MARIA J. DERBLOM, EXECUTRIX (ESTATE OF FRED H. RETTICH), ET AL. v. ARCHDIOCESE OF HARTFORD
(AC 42630)
Connecticut Appellate Court
March 9, 2021
Lavine, Prescott and Alexander, Js.*
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Syllabus
The plaintiffs, the executrix of the estate of R, several former students of a defunct Catholic school located in Madison that was the residual beneficiary of R‘s estate, the students’ parents, and M Co., a corporation operating a private school that is purporting to be the successor to the defunct school, brought this action for relief against the defendant. After R died in 2013, the residuary of his estate was distributed to the defunct school in accordance with his will. In 2018, the defendant announced that, for financial reasons, it would be closing the defunct school and establishing a new school in Branford. Some of the parents of the students attending the defunct school then formed M Co., with the intent of establishing a new Catholic school in Madison. The plaintiffs alleged in their complaint that the residuary clause in R‘s will created a constructive trust for the benefit of the plaintiffs and that the defendant had a duty to convey the funds to M Co., as successor to the defunct school, or to return the funds to R‘s estate for distribution to his heirs. The defendant filed a motion to dismiss, asserting that none of the plaintiffs had standing to enforce the charitable gift. The trial court granted the motion and rendered judgment thereon, from which the plaintiffs appealed to this court. Held that the trial court properly granted the defendant‘s motion to dismiss because the plaintiffs lacked standing: the trial court did not err in construing R‘s bequest as an absolute or outright gift to the defunct school instead of as an endowment that created a charitable trust benefitting the plaintiffs; the residuary clause of the will did not limit the expenditure of principal, restrict the manner in which the funds could be used, name any beneficiaries or a trustee, or include any other language evidencing an intent to form a trust or to exercise any future control over the residue of the estate; moreover, the trial court did not err in concluding that the special interest exception to the rule that the attorney general has exclusive authority to bring an action to enforce charitable gifts was inapplicable to confer standing to the plaintiffs as the exception is limited to actions involving charitable trusts and R‘s bequest to the defunct school constituted an outright gift, extending the exception to include charitable gifts would undermine their nature as, unlike with charitable trusts, when a donor completes a gift he immediately and irrevocably transfers and relinquishes all control over the gifted property, and the plaintiffs failed to provide any legal authority to support their assertion that the exception should be extended to completed charitable gifts.
Argued October 20, 2020—officially released March 9, 2021
Procedural History
Action, inter alia, seeking the establishment of a constructive trust, and for other relief, brought to the Superior Court in the judicial district of New Haven, where the court, Pierson, J., granted the defendant‘s motion to dismiss and rendered judgment thereon, from which the plaintiffs appealed to this court. Affirmed.
Drzislav Coric, with whom was Cody A. Layton, for the appellants (plaintiffs).
Kay A. Williams, with whom was Lorinda S. Coon, for the appellee (defendant).
Opinion
The following facts, as alleged in the complaint or as established by uncontested evidence submitted in conjunction with the motion to dismiss, and procedural history are relevant to our resolution of this appeal. In April, 2012, Rettich executed a will that contained a residuary clause in favor of OLM “or its successor, for its general uses and purposes.”5 Beginning in 2004, OLM had become an archdiocesan school under the auspices of the defendant.
It was important to Rettich that residents of Madison be able to send their children to a Catholic school in Madison. Prior to the execution of his will leaving the residue of his estate to OLM, Rettich had donated $500,000 to OLM. OLM later sent a letter to Rettich that marked the anniversary of that donation and informed him that $200,000 of the donated funds had been used by OLM to establish an endowment to “ensure [OLM‘s] future.” The letter stated that the money was “invested and protected by the Archdiocese of Hartford for the exclusive use of OLM by US Trust.” In his will, Rettich made no reference to his earlier donation or to any endowed funds or existing trust benefiting OLM.6
More than two years later, in January, 2018, the defen-dant announced that it would be closing OLM and another parish school in Branford, St. Mary School.8 It indicated that it intended to open a new school, East Shoreline Catholic Academy (ESCA), which would be located at the former St. Mary School site in Branford. According to a press release appended to the underlying complaint, “[t]he formation of ESCA is not considered a merger, because [OLM and St. Mary School] will cease to exist and a new corporation . . . will be formed. ESCA, however, will continue to be operated by the same three parishes [that operated OLM and St. Mary School].”
On February 28, 2018, shortly after the announcement of OLM‘s closing, some parents of students attending OLM, including some of the plaintiff parents, formed the plaintiff corporation, Our Lady of Mercy School of Madison, Inc., with the intent to form a new Catholic school in Madison that, as alleged in the complaint, would “[keep] the current mission and vision of OLM intact.”9 The plaintiffs further alleged
In April, 2018, the plaintiffs initiated the underlying action. The complaint contained seven counts and incorporated by reference and attached a number of exhibits.11 Count one was brought on behalf of the plaintiff students and alleged that Rettich‘s bequest to OLM should be viewed as an endowment that resulted in a constructive trust benefitting the plaintiff students with the defendant acting as trustee. It asserted that the defendant has an equitable duty to convey the corpus of that alleged trust to the plaintiff corporation or, alternatively, back to Rettich‘s estate for distribution because the defendant “would be unjustly enriched if it were permitted to retain the endowment and disseminate it at its own discretion and for purposes wholly unrelated to the operation and preservation of OLM or a rightful successor.” Count two, also brought on behalf of the plaintiff students, sounded in breach of fiduciary duty premised on the defendant‘s having closed OLM and its alleged misappropriation of the “endowment” from Rettich. Counts three and four were brought by the plaintiff parents and effectively tracked the first two counts, sounding in constructive trust and breach of fiduciary duty. Counts five and six were brought by the plaintiff corporation and Derblom, respectively, and, as in the prior counts, alleged the existence of a constructive trust and an equitable duty on the part of the defendant to convey any and all funds to the plaintiff corporation for the intended beneficiaries or, alterna-
tively, to the estate. Finally, in count seven, Derblom asserted on behalf of the estate “a legal and/or equitable interest in the endowment made to OLM, by reason of danger of loss or uncertainty” and sought a declaratory judgment “determining [1] whether the endowment shall be conveyed to [the plaintiff corporation] or some other appropriate entity for the benefit of the [p]laintiffs; [and] [2] whether the endowment to OLM has lapsed with no clear successor and all funds shall be returned to [Rettich‘s estate] for dissemination to his rightful heirs at law.”
The defendant filed a motion to dismiss the action in its entirety in July, 2018, arguing that none of the plaintiffs had standing “to bring an action to enforce the terms of a completed charitable gift to a school” and, as a result, the court was “without subject matter jurisdiction over the claims against the defendant . . . .” The defendant filed a memorandum in support of the motion to dismiss, in which it argued that, under Connecticut law, only the attorney
In September, 2018, the plaintiffs filed an objection to the motion to dismiss and accompanying memorandum in support of the objection. The plaintiffs argued that the “attorney general‘s lack of involvement in the present matter is immaterial” because “[s]tanding is conferred on the [plaintiff students, the plaintiff parents, and the plaintiff corporation] via the special interest exception,” citing Grabowski v. Bristol, Superior Court, judicial district of New Britain, Docket No. CV-95-0468889-S (June 3, 1997) (19 Conn. L. Rptr. 623), aff‘d, 64 Conn. App. 448, 780 A.2d 953 (2001).12 With respect to Derblom, the plaintiffs argued that she had standing apart from the other plaintiffs because, in the event the court were to determine that a constructive trust in favor of the other plaintiffs failed, she would have a real legal interest as executor of the estate to ensure that any trust funds were returned to the estate for redistribution to Rettich‘s heirs.
The defendant filed a reply to the plaintiffs’ objection. It argued, inter alia, that the common-law special interest exception relied on by the plaintiffs was inapplicable because it has been recognized in Connecticut only in the context of charitable trusts, not testamentary gifts. It also argued that, even if applicable, courts have construed the exception narrowly and the plaintiffs simply failed to establish a special interest sufficient to confer standing. The plaintiffs filed a supplemental memorandum of law rebutting the arguments of the defendant.
The motion to dismiss was argued to the court on October 22, 2018. On February 6, 2019, the court issued a memorandum of decision granting the defendant‘s motion to dismiss. The court concluded that the provision of Rettich‘s will leaving the residue of his estate to OLM constituted a testamentary gift and did not create a charitable trust. It further concluded that the exclusive power to enforce that type of gift lies with the attorney general pursuant to our common law and as codified in
Before turning to our analysis of the plaintiffs’ claims, we first set forth our well settled standard of review applicable to the granting of a motion to dismiss. “A
“The issue of standing implicates subject matter jurisdiction and is therefore a basis for granting a motion to dismiss. . . . [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. . . .
“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.” (Internal quotation marks omitted.) Id. If “a party is found to lack standing, the court is consequently without subject matter jurisdiction to determine the cause.” (Internal quotation marks omitted.) J.E. Robert Co. v. Signature Properties, LLC, 309 Conn. 307, 318, 71 A.3d 492 (2013).
Our Supreme Court has explained that “[d]ifferent rules and procedures will apply, depending on the state of the record at the time the motion [to dismiss] is filed.” Conboy v. State, 292 Conn. 642, 651, 974 A.2d 669 (2009). More specifically, a court may be called on to determine whether subject matter jurisdiction is lacking on the basis of “(1) the complaint alone; (2) the complaint supplemented by undisputed facts evidenced in the record; or (3) the complaint supplemented by undisputed facts plus the court‘s resolution of disputed facts.” (Internal quotation marks omitted.) Id. “If the complaint is supplemented by undisputed facts established by affidavits submitted in support of the motion to dismiss . . . the trial court, in determining the jurisdictional issue, may consider these supplementary undisputed facts and need not conclusively presume the validity of the allegations of the complaint. . . . Rather, those allegations are tempered by the light shed on them by the [supplementary undisputed facts]. . . . If affidavits and/or other evidence submitted in support of a defendant‘s motion to dismiss conclusively establish that jurisdiction is lacking, and the plaintiff fails to undermine this conclusion with counteraffidavits . . . or other evidence, the trial court may dismiss the action without further proceedings. . . . If, however, the defendant submits either no proof to rebut the plaintiff‘s jurisdictional allegations . . . or only evidence that fails to call those allegations into question . . . the plaintiff need not supply counteraffidavits or other evidence to support the complaint, but may rest on the jurisdictional allegations therein.” (Emphasis omitted; internal quotation marks omitted.) Hilario‘s Truck Center, LLC v. Rinaldi, 183 Conn. App. 597, 602, 193 A.3d 683, cert. denied, 330 Conn. 925, 194 A.3d 776 (2018). This case falls under the second category, in which the facts as alleged in the complaint are supplemented by undisputed facts evidenced in affidavits and other documents submitted in support of the motion to dismiss.
I
The plaintiffs first claim that the court improperly construed Rettich‘s bequest as
“The construction of a will presents a question of law to be determined in light of facts which are found by the trial court or are undisputed or indisputable. . . . [If] the issue before us concerns the court‘s legal conclusion regarding the intent of [a testator] as expressed solely in the language of [a] will, we must decide that issue by determining, de novo, whether that language supports the court‘s conclusion. . . . Our primary objective in construing [a] will is to ascertain and effectuate [the testator‘s] intent. . . . In searching for that intent, we look first to the precise wording employed by the testat[or] in [the] will . . . [because] the meaning of the words as used by the testat[or] is the equivalent of [his] legal intention—the intention that the law recognizes as dispositive. . . . The question is not what [he] meant to say, but what is meant by what [he] did say.” (Citations omitted; internal quotation marks omitted.) Canaan National Bank v. Peters, 217 Conn. 330, 335–36, 586 A.2d 562 (1991); see also Schwerin v. Ratcliffe, 335 Conn. 300, 310, 238 A.3d 1 (2020) (“The most inflexible rule of testamentary construction and one universally recognized is that the intention of the testator should govern the construction, and this intention is to be sought in the language used by the testator in the light of the circumstances surrounding and known to him at the time the will was executed. . . . In seeking the testator‘s testamentary intent, the court looks first to the will itself . . . . It studies the will as an entirety. The quest is to determine the meaning of what the [testator] said and not to speculate upon what [he] meant to say . . . .” (Internal quotation marks omitted.)).
Before turning to the will language at issue, it is helpful first to consider what distinguishes the giving of an outright gift to a charity from a gift given in trust. A charitable trust “is a fiduciary relationship with respect to property arising as a result of a manifestation of an intention to create it, and subjecting the person by whom the property is held to equitable duties to deal with the property for a charitable purpose.” (Emphasis added.) 2 Restatement (Second), Trusts § 348, p. 210 (1959). A trust “requires three basic elements: (1) a trust res; (2) a fiduciary relationship between a trustee and a beneficiary requiring the trustee to deal with the trust res for the benefit of the beneficiary; and (3) the manifestation of an intent to create a trust.” Goytizolo v. Moore, 27 Conn. App. 22, 25, 604 A.2d 362 (1992).
By contrast, a gift, whether testamentary or inter vivos, “is the transfer of property without consideration . . . [in which] the donor [parts] with control of the property [that] is the subject of the gift with an intent that title shall pass immediately and irrevocably to the donee.” (Emphasis added; internal quotation marks omitted.) Parley v. Parley, 72 Conn. App. 742, 749, 807 A.2d 982 (2002). Thus, whenever someone donates to charity without reserving any right of control or placing limitations on the donation‘s use, this constitutes a gift, and the law will not recognize any resulting trust. See Carl J. Herzog Foundation, Inc. v. University of Bridgeport, 243 Conn. 1, 7–8, 699 A.2d 995 (1997); Russell v. Yale University, 54 Conn. App. 573, 578, 737 A.2d 941 (1999).
The law recognizes a distinction between a donor who expresses an intent to make a donee a trustee and one who intends to make an absolute gift. “In the case of a trust, the legal title only is in the corporation, subject to the duties imposed by the terms of the trust instrument and by the
Turning to the present case, the residuary clause of Rettich‘s will states in relevant part: “All the rest, residue, and remainder of my property of every kind and description . . . remaining after the payment of estate, inheritance, succession, transfer and death taxes or duties . . . I give and bequeath, in memory of Fred H. & Rosa Rettich, to [OLM], 149 Neck Road, Madison, Connecticut, or its successor, for its general uses and purposes.” The language used is not ambiguous and must be given its ordinary meaning. It clearly and expressly provides that the residue of the estate is “give[n]” to OLM, without placing any restriction on OLM‘s use. This language reasonably can be construed only as manifesting an intent to convey full control over the residue of his estate to OLM as an outright gift. Rettich did not use any qualifying language that would suggest that he intended to give the residue only “in trust” or use any other language indicative of an intent to create a trust of any kind. Rettich placed no limit on the expenditure of the principal. No beneficiary or trustee is named in the will. Although it is true that courts may recognize the formation of a testamentary charitable trust even in the absence of precise language; see, e.g., O‘Leary v. McGuinness, 140 Conn. 80, 84, 98 A.2d 660 (1953) (will bequeathing legal title to property to testator‘s executors but giving beneficial interest to charities to be selected by those executors created trust despite word “trust” not appearing in will); courts will not read terms into a will that are not otherwise implied and will not recognize the formation of a trust in the absence of some manifestation of intent to do so, which simply does not exist in Rettich‘s will. See Winchester v. Cox, 129 Conn. 106, 111, 26 A.2d 592 (1942) (“[if] property is conveyed to a charitable corporation, simply with the requirement that it be used for one of its authorized purposes, this is not in itself sufficient to establish a trust“); Lyme High School Assn. v. Alling, 113 Conn. 200, 204, 154 A. 439 (1931) (holding that bequest to school containing no provision requiring that funds be held in trust or restricting manner in which funds may be managed or used is not trust).
The plaintiffs would have us interpret Rettich‘s use of the language “or its successor” in his bequest to OLM as manifesting something more than an intent to make an outright gift to OLM. The plaintiffs imply that those words convey that it was Rettich‘s intent that, in the event OLM closed or otherwise ceased to exist under its current name after the residue of the estate passed, any unspent funds must pass to whichever school is deemed OLM‘s successor. We are not persuaded, however, by this argument. Rather, we construe the language “or its successor” as only commonplace testamentary verbiage intended to avoid a potential failure of the residuary bequest in the event that OLM had ceased to exist or changed its name before Rettich died and before he had an opportunity to amend his will. The language by itself, with no other indicia of any intent to exercise future control over
II
Next, the plaintiffs claim that the court improperly concluded that a common-law special interest exception to the rule that the state‘s attorney general has exclusive authority to bring an action to enforce Rettich‘s charitable gift is limited in Connecticut to actions involving charitable trusts and, thus, was inapplicable to confer standing on the plaintiffs in the present case involving a gift. We are not persuaded.
“At common law, a donor who has made a completed charitable contribution, whether as an absolute gift or in trust, had no standing to bring an action to enforce the terms of his or her gift or trust unless he or she had expressly reserved the right to do so. Where property is given to a charitable corporation and it is directed by the terms of the gift to devote the property to a particular one of its purposes, it is under a duty, enforceable at the suit of the [a]ttorney [g]eneral, to devote the property to that purpose.” (Emphasis altered; footnote omitted; internal quotation marks omitted.) Carl J. Herzog Foundation, Inc. v. University of Bridgeport, 243 Conn. 1, 5–6 (1997), quoting 2 Restatement (Second), Trusts § 348, comment (f), p. 212 (1959). “Connecticut is among the majority of jurisdictions that have codified this common-law rule and has entrusted the attorney general with the responsibility and duty to represent the public interest in the protection of any gifts, legacies or devises intended for public or charitable purposes. . . .
Although the plaintiffs recognize that, as a matter of statutory and common law, standing to enforce the terms of a completed charitable gift lies exclusively with the attorney general, they nevertheless argue that courts in this state have recognized a so-called “special interest” exception to this general rule and claim that the trial court improperly declined to apply that exception with respect to Rettich‘s gift to OLM. We agree with the trial court and the defendant that the exception is inapplicable to the present case.
The special interest exception has been recognized by Connecticut courts as an exception to the rule that the attorney general has the sole and exclusive authority to bring an action to protect any “gifts, legacies or devises” intended for a charitable purpose.16 As noted by the defendant and the court, however, the special interest exception has been applied narrowly only in cases involving charitable trusts, not charitable gifts. See Carl J. Herzog Foundation, Inc. v. University of Bridgeport, supra, 243 Conn. 8 n.4 (“it is well established in the context of charitable trusts that there are others, in addition to the attorney general, who may enforce the terms of a trust” (emphasis added)). In fact, in urging us that the exception applies to the facts
of
First, as we already have discussed, there is a significant legal distinction, relevant to our consideration of the issue of standing, between a charitable trust and a gift. When a donor completes a gift, he gives up all control over the donated property, which is irrevocably transferred to the donee. Parley v. Parley, supra, 72 Conn. App. 749. He no longer has any legal interest in the completed gift. Thus, as stated by the trial court, “[c]onferring standing on the plaintiffs to pursue claims for constructive trust, breach of fiduciary duty, and a declaratory judgment would be wholly inconsistent with the characteristics of a gift.”
Second, the plaintiffs have provided us with no legal authority supporting their assertion that the special interest exception should be expanded to include actions by third parties regarding completed charitable gifts like the bequest from Rettich to OLM. They devote only a single paragraph to this issue in their appellate brief. Our own research shows that courts in other jurisdictions have reached different conclusions regarding the scope of the special interest exception in cases in which a donor had retained some express legal right over a charitable gift or had expressed a clear intent to restrict the use of the gift to a specific purpose. Compare, e.g., Hardt v. Vitae Foundation, Inc., 302 S.W.3d 133, 139–40 (Mo. App. 2009) (declining to expand common-law special interest exception in action by donor to enforce restrictions on charitable gift in absence of showing that attorney general lacked ability to represent donor‘s interest), with Smithers v. St. Luke‘s–Roosevelt Hospital Center, 281 App. Div. 2d 127, 140–41, 723 N.Y.S.2d 426 (2001) (holding wife of deceased donor of charitable gift to hospital, which gift was subject to numerous restrictions agreed to by hospital, had concurrent standing with attorney general to enforce restrictions). The plaintiffs, however, have not cited or relied on these or any other out-of-state authority to support their argument, and we are disinclined to enter into any discussion of the relative merits or persuasiveness of those authorities at this time because, in our view, they are distinguishable from the matter before us, which does not involve a gift encumbered by any cognizable intent on behalf of the donor to retain any legal interest in the donation or to place any specific restrictions on the use of the gift. The gift to OLM was outright for its “general uses and purposes.”
The plaintiffs have provided no compelling argument as to why, under the present circumstances, we should abandon the well established and legislatively adopted general rule that the attorney general has the exclusive power to enforce Rettich‘s testamentary gift to the extent it is necessary to vindicate the interests of the plaintiffs and of the general public. Because the plaintiffs lacked standing, we conclude that the court properly granted the defendant‘s motion to dismiss.
The judgment is affirmed.
In this opinion the other judges concurred.
* The listing of judges reflects their seniority status on this court at the date of oral argument.