Naier v. Beckenstein
2011 Conn. App. LEXIS 483
Conn. App. Ct.2011Background
- Rose Beckenstein created the Rose trust in 1983; Eleanor Naier was given a testamentary power of appointment to distribute principal to her issue, excluding closely held business interests.
- Following Rose's 1985 death, the Rose trust and Henry Beckenstein's estate each held a 50% partnership interest in real estate entities; Rose and Louis Beckenstein's daughter, Eleanor, could not appoint closely held business interests.
- In 1997, Eleanor Naier and her children sued Fleet Bank (trustee) and the Beckensteins for breach of fiduciary duty and CUTPA regarding the partnerships; Fleet Bank later became Fleet Hartford, successor to the trustee.
- In 2000, a global settlement with Fleet Bank, Roz-Lynn Beckenstein, and Arthur Beckenstein transferred the Rose trust’s partnership interests and paid cash to the Rose trust; settlement affected the trust, not the plaintiffs directly.
- In 2007, the plaintiffs (as co-trustees of the Eleanor Naier trust) sued the defendants again for alleged misleading actions during the prior litigation; the trial court dismissed for lack of standing, which the appellate court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing of Rose trust beneficiaries | Beneficiaries assert standing as harmed by misrepresentation in the 1997 action. | Only the trustee has standing to sue for trust interests. | Beneficiaries lack standing; only the trustee may sue to protect the trust. |
| Standing of plaintiffs as individuals | Plaintiffs were parties to the 1997 action and were allegedly defrauded. | Damage belonged to the trust, not to the plaintiffs personally. | No standing in the present action as individuals. |
| Standing of plaintiffs as co-trustees of Eleanor Naier revocable trust | Eleanor Naier's will and Trust succession assign claims to the Eleanor Naier trust. | Rose trust barred appointment of closely held interests to plaintiffs; no successor in interest. | No standing as trustees of Eleanor Naier revocable trust. |
| Effect of termination of Rose trust on standing | Termination and wind-up implied conveyance to beneficiaries, giving standing. | Even after termination, claims did not vest in plaintiffs due to trust language and remoteness. | Termination did not confer standing on beneficiaries. |
Key Cases Cited
- Treat v. Stanton, 14 Conn. 445 (1841) (trustee exclusive right to sue for interference with trust property)
- Second Exeter Corp. v. Epstein, 5 Conn.App. 427 (1985) (trust beneficiary standing limitations)
- Bogert, Trusts and Trustees, (treatise) (—) (discusses beneficiary standing (non-case citation not included))
- Gold v. Rowland, 296 Conn. 186 (2010) (standing requires a direct, personal, legal interest)
- Ganim v. Smith & Wesson Corp., 258 Conn. 313 (2001) (remoteness and direct injury considerations in standing)
- Preston v. Preston, 102 Conn. 96 (1925) (beneficiary action typically through trustee; trustee has right of action)
- Palmer v. Hartford National Bank & Trust Co., 160 Conn. 415 (1971) (trustee's title and control; beneficiary actions generally derivative)
- Megin v. New Milford, 125 Conn.App. 35 (2010) (plenary review of standing; jurisdictional question)
- Hartford National Bank & Trust Co. v. VonZiegesar, 154 Conn. 352 (1966) (construction of trust terms limiting beneficiary rights)