Opinion
No. CV 04-4000604
June 10, 2005
MEMORANDUM OF DECISION RE DEFENDANTS' MOTION TO DISMISS AND MOTION TO STRIKE ( #111)
This is an action brought in two counts. In the First Count a claim is made for a declaratory judgment as to the appropriate distribution of shares of a trust. The Second Count claims a breach of fiduciary duty by David P. Bernard. The Plaintiff also claims under the First Count, reasonable attorneys fees as if the Trustee had sought instructions under General Statutes § 52-251; under both counts, temporary and permanent injunctions preventing David P. Bernard from doing any act that would jeopardize the Plaintiff's receipt of her share; and under the Second Count, removal of David P. Bernard as trustee, an accounting by him, a surcharge of him personally for attorneys fees payable out of the estate or trust assets, and monetary damages.
The Defendants have moved to dismiss, or in the alternative, strike Plaintiff's claim for attorneys fees under General Statutes § 52-251 as well as the claims in the Second Count purporting to assert a claim of breach of fiduciary duty or, alternatively, to strike the claims for relief requested thereunder.
General Statutes § 52-251 provides that: "In any action brought to a court of equitable jurisdiction for the construction of a will or for the advice of the court as to the administration of an estate or trust under a will or trust instrument, by any person acting in a fiduciary capacity thereunder, there shall be allowed to each of the parties to the proceeding such reasonable sum for expenses and counsel fees as the court, in its discretion, deems equitable. The allowance shall be taxed as costs in the action, to be paid out of the estate."
"Section 52-251 provides for an allowance of counsel fees and expenses in actions `for the construction of a will or for the advice of the court as to the administration of an estate or trust under a will or trust instrument' brought only by fiduciaries. `The statute should be so construed as to limit it to proceedings fairly falling within its terms.' Connecticut Bank Trust Co. v. Hurlbutt, 157 Conn. 315, 329, 254 A.2d 460 (1968) . . . The beneficent purpose of 52-251 is to make it possible for fiduciaries to obtain a binding resolution of questions that give them serious concern in the performance of their duties. It is not a vehicle available to others who seek to raise issues that do not trouble the fiduciaries. The [intervenors], of course, were not foreclosed from pursuing their claim to be beneficiaries in a separate suit against the trustees, but in that event would have had to bear their own litigation expenses, at least if they were unsuccessful." Connecticut Bank Trust Co. v. Coffin, 212 Conn. 678, 696-97 (1989). The Court in Coffin affirmed the denial of attorneys fees to intervenors in a suit which originally did not involve them. The court also rejected the claim that the intervention had conferred a benefit on the trust, noting that, as a result of the intervention, the trust had become obliged to reimburse other parties for substantial expenses they had incurred as a result of the intervention. The Court also noted that the trust would not have been required to bear any such cost if the intervenors had simply brought an action against the trustees directly in pursuit of their claim to beneficiary status. The Court also found it difficult to perceive how the court action had benefitted the trust, where the issue the intervenors sought to litigate had been resolved in favor of the trustee's position. This is consistent with what the Court stated in Connecticut Bank Trust Co. v. Hurlbutt, 157 Conn. 315, 329 (1968), that the statute was not intended to apply to the prosecution of an ordinary antemortem or postmortem claim.
The situation is similar here. The essence of the Plaintiff's claim is that she should be determined to be a beneficiary of the trust and that the trustee is not treating her as such. Her claims are strictly made for her own benefit and not for the benefit of the trust or of the other beneficiaries. In fact, if her claims are successful, the trust shares of the other beneficiaries will be diminished. Therefore the motion to strike the claim for attorneys fees pursuant to General Statutes § 52-251, set forth in paragraph 2 of the claim for relief, is granted.
As to the Second Count, the Plaintiff claims that David P. Bernard entered into a fiduciary relationship with her in respect to Barbara M. Bernard's Trust and estate and that David P. Bernard has breached that relationship in various respects. In ruling on a motion to strike, the trial court must take the facts to be those alleged in the pleadings and to construe them in the manner most favorable to sustaining their legal sufficiency. Connecticut National Bank v. Douglas, 221 Conn. 530, 536 (1992). "The fiduciary duties of a trustee and of an executor of an estate are quite similar. These duties include the duty of loyalty and the duty to avoid self-dealing, the duty to be diligent in the management of the Trust or Estate and the duty of impartiality towards beneficiaries and heirs. Wilhelm, Settlement of Estates in Connecticut, 2d. (2003) § 7.17. The duty of loyalty includes a prohibition on the fiduciary using trust or estate assets for personal use or to pay personal obligations and a prohibition against commingling estate or trust assets with the fiduciary's personal property. Id., §§ 7.18-7.20. The duties of a trustee and an executor include managing the assets of the trust or estate so as to protect the interests of a beneficiary, heir or legatee. New Haven Savings Bank v. LaPlau, 66 Conn.App. 1 (2001)." Stuart v. Stuart, Superior Court, Judicial District of Stamford-Norwalk, Complex Litigation Docket at Stamford, Docket No. X08 CV 020193031 (Adams, J., June 28, 2004) ( 37 Conn. L. Rptr. 367).
The Defendants claim that the allegations of the Second Count do not support a claim of breach of fiduciary duty. However the Plaintiff does allege that David P. Bernard has "said that he would not make any distribution of her share of Trust property," and "is seeking to benefit personally by trying to obtain one-third of the Trust property rather than one-quarter if plaintiff's beneficial rights are recognized; as well as by charging unreasonable fees as trustee." These allegations are sufficient to support a claim of breach of fiduciary duty.
The Defendants also claim that the Plaintiff's claims for relief under the Second Count seeking removal of Bernard as trustee, an accounting by him as Trustee, surcharge of him personally by the amount of any attorneys fees payable out of the Trust or estate assets for unnecessary litigation, or unreasonably necessitated litigation, and monetary damages, should be stricken since the Plaintiff's allegations do not support these claims for relief. As to the removal of Bernard as trustee, the court has jurisdiction to remove a fiduciary and whether to do so is directed to the sound discretion of the court. Ramsdell v. Union Trust Co., 202 Conn. 57, 64-5 (1987). As to the claim for an accounting, the Plaintiff does not seek a "final accounting" as the Defendants claim but simply an accounting. Such an accounting can be done at any time and does not necessarily need to await the final account of the Probate Estate as the Defendants argue. As to the claim for a surcharge as to Bernard for any fees paid out of the trust for litigation as well as monetary damages, this court has jurisdiction to order money damages in an action by a beneficiary claiming breaches of duty by a trustee. See, Dettenborn v. Hartford-National Bank Trust Co., 121 Conn. 388 (1936). As to whether the court will find a basis to award any or all of the relief requested must await a trial on the merits. Therefore the Defendants' motion to strike the Second Count and the relief requested thereunder is denied.
Jane S. Scholl, J.