KAREN KOUTRAKOS & Another v. HELEN LALLO.

• Court: Massachusetts Appeals Court
• Decided: April 11, 2025
• Docket: 24-P-0251
• Status: Unpublished

Opinion

NOTICE: Summary decisions issued by the Appeals Court pursuant to M.A.C. Rule 23.0, as appearing in 97 Mass. App. Ct. 1017 (2020) (formerly known as rule 1:28, as amended by 73 Mass. App. Ct. 1001 [2009]), are primarily directed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, such decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 23.0 or rule 1:28 issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260 n.4 (2008).

COMMONWEALTH OF MASSACHUSETTS

APPEALS COURT

24-P-251

KAREN KOUTRAKOS & another1

vs.

HELEN LALLO.

MEMORANDUM AND ORDER PURSUANT TO RULE 23.0

This case concerns a dispute regarding the ownership of a

residential property located at 665 Townsend Street in

Fitchburg, Massachusetts (the property). The property was owned

by Michael Koutrakos, the father of all the parties involved in

this case. Michael2 transferred the property to his only

daughter from his first marriage, the defendant Helen Lallo, by

quitclaim deed in 2012. In 2021, about seven years after

Michael died, plaintiffs Karen Koutrakos and Christina Goguen,

two of Michael's four surviving children from his second

1 Christina Goguen.

2As several members of the family share the same last name, we refer to them by their first names for ease of reference. marriage, brought this action challenging Lallo's ownership of

the property. Following a trial, a judge of the Probate and

Family Court awarded the property to Lallo. This appeal ensued.

Background. We summarize the facts found by the judge,

reserving certain details for our discussion of the issues.

Michael and Lallo's mother were divorced in 1951 when Lallo was

five years old. Following the divorce, Lallo lived with her

mother and never resided at the property, which Michael

purchased in 1972 with his second wife, Irene. Michael and

Irene had five children together: Karen, Christina, Michael

(deceased), William and Pamela, all of whom were raised in the

home on the property. Michael also operated an appliance

maintenance business known as Fitchburg Appliance in a separate

building located on the property. Michael was prone to making

poor business decisions and, at one point in 2003 or 2004, he

failed to pay a debt owed to a vendor and a lien was placed on

the property. Ultimately, the debt was paid by Irene and

William; William contributed $10,000 to resolve the matter and

Irene contributed the remaining funds. Thereafter, at Irene's

urging, the property was placed in a trust (the 665 Townsend

Street Realty Trust) and deeded to William as trustee. However,

once Irene died in 2008, Michael sued William to recover

ownership of the property. William acquiesced to his father's

2 wishes and, after he was reimbursed for the $10,000, he conveyed

the property back to Michael by quitclaim deed. The deed was

prepared by Attorney Christine Tree.

At about the same time, Michael asked Attorney Tree to

prepare his last will and testament (will), which he executed on

October 9, 2008. As relevant here, Michael left the property to

Karen and Christina. At this time, Karen was living in the home

with her father. The will specified that Michael

"intentionally" failed to provide for William, Pamela, and

Lallo. As regards Pamela and Lallo, the will clarified that

they were excluded "not from any lack of love or affection, but

instead, due to my belief that they have otherwise been amply

provided for in life." The judge found that Michael told Karen

about the will almost immediately after it was executed.

As noted, Lallo never lived with her father after 1951, but

they remained in contact throughout the years. In May of 2012,

Lallo's husband was diagnosed with a serious medical condition

that led to his death. After learning of the diagnosis, Michael

decided to transfer the property to Lallo. Michael contacted a

different attorney from the one who had prepared his will,

Robert Terk, and asked him to prepare a quitclaim deed

transferring the property to Lallo. Attorney Terk did so,

Michael signed the deed, and Attorney Terk recorded the deed at

3 the registry of deeds. The judge specifically found that

Michael had the required capacity to execute the deed and was

not subject to any undue influence or fraud at the time.

Shortly thereafter, Michael told Lallo that he had transferred

the property to her. The judge found that Michael did not give

Lallo any instructions or place any limitations on the scope of

her ownership of the property and did not mention either

plaintiff. Michael also informed Karen that he had transferred

the property to Lallo. The judge found that during that

conversation, Michael told Karen that he trusted Lallo "to do

the right thing."3

Michael died on April 2, 2015.4 Karen had been Michael's

primary caretaker for a number of years before his death and

together with an employee of Fitchburg Appliance, John Anderson,

who lived on the property, she also continued to operate the

business. The judge found that from the time Michael

3 While the judge found that Karen testified credibly that "[Michael] said that he trusted [Lallo] to do the right thing," he did not find any of her additional testimony about the conversation credible.

4 Michael had diabetes and suffered from alcoholism and chronic pain. The judge did not credit Karen's testimony about the severity of Michael's health issues at the time he transferred the property to Lallo; however, by 2014, Michael's health had worsened. By June 2014, Michael was approved for twenty-four hour care by Medicare, and by September of that year, he was admitted to a skilled nursing facility.

4 transferred the property to Lallo in 2012 until he died three

years later, Michael made a number of different representations

to the plaintiffs and to others about what would become of the

property on his death.5 Although the reasons for Michael's

obfuscations were not entirely clear, he made no changes to his

estate plan after he transferred the property to Lallo, even

though he had the opportunity to do so. For example, in

September 2014, when Michael was at a skilled nursing facility,

Karen asked Attorney Terk to prepare various documents seeking

to (1) appoint her as Michael's attorney-in-fact, (2) convey the

property to her and Christina, and (3) make a declaration of

homestead in her favor, but Michael refused to meet with

Attorney Terk and did not sign any of the documents.

He also did not modify his estate plan after meeting with

Attorney Tree shortly before he died. As previously noted,

Attorney Tree had prepared Michael's will years earlier.

5 The judge credited testimony from Michael's grandchildren that Michael stated, at various times, that the property would go to Karen and Christina after his death and that Lallo would transfer the property to the sisters and take care of them. The judge also found, however, that between execution of the 2012 deed and his death, Michael told various versions of stories about what would happen to the property when he died. Michael's inconsistent comments about the title to the property were not a secret among family members. The judge noted that written communications between Lallo's son and Christina illustrate this point. At one point the son wrote that he had heard "some versions of the story and honestly my eyes glaze over."

5 Attorney Tree met with Michael in March 2015. At that time,

Michael did not remember having executed the quitclaim deed

transferring the property to Lallo, but he nonetheless made no

relevant changes to his estate plan.6 Soon after Michael died,

around November 2015, Karen asked Lallo to transfer the property

to her by signing a quitclaim deed which Karen had prepared on

her own. Lallo did not do so. She informed Karen that she was

concerned about potential liens and felt "uneasy signing

anything without talking to a professional."

Meanwhile, following Michael's death, Karen continued to

live at the property with Anderson, and the two continued to

operate Fitchburg Appliance. The two also paid for various

expenses, including taxes and insurance on the property until

2021, at which time Lallo received notice that the insurance

policy on the property was cancelled due to the poor condition

of the house. Thereafter, Lallo obtained property insurance for

which she paid. The new insurance company subsequently sent a

remedial condition notification to Lallo, detailing numerous

problems with the property. In written messages between Lallo

and Karen in April 2021, Lallo expressed the view that the

6 Michael made one request during the meeting. He asked to change a 2009 codicil to his will in which he bequeathed his motorcycle to a girlfriend, because he was no longer dating the woman.

6 property had become a liability and "needs to be sold," to which

Karen responded that the property should instead be transferred

to her and Christina. On May 20, 2021, Karen, with the

assistance of Attorney Tree, attempted to negotiate purchasing

the property and offered to pay Lallo $40,000. Lallo did not

respond to the offer and instead hired a real estate agent to

sell the property, thereby prompting this lawsuit.

The complaint was filed in July 2021, pursuant to G. L.

c. 215, § 6, "to establish and affirm [the plaintiffs'] 100%

ownership" in the property. Counts one through three of the

complaint alleged (1) the existence of a constructive trust, (2)

mistake, and (3) lack of intent on the part of Michael. In

count four, the plaintiffs sought a declaratory judgment that

the 2012 transfer of the property to Lallo was improper and

void. They also sought reformation of the deed, injunctive

relief, rescission of the deed, and judicial reformation (counts

five through eight).

The judge rejected the plaintiffs' claims in a thoughtful

memorandum and order. He summarized the argument as follows:

"Essentially, the Plaintiffs request that the Court find that the Decedent settled an express trust in which [Lallo] was the trustee, the Plaintiffs were the beneficiaries, the Subject Property was the trust property, the terms were that [Lallo] was to convey the Subject Property to the Plaintiffs outright and free from trust upon the death of the Decedent, [Lallo] committed a breach of trust, and the

7 Court declare that [Lallo] holds the Subject Property in constructive trust to remedy that breach."

In reaching his conclusion that no express trust had been

created, the judge relied on Lallo's testimony, which he

credited, that Michael did not place any conditions on the

transfer of the property and did not state that Lallo was to

hold the property for the benefit of the plaintiffs, or

otherwise use "any other words, imperative or precatory, which

created a trust." Furthermore, the judge explicitly found

Karen's testimony regarding her father's intent not credible.

In addition, he found that Michael's wishes could not be

established by the oral statements of the witnesses with whom

Michael allegedly spoke, because whatever Michael said was not

trustworthy. The judge acknowledged that although the

statements constituted hearsay, that fact did not render them

inadmissible; however, because Michael was not honest about his

intentions and had reasons to prevaricate,7 those statements were

not reliable.

7 The judge observed that

"[Michael] had motivation to be untruthful with regard to his gift of the Subject Property to [Lallo]. [Michael's] decision to gift the Subject Property to [Lallo] would have likely upset his children with Irene. It especially would have upset Karen, who was residing with him at the Subject Property and did not express any intention of leaving. While [Michael] did not have severe medical conditions at that point, it

8 Next, the judge concluded that the circumstances did not

warrant the imposition of a constructive trust. As the judge

explained, a constructive trust is a "flexible tool of equity

designed to prevent unjust enrichment resulting from fraud, a

violation of a fiduciary duty or confidential relationship,

mistake, or 'other circumstances' in which a recipient's

acquisition of legal title to property amounts to unjust

enrichment." Maffei v. Roman Catholic Archbishop of Boston, 449

Mass. 235, 246 (2007), cert. denied, 552 U.S. 1099 (2008),

quoting Fortin v. Roman Catholic Bishop of Worcester, 416 Mass.

781, 789, cert denied, 511 U.S. 1142 (1994). In rejecting the

plaintiffs' request to impose a constructive trust, the judge

focused on the credible evidence -- particularly Lallo's

testimony -- that established Michael executed the quitclaim

deed in 2012 with the intent to convey the property to Lallo

"outright and free from trust with no instructions or

limitations whatsoever." Because the deed represented Michael's

seemed likely that he would in the near future. [Michael] did not want to be placed in a nursing home or other type of residential care facility. He likely thought he needed to rely on Karen to care for him to avoid that. If Karen knew she would not obtain ownership of the Subject Property after [Michael's] death, she would be less likely to care for him when he became sick."

9 intentions in 2012, the judge concluded that a constructive

trust as an equitable remedy "would not be appropriate."

Next, the judge found that the evidence did not support the

plaintiffs' assertion that Lallo had been unjustly enriched. As

the judge found, Karen did not pay rent at any time, and the

majority of the expenses related to the property were paid by

Anderson; consequently, Lallo had not been enriched to Karen's

detriment.8 As we discuss in more detail below, we agree with

the judge's reasoning, with only minor exceptions, and affirm

the judgment.

Discussion. "We accept the judge's findings of fact in a

bench trial unless they are clearly erroneous, . . . and the

credibility of witnesses rests within the purview of the trial

judge. However, [t]he judge's legal conclusions are reviewed de

novo" (quotations and citations omitted). Robert & Ardis James

Found. v. Meyers, 474 Mass. 181, 187 (2016).

First, Karen and Christina argue that the judge erred in

concluding that the evidence did not establish the existence of

an express oral trust. They assert: (1) the law regarding oral

trusts does not apply to a claim of ownership of real property;

(2) because they did not claim that the circumstances

8 It may be that Christina is in a different position from Karen in this regard, but Christina has not made that argument, at trial or on appeal.

10 established the existence of an express oral trust in their

complaint, the judge should not have considered it; and (3) in

any event, if ownership of the property could be established by

an express oral trust, one existed here.

To begin with, it matters not whether the judge erroneously

applied the law of oral trusts to the facts or whether the issue

of an oral trust was raised below, because the judge also

addressed and soundly rejected the argument that a constructive

trust had been created for the benefit of Karen and Christina.

Simply put, as Lallo correctly asserts, even if we were to

assume error, the error was harmless.

We now turn to the argument that the judge erred because

the circumstances warrant the imposition of a constructive

trust. We discern no error. To the contrary, the record offers

ample support for the judge's finding that Michael intended to

transfer the property to Lallo free and clear of any obligation

to Karen or Christina. This finding, which is based on the

judge's assessment of the credibility of the witnesses,

effectively precludes the creation of a constructive trust.

Furthermore, there is no evidence to support the claim that

Lallo owed a fiduciary duty to Karen and Christina. To the

extent that Michael, at times, suggested that Lallo would "do

the right thing," that does not support a conclusion that Lallo

11 was aware of any duty placed on her, as the judge found.

Moreover, as we have noted, the judge further found not only

that Michael's statements were ambiguous, but that he was not

honest about his intentions regarding the property.

Lastly, we reject the plaintiffs' argument that certain

findings of fact, particularly those on which the judge relied

to conclude that Michael intended to transfer the property to

Lallo free and clear, are clearly erroneous. Our review of the

record demonstrates that the judge's findings are supported by

the evidence and that his inferences from those findings are

reasonable ones.

As such, contrary to the plaintiffs' assertion, we are

bound by those findings and inferences. See Klairmont v.

Gainsboro Restaurant, Inc., 465 Mass. 165, 183 (2013).

Judgment affirmed.

By the Court (Vuono, Hershfang & Tan, JJ.9),

Clerk

Entered: April 11, 2025.

9 The panelists are listed in order of seniority.