Craft v. Kane

18 Mass. L. Rptr. 43
CourtMassachusetts Superior Court
DecidedApril 28, 2004
DocketNo. 932412C
StatusPublished

This text of 18 Mass. L. Rptr. 43 (Craft v. Kane) is published on Counsel Stack Legal Research, covering Massachusetts Superior Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Craft v. Kane, 18 Mass. L. Rptr. 43 (Mass. Ct. App. 2004).

Opinion

Fahey, J.

This case is before this court on remand from the Massachusetts Appeals Court. Craft v. Kane, 51 Mass.App.Ct. 648, 653-54 (2001). The Appeals Court heard Attorney Carlo Cellai’s (“Attorney Cellai”) appeal of this court’s (Whitehead, J.) denial of his motion [9 Mass. L. Rptr. 121] to establish and enforce an attorney’s lien. Id. at 648. Specifically, the Appeals Court asks that this court conduct a thorough exploration of the plaintiffs discharge of Attorney Cellai “to determine whether the discharge of Cellai was in bad faith or for good cause.” Id. at 653. The Appeals Court also asks that this court make “a final determination of the amount received by the executor and held by him under a constructive trust, to the extent that such amount constitutes the net proceeds of the fire insurance applicable to the damage to the real estate . . .” Id. at 653-54.

An evidentiaiy hearing was held in July 2004 on a Motion to Enforce an Attorney’s Lien. The issues to be determined are the amount held in the constructive trust and the value of the attorney’s services. For the reasons discussed below, this motion is allowed.

[44]*44 FINDINGS OF FACT

These facts taken from the Background section of the Memorandum of Decision of Whitehead, J., are not disputed.

On January 18, 1993, the decedent, William E. Kelly, Jr. (“Kelly”), was smoking in bed at his residence located at 143 Bourne Avenue in Somerset. A fire ensued and, as a result, the dwelling was partially burned and Kelly was severely injured. Kelly suffered third-degree bums over 95 percent of his body and was taken by ambulance to Charlton Hospital. Kelly was subsequently airlifted to the burn unit at Massachusetts General Hospital. At some point, Kelly lost consciousness. On January 24, 1993, without having regained consciousness, Kelly died. From the time he was taken from the fire to the time of his death, Kelly was unable to communicate with his doctors or anyone else.

Kelly’s will contained the following specific bequest:

I give, devise and bequeath my real estate at 143 Bourne Avenue, Somerset, Massachusetts to FRANCES CRAFT (“Craft”), providing she survives me by thirty (30) days.

Kelly’s will further provided that Jeanne P. Louizos (“Louizos”) would take the remainder of his estate. Irving B. Kane (“Kane”) was named as the executor of the will.

Prior to his death, Kelly had insured the property in question and, in accordance with this policy, his insurance carrier paid the sum of $43,732.38 to Kelly’s estate.

Based on the credible evidence presented and the reasonable inferences drawn therefrom, I also find the following facts.

Craft was present in the home at the time of the fire and claimed to have sustained personal injury as a result. She was then engaged to Kelly and claimed her own physical injury and also emotional distress at witnessing Kelly’s injury. Craft and Attorney Cellai both signed in August 1993 a contingent fee agreement for him to represent her on her personal injury claim against the decedent Kelly. Two months later they both signed another contingent fee agreement concerning the “recovery for funds for the insurance proceeds paid out to the Estate of William Kelly for damage caused by the fire to 143 Bourne Avenue, Somerset.” The second contingency agreement was entered into due to Craft being the beneficiary under Kelly’s will of a specific bequest of the real estate at 143 Bourne Avenue, Somerset. In each Agreement, the client agreed to pay 1/3 of the gross recovery to Attorney Cellai. Both of the Agreements specified that “the client is not to be liable to pay compensation otherwise than from amounts collected for him (sic) by the Attorney, except as follows: None.” The Agreements also stated that “the client is in any event to be liable to the Attorney for his (sic) reasonable expenses and disbursements.”

The complaint that Attorney Cellai filed on October 14, 1993 on Craft’s behalf included a claim in Count I for physical injury, a claim in Count II for emotional distress, and a claim in Count III for loss of property; all of these claims were allegedly the result of Kelly’s negligence. The complaint also alleged that the executor had failed to reimburse Craft for expenses she incurred in repairing the property after the fire (Count IV), and that she was entitled by way of declaratory relief to the insurance proceeds received by the executor as a result of the fire (Count V). Craft’s claim for the insurance proceeds, Count V, “was premised around a unique and unified legal theory . . . which has never been ruled upon by the Court in the Commonwealth.” Exhibit 25, Appellant’s Brief, p. 12.

Craft spent her own money to “button up” the house after the fire; the executor refused initially to reimburse her for that. That Count IV claim settled in 1994 with payment to her in the amount of $1,650.00 out of which, because Craft was in dire financial straits, Attorney Cellai did not take his fee. Other than the settlement for $1,650.00 on Craft’s Count IV claim, Craft received no offers of settlement for her other claims while Attorney Cellai represented her.

When Attorney Cellai notified Kane that Craft claimed the insurance proceeds, Kane, pursuant to his fiduciary duties, researched whether Craft, a specific legatee under Kelly's will, or Louizos, the residuary legatee, was entitled to the insurance proceeds. The executor not only denied Craft’s claims, but also claimed that, because the house had burned and was uninhabitable, it had “adeemed,” such that the recoverable insurance for the damage to the real properly passed to the residual legatee. Kane informed Attorney Cellai that the insurance proceeds constituted personalty and therefore belonged to Louizos. Kane made this assertion in good faith but his arguments were, at least so far, unavailing.

Notwithstanding the novel theory asserted in Count V, Attorney Cellai moved for partial summary judgment on that claim in 19941 and was successful [2 Mass. L. Rptr. 395). The court (Donovan, J.) entered an order and an amended order in 1994 that the executor held the fire insurance proceeds in a constructive trust for the benefit of Craft but only to the extent that the proceeds of the policy represented damage to the real estate, not damage to the personal property, and subject also to the extent that the proceeds might be required to pay the decedent’s debts, funeral expenses, taxes, and costs and expenses of administration. Determining that the specific devise of Kelly’s house to Craft was not adeemed, the court also held that, if the estate’s expenses could be satisfied in their entirety from the estate’s other funds, the executor was to hold the real estate proceeds of the insurance policy in a constructive trust [45]*45for the benefit of Craft. Kane notified Attorney Cellai that he intended to appeal Justice Donovan’s decision when and if it ever became a final judgment.

The insurer paid the estate $43,732.382 for the fire damage based, at least in part, upon an adjustment by Panakio Adjustors (“Panakio”), who was hired to provide an estimate of the real estate damage and the personal property damage incurred as a result of the fire. I accept that of this $43,732.38 (less the $100.00 deductible), the amount of $26,115.97 was paid and recovered for damage to the real-estate and $17,616.41 was paid and recovered for damage to Kelly’s personalty. Panakio was paid $4,378.24 for his services.

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Bluebook (online)
18 Mass. L. Rptr. 43, Counsel Stack Legal Research, https://law.counselstack.com/opinion/craft-v-kane-masssuperct-2004.