Court Official: Court is now in session.
-: That's JC13105, Matthew Sachs v. Nancy Dysinger.
-: Morning, if it would please the court,
(indistinct) plaintiffs Matthew and Rebecca Sachs.
Issue before the court involves construction
of general law chapter 203E, section 604,
which provides the person may commence
a judicial proceeding that contests the validity of a trust
that was (indistinct) at the settlor's death,
within one year of the settlor's death,
or 60 days of receiving notice.
-: [Justice Wendlandt] So is it your position that
that is a statute of limitation, or a statute of repose,
or does it not matter to your client?
-: My position is it does not matter for purposes
of my client in this case, but I think
the applicability comes to that in the end.
It makes sense to be treated as a statute of repose,
but noting however, that it does not include the language
of classic statutes of repose in the commonwealth,
which includes language like in 260, section 2B in no event.
So where there's a statute of repose, it's unequivocal
for that matter, where there's a statue of limitation,
the limitation is stated in the affirmative using language
such as that, and throughout chapter 260, shall be commenced
only, rather than the permissive may commence.
Justice Lowry: Your position is that unjust enrichment
and intentional interference
with advantageous relationships is no statute
of limitations permissible.
-: Not under this section.
They are addressed in chapter 260, and not
by this provision that deals only with proceedings
contesting the validity of that trust as indicated
in the comments of the National Conference of Commissioners
in preparing this uniform act, a contest as an action
to invalidate all or part of the terms of that trust,
or property transfers to the trustee.
And they specifically say in drafting
this proposed uniform statute, which was adopted
in this regard by the Massachusetts legislature
without change, that an action against a beneficiary
or other person for intentional interference
with an inheritance or gift, not being a contest is
not subject to this section.
Justice Georges: Counsel, can we ask you that,
how do you get to your remedy without getting
to the validity of the change in that you claim was made
as a matter of undue influence?
How do you get to the end without getting to the first part?
-: Well, actually, damages arise under the plaintiff's claims
only upon enforcement of the trust.
So if the trust is revoked, there would be no damage.
Upon enforcement of the trust as amended, damages accrue.
And that is the final element of each
of the common law claims raised by the plaintiff.
So the plaintiff's claims rely upon, actually rely upon
the enforcement of the trust as amended.
Without that, there are no damages.
So that's the approach, it's dependent upon the enforcement
of the trust as amended.
Without that, there are no damages
for intentional interference, and there's no
unjust enrichment, so it-
-: Well, Counsel, if I assume that I'm going
to that the first, sorry, the first, that the dismissal
of the complaint against the trust to rescind the trust,
or change the terms, if I assume that's out,
then the trust is going to be enforced, right?
Sam: Yes.
-: So why are there not going to be damages then,
that they could file a suit on?
-: Well, there, I think there will be.
Judge Cypher: There will be?
-: Because that is the allegation, there will be damages.
The point for present purposes in examining
the level of court's action is that
those claims are not a proceeding to contest
the validity of the trust.
There are claims for common law damages that are-
-: I think I might not have understood what you were talking
about before, so I think I do now.
Justice Kafker: The substance of the action's
the same, isn't it?
I mean, I'm trying to understand the difference
between if you're trying to rescind it, because there was
undue influence, and you're trying to sue after,
because there's undue influence,
isn't the substance exactly the same?
It's just, you're allowing it to be enforced, and then,
so you could have brought the other claim, right?
Challenging, if you could bring a timely claim,
you could bring a claim to challenge the enforcement
of the trust, right?
Sam: Yes.
-: And that claim is exactly the same as the one you're
bringing later, it's just allowing the trust
to be executed, right?
-: Well, it's not the same.
-: Why isn't it the same?
Because isn't the substance of the argument exactly the same
that there was undue influence and therefore it resulted
in a different, beneficiary?
-: Well, the evidence of undue influence would be the same,
but that doesn't make the causes of action.
-: Isn't what you have prove exactly the same too?
How would proving the one that tries to blow up the trust,
be different from proving the tortious interference,
or the unjust enrichment?
How would it be different?
-: Well, taking the interference claim, and I would draw
the court's attention to the elements
of intentional interferences as stated
in Blackstone and Cashman 448 Mass. 255.
The element that we're addressing through that question,
Your Honor, is the defendant, proving that
the defendant's interference with the relationship,
in addition to being intentional, was improper in means
or motive, which is different than whether there was
undue influence getting into the settlor's free will.
It is a different standard of proof,
a different element of proof.
It involves some of the same evidence,
but it's fundamentally different in that
an intentional interference claim doesn't rely
on undue influence in the same sense of absence
of testamentary intent, and that sort of thing.
It's the defendant's interference with the relationship
being improper in motive or means.
So it is a classic court claim of interference
that doesn't hinge solely on an undue influence.
-: And is there another difference that the action
to rescind a trust would be an action in rem,
that is as against the trust, whereas an action regarding
intentional interference is something against the person,
the person who intentionally interfered?
-: Absolutely, Your Honor.
-: And don't we legally treat those as different,
even if the underlying story is the same?
-: Exactly, and there there's no claim here against
the trustee for any reclamation or anything like that.
It's strictly the kind of third-party claim that was
expressly accepted out in the uniform committee's comment
with regard to same.
-: So I understand that as it relates
to the intentional interference, because that gets to
Nancy and the grandmother poisoning the well, and having
the assets eventually be divided in four,
as opposed to as the five, and it goes to conduct
before the trust was actually redrafted,
and it doesn't have anything to do with challenging
the manner of execution, or anything like that.
But the unjust enrichment is, that involves all the odds,
and it's trying to change what the distribution
that's called for under the trust would be.
So why doesn't the unjust enrichment fall within the concern
of the contest in the one year statute
of recode for limitation?
-: It is a closer claim, granted, but it falls
within the same distinction, I think, of whether
the claim brought is one in rem or against the persons,
the defendants for damage remedies.
So I think that's a fundamental line that can be drawn
between the claims that seem to be addressed by the statute,
whatever it's attempting to do with regard
to the theme, rem of the trust, and (indistinct),
and damages against third parties on common law theories,
which are more directly addressed
under the statutes in chapter 260.
-: Is there any explanation to that comment besides,
you've listened the sentence or two that's in the comment.
Is there anything more that,
did they explain the reasoning in that comment?
I haven't seen, I haven't gone back to the comment.
-: I've seen, Your Honor.
-: Is there any commentary on the comment out there?
-: Not that I've seen other than what I'm attempting
to provide today, nothing written.
-: So why is Michigan, Missouri, DC, and Judge Feely wrong?
-: I think on a plain language basis,
the statute means what it says.
Apart from the kind of rather concerning permissive language
that is adopted here, in contrast
to the recognized statutes of limitation in the common law,
this is not a claim that involves the validity of the trust
for the reasons that have been argued.
So it's wrong, because it kind of jumps to the conclusion
without looking at the points in between
as far as how to get there.
This is not, and those were not entirely actions
to assert the validity of the trust, but damages
the common law claims, claims for damages
on common law theories.
I would highlight to the court, not only the distinction
in the language used in section 604, the permissive language
contrasting the recognized statutes of limitation
and statutes of repose, and reflect on the difference,
and what meaning should be attributed to the difference
in the language chosen between the permissive
and the definitive.
Looked at more broadly, I've reflected on the court citation
last year in Del Sandro to kind of the general rule
of statutory construction, citing Galinsky and Irving,
that in that a statute must be interpreted according
to the intent of the legislature, ascertained
from its words, construed by the ordinary
and prudent usage of the language.
We've been through that in our discussion.
Considered in with the cause of its enactment,
the mischief or imperfection to be remedied,
and the main object to be accomplished to the end
of the purpose of the framers may be effectuated.
The question then, looking at the statute more broadly,
and again, my contention is that the statute has
no application to the common law claims for damages.
But looked at more broadly,
what is the main object of section 604?
The main object, and I suggest this, and I don't have
any reading or comments to cite the court to,
but the main object, when you look at the statute
as a whole, and we've only focused on paragraph 81,
it goes on through paragraph C, but the main I object,
I would suggest, appears to be to provide certainty
in trust administration, and limit the liability
of the trustee, of the trustee only,
for distribution of trust assets.
Interestingly, paragraph A2, we've been talking about A1.
Paragraph A2 establishes something kind of unique
in that it's a statutory option for settlor's amendment
of a contested trust following notice.
If someone wished to provide notice of an amendment,
or a revocable trust, there's a 60 day clock that runs,
which would create the certainty in administration
of allowing a settlor to address something raised.
That seems to be a main object
to be accomplished through this.
The balance, paragraph B addresses the liability,
or limits of liability of the trustee, only the trustee.
Paragraph C is the only provision that concerns liability
of persons other than trustees in the statute,
and that is not a limitation of liability,
but an expansion of liability.
Paragraph C provides that a beneficiary of a trust
that is determined to have been invalid shall be liable
to return any distributions received, regardless,
apparently regardless of whether
the trustee was liable under paragraph B.
Nothing earth-shaking about that, but it is noteworthy
in that that is the only part of this paragraph,
or the, you know, part of this, this statute, section 604,
that purports to address liability in any way,
and that is not as a limitation of liability, but only
as an affirmative statement that there is a liability.
-: When's the earliest your clients could have known
what was going on?
-: Could have known, given the family dynamic, Your Honor,
I'm not sure of when they could have known
as a practical matter, I can't answer that.
-: How about as a legal matter?
When is it that they could have known?
Sam: Well, I mean-
-: When there was a probate?
-: Looked at in the broadest sense, they could have known
if someone told them after it had been changed.
So revocable trusts are kind of inherently private, unless-
-: Yeah, but Nancy doesn't want to let them know.
So when is it, when would they be able to know
when they, because it went through probate, right?
Sam: The-
-: How the fit was funding the trust?
-: I don't believe this went through probate,
because the assets went through the trust.
So there was nothing, if I'm my memory serves,
I would stand to be corrected, there was no probate estate
for the settlor, his wife survived, and it was upon
the wife's probate that this was discovered.
That doesn't exactly answer the question
when could they have known,
but that's when things came to a head.
It was, all the assets passed through the trust.
There was no probate in this particular case,
and this issue came to light upon her death.
-: Can I just ask one last question for me anyway,
subsection C that you just read, how do you square that
with allowing an unjust enrichment claim out of time?
-: It doesn't purport to be the exclusive remedy.
It provides that a circumstance where they are liable.
It doesn't say anything about it being an exclusive remedy.
Court Official: Any further questions?
Thank you, Sam.
Sam: Thank you.
Court Official: Counsel?
-: Good morning or good afternoon.
My name's Marty Moroshigan.
I represent the defendants, all of the sisters of,
that are all named as defendants in this matter, the-
Court Official: Can you talk a little louder?
-: Okay.
The one thing I want to clear up one of the judges asked was
when did they, they earliest they could have known.
In the addendum, in our brief is a Xerox
of the probate proceeding of Karen.
So Aaron died in 2017, and the docket is there.
So as an heir, the earliest they would have known
would have been in the 2017 probate.
If I may, Your Honor, as the, this is an appeal
from a decision of the superior court, dismissing the claims
asserted by the children of one of the siblings
of Aaron Sachs, the two children and Matthew and Rebecca,
the four defendants are sisters.
-: Counsel, can I ask you to specifically address
the comment, and the line in the comment that says
that an action against a beneficiary
for intentional interference not being a contest is not
subject to this section?
-: Yes, I can.
If you look at this, first of all, this isn't a statue.
This is just a national organization that submitted
something, and I didn't see it anywhere
in the Massachusetts legislative history,
but the prior sentence says a contest is an action
to invalidate all or part of the trust.
That is what's going on here, despite the artful drafting
that if it's not-
-: That was what's definitely was asked for in count one,
when they sought rescission, but they dropped that count.
-: Oh, they, the contest is all the other counts as well,
because the remedy they're seeking.
I mean, they're arguing a lot about damages,
but if you look at the remedies they're seeking,
they're seeking a rescission still of the amendment.
-: [Justice Wendlandt] Well, that one's out.
-: Yeah, well, that's the only way they can recover
under the theory that they've-
-: Well, no, they can go after the aunts
for intentional interference
as a standalone claim.
-: The other aspect is that the, they're seeking
an enforcement of the original trust.
-: But are you talking, counsel,
about the actual pleading right now?
Like what was complained in the pleading?
So what relief was requested the pleading?
-: There's four prayers for relief.
-: [Justice Wendlandt] All right.
-: One is rescission.
-: [Justice Wendlandt] Right.
-: That's in the amended complaint, even, so that's
still there, they haven't taken that out.
The second is enforcement of the 2011 trust
according to its terms.
The third is to prevent the four sisters from recovering
in excess of the 20% allocation
toward the sisters in the 2011 trust.
And then the fourth makes a claim indicating that there's
damages against Sheila and Nancy
in the amount of their damages.
-: And wait, what about the damages?
-: Just in the amount of their damages,
but the damages all relate back and refer to the trust.
-: All right, but if I accept that,
if we just say the count on rescission is out,
so that takes out the first three prayers of relief,
doesn't it, and leaves us with number four, no?
-: Not necessarily, Your Honor.
The gist of this claim, and then the case will show this is
that they have essentially taken a trust contest,
and they're seeking to knock out the first portion
of the amended trust, and they're seeking to enforce
the underlying trust.
The damages that they're seeking just happen to be
identical to what would have been requested
in the 2011 trust.
-: But this isn't a distinction
without a difference though, right?
Because if you go back to justice Wendlandt's comment,
assume that the rescission is an in rem proceeding, right?
And so let's just say that that's out, and so now
there's no cause of action and no claim against the trustee.
And let's say the trustee then disperses the money
the way that the trust was as amended, okay?
So now everybody's got arguably more than they would have
if it were a distributed the way it was the way
that the plaintiffs would like it to see.
So now every, all the sisters now have the money, right?
So now under their theory, that's now in personam,
they will try to go and disgorge from the sisters,
what they received from the trustee.
So isn't that a very different set of circumstances?
-: That subsection C relates to if the, if you ever read,
you can't just read C in isolation.
You have to look at the paragraphs before.
That section states that if a trustee distributes
the funds, and it turns out to be in error,
the beneficiary is liable not to the claimants,
the beneficiary is liable back to the trustee,
because the argument is the trustee gave out
these funds when they, if they knew about a claim.
If right now, if Miss Dysinger had said,
"Oh, I don't care about the claim.
I'm going to cut checks to all my sisters,
and if the claim prevails,
they'll have to give you the money back."
Good luck getting that money back.
Justice Georges: Sure.
-: But the point of that C is if there's a distribution
by the trustee, because the beneficiaries rely
on the trustee, we can call it in person, call it in rem.
-: Yeah, but hold on for a second though,
but let's just say that that's the case,
and then it's fully vindicated, and it's found that
they should not have distributed the money
to those beneficiaries, and now the money then,
in concept, goes back to the trustee.
What does the trustee do with it?
-: What's the trustee doing with what?
-: With the money that's returned?
-: Most of the expense, if it was distributed in error,
it would have to go through the expense of chasing each
of her three sisters down, and sending them a letter saying,
please pay me the money.
-: No, no, no, I'm past that.
It's been turned back.
What does the trustee do with the money?
-: It would have to be subject to the decision of the court,
whatever the court decides.
-: And conceivably, it could go to-
-: Conceivably, yes.
-: Right, conceivably, it can go back to the children, right?
-: We're losing sight of one thing.
This section 203 is a revocable trust is a modern,
it's like a will substitute.
What you're seeing more and more is that people create
a will, the money upon death pours over into the trust.
So if we are to look at the trust in the context
of the estate administration, you're looking
for clear language, you're looking for finality.
If you allow the remedy that they're seeking,
what you're telling these trusts, whether the trustee,
whether the beneficiary, whether a co-trustee,
or otherwise, you're telling them you are at risk
of a three year statute of limitations for tort,
or you are at risk for a six year statute
of limitation for contract.
If a trustee came to me and said, "What should I do?"
My suggestion would be you have a risk of three years
or six years to be sued.
-: The trustee doesn't, the beneficiaries do.
Marty: Of course there's that risk.
-: No, no, no. The rescission's out.
This is an in personam action against the beneficiaries
of the trust, it's not the trustee.
-: Well, that's the artful way of paraphrasing it.
-: Well, wait, wait, wait, wait, artful?
I mean, there's, I mean, it's a complaint,
isn't it against them as individuals too, right?
Marty: There's a reason it's against
them as individuals.
-: Right.
Marty: They knew they were past the one year deadline.
That's the reason.
-: And also there's a count
in there against them as individuals.
And if, suppose they did not even bother with the trust?
Suppose the plaintiff just said, "Forget the trust,
I'm just really mad at my aunts.
They interfered with my life, and so I'm suing them
regardless of what, I'm not even touching the trust.
I didn't file anything about the trust."
Wouldn't that complaint stand?
-: Not in the, no.
Judge Cypher: No, why not?
-: What they're trying to accomplish here, and the gist
of the allegations are, I mean, it's phrased, excuse me.
It's phrased well, in the sense that,
well, let's avoid the trust.
Let's sue the individual beneficiaries,
one of which happens to be the trustee.
Once that trustee, who's also a beneficiary knows
of the claim, she can't make any distributions,
because she's at risk.
-: Well, suppose wait until after the distribution,
she's still at risk, right?
Court Official: Right.
-: I mean, she's at risk for her behavior with her relatives,
not at risk because she's trustee.
-: No, she's, I disagree with that.
The claims, even though they, as you say,
they're in personam, but the claim,
the essence of the claims, isn't the personam claim.
It's essentially to knock out-
-: So then any complaint, and I want to make sure
I totally get this trust area, any complaint that has
in it somewhere, some one of the defendants,
there's a trust issue somewhere, but even though
it's not pled, maybe it's a complaint again
for contract, or delivery of services, whatever it is.
If there's some kind of underlying trust issue in there,
it all has to be resolved through the trust?
-: But if the, the will, the way it's set up is
everything pours into the will, and then from there,
if you had a will contest, you'd have to go in
to the probate court, make your claim within a year,
and this is no different.
All we're doing is we're taking the assets,
and transferring them from the probate court,
shifting it over to the trust,
and then letting the trustee make the distributions.
Judge Cypher: Well, that's not what I meant,
but nevermind.
Court Official: So what do we-
-: We can't have a situation where-
Court Official: Can I get you-
-: The claims against the personal representative,
there's a one-year limitations period.
So what you're saying is if I'm forming a trust,
and the trust then, if that becomes a subject to challenge,
not to the trust, I'm going to sue
the individual beneficiaries, you have now skirted
the one year limitations period in probate court,
and you skirted the one-year limitations in 203E.
Every court, there haven't been many rulings
on this as a relatively new statute,
but every court in South Dakota, and Missouri, and others
that are cited in the brief has found in our favor,
in favor of knocking out the trust,
and denying the claim.
-: Can I, I get you on all of that, and I actually thought
you were right, but I'm very bothered by the comment,
because the comment, you can't just dismiss the comment,
because they're the model drafters
of the act who wrote that comment, right?
They're not a bunch of, you know,
they're not some stray law review out there.
They're the people who wrote this act.
So tell me what they meant, because we adopt
their act pretty much verbatim, don't we?
Marty: I believe we did, but if you look at-
-: Okay, so we've got the authors of the act
that we're adopting verbatim.
The legislature is not a bunch of probate lawyers.
We gotta come to terms with this comment, so tell us
what we do with it, and why it's,
just ignoring it's not gonna help.
-: Well two things, one, you have to look
at the statutory language first.
-: I've looked at the language,
and your brother argues as follows.
You're allowing the trust to be, to go through the process.
You're suing under a different cause of action,
it has different standards of proof.
And again, I'm bothered by all the points you make,
which is, it seems like we're just having the same fight
without the statute of limitations,
and wiping out the statute of limitations.
But it's just the guys who wrote the act said this,
so it's like, weird, and I need help.
-: If I may, if you look at the sentence before,
I think I mentioned this, I'll mention it again,
it defines what a contest is.
That's precisely what's going on here.
Without, in order to get to the beneficiaries,
you have to have some decreased-
-: The contest- the contest- the contest-
No, there is another way because a contest is a term of art,
but a lawsuit, a tortious interference claim is not
a contesting the will directly, it's a cause of action.
It's different, right?
I mean, it may be the exact same, and that's what's
bothersome, but it's different semantically.
-: Along those lines, along Justice Kafker's lines,
can you address the holding in Marshall versus Marshall
from the U.S. Supreme court,
and how they applied these concepts in that case?
Marty: Which case was this?
-: Marshall versus Marshall from 2006?
Marty: I don't recall seeing that case.
-: Okay, that's one where the Supreme Court clarified
the probate, what's called the probate exception
to federal jurisdiction.
They reversed the ninth circuit,
where the ninth circuit had held basically that
they could not bring a tort claim,
because it was too related to the trust.
But the court said they reversed it, and said
the plaintiff's tortious interference claim is
a widely recognized tort that does not involve
the administration of an estate probate of a will,
or other purely probate matter.
So they let that claim go through as unrelated.
It's, I don't see the difference.
-: Well, I haven't read the case, Your Honor,
but I can tell you that the cases that we've cited
in the brief, and the Harvey versus Newman case,
the one that we discovered just recently,
also a Superior Court case, I believe he touches on that.
And if you look at the gist of what they're doing,
which is the critical point, the gist of what they're
trying to do is invalidate the trust arguments,
and turn this into a action against the individual.
The courts on the analyze section 203E,
chapter 203E have rejected that proposition,
and I'm asking that this court also reject that proposition,
and uphold the decision of the Superior Court dismissing
the entire claims filed by the plaintiffs in this matter.
Judge Cypher: Thank you.
Court Official: Any further questions?
Thank you.
Court Official: Thank you, counsel.
Court Official: All rise.
Hear ye, hear ye, hear ye.
(indistinct)
This court is now adjourned,
so says the Commonwealth of Massachusetts.