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Verri v. RBC Capital Markets, LLC

Superior Court of Rhode Island

July 26, 2017

ROBERT P. VERRI, QUA CO-TRUSTEE OF THE ROSE IZZI TRUST-1994, AND PATRICIA VERRECCHIA MOREAU, QUA CO-TRUSTEE OF THE VALENZIO IZZI TRUST-1994, Plaintiffs,
v.
RBC CAPITAL MARKETS, LLC. a/k/a RBC WEALTH MANAGEMENT, formerly known as and/or alias RBC Dain Rauscher Inc. and/or as the successor to Tucker Anthony Day and/or Tucker Anthony-also doing business as Freedom Trust Company, alias John Doe Corporations 1 through 10, as the case may be, Defendants.

         Providence County Superior Court

          For Plaintiff:Edward J. Mulligan, Esq.

          For Defendant: Rebecca M. Murphy, Esq.

          DECISION

          LICHT, J.

         This litigation focuses on one of two reciprocal trusts. Defendant RBC Capital Markets, LLC (RBC or Defendant) moves to stay the litigation and compel arbitration. Plaintiffs Robert Verri (Verri) and Patricia Verrecchia[1] Moreau (Moreau) (together, Plaintiffs) object to this motion.

         I

         Facts and Travel

         On September 12, 1994, Valenzio Izzi (Valenzio)[2] and Rose Izzi (Rose), husband and wife, created two reciprocal, revocable trusts. Valenzio was the initial trustee of the Valenzio Izzi Trust (Valenzio Trust), which was administered for his benefit during his lifetime. Likewise, Rose was the initial trustee of the Rose Izzi Trust (Rose Trust), and the trust was administered for her benefit during her lifetime. The settlors also created trust accounts with Tucker Anthony under the guidance of financial planner Joseph A. Kumiega[3] (Kumiega). Valenzio died on December 14, 1998, and, pursuant to the terms of his trust, Rose and Paul V. Verrecchia (Verrecchia) became the successor co-trustees of the Valenzio Trust and Rose became its income beneficiary. Rose died on July 16, 2012, and Moreau joined Verrechia as co-Trustee of the Valenzio Trust. At that time, Moreau and Kumiega[4] became co-trustees of the Rose Trust.

         Through merger and acquisition, Tucker Anthony became part of RBC. Per RBC's practices, clients must sign a series of Client Account Information forms. Rose alone signed two such forms on behalf of the Valenzio Trust, one on August 22, 2008, and another on June 30, 2009. Moreau and Verrecchia subsequently executed another Client Account Information form on behalf of the Valenzio Trust on December 7, 2012.

         Plaintiffs, upon examining the financial history of the Valenzio Trust, believe that Rose was "without authority and in violation of her duties as Co-Trustee of her husband's estate [sic] had wrongfully, mistakenly, and/or negligently taken monies from the principal of her husband's Trust." Compl. ¶ 26. Plaintiffs further claim, inter alia, that RBC "wrongfully and in violation of its fiduciary and contractual duties allowed Rose Izzi, permitted, turned a blind eye, and/or acceded to Rose Izzi taking and misappropriating monies out of the Valenzio Trust." Id. ¶ 37.

         RBC, in turn, claims that these allegations must be first submitted to arbitration, as required by the arbitration provisions from the Client Account Agreement incorporated by reference into the Client Account Information forms.

         II

         Standard of Review

         "Arbitration is a desirable method of dispute resolution that long has been favored by the courts." Soprano v. American Hardware Mut. Ins. Co., 491 A.2d 1008, 1011 (R.I. 1985). "Nevertheless, '[n]o one is under a duty to arbitrate unless with clear language he [or she] has agreed to do so.'" School Comm. of Town of N. Kingstown v. Crouch, 808 A.2d 1074, 1078 (R.I. 2002) (quoting Stanley-Bos ...


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