Frank F. Sommers, Permanent Successor Trustee of the Margaret J. Wachter Trust v. Charles Towey, Maureen Fuller-Hopkins, David Nichols, et al.
Published: Aug. 19, 2000 | Result Date: Apr. 6, 2000 | Filing Date: Jan. 1, 1900 |Case number: 269774 Verdict – $482,157
Facts
Charles Towey, a certified public accountant, was named by Margaret Wachter as the successor trustee of her revocable trust, created by Wachter on Dec. 17, 1991. The assets in the trust consisted of Wachter's unencumbered real property residence, checking account, and stocks and mutual funds, totaling approximately $380,000. Wachter resigned as trustee and Towey became successor trustee on March 3, 1995. Wachter was then 96 years old. Upon becoming successor trustee, Towey began a systematic liquidation of trust assets. The monies were used to fund a speculative, start-up business venture by Towey. Towey made loans of trust monies in the form of a line of credit to his friends and business associates, Maureen Fuller-Hopkins and David Nichols. Towey loaned monies totaling over $285,000 to Fuller-Hopkins and Nichols, who in turn, invested the monies into Towey's start-up business venture. The promissory notes were inadequately secured by real and personal properties owned by Fuller-Hopkins and Nichols. Towey personally guaranteed the promissory notes. Towey also invested Wachter's trust assets directly in his start-up business venture. Towey also mortgaged Margaret's previously unencumbered residence, telling the bank that he would use the $175,000 for home improvements for eventual rental of the residence, for rental income, and to pay for Wachter's nursing home care. However, the home was never improved for rental and Wachter's nursing home bills went unpaid by Towey. Instead, the monies went into Towey's start-up business venture. Towey placed Wachter in a nursing home due to poor health in May 1996 and then abandoned her. Adult Protective Services contacted the Public Guardian when Wachter's nursing home bills went unpaid by Towey and Wachter was in danger of being discharged. Fuller-Hopkins and Nichols defaulted on the promissory notes. Towey also defaulted on his personal guaranty of the promissory notes. Prior to the prosecution of this action, Towey was removed by the Superior Court as trustee of the Wachter Trust and succeeded by the Public Guardian in June 1998. Upon Wachter's death in September 1999, the Public Guardian resigned as trustee of the Wacther Trust and Sommers was appointed successor trustee. Sommers continued the prosecution of the action with the express consent of the residuary beneficiaries of the Wachter Trust. The petitioner brought this action against the respondents based on damages for breach of trust, conspiracy to commit breach of trust, fiduciary abuse, conspiracy to commit fiduciary abuse, breach of contract and guaranty and foreclosure. The petitioner also sought punitive damages and attorney fees and costs.
Settlement Discussions
Respondents, particularly Towey, kept promising to obtain a personal loan to repay back monies but offered no guarantees of repayment. There were also concerns that Towey would declare bankruptcy and any settlement would be avoided.
Damages
The petitioner presented evidence that the trust was depleted by the amount of $302,943.
Other Information
The respondents who had three different attorneys including bankruptcy counsel, were in propria persona at trial.
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