48 Conn. App. 1 | Conn. App. Ct. | 1998
Opinion
This appeal involves a contractual dispute between the plaintiff, Jennie T. Schmaling, and her son, the defendant Scott M. Schmaling,
The dispositive issue in this appeal by the plaintiff is whether the trial court properly rejected the attorney trial referee’s finding of lack of donative intent on the part of the plaintiff when she conveyed an interest in the property to the defendant to enable the parties to obtain mortgage financing. We reverse the trial court’s judgment in part.
The attorney trial referee found the following facts. Prior to March 10,1982, the plaintiff was the sole owner of certain real property located at 5 Idlewild Manor in Greenwich. The plaintiff was a widow and had resided at the property for approximately forty-six years. She owned the property free and clear of any mortgages or material encumbrances. The defendant was planning to marry, and the plaintiff believed that he would need to secure suitable housing for himself and his wife. The plaintiff offered to allow the defendant to add a second floor to the structure of her home to enable him and his wife to live on the property; the defendant did nothing to induce his mother to make such an offer.
To finance the construction of the second floor pursuant to the plaintiffs offer, it was necessary to obtain a mortgage loan. To secure mortgage financing, the parties believed that it was necessary to have the defendant’s name on the property as a record owner. As a result, the plaintiff conveyed an undivided one-half interest in the property, via quitclaim deed, to the defendant, with the parties holding title as joint tenants with right of survivorship. The parties obtained a mortgage loan on June 4, 1982, in the amount of $32,000. That loan was subsequently refinanced on February 23,1983, in the amount of $43,000.
The defendant completed constmction of the second floor living quarters, which substantially increased the overall value of the property. During the constmction of the second floor living quarters, the defendant caused $1500 worth of damage to the first floor living quarters. The defendant and his wife moved into the second floor living quarters shortly after the constmction was completed. The defendant and his family continued to reside in the second floor premises until March, 1992, when they moved out because the property was not large enough for the defendant, his wife and their four children. The second floor was subsequently rented to third parties at a rent of $1550 per month.
At the time of their original agreement, the parties contemplated that the defendant would perform additional maintenance and improvement to the first floor living quarters occupied by the plaintiff, although they never agreed on the specific nature and scope of such
The defendant made all of the required mortgage payments. In 1985, the plaintiff stopped paying her agreed share of the property taxes and other shared expenses for which she was responsible under the agreement. From that time, the defendant paid both his portion and the plaintiffs share of taxes and expenses due under the agreement. As a result, the defendant paid the following extra amounts on behalf of the plaintiff: $9039.54 in property taxes, $4710.85 for property insurance and $509.14 for electricity supplied to the barn on the property.
The attorney trial referee made the following additional findings and conclusions: (1) the plaintiff failed to prove, by clear and convincing evidence, that the defendant misrepresented his intentions, either intentionally, negligently or recklessly, with respect to the period of time that he would reside at the property or what would happen to his ownership interest in the property should he move out of the second floor residence; (2) there was no evidence of a donative intent in connection with the plaintiffs transfer of the property interest to the defendant; (3) any presumption of dona-tive intent arising from the relationship of the parties was overcome by the agreement of the parties that the sole motivation for transferring the property interest to the defendant was for the purpose of obtaining
As a result of those findings and conclusions, the attorney trial referee made the following recommendations to the trial court:
On February 28, 1995, the trial court, after reviewing the attorney trial referee’s report, issued its memorandum of decision. In its decision, the trial court (1) rejected the attorney trial referee’s finding that there was a lack of donative intent on the plaintiffs part in conveying an undivided one-half interest in joint tenancy to the defendant because the law presumes a dona-tive intent where the grantee is a natural object of the grantor’s bounty; and (2) rejected the attorney trial referee’s conclusion that the defendant was not entitled to a partition of the property because the trial court believed that the referee did not credit the stipulation of the parties as to the defendant’s right to partition subject only to the plaintiffs special defenses. Accordingly, the trial court rendered judgment in favor of the plaintiff on count one of her complaint in the amount of $1500, but rendered judgment in favor of the defendant on all the remaining counts of the plaintiffs complaint. The trial court also rendered judgment in favor of the defendant on his counterclaims, awarding him $14,259 under the first counterclaim. In addition, the trial court rendered judgment for the defendant on his complaint and ordered a partition by sale, appointing a committee to sell the property at auction on April 22, 1995. The plaintiff filed a motion to open the judgment and a motion to reargue. There is no indication whether the trial court ruled on the motion to open. The motion to reargue was denied by the trial court. This appeal followed.
The plaintiff appeals from the trial court’s judgment in favor of the defendant as to (1) counts two, three and four of the plaintiffs complaint, (2) counts one and two of the defendant’s counterclaim, and (3) the defendant’s complaint seeking a partition by sale. On appeal, the plaintiff claims that the trial court improperly (1) ruled that donative intent was a question of law to be determined by the trial court, not the attorney trial referee, (2) found the existence of donative intent contrary to the findings of the attorney trial referee, and (3) ordered a partition by sale of the property. In response, the defendant claims that because of the death of the plaintiff during the pendency of this appeal, this appeal is now moot by virtue of the right of survivor-ship inherent in the joint tenancy property interest. We reverse the judgment in part.
I
The dispositive issue in this appeal is whether the trial court properly rejected the attorney trial referee’s finding that the plaintiff did not have donative intent with respect to the conveyance to the defendant of an undivided one-half interest, with light of survivorship, in her property at 5 Idlewild Manor in Greenwich. We hold that the trial court improperly rejected the attorney
While mootness ordinarily is a threshold issue implicating the subject matter jurisdiction of the court to hear an appeal, in this case, the mootness issue is intertwined with and dependent on the question of donative intent. Therefore, to decide that the appeal may be moot, based on the right of survivorship coincident with the joint tenancy, begs the question of whether there was donative intent to convey a property interest to the defendant in the first place. Because we conclude that the trial court improperly overruled the attorney trial referee’s finding of lack of donative intent, the mootness issue is no longer relevant. Because there was a lack of donative intent on the part of the plaintiff to convey a property interest other than for purposes of obtaining mortgage financing, the legal right of survi-vorship, on which the defendant’s claim of mootness is based, does not exist.
In proceedings involving attorney trial referees, the trial court may not disturb the factual findings made by the referee. Hassane v. Lawrence, 31 Conn. App. 723, 728, 626 A.2d 1336 (1993). The trial court may not retry the case and find facts contrary to those found by the referee “ ‘unless a material fact has been found without evidence or the [referee] has failed to find an admitted or undisputed fact, or has found a fact in such doubtful language that its real meaning does not appear.’ Practice Book § 439; see Bowman v. 1477 Central Avenue Apartments, Inc., [203 Conn. 246, 256-57, 524 A.2d 610 (1987)]; Cohn v. Hartford, 130 Conn. 699, 704-705, 37 A.2d 237 (1944). Thus, our review of the substantive merits of the trial court’s judgment devolves into two questions: (1) did the court exceed its authority by finding additional facts or rejecting facts found by the referee; and (2) did the court err in applying the
The issue of the donative intent of a grantor is an issue of fact. Whitney v. Whitney, 171 Conn. 23, 33, 368 A.2d 96 (1976); Lord v. Stavrakis, 6 Conn. App. 161, 162, 503 A.2d 629, cert. denied, 199 Conn. 804, 506 A.2d 146 (1986). “The case at bar presented the question of the plaintiffs intention. Intent is a question of fact, the determination of which is not reviewable unless the conclusion drawn by the trier is one which could not reasonably be drawn. Meriden Trust & Safe Deposit Co. v. Miller, 88 Conn. 157, 162, 90 A. 228 [1914]; D. M. Read Co. v. American Bank & Trust Co., 110 Conn. 461, 462, 148 A. 130 [1930].” Walter v. Home National Bank & Trust Co., 148 Conn. 635, 638, 173 A.2d 503 (1961). While it is true that the law presumes a donative intent when the grantee is the natural object of the grantor’s bounty, that presumption is rebuttable. Farrah v. Farrah, 187 Conn. 495, 500, 446 A.2d 1075 (1982); Cohen v. Cohen, 182 Conn. 193, 201, 438 A.2d 55 (1980); Saradjian v. Saradjian, 25 Conn. App. 411, 414-15, 595 A.2d 890 (1991).
In this case, the attorney trial referee made specific findings regarding the lack of donative intent by the plaintiff. In addition, he emphasized the importance of this issue to the overall framework of the case by stating: “Ultimately, the undersigned believes the outcome of this case should be determined by what is perceived to be the key fact in the case: the only reason for the transfer of the property interest to the defendant was to facilitate the mortgage loan. There was no suggestion that the defendant would not have undertaken the addition without an ownership interest in the property, and no suggestion that there was any discussion, express agreement, or even implied agreement making the transfer an element of consideration being furnished by the plaintiff. . . . The defendant acquired a nominal
While the trial court specifically rejected that finding of lack of donative intent, construing it as an issue of law based on the presumption of donative intent existing between mother and son, the attorney trial referee specifically found that the presumption was overcome in this case: “Any presumption of donative intent, arising from the relationship of the parties, was overcome by the agreement of the parties that the sole motivation for the transfer of the interest in the property to the defendant was in connection with financing the addition.”
In rejecting the attorney trial referee’s factual finding as to donative intent, the trial court summarily found the existence of donative intent without an extended discussion or analysis of the issue, relying solely on the existence of the presumption to justify its holding: “As to the alleged lack of donative intent on the part of the plaintiff, it is clear from the referee’s report that she voluntarily placed her property in joint tenancy in order to accomplish a goal that she herself sought, viz., that the defendant and his family live in the same house with her. The law presumes a donative intent where a grantee is the natural object of the grantor’s bounty.” Since the presumption is one of fact and not law; Sarad-jian v. Saradjian, supra, 25 Conn. App. 414-15; we hold that the trial court improperly rejected the attorney trial referee’s finding on this issue.
As further support for our holding in this case, Cohen v. Cohen, supra, 182 Conn. 193, is instructive. In that case, a mother and son held title to a condominium property as joint tenants with right of survivorship. There were two reasons for that ownership arrange
Our Supreme Court affirmed the trial court’s decision that a constructive trust should be imposed on the son’s interest in the property to prevent the abuse of a confidential relationship between mother and son, and to prevent the resulting unjust enrichment to the son. The court held that the conveyance to the son was based on trust and confidence, and “[wjhere that confidence and trust are abused, equity will intervene to remedy the wrong done, although the law would otherwise leave the parties where it finds them.” Id.
While the facts of Cohen are not completely analogous to those of the present case, there are many similarities that we find pertinent. In both cases, there was a dispute over property held by mother and son as joint tenants with right of survivorship. In both cases, the parties held record title, but the trier of fact concluded that that was not determinative on the basis of a balancing of the equities. In both cases, the trier of fact attempted to prevent unjust enrichment in the hands of one joint tenant through the use of a constructive trust to effectuate the parties’ true intentions. We conclude that the present case is substantially similar to the factual and legal posture of Cohen, which, therefore, provides further authority for our conclusion.
The plaintiff next claims that the trial court improperly ordered a partition by sale of the subject property. The plaintiff argues that the equities in this case indicate that to order a partition by sale of the property would “offend justice, equity and fairness” because she never intended to relinquish control of her property to the defendant when she executed the deed to him to obtain mortgage financing. Because of our conclusion that the trial court improperly rejected the attorney trial referee’s finding of lack of donative intent, we agree with the plaintiff. In addition, we conclude that the trial court improperly relied on the stipulation of the parties that the defendant was entitled to a partition subject to resolution of the plaintiffs special defenses. We address each of those arguments in turn.
“A partition by sale, although a creature of statute, is an equitable action. Gaer Bros., Inc. v. Mott, 147 Conn. 411, 415, 161 A.2d 782 (1960). Section 52-500 (a) permits a court, ‘upon the complaint of any person interested, [to] order the sale of any property, real or personal, owned by two or more persons, when, in the opinion of the court, a sale will better promote the interests of the owners.’ See also Borzencki v. Estate of Stakum, 195 Conn. 368, 372, 489 A.2d 341 (1985). The standard for reviewing the defendant’s claim is whether the court abused its discretion in ordering a partition by sale. See LaCroix v. LaCroix, 189 Conn. 685, 689-90, 457 A.2d 1076 (1983). In determining whether there has been an abuse of discretion, every reasonable presumption should be given in favor of the correctness of the court’s ruling. DiPalma v. Weisen, 163 Conn. 293, 298-99, 303 A.2d 709 (1972).” Geib v. McKinney, 224 Conn. 219, 228-29, 617 A.2d 1377 (1992).
In this case, the trial court abused its discretion because its decision to order a partition by sale was
In addition, our conclusion is supported by a balancing of the equities in the case. While the defendant has legitimate claims concerning amounts due him under the agreement, and his ongoing liability under the mortgage note, it would be inequitable to allow him to be unjustly enriched at the plaintiffs expense through the mechanism of a partition by sale. It seems highly inequitable, on this record, to allow the defendant to partition the property merely because he has suffered monetary damages, particularly because the plaintiff never had the donative intent to convey an actual property interest to the defendant.
The trial court further based its decision on the stipulation of the parties that the defendant was entitled to a partition subj ect only to the plaintiffs special defenses of fraud and breach of contract, which the attorney trial referee found in favor of the defendant. A review of the record reveals that this stipulation was not a conventional stipulation. It related to the plaintiffs answer to the defendant’s complaint seeking a partition by sale and admitted only the factual predicates that the defendant alleged in the first three paragraphs of his complaint, the existence of which constituted a prima facie case entitling the defendant to the remedy of partition.
The factual allegations admitted by the plaintiff were that the parties were owners of the described real estate, holding record title derived from the deed executed by the plaintiff, and that the property was encumbered by a mortgage in the amount of $43,000. While
In addition, the attorney trial referee found specifically in favor of the plaintiff on her special defenses to the partition by sale complaint because it would unjustly enrich the defendant at the plaintiffs expense. In his recommendation to the trial court, the attorney trial referee stated that in the defendant’s action against the plaintiff seeking a partition by sale, judgment should enter for the plaintiff based on her special defenses. While the attorney trial referee found an absence of fraud by the defendant, he did credit the equitable argument contained in the plaintiff’s special defense, stating that the special defense was “essentially the grounds set forth in the fourth count of the plaintiffs own complaint unjust enrichment.” The trial court improperly ignored that recommendation, stating only that “the referee specifically rejected” the plaintiffs special defenses of fraud and breach of contract. Our review of the record indicates the contrary. The referee specifically found the equitable argument portion of the special defense was valid. Therefore, the trial court improperly concluded that the defendant was entitled to a partition by sale.
The defendant claims that this appeal is now moot on the basis of the right of survivorship coincident with the joint tenancy. Because the plaintiff died during the pendency of this appeal, the defendant claims that this appeal is now moot because title to the property passed completely to him by operation of law upon the plaintiffs death. Therefore, the defendant claims that we cannot provide relief to the substituted plaintiff because the plaintiff has no property interest. Because of our holding on the donative intent issue, that claim is without merit.
As a result of the lack of donative intent on the part of the plaintiff, the defendant held only nominal title, not legal title, to the property in question. Therefore, he is not a trae joint tenant with the right of survivor-ship. Since there was no right of survivorship coincident with a joint tenancy, this appeal is not moot as the defendant claims. Upon the death of the plaintiff, the property passed to her estate, subject to the trial court’s imposition of a constructive trust on the defendant’s portion, and did not pass to the defendant by operation of law. Accordingly, this appeal is not moot because the estate has an interest in the property that will be affected by the disposition of this appeal.
IV
On the basis of our holding that the trial court improperly rejected the attorney trial referee’s finding of a lack of donative intent by the plaintiff, we also agree with the attorney trial referee that a constructive trust should be imposed on the defendant’s interest in the property, subject to payments of the amounts due the defendant and the satisfactory protection of the defendant from future liability on the mortgage. Accordingly, we remand the case to the trial court to render judgment
“Although it is well settled that, in general, real property absolutely conveyed cannot be shown to be subject to an express trust created by parol agreement; General Statutes § 52-550; Hieble v. Hieble, 164 Conn. 56, 59, 316 A.2d 777 (1972); Worobey v. Sibieth, 136 Conn. 352, 355, 71 A.2d 80 (1949); exceptions to this rule have been recognized where an injustice, sufficient to raise an equitable trust, would otherwise result. ... In such cases, a trust does not arise so much by reason of the parol agreement of the parties but by operation of law. . . . In Beatty v. Guggenheim Exploration Co., 225 N.Y. 380, 386, 122 N.E. 378 (1919), Judge Cardozo wrote: ‘A constructive trust is the formula through which the conscience of equity finds expression. When property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest, equity converts him into a [trustee ....]’ See 5 [A. Scott], Trusts [(3d Ed. 1967)] § 462, p. 3,413. The imposition of a constructive trust by equity is a remedial device designed to prevent unjust enrichment. . . . Thus, a constructive trust arises where a person who holds title to property is subject to an equitable duty to convey it to another on the ground that he would be unjustly enriched if he were permitted to retain it. . . . One holding title to property upon which a constructive trust is imposed is not compelled to reconvey the property because he is a constructive trustee; it is because he can be compelled to convey title to the property that he is a constructive trustee.” (Citations omitted.) Cohen v. Cohen, supra, 182 Conn. 202-203.
This case seems particularly suited to the imposition of a constructive trust, as the attorney trial referee recommended. To allow the defendant to retain a property interest in 5 Idlewild Manor in Greenwich would
The judgment is reversed in part and the case is remanded for further proceedings consistent with this opinion.
In this opinion the other judges concurred.
For purposes of this opinion in the appeal from consolidated cases in which Jennie T. Schmaling (deceased) was the plaintiff in the first case and the named defendant in the second case, and Scott M. Schmaling is the defendant in the first case and the plaintiff in the second case, Jennie T. Schmaling will be referred to as the plaintiff and Scott M. Schmaling will be referred to as the defendant. This is consistent with the attorney trial referee’s references to the parties throughout the proceedings. People’s Bank was named as a defendant in the second case but did not file an appearance. See footnote 3.
We note that the attorney trial referee issued his initial report on October 4, 1994. The defendant then filed a motion to correct on October 18, 1994. The referee issued his rulings on the motion to correct and corrected findings on October 30, 1994.
We note that the mortgagee, People’s Bank, luis not filed an appearance in this action despite being a named defendant in the defendant’s action seeking a partition. The attorney trial referee recommended that People’s Bank be defaulted in this action.