United States Court of Appeals For the First Circuit
No. 20-1942
MERRILL LYNCH, PIERCE, FENNER & SMITH, INC.,
Plaintiff, Appellee,
v.
KATHERINE FLANDERS-BORDEN,
Defendant, Appellant,
WILLIAM J. SHERRY; DAVID E. FLANDERS; KARYN S. BEEDY; BRETT L. PETERSON,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS
[Hon. George A. O'Toole, Jr., U.S. District Judge]
Before
Lynch and Kayatta, Circuit Judges, and Laplante,* District Judge.
Scott E. Adams for appellant. Nellie E. Hestin, with whom McGuireWoods LLP was on brief, for appellee Merrill Lynch, Pierce, Fenner & Smith, Inc. Hilary S. Schultz, with whom Shultz Law, LLP was on brief, for appellees William J. Sherry, David E. Flanders, Karyn S. Beedy, and Brett L. Peterson.
* Of the District of New Hampshire, sitting by designation. August 26, 2021 KAYATTA, Circuit Judge. This appeal concerns the
validity of a Transfer on Death Agreement ("TOD Agreement")
executed by Alton L. Flanders, III. The TOD Agreement relates to
an account containing a subset of Flanders's assets for which
Merrill Lynch, Pierce, Fenner & Smith, Inc. ("Merrill Lynch") acts
as custodian. If valid, the TOD Agreement avoids probate of an
at-death transfer of the account assets to five designated
beneficiaries, as follows: 20% to Flanders's daughter Katherine
Flanders-Borden ("Borden"), 20% to Flanders's brother David
Flanders ("David"), and 40%, 10%, and 10%, respectively, to three
of Flanders's friends -- William Sherry, Karyn Beedy, and Brett
Peterson. After Flanders died intestate, David, Sherry, Beedy,
and Peterson (the "consenting beneficiaries") consented to the
distribution of the account assets per the terms of the TOD
Agreement. Borden, however, claimed that Flanders lacked the
mental capacity to enter into the TOD Agreement and that all of
the assets distributed by the agreement should therefore revert to
his estate, of which she is the sole executor and heir.
To resolve the dispute about how the TOD Agreement assets
should be distributed, Merrill Lynch commenced this interpleader
action, joining Borden and the four consenting beneficiaries as
interpleader defendants. Without opposition from any party,
Merrill Lynch moved for and obtained a discharge of any and all
liability arising from the dispute. The district court
- 3 - subsequently granted summary judgment to the consenting
beneficiaries, holding that no reasonable jury could find on the
summary judgment record that Borden had met her burden of showing
Flanders lacked capacity at the time he entered into the TOD
Agreement. After the district court denied Borden's motion for
reconsideration, she timely filed this appeal. For the following
reasons, we affirm.
I.
Borden presents three claims of error on appeal:
(1) Flanders's estate should have been joined in this action;
(2) the district court applied the wrong state's law in deciding
the motion for summary judgment; and (3) the district court erred
in granting summary judgment to the consenting beneficiaries.1 We
consider each claim in turn, supplying background facts as
necessary along the way.
A.
We begin with Borden's contention that Flanders's estate
is a required party under Rule 19 of the Federal Rules of Civil
Procedure and that remand is therefore required to allow the
joinder of the estate. We normally review Rule 19(a)
determinations for abuse of discretion. See Picciotto v. Cont'l
Cas. Co., 512 F.3d 9, 14-15 (1st Cir. 2008). Here, however, the
1 At oral argument, Borden expressly waived the challenge made in her opening brief to Merrill Lynch's discharge.
- 4 - issue of whether the estate is a required party was never raised
below, and so there is no determination to review. Appellees
therefore urge us to consider this claim waived.
It hardly bears repeating that as a general matter,
"arguments not raised in the district court cannot be raised for
the first time on appeal." Sierra Club v. Wagner, 555 F.3d 21, 26
(1st Cir. 2009). Application of that general principle, however,
is not necessarily straightforward in the context of Rule 19, see
generally 7 Charles Alan Wright & Arthur R. Miller, Federal
Practice and Procedure § 1609 (3d ed. 2021), and it appears that
our circuit has not yet decided whether a claim that a required
party has not been joined is waived by failing to raise it in the
district court. We need not resolve the issue of waiver, however,
because even assuming Borden's Rule 19 argument was not waived in
the district court, it is clear that Flanders's estate is not a
required party.
Rule 19 is geared toward circumstances "where a lawsuit
is proceeding without a party whose interests are central to the
suit." Bacardi Int'l Ltd. v. V. Suárez & Co., 719 F.3d 1, 9 (1st
Cir. 2013). Under the rule, such a party must be joined when
feasible. Fed. R. Civ. P. 19(a). When joinder is not possible,
the court must determine whether the action should proceed among
the existing parties or be dismissed. Fed. R. Civ. P. 19(b). We
have emphasized that Rule 19 "calls for courts to make pragmatic,
- 5 - practical judgments that are heavily influenced by the facts of
each case." Bacardi, 719 F.3d at 9; see also Pujol v. Shearson/Am.
Express, Inc., 877 F.2d 132, 134 (1st Cir. 1989) (Breyer, J.)
(explaining that Rule 19(a) requires courts to "decide whether
considerations of efficiency and fairness, growing out of the
particular circumstances of the case, require that a particular
person be joined as a party").
A person is a "required party" who must be joined under
Rule 19(a) if "in that person's absence, the court cannot accord
complete relief among existing parties" or if
that person claims an interest relating to the subject of the action and is so situated that disposing of the action in the person's absence may:
(i) as a practical matter impair or impede the person's ability to protect the interest; or
(ii) leave an existing party subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations because of the interest.
Fed. R. Civ. P. 19(a)(1)(A)–(B). Flanders's estate satisfies none
of these criteria.
First, even in the estate's absence, the court could
(and did) accord complete relief among the existing
parties: Merrill Lynch, as interpleader plaintiff, was discharged
of liability arising from the interpleader action and the
underlying dispute, and the court determined the rights under the
- 6 - TOD agreement of all five beneficiaries, each of whom was joined
as an interpleader defendant. Aside from baldly asserting that
"[a]bsent joinder of the estate, complete relief cannot be
granted," Borden develops no argument to the contrary.
Second, even assuming the estate can claim an interest
in the outcome of this dispute despite the fact that it is an
outsider to the TOD Agreement, proceeding in the estate's absence
did not "as a practical matter impair or impede" its ability to
protect that interest. Fed. R. Civ. P. 19(a)(1)(B)(i). We have
explained that where the interests of an absent party are aligned
closely enough with the interests of an existing party, and where
the existing party pursues those interests in the course of the
litigation, the absent party is not required under Rule 19. See
Bacardi, 719 F.3d at 10-12; see also Shearson, 877 F.2d at 135-
36; Fed. Ins. Co. v. Singing River Health Sys., 850 F.3d 187, 201
(5th Cir. 2017). The interests of the absent and existing parties
need not be "virtually identical." Bacardi, 719 F.3d at 11.
Throughout this dispute, Borden has argued that the TOD
Agreement is voidable on the basis that Flanders lacked capacity
to enter into it. As Borden acknowledges, that is precisely the
position she would expect the estate to take were it too a party,
because the TOD account assets would revert to the estate if the
TOD agreement were voidable. See id. at 10-12; Shearson, 877 F.2d
- 7 - at 135-36. The interests of Borden and the estate are therefore
identical -- or very nearly so.
In her reply brief, Borden makes a belated attempt to
identify interests that the estate could not protect due to its
absence: "unreleased estate tax liens" on the TOD account assets
and an alleged failure on the part of Merrill Lynch to receive an
"estate tax waiver" as required by the TOD Agreement. Borden
failed to raise these arguments in her opening appellate brief,
and she failed to develop the factual foundation for either
argument: She provided no evidence that the estate is subject to
any estate tax liens or, as required by the TOD Agreement, that an
estate tax waiver is required in Massachusetts. We therefore deem
these arguments waived on appeal. See United States v. Casey, 825
F.3d 1, 12 (1st Cir. 2016) (deeming arguments raised for first
time in reply brief waived); United States v. Zannino, 895 F.2d 1,
17 (1st Cir. 1990) ("[W]e see no reason to abandon the settled
appellate rule that issues adverted to in a perfunctory manner,
unaccompanied by some effort at developed argumentation, are
deemed waived.").
It is of no help to Borden that she was joined in her
individual capacity, rather than in her capacity as executor of
the estate. Even as "just" an individual, her only interest in
this lawsuit is in advocating for an outcome that redirects the
assets to the estate and ultimately to her as sole heir. In
- 8 - pragmatic terms, for purposes of this litigation, Borden and the
estate are one: Borden possessed in equal measure every interest
that the estate has in the outcome of this lawsuit, and with no
conflicting interest. Moreover, as an active participant in the
litigation, Borden was aware of the estate's potential interest in
its outcome and was capable, as executor, of asserting that
interest through a motion to intervene. The fact that Borden was
"well aware of this situation," yet "never moved to intervene" on
behalf of the estate, indicates that she did not deem the estate's
"interests substantially threatened by the litigation." United
States v. San Juan Bay Marina, 239 F.3d 400, 406-07 (1st Cir.
2001); see also Singing River Health Sys., 850 F.3d at 201. Even
under our assumption that Borden's Rule 19 claim is not waived, it
would be inequitable to allow Borden to sit on her hands throughout
years of litigation only to now assert the estate's interest. See
Wright & Miller, supra, § 1609 (explaining that Rule 19 "is based
on equitable principles"); Provident Tradesmens Bank & Tr. Co.,
390 U.S. at 120-21 (noting the equitable origins of joinder
jurisprudence).
Borden also argues that joinder is required because the
estate's absence leaves "an existing party subject to a substantial
risk of incurring double, multiple, or otherwise inconsistent
obligations." Fed. R. Civ. P. 19(a)(1)(B)(ii). This is because,
according to Borden, the estate may attempt to "re-litigat[e]
- 9 - competency."2 Only the consenting beneficiaries and Merrill Lynch
would face such a risk, however, and none of them have complained,
either in the proceedings below or in this court. Indeed, before
us they have vigorously opposed Borden's assertion that the estate
must be joined. Particularly given the nonjurisdictional and
pragmatic nature of Rule 19, see Lincoln Prop. Co. v. Roche, 547
U.S. 81, 90 (2005); Pujol, 877 F.3d at 134-35, we decline Borden's
request to remand for joinder at this late date based on the
potential risk of multiple obligations borne by parties who do not
themselves seem concerned, see Bevan v. Columbia Broad. Sys., Inc.,
293 F. Supp. 1366, 1369 (S.D.N.Y. 1968) (holding plaintiffs
"lack[ed] standing" to assert joinder based on
Rule 19(a)(1)(B)(ii) because "[i]f the defendants, as appears to
be the case, are content to risk a possible double liability, that
is their concern and it hardly lies in plaintiffs' mouths to urge
such solicitous protection upon them"); cf. Provident Tradesmens
Bank & Tr. Co., 390 U.S. at 110 (holding that although a "defendant
may properly wish to avoid multiple litigation, or inconsistent
relief," if "[a]fter trial . . . the defendant has failed to assert
this interest, it is quite proper to consider it foreclosed").
2 In her reply brief, Borden also asserts that the estate may attempt to relitigate estate tax liens, but that argument is waived for failure to raise it in her opening appellate brief.
- 10 - We also note that, aside from a bald assertion, Borden
develops no basis for contending that the estate will not be bound
by the judgment in this case, given her presence as a party.3
Though we do not here decide that question, Rule 19(a)(1)(B)(ii)
is concerned with a "substantial risk" of inconsistent
obligations. Fed. R. Civ. P. 19(a)(1)(B)(ii); see Wright & Miller,
supra, § 1604 (explaining that the "key is whether the possibility
of being subject to multiple obligations is real" and that "an
unsubstantiated or speculative risk is insufficient"); Bacardi,
719 F.3d at 13 (holding no joinder necessary where "risk of
inconsistency may be theoretically possible, but is not a practical
concern"). We are not convinced that the risk of inconsistent
obligations is "substantial" under the circumstances.4
Finally, to the extent Borden argues the policy of
judicial efficiency underlying Rule 19 warrants remand for joinder
of the estate, we cannot agree: particularly given the nearly
three years of proceedings in the district court and the fact that
the case has "reached the Court of Appeals," there is "no
reason . . . to throw away a valid judgment." Provident Tradesmens
3 Were Borden correct on this point, it would mean that the estate likely has an interest in not being joined. 4 In describing, and rejecting, Borden's argument, we do not mean to suggest that we agree the estate can sit by without intervening and then claim not to be bound by a ruling against Borden.
- 11 - Bank & Tr. Co., 390 U.S. at 116; see also Pujol, 877 F.3d at 134
(explaining that Rule 19, together with the other joinder rules,
"aims 'to achieve judicial economies of scale by resolving related
issues in a single lawsuit,' while at the same time preventing
'the single lawsuit from becoming fruitlessly complex or
unending.'" (emphasis added) (quoting Smuck v. Hobson, 408 F.2d
175, 179 (D.C. Cir. 1969))).
B.
We consider next Borden's claim that the district court
erred by applying Massachusetts law instead of New York law.
Borden's argument hinges on the TOD Agreement's choice-of-law
provision, which states: "This Agreement shall be governed by,
construed, administered, and enforced according to the laws of the
State of New York." Appellees urge us to disregard this provision.
On this issue, irony reigns. The party challenging the formation
of a contract asks us to enforce a provision of that contract,
while the parties seeking to enforce the contract disclaim the
applicability of that provision.
Irony to one side, Borden simplifies matters for us by
having failed to raise her choice-of-law argument in the district
court. The argument is therefore forfeited, and we need not
consider it. See Sierra Club, 555 F.3d at 26. Even if we were to
review for plain error, however, Borden could not prevail. See
Fothergill v. United States, 566 F.3d 248, 251-52 (1st Cir. 2009).
- 12 - Under that "formidable" standard of review, Borden must show
"(1) that an error occurred (2) which was clear or obvious and
which not only (3) affected the [appellant's] substantial rights,
but also (4) seriously impaired the fairness, integrity, or public
reputation of judicial proceedings." Id. at 252 (alteration in
original) (quoting United States v. Duarte, 246 F.3d 56, 60 (1st
Cir. 2001)).
We apply Massachusetts choice-of-law rules to determine
the applicable law. Klaxon Co. v. Stentor Elec. Mfg. Co., 313
U.S. 487, 496 (1941). "Massachusetts will give effect to a choice
of law provision" where doing so is "fair and reasonable." Realty
Fin. Holdings, LLC v. KS Shiraz Manager, LLC, 18 N.E.3d 350, 354
(Mass. App. 2014) (citing Morris v. Watsco, Inc., 433 N.E.2d 886,
888 (Mass. 1982)). There is an exception, however, "where the
validity of the contract's formation is challenged, as with a claim
of precontract misrepresentation or fraud in the inducement, in
which case it is less likely that the contract's choice of law
provision will be honored." Id. at 355.5
5 Borden argues this exception is limited to claims of fraud, but the case law speaks broadly of claims challenging "the validity of the contract's formation." Realty Fin. Holdings, 18 N.E.3d at 355. And Borden's invocation of Lambert v. Kysar, 983 F.2d 1110, 1121 (1st Cir. 1993), which discusses a fraud exception to application of forum-selection clauses, not choice-of-law provisions, does not convince us that we should ignore such clear language.
- 13 - Here, the TOD Agreement's choice-of-law provision states
the agreement will be "governed by, construed, administered, and
enforced" according to New York law. But Borden's challenge is to
the formation of the contract, and she does not ask us to construe,
administer, or enforce the agreement. See Ne. Data Sys., Inc. v.
McDonnell Douglas Comput. Sys. Co., 986 F.2d 607, 611 (1st Cir.
1993) ("Because this claim concerns the validity of the formation
of the contract, it cannot be categorized as one involving the
rights or obligations arising under the contract. Hence, the claim
falls outside the contract's choice-of-law provision." (emphasis
in original)). The district court therefore committed no plain
error in applying Massachusetts law to Borden's claim.
C.
Lastly, we turn to Borden's claim that the district court
improperly granted summary judgment to the consenting
beneficiaries. We review orders granting summary judgment de novo.
Pac. Indem. Co. v. Deming, 828 F.3d 19, 22 (1st Cir. 2016). In
undertaking that review, we must "constru[e] the record in the
light most favorable to the non-moving party and resolv[e] all
reasonable inferences in that party's favor." Pierce v. Cotuit
Fire Dist., 741 F.3d 295, 301 (1st Cir. 2014). Summary judgment
is appropriate where the record reveals "no genuine dispute as to
any material fact" and the moving party "is entitled to judgment
as a matter of law." Fed. R. Civ. P. 56(a).
- 14 - As noted above, Borden claims the TOD Agreement is
voidable because Flanders lacked capacity to enter into the
agreement. The consenting beneficiaries moved for summary
judgment, arguing Borden failed to present any evidence regarding
Flanders's capacity. The motion was supported by affidavits from
each of the consenting beneficiaries and two of Flanders's
attorneys.
Borden failed to file a timely opposition. Instead, she
filed a motion for enlargement of time. The district court granted
Borden a twenty-one-day extension but advised Borden that she
"should not expect any further continuances." Borden missed the
extended deadline. Over a month late, she filed an "answer" to
the motion for summary judgment. A few months later, Borden filed
a motion for leave to file an amended opposition to the motion for
summary judgment, as well as an "emergency motion" containing
"newly uncovered evidence."
Borden's three late filings contained evidence she
claimed demonstrated Flanders's incapacity, consisting principally
of medical records from Flanders's hospitalization from October 30
to November 16, 2015, four months before Flanders signed the TOD
Agreement. According to those records, Flanders had been "more or
less appropriately managing his own affairs until" mid-October
2015, when he developed "confusion and hostility/paranoid
ideation" towards his caretakers, which led to a brief period of
- 15 - hospitalization on October 19, 2015. The doctors "[s]uspect[ed]"
these symptoms were "substance abuse related." Flanders had an
"extensive history of substance abuse/alcohol use disorder," a
toxicology screen revealed he had been taking "benzodiazepines and
opiates," and he had apparently been drinking around "a bottle of
wine a day." The doctors "[a]nticipate[d]" Flanders's symptoms
would "substantially clear over several days," apparently because
Flanders had experienced a "strikingly similar" substance-abuse-
related "delirium" a year earlier, but it had cleared in a similar
amount of time. The records also contained a "Notice of
Determination of Patient Incapacity" dated November 5, 2015. In
that document, a doctor determined that Flanders lacked "capacity
to make or communicate health care decisions" pursuant to
Massachusetts law. See Mass. Gen. Laws ch. 201D, § 6. The doctor
described Flanders's incapacity as being caused by "neurocognitive
disorder," "irreversible," of "moderate" extent, and of "long
term" duration. See id. ("The determination [of patient
incapacity] shall . . . contain the attending physician's opinion
regarding the cause and nature of the principal's incapacity as
well as its extent and probable duration."). Elsewhere, the doctor
diagnosed Flanders with "[p]robable major vascular neurocognitive
disorder with behavioral disturbance." Before Flanders was
discharged to his home, the doctors described him as "alert," "very
- 16 - insightful," and "[a]ware of his discharge plans," but also stated
that he had "residual confusion" and "[p]oor judgment and insight."
The district court struck Borden's untimely opposition
and denied her subsequent motions; the hospitalization records
were therefore not included in the summary judgment record
considered by the court. The court then granted the consenting
beneficiaries' motion for summary judgment, holding that "[o]n
th[e] summary judgment record, no reasonable factfinder could find
that at the time of the [TOD Agreement], [Flanders] was incapable
of understanding and deciding upon its terms or was unable to act
in a reasonable manner in relation to the transaction."
The court explained that its decision was based on the
following undisputed facts taken from the affidavits accompanying
the consenting beneficiaries' motion. Flanders had expressed to
his friends, his brother, and his long-time personal attorney that
he did not want to leave his full estate to Borden. To that end,
Flanders spent years working with one of his lawyers, Jessie McCann
Brescher, to craft an estate plan that would provide for the
consenting beneficiaries. He met with Brescher in February 2016
to discuss setting up a TOD account for that purpose. Flanders
then "obtained a blank TOD certificate, gathered the information
necessary to complete it, including obtaining the mailing
addresses and social security numbers for the five people he wanted
to name as beneficiaries, and provided the information to Brescher
- 17 - to complete." According to Brescher's affidavit, Flanders signed
the TOD certificate in her presence on March 22, 2016, after
reading it, indicating he had no questions, and stating that he
was signing voluntarily as his free act and deed. Brescher's
affidavit states Flanders was "lucid" and "mentally alert" and
that she "ha[s] no doubt that [Flanders] understood what he was
doing on March 22, 2016 when he signed the TOD Certificate, what
the document was designed and intended to accomplish, and to whom
he was planning to leave specified portions of his stock."
Finally, the court explained that "multiple individuals who were
in contact with [Flanders] around the time he signed the TOD
Agreement have attested to his mental soundness, and there is no
medical evidence in the summary judgment record to the contrary."
Although two affiants acknowledged Flanders's two-week
hospitalization from October to November 2015, they stated that at
all other times he "seemed in full control of his mental faculties"
and only took medications prescribed by his doctor.
On appeal, Borden trains her attention on the district
court's conclusion that there was no medical evidence in the
summary judgment record belying Flanders's mental soundness.
Borden does not argue that the court was wrong to exclude her
untimely filings. Rather, she suggests that Sherry's affidavit in
support of the consenting beneficiaries' motion itself referred to
the medical records she sought to introduce. Therefore, according
- 18 - to Borden, the record contained a genuine issue of material fact
foreclosing summary judgment. The consenting beneficiaries
dispute that Sherry's affidavit referred to those records. They
also argue that the medical records Borden relies upon are
unauthenticated and constitute inadmissible hearsay. Even
assuming the medical records were properly presented to the court
for consideration in connection with the summary judgment motion,
however, we conclude that they fail to raise a genuine dispute of
material fact as to Flanders's contractual capacity.
Under Massachusetts law, a "contract is voidable by a
person who, due to mental illness or defect, lacked the capacity
to contract at the time of entering into the agreement." Sparrow
v. Demonico, 960 N.E.2d 296, 301 (Mass. 2012). Contractual
incapacity exists where a party is either "incapable of
understanding and deciding upon the terms of the contract," id.
(quoting Wright v. Wright, 29 N.E. 380, 381 (Mass. 1885)), or
where, "by reason of mental illness or defect, [the person] is
unable to act in a reasonable manner in relation to the transaction
and the other party has reason to know of his condition," id. at
302 (alteration in original) (quoting Krasner v. Berk, 319 N.E.2d
897, 900 (Mass. 1974)). In either case, "medical evidence is
necessary to establish that a person lacked the capacity to
contract due to the existence of a mental condition." Id. at 304.
"The inquiry as to the capacity to contract focuses on a party's
- 19 - understanding or conduct only at the time of the disputed
transaction," id. at 303, and the "burden is on the party seeking
to void the contract to establish that the person was incapacitated
at the time of the transaction," id. at 301.6
Borden's primary argument is that the hospitalization
records are evidence of Flanders's mental incapacity; that no
witness presented evidence of successful treatment or cure of his
conditions; and that a reasonable jury could therefore infer that
Flanders was incapacitated at the time he signed the TOD Agreement.
Borden does not distinguish between the acute episode of confusion
and paranoia induced by substance abuse and the neurocognitive
disorder diagnosis. In either case, though, her argument fails.
The relevant inquiry is Flanders's mental state "at the
time of the disputed transaction." Id. 303. Flanders's
hospitalization, however, was four months prior to his execution
6Borden argues that Sherry admitted he was in a fiduciary relationship with Flanders and that the consenting beneficiaries therefore bear the burden of proof. This argument, raised for the first time in Borden's reply brief, is waived. See United States v. Tosi, 897 F.3d 12, 15 (1st Cir. 2018) ("[A]rguments available at the outset but raised for the first time in a reply brief need not be considered."). Even if we were to overlook that waiver and assume Sherry was a fiduciary of Flanders, the case cited by Borden holds only that a "fiduciary who benefits in a transaction with the person for whom he is a fiduciary bears the burden of establishing that the transaction did not violate his obligations." Cleary v. Cleary, 692 N.E.2d 955, 961 (Mass. 1998) (emphasis added). Cleary does not mention capacity, let alone shift the burden of proving capacity to the fiduciary.
- 20 - of the TOD Agreements. On these facts, that chronology is fatal
to any argument of incapacity based on the substance-abuse-induced
episode of confusion. Perhaps a reasonable jury could infer that
Flanders's confusion persisted for a short time after his
discharge. But a finding that Flanders lacked capacity four months
later, based solely on the acute bout of confusion -- in the face
of uncontroverted evidence of his mental lucidity at all relevant
times, including most importantly during the transaction at issue
-- would amount to mere speculation.7 More is needed to establish
a genuine dispute of material fact, particularly since Borden bears
the ultimate burden on the issue of contractual competence. See
Mariasch v. Gillette Co., 521 F.3d 68, 71 (1st Cir. 2008)
("[S]ummary judgment cannot be defeated by relying on improbable
inferences, conclusory allegations, or rank speculation." (quoting
Ingram v. Brink's, Inc., 414 F.3d 222, 228–29 (1st Cir. 2005)));
Mesnick v. Gen. Elec. Co., 950 F.2d 816, 822 (1st Cir. 1991) ("On
issues where the nonmovant bears the ultimate burden of proof, he
must present definite, competent evidence to rebut the motion.").
Conversely, and favorably to Borden, we may assume that
a reasonable jury could find that Flanders's "[p]robable,"
neurocognitive disorder persisted at the time he signed the TOD
7 Nor did Borden provide any evidence to contradict the consenting beneficiaries' testimony that Flanders was apparently "following his doctors' advice and . . . taking only the medications they prescribed."
- 21 - Agreement, given that his "patient incapacity" was described by
the doctor as "irreversible" and "long term." But Borden makes no
argument that the doctor's determination in November 2015 that
Flanders lacked "capacity to make or communicate health care
decisions" under Massachusetts law means Flanders was
contractually incompetent in March 2016. Nor could she. See Mass.
Gen. Laws ch. 201D, § 6 ("A determination made pursuant to this
section that a principal lacks capacity to make health care
decisions is solely for the purpose of empowering an agent to make
health care decisions pursuant to a health care proxy." (emphasis
added)); Cohen v. Bolduc, 760 N.E.2d 714, 722 n.25 (Mass. 2002)
("A person may be adjudicated legally incompetent to make some
decisions but competent to make others."); Johnson v. Kindred
Healthcare, Inc., 2 N.E.3d 849, 854 n.10 (Mass. 2014) ("The
capacity 'to make treatment decisions' is distinct from the
capacity 'to make informed decisions as to [one's] property or
financial interests.'" (alteration in original) (quoting Cohen,
760 N.E.2d at 722 n.25)). Similarly, a tentative diagnosis of a
moderate level of neurocognitive disorder does not itself equate
with contractual incapacity. Cf. Paine v. Sullivan, 950 N.E.2d
874, 881 (Mass. App. 2011) (noting that "a diagnosis of Alzheimer's
disease in and of itself does not compel a conclusion that a
testator lacks capacity to execute a will").
- 22 - So, the records get Borden part way, by showing some
form of incapacity and the existence of a mental condition, but a
gap remains between what she shows and what she would like to show
(contractual incapacity). And to close that gap, Borden needs
under Massachusetts law what she clearly does not have -- medical
evidence linking Flanders's neurocognitive disorder to a lack of
contractual capacity at the time he executed the TOD Agreement.
Sparrow, 960 N.E.2d at 304-05. There is no medical evidence at
all, such as expert testimony, connecting Flanders's disorder to
an inability to "understand[] and decid[e] upon the terms of the
contract" or "act in a reasonable manner in relation to the
transaction" at the time he signed the TOD Agreement (or at any
other time). Id. at 301-02 (first quoting Wright, 29 N.E. at 381;
then quoting Krasner, 319 N.E.2d at 900); see also id. at 304.
Nor for that matter does Borden offer circumstantial evidence of
symptoms sufficient to suggest that Flanders's neurocognitive
disorder in any way manifested in a loss of those abilities around
the time Flanders signed the TOD Agreement. Id. at 305. Without
such evidence, a jury could only speculate in attempting to
determine the disorder's effect, if any, on Flanders's contractual
capacity.
Finally, Borden mounts various attacks on the consenting
beneficiaries' evidence regarding Flanders's capacity, none of
which we find availing. First, Borden argues that Brescher's
- 23 - statements regarding Flanders's capacity at the time he signed the
TOD Agreement are speculative. But those statements were based on
Brescher's personal observations of Flanders reading and signing
the TOD Agreement and her conversations with Flanders during that
meeting. Thus, there is nothing speculative about her conclusion
that Flanders "understood what he was doing on March 22, 2016 when
he signed the TOD Certificate, what the document was designed and
intended to accomplish, and to whom he was planning to leave
specified portions of his stock."
Second, Borden argues that Brescher's opinion as to
Borden's competency must be disregarded because Brescher is not a
medical expert. Borden misunderstands the relevant standards.
Although medical evidence, as opposed to lay testimony, "is
contract due to the existence of a mental condition," Sparrow, 960
N.E.2d at 304 (emphasis added), a "non-expert is competent to
testify to the physical appearance and condition and acts of a
person both for their probative value for the jury and for the
purpose of furnishing facts as the basis of hypothetical questions
for experts," id. at 305 (quoting Cox v. United States, 103 F.2d
133, 135 (7th Cir. 1939)). A reasonable jury would be entitled to
believe Brescher's unrebutted testimony regarding Flanders's
condition and acts at the time he signed the TOD Agreement.
- 24 - Third, Borden argues that the consenting beneficiaries'
evidence only demonstrates that Flanders had "the lesser level of
testamentary capacity, not the higher standard required for
contractual capacity." See Maimonides Sch. v. Coles, 881 N.E.2d
778, 788 (Mass. App. 2008) (describing test for contractual
capacity as "more demanding" than test for testamentary capacity);
compare Palmer v. Palmer, 500 N.E.2d 1354, 1357-58 (Mass. App.
1986) ("Testamentary capacity requires ability on the part of the
testator to understand and carry in mind, in a general way, the
nature and situation of his property and his relations to those
persons who would naturally have some claim to his remembrance";
"freedom from delusion which is the effect of disease or weakness
and which might influence the disposition of his property"; and
"ability at the time of execution of the alleged will to comprehend
the nature of the act of making a will." (quoting Goddard v.
Dupree, 76 N.E.2d 643, 645 (Mass. 1948))), with Sparrow, 960 N.E.2d
at 301-02 (contractual capacity requires the ability to
"understand[] and decid[e] upon the terms of the contract" and
"act in a reasonable manner in relation to the transaction" (first
quoting Wright, 29 N.E. at 381; then quoting Krasner, 319 N.E.2d
at 900)). According to Borden, to demonstrate Flanders's capacity,
the consenting beneficiaries would have to show he understood that
the TOD Agreement would have tax implications for the estate.
- 25 - This argument stumbles at the starting blocks: As we
have repeatedly noted, the burden is on Borden to show Flanders
lacked capacity, not on the consenting beneficiaries to show he
had capacity. Sparrow, 960 N.E.2d at 301. Moreover, even assuming
Flanders was unaware of the tax implications of the TOD Agreement
(an assertion for which Borden provides no evidence), lack of
awareness is not lack of capacity; rather, it is a lack of
knowledge that could have many causes, including (as Borden
speculates) less-than-exhaustive advice on the part of Flanders's
attorneys or accountants.
Finally, Borden alleges that Sherry "saw a delusional
state that no other witness knew of or revealed," calling into
question the credibility of the other witnesses. This argument is
based on a false premise: Flanders's brother acknowledged in his
affidavit that Flanders was "hospitalized" for "a couple of weeks
in November of 2015," though he stated that "in all the times" he
spoke with Flanders, he "never doubted [Flanders] was in full
control of his mental faculties." More fundamentally, Borden
offers no evidence that the other witnesses were unaware of
Flanders's hospitalization. Borden guesses what a jury might
conclude if Brescher were asked about her knowledge of Flanders's
hospitalization and diagnosis, but Borden -- who bears the burden
of proof -- never deposed Brescher (or any other witness), nor has
she otherwise presented evidence as to Brescher's knowledge. As
- 26 - a result, we (and the jury) can only speculate on this record as
to both Brescher's knowledge and the import of her knowledge as to
her credibility. Such "unsupported speculation" cannot substitute
for producing "specific facts, in suitable evidentiary form,
to . . . establish the presence of a trialworthy issue." Triangle
Trading Co. v. Robroy Indus., Inc., 200 F.3d 1, 2 (1st Cir. 1999)
(alteration in original) (first quoting Smith v. F.W. Morse & Co.,
76 F.3d 413, 428 (1st Cir. 1996); then quoting Morris v. Gov't
Dev. Bank of P.R., 27 F.3d 746, 748 (1st Cir. 1994)); see Nunes v.
Mass. Dep't of Corr., 766 F.3d 136, 142 (1st Cir. 2014) ("Generally
speaking, a party cannot raise a genuine dispute merely 'by relying
on the hope that the jury will not trust the credibility of the
witness,' but must instead present 'some affirmative evidence' on
the point, except perhaps where the testimony is 'inherently
unbelievable.'" (quoting McGrath v. Tavares, 757 F.3d 20, 28 n.13
(1st Cir. 2014))); cf. Blanchard v. Peerless Ins. Co., 958 F.2d
483, 490 & n.10 (1st Cir. 1992) (vacating grant of summary judgment
where nonmovant pointed to "undisputed evidence from which a jury
might reasonably infer that [the witness's] statements as to his
subjective intent were motivated by self-interest").
II.
For the foregoing reasons, we affirm the judgment of the
district court.
- 27 -