Superior Court Providence County (PC 09-5006) Luis M. Matos,
Plaintiff: Joseph F. Hook, Esq.
Defendant: David E. Maglio, Esq.
Present: Suttell, C.J., Goldberg, Flaherty, Robinson, and
Francis X. Flaherty, Associate Justice.
protracted squabble among siblings reaches us after a decade
of litigation. At issue are amendments to an inter
vivos trust and gifts of interest in a family limited
partnership that was established by Augusta Hathaway during
the 1990s in an effort to limit the tax liability to her
estate. A trial was held in December 2014, after which a jury
found that Ms. Hathaway lacked the testamentary capacity to
amend her trust and that the defendant, Marion Louttit, Ms.
Hathaway's youngest daughter, had unduly influenced Ms.
Hathaway, thereby causing Ms. Hathaway to execute the
challenged amendments and gifts. The jury also found that
Marion Louttit had breached her fiduciary duty as trustee of
the inter vivos trust. Following the jury's
verdict, Louttit renewed her motion for judgment as a matter
of law and moved for a new trial. After duly considering
those motions, the trial justice denied Louttit's motion
for new trial and judgment as a matter of law on the claims
of testamentary capacity and undue influence. However, the
trial justice granted both motions as to the fiduciary duty
verdict because, according to the trial justice, the
plaintiff, Wenda Branson-Ms. Hathaway's middle
daughter-had failed to prove damages. An order entered on
February 4, 2016, to that effect, which also denied the
plaintiff's motion for attorneys' fees. Judgment
entered that same day, and the parties
cross-appealed. After carefully reviewing the parties'
arguments and thoroughly examining the evidence presented at
trial, we affirm the judgment of the Superior Court in all
respects, and we vacate the grant of a new trial as to the
plaintiff's breach of fiduciary duty claim.
essential facts of this case are not in dispute. Augusta
Hathaway lived in her home in Barrington for nearly fifty
years. She married twice, and had three daughters: Joan
Prout-Oscarsson, Wenda Branson, and Marion Louttit. In 1992,
following the death of her second husband, Ms. Hathaway
created the Augusta P. Hathaway Living Trust Agreement to
distribute her assets upon her death. In addition, the trust
contained language that required the trustee to apply
"so much of the net income and principal of the Trust
Estate, even to the extent of exhausting principal, as the
Settlor may at any time or times direct in writing or as the
Trustee may deem advisable for the Settlor's support,
maintenance, health, education, or welfare."
1997, the trust was amended to include an equalization
clause, which provided that:
"[T]he Trustee shall take into consideration that it is
the Settlor's desire and intention that all of the
Settlor's children share equally in her estate. To that
end, in distributing the Trust Estate, per stirpes,
to the Settlor's issue, the Trustee shall consider all
gifts and loans made by the Settlor to her children or other
issue during her lifetime. Gifts and loans made to each child
and his or her issue shall be added together to arrive at a
total family share for each child. To the extent that the
total family shares for each child are unequal, the Trustee
shall first allocate to each child and to the issue of a
deceased child the amount or amounts necessary which, when
added to the total family share for each child will equalize
the total amounts given to each child's family during the
the same time, Ms. Hathaway also established the A. P.
Hathaway Family Limited Partnership, to which she deeded her
Barrington home. The partners to the limited partnership were
Ms. Hathaway, who retained the general interest, and limited
partners Louttit, who also retained an interest for the
benefit of her two children, and Branson, who also retained
an interest for the benefit of Kristal Osborn, who was then a
minor child. Over the next several years, Ms. Hathaway
gifted additional interests in the limited partnership to her
children and grandchildren. The last unchallenged gifting
document, executed in 1999, indicates that Hathaway retained
44.1 percent, Louttit owned a combined 31.06 percent for
herself and her children, and Branson owned a combined 24.84
percent for herself and Kristal Osborn.
record reveals that, in the fall of 2000, Louttit and her
mother discussed Louttit's wish to move into the
Barrington home with her husband, Jonathan, and their family
as soon as some planned construction at the home could be
completed. However, Louttit and Jonathan had
difficulty securing a loan to pay for the construction
because the ownership of Ms. Hathaway's home was divided
among the other members of the limited partnership.
October 2000, Louttit and Jonathan met with Ms.
Hathaway's attorney, Andrew Davis, for the purpose of
effecting changes to Ms. Hathaway's estate plan. Mr.
Davis's legal bills for the date in question indicate
that the purpose of the meeting was to conduct a "review
of partnership documents and prepare [a] new gifting
the trials and increasing infirmities of age, Ms. Hathaway
moved into an assisted living facility in November 2000.
Sadly, just a few weeks later, she attempted suicide and was
admitted to Butler Hospital for care. When asked why she had
tried to take her own life, she responded, "to relieve
my family of the burden of taking care of me" and that
"[t]his is the easiest way to give my house to
them." Ms. Hathaway was discharged from inpatient care
on December 1, 2000. In a discharge report, her treating
physician diagnosed Ms. Hathaway as having bipolar disorder,
type II depressed, and "Alzheimer's dementia,
mild." Her physician reported that Ms. Hathaway
"requires a higher level of care secondary to obvious
cognitive deficits" and that "[s]he demonstrates
impairments in the areas of safety, medication management,
and money management." Importantly, the physician at
Butler Hospital also reported that "[s]he demonstrates
significant difficulty in determining negative consequences
of her actions and poor coping skills as well" and that
"she had difficulty weighing the risks, benefits, and
alternatives to suicide for handing her property over to her
also noteworthy that, in the months following her discharge
from Butler Hospital, Ms. Hathaway made several changes to
her estate plan, all of which were geared toward shifting the
major portion of her estate to the Louttit family and away
from Branson and Osborn. Ms. Hathaway signed two documents
(the partnership gifts) transferring her remaining interest
in the limited partnership, including the general partnership
share, to Louttit and her family. She also made several
amendments to her trust. The first, signed on December 19,
2000, appointed Louttit as trustee. Another amendment, signed
on February 28, 2001, made Branson and Osborn's
beneficiary interest in the trust conditional on the transfer
of their interest in the limited partnership to Louttit. The
relevant language of that amendment provided:
"Notwithstanding anything herein to the contrary, it is
the Settlor's specific intent that all of the interests
in THE AUGUSTA P. HATHAWAY FAMILY LIMITED PARTNERSHIP be
owned by MARION P. LOUTTIT and her family, in spite of the
fact that such ownership might result in an ultimate unequal
distribution of the Settlor's estate. To that end, the
Settlor hereby provides that any and all benefits or trust
distributions provided for WENDA P. BRANSON and/or KRISTAL A.
FAHEY pursuant to this trust are contingent upon the said
WENDA P. BRANSON and KRISTAL A. FAHEY transferring, without
consideration, all of their respective interests in THE
AUGUSTA P. HATHAWAY FAMILY LIMITED PARTNERSHIP to MARION P.
LOUTTIT or if she is not then living, to her living issue
per stirpes. Said transfer to be accomplished within
ninety (90) days of the Settlor's death, provided
however, that MARION P. LOUTTIT may, at her sole discretion
elect to purchase within said ninety (90) day period said
interests in THE AUGUSTA P. HATHAWAY FAMILY LIMITED
PARTNERSHIP from WENDA P. BRANSON and KRISTAL A. FAHEY at
such price and upon such terms and conditions as MARION P.
LOUTTIT shall deem appropriate."
the time of those amendments, Jonathan sent a letter to
Branson, in which he asked that she and Osborn surrender
their shares in the limited partnership. In that
correspondence, Jonathan represented that making the
transfers would have the result of "saving the estate
almost $200, 000 in estimated estate taxes." He
clarified, however, that "it is still your mother's
intention that you, Marion and Joan will eventually share
equally in her estate at the time of her death. That will
include the value of the house." Jonathan later
testified at trial that, in fact, there would not have been
any savings in estate taxes because the house already had
been conveyed to the limited partnership in 1997. In any
event, Branson and Osborn did not comply with Jonathan's
request and did not surrender their shares in the limited
after she received the letter from Jonathan, Branson received
another letter, this one purportedly from Ms. Hathaway. The
relevant portions of that letter said:
"As you know, my arthritis has now made it impossible
for me to write letters to people. Because of this, I've
asked one of the secretary's [sic] at [the
assisted living facility] to type this for me.
"* * *
"What I would like you to do is to please call Andrew
Davis, my attorney and make arrangements to transfer your
shares in the partnership back to me. Since you now have a
copy of my will you know that I intend to leave you, Marion
and Joan equal shares in my estate when I'm gone.
However, if we can not resolve the problems with the
partnership I may have to rethink my estate planning."
the letter was purported to have been written by Ms.
Hathaway, Jonathan later testified that, in fact, he had
drafted the letter after meeting with Ms. Hathaway at the
assisted living facility and that she had not dictated the
letter to him. He claimed, however, that he later reviewed
the contents of the letter with Ms. Hathaway.
because she was being asked to give up her shares in the
limited partnership, Branson set up a meeting with Ms.
Hathaway, Prout-Oscarsson, and Osborn over dinner for the
purpose of discussing the potentially uneven distribution of
Ms. Hathaway's estate. Branson surreptitiously recorded
much of the conversation because, she later testified, she
was worried that Ms. Hathaway would not be able to remember
the conversation and Branson wanted to be able to play the
recording to her mother to remind her of what she had
said. Branson and Prout-Oscarsson asked their
mother to explain why Louttit was to receive the lion's
share of the limited partnership interest. In her response to
that inquiry, Ms. Hathaway said, "It was always meant
that you and Joan would get the money and Marion there would
take the house" and that she "wanted everybody to
get an equal share." When Branson asked how the
daughters would get an equal share if Louttit owned the
entire house, the following exchange ensued:
"BRANSON: [D]id Joan and I get equal amounts of money
that equal, is the same as what Marion gets in the house?
"HATHAWAY: I don't know.
"BRANSON: Well, how can it be equal if it's not?
"HATHAWAY: Well, she's got an attorney.
"PROUT[-OSCARSSON]: So do we.
"HATHAWAY: Yeah, all right. Andrew Davis?
"BRANSON: Yeah, but that's - - you're supposed
to be, that's your attorney, not Marion's.
"HATHAWAY: Oh, well, I don't have an attorney, I
don't need one."
Hathaway made the final amendment to her living trust several
months later, on August 3, 2001. That amendment made Louttit
the trustee and dispensed with any pretense of distributing
the trust assets equally upon Ms. Hathaway's death.
Instead, the amendment provided that Branson, Osborn, and
Prout-Oscarsson would each receive $2, 000 from the trust,
while the remaining balance of the trust assets would be
distributed to Louttit or her living issue. The amendment
also added a no-contest clause, which provided that
"[i]f any beneficiary hereunder or heir at law shall
contest the validity of this Trust Amendment * * * then all
benefits provided for such beneficiary or heir at law shall
lapse as if such beneficiary had predeceased the
can be no doubt that Louttit and Jonathan were intricately
involved with the changes to Ms. Hathaway's estate plan
during this period. Louttit scheduled her mother's
appointments with her attorney and drove Ms. Hathaway to meet
with Mr. Davis to discuss drafting the partnership gifts and
trust amendments. Louttit and Jonathan were present for all
those meetings and they also were present when Ms. Hathaway
executed the partnership gifts and amendments to the trust,
with the sole exception of the August 3, 2001 trust
amendment, which she signed at the assisted living facility
rather than at her attorney's office. Jonathan was also
in routine contact with Mr. Davis, and Jonathan sent emails
to him on more than one occasion to discuss the limited
partnership and the trust amendments.
2003, Ms. Hathaway inherited $10, 000 after the passing of
one of her friends. Louttit, who had held Ms. Hathaway's
financial power of attorney since 1997, sent an email to Mr.
Davis seeking advice on how to proceed with the inheritance
check her mother had received. Louttit wrote of her mother,
"She doesn't want my two sisters to know about this
money. She told Jon and I she wants to put the money in our
children's accounts for their education. * * * I
don't want it to look like I just deposited this money
into our children's accounts." Later, Louttit, on
behalf of her mother, deposited the inheritance funds into
college savings accounts for her two children.
Hathaway passed away in November 2008. Branson brought this
suit in August 2009 seeking to void the 2000 and 2001
partnership gifts and the February 28 and August 3, 2001
trust amendments. Branson also alleged that Louttit had
breached her fiduciary duty as trustee by diverting funds
from the trust. A jury trial was held in December 2014.
trial, Branson presented the testimony of John Stoukides,
M.D., an expert qualified in geriatric medicine and
palliative care. Doctor Stoukides, who had practiced in the
field of geriatric and palliative care for over twenty-five
years, testified that he had reviewed Ms. Hathaway's
medical records from various dates between 1997 and 2004.
Doctor Stoukides was asked at trial: "Were you asked to
evaluate Augusta Hathaway's capacity to make gifts to her
daughter?" He responded: "I was asked to basically
look at her cognitive ability as was documented in her
medical records and render an opinion whether or not I felt
she had the requisite capacity to make complex financial
decisions, so I think that's a yes to your answer."
Stoukides reported that Ms. Hathaway had been suffering from
memory problems since at least 1997, when she visited a
neurologist who, after a follow-up appointment in early 1998,
diagnosed Ms. Hathaway with early Alzheimer's disease.
Doctor Stoukides also reviewed the report of an occupational
therapist who had evaluated Ms. Hathaway during her stay at
Butler Hospital in late 2000. According to Dr. Stoukides, the
occupational therapist had given Ms. Hathaway a series of
coins to count, but, he testified, "she couldn't
even comprehend the value of the coins and give her a value
of, you know, what a quarter, a dime, a nickel, and a penny
are worth." He reported that it was the opinion of the