DeGiacomo v. City of Quincy

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SJC-11940
JAMES R. DeGIACOMO, trustee,1 vs. CITY OF QUINCY & others.2
Suffolk. September 7, 2016. - November 15, 2016.
Present: Gants, C.J., Botsford, Lenk, Hines, Gaziano, Lowy, &
Budd, JJ.
Res Judicata. Collateral Estoppel. Judgment, Preclusive
effect. Trust, Charitable trust. Contract, Lease of real
estate, Rescission. Real Property, Lease. Fiduciary.
Attorney General.
Civil action commenced in the Supreme Judicial Court for
the county of Suffolk on February 19, 2014.
The case was heard by Spina, J., on motions for summary
judgment.
James R. DeGiacomo (Susan J. Baronoff with him) for the
plaintiff.
James S. Timmins, City Solicitor, for city of Quincy.
Barry S. Pollack (Phillip Rakhunov with him) for Quincy
Historical Society.
1
Of the Adams Temple and School Fund.
2
Quincy Historical Society; Attorney General, interested
party.
2
GANTS, C.J. In 1971, the city of Quincy (Quincy), as
trustee of the Adams Temple and School Fund (Adams Fund), filed
a "bill of complaint" in equity asking a single justice of the
Supreme Judicial Court to enter a decree authorizing it to
execute a proposed fifty-year lease of the building and parking
lot of the Adams Academy that it had negotiated with the Quincy
Historical Society (Society). The Attorney General was a
defendant in that action, but the Woodward School for Girls,
Inc. (Woodward School or School), which was the sole income
beneficiary of the Adams Fund, was not. In 1972, the single
justice decreed that Quincy was authorized to execute the
proposed lease. The successor trustee of the Adams Fund now
seeks rescission of that lease, as well as money damages and
restitution, claiming that Quincy violated its fiduciary duty of
loyalty by executing the lease approved by the single justice.
The issue presented on appeal is whether the successor
trustee of the Adams Fund is precluded by res judicata from
obtaining that relief. The successor trustee contends that he
should not be precluded because neither he nor the Woodward
School was a party to the equity proceeding in 1972, and the
School could not reasonably have intervened because it was not
given notice of the proposed lease or the filing of the
complaint. Quincy and the Society contend that preclusion is
appropriate because, where the Adams Fund is a public charitable
3
trust, the only necessary party to the equity proceeding was the
Attorney General, who was in privity with the School based on a
statutory responsibility under G. L. c. 12, § 8, to "prevent
breaches of trust" in the administration of public charities.
We conclude that the successor trustee is precluded by res
judicata from prevailing on his challenge to the execution of
the lease.
Background. The Adams Fund arose from the 1822 deed of
trust of former President John Adams, who deeded a portion of
his estate to the benefit of Quincy and its residents. The
history of the Fund is described in Woodward Sch. for Girls,
Inc. v. Quincy, 469 Mass. 151, 154-155 (2014) (Woodward School),
so we will recount here only those facts relevant to the
disposition of this appeal.
In 1953, this court decreed in an unpublished order that
the net income from the Adams Fund shall be paid "for the
conduct, operation, maintenance, management, and advancement" of
the Woodward School. The Woodward School remains the sole
income beneficiary of the Fund.
In 2007, the Woodward School filed a complaint and petition
for an accounting with a single justice of this court, and the
single justice transferred the case to the Norfolk County
Division of the Probate and Family Court Department. After the
issuance of a report by a special master and a bench trial, the
4
judge in February, 2011, entered findings of fact and an
"amended judgment and rationale," in which he concluded that
Quincy had failed as trustee to manage the Adams Fund in a
competent and prudent manner, and thus committed a breach of its
"primary duty" to maximize the income of the trust. Among other
relief, the judge removed Quincy as trustee and appointed the
plaintiff as successor trustee.3 The judge specifically found
that Quincy had committed a breach of its "duty of loyalty to
the Woodward School" when it petitioned the single justice for
approval of a fifty-year lease of the Adams Academy to the
Society for "nominal rent." The judge, however, did not order
that any action be taken regarding the lease, apart from
enjoining Quincy from negotiating any modification or extension
of the lease before the successor trustee had assumed
stewardship of the Adams Fund. We affirmed the amended judgment
as to liability but remanded the case to the Probate and Family
Court for recalculation of the damages. Id. at 180.
In February, 2014, the successor trustee filed a complaint
against Quincy and the Society in the county court, invoking
this court's equity authority under G. L. c. 214, § 1. The
complaint alleged that Quincy violated its fiduciary duty to the
3
The judge also ordered the city of Quincy (Quincy) to pay
$2,994,868 to the Adams Temple and School Fund (Adams Fund) for
its breach of fiduciary duty and directed Quincy to file an
accounting for the Adams Fund for the period from January 1,
2009, until the successor counsel commenced his stewardship.
5
Woodward School by failing to notify the School of its intention
to lease the Adams Academy and by leasing the property at a
rental price below market, and sought rescission of the lease
and money damages. The complaint also alleged that the Society
knowingly participated in Quincy's breach of fiduciary duty and,
therefore, was liable for restitution in the amount of its
unjust enrichment.
The plaintiff successor trustee moved for partial summary
judgment, claiming that he was entitled under the doctrine of
issue preclusion to a declaration that Quincy had committed a
breach of its fiduciary duty to the Woodward School with respect
to the lease, as had been found by the judge. The defendants,
Quincy and the Society, cross-moved for summary judgment,
claiming, among other grounds, that they were entitled to
judgment under the doctrine of res judicata because of the
judgment of the single justice in 1972 authorizing the execution
of the lease.
The single justice allowed the defendants' motions, denied
the plaintiff's motion, and entered judgment on behalf of the
defendants. The single justice concluded that "[t]he 1972
decree settles as a matter of res judicata the issue of whether
[Quincy] breached its duty of loyalty in executing the lease
with the Society. It did not." The single justice also
concluded that, because the judge made a "mistake of law" in
6
finding that Quincy had committed a breach of its fiduciary duty
of loyalty by petitioning this court for approval of the lease,
the judge's finding "can have no effect in the nature of
collateral estoppel for the current litigation." The successor
trustee appealed from the judgment to the full court, contending
that the single justice erred as a matter of law in concluding
that the defendants were entitled to judgment under the doctrine
of res judicata.4 We review the single justice's disposition of
a motion for summary judgment de novo. Miller v. Cotter, 448
Mass. 671, 676 (2007).
Discussion. The doctrine of res judicata is based on
"[c]onsiderations of fairness and the requirements of efficient
judicial administration," which "dictate that an opposing party
in a particular action as well as the court is entitled to be
free from attempts to relitigate the same claim." Wright Mach.
Corp. v. Seaman-Andwall Corp., 364 Mass. 683, 688 (1974). See
Biggio v. Magee, 272 Mass. 185, 188 (1930) ("the doctrine of res
judicata is a rule of public policy founded on the established
principle that it is in the interest of the parties and for the
public welfare that litigation once decided on its merits should
end").
4
The successor trustee does not challenge on appeal the
single justice's denial of his motion for partial summary
judgment.
7
Res judicata is now understood as a "generic term" that
describes two specific types of preclusion. Heacock v. Heacock,
402 Mass. 21, 23 n.2 (1988). "Claim preclusion makes a valid,
final judgment conclusive on the parties and their privies, and
prevents relitigation of all matters that were or could have
been adjudicated in the action." Kobrin v. Board of
Registration in Med., 444 Mass. 837, 843 (2005), quoting O'Neill
v. City Manager of Cambridge, 428 Mass. 257, 259 (1998).
"[C]laim preclusion requires three elements: '(1) the identity
or privity of the parties to the present and prior actions, (2)
identity of the cause of action, and (3) prior final judgment on
the merits.'" Kobrin, supra, quoting DaLuz v. Department of
Correction, 434 Mass. 40, 45 (2001).
"[I]ssue preclusion 'prevents relitigation of an issue
determined in an earlier action where the same issue arises in a
later action, based on a different claim, between the same
parties or [parties in privity with the same parties].'"
Kobrin, 444 Mass. at 843, quoting Heacock, 402 Mass. at 23 n.2.
A party is precluded from relitigating an issue where "(1) there
was a final judgment on the merits in the prior adjudication;
(2) the party against whom preclusion is asserted was a party
(or in privity with a party) to the prior adjudication; and (3)
the issue in the prior adjudication was identical to the issue
in the current adjudication," was essential to the earlier
8
judgment, and was actually litigated in the prior action.
Kobrin, supra, quoting Tuper v. North Adams Ambulance Serv.,
Inc., 428 Mass. 132, 134 (1998).
We focus on issue preclusion. Here, the first and third
elements are plainly satisfied: there was a final judgment on
the merits in the 1972 bill of complaint litigation, and the
essential issue in both cases is the same -- whether execution
of the lease of the Adams Academy to the Society constitutes a
breach of Quincy's fiduciary duty of loyalty. The dispute
concerns the second element.
The successor trustee essentially makes two arguments why
the second element is not satisfied in this case. First, he
claims that he was not a party to the 1972 litigation, because
he was not appointed until 2011, and that he should not be bound
by the adjudication of the earlier litigation because the
original trustee, Quincy, committed a breach of its fiduciary
duty of loyalty by seeking the decree it obtained. We need not
dwell long on this argument. We recognize that a successor
trustee may act on behalf of the beneficiaries in bringing a
claim of breach of fiduciary duty against the former trustee.
See O'Connor v. Redstone, 452 Mass. 537, 552 (2008). But the
adjudication in 1972 determined that Quincy did not commit a
breach of its fiduciary duty by seeking the decree, because the
single justice approved the execution of the lease proposed in
9
the decree. That adjudication arose from Quincy's exercise of
the long-established privilege of a trustee to seek directions
or approval of a proposed decision from a court in equity "to
protect the trustee from the risks of future liability or
controversy." See Putnam v. Collamore, 109 Mass. 509, 512
(1872). If such an adjudication did not bind a successor
trustee, then it would not protect the trustee from the risks of
future liability or controversy. See generally Restatement
(Second) of Judgments § 62 comment a (1982) ("a person standing
in one of a variety of pre-existing legal relationships with a
party may be bound by a judgment affecting that party"). The
principles of res judicata thus require that a final
adjudication remain binding on both the original parties and
their successors in interest. See Willett v. Webster, 337 Mass.
98, 101 (1958) (successors in interest are in privity with
predecessors and entitled to same preclusion defense). See also
Leslie v. LaPrade, 726 A.2d 1228, 1231 (D.C. 1999) (successor
trustee barred by res judicata from relitigating claims brought
previously by former trustee).
The successor trustee's second argument requires greater
attention. The successor trustee claims that he is acting on
behalf of the Adams Fund's sole income beneficiary, the Woodward
School, which was not a party in the 1972 litigation. He
contends that issue preclusion can be applied against the School
10
only if the Attorney General, who was a party, was in privity
with the School. There was no privity here, the successor
trustee claims, because the School had a special interest in the
terms of the lease separate from the general public interest
represented by the Attorney General. To explore this argument,
we must examine the meaning of privity, and then apply that
meaning to the law of charitable trust administration and the
oversight role of the Attorney General.
What this court said about privity in 1909 remains true
today: "[T]here is no generally prevailing definition of
privity which can be automatically applied to all cases." Old
Dominion Copper Mining & Smelting Co. v. Bigelow, 203 Mass. 159,
214 (1909), aff'd, 225 U.S. 111 (1912). See Jefferson Sch. of
Social Science v. Subversive Activities Control Bd., 331 F.2d
76, 83 (D.C. Cir. 1963) ("The term privity is an elusive
concept, without any precise definition of general
applicability"). Instead, privity is best understood simply as
a legal conclusion that follows from an analysis of the
relationship between the parties to a prior adjudication and the
party to be bound. See Southwest Airlines Co. v. Texas Int'l
Airlines, Inc., 546 F.2d 84, 95 (5th Cir.), cert. denied, 434
U.S. 832 (1977), quoting Vestal, Preclusion/Res Judicata
Variables: Parties, 50 Iowa L. Rev. 27 (1964) ("privity in
itself does not state a reason for either including or excluding
11
a person from the binding effect of a prior judgment, but rather
it represents a legal conclusion that the relationship between
the one who is a party on the record and the non-party is
sufficiently close to afford application of the principle of
preclusion").
In the context of this case, the determination whether a
nonparty is in privity with a party depends on the nature of the
nonparty's interest, whether that interest was adequately
represented by a party to the prior litigation, and whether
binding the nonparty to the judgment is consistent with due
process and common-law principles of fairness.5 See Parklane
Hosiery Co. v. Shore, 439 U.S. 322, 327 n.7 (1979) ("It is a
violation of due process for a judgment to be binding on a
litigant who was not a party or a privy and therefore has never
had an opportunity to be heard"); Hansberry v. Lee, 311 U.S. 32,
42 (1940) ("there [is] a failure of due process only in those
cases where it cannot be said that the procedure adopted . . .
fairly insures the protection of the interests of absent parties
who are to be bound by it"); Massachusetts Prop. Ins.
Underwriting Ass'n v. Norrington, 395 Mass. 751, 754 (1985),
5
We do not mean to suggest that this line of inquiry must
apply in all nonparty preclusion cases; some established grounds
for preclusion, such as preclusion based on a prior agreement,
do not require analysis as to the adequacy of representation.
See Taylor v. Sturgell, 553 U.S. 880, 894-895 (2008)
(identifying established grounds for nonparty preclusion under
Federal common law).
12
quoting Mongeau v. Boutelle, 10 Mass. App. Ct. 246, 249-150
(1980) ("A nonparty to a prior adjudication can be bound by it
'only where [the nonparty's] interest was represented by a party
to the prior litigation'"); Morganelli v. Building Inspector of
Canton, 7 Mass. App. Ct. 475, 481 (1979) (question of privity
"depends on the nature of the plaintiffs' interest, whether that
interest was represented in [the prior litigation], and whether
there are special circumstances or due process considerations
which make it unfair to bind the plaintiffs to that judgment").
To determine the nature of the Woodward School's interest
in the 1972 litigation, whether that interest was adequately
represented by the Attorney General, and whether binding the
School to the judgment is consistent with due process and
common-law principles of fairness, we need to look closely at
the law of charitable trusts. "A charitable trust, like a
private trust, is a fiduciary relationship." 5 A.W. Scott, W.F.
Fratcher, & M.L. Ascher, Scott and Ascher on Trusts § 37.1 at
2354 (5th ed. 2008) (Scott & Ascher). But whereas the trustee
of a private trust owes a fiduciary duty to manage trust
property "for the benefit of designated beneficiaries," "there
are ordinarily no definite beneficiaries" in a charitable trust.
Id. at 2354-2355. Rather, a charitable trust must provide some
benefit to "either the public at large . . . or an indefinite
class of persons." Kent v. Durham, 142 Mass. 216, 217 (1886).
13
A charitable trust is created for the benefit of "a broader
community." Weaver v. Wood, 425 Mass. 270, 275 (1997), cert.
denied, 522 U.S. 1049 (1998). It serves "to the greatest
possible extent the public as the ultimate beneficiary."
Attorney Gen. v. President & Fellows of Harvard College, 350
Mass. 125, 137 (1966). See generally Restatement (Second) of
Trusts § 348 comment a (1959) (in charitable trust, "there need
not be and ordinarily is not a definite beneficiary . . . , and
the trustee is ordinarily not in a fiduciary relation to any
specific person"). The designee of the charitable trust's
income is not deemed the true beneficiary of the trust but
instead the "conduit" of the trust's over-all charitable
mission. G.G. Bogert & G.T. Bogert, The Law of Trusts and
Trustees § 363 (rev. 2d ed. 1991).
Where a trustee of a private trust seeks direction or
approval from a court in a matter that may adversely affect the
rights of beneficiaries in the corpus of a trust, the designated
beneficiaries must be parties to the action, and be given notice
and an opportunity to be heard. See Shirk v. Walker, 298 Mass.
251, 262 (1937); Lincoln v. Aldrich, 141 Mass. 342, 342 (1886).
But, because a charitable trust has a charitable mission rather
than designated beneficiaries, our law recognizes the Attorney
General as the appropriate party to "enforce the due application
of funds given or appropriated to public charities within the
14
commonwealth and prevent breaches of trust in the administration
thereof." G. L. c. 12, § 8. See Scott & Ascher, supra at
§ 37.3.1, at 2403 (chief difference between duties of trustee of
charitable trust and duties of trustee of private trust "is that
the duties of the trustee of a charitable trust are not
ordinarily enforceable by specific beneficiaries; instead, they
are enforced by the Attorney General").
It has long been established, under both our common law and
§ 8, that "[t]he duty of taking action to protect public
charitable trusts and to enforce proper application of their
funds rests solely upon the Attorney General as the
representative of the public interests." Ames v. Attorney Gen.,
332 Mass. 246, 250 (1955). The Attorney General is a required
party in all judicial proceedings concerning charitable trusts.
G. L. c. 12, § 8G. And our decisions have frequently described
the Attorney General's special responsibility to ensure the
proper administration of charitable trusts. See, e.g., Trustees
of Dartmouth College v. Quincy, 331 Mass. 219, 225 (1954) ("It
is ordinarily the exclusive function of the Attorney General to
see that [a charitable trust established for the benefit of the
public] is properly administered"); Dillaway v. Burton, 256
Mass. 568, 573 (1926) ("It is well settled that it is the
exclusive function of the Attorney General to correct abuses in
the administration of a public charity by the institution of
15
proper proceedings"). In short, the Attorney General serves as
the guardian of the public interest with respect to charitable
trusts and, when a trustee seeks direction or approval of the
court, we expect the Attorney General's recommendation to be
furnished after due diligence and careful consideration. See
Dillaway, supra at 575 ("The power and duty delegated to the
Attorney General to enforce the proper application of charitable
funds are a recognition by the Legislature . . . of his fitness
as a representative of the public in cases of this kind").
Although our case law is replete with cases declaring that
the Attorney General is the only person with standing to bring
an action to correct abuses in the administration of a
charitable trust, it is more accurate to declare that the
Attorney General is the only person apart from a trustee who, on
behalf of the general public served by the trust's charitable
mission, has standing to bring such an action. See In re Boston
Regional Med. Ctr., 328 F. Supp. 2d 130, 147 (D. Mass. 2004),
citing W.F. Fratcher, Scott on Trusts § 391, at 364-365 (4th ed.
1989). Under the law of charitable trusts, a private plaintiff
also has standing to bring claims against a public charity where
the plaintiff "asserts an individual interest in the charitable
organization distinct from that of the general public." Maffei
v. Roman Catholic Archbishop of Boston, 449 Mass. 235, 245
(2007), cert. denied, 552 U.S. 1099 (2008). See Weaver, 425
16
Mass. at 275 (private plaintiff's standing arises from "personal
right that directly affects the individual" beneficiary). We
implicitly recognized that the Woodward School meets this
requirement of standing because we affirmed in part the order in
Woodward School, 469 Mass. at 154, where the School was the sole
plaintiff.
The named parties in the 1972 bill of complaint were the
individuals who comprised the board of managers and board of
supervisors of the Adams Fund;6 the oldest living male descendant
of President Adams;7 the Attorney General; two ministers, two
lawyers, two physicians, and a magistrate, all of whom resided
in Quincy; and two churches located in Quincy.8 The Woodward
6
"[T]he board of supervisors and the board of managers
shared responsibility for overseeing the Adams Fund." Woodward
Sch. for Girls, Inc. v. Quincy, 469 Mass. 151, 154 n.6 (2014)
(Woodward School).
7
The only principal beneficiary identified in the deed of
trust was the oldest living male descendant of President John
Adams, "who was to receive the principal only on 'gross
corruption or mismanagement,' or knowing waste" by Quincy, as
trustee. Woodward School, 469 Mass. at 154.
8
In President Adams's deed of trust, he instructed that
rents from the properties he conveyed into the trust be placed
in a public fund and that, once the fund grew to a sufficient
size, the monies be used to construct a place of religious
worship and, after that construction was completed, "applied to
the support of a School for the teaching of Greek and Latin
languages, arts and sciences, which a majority of the ministers,
magistrates, lawyers, and physicians, inhabiting the said town,
may advise."
9
For purposes of our review of the single justice's
allowance of the defendants' motions for summary judgment, we
17
School, however, was not named as a party in the 1972 equity
proceeding, and there is no information in the record to suggest
that it was given notice of the action. As a consequence, the
Woodward School had no opportunity to be heard in that
proceeding or to seek to intervene in that proceeding so that it
might be heard regarding the propriety of the proposed lease.
In determining whether the successor trustee, acting on
behalf of the Woodward School, should be bound by that
adjudication and precluded from relitigating the issue whether
Quincy's execution of the lease comported with its fiduciary
duty of loyalty as a trustee of a charitable trust, we consider
first whether the School's interest in the equity proceeding was
adequately represented by a party to that prior litigation,
specifically the Attorney General. The successor trustee
contends that the Attorney General could not have adequately
represented the School's interest because the Attorney General
represented only the public interest in the Adams Fund's
charitable mission, not the distinctly different individual
interest of the School in the fund.
We need not decide here whether the Attorney General,
because of the Attorney General's duty to ensure that charitable
trusts are adequately administered, must always be deemed to
accept the successor trustee's assertion that the School was
given no notice and did not learn of the 1972 action before its
final adjudication.
18
adequately represent all charitable interests in an equity
action brought by a trustee of a charitable trust. It suffices
that we conclude that, in light of the nature of the School's
interest in this underlying litigation, the then Attorney
General, because of his statutory and common-law duty to protect
the public interest in charitable trusts, must be deemed to have
adequately represented that interest. The crux of the equity
litigation in 1972 was whether Quincy would be in violation of
its fiduciary duty of loyalty if it executed the proposed lease
that relieved the Adams Fund of the financial burden of
maintaining the Adams Academy but charged the Society a
relatively nominal rent of only $1,200 per year for fifty years.
The nature of the School's interest in that litigation was the
amount of net income to be derived by the Adams Fund from the
Adams Academy property, which the School would receive as the
Adams Fund's sole beneficiary. The students of the School were
among the public beneficiaries of the Adams Fund that the
Attorney General had a duty to represent, and they shared the
School's interest in the amount of net income to be yielded from
this property, because that income would be used for the
students' education. "A party's representation of a nonparty is
'adequate' for preclusion purposes only if, at a minimum: (1)
the interests of the nonparty and her representative are aligned
. . . ; and (2) either the party understood herself to be acting
19
in a representative capacity or the original court took care to
protect the interests of the nonparty" (citation omitted).
Taylor v. Sturgell, 553 U.S. 880, 900 (2008) (Federal common law
of preclusion). With respect to the interest in maximizing the
net income arising from the lease, the interests of the School
and the Attorney General were aligned, and we must infer that
the Attorney General recognized his obligation to represent the
public interests served by the charitable trust under § 8, and
that this court recognized its obligation to protect both the
School and its students.
We consider next whether, even if the Attorney General
adequately represented the School's interest in the equity
litigation, it would be inconsistent with due process and
common-law principles of fairness to bind the successor trustee
to that adjudication where the School was not given notice of
the action to approve the proposed lease and had no opportunity
to be heard.9 The successor trustee's argument rests on the
premise that Quincy was legally obligated in 1972 to give notice
of its bill of complaint to the School. But we have found no
statute, rule, or appellate case that indicates that the trustee
of a charitable trust was legally obligated in 1972 to give
9
For purposes of our review of the single justice's
allowance of the defendants' motions for summary judgment, we
accept the successor trustee's assertion that the School was
given no notice and did not learn of the 1972 action before its
final adjudication.
20
notice to an income beneficiary of an action in equity seeking
instructions as to the management of the trust. Based on our
understanding of the case law, the prevailing view of the law in
1972 was that, because it was the "exclusive function" of the
Attorney General to protect the public interests from abuse in
the administration of a public charity, see, e.g., Dillaway, 256
Mass. at 573, it was sufficient in such actions to give notice
to the Attorney General rather than individual charitable
beneficiaries. See id. at 575 ("power and duty delegated to the
Attorney General" reflects Legislature's recognition "of the
necessity of protecting public charities from being called upon
to answer to proceedings instituted by individuals, with or
without just cause, who have no private interests distinct from
those of the public").10 Where there was no legal obligation to
give notice of the equitable action to an income beneficiary of
10
We emphasize that we conclude only that a trustee of a
charitable trust at the time of the 1972 decree did not have
this legal obligation. We recognize that under the
Massachusetts Uniform Trust Code enacted in 2012, "a trustee
shall keep the qualified beneficiaries of the trust reasonably
informed about the administration of the trust," G. L. c. 203E,
§ 813 (a), and that, under certain circumstances, "[a]
charitable organization expressly designated to receive
distributions under the terms of a charitable trust shall have
the rights of a qualified beneficiary," G. L. c. 203E,
§ 110 (b). See Understanding and Using Trusts § 18.7 (Mass.
Cont. Legal Educ. 3d ed. 2014 & Supp. 2016) (any action seeking
court authority to "reform, modify, or clarify the trust's
provisions . . . must include the [A]ttorney [G]eneral as an
interested party, and any charitable organization named as a
beneficiary in the trust will be a 'qualified beneficiary'
entitled to notice").
21
a charitable trust, and where in the circumstances of this case
the Attorney General adequately represented the relevant
interest of the income beneficiary, the denial of issue
preclusion would defeat the purpose of the equitable action
itself, which was to protect the trustee from any subsequent
claim that it had committed a breach of its fiduciary duty by
executing the lease.
Therefore, we conclude that the single justice correctly
determined that the Woodward School was bound by the
adjudication of the 1972 litigation, which implicitly determined
that execution of the lease would not violate Quincy's fiduciary
duty of loyalty. As such, the successor trustee is now
precluded from claiming on behalf of the School that Quincy
committed a breach of its fiduciary duty of loyalty by executing
the lease. Consequently, we therefore affirm the single
justice's allowance of the defendants' motions for summary
judgment.11
11
Our conclusion that the successor trustee is precluded
from challenging the adjudication of the 1972 litigation does
not mean that he is absolutely barred from seeking relief in
equity regarding the remaining years of the lease. This court's
decree in 1972 authorized Quincy to execute the proposed lease
and implicitly concluded that Quincy's execution of the lease
would not constitute a violation of its fiduciary duty of
loyalty, but it also provided that "the parties may apply to
this Court from time to time as may be necessary for further
instructions or directions on a new bill or petition." We take
no view as to whether there are reasonable grounds for such an
application.
22
Judgment affirmed.