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Zeglinski v. Paziuk

United States District Court, E.D. North Carolina, Southern Division

May 24, 2019

RADOSLAW ZEGLINSKI, individually and as attorney in fact; HEIRS OF KATARZYNA ZIENKIEWICZ; MIECZYSLAW ZIENKIEWICZ; CELINA ZEGLINSKA, and PRZEMYSLAW ZEGLINSKI, Plaintiffs,
v.
DONNA POSEY PAZIUK, also known as Donna Posey; MATTHEW THOMPSON, Individually and as Attorney for Decedent George Paziuk; ANTHONY A. SAFFO, Individually and as Attorney for Decedent George Paziuk, and as Executor of Paziuk Estate, and Trustee of the George Paziuk Revocable Trust, and as Trustee of the Void or Voidable George Paziuk Marital Trust; BRED SCHARD CO., Trustee of George Paziuk Revocable Trust; and LAWRENCE S. CRAIGE, Guardian of the Estate of George Paziuk, Defendants.

          ORDER

          LOUISE W. FLANAGAN United States District Judge

         Plaintiffs, citizens and residents of Poland, [1] are beneficiaries of the estate of George Pazuik (“Paziuk”), a relative who died April 20, 2015, in Wilmington, North Carolina. Proceeding pro se, they bring a variety of claims in complaint filed December 3, 2018, against Pazuik's widow, Donna Posey Paziuk (“Posey”) and Bret Schardt (“Schardt”), other beneficiaries of the estate, together with three attorneys, Matthew Thompson (“Thompson”), a practitioner with Ward and Smith, P.A., Anthony A. Saffo (“Saffo”), of the Saffo Law Firm, P.C., and Lawrence S. Craige (“Craige”), of Craige & Fox, PLLC. These Wilmington, North Carolina based practitioners were involved in the creation, maintenance, and/or settlement of the complained about estate. A myriad of motions are now before this court, including defendants' multiple motions to dismiss and plaintiffs' motions for entry of default.

         STATEMENT OF THE CASE

         While the complaint was not filed until December 3, 2018, the genesis of this case on the court's docket relates back to June 26, 2018, when plaintiff Radoslaw Zeglinski filed for leave to proceed in forma pauperis (which motion was rendered moot by plaintiff submitting the appropriate fees). Plaintiffs' claims spring from dispute concerning settlement of the Paziuk estate, particularly regarding distribution of the George Paziuk Revocable Trust (“revocable trust”). Plaintiffs accompanied their complaint with a plethora of documentary evidence ranging from documents governing the Paziuk estate, to correspondence between plaintiffs and defendants, to state-court orders regarding Paziuk and the estate.

         Each defendant has raised for decision a motion to dismiss. Defendants Saffo, Thompson, and Posey separately move pursuant to Federal Rule of Civil Procedure 12(b)(6) for dismissal arguing plaintiffs have failed to state a claim and that, if a claim is stated, which they collectively deny, it is for reformation of a revocable trust, which is barred by the statute of limitations. Defendants Craige and Schardt rely on unique grounds for dismissal while jointly maintaining that plaintiffs' claims are barred by the statute of limitations and statute of repose, also pursuant to Rule 12(b)(6). All defendants, save Posey, argue they have received insufficient service of process, with defendants Saffo, Thompson, and Craige moving for dismissal of plaintiffs' complaint pursuant to Rule 12(b)(5) on said basis.

         Each defendant relies on personal affidavit, with defendants Thompson and Craige also submitting affidavits of assistants that work at their respective law firms. Defendant Craige also relies on January 31, 2013 state court order modifying the guardianship of Paziuk, removing guardianship of Paziuk's person, but maintaining defendant Craige as guardian of Paziuk's estate, (Jan. 31, 2013 order (DE 50-1) at 4), as well as final account submitted to state court for the guardianship estate of Paziuk, (DE 50-2). Defendant Schardt relies on his renunciation of right to serve as a co-trustee of the revocable trust, as was filed in state court. (DE 66-1).

         On February 28, 2019, plaintiffs moved for entry of default against defendants Craige and Schardt pursuant to Rule 55(a). Twelve days later, discovery was stayed pending the court's address of the instant motions to dismiss submitted at that time. Nine days later, Defendant Craige has moved for leave to file response to complaint, and defendant Schardt also seeks an extension of time to file answer. Plaintiffs filed response in opposition to defendants Saffo, Thompson, and Posey's motions to dismiss. The rest of defendants' motions have, however, not been responded to.

         STATEMENT OF THE FACTS

         Unwinding of the facts starts with creation of the revocable trust. The issues disputed came to life upon Pazuik's death. The court's summary of pertinent events, from the trust's creation to Pazuik's death, rests on plaintiffs' complaint and documents appropriately considered.[2]

         March 26, 1998: Revocable trust created by Pazuik

         Pazuik, a resident of New Hanover County, North Carolina, created the revocable trust at issue March 26, 1998. No. copy of the original trust agreement is before the court; however, this is of no moment to the analysis following.

         September 12, 2008: Amendment to and restatement of the revocable trust (“September 12, 2008 Restatement”)

         Twenty years after its inception, the revocable trust was amended and restated in its entirety on September 12, 2008. The September 12, 2008 Restatement is lodged on the docket at entry 16-11 at pages 1 - 37. It references Exhibits “A, ” “B, ” and “C.” Exhibit A purports to be a list of the property of the revocable trust. This exhibit was not filed with the court. Exhibit B to the September 12, 2008 Restatement purports to identify individuals receiving specified distributions. There is no Exhibit B effective September 12, 2008 in the court's file.[3] Exhibit C purports to be a list of charitable organizations to receive distributions. This exhibit to the September 12, 2008 Restatement, bearing the same September 12, 2008 date, was made a part of the record.

         Under the September 12, 2008 Restatement, once Paziuk died, the revocable trust's assets were to be distributed in three successive steps:

1. Pursuant to Article VI, Section 1(A) of the September 12, 2008 Restatement, the trustee would distribute a portion of the trust's assets to individuals to be named in Exhibit B thereto;
2. Pursuant to Article VI, Section 1(B) of the September 12, 2008 Restatement, the trustee would distribute another portion of the trust's assets to certain charities named in Exhibit C thereto; and
3. Pursuant to Article VI, Section 2 of the September 12, 2008 Restatement, the trustee would distribute the remainder to plaintiffs and two others.

         The September 12, 2008 Restatement additionally provided that “[a]t such time the initial Trustee [Paziuk] no longer serves as Trustee, and if the Grantor [Paziuk] has not, or cannot, act to appoint a successor trustee, then Anthony A. Saffo, Esq. and Bret Schardt shall become Trustees, and shall serve together as Co-Trustees.” (September 12, 2008 Restatement (DE 16-11) at 25).

         November 16, 2011: Paziuk adjudicated incompetent Guardians appointed including defendant Craige

         In 2011, Paziuk had a stroke. After the stroke, the General Court of Justice, Superior Court Division, for New Hanover County (“state court”) appointed two guardians: one for Paziuk's person, LaVaughn Nesmith, and another for Paziuk's estate, defendant Craige.

         May 29, 2012: Defendant Schardt renounces trusteeship

         On May 29, 2012, defendant Schardt filed with the state court renunciation of right to serve as a co-trustee of the revocable trust. (See DE 66-1 ¶¶ 5, 7 (“Bret Schardt is an employee of RBC Wealth Management . . . . That due to RBC's company policy Bret Schardt wishes to renounce his right to serve as a successor Co-Trustee of the Paziuk Trust.”); id. ¶ 8 (“at no time since George Paziuk was adjudicated incompetent did Bret Schardt ever accept his trusteeship over the Paziuk Trust, nor perform any duties . . . as a trustee . . . .”).

         June 15, 2012: Premarital agreement between Pazuik, with defendant Craige acting on Paziuk's behalf, and defendant Posey (“June 15, 2012 premarital agreement”)

         In May 2012, defendant Craige petitioned the state court to authorize Paziuk's estate to pay for the wedding of Paziuk to Posey. In the petition, defendant Craige also indicated that Paziuk would have an attorney prepare a premarital agreement, which defendant Craige would sign on behalf of Paziuk's estate. Defendant Craige wrote to plaintiff Katarzyna Zeinkiewicz May 25, 2012, enclosing for her review the petition for disbursement and notice of hearing regarding the petition. The state court granted the petition.

         The June 15, 2012 premarital agreement incorporated the September 12, 2008 Restatement and provided that the September 12, 2008 Restatement “shall take priority and control over any rights and interests in property of PAZIUK which might otherwise become vested in [defendant Posey] by reason of her marriage to PAZIUK.” (June 15, 2012 premarital agreement (DE 16-14) at 10-11; see also Compl. (DE 16) ¶¶ 27-28).

         The premarital agreement additionally provided that “[n]either party shall hereafter secure any credit card which the other party is authorized to use nor shall either party use or make changes on any credit account in the other party's name, and neither party shall be liable in any manner for debts created through the use of a credit card or charge account in the other party's name.” (June 15, 2012 premarital agreement (DE 16-14) at 11; see also Compl. (DE 16) ¶ 31).

         January 31, 2013: Paziuk guardianship modified

         In January 2013, the guardianship of Paziuk's person was modified, restoring to Paziuk rights to make all decisions that would otherwise be made by a guardian of his person. (See Jan. 31, 2013 order (DE 50-1)). The court held that “Paziuk has recovered since the time of adjudication so that he can make decisions about and communicate his needs regarding all matters other than those regarding his estate.” (Id. at 3). The order additionally provided defendant Craige would continue as guardian of the Paziuk estate. (Id.).

         May 7, 2013: Amendment to the revocable trust (“May 7, 2013 Amendment”)

         On May 7, 2013, Paziuk amended the revocable trust, creating a marital trust. (May 7, 2013 Amendment (DE 16-11) at 38-44). Changes made to the September 12, 2008 Restatement through the May 7, 2013 Amendment were made by George Paziuk at the time when he was adjudicated to be incompetent. Under the May 7, 2013 Amendment, and a September 25, 2014 modification reflecting a fully executed Exhibit B thereto, [4] once Paziuk died, the trust's assets were to be distributed in four steps.

         The first and second steps remain as sequenced in the September 12, 2008 Restatement. The third step previously described, where the trustee would distribute the remainder to plaintiffs and two others lost its order in the May 7, 2013 Amendment. This became the fourth and final step where the parties agree, after the first and second steps, the trustee must distribute $6, 000, 000.00 to the marital trust for defendant Posey before distributing any remainder to plaintiffs.

         Defendant Schardt, defendant Saffo, who served as Paziuk's attorney, executor, and trustee of the Paziuk estate and trusts, and defendant Thompson, who drafted the May 7, 2013 Amendment, were aware Paziuk's competency had not been restored. Plaintiffs allege these defendants knew defendant Craige was a necessary party to any attempt to change the revocable trust and that defendant Craige as guardian had a duty to protect the assets of Paziuk. It is also alleged that defendant Craige intentionally was not notified concerning the May 7, 2013 Amendment.

         September 25, 2014: Exhibit B to the September 12, 2008 Restatement

         On September 25, 2014, Exhibit B, which identifies by name those who are to receive specified distributions, as directed by Article VI, Section 1(A) of the September 12, 2008 Restatement (and as not altered by the May 7, 2013 Amendment), apparently was modified. The exhibit bearing this date provides for cash distributions totaling in excess of $3, 000, 000.00 to 17 individuals.[5] Plaintiffs are to receive $1, 500, 00.00, to be distributed equally among them and two others not named as plaintiffs in the case. Defendant Schardt also is among those listed to receive a distribution, in his case, of the sum of $100, 000.00.

         April 20, 2015: Paziuk died

         On April 20, 2015, Paziuk died. Defendant Saffo, as trustee, began distributing the trust's assets. Defendant Posey started to transfer money out of the marital trust. On June 12, 2015, defendant Craige filed in state court the final account for the guardianship estate.

         During a July 12, 2016 meeting with defendants Saffo and Thompson, plaintiff Radoslaw Zeglinski was informed of the May 7, 2013 Amendment. He received a partial distribution from the estate. Plaintiffs also appear to allege that defendant Posey accrued $22, 497.95 in credit card debt after Pazuik's death, which was paid for by the Paziuk estate. This is in alleged contravention of the June 15, 2012 premarital agreement. Plaintiffs also allege that defendant Posey lied to Paziuk during his lifetime, stating his aunt had died and that he had no living relatives. Plaintiffs contend, too, that defendant Posey was abusive to Paziuk during his lifetime. On March 7, 2018, the state court granted motion made by plaintiffs' then attorney Lonnie Merritt (“Merritt”), wherein it was represented to the state court that plaintiffs sought order directing defendant Saffo to make distribution to plaintiffs and to close Paziuk's estate.

         DISCUSSION

         Plaintiffs seek the May 7, 2013 Amendment, which created the marital trust, to be declared void. They also seek the $6, 000, 000.00 transferred to the marital trust to be returned and a constructive trust created on their behalf. It appears they seek Exhibit B to the September 12, 2008 Restatement, dated September 25, 2014, to be declared void even though it provides for a $1, 500, 00.00 distribution in equal shares to them and two others, ostensibly because it also provides for a $100, 000.00 distribution to defendant Schardt.[6] They also seek damages to be paid to each plaintiff in the amount of $3, 000, 000.00 and request that “the Premarital Agreement along with all Exhibits thereto and any other documents being held by the Clerk of Court should now be removed from seal and become part of ...


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