Jennifer R. Shaw ("Petitioner") filed her Petition for Partition on March 16, 2011, relative to property (the "Partition Property") located at 21 Briar Patch Lane in Sudbury, Massachusetts. [Note 1] On May 3, 2011, Darrell R. McKay ("Respondent") filed his Answer and Counterclaim, alleging that Petitioner wrongfully allowed the value of the Partition Property to decline by delaying its sale, and alleging that Petitioner mishandled or did not properly account for certain assets from the parties' parents' estates. [Note 2] Petitioner filed her Answer to Counterclaims on May 23, 2011. A case management conference was held June 15, 2011, on which date Attorney Joseph P. DiBlasi (the "Commissioner") was appointed as commissioner. On July 28, 2011, the Commissioner filed his Interim Report (the "Interim Report"), including as Exhibit Q a spreadsheet summarizing Petitioner's claimed expenses relative to the Partition Property, filed with the Commissioner at an unknown date after May 13, 2011. [Note 3] Respondent filed his Statement of Set-Off Claims, [Note 4] with exhibits, on December 6, 2011. The Commissioner filed a Report (the "December Report") on December 7, 2011. Petitioner filed her Opposition to Portions of the December Report on December 7, 2011. This court issued a warrant of sale of the Partition Property dated December 8, 2011. On January 4, 2012, the Commissioner filed his Report Regarding Sale of the Partition Property (the "Sale Report"). On February 27, 2012, Respondent filed both his Motion to Strike Petitioner's Claimed Expenses [Note 5] and his Motion to Allow Set-Off of Loss of Value, along with supporting Affidavit of Attorney Nancy Sue Keller.
Respondent filed his Motion for Summary Judgment and Appendix on May 1, 2012. Respondent filed his Motion for Partial Release of Escrowed Funds on May 7, 2012, which this court allowed on May 22, 2012. [Note 6] Petitioner filed her Opposition to Respondent's Motion for Summary Judgment and Cross Motion for Summary Judgment on June 1, 2012, including Petitioner's claim for a set-off for her expenses relative to the Partition Property, and including as Exhibit C documentation of such expenses. Respondent filed his Response to Petitioner's Opposition and Opposition to Petitioner's Cross Motion for Summary Judgment on June 15, 2012. A hearing was held on July 11, 2012, on all motions, at which time the matter was taken under advisement.
Summary judgment is appropriate where there are no genuine issues of material fact and where the summary judgment record entitles the moving party to judgment as a matter of law. See Cassesso v. Comm'r of Corr., 390 Mass. 419 , 422 (1983); Cmty. Nat'l Bank v. Dawes, 369 Mass. 550 , 553 (1976); Mass. R. Civ. P. 56(c).
The following material facts are not in dispute:
1. By deed dated February 23, 1988, and as shown on Transfer Certificate of Title 182176, recorded with the Middlesex South Registry of Deeds at Book 1041, Page 26, the parties' father, Alden Low McKay ("Alden"), conveyed the Partition Property to Respondent and Petitioner, who became tenants in common, each owning an undivided fifty percent interest. Alden reserved a life estate in the Partition Property for himself. [Note 7]
2. On an unknown date prior to Alden's death, Petitioner was added as a joint-owner to an account (the "Raytheon Account") that Alden had established at the Raytheon Employees Federal Credit Union. All of the funds in the Raytheon Account were deposited by Alden and not by Petitioner.
3. Alden died on November 19, 1992, [Note 8] after which Virginia continued to live at the Partition Property.
4. Alden's will, dated January 19, 1988, states, in part:
ARTICLE III: I give, devise, and bequeath all of my silverware, china, crystal and diamond rings . . . to [Petitioner]. All the rest, residue and remainder of my property, whatsoever and wheresoever situated, of which I may die seized or possessed, or to which I may be entitled at my death, I give, devise and bequeath in equal shares to my beloved children: [Respondent] and [Petitioner] . . .
5. On February 23, 1993, Petitioner filed a petition with the Middlesex County Probate Court to be a voluntary executrix, which petition stated that Alden's estate consisted entirely of "Miscellaneous Personal Property" with a value of three thousand dollars ($3,000.00). [Note 9] Petitioner never informed Respondent of such petition. Petitioner did not share any of the personal property with Respondent.
6. Alden owned a life insurance policy (the "Life Insurance") on his own life, through Metropolitan Life Insurance Company. In 1993, as the sole beneficiary of such policy, Petitioner received twenty-five thousand, two-hundred twenty-six dollars and three cents ($25,226.03) from the Metropolitan Life Insurance Company. Petitioner did not share any of this amount with Respondent.
7. Alden owned a 401(k) account (the "401(k) Account") valued at approximately thirty thousand dollars ($30,000.00) at the time of his death. [Note 10]
8. Petitioner has never made an accounting to Respondent relative to the assets in Alden's estate.
9. At an unspecified date after March 23, 1993, [Note 11] the parties were named as Virginia's guardians. At unspecified times after Alden's death, Petitioner was involved to some extent in the management of Virginia's business affairs. [Note 12]
10. After Alden's death, Virginia received payments as a beneficiary to Alden's pension plan (the "Pension Payments"). The Pension Payments were deposited directly into Virginia's account and not made to either Petitioner or Respondent. The record does not indicate that any Pension Payments were deposited after Virginia's death.
11. After Alden's death, Virginia received social security benefits.
12. Virginia died intestate on December 6, 2004, after residing in a nursing facility since an unknown date in October of 2004. Certain expenses related to Virginia's care at such nursing facility were subsidized by MassHealth.
13. After Virginia's death, neither party moved into the Partition Property. Nothing in the record indicates that anyone occupied the Partition Property during the time between Virginia's death and the sale of the Partition Property.
14. In January of 2005, ReMax prepared a comparative market analysis (the "ReMax Analysis") for Petitioner and Petitioner's husband, Robert Shaw ("Robert"), which recommended that the Partition Property be listed for sale at four-hundred sixty-five thousand dollars ($465,000.00). [Note 13] This recommended price was contingent on certain repairs being made.
15. From 2006 through 2010, Petitioner took no steps to renovate the Partition Property for the purpose of either occupying it herself or buying Respondent's interest in the Partition Property.
16. On June 5, 2006, Respondent sent an email to Robert, stating in part:
[Margie McKay (the parties' aunt)] just happened to mention that she asked [Petitioner] if she had sold the [Partition Property] yet. [Petitioner] told her that [Petitioner] had not moved forward with the sale of the home. I was very disappointed to learn that the house continues to sit vacant. I need your help to develop an action plan.
On June 7, 2006, Respondent sent an email to Robert, stating in part:
Good news on the attic being cleaned out. There is nothing that I desire in the house. . . . I agree with you with having someone haul the stuff away. I am sure it smells like mildew with it being closed up for so long.
It would be great to try to sell the house during the summer. Thanks for the offer on the action plan. I had offered to Jennifer on a number of occasions to come up and help clean out the house. . . .
17. On July 8, 2006, Respondent sent an email to Petitioner, and a copy of such email to Robert, indicating that Respondent had lost his job, and stating: "My request is that you would place the [Partition Property] on the market and attempt to sell it prior to October. I believe the best time to sell a home in New England is when the weather is good." Such email also stated: "I am saddened that our relationship has ended."
18. On April 18, 2007, Respondent sent an email to Petitioner, and a copy of such email to Robert, suggesting a potential buyer for the Partition Property. Such email stated:
I told [the potential buyer] that I had no idea as to the appraised value for the [Partition Property] in the current market place in Massachusetts. I was wondering if you and [Robert] would talk over a potential sale price. Then I will call you and we can jointly discuss a sales price on the phone.
19. On August 17, 2008, Respondent sent an email to Petitioner, stating that he "would like to discuss having [three] appraisals of the [Partition Property], with the request that [Petitioner] purchase [Respondent's] portion of [their] joint ownership."
20. On August 23, 2008, Respondent sent an email to Petitioner refusing Petitioner's "request to jointly fund the last three years of expenses on the [Partition Property]."
21. From an unknown date until at least her deposition on November 21, 2011, Petitioner blocked Respondent's emails. [Note 14]
22. In February of 2009, a water pipe froze and burst at the Partition Property, resulting in flooding, damage, and a water bill of approximately seven thousand dollars. [Note 15] Petitioner paid two-hundred fifty dollars toward the water bill and refused to pay the remainder. [Note 16] Petitioner did not inform Respondent about such damage or such water bill until at least 2010.
23. From 2004 until December 31, 2009, Petitioner never provided Respondent with documentation of expenses related to the Partition Property, nor did she identify such expenses to Respondent.
24. On May 18, 2010, Robert sent an email to Respondent stating, in part: "We are coming close to getting the [Partition Property] ready to put on the market. [Petitioner] and I have been working there steadily to get it ready for a listing. . . . [Petitioner] has contacted a local realtor."
25. On May 18, 2010, Respondent replied to Robert's email of that date, stating, in part:
Have not heard from you in number of months. I was beginning to think that [Petitioner] prohibited you from speaking to me.
Every summer, [Petitioner] starts working on the [Partition Property] to sell. And then she never follows thru. I do not believe she will relinquish control of the [Partition Property]. I wonder how many thousands of dollars the value of the house has lost due to her willful neglect to settle the estate. And now after all of these years she wants to sell in the midst of the worst recession we have had since the depression.
I will not agree to sell the [Partition Property] at this time. I have had no input or say for many years.
26. On March 6, 2011, Robert sent an email (the "2011 Email") to Respondent stating, in part:
. . . We have been paying all of the [Partition Property] expenses since [Virginia's] care was taken over by the State of Massachusetts 10/13/2004.
Enclosed is a detailed list of housing expenses for the [Partition Property]. . . . We can no longer afford to continue to bare [sic] all of the responsibility and expenses for [the Partition Property].
With your concurrence, it is our intention to put [the Partition Property] up for sale in April 2011. Upon sale of this property[,] will [sic] be expecting that half of these itemized expenses will be deducted from your portion of [the Remaining Proceeds].
. . . I hope that we can work this situation out without involving lawyers like your last email correspondence to me suggested.
We will no longer be paying any more of the [Partition Property] expenses. Please send me your current home mailing address.
27. On June 23, 2011, the Partition Property was appraised at three-hundred forty thousand dollars ($340,000.00).
28. With the parties' consent, the Commissioner listed the Partition Property for sale on July 21, 2011.
29. On December 22, 2011, the Partition Property was sold for three-hundred sixteen thousand dollars ($316,000.00).
30. On May 22, 2012, this court allowed Respondent's Motion for Partial Release of Escrowed Funds, and ordered the Commissioner to distribute forty thousand dollars ($40,000.00) to each party.
31. After the distributions allowed pursuant to Respondent's Motion for Partial Release of Escrowed Funds, closing costs, unpaid expenses, and master fees, approximately one-hundred eighty-nine thousand one-hundred twenty dollars and seventy cents ($189,120.70) remains from the proceeds of the sale of the Partition Property (the "Remaining Proceeds").
32. Petitioner has filed documentation of expenses that Petitioner alleges she incurred in connection with the Partition Property, in the amount of eighty-five thousand two-hundred seventy-four dollars and sixty-six cents ($85,274.66). [Note 17]
33. Respondent has not filed a claim for any expenses paid directly by him to maintain the Partition Property. [Note 18] As noted, supra, Respondent's set-off claims are based on Petitioner's alleged mishandling of the sale of the Partition Property and of the parties' parents' estates, as well as the costs of this partition action.
The Partition Property has been sold and the sole remaining issue in this case is the division of the Remaining Proceeds. The record title indicates that Petitioner and Respondent each own a fifty percent undivided interest. "Confronted with a petition for partition, a co-owner may attempt to show that his beneficial interest is 'different from that indicated by the record title.'" Moat v. Ducharme, 28 Mass. App. Ct. 749 , 751 (1990) (quoting Asker v. Asker, 8 Mass. App. Ct. 634 , 638 (1979)).
Petitioner argues that the first eighty-five thousand two-hundred seventy-four dollars and sixty-six cents ($85,274.66) of the Remaining Proceeds should be paid to Petitioner as a reimbursement for one-half of the expense of maintaining the Partition Property since Virginia's death. [Note 19] [Note 20] Petitioner also argues that the cost of defending against Respondent's counterclaims should be paid out of the Remaining Proceeds. Petitioner denies that Respondent is entitled to compensation from the Remaining Proceeds as a result of any diminution in value of the Partition Property since Virginia's death. Petitioner also argues that Respondent's legal fees should not be paid out of the Remaining Proceeds.
Respondent challenges Petitioner's alleged expenses, arguing that they are unreasonable and would result in unjust enrichment, because they result from Petitioner's allegedly unreasonable delay in selling the Partition Property. Respondent further argues that the first seventy-eight thousand five-hundred dollars ($78,500.00) of the Remaining Proceeds should be paid to Respondent, as just compensation for the diminution in value of the Partition Property while it sat unsold, as well as Respondent's reasonable attorney's fees. Such amount also includes the value of items that Respondent argues that he was entitled to receive under Alden's will or from Virginia's estate. In addition, Respondent argues that Petitioner should be subject to sanctions as a result of Petitioner's failure to cooperate with Respondent's discovery requests.
"[T]he purpose of partition proceedings is to balance the rights and equities of the parties concerning the property at issue." Gonzalez v. Pierce-Williams, 68 Mass. App. Ct. 785 , 787 (2007). With such purpose in mind, I will address these arguments in turn.
A. Diminution in value.
Respondent argues that Petitioner needlessly delayed the sale of the Partition Property for several years, during which time the value of the Partition Property dropped substantially. [Note 21] Respondent further argues that Petitioner's delay was a violation of a fiduciary duty to Respondent. Therefore, Respondent maintains that he is entitled to one-half of the value at which the Partition Property was appraised in 2005. [Note 22] In reply, Petitioner contends that Respondent neglected his responsibilities and points out that Respondent could have brought a partition action himself or sold his interest in the Partition Property. Petitioner also asserts that no Massachusetts court has ever granted a set-off for diminution in value of a partitioned property caused by market conditions.
It is undisputed that Petitioner and Respondent held the Partition Property as tenants in common since before Alden's death. As such, both Petitioner and Respondent had a right to bring a partition action at any time, pursuant to G. L. c. 241, § 1, which provides that "[a]ny person, except a tenant by the entirety, owning a present undivided legal estate in land, not subject to redemption, shall be entitled to have partition . . ." See Mills v. Blakelin, 307 Mass. 542 , 546 (1940) ("A tenant in common has the right to alienate his interest and the exercise of his right to secure a partition of the land cannot be unduly restricted . . .").
The summary judgment record indicates that Petitioner was or should have been aware that Respondent did not want to delay sale of the Partition Property. [Note 23] However, such awareness did not in itself legally obligate Petitioner to facilitate a rapid sale. Tenants in common have limited fiduciary duties to each other. See, e.g., Bacon v. Bacon, 266 Mass. 462 , 473 (1929) (regarding collection of rents). However, a tenant in common has no duty to protect a cotenant's interest in shared property by facilitating the property's sale at the most advantageous time, except to the extent that such duty might arise out of a contractual obligation or the cotenant's reasonable reliance.
Nothing in the record indicates that the parties had any agreement relative to the sale of the Partition Property on which it would be reasonable for Respondent to rely. [Note 24] Respondent's emails to Petitioner and Robert use language that implies an unresolved situation. In 2006, Respondent wrote that he needed "help to develop an action plan" and requested - without any direct reply from Petitioner - that an effort be made to sell the house by October of that year. In 2007, Respondent asked to discuss a sale price with Petitioner and Robert. In 2008, Respondent requested that Petitioner purchase Respondent's interest in the Partition Property. In 2010, Respondent wrote that he would "not agree to sell the [Partition Property] at [that] time." The 2011 Email indicates that Robert did not assume either that Respondent would agree at that date to sell the Partition Property or that expenses could be allocated without involving lawyers.
Ultimately, it was up to Respondent to act to protect his own interest, if he believed that Petitioner's inaction was imprudent or wasteful. See O'Brien v. Mahoney, 179 Mass. 200 , 204 (1901) ("No man can be held to a tenancy in common of land without his own consent. This rule is at once the privilege and burden of such ownership."); Canepari v. Pascale, 78 Mass. App. Ct. 840 , 846 (2011) (noting that a tenant in common concerned about delay in the sale of a partition property may commence a partition action). Respondent could have independently sought out a real estate broker. [Note 25] The fact that Respondent resided in another state does not in itself reduce his responsibility to look after his own property interest. [Note 26] Furthermore, Respondent might have been prompted to act by Petitioner's ongoing resistance to selling the Partition Property or by the personal conflict and breakdown in communication between the parties.
On the basis of the foregoing, I find that Respondent is not entitled to compensation for the diminution in value of the Partition Property prior to its sale, inasmuch as Petitioner had no legal obligation to sell the Partition Property on an expedited basis, and inasmuch as Respondent had full authority as a tenant in common to bring a partition action, if the parties could not otherwise agree to sell the Partition Property.
B. Petitioner's alleged contribution to expenses.
Petitioner argues that she should be compensated out of the Remaining Proceeds for one-half of certain expenses related to the maintenance of the Partition Property before its sale. Respondent contends that he should not contribute to Petitioner's expenses for three reasons. First, Respondent argues that the expenses are unreasonable, because Petitioner incurred them by delaying sale of the Partition Property without cause. Second, Respondent alleges that at least part of such expenses were paid from funds belonging to the parties' parents, or from funds designated for such expenses by the parties' parents, or from property that Respondent should have inherited from the parties' parents, and therefore Petitioner should not be reimbursed. Third, Respondent argues that Petitioner is not entitled to reimbursement to the extent that she claimed tax deductions for such expenses. [Note 27]
As discussed, supra, Petitioner did not have a fiduciary duty to sell the Partition Property at an advantageous time, including any point at which maintenance expenses might exceed any benefit from delaying sale. As discussed, supra, Respondent held an interest in the Partition Property as a tenant in common and was therefore entitled to bring a partition action at any time. See Canepari at 846. Respondent was not dependent on Petitioner's reasonableness, inasmuch as he had authority to dispose of his interest in the Partition Property, with or without Petitioner's agreement, ending his obligation to contribute to the expense of maintaining the Partition Property. Therefore, I find that the expenses requested by Petitioner are not unreasonable on the basis of any unreasonable delay in sale of the Partition Property by Petitioner.
Respondent maintains that Petitioner's expenses relative to the Partition Property were effectively subsidized by certain of Alden's and Virginia's assets that Petitioner improperly retained instead of dividing between the parties. Such assets include the Life Insurance, the Raytheon Account, the 401(k) Account, and the Pension Payments, as well as personal property.
G. L. c. 241, § 25, provides that "[t]he court in which a petition has been brought . . . shall have jurisdiction in equity over all matters relating to the partition, and, in case of sale, over the distribution of the proceeds thereof; also to hear and determine all matters of accounting between the parties to the petition in reference to the common land . . ." This court does not have jurisdiction to consider Respondent's arguments concerning his inheritance, because such arguments are not a matter of accounting in reference to the Partition Property within the meaning of the statute. In Asker v. Asker, 8 Mass. App. Ct. 634 , 640 (1979), the Appeals Court held that a partition accounting "would not extend to such unrelated matters as personal property of the defendant which the plaintiff, according to the defendant's answer, 'removed from the premises and converted to his own use.'" See also Moseley v. Moseley 240 Mass. 22 , 25 (1921) ("[J]urisdiction is not conferred on [the court] to adjust the accounts of the parties to a contract merely because they are cotenants and partition has been decreed."). In the case at bar, Respondent makes essentially the same claim; it makes no difference that the Partition Property and the allegedly misappropriated property came from the same source, or that the alleged misappropriation involved the maintenance of the Partition Property. [Note 28] Although this court's allocation of the Remaining Proceeds could conceivably be a means of restitution, the statute does not allow for it. [Note 29] Therefore, I find that this court does not have jurisdiction to consider Respondent's counterclaims to the extent that they seek a set-off resulting from Petitioner's use of the Life Insurance, the Raytheon Account, the 401(k) account, the Pension Payments, or Alden's or Virginia's personal property. [Note 30]
Respondent argues that Petitioner would be unjustly enriched if his share of the expenses is not reduced by any benefit that Petitioner may have received from tax deductions related to the Partition Property. Respondent bases his argument on a child support case, Santagate v. Tower, 64 Mass. App. Ct. 324 (2005), asserting that a party is only entitled to reimbursement for funds actually expended. Petitioner concedes that she and Robert claimed tax deductions for real estate taxes paid on the Partition Property during certain unspecified tax years between 2004 and 2009. However, the summary judgment record does not indicate - and Respondent does not allege with specificity - which years such deductions were claimed or the value of such deductions to Petitioner. Moreover, the Interim Report states the Commissioner's plausible belief that any tax benefit to Petitioner was outweighed by Petitioner and Robert's labor and administrative efforts in maintaining the Partition Property, [Note 31] and by any benefit Respondent received by deferring his contribution to the expenses. [Note 32] Since the record is deficient relative to any tax benefit received by Petitioner, and in light of Petitioner's administrative contribution, I find that there is no basis to reduce Respondent's contribution to Petitioner's requested expenses as a result of any tax benefit to Petitioner.
Since this court does not find a basis in Respondent's arguments for reducing Petitioner's requested expenses, it must determine the validity of such expenses. Petitioner submitted to the Commissioner documentation of expenses totaling eighty-five thousand two-hundred seventy-four dollars and sixty-six cents ($85,274.66). [Note 33] Such documentation is Exhibit C to Petitioner's Opposition and such expenses are summarized in Exhibit Q to the Interim Report. The Interim Report states that "[t]he great majority of the listed expenses appear to be the normal and expected expenses for such a vacant property, such as real estate taxes, heat, landscaping, and contractor expenses." However, the Commissioner questioned certain expenditures made after Virginia's death: four-thousand one-hundred sixteen dollars and eighty-eight cents ($4,116.88) for electricity, four-hundred thirty-six dollars and ninety-seven cents ($436.97) for a telephone line, and two-hundred one dollars ($201.00) for a post office box, as well as fifteen hundred dollars ($1,500.00) paid to Petitioner's counsel at the time the petition in this action was filed.
Petitioner asserts that the electrical and telephone service were necessary to maintain an alarm system at the Partition Property. [Note 34] I find that expenses for such purpose are reasonable, especially since the record implies that the Partition Property was at times unsupervised, inasmuch as the flooding caused by the burst pipes was not discovered immediately or by Petitioner. Since Petitioner does not address the Commissioner's objection to the post office box, I find that it is inappropriate to allow a set-off for the cost of the post office box.
Petitioner's Opposition does not directly address the payment of fifteen hundred dollars made to Petitioner's Counsel. However, as discussed, infra, Petitioner's Opposition instead seeks a set-off of approximately fifteen thousand dollars ($15,000.00) in legal fees that include the cost of defending against Respondent's counterclaims. It appears from Petitioner's Opposition to Portions of [the December Report] that Petitioner includes the fifteen-hundred dollar payment in the requested fifteen thousand dollars. For the reasons discussed, infra, I find that it is inappropriate to allow a set-off for Petitioner's legal costs.
C. Fees and costs.
G. L. c. 241, § 22, provides that
[t]he reasonable expenses and charges of partition proceedings, including . . . the fees of counsel, of the [C]ommissioner, and of all agents, guardians and other persons appointed to represent interests . . . , shall be determined by the court, and in case of sale paid by the [C]ommissioner out of the [P]roceeds; . . . Such contribution shall be in proportion to the interests of the parties unless the court finds a different proportion more equitable. . . .
In Aiello v. Aiello, 63 Mass. App. Ct. 914 , 915 (2005), the Appeals Court held that § 22 "erects a presumption that expenses shall be allocated proportionately." However, "the statute leaves room for the exercise of some discretion." See id.
In some proceedings, the conduct of the litigation itself may give rise to equitable considerations favoring deviation from the presumptive proportionate allocation (such as, for example, when the petitioner needlessly pursues a course that causes the cost of the proceedings to escalate, or when substantial fees are incurred in resolution of issues unrelated to the partition). See id. at 916.
Petitioner argues that she is entitled to the cost of defending against Respondent's counterclaims, which Petitioner contends were made in bad faith, insofar as Respondent should have known that this court does not have jurisdiction over personalty and non-probate property. In reply, Respondent argues that he should be reimbursed out of the Remaining Proceeds for all of his legal expenses, including the Commissioner's fee, because Respondent contends that the entire partition action was unnecessary and that Petitioner delayed these proceedings without cause.
Respondent's counterclaims were not so clearly made in bad faith as to justify Petitioner's request for legal expenses. [Note 35] Petitioner compares her argument for costs to a motion pursuant to G. L. c. 231, § 6F, which applies where a court determines that "all or substantially all of the . . . counterclaims . . . made by any party who was represented by counsel . . . were wholly insubstantial, frivolous and not advanced in good faith." [Note 36] Petitioner's Opposition focuses on potential jurisdictional problems that for several reasons do not clearly indicate bad faith. [Note 37] First, " . . . a mistaken belief that the court has jurisdiction, stands on the same plane as any other mistake of law." Loomer v. Dionne, 338 Mass. 348 , 351 (1959) (quoting Gaines v. New York, 215 N. Y. 533, 539-40 (1915)). Respondent's counterclaim itself is not "blatantly unmeritorious." See City of Worcester v. AME Realty Corp., 77 Mass. App. Ct. 64 , 71 (2010). [Note 38] Furthermore, whether this court has jurisdiction over Respondent's counterclaim is not a frivolous question, inasmuch as this court has broad jurisdiction pursuant to G. L. c. 241, § 25, as discussed, supra. Over a year prior to filing her Opposition, Petitioner answered Respondent's counterclaim without raising the issue of jurisdiction, even though the counterclaim clearly involved non-probate property. [Note 39] In the Interim Report, the Commissioner appeared uncertain how this court would address Respondent's counterclaims.
Moreover, the summary judgment record indicates that Petitioner has not addressed Respondent's counterclaims in a way that effectively limits costs. If Petitioner truly believed that Respondent's counterclaims were frivolous or improperly before this court, Petitioner should have filed a motion to dismiss such counterclaims. Instead, Petitioner refused to cooperate with Respondent's discovery requests relative to the counterclaims, [Note 40] prolonging litigation over discovery matters. "Reasonable fees and costs . . . do not include compensation for unnecessary or ineffectual activity. The fees seeker must show the utility of the services." City Rentals, LLC v. BBC Co., Inc., 79 Mass. App. Ct. 559 , 567 (2011).
For the foregoing reasons, I find that it would be inappropriate to grant Petitioner's request for legal costs, including costs incurred defending against Respondent's counterclaims.
As Respondent points out, litigation in this case has clearly created expenses that the parties may have avoided by selling the Partition Property without involving this court. However, contrary to Respondent's argument, such expenses do not make it appropriate for Petitioner to bear the cost of partition alone. As discussed, supra, Petitioner had no legal duty to reduce the expense of partition, either by selling at an earlier date or by selling without court oversight. Whether or not Petitioner reasonably acted in Respondent's best interest or her own best interest, Petitioner was entitled to invoke the partition process provided by law. Cf. Stahler v. Sevinor, 324 Mass. 18 , 22 (1949) ("Upon the refusal of the defendant to recognize that there had been a termination of the trust, the plaintiff was entitled to invoke the aid of the court."). An important purpose of this court is to resolve disputes between parties who cannot otherwise agree. See East Coast Aviation Corp. v. Massachusetts Port Authority, 346 Mass. 699 , 708 (1964) (interest rate to be determined in court if parties disagree); Korff v. Korff, 64 Mass. App. Ct. 94 , 98 (2005) (wife can return to court if she disagrees with husband about annual alimony computations). Petitioner cannot be penalized merely because she did not believe that the parties' minds would meet. Therefore, I find that it would be inappropriate to grant Respondent's request for costs on the basis of Petitioner's decision to bring this partition action.
D. Respondent's motions for sanctions.
Respondent also moves for sanctions against Petitioner based on Petitioner's failure to comply with discovery requests and the resulting delays. Specifically, Respondent asks for fees and costs associated with discovery and that certain facts be deemed admitted by Petitioner. Petitioner argues that Respondent is not entitled to such sanctions because they would be inappropriately punitive, and because Respondent has not alleged that any prejudice resulted or that he was unable to prepare his case.
Pursuant to Mass. R. Civ. P. 37, this court has "broad discretion to impose whatever sanctions are just in order to ensure that the discovery process operates efficiently." Corsetti v. The Stone Co., 396 Mass. 1 , 26 (1985). Such sanctions "act as a deterrent to unwarranted evasions of discovery." Id. As discussed, supra, Petitioner cannot justify disregarding discovery requests solely on the basis of a belief that they pertain to claims that lack merit. However, Petitioner's conduct did not rise to the level of an unwarranted evasion requiring sanctions.
Petitioner has not been evasive. The nature of Petitioner's objections to Respondent's discovery requests was made clear to both Respondent and this court early in this case. [Note 41] Petitioner ultimately complied with discovery orders from this court, unlike other litigants against whom sanctions have been upheld. See, e.g., Ayash v. Dana-Farber Cancer Institute, 443 Mass. 367 , 402 (2005). Pursuant to this court's order dated November 10, 2011, Petitioner and Robert were deposed on November 21, 2011. Pursuant to this court's order dated December 8, 2011, Petitioner supplemented answers provided at those depositions and responded to Respondent's other outstanding discovery requests.
The delay in Petitioner's cooperation has not significantly harmed Respondent. Cf. Grassi Design Group, Inc., 74 Mass. App. Ct. 456 , 460-61 (2009) (stating that delay was less egregious and prejudice more easily remedied at an earlier stage in litigation). This court extended the discovery deadline to allow for full discovery by Respondent on arguably peripheral issues, and Respondent received meaningful responses from Petitioner. Respondent has not been significantly prejudiced, unlike litigants in some cases where sanctions were upheld. Cf. Shaw v. Rodman Ford Truck Center, Inc., 19 Mass. App. Ct. 709 , 713 (1985) (expert testimony excluded where party ignored written request to supplement interrogatories for over nine months before supplementing four days prior to trial). Moreover, the disputed discovery requests related to Respondent's counterclaims, many of which this court finds are not properly before this court, as discussed, supra. [Note 42]
As a result of the foregoing, Respondent's motions for sanctions for Petitioner's failure to comply with discovery requests are DENIED.
As a result of the foregoing, Respondent's Motion for Summary Judgment is DENIED, inasmuch as Respondent is not entitled to reimbursement for any diminution in value of the Partition Property, and inasmuch as this court does not have jurisdiction to hear Respondent's counterclaims that are not in reference to the Partition Property.
As a result of the foregoing, Petitioner's Cross Motion for Summary Judgment is ALLOWED IN PART, inasmuch as Petitioner is entitled to reimbursement from the Remaining Proceeds for certain of her expenses in maintaining the Partition Property. As a result of the foregoing, Petitioner's Cross Motion for Summary Judgment is DENIED IN PART, inasmuch as Petitioner is not entitled to reimbursement from the Remaining Proceeds for attorney's fees or the post office box.
As a result of the foregoing, I find that the Remaining Proceeds shall be distributed as follows: Of the one-hundred eighty-nine thousand one-hundred twenty dollars and seventy cents ($189,120.70) in Remaining Proceeds, [Note 43] eighty-three-thousand five-hundred seventy-three dollars and sixty-six cents ($83,573.66) is awarded to Petitioner, effectively a set-off representing Respondent's contribution of forty-one-thousand seven-hundred eighty-six dollars and eighty-three cents ($41,786.83) toward the expenses itemized in Exhibit Q of the Interim Report, but not including any contribution toward Petitioner's legal costs or the post office box. After such award to Petitioner, Petitioner and Respondent shall each receive fifty-two thousand seven-hundred seventy-three dollars and fifty-two cents ($52,773.52), being one-half of the amount that remains.
Judgment to enter accordingly.
[Note 1] The Partition Property is improved with a single-family house.
[Note 2] Petitioner and Respondent are siblings. Petitioner was formerly known as Jennifer R. McKay.
[Note 3] The spreadsheet is undated. The last item listed on such spreadsheet is an insurance payment made on May 13, 2011. The Interim Report states that the Commissioner received and reviewed canceled checks and receipts relative to Petitioner's claimed expenses. Such checks and receipts are before this court as Exhibit C to Petitioner's Opposition to Respondent's Motion for Summary Judgment.
[Note 4] Respondent does not claim a set-off for any expenditure made by him, except legal costs. Respondent's set-off claims are based on an alleged diminution in value of the Partition Property due to delay in sale, Petitioner's alleged misappropriation of certain assets from the parties' parents' estates (or use of such assets to maintain the Partition Property), and the costs of litigating this partition action.
[Note 5] Such motion was apparently filed in response to Petitioner's claims as summarized in the Interim Report, since Petitioner had not yet filed anything relative to such claims with this court. Such motion generally "moves that this . . . [c]ourt strike any and all claimed expenses incurred on the [Partition Property] after 2004 on the grounds that the claimed expense[s] cannot be viewed as reasonable charges . . . where they are attributable to Petitioner's breach of her fiduciary duties . . ." (emphasis added).
[Note 6] Respondent's Motion for Partial Release of Escrowed Funds (from the Remaining Proceeds, as hereinafter defined) requested that the Commissioner distribute forty thousand dollars ($40,000.00) to each party.
[Note 7] Transfer Certificate of Title 182176 does not refer to any rights that the parties' mother, Virginia Ruth McKay ("Virginia") had in the Partition Property, and Petitioner states in her Opposition that Virginia "never held any interest in the [Partition] Property." However, Respondent's Statement of Undisputed Material Facts asserts that both Alden and Virginia held a life estate, an assertion that Petitioner admitted, apparently unintentionally.
[Note 8] Petitioner's voluntary executrix petition erroneously states that Alden died on November 20, 1992.
[Note 9] Respondent contends that Alden's personal property had a significantly higher value.
[Note 10] The summary judgment record contains little evidence about the 401(k) Account. According to the Interim Report, Petitioner asserts that the parties were equal beneficiaries and that each received a check directly for one-half of the value of the 401(k) Account. Respondent denies that he received any of the value of the 401(k) Account.
[Note 11] The summary judgment record includes an unsigned client fee agreement drawn up for Petitioner by an attorney, in connection with guardianship of Virginia, and dated December 23, 1992. Although the agreement is unsigned, the record contains checks for a retainer fee dated December 24, 1992. Billing statements in the record indicate that a hearing was held March 23, 1993.
[Note 12] Respondent has alleged that Petitioner had a power of attorney for Virginia for several years. Petitioner denies that she had such power of attorney, but admits that she provided Virginia "with assistance in organizing her bills and writing her checks at her express direction and control." Petitioner further stated in her deposition that she "was named co-guardian [with Respondent] . . ."
[Note 13] The Interim Report states that the ReMax Analysis is dated January 20, 2005. The portion of the ReMax Analysis in the record shows a date of January 11, 2005, which does not necessarily appear to be the document's final date.
[Note 14] Petitioner stated in her deposition that she "believe[d] it was around 2006" that she blocked Respondent's emails. Petitioner also stated in her deposition that she had changed her email address at an unspecified date. The deposition did not clearly distinguish between blocking Respondent's emails and changing the email address.
Respondent apparently alleges in his Statement of Undisputed Facts that his emails were blocked in response to his email of August 17, 2008, although it is not part of Exhibit 12 to that document as indicated. However, this contradicts the subject line of the email by which Respondent forwarded to his counsel Respondent's email of August 23, 2008, which states: " . . . After I sent her this email she deleted me from her email."
[Note 15] The flooding was reported to the Sudbury Fire Department by someone other than the parties. The Interim Report erroneously states that the flooding occurred in 2011.
[Note 16] The Town of Sudbury has since agreed to substantially lower the bill.
[Note 17] Such amount includes an initial payment to Petitioner's counsel. As discussed, infra, Petitioner seeks legal fees beyond this amount.
[Note 18] However, as discussed, infra, Respondent challenges Petitioner's alleged expenses.
[Note 19] Such amount is the full value of Petitioner's claimed expenses, but would reimburse Petitioner for only half of such expenses, because Petitioner would already be entitled to half of this amount if the parties divided the Remaining Proceeds evenly.
[Note 20] Some claimed expenses predate Virginia's death, going back as far as June 11, 1996. The Interim Report states that the Commissioner was advised by counsel for Petitioner that Petitioner began paying certain expenses during Virginia's lifetime, because Virginia became unable to do so.
[Note 21] Respondent asserts that the value of the Partition Property decreased approximately one-hundred forty-nine thousand dollars ($149,000.00) as a result of unreasonable delay. Respondent does not explicitly state the basis for this number, but it appears to be the difference between the price recommended in the ReMax Analysis and the actual sale price.
[Note 22] Respondent asserts that the Partition Property should have been sold at approximately the date of such appraisal, but Respondent's basis for asserting such date is unclear. Moreover, as Petitioner points out, a set-off based on diminution in value implies speculation. See Combs v. Whittle, 19 LCR 301 , 303 (2011) (finding that a calculation of diminution in value was "impermissibly speculative," in part because it was not tested against the market).
[Note 23] Petitioner stated in her deposition that "[f]airly soon after [Virginia's] death, [Petitioner and Respondent] talked about getting the [Partition Property] cleaned out so that [they] could get fair market value for it." Petitioner further stated that in the first year after Virginia's death, Petitioner and Respondent had approximately two conversations about selling the Partition Property.
[Note 24] This court notes that some of the communication between the parties took place against the backdrop of a "financial collapse in . . . 2008 that led to [a] persistent recession", Bulldog Investors General Partnership v. Secretary of the Commonwealth, 460 Mass. 647 , 675 (2011), and a "precipitous fall in the real estate market", Caveney v. Caveney 81 Mass. App. Ct. 102 , 107 (2012), which may have influenced the parties' opinions relative to sale of the Partition Property.
[Note 25] The Interim Report states: "Although the real estate market was by all accounts much stronger in 2005 and 2006 than it is now, [Respondent] does not offer any specific written evidence to determine value during this period."
[Note 26] The Commissioner plausibly suggests that "if . . . [Petitioner] provided notice to [Respondent] about the expenses and requested compensation as they were being incurred, it could very well have prompted him to take independent action . . ." However, even without such specific prompting, Respondent should have known that ongoing maintenance of the Partition Property would incur significant costs.
[Note 27] Respondent does not challenge the reasonableness of Petitioner's expenses apart from his allegations that the sale was unnecessarily delayed and that Petitioner did not actually bear the burden of those expenses. Respondent does not argue that the expenditures were otherwise unnecessary, imprudent, or exaggerated.
[Note 28] The summary judgment record indicates that Respondent has a dispute with Petitioner over her handling of Alden's and Virginia's estates, and that such dispute is clearly separate from the Partition Property; for example, even if the Partition Property had been conveyed to someone other than the parties, Respondent might still argue Petitioner wrongly took his half of the Life Insurance.
[Note 29] Even if all of Respondent's counterclaims were properly before this court, they raise other concerns, insofar as the Life Insurance, the Raytheon Account, the 401(k) account, and the Pension Payments are all non-probate assets and, as such, are not governed by Alden's will. See Bongaards v. Millen, 440 Mass. 10 , 43 (2003) (referencing life insurance and pension death benefits as "will substitutes"). Petitioner has also argued that such counterclaims are time-barred.
[Note 30] Respondent can pursue such claims in a different venue.
[Note 31] As the Interim Report noted, Petitioner is not seeking any set-off or reimbursement for such labor and administration.
[Note 32] See Osborne v. Biotti, 404 Mass. 112 , 114 (1989) ("Because of the time value of money, a sum of money received in the future is worth less than the same sum received today.").
[Note 33] As noted, supra, note 27, Respondent does not argue that any of Petitioner's alleged expenses are unreasonable.
[Note 34] The Commissioner has not commented on the reasonableness of electrical and telephone service to support an alarm system in general, or on the reasonableness of these specific costs.
[Note 35] This court notes that the Interim Report states: "Although [Respondent's] counterclaim is not of typical type averred in a petition for partition action, I do not see anything that strictly prohibits such a counterclaim . . ."
[Note 36] Petitioner has not formally brought a motion pursuant to G. L. c. 231, § 6F. However, this statutory standard is a reasonable basis for analysis, especially since Petitioner analogizes to it.
[Note 37] Significantly, not all of the counterclaims relate to personalty or non-probate property. Respondent also made the counterclaim seeking compensation for a diminution in value of the Partition Property. It is not clear that Petitioner objects to such counterclaim on a jurisdictional basis, or that Petitioner argues that such counterclaim was brought in bad faith. Since diminution in value is a substantial part of Respondent's argument, it is not clear that substantially all of Respondent's counterclaims are frivolous, as would be required by c. 231, § 6F.
[Note 38] It is worth noting that Respondent made his counterclaims on the basis of limited information. The expenses for which Petitioner seeks reimbursement were paid over a period of fifteen years (from June 11, 1996 to May 13, 2011). During many of those years, Petitioner did not communicate with Respondent about the nature and amount of such expenses; Respondent did not receive documentation of such expenses until after this case had commenced and the Commissioner requested such documentation. Four of the requests made of this court in the counterclaim involve an "accounting." The Commissioner opined in the Interim Report that Petitioner's conduct "would not be the expected norm if one was paying with one's own funds," inasmuch as she paid out more than eighty thousand dollars over fifteen years for the Partition Property, which produced no income, before either seeking to sell the Partition Property or asking Respondent in writing for reimbursement.
[Note 39] However, Petitioner did raise concerns about probate issues early in the case.
[Note 40] The December Report lists six examples of Petitioner's failure to comply with discovery, which it states is not meant as an exhaustive list.
[Note 41] This court's records indicate that Petitioner raised concerns about the cost of discovery relative to Respondent's counterclaims at the Case Management Conference, prior to the appointment of the Commissioner.
[Note 42] Respondent requested that certain facts be deemed admitted. Most such facts relate to Respondent's counterclaims, most of which are not properly before this court. Respondent's request relative to some such facts is moot, inasmuch as Petitioner ultimately admitted or denied such facts. Furthermore, this court cannot deem admitted facts that are irrelevant to the claims properly before it. "[O]ur system favors the substantive resolution of disputes on the merits in most instances," Grassi at 461 (2009), and Petitioner's conduct has not created an exception in this case.
[Note 43] The Sale Report, dated December 30, 2011, stated that the Commissioner at that date held in escrow as net proceeds from the sale of the Partition Property two-hundred seventy-two thousand eight-hundred ninety-nine dollars and forty-four cents ($272,899.44). On April 13, 2012, the Commissioner filed an additional bill of three-thousand seven-hundred seventy-eight dollars and seventy-four cents ($3,778.74). Subtracting such bill from the net proceeds, and subtracting the eighty thousand dollars ($80,000.00) already distributed to the parties, leaves one-hundred eighty-nine thousand one-hundred twenty dollars and seventy cents ($189,120.70).
Respondent's Motion for Partial Release of Escrowed Funds, dated May 4, 2012, stated that the Commissioner held in escrow two-hundred sixty-nine thousand one-hundred forty-seven dollars and forty-six cents ($269,147.46) before the distribution to the parties, which would leave the slightly greater amount of one-hundred eight-nine thousand one-hundred forty-seven dollars and forty-six cents ($189,147.46). The cause of this discrepancy is unknown.