348 Conn. 264
Conn.2023Background
- Richard Ripps executed an amended inter vivos trust and a will in 2006 leaving the residue to that trust; ripps died in 2007 and the trust is the residuary beneficiary.
- The estate includes a 49% interest in three commercial LLCs (Evergreen Walk, Northern Hills, M/S Town Line); John Finguerra held the other 49% and served as sole manager after Ripps’s death; the estate remained open ~17 years.
- Laurence Rubinow served as sole executor (and a cotrustee); plaintiffs (Ripps’s children and their mother Susan Barash, a later cotrustee) alleged Rubinow had conflicts/self-dealing benefitting Finguerra (e.g., 2011 Evergreen Walk amendment authorizing a retroactive manager salary, a $3M loan using sale proceeds, and a 2014 sale that produced less than expected).
- Barash challenged Rubinow in Probate (petition to remove executor; accountings); Probate Court denied removal and approved accountings; those decrees were appealed and consolidated for a trial de novo in Superior Court.
- Plaintiffs sued cotrustee Barbara Lembo, alleging she breached fiduciary duties by failing to investigate or pursue claims against Rubinow and by failing to protect/collect trust interests before the residuary assets were transferred to the trust.
- The trial court granted Lembo summary judgment, holding a trustee has no duty to collect or protect residuary assets until the estate settles; the Supreme Court reversed, holding (1) probate decrees subject to a de novo appeal are not preclusive during the appeal, (2) a trustee owes a duty to protect and collect trust property (including interests held by an executor) upon accepting trusteeship, and (3) self-dealing is not a required element of a trustee breach claim.
Issues
| Issue | Plaintiff's Argument (Barash) | Defendant's Argument (Lembo) | Held |
|---|---|---|---|
| Preclusive effect of Probate Court decree denying removal of executor while de novo appeal pending | Probate Probate denial should not bar derivative claims against Lembo because Probate findings were wrong | Probate decree is final and ordinarily preclusive even while appeal pending | Decree is not preclusive while a de novo appeal is pending; federal rule adopted: a pending trial de novo suspends preclusion |
| Duty to protect/collect residuary assets before transfer to trust | Trustee duties begin on acceptance and include reasonable steps to collect/protect trust interests held by an executor | No duty exists until the estate settles and assets are conveyed to the trust (trustee duties haven’t commenced) | Trustee owes a duty to protect and collect prospective trust property and to pursue reasonable claims against the executor after appropriate inquiry |
| Sufficiency of complaint: is self-dealing a required element of trustee breach claim? | Plaintiff need only plead fiduciary relationship, breach, causation, damages; self-dealing not required | A breach claim must allege self-dealing (per Rendahl) | Self-dealing is not an essential element for breach-of-trustee fiduciary duty; complaint pleaded the four-element standard and is sufficient |
| Summary judgment on the record presented | Evidence (deposition admissions, accountings, transactions) raises genuine issues whether Lembo knew or should have known and failed to act | Lembo reasonably relied on Rubinow/Finguerra and no triable breach shown; also other defenses (statute of limitations, good faith presumption) | Reversed: genuine issues of material fact exist; trial court should reconsider remaining defenses on remand |
Key Cases Cited
- Solon v. Slater, 345 Conn. 794 (Conn. 2023) (Probate decrees are final judgments for preclusion purposes, but context matters)
- Kerin v. Stangle, 209 Conn. 260 (Conn. 1988) (appeal from probate generally does not vacate or suspend decree absent de novo procedure)
- Warner v. Merchants Bank & Trust Co., 2 Conn. App. 729 (Conn. App. 1984) (distinguished—that case involved whether a testamentary trust had come into existence)
- Pepper v. Zions First Natl. Bank, N.A., 801 P.2d 144 (Utah 1990) (trustee of inter vivos trust that is residuary beneficiary must enforce claims against executor)
- Salem Park, Inc. v. Salem, 149 Conn. 141 (Conn. 1961) (prior judgment retains preclusive effect during appeal absent de novo trial)
- Rendahl v. Peluso, 173 Conn. App. 66 (Conn. App. 2017) (Appellate Court described self-dealing element; Supreme Court overruled that requirement as to trustee breach claims)