Estate of Ada Y. Greenblatt , 2014 Me. LEXIS 33 ( 2014 )

MAINE SUPREME JUDICIAL COURT Reporter of Decisions
Decision: 2014 ME 32
Docket: Lin-13-115
Argued: November 19, 2013
Decided: February 25, 2014
Panel: SAUFLEY, C.J., and ALEXANDER, LEVY, SILVER, MEAD, GORMAN, and
JABAR, JJ.
ESTATE OF ADA Y. GREENBLATT
JABAR, J.
[¶1] Mark Levine, a beneficiary of the Estate of Ada Greenblatt, appeals
from a judgment entered in the Lincoln County Probate Court (Berry, J.)
completing settlement of the estate and ordering him to pay attorney fees and costs
of part of the proceedings pursuant to M.R. Prob. P. 54(d). Levine argues that the
court erred in determining that the personal representatives of the estate did not
breach their fiduciary duties when they distributed a religious print valued at $100
to one of the beneficiaries who was also a personal representative. We affirm the
judgment.
I. BACKGROUND
[¶2] The evidence, viewed in the light most favorable to the court’s
judgment, supports the following findings of the Probate Court. See In re Estate of
Hunt, 2010 ME 23, ¶ 2, 990 A.2d 544.
[¶3] Ada Greenblatt died testate and without issue on December 19, 2008.
Ada’s will provides for two $10,000 bequests to charitable organizations and
2
specific bequests of $1,000 each to fourteen of her nieces and nephews. Ada’s will
further provides that the remainder of her estate was to be distributed to her
brothers, sisters, and sister-in-law in equal shares, or if they are deceased, to their
families, per stirpes. Ada’s will provides no further instructions on how to
distribute her residuary estate.
[¶4] Ada’s residuary estate consists primarily of real property and personal
property. Many of the personal property items do not have significant monetary
value but have sentimental value to members of the family. Ada designated two
personal representatives in her will: Owen Greenblatt, her brother, and Stephen
Singer,1 her nephew. The personal representatives opted to distribute the items of
personal property that had sentimental value in kind. To distribute these items, the
personal representatives provided the beneficiaries with a list of each item
including the item’s appraised value. From this list, the beneficiaries could then
select the items that they wanted in the order of their preference.
[¶5] Before sending the list to the beneficiaries, Ada’s only surviving
siblings, Owen and Riva Greenblatt, were given the opportunity to select items that
they wanted. The personal representatives did not inform the other residuary
beneficiaries that Owen and Riva would have the opportunity to select items before
1
Although the will appointed Ada’s brothers, Owen and Isear Greenblatt, as the two personal
representatives, Isear had predeceased Ada. Thus, the will appointed Stephen Singer as the successor
personal representative.
3
the remaining beneficiaries. Owen and Riva selected a few items from the list,
some of which were then marked as “unavailable” on the list, and the personal
representatives sent the list of items to the remaining beneficiaries.
[¶6] This dispute centers on the distribution of a single item of personal
property in Ada’s residuary estate, a mizrah (an ornamental religious print) valued
at $100. Owen selected the mizrah, but it was not marked as unavailable on the
list. Mark Levine, a residuary beneficiary of the estate,2 received the list of
personal property items to be distributed in kind, and he also selected the mizrah.
Levine was later informed that the mizrah was unavailable because Owen had
already selected it. Levine challenged the distribution of the mizrah, and he
responded with a three-page letter to the attorney for the Estate, alleging that Owen
had breached his fiduciary duties as a personal representative by taking the mizrah.
[¶7] After Levine sent the letter objecting to the distribution of personal
property, he did not participate in any further actions related to the distribution of
the estate’s property. Specifically, in order to distribute the estate’s real property
interests, the personal representatives asked each residuary beneficiary to sign a
waiver of notice and limited power of attorney so that they could sell the property.3
2
Levine is Ada Greenblatt’s nephew. He is a residuary beneficiary because his mother, Ada’s sister,
predeceased Ada.
3
Ada’s residuary estate also included her interest in her parents’ home, where Ada lived before her
death. After Ada’s parents died, Ada and her siblings received equal interests in the home. Thus, in
4
Levine declined to sign the documents and refused to respond to further requests to
participate in a sale. Accordingly, the personal representatives filed a petition to
partition the proceeds from the sale of the home. See 18-A M.R.S. § 3-911 (2013).
After at least eight attempts at serving Levine, the summons and complaint for the
partition action was posted to the door of his home. Levine failed to file a
responsive pleading and did not appear at the hearing. On October 26, 2011, the
Superior Court entered a default judgment partitioning the proceeds from the sale
of the real property.
[¶8] After the sale of the real property and court-ordered partition of the
proceeds, the personal representatives petitioned the Probate Court for an order
completing settlement of the estate. See 18-A M.R.S. § 3-1001 (2013). Levine
opposed the petition, claiming that Owen Greenblatt breached his fiduciary duty to
the estate by taking the mizrah. Further, Levine argued that because the personal
representatives breached their fiduciary duties, the court should not allow the
personal representatives to be reimbursed for legal fees with estate funds. See
18-A M.R.S. § 3-720 (2013).
[¶9] The court entered a judgment completing settlement of the estate after
making “minor adjustments” to the personal representatives’ accounting of the
addition to being residuary beneficiaries to Ada’s estate, Ada’s siblings and their heirs were also partial
owners of the home in Bath.
5
estate’s expenses. With respect to Levine’s allegations of a breach of fiduciary
duty, the court found that although the distribution of personal property was “not
perfect,” it was “not improper.”
[¶10] Further, the court granted the Estate’s request for costs and attorney
fees with respect to the partition action, finding that Levine’s failure to cooperate
in the sale of the estate’s real property resulted in the “needless . . . filing [of] the
expensive partition action that only accomplished what would have been achieved
if [Levine] . . . had simply signed and returned the waivers and powers [o]f
attorney.” See Estate of McCormick, 2001 ME 24, ¶ 25 n.10, 765 A.2d 552
(discussing sanctions for the filing of a “frivolous or malicious claim or
objection”); M.R. Prob. P. 54(d). Levine timely appealed. See M.R.
App. P. 2(b)(3).
II. DISCUSSION
[¶11] Levine argues that although the court found that the distribution
scheme was “not improper,” it erred in failing to conclude that Owen breached his
fiduciary duty as a personal representative in distributing the mizrah to himself.
[¶12] “When an order of the Probate Court is appealed, we defer to the
Probate Court on factual findings unless they are clearly erroneous, but we review
de novo the application of the law to the facts.” Estate of Horne, 2003 ME 73,
¶ 17, 822 A.2d 1177. Personal representatives of an estate are fiduciaries, and
6
pursuant to 18-A M.R.S. § 3-703(a) (2013), they must observe the same standards
of care that apply to trustees of an express trust as set out in specified provisions of
the Maine Uniform Trust Code. See 18-B M.R.S. §§ 802-803, 805-807 (2013).
Among the standards of care that apply to personal representatives are the duties of
loyalty and impartiality. See 18-A M.R.S. § 3-703(a) (citing 18-B M.R.S.
§§ 802-803).
[¶13] Although Levine argues that Owen breached the duty of loyalty, he
does not allege that Owen took any action that was not “solely in the interests of
the beneficiaries.” See 18-B M.R.S. § 802(1). Rather, Levine argues that the
personal representatives treated some beneficiaries more favorably than they
treated others. Thus, we proceed to analyze whether the personal representatives’
actions violated the duty of impartiality pursuant to 18-B M.R.S. § 803.
[¶14] The duty of impartiality generally applies if there are two or more
beneficiaries with interests in an estate, and it requires a personal representative to
“act impartially in . . . managing and distributing the [estate] property, giving due
regard to the beneficiaries’ respective interests.” Id. In other words, the personal
representative “represents all the beneficiaries under the will and, in so doing, must
adopt a neutral position respecting their conflicting claims.” Desmond v. Persina,
381 A.2d 633, 638 (Me. 1978). Further, the duty of impartiality includes a
restriction that “the executor may not take sides in the adjudication of the
7
individual claims of beneficiaries one against another.” In re Estate of Morine,
363 A.2d 700, 704 (Me. 1976).
[¶15] However, with respect to the scope of a duty of impartiality:
It would be overly simplistic, and therefore misleading, to equate
impartiality with some concept of “equality” of treatment or
concern—that is, to assume that the interests of all beneficiaries have
the same priority and are entitled to the same weight in the trustee’s
balancing of those interests.
Restatement (Third) of Trusts § 79 cmt. b (2007). Similarly, the comment to
section 803 of the Uniform Trust Code, on which the Legislature based
18-B M.R.S. § 803,4 states: “The duty to act impartially does not mean that the
trustee must treat the beneficiaries equally. Rather, the trustee must treat the
beneficiaries equitably in light of the purposes and terms of the trust.” Unif. Trust
Code § 803 cmt., included with 18-B M.R.S.A. § 803 (2012). In sum, “it is the
trustee’s duty, reasonably and without personal bias, to seek to ascertain and to
give effect to the rights and priorities of the various beneficiaries or purposes as
expressed or implied by the terms of the trust.” Restatement (Third) of Trusts § 79
cmt. b. If the will appoints a beneficiary to serve as a personal representative, we
note that the personal representative does not automatically breach a fiduciary duty
by distributing assets to himself or herself as a beneficiary. See generally
Restatement (Third) of Trusts §§ 78 cmt. c(2), 79 cmt. b(1) (2007).
4
See L.D. 921, Summary (121st Legis. 2004) (adopting the revised Uniform Trust Code).
8
[¶16] It is undisputed that the personal representatives in this case had the
discretion to determine how to distribute the residuary assets. See 18-A M.R.S.
§ 3-906(a)(4) (2013) (“Residuary assets may be distributed, at the personal
representative’s discretion, in pro rata or non pro rata shares.”). When the will
confers discretion on the personal representatives, we defer to the decisions of the
personal representatives, absent an abuse of their discretion. See Alford v.
Richardson, 120 Me. 316, 321-24, 114 A. 193 (1921) (“[When a] will invests the
trustee with the right to use his discretion . . . [s]o long as he acts within his power,
honestly and in good faith, his determination is conclusive.”); see also Wight v.
Mason, 134 Me. 52, 59-61, 180 A. 917 (1935); Restatement (Third) of Trusts § 50
cmt. b (2003). The will did not provide specific instructions on how to distribute
the residuary assets, and the Probate Code provides only minimal guidance, stating
that personal representatives shall distribute the residuary assets of the estate “in
accordance with the best interests of the residuary devisees.” 18-A M.R.S.
§ 3-906(a)(4).
[¶17] Here, in distributing the residuary assets, the personal representatives
created a thirteen-page list of personal property items that they determined had
sentimental value to the residuary beneficiaries. The personal representatives
complied with section 3-906(a)(4), which permits them to distribute property in
9
kind to the beneficiaries, in a non pro rata share, if the items are “valued as of the
date on which they are distributed.”
[¶18] Then, the personal representatives gave Ada’s only surviving siblings,
Owen and Riva, the opportunity to select items before distributing the list of items
to the remaining residuary beneficiaries. The items to be distributed in kind were
primarily items that originally belonged to Owen and Ada’s parents—Levine’s
grandparents. Owen testified that the personal representatives determined that
each of the residuary beneficiaries “should have a chance to retain some memento
from Ada, and by extension [Owen and Ada’s] parents.”
[¶19] It was reasonable and consistent with the best interests of the
beneficiaries for the personal representatives to determine that the surviving family
members in the nearest degree of kinship to Ada’s parents, who had grown up in
the home with those items, should have the opportunity to select among the items
before giving the same opportunity to the remaining residuary beneficiaries. See
id.; Restatement (Third) of Trusts § 79 cmt. b. Further, the evidence in the record
indicates that when the personal representatives created the plan, and when Owen
selected the mizrah, he was unaware that any other beneficiary wanted the item.
Thus, the evidence supports the court’s implicit finding that Owen was not
motivated by a personal bias. See Restatement (Third) of Trusts § 79 cmt. b.
10
[¶20] The mizrah was valued at $100, and Owen offset his remaining
residuary interest in the estate by that amount. Thus, the in-kind distributions did
not alter the proportionate shares of the estate that each residuary beneficiary
ultimately received. Because this distribution scheme and Owen’s selection of the
mizrah was not an abuse of the personal representatives’ discretion and, thus, did
not violate the fiduciary duty of impartiality, we decline to disturb the Probate
Court’s determination that the personal representatives’ actions were “not
improper.”5
The entry is:
Judgment affirmed and motion for sanctions
denied.
______________________________________
On the briefs and at oral argument:
Nicholas H. Walsh, Esq., Nicholas H. Wash P.A., Portland, for
appellant Mark Levine
Noreen A. Patient, Esq., Eaton Peabody, Brunswick, for
appellees Owen Greenblatt and Stephen Singer
Lincoln County Probate Court docket number 2012-0191
FOR CLERK REFERENCE ONLY
5
The estate has also filed a motion pursuant to M.R. App. P. 13(f) for treble costs and reasonable
expenses, arguing that Levine’s contentions on appeal are frivolous and made with no reasonable
likelihood of success. Because this appeal does not lack merit, we decline to award sanctions. Cf. Estate
of Dineen, 2006 ME 108, ¶ 8, 904 A.2d 417.
11