UBS can be sued over improperly' distributed IRAs.


Byline: Pat Murphy

A woman who claimed she was the rightful beneficiary of three individual retirement accounts owned by her deceased boyfriend could sue UBS Financial Services for wrongfully delaying her payments and for distributing funds to improper claimants, the Appeals Court has decided.

A Superior Court judge had dismissed Donna M. Aliberti's counterclaims for breach of fiduciary and breach of contract, as well as a claim for unfair and deceptive trade practices under G.L.c. 93A, 2.

But Appeals Court Judge Joseph M. Ditkoff, writing for a unanimous panel, found that Aliberti's fiduciary duty and contract claims could go forward under New York law as dictated by a choice-of-law provision in UBS's customer agreement.

Specifically, the panel concluded that a custodian holding an IRA has duties under New York law, both as a fiduciary and in contract, to a beneficiary of the account.

Moreover, the panel found that Aliberti had a viable 93A claim against UBS.

"UBS actively ignored Aliberti for months despite repeated complaints and requests for information, and UBS later filed an amended complaint against Aliberti alleging abuse of process and malicious prosecution in response to her assertion of her rights," Ditkoff wrote.

The 22-page decision is UBS Financial Services, Inc. v. Aliberti, Lawyers Weekly No. 11-135-18. The full text of the ruling can be found at

New York choice-of-law clauses

Carmen A. Frattaroli of Salem represents Aliberti. In an emailed statement, Frattaroli wrote that he and his client were pleased the Appeals Court reinstated Aliberti's claims.

James O. Fleckner, an ERISA litigator in Boston, said it is not uncommon for financial services contracts to include New York choice-of-law clauses.

"I see it quite a bit, particularly given that a lot of the large financial services companies have New York centers of operation," Fleckner said.

He added that the duties of a custodian of an IRA under Massachusetts law would be similar to those duties under New York law, with the terms of the customer's service agreement as the starting point in each case.

"That is what really establishes the relationship between the parties," he said.

Joseph L. Bierwirth, a probate, trust and business litigator in Boston, said the Appeals Court's decision on the 93A claim was in line with the court's ruling in a 2005 case. In Quinton v. Gavin, the court laid out the standard for finding 93A liability when a trustee acts as...

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