PATRICIA KELLEY ENTERPRISES LTD. v. ROCKPORT REALTY TRUST, Louise Norwood, Trustee

Introduction and Statement of Undisputed Facts

Plaintiff Patricia Kelley Enterprises Ltd. (Patricia Kelley, General Partner) owns the property at 10 Mill Lane in Rockport. Defendant Rockport Realty Trust owns the abutting parcel at 8 Mill Lane. Both properties were formerly owned by Edgar and Madaline Norwood, who sold 10 Mill Lane to Ms. Kelley and her former husband: [Note 1]

EXCEPTING AND RESERVING from the aforementioned premises by the Grantors, their children and grandchildren the right to use in common with the grantees, their heirs, and assigns a certain driveway situated between the premises herein and other property retained by the Grantors [8 Mill Lane] to provide a means of ingress and egress to the back portion of the Grantors other property. Said right of way shall be reserved soley by the Grantors and their children and grandchildren and any subsequent sale or transfer of the other property retained by the Grantors to a person other than a child or grandchild of the Grantors shall cause said right of way to be extinguished.

Deed, Edgar A. Norwood and Madaline O. Norwood to Thomas A. Kelley, Jr. and Patricia A. Kelley (Dec. 22, 1977), recorded in the Essex (South) Registry of Deeds, Book 6430, Page 340 (errors in original) (hereafter, the “Norwood to Kelley deed”).

Rockport Realty Trust, the current record owner of the benefited property (8 Mill Lane — the “property retained by the Grantors” as referenced in the Norwood to Kelley deed), is a so-called “nominee trust.” [Note 2] Defendant Louise Norwood (a Norwood only by marriage, and not a “child or grandchild of the Grantors”) is its current trustee. The trust has been recorded at the Essex (South) Registry of Deeds, [Note 3] but its schedule of beneficiaries has not. [Note 4] Indeed, there is nothing either in the trust document or the law that requires public disclosure of the beneficiaries’ identities. Declaration of Trust Establishing the Rockport Realty Trust (Jul. 28, 1998); Morrison v Lennett, 415 Mass. 857 , 860 (1993). [Note 5] Moreover, the schedule of beneficiaries of the Rockport Realty Trust may be revised at any time, again without public disclosure. Declaration of Trust at 2, ¶ 3.1. So long as all current beneficiaries consent, there are no restrictions on who may become a beneficiary of the trust. Id. at 2, ¶ 3.4.

Even if the beneficiary(ies) of the Rockport Realty Trust was disclosed, nothing of substance would be learned. This is because the beneficiary is yet another trust — a trust which has neither been recorded nor disclosed its beneficiaries on the public record. Norwood Family Rockport Trust, Karl Norwood, Todd Norwood and Christopher Norwood, Trustees (Jul. 28, 1998). The current beneficiaries of that trust, which the plaintiff learned only through discovery in this case, are Ms. Norwood (as just noted, not a “child or grandchild”), Karl Norwood (a “child”), Christopher Norwood (a “grandchild”) and Todd Norwood (a “grandchild”). The plaintiff contends that the conveyance of 8 Mill Lane to the Rockport Realty Trust extinguished 8 Mill Lane’s right to use 10 Mill Lane’s driveway. The trust contends that, since all but one of its ultimate beneficiaries are “child[ren] or grandchild[ren] of the Grantors,” the right to use the driveway remains. Both the plaintiff and the trust have moved for summary judgment. For the reasons set forth below, the plaintiff’s motion for summary judgment is ALLOWED and the defendant’s motion is DENIED. By the express terms of the reservation in the Norwood to Kelley deed, the driveway easement has been extinguished.

Discussion

Summary judgment is appropriately entered when, as here, “there is no genuine issue as to any material fact and … the moving party is entitled to judgment as a matter of law.” Mass. R. Civ. P. 56; Cassesso v. Comm’r of Corr., 390 Mass. 419 , 422 (1983); Cmty Nat’l Bank v. Dawes, 369 Mass. 550 , 553 (1976).

The driveway easement in dispute was created by reservation in the Norwood to Kelley deed. By the express terms of that reservation, 8 Mill Lane’s right to use 10 Mill Lane’s driveway ceases immediately upon the sale or transfer of 8 Mill Lane “to a person other than a child or grandchild of the Grantors.” Both of the Grantors are now deceased and the property has been transferred to the Rockport Realty Trust. A trust is not a “child or grandchild.” Thus, the driveway rights are now extinguished.

The defendant argues that this is too literal a reading, particularly when the trust at issue is a nominee trust and all but one of the ultimate beneficiaries is a child or grandchild. But this argument ignores that exception (Ms. Louise Norwood who, as noted above, is a Norwood only by marriage) and, more importantly, is inconsistent with both the reservation and the law. It looks at the situation solely from the perspective of the allegedly benefited side (who rely, in essence, on an argument that “the situation is functionally the same for us”) and ignores the burdened party for whom the situation is radically different. Once (as here) the benefited parcel is effectively in anonymous, undisclosed ownership (the trust), the owner of the burdened parcel has no assured way of knowing whether the burden (the driveway easement) continues or not. [Note 6] This is contrary to the basic purposes of property law — certainty, and the ability to determine rights “with relative ease.” Spillane v. Adams, 76 Mass. App. Ct. 378 , 389 (2010) (determination of boundary lines). See also Moscatiello v. Bd. of Assessors of Boston, 36 Mass. App. Ct. 622 , 626 (1994) (discussing tax assessment of parcels titled in the names of nominee trusts, and holding that “[i]t would be administratively unsound to require assessors to analyze the provisions of each trust instrument and to determine eligibility for the exemption based on subtle differences in the degree of control exercised by a beneficiary who uses trust property as his principal residence”). It is also contrary to the wording used in the reservation itself — words which, by limiting the right to use the driveway to the parcel’s ownership by a child or grandchild, show the clear intent to keep ownership on the public record where it would always be capable of immediate evaluation. Anything else would be impossible to police. Had a nominee trust or other form of disguised ownership been contemplated by the parties to the Norwood to Kelley deed, the reservation could easily have said so, and a “policing mechanism” would surely have been included in the deed.

Conclusion

For the foregoing reasons, the driveway easement in dispute in this case has been extinguished. Judgment shall enter accordingly.

SO ORDERED.

By the court (Long, J.)