Opinion
No. UWY-CV08-5008846S
June 3, 2009
MEMORANDUM OF DECISION
Factual Background
The decedent, Nicholas Lintgeris, married the defendant, Sharon Lintgeris, on September 25, 2004; Mr. Lintgeris died within two weeks of the marriage — on October 8, 2004. The couple had no children together; the decedent, however, had three children of prior marriages. Sharon Lintgeris was appointed Administrator of her late husband's estate on November 18, 2004; she filed an inventory but then filed no further accountings and so was removed as Administrator on April 9, 2007. In her place, William J. Ward was appointed Administrator of the Estate and he prosecutes this action. A hearing in damages was held on March 25, 2009, at the conclusion of which the parties requested they be permitted to file briefs on the calculation of damages and "the statutory theft claim" later to be discussed.
In his brief, the plaintiff has claimed the loss to the estate is $84,755.61 and seeks treble damages under § 52-564 as well as attorney fees.
The plaintiff has asserted four (4) counts as against the defendant. The First Count states a common-law action for conversion; it alleges the defendant's conduct in unauthorizedly using the funds and assets of the Estate constituted an assumption and exercise of rights over the plaintiff's assets to the exclusion of the plaintiff's rights, that a demand for return of the same had been made but was refused, and, thus, there was harm to the plaintiff. Count One, Paragraphs 12-15. The essence of the wrong in conversion is that the property rights of another have been dealt with in a manner adverse to the owner and inconsistent with his/her rights of dominion. Label Systems Corp. v. Aghamohammadi, 270 Conn. 291, 329 (2004). The term "owner" is one of flexible meaning; it is not confined to someone who has the absolute right in a chattel but also applies to someone who has possession and control thereof. Id.
Where there is a refusal to deliver up the property of another upon demand, there is conversion. Thus, a cause of action sounding in conversion must plead demand for return and a refusal. Moore v. Waterbury Tool Co., 124 Conn. 201, 211 (1938).
The Second Count alleges a cause of action for theft under Connecticut General Statutes § 53a-119 (Larceny). Pursuant to that statute, "[a] person commits larceny when, with intent to deprive another of property or to appropriate the same to himself/herself or a third person, he/she wrongfully takes, obtains or [withholds] such property from [the] owner." (Citations omitted; internal quotation marks omitted.) Suarez-Negrete v. Trotta, 47 Conn.App. 517, 520-21 (1998).
Count Three asserts the defendant's breach of fiduciary duty in that she removed property and funds without the authority or consent of the Naugatuck Probate Court and wasted the assets of the Estate.
Count Four re-asserts the facts alleged in prior counts and re-asserts as well a violation of Connecticut General Statute § 53a-119 (the gravamen of the Second Count) and a breach of fiduciary duty (the centerpiece of Count Three) without the assertion of any new allegations. Count Four claims a cause of action for reckless and wanton misconduct. Under this state's decisional law, "recklessness" requires "a conscious choice of a cause of action either with a knowledge of the serious danger to others involved or with knowledge of facts which would disclose the danger to any reasonable man, and the actor must recognize that his conduct involves a risk substantially greater . . . than that which is necessary to make his conduct negligent." Matthiessen v. Vanech, 266 Conn. 822, 830 (2003). "Wilful," "wanton," and "reckless" have been treated as synonymous. Id., at 832-33.
APPLICABLE LAW
"[U]nless otherwise defined or unless otherwise required by the context, the term `fiduciary' includes an executor, administrator, trustee, conservator or guardian." Connecticut General Statute § 45a-199. The fiduciary duty comprises two prongs: a duty of care and a duty of loyalty. While the duty of care requires that fiduciaries exercise their best care and judgment, the duty of loyalty derives from the prohibition against self-dealing that inheres in the fiduciary relationship. Saginaw Products Corp. v. Cavallo, superior court, judicial district of New Haven, Docket No. 326329 (August 11, 1994, Burns, J.), aff'd., 40 Conn.App. 771 (1996). An executrix has a fiduciary responsibility to maintain "an undivided loyalty to the estate." ( Ramsdell v. Union Trust Co., 202 Conn. 57, 65) and must diligently represent "the rights of the heirs and distributes and also those of creditors." Finnegan v. Laffontaine, 122 Conn. 561, 567 (1937). While executors and administrators are not trustees, "they occupy a position in many respects analogous . . . and many of the rules determining the powers and duties of trustees apply to them." Hall v. Meriden Trust Sales Deposit Co., 103 Conn. 226, 233 (1925). A trustee "must exclude all selfish interest and also all consideration of . . . third persons." (Internal quotation marks omitted.) Hall v. Schoenwetter, 239 Conn. 553, 559 (1996). "A trustee commits a breach of trust . . . even if he does the best he can . . . if his best is not good enough . . . His duty is to exercise such care and skill as a person of ordinary prudence would exercise and he is liable for a loss resulting in his failure to comply with this standard . . ." In re Matthew D., Court of Probate, district of Stafford (August 29, 2003, Hamer, T.) 17 Quinnipiac Probate L.J. 237). "The superior position of the fiduciary or dominant party affords him great opportunity for abuse of the confidence reposed in him." Cadle Co. v. D'Addario, 268 Conn. 441, 455 (2004). A trustee who co-mingles funds and assets and fails to keep adequate records or an accounting of the assets of a trust is liable for breach of fiduciary duty. See e.g., Howard v. MacDonald, 270 Conn. 111 (2004); the result is the same when the fiduciary self deals or fails to properly maintain Estate assets. See Hall v. Schoenwetter, 239 Conn. 553 (1996). "A fiduciary who makes improper payment is accountable . . . for sums so disbursed; good faith is no defense to that liability and, if restitution is not made voluntarily, it may be ordered . . ." McAuliffe v. Carlson, 386 F.Sup. 1245, rev'd on other grounds 520 F.2d. 1305 (1975); see also Elmendorf v. Poprocki, 155 Conn. 115 (1967). Where, as here, a breach of fiduciary duty is pled, the plaintiff has only the burden of proving the other party owed him/her a fiduciary duty. Once the plaintiff has demonstrated the existence of that duty, the burden is lifted from the plaintiff and placed on the fiduciary to prove his/her conduct was fair and equitable.
Though the plaintiff has not specifically pled a count in fraud, it is clear his shifting of the burden is equally applicable to a cause of action for breach of fiduciary duty. See Wieselman v. Hoeniger, 103 Conn.App. 591 n. 7 (2007). Additionally, the plaintiff has asserted a cause of action for theft under Connecticut General Statute § 53a-119 (Larceny) in Count Two. That statute requires the showing of an intent to deprive another of property or to appropriate the same to oneself or another.
Adjudication A. Estate Checking Account
The Administrator (hereinafter "Defendant") filed an Inventory with the Probate Court on March 31, 2005. Exhibit 1. It was incomplete in that it assigned no value to three vehicles (a `94 Ford Explorer, a `96 Chevrolet Lumina, and a `91 Ford Explorer); the Inventory was never amended. Listed among the assets was the decedent's sole interest in Naugatuck property listed as having a value of $175,000; also listed were an employee stock purchase plan, a motorcycle, and two accounts at Naugatuck Valley Savings and Loan (NVS L) (one a checking account and the other a savings account). The value of the Estate was listed at $89,524.57. Exhibit 2, the disbursement statement from the sale, showed net proceeds to the defendant in the amount of $60,594.40 after the mortgage, attorney fees, and other closing costs were paid. Within days of the closing, the defendant opened an Estate checking account in the amount of the net proceeds; as the Administrator of the Estate, she agreed she was the only one with access to the account and that it was she who opened it. Between November 16, 2005, and January 11, 2007, she made withdrawals in the amount of $17,623.02. She also testified to paying four telephone bills from money in this account during October and December of 2006 (two years after the decedent's death and unrelated to the Estate) in the sum of $1,116.29. The same exhibit shows Mrs. Lintgeris wrote checks for $23,237.68 on this account. On at least two of the days she wrote checks on this account (7/18/05 — $7,202.88; 7/15/05 — $855), she made deposits in the decedent's personal checking account (7/18/05 — $2,002.88; 7/15/05 — $836.90), but she testified to not recalling those transactions and could not therefore state what it is was done with the remainder of the monies withdrawn. These two checks (for $7,202.88 and $855) were written to herself. When removed as Administrator, all that remained of the $60,594.40 of the proceeds from the house sale was $18,417.41. The sum of $4,445.54 was withdrawn from the Estate account — appropriately — to repay a loan the decedent had (Exh. B). The plaintiff has asked $8,000 be returned from this account because "there is no indication Ms. Lintgeris paid the funeral home bill of $8,000." Brief at 8. The court finds to the contrary. The funeral home bill was sent to the defendant (Exh. A). Exhibit A clearly shows it was paid on October 18, 2004, though it references no check number and doesn't indicate who paid it. The decedent's sister — Mary Ricciardi — was the only other witness who testified and she did not testify to having paid the funeral bill. The defendant withdrew $8,000 from the Estate account on June 29, 2005. and she testified that she paid the bill "when he was buried." Tr., at 13. The date of the payment (within ten days of her husband's death) and the subsequent withdrawal of $8,000 from the Estate account persuades the court the defendant did in fact pay the bill and eight months later withdrew from the Estate account the amount she had paid the funeral home before she had been appointed Administrator and before an Estate account had been established. The shortfall in the proceeds from the house sale — for which there are no records and the defendant offers no reason — is $60,000 minus the amounts representing repayment of the decedent's loan and the funeral bill ($12,445.54) and the $18,417.41 remaining in the account when she was removed — is $29,137.05 for which the defendant is liable.
Plaintiff's brief, at p. 5, incorrectly states the sum is $16,623.01.
Plaintiff's indication of $23,537.42 is incorrect.
Testimony made clear the defendant used money withdrawn (She identified her signature on withdrawal slips) for such purposes as paying telephone/television service bills, cash gifts to her children of a prior marriage (neither of whom did work for the estate), etc.
B. Decedent's Personal Savings Account
When the decedent died, his personal savings account showed a balance of $5,192.05 (Exh. 4); as a result of a deposit of $1,232.20 on 11/4/04, the account total rose to $6,424.25 (with significant interest payments attributed to it thereafter). The defendant was the only person who could withdraw from this account. Cash withdrawals of $4,267.63 (on Dec. 7. 2004 — Exh. 4) and $300 (on Nov. 22, 2004 — Exh. 4) were made. The defendant deposited precisely $4,267.63 (on the same day she withdrew that specific amount) into the decedent's personal checking account (Exh. 5) — the same account on which she wrote approximately fifty checks to cash as Administrator and which she cashed as Administrator. She is therefore liable for the return of $4,567.63 to the personal savings account.
C. Life Insurance Proceeds
The decedent's sister testified to being beneficiary of an accidental life insurance policy established by Mr. Lintgeris. Tr., at 69. The check was in the amount of $39,000; she handed over the check in December of 2005 to the defendant because, she testified, he intended it to be used for the care of three of his children by a prior union. She believed he intended it to go into his Estate. Tr., at 70. On December 23, 2005, the defendant deposited $39,000 into the Decedent's personal checking account (Exh. 5). The defendant denied at trial that the $39,000 deposited in the decedent's checking account represented the same $39,000 provided under the accidental life insurance policy. Her explanation was that she kept large sums of cash in envelopes in the home of a former sister-in-law (not Mrs. Ricciardi). The court finds the testimony not credible in view of the defendant's frequent banking excursions, the inherent security risk in the described practice, and the fact the sister-in-law was never called as a witness at trial. The entirety of the policy proceeds — which the defendant never denied receiving — should be returned to the decedent's Estate.
D. Decedent's Personal Checking Account
Ms. Lintgeris testified that she was the only person with access to the decedent's personal checking account after his death and it is clear a significant portion of the Estate's assets was deposited into this account by Ms. Lintgeris-specifically, $54,107.41 (from 12/7/04-12/25/05). Though she testified these deposits did not come from Estate assets, the court finds that assertion not credible in view of her weekly earnings of $550, her failure to offer any evidence of other large sums available to her, and the absence of any evidence she may have had other convertible assets. She wrote checks in the amount of $53,251.94 on this account (for the period beginning 12/23/04 and ending 12/25/05), signing as "Administrator" on both the front and back of the checks. The plaintiff correctly notes (on un-numbered page 13 of his memorandum) that totally unrelated expenses were paid out of this account for her children (not the issue of the decedent) for such purposes as a name change, dental braces, gifts, etc. Exh. 5 demonstrates at least $6,062 in such checks (The $150 in fees paid to an attorney who helped her set up the Estate is appropriately expensed to the Estate because intended to assist her in managing the probate process). Plaintiff suggests that amount be added to the amount representing checks written on this account. The court declines to do so. It is far more likely the sums advanced to her children were part of the same sums withdrawn inappropriately from this account and to debit her twice for the same monies — particularly since neither the amounts written to cash nor the dates on which the checks were written are mirror images — would be to penalize her twice for the same wrongdoing.
The plaintiff's total (on un-numbered page 13 of his memorandum) is incorrectly stated as $51,251.94.
The court finds the defendant is liable to the Estate in the total amount of $72,704.68 ($29,137.05 plus $4,567.63 plus $39,000).
The plaintiff seeks treble damages. Although no count in the complaint pleads a statutory theft cause of action under C.G.S. § 52-564, it is so that statutory theft under § 52-564 is synonymous with larceny as provided for in C.G.S. § 53a-119-which is pled in counts Two (Theft) and Four (Reckless and wanton misconduct). Having pled in Count Two that the defendant "intended to deprive the plaintiff of [its] property and to appropriate the same to herself, "a cause of action for civil theft is stated. Statutory theft (§ 52-564), however, requires a plaintiff prove the additional element of intent over and above what must be demonstrated to prove conversion (Count One of this complaint). Whitaker v. Taylor, 99 Conn.App. 719, 732 (2007) (Citation omitted.). At the very least, the defendant's use of Estate assets to benefit her own children establishes the necessary intent to permanently deprive the plaintiff of his property.
Liability for conversion is a pre-condition to a finding of liability for treble damages under § 52-564. The defendant's use of Estate fund to benefit her own children constituted an unauthorized use of the plaintiff's property and thus constitute conversion.
Additionally, though there is law that the remedy of punitive damages under § 52-564 is not available where the complaint has not expressly invoked that statute (See e.g., Alaimo v. Royer, 188 Conn. 36, at 43), the plaintiff here cites the statute in his Prayer for Relief and there is therefore notice to the plaintiff of such request. The plaintiff's evidence, taken as true, establishes a prima facie case of conversion, theft, and breach of fiduciary duty. It is not necessary for the court to determine whether the appropriate burden to prove statutory theft pursuant to § 52-564 is by clear and convincing evidence as enunciated in Suarez, supra, at 520 or the usual preponderance of the evidence standard as referenced in dicta in Howard v. McDonald, 270 Conn. 111, 130 (2004) since the higher standard of proof is sustained "if evidence introduces 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." Chernick v. Johnston, 100 Conn.App. 276, 280 (2007) (citation omitted). The plaintiff has sustained even this higher proof standard. Exh. 8 is a handwritten letter from defendant to plaintiff on 7/23/07. The defendant therein acknowledges her "irresponsible behavior" and "negligence" in managing the Estate yet she places the blame largely on her former attorney. In the letter, she asserted she had paid all of the decedent's bills after he died and had "deposited $10,000 in the childrens (sic) account and gave the receipt to my husband's sister (Mrs. Ricciardi?)." Yet, no proof of deposit in any account held by the children of the decedent was offered, no copy of a receipt allegedly given a former sister-in-law was introduced, and, if that sister-in-law to whom she said she had given a receipt were in fact Mrs. Ricciardi, no question was asked that lady about such receipt when Mrs. Ricciardi testified. The defendant's post-trial brief references only the unadorned testimony of Ms. Lintgeris — to include her testimony that, following her husband's death, she was treated by "several doctors for depression and stress related anxiety." Page 2 of memorandum. That is offered to negate a finding of intent to divert Estate assets. Id. at 3. Yet no doctors were identified in the letter or at the hearing, no medication was ever identified, no records of treatment were provided, and no proof that medication was ever prescribed by any practitioner was supplied. The claim is also made that defendant's deposit of funds into the decedent's personal checking account was "used for the benefit of the decedent's children" (Memorandum, at 3.) but not a scintilla of evidence was offered to corroborate that assertion.
Treble damages are awarded as per C.G.S. § 52-564.
Plaintiff also requests attorney fees of $14,920.00. Exh. 7. He correctly states that such fees may be awarded as a component of punitive damages and upon a showing of fraud. Here, however, fraud has been neither alleged nor established. The legislature has enacted numerous statutes permitting the award of attorney fees (See e.g., §§ 31-72, 36-449, 46b-62, 52-192a, and 52-584). When the General Assembly wants to authorize the award of attorney fees, it knows how to do it. Ames v. Comm'r. of Motor Vehicles, 267 Conn. 524, 533 (2004). The court is unaware of any statute which permits recovery of attorney fees upon a finding of conversion, theft, or breach of fiduciary duty. Absent contractual or statutory authorization, there cannot be recovery of such fees. Gionfriddo v. Avis Rent-A-Car System, Inc., 192 Conn. 280, 297 (1984). Connecticut has adopted this general rule of law — known as the American rule. See Broadnax v. New Haven, 270 Conn. 133, 178 (2004). Finally, plaintiff's affidavit of attorney fees is conclusory and does not provide the evidentiary showing required under decisional law. At minimum, a description of the services rendered and the hours expended for each task are required in order that the court be able to apply its experience and knowledge to determining the reasonableness of the fee requested. See Smith v. Snyder, 267 Conn. 456, 471 (2004). While the plaintiff's hourly rate is modest, the assertion he has been paid the requested amount of $14,920.00 without evidentiary support is insufficient. The record thus precludes an award of attorney fees.
The defendant, in her post-trial memorandum, argues any judgment rendered ought be diminished to the extent she is entitled to take as the surviving spouse under C.G.S. § 45a-437(a). The practical effect of this argument is to claim a set-off — a reduction of damages. This matter was returned to court on 5/13/08 and counsel appeared for the defendant on that date. No responsive pleading having been filed, a default for failure to plead entered on motion on 8/7/08. Thereafter, the defendant filed no other motion — i.e., a Motion to Open the Default or a Notice pursuant to P.B. § 17-34(a) and no request for permission to file such notice was made at the hearing in damages. In relevant part, § 17-34(a) provides that, in any hearing in damages upon default, the defendant shall not be permitted to offer evidence to contradict any allegation of the complaint unless notice of the intent to contradict such allegations is given the plaintiff nor shall the defendant be permitted to prove any matter of defense without notice to the plaintiff of the intention to prove such matter. The defendant provided no notice of the intent to contest, for example, the intent required to establish liability under the larceny or theft counts nor of her intent to argue a set-off against damages awarded. A default admits the material facts that constitute a cause of action . . . and entry of default . . . conclusively determines the liability of a defendant. Whitaker v. Taylor, 99 Conn.App. 719, 725 (2007). The interests of justice and fairness persuade the court the defendant ought not be permitted, under the circumstances here presented, to contest liability or assert a set-off.
Judgment for the plaintiff enters in the amount of $218,114.04.