BERKSHIRE HEALTHCARE SYSTEMS, INC. [Note 1] v. KAREN M. HAGLEY [Note 2] and others [Note 3]

GINSBURG, P.J. Berkshire Healthcare Systems, Inc., d/b/a Hillcrest Commons Nursing and Rehabilitation Center ("Hillcrest"), brought a civil action against Karen Hagley, Philip Hiser, Jr., Frank Hiser, and Albert Hiser (the "beneficiaries") as beneficiaries of the Hiser Realty Trust ("Hiser Trust") for unpaid nursing home charges due from Philip Hiser, Sr., the father of the beneficiaries and the trustor/settlor of the Hiser Trust. The beneficiaries moved to dismiss count 5 of the complaint, which sought to reach and apply assets held in the Hiser Trust, based on failure to state a claim upon which relief can be granted under Mass. R. Civ. P. 12(b)(6). A District Court judge allowed the motion to dismiss, and Hillcrest appeals that decision. We affirm the judge's allowance of the motion to dismiss.

Hillcrest contends the beneficiaries are indebted to it in the amount of $45,662.48 for unpaid services rendered to Philip Hiser, Sr., when he was a resident at Hillcrest between July 1, 2019 and October 8, 2019. Among other claims, Hillcrest seeks to reach and apply assets held by the Hiser Trust, specifically the real property located at 66 Mill Street in Lee, Massachusetts. [Note 4] Hillcrest contends the court should impose a "resulting trust" on the Hiser property, which would allow Hillcrest as creditor to recover against that property. The beneficiaries contend that no resulting trust could exist because the property transfer was a gift to the family member beneficiaries.

Facts. On January 30, 1996, Philip Hiser, Sr. and his wife Lillian Mae Hiser created the Hiser Realty Trust. The Hiser Trust provides that all property acquired by the Trust shall be held in trust, solely as nominee, for the sole benefit of the beneficiaries, their four children. Relevant terms of the Trust will be discussed more fully below. Contemporaneously with creating the Hiser Trust, Philip Hiser, Sr. and

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Lillian Mae Hiser conveyed the residential real estate located at 66 Mill Street into the Hiser Trust for no consideration. There were no facts alleged that, at the time of the formation of the Trust, Philip Hiser, Sr. or Lillian Mae Hiser owed any debt to anyone. On December 29, 2016, Philip Hiser, Sr. entered into an agreement with Hillcrest where he was to pay Hillcrest for nursing home care and services. Philip Hiser, Sr. died on October 28, 2019 and, at the time, owed Hillcrest $45,662.48. [Note 5] Two of the beneficiaries live at the 66 Mill Street property. Hillcrest alleges that Philip Hiser, Sr. and Lillian Mae Hiser paid property taxes for the 66 Mill Street property. Hillcrest filed suit on May 5, 2020. On June 23, 2020, the beneficiaries filed a motion to dismiss count 5 of the complaint, the reach and apply claim, pursuant to Mass. R. Civ. P. 12(b)(6) for failure to state a claim upon which relief can be granted. On September 17, 2020, a District Court judge allowed the motion to dismiss. After the parties stipulated to the entry of a final judgment, Hillcrest appealed the court's allowance of the motion to dismiss.

Discussion. A complaint must be dismissed pursuant to Mass. R. Civ. P. 12(b)(6) if it fails to state a claim upon which relief can be granted. To survive a motion to dismiss pursuant to Mass. R. Civ. P. 12(b)(6), a complaint must set forth factual allegations sufficient "to raise a right to relief above the speculative level . . . [based] on the assumption that all the allegations in the complaint are true." Iannachino v. Ford Motor Corp., 451 Mass. 623, 636 (2008), quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A conclusory legal allegation without any facts to support it is insufficient to defeat a motion to dismiss under Mass. R. Civ. P. 12(b)(6). Schaer v. Brandeis Univ., 432 Mass. 474 , 477-478 (2000). "We review the grant of a motion to dismiss de novo, accepting as true all well-pleaded facts alleged in the complaint, drawing all reasonable inferences therefrom in the plaintiff's favor, and determining whether the allegations plausibly suggest that the plaintiff is entitled to relief." Lanier v. President & Fellows of Harvard College, 490 Mass. 37, 43 (2022).

"A resulting trust 'is a reversionary, equitable interest implied by law in property that is held by a transferee, in whole or in part, as trustee for the transferor or the transferor's successors in interest'" (citations omitted). Citizens Bank of Mass. v. Coleman, 83 Mass. App. Ct. 609, 612 (2013). "A resulting trust pivots on the key element of intent." Id. "The case is made by showing circumstances which raise a presumption that the person making the transfer or causing it to be made did not intend to give the transferee the beneficial interest in question, and thus that the interest remained in the transferor or payor or his or her estate." Id., quoting Restatement (Third) of Trusts § 7 comment a, at 87 (2003).

The gratuitous transfer to a family member is presumed to be a gift. Id. The presumption can be overcome if "it is established that (1) the intent of the transferor at the time of the transfer was not to convey the beneficial interest to the transferee, and (2) there was acquiescence on the part of the transferee." Id. at 616-617. Further, "[T]he manner in which the transaction was subsequently treated by [the parties] is significant of their understanding of its nature." Kennedy v. Innis, 339 Mass. 195, 202 (1959).

Here, Hillcrest seeks to reach and apply real estate that was transferred into the Hiser Trust more than twenty-two years before the debt at issue was incurred. According to the plain and unambiguous language of the introduction to the Hiser

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Trust, the Trust was a nominee trust created "for the sole benefit of the individuals . . . listed in the Schedule of Beneficiaries." The Schedule of Beneficiaries lists the four Hiser children by name. Section 4.1 of the Trust provides: "The Trustees shall hold the principal of this Trust and receive the income therefrom for the benefit of the Beneficiaries . . . ." Section 4.2 of the Trust provides: "[T]he Trustees shall have no power to deal in or with the Trust Estate except as directed by all of the Beneficiaries." And Section 5.2 of the Trust states: "In the case of any termination of the Trust, the Trustees shall transfer and convey the specific assets constituting the Trust Estate . . . to the Beneficiaries . . . ." Under the plain, unambiguous language of the Trust, the beneficiaries had control of the property.

According to Hillcrest's complaint, two of the beneficiaries live at the house in Lee. Living in the home shows present beneficial use. Hillcrest's claim that Philip Hiser, Sr. lived at the property between 1996 and the time of his death in 2019 is belied by the fact that Hillcrest seeks in this lawsuit money for nursing home services to Philip Hiser, Sr. that commenced in 2016. Further, even if Philip and Lillian Hiser paid the property taxes for the 66 Mill Street property, and even if they lived at the property for some period of time after gifting it to their children, that is not inconsistent with them acting as trustees of a nominee trust for the benefit of the beneficiaries. See Bongaards v. Millen, 55 Mass. App. Ct. 51, 55-56 (2002). Hillcrest claims the Hiser Trust was a misbegotten estate planning device, but "it is a perfectly usual employment of the trust devise to place property in a safe harbor against the possibility of future rough financial seas." Shamrock Inc. v. Federal Deposit Ins. Corp., 36 Mass. App. Ct. 162, 167 (1994).

There are no facts alleged to support Hillcrest's claim that Philip Hiser, Sr. and Lillian Mae Hiser did not intend to gift the 66 Mill Street property to the beneficiaries, their four children, twenty-two years before the debt at issue was incurred. There are no facts alleged that the transfer of the property into the Trust twenty-two years before the debt was incurred was an attempt to avoid a debt to a creditor. Therefore, having found no resulting trust existed, the trial judge properly allowed the motion to dismiss Hillcrest's reach and apply claim.