231 Conn.App. 460
Conn. App. Ct.2025Background
- Siblings were beneficiaries of an irrevocable trust set up by their mother in 2006, with the primary trust asset being a house in Stonington, Connecticut.
- After their mother’s death in 2017, disputes arose regarding the management and eventual distribution of the property, particularly whether it should have been sold within one year of death and how liquidated.
- Catherine Spinnato (plaintiff) became sole trustee after resolving related disputes with other beneficiaries, handled significant property repairs, and attempted to buy out her brother Charles Bruno’s (defendant) 10% share.
- Litigation ensued over Catherine’s management, her occupancy of the property, compensation for expenditures, and whether she breached her fiduciary duties as trustee.
- Trial court ruled in Catherine’s favor on most issues; Charles Bruno appealed, challenging the trust’s interpretation, breach of duty claims, timing requirements, and procedural decisions on attorney’s fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Definition of "liquidate" in trust instrument | "Liquidate" includes alternatives to sale (e.g., payout), trustees have broad discretion | "Liquidate" mandates sale of property and conversion to cash | Court held “liquidate” does not necessarily mean sale; discretion exists for alternative distribution |
| Requirement to sell property within one year | Trustees may distribute property outside the one-year timeline due to discretionary language | Trust demanded sale/distribution within a year of death | One-year timeline is aspirational, subject to trustee discretion; delay not a breach |
| Breach of fiduciary duty by trustee | Any self-dealing was undertaken in good faith, protected by trust clause | Plaintiff’s self-dealing was unfair and a breach; value determination only via open-market sale | Good faith clause shields plaintiff from liability despite self-dealing; no breach found |
| Trial court’s attorney fee procedure | Further proceedings were needed to determine reasonable attorney fees | Court should have denied fees outright due to insufficient record | Additional proceedings for fees were proper; no error in procedure |
Key Cases Cited
- Hartford Nat'l Bank & Trust Co. v. VonZiegesar, 154 Conn. 352 (Conn. 1966) (Cardinal rule is to effectuate the intent of the testator/settlor in trust interpretation)
- Spencer v. Spencer, 71 Conn. App. 475 (Conn. App. Ct. 2002) (Construction of a trust instrument is based on its language and the settlor's circumstances)
- Spector v. Konover, 57 Conn. App. 121 (Conn. App. Ct. 2000) (Burden on fiduciary to prove fair dealing by clear and convincing evidence)
- Barash v. Lembo, 348 Conn. 264 (Conn. 2023) (Trustee’s fiduciary duties)
- Taylor v. Taylor, 117 Conn. App. 229 (Conn. App. Ct. 2009) (Trust construction is a legal question reviewed in light of trial court’s findings)