Lawyers for the Woodward School want Quincy to pay nearly $724,000, plus interest, in damages awarded by a court that found the city had mismanaged a trust meant to benefit the school.
The award was part of a $3 million judgment that a Probate and Family Court judge levied against the city in 2011 for breaching its fiduciary duties managing the John Adams Fund, of which the school has been sole beneficiary since 1953.
During a hearing earlier this month at Norfolk County Probate and Family Court, lawyers for the all-girls private school on Hancock Street stated that the payment being requested was unaffected by a Supreme Judicial Court decision issued last month to have the bulk of the damages recalculated , and thus should be promptly paid to the school and the Adams Fund.
Josephine Deang Chin, one of the Boston attorneys representing the Woodward School, said in an e-mail that the school would like the city to issue a payment of $723,974, plus 12 percent interest per year from the point of the trial court’s decision on Feb. 23, 2011.
Further delays will hurt the school and the city, attorneys stated in their motion.
“Interest on the deferred damages would continue to accrue at the statutory rate of 12 percent per annum, an amount that the taxpayers of Quincy will ultimately pay,” the motion stated.
For its part, Quincy is not disputing that some of the damages “are not in play” in the high court-ordered recalculation, said city solicitor James Timmins, adding that he anticipates a response on the matter from the court soon.
“Once we know what the order is, we’ll discuss the payment strategy,” Timmins said.
The Supreme Judicial Court, hearing the case on appeal, affirmed last month that the city had been fiscally irresponsible in its handling of the former president’s trust, but ruled that the lower court erred in the formula it used to calculate the bulk of the damages. The matter was ordered back to the Probate Court for recalculation.
However, the justices affirmed the $723,974 in damages, which included the recoupment of profits never realized as a result of the city selling real estate on behalf of the Adams Fund at below-fair-market value. Of that total, $475,426 is due to Woodward and the rest to the fund, according to court records.
“The amount is owed to the trust,” said Boston attorney James R. DeGiacomo, the Adams Fund’s court-appointed trustee. “It’s been affirmed. Why are we not entitled to receive that judgment that’s no longer involved in the case?”
DeGiacomo was named trustee of the Adams Fund in 2011 after the court ordered Quincy be removed due to its neglect of the fund. At the status conference earlier this month, Probate Court Judge James V. Menno allowed DeGiacomo’s request to enter the case as a plaintiff because, in his role as the fund’s trustee, he is now directly tied to the recalculation outcome.
Earlier this year, DeGiacomo filed a separate suit before a single justice of the Supreme Judicial Court against the city and the Quincy Historical Society, claiming that the city further mismanaged the fund by leasing the trust’s only remaining property asset, the Adams Academy Building on Adams Street, to the historical society for just $100 a month for 50 years. The lease agreement began in 1972 and is slated to end in 2022.
“My view has been no secret that the city has treated the historical society as a beneficiary of the Adams trust, and they’re not. That’s the bottom line of it,” DeGiacomo said.
That case is still in the early stages, but Timmins said the city would like to pursue an approach that would combine the two cases involving the Adams Fund.
“One of the things we’d like to do, especially since Mr. DeGiacomo is now involved in both [cases], is work the whole thing out with one resolution as opposed to having two separate cases that get resolved in two separate ways,” Timmins said. “It’s cost-efficient, it makes sense, and we have to end this. . . . Mayor [Thomas P.] Koch doesn’t think the city should be in the trust business. We can’t keep responding to complaints from Woodward School.”
The dispute between the school and the city began in 2005, when school officials asked why the city’s annual distribution from the fund had decreased from $25,000 to $3,000 to $4,000. Dissatisfied by what school officials said was a lack of response from city officials, they filed a lawsuit in 2007 petitioning for an official accounting of the trust.
Last month, the state’s highest court affirmed the lower court’s findings of mismanagement against the city in its handling of the 192-year-old trust. But in its 50-page ruling, the Supreme Judicial Court concluded the lower court was wrong to base the bulk of the $3 million award on hypothetical unrealized gains from investment advice the city received, but did not heed, from a bank in 1973. The court concluded that the city was under no obligation to take the investment advice.
Both the recalculation of damages and the historical society lease cases are not expected to proceed to the trial stages until next year.
Katheleen Conti can be reached at kconti@globe.com. Follow her on Twitter @GlobeKConti.