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In re IMO LW&T of Hurley

Court of Chancery of Delaware

March 20, 2014

Re: IMO the LW&T of Blanche M. Hurley, deceased, et al.

Submitted: December 20, 2013

David J. Ferry, Jr., Esquire Regina M. Matozzo, Esquire Ferry, Joseph & Pearce, P.A. 824 Market Street, Suite 1000 P.O. Box 1351 Wilmington, DE 19899

Matt Neiderman, Esquire Gary W. Lipkin, Esquire Duane Morris LLP 222 Delaware Avenue, Suite 1600 Wilmington, DE 19801

Eric C. Howard, Esquire Morris James Wilson Halbrook & Bayard LLP 107 W. Market Street P.O. Box 690 Georgetown, DE 19947

Dear Counsel:

Two brothers, who understood that their grandmother intended to divide the bulk of her estate evenly among her three biological grandchildren, were surprised to learn after her death that a valuable piece of property their grandmother owned instead was devised solely to their sister under a will and trust their grandmother executed six months before she died. In this action, the brothers challenge that will and trust as the product of undue influence or a lack of testamentary capacity. Their sister, who is named as the trustee of the trust and the executrix of their grandmother's estate, has moved to dismiss the action for failure to state a claim under Court of Chancery Rule 12(b)(6).

Although Delaware's "reasonable conceivability" pleading standard is minimal, it is not meaningless, and it does not excuse a plaintiff from alleging sufficient factual allegations that, if proven, would entitle the plaintiff to relief. If, after assuming the truth of the factual allegations in the complaint, and after drawing reasonable inferences in favor of the plaintiff, the plaintiff could not recover under any reasonably conceivable set of circumstances, this Court must dismiss the complaint. Rule 12(b)(6) serves a gate-keeping function and ensures that a would-be litigant cannot impose on the other side the substantial costs of proceeding with litigation until the plaintiff can make out the bare facts necessary to support a claim.

This, the petitioners have not done. For the reasons that follow, I recommend that the Court enter an order granting the respondent's motion to dismiss.

FACTUAL BACKGROUND

The following facts are drawn from the complaint and the documents it incorporates by reference, giving the petitioners the benefit of all reasonable inferences. Todd Durden ("Todd")[1] and Tedd Durden ("Tedd, " and collectively with Todd, the "Petitioners"), are Blanche M. Hurley's (the "Decedent") two biological grandsons. The Decedent died testate on October 10, 2012, at the age of 96, and was survived by her daughter, Marjorie Hurley-Sewell ("Marjorie"), Marjorie's three natural children, Todd, Tedd, and the respondent, Tamera Hazzard ("Tamera"), Marjorie's three adopted children, and several great grandchildren.

The petitioners allege the Decedent was represented for many years by George Smith, Esquire, who assisted the Decedent with estate planning. In 2003, the Decedent executed the Revocable Trust of Blanche M. Hurley. Between 2006 and 2009, the Decedent executed three amended or restated versions of that revocable trust. On September 27, 2011, the Decedent executed the Third Amended and Restated Revocable Trust of Blanche M. Hurley (the "2011 Trust"). Less than six months later, on March 13, 2012, the Decedent executed the Fourth Amended and Restated Revocable Trust of Blanche M. Hurley (the "2012 Trust"), along with a last will and testament (the "2012 Will"). The 2012 Will provided that the Decedent's entire estate would pass to the 2012 Trust.

The 2011 Trust and the 2012 Trust and 2012 Will, and the differences between the estate plans established in those documents, are the subject of this action. The Petitioners contend that the 2012 Trust and 2012 Will should be set aside by this Court and that the 2011 Trust should be reinstated. The 2011 Trust provided for the sale of the Decedent's properties at 204 2nd Street in Bethany Beach, Delaware and 7709 Barnum Road in Bethesda, Maryland, and directed that the proceeds of those sales would become part of the trust, with the trust funds being divided as follows: (1) one quarter of the principal to purchase an annuity paying $1, 500 a month to Marjorie for a period of ten years, with any remaining payments passing to the Petitioners and Tamera equally if Marjorie died before the annuity expired, and (2) the remaining principal distributed outright in equal shares to the Petitioners and Tamera. A life estate in a third property owned by Decedent and located at 206 2nd Street, Bethany Beach, Delaware, was given to Marjorie, with the remainder passing to Tamera. The 2011 Trust named Mr. Smith as the trustee and a second attorney as successor trustee.

The Petitioners, however, allege that Tamera was unhappy with Mr. Smith's representation of her husband's family, and therefore "arranged" for the preparation and execution of new estate documents by another attorney, Stephen Ellis, Esquire, who previously had represented Tamera and her family.[2] The 2012 Trust and 2012 Will that Mr. Ellis prepared altered the Decedent's estate plan in certain respects. For example, the 2012 Trust gave the property at 204 2nd Street, Bethany Beach, Delaware solely to Tamera, rather than providing for its sale and distribution of the proceeds equally among Todd, Tedd, and Tamera. The 2012 Trust also increased the amount of the annuity to be purchased for Marjorie and added two of Marjorie's adopted children as contingent beneficiaries of the annuity. Finally, the 2012 Trust and 2012 Will named Tamera as trustee and executrix, respectively, and designated Tamera's daughter as alternate successor trustee and alternate successor executrix, respectively.

The Petitioners contend the 2012 Trust and 2012 Will should be set aside, either because the Decedent lacked testamentary capacity when she executed those documents or because Tamera unduly influenced the Decedent to alter the estate plans memorialized in the 2011 Trust. According to the Petitioners, Tamera "arranged" for the preparation of the 2012 Trust and 2012 Will by Tamera's attorney, Mr. Ellis, rather than by Mr. Smith, who had represented the Decedent for several years, because Tamera was unhappy that Mr. Smith's representation of Tamera's husband's family had resulted in a significant reduction in her husband's potential inheritance.[3] The Petitioners also allege that, other than the 2012 Trust and 2012 Will, the Decedent informed them of all her estate planning decisions, [4] the Decedent was 96 year old, [5] had a tumor between her skin and skull that was removed in 2009, [6] and had ...


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