|In Sacchetti v. Sacchetti, Case No. 10-P-2200, 2012 Mass. App. Unpub. LEXIS 1000 (Sept. 24, 2012), a decision issued pursuant to Rule 1:28, the Appeals Court addressed cross-appeals from a judgment following the eleven-day trial of a dispute between father and son concerning the father’s assets. |
Evo Sacchetti and his wife Lynn relied on their son Kenneth Sacchetti for investment advice. According to that advice, Lynn listed Kenneth’s name as a joint tenant on some of her accounts to avoid probate. Following Lynn’s death in 1989, Kenneth claimed ownership of these joint accounts and promised to transfer them to Evo. Kenneth also assumed control of Evo's finances, who believed he could trust Kenneth in financial matters. When Evo suffered a stroke in 2008, however, Kenneth continued to claim ownership of the joint accounts with Lynn as well as certain accounts he held jointly with Evo, and also claimed a fifty-percent interest in the family home in Milton as a joint tenant with Evo with a right of survivorship. Evo subsequently filed suit in Superior Court against Kenneth for breach of fiduciary duty and other torts arising from Kenneth’s alleged manipulation of Evo's assets over a twenty-year period.
The Superior Court ruled in Evo’s favor, ordering Kenneth to reconvey title to the Milton home to Evo and to convey certain bank and brokerage accounts to Evo. Both parties appealed from the judgment. Evo appealed from the denial of his motion to make additional findings and to amend the judgment, which failed to require Kenneth to account for $1.1 million in withdrawals he had made from an account that was found to belong to Evo. Kenneth appealed from the denial of his motion for a new trial or to alter or amend the judgment, arguing that the statute of limitations had expired on some of Evo's claims and that the judge erred in concluding that Kenneth was not the owner of certain funds.
The Appeals Court affirmed in part (denying Kenneth’s request for a new trial or an amended judgment) and reversed in part (granting Evo’s request for additional relief).
Regarding Kenneth’s statute of limitations defense, the Court recited the well-settled principle that a cause of action for breach of trust or fiduciary duty does not accrue until the trustee repudiates the trust and the beneficiary has actual knowledge of that repudiation. The Court then held that the trial judge was not required to believe Kenneth's naked assertions that Evo “knew” of Kenneth's breach of fiduciary duty and thus that his claims had accrued and expired long ago. It was a question of credibility, and there was no error in the trial judge's conclusion that the statute of limitations did not begin to run until 2008, after Evo had suffered a stroke and his family and financial experts began to review his assets and discovered Kenneth's wrongdoing.
The Court also rejected Kenneth’s argument that the trial judge erred in concluding that Evo was entitled to the proceeds of the sale of "Kenneth's" Florida condominium because Evo’s name was not on the deed. Kenneth had not included the deed in the record, and thus there was no documentary support for Kenneth’s argument that Evo’s name was not on the deed. Moreover, even if it were true that Evo’s name was not on the deed, the Court explained that the evidence permitted the reasonable inference that it was Lynn's and/or Evo’s money that was used to purchase the condominium, and that the trial judge could properly deny Kenneth's contention that his parents intended to make a gift to him.
Regarding Evo’s argument that Kenneth should be liable to account for the $1.1 million he had withdrawn from Evo's account, the record reflected Kenneth’s concession that he had withdrawn the funds and deposited them into other accounts, including $989,000 into his own account with Weymouth Bank. Although the Court acknowledged that not all of the funds in the Weymouth Bank account derived from Evo's funds, the Court found this fact to be irrelevant. Kenneth had failed to demonstrate that the withdrawn funds were provided to or used for Evo's benefit, and so the Court ordered Kenneth to return the funds to Evo. The Court noted that it was not incumbent on Evo to prove that all of the funds in the Weymouth Bank account belonged to him, even though that account is a source from which Kenneth may repay the funds he withdrew.
This update was authored by Mark Swirbalus, a Director in the firm's Probate & Fiduciary Litigation group. For questions or additional information on this topic, please contact Mark at email@example.com or contact any member of the Probate & Fiduciary Litigation group.
This newsletter should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer concerning your situation and any specific legal questions you may have.
Pursuant to IRS Circular 230, please be advised that, this communication is not intended to be, was not written to be and cannot be used by any taxpayer for the purpose of (i) avoiding penalties under U.S. federal tax law or (ii) promoting, marketing or recommending to another taxpayer any transaction or matter addressed herein.
©2012 Goulston & Storrs – A Professional Corporation All Rights Reserved