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Gregory v. Birkbeck

Superior Court of Maine

January 25, 2018

KEITH A. GREGORY,
v.
DONALD BIRKBECK, and DANIEL GOLODNER, Plaintiffs, and ASHLEY BIRKBECK, Defendants.

          ATTORNEY FOR APPELLANT: DAVID MOONEY, ESQ. DAVID P. MOONEY ATTORNEY AT LAW ONE

          ATTORNEY FOR APPELLEE: JAMES MUNDY, ESQ. WHITNEY MUNDY & MUNDY

          ORDER ON DEFENDANTS' MOTION TO DISMISS

          John O'Neil, Jr. Justice

          I. BACKGROUND

         This case arises out of the administration of a trust executed by the late Dr. Lawrence Golodner ("Dr. Golodner"). The trusts were marital trusts for the benefit of Gail Golodner ("Gail"), Dr. Golodner's wife and one of the co-trustees, during her life, and upon her death the trust assets were to be distributed to the beneficiaries, plaintiffs Keith Gregory ("Gregory") and Daniel Golodner ("Mr. Golodner"). The plaintiffs brought the instant complaint on May 16, 2017 against defendants Donald and Ashley Birkbeck, alleging Breach of Fiduciary Duties (Count I), Unjust Enrichment (Count II), and Constructive Fraud (Count III). The breach of fiduciary duty claim is directed at Ashley Birkbeck as the representative of the estate of Gail Golodner. Although at the time of filing, Mrs. Birkbeck was not the representative of Gail's estate; she has since been officially appointed to the position.

          Plaintiffs have brought additional suits against Gail, Jeffrey Clark, the other co-trustee of the trusts, and others in Docket No. CV-16-182 and CV-16-183. These cases were stayed pending resolution of several procedural issues, such as the appointment of a representative of Gail's estate. The distribution of Gail's estate is also pending before the Probate Court, Docket No. 2013-475.

         A. Facts

         The Complaint lays out the following facts. Plaintiffs Keith Gregory and Daniel Golodner are beneficiaries of the two trusts that their father, Dr. Lawrence Golodner, executed. (Compl. ¶¶ 15-16.) The first trust is a Revocable Trust dated September 26, 1989, amended and restated on June 27, 1995. (Compl. ¶ 13) The trust is an Irrevocable Trust Agreement dated August 9, 1995 (together, the "Trusts"). (Compl. ¶ 8.) These Trusts created marital trusts for Dr. Golodner's late wife, Gail. (Compl. ¶ 11.) After her death, the Trusts' assets were to pass to Gregory and Mr. Golodner. (Compl. ¶¶ 15-16.)

         Originally, the Trusts named Gail Golodner and Sidney White as co-trustees. (Compl. ¶ 17.) However, Jeffrey Clark was appointed to serve as co-trustee of both Trusts alongside Gail. (Compl. ¶ 20.) Donald and Ashley Birkbeck cared for Gail in the years before her death due to her age and declining health. (Compl. ¶¶ 58-58.)

         In their complaint, plaintiffs first allege that Gail and Clark violated their fiduciary duties to them as beneficiaries of the trusts. Specifically, they allege that the trustees did not provide plaintiffs with any accountings or sufficient information about the Trusts despite requests for such information. (Compl. ¶¶ 18-28.) Plaintiffs also contend that Gail used her trustee powers to make distributions in violation of the trust agreements for her personal benefit. (Compl. ¶¶ 29-30.) They also allege that Clark made such distributions at Gail's direction and knew and/or did not stop the alleged breaches from happening. (Compl. ¶ 31.)

          Plaintiffs further allege that Gail improperly borrowed money from both trusts. (Compl. ¶¶ 33-34.) Specifically, plaintiffs point to two loans from the trusts to Gail totaling $170, 000 that are secured by mortgages on Gail's property. (Compl. ¶ 34.) Plaintiffs assert that this money was then distributed to Donald and Ashley Birkbeck in exchange for receiving a life estate in property in South Berwick in violation of the trust agreements. (Compl. ¶ 35.) They further allege that Gail told Mr. Gregory that she was paying Donald Birkbeck to build her a home on the South Berwick property. (Compl. ¶ 36.) Plaintiffs again assert that Mr. Birkbeck's payment came from improperly distributed trust money. (Compl. ¶¶ 37, 39.)

         In their unjust enrichment claim, plaintiffs allege that defendants "engaged in financial transactions, beyond compensation for services rendered" (Compl. ¶ 58.); that Gail never took possession of the South Berwick property before her death (Compl. ¶ 60.); and that Gail received inadequate compensation for transactions with the Birkbecks. (Compl. ¶ 61.)

         Finally, in Count III, plaintiffs allege that defendants engaged in the transactions knowing of Gail's health, finances, and status as co-trustee. Consequently, plaintiffs argue "that the transactions placed an unreasonable mortality risk of loss upon the trust assets and accepted cash and compensation with knowledge that the funds were derived from the Lawrence Golodner Trust Assets." (Compl. ¶ 65.)

         Defendants moved to dismiss the Complaint on June 20, 2017. On July 17, 2017, plaintiffs moved for an entry of default and default judgment against the ...


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