WILLIAM C. FAGE v. WENDY BISHOP, CHRISTOPHER GRANT, and DOUGLAS GRANT.

INTRODUCTION

This action was commenced on December 18, 2017 with the filing of a complaint by plaintiff William C. Fage ("Mr. Fage") against his deceased wife Claire's ("Ms. Fage") children from a prior marriage. Mr. Fage seeks to clear title to property located at 1 Williams Street, Sterling, Massachusetts ("the Property"), which Mr. Fage had deeded to Ms. Fage as trustee of The Fage Family Trust ("the 1996 Deed" and "the Trust," respectively) shortly before Ms. Fage's death in October, 1996. The matter is before the court on Plaintiff William C. Fage's Motion for Judgment on the Pleadings ("the Motion") and Defendant Douglas E. Grant's Opposition To Plaintiff's Motion For Summary Judgment On Pleadings And Request For Trial and his Motion for Reconsideration of Interlocutory Order for Plaintiff's Motion For Judgment on the Pleadings (collectively, "the Opposition"). [Note 1]

PROCEDURAL HISTORY

Mr. Fage's initial complaint asserted three counts: for reformation of the 1996 Deed to reflect different grantees from Ms. Fage, on the grounds that Ms. Fage was not a trustee of the Trust at the time of the 1996 Deed (Count I); for adverse possession (Count II); and for a declaratory judgment (Count III) declaring (a) that Mr. Fage had created the trust and was its sole beneficiary, (b) that Ms. Fage was not intended to have a beneficial interest in the Property, (c) that, if Ms. Fage did hold title to the Property, she did so subject to a "resulting constructive trust," (d) that the defendants received no interest in the Property on their mother's death, and (e) that Mr. Fage owned the Property in fee simple.

On February 28, 2018, a case management conference was held (Long, J.), at which Mr. Grant appeared and indicated his belief that Mr. Fage intentionally vested title to the Property in Ms. Fage, and that Ms. Fage died with a will. He also indicated that he had initiated an action in 2015 in the Probate and Family Court Department of the Trial Court ("Probate Court") concerning Ms. Fage's estate. Counsel for Mr. Fage represented that she would investigate the status of the Probate Court proceedings. The court requested that counsel for Mr. Fage submit a copy of the Trust to the court prior to the next court date.

On March 19, 2018, Mr. Grant filed an answer; the other two defendants, Wendy Bishop and Christopher Grant, did not. Default was entered as to them on March 23, 2018. On April 24, Mr. Fage and defendant Wendy Bishop filed an Agreement for Judgment. By order dated April 30, 2018, the court (Long, J.) deferred entry of a default judgment as to the remaining defendant to the conclusion of the action.

On May 1, 2018, a status conference was held, at which counsel for the plaintiff reported that there had been no recent activity in the Probate Court action. As a result, the court (Long, J.) allowed Mr. Fage to continue to pursue his claims in this court. A trial was scheduled for August 8, 2018.

On July 16, 2018, Mr. Fage filed a Motion to Amend Complaint and Continue Trial. In requesting leave to amend the complaint, Mr. Fage stated that he had been able to locate a number of additional documents related to the Trust, including a Declaration of Trust and a Certification of Trust, which showed that Ms. Fage was a trustee of the Trust. The Amended Complaint attached these documents as exhibits and substituted a new Count I, seeking to quiet title to the Property in the Trust.

On July 19, 2018, the court (Long, J.) allowed the plaintiff's motion, deeming the attached Amended Complaint filed, and cancelled the scheduled trial. On August 14, 2018, Mr. Grant filed an answer to the Amended Complaint. On October 15, 2018, Mr. Fage filed the instant motion and Mr. Grant filed his opposition on November 1, 2018. On March 5, 2019, a hearing was held on the Motion. After argument, the court (Roberts, J.) took the Motion under advisement. Thereafter, by correspondence dated March 8, 2019, counsel for Mr. Fage reported to the court that, by deed dated July 31, 2007 and recorded at the Worcester Registry of Deeds ("the Registry") at Book 41601, Page 142, Mr. Fage had conveyed the Property from himself individually to himself as Trustee of The Sunshine Valley Health Trust-II.

STANDARD OF REVIEW

Pursuant to Mass. R. Civ. P. 12(c), "[a]fter the pleadings are closed but within such time as not to delay the trial, any party may move for judgment on the pleadings." The comment to Rule 12 states that "Rule 12(c) is designed to cover the rare case where the answer admits all the material allegations of the complaint (or the reply admits all the allegations of the counterclaim) so that no material issue of fact remains for adjudication." Accord Wing Memorial Hospital v. Department of Public Health, 10 Mass. App. Ct. 593 , 596 (1980) ("The judge decided these questions of law adversely to the plaintiff, and no material fact was in dispute. The case was properly disposed of by a motion under rule 12 (c)."). That is the case here, where Mr. Grant's answer did not deny the allegations set forth in Mr. Fage's amended complaint. See Mass. R. Civ. P. 8(d) ("Averments in a pleading to which a responsive pleading is required, other than those as to the amount of damage, are admitted when not denied in the responsive pleading.").

FACTS

The following allegations of the amended complaint were not denied and are accepted as true for purposes of this motion:

1. Pursuant to a deed dated December 19, 1985, and recorded in the Worcester County Registry of Deeds at Book 9132, Page 155 ("the 1985 Deed"), [Note 2] Curtis Fage and Dorothy Fage deeded the Property to their son, Mr. Fage. Amended Complaint ¶ 6.

2. The Property's present address is 1 Williams Street. Amended Complaint ¶¶ 1, 6.

3. Since 1985, the Property has been Mr. Fage's primary residence and he has maintained it and paid taxes on it during that period. Amended Complaint ¶¶ 8, 32, 34.

4. On May 10, 1996, Mr. Fage, together with Barry Watson ("Mr. Watson") as trustee and Lee Lambeth ("Mr. Lambeth") as trustee, executed a number of instruments purporting to create "The Fage Family Trust." These included a "Certified Extract of Contract Creating the Fage Family Trust" ("the Certified Extract"), which named Messrs. Watson and Lambeth as trustees of the Trust; a "Memorandum of Trust;" "Exhibit A," which named Mr. Fage as the sole beneficiary of the Trust; "Exhibit C," purporting to transfer personal property to the trustees, but lacking Mr. Fage's signature; "Exhibit D-1" and "Exhibit D-2," in which Mr. Watson and Mr. Lambeth respectively accepted the position of trustee; a "Manager's Agreement," pursuant to which the trustees purported to appoint Mr. Fage as the "manager" of the Trust; and a "Residential Lease Agreement," whereby the Trust purported to lease the Property to Mr. Fage. Amended Complaint Ex. A.

5. The Memorandum of Trust states that it is "a summary of and is subject to all of the terms, covenants and conditions of the unrecorded CONTRACT by and among the parties wherein the Creator did create the Trust, which for federal income tax purposes is treated as a trust. This Entity is known as The Fage Family Trust, with Federal I.D. 04-6814136. The Contract is dated May 10, 1996 and names Barry Watson and Lee Lambeth as Trustees." The "contract" is not part of the record in these proceedings.

6. Another document executed on this date, titled "Exhibit B," states: "The real property transferred to the Fage Family Trust by the Creator is set forth below, along with the date of transfer to the Trustees." The handwriting on this document lists "House" with a figure next to it of $160,000 and "Land" with a figure next to it of $45,000. The signature block states, "Transferred this 10th day of May, 1996," followed by the signature of the plaintiff, and "Received this 10th day of May, 1996," followed by the signatures of Messrs. Lambeth and Watson. [Note 3]

7. Also on May 10, 1996, Messrs. Lambeth and Watson signed, as trustees, the minutes for a meeting of "The Fage Family Trust." The minutes note that Messrs. Lambeth and Watson had agreed to act as trustees, that Mr. Fage was designated the "manager" of the Trust, that Mr. Fage owned 100% of the beneficial interest in the Trust and that the "Successor Beneficiaries" of the Trust were Joel W. Fage, Aleta L. Davison and John Curtis Fage, each as to a 33 1/3% interest. Amended Complaint Ex. A.

8. On May 10, 1996, [Note 4] Mr. Fage also executed an instrument titled "Declaration of Trust," with the subheadings "The Fage Family Trust" and "A Complex Irrevocable Trust" ("the Declaration"). Unlike the documents described in paragraphs 4-7 above, the Declaration named Ms. Fage and an entity named Santiago Holdings as the trustees and was signed by Mr. Fage, but was not signed by Ms. Fage or a representative of Santiago Holdings. Amended Complaint Ex. B.

9. Mr. Fage, along with Ms. Fage, also executed a document titled "Certification of Trust of The Fage Family Trust" ("the Certification"), which certified that the Trust was created on May 10, 1996, by William C. Fage "under a trust agreement executed on that date," that "[t]he currently acting Trustees of the trust are William C. Fage and Claire Fage," and that the Taxpayer Identification Number for the Trust was 04-6814136. The Certification is dated May 10, 1996, but the notarization is dated September 13, 1996. Amended Complaint Ex. D. [Note 5]

10. Neither the Declaration nor the Certification was ever recorded. Amended Complaint ¶ 18.

11. Pursuant to the 1996 Deed, Mr. Fage conveyed the Property to "The Fage Family Trust, Claire Fage, Trustee" in exchange for recited consideration of "love and affection." The 1996 Deed is dated May 10, 1996, but the date of the notarization is September 14 with no listed year. It was recorded in the Registry on November 14, 1996, in Book 18398, Page 241. Amended Complaint Ex. E.

12. On May 11, 1996, Mr. Watson executed a "Resignation of Trustee of The Fage Family Trust" on behalf of Santiago Holdings, which document states that "[d]ue to circumstances beyond my control, I must herewith submit my resignation as TRUSTEE of THIS TRUST, to become effective immediately." This document was notarized, though the notarization is undated. Amended Complaint Ex. C.

13. Ms. Fage passed away on October 9, 1996. Amended Complaint ¶ 19.

14. The defendants are the three children of Claire Fage. Amended Complaint ¶ 28.

15. Messrs. Watson and Lambeth signed, as trustees, documents purporting to be minutes of meetings of "The Fage Family Trust" on May 9, 1997; May 8, 1998; October 20, 1998; May 10, 1999; June 15, 1998; and May 7, 2000.

16. In August, 1998 [Note 6] Messrs. Watson and Lambeth, as trustees, and Mr. Fage, as manager, signed an instrument providing themselves with banking authority for the Trust. Amended Complaint Ex. A.

17. By deed dated September 21, 2001, and recorded in the Registry at Book 25527, Page 345 ("the 2001 Deed"), Mr. Watson, as trustee for the Trust, conveyed the Property to Mr. Fage individually. Amended Complaint Ex. F.

18. The court takes judicial notice of the fact that, both prior to and after the date of the 2001 Deed, Mr. Fage obtained financing in his own name using the Property as collateral. See mortgage from Mr. Fage to BankBoston recorded at the Registry on August 9, 1999 at Book 21710, Page 277; mortgage from Mr. Fage to Travelers Bank & Trust recorded at the Registry on November 23, 2001 at Book 25310, Page 307; mortgage from Mr. Fage to Travelers Bank & Trust recorded at the Registry on April 9, 2002 at Book 26344, Page 253; and mortgage from Mr. Fage to Fleet Bank recorded at the Registry on February 27, 2003 at Book 29155, Page 370. The Registry records reflect that all of these mortgages have been discharged. See discharges of mortgage recorded at the Registry at Book 50796, Page 166; Book 25866, Page 146; Book 51055, Page 194 and Book 55410, Page 249.

19. On or about June 17, 2013, Mr. Fage attempted to refinance the Property again, and was informed by the lender that the intended transfer of the Property in trust in 1996 failed because no trust or trustee's certificate was recorded, so that the 1996 Deed instead served to convey title to Ms. Fage individually. Amended Complaint ¶¶ 25-26.

DISCUSSION

To set forth the facts on which the Motion is based is to acknowledge the incompetence that infected the creation of the Trust in 1996. It is not clear what document actually created, or attempted to create, the Trust, whether it was the unrecorded "contract" of which no copy is found in the record, or the undated Declaration. It is not clear who the original trustees of the Trust were, whether they were Messrs. Watson and Lambeth, Ms. Fage and Santiago Holdings, or Mr. and Ms. Fage. If the original trustees were Messrs. Watson and Lambeth, the Property was never effectively transferred to them. [Note 7] While the beneficiary, Mr. Fage, and the "successor" beneficiaries are identified in the documents designating Messrs. Watson and Lambeth as trustees, no similar identification is provided with respect to the trust created by the Declaration or the trust, if different, referenced in the Certification. [Note 8]

Despite all of the issues that these documents raise, there are certain points of clarity found in the documents and the subsequent history: (1) that Mr. Fage intended to create a trust; (2) that he intended to convey the Property into that trust; and (3) that Mr. Fage intended that he be the beneficiary of the trust and that, upon his death, the remainder beneficiaries be Joel and John Fage and Atela Davison, not Ms. Fage or her estate. However, the effect of the 1996 Deed to Ms. Fage, recorded without any trustee certificate or recorded trust, was to vest title in Ms. Fage individually, not as trustee. See Mitchell v. U.S. Bank, 22 LCR 120 , 130 (2014) citing A.L. Eno, Jr. & W.V. Hovey, Real Estate Law, § 2.19 (4th ed. 2004). The result, in the absence of the relief sought here, would be the transfer of title to the Property to her estate upon her death.

At or near the time of conveyance, the cure for this defect would have been a new deed from Mr. Fage to Ms. Fage, this time recorded with a proper trustee's certificate or with the document creating the Trust. See M. Pill, Real Estate Law, § 2.19 (4th ed. 2018). Alternatively, REBA Title Standard No. 53 suggests the use of an attorney affidavit recorded pursuant to G.L. c 183, § 5B, to correct the defect. Given Ms. Fage's death and the passage of time, neither cure has been effected; hence, this action.

General Laws c. 185, § 1(k), grants this court original jurisdiction concurrent with the supreme judicial court and the superior court over "[a]ll cases and matters cognizable under the general principles of equity jurisprudence where any right, title or interest in land is involved." Where its equity jurisdiction is invoked, this court has a number of remedies available to it, including the imposition of a constructive trust. See Gottlieb v. Girl Scouts of E. Mass., Inc., 24 LCR 349 , 353; Morrison v. Morrison, 14 LCR 677 , 679 (2006). "A constructive trust is a flexible tool of equity designed to prevent unjust enrichment resulting from … mistake, or 'other circumstances' in which a recipient's acquisition of legal title to property amounts to unjust enrichment." Maffei v. Roman Catholic Archbishop, 449 Mass. 235 , 246 (2007). "One type of constructive trust, implied by law as a result of mistake … or unjust enrichment, may be imposed, generally as between transferor and transferee, without proof of fraudulent intent." Cavadi v. DeYeso, 458 Mass. 615 , 627 (2011).

So, for example, in Stevens v. Nagel, 64 Mass. App. Ct. 136 (2005), the plaintiffs brought suit against the estate of their uncle, seeking to impose a constructive trust on a portion of the estate that consisted of funds that his deceased wife, their aunt, had wrongfully taken from their father's estate. According to the Appeals Court,

[r]educed to essentials, the complaint sketches a claim for restitution to the extent that, without giving any value, [the uncle] received from [the aunt] money that belonged to the plaintiffs. Here, as in National Shawmut Bank of Boston v. Fidelity Mut. Life Ins. Co., 318 Mass. 142 , 150, 61 N.E.2d 18 (1945), "the fundamental question … is whether [Charles] received money which in equity and good conscience belongs to the plaintiffs. If so, [Charles's estate] must restore it.

Id. at 140-141. In reaching its conclusion, the Stevens court cited to and quoted from Simonds v. Simonds, 45 N.Y.2d 233, 242 (1978): "Unjust enrichment … does not require the performance of any wrongful act by the one enriched. Innocent parties may frequently be unjustly enriched. What is required, generally, is that a party hold property ‘under such circumstances that in equity and good conscience he ought not retain it.'"

The present case is appropriate for the imposition of a constructive trust. Mr. Fage clearly intended the Property to be held in trust for his benefit, and not to pass to his wife individually and then through her estate. The language of the documents, the transfer of the Property to Ms. Fage for "love and affection," the subsequent reconveyance of the Property to Mr. Fage, and his shouldering of all the costs associated with the Property over many years all support the imposition of a constructive trust. Without intending any suggestion that Ms. Fage was anything other than an innocent party to the transaction at issue here, this court has concluded that a contrary result would unjustly enrich Ms. Fage's estate. On this record, Ms. Fage received property that in equity and good conscience belongs to Mr. Fage. Finally, it does not appear that any third party's rights will be adversely affected by this relief.

CONCLUSION

Based on the admitted facts set forth in the Amended Complaint and for the foregoing reasons, Plaintiff's Motion for Judgment on the Pleadings is ALLOWED as to Count III of the Amended Complaint. Judgment will issue declaring that the intended trustees of the Trust, whether Ms. Fage, Mr. Watson or Mr. Lambeth, held the Property in a constructive trust for the benefit of Mr. Fage, and that the 2001 Deed was effective to transfer title to Mr. Fage. Counts I and II, which the court does not reach, are dismissed.