Answer Doc 25 As Filed 7-1-20

Case 20-01030 Doc 25 Filed 07/01/20 Entered 07/01/20 09:28:00 Desc Main
Document Page 1 of 26
UNITED STATES BANKRUPTCY COURT

EASTERN DISTRICT OF MASSACHUSETTS
In Re: ) Chapter 7
JOHN KENNETH MCNABB ) Case No. 19-14315-FJB
Debtor )
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Julie McNabb ) Adversary Proceeding No.
Plaintiff ) 20-1030
v. )
John Kenneth McNabb )
Defendant )
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DEFENDANT’S ANSWER ANDAFFIRMATIVE DEFENSES

TO AMENDED COMPLAINT
To the Honorable Frank J. Bailey, Bankruptcy Judge:
The above captioned Debtor/Defendant, by and through his undersigned Counsel submits
the following Answer to the Amended Complaint in the above captioned adversary proceeding.
Pursuant to the Courts Order, the Answer is due on July 2, 2020.
ANSWER
PARTIES
1. The Plaintiff, Julie McNabb, is a natural person residing at 53 Pond Street, Cohasset,
Massachusetts 02025, hereinafter referred to as "Plaintiff'.
ANSWER: The Defendant ADMITS the allegations contained in paragraph one of the
amended complaint (“the complaint”).
2. The Defendant, John Kenneth McNabb, is a natural person residing at 16 Damon
Road Scituate, Massachusetts 02066, hereinafter "Defendant" or "Debtor".
ANSWER: Defendant ADMITS some the allegations contained in paragraph two of the
complaint.
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Defendant states that he has moved and his new address is 544A Nantasket Ave., Hull,
MA 02045. Notice of this address change was provided to the Court in Document 21 in the
underlying Bankruptcy Petition #: 19-14315, on April 2, 2020.
JURISDICTION AND VENUE
3. This is an adversary proceeding pursuant to Rule 7001(6) of the Federal Rules of
Bankruptcy Procedure to determine the dischargeability of a liability related to fraud
and fiduciary embezzlement.
ANSWER: Defendant ADMITS the procedural allegations contained in paragraph three
of the complaint but DENIES that there is any debt nor is there any basis to assert a successful
cause of action pursuant to 11 U.S.C. §523.
4. This Court has jurisdiction over this proceeding pursuant to 28 U.S.C. § 1334.
ANSWER: Defendant ADMITS the allegations contained in paragraph four of the
complaint.
5. This adversary proceeding constitutes a core proceeding pursuant to 28 U.S.C. §
l 57(b)(2)(K).
ANSWER: Defendant ADMITS the allegations contained in paragraph five of the
complaint.
6. This District is the proper venue for this proceeding pursuant to 28 U.S.C. § 1409
ANSWER: Defendant ADMITS the allegations contained in paragraph six of the
complaint.
FACTS
7. The Plaintiff is an elderly person within the meaning of M.G.L. c. 19A §14.
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ANSWER: Defendant ADMITS the allegations contained in paragraph seven of the
complaint.
8. The Plaintiff is the Debtor's mother.
ANSWER: Defendant ADMITS the allegations contained in paragraph eight of the
complaint.
The Defendant alleges that the Plaintiff has had diminished capacity since January 2018
and further alleges that her daughter Lauren Nolan (“Lauren”) has been exerting undue influence
on her since November 9, 2018. Since November 9, 2018 the Plaintiff has not had any
conversations with the Defendant or his brother Michael McNabb (“Michael”) except a few brief
times when Lauren was also present.
The Defendant states that he lived with the Plaintiff for thirty (30) years and had daily
contact and a very close relationship with her, and that he finds the alleged statements attributed
to the Plaintiff in the complaint and the Affidavit submitted with the Plaintiff’s Opposition to the
Defendants Motion to Dismiss, and her actions in purportedly revoking his DPOA and assigning
the DPOA to Lauren and throwing him out of the 53 Pond Street house, to be completely
uncharacteristic of her behavior and concludes that they were the result of undue influence by
Lauren. The Defendant states that Lauren had serious objections to his recent marriage and since
November 9 has been making many false accusations against him because of this falling out.
Since January 2018 the Plaintiff’s mental state has declined. The family had to stop her
from driving. She has been diagnosed with dementia, has been prescribed Alzheimer’s
medication, and has exhibited many serious memory issues such as:
• The Plaintiff was surprised once when the Defendant told her that Lauren was
married even though of course the Plaintiff was at the wedding decades ago.
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• The Plaintiff would frequently forget that the Defendant was her son or that
Lauren was her daughter, referring to Lauren just as her “friend.”
• Frequently the Plaintiff would say to the Defendant that she was afraid she wasn’t
in her own house, even though she was and the police would be coming for her.
The Plaintiff’s worsening condition required the Defendant in 2018 to buy all her food &
medication, pay the household bills, drive her places, take care of the house and grounds, and
perform other helpful functions during all of 2018.
9. At all relevant times the Debtor was a fiduciary for the Plaintiff in accordance
with provisions contained in the Plaintiffs Will, Durable Power of Attorney, and
the McNabb Family Trust ("the Trust").
ANSWER: The Defendant ADMITS in part and DENIES in part the allegations
contained in paragraph nine of the complaint.
The Defendant DENIES there is a fiduciary role from the Will since that will not provide
a fiduciary role as long as the Plaintiff is alive. The Defendant DENIES there is an applicable
fiduciary role from the Trust to the Rockland Trust joint bank account the Plaintiff had with the
Defendant since the Trust fiduciary responsibilities are solely for the Trust assets which include
just the home and property at 53 Pond Street, Cohasset, Massachusetts (where the Plaintiff
resides and has a life estate). The Defendant ADMITS there is a fiduciary role from the Durable
Power of Attorney (the “DPOA”) provided that the Court rules that the Defendant has an
ascendant role over the Plaintiff due to the Plaintiff’s diminished capacity.
10. At all relevant times prior to 2018 the Debtor was instrumental in the Plaintiffs
production of estate planning documents.
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ANSWER: The Defendant DENIES the allegations contained in paragraph ten of the
complaint.
The Defendant proposed to the Plaintiff that she create the Trust and other estate planning
instruments but had no more involvement in the process until October 19, 2017 when the
Plaintiff, the Defendant, Michael, and Lauren went to the attorney’s office to sign the documents.
Michael was heavily involved with the Plaintiff’ and the attorney in the estate planning process.
11. The Debtor was designated as an agent for the Plaintiff in a Durable Power of
Attorney executed on October 19, 2017.
ANSWER: Defendant ADMITS the allegations contained in paragraph eleven of the
complaint.
The Defendant alleges that the DPOA provided authority for the Defendant in addition to
and independent of the authority provided by the terms of the joint account. Defendant alleges
that the DPOA is not like most other DPOAs because in this DPOA the Plaintiff did not direct
that all the attorney-in-facts actions were solely to serve her interests but also, as stated in section
I(V) of the DPOA which allowed him to make gifts to himself and or his children, to serve the
interests of the attorney-in-fact and his children.
The Defendant alleges that the DPOA was designed and written by the Plaintiff who
specifically authorized the Defendant to withdraw funds from the joint bank account, to make
gifts to himself that were not to be construed as self-dealing, and to compensate himself for
acting as the Plaintiff’s attorney-in-fact:
• Section I of the DPOA states in pertinent part “I grant to my agent and attorney-in-
fact full power and authority to do everything necessary in exercising any of the
powers herein granted as fully as I might or could do if personally present…”;
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• Section I(B) of the DPOA authorizes the Defendant to “make, receive, sign and
endorse checks and drafts, deposit and withdraw funds”;
• Section I(V) of the DPOA states in pertinent part that “it shall not be deemed to be
self-dealing on the part of my attorney-in-fact herein to make gifts, transfers or
dispositions to or for himself or his children, because they are the objects of my
bounty in harmony with my estate plans;…” and
• Section IV of the DPOA states in pertinent part that: “My attorney-in-fact named
herein shall be entitled to reasonable compensation for any expenses that are
incurred and for the time, effort and services rendered as my attorney-in-fact.”
12. Beginning in January of 2018, the Debtor began making significant and frequent cash
withdrawals from the Plaintiffs bank account.
ANSWER: Defendant ADMITS the allegations contained in paragraph twelve of the
complaint.
the Defendant alleges that all his withdrawals were authorized by the terms of the joint
account and the DPOA. The “Plaintiff’s bank account” was actually a joint account with the
Plaintiff and Defendant as Account Owners (and starting in November 2018 also Lauren). As an
Account Owner, the Defendant had the legal right to withdraw any or all funds from the account
and gave him legal title to all the funds in the account.
The Defendant was added to the account as an Account Owner on September 24, 2008.
The Defendant alleges that at that time the Plaintiff told him that she added him to their joint
account “just in case you need to get any money.” The Defendant alleges that the Plaintiff’s
action to add he Defendant to the joint account should have the presumption of donative intent
and is presumed to have been a gift to him of all the funds in the account. Any statements
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subsequent to that date by the Plaintiff which would contradict that presumption are
inadmissible. The Defendant alleges that the Plaintiff has given him substantial sums of money
at various times in the past and whenever he was going to buy something for the Plaintiff she
would always say “make sure you get something for yourself.”
The Plaintiff did not restrict the Defendant’s use of the funds in the account at that time
or any later time either by executing a written or oral agreement with the Defendant to make it a
limited or “convenience” account nor by establishing the Defendants account ownership as a
Limited Access Deposit Account pursuant to Massachusetts General Laws.
The DPOA signed by the Plaintiff on October 19, 2017 gave the Defendant authority to
withdraw funds from the account, to make gifts to himself that were not to be construed as self-
dealing, and to compensate himself for acting as the Plaintiff’s attorney-in- fact.
13. The Debtor withdrew funds from the Plaintiffs bank account by means of 255
automatic teller machines ("ATM") cash withdrawal transactions
ANSWER: The Defendant DENIES the allegations contained in paragraph thirteen
of the complaint. This allegation is inexplicable and contradicts the allegation in the next
paragraph.
14. The Debtor withdrew funds from the Plaintiffs bank account by means of 48 cash
withdrawal transactions.
ANSWER: Defendant ADMITS the allegations contained in paragraph fourteen of the
complaint. There were 49 ATM withdrawals by the Defendant totaling $14,256.50 in 2018.
15. The Debtor otherwise withdrew funds from the Plaintiffs bank account.
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ANSWER: The allegation is so vague the Defendant lacks sufficient information to admit
or deny the allegations contained in paragraph fifteen of the complaint so the Defendant DENIES
the allegations.
16. The Debtor converted the money to his own use and enjoyment.
ANSWER: The Defendant DENIES the allegations contained in paragraph sixteen of the
complaint.
All the funds withdrawn or spent by the Defendant were authorized by the terms of the
joint account and the DPOA. The bank account was a joint account with the Plaintiff and
Defendant (and in November 2018 also included Lauren) as Account Owners, which gave the
Defendant the legal right to withdraw any or all funds from the account and which gave him title
to all the funds in the account. The Defendant was added to the account as an Account Owner on
September 24, 2008. The Plaintiff did not restrict the Defendant’s use of the funds in the account
either by executing a written or oral agreement with the Defendant to make it a limited account
nor by establishing the Defendants account ownership as a Limited Access Deposit Account
pursuant to Massachusetts General Laws.
The DPOA gave the Defendant authority to withdraw funds from the account, to make
gifts to himself that were not to be construed as self-dealing, and to compensate himself for
acting as the Plaintiff’s attorney-in- fact.
17. The Plaintiff knew that the Defendant had access to her bank account.
ANSWER: The Defendant ADMITS the allegation in paragraph 17 of the complaint.
18. The Plaintiffs understanding was that the Defendant would only use her money on
demand for items and services needed by the Plaintiff.
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ANSWER: The Defendant has no knowledge of the understanding of the Plaintiff’s state
of mind and therefore DENIES the allegations in paragraph eighteen of the complaint. The
Defendant DENIES the allegation in paragraph eighteen that there was any restriction that the
funds in the joint account could only be used for items and services needed by the Plaintiff.
The Plaintiff did not restrict the Defendant’s use of the funds in the account either by
completing a written or oral agreement with the Defendant to make it a limited or “convenience”
account nor by establishing the Defendants account ownership as a Limited Access Deposit
Account pursuant to Massachusetts General Laws. The Plaintiff either did not review the
monthly bank statements or reviewed them and did not take any action, thereby waiving her right
to take any action pursuant to the equitable doctrines of waiver and equitable estoppel. The
DPOA signed by the Plaintiff on October 19, 2017 allowed the Defendant to spend money from
the account with no restrictions.
19. The Defendant did not deposit any of his own money into the Plaintiff's bank account
from which he was withdrawing funds.
ANSWER: Defendant ADMITS the allegations contained in paragraph nineteen of the
complaint.
Defendant alleges that the fact he never deposited funds in the account in no way limited
his legal authority to use some or all of the funds in the account.
20. On November 9, 2018 the Debtor moved himself and his wife into the Plaintiff's house
in Cohasset, Massachusetts.
contained in paragraph twenty of the complaint.
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The Defendant DENIES that he “moved himself” into the Plaintiff’s house on November
9, 2018 because he had lived in the house for about 30 years, from 1989 until December 23,
2018. The Defendant ADMITS that, after getting permission from the Plaintiff, moved his fiancé
and her two sons into the house on November 9, 2018 (the Plaintiff and his fiancé were married
on November 18). They stayed in the house for about a month after the wedding.
21. The Debtor and his wife began making alterations to the house that the Plaintiff did
not agree with.
ANSWER: The Defendant DENIES the allegation in paragraph twenty-one that he made
“alterations” to the house and states that they were merely repairs. The Defendant DENIES that
his wife had any role in the repairs. The Defendant lacks sufficient information to admit or deny
the allegation contained in paragraph twenty-one of the complaint that the Plaintiff “did not
agree with” the house repairs that he was making therefore the Defendant DENIES this
allegation.
There were no alterations to the house; they were only completely necessary and critical
repairs to remove clogs in the Plaintiffs bathroom and fix leaks in the kitchen, laundry room,
and the Plaintiffs former room, the faulty electrical system, and a window replacement, which as
Trustees of the Trust both the Defendant and Michael were responsible for making sure were
made. The Defendant alleges that the Plaintiff at no time made any comments to the Defendant
about the house repairs. The Trust agreement requires that the Plaintiff is responsible for paying
for house repairs. The bank records from the joint account show that the Defendant spent
$4,522.25 on house repairs from the joint account.
22. The Plaintiff approached her daughter and expressed concern for what was occurring.
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ANSWER: The Defendant has no knowledge whether the Plaintiff approached her
daughter and expressed concern, so the Defendant DENIES the allegation in paragraph twenty-
two of the complaint.
The Defendant alleges that Plaintiff never at any time in 2018 made any such concerns or
comments to him.
23. The Plaintiff expressed concern to her daughter that the Debtor was mishandling her
bank account.
ANSWER: The Defendant has no knowledge what if anything was expressed to her
daughter and therefore DENIES the allegations contained in paragraph twenty-three of the
complaint.
The Defendant alleges that Plaintiff never spoke to the Defendant about any alleged
concerns about his spending in their joint bank account. Lauren has unclean hands in this matter
because she also withdrew funds from the account, totaling $9,933.29, between January –
November 2018 without any authorization. She was not an account owner and did not have a
DPOA during that time.
24. On December 4, 2018, the Plaintiff changed her Durable Power of Attorney
designation from the Debtor to her daughter.
ANSWER: The Defendant DENIES the allegations contained in paragraph twenty-four
of the complaint.
The Defendant alleges that on December 4, 2018, the Plaintiff had diminished capacity
and was not competent to legally sign a DPOA or to revoke the Defendant’s prior DPOA which
was also purportedly done on that date..
25. Plaintiff's daughter obtained bank records for the Plaintiff's bank account.
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ANSWER: The Defendant has no knowledge of what, if anything, Plaintiff’s daughter
obtained and therefore DENIES the allegations contained in paragraph twenty-five of the
complaint.
26. The bank records revealed that the Debtor was misappropriating funds that belonged
to the Plaintiff.
ANSWER: The Defendant DENIES the allegations contained in paragraph twenty-six of
the complaint.
The Defendant alleges that he could not misappropriate funds he had the authority to use
pursuant to the terms of the joint account and the DPOA. The bank records show that the
Defendant was spending money to pay for household expenses, household repairs, medication
for he and the Plaintiff and for various other expenses. Funds were withdrawn from the joint
account to pay for household repairs because the Trust required that the Plaintiff is responsible
for those costs.
The bank records show that the “Plaintiff’s bank account” was actually the Defendant
and Plaintiff’s joint account (which included Lauren as of November 2018) and in 2018 the
Defendant spent $51,692.11 from the joint account as follows: ATM withdrawals $14,256.50;
groceries for $4,186.64; house expenses: $20,933.20; house Repairs $4,522.55; medical
expenses for the Plaintiff $740.43; other $3,352.46; pharmacy for the Defendant and Plaintiff
$2,069.73; and the Plaintiff’s tax expenses $514.60.
The Defendant alleges that the terms of the joint account gave the Defendant legal title to
all the funds in the account and allowed him to withdraw and or all funds from the account. The
Defendant was added to the account as an account owner on September 24, 2008. The Plaintiff
did not restrict the Defendant’s use of the funds in the account either by executing a written or
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oral agreement with the Defendant to make it a limited or “convenience” account nor by
establishing the Defendants account ownership as a Limited Access Deposit Account. pursuant
to Massachusetts General Laws.
27. Based on a review of the records, more than $30,000 had been taken from the
Plaintiff's bank account.
ANSWER: The Defendant ADMITS the allegations contained in paragraph twenty-seven
of the complaint.
Defendant withdrew $51,692.11 from the joint account during 2018. The Defendant also
spent money from the account in 2017. Lauren also withdrew funds from the account, about
$9,900 in 2018. All the withdrawals by the Defendant were authorized pursuant to the terms of
the joint account and the DPOA. The statement “over $30,000” is impermissibly vague.
28. The Debtor never had authorization to use the Plaintiffs money for purposes unrelated
to her household needs.
ANSWER: The Defendant DENIES the allegations contained in paragraph twenty-eight
of the complaint.
The Defendant had authorization to use funds from the joint account by the terms of the
joint account and the DPOA. The joint account with the Plaintiff and Defendant (and Lauren
who was added in November 2018) gave the Defendant legal title to all the funds in the account
and allowed him to withdraw and or all funds from the account. The Defendant was added to the
account as an account owner on September 24, 2008.
The Plaintiff did not restrict the Defendant’s use of the funds in the account either by
executing a written or oral agreement with the Defendant to make it a limited account nor by
establishing the Defendants account ownership as a Limited Access Deposit Account pursuant to
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Massachusetts General Laws. Defendant states that this is consistent with the Plaintiff’s
behavior in the thirty (30) years he lived with the Plaintiff because he was very generous with
him and frequently gave him money and financial support especially when he went to speak at
several computer security conferences, and would frequently ask the Defendant if he needed any
money.
29. The Plaintiff has no recollection that any of the funds he took were used for household
needs of the Plaintiff.
ANSWER: The Defendant lacks sufficient information to admit or deny the allegations
contained in paragraph twenty-nine of the complaint therefor the Defendant DENIES the
allegations.
30. At all relevant times the Debtor knew that he was a fiduciary for the Plaintiff under a
Power of Attorney and otherwise.
ANSWER: The Defendant ADMITS in part and DENIES in part the allegations contained
in paragraph thirty of the complaint. The Defendant DENIES there is a fiduciary role from the
Will since that will not provide a fiduciary role as long as the Plaintiff is alive. The Defendant
DENIES there is an applicable fiduciary role from the Trust to the joint bank account since the
Trust fiduciary responsibilities are solely for the Trust assets which include just the home and
property at 53 Pond Street, Cohasset and do not include the joint bank account. The Defendant
ADMITS there is a fiduciary role from the DPOA provided that the Court rules that Defendant
has an ascendant role over the Plaintiff due to the Plaintiff’s diminished capacity which
Defendant has alleged.
31. The Debtor knew, or reasonably should have known that he owed the Plaintiff a duty
of utmost faith and loyalty.
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ANSWER: Defendant ADMITS the allegations contained in paragraph thirty-one of the
complaint.
Defendant alleges that the DPOA is not like most other DPOAs because in this DPOA
the Plaintiff did not direct that all the attorney-in-facts actions were solely to serve her interests
but also, as stated in section I(V) of the DPOA which allowed him to make gifts to himself and
or his children, to also serve the interests of the attorney-in-fact and his children.
32. After the Plaintiff hired counsel and confronted the Debtor, he filed a Chapter 7
bankruptcy petition with this Honorable Court.
ANSWER: The Defendant DENIES the allegations contained in paragraph thirty-two of
the complaint.
The first time the Plaintiff in this adversary proceeding, Julie McNabb, contacted the
Defendant about this matter was when this complaint was filed on February 28, 2020. On June
10, 2019 Attorney Fein wrote a letter to the Defendant about this matter, but his client was
Lauren, not the current Plaintiff Julie McNabb, and the Plaintiff in the proposed complaint he
enclosed in the letter was not the current Plaintiff, Julie McNabb, but was in fact Lauren
(“individually and in her capacity as Durable Power of Attorney for Julie McNabb”). The
Defendant filed for Bankruptcy December 20, 2019 over six months after the June 10, 2019
letter.
COUNT ONE – Section 523(A)2
33. The Plaintiff repeats and realleges each and every allegation contained in paragraphs
(1) through (32) above as if set forth herein separately.
ANSWER: Defendant repeats and realleges his responses to each and every allegation
contained in paragraphs (1) through (32) above as if set forth herein separately.
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34. The debt owed by the Debtor to the Plaintiffs arises out of a claim for money obtained
by false pretenses, a false representation, or actual fraud.
ANSWER: The Defendant DENIES the allegations contained in paragraph thirty-four of
the complaint.
The Defendant alleges that this allegation is unfounded. There is no “debt.” All of the
Defendant’s withdrawals and expenditures from the Rockland Trust joint bank account were
authorized by the terms of the joint account and the DPOA.
The Defendant alleges that there were no false pretenses, false representations, or actual
fraud.
The Defendant alleges that the money was “obtained by” the Defendant by virtue of his
already existing access, since September 24, 2008, to the joint account and the authority from the
October 19, 2017 DPOA, both of which began well before the date of the alleged
misrepresentations. Since the date of the alleged misrepresentations was not at the inception of
the Defendant’s access to the bank account even if they had taken place they would not prevent
the discharge of the alleged debt.
35. On and after January 1, 2018 the Debtor knowingly lied to the Plaintiff at her
residence by telling her he required access to her money to buy her necessities before
converting Plaintiff's money to his own use and permanently depriving Plaintiff of said
funds.
ANSWER: The Defendant DENIES the allegations contained in paragraph thirty-five of
the complaint.
The Defendant alleges there were no such lies and that this his allegation is highly
implausible because the Defendant knew he already had authorization to use the funds from the
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terms of the joint account which he was added to on September 24, 2008 and because of the
authorization from the DPOA which the Plaintiff assigned to the Defendant on October 19, 2017.
The Defendant did not “convert the Plaintiff’s money to his own use” because he already had
title to and authorized use of the all funds in the joint account.
Even if such misrepresentations has been made, the Plaintiff could have easily seen they
were lies by reviewing the bank account statements which were mailed to her monthly and which
the Defendant left for her on the kitchen table with the other mail addressed to her when they
arrived. The Plaintiff either did not review the bank statements or reviewed them and did not
take any action, until Dec. 2018, thereby waiving her right to take any action pursuant to the
equitable doctrines of waiver and equitable estoppel.
This claim should be disregarded by the Court since it was not pled with particularity and
did not include the who, what, and where and the specific content of each alleged
misrepresentation as required by Federal Rules of Civil Procedure Rule 9(b).
36. The statements included, but were not limited to, verbal assurances that he would only
use Plaintiff's money to buy groceries for Plaintiff and he would only use her social
security number for her estate planning purposes before he used it to fraudulently
transfer $5,000 from Plaintiff's bank account on December 5, 2018.
ANSWER: The Defendant DENIES the allegations contained in paragraph thirty-six of
the complaint.
The Defendant alleges that there were no such assurances because there was no such
restrictions on use of the funds. The Defendant alleges that he had authorization from the DPOA
and the joint account to make those withdrawals. The account was a joint account with the
Plaintiff and Defendant (Lauren who was added in November 2018) which gave the Defendant
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legal title to all the funds in the account and allowed him to withdraw and or spend all funds
from the account.
The Defendant was added to the account as an account owner on September 24, 2008.
The Plaintiff did not restrict the Defendant’s use of the funds in the account either by executing a
written or oral agreement with the Defendant to make it a limited or “convenience” account nor
by establishing the Defendants account ownership as a Limited Access Deposit Account
The Defendant states that the bank transfer was actually three transfers totaling $6,010
and that he transferred the funds from a new joint account (setup by the Plaintiff and Lauren
without the Defendant’s knowledge) with the Plaintiff and Lauren as account owners to the old
joint account which on December 5, 2018 had as account owners the Plaintiff, the Defendant,
and Lauren. The amended complaint misleadingly implies that the Defendant withdrew the finds
which is incorrect. The funds were transferred from one account which the Plaintiff had access to
another account to which she also had access.
Defendant alleges that the reason he made the transfers was that on December 4, 2018
Lauren transferred $82,651.11 (the total balance) from the old joint account to the new joint
account, reducing the balance to zero ($0.00) in the old joint account. On December 5, 2018 the
Defendant transferred $6,010 in three transfers of first $10 (as a test) then $5,000 and $1,000,
back into the original account to make sure any outstanding checks and automatic payments
would be covered. However, a few checks had bounced. On December 26, 2018 Lauren
transferred $4,179.60 from the old joint account to the new joint account again reducing it to
zero, and closed the account.
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The Defendant had legal authority to make the transfer because although his DPOA,
which authorized him to make withdrawals, transfers, etc. for the Plaintiff, was purportedly
revoked on December 4, 2018, he did not receive notice of that until December 6, 2018.
37. The Plaintiffs reasonably relied on the truth of the false statements made by the
Debtor.
ANSWER: The Defendant has no knowledge of what the Plaintiffs reasonably relied
upon and therefore, the allegation in paragraph thirty-seven of the complaint is DENIED.
The Defendant alleges that is not plausible that if the alleged misrepresentations stated in
paragraphs 35 and 36 were made that the Plaintiff could have had justifiable reliance in them
because any review of the monthly bank statements would have shown otherwise. Rockland
Trust sent monthly bank statements to the Plaintiffs house which the Defendant left on the
kitchen table with her other mail for her to look at if she wanted to. The Plaintiff by the equitable
doctrines of waiver and equitable estoppel, waived her claims herein by either not reviewing the
bank statements or by her continued inaction after seeing the bank statements and by not taking
any action.
38. The Debtor withdrew funds from the Plaintiffs bank account and fraudulently
converted those funds to his own use and enjoyment.
contained in paragraph thirty-eight of the complaint.
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The Defendant ADMITS that he did withdraw funds from the Defendant’s and Plaintiff’s
joint bank account but DENIES that there was any fraud and that he “converted these funds to
his own use and enjoyment” because he had authorization from the terms of the joint account and
the DPOA to withdraw those funds.
39. The Plaintiffs suffered harm as a result of the Debtor's actions.
ANSWER: Defendant DENIES the allegations contained in paragraph thirty-nine of the
complaint. The Plaintiff in the DPOA authorized the Defendant to make gifts to himself that
would not be considered self-dealing, so by withdrawing the funds for many uses, including food
for the Plaintiff and Defendant and household expenses, and for his personal use, he was only
carrying out the Plaintiff’s wishes.
WHEREFORE, the Defendant respectfully requests this Honorable Court enter judgment
in his favor by determining that the alleged debt is dischargeable, and to order any further or
alternative relief that it deems just and reasonable.
COUNT TWO – Section 523(a)4
40. The Plaintiff repeats and realleges each and every allegation contained in paragraphs
(1) through (39) above as if set forth herein separately.
ANSWER: Defendant repeats and realleges his responses to each and every allegation
contained in paragraphs (1) through (39) above as if set forth herein separately.
41. The debt owed by the Debtor to the Plaintiffs arises out of a claim for money obtained
by fraud or defalcation while acting in a fiduciary capacity.
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contained in paragraph forty-one of the complaint.
The Defendant DENIES there was any debt and that he committed fraud or defalcation
and there was no breach of fiduciary duty and no breach of the duty of loyalty. All of the
withdrawals by the Defendant were authorized by the terms of the joint account and the DPOA.
fiduciary role from the Trust to the joint bank account since the Trust fiduciary responsibilities
are solely for the Trust assets which include just the home and property at 53 Pond Street,
Cohasset. The Defendant ADMITS there is a fiduciary role from the DPOA provided the Court
rules that the Defendant had an ascendant role over the Plaintiff due to the Plaintiff’s diminished
capacity which Defendant has alleged.
This claim should be disregarded by the Court because it was not pled with particularity
as required by Federal Rules of Civil Procedure Rule 9(b).
42. At all relevant times between October 19, 2017 and December 4, 2018, the Debtor was
acting as the Plaintiffs fiduciary under a Power of Attorney and otherwise.
contained in paragraph forty-two of the complaint. The Defendant DENIES there is a fiduciary
role from the Will since that will not provide a fiduciary role as long as the Plaintiff is alive. The
Defendant DENIES there is an applicable fiduciary role from the Trust to the joint bank account
since the Trust fiduciary responsibilities are solely for the Trust assets which include just the
home and property at 53 Pond Street, Cohasset. The Defendant ADMITS there is a fiduciary role
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from the DPOA provided the Court rules that Defendant had an ascendant role over the Plaintiff
due to the Plaintiff’s diminished capacity which Defendant has alleged.
43. While operating as a fiduciary for the Plaintiff, the Debtor fraudulently converted
more than $30,000 of her funds to his own use and enjoyment.
contained in paragraph forty-three of the complaint.
fiduciary role from the Trust to the joint bank account since the Trust fiduciary responsibilities
are solely for the Trust assets which include just the home and property at 53 Pond Street,
Cohasset. The Defendant ADMITS there is a fiduciary role from the DPOA provided the Court
rules that the Defendant had an ascendant role over the Plaintiff due to the Plaintiff’s diminished
capacity which Defendant has alleged.
The Defendant DENIES he fraudulently converted any finds. The Defendant alleges that
he had authorization to use the funds pursuant to the DPOA and in the terms of the joint account
with the Plaintiff and Defendant (and Lauren who was added in November 2018) which gave the
Defendant legal title to all the funds in the account and allowed him to withdraw and or all funds
from the account. The Defendant was added to the account as an account owner on September
24, 2008. The Plaintiff did not restrict the Defendant’s use of the funds in the account either by
completing an written or oral agreement with the Defendant to make it a limited account nor by
establishing the Defendants account ownership as a Limited Access Deposit Account pursuant to
Massachusetts General Laws. The statement “over $30,000” is impermissibly vague.
22
This Court should disregard this claim since it was not pled with particularity as required
by Federal Rules of Civil Procedure Rule 9(b).
44. The Debtor embezzled more than $30,000 of the Plaintiffs money with the intent to
permanently deprive her of the same.
ANSWER: The Defendant DENIES the allegations contained in paragraph forty-four of
the complaint.
The Defendant alleges that one cannot embezzle one’s own money and that his use of the
funds was not contrary to his authorization to do so. The account was a joint account with the
Plaintiff and Defendant (and Lauren who was added in December 2018) which gave the
Defendant legal title to all the funds in the account and allowed him to withdraw and or all funds
from the joint account. The Defendant was added to the account as an account owner on
September 24, 2008. The Plaintiff did not restrict the Defendant’s use of the funds in the account
either by executing a written or oral agreement with the Defendant to make it a limited account
nor by establishing the Defendants account ownership as a Limited Access Deposit Account
This claim should be disregarded by the Court because it was not pled with particularity
as required by Federal Rules of Civil Procedure Rule 9(b).
AFFIRMATIVE DEFENSES
First Affirmative Defense

Waiver and Equitable Estoppel
The Plaintiff’s claims are barred by the doctrines of waiver and equitable estoppel. The
Plaintiff waived the right to object of the alleged unauthorized nature of the Defendant’s
spending and is barred by the doctrine of equitable estoppel by either not looking at the monthly
bank statements or by reviewing them and taking no action.
23
Second Affirmative Defense

Laches
The Plaintiffs claims are barred based on the doctrine of laches. The allegations of fraud
and embezzlement, which are vague because the allegations were not pled with particularity as
required by FRCP Rule 9(b), are barred if the alleged actions occurred prior to the date when the
running of the applicable statute of limitations for each alleged action began. Additionally, the
eleven month delay between January 1, 2018 when the Defendant began the withdrawals and
December 2018 when the Plaintiff suddenly cut off the Defendants access to the joint account
without notice unduly prejudiced the Defendant.
Third Affirmative Defense

License
The Plaintiffs claims are barred due to an express or implied license. The Defendant’s
actions were authorized by the Plaintiff in the terms of the joint account and the DPOA.
Fourth Affirmative Defense

Failure to state a claim for which relief can be granted
The Plaintiffs claims are barred for failure to state a claim for which relief can be granted.
Fifth Affirmative Defense

Reserve Rights
The Defendant reserves the right to assert additional affirmative defenses based on
further investigation and discovery.
WHEREFORE, the Defendant respectfully requests this Honorable Court enter judgment
in his favor by determining that the alleged debt is dischargeable, and to order any further or
alternative relief that it deems just and reasonable.
John Kenneth McNabb

By his Counsel,
24
Dated: July 1, 2020 /s/Gary W. Cruickshank, Esq.

21 Custom House Street, Suite 920
Boston MA 02110
(617)330-1960
(BBO107600)
gwc@cruickshank-law.com
25
CERTIFICATE OF SERVICE
I, Gary W. Cruickshank, hereby certify that on July 1, 2020, I electronically filed with the Clerk
of the Bankruptcy Court, the foregoing Answer and served same in the following manner upon
the interested parties:
Email service: via the Court’s CM/ECF system which sent notification of such filing to the
following:
• Christopher J. Fein cjfein@feinlawoffice.com
/s/Gary W. Cruickshank, Esq.
26

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Case 20-01030 Doc 25 Filed 07/01/20 Entered 07/01/20 09:28:00 Desc Main

UNITED STATES BANKRUPTCY COURT

DEFENDANT’S ANSWER ANDAFFIRMATIVE DEFENSES

To the Honorable Frank J. Bailey, Bankruptcy Judge:

Pursuant to the Courts Order, the Answer is due on July 2, 2020.

Massachusetts 02025, hereinafter referred to as "Plaintiff'.

amended complaint (“the complaint”).

2. The Defendant, John Kenneth McNabb, is a natural person residing at 16 Damon

Road Scituate, Massachusetts 02066, hereinafter "Defendant" or "Debtor".

underlying Bankruptcy Petition #: 19-14315, on April 2, 2020.

JURISDICTION AND VENUE

3. This is an adversary proceeding pursuant to Rule 7001(6) of the Federal Rules of

Bankruptcy Procedure to determine the dischargeability of a liability related to fraud

and fiduciary embezzlement.

ANSWER: Defendant ADMITS the procedural allegations contained in paragraph three

cause of action pursuant to 11 U.S.C. §523.

ANSWER: Defendant ADMITS the allegations contained in paragraph four of the

5. This adversary proceeding constitutes a core proceeding pursuant to 28 U.S.C. §

ANSWER: Defendant ADMITS the allegations contained in paragraph five of the

ANSWER: Defendant ADMITS the allegations contained in paragraph six of the

ANSWER: Defendant ADMITS the allegations contained in paragraph seven of the

8. The Plaintiff is the Debtor's mother.

ANSWER: Defendant ADMITS the allegations contained in paragraph eight of the

times when Lauren was also present.

Lauren was her daughter, referring to Lauren just as her “friend.”

perform other helpful functions during all of 2018.

the McNabb Family Trust ("the Trust").

contained in paragraph nine of the complaint.

production of estate planning documents.

Attorney executed on October 19, 2017.

ANSWER: Defendant ADMITS the allegations contained in paragraph eleven of the

interests of the attorney-in-fact and his children.

acting as the Plaintiff’s attorney-in-fact:

powers herein granted as fully as I might or could do if personally present…”;

endorse checks and drafts, deposit and withdraw funds”;

self-dealing on the part of my attorney-in-fact herein to make gifts, transfers or

bounty in harmony with my estate plans;…” and

withdrawals from the Plaintiffs bank account.

ANSWER: Defendant ADMITS the allegations contained in paragraph twelve of the

limited or “convenience” account nor by establishing the Defendants account ownership as a

Limited Access Deposit Account pursuant to Massachusetts General Laws.

automatic teller machines ("ATM") cash withdrawal transactions

ANSWER: The Defendant DENIES the allegations contained in paragraph thirteen

ANSWER: Defendant ADMITS the allegations contained in paragraph fourteen of the

pursuant to Massachusetts General Laws.

acting as the Plaintiff’s attorney-in- fact.

ANSWER: The Defendant ADMITS the allegation in paragraph 17 of the complaint.

demand for items and services needed by the Plaintiff.

the account with no restrictions.

from which he was withdrawing funds.

ANSWER: Defendant ADMITS the allegations contained in paragraph nineteen of the

contained in paragraph twenty of the complaint.

not agree with.

$4,522.25 on house repairs from the joint account.

two of the complaint.

DPOA during that time.

designation from the Debtor to her daughter.

ANSWER: The Defendant DENIES the allegations contained in paragraph twenty-four

was also purportedly done on that date..

ANSWER: The Defendant has no knowledge of what, if anything, Plaintiff’s daughter

ANSWER: The Defendant DENIES the allegations contained in paragraph twenty-six of

for those costs.