Sun Life Assurance Co. of Can. v. Haroian Irrevocable Ins. Tr. Apr. 29, 1997

RICHARD G. STEARNS UNITED STATES DISTRICT JUDGE

ORDER ON DISTRIBUTION OF INTERPLEADER FUNDS

RICHARD G. STEARNS UNITED STATES DISTRICT JUDGE

Plaintiff Sun Life Assurance Company of Canada (Sun Life) brought this action for interpleader to resolve a dispute between siblings over death benefits payable to a trust (the Haroian Irrevocable Life Insurance Trust (Haroian Trust)). It is undisputed that defendants Henry A. Haroian, Jr. and Sylvia Tarbell are designated as co-trustees of the Haroian Trust. According to the terms of the Trust, proceeds of the Sun Life insurance policy are to be paid to the Trustees upon the death of the remaining settlor. “The Trustee[s] alone shall exercise each incident of ownership over each such policy [and] [t]he insurance company that has issued such policy shall recognize the Trustee[s] as the absolute owner[s] of such policy.” Dkt. 52-1 The Trustees are directed to first pay “any and all” federal and state inheritance and/or gift taxes associated with the death of the surviving settlor of the trust (Henry A. Haroian, Sr.) Id.; see also Dkt. #52 at 5. Consistent with Federal Rule of Civil Procedure 22 and 28 U.S.C. §1335(a)(1), the court ordered Sun Life to deposit the $257, 776.95 in insurance proceeds with the Clerk of this court on June 11, 2021. See Dkt #28.

Sun Life later sought “a discharge from liability and an award of attorneys' fees and costs [$18, 345.50 in fees and $601.02 in costs] from the amount on deposit.” Dkt #40. After deleting some extraneous billings and unexplained work, the court awarded Sun Life $14, 516. The court taxed each co-trustee for the tasks distinctly related to their contribution to the litigation (5.90 hours to Tarbell and 25.30 hours to Haroian, Jr.), and allocated 18.50 hours of mutually shared tasks to be split between the co-trustees to be paid to Sun Life. Therefore, in distributing the corpus to the co-trustees, $4, 242 in fees and $300.51 in costs will be deducted from Tarbell's portion and $9, 674 in fees and $300.51 in costs from Haroian, Jr.'s portion.

On August 5, 2021, the court ordered the co-trustees to make their respective claims to the Sun Life death benefit deposited with the court (less the Sun Life fees and costs) by August 26, 2021. Tarbell filed a claim “as cotrustee and co-beneficiary” on August 25, 2021 (to date, Haroian, Jr., the other co-trustee, has not filed a claim). Dkt # 52. In her claim, Tarbell acknowledges that an estate tax liability of $235, 583 on her father's estate was due by August 18, 2020 to the Commonwealth of Massachusetts and that she and Haroian, Jr., as principal beneficiaries of the estate, each paid half to avoid interest or penalties. Tarbell asks the court to pay the co-trustees their respective share of the estate tax, along with other financial obligations of the Haroian Trust, including the Sun Life fees and costs awarded by the court.

As an initial matter, the court pays Sun Life the fees ordered in its opinion dated August 3, 2021. As the remainder of the insurance proceeds is inadequate to cover the Trust expenses listed in Tarbell's claim and, as a consequence, such decisions are undertaken jointly by the co-trustees, the court issues the remainder of the funds to them in equal shares adjusted according to the court's Order on Sun Life's fees.

ORDER

The court directs the Clerk of Court to disperse checks in the following amounts from the monies deposited in this case in the interest-bearing Court Registry Investment System (CRIS) in accordance with Local Rule Local Rule 67.2 of the United States Court for the District of Massachusetts and General Order 16-03 - $14, 516 to Sun Life Assurance Company of Canada c/o its counsel Mirick O'Connell DeMallie & Lougee LLP, 100 Front Street, Worcester, MA 01608-1477; $118, 914.48 plus half of the accrued interest to Henry A. Haroian, Jr., as Co-Trustee of Haroian Irrevocable Insurance Trust; and $124, 346.47 plus half of the accrued interest to Sylvia J. Tarbell, as Co-Trustee of Haroian Irrevocable Insurance Trust, c/o William Appleyard, 34 Mugford Street, Marblehead, Massachusetts 01945. The Clerk will close this case.

SO ORDERED.