Pacelli v. Pacelli

Massachusetts Appeals Court · Family Law

Family LawPartitionRule Against PerpetuitiesRestraints on AlienationTenancy in CommonContractspartitiontenants in common

Facts

Property at 134 Thorndike Street was held in a nominee trust whose beneficiaries were four Pacelli brothers: Vincent, Gerald, John, and Joseph. In 2003, the four brothers and their three sisters executed and recorded an agreement providing that each sibling would receive a one-seventh share of net sale proceeds, that only the brothers had voting rights, and that all of the surviving beneficial interest holders had to agree to any sale of the property. The agreement also allowed each sibling to appoint a successor or heir to his or her one-seventh interest in sale proceeds, with the successor bound by the agreement. After Vincent terminated the trust in 2015 and title vested in the brothers as tenants in common, Gerald and other siblings pursued partition by sale, while Vincent relied on the unanimity provision to oppose sale.

Issue

Whether the siblings' agreement prohibiting sale absent unanimous consent of the surviving four brothers is enforceable after the trust terminated. Specifically, the court considered whether the provision violated the rule against perpetuities, constituted an unreasonable restraint on alienation, or was otherwise unenforceable for lack of consideration, failure knowingly to waive partition, or termination of the trust.

Rule

A contract affecting cotenants' rights should, if reasonably possible, be interpreted to avoid violating the rule against perpetuities and to give effect to the parties' intent. A unanimity-to-sell provision limited to the lifetimes of identified surviving holders, and not extending veto power to heirs or assigns, does not violate the rule against perpetuities. Whether such a provision is an unreasonable restraint on alienation is a fact-specific inquiry guided by factors including the restraining party's land interest, duration, worthwhile purpose, the likelihood of prohibited conveyances, and the number of persons to whom alienation is prohibited. A cotenant may waive partition by agreement for a reasonable time, including implicitly through a unanimity requirement for sale.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Portland, Maine, four siblings who own a warehouse as tenants in common sign a recorded agreement stating that the property may be sold only if all surviving named siblings consent. A separate clause says each sibling may leave his or her right to 25% of future sale proceeds to a successor, and any successor must comply with the agreement. After one sibling dies, her son claims he inherited both her proceeds share and her veto power and blocks a proposed sale.

If a court follows the majority rule from this case, which result is most likely?

Explanation. The majority construed the agreement to avoid a rule against perpetuities problem and to give effect to the word "surviving." A successor's right to receive a share of sale proceeds does not automatically include the power to veto a sale when the agreement limits that power to surviving named holders. Because the approval right ends within the lifetimes of identified persons, it does not vest too remotely. (Derived from Pacelli v. Pacelli (n.d.).)