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Hazen v. Hazen

Superior Court of Maine, Cumberland

August 9, 2016

STEVEN KELSEY HAZEN, Plaintiff,
v.
FRANKLIN GRAHAM HAZEN, MARY ELIZABETH OSGOOD, MICHAEL FRANKLIN HAZEN, RODERIC OSGOOD, and ROBERT E. MacDONALD, trustee for the PRUDENCE ELEANOR HAZEN TRUST, Defendants, and RODERIC OSGOOD, trustee for the FRANKLIN GRAHAM HAZEN REVOCABLE TRUST, Party-in-Interest.

          ORDER ON DEFENDANTS' MOTION TO DISMISS COUNTS I, II, III, VI, & VII OF THE AMENDED COMPLAINT, DEFENDANTS' MOTION TO DISQUALIFY, & PLAINTIFF'S MOTION FOR SANCTIONS

          Wee E. Walker, Justice.

         Presently before the court are the following motions: (1) Defendants Mary Elizabeth Osgood and Michael Franklin Hazen's motion to dismiss Counts I, II, III, VI, and VII of Plaintiff Steven Kelsey Hazen's amended complaint; (2) Defendants Mary Osgood and Michael Hazen's motion to disqualify Plaintiffs counsel, Colby Wallace, Esq.; and (3) Plaintiffs motion for sanctions. Defendant Franklin Graham Hazen has moved to join Mary Osgood and Michael Hazen's motions.[1] Based on the following, Defendants' motion to dismiss and motion to disqualify are both denied. Plaintiff s motion for sanctions is also denied.

         I. BACKGROUND

         According to Plaintiffs amended complaint, Franklin Hazen and Prudence Eleanor Hazen were married until Prudence Hazen's death in October 2009. (Am. Compl. ¶ 15.) On March 25, 2009, Franklin and Prudence Hazen entered into an agreement regarding the organization, ownership, and disposition of their respective estates by signing a document entitled "Report of Recommendations Regarding the Estates of Franklin G. and Prudence E.K. Hazen" (the "Agreement"). (Id. ¶¶ 16-17.) According to Plaintiff, the Agreement provided that Franklin and Prudence Hazen would divide their assets between two trusts, the Prudence Eleanor Hazen Trust (the "Prudence Trust") and the Franklin Graham Hazen Revocable Trust (the "Franklin Trust"). (Id. ¶¶ 5-6, 18.) The Prudence Trust and the Franklin Trust were established on April 17, 2009, in accordance with the Agreement. (Id. ¶¶ 5-6, 28-29.) Plaintiff asserts that Franklin Hazen, Mary Osgood, Michael Hazen, and he are the four beneficiaries of the Prudence Trust. (Id. ¶ 8.) Plaintiff asserts that Franklin Hazen is the only beneficiary of the Franklin Trust while he is living. (Id. ¶ 9.) Plaintiff asserts that, as a result of a March 25, 2013 amendment to the trust, only Mary Osgood and Michael Hazen have remainder rights in the Franklin Trust. (Id. ¶IO.)

         According Plaintiff, one of the assets transferred to the Prudence Trust was a parcel of real property located 70 Murch Point Road in South Casco, Maine referred to as the "Camp." (Id. ¶ 19.) According to Plaintiff, the Agreement provided that the Camp would be preserved for Franklin and Prudence Hazen's use during their lives and would then pass to Mary Osgood, Michael Hazen, and Plaintiff, upon the death of the second to die of Franklin and Prudence Hazen. (Id. ¶ 22.) According to Plaintiff, the Agreement provided that all other property held by both the Prudence and Franklin Trusts would be managed, liquidated, subdivided and generally utilized to maintain and improve the Camp and to take care of Franklin and Prudence Hazen during their lives. (Id. ¶ 23.) Prudence Hazen died on October 7, 2009. (Id. ¶ 30.)

         On May 31, 2013, Plaintiff, Mary Osgood, Michael Hazen, and Franklin Hazen, as beneficiaries of the Prudence Trust, entered into a Nonjudicial Settlement Agreement regarding the Prudence Trust (the "Settlement Agreement"). (Defs. Mot. Dismiss, Ex. A.) As part of the Settlement Agreement, Plaintiff, Mary Osgood, Michael Hazen, and Franklin Hazen entered into a Consent and Release Agreement (the "Release"), discharging each other from all claims based on actions taken or not taken with regard to the Prudence Trust. (Id.) The Settlement Agreement and the Release were incorporated into a June 5, 2013 Order issued by the Cumberland County Probate Court, docket number 2013-0695. (Am. Compl. ¶ 5, Ex. A.)

         Plaintiff initially filed his complaint in this action on September 28, 2015. Plaintiff filed an amended complaint May 12, 2016. Plaintiffs amended complaint alleges that the trustees of both the Prudence and Franklin Trusts have failed or refused to market or sell the property held by the Prudence and Franklin Trusts in accordance with the Agreement. (Id. ¶ 31-32.) Plaintiff alleges that the trustees' failure to liquidate all property in Prudence and Franklin Trusts is the result of repeated intentional interference by Defendants. (Id. ¶ 31-33.) Plaintiff alleges that, as a result of Defendants' interference, the Camp has not been maintained or improved in accordance with the Agreement. (Id. ¶ 34.) Plaintiff also alleges that Franklin Hazen has materially altered the terms of the Franklin Trust by reducing Plaintiffs one-third share of the Franklin Trust as a result of undue influence from Mary Osgood, Michael Hazen, and Roderic Osgood. (Id. ¶¶ 36-38.) Plaintiffs amended complaint asserts claim for breach of contract (Count I), breach of implied contract (Count II), interference with a contractual relationship (Count III), tortious interference with an expected inheritance (Count IV), undue influence (Count V), declaratory judgment (Count VI), and a declaration of trustee's authority (Count VII). (M¶¶ 45-80.)

         Mary Osgood, Michael Hazen, and Roderic Osgood filed an answer and counterclaim on May 20, 2016. Franklin Hazen filed his answer and counterclaim on May 23, 2016. On May 20, 2016, Defendants Mary Osgood and Michael Hazen also filed a motion to dismiss Counts I, II, III, VI, and VII of the amended complaint for failure to state a claim or, in the alternative, to disqualify Plaintiffs counsel, Colby Wallace, Esq. Franklin Hazen filed a motion to join Mary Osgood and Michael Hazen's motion to dismiss and their motion to disqualify on June 6, 2016. Plaintiff filed an opposition to the motion to dismiss and motion to disqualify on June 8, 2016. In his opposition, Plaintiff requests that the court impose sanctions on Defendants. Defendants Mary Osgood and Michael Hazen filed a reply on June 17, 2016. The court addresses each motion in turn.

         II. DEFENDANTS' MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM

         A. Standard of Review

         Defendants have moved to dismiss Counts I, II, III, VI, and VII of Plaintiff s amended complaint pursuant to Maine Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. (Defs. Mot. Dismiss 1-3.) Typically, Rule 12(b) motions are made before the filing of a responsive pleading. See M.R. Civ. P. 12(b). Defendants in this case simultaneously answered and moved to dismiss. Therefore, Defendants' motion is more accurately a motion for judgment on the pleadings pursuant to Rule 12(c). See M.R. Civ. P. 12(c) ("After the pleadings are closed but within such time as not to delay the trial, any party may move for judgment on the pleadings.").

         However, a motion for judgment on the pleadings by a defendant "is the equivalent of a motion to dismiss for failure to state a claim." MacKerron v. MacKerron, 571 A.2d 810, 813 (Me. 1990); 2 Harvey, Maine Civil Practice § 12:14 at 429-30 (3d ed. 2011). Therefore, regardless of whether Defendants' motion is titled as a motion to dismiss for failure to state a claim or motion for judgment on the pleadings, the court's analysis is the same. Both motions test the legal sufficiency of the complaint. MacKerron, 571 A.2d at 813. The sufficiency of the complaint is a question of law. Id. The court reviews the complaint in the light most favorable to the plaintiff to determine whether the complaint "sets forth elements of a cause of action or alleges facts that would entitle the plaintiff to relief pursuant to some legal theory." Bean v. Cummings, 2008 ME 18, ¶ 7, 939 A.2d 676 (internal citation and quotation marks omitted). "A complaint is sufficient unless it appears to a certainty the plaintiff is entitled to no relief under any set of facts he might prove in support of his claim." MacKerron, 571 A.2d at 813 (internal citation, alterations, and quotation marks omitted).

         The sole basis for Defendants' motion to dismiss is the May 31, 2013 Release. (Defs. Mot. Dismiss 5.) Defendants assert that, under the terms of the Release, they were released from the claims asserted in Counts I, II, III, VI, and VII of the amended complaint. (Id. at 5-10.) Release is an affirmative defense. M.R. Civ. P. 8(c). Generally, a defendant may not assert affirmative defenses in either a motion for judgment on the pleadings or a motion to dismiss for failure to state a claim. MacKerron, 571 A.2d at 813; 2 Harvey, Maine Civil Practice § 12:14 at 429-30. An affirmative defense may be raised in motion to dismiss for failure to state a claim only if the facts giving rise to the defense appear on the face of the complaint. 2 Harvey, Maine Civil Practice § 12:12 at 423. Release has been recognized as an affirmative defense that may be raised on a motion to dismiss for failure to state a claim. Id. § 12:12 at 424-25 (citing Hoover v. Lacey, 80 F.Supp. 691 (D.D.C. 1943)).

         Neither the Settlement Agreement nor the Release are referenced in or attached to Plaintiffs amended complaint. See (Am. Compl.) Defendants have provided the court with a copy of the Settlement Agreement and the Release as part of their motion to dismiss. (Defs. Mot. Dismiss, Ex. A.) Normally on a motion to dismiss for failure to state a claim, only the facts alleged in the complaint are considered by the court. Moody v. State Liquor & Lottery Comm 'n, 2004 ME 20, ¶ 8, 843 A.2d 43. If the court considers materials outside the pleading, the court must convert the motion to dismiss into a motion for summary judgment under Rule 56. M.R. Civ. P. 12(b). However, in limited circumstances, the court may consider certain extraneous documents without converting a motion to dismiss to one for a summary judgment. Moody, 2004 ME 20, ¶ 9, 843 A.2d 43. The court may consider "official public documents, documents that are central to the plaintiffs claims, and documents referred to in the complaint, without converting a motion to dismiss into a motion for a summary judgment when the authenticity of such documents is not challenged." Id. ¶ 10.

         Although the Release is not referenced in or attached to the amended complaint, the Settlement Agreement and the Release were incorporated in and attached to the June 5, 2013 Probate Court Order. (Am. Compl. ¶ 5, Ex. A.) The Probate Court Order is referenced in and attached to the amended complaint without the Settlement Agreement or the Release. (Id.) Defendants argue that, because the Settlement Agreement and the Release were incorporated in and attached to a court order, they are public documents. (Defs. Mot. Dismiss 4-5.) Plaintiff does not dispute that the Settlement Agreement and the Release are public documents, nor their authenticity. (PI. Opp'nto Defs. Mot. Dismiss 2-6.)

         Because June 5, 2013 Probate Court Order, which references both the Settlement Agreement and the Release, is referenced in and attached to the amended complaint, the Settlement Agreement and the Release constitute documents referred to in the amended complaint. Moreover, because the Settlement Agreement and the Release were referenced in and attached to the June 5, 2013 Probate Court Order, they are also public documents. Accordingly, the Release is both a document referred to in the amended complaint and a public document under the Moody exception. Therefore, the court may consider the Release in deciding Defendants' motion to dismiss without converting the motion to one for summary judgment. ...


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