IN RE: the ESTATE OF John R. CONNOLLY. (2019)

MEMORANDUM AND ORDER PURSUANT TO RULE 1:28

Jean O'Brien (Jean ¹ ) appeals from a consolidated judgment entered in the Probate and Family Court, allowing the first account and the second and final account of the estate of John R. Connolly (decedent), and enforcing the in terrorem clause of the decedent's will, under which Jean's interest in the estate was revoked. We reverse the enforcement of the in terrorem clause against Jean, and otherwise affirm the judgment in all respects.

Background. The decedent died testate on January 2, 2012. He was survived by his brother, William Connolly (William), who died a few months after the decedent, and by William's four children: Sean Connolly (Sean), Carole Saslaw (Carole), Lisa Connolly (Lisa), and Christine Wirkkala (Christine). The decedent's sister, Barbara O'Brien (Barbara), predeceased him; Barbara's two children, Jean and Bruce O'Brien (Bruce), survived the decedent. On March 23, 2012, a decree entered allowing the decedent's will and appointing Sean as personal representative. The decedent's estate consisted of several bank accounts and three parcels of real property: 3 Prospect Street, Beverly (the decedent's former residence); 14 Charnock Street, Beverly; and Leslie Road, Rowley. The decedent also held an interest in a fourth parcel of real property located at 6 and 6 1/2 Prospect Street, Beverly, which consisted of a two-family house (at 6 Prospect Street) and a single-family house (at 6 1/2 Prospect Street).²

The will devised 3 Prospect Street and the Leslie Road property in equal shares to the decedent's six nieces and nephews; Charnock Street was left to Sean. William's four children received, in equal shares, the decedent's interest in 6 and 6 1/2 Prospect Street. The residue of the estate was devised to William and to Jean and Bruce as Barbara's surviving children.

In administering the estate, Sean was unable to determine the decedent's precise ownership interest in 6 and 6 1/2 Prospect Street. He was aware of potential claims by Barbara's surviving husband, George O'Brien (George), and by William's estate -- prior to the decedent's death, there had been a family quarrel over the ownership of this property. Accordingly, Sean filed a complaint in the Land Court for declaratory judgment and to quiet title. Carole, as William's personal representative, filed an answer and counterclaim asserting that William alone owned 6 and 6 1/2 Prospect Street. George filed a counterclaim asserting that Barbara's one-half interest in the property passed to him upon her death and, as a result, he held that interest with the decedent (before his death) as tenants in common. Jean also asserted that the decedent and her mother Barbara each owned a fifty percent share of the property. Depending on how these claims were resolved, the decedent could have had held one hundred percent, sixty-seven percent, fifty percent, thirty-three percent, or no ownership interest in the property.

In July 2012 Sean filed an inventory of the estate reflecting a combined value of personal and real property of approximately $ 833,500.³ On March 13, 2013, Jean petitioned for supervised administration of the estate as she believed estate assets were being wasted; Bruce, Lisa, and Christine assented to Jean's petition. Jean also sought an injunction to prevent Sean from pursuing the Land Court action “until such time as he shall demonstrate the necessity of such action to the administration of th[e] estate, and the authority under which he acts,” which was promptly denied.

On November 20, 2013, Sean filed a separate equity action, styled a complaint for instructions, in the probate court. Specifically, he sought guidance on how to allocate the outstanding expenses of estate administration (primarily legal fees) among the beneficiaries. Sean also asked the judge to determine whether Jean had violated the in terrorem clause by filing her petition for supervised administration and motion for injunctive relief. Jean, Bruce, Lisa, and Christine each filed a motion to dismiss Sean's complaint, arguing that the complaint was unnecessary because the formula for abatement was prescribed by statute. See G. L. c. 190B, § 3-902. Sean's subsequent motion for summary judgment on the complaint for instructions was denied.

On September 16, 2014, Sean filed a court-ordered first account, for the period of January 2, 2012 to June 30, 2014.⁴ Jean, Bruce, Lisa, and Christine each filed a formal objection challenging expenditures and legal fees incurred in relation to specifically devised real estate but charged to the estate generally. Sean was ordered to file a second and final account, which he did on December 14, 2015, for the period of July 1, 2014 to December 11, 2015. The legal fees stated in that account totaled more than $ 225,000. Although they did not file formal objections to the second and final account, the objectors maintained at trial that the legal fees billed to the estate were excessive.

After five days of trial, the judge struck all of the challenges to the first account, allowed the first account, and allowed the second and final account subject to certain adjustments. With regard to the complaint for instructions, the judge concluded that Sean's proposed allocation of administrative expenses was proper and complied with G. L. c. 190B, § 3-902. In addition, the judge determined that Jean's filing of her petition for supervised administration triggered the “very broad” in terrorem clause of the will. As a result, the judge revoked Jean's entire interest in the estate. Jean timely appealed.

Discussion. Jean argues on appeal (1) that the judge failed to apply strictly conservative principles in reviewing Sean's administration of the estate and in allowing the resulting attorney's fees; (2) that the two accounts improperly allocated expenses to the estate generally rather than to the specifically devised real property to which the particular expenses pertained; and (3) that the judge erred in enforcing the in terrorem clause against her.

1. Administration of the estate. We discern no error or abuse of discretion in the judge's allowance of the attorney's fees incurred by Sean in conducting his duties as personal representative. “The relation between an executor on the one hand and legatees under a will on the other is fiduciary in character, and requires on his part the utmost good faith in his dealings with them, and reasonable diligence to protect their interests.” Taylor v. Jones, 242 Mass. 210, 215 (1922). See G. L. c. 190B, § 3-703 (a) (“A personal representative is a fiduciary who shall observe the standards of care applicable to trustees as described in chapter 203C”).

Nothing in the record indicates that Sean acted in bad faith or without reasonable diligence in managing and settling the estate. Upon appointment as personal representative, he immediately engaged an attorney to help resolve the complex issues related to preserving estate assets and handling the devised real property. All the experts who testified at trial agreed that Sean's duty to marshal the estate's assets authorized him to preserve those assets by taking control of the real property held by the decedent at the time of his death. See G. L. c. 190B, § 3-709 (a).⁵

Moreover, the judge permissibly found that after taking possession of the properties, it was necessary for Sean to pursue the Land Court action to clear the title to 6 and 6 1/2 Prospect Street and to determine the decedent's precise interest in the property. When Sean initiated the action, the many ownership possibilities impeded him from simply conveying the property to the devisees. Thus, filing the Land Court action was a reasonable measure to prevent potential claims against the estate. The expert testimony, which the judge credited, supported this conclusion. See Haskell v. Versyss Liquidating Trust, 75 Mass. App. Ct. 120, 125 (2009) (“deference is given to the trial judge's credibility assessments of experts”).

Ultimately, a settlement was reached among the parties and an agreement for judgment issued in the Land Court declaring that the decedent had a sixty-five percent ownership interest in 6 and 6 1/2 Prospect Street and that George possessed a thirty-five percent interest.⁶ The judge found that this resolution benefitted the estate, increasing the decedent's interest by fifteen percent. This finding is supported by the evidence and is not clearly erroneous. The litigation also resulted in an agreement that Sean would sell the property for a predetermined price, eliminating the need to obtain a license to sell and incur additional costs.

The evidence also supported the judge's finding that Sean's complaint for instructions was reasonably necessary. Because administrative costs had depleted the residual estate, Sean had good cause to seek the judge's guidance and make certain that his proposed abatements of the devised real estate complied with G. L. c. 190B, § 3-902, and would fully satisfy all estate expenses. See McMillen v. McMillen, 57 Mass. App. Ct. 568, 577 (2003) (“A complaint for instructions is warranted when a fiduciary harbors reasonable doubt as to the interpretation of an instrument or his duties under it”). This was especially so given the continuing disagreements among the parties and Sean's unsuccessful attempts to obtain their assent to his accounts. See id. at 578. Sean's doubt as to the proper distribution of expenses was reasonable, even though the judge ultimately concluded that his accounting was proper.⁷ Id.

With respect to the attorney's fee award itself, the “[d]etermination of a reasonable fee is in the first instance largely committed to the sound discretion of the trial judge, who is in the best position to evaluate the nature of the case, the conduct of the litigation, the amount of time reasonably required to litigate it, and the fair value of the attorney's services.” Brady v. Citizens Union Sav. Bank, 91 Mass. App. Ct. 160, 161 (2017). “In determining what is a fair and reasonable charge to be made by an attorney for his services many considerations are pertinent, including the ability and reputation of the attorney, the demand for his services by others, the amount and importance of the matter involved, the time spent, the prices usually charged for similar services by other attorneys in the same neighborhood, the amount of money or the value of the property affected by controversy, and the results secured.” Matter of the Estate of King, 455 Mass. 796, 807 (2010), quoting Cummings v. National Shawmut Bank, 284 Mass. 563, 569 (1933). To “prevent the fund from being either entirely or in great part absorbed by counsel fees,” the judge is to apply “strictly conservative principles.” Brady, supra at 162, quoting Clymer v. Mayo, 393 Mass. 754, 772-773 (1985).

The judge's written findings reflect that she carefully evaluated the pertinent factors in determining a fair and reasonable fee for Sean's attorneys. See Brady, 91 Mass. App. Ct. at 163. The judge accounted for the experience and excellent reputations of Sean's attorneys -- specifically recognizing that one of the partners working on the case was “highly in demand” -- and found their rates comparable to others “providing similar services in Essex County.” The judge also evaluated the complexity of administering the estate with multiple real properties involved and issues surrounding their conveyance. The judge acknowledged that the fees were significant compared to the total value of the estate, but found them reasonable in light of the favorable resolution of the Land Court action and the litigious nature of the probate proceedings, in which the parties filed numerous pleadings and objections, some of “questionable merit.” The judge considered appropriate factors; we discern no clear error or abuse of discretion. See WHTR Real Estate Ltd. Partnership v. Venture Distrib., Inc., 63 Mass. App. Ct. 229, 235-237 (2005).

2. Allocation of expenses. We likewise discern no error or abuse of discretion in the judge's allowing Sean to allocate certain expenses to the estate generally rather than to the specific properties to which the expenses related. After taking possession of 3 Prospect Street, Sean had an obligation to secure and preserve that estate asset, and to pay the taxes, insurance, and other operating expenses. See G. L. c. 190B, §§ 3-709 (a) & 3-715 (7). As the judge found, the expenses incurred for the repairs and cleaning of 3 Prospect were necessary to remediate, or at least reduce, any liability to the overall estate for the hazardous conditions existing at that uninhabitable property.

The Land Court action also served the general administration of the estate by definitively determining the value of the decedent's interest in 6 and 6 1/2 Prospect Street. The decedent's interest in that property was uncertain before the Land Court action commenced, and Sean had no way of knowing what the outcome would be. The record does not support Jean's contention that Sean pursued the Land Court action in bad faith or in breach of his fiduciary duties.

3. In terrorem clause. The determination whether Jean's petition for supervised administration and motion for injunctive relief triggered the in terrorem clause of the decedent's will “is a legal conclusion that we review de novo.” Savage v. Oliszczak, 77 Mass. App. Ct. 145, 147 (2010), quoting Ritter v. Massachusetts Cas. Ins. Co., 439 Mass. 214, 215 (2003). “[B]ecause equity does not favor forfeitures, [in terrorem] clauses have been construed narrowly.” Savage, supra at 149, quoting Bogert, Trusts and Trustees § 181 (rev. 2d ed. 2007).

Article ninth of the will provides that a beneficiary who contests the will's validity forfeits his or her share.⁸ Jean's court filings did not attack or challenge the validity of the will or any part of it; she merely sought the court's supervision of the administration of the estate. If she had been successful, the will would still have been “carried out in accordance with its terms.” See Mazzola v. Myers, 363 Mass. 625, 639 (1973) (“The short and complete answer is that, in seeking an interpretation of the will, the plaintiff has not attacked or challenged the will or any part of it”). Accordingly, the in terrorem clause should not have been enforced against Jean, and her interest in the estate should not have been revoked.

Conclusion. Paragraph 3 of the judgment dated April 28, 2017 (entered May 1, 2017), enforcing the in terrorem clause against Jean O'Brien, is reversed. In all other respects, the judgment is affirmed. The case is remanded for amendment of the second and final account consistent with this memorandum and order.⁹

So ordered.

Affirmed in part; reversed in part and remanded.

FOOTNOTES

1.   Because many of the beneficiaries share the same surname, we refer to them by their first names.

2.   William resided at 6 1/2 Prospect Street throughout his adult life until he moved to a nursing home approximately one year before his death.

3.   The original inventory reflected five bank accounts held by the decedent at the time of his death totaling approximately $ 123,000. Three years after the decedent's death, Sean amended the inventory (by court order) to reflect a reduction in the personal property by $ 50,000, representing cash he had withdrawn from one of the decedent's bank accounts prior to his death. The amended inventory reflected the value of the decedent's estate at approximately $ 655,400.

4.   Along with the account, Sean's attorney filed an affidavit itemizing his legal fees to date. Jean filed a motion to strike the affidavit in part.

5.   The testifying experts, whom the judge found credible, all opined that Sean had the statutory power to “maintain an action to recover possession of [6 and 6 1/2 Prospect Street] or to determine title thereto” under G. L. c. 190B, § 3-709 (a). The judge also credited expert testimony that a personal representative has a duty to the beneficiaries not to pass a property to them with defective title.

6.   In addition, Sean, Carole, Lisa, Christine, and George waived any future claims to 6 and 6 1/2 Prospect Street. They also agreed to have a portion of the net sale proceeds ($ 32,000) held in escrow pending further instructions from them or from the court.

7.   Similarly, the judge did not err in concluding the Sean's motion for summary judgment on the complaint for instructions was “reasonable and prudent,” as the motion had the potential to narrow the issues for trial and as counsel's efforts in preparing the summary judgment motion assisted in preparation for trial.

8.   Article ninth states, in pertinent part, “If any beneficiary hereunder shall contest the probate or validity of this Will, or any provision thereof, or shall institute or join in (except as party defendant) any proceeding to contest the validity of this Will or prevent any provision thereof from being carried out in accordance with its terms (regardless of whether or not such proceedings are instituted in good faith and with probable cause), then all benefits provided for such beneficiary are revoked, and such benefits shall pass to the other beneficiaries named in the provision.”

9.   We note that the personal representative submitted an alternate second and final account reflecting the proposed distributions to the beneficiaries in the event that the in terrorem clause was not enforced.