Opinion
15-P-1086
05-06-2016
NATIONAL LUMBER COMPANY v. BRYAN E. LAUZON & another, trustees, & others.
NOTICE: Summary decisions issued by the Appeals Court pursuant to its rule 1:28, as amended by 73 Mass. App. Ct. 1001 (2009), are primarily directed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, such decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 1:28 issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260 n.4 (2008).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The plaintiff, National Lumber Company (National), appeals from the dismissal, after a bench trial, of the fifth count of its complaint. Count V sought to reach and apply defendant Bryan E. Lauzon's interest in a residential property held by Borderland Realty Trust (trust), of which Lauzon was a cotrustee. See G. L. c. 214, § 3(6). We affirm.
Count I (in rem) was dismissed after a trial. Counts II-IV were dismissed without prejudice as a result of Lauzon's bankruptcy filing. No issue is raised in this appeal about these counts.
Lauzon and James M. Grimes were in the business of acquiring, improving, and selling residential properties for profit. In 2008, Lauzon and Grimes established the trust, of which they were cotrustees and their respective wives, the interveners, were the named beneficiaries. The trust instrument granted Lauzon and Grimes, as trustees, substantial powers, including the power to "transfer, sell, mortgage, and otherwise dispose of all or any part of the Trust property" without the named beneficiaries' consent and the power to terminate the trust with notice to the beneficiaries. Regardless of the breadth of the trustees' powers under the trust, they could only be exercised for the benefit of the beneficiaries. The trust instrument provided that "any and all property and interest in property" in the trust was to be held "for the sole benefit of" the named beneficiaries. At the time relevant to this case, the trust held a property on Priscilla Mullens Way in Carver (trust property).
Pursuant to an agreement between National and the trust's named beneficiaries, the trust property has been sold to a third party and $90,000 of the proceeds from that sale are held in escrow pending disposition of this appeal.
Lauzon was the sole stockholder and president of Pride & Quality Construction, Inc. (Pride). In 2008, National supplied lumber and building materials to Pride on credit, and Lauzon personally and unconditionally guaranteed payment. Pride subsequently failed to satisfy its obligations to National, and National brought the underlying suit seeking, among other things, to reach and apply the trust property. After a bench trial, the judge found in Lauzon's favor and dismissed the reach and apply claim. We accept the judge's findings of fact "'unless they are clearly erroneous' and '[w]e review the judge's legal conclusions de novo.'" Cavadi v. DeYeso, 458 Mass. 615, 624 (2011), quoting from T.W. Nickerson, Inc. v. Fleet Natl. Bank, 456 Mass. 562, 569 (2010).
National argues that Lauzon's powers as trustee under the trust instrument were so extensive as to effectively give him a beneficial or ownership interest in the trust property. The trust, National contends, was a discretionary inter vivos trust controlled by Lauzon and Grimes. See State St. Bank & Trust Co. v. Reiser, 7 Mass. App. Ct. 633, 633-634 (1979). It is true that "[w]hen a person creates for his own benefit a trust for support or a discretionary trust, his creditors can reach the maximum amount which the trustee, under the terms of the trust, could pay to him or apply for his benefit." Id. at 636. But National failed to show, either as a matter of law or of fact, that the trust in this case was created for his benefit rather than for the benefit of the beneficiaries.
Although it is true that the trust's terms provided Lauzon and Grimes substantial powers as trustees, the trust instrument required that those powers to be exercised solely for the benefit of the beneficiaries. No provision of the trust permitted the trustees to apply any or all of the trust res to their own benefit. Thus, National's claim is defeated by the language of the trust instrument itself. By contrast, the cases National relies on, State St. Bank and Trust Co. v. Reiser, 7 Mass. App. Ct. 633, and Ware v. Gulda, 331 Mass. 68 (1954), involved trusts in which the assets could be disbursed for the settlor's benefit.
National argues, however, that regardless of the trust language, Lauzon's intent was to retain a beneficial interest in the trust res. This was a question of fact. "The intent with which a person acts is usually a question of fact . . . to be determined from his declarations, conduct and motive, and all the attending circumstances." Galotti v. United States Trust Co., 335 Mass. 496, 501 (1957), quoting from Casey v. Gallagher, 326 Mass. 746, 749 (1951). Here, the judge found that the evidence established that Lauzon and Grimes "established the Trust for the benefit of their spouses, who constituted the Trust's sole beneficiaries." National has not shown this finding to be clearly erroneous. Indeed, the evidence showed that the trustees had held and applied the trust res for the benefit of the beneficiaries. Specifically, proceeds from the sale of the trust property were disbursed to the beneficiaries -- not to Lauzon.
National also argues that the conveyance of the trust property gave rise to a resulting trust. However, the merits of a claim of resulting trust are not properly before us. In a motion in limine filed the day before trial, National sought leave to amend its complaint to add a claim for resulting trust, but the motion was denied on "grounds of undue delay and the amendment's futility." Thus, the only issue properly before us is whether the motion judge abused his discretion by denying the motion to amend. See Goulet v. Whitin Mach. Works, Inc., 399 Mass. 547, 549 (1987). No abuse of discretion appears. The motion was brought, as noted above, on the day before trial, and over four years after the filing of the complaint. National's motion gave no explanation for the delay. See Berman v. Alexander, 57 Mass. App. Ct. 181, 191 (2003) (finding that judge was within his discretion to deny motion to amend complaint as unduly delayed where motion was filed one month before trial). Since the judge could properly have denied the motion on the ground of undue delay alone, we need not reach the question of futility.
For the reasons set out above, the motion judge's dismissal of count V (reach and apply) of the complaint is affirmed.
Judgment affirmed.
By the Court (Grainger, Wolohojian & Maldonado, JJ.),
The panelists are listed in order of seniority. --------
/s/
Clerk Entered: May 6, 2016.