Source: http://masscases.com/cases/app/81/81massappct511.html
Timestamp: 2019-04-24 02:41:04+00:00

Document:
BARBARA MCEACHERN, trustee, [Note 1] vs. THOMAS BUDNICK.
Trust, Amendment and modification. Practice, Civil, Summary judgment.
SUMMARY PROCESS. Complaint filed in the Western Division of the Housing Court Department on December 5, 2008.
After transfer to the Superior Court, the case was heard by Robert G. Fields, J., sitting under statuatory authority, on motions for summary judgment, and a motion for reconsideration was also heard by him.
Wendy H. Sibbison (Patricia A. DeJuneas with her) for the plaintiff.
Marion T. Rosenau for the defendant.
delivery of the instrument of amendment, without regard to evidence proffered to demonstrate that the individual signing the amendment did not intend to complete delivery, or cause the instrument of amendment to become effective, until satisfaction of some future event or condition. We reverse the judgment, and remand for further proceedings.
Background. We summarize the undisputed facts appearing on the summary judgment record; to the extent the record includes disputed evidence, we consider that evidence in the light most favorable to the plaintiff, against whom summary judgment entered on the parties' cross motions. See Ritter v. Massachusetts Cas. Ins. Co., 439 Mass. 214 , 215 (2003).
On April 1, 1992, Mildred M. Budnick (Mildred), as grantor, established a revocable inter vivos trust under the Mildred M. Budnick Revocable Trust Agreement (trust agreement), recorded that day in the Barnstable County registry of deeds in book 9058, page 252. The trust agreement named Mildred the sole trustee of the trust, and provided that, in the event of Mildred's resignation or incapacity, her daughter, Barbara A. McEachern (Barbara), would become the successor trustee.
Under art. III, pars. A-D of the trust agreement, upon Mildred's death the trustee was instructed to distribute the trust estate proportionally among four beneficiaries (if then living) [Note 3]: (i) ten percent to Thadeus Budnick, Mildred's brother-in-law; (ii) twenty percent to Heather M. McEachern, Mildred's granddaughter; (iii) twenty percent to Ross M. McEachern, Mildred's grandson; and (iv) the balance to Barbara. The last paragraph of art. III expressly stated that Mildred intentionally made no provision for her son, the defendant Thomas P. Budnick (Thomas).
"Notwithstanding the provisions of paragraphs A) to D) hereabove, the trustee shall distribute the real estate at 19 Harding Avenue, Ludlow, Hampden County, Massachusetts to the Grantor's son, Thomas P. Budnick."
on disputed questions of fact concerning Mildred's intent to deliver either the 1996 amendment or the 2005 amendment. However, on Thomas's motion for reconsideration, the judge concluded that the amendments were indeed effective because at the time she executed both amendments, Mildred was both grantor and sole trustee of the trust, so that delivery was automatic upon completion of her signature. This appeal followed.
Discussion. "Where a trust instrument explicitly provides for a power and method of modification, that power 'must be exercised in strict conformity to its terms.' " Fogelin v. Nordblom, 402 Mass. 218 , 223 (1988), quoting from Phelps v. State St. Trust Co., 330 Mass. 511 , 512 (1953). See Bongaards v. Millen, 440 Mass. 10 , 15 (2003). As we have observed, art. III, par. D of the trust imposed four requirements for any amendment thereto: (i) a written instrument, (ii) signed by the grantor, (iii) acknowledged by the grantor, and (iv) delivered to the trustee. Satisfaction of the first three requirements is not at issue in the present case; the parties divide solely on the question of delivery.
determined from his declarations, conduct and motive, and all the attending circumstances." Galotti v. United States Trust Co., 335 Mass. 496 , 501 (1957), quoting from Casey v. Gallagher, 326 Mass. 746 , 749 (1951).
With these principles in mind, it is manifest that the question whether the 1996 amendment or the 2005 amendment was delivered cannot be resolved on the summary judgment record. The summary judgment record includes evidence that Mildred expressed her intention at the time she executed each of the two amendments that it should not become effective until after she gave the matter further consideration. If accepted, such evidence negates satisfaction of the requirement under the trust agreement of delivery as a condition of the effectiveness of any instrument of amendment.
Thomas nonetheless argues that the circumstances of the present case should not be governed by the general principle, since a single individual (Mildred) was both settlor of the trust and its sole trustee at the time she executed each of the two amendments. In such circumstances, insisting on proof of delivery is unnecessary, Thomas contends, since the trustee necessarily is in possession of the amendment upon its execution by the settlor. The argument is flawed in several respects.
First, to the extent the argument suggests that we should dispense with the requirement of delivery entirely, it ignores the express terms of the trust establishing delivery as a necessary precondition to any amendment of the trust. [Note 12] As we have observed, of course, the provisions of a trust agreement concerning the means by which it may be amended are applied strictly. See Bongaards v. Millen, 440 Mass. at 15.
long been recognized in Massachusetts that a deed or other document may be placed in escrow, in which the instrument is physically transferred from the grantor to another party, under a condition that delivery shall not occur, and the instrument accordingly shall not become effective, until satisfaction of one or more escrow conditions. See, e.g., Foster v. Mansfield, 3 Met. 412 , 415 (1841). See also Mather v. Corliss, 103 Mass. 568 , 571 (1870); Daggett v. Simonds, 173 Mass. 340 , 347 (1899). Moreover, as we have observed, physical transfer of an instrument will not complete delivery where the parties to the instrument lack the intention that any interest be transferred by the instrument at that time. See Murphy v. Smith, 291 Mass. at 94.
not (as Thomas suggests) lead to an absurd result. It requires no particular stretch of imagination to envision circumstances in which a party may wish for reasons of convenience to have documents prepared on a provisional basis, and then (again for reasons of convenience) to execute and acknowledge them but have them held in escrow pending occurrence of a future event (which may in fact never materialize). The absurdity in such circumstances would not be the settled rule we follow today, but a rule in which such an escrow would either be given effect or not, depending on the fortuitous circumstance of the identity of the trustee.
The judgment is reversed, and the case is remanded to the Superior Court for further proceedings consistent with this opinion.
[Note 1] Of the Mildred M. Budnick Revocable Trust.
[Note 2] See G. L. c. 211B, § 9.
[Note 3] If any named beneficiary predeceased Mildred, such beneficiary's share was to be distributed per stirpes; if no named beneficiaries remained living at the time of Mildred's death, the trust property was to be distributed to Christ the King Church, of Ludlow.
[Note 4] The record indicates that Soja advised Mildred (incorrectly) that the 1996 amendment would not become effective unless and until it was recorded with the Barnstable registry of deeds. Under G. L. c. 203, § 3, instruments amending a recorded trust must be recorded in order to bind third parties without notice, but recording is not essential to the effectiveness of the amendment as among parties who have actual notice of the amendment. Had it occurred, of course, recording would have constituted conclusive evidence of delivery. See G. L. c. 183, § 5.
[Note 5] Though the original document has not been located, the record includes a photocopy of the signed instrument, and the parties do not dispute its accuracy.
[Note 6] Both the 1996 amendment and the 2005 amendment were denominated "First Amendment to Mildred M. Budnick Revocable Living Trust Agreement." For the sake of clarity, we refer to each by reference to the year in which it was prepared and signed.
[Note 7] The 2005 amendment also included language providing for distribution from the trust to Thomas of "any automobile the grantor [sic] may own at her death," and amendments to two other provisions of the trust agreement relating to Thadeus Budnick, in ways not relevant to the issues raised in the present appeal. The effect of a provision in the trust providing for distribution from the trust of an automobile owned by the grantor (rather than the trust) is not immediately clear, but the question does not bear on the issues raised in this appeal.
[Note 8] Like the 1996 amendment, the whereabouts of the original 2005 amendment are unknown, but the parties do not dispute the accuracy of the photocopy of it included in the record. See note 5, supra.
[Note 9] Mildred expressed certainty concerning her decision to devise her automobile to Thomas under her new will, however; she stated that she had included provision for such a transfer in both the 2005 amendment and her new will so that "in the event that she did not proceed with the trust amendment, he would receive the car through her will."
[Note 10] The answer did not specify whether Thomas relied on the 1996 amendment or the 2005 amendment. In his memorandum opposing Barbara's motion for summary judgment and supporting his cross motion, Thomas refers to both instruments.
[Note 11] The question of delivery of an instrument of trust (or of amendment thereto) is equivalent to that of similar instruments of transfer not in trust. See Silbert, supra.
[Note 12] We note that Mildred was both settlor and trustee at the time she executed the trust agreement, including the requirement of delivery.
[Note 13] Thomas suggests that extrinsic evidence of intent not only may but must be ignored in the present case, contending that such parol is inadmissible in the absence of demonstrated ambiguity in the instrument of amendment itself. The argument misses the mark. The question is not one of construing the meaning of the instrument of amendment, but whether it was delivered. Since the question of delivery of an instrument is by its very nature extrinsic to the terms of the instrument itself, it often rests on parol evidence. See, e.g., Howland v. Plymouth, 319 Mass. 321 , 324 (1946); Eckstrom v. Eckstrom, 327 Mass. 140 , 142 (1951).
[Note 14] We note that the court in In re Trust Created by Cease, supra, appears to have excluded parol evidence on the question of intent. For the reasons we have noted, however, we disagree with such application of the parol evidence rule to evidence of intent concerning the question of delivery. See note 13, supra.

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