Opinion
No. CV06 5001737
October 6, 2008
MEMORANDUM OF DECISION
The plaintiff, Constance Jarvis, brings this action against her nieces, the defendants Constance M. Lieder (Constance) and Carol A. Heffernan (Carol), and her grandniece, the defendant Colleen M. Lieder (Colleen), seeking a reconveyance or equitable relief, including the imposition of constructive trusts, on real property and funds conveyed to the defendants.
The present action was consolidated and tried with a companion case, Heffernan v. Ritchie, Superior Court, judicial district of Ansonia-Milford, Docket No. CV 07 5003722, on December 10, 2007. After the plaintiffs in Heffernan v. Ritchie (the defendants here) rested the court granted a motion to dismiss the claims against the defendants in that companion case, pursuant to Practice Book § 15-8. The court found no evidence that the defendants in the companion case, Kenneth Ritchie, Ronald Ritchie and Deborah Hyder, influenced the plaintiff, Constance Jarvis, to file the present action against Constance Lieder, Carol Heffernan and Colleen Lieder.
I Pleadings
The plaintiff commenced this action by service of process on September 21, 2006. The amended complaint, dated July 17, 2007, alleges the following facts. At all times relevant hereto "a confidential relationship existed between the plaintiff and defendants." The plaintiff was the owner of a home located at 34 North Coe Lane in Ansonia, Connecticut, which she and her late husband, Charles Jarvis, acquired in 1970. At his death, the house was valued on Mr. Jarvis' succession tax return at $138,000. In December 1999, the plaintiff quitclaimed the home to Constance, Carol and her nephew, Ronald J. Ritchie, with all grantees "understanding that they would hold such property on her behalf and for her benefit." On May 15, 2001, Ronald Ritchie reconveyed his interest back to the plaintiff who, on June 7, 2001, transferred that interest back to Ronald Ritchie and to Colleen, on the "understanding that they would hold the property on her behalf and for her benefit."
The complaint further alleges that in 2000, the plaintiff transferred funds to the defendants with "all parties understanding that the funds would be held by the defendants for the plaintiff's benefit and disbursed in accordance with her wishes." The funds were initially transferred to a joint account with Colleen, who was assisting the plaintiff in managing her finances. Then, the plaintiff alleges, Colleen transferred the funds to accounts held by all three defendants. The complaint further alleges that, over a period of years, Colleen continued to transfer funds from the account she and the plaintiff held jointly to an account held by the three defendants.
The plaintiff alleges that all transfers were made by the plaintiff in reliance on the trust and confidence she placed in the defendants and in reliance on her belief that they would obey her wishes. The defendants have since refused to use and disburse the funds in accordance with the plaintiff's wishes, and, despite her request, they have refused to return the funds and real estate to her.
The amended complaint is in three counts. The first count alleges that the defendants' actions constitute a breach of the trust and confidence placed in them by the plaintiff and that they have been unjustly enriched. The second count alleges that the defendants have unlawfully converted the funds they received from the plaintiff. The third count alleges that the defendants' conduct constitutes statutory theft, in violation of General Statutes § 52-564. In her demand for relief, the plaintiff seeks a judgment declaring that the defendants hold the real estate and funds in trust for her, a judgment requiring the defendants to reconvey the real estate and funds back to her, a judgment requiring that the defendants account for any funds disbursed or spent, money damages, treble damages for statutory theft pursuant to § 52-564 and other equitable relief.
In their answer, the defendants have denied any wrongdoing and claim by special defense that the plaintiff's transfers were gifts to the defendants, and that her various claims are barred by the statute of limitations and by laches. The plaintiff denies the various special defenses, and, by way of avoidance, pleads that the statutes of limitations was tolled by the defendants' continuing course of conduct and concealment of the plaintiff's causes of action.
Findings
The action was tried to the court. From the evidence and inferences drawn therefrom, the court finds the following facts, The plaintiff, whose date of birth is March 29, 1915, was married to Charles "Boots" Jarvis for fifty-eight years. Charles Jarvis was a school teacher and legendary football coach at Ansonia High School between 1939 and 1966. The plaintiff was a high school graduate who attended business college but did not graduate. She also attended hairdressing school. During the marriage, she worked outside the home until age seventy as a hairdresser, at a department store and as an office manager of small businesses. Mr. Jarvis handled the couple's finances and wrote the checks to pay their bills. In 1970, the couple, which was childless, purchased a small cape-style home at 45 North Coe Lane in Ansonia, Connecticut.
Charles Jarvis also coached baseball and basketball and was teacher at the high school. His record as a football coach was 175 wins, 77 losses and 12 ties. See http://www.ansoniagridiron.org.history.
The plaintiff was one of six children. Constance and Carol are daughters of one of the plaintiff's sisters. Colleen, a corporate accountant employed by a consulting firm, is the daughter of Constance. Ronald Ritchie, Kenneth Ritchie and Deborah Hyder are the sons and daughter, respectively, of the plaintiff's sister, Mary Ritchie.
Until 2006, the plaintiff and the defendants had a warm family relationship. Carol and Constance would visit the plaintiff and occasionally bring her food. They would take her out for coffee or to go shopping. Sometimes, they took her to wakes and funerals. On occasion, they cleaned the plaintiff's home and once painted her basement stairs. Carol threw an eighty-fifth birthday party for the plaintiff and took her to a restaurant for her ninetieth birthday. She took the plaintiff to medical appointments and picked up her prescriptions. When the plaintiff injured her back, Carol helped her bathe. Sometimes Carol would pick up the plaintiff's prescriptions. Constance cleaned for the plaintiff and went grocery shopping for her. On occasion she would purchase items like house dresses, bedroom slippers and stamps for the plaintiff.
On October 10, 1999, after fifty-eight years of marriage, Charles Jarvis died. The plaintiff, who was then eighty-four years of age, was emotionally shaken. At the time of her husband's death, the plaintiff was in reasonably good health for her age but was legally blind. She could read only by using a magnifying glass and also was hard of hearing. Before Charles Jarvis' death, Colleen began discussing the plaintiff's finances with her and the eligibility requirements for long-term medical care under "Title XIX" (referring to Title XIX of the federal Social Security Act, 42 U.S.C. § 1396a) or medicaid, should the plaintiff require such care in the future. The plaintiff desired to convey her home to Constance, Carol and Ronald Ritchie. She discussed this proposal with the defendants and asked them which attorney she should employ to effectuate the conveyance. Carol recommended Attorney Thomas Condon, who had prepared the will of the plaintiff's mother and sister. On December 13, 1999, Constance, Carol and the plaintiff met with Attorney Condon in his office. The subject of a life estate was discussed in the meeting, although there was no evidence as to what was said. Attorney Condon did not speak with the plaintiff outside the presence of her nieces, nor did he advise her that her home would be subject to the creditors of her nieces and nephew upon transfer. He prepared a quitclaim deed, and, on December 13, 1999, the plaintiff conveyed her home by quitclaim to Ronald Ritchie and to Constance and Carol "for the consideration of LOVE AND AFFECTION, received to my full satisfaction . . ." At the time of the conveyance, the plaintiff understood that she would be able to live in the house until her death, at which time it would belong to her nieces and nephew. Carol Heffernan, too, testified that there was an understanding and an assumption that the plaintiff would continue to live in the house.
Attorney Condon was semi-retired and ill at the time of trial. His deposition was admitted into evidence. He remembered little of the meeting with the plaintiff and her nieces.
After Charles Jarvis' death, Colleen became more than a grandniece who shared a warm familial relationship with the plaintiff. She became the plaintiff's trusted financial advisor. Colleen was an educated young woman and a corporate accountant. The plaintiff was elderly and unable to read without the aid of a magnifying glass.
When Mr. Jarvis died, he and the plaintiff had approximately $154,577 in three bank accounts at First Union Bank: (1) a joint checking account having a balance of $21,172.38 as of October 10, 1999; (2) a savings account having a balance as of the same date of $84,056.48; and (3) a passbook savings having a balance as of the same date of $49,349.93. The plaintiff referred to this third account as an "education account" because it had been created and maintained by her husband and her to aid in paying the college tuitions of two of their grandnieces, Jessica Hyder and Jennie Ritchie.
On November 15, 1999, the two savings accounts were closed. The proceeds of the smaller passbook account, then totaling $49,451.48, were deposited into a joint checking account opened at First Union Bank in the names of the plaintiff and Colleen. This account was referred to at trial as the "small" checking account. Colleen has acknowledged that her name was placed on this account for purposes of convenience, to enable her to sign checks for the plaintiff's bills. The defendants make no claim of ownership as to this account.
The proceeds of the larger savings account owned by the plaintiff and her late husband were placed in an annuity opened by the plaintiff. Constance and Carol were named as beneficiaries of the annuity.
On March 3, 2000, the joint checking account owned by the plaintiff and her late husband was closed with a balance of $31,458.99, the balance having increased after Mr. Jarvis' death as a result of various deposits, including life insurance proceeds. On March 15, 2000, the closing proceeds from this account were deposited into the joint checking account in the names of the plaintiff and Colleen.
On September 30, 2000, a certificate of deposit (CD) was opened in the names of all three defendants. The CD was funded with a $55,000 check CT Page 16136 signed by Colleen and drawn on the small checking account.
In December 2000, a second checking account was opened at First Union in the names of all three defendants. This account, referred to as the "large" account, was initially funded with a $5000 check signed by Colleen and drawn on the small checking account. On January 22, 2001, Colleen wrote an additional check in the amount of $15,000 drawn on the small account and deposited the check into the large account. Thereafter, the small checking account functioned as the repository of the plaintiff's social security checks and the survivorship benefits she received from her late husband's pension. The balance in the small checking account was kept at or about the "minimum required" balance of $5,000. Whenever the balance of the small account increased significantly about that amount, Colleen withdrew sums of money from the small account and deposited the sums into the large account. Between March 2001 and June 2006, there were approximately three dozen withdrawals from the small account and corresponding deposits into the large account, generally ranging from $1,800 to $5,000. The total amount transferred from one account to the other exceeded $130,000.
There was no evidence as to why $5,000 was a minimum required balance.
The monthly statement for the small account (held by plaintiff and Colleen jointly) was sent to the plaintiff's home. The statement for the large account (held jointly by the defendants) was sent to Colleen.
Twice a month, Colleen visited the plaintiff at her home and reviewed her bills with her. The plaintiff had to use her magnifying glass to examine the bills. Colleen wrote out and signed checks paying the bills. All bills were paid out of the large checking account held jointly by the defendants. Occasionally, Colleen would bring over the monthly statement for this account. As early as 2000 or 2001, the plaintiff saw, but did not question, that the account was in the names of the defendants. Colleen also provided the plaintiff with a monthly stipend of $850 out of this account.
In May 2001, Constance called Ronald Ritchie and told him that the plaintiff wanted him to convey his one-third interest in 34 North Coe Lane back to her. On May 15, 2001, Ronald Ritchie dutifully went to Attorney Condon's office, where a quitclaim deed already had been prepared. He executed the deed and later informed the plaintiff that he had done so. On June 7, 2001, the plaintiff quitclaimed half of her one-third interest in the home to Ronald Ritchee and half to Colleen Lieder "for the consideration of LOVE AND AFFECTION . . ."
In 2002, the plaintiff retained Attorney Gary Hale to prepare her last will and testament. Hale, who as a child had been the plaintiff's newspaper delivery boy, had prepared prior wills for the plaintiff and her husband. Hale met with the plaintiff at her home. He testified that the plaintiff was "sharp [and] knowledgeable" in her dealings with him. In her will, which she executed on September 29, 2002, the plaintiff directed that her funeral expenses and taxes be paid. She also made specific bequests, in varying amounts, to fourteen individuals, including the defendants, and to her parish. These bequests totaled $141,000. Her will further provided that if there were any remaining funds in the plaintiff's estate, they were to be divided equally between Carol and Constance, who were also named her co-executrices. Hale testified that the plaintiff told him that she had previously transferred some monies "to other parties," but did not mention that she had quitclaimed her house to her nieces and nephew.
Article Fifth of the plaintiff's will includes the following bequests:
1. To my niece and godchild, Constance Leider . . . the sum of ten thousand dollars . . .
2. To my nephew and god child, Ronald J. Ritchie, Jr. . . . the sum of ten thousand dollars . . .
3. To my niece, Carol Heffernan . . . the sum of ten thousand dollars . . .
4. To my grandniece, Colleen Lieder . . . the sum of twenty thousand dollars.
5. To my nephew, Kenneth Ritchie . . . the sum of ten thousand dollars . . .
6. To my grandniece, Jessica Hyder, presently a minor child . . . the sum of twenty thousand dollars ($20,000) to be used primarily for educational purposes; and
7. To my grandniece, Jennie Ritchie, presently a minor child . . . the sum of twenty thousand dollars ($20,000) to be used primarily for educational purposes; and
8. To my niece, Deborah Hyder . . . the sum of ten thousand dollars . . .
9. To my nephew, Brother John Konwerski . . . the sum of five thousand dollars . . .
10. To my nephew, James Konwerski . . . the sum of five thousand dollars . . .
11. To my nephew, John Konwerski . . . the sum of five thousand dollars . . .
12. To my nephew, Donald Wailonis . . . the sum of five thousand dollars . . .
13. To my nephew, Paul Konwerski . . . the sum of five thousand dollars . . .
14. To my nephew, Dennis Ritchie, Jr. . . . the sum of five thousand dollars.
This statement was Attorney Hale's characterization, not the plaintiff's.
In 2005, the plaintiff asked Colleen for an increase in her $850 allowance to pay various incidental expenses. Colleen refused to increase her allowance.
In 2005, Jessica Hyder entered college. When a tuition payment was due, Jessica's mother would inform the plaintiff, and the plaintiff would tell Colleen. Colleen then had a check drawn on Wachovia Bank in the amount of $2,500 on the large account held jointly by the defendants and made payable to Eastern Connecticut State University. Three such checks were drawn, dated July 22, 2005, December 1, 2005, and June 26, 2006. Colleen prepared and had Jessica sign a memo, witnessed by the plaintiff, stating that the check was an advance from, and would be deducted from, her inheritance. The memo accompanying the July 22, 2005 tuition check was also witnessed by each of the defendants and Ronald Ritchie. The memo accompanying the June 26, 2006 tuition check was witnessed by the defendants.
In December 2005, Ronald Ritchie took the plaintiff to the bank, where she removed Carol and Constance as beneficiaries of her annuity and named ten other relatives, not including Carol and Constance, in their stead for varying amounts. Kenneth Ritchie and Ronald Ritchie were each beneficiaries of 31.5 percent of the annuity, and Deborah Hyder was a named beneficiary for 10 percent of the annuity. The plaintiff's nephews, John Konweski, James Konweski, Donald Wailonis, Paul Konweski, Derek Ritchie and Dennis Ritchie, were beneficiaries for amounts ranging from 1 percent to 10 percent of the annuity. The plaintiff reserved 0.5 percent for St. Anthony's Church.
In March 2006, Constance's mother-in-law had triple by-pass heart surgery. Constance had to provide post-operative home care for her. During the same time period, Constance's sister-in-law became terminally ill and died on May 4, 2006. Also in March 2006, Carol's daughter lost her babysitter in a motor vehicle accident, requiring Carol to provide child care for her granddaughter in March and part of April. As a result of these events, both Constance and Carol suspended their visits to the plaintiff.
On May 4, 2006, the plaintiff was hospitalized for a rapid heart beat. The defendants did not visit the plaintiff in the hospital, nor when she returned home. Indeed, they were unaware of her cardiac incident for some time.
On June 28, 2006, the plaintiff, the defendants, Ronald Ritchie, Kenneth Ritchie, Jessica Hyder and David Hyder met at the plaintiff's home. The purpose of the meeting was to give Jessica another $2,500 tuition check. Colleen first had Jessica sign the following writing:
I Jessica Hyder have on June 28, 2006 accepted a bank check from Constance J. Jarvis in the amount of Two thousand five hundred dollars ($2,500.00) dated June 26, 2006. This bank check is made payable to Eastern Connecticut State University were [sic] I will be attending classes full time in September 2006. I acknowledge that receipt of this check as part of my inheritance from the Constance J. Jarvis's estate prior to her death with her consent for my college education. At the time that Constance J. Jarvis's death and probating of her will the amount of this check will be deducted from the amount I would have received ($20,000.00) if I chose not to receive this money at this time for my college education. I have further acknowledge [sic] that I am the age of 18 and therefore am able to sign this waiver without parental consent.
The document was signed by Jessica, as well as by the plaintiff, Carol and Colleen.
Jessica received her check. Kenneth Ritchie stated that the plaintiff wanted the defendants to return the education funds to her. The defendants refused. The plaintiff sat silent during this heated discussion. When an altercation ensued, Jessica left with her father.
Soon thereafter, the plaintiff, with the assistance of Ronald Ritchie, who worked for the telephone company, had her telephone number changed.
In August 2006, a meeting was held between the plaintiff and the defendants. The plaintiff was represented by Attorney Dominick Thomas; the defendants were represented by Attorney Kevin Condon, the son of Attorney Thomas Condon. At this meeting, Attorney Thomas demanded that the defendants return to the plaintiff all funds and property conveyed to them that had belonged to the plaintiff. The defendants refused. The plaintiff commenced this action by service of process on September 21, 2006.
Subsequently, the defendants authorized their attorney to serve the plaintiff with a notice to quit the premises at 34 North Coe Lane. However, the defendants never pursued an action to evict the plaintiff.
In October 2006, the defendants withdrew $10,000 from the large checking account and used the monies to pay their attorney. In May 2007, they transferred $20,000 from the CD to the large account and withdrew another $10,000 from the large account in August 2007 to pay additional monies to their attorney.
There are three assets in issue: the home at 34 North Coe Lane, the large account held jointly by the defendants and the CD held jointly by the defendants. While the plaintiff treats the real and personal property similarly in much of her brief, the court finds it helpful to address each asset individually.
II
With respect to the home, the plaintiff seeks either a reconveyance or imposition of a constructive trust. Before addressing whether the plaintiff has proven her entitlement to that remedy, the court must address an evidentiary objection raised by the defendants at trial, albeit not addressed in their brief.
A.
At trial, the plaintiff testified on direct examination:
I think that I told Carol and it could be Connie because they were always together, but I told them that I would like very much to sign the house, you know, and my family, Connie, because she is my God child, and Carol because she is the older one, you know, because they were very good to me and I figured, well, they will take care of me, and my nephew Ronald, there were three of them that I had to put down.
Attorney Thomas, the plaintiff's attorney, then asked: "Now, in your mind when were they going to get the house, when was it going to be theirs?" Before the plaintiff was able to complete her answer, the defendants' attorney, Eugene Mucci, objected, and the following exchange occurred between counsel and the court:
Mr. Micci: I object, I object, Your Honor, the deeds are in evidence, they are fully integrated documents, they speak for themselves, there is no qualification, or reservation, the documents speaks for themselves, so, I don't think the witness can testify what her intention is provided in the documents as presented.
Mr. Thomas: Your Honor, I believe in an especially trust situation, this is her understanding and her age is a very significant thing to take into account. Certainly, there are deeds in evidence, but I think it's very important for the Court to understand what her understanding was.
There is, also, in evidence, Your Honor, the document that is the will drawn up two years almost after these deeds in which she was disposing of the property, the real property, in the will, so, I was just trying to supplement that as to what her understanding was.
Mr. Micci: If I may, Your Honor, a constructive trust situation, a constructive trust is a remedy, it has nothing to do with is import on the evidence, the document speaks for itself, it is fully integrated without qualification.
The Court: I am not going to rule on the substantive issue . . . I hear you and I understand the claim. I am going to let the testimony in and I will address the substantive issue as to whether it can be considered or not since there are deeds here, I will address that in a written decision, but I am just taking testimony.
Mr. Micci: Very well.
Practice Book § 5-2 provides:
Any party intending to raise any question of law which may be the subject of an appeal must either state the question distinctly to the judicial authority in a written trial brief under Section 5-1 or state the question distinctly to the judicial authority on the record before such party's closing argument and within sufficient time to give the opposing counsel an opportunity to discuss the question. If the party fails to do this, the judicial authority will be under no obligation to decide the question.
The defendants distinctly stated the question of law during the presentation of evidence, and the court committed itself to deciding the issue "in a written decision." Although neither side has addressed the issue in its post-trial briefs, the issue is properly before the court.
The court also observes that the statute of frauds need not be specically pleaded. Practice Book § 10-50. See E. Paul Kovacs Co. v. Blumgarten, 150 Conn. 8, 11, 183 A.2d 844 (1962); McMahon v. Bryant Electric Co., 121 Conn. 397, 403, 185 A. 181 (1936).
The court understands the defendants' objection to be based on the statute of frauds. In Connecticut, the rule is "that property absolutely conveyed cannot be shown to be subject to an express trust by reason of a parol agreement to that effect." Worobey v. Sibieth, 136 Conn. 352, 355, 71 A.2d 80 (1949). The rule is grounded in the statute of frauds, codified in General Statutes § 52-550. Hieble v. Hieble, 164 Conn. 56, 59, 316 A.2d 777 (1972). In this jurisdiction, however, the statute of frauds does not apply to trusts arising by operation of law. Id. "Within this category fall constructive trusts . . ." Worobey v. Sibieth, supra, 136 Conn. 355-56. Insofar as the plaintiff seeks equitable relief, including the imposition of a constructive trust on 34 North Coe Lane, the court may consider the plaintiff's parol evidence.
General Statutes § 52-550 provides:
(a) No civil action may be maintained in the following cases unless the agreement, or a memorandum of the agreement, is made in writing and signed by the party, or the agent of the party, to be charged: (1) Upon any agreement to charge any executor or administrator, upon a special promise to answer damages out of his own property; (2) against any person upon any special promise to answer for the debt, default or miscarriage of another; (3) upon any agreement made upon consideration of marriage; (4) upon any agreement for the sale of real property or any interest in or concerning real property; (5) upon any agreement that is not to be performed within one year from the making thereof; or (6) upon any agreement for a loan in an amount which exceeds fifty thousand dollars.
(b) This section shall not apply to parol agreements for hiring or leasing real property, or any interest therein, or one year or less, in pursuance of which the leased premises have been or are actually occupied by the lessee, or any person claiming under him, during any part of the term.
B.
The plaintiff alleges that she executed the quitclaim deed transferring her home to Constance and Carol, and to her nephew, Ronald Ritchie, on the understanding that "they would hold such property on her behalf and for her benefit." The plaintiff further alleges that a confidential relationship existed between her and the defendants. The plaintiff claims that Carol and Constance have violated their understanding with her. The plaintiff seeks a reconveyance of the property or other equitable relief, including the imposition of a constructive trust on the property.
"[A] constructive trust arises contrary to intention and in invitum, against one who, by fraud, actual or constructive, by duress or abuse of confidence, by commission of wrong, or by any form of unconscionable conduct, artifice, concealment, or questionable means, or who in any way against equity and good conscience, either has obtained or holds the legal right to property which he ought not, in equity and good conscience, hold and enjoy." (Internal quotation marks omitted.) Aetna Life Casualty Co. v. Union Trust Co., 230 Conn. 779, 791, 646 A.2d 799 (1994). "[W]here there is a transaction, contract, or transfer between persons in a confidential or fiduciary relationship, and where the dominant party is the beneficiary of the transaction, contract, or transfer . . . the burden shifts to the fiduciary to prove fair dealing." (Internal quotation marks omitted.) Barber v. Skip Barber Racing School, LLC, 106 Conn.App. 59, 76, 940 A.2d 878 (2008). "Furthermore, the standard of proof for establishing fair dealing is not the ordinary standard of fair preponderance of the evidence, but requires proof either by clear and convincing evidence, clear and satisfactory evidence or clear, convincing and unequivocal evidence." Dunham v. Dunham, 204 Conn. 303, 322-23, 528 A.2d 1123 (1987), overruled in part on other grounds by Santopietro v. New Haven, 239 Conn. 207, 213 n. 8, 682 A.2d 106 (1996). "The clear and convincing standard of proof is substantially greater than the usual civil standard of [proof by] a preponderance of the evidence, but less than the highest legal standard of proof beyond a reasonable doubt. It is sustained if the evidence induces in the mind of the trier a reasonable belief that the facts asserted are highly probably true, that the probability that they are true or exist is substantially greater than the probability that they are false or do not exist." (Emphasis in original; internal quotation marks omitted.) Miller v. Commissioner of Correction, 242 Conn. 745, 794, 700 A.2d 1108 (1997).
The Supreme Court "broadly has stated that [a] fiduciary or confidential relationship is characterized by a unique degree of trust and confidence between the parties, one of whom has superior knowledge, skill or expertise and is under a duty to represent the interests of the other . . . The superior position of the fiduciary or dominant party affords him great opportunity for abuse of the confidence reposed in him . . . [The court has] not, however, defined that relationship in precise detail and in such a manner as to exclude new situations, choosing instead to leave the bars down for situations in which there is a justifiable trust confided on one side and a resulting superiority and influence on the other." (Citation omitted; emphasis added; internal quotation marks omitted.) Falls Church Group, Ltd. v. Tyler, Cooper Alcorn, LLP, 281 Conn. 84, 108, 912 A.2d 1019 (2007). The court has "noted factors to consider, such as whether one party had superior knowledge or skill, whether one party undertook to act primarily for the benefit of the other, and whether the plaintiff was lacking in mental acuity, business intelligence or knowledge of the basic principles involved." Mystic Color Lab, Inc. v. Auctions Worldwide, LLC, CT Page 16143 284 Conn. 408, 415 n. 10, 934 A.2d 227 (2007).
"In the seminal cases in which [the] court has recognized the existence of a fiduciary relationship, the fiduciary was either in a dominant position, thereby creating a relationship of dependency, or was under a specific duty to act for the benefit of another." Hi-Ho Tower, Inc. v. Com-Tronics, Inc., 255 Conn. 20, 38, 761 A.2d 1268 (2000). "In the cases in which [the] court has, as a matter of law, refused to recognize a fiduciary relationship, the parties were either dealing at arm's length, thereby lacking a relationship of dominance and dependence, or the parties were not engaged in a relationship of special trust and confidence." Id., 39; see also DeMorais v. Wisniowski, 81 Conn.App. 595, 606-08, 841 A.2d 226, cert. denied, 268 Conn. 923, 848 A.2d 472 (2004).
With respect to the plaintiff's quitclaim of her home to Carol and Constance and to Ronald Ritchie, the court cannot impute any special relationship that Colleen had with the other two defendants. The rule is that "the special or confidential relationship must be between the transferor and transferee . . ." Gulack v. Gulack, 30 Conn.App. 305, 311, 620 A.2d 181 (1993). Colleen was not a transferee of the 1999 quitclaim deed. Though the plaintiff subsequently conveyed an interest in the home to her, using Attorney Thomas Condon, the court finds by clear and convincing evidence that this conveyance was the product of fair dealing.
As Carol testified, the plaintiff, who was childless, considered her nieces and nephews, especially Carol and Constance, as her children. While a parent and child relationship is not in and of itself a fiduciary one, it does generate a "natural inclination to repose great confidence and trust." Cohen v. Cohen, [ 182 Conn. 193, 203, 438 A.2d 55 (1980)], quoting Hieble v. Hieble, 164 Conn. 56, 61, 316 A.2d 777 (1972).
Filosi v. Hawkins, 1 Conn.App. 634, 639, 474 A.2d 1261 (1984); see Giulietti v. Giulietti, Superior Court, judicial district of New Britain, Docket No. X03 CV 98 0492096 (December 16, 1999, Kremski, J.T.R.), aff'd, 65 Conn.App. 813, 784 A.2d 905, cert. denied, 258 Conn. 946, 788 A.2d 95 (2001). Carol and Constance provided companionship to the plaintiff, assisted her with errands, brought her to medical appointments and funerals, purchased household items for her, attended to her when she was infirm, helped her maintain her home and threw her birthday parties.
Furthermore, at the time she executed the quitclaim deed to Carol, Constance and Ronald Ritchie in December 1999, the plaintiff was eighty-fourth and one-half years of age and legally blind. Advanced age and the health of a donor are relevant considerations in the determination of a special relationship. See Berty v. Gorelick, Superior Court, judicial district of Fairfield, Docket No. CV 93 307939 (August 6, 1996, Grogins, J.), aff'd, 59 Conn.App. 62, 66, 756 A.2d 856 (2000); see also Treffinger v. Sterling, 269 Md. 356, 305 A.2d 829 (1973); Van Cleave v. Estate of Fairchild, 950 So.2d 1047, 1052 (Miss.App. 2007); Richmond v. Christian, 555 S.W.2d 105, 107 (Tenn. 1977). The plaintiff's diminished eyesight prevented her from reading without a magnifying glass and prevented her from driving. She could read some things but was dependent on others for reading some documents to her and for her transportation. Contrary to the version of events advanced by Carol and Constance, the court finds that they steered the plaintiff to the attorney of their choice, Attorney Thomas Condon, drove the plaintiff to his office, and were present with the plaintiff and Attorney Condon during his discussion with the plaintiff that included the subject of the plaintiff retaining a life estate and were present for the execution of the quitclaim deed. The court finds that a confidential relationship existed between the plaintiff and her nieces, Carol Heffernan and Constance Lieder.
General Statutes § 10-294a provides:
For the purposes of this chapter [chapter 174 of the General Statutes, Education of the Legally Blind]: (a) A person is legally blind if such person's central visual acuity does not exceed 20/200 in the better eye with correcting lenses, or if such person's visual acuity is greater than 20/200 but is accompanied by a limitation in the fields of vision such that the widest diameter of the visual field subtends an angle no greater ban twenty degrees; (b) A person has impaired vision if such person's central visual acuity does not exceed 20/70 in the better eye with correcting lenses.
Whether there was a confidential relationship between the plaintiff and the defendants is a question of fact. Crane v. Hartford-Connecticut Trust Co, 11 Conn. 313, 315, 149 A. 782 (1930). The plaintiff testified that there was no confidential relationship between her and the defendants. The court, however, does not consider the plaintiff's statement to be a judicial admission. "Judicial admissions are voluntary and knowing concessions of fact by a party or a party's attorney occurring during judicial proceedings." (Internal quotation marks omitted.) Macy v. Lucas, 72 Conn.App. 142, 153, 804 A.2d 97, cert. denied, 262 Conn. 905, 810 A.2d 272 (2002). "It does not follow that the testimony of a party has invariably, and under all circumstances, the conclusive character of a judicial admission such as to require the court to find in accordance therewith, and contrary to the actual facts as established by other credible evidence. Unless it amounts to such a stipulation or waiver as to have the force of a judicial admission, the testimony of a party to a fact is ordinarily no more conclusive upon him than the evidence given by any other witness; and it is the duty of the court or jury to determine the fact not alone from the testimony given by the party but from all the evidence in the case . . . Where it is doubtful if the party to the action, whether because of mental impairment or imperfect knowledge of English, comprehends his own testimony, or it is so confused, uncertain or contradictory as not to constitute an unequivocal admission of fact, the court is not precluded from considering the testimony of other witnesses and deciding the case in accordance with the actual facts as they might appear from all the evidence produced." (Citation omitted; internal quotation marks omitted.) King v. Spencer, 115 Conn. 201, 204-05, 161 A. 103 (1932).
The plaintiff's statement that she did not have a confidential relationship with the defendants was not a knowing admission. The plaintiff was asked the conclusory question as to whether she had a confidential relationship with each of the defendants. She gave a conclusory answer not knowing the legal test or such a relationship. On the other hand, she said that she trusted the defendants and testified to facts that would give rise to a confidential relationship. Her attorney argued orally and in the plaintiff's brief that there was such a relationship and that it is supported by the evidence. In the absence of any showing that this ninety-three year old plaintiff understood what the law comprehends a confidential relationship to be, the court does not treat her conclusory statement as a legal admission.
Unquestionably, Colleen had a confidential relationship with the plaintiff as well. Colleen had promised Charles Jarvis that she would take care of the plaintiff's finances. She kept her word. She counseled the plaintiff about how she could earn more interest on her money. She advised the plaintiff and the plaintiff trusted her. She discussed the financial requirements for Title XIX eligibility, and the necessity of removing assets from the plaintiff's name to do so. She not only designed the plan whereby the defendants acquired the plaintiff's liquid funds, she participated in the execution of the plan. Moreover, she continued to advise the plaintiff into 2005, and periodically transferred funds from the small account to the large account. At all times, she acted in concert with Carol and Constance. Given her role as the educated and sophisticated financial adviser, as well as the beloved grandniece, Colleen clearly had a confidential relationship with the plaintiff. See Gager v. Mathewson, 93 Conn. 539, 544, 107 A. 1 (1919) (business advisers occupy fiduciary relation to person being advised). Thus, all three defendants had a confidential relationship with the plaintiff.
Accordingly, the burden shifts to the defendants to prove fair dealing; Barber v. Skip Barber Racing School, LLC, supra, 106 Conn.App. 76; and to prove it by clear and convincing evidence. Dunham v. Dunham, supra, 204 Conn. 322-23.
On the one hand, the defendants not only were the natural objects of the plaintiff's bounty, that is, her heirs at law; Page v. Phelps, 108 Conn. 572, 585, 143 A. 890 (1928); they were her closest relatives and had done much for her. That the plaintiff quitclaimed her entire interest to the defendants, as well as to Ronald Ritchie, is not so conclusively suspect in light of her close and confidential relationship with them, the parties' understanding that the plaintiff would continue to live in the home as long as she could and the plaintiff's mixed motives in conveying her home. She not only sought to reward the grantees for their love, affection and care but also, despite her denials at trial, to qualify for Title XIX if she required long-term nursing home care in the future, without having to "spend down" her assets. See generally Ahern v. Thomas, 248 Conn. 708, 713-17, 733 A.2d 756 (1999). The plaintiff herself testified that she conveyed her home to Carol, Constance and Ronald because "they were very good to me and they will take care of me." On the other hand, as the court has observed, Constance and Carol steered the plaintiff to Attorney Thomas Condon, whose son Kevin later represented them in a meeting with the plaintiff when the relationship between aunt and nieces had become adversarial. Also, Constance and Carol were in the room when the plaintiff consulted with Attorney Thomas Condon to discuss the subject of retaining a life estate and when she executed the quitclaim deed.
The so-called fiduciary rule, which includes confidential relationships, "works independently of the question whether there was fraud or whether there was good intention" on the part of the beneficiary of a gift, transfer or conveyance. Mallory v. Mallory Wheeler Co., 61 Conn. 131, 138, 23 A. 708 (1891); accord Murphy v. Wakelee, 247 Conn. 396, 402, 721 A.2d 1181 (1998).
The Supreme Court has acknowledged "[t]he legislative concern that the medicaid program not be used as an estate planning tool. The medicaid program would be at fiscal risk if individuals were permitted to preserve assets for their heirs while receiving medicaid benefits from the state." Forsyth v. Rowe, 226 Conn. 818, 828, 629 A.2d 379 (1993). Nonetheless, both Colleen and the plaintiff were concerned with shielding the latter's assets from Title XIX exposure.
However, in 2001, when Ronald Ritchie conveyed his interest in the home back to the plaintiff, the plaintiff again quitclaimed her interest in the home to Ronald Ritchie and Colleen, without retaining any interest. There was no evidence that any of the defendants sought to influence the plaintiff at this time. The court finds by clear and convincing evidence that the defendants have sustained their burden of proving fair dealing in connection with the plaintiff's conveyance to them of her home. The plaintiff conveyed fee simple title to Constance and Carol in 1999 and to Colleen (as well as Ronald Ritchie) in June 2001, without retaining a life estate, not because of any influence of the defendants, but because that is what she wanted to do.
C.
This finding does not end the matter. The burden now returns to the plaintiff to prove the allegations of her complaint. The plaintiff alleges in her complaint that she quitclaimed her home to the defendants "with all parties understanding that [they] would hold such property on her behalf and for her benefit." In effect, the plaintiff claims that there was an implied understanding — that is, an agreement — among the parties that she would continue to live in the house without paying rent for the rest of her life.
Where a donee who by deed has received realty under an oral promise to hold it for the benefit of the donor refuses to perform his promise, courts will impose a constructive trust where a confidential relationship exists between donor and donee. Hieble v. Hieble, supra, 164 Conn. 60. The plaintiff does not claim, nor is there evidence of, an express oral promise by the defendants. But "[c]ontracts may be express or implied. These terms . . . do not denote different kinds of contracts, but have reference to the evidence by which the agreement between the parties is shown. If the agreement is shown by the direct words of the parties, spoken or written, the contract is said to be an express one. But if such agreement can only be shown by the acts and conduct of the parties, interpreted in the light of the subject matter and of the surrounding circumstances, then the contract is an implied one. The plaintiffs' complaint does not allege any direct words of promise by the defendant[s] . . . The question then is — Do the acts and conduct of the parties show such a promise?" Skelly v. Bristol Savings Bank, 63 Conn. 83, 87, 26 A. 474 (1893).
Beyond any question, there was such an implied promise between the plaintiff, Carol and Constance with respect to the 1999 quitclaim conveyance. That the plaintiff also had other motives for conveying her house to them does not undermine this finding. The plaintiff was 85 1/2 years of age, legally blind, had recently lost her husband of fifty-eight years and was childless. It is fantastic to suggest that at her stage and condition of life she intended to risk becoming homeless. See Mitchell v. Mitchell, Superior Court, judicial district of Danbury, Docket No. 302388 (February 11, 1992, Fuller, J.) ( 7 C.S.C.R. 315) [ 6 Conn. L. Rptr. 599] ("It is not logical that the plaintiff, concerned about his future, would voluntarily divest himself of all his assets without some assurances that he would be taken care in the future by his children and have a place to live"); see also Sekelsky v. Sekelsky, Docket No. 12109/01, 2005 N.Y. Slip Op. 52280 (N.Y.Sup. October 18, 2005) ("In light of the elder Mr. Sekelsky's financial limitations, where was he to live after he had deeded over his sole residence to his son? . . . [T]he transfer of the property did not garner him any ready cash with which to purchase another property. The only logical and just inference is that the defendant was to receive fee simple without any immediate financial cost to him in return for his father's ability to continue residing at the [residence]"). Her nieces, Constance and Carol, middle-aged women she had known all their lives, were her closest relatives and had catered to her for some time. "In confidential family relationships, mutual understanding does not always depend upon words expressly uttered . . ." Djamoos v. Djamoos, 545 N.Y.S.2d 596, 597, 153 A.D.2d 871 (1989). "Indeed, silence may evidence a tacit promise." Dobbs v. Dobbs, United States District Court, Docket No. 06 CV 6104 (S.D.N.Y. August 14, 2008). Moreover, Carol confirmed in her testimony that there was such an understanding. Finally, it is telling that, in fact, the plaintiff has continued to live in the house, rent-free, since 1999. "In the context of constructive trusts, `a promise may be implied or inferred from the very transaction itself.' Sharp v. Kosmalski, [40 N.Y.2d 119, 122,] 351 N.E.2d 721, 723, [ 386 N.Y.S.2d 72] (N.Y. 1976)." Id.; see Sekelsky v. Sekelsky, supra, 2005 N.Y. Slip Op. 52280 ("As proof of the tacit understanding between the parties, the evidence is clear that the parties continued to reside together without the elder Mr. Sekelsky making any alternative housing arrangements"). The acts and conduct of the plaintiff, Carol Heffernan and Constance Lieder show a promise by these defendants to allow the plaintiff to occupy the house in which she has lived since 1970 as if she still retained the right to do so.
While the defendants authorized their attorney to threaten the plaintiff with eviction after the parties' June 2006 confrontation at the home, Constance Lieder testified that "[i]t was not eviction. We have to get a new roof put on the house, and in order for us to keep the insurance, it was advised that the whole back of the house is not good and she is not going to stay there and listen to that, so if she had to move out for a few days while the roof was getting done."
Although she did not acquire her interest in 34 North Coe Lane until June 7, 2001, eighteen months after her mother and aunt had done so, Colleen also had this understanding with the plaintiff. Colleen was the plaintiff's trusted financial adviser and the architect of the scheme whereby the plaintiff's assets, real and personal, were taken out of her name. She knew that the plaintiff wanted use of these assets during her life. At all times, the defendants acted in concert with each other. Although there is no direct evidence that Colleen instigated the 2001 transfer of the one-third interest in 34 North Coe Lane from the plaintiff to herself and Ronald Ritchie, she was well aware of the understanding that the plaintiff would live in the home as long as she was able to do so and acquiesced in that agreement.
"[T]he promise to do a future act, coupled with a present intention not to fulfill the promise, will constitute a fraudulent promise. When one promises another to do something in the future as a consideration or inducement to him to do something, he impliedly asserts a present intent to carry out his promise." Sallies v. Johnson, 85 Conn. 77, 80, 81 A. 974 (1911). None of the defendants took title to the property with the intention to dispossess the plaintiff. Compare Dowd v. Tucker, 41 Conn. 197 (1874). However, "[i]t is unnecessary to find fraudulent intent for the imposition of a constructive trust. Whether there be fraud at the inception or a repudiation afterward, the whole significance of such cases lies in the unjust enrichment of the grantee through his unconscionable retention of the trust res." Hieble v. Hieble, supra, 164 Conn. 63. To allow the defendants to dispossess the plaintiff of her home, and thereby profit from a leasing of the property, would unjustly enrich the defendants. See Smith v. Planning Zoning Board, 203 Conn. 317, 323, 524 A.2d 1128 (1987) ("By the common law, a tenant for life, where he is under no restriction in the deed by which he holds, could use the land in the same manner as the holder in fee. Every life tenant had the right to the undisturbed possession of the land and to the income and profits derived from such land"). "The imposition of a constructive trust by equity is a remedial device designed to prevent unjust enrichment." Cohen v. Cohen, 182 Conn. 193, 203, 438 A.2d 55 (1980).
"There are numerous cases to the effect that, where at the time of the transfer the transferee was in a confidential relation to the transferor and the transferor relied on his oral promise to reconvey the land, he is chargeable as constructive trustee for the transferor. In these cases it is held that the constructive trust will be imposed even though at the time when he acquired the property the transferee intended to perform his promise and was not therefore guilty of fraud in acquiring it, and even though the transferee did not take improper advantage of the confidential relation in procuring the transfer and was not therefore guilty of using undue influence. The abuse of the confidential relation in these cases consists merely in his failure to perform his promise. A constructive trust is imposed even though there is no fiduciary relation such as that between attorney and client, principal and agent, trustee and beneficiary; it is sufficient that there is a family relationship or other personal relationship of such a character that the transferor is justified in believing that the transferee will act in his interest." 1 W. Fratcher, Scott on Trusts (4th Ed. 1987) § 44.2, pp. 451-58. "[I]t is difficult to see why a constructive trust should not be imposed on the ground of the existence of a confidential relation in every case where land is transferred upon an oral trust for the transferor, since the transfer would never be made except for the confidence that the transferor places in the transferee." Id., pp. 458-59. It is also difficult to see why such a trust ought not to be imposed where land is transferred based on an implied understanding among family members. "Courts may use the equitable device of a constructive trust to remedy the unjust enrichment which results from not disposing of property as promised after the promise induced someone with whom the promisor shared a confidential relationship to transfer the property to the promisor." Starzec v. Kida, 183 Conn. 41, 49, 438 A.2d 1157 (1981). The defendants have refused to acknowledge the plaintiff's right to live in the home as long as she is able to do so, and by threatening to serve her with a notice to quit, have undermined the security of the ninety-three year old plaintiff.
Ronald Ritchie retains an interest in the property. Ronald Ritchie is not a party to the litigation between the plaintiff and her nieces and grandniece, and testified for his great aunt. Connecticut law is unsettled as to whether all owners of real estate must join in a notice to quit and, presumably, in the ensuing summary process action. See Toler v. Grant, Superior Court, judicial district of Hartford, Docket No. 144942 (April 2, 2008, Wiese, J.) ( 45 Conn. L. Rptr. 282), and cases collected and discussed therein.
As observed supra, a life estate is a valuable interest in real property: a freehold. Smith v. Planning Zoning Board, 3 Conn.App. 550, 553, 490 A.2d 539 (1985), aff'd, 203 Conn. 317, 524 A.2d 1128 (1987). "It is held that a life estate in land is real property, enabling the owner to sell or encumber it, and, if it be nonexempt property, it may be attached for the owner's debts or levied upon by execution and sold." (Internal quotation marks omitted.) Id. Were the defendants to dispossess the plaintiff of her life estate, they would be unjustly enriched by rents and profits accruing during the remainder of the plaintiff's life, to which they are not entitled. See Humphrey v. Gerard, 83 Conn. 346, 77 A. 65 (1910). Under the common law, "[e]very life tenant had the right to the undisturbed possession of the land and to the income and profits derived from such land." Smith v. Planning Zoning Board, supra, 203 Conn. 323.
D. CT Page 16149
Turning to what remedy is most appropriate, there are some authorities that hold that it is inappropriate to impose a constructive trust to convey a life estate. See Schroeder v. Buchholz, 2001 N.D. 36, 622 N.W.2d 202, 208-09 (2001). Other authorities disagree. For example, in McCarley v. Smith, 81 Ark.App. 438, 440, 105 S.W.3d 387, 389 (2003), the court held that "[i]t would be permissible, in a land-transfer case, for the court to impose a constructive trust and grant relief in the form of a life estate if there was clear and convincing evidence that the land was deeded with the intention that the conveyor would be allowed to live on the land for the rest of her life. This was done in Brasel v. Brasel, 313 Ark. 337, 854 S.W.2d 346 (1993).
"The imposition of a constructive trust is an equitable remedy, the granting of which is within the equitable discretion of the court." Sullivan v. Delisa, 101 Conn.App. 605, 616, 923 A.2d 760, cert. denied, 283 Conn. 908, 928 A.2d 540 (2007). "The governing motive of equity in the administration of its remedial system is to grant full relief, and to adjust in the one suit the rights and duties of all the parties, which really grow out of or are connected with the subject-matter of that suit . . . 1 J. Pomeroy, [Equity Jurisprudence (5th Ed.) . . . Equity regards as done what ought to be done . . . or which ought to have been done." (Citations omitted; internal quotation marks omitted.) Natural Harmony, Inc. v. Normand, 211 Conn. 145, 149, 558 A.2d 231 (1989). "For that reason, equitable remedies are not bound by formula but are molded to the needs of justice." Montanaro Bros. Builders, Inc. v. Snow, 4 Conn.App. 46, 54, 492 A.2d 223 (1985).
After weighing the equities, the court finds that the appropriate equitable remedy — equitable to all parties — and in light of the other relief granted by the court, is a constructive trust whereby the defendants are ordered to convey a life estate in 34 North Coe Lane, Ansonia, Connecticut, to the plaintiff.
III
The large account and the certificates of deposit are in the names of all three defendants, each of whom participated in the scheme to bring that about. The defendants deny that these monies belong to the plaintiff.
The court has found in part II B that the defendants each had a confidential relationship with the plaintiff. Therefore, the defendants have the burden of proving fair dealing with the plaintiff by clear and convincing evidence. With respect to the CD they have not done so. While the plaintiff desired to earn more interest on her money and, despite her denials, wanted to shield her assets from Title XIX exposure in the event she suffered an illness requiring long-term care, she did not know that the monies she and her husband had saved, including the monies in the "education account," had been converted by the defendants into a CD in their names and over which they exercised complete dominion and control.
With respect to the large account there are several factors to consider. First, the funds that were transferred into the large account were used by the defendants exclusively for the support of the plaintiff, until the institution of this lawsuit. This support included payment of taxes, utilities, repairs to the house and heating. The defendants never used these funds, which they claim were theirs, or the monies from the CD, for their own expenses. Thus, the defendants treated the funds as if they belonged to the plaintiff. The defendants' claim that these monies were theirs and that they supported the plaintiff out of the goodness of their hearts — and coincidentally did so out of these accounts which they otherwise did not use — is not persuasive.
Second, the memoranda that Colleen prepared and had Jessica Hyder sign on three separate occasions — two of which were witnessed by Carol and Constance — declare that the monies given to Jessica from the large account belonged to the plaintiff. Colleen claim that the plaintiff wanted the defendants to pay Jessica's tuition out of the large account and later be reimbursed by the plaintiff out of the proceeds of her annuity, to avoid adverse tax consequences and loss of interest, is not credible. That may have been the defendants' intent, and one they could have effectuated so long as they controlled the annuity, but the court is not persuaded that it was the plaintiff's intent.
Third, gift tax returns have never been filed, undermining the defendants' claim that the funds were gifts by the plaintiff to them.
Fourth, Colleen continued recording transactions in the same spiral ledger that Mr. Jarvis had used to record transactions out of the couple's checking account, a curious practice in light of the defendants' claim of ownership and one subtly suggestive that Colleen did not believe that the plaintiff had been divested of ownership of the account.
On the other hand, the plaintiff knew about the existence of the large account virtually from its inception. Colleen brought her the monthly statements and the plaintiff saw that the account was in the defendants' names. She never asked why their names were on the account. She also was aware that Colleen regularly transferred monies from their joint checking account to the large account.
In addition, when Attorney Hale consulted with the plaintiff in preparation for his drafting her will in 2002, the plaintiff mentioned to him that she had made a prior conveyance of funds to third persons. Attorney Hale did not recall whether the plaintiff stated to whom she had given this money. "The statements testified to by [Attorney Hale] were made by [the plaintiff] in the context of their attorney-client relationship. Statements made in the confines of the attorney-client relationship have a particular degree of reliability and trustworthiness. The client is presumed to be looking after her own interest by giving full and truthful information to her attorney." In re Sean H., 24 Conn.App. 135, 142, 586 A.2d 1171, cert. denied, 218 Conn. 904, 588 A.2d 1078 (1991).
The fact that the plaintiff, early on, saw that the account was in the defendants' names and did or said nothing about this practice is consistent with her desire to shield her assets from creditors and with the trust she reposed in Colleen. Viewed in the context of other evidence, the plaintiff's statement to Attorney Hale is consistent with the plaintiff's intent that the funds in this account, both principal and interest, be used for her support and the maintenance of her home during her life, and that at her death, the defendants could enjoy whatever was left; that is, any gift to the defendants was of a testamentary nature and a remainder. She did not intend — and the defendants' actions reflect that they recognized — that the plaintiff relinquish effective control of her monies, principal or interest, during her lifetime. The defendants were not entitled to present enjoyment of the monies. Harrison v. Belden, 26 Conn. 67, 73 (1857); see In re Campbell's Will, 307 N.Y. 29, 119 N.E.2d 577, 579 (1954). Therefore, the defendants were not entitled to claim otherwise and to withdraw monies from that account to pay their attorneys fees in this action. The defendants have not proven fair dealing by clear and convincing evidence.
IV
In the second count, the plaintiff claims that the defendant's actions constitute conversion. "The tort of [c]onversion occurs when one, without authorization, assumes and exercises ownership over property belonging to another, to the exclusion of the owner's rights . . . Thus, [c]onversion is some unauthorized act which deprives another of his property permanently or for an indefinite time; some unauthorized assumption and exercise of the powers of the owner to his harm. The essence of the wrong is that the property rights of the plaintiff have been dealt with in a manner adverse to him, inconsistent with his right of dominion and to his harm . . ." (Citation omitted; internal quotation marks omitted.) Deming v. Nationwide Mutual Ins. Co., 279 Conn. 745, 770, 905 A.2d 623 (2006).
The court finds that the defendants are liable for conversion of the accounts.
V
In the third count, the plaintiff alleges that the defendants' actions constitute statutory theft, for which she is entitled to treble damages. General Statutes § 52-564 provides: "Any person who steals any property of another, or knowingly receives and conceals stolen property, shall pay the owner treble his damages." "The elements that the plaintiffs must prove to obtain treble damages under the civil theft statute, § 52-564, are the same as the elements required to prove larceny, pursuant to General Statutes § 53a-119 . . . The elements of civil theft are also largely the same as the elements to prove the tort of conversion, but theft requires a plaintiff to prove the additional element of intent over and above what he or she must demonstrate to prove conversion . . . A person commits larceny when, with intent to deprive another of property or to appropriate the same to himself or a third person, he wrongfully takes, obtains or withholds such property from an owner . . . It must be shown that (1) there was an intent to do the act complained of, (2) the act was done wrongfully, and (3) the act was committed against an owner." (Citations omitted; internal quotation marks omitted.) Sullivan v. Delisa, supra, 101 Conn.App. 619-20; see Mystic Color Lab, Inc. v. Auctions Worldwide, LLC, supra, 284 Conn. 418-19 ("Statutory theft . . . requires an element over and above what is necessary to prove conversion, namely, that the defendant intentionally deprived the complaining party of his or her property"). The plaintiff must have proved these three elements by clear and convincing evidence. "[C]lear and convincing proof of the actions alleged is required in order to assess treble damages pursuant to § 52-564." Schaffer v. Lindy, 8 Conn.App. 96, 105, 511 A.2d 1022 (1986). "Clear and convincing proof is a demanding standard denot[ing] a degree of belief that lies between the belief that is required to find the truth or existence of the [fact in issue] in an ordinary civil action and the belief that is required to find guilt in a criminal prosecution . . . [The burden] is sustained if evidence induces in the mind of the trier a reasonable belief that the facts asserted are highly probably true, that the probability that they are true or exist is substantially greater than the probability that they are false or do not exist." (Internal quotation marks omitted.) Notopoulos v. Statewide Grievance Committee, 277 Conn. 218, 226, 890 A.2d 509, cert. denied, 127 S.Ct. 157, 166 L.Ed.2d 39 (2006). "It is clear that an award of treble damages is an extraordinary statutory remedy." Schaffer v. Lindy, supra, 8 Conn.App. 104.
The court concludes that the plaintiff has not proven by clear and convincing evidence that the defendants committed the tort of conversion and did so wrongfully. The court is troubled by the fact that the plaintiff very much desired to shield her assets in the event it ever became necessary to qualify for Title XIX benefits, and also wished to reward the defendants, especially Carol and Constance. Accordingly, the plaintiff is not entitled to treble damages pursuant to General Statutes § 52-564.
VI
The defendants have briefed two special defenses: laches and the statute of limitations.
A.
"Laches consists of an inexcusable delay which prejudices the defendant . . . First, there must have been a delay that was inexcusable, and, second, that delay must have prejudiced the defendant . . . A determination that a plaintiff has been guilty of laches is one of fact for the trier and not one that can be made by this court, unless the subordinate facts found make such a determination inevitable as a matter of law." (Citation omitted; internal quotation marks omitted.) Riscica v. Riscica, 101 Conn.App. 199, 207-08, 921 A.2d 633 (2007). "The mere lapse of time does not constitute laches . . . unless it results in prejudice to the defendant . . . as where, for example, the defendant is led to change his position with respect to the matter in question." (Citations omitted; internal quotation marks omitted.) Emerick v. Emerick, 28 Conn.App. 794, 804, 613 A.2d 1351, cert. denied, 224 Conn. 915, 617 A.2d 171 (1992).
With respect to the CD and title to the house, the defendants have proven neither element of laches. This action was brought the same year the plaintiff learned that the defendants denied she had any interest in either asset.
The same is true of the large checking account. Although the plaintiff was aware as early as 2000 or 2001 that there was such an account, and that it was in the names of the defendants, she was not aware that the defendants denied that she had equitable title to that account until 2006. The defendants have proven neither undue delay nor prejudice.
CT Page 16154
B.
The defendants also have asserted the defense of the statute of limitations. They argue that the plaintiff's claims are barred by General Statutes § 52-577. The plaintiff argues that the statute of limitations does not apply to claims for equitable relief, such as a constructive trust or unjust enrichment, that the statute was tolled by the continuing course of conduct of the defendants, with whom the plaintiff had a special or confidential relationship, and that the statute was tolled by the defendants' fraudulent concealment, pursuant to General Statutes § 52-595.The court agrees that the plaintiff's claims for equitable relief are not barred by the tort statute of limitations since "in an equitable proceeding, a court may provide a remedy even though the governing statute of limitations has expired, just as it has discretion to dismiss for laches an action initiated within the period of the statute." Dunham v. Dunham, supra, 204 Conn. 326.
The defendants have the burden of proving that the plaintiff's action is barred by the statute of limitations. Barreira Landscaping Masonry v. Frontier Ins. Co., 47 Conn.Sup. 99, 111, 779 A.2d 244 (2000) [ 29 Conn. L. Rptr. 188]; see Practice Book § 10-50 (statute of limitations is affirmative defense); Mercer Electric Mfg. Co. v. Connecticut Electric Mfg. Co., 87 Conn. 691, 697, 89 A. 909 (1914) (affirmative defenses must be proved by defendant).
Section 52-577 is an occurrence, as opposed to an accrual, statute that runs from "the date of the act or omission complained of." (Internal quotation marks omitted.) Fichera v. Mine Hill Corp., 207 Conn. 204, 212, 541 A.2d 472 (1988). "As the Connecticut Supreme Court concluded, the history of that legislative choice of language [in § 52-577] precludes any construction thereof delaying the start of the limitations period until the cause of action has accrued or the injury has occurred." (Internal quotation marks omitted.) Id.
Conversion occurs when one, without authorization, assumes and exercises a right of ownership of property belonging to another to the exclusion of the owner's rights. See Aetna Life Cas[ualty] Co. v. Union Trust Co., 230 Conn. 779, [790, 646 A.2d 799] (1994) . . . In a conversion action, "[t]he essence of the wrong is that the property rights of the [original owner] have been dealt with in a manner adverse to him, inconsistent with his right of dominion and to his harm." Coleman v. Francis, 102 Conn. 612, 615, [ 129 A. 718] (1925); see also [1] Restatement (Second), Torts § 222A [(1965)]. There are two classes of conversion. See Coleman[v. Francis, supra,] 102 Conn. 615. Thus, in order to determine whether the [plaintiff's] conversion claim is barred by the statute of limitations, the court must first decide which of those two types of conversion is alleged.
In the first class of conversion the possession is wrongful from the outset. See Epstein [ v. Automatic Enterprises, Inc., 6 Conn.App. 484, 488, 506 A.2d 158 (1986)]. Proof of the wrongful taking establishes the conversion; thus there is no need for a demand and a refusal for return of the property to establish the tort. See id. The statute of limitations for this type of conversion begins to run on the date the property was wrongfully taken. See Sterniak v. Mullins, [Superior Court, judicial district of New Britain, Docket No. CV 02 0516931 (September 18, 2003, Cohn, J.] (citing Hefferman v. Marine Midland Bank, N.A., 727 N.Y.S.2d 60, 62[, 283 A.D.2d 337] (N.Y.App. 2001)).
The second class of conversion occurs when the possession is originally rightful, but becomes wrongful as a result of: (1) a wrongful detention; (2) a wrongful use of the property; or (3) the exercise of an unauthorized dominion over the property. See Epstein [v. Automatic Enterprises, Inc., supra,] 6 Conn.App. 488. With regard to the first instance, where the original possession is authorized, but becomes wrongful when the property is detained without authorization, a conversion does not occur until the possessor refuses to return the property on demand. See id. Demand is only required in the "detention" scenario because by definition, a rightful possession cannot become a "detention" until a possessor fails to comply with a request to quit possession made by the rightful owner . . . In this type of conversion, the statute of limitations begins to run when the demand is refused. See id.
In the other two instances in the second class of conversion, either the wrongful use or the unauthorized dominion constitute the conversion and no demand for the return of the property is necessary. Thus, the statute of limitations in either case begins to run when a party, publicly or outwardly, exhibits wrongful use or unauthorized dominion over the property . . . see also Songbyrd, Inc. v. Grossman, 206 F.3d 172, 183 (2d Cir. 2000) (stating that when a rightful possessor of property uses it as his own, the "character" of possession changes and a conversion occurs). Whether the rightful owner had actual knowledge of the conversion is of no consequence for purposes of the statute of limitations. See Cablevision of Connecticut v. Sollitto, 109 F.Sup.2d 84, 85 (D.Conn. 2000); see also Fichera v. Mine Hill Corp., 207 Conn. 204, 212-13[, 541 A.2d 472] (1988) ("The three year limitation period of § 52-577 begins with the date of the act or omission complained of, not the date when the plaintiff first discovers an injury").
Stuart Sons, L.P. v. Curtis Publishing Co., 456 F.Sup.2d 336, 343-44 (D.Conn. 2006).
The court finds that the defendants' conversion of the large account is of the second class of conversion. That is, the plaintiff either authorized the creation of that account or acquiesced in its creation in the defendants' names soon after it was established. The defendants' possession of the large account did not become wrongful until 2006, when they refused turn it over to the plaintiff in the meeting that included the parties' attorneys. Therefore, with respect to the large account, the defendants' statute of limitations defense fails.
The CD is within the first class of conversion. As discussed supra, while the plaintiff desired to earn more interest on her money and, despite her denials, wanted to shield her assets from creditors in the event illness requiring long-term care, there is no evidence that she knew of the existence of the CD in the defendants' names and over which they exercised complete dominion and control to her exclusion. For this reason, the court finds that the defendants' possession was wrongful from the outset, that is, from September 30, 2000. Since this action was commenced more than three years from that date, it is barred unless the statute of limitations is tolled by a recognized common-law or statutory exception.
The plaintiff trusted her nieces and grandniece and was dependent on them. At all times, Colleen was in control of the plaintiff's finances. Moreover, she acted in concert with Carol and Constance. She liquidated the plaintiff's existing accounts, in particularly the education account, and, with Constance and Carol, purchased the CD. The defendants had an obligation to inform the plaintiff in 2000 that the CD had been purchased in their names and that they claimed full ownership of the CD. They did not. The plaintiff did not learn that the CD was purchased in the defendants' names or that the defendants claimed ownership of it until 2006. The statute of limitations is therefore tolled under such cases as Vanliner Ins. Co. v. Fay, 98 Conn.App. 125, 139-42, 907 A.2d 1220 (2006); Giulietti v. Giulietti, supra, 65 Conn.App. 833-36; McDonald v. Hartford Trust Co., 104 Conn. 169, 189, 132 A. 902 (1926); Rosetti v. Amenta, Superior Court, judicial district of Hartford, Docket No. CV 95 0705787 (August 8, 1997, Satter, J.]; Price v. Price, Superior Court, judicial district of New Haven, Docket No. CV 89 0289076 (May 1, 1993, Axelrod, J.); Castellano v. Mongillo, Superior Court, judicial district of New Haven, Docket No. 296846 (December 23, 1992, Hodgson, J.).
VII
Judgment shall enter for the plaintiff on counts one and two. Judgment shall enter for the defendants on count three. The court orders the following relief:
1. A constructive trust is imposed on the defendants' interest in 34 North Coe Lane, Ansonia, Connecticut, such that the defendants are ordered to convey to the plaintiff a life estate in that property.
2. The defendants are ordered to transfer to the plaintiff the certificate of deposit or the proceeds thereof.
3. The defendants are ordered to transfer to the plaintiff the Investment Account No 5235-9542, CAP Account No 8887986527 held by Wachovia Securities or the proceeds thereof.
4. Judgment is granted in favor of the plaintiff and against the defendants in the amount of $20,000 plus interest of $525.00.