MARGARET E. DAY, COCONSERVATOR (ESTATE OF SUSAN D. ELIA) v. RENEE F. SEBLATNIGG ET AL.
(AC 38734)
Connecticut Appellate Court
December 11, 2018
DiPentima, C. J., and Prescott and Flynn, Js.
Argued September 6
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Syllabus
The plaintiff, the coconservator of the estate of E, brought this action seeking a declaratory judgment that a certain irrevocable trust was void ab initio and unenforceable, and that any and all assets transferred from E‘s estate into the trust be returned to the estate. The Probate Court previously had granted E‘s request for the voluntary appointment of a conservator of her person and estate. The defendant S, the former conservator of E‘s estate, had entered into an asset protection services agreement on E‘s behalf with an affiliate of the defendant F Co. Thereafter, the trust was formed to hold E‘s assets, which were transferred from E‘s conservatorship estate to the trust. After S resigned, the plaintiff was appointed coconservator of E‘s estate for the limited purpose of matters relating to E‘s interest in the trust, and this action followed. The trial court granted the plaintiff‘s motion for summary judgment, declaring that the trust was void ab initio and unenforceable, and ordering that the assets that were transferred be returned to E‘s estate. From the judgment rendered thereon, F Co. appealed to this court. F Co. claimed, inter alia, that the plaintiff had no standing pursuant to the conservatorship statute (
- The plaintiff had statutory standing to bring the declaratory judgment action on behalf of E‘s conservatorship estate; a conservator of the estate has such power as is expressly or impliedly given to her pursuant to
§ 45a-655 , which provides that the conservator of the estate may bring an action for and collect all debts due to the conserved person, a conservator is not required to obtain Probate Court approval prior to commencing an action on behalf of the ward if that power is a necessary implication of§ 45a-655 (a) , which grants to conservators the necessary power to commence litigation where such a course is necessarily implied by a conservator‘s duty to manage the ward‘s affairs, the legislature has not included language requiring Probate Court approval in§ 45a-655 (a) when discussing a conservator‘s ability to initiate an action on behalf of a conserved person, the power of conservators of the estate to initiate an action on behalf of a conserved person has been broadly interpreted, and, thus, although§ 45a-655 (a) does not expressly provide that a conservator may initiate a declaratory judgment action questioning the validity of a trust created without the former conservator having obtained Probate Court approval, such power is reasonably implied from the statute and from case law. - F Co. could not prevail on its claim that the trial court erred in rendering summary judgment in the absence of a necessary party, B Co., which was based on its claim that B Co., as the sole trustee of the trust, held legal title to the assets in the trust and, thus, had to be joined as a necessary party to this action: no statute mandates the naming and serving of a putative trustee, F Co. failed to show that the failure of the plaintiff or the court to join B Co. as a party infringed on the due process rights of B Co., which had knowledge of this action and chose not to intervene, and in light of the prayer for relief, the issue before the trial court concerned the validity of the trust and did not involve the trustee protecting any wrongful interference with the trust‘s assets, and, therefore, the presence of B Co., which did not have possession of the assets of the trust, in this action involving the validity of the trust due to the conservator‘s failure to obtain Probate Court approval was not absolutely required in order to assure a fair and equitable trial; moreover, B Co.‘s interests were aligned sufficiently with that of F Co., which as the protector of the trust, had the duty to manage and the power to remove the trustee under the terms of the trust, and the trial court having determined that there was no genuine issue of material fact that the trust was void ab initio, B Co. did not have an interest in a trust that never lawfully existed and, thus, did not have power to transfer the assets.
- F Co.‘s claim that the trial court erred when it concluded that E lacked the ability to execute the trust while under a voluntary conservatorship was unavailing: a voluntary conserved person does not retain control over her estate, as the clear language of
§ 45a-655 gives control over the estate to the conservator, and contrary to F Co.‘s claim that the 2007 revision of the conservatorship statutes suggests that a voluntary conserved person retains control over her estate, the amendment does not alter the power and duties of the conservator but, rather, establishes the method through which a conservator must carry out her statutory duties, and to interpret the statutory revision to eliminate the responsibilities a conservator has with respect to a conserved person‘s estate could effectively negate the powers and duties given to conservators in§ 45a-655 , which would run afoul of the principle of statutory construction that the legislature does not intend to enact meaningless provisions; moreover, it would make meaningless the Probate Court‘s granting of an application for a voluntary conservator to permit a duality of control over assets due to the confusion that can be sown when a conservator and a voluntary conserved person take conflicting action with respect to the same asset, especially given that a voluntarily conserved person may seek to be released from the voluntary conservatorship; accordingly, no genuine issue of material fact existed that E lacked the legal capacity to form the trust, and the trial court, therefore, properly determined that no genuine issue of material fact existed that the trust was void ab initio.
Argued September 6—officially released December 11, 2018
Procedural History
Action for a judgment declaring, inter alia, a certain trust void ab initio and unenforceable, and for other relief, brought to the Superior Court in the judicial district of Stamford, where the court, Heller, J., granted the plaintiff‘s motion for summary judgment and rendered judgment thereon, from which the defendant First State Fiduciaries, LLC, appealed to this court. Affirmed.
James G. Green, Jr., with whom were
Bridgitte E. Mott, with whom was Richard E. Castiglioni, for the appellee (plaintiff).
Opinion
FLYNN, J. The principal issue in this case is whether a settlor of a revocable trust who is later under a voluntary conservatorship may, while under conservatorship, acting on her own behalf, convert the trust to an irrevocable trust without action by her conservator and without her conservator obtaining Probate Court approval. The defendant, First State Fiduciaries, LLC,1 appeals from the judgment of the Superior Court granting the motion of the plaintiff, Margaret E. Day, coconservator of the estate of Susan D. Elia, for summary judgment and declaring that the Susan D. Elia Irrevocable Trust dated September 15, 2011 (Delaware irrevocable trust) was void ab initio and unenforceable, and that all transfers of assets from Elia‘s conservatorship estate to the Delaware irrevocable trust or its wholly owned limited liability company, Peace at Last, LLC, were unauthorized and improper and ordering that the assets from Elia‘s conservatorship estate that were transferred to the Delaware irrevocable trust to Peace at Last, LLC,2 shall be immediately returned to Elia‘s conservatorship estate.
On appeal, the defendant claims that the court erred in granting the plaintiff‘s motion for summary judgment in the absence of an indispensable party, Bryn Mawr Trust Company of Delaware (Bryn Mawr).3 We conclude that the court properly determined that Elia could not lawfully replace the Connecticut revocable trust with the Delaware irrevocable trust while under a conservatorship. We also conclude that the court properly determined that the former conservator of Elia‘s estate, Renee F. Seblatnigg, could not transfer the assets of the conservatorship estate to the Delaware irrevocable trust and that this transfer was void ab initio. Finally, we conclude that Bryn Mawr was not an indispensable party. We affirm the judgment of the trial court.
On January 18, 2014, the plaintiff initiated the present action in which she
In its memorandum of decision, the Superior Court set forth the following undisputed material facts. “Elia is seventy-one years old. She suffers from advanced Parkinson‘s disease and lung cancer. In June, 2011, Elia applied to the Greenwich Probate Court for the voluntary appointment of a conservator of her person and her estate. Following a June 28, 2011 hearing in the Greenwich Probate Court, at which the court, Hopper,J., saw Elia in person, heard her reason for seeking voluntary representation, and explained to her that appointing a conservator as requested would subject her and her property to the authority of the conservator, the court found that Elia resided or had domicile in the Greenwich Probate District, that the court had jurisdiction, that Elia had requested the appointment of a conservator of the person and the estate, and that the proposed conservators had accepted the position of trust. The Greenwich Probate Court accordingly granted Elia‘s application for voluntary representation. By decree issued on June 28, 2011 . . . the court appointed Seblatnigg the conservator of Elia‘s estate and Richard DiPaola . . . the conservator of Elia‘s person.
“The June 28, 2011 decree provided that Seblatnigg, as the conservator of Elia‘s estate, had the power to manage the estate, to apply estate funds to support Elia, to pay her debts, and to collect debts due to her. At the time of Seblatnigg‘s appointment as conservator of Elia‘s estate, Elia owned or held an equitable interest in cash and securities valued in excess of $6,000,000, including those held in the Susan D. Elia Revocable Trust, a 2007 revocable trust governed by Connecticut law (the Connecticut revocable trust).
“In September, 2011, Seblatnigg consulted with the managers of First State Fiduciaries, [Attorney] Robert Mauceri . . . and [Attorney] James Holder . . . regarding the creation of an asset protection plan for Elia. They recommended to Seblatnigg that Elia establish and fund a self-settled irrevocable Delaware asset protection trust and a limited liability company, to be owned by the trust, to hold her assets.
“Seblatnigg, as conservator of Elia‘s estate, entered into an asset protection services agreement on Elia‘s behalf with First State Facilitators, LLC (First State Facilitators), an affiliate of First State Fiduciaries, on September 15, 2011. Seblatnigg, as conservator, also signed a legal representation agreement on behalf of Elia with Mauceri. On the same day, Seblatnigg met with Elia and supervised her execution of the instrument that created the Delaware irrevocable trust. The trust instrument named Seblatnigg and Salvatore Mulia . . . as the independent trustees of the Delaware irrevocable trust and named First State Fiduciaries as the protector of the Delaware irrevocable trust. Seblatnigg did not seek or obtain the approval of the Greenwich Probate Court to establish the Delaware irrevocable trust or to advise Elia to execute the trust instrument.
“Seblatnigg resigned as the conservator of Elia‘s estate on April 5, 2013. The Greenwich Probate Court accepted Seblatnigg‘s resignation on May 21, 2013, subject to the allowance of her final account, and appointed Mulia the successor conservator of Elia‘s estate.
“The Greenwich Probate Court appointed the plaintiff the coconservator of Elia‘s person on May 23, 2013. On January 9, 2014, at Elia‘s request, the Greenwich Probate Court issued a decree . . . naming the plaintiff the coconservator of Elia‘s estate for the limited purpose of any matters relating to Elia‘s interest in the Delaware irrevocable trust, because Mulia had a possible conflict of interest.
“In March 2014, shortly after the plaintiff commenced this declaratory judgment action, First State Fiduciaries filed a petition in the Delaware Court of Chancery (Delaware action) in which it sought an order compelling Morgan Stanley Smith Barney, LLC (Morgan Stanley), which held the assets of the Delaware irrevocable trust, to transfer the trust assets to the purported new sole trustee, the Bryn Mawr Trust Company of Delaware . . . . Morgan Stanley filed an answer and counterpetition in the nature of an interpleader, in which it maintained that it had no interest in the trust assets, on May 19, 2014.
“On May 16, 2014, the plaintiff moved to intervene in the Delaware action. The motion to intervene was granted on June 10, 2014. The plaintiff filed a response, counterclaim, and third-party complaint in the Delaware action that day. On January 29, 2015, the plaintiff moved for a protective order and to stay discovery in the Delaware action. Morgan Stanley joined in the plaintiff‘s motion to stay the Delaware action.
“On February 13, 2015, a special master in the Delaware action recommended that the court deny First State Fiduciaries’ motion to compel and grant the plaintiff‘s motion for a protective order and a stay of any discovery. In a letter to counsel dated August 4, 2015, the special master indicated that she was recommending that the court stay the Delaware action in its entirety.” (Footnotes omitted.)
The court granted the plaintiff‘s motion for summary judgment. The court determined that “[n]o genuine issue of material fact exists as to whether Elia was under a voluntary conservatorship at the time she executed the instrument creating the Delaware irrevocable trust. While Seblatnigg, as conservator, could have created and funded the Delaware irrevocable trust with the Greenwich Probate Court‘s approval, she chose instead to do so without the court‘s authorization” in violation of
We first set forth the relevant standards that generally govern our review of a court‘s decision to grant a motion for summary judgment. “The standards governing our review of a trial court‘s decision to grant a motion for summary judgment are well established. Practice Book [§ 17-49] provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. . . . In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party. . . . The party seeking summary judgment has the burden of showing the absence of any genuine issue [of] material facts which, under applicable principles of substantive law, entitle him to a judgment as a matter of law . . . and the party opposing such a motion must provide an evidentiary foundation to demonstrate the existence of a genuine issue of material fact. . . . A material fact . . . [is] a fact which will make a difference in the result of the case. . . . Finally, the scope of our review of the trial court‘s decision to grant the plaintiff‘s motion for summary judgment is plenary.” (Internal quotation marks omitted.) Romprey v. Safeco Ins. Co. of America, 310 Conn. 304, 312–13, 77 A.3d 726, 731 (2013). Having set forth the relevant standard of review, we now turn to the defendant‘s claims on appeal.
I
We begin by addressing the defendant‘s jurisdictional claim that the court improperly concluded that the plaintiff had standing to commence this declaratory judgment action on behalf of Elia‘s conservatorship estate.6 “The issue of standing
“[I]t is the burden of the party who seeks the exercise of jurisdiction in his favor . . . clearly to allege facts demonstrating that he is a proper party to invoke judicial resolution of the dispute. . . . It is well established that, in determining whether a court has subject matter jurisdiction, every presumption favoring jurisdiction should be indulged. . . . Because a determination regarding the trial court‘s subject matter jurisdiction raises a question of law, our review is plenary. . . .
“Standing is the legal right to set judicial machinery in motion. One cannot rightfully invoke the jurisdiction of the court unless he [or she] has, in an individual or representative capacity, some real interest in the cause of action, or a legal or equitable right, title or interest in the subject matter of the controversy. . . . When standing is put in issue, the question is whether the person whose standing is challenged is a proper party to request an adjudication of the issue . . . . Standing requires no more than a colorable claim of injury; a [party] ordinarily establishes . . . standing by allegations of injury [that he or she has suffered or is likely to suffer]. Similarly, standing exists to attempt to vindicate arguably protected interests. . . .
“Standing is established by showing that the party claiming it is authorized by statute to bring suit or is classically aggrieved. . . . The fundamental test for determining [classical] aggrievement encompasses a well-settled twofold determination: first, the party claiming aggrievement must successfully demonstrate a specific, personal and legal interest in [the subject matter of the challenged action], as distinguished from a general interest, such as is the concern of all members of the community as a whole. Second, the party claiming aggrievement must successfully establish that this specific personal and legal interest has been specially and injuriously affected by the [challenged action]. . . . Aggrievement is established if there is a possibility, as distinguished from a certainty, that some legally protected interest . . . has been adversely affected.” (Citations omitted; internal quotation marks omitted.) Wilcox v. Webster Ins., Inc., 294 Conn. 206, 213–15, 982 A.2d 1053 (2009).
At issue is the plaintiff‘s standing to initiate the underlying action. The plaintiff was not the initial conservator of Elia‘s estate, but rather was appointed by the Probate Court in January, 2014, as coconservator of Elia‘s estate “for the limited purpose” of matters relating to Elia‘s interest in the Delaware irrevocable trust. The defendant contends that the plaintiff lacks standing because she failed to obtain Probate Court approval to initiate the declaratory judgment action and that
The defendant misinterprets the language of
A conservator is not required to obtain Probate Court approval prior to commencing suit on behalf of the ward if that power is a necessary implication of
Consistent with our decision in Doyle, we construe the statutory scheme adopted by our legislature in enacting
We conclude that the plaintiff has statutory standing to bring the declaratory judgment action because a conservator of the estate has such power as is “expressly or impliedly given to [her] by [§ 45a-655].” (Internal quotation marks omitted.) Luster v. Luster, 128 Conn. App. 259, 270, 17 A.3d 1068, cert. granted, 302 Conn. 904, 23 A.3d 1243 (2011) (appeal dismissed April 12, 2012). The power of conservators of the estate to initiate suit on behalf of a conserved person has been broadly interpreted. “In Connecticut, there are many examples in our case law of conservators bringing suit on behalf of their wards to protect their interests.” Id., 272–73. Although
II
We next turn to the defendant‘s claim that the court erred in rendering summary judgment in the absence of a necessary party, Bryn Mawr, the putative trustee of the Delaware irrevocable trust.7 We disagree.
In its opposition to the plaintiff‘s motion for summary judgment, the defendant argued that Bryn Mawr, as trustee of the Delaware irrevocable trust, was a necessary party. In its memorandum of decision, the court rejected this argument and reasoned that Bryn Mawr is not a necessary party to the court‘s determination of whether the Delaware irrevocable trust was void ab initio.
“Necessary parties . . . are those [p]ersons having an interest in the controversy, and who ought to be made parties, in order that the court may act on that rule which requires it to decide on, and finally determine the entire controversy, and do complete justice, byadjusting all the rights involved in it. . . . [B]ut if their interests are separable from those of the parties before the court, so that the court can proceed to a decree, and do complete and final justice, without affecting other persons not before the court, the latter are not indispensable parties. . . . A party is deemed necessary if its presence is absolutely required in order to assure a fair and equitable trial. . . . The decision whether to grant a motion for the addition
“It is well settled that the failure to join an indispensable party does not deprive a trial court of subject matter jurisdiction. See
The defendant argues that subject matter jurisdiction is implicated and that the joinder of Bryn Mawr as a necessary party is mandated because Bryn Mawr is the current sole trustee of the Delaware irrevocable trust and, as such, holds legal title to the assets in the trust. The defendant contends that Bryn Mawr alone has the power to transfer those assets out of the trust in the event that this court affirms the trial court‘s decision that the Delaware irrevocable trust is void ab initio.
We first conclude that no statute mandates the naming and serving of a putative trustee and, accordingly, joinder of Bryn Mawr is not so mandated by statute in this case. Furthermore, the defendant has not shown that the plaintiff‘s or the court‘s failure to join Bryn Mawr as a party infringes on Bryn Mawr‘s due process rights. See Wells Fargo Bank, N.A. v. Treglia, 156 Conn. App. 1, 16 n.6, 111 A.3d 524 (2015) (“[j]oinder of a necessary party is mandatory when that party‘s due process rights are implicated in the action“). Bryn Mawr is a party to the Delaware action during which the Connecticut litigation was discussed, and the Delaware proceedings were stayed pending a final judgment inthis Connecticut action. Bryn Mawr, therefore, had knowledge of the Connecticut litigation and chose not to intervene. A substitute trustee of an irrevocable trust that was void at its creation has not been deprived of due process rights by failure to be joined as a party. Furthermore, the defendant, First State Fiduciaries, which is a party because of its common interest, can adequately represent Bryn Mawr‘s interest in this action.
We next determine, in the absence of a statute mandating joinder, whether the trial court can “proceed to a decree, and do complete and final justice” without Bryn Mawr joined in the declaratory
The undisputed evidence in this case demonstrates that a question existed in the Delaware action as to whether Bryn Mawr properly was appointed trustee of the Delaware irrevocable trust. The defendant filed a petition in the Delaware action seeking an order compelling Morgan Stanley to transfer the trust assets to Bryn Mawr. Morgan Stanley filed an interpleader in the Delaware action, in which Morgan Stanley stated that it had not transferred the assets to Bryn Mawr because the defendant had not produced evidence sufficient to establish that Bryn Mawr was the duly appointed trustee of the trust. The Delaware Court of Chancery appointed a special master to oversee the assets of the Delaware trust, and the special master was given authority to execute the documents necessary to transfer the trust assets to the Wilmington Trust Company, the new custodian. The defendant‘s counsel conceded at oral argument before this court that the possession of the assets at issue is currently with the Delaware Chancery Court, which has stayed the action before it, pending a final judgment in this action.
In her prayer for relief, the plaintiff sought a declara-tory judgment that the Delaware irrevocable trust be declared void ab initio and sought the relief that “any and all assets transferred to the trust or any entity owned by the trust be returned to the conservatorship estate from whence it came.” The issue before the trial court did not involve the trustee protecting any wrongful interference with the trust assets, rather the issue before the court was the validity of the trust. The presence of Bryn Mawr, which entity does not now have possession of the trust assets, in an action involving the validity of the trust due to the conservator‘s failure to obtain Probate Court approval, is not absolutely required in order to assure a fair and equitable trial. Furthermore, Bryn Mawr‘s interests are aligned sufficiently with that of the defendant, which, as the protector of the Delaware irrevocable trust, had the duty to manage and the power to remove the trustee under the terms of the trust.
The trial court concluded, and we agree, that there is no genuine issue of material fact that the Delaware irrevocable trust was void ab initio. Bryn Mawr does not have an interest in a trust that never lawfully existed, and, accordingly, does not have the power to transfer the assets, which are not currently in its possession. Accordingly, the court properly determined that there was no genuine issue of material fact that Bryn Mawr was not a necessary party in this action.
The defendant next claims that the court erred when it concluded that Elia lacked the ability to execute the Delaware irrevocable trust while under a voluntary conservatorship. We disagree.
The court determined that there was no genuine issue of material fact that Elia was under a voluntary conservatorship at the time she executed the instrument, which identified her as the grantor, creating the Delaware irrevocable trust.9 The court determined, as a matter of law, that Elia did not have the capacity to form the Delaware irrevocable trust because she was voluntarily conserved at the time.
The issue before us concerns a voluntary conservatorship of the estate. Unlike an involuntary conservatorship wherein the Probate Court must find that the respondent is “incapable of managing his or her affairs or is incapable of caring for him or herself“;
A “conservator of the estate” is defined in
The conservatorship statutes have been revised in 2007 to reflect that a conservator is to manage an estate in the least restrictive means possible.
However, the 2007 revision does not mean, as the defendant suggests, that a voluntarily conserved person retains control over her estate. The statutory amendment, which requires that a conservator carry out herduties using the least restrictive means possible, does not alter the power and duties of a conservator. Rather, it establishes the method through which a conservator must carry out her statutory duties. To interpret this statutory revision to eliminate the responsibilities a conservator has with respect to a conserved person‘s estate could effectively negate the powers and duties given to conservators in
The clear language of
In contrast to an involuntary conservatorship, a voluntarily conserved person may seek to be released from the voluntarily conservatorship, thereby regaining control of her estate.
Because a voluntarily conserved person does not retain control over her estate, no genuine issue of material fact existed that Elia lacked the legal capacity to form the Delaware irrevocable trust. Accordingly, we conclude that the court properly determined that no genuine issue of material fact existed that the Delaware irrevocable trust was void ab initio.10
The judgment is affirmed.
In this opinion the other judges concurred.