Leo Brynes Trust et al v. Brynes et al

UNITED STATES DISTRICT COURT
DISTRICT OF RHODE ISLAND
LEO BRYNES TRUST d/b/a MANTON 	:
INDUSTRIES, BIG TOP FLEA MARKET :
and HOWARD BRYNES, individually 	:
:
v. 	:
:
KEITH BRYNES, ATLANTIC 	:
ABATEMENT & CONSTRUCTION, 	: 	C.A. No. 19-00509-WES
INC., and ATLANTIC ABATEMENT 	:
CORPORATION 	:
:
v. 	:
:
MARK CARLSON, AMERICAN PRIDE 	:
INSULATION CO., INC., FRANCIS 	:
AND JOCELYNNE DUBUQUE AND 	:
SANTANDER BANK, N.A. 	:
REPORT AND RECOMMENDATION
Lincoln D. Almond, United States District Court
Pending before me for a report and recommendation (28 U.S.C. § 636(b)(1)(B)) is
the Motion to Dismiss Count I of the First Amended Counterclaim pursuant to Fed. R. Civ.
P. 12(b)(6). (ECF No. 50). The Motion is filed by Plaintiffs and Counterclaim Defendants
Leo Brynes Trust d/b/a Manton Industries, Big Top Flea Market and Howard Brynes
(collectively “Counterclaim Defendants”). 	Defendants and Counterclaim Plaintiffs Keith
Brynes, Atlantic Abatement & Construction, Inc. and Atlantic Abatement Corporation
(collectively “Counterclaim Plaintiffs”) filed an Objection. (ECF No. 57). Count I of the
Counterclaim seeks a “Reporting and Accounting by Custodial Trustee Pursuant to R.I. Gen.
Law § 18-13-15 – as to Howard Brynes.” A hearing was held on January 11, 2021. After
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reviewing the pleadings and arguments of the parties, in addition to performing independent
research, I recommend that the Motion to Dismiss (ECF No. 50) be GRANTED.
I. 	Facts
The following factual allegations are gleaned from the Counterclaim and, pursuant
to Rule 12(b)(6), Fed. R. Civ. P., are accepted as true for purposes of considering the instant
Motion to Dismiss. 	The parties to this case are embroiled in extensive litigation. 	At the
heart of this Motion are claims related to the Leo Brynes Trust, which was established in
November 1965. (ECF No. 35 at p. 2). Keith Brynes asserts that he is a beneficiary of the
Leo Brynes Trust and that Howard Brynes, his father, is the Trustee. (ECF No. 35 at p. 2,
13). In his Counterclaim, Keith Brynes asserts that he has sought and been denied access to
“Trust documents, a financial accountant and statements of the Trust assets.” Id. at p. 13.
Keith further claims that Howard has “represented that the Trust would be amended in order
to cut Keith Brynes out as a beneficiary and that the Trust would be dissipated, and the assets
disbursed so that [Keith] does not receive his beneficiary interest.” Id. Keith asserts that
under R.I. Gen. Laws § 18-13-15, he is entitled to a “written statement and accounting of the
Leo Brynes Trust” as well as a copy of the Trust and any amendments. Id. at p. 14.
II. 	Standard of Review
In ruling on a motion to dismiss pursuant to Rule 12(b)(6), the Court construes the
complaint in the light most favorable to the plaintiff, see Greater Providence MRI Ltd. P’ship
v. Med. Imaging Network of S. New England, Inc., 32 F. Supp. 2d 491, 493 (D.R.I. 1998);
Paradis v. Aetna Cas. & Sur. Co., 796 F. Supp. 59, 61 (D.R.I. 1992), taking all well-pleaded
allegations as true and giving the plaintiff the benefit of all reasonable inferences, see Arruda
v. Sears, Roebuck & Co., 310 F.3d 13, 18 (1 st Cir. 2002); Carreiro v. Rhodes Gill & Co., 68
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F.3d 1443, 1446 (1st Cir. 1995); Negron-Gaztambide v. Hernandez-Torres, 35 F.3d 25, 27
(1st Cir. 1994). If under any theory the allegations are sufficient to state a cause of action in
accordance with the law, the motion to dismiss must be denied. See Hart v. Mazur, 903 F.
Supp. 277, 279 (D.R.I. 1995). While a plaintiff need not plead factual allegations in great
detail, the allegations must be sufficiently precise to raise a right to relief beyond mere
speculation. See Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (abrogating the “no set
of facts” rule of Conley v. Gibson, 355 U.S. 41, 44-45 (1957)). “The complaint must allege
‘a plausible entitlement to relief’ in order to survive a motion to dismiss.” Thomas v. Rhode
Island, 542 F.3d 944, 948 (1st Cir. 2008) (quoting Twombly, 550 U.S. at 559).
III. 	Discussion
Count I of the Counterclaim seeks a “Reporting and Accounting by Custodial Trustee
Pursuant to R.I. Gen. Law § 18-13-15 – as to Howard Brynes.” 	(ECF No. 35 at p. 12).
Counterclaim Defendants assert that Count I fails to state a claim because R.I. Gen. Laws §
18-13-1, et seq, the Rhode Island Uniform Custodial Trust Act (“RIUCTA”), does not apply
to the Trust as a matter of law. They argue that RIUCTA is inapplicable for two reasons.
First, they assert that RIUCTA is inapplicable because “custodial trusts are specifically
created to manage property for a primary beneficiary who is or becomes incapacitated by
disability.” (ECF No. 50 at p. 3, citing Restatement (Third) of Trusts §1 cmt. A). In support
of this argument, Counterclaim Defendants argue that the purpose of the Trust in this case
was not related to property management for an incapacitated beneficiary. 	Id. at pp. 3-4.
Second, Counterclaim Defendants note that the Trust was formed in 1965 and argue that the
requirements of RIUCTA, which was not adopted until 1988, cannot apply to the Trust
because it predates the statute.
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Counterclaim Plaintiffs disagree on both accounts. 	First, they argue that Section
10(b) of the Trust, which provides for the creation of a “Family Trust” plainly establishes a
custodial trust subject to the accounting requirements under R.I. Gen. Laws § 18-13-15.
Counterclaim Plaintiffs contend that even though the Trust “language does not state verbatim
that used in the statute, it does not change the type of trust that exists.” (ECF No. 57 at p.
5). In support of this argument, Counterclaim Plaintiffs cite to the only Rhode Island case
that has addressed a “custodial trust.” 	See Miller v. Saunders, 80 A.3d 44 (R.I. 2013).
Counterclaim Plaintiffs contend that Miller directly supports their argument that the Trust in
question is a custodial trust. 	Counterclaim Defendants counter that the case is irrelevant
because the trust at issue in that case was created in 2007, long after Rhode Island adopted
RIUCTA.
In Miller v. Saunders, the Rhode Island Supreme Court was tasked, inter alia, with
determining whether a note handwritten on a life insurance policy created a trust under
RIUCTA. In Miller, the decedent handwrote a note naming his sister “as custodial trustee
for the benefit of [his] minor children,” but did not specifically name RIUCTA. The Court
noted that the statute specifically provides “that a custodial trust may be created by
designating the recipient ‘[in] substance...as custodial trustee for ____ (name of beneficiary)
under the Rhode Island Uniform Custodial Trust Act.’” Miller, 80 A. 3d. at 50. The Court
concluded that despite not explicitly citing RIUCTA in his handwritten note, the decedent
had nonetheless created a trust governed by the statute.
In attempting to analogize Miller to this case, Counterclaim Plaintiffs argue that like
the decedent in that case, this Trust does not specifically name RIUCTA but otherwise
satisfies the statute’s requirements to establish a custodial trust. 	While Counterclaim
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Plaintiffs accurately describe the outcome in Miller, their attempt to apply that holding to
the facts presented here is a reach. 	In Miller, the Rhode Island Supreme Court was
considering specific trust language drafted well after RIUCTA was adopted into law and
attempting to ascertain the intent of the drafter. In the present case, the drafter simply could
never have intended to create a trust under the terms of a statute when the statute was not in
existence when the trust was created. RIUCTA was enacted in 1988 and plainly intended to
thereafter create a uniform statutory scheme to govern certain trusts. 	By explicitly or “in
substance” referencing RIUCTA in the trust document as required by the statute, the
statutory requirements that govern the trust are triggered. Its plain purpose was to create a
new uniform model to regulate and administer certain trusts so that more extensive trust
documents need not be drafted in each instance. Further, there is nothing in RIUCTA that
provides for retroactive application of its provisions to an existing trust. 	Rather, the
requirement that a trust refer to the Act expressly or “in substance” to be a custodial trust
subject to the Act strongly suggests that it was intended to apply prospectively only.
Accordingly, there is no legal basis to apply RIUCTA to a trust drafted over twenty years
before it was enacted.
Therefore, there is no need to delve into the language of the Trust and consider
whether Section 10(b) even creates a custodial trust because it is clear that RIUCTA cannot
apply here as a matter of law, and thus I recommend that the Motion to Dismiss Count I of
the Counterclaim be GRANTED.
On a final note, at the hearing on the Motion, Counterclaim Plaintiffs’ counsel argued
that even if RIUCTA does not apply, Count I should survive because his clients have
common-law claims which support an entitlement to a Trust Accounting. However, Count
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I of the Counterclaim as drafted cannot reasonably be read to include any such common-law
claims since it is solely and unequivocally grounded in RIUCTA. 	Accordingly, if
Counterclaim Plaintiffs believe in good faith that they have such a common-law entitlement,
their recourse is to file a Motion for Leave to Amend their Counterclaim to actually and
specifically state such a claim.
Conclusion
For the foregoing reasons, I recommend that Counterclaim Defendants’ Motion to
Dismiss Count I of the Counterclaim (ECF No. 50) be GRANTED.
Any objection to this Report and Recommendation must be specific and must be filed
with the Clerk of the Court within fourteen days of its receipt. See Fed. R. Civ. P. 72(b); LR
Cv 72. Failure to file specific objections in a timely manner constitutes waiver of the right
to review by the District Court and the right to appeal the District Court’s decision. 	See
United States v. Valencia-Copete, 792 F.2d 4, 6 (1 st Cir. 1986); Park Motor Mart, Inc. v.
Ford Motor Co., 616 F.2d 603, 605 (1st Cir. 1980).
/s/ 	Lincoln D. Almond
LINCOLN D. ALMOND
United States Magistrate Judge
March 1, 2021
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