Tamposi v. Denby (136 F. Supp. 3d 77, 2015)

MEMORANDUM AND ORDER ON MOTIONS FOR SUMMARY JUDGMENT ON CROSS-CLAIMS

SAYLOR, District Judge

This is a claim for legal malpractice arising out of prior litigation in New Hampshire concerning the administration of family trusts. Plaintiff Elizabeth M. Tamposi brought claims in this Court against various attorneys and law firms that had represented her interests in the prior litigation, alleging legal malpractice, breach of fiduciary duty, and unjust enrichment. Three defendants — Butler, Rubin, Saltarelli & Boyd, LLP; Faegre Baker Daniels LLP (successor in, interest to Baker & Daniels, LLP); and Julie Shelton (together, the “Shelton Parties”) — filed counterclaims against Tamposi. Ah eight defendants filed cross-claims- against multiple other defendants.'

On December 23, 2014, the. parties filed a joint stipulation dismissing ah claims by and against Tamposi and the majority of the cross-claims. The only claims remaining in the case are the cross-claims for legal malpractice filed by the Shelton Parties against all other defendants.

Four motions for summary judgment have' been filed as, to those cross-claims— one by Michael Weisman, Rebecca McIntyre, and Weisman & McIntyre, P.C. (together, the “W&M Parties”); one by McIntyre alone; one by Burke, Warren, MacKay, & Serritella, P.C., and Stephanie Denby (the “Denby Parties”) as to the cross-claims of only Btitler Rubin and Baker Daniels; and one by the Denby Parties as-to the cross-claims of all of the Shelton Parties.

For thé reasons set forth below, the motion of the Denby Parties for summary judgment as to the cross-claims of Butler Rubin and Baker Daniels will be granted, and all other motions will be denied.

I. Background

The following' facts are undisputed unless otherwise noted.

A. The Samuel A. Tamposi, Sr. Trusts

Samuel A. Tamposi, Sr. was a prominent and successful real estate developer in New Hampshire. (W&M SMF ¶ 3). In 1992, as part of his estate plan, he established the Samuel A.' Tamposi, Sr. 1992 Trust (the “1992 Trust”) and named himself as beneficiary during his life and his six children as beneficiaries after his death. (Id.). See Shelton v. Tamposi, 164 N.H. 490, 493, 62 A.3d 741, 744 (2013). He amended the trust four times prior to his death. Id.) (Dkt. No. 209, Ex. 6, at 31-45). In its final form, the trust provided that upon Samuel’s death, the trust corpus was to be divided into twelve separate sub-trusts — six containing assets exempt from the federal generation-skipping, transfer tax and six containing non-exempt assets. Shelton, 164 N.H. at 493, 62 A.3d at 744. As provided by the 1992 Trust, the twelve sub-trusts would be divided eqiially among Samuel’s six children, with each of the six being named as the primary beneficiary of one “GST exempt” trust and one “nonexempt” trust. (Denby SMF ¶ 3); Shelton, 164 N.H. at 493, 62 A.3d at 744.

Article TENTH of the 1992 Trust provided that each of the twelve sub-trusts would constitute a separate and distinct trust, but that each could be combined with the other trusts in a common' fund for the convenience of administration. (Id.). In that way, legal title to the trust property would be held in the name of the larger Samuel A. Tamposi, Sr. Trusts, while equitable title would rest with the twelve individual trusts. (Id.).

Article TENTH-B of the 1992 Trust, as amended, specified that two of Samuel’s sons — Samuel Tamposi, Jr. (“Sam”) and Stephen Tamposi (“Steve”) — were to serve as “investment, directors” for the entire trust property and for the twelve individual trusts. (Id. ¶ 4; Resp. to Denby SMF ¶ 4). The enumerated responsibilities and powers of the investment directors included, but were not limited to, “the management, control, handling, financing, refinancing and structuring-of any and all real estate interests and other operating entities from time to time included in the trust property” and the “full power and authority to direct the retention or sale of all other assets from time to time included in the trust property and to direct the purchase of property with any principal cash included in the trust property.” (1992 Trust Art. TENTH-B(d) and (e)).

The 1992 Trust contained an in terro-rem clause that provided, in relevant part:

If any person shall at any time commence or join in the prosecution of any proceedings in any court or tribunal ... to have ■... this trust ... set-aside- or declared invalid or to contest any part or all of the provisions included in ... this trust ... or to cause or.to induce any other person to do so, then and in that event such person shall thereupon forfeit any and all right, title and interest in or to any portion of this trust, and this trust shall be 'distributed in the same manner as would have occurred had'such person died prior to the date of execution of this trust.

(1992 Trust Art. FOURTEENTH).

Upon his death, Samuel’s estate and trust property consisted of “various tenancies, business entities, limited partnerships, [and] corporations and numerous parcels of real estate in New Hampshire and Florida,” and was valued at approximately $20.5 million. Order at 6, Shelton v. Tamposi, No. 316-2007-EQ-2109 (N.H. Probate Ct. Aug. 18, 2010).

B. The Elizabeth M. Tamposi Trusts

Elizabeth (“Betty”) M. Tamposi, the original plaintiff in this action, is one of Samuel’s children. When Samuel died on May 25, 1995, Betty became the beneficiary of two of the twelve individual trusts that were sub-divided out. of the 1992 Trust. (Denby SMF ¶ 1). Those two trusts, known as the Elizabeth M. Tamposi Trusts (“EMT Trusts”), also named Betty’s children (the “Goodlander Children”) as beneficiaries. (Id.).

In addition to her interests in the -EMT Trusts, Betty also acquired minority interests in many Tamposi holdings in which the EMT Trusts owned no interest (the “Gifted Assets”). (Denby SMF ¶ 7; Steve Dep. at 16-17), Those included ownership interests in business entities known as Ballinger Properties LLC and Citrus Hills Holdings LLC. (Steve Dep. at 16-17).

C. Trust-Related Conflict Prior to 2007

After Samuel died in 1995 and Sam and Steve took over as investment directors, the Tamposi family experienced significant discord concerning the proper relationship between the investment directors and the trustee. (Denby SMF ¶ 13). In the summer of 1995,- Steve and Betty discussed the possibility of a buyout of Betty’s interest in the Trusts for approximately $500,000. (Id. ¶ 14). According to Steve, they discüssed that possibility again some time in 1997, 1998, or 1999. (Steve Dep. at 88-89).

On January 26, 2000, Sam and Steve, together with trustee Gerald R. Prunier, filed an action in the Hillsborough County (N.H.) Probate Court seeking a declaratory judgment as to the division of fiduciary responsibilities between the investment directors and the trustee of the 1992 Trust. (Dkt. No. 182, Ex. 4). The petition alleged that Betty and her brother Nicholas Tam-posi (“Nick”) had expressed an interest in a separation or buyout of their beneficial interests in the trust property. (Id.),

On March 17, 2000, Betty and Nick filed an action for. declaratory judgment against Sam and Steve. (Denby SMF, ¶ 19; Dkt. No. 182, Ex. 17). Among other things, the action sought a declaratory judgment as to whether the in terrorem clause in the -1992 Trust would trigger a forfeiture if Betty and Nick responded to the declaratory-judgment action filed by Sam, Steve, and Prunier. (Denby SMF ¶ 19; Dkt. No. 182, Ex. 17).'

On October 2, 2000, New Hampshire Probate Court Judge Raymond A. Cloutier ruled that Betty and Nick would not violate the in terrorem clause by seeking to uphold fiduciary standards under the trust and New Hampshire law, as long as they did “not challenge or attempt to challenge the validity of the trust or the authenticity of the [trust] documents or signatures.” (Denby SMF ¶ 20; Dkt. No. 182, Ex. 19).

In September 2001, Betty filed another action against Sam, Steve, trustee Prunier, and trustee David Tully alleging breach of fiduciary duties. (Denby SMF ¶ 21; Dkt. No. 182, Ex. 20). Among other things, the 2001 lawsuit sought removal of Sam and Steve as investment directors and Prunier as trustee of the 1992 Trust “and the individual, trusts established thereunder.” (Denby SMF ¶ 21; Dkt. No. 182, Ex. 20, at 49). The complaint alleged that Prunier, Sam, and Steve had been using the in terrorem clause to “stifle dissent.” (Denby SMF ¶ 21).

In late 2001, Betty and Nick withdrew their .complaint for breach of fiduciary duty in order to engage in settlement discussions. (Denby SMF ¶ 22). Genus Resources, LLC was hired to mediate the dispute. (Id,). On May 2, 2002, Genus put out an Assessment Report that stated in part:

Betty wants essentially four things: [1] access on a regular basis to cash generated by her interests in the family assets in order tó finance personal choices for herself and her family; [2] independence for herself and her children from control of their lives by the [(Investment [directors of the Tamposi Trusts; [3] more professional management of the Tampo-si family businesses, management which adheres to best practices standards; and [4] continuing her ownership of the Tamposi family business interests as they comprise an intact business.

(Genus Assessment Rep. at 52-53). The mediation was ultimately unsuccessful. (Denby SMF ¶ 23). Betty’s 2001 complaint was not reinstated after the failed mediation. (Id).

On June 16, 2004, Betty sent a letter to Sam, Steve, and two of her other siblings requesting a buyout “instead of the settlement agreement that would have left [her] involved in family business affairs for the long run.” (Dkt. No. 182,* Ex. 22). The letter also' requested that Sam and Steve resign as investment directors of the EMT Trusts. (Id).

In July 2004, Betty and Nick agreed to sell their ownership interests in certain assets to Sam and Steve for $17 million, pursuant to a Letter of Intent that expressed that agreement in writing. (Denby SMF ¶ 25; Dkt. No. 182, Ex. 23).

On November 13, 2006, Betty and her siblings entered into a settlement agreement in which each signatory agreed to release all rights of action against ■ one another- that related to the September 2001 lawsuit and two other suits that had also been filed in New Hampshire probate court and later withdrawn. (W&M SMF ¶ 6; Settlement Agreement at 2-3). The terms of the settlement agreement included (but were not limited to) the following: (1) Sam and Steve would resign as investment directors of all assets of the EMT Trusts except for ten; (2) Betty would release any claim for breach of fiduciary duty against her siblings or trustees Pru-nier and Tully; (3) Prunier and Tully would resign as trustees of the EMT Trusts; (4) Betty would nominate Richard Couser as the successor trustee of the EMT Trusts; and (5) Betty would be responsible for her own legal fees, but could seek reimbursement from the EMT Trusts. (Denby SMF ¶ 27). ■

Shortly after the settlement agreement was signed, Couser became ill and became unable to serve as trustee. (Id. ¶ 7). He officially resigned on May 18, 2007, before taking possession of any of the trust assets from Prunier. (Id. ¶ 29).

As of November 19, 2006, Sam and Steve served as investment directors with respect to ten of the assets held in the EMT Trusts. (Denby SMF ¶ 6; Settlement Agreement at 4). They also remained as managers of all assets in the EMT Trusts and retained operating control over them. (Betty Dep. Apr. 8, 2014 at 435-36; Steve Dep. at 150-52). They also remained, and still remain, managers of Betty’s Gifted Assets. (Denby SMF ¶ 6; Steve Dep. at 16-17).

One of the ten assets for which Sam and Steve remained' investment directors after the settlement agreement was Tamposi, LLC. (Denby SMF ¶ 30). Tamposi, LLC owned 50 Class B Units of N.E.S.V.I., LLC, the entity that at the time owned the majority interest in the Boston Red Sox. (Id.). The company also was a party to an agreement under which it could require N.E.S.V.I., LLC to purchase all or some of the Class B Units it owned (the “Put Option”). (M;,Dkt. No. 182, Ex. 27, ¶ 13). The Put Option provided that it could be exercised during the first 90 days of each calendar year beginning in 2004, with the final option period terminating in April 2008. (Dkt. No. 182, Ex. 27, ¶ 13).

D. The Hiring of Julie Shelton and Stephanie Denby

Julie Shelton is a trial lawyer, licensed to practice law in Illinois, with approximately 30 years of litigation experience. (Id. ¶ 39; Denby SMF II ¶ 1; Denby Dep. at 217). Shelton and Betty Tamposi have known each other since 1973. (Id. ¶ 40). Shelton was aware in 2001 that Betty had sued her brothers about an issue related to her family trusts. (Id.).

Sometime in the spring of 2007, Betty contacted Shelton and requested help in finding a new trustee for the EMT Trusts to replace Richard Couser. (Id. ¶ 41; Shelton Dep..-at 21-22). At that time, Shelton was a partner at Butler, Rubin in Chicago. (Denby SMF II, Dkt. No.-206, ¶ l), She had no experience as a trust or probate lawyer, and limited. knowledge of those areas of law. (Denby SMF II ¶ 1)...

Shelton recommended an attorney named Stephanie Denby, referring to her in their conversation as “somebody who I respect highly as a trust and estates lawyer.” (Shelton Dep. at 22). At the time, Denby was employed by the law firm of Burke, Warren, MacKay & Serritella, P.C. in Chicago.

On April 27, 2007, Shelton sent an e-mail to Denby with the subject, “Betty Tampo-si.” (Denby SMF ¶ 42). In the e-mail, Shelton suggested that she, Denby, and Betty set a meeting for the morning of May 3,2007. (Dkt. No. 182, Ex. 43).

On May 2, 2007, Shelton received a stack of materials from Betty, including the EMT Trusts, the 2001 complaint, the settlement agreement,' and some financial documents. (Denby SMF ¶ 43; Dkt. No. 182, Ex. 44). She sent the originals to Denby, keeping copies of certain documents for herself. (Denby SMF ¶ 43; Dkt. No. 182, Ex. 44).

Shortly thereafter, Shelton, Betty, and Denby met at Denby’s office in Chicago and spoke for several hours. (Denby SMF ¶ 42). Betty explained that she had concerns about the implications of the 2006 settlement agreement, including the level of power left to her trustee as compared to the' investment directors. (Betty Dep. at 48-49). Denby shared'her initial response to those 'concerns. (Denby SMF ¶ 42). After the meeting, Denby set up further meetings with multiple institutional trustees, including J:P. Morgan and Bank of America. (Id. ¶ 44). Shelton attended at least some of those meetings. (Id.). Ultimately, each potential institutional trustee declined to take on the trusteeship of. the EMT Trusts. (Id.).

After the institutional' trustees declined to become involved, Betty asked Denby if she would be willing to serve as her trustee. (Id. ¶ 46). Denby declined, explaining that she generally did not act as a trustee. (Id.; Denby Dep. at 130).

On May 30, 2007, Betty and Denby executed a formal engagement letter. In the letter, Burke, Warren (through Denby) agreed to represent Betty “in conjunction with administration of your family trusts.” (Dkt. No. 182, Ex. 47).

At some point in the summer of 2007, Betty asked Denby to find out whether Shelton would agree to serve as trustee of the EMT Trusts. (Denby SMF ¶ 52; W&M SMF ¶ 15). In late July or early August 2007, Denby approached Shelton and asked her if she would be willing to serve. (Denby SMF II 52; Shelton Dep. at 25-26).

” According to Shelton, she responded that she had “no idea how to be a trustee.” (Shelton Dep, at 26). Shelton testified that Denby then reassured her and promised her that she would provide professional assistance. (Id.). Specifically, she testified: “And she [Denby] said a number of different things. I can’t tell you the exact words, but basically, it was, T will help you every step of the way, and Betty needs you. You don’t need to worry about it. It will be fine. You can do this. I will help you, I will guide you and I will teach you.’ ” (Id.). On that representation, and specifically on the understanding that Denby would serve as trustee counsel, Shelton agreed to serve as trustee starting in August 2007. (Denby SMF ¶ 52).

At her deposition, Denby ■ testified as follows:

Q. [D]id you say anything to Ms. Shelton about either the benefits to her personally or the risks to her personally if she undertook that role? ... In the set of conversations relating to whether Ms. Shelton would become trustee.

A. No.

(Denby Dep. at 380-81).

On August 16, 2007, Shelton began to bill Betty for her services as trustee. (Dkt. No. 193, Ex. 2, at 243). At all times while she remained trustee of the EMT Trusts, she sent invoices to Betty through her law firms — first Butler Rubin, and later Baker Daniels. (Saltarelli Aff. ¶ 2; Stanley Aff. ¶ 2).

E. Betty’s Purported Cash Problems and Early Attempts to Resolve. Them

From 2000 to 2006, Betty incurred approximately $900,000 in legal fees in connection with the initial litigation. The fees included charges by Richard Couser. (Betty Dep. Apr. 8,2014 at 436).

In April 2005, then-trustee Prunier authorized a loan from the EMT Trusts to Betty of approximately $1.5 million to purchase a luxury home on Lake Winnipesau-kee in New Hampshire. (Denby SMF ¶ 34; Betty Dep. at 508; Dkt. No. 182, Ex. 93, at 26). The purchase price of the property was approximately $1.7 million. (Betty Dep. at 526-27).

On January 26, 2007, Betty signed a contract with Cobb Hill Construction obligating herself to pay almost $1.5 million for home renovations. (Denby SMF ¶ 35; Dkt. No. 182, Ex. 30).

By mid-May 2007, Betty was experiencing a self-described “cash crunch.” (Betty Dep. at 561). On-May 22, 2007, she wrote an e-mail to Denby in which she requested her help in obtaining reimbursement for the attorneys’, fees that she had incurred (approximately. $900,000) as part of ’ the prior litigation. (Id.; Dkt. No. 182, Ex. 28). After'describing the scenario to Denby in the first portion of the e-mail, Betty wrote: “I don’t know what you can do with all this but I’m hoping you can figure something out that will help me get the reimbursement in whole and not staggered or not anything even, depending, on what them ‘mood’ is. Achü” (Dkt. No. 182, Ex. 28).

On May 31,2007, Betty sent an e-mail to Shelton in which she wrote: “This issue with ... Couser is heating up. Can you call me?” (Dkt.' No. 182, Ex. 48). To the email, she attached a letter from Couser that, among other things, sought payment of outstanding legal fees. (Id.; SMF ¶ 48).

On June. 4, 2007, Betty was served with notice that her husband, Theodore Good-lander, had filed a petition for divorce. (Denby SMF ¶ 36; Dkt. No. 182, Exs. 31-32). In his petition, Ted requested an equitable division of his and Betty’s assets as well as permanent spousal support. (Denby SMF ¶ 36; Dkt. No. 182, Ex. 31).

. On June 7, 2007,- Denby met with David Barradale and Pam Newkirk, two attorneys for Prunier, to address Betty’s need for additional cash flow from the trusts. (Denby SMF ¶ 49; Denby Dep. at 364). At the meeting, Denby informed Barradale that Betty had significant cash needs. (Denby SMF ¶ 49).

Also present at the June 7, 2007 meeting were CFO Jeff Knight of the Tamposi Company and Gene Van Loan, the attorney and trustee for Nick Tamposi. (Denby SMF ¶ 49; Denby Dep. at 364). Knight discussed the balance sheet and cash flow of the EMT Trusts, and explained that Sam and Steve, in their capacity as investment directors, would be distributing $22,000 per month to Betty. (Denby SMF ¶ 49; Denby Dep. at 365).

On June 15, 2007, attorney' Barradale sent a letter to Denby addressing the’'delay in finding a successor'trustee to replace Couser. (Dkt. No. 182, Ex. 49). He noted that an initial target of July 1, 2007, had been set to name a successor trustee for both Betty’s and Nick’s subtrusts, and that that date remained the target in Nick’s case. (Id. at 2-3). He then stated: “It is important to [Prunier] to have a target date of August 1, 2007, for the transition of trustee responsibilities for Betty’s subtrusts. ... It is unfair to the fiduciaries who have resigned for this issue to keep them in limbo and to otherwise hold up the transition of trustee responsibilities.” (Id. at' 3, 4). ’

In his letter, Barradale also stated that on the date of the transfer of trustee responsibilities, a closing would take place during which' “[t]he [t]rústees who have resigned would receive releas.es for the period from the effective date of the Settlement Agreement through the .closing date.” (Id. at 2). He further stated: “I anticipate the [investment [d]irectors will also require a release.” (Id.).

On June 22, 2007, in preparation for a meeting in New Hampshire with Betty’s divorce attorney, Shelton met with Denby to discuss Betty’s divorce case. (Denby SMF ¶ 53). On that same day, Denby sent Shelton a copy of Betty’s 2001 complaint and the November 2006 settlement agreement. (Id.).

At some point, Shelton and Betty began to consider filing an action against Couser for legal malpractice. On June 25, 2007, Shelton sent Denby an e-mail informing her of a recommendation Shelton had received for an attorney to handle such a lawsuit. (Denby SMF ¶ 54; Dkt. No. 182, Ex. 56).

On June 28, 2007, Shelton and Denby attended a meeting with Betty’s divorce attorney and a forensic accountant in New Hampshire. (Denby SMF ¶ 55). The meeting lasted about three hours. (Id.). Following the meeting, Shelton sent an e-mail to Betty telling her that she thought the meeting had gone well and asking to be kept “posted on how things go on Monday.” (Id.; Dkt. No. 182, Ex. 57). Shelton testified (and both sides agree) that her email referred to a divorce hearing that was set to take place the following Monday, July 2, 2007. (Denby SMF ¶ 55; Shelton Dep. at 275).

On August 20, 2007, Betty sent an e-mail to her brothers Sam and Steve in which she proposed dates for an in-person meeting involving the three of them, Shelton, and Denby. (Id. ¶ 58; Dkt. No. 182, Ex. 61). Sam responded with a list of dates on which he could meet, but Steve stated that he would prefer to participate by telephone. (Denby SMF ¶ 58; Dkt. No. 182, Ex. 61; Dkt. No. 182, Ex. 62). Betty forwarded Steve’s e-mail to Shelton (but not Denby) and wrote: “what do you think we should do-he is resisting ... should we let him know about issues on the agenda? that we want to talk about the implications of the divorce and a buy out? ... that the red sox are an issue ... they are trying to force.my hand with the agenda.” (Dkt. No. 182, Ex. 62). Shelton responded by advising Betty not to respond to Steve’s e-mail “for the moment.” (Id.). Shelton further advised Betty that a telephone meeting would be acceptable, but Betty was “adamantly-opposed” to the idea. (Shelton Dep. at 372). Shelton testified that Betty “felt it was really important to get Steve there for some reason” and that Shelton “deferred to her desire.” (Id.).

On August 29, 2007, Shelton sent a letter to Sam and Steve in which she introduced herself as the new trustee of the EMT Trusts and again attempted to schedule an in-person meeting. (Denby SMF ¶ 60; Dkt. No, 182, Ex. 65). She volunteered to travel from Chicago to New Hampshire in order to facilitate the meeting. (Dkt. No. 182, Ex. 65).

•According to Shelton, Denby wrote the original draft of the letter. (Shelton Dep. at 396-97; Dkt. No. 182, Ex. 66). She testified that the letter was written with an eye toward potential litigation, and that she attempted to “soften” it with her edits. (Shelton Dep. at 397, 399). The letter stated that “Betty ha[d] significant cash flow issues” and that the group “need[ed] to discuss projected cash flows as well as how to address her current cash needs.” (Id.). The cash-flow issues to which.she referred at that time were caused by expenditures related to Betty’s pending divorce and home renovations. (Shelton Dep. at 391-92).

Shelton knew that Betty was unable to meet her monthly obligations with the $22,000 monthly distribution she received from the trusts at that time. (Id. at 392). She testified that she did not consider herself Betty’s lawyer at the time, but that she did consult with Betty and Denby as to possible strategies for increasing Betty’s cash flow. (Id. at 253).

In September and October of 2007, Betty wrote personal checks totaling more than $38,500, including one in the, amount of $7,150 for a down payment on a family weekend retreat and, $6,780 to Harvard University for her own tuition. (Dkt. No. 182, Ex. 33; Trial Tr. at 1324-25, N.H. Litigation (Dec. 9, 2009)). She also donated $20,000 to.Georgetown University in.that same time frame. (Betty-Dep. June 5,2014 at 846-47). Shelton was unaware at the time that Betty had made those expenditures. (Shelton Dep. at 741).

F. The Hiring of Weisman & McIntyre

At all times relevant to the complaint, Weisman & McIntyre, P.C. (“W&M”) was a professional corporation organized under the laws of Massachusetts.' (W&M SMF ¶ 1). The two members of W&M were defendants Michael D. Weisman and Rebecca (“Betsy”) McIntyre. (Id.). Weisman owned two-thirds of the corporation’s shares, and McIntyre owned the remaining third. (McIntyre SMF ¶ 1).

In August and early September 2007, Betty and Shelton interviewed, at least three litigation attorneys, including Michael Weisman and ,A1 Zabin, -with a view toward filing a potential malpractice claim against Couser. (Denby SMF ¶ 68; W&M SMF ¶ 21; Shelton Dep. at 57-58,' 65-66). Shelton was the “point person” on the search. (W&M SMF ¶ 21; Shelton Dep. at 325). She learned of Weisman through a recommendation from an attorney who in turn had been recommended to her ■ by Fran Fox, a former colleague. (W&M SMF ¶ 21; Shelton Dep. at 57-58). She had asked Fox for “the names of some lawyers in Boston that [they] could talk to about a potential malpractice claim.” (Shelton Dep. at 57-58). She asked for Boston lawyers because Betty had “suggested that [they] wouldn’t want a New Hampshire lawyer.”

(Id. at 57).

On August 24, -2007, Betty and Shelton met’with Weisman at the offices of W&M. (W&M SMF ¶ 22). Weisman told them that he and McIntyre, who was not present at the meeting, were not experts in trust law or trust litigation. (Id.; Shelton Dep. at 825-26). The primary subject of the meeting was a potential malpractice claim against Couser. (W&M SMF ¶ 22; Shelton Dep. at 65-66).

At some point in the next few weeks, the idea of initiating litigation against not only Couser (for malpractice), but also potentially against Sam and Steve’(for bréach of fiduciary duty), arose. (Betty Dep.,at 634-36; Shelton Dep. at 66-67). From that point on, the search for a litigation attorney was conducted with both possibilities in mind. (Betty Dep. at 634-36; Shelton Dep. at 66-67).

On September 4, 2007, Shelton sent an e-mail to Betty and Denby updating them on the search for a litigation attorney. (Denby SMF ¶ 84; Dkt. No, 182, Ex. 80, at 2-3). In the e-mail, Shelton stated: “I think we need to do the following asap: ... Talk to [attorney] Zabin' about the Red Sox angle and the goal of getting a buy out.” (Denby SMF ¶ 84; Dkt. No. 182, Ex. 80, at 3).'

By September 19, 2007, discussions with Weisman had progressed substantially. That day, Weisman sent a draft of a fee agreement to Shelton, who forwarded it along to Betty.. (Dkt. No. 182, Ex. 81). The letter stated that W&M would provide representation in connection with two matters: any legal malpractice or other claims against Couser and any claims against any “appropriate individual or entity for breach of fiduciary duty or other,legal claims respecting, the management of assets in which you have a direct or indirect ownership interest, including, but not limited tó, your ownership interest in the Boston Red Sox.” (Id.). It also stated that W&M would be paid “one third (l/3rd) of the gross amounts of recovered by you in this matter as a result of settlement, judgment or otherwise.” (Id.).

Later that same day, Shelton sent an email to Weisman about the proposed representation agreement with W&M. (Denby SMF ¶ 86; Dkt. No. 182, Ex. 82). That email stated in part:

I spoke with Betty last night and she is adament [sic] about having a fixed cap of fees of $200,000. She is willing to agree to payment of the contingent fee on the Red Sox whether or not you reach $200,000 in fees before resolving the Red- Sox sale, but not on the buy out. (I think that is probably a moot point since it’s likely we won’t get a buy out without filing a lawsuit and getting to the brink of the brothers being removed as trustees.)

(Dkt. No. 182, Ex. 82).

Betty and Shelton retained W&M on September 21, 2007. (W&M SMF ¶ 25; Crossclaims of Shelton Parties, ¶ 34; Weis-man Dep. at 16-18). Betty signed a retainer agreement on September 22,2007. (Dkt. No. 193, Ex. A, at-'220-23). The agreement was written and signed by Weisman, and stated in part:

I will be the lawyer principally responsible for this representation, although I may assign projects relating to the case to other lawyers or other personnel at W&M under my supervision. I will continue to be responsible to you for the entire assignment, howéver, and will be available to discuss the use of other personnel with you.

(Id, at 220).

Betty and Shelton were the decision-makers in the determination to retain W&M, and they are the ones whp negotiated the fee arrangement with Weisman. (Denby SMF -¶¶ 69, 87; Shelton. Dep. at 531-32).

As of the time that Betty and Shelton retained W&M, McIntyre had never served as lead counsel in a trial. (McIntyre SMF ¶ 2). She and Weisman had tried several cases ■ together, but Weisman had always served as lead counsel and McIntyre had always been the “second chair.” (Id.). -, , , .

G. Betty and Shelton’s Direct Re- , quests for Additional Funds

At some point, in approximately September 2007, Betty, asked her; mother Barbara and her brother Nick for a, loan. (Betty Dep. at 696). Nick provided her with a loan, but her mother declined, apparently on the advice of Sam. Betty, Shelton, and Denby all testified that Sam told Barbara that she should not provide Betty with any money, because there was “a huge backlog of funds” in the EMT Trusts. (Id.; Shelton Dep. at 426; Denby Dep. at 249-50).

On September 7, 2007, Betty’s bookkeeper Sue Edwards sent Shelton and Denby documents related to tuition payments for Betty’s children Maggie and John. (Denby SMF ¶ 62; Dkt. "No. 182, Ex. 67). The documents- had previously been sent by fax to the Tamposi Companies for payment. (Denby SMF ¶ 62; Dkt. No. 182, Ex. 67). Betty had been attempting to get Sam and Steve to pay the tuition for Maggie and John. (Denby SMF ¶ 62). She told Shelton “at some point, around [that] time” that Sam was not cooperating with the request for tuition payments. (Shelton Dep. at 441).

In early September 2007, Betty, Shelton, and Denby held a conference call in which they discussed options for increasing Betty’s cash flow. (Denby SMF ¶ 64; Shelton Dep. at 441). During the call, they agreed to request a $1.5 million cash distribution from Sam and Steve. (Shelton Dep. at 441). Shelton prepared a draft-of a letter to be sent by her to Sam and Steve. The initial draft stated, in part: “I have determined that Betty is in immediate' need of $1.5 million in order to maintain her health and reasonable comfort.” (Dkt. No. 182, Ex. 68). ■

Shelton circulated the draft of the letter to Betty and Denby on September 7, 2007. (Dkt. No. 182, Exs. 68-69). Betty responded to Shelton and Denby later that day and wrote: “Let’s round the number up to $1.8 million” (Dkt. No. 182, Ex. 69, at 5). She attached a spreadsheet entitled. “Betty Bills Owed” that purported to outline her financial obligations, which totaled $1,781,238.07. (Denby SMF ¶ 65; Dkt. No. 182; Ex. 69, at 4). Denby responded and wrote;: “As you are already at $1.7, do you ask for $2 million.” (Denby SMF ¶ 65; Dkt. No. 182, Ex. 69, at 5). Betty then wrote back and agreed that they should ask for $2 million. (Denby SMF ¶ 65; Dkt. No. 182, Ex. 69, at 5).

Later that' day, on September 7, 2007, Shelton mailed the final draft of the letter to Sam and Steve via FedEx. (Dkt. No. 182, Ex. 69, at 2; Denby SMF ¶ 67). The letter stated in part:

As you know, the Trusts provide for. the trustee to pay to the bénefíciaries such amounts from the income and principal .as the trustee considers necessary for the beneficiary’s maintenance in health and reasonable comfort. I have determined due to insufficient cash flow over the past few years as well as some extraordinary expenses, Betty needs an additional distribution in the amount of $2 million to pay off these accumulated debts. ... As you are probably aware, because of her financial distress, Betty has been forced to seek loans from family members, including your mother, Barbara Tamposi. Barbara declined to assist Betty based on your representation to her that there was a “huge backlog of funds” Betty could access from the trusts. Accordingly, I would ask that you please arrange to transfer funds from that “backlog” in the amount of $2 million into Betty’s 1992 subtrust within the next seven days. If you are unable or unwilling to transfer these funds, please provide me with a full explanation of your reasons for not doing so.

(Id.). Sheldon intended the letter not only to obtain cash to help Betty pay her bills, but also to initiate a dialogue with Sam and Steve. (Shelton Dep. at 348).

On September 13, 2007, attorney Robert Stein, acting as counsel for Sam and Steve in the role as investment directors, sent a letter to Shelton in response. (Denby SMF ¶ 71; Dkt. No. 182, Ex. 71). The letter stated in part:

I think you have the cart before the horse. I confirmed with [counsel for Pru-nier,] David'Barradale[,] today that the settlement documents have not' been signed, nor has the release been signed by your client and her extended family. Unless or until the documents are finalized, the appropriate releases .signed, and appropriate allocations made, I believe the proposed meeting between you, Sam and Steve, and the proposed distribution to Betty Tamposi; are premature.

(Denby SMF ¶ 71; Dkt. No. 182, Ex. 71).

Upon receiving the letter from Stein, Shelton forwarded it to Denby, Betty, and Weisman. (Denby SMF Denby ¶ 72; Shelton Dep. at 479). Shelton wrote an initial draft of a response, and Denby and Weis-man provided edits. (Denby SMF ¶ 72; Dkt. No. 182, Ex. 72; Shelton Dep. at 492-93). Among other things, .the response expressed a continuing desire by Betty and Shelton to arrange a meeting with Sam and Steve. (Denby SMF ¶ 72; Dkt. No. 182, Ex. 72). Shelton appears to have sent a final version of the letter to Stein by fax on September 14,' 2007. (Denby SMF ¶ 74; Dkt. No. 182, Ex. 74). -

On September 18, 2007, Betty sent an email to Shelton that stated, in full: “Jules, okay ... now we need to whack really really hard to get their attention. Betty.” (Dkt. No. 182, Ex. 86). In response, Shelton wrote: “So we file the complaint Weis-man is. drafting. He will have a draft to us later today.” (Denby SMF ¶ 92; Dkt. No. 182, Ex. 86). Denby was not included in that e-mail exchange. (Denby SMF ¶ 92; .Dkt. No. 182, Ex. 86).

On September 19, 2007, Sam wrote to Sue Edwards (Betty’s bookkeeper) by fax and informed her that his mother Barbara would “not pay for John and [MaggieJ’s tuition until all matters are formally resolved and signed relating to the Tamposi sibling settlement. [FJor example releases signed by Betty and her adult children, etc.” (Denby SMF ¶ 73; Dkt. No. 182, Ex. 73) (emphasis in original). Shelton received a copy of the fax message on September 20, 2007. ((Denby SMF ¶ 73; Shelton Dep. at 535-36). As to her interpretation of Sam’s use of the word “releases,” she testified: “I thought he was talking about releases for any actions that were taken by the investment directors between the time of the settlement agreement in 2006 and the present.” (Shelton Dep. at 536). She felt that the letter was “at least certainly concerning, warranting concern” in that it indicated that Sam and Steve were not attempting to cooperate with Betty or with her as Betty’s trustee. {Id. at 536-37).

On September 20, 2007, attorney Stein sent another letter to Shelton. (Denby SMF ¶ 74; Dkt. No. 182, Ex. 74). That letter stated in part:

Things have certainly not gotten off to a good start in the transition from Dick Couser to you. ... First, the meeting oh September 20 is simply not going to happen. In addition to the issues already raised in our letters)- Steve -took a very bad fall the other day and is not able to get on a plane due to spine and tailbone injuries. Moreover, there is nothing that requires him to attend a face-to-face meeting in Nashua at a time selected by you. His responsibilities can be fulfilled via conference call, a teleconference, or by you visiting the-lovely State of Florida. Sam and Steve are willing to work towards meeting with you, but as I indicated in my earlier correspondence, you have the cart before the horse.

(Denby SMF ¶ 74; Dkt. No. 182, Ex. 74).

On that same day, Betty sent an e-mail to. Shelton and Denby in which she described a conversation she had had earlier that day with her mother'Barbara about Sam’s and Steve’s desire for her to sign a release. (Denby SMF ¶ 75;. Dkt. No. 182, Éx. 75). She concluded the email with the following language: “looking forward to getting a plan together and by a stroke of unbelivavble [sic] luck get a buy out.” (Denby SMF ¶ 75; Dkt. No. 182, Ex. 75).

On September 26, 2007, Weisman sent a letter to an attorney for Barbara Tamposi proposing that Sam and Steve buy out the EMT Trusts for $24,269,406.78. (Denby SMF ¶¶ 76, 88, Dkt. No. 182, Ex. 76). Based on what she knew at the time, Shelton approved of Weisman’s sending the letter, although she is not sure if she gave her approval in advance of his sending it. (Shelton Dep. at 576-77).

H. The Filing of the Massachusetts and New Hampshire Lawsuits

By September 2007, Betty and Shelton had begun to discuss the possibility of litigation against Sam and Steve. According; to Shelton, Denby, Weisman, .and McIntyre, the group had at least one discussion in which they reviewed their legal options., (Denby SMF ¶ 94). One of those options was to file a petition for instructions rather than a lawsuit. (M). According .to Shelton, .Betty was “adamantly opposed” to that option, both because it “wouldn’t solve ... [t]he problem that she always had to be dependent on [Sam. and Steve] in some way or .another for her well-being” and because “it wouldn’t have involved the [Gifted A]ssets.” (Shelton Dep. at 101, . 102, 555; 649). Largely due to Betty’s reaction- to that idea, the group decided to file two lawsuits alleging breach of fiduciary duty: one in the New Hampshire Probate Court and one in the Massachusetts Superior Court as to the Red Sox option. (Denby SMF ¶¶ 94-97).

In connection with the anticipated litigation in New Hampshire, and on 'Weisman’s recommendation, Betty and Shelton hired Steve Gordon and Arpiar (Arpie) Saunders of Shaheen & Gordon, P.A. as New Hampshire local counsel. (Denby SMF ¶ 78; Shelton Dep, at 609-10, 827-28). Shelton understood at that time that Saunders had more experience with probate litigation, and in New Hampshire courts, than did Weisman. (Shelton Dep. at 826-28).

In preparing for litigation, Denby reviewed a number of materials, including all of the trust documents; • Judge Cloutier’s decision from October 2000; some of the filings from that litigation; and some research into the application of the in terro-rem clause that had previously been performed by Couser. (Denby Dep. at 29, 40-42, 65). She also testified: “I reviewed the UTC [Uniform Trust Code]. I reviewed the New Hampshire [C]ode. I looked at ‘Scotts on Trust.’ I looked at ‘Bog[e]rt. on Trust’ to look and see what issues were relevant to New Hampshire and other issues and [the] in terrorem clause.” (Id. at 67-68).

According to W&M’s billing records, Weisman began to work on a complaint for Betty and Shelton on September 16, 2007. (Dkt. No. 193, Ex. 5, at 56). McIntyre began doing so on September 23, 2007. (Id. at 57). Weisman continued to work on one or both complaints through at least September 28, 2007. (Id. at 56-57).

On September 22, 2007, the W&M office prepared a memorandum that purported to provide summaries of • seven New Hampshire eases and two New Hampshire statutes. (Dkt. No. 182, Ex. 85). The document was distributed to Denby shortly thereafter. (Denby Dep. at 88).

On September 25, 2007, McIntyre circulated a draft of the New Hampshire complaint to Betty, Denby, Shelton, and Weis-man. (Denby SMF ¶ 79; Dkt. No. 182, Ex. 77). McIntyre testified that the information in the first draft of that complaint had been provided to her by Weisman, and that she thought at least some of it had originally come from Betty and Denby. (McIntyre Dep. at 22-23, 28-29).

Denby testified that “everybody” was involved in the discussions that led to the drafting of the complaint, including Shelton. (Denby Dep. at 166-67, 445-46), She further testified:

Q. And is that the first time you had occasion to think about the remedies that would be sought in New Hampshire when you saw what Betsy had drafted?

A. No. I think that there were discussions regarding remedies prior to drafting of the complaint.

Q. And were you involved in those discussions?

A. Yes.

Q. And did you — is it fair to say you rendered advice as to what remedies should be sought?

A. I explained options as to what remedies would be sought — could be sought as to what were appropriate remedies that you could seek in breach of fiduciary duty cases, but Betty was the person who was electing which remedies she wanted to pursue. She was very strong-minded about that.

(Denby Dep. at 166).

The New Hampshire complaint was edited to at least some degree by McIntyre, Denby, Weisman, Shelton, Gordon, and Saunders. (Denby SMF ¶ 79; Weisman Dep. at 69-76). Denby testified that she made “revisions to the prayers for relief.” Specifically, she testified as follows:

I think the original prayer for relief asks that Gerald Prunier be removed as trustee. I think I added, “Remove Sam and Stephen as directors of the Tamposi Companies.” And I think that I added E, “Other. Order. the liquidation , of the Tamposi Companies.”

(Denby Dep. at 443).

On September 28, 2007, Betty and Shelton filed a complaint in Massachusetts Superior Court against Tamposi LLC, Ballinger Properties LLC, Sam, -and Steve. (Denby SMF ¶ 77; Dkt. No. 182, Ex. 27; Julie Shelton, Trustee, et al. v. Tamposi LLC et al., Suffolk Superior Court Civil Action No. 07-4283, September 28, 2007). It alleged a breach of fiduciary duty and sought, among other things, an order compelling the respondents to exercise the Put Option for sale of the shares of Tamposi LLC owned by the EMT Trusts. (Mass. Compl. at 12-16). The complaint was signed by McIntyre. (McIntyre Dep. at 41). Betty testified that the goal of the lawsuit was to try and force the liquidation of the Boston Red Sox asset so that she could obtain some quick cash.'' (Denby SMF ¶ 77; Betty Dep. at 591-92).

On October 1, 2007, Shelton sent an email to McIntyre, Denby, and Betty in which she asked McIntyre to make sure she incorporated some particular changes that had been made by Denby into the New Hampshire complaint. (McIntyre SMF ¶ 40; Shelton Dep: at 92-94). On October 5, Denby circulated a new draft that incorporated her and" Gordon’s changes. (W&M SMF ¶ 31; Dkt. No. 193, Ex; 2, at 406). Later that day, Shelton emailed Denby and wrote: ‘Yes. Otherwise, I think the complaint looks great.” (Shelton Dep. at 612). On October 8, Denby and Shelton exchanged e-mails about the.draft. (Dkt. No. 193, Ex. 2, at 406).

Shelton agreed at her deposition that she “engaged in multiple long discussions with Stephanie and Michael Weisman and Betty concerning whether or not the lawsuit should be filed” and that she ultimately approved of its filing. (Shelton Dep. at 92-93, 506). However, she also testified that she was only “minimally” involved in the editing process overall and that she approved' the complaint upon “relying on the advice of [her] counsel.” (Shelton Dep. at 92-93, 504). More specifically,' she testified:

... I was not a member of the team in the same way that the rest of them were. I offered some stylistic suggestions and answered maybe some specific questions that they directed at me, but I was not involved in formulating any of • the legal theories or articulating .any of the legal theories at any time.

(Shelton Dep. at 615-16).

On October 9, 2007, Gordon e-mailed a proposed “final” draft of the New Hampshire complaint for review and requested approval to file it. (W&M SMF ¶ 31). Denby responded that Weisman and’McIntyre were occupied with a trial in a different case, but that Betty, Shelton, and Weisman had all signed off on the last draft and that Gordon could therefore proceed to file it. (Id.; Shelton Dep. at 619-20).

On October 12, 2007, Betty and Shelton (in her capacity as trustee) filed the complaint in Hillsborough County Probate Court in New Hampshire. The complaint alleged breaches of fiduciary duty by Sam and Steve. (Denby SMF ¶ 80; Dkt. No. 182, Ex. 1); Complaint, Shelton v. Tamposi, No. 316-2007-EQ-2109 (N.H. Probate Ct. October 12, 2007). The alleged breaches of fiduciary duty included the failure to address Betty’s “immediate and pressing cash needs,” Sam’s misappropriation of the benefits associated with ownership of the Red Sox, and economic coercion. (N.H. Compl. at 4, 8, 10). The complaint requested the following relief:

A. Order [defendants to provide [plaintiffs with a formal accounting or [investment [d]irectors’ report from November 13,2006 to the present; •

B. Surcharge [defendants for all losses to the EMT Trusts caused by [defendants’ breaches of their fiduciary duties to [plaintiffs;

C. Remove Samuel and Steve as [investment [d]irectors of the EMT Trusts;

D. Remove Samuel and Steve as [directors of the Tamposi Companies;

E. Order the liquidation of the Tamposi Companies so that the assets can effectively be managed for the benefit of Elizabeth and her children as intended by her father when he created the EMT Trusts;

F. Enjoin [defendants from charging Elizabeth or the EMT Trusts any additional fees or attorney fees in conjunction with their seeking judicial relief;

G. Award [plaintiffs their attorneys’ fees and costs in this action, and any other costs caused by the actions of [defendants; and

H. Grant such other and further relief as this Court deems just and proper.

(N.H. Compl. at 14-15).

When asked about the’ risk that the request in the New Hampshire complaint for an order liquidating'the Tamposi Companies could trigger the in terrorem clause, Shelton testified as follows:

Q. And I know this wasn’t your main area of litigation expertise, but did you have a thought that, “Gee, that might actually — -by seeking dissolution of the underlying companies, which was set up by the father in the way he set it up in the trust documents, isn’t it possible that we’re flying into the teeth of the in terro-rem clause?” Did you have any ■ thought like that before letting this complaint get filed in New Hampshire?

A. No. I didn’t have any thought like that., I didn’t understood the structure of the Tamposi companies. I didn’t understand what, the assets that were held in the, trust very clearly. And I understood this as something Stephanie and Betty had discussed and felt it was important to the — to the cause of action.

Q. So is it fair to say that — and don’t let me put words ■ in yóur mouth. I’m really asking you, is it fair to say that you relied on what Stephanie and Betty wanted in not looking into whether or not seeking dissolution of the Tamposi companies would be a big , problem for the in ■ terrorem clause?

A. I had a conversation many times at the beginning of this whole saga with , Stephanie, with Betty, with Michael, saying, “Stephanie has all the files. She has Couser’s whole file. She has ' all the prior trust stuff. I’m not going to look at that again. I’m not going to duplicate the efforts that she’s made. I’m not going to look at it. So I’m not going to have that information. So I want you all to know I don’t have it, ■and I’m relying on Stephanie and Betty for that information.” And so did I have the ability at that point to ' understand that this might have been something that someone , down the line would consider a violation of the in terrorem clause? No.

(Shelton Dep. at 99-101). When later asked if she was warned by counsel 'of such a risk, she testified:

Q. Would you agree that in the discussions that took place prior to the filing of the New Hampshire litigation, I think the words you used was that the lawsuit that was being filed by bringing a breach of fiduciary 'duty claim minimized the risk of enforcement of the in terrorem clause. Is that the advice that you believe you recollect receiving from Stephanie Denby and Michael Weisman?

A. I would say that’s accurate.

Q. They didn’t say that there wasn’t any risk, did they?

A. No.

Q. And in fact, isn’t it correct that prior to the filing of the New Hampshire probate case, Stephanie Denby then, in fact, advised you and advised Betty in conversations that took place that there was a risk that the in terrorem clause could be enforced against Betty’ . . :

A. Yes.

Q. And Michael Weisman also advised ■ you and Betty of that risk, correct?

A. I think Michael — I would say yes. I would say yes.

(Id. at 201-02).

She also testified as follows as to the state of her knowledge on October 12, 2007,. the date that the New Hampshire complaint was filed:

Q. As of October 12th, 2007, were you aware of the fact that a plaintiff who brings an action and has been held to have acted in bad faith in bringing that action could be held liable for the: other side’s attorneys’ fees? It’s a yes-or-no question. .

A. Theoretically, yes.

Q. You did know, as of October of 2007, that there was a common law éxception justifying the award of fees when a [cjourt determined that a party had acted in bad faith, right?

A. I would say, yes.

Q. You knew .about the bad faith exception to the American rule that each side, bears its- own fees. You knew of that exception before you filed this probate court complaint, collect?

A. Generally, yes.

(Id. at 708-09, 788-89, 817).

On October 22, 2007, Shelton sent an email to Betty and Weisman in which she stated, among other things: “Michael, ... Betty is looking for reassurance that you are going to lead the litigation and that you have a clear understanding of the facts and the strengths and weaknesses of her claims.” (McIntyre SMF ¶. 52; Shelton Dep. at 658). In that same e-mail, Shelton wrote: “I do not need to participate and would just like to be updated in case there’s something I need to know as trustee.” (Shelton Dep. at 127). At her deposition in this action, she testified about that e-mail as follows:

Q. I don’t want this question to come out as sarcastic, but how would you know what you needed to know as trustee in connection with the litigation? How would you learn that?

A.. Well, I would expect my lawyers to let me know.

Q. And who were the lawyers you would have expected to let you know at that time?

A. Stephanie and Michael.

Q. What about Rebecca?

A. Betsy wasn’t really very involved at this point.

(Shelton Dep. at 127-28).

On November 6, 2007, Shelton and Den-by executed a formal engagement letter under which Denby and Burke, Warren agreed to provide Shelton with “services in advising you on Trust Administration matters for the [EMT] trusts.” (Denby-Shel-ton Engagement Letter at 1). The engagement letter addressed services provided to Shelton .individually, in her role as trustee; Butler Rubin was not named as the trustee nor mentioned in the letter.in any other capacity. (Denby SMF II ¶ 4).

On January 2, 2008, Sam and Steve responded to the New Hampshire complaint with thirteen separate motions; (Denby SMF ¶ 101; Dkt. No. 182, Ex.- 91). One' of those motions sought an order that Betty had forfeited her beneficial interests in the EMT Trusts. (Denby SMF ¶ 101; Dkt. No. 182, Ex. 91).

On July 8, .2008, Shelton testified at a deposition in the Massachusetts litigation. In response to a question about Sam and Steve, she stated: “I have no basis to claim that they have mismanaged assets.” (Shelton Dep., Mass. Litigation (July 8, 2008) at 148-49; Dkt. No. 182, Ex,.89, at 148-49).

On August 4, 2008, Denby sent a letter to both Betty and Shelton “formalizing their] agreement that [Burke, Warren] represented] Julie Shelton in her capacity as [t]rustee of the [EMT Trusts] and Elizabeth M. Tamposi, both individually, and as beneficiary of , the [EMT] Trusts.’.’ (Waiver of Conflicts at 1). The letter stated in part: •

Such dual representation could result in a potential conflict of interest. ... By this 'Agreement you each agree to full disclosure and candor in our discussions with one another. ... It is possible that serious differences ■ of opinion or disagreements might arise between the two of you in the course of our representation, and in that event considerations of legal ethics might compel us to cease representing both of you. ... Please acknowledge your consent to our dual representation by signing the counterpart of the enclosed letter and returning it to me.

(Id. at 1-2). Shelton signed the letter directly below a statement that read (in all capital letters): “I consent to the representation of both-Elizabeth M. Tamposi and me in my capacity as trustee by Burke, Warren, MacKay & Serritella, P.C. in accordance with the foregoing.” (Id. at 2).

On September 11, 2008, Sam and Steve filed an answer in the New Hampshire proceeding. (Dube Aff., Ex. 32). Among other things, the answer requested an award of “attorney’s fees, experts’ fees, and costs'for the defense of th[e] action and the defense of all actual and/or threatened litigation before November 13, 2006.” (Answer, N.H. Litigation, at 10).

The' New Hampshire proceeding was assigned to Probate Court Judge Gary Cas-savechia. On November 6, 2008, and November 14,2008, Judge Cassavechia held a hearing on several pending motions. Order at 6-7, Shelton v. Tamposi, No. 316-2000-EQ-00178 (N.H. Probate Court Dec. 3, 2008).

On December 3, 2008, the court issued an order' on the motions. (Denby SMF ¶ 103; Dkt. No. 182, Ex! 92). The order stated in part:

The respondents have raised very serious- issues in their defense of the requests for funds and payment of attorney’s fees, including: the fitness of Julie Shelton as trustee; whether the trustee is merely acting as agent for one, or primarily for one, of the beneficiaries; whether this litigation will' only benefit, or predominantly benefit, one beneficiary; and whether all beneficiaries have been and are adequately represented.

The court has also heard testimony, including testimony from the trustee herself, that she is not an expert in trust law and has had no prior experience in trust administration. It has equitable power to surcharge the trustee if there is a later determination that she has acted improperly in the prosecution of this litigation or in making disbursements.

Order at 6-7, Shelton v. Tamposi, No. 316-2000-EQ-00178 (N.H. Probate Court Dec. 3, 2008); (Denby SMF ¶ 103; Dkt. No. 182, Ex. 92).

Shelton testified as follows about the order:

Q. After having read th[e order], did you understand that you could be personally surcharged?

A. I did not understand that I could be personally surcharged.

Q. What did you think “surcharge the trustee” meant?

A. Well, I was — I didn’t know what it meant in this context. I talked to my lawyers about it and was reassured that, “There’s nothing improper going on. So this isn’t something you need to be concerned about.”

Q. [Y]ou understood, didn’t you, that the risk was that if the judge found that you had acted improperly, you could be held personally responsible], right?

A. I didn’t really understand the breadth of it. I didn’t really understand that I could have to pay Stephanie back— or, have to pay back all the fees that I had paid to Stephanie[,] all the fees I had paid to Michael, all the mortgage payments that had been made to Betty. I mean, I really — I did not have a clear understanding of that at all.

Q. So you didn’t understand what could be encompassed within a surcharge?

A. I didn’t understand what could be encompassed within a surcharge. I didn’t understand — I really didn’t understand very much about it. ... And I didn’t have any reason to believe that my interests at that point were diverging from the interests of the beneficiaries in pursuing the litigation.

(Shelton Dep. at 683, 924-25).

Asked why she chose not to resign after the December 3, 2008 order, Shelton testified:

A. Well, neither of my counsel advised me that I should consider resigning. Neither of my counsel advised me that perhaps I needed to consult counsel who was just interested in my welfare and not also Betty’s. My counsel were very reassuring about the fact that a surcharge was not going to happen because' everything was appropriate and proper. Had I known that they were not considering my interests as much as the interests of the case in general and maybe their own interests, Betty’s interests, I would have probably done something differently.

Q. And is it your testimony that if, in October of 2007, Mike or Betsy or Stephanie had advised you that there was a theoretical possibility of personal liability,' but that no trustee had ever been found personally liable for attorneys’ fees under the circumstances of the case you were about to file, it’s your testimony that you- still would have withdrawn?

A. You know, I don’t know exactly what I would have done, but I would have been able to make the decision with full knowledge of the risks that were confronting me. And since I didn’t have that full knowledge, I wasn’t able to do that.

(Id. at 816-17).

On December 23, 2008, Betty and Shelton filed a motion for partial summary judgment in which they asked the court to rule that their initiating the New Hampshire litigation would not trigger the in terrorem clause of the 1992 Trust. (Denby SMF ¶ 104; Dkt. No. 182, Ex. 93).

Shelton’s records reflect that she billed 54.5 hours for services rendered as trustee of the EMT Trusts in the month of January 2009. (Dkt. No. 193, Ex. 2, at 294-95). Those services included at least three litigation strategy meetings that included McIntyre, among others- (Id.).

On February 12, 2009, a hearing was held on Betty and Shelton’s motion for partial summary judgment in the New Hampshire litigation. (Denby SMF ¶ 106; Dkt. No. 182, Ex, 95). During attorney Weisman’s argument at the hearing, Judge Cassavechia stated:

So if I — if you roll the dice here. I mean, just to get my arms around this. And I say the. investment advisors have not breached their duty, now you — at that point you’re in yiolation of the in terro-rem clause. ... So if I find it .wasn’t in good faith, and without probable' cause, the in terrorem clause ... If I find as Mr. Stein or these other people have argued, that this is all about busting the trust, getting the cash — you know, if that’s ultimately what happens, and I find that it was therefore not in good faith, there — it cost the trust money, and there really from the get go, I don’t think, there was a probable basis to believe it. At that point, your client would be out.

(Tr. of Feb. 12, 2009 Hearing in N.H. Litigation, at 106-07). Both Betty " and Weisman were present at the hearing; Shelton was not. (Denby SMF ¶ 106; Resp. to Denby ¶ 106):

.After the hearing on the motion for partial summary judgment, Betty expressed concerns to Denby, Weisman, and Shelton about “[t]he fact that the judge was questioning one of the prayers for relief.” (Betty Dep. at 797-99). As a result of