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In re The Janet S. Bagdis Living Trust

Supreme Court of Rhode Island

March 24, 2016

In re: The Janet S. Bagdis Living Trust Agreement Dated September 23, 1996, as amended on January 12, 2007 and July 26, 2008.

Providence County Superior Court (PM 14-882) Associate Justice Brian Van Couyghen

For Appellant: Kimberly A. Bagdis, Pro Se.

For Appellee: Nicole J. Benjamin, Esq. Joseph R. Marion III, Esq.

Present: Suttell, C.J., Goldberg, Flaherty, and Indeglia, JJ.

OPINION

FRANCIS X. FLAHERTY, ASSOCIATE JUSTICE

Kimberly Bagdis, a self-represented appellant, seeks to vacate a Superior Court order that required the disposition of funds held in trust for her be used to pay attorneys' fees. Before this Court, she argues that the trial justice made several reversible errors. First, she argues that the trial justice erred when he approved the first and final accounting of the trustee and appellee, Lynne Wilson and when he approved the payment of the settlor's final debts and expenses, as well as administration costs, from the trust. Second, she argues that the trial justice erred when he discharged and released Wilson from her fiduciary duty because Wilson had breached that duty by administering the trust's assets in an imprudent manner. Third, she contends that her due process rights were violated by the Superior Court. In this regard, she maintains that the trial justice erred because Wilson was allowed to testify at "an unscheduled, impromptu hearing" when Kimberly was not present and that she did not have an opportunity to cross-examine her. She also argues that the trial justice violated her right to due process when he limited her time for argument during a subsequent hearing.

This matter came before us on December 9, 2015, pursuant to an order directing the parties to appear and show cause why the issues raised by the appeal should not summarily be decided. After considering the parties' oral and written arguments and examining the record, we are of the opinion that cause has not been shown and that this case can be decided without further briefing or argument. For the reasons given below, we affirm the judgment of the Superior Court.

Facts and Travel The Trust

Janet Bagdis died on January 17, 2010. Before her death, she established an inter vivos trust, the Janet S. Bagdis Living Trust. That trust, as amended, provided for three shares that were to be apportioned among her children and grandchildren. Specifically, her daughter and successor trustee, Lynne Wilson, was to receive 50 percent; her son, Neil, was to receive 30 percent; and the remaining 20 percent was to go to Wilson to hold in trust for the benefit of Janet's grandchildren, Kimberly and Jeffrey.[1] There was a provision that the 20 percent share was to be distributed at Wilson's discretion for the care of Jeffrey and Kimberly until March 13, 2014, when the younger of the two, Kimberly, reached the age of twenty-five. At that time, whatever remained of the 20 percent share was to be distributed to the two grandchildren in equal shares. Because neither of the grandchildren had attained the age of twenty-five at the time of the settlor's death, the trustee, Wilson, elected to establish a second trust to administer the 20 percent share. This second trust was denominated the Janet S. Bagdis Continuing Trust (the Trust) and the corpus was held in a cash account at Fidelity Investments.

Under her discretionary powers, Wilson apparently intended to distribute all the remaining assets in equal shares to Jeffrey and Kimberly before the automatic termination date of March 13, 2014. Wilson asked both Jeffrey and Kimberly to sign a release discharging her of her duties and releasing her of any liability. As is common in trust administration, in return for a release, Wilson would then make the distribution of that beneficiary's share of the Trust. Kimberly did not sign the release in exchange for the distribution of her $37, 565.75 share.[2]

Epistolary Episodes

The record indicates that between September 2010 and December 2012, Wilson attempted on numerous occasions to contact Kimberly to discuss the distribution of the Trust assets that were being held for her benefit. After she sent Kimberly four letters, via certified or priority mail, to her home in Pennsylvania, and after speaking with both Kimberly's brother and mother, Wilson finally heard from Kimberly in December 2011. Kimberly explained to her aunt that she had received both the letter informing her of her share and the accompanying release, but that she had not yet gone to the bank to set up the necessary account to deposit the funds and that she needed a new copy of the release. Wilson obliged, and followed up in January 2012 by sending Kimberly a text message to ensure that the release had arrived. Kimberly informed her aunt that the materials had arrived, but that she still had yet to go to the bank.

When, after the passage of ten more months, Wilson had no further response from Kimberly, she decided to make two last attempts at contacting her niece. First, Wilson sent Kimberly yet another letter, again asking that she sign the release and requesting that she call if she had any questions about the process. Also, Wilson both telephoned Kimberly and sent her a text message to follow up on this latest correspondence. Once again, Wilson did not receive a response. Finally, by March 2013, it became apparent to Wilson that Kimberly would not be signing the release. With Kimberly's twenty-fifth birthday-and, therefore, the Trust's termination-looming in the near future, Wilson retained the services of an attorney to advise her about the winding down of the Trust.

The attorney sent Kimberly a letter explaining that the distribution of $37, 565.75 to her was one of the final tasks necessary to complete the administration of her grandmother's estate. Wilson's attorney also informed Kimberly that her failure to return the executed release would result in a further delay in administering the estate and waste Kimberly's portion of the Trust proceeds. Again, the letter asked ...


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