7-25-13 (paper 86) surreply d'agostino

UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS

____________________________________

) MIIA C. D’AGOSTINO, )

) Plaintiff, )

) v. ) CIVIL ACTION NO. 1:12-cv-11628-DJC

) )

FEDERAL INSURANCE COMPANY and ) BANK OF AMERICA, N. A. ) LEAVE GRANTED JULY 25, 2013

) Defendants. )

____________________________________)

PLAINTIFF’S SURREPLY IN SUPPORT OF HER OPPOSITION TO DEFENDANT BANK OF AMERICA, N. A.’S MOTION TO DISMISS

The Bank’s “Reply Memorandum” does not respond to the legal syllogisms of plaintiff’s

Opposition. The Bank makes no serious challenge to the breach of fiduciary duty claim, because

there is none to be made. In a footnote, the Bank erroneously suggests that plaintiff has already

had her bite at the apple on her fiduciary duty claim in Massachusetts Probate Court, even

though that court does not have jurisdiction to hear such a claim. As to c. 93A subject matter

jurisdiction, the Bank focuses on the label “trustee” and ignores the commercial context provided

by the Bank’s vast wealth management/professional trustee service business. With respect to the

c. 176D claim, the Bank erroneously asserts that because Chubb issued an insurance policy, this

Court could not possibly hold that the Bank is also in the business of insurance.

I. PLAINTIFF’S BREACH OF FIDUCIARY DUTY CLAIM.

In its Reply, the Bank argues “that Plaintiff has not asserted a claim for breach of

fiduciary duty” (Paper 82, at 1) and in a footnote (id. at 2 n. 2) incorrectly suggests that

plaintiff’s Probate Court action raises “in essence claims for breach of fiduciary duty.”

Case 1:12-cv-11628-DJC Document 86 Filed 07/25/13 of 6

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However, the breach of fiduciary duty claim is adequately pled, and there is no reason it

should be dismissed. See Plaintiff’s Opposition (Paper 66) at 12 n.6. The Massachusetts Probate

Court has no subject matter jurisdiction over actions at law for damages for breach of fiduciary

duty, or over actions under 93A. See M.G.L. c. 215 §3, c. 93A §9 (1). Implicitly recognizing the

Probate Court proceeding to be no bar to plaintiff’s prosecution of this action, the Bank’s motion

to dismiss does not assert an affirmative defense of either res judicata or the “prior pending

action” doctrine.1

II. 93A SUBJECT MATTER JURISDICTION.

Contrary to the Bank’s reply, plaintiff’s opposition did not assert the 93A jurisdictional

foundation to rest “solely” on “the Bank’s alleged breaches of fiduciary duty in the course of its

administration of … the Trust.” (Paper 82, at 2) Instead, Massachusetts law is quite clear that the

alleged wrongdoing—the deceptive or unfair act or practice—must be examined to see if it

plausibly may be found to have been undertaken in a business context. Linkage Corp. v. Trustees

of Boston University, 425 Mass. 1, 24 (1997). Plaintiff’s Second Amended Complaint (“SAC”)

and Opposition more than adequately meet this jurisdictional burden.2

The SAC is very much concerned with the commercial context of the Bank’s commercial

dealings with the plaintiff and with Chubb. Specifically, plaintiff contends that the Bank qua

professional wealth management trustee subordinated its fiduciary duty to the plaintiff in

furtherance of the interests of the Bank qua bank and/or of the Bank and Chubb in the operation

1 See Fed. R. Civ. P. 8(c). Cf. Arizona v. California, 530 U.S. 392, 407-411 (2000). See Bank of America v. Trustees of 52 Fenway Condominium Trust, 2013 WL 1124680 (D. Mass. 2013) (“Under [prior pending action] doctrine, ‘the pendency of a prior action, in a court of competent jurisdiction, between the same parties, predicated upon the same cause of action and growing out of the same transaction, and in which identical relief is sought, constitutes good ground for abatement of the later suit.’”)(emphasis supplied). 2 If jurisdiction is established, the Rule 12 (b)(6) analysis turns to whether the complaint alleges injury or harm that has a causal connection to any one or more of the alleged unfair or deceptive acts, accepting as true the non-conclusory allegations as true and drawing all reasonable inferences in favor of the plaintiff. Here the Bank does not contest an insufficiently pleaded injury having the requisite causal nexus. Nor does the Bank question that the alleged actions are unfair or deceptive. See also note 4 infra.


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of this master insurance program venture, thereby causing injury to the Trust and to the plaintiff.

The SAC also fairly alleges conduct by the Bank in its separate business venture with Chubb to

provide insurance coverage for thousands of trust properties administered by the Bank qua

trustee in the course of its billion dollar wealth management business which caused harm to the

Trust and to the plaintiff. The SAC also alleges conduct by the Bank in the business of insurance

caused harm to the Trust and to plaintiff.

The Bank’s reply avoids this evidence of business context by mischaracterizing the

plaintiff’s argument and misreading the law. Plaintiff does not: (i) seek to “convert her … breach

of fiduciary duty claim into a … 93A claim;” (ii) contend that a “paid trustee is automatically

subject to G.L. c. 93A;” (iii) contend that “the Bank’s alleged ‘business venture’ with …

[Chubb] transform[s] the Bank’s administration of the Trust into conduct involving ‘trade or

commerce;’” or, (iv) ask the Court for “an … expansion of Massachusetts law;” (Paper 82, at 4).

The Bank misreads Latucca v. Robsham, 442 Mass. 205 (2004). Latucca was a

quintessential intra-venture litigation where the trust was merely the arena or setting in which the

defendant Robsham was alleged to have engaged in self-dealing to the detriment of the other

venturers. The Court refused to apply c. 93A to Robsham’s actions as trustee, not merely

because Robsham had the formal status of “trustee,” but because Robsham, as trustee, “was

acting as part of the same venture along with friends and relatives.” 442 Mass. at 209.3

Similarly, in Steele v. Kelley, the litigants were friends who became trustee and beneficiary of a

trust involving a parcel of commercial real estate in Boston. 46 Mass. App. Ct. at 713. The

3 While Robsham had also acted separately in another capacity, as lender to the trust, there were no unfair or deceptive acts committed by Robsham wearing his lender cap that caused harm to the trust. Id. However in the case at bar the SAC alleges two other business activities of the Bank each constituting “trade or commerce” and each causing injury to the plaintiff.


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courts in these cases did not consider professional trustees acting on the same scale as the Bank’s

wealth management business.

This is exactly the point made in Quinton v. Gavin, where the Massachusetts Appeals

Court declared that a party that “sold . . . trustee services in the marketplace to consumers . . .

should [not] be treated any differently from similarly situated business professionals who are

subject to the reach of G.L. c. 93A §9.” 64 Mass. App. Ct. 792, 799 (2005) (citing cases applying

c.93A liability to attorneys, medical care providers, and stock brokers). The Bank leans heavily

on the court’s dicta in Quinton that the trustee in that case used the trust form as a sham, but

there is no statement in the case that this fact was a necessary to the holding.

III. The Bank’s liability under 176D.

According to the Bank because Chubb “is contractually obligated to indemnify the Trust

for losses to the property” (Paper 82, at 5), it necessarily follows the Bank cannot be in the

business of insurance for purposes of G.L. c. 176D. For at least two distinct reasons this

“conclusion” does not follow the truth of the premise.

First, neither any rule of logic nor principle of insurance law precludes adjudication that

each of Chubb and the Bank has the legal status of an “insurer” on account of the December

2008 casualty. See plaintiff’s Opposition (Paper 66, at 17, 19). That under the policy (which

both Chubb and the Bank concealed from the plaintiff) Chubb is “contractually obligated to

indemnify the Trust” is beside the point. On this Rule 12 (b) (6) record it is certainly plausible4

that the plaintiff may adduce proof the Bank has contracted as an insurer as well.

4 See Hernandez-Cuevas v. Taylor, __ F. 3d __, 2013 WL 3742484 (1st Cir. July 17, 2013) (“Ultimately, ‘[t]he relevant question ... in assessing plausibility is not whether the complaint makes any particular factual allegations but, rather, whether ‘the complaint warrant[s] dismissal because it failed in toto to render plaintiffs’ entitlement to relief plausible.’”).


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Second, the Bank need not be an “insurer” to be “in the business of insurance” and hence

subject to liability for unfair settlement practices under G. L. c. 176D §3(9). Those subject to

liability under §3(9) include “any … corporation, association, partnership, any other legal entity

or self-insurer which is engaged in the business of insurance, including agents, brokers, and

adjusters…”. G. L. c. 176D §1 (a). See plaintiff’s Opposition (Paper 66, at 17, 19) citing Lemos

v. Electrolux North America, Inc., 78 Mass. App. Ct. 376 (2010) and Miller v. Risk Mgt.

Foundation of Harvard Med. Insts., Inc., 36 Mass. App. Ct. 411 (1994).

The Bank’s Reply misapprehends Lemos and mischaracterizes plaintiff’s argument5 as to

whether the collaborative venture of the Bank and Chubb constitutes the business of insurance.

Independent of whether the Bank after discovery might be adjudicated to be an insurer,

on these allegations—see note 5 supra—by its participation in this venture, whether as an agent,

partner, or co-venturer, and to further either its interests or the interests of this venture, the Bank

sought to minimize the amount paid to the Trust and Ms. D’Agostino. The unfair and deceptive

actions by the Bank undertaken by or on behalf of this venture to achieve those goals constitute

engaging in the business of insurance.

IV. CONCLUSION.

Defendant Bank of America’s Motion to Dismiss should be DENIED.

5 The Bank’s Reply incorrectly posits that plaintiff relies on Lemos “to argue that the alleged ‘venture’ between the Bank and … [Chubb] means that the Bank was ‘engaged in the business of insurance’.” (Paper 82, at 6). In fact, plaintiff cited Miller—not Lemos—in support of her contention that this collaborative venture constitutes the business of insurance. (Paper 66, at 19). The collaborative venture between the Bank and Chubb acted as “claims negotiator and potential settler” standing between the plaintiff and her rightful indemnity and in the course of doing so violated c. 176D §3(9). Miller, 36 Mass. App. Ct. at 417-19. That Risk Management was not an insurer did not insulate it from 176D exposure. Id.; see Lemos, 78 Mass. App. Ct. at 382-83.


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MIIA C. D’AGOSTINO Plaintiff, July 25 , 2013 by her attorney,

/s/ Richard A. Goren Richard A. Goren BBO #203700 Law Office of Richard Goren 101 Federal Street Suite 1900 Boston, Massachusetts 02110 617-261-8585 [email protected]

CERTIFICATE OF SERVICE I hereby certify that this Surreply will be sent electronically to the registered participants as identified on the Notice of Electronic Filing (NEF), and that paper copies will be sent to those non-registered participants (if any) on July 25, 2013.

/s/ Richard A. Goren


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7-25-13 (paper 86) surreply d'agostino

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