In Berkowitz v. Berkowitz, Civil Action No. 11-10483-DJC, 2012 U.S. Dist. LEXIS 31487 (D. Mass. March 9, 2012), the U.S. District Court denied a motion to dismiss a complaint alleging breach of an oral trust.
In 1998, Samuel Berkowitz gave a general power of attorney to his daughter Bonnie. One year later, he conveyed certain real estate to Bonnie, allegedly instructing her that if he were to die, then she was to use the value of the real estate to take care of his wife Barbara for her lifetime, and thereafter that Bonnie was to share the remaining value with her brother. Samuel characterized this as an "express oral trust" for the benefit of his wife for life, with the remainder for Bonnie's brother and Bonnie herself.
Over the next two or three years, there were a series of transfers by Bonnie involving accounts in Samuel's name, to which he acquiesced after-the-fact because he allegedly believed the transfers were initiated by Bonnie in furtherance of his wishes as expressed in the oral trust agreement.
In June 2008, Samuel asked Bonnie for an accounting of the oral trust assets. Bonnie repudiated holding any assets in trust for Samuel. He filed suit in March 2011, claiming breach of fiduciary duty and requesting an accounting. Bonnie filed a motion to dismiss the complaint on three grounds: (1) that the complaint fails to state a claim upon which relief can be granted; (2) that the breach of fiduciary duty claim is barred by the three-year statute of limitations; and (3) that this claim is also barred by the statute of frauds. The Court denied the motion.
The Court held that the complaint states an actionable claim for breach of fiduciary duty under the alleged oral trust. Quoting Cooney v. Montana, 347 Mass. 29, 34-35 (1964), the Court explained that "[t]o create an oral trust sufficient to impose a fiduciary duty on a would-be trustee, '[n]o particular form of words is necessary but the words employed must unequivocally show an intention that the legal estate be vested in one person to be held in some manner or for some purpose on behalf of another.'"
Regarding the statute of limitations defense, the Court took as true Samuel's allegation that Bonnie did not repudiate the trust until June 2008, and noted that a cause of action for breach of fiduciary duty does not accrue until the trustee repudiates the trust and the beneficiary has actual knowledge of the repudiation.
Finally, as to Bonnie's argument under the statute of frauds that agreements concerning the conveyance, sale or lease of property, and agreements establishing a legacy trust, must be in writing to be legally enforceable, the Court explained that the question of whether the statute of frauds applies is best answered at summary judgment or at trial on the basis of discovered facts.
Day Pitney Newsletter
Clifford Nichols wrote an article, "When Addressing Cybersecurity and Data Breach, Don't Forget eDiscovery," for New Jersey Law Journal. The article is about how companies should consider eDiscovery and litigation response issues when making policy or infrastructure changes to address cybersecurity and data breach risks.
Rick Sanders is quoted in an article, "Business Groups Encouraged by Legislators," in NJBIZ, which addresses political activity behind a bill to phase out New Jersey's estate tax. Under the bipartisan bill, the estate tax, which currently applies to inheritances valued at $675,000 or more, would be eliminated gradually over a five-year period. "It affects such a small part of the population," Sanders said. "It just strikes me as unusual that all of a sudden, this bill came. I think it's not coincidental that the governor was campaigning for president at the time he called for the repeal. For years and years, there's been proposals to increase the exemption to $1 million and it never got any traction in New Jersey."
Boston, Mass., January 20, 2016 – Day Pitney is pleased to announce Jillian Hirsch, a partner in Day Pitney’s Litigation Practice, has been selected as one of Massachusetts Lawyers Weekly’s 2015 Lawyers of the Year. Honorees were nominated by their colleagues, clients and other legal professionals for their outstanding professional accomplishments.
Boston, Mass. November 11, 2015 – Day Pitney is pleased to announce Leiha Macauley, a partner in Day Pitney’s Individual Clients Practice, has been selected as a 2015 Boston Rising Star by The National Law Journal.
Jillian Hirsch was quoted in an article, "Trust divisible in divorce despite possible new beneficiaries," in Massachusetts Lawyers Weekly. In the article, Hirsch, who represented the wife in the matter, explains why the Appeals Court's decision of Pfannenstiehl v. Pfannenstiehl is significant.
"It confirmed that an interest in a trust with an ascertainable standard--specifically one with a history of distributions woven into the fabric of the marriage--is a vested, presently enforceable interest and therefore properly included in a marital estate for purposes of equitable division of property in a divorce," she said.
Stamford, Conn., August 24, 2015 - Day Pitney is pleased to announce that 68 attorneys have been selected for inclusion in the 2016 Best Lawyers in America. Best Lawyers ranks lawyers through peer-review surveys, and has been published annually since 1983.