Lynn M. DIPIETRO v. Budd F. HEALY.
MEMORANDUM AND ORDER PURSUANT TO RULE 23.0
The respondent Budd F. Healy appeals from a May 16, 2019 decree and order after rescript (2019 decree), issued by a judge of the Probate and Family Court (probate court), allowing the first and final account of the petitioner Lynn M. DiPietro, the former conservator of Healy's estate. He also appeals from the order denying his posttrial motion filed pursuant to Mass. R. Civ. P. 52, as amended, 423 Mass. 1408 (1996), and Mass. R. Civ. P. 59, 365 Mass. 827 (1974), seeking to amend the 2019 decree and certain factual findings (posttrial motion). For the reasons set out below, we affirm in part and vacate in part.
Background. We recite here the facts relevant to the issues on remand; a full recitation of the factual findings in the underlying proceedings may be found in DiPietro v. Healy, 94 Mass. App. Ct. 1119 (2019) (DiPietro I). On January 29, 2019, this court, in an unpublished decision issued in DiPietro I, vacated a portion of the August 26, 2016 decree and order (2016 decree) of the probate court allowing DiPietro's first and final account (account). The matter was remanded for specific findings and conclusions by the judge, requiring a clear statement as to the applicable legal standard in proving a conservator's account, and whether DiPietro had met her burden. Neither a new trial nor further evidentiary hearing were ordered on remand.
On remand, after a case status conference and reconsideration of the evidence presented at trial, the judge issued the 2019 decree with accompanying findings and rationale after rescript. The judge ordered (1) that Healy retain the $20,383.80 payment made to him by DiPietro (assuming the payment already had been made) as ordered by the 2016 decree,2 (2) that DiPietro reimburse Healy an additional $54,217.10 improperly siphoned from his estate resulting from breaches of her fiduciary duty as conservator,3 and (3) approval of DiPietro's first and final account.
In June 2019, Healy filed his posttrial motion seeking to amend the 2019 decree and certain factual findings. In that motion, Healy primarily argued that (1) the account should be entirely disallowed because of the incomplete inventory, and that the judge's factual findings were unsupported or went against the evidence; (2) ownership of the AXA Equitable Variable Life Insurance policy (AXA policy) should be returned to him, as well as certain personal property (namely, his uncle's memorabilia); (3) he should be reimbursed for unauthorized withdrawals from his estate, (4) prejudgment interest should be awarded on his damages; and (5) he should be awarded attorney's fees incurred below and on appeal. The motion was denied without a hearing. Healy timely appealed from both the 2019 decree and the order denying his posttrial motion.
Discussion. On appeal, in addition to making essentially the same arguments as those raised in his posttrial motion, Healy claims that the judge erred in failing to hold an evidentiary hearing (or conduct a new trial) on remand because, he argues, the trial evidence was insufficient to support the judge's findings after rescript. We address each argument in turn.
1. Evidentiary hearing. Healy argues that the judge abused her discretion in failing to conduct an evidentiary hearing or new trial on remand as dictated by DiPietro I. He claims that because DiPietro failed to present at trial testimony and records supporting the vast deficiencies in the account, there was insufficient evidence on which the judge could rely to support her factual findings and rationale after rescript.
To sustain an appellate claim that a judge committed an abuse of discretion, it must be demonstrated that “the judge made ‘a clear error of judgment in weighing’ the factors relevant to the decision, such that the decision falls outside the range of reasonable alternatives” (citations omitted). L.L. v. Commonwealth, 470 Mass. 169, 185 n.27 (2014).
As the decision in DiPietro I reads, the judge was not required on remand to conduct a new trial or evidentiary hearing. Generally, we defer to a judge's discretion in determining whether a further evidentiary hearing is necessary in order to effectuate the purpose of a remand. See Matter of the Estate of Moretti, 69 Mass. App. Ct. 642, 652-653 (2007); First Nat'l Bank of Boston v. Brink, 372 Mass. 257, 264 (1977). Here, the purpose of the remand stated in DiPietro I was to provide a clear statement as to the legal standard for proving an account, and whether DiPietro had met that standard. We conclude that the judge clearly stated the legal standard, but we are left with questions on review as to whether DiPietro fully proved the account. For instance, it is unclear how DiPietro, in her inventory of Healy's estate, arrived at the value of $978 for his “miscellaneous tangible personal property.” It is likewise unclear whether she is still in possession of that, or other of Healy's, personal property. We conclude that the judge should have held an evidentiary hearing to clarify questions relating to, among other things (as detailed below), a description and the whereabouts of Healy's personal property, and how the value was derived. Accordingly, we order that an evidentiary hearing be held on remand to address questions as to Healy's personal property valued on the inventory at $978, and the whereabouts of his uncle's memorabilia he claims is missing. An evidentiary hearing is required on these and certain other matters as detailed below.
2. Inventory and account. Healy next argues that because the judge erred in not requiring DiPietro after remand to file a complete and accurate inventory, the account cannot be properly reconciled and, thus, must be disallowed except for those items with which he agrees.
a. Inventory. We do agree that it would have been better for the judge to have required DiPietro earlier in the proceedings to file a complete and accurate inventory of Healy's property of which she took control upon her appointment as conservator to include certain known assets, some of which appeared on the account. See G. L. c. 190B, §§ 5-417 (a) and 5-418 (c) (1). Neither a starting value nor a sufficient explanation as to the whereabouts of some of these items were satisfactorily addressed during the 2016 trial held on DiPietro's conservatorship account (2016 trial).
Nonetheless, the judge was able to address each of the items Healy claimed were missing from the inventory (i.e., his personal belongings and tools, a boat, his Jeep, the AXA policy, and the TIAA-CREF retirement account) based on the less than perfect record that she had before her. Requiring DiPietro to restart the process would likely be futile, given her lack of records. As a result, we conclude that the judge did not abuse her discretion when she declined to require DiPietro to file a new inventory on remand. See L.L., 470 Mass. at 185 n.27.
b. Account. Healy claims that because the inventory was not complete and accurate, allowance of the account must be vacated because there is no valid beginning balance with which the account can be reconciled. We are not persuaded.
We recognize that the judge did the best she could with the incomplete records of the estate presented by DiPietro at trial, through both her testimony and the forty-six admitted exhibits. Clearly DiPietro breached her duties as conservator when she failed to maintain clear and accurate records of her administration of Healy's estate. See G. L. c. 190B, § 5-417 (b). See also Matter of the Estate of Moretti, 69 Mass. App. Ct. at 652-653. However, we do agree that findings as to Healy's personal property, IRA, and CNA long-term care insurance policy are lacking, and the ownership of the AXA policy needs attention.4
(i) Personal property. Included on DiPietro's inventory was an entry for “miscellaneous tangible personal property” valued at $978. As the judge found, other than listing this item on the inventory there was no further description of this property included in the account, nor was any information provided during the 2016 trial as to what the personal property consisted of or how DiPietro arrived at its stated $978 value. The judge found DiPietro liable for the entire $978 because she failed to provide suitable records in support of the entry.5 Rather than simply ordering DiPietro to reimburse Healy $978, however, DiPietro should have been ordered to provide a detailed description of the property, the precise calculation utilized to arrive at the value, and ultimately to return the property to Healy if such property still was in DiPietro's possession. Because detailed information regarding Healy's miscellaneous personal property is absent from the judge's findings, the matter must be addressed at an evidentiary hearing on remand. Also at that hearing, the whereabouts of the alleged missing memorabilia must be addressed; it may be discovered that this memorabilia and the miscellaneous personal property are one and the same.
(ii) Individual retirement account (IRA); CNA long-term care insurance policy. DiPietro testified at trial, and as evidenced by the account, that during her conservatorship Healy was receiving payments from both an IRA and a CNA long-term care insurance policy. Neither of these items were sufficiently addressed at trial, nor in the judge's findings after rescript. Because there may have been some residual value remaining in each of these benefits at the time DiPietro's conservatorship terminated in September 2014, it should be determined at an evidentiary hearing on remand whether Healy is entitled to reimbursement by DiPietro for any remaining value or whether the IRA and CNA policy can be returned to him.
(iii) AXA policy. On August 15, 2014, DiPietro changed ownership of the AXA policy from Healy to the Lynn DiPietro Living Trust; at that time the cash surrender value of the policy was $26,355.22. On February 17, 2015, after DiPietro's conservatorship already had been terminated, and Healy had revoked her appointment as his attorney-in-fact, DiPietro withdrew $1,125 from the AXA policy. At the time of the 2016 trial, the judge determined that the current cash surrender value of the AXA policy was $19,258.80. We agree it was appropriate as part of the 2019 decree to allow Healy to retain the $20,383.80 payment ($19,258.80 + $1,125) made by DiPietro reimbursing him for funds taken inappropriately from the AXA policy.6 However, allowing DiPietro the option to retain ownership of the AXA policy after making that payment was error.
DiPietro must immediately transfer ownership of the AXA policy back to Healy. She transferred the policy ownership after knowing she was no longer attorney-in-fact for Healy, and that his sister subsequently had been given power of attorney (on March 28, 2014). DiPietro lacked authority as conservator to gift to herself an asset of the estate she was appointed to protect, and she breached her fiduciary duty in doing so. Being allowed to retain ownership of the AXA policy deprives Healy (and his chosen beneficiaries or estate) of a $500,000 death benefit and future cash value proceeds, contrary to his best interests. See G. L. c. 190B, §§ 5-423 (c) (1-7) & (14-24). The judge abused her discretion in allowing DiPietro the option to retain ownership of the AXA policy and, thus, DiPietro is ordered to transfer ownership of the AXA policy to Healy within ten days of the issuance of the rescript. See L.L., 470 Mass. at 185 n.27.
3. Interest on damages. Healy also argues that because DiPietro breached her fiduciary duties to him, he is entitled to be put back into the position that he was in prior to her taking control of his estate as conservator, and that damages awarded must include prejudgment interest reaching back to the commencement of this action -- August 5, 2013 -- or preferably to the time of DiPietro's fiduciary breach -- December 2, 2013. We agree.
“In any action in which damages are awarded, but in which interest on said damages is not otherwise provided by law, there shall be added ․ to the amount of damages interest thereon at the rate [of twelve percent] provided by [G. L. c. 231, § 6B] to be determined from the date of commencement of the action even though such interest brings the amount of the ․ finding beyond the maximum liability imposed by law.” G. L. c. 231, § 6H. Section 6B “is intended ‘to compensate a damaged party for the loss of use or the unlawful detention of money.’ ” Woodward Sch. for Girls, Inc. v. Quincy, 469 Mass 151, 174 (2014), quoting McEvoy Travel Bur., Inc. v. Norton Co., 408 Mass. 704, 717 (1990). In contrast, however, “[w]hen a breach of trust occurs, the beneficiary of the trust is ‘entitled to be put in the position he would have been in if no breach of fiduciary duty had been committed.’ ” Woodward Sch. for Girls, Inc., supra, quoting Berish v. Bornstein, 437 Mass. 252, 270 (2002). Making a beneficiary whole for missteps by a fiduciary “may require awarding interest beginning from the time of the breach, such that the [beneficiary]'s assets resemble what they would have but for the breach. In such circumstances, the award of prejudgment interest is part and parcel of the award of damages itself.” Woodward Sch. for Girls, Inc., supra.
Here, DiPietro petitioned for appointment of conservator on August 5, 2013. DiPietro first breached her fiduciary duty to Healy on December 2, 2013, when she was obligated but failed to file an inventory of Healy's estate. Accordingly, in order to make Healy whole, the interest on damages should be calculated beginning December 2, 2013, when DiPietro failed to present an inventory of assets of which she took control upon her appointment as conservator unless a particular breach can be tied to a specific later date. See Woodward Sch. for Girls, Inc., 469 Mass. at 174-175. On remand, the clerk of the probate court shall calculate the amount of prejudgment interest (at a rate of twelve percent) on damages awarded, beginning on December 2, 2013 (unless a particular breach can be tied to a specific later date), up to and including the date of entry of the 2019 decree (May 28, 2019). See id.; G. L. c. 231, § 6B.
4. Posttrial motion. Healy finally argues that the judge abused her discretion in denying his motion pursuant to Mass. R. Civ. P. 52 and 59 seeking to amend the 2019 decree. He claims that the judge erred in allowing DiPietro's conservatorship account when there existed numerous inconsistencies within the account, not reconcilable with the incomplete inventory; he contends there was insufficient evidence on which to base findings after remand without first holding an evidentiary hearing or new trial. We review the denial of a rule 59 motion to amend a judgment for an abuse of discretion. See Wojcicki v. Caragher, 447 Mass. 200, 209 (2006).
Healy argued in his posttrial motion essentially what he argues in this appeal. We here concluded, supra, that an evidentiary hearing after remand should have been held to address the disputed factual inconsistencies regarding, among others, the valuation and whereabouts of certain personal property, and information regarding any residual value of an IRA and long-term care insurance policy from which, according to the account, Healy was drawing benefits. Based on the foregoing, we conclude that the judge abused her discretion in denying Healy's posttrial motion.
5. Attorney's fees. Healy seeks an award of attorney's fees in the lower court and on appeal. Although it does not appear that Healy made a written request below, on remand the judge should consider an award of Healy's attorney's fees, especially in light of DiPietro's fiduciary breaches as conservator. “The test for awarding attorney's fees includes a determination whether the [fiduciary] was at fault, and the decision to award fees is a matter within the sound discretion of the trial judge.” Lattuca v. Robsham, 442 Mass. 205, 210 (2004).
We decline to award Healy attorney's fees in connection with this appeal, as the reasons for remand were not based on any action or inaction by DiPietro. Therefore, no attorney's fees incurred in connection with this appeal are warranted.7
Conclusion. So much of the May 16, 2019 decree that pertains to the allowance of DiPietro's October 23, 2014 account, and the filing of a petition for complete settlement is vacated, and the matter is remanded for further proceedings in accordance with this memorandum and order. DiPietro is ordered to transfer ownership of the AXA policy to Healy within ten days of the issuance of the rescript. The remainder of the decree is otherwise affirmed. So much of the judge's relevant procedural history, findings of fact, standards of law, and rationale after rescript that pertain to Healy's personal property, and the ownership of the AXA policy are vacated, and the matter is remanded for an evidentiary hearing on remand in accordance with this memorandum and order. Prejudgment interest calculated at a rate of twelve percent shall be added to any damages awarded. The order denying Healy's motion pursuant to Mass. R. Civ. P. 52 and 59 is vacated.
affirmed in part; vacated in part and remanded
2. The payment represented the present cash value ($19,358.80 as of August 26, 2016) of his AXA Equitable Variable Life Insurance Policy (AXA policy), and an unauthorized withdrawal in February 2015 by DiPietro of $1,125 made from that policy's cash benefit. As ordered by the 2016 decree, DiPietro was instructed to transfer the ownership of the AXA policy back to Healy or, alternatively, pay him the present cash value; DiPietro opted to pay the cash value and retain ownership of the policy.
3. The $54,217.10 award represented (1) two additional unauthorized withdrawals by DiPietro from the AXA policy totaling $8,535, (2) a $5,971.42 discrepancy in the cash value of the AXA policy between the time of DiPietro's conservatorship appointment and termination, (3) the $978 value placed on Healy's miscellaneous personal property (not returned to Healy) as listed on the inventory, (4) a $3,191.96 discrepancy between withdrawals made from Healy's bank account and reimbursement deposits into that account from DiPietro's personal account, (5) the determined value of the TIAA-CREF annuity account ($19,271.38) at the time DiPietro's conservatorship was terminated in September 2014, and (6) unaccounted for transactions on Schedule B of the account (totaling $16,269.34) for which, the judge found, DiPietro failed to provide suitable records.
4. As to the boat and the Jeep that Healy claims he owned during DiPietro's conservatorship, we discern no error with the judge's findings or conclusions pertaining to these items, as the judge's determinations regarding the boat and the Jeep were supported by admitted exhibits and DiPietro's trial testimony, which the judge found credible. We defer to the factfinder's assessment of the evidence and witnesses' credibility. See Adoption of Rhona, 57 Mass. App. Ct. 479, 482 (2003).As to the TIAA-CREF retirement account, Healy agrees that the principal balance of that account in January 2014 was $39,271. However, he contends that based on the account there was a subsequent shortfall of $8,805 in the retirement account. Because DiPietro was ordered to reimburse Healy's estate for the full $39,271 ($19,271.38 from the TIAA-CREF annuity account, and $20,000 from the AXA policy), he was made whole and, therefore, we find it unnecessary to further address Healy's argument with regard to the TIAA-CREF retirement account.
5. Notably, the judge found that DiPietro credibly testified that sometime in the summer of 2012, the parties held a yard sale at the then marital home, at which various tools and personal property of Healy was sold; Healy received all of the proceeds from this sale.
6. We conclude that Healy also is entitled to the $8,535 in damages as ordered by the 2019 decree; this amount represents two additional unauthorized withdrawals taken by DiPietro in March 2014 from the cash portion of the AXA policy. See note 2, supra. Because the judge found there were no suitable records produced showing the purpose for which these withdrawals were made (DiPietro claimed it was for unidentified attorney's fees), the withdrawals were determined a breach of DiPietro's fiduciary duties. We agree.
7. We deny DiPietro's request for appellate attorney's fees.
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