhibits at trial, (2) testified that his January 12 financial statement was generally an accurate reflection of his economic standing at the commencement of trial, and (3) twice revised his financial statements during the course of trial (and called such revisions to the judge's attention) to reflect changes to the value of the trust. Cf. Larson v. Larson, 28 Mass. App. Ct. 338, 341 (1990). In these circumstances, we decline to disturb the judge's order assigning to the husband his interest in the FBJ 1973 Trust.

During one such revision the husband's trial counsel informed the judge that the trust was listed as an additional asset of the husband.

(b) The Jennings Children's Trust--Frederic. There was evidence through the testimony of Robert Irwin that the Fiduciary Trust Company was the executor of the will of the husband's mother. The will provided not only that the husband was to receive the property at 261 Argilla Road but that the husband and his three siblings would share the total estate as equally as possible. There was an initial disbursement of $500,000 among the four children ($125,000 per child). However, because the 261 Argilla Road property turned out to have a greater value than anticipated, the estate had to call back the $125,000 distribution to the husband to satisfy the equalization provisions of the will. The husband claimed that he no longer had the money to repay the estate. As the Jennings Children's Trust for the husband had assets of approximately $125,000, the trustees extended a loan to the husband in that amount, secured by a mortgage on the Argilla Road property dated September 20, 2006, to enable him to repay the estate. Irwin testified that the husband owes the Jennings Children's Trust $125,000. The husband argues that the court's finding that his interest in the Jennings Children's Trust is worth $125,000 is clearly erroneous as it fails properly to take into account his debt to the trust 'which would have negated its value to him.' The husband states that in order to effectuate an equitable resolution of the parties' financial affairs, a judge must consider not only the parties' assets but their liabilities. See Passemato v. Passemato, 427 Mass. 52, 58 (1998).

Irwin testified that the only current asset of the Jennings Children's Trust is the note for $125,000. He explained that 'the trust holds the mortgage'; '[t]he estate holds the cash.'

While finding that the value of the Jennings Children's Trust for the husband was $125,000, the judge also considered and found that the husband had reported a mortgage debt to Fiduciary Trust in the amount of $125,000. The judge directed that, except as otherwise ordered, it was fair, reasonable, and appropriate that the parties be responsible for the payment of their own liabilities. Clearly, the judge had in mind the husband's debt in fashioning the equitable division. Again, we decline to disturb the judgment.

We note also that the husband's claimed expenditure of the $125,000 advanced by the estate gave rise to the debt at issue.

(c) Artfully African. The judge found that the husband with his companion (with whom he lives) invested in a business venture called Artfully African through which he plans to purchase and resell works of art from Africa. The judge found that the business has an inventory valued at approximately $103,000 and that the husband's business plan for Artfully African calls for a 500 percent markup to sale price. Although the husband testified that he had put approximately $30,000 into Artfully African, he failed to list his ownership of the business on his financial statements. The husband 'claim[ed],' the judge found, that he still owed his companion 'his $80,000 portion of the investment' in the business. The judge determined that the husband had a fifty percent interest in Artfully African worth approximately $257,500 ($103,000 increased by 500 percent markup and then reduced to reflect husband's fifty percent ownership interest) and assigned that asset to him.

The husband testified, among other things, that he owed his companion $80,000 in order to establish an approximately fifty percent share in the business. It was the husband's position that 'at the moment' his companion was the sole owner of the business.

The husband appears to argue that the judge erred in determining that he has a current ownership interest in Artfully African. He further claims that the court's valuation of his interest was clearly erroneous as it is evident from his testimony that he was merely 'speculating at a 500 percent markup.' He also argues that the court erred by failing to deduct 'the cost of goods' (presumably $103,000) before arriving at a net revenue figure and further erred by failing to deduct the $80,000 he owed to his companion, even to be considered as a partner, from his share of the revenue. We discern no clear error, as there was sufficient evidence to support the judge's finding of value.

At trial, the husband's companion testified that she and the husband had begun to undertake a business of importing African furniture and home decor. Continuing, she stated that although she had made the bulk of the investments (and the parties had not formalized any agreement as yet), it was 'meant to be a joint undertaking.' Based on the companion's testimony and the husband's admitted substantial investment in the business, the judge reasonably could conclude that Artfully African was a joint business.

The husband also acknowledged at trial that his companion had earlier testified in a deposition that he was a fifty percent partner in Artfully African.

While it is true that the husband (who is well trained in economics) equivocated somewhat when questioned at trial as to what the markup would be on the inventory of Artfully African, he stated that his 'rule of thumb is five fold.' The husband further testified that if his 'expectation of five times markup' proved successful, he would derive revenue of $515,000. On this evidence we are not convinced that the judge's finding concerning the planned 500 percent markup of the inventory of Artfully African is unduly speculative or otherwise clearly erroneous. We note also that the husband points to no authority that would have required the judge in the present case to deduct the cost of the inventory. See Moriarty v. Stone, 41 Mass. App. Ct. 151, 154, 155 n.3 (1996) (utilizing fair market value of inventory).

We also reject the husband's argument that the judge erred in failing to deduct 'from his share of the revenue' the $80,000 he owed his companion to even be considered as a partner. It is implicit (if not explicit) in the court's findings that the judge did not credit the husband's claim that he would have no ownership interest in Artfully African until he paid his companion $80,000. Moreover, it is apparent that the judge had serious concerns with the husband's credibility concerning business and financial matters, noting that the husband's testimony and approach to such matters were 'evasive.'

(d) The division of the Argilla Road property. The husband challenges the court's assignment to the wife of sixty percent of the net proceeds of the sale of the Argilla Road property. We discern neither an abuse of discretion nor other error of law.

The husband argues that should this court find that the judge erred in valuing Artfully African and in his treatment of the FBJ 1973 Trust and the Jennings Children's Trust--Frederic, the 'overall division of assets falls completely apart.' This argument is rendered nugatory in view of our discussion, supra.

The husband does not argue that the Argilla Road property was not an asset subject to equitable division.

The general principles governing the equitable division of assets under G. L. c. 208, § 34, are discussed in cases such as Redding v. Redding, 398 Mass. 102, 107-108 (1986); Bowring v. Reid, 399 Mass. 265, 267-268 (1987); Adams v. Adams, 459 Mass. 361, 371 (2011); and Denninger v. Denninger, 34 Mass. App. Ct. 429, 430-431 (1993), and need not be rehearsed in detail. It is enough to say that once a judge has fairly considered the relevant factors under § 34 his determinations as to property division may not be reversed unless 'plainly wrong and excessive.' Redding v. Redding, 398 Mass. at 107. With respect to inherited property the following language appearing in Williams v. Massa, 431 Mass. 619, 626-627 (2000), is instructive:

'Unlike several other States that have enacted statutes governing the allocation of inherited or gifted assets in a divorce proceeding, Massachusetts has no hard and fast rules on when such an allocation is appropriate. Once the judge included these assets as part of the marital estate, she had broad discretion to determine how to divide the entire estate equitably . . . , including discretion not to divide the inherited and gifted assets between the parties. . . .
[A]n equitable, rather than an equal, division of property is the ultimate goal of G. L. c. 208, § 34. To that end, a judge is required to consider the respective contributions of the parties to the marital partnership, and a disparity in contributions may be reflected in the distribution of the inherited and gifted assets. . . . A judge may also consider . . . the source of the assets, each parties' role in managing the assets, and whether the assets in question had been kept separate or commingled with the couple's jointly owned property.'
See Moriarty v. Stone, 41 Mass. App. Ct. at 157 ('parties' respective contributions to the marital partnership remain the touchstone of an equitable division of the marital estate'). In fashioning his equitable division of the estate, the judge was well aware of and considered the original source of the asset (i.e., the husband's mother), the husband's mother's retention of legal title to the property throughout much of the marriage (as well as her contributions towards certain of the costs of the property), and the husband's inheritance of the property in 2005 -- some one year after the parties had separated. The judge also considered, however, the unusual circumstances involving the Argilla Road property that were presented by this case, including the parties' occupancy of the property since 1989, the parties' expectation that they would acquire title to the property (and their treatment of the property in the light of that expectation), the wife's valuable contributions to the maintenance of the property (see note 4, supra), and the fact that the property, the parties' largest asset, had become 'woven into the fabric' of this long-term marriage. The judge referred to the 261 Argilla Road property as the 'marital home' both in his findings and in the judgment.

The husband argues in his principal and reply briefs that there is no evidence in the record to support the judge's finding that the parties, relying upon statements of the husband's mother, anticipated that the Argilla Road property would be theirs and that they treated it as such. This argument is puzzling, particularly in view of the husband's own testimony that he had numerous discussions with his mother concerning her intentions with respect to the big house at Argilla Road. The husband stated that he 'was told from very early on' by his mother that he would have his choice of which house he wanted and, although the wife preferred the smaller house, he had always said that he wanted the big house.

In addition, the judge weighed each of the factors specified in § 34, including the wife's income and her use of that income throughout the marriage to support the needs of the family, the husband's limited income throughout much of the marriage, the husband's greater opportunities to acquire income and assets in the future, and the husband's conduct which, at times, depleted the marital assets without any resulting benefit to the family. On review of the record, and mindful of the considerable discretion accorded to probate judges in such matters, we cannot fairly conclude that the judge abused his discretion in crafting a property division under which the wife was assigned, among other things, sixty percent of the net proceeds of the sale of the 261 Argilla Road property.

There is no merit in the husband's additional argument (apparently grounded in comments made by the judge during a pretrial colloquy concerning the possible settlement of the case) that the judge appears not to have understood that he had discretion to award all of the house to him.

(e) Attorney's fees. The wife requested, in her answer and counterclaim, that she be awarded her reasonable attorney's fees and costs. On June 15, 2009, some seven weeks after the trial had concluded, she filed with the court an affidavit of attorney's fees in which she requested that the husband pay her total fees, costs, and expenses in the amount of $150,538.11. In its judgment of divorce dated October 14, 2009, and in its later findings of fact, the court determined that the wife had, in fact, incurred total attorney's fees and costs in the amount of $150,538.11. Of that amount the judge stated that the wife shall be responsible for the payment of $50,176, 'which represents a more realistic fee which should, and could, have been generated for an action such as this one.' The husband was ordered to reimburse the wife for the balance of $100,362.11 'which represents the additional, and avoidable, extra fees and costs incurred as a direct result of [h]usband's litigation choices, strategy and conduct.' The judge made detailed findings explaining the rationale for the award of attorney's fees to the wife, which we summarize in the margin.

The certificate of service appearing on the affidavit recites that it was served on June 15, 2009, on the two attorneys 'of record' who represented the husband at trial. The husband does not dispute in his brief the recitals on the certificate.

The judge found that the husband was 'rigid and unyielding' throughout the course of the litigation. Among other things, the judge stated that the husband 'remained steadfast that he should retain sole ownership of the multi-million dollar Ipswich real estate where the parties had lived for many years even though he never once proposed a remotely realistic financial proposal that could be deemed fair or reasonable pursuant to [G. L. c. 208, §] 34.' Continuing, the judge stated that even in his proposed judgment, the husband suggested that he retain the entire Ipswich property in return for a one time payment to the wife of $23,100, an amount that arguably represents less than one percent of its value. The judge also found that the husband's complex and evasive testimony and approach to business and financial matters unnecessarily increased the amount of time spent by the wife's attorneys on discovery, trial preparation, and actual trial time. It is to be noted that in his § 34 findings, the judge stated, inter alia, that the husband failed to list on his financial statements (1) accounts receivable by Econologistics in the amount of $20,000, (2) his ownership interest in Artfully African, and (3) his interest in a certain trust. The judge also did not find credible portions of the husband's evidence concerning his expenses and needs.

A probate judge 'has considerable discretion in determining the necessity and the amount of attorney's fees.' Moriarty v. Stone, 41 Mass. App. Ct. at 159. See Cooper v. Cooper, 62 Mass. App. Ct. 130, 141 (2004). 'Such an award is ' presumed to be right and ordinarily ought not to be disturbed." Moriarty v. Stone, supra, quoting from Ross v. Ross, 385 Mass. 30, 39 (1982). The husband argues initially that because no evidence was submitted at trial as to the amount of the attorney's fees incurred by the wife or the reasonableness of the fees charged, and because the wife's later affidavit lacked any detail or itemization as to the specific services performed by counsel and when they were performed, it was error for the judge to award fees to the wife 'without at least a hearing.' The husband further claims that 'the denial of an opportunity to examine the affiant deprived the husband of his right to notice and a hearing.'

The problem with the husband's argument, insofar as he claims that he was entitled to an evidentiary hearing on the question of fees, is that there is no indication in the record before us that he requested such a hearing. See Tatar v. Schuker, 70 Mass. App. Ct. 436, 451 (2007), citing J.P. Constr. Co. v. Stateside Builders, Inc., 45 Mass. App. Ct. 920, 920-921 (1998) (evidentiary hearing on reasonableness of attorney's fees required only if specifically and timely requested). On the argument made, there was no error.

From all that appears, the husband also failed to file any opposition or response to the wife's affidavit and request for fees.

We note that although the wife's affidavit of attorney's fees was not as detailed as it should have been, the judge was intimately familiar with all aspects of the proceedings, having heard various motions, issued pretrial orders, and presided at the pretrial conference and the four-day trial. He was well aware of the issues involved, and their complexity, and had the opportunity to observe firsthand the work of counsel. See Brash v. Brash, 407 Mass. 101, 106 (1990). See also Tatar v. Schuker, 70 Mass. App. Ct. at 451 n.21, quoting from Handy v. Penal Institutions Commr. of Boston, 412 Mass. 759, 767 (1992) ('It is not the law that a request for [attorney's] fees must be entirely denied when a fee applicant does not submit contemporaneous time records to the court').

The husband also challenges the judge's rationale for the award of fees, claiming that it is flawed inasmuch as it characterizes his attempts to secure sole ownership of the Argilla Road property as 'rigid and unyielding.' The husband states that in light of the fact that the home had been in his family for generations and he inherited the home during the divorce proceedings, his position was 'anything but 'rigid and unyielding" and his offer to the wife through his proposed judgment of a modest cash sum was at least reasonable. In view of the judge's findings, which we have previously discussed, concerning the parties' use and occupancy of, expectations concerning, and contributions toward the Argilla Road property, and the fact that the property had been woven into the fabric of the marriage, we do not think that that part of the rationale in dispute is fatally flawed. See C.D.L. v. M.M.L., 72 Mass. App. Ct. 146, 163 (2008).

Finally, to the extent the husband suggests that the attorney's fees award was intended, at least in part, to penalize him from proceeding to trial (rather than reaching some form of settlement), the judge appears to have addressed this very issue: 'Certainly, [h]usband has the right to approach this litigation utilizing his chosen strategies. Once the case has been fully tried, however, the [c]ourt finds that the actions and choices of [h]usband have greatly prolonged the litigation and caused unnecessary and substantial increases to [w]ife's fees and costs.' The judge recognized fully the husband's right to have his day in court but, the husband having had that day, the judge would not ignore the husband's strategies or his evasive approach to financial matters. Cf. ibid. (f) Appellate attorney's fees. The wife, arguing that the husband's appeal is 'frivolous in nature,' requests an award of appellate attorney's fees from the husband. Although we decide by this memorandum and order that the husband will not prevail on his appeal, we are of opinion that all of his arguments are not frivolous. Consequently, we deny the wife's request.

Judgment affirmed.

By the Court (Cohen, Brown & Milkey, JJ.),


Summaries of

Jennings v. Jennings

COMMONWEALTH OF MASSACHUSETTS APPEALS COURT
Sep 8, 2011
No. 10-P-937 (Mass. Sep. 8, 2011)
Case details for

Jennings v. Jennings

Case Details

Full title:FREDERIC BEACH JENNINGS, JR. v. LUCILLE CANDACE JENNINGS.

Court:COMMONWEALTH OF MASSACHUSETTS APPEALS COURT

Date published: Sep 8, 2011

Citations

No. 10-P-937 (Mass. Sep. 8, 2011)