South-Western Legal Studies in Business

Consumer Protection Statute May Be Used Against Trustee Who Engaged in Fraud
Description Appeals court held that the state Consumer Protection Act could be used against a professional trustee who looted the accounts of numerous clients. As he was engaged in business and defrauded customers, he is subject to the treble damage provision of the statute.
Topic Wills, Estates, and Trusts
Key Words Trusts; Fraud; Consumer Protection; Damages
C A S E   S U M M A R Y
Facts Gavin, a CPA and financial advisor, acted as a professional trustee. About 50 clients used him as trustee of estates where their heirs were the beneficiaries. For years, Gavin stole money from the trusts. Trust beneficiaries sued Gavin for breach of fiduciary duties and violation of the Massachusetts Consumer Protection Act (MCPA). The cases were consolidated. The court held for plaintiffs and, under the MCPA, trebled the damages. Gavin appealed.
Decision

Affirmed. The MCPA applied here as the trustee used trust funds for himself was engaged in commerce as required for liability to be imposed under that statute. His creation of the trusts was a sham to gain control of resources for his own business purposes. It was also appropriate for attorney fees to be granted, as permitted by statute.

Citation Quinton v. Gavin, ---N.W.2d--- (2005 WL 2650981, App. Ct., Mass., 2005)

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