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UBS Financial Services, Inc. v. Brescia

United States District Court, District of New Hampshire

February 12, 2014

UBS Financial Services, Inc.
Glen Brescia and the Estate of Toni Ann Brescia Opinion No. 2014 DNH 031

David E. Buckley, Esq. Patrick E. Donovan, Esq.


Joseph N. Laplante, United States District Judge

This is a dispute over whether two individual retirement accounts (“IRAs”), held by a decedent, Toni Ann Brescia, belong to her estate or to her ex-husband, Glen Brescia. Despite their intervening divorce, Glen was designated as the beneficiary of the accounts at the time of Toni Ann’s death. In making a claim to the IRAs nonetheless, the estate argues that, through their divorce stipulation and accompanying “Release Agreement, ” Toni Ann and Glen “unambiguously articulate[d] an intent to relinquish any anticipatory or expectancy interest in each other[s’] investments or retirement accounts, ” or, in any event, that this court should reform the agreement to provide for such a result. Glen disagrees as to both the estate’s interpretation of the agreement and its right to reformation.

This court has diversity jurisdiction over this action, see 28 U.S.C. § 1332(a)(1), which Glen, a citizen of Massachusetts, commenced by seeking a declaratory judgment of his sole right to the IRAs against UBS Financial Services, Inc., the custodian of the account and a citizen of New Jersey. UBS responded by bringing a third-party complaint for interpleader, see 28 U.S.C. § 1335, against both Glen and the estate, which is a citizen of New Hampshire, see id. § 1332(c)(2). The estate, for its part, then brought a cross-claim against Glen, seeking a declaratory judgment of its sole right to the IRAs.[1] Each party has filed a motion seeking summary judgment, see Fed.R.Civ.P. 56, on its own claim, and against the other’s claim, to the IRAs. The parties declined the court’s offer of oral argument.

For the reasons explained fully below, the court grants Glen’s motion for summary judgment, and denies the estate’s, resulting in an award of the IRAs to Glen. The New Hampshire Supreme Court has held that “a divorce decree or stipulation which merely releases all claims of one party to the property of the other does not, in the insurance policy context, destroy the beneficiary status of the first party, because the beneficiary status is not a vested property right.” Dubois v. Smith, 135 N.H. 50, 59 (1991). This rule, which the New Hampshire Supreme Court has since applied to an IRA as well, Est. of Tremaine ex rel. Tremaine v. Tremaine, 146 N.H. 674 (2001), dictates the outcome here. Dubois likewise dooms the estate’s reformation claim, since here (as there) the record contains no evidence that the parties “agreed to forever forfeit [the ex-spouse’s] beneficiary interest.” 135 N.H. at 60 (quotation formatting omitted). So, despite the estate’s game attempts to distinguish these cases--and whatever the equitable appeal of its suggestion that Toni Ann would “want [her] assets to be inherited by family members or loved ones, instead of [her] ex-spouse[]”--this court must award the IRAs to Glen.

I. Applicable legal standard

Summary judgment is appropriate where “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A dispute is “genuine” if it could reasonably be resolved in either party's favor at trial, and “material” if it could sway the outcome under applicable law. See Estrada v. Rhode Island, 594 F.3d 56, 62 (1st Cir. 2010). In analyzing a summary judgment motion, the court “views all facts and draws all reasonable inferences in the light most favorable to the non-moving” parties. Id. On cross-motions for summary judgment, “the court must consider each motion separately, drawing inferences against each movant in turn.” Merchants Ins. Co. of N.H., Inc. v. U.S. Fid. & Guar. Co., 143 F.3d 5, 7 (1st Cir. 1998) (quotation marks omitted).

II. Background

The underlying facts are more or less undisputed. Glen and Toni Ann were married in 1999. During the marriage, Toni Ann opened two IRA accounts with UBS, executing, for each account, an “IRA Application and Adoption Agreement” with UBS.[2] In relevant part, each agreement (a) identified Glen as the “First Primary Beneficiary, ” (b) did not identify any “Second Primary Beneficiary, ” or contingent beneficiaries, and (c) acknowledged that “any interest in this IRA that is not effectively disposed of by the beneficiary designation I make in this Application or any subsequent beneficiary designation will be paid to my surviving spouse and if no surviving spouse to my estate.”

In 2006, Glen and Toni Ann filed for divorce with the then-Salem Family Division of the Rockingham County Superior Court. Their marriage produced no children. The divorce was granted when the court approved a “Final Decree on Petition for Divorce or Legal Separation” executed and submitted by the parties in August 2006. While the form provided boxes and blanks to complete for the division of various marital assets, many of the blanks had been marked “see attached, ” an apparent reference to a “list of the division of property” appended to the form, and also signed by each of the parties. In relevant part, this list stated, “IRA - Each keep their own.” On the same day they submitted the form divorce decree, the parties also executed the “Release Agreement” mentioned above. This document states, in pertinent part, that the parties

are not represented by Counsel, and they have agreed that they desire and intend to divide their assets independently and without legal assistance. Husband and Wife drafted an instrument to make a final and complete settlement of all matters relating to the interests of each with respect to current assets and liabilities . . . .
Heretofore [sic], at this time the Husband and the Wife hereby waive[], renounce[], and relinquish[] unto each other, their respective heirs, executors, administrators and assigns forever, in law or in equity, all and any interest of any kind or character which either may have or may hereafter acquire in or to any real or personal property of the other and whether now owned or hereafter acquired by either.

Toni Ann died in a car accident nearly six years later, on May 5, 2012. Her estate has since come forward with a “Last Will and Testament, ” which she purportedly executed on April 23, 2012, just 12 days prior to her death.[3] This instrument leaves (with one exception not relevant here) “everything I own. House, cars, bank accounts, IRAs, investments etc.” to one Joseph Addario, whom the instrument identifies as Toni Ann’s “Domestic Partner, ” and also names as the executor of the estate. Toni Ann had no children at the time of her death.

As noted at the outset, Toni Ann had not changed the beneficiary designation in favor of Glen on either of the IRAs at any point. At the time UBS deposited the contents of the IRAs into this court, see ...

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