The plaintiffs, two brothers, brought this action seeking, among other things, a declaratory judgment that under the terms of a trust (the Trust) established by their father, Ernesto Liporto, the property held in the Trust must be distributed from themselves as trustees to themselves as beneficiaries and tenants in common. The plaintiffs are opposed by the defendants, their brothers and co-trustees of the Trust, who contend that the co-trustees are not presently required by the terms of the Trust to distribute the Trust property until all the Trust assets have been identified and accounted for. The plaintiffs now move for summary judgment on whether the plain language of the Trust presently requires the co-trustees to distribute the Trust property. The defendants have cross-moved for summary judgment on the Trust interpretation issue, and seek further judgment that, as a matter of law, the court cannot partition the Trust property because the parties have only an equitable, not a legal, interest. For the reasons set forth below, the plaintiffs motion for partial summary judgment is ALLOWED and the defendants motion for summary judgment is DENIED.
Summary judgment may be entered when there are no genuine disputes of material fact on the claims put in issue by the motion, and the moving party is entitled to judgment on these undisputed facts as a matter of law. Mass. R. Civ. P. 56(c); Ng Bros. Constr. v. Crannery, 436 Mass. 638 , 643-644 (2002). When considering a motion for summary judgment, the court does not pass upon the credibility of witnesses or the weight of the evidence or make its own decision of facts. Atty Gen. v. Bailey, 386 Mass. 367 , 370 (1982) (citations omitted). All material facts must be viewed, and all reasonable inferences from those facts must be drawn, in the light most favorable to the party opposing the motion. Id. at 371.
The following facts are not in dispute. Ernesto Liporto executed the Ernesto Liporto Revocable Trust Agreement on May 10, 1993. He passed away on July 18, 2008. His wife, Bertha Liporto, predeceased him on April 20, 2007. The Trust holds title to two properties in Hamilton, Massachusetts: Lot 1 as shown on a subdivision plan for Whipple Road (recorded at the Southern Essex District Registry of Deeds, book 27680, page 484) and 24 Juniper Road, which was Mr. Liportos residence. The plaintiffs and defendants are all brothers and they are the four co-trustees and remainder beneficiaries of the Trust. [Note 1]
By its terms, the Trust is to be construed according to the laws of Florida. The portions of the Trust that are relevant to this action are as follows. Article I of the Trust instructs: The Trustee shall hold, manage, invest and reinvest the trust estate and shall collect the income therefrom and shall dispose of the net income and principal as follows
This sentence is followed by three sections under Article I labeled A, B, and C, each of which directs the trustee on how to dispose of the Trust assets under different scenarios contemplated by Mr. Liporto.
Section A addresses how the Trust assets were to be handled while Mr. Liporto was alive. This section directs the trustee shall pay to or apply for the benefit of the Grantor all of the net income together with such payments from the principal as the Grantor may need from time to time. This section also provides that in the event Mr. Liporto could no longer act in his own behalf, the trustee may pay to or apply for the benefit of the Grantor amounts from the Trust estate as the trustee may from time to time deem advisable for Mr. Liportos benefit.
Section B provides for what was to happen upon Mr. Liportos death in the event that he was survived by Mrs. Liporto, a scenario that did not come about. That section instructs the trustee to establish a Credit Shelter Trust with Mrs. Liporto as the beneficiary. Section B (1) provides that should Mrs. Liporto survive Mr. Liporto, the income from the Credit Shelter Trust shall be paid to or applied for the benefit of Mrs. Liporto. Section B (2) further authorizes the trustee to use the principal of the Credit Shelter Trust, as she deems necessary or advisable for Mrs. Liportos benefit. Section B (3) provides that upon Mrs. Liportos death, the principal and undistributed income from the Credit Shelter Trust shall be distributed outright to Grantors children per stirpes.
Section C concerns how the Trust assets would be distributed if Mrs. Liporto did not survive her husband. The relevant subsection states:
2. The Balance of Grantors trust estate shall be distributed outright equally to Grantors children, ERNEST P. LIPORTO, DAVID R. LIPORTO, ALLAN [sic] J. LIPORTO and DONALD C. LIPORTO, per stirpes.
Section C (1) devised certain property in Hamilton to Donald Liporto provided that the property was held by the Trust at the time it was to be distributed. Mr. Liporto, however, had transferred this property to an unrelated party in 1997, and therefore subsection C (1) is not at issue in this present action.
Article IX provides for successor trustees in the event that Mr. Liporto was no longer able to act as trustee. That section designates Mrs. Liporto as successor trustee, and in the event that she was no longer able to act, Mr. Liportos children would serve as successor trustees. Article V provides that if Mr. Liportos children were to act as co-trustees under the agreement, either in Florida or in Massachusetts, then Grantor directs that a majority of them shall have the authority to exercise all powers conferred on said Trustees under both jurisdictions. Under Article V, the trustee has full power and authority to protect, conserve, sell, lease, encumber, or otherwise manage and dispose of any real estate owned by this Trust at any time .
The only two facts that are in dispute between the parties are whether certain jewelry belonging to Mrs. Liporto became part of the Trust property upon her death, and whether the parties made equal contributions to maintain the Trusts real property assets. Neither of these disputed facts, however, prevents the court from granting partial summary judgment in favor of the plaintiffs. The dispute as to who has title to Mrs. Liportos jewelry is beyond the jurisdiction of this court. See G.L. c. 185 § 1. The issue concerning unequal contributions to the maintenance of the property cannot be addressed until there is a partition of the properties, which depends on first answering the question of whether or not the terms of the Trust require the parties to distribute the Trust property to themselves as beneficiaries and tenants in common. For the following reasons, I conclude that the plain language of the Trust does, in fact, demonstrate Mr. Liportos intention that such a distribution is required under the present circumstances.
Under Florida law, when the terms of a trust agreement are unambiguous, the meaning of the trust and the intent of the maker are determined solely from the face of the document and the plain meaning of the language therein. See Barry v. Lieberman, 689 So. 2d 1186, 1187-88 (Fla. 4th Dist. Ct. App. 1997). The plain language of the Trust expresses Mr. Liportos intention to utilize the Trust for his benefit during his lifetime, and then for his wifes benefit during her lifetime should she survive him with the remainder to be distributed equally among their children. This is evident from the language Mr. Liporto chose to use: During the lifetime of the Grantor (Article I (A)); If Grantors Wife, BERTHA M. LIPORTO, survives Grantor, then during her lifetime . (Article I (B)(1)). There is no similar language to support the defendants contention that the Trust could be used to provide income to Mr. Liportos children during their lifetimes after their mothers or fathers death. Unlike the language used in conjunction with Mr. and Mrs. Liporto, the Trust never speaks of lifetime in reference to Mr. Liportos children. Quite the opposite, it commands that, under the contingency described in Section C where Mrs. Liporto does not outlive Mr. Liporto, the balance of the Trust estate shall be distributed outright to the plaintiffs and defendants per stripes.
The language of the Trust is not ambiguous on this point. In other parts of the Trust, Mr. Liporto used permissive language such as may or as she deems necessary that gave the trustee a measure of discretion, but in Section C (2), Mr. Liporto gave the co-trustees no discretion. By employing the word shall as opposed to more permissive language, Mr. Liporto left the co-trustees no choice; Section C (2) is a mandatory requirement that the co-trustees do the particular action described in that section upon the death of Mr. Liporto. See Pipitone v. Pipitone, 23 So. 3d 131, 135 (Fla. 2d Dist. Ct. App. 2009) (contrasting mandatory language such as shall with permissive language such as may); see also Noel v. Sheldon J. Schlesinger, P.A., 984 So. 2d 1265, 1267 (Fla. 4th Dist. Ct. App. 2008) (same); Anton v. Anton, 763 So. 2d 404, 407 (Fla. 4th Dist. Ct. App. 2000) (same).
Despite the clear language that Mr. Liporto used in the Trust, the defendants contend that there is no definite date for the distribution of the Trust real estate and, in fact, under the terms of the Trust, the co-trustees have the power to continue to manage the Trust real estate with no definitive end date. See Defendants Memorandum of Law in Support of Their Opposition to Plaintiffs Motion for Summary Judgment and in Support of Their Cross Motion for Summary Judgment, at p. 12. For support, the defendants attempt to rely on Article V of the Trust, which directs that the trustee shall have full power and authority to protect, conserve, sell, lease, encumber, or otherwise manage and dispose of any real estate owned by the Trust. Article V also instructs that if Mr. Liportos children act as trustees, a majority of them shall have the authority to exercise all powers conferred on said Trustees under Massachusetts or Florida law. Article V, however, cannot be read so that it completely trumps the mandatory language of Article I that the Trust property shall be distributed outright . As plaintiffs note, Article V does serve an important function: if Mr. Liporto had been no longer able to serve as trustee, then this section instructs his sons, as co-trustees, on how to proceed with managing the Trust and making decisions while their father or mother was alive.
But under the present circumstances, where Mr. and Mrs. Liporto are both deceased, the mandate of the Trust is clear. It is readily apparent from the Trust language that Mr. Liporto intended the Trust property to be distributed at a definite time, which was either at the death of his wife or at his death, if he survived his wife. The distribution of the Trust property does not require any majority vote of the co-trustees; it is, as plaintiffs contend, a ministerial act. See Lumbert v. Estate of Carter, 867 So. 2d 1175, 1177-79 (Fla. 5th Dist. Ct. App. 2004) (when condition precedent to partial distribution of trust assets occurred, the beneficiarys rights had vested, and [t]he actual distribution of these shares was merely a ministerial act).
Much of the defendants argument in opposition to the plaintiffs motion and in support of their own rests on the theory that the Trust assets cannot be distributed until Mrs. Liportos jewelry is transferred to the Trust and accounted for. [Note 2] Title to the jewelry may very well be in dispute between the parties, but the resolution of that issue, as discussed above, is for another court with the appropriate jurisdiction to decide. There is no language in the Trust that suggests a complete accounting of all Trust assets is a condition precedent to the distribution of the Trust property. The only condition precedent to the distribution that can be identified from the plain language of the Trust is the passing of either Mr. Liporto or Mrs. Liporto, whichever one outlived the other.
In their motion for summary judgment, the defendants repeat the argument they made in their earlier memorandum in support of their motion to dismiss this action for lack of subject matter jurisdiction. Once again, the defendants argue that as a matter of law, partition cannot be granted by this court because they and the plaintiffs have only an equitable interest in the Trust property. To be sure, the defendants are correct that property owned by a trust is not subject to partition. See Rolland v. Hamilton, 314 Mass. 56 , 60 (1943). However, as this court has explained in a prior order, this case presents two questions: 1) whether the terms of the Trust require distribution of the property to the parties, individually, as tenants in common, and 2) if (but only if) distribution is mandated and title placed in the plaintiffs and defendants, then we would reach the question of how partition should proceed. See Notice of Docket Entry, Sept. 21, 2012. Having found that the plain language of the Trust presently requires the distribution of the Trust property to the parties as tenants in common, this case will now proceed to addressing the second question concerning the absolute right of co-tenants to seek a partition of property. See OBrien v. Mahoney, 179 Mass. 200 , 203 (1901). It is in this second phase of the case where the parties may make arguments regarding the allegedly unequal contributions made by the co-trustees for the upkeep and maintenance of the Trust property.
For the reasons set forth above, the plaintiffs motion for partial summary judgment is ALLOWED and the defendants motion for summary judgment is DENIED.
By the court (Long, J.)
[Note 1] Articles II and III instruct the trustee on what to do if a beneficiary of the Trust is a minor or under legal disability. All of the four brothers are over 21 and are under no legal disability.
[Note 2] It appears from the materials submitted that the defendants are willing to turn the distribution of the Trust property into a bargaining chip in order to resolve their concerns regarding Mrs. Liportos jewelry. Exhibit 8 in Plaintiffs Indexed Appendix to Plaintiffs Statement of Material Facts is a letter sent by the defendants to the plaintiffs, dated 8-21-11, stating THERE WILL BE NO ACTION OR NEGOTIATIONS ON DADS HOUSE UNTIL ALL OF MOMS JEWLRY [sic] IS TURNED INTO LUCILLE DUVAL AT THE BANK. THIS MEANS WE WILL PAY THE TAXES AND INSURANCE ON THE HOUSE FOR THE REST OF OUR LIVES. (emphasis in original).