Opinion
NNHCV155035763
11-28-2016
Carol A. Merriman et al. as Co-Executors v. Joan C. McQuillan
UNPUBLISHED OPINION
MEMORANDUM OF DECISION AFTER TRIAL
Steven D. Ecker, J.
Plaintiffs and defendant are the children of Emma Casinghino, who passed away on April 13, 2013. Plaintiffs brought this lawsuit, in their capacities as co-executors of their mother's estate, to collect an alleged debt of $149,000 owed by their sister, Joan McQuillan. The court heard evidence on May 4 and 5, 2016. Post-trial briefs were submitted thereafter. The ultimate issue that must be decided is whether the transfer of funds by Emma Casinghino to Joan McQuillan on May 9, 2011, was a gift or a loan, and, if a loan, whether the terms of that loan require repayment under the present circumstances. The court finds that the transaction was a loan, not a gift, but McQuillan has no present repayment obligation. Accordingly, judgment will enter in favor of the defendant.
A fourth sibling, David P. Casinghino, is not a party to this action.
Whether the transfer of money in 2011 from mother to daughter was a gift is a question of Mrs. Casinghino's intention at the time. See, e.g., Wasniewski v. Quick and Reilly, Inc., 292 Conn. 98, 103, 971 A.2d 8 (2009) (valid inter vivos gift requires intent on the part of the donor that title to property shall pass immediately); Kukanskis v. Jasut, 169 Conn. 29, 34, 362 A.2d 898 (1975) (same). The evidence of donative intent in the present case was conflicting. Joan McQuillan testified that her mother clearly expressed an intention to convey a gift. There was testimony from a bank employee, Nancy Myshrall, to support that version of events. On the other hand, there is also substantial documentary evidence indicating that the transfer was not a gift, but a loan. See, e.g., Pl. Exhibit 2 (Last Will and Testament of Emma Casinghino dated 12/11/13, Article IV); Def. Exhibit C (loan documentation dated 5/13/11).
Donative intent is the sole issue here because there is no dispute that the funds were in fact delivered into defendant's possession, fur her use, at the time of transfer. See Wasniewski v. Quick and Reilly, Inc., 292 Conn. 98, 104, 971 A.2d 8 (2009) (discussing element of delivery).
Determining a person's intentions is not always an easy undertaking. It sometimes is difficult even to known one's own intentions; the task is more challenging when the assessment must be made from the outside, without direct access to the actor's subjective state. The difficulty is compounded when the inquiry relates to a person's past intentions, because the contemporaneous indicia of intent have mostly evaporated, and disproportionate or distorted significance may be attributed to the fragmentary artifacts of intention left behind. Further obstacles are encountered when this archeological endeavor must be carried out in a courtroom, a setting where the available evidence is restricted by resource limitations and constrained by admissibility rules, which often results in a highly selective and incomplete rendering of the historical reality sought to be reconstructed. To make matters harder still, the subject of the inquiry in the present case is deceased--we are trying in 2016 the state of mind of a woman who died in 2013 regarding intentions she possessed in 2011.
The foregoing observations do not release the court from its responsibility to make a decision here. To the contrary, many adjudicative decisions must be made under these conditions, and various legal doctrines exist to help guide the decisionmaking. The point simply is to convey to the parties the court's awareness that its resolution of the legal issue here does not purport to represent a definitive historical finding about what Mrs. Casinghino must have had in mind in 2011, nor should the court's decision in this case be taken, directly or indirectly, casting blame or praise on any member of their family, nor does this decision in any way reflect an " accounting" of the parties' lifetime credits or debits, financial or otherwise. The court heard evidence relating to a particular transaction, or short series of transactions, occurring in a very brief period in the history of this family. It would be presumptuous for the court to construct a generalized narrative about the family or the relationships within it, and no such narrative is intended. The court is issuing a legal decision within a legal framework designed to resolve disputes with certainty under conditions of uncertainty.
The party claiming the gift--defendant here--bears the burden of proving by clear and satisfactory proof that a gift was made. See, e.g., Capozzi v. Luciano, 174 Conn. 170, 173, 384 A.2d 359 (1978); Long v. Schull, 184 Conn. 252, 255, 439 A.2d 975 (1981); Kukanskis v. Jasut, supra, 169 Conn. at 32. This means that Mrs. McQuillan is required under Connecticut law to establish that her mother intended the $149,000 as a gift rather than a loan. " Clear and satisfactory" evidence is equivalent to " clear and convincing" evidence. See Dalia v. Lawrence, 226 Conn. 51, 78, 627 A.2d 392 (1993). This burden is sustained only 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." Id. at 78-79 (quoting Lopinto v. Haines, 185 Conn. 527, 534, 441 A.2d 151 (1981)) (emphasis added in Dalia) .
Defendant has not met this high burden. Her version of events is plausible, and it may be true, but the evidence is equivocal, and the documentary evidence weighs heavily against her. See Pl. Exhibits 2, 4; Def. Exhibit C, H. She is correct that this documentary evidence all came into existence after the date of the actual transfer of funds, and therefore the documents do not necessarily prove what the decedent's intentions were on May 9, 2011, the date the money was transferred. However, one of the documents was executed very close in time to the conveyance, see Def. Exhibit C (loan documentation dated May 13, 2011), and two are written in defendant's own hand, see Pl. Exhibit 4 (letter dated October 3, 2011, written by defendant to plaintiff John Casinghino) and Def. Exhibit C. Defendant presented no documentary evidence contradicting the contents of any of these exhibits. Defendant has not established by clear and satisfactory proof that a gift was intended.
The second issue requires the court to determine the terms of the loan, and, in particular, the repayment obligation. A loan is a contract, and contracts must be construed to effectuate the intentions of the contracting parties. See, e.g., Sturman v. Socha, 191 Conn. 1, 10, 463 A.2d 527 (1983). Defendant argues that if the conveyance is determined to be a loan rather than a gift, then the terms of the loan, when made, limited her obligation to repay the borrowed funds only out of the net proceeds derived from the sale of the Dayton Road property. See Second Amended Answer and Special Defenses, First Special Defense. This assertion, under all of the circumstances, strikes the court as by far the most likely description of the actual intentions of defendant and Emma Casinghino at the time of the loan. See Def. Exhibit C (providing that McQuillan " will reimburse me this amount [$149,000] following the sale of 232 Dayton Road, South Glastonbury, Connecticut"). At that time, Mrs. Casinghino was living with McQuillan, was dependent upon her in important ways, and undoubtedly felt substantial gratitude for her daughter's emotional and logistical support. Based on the evidence, including without limitation the testimony of McQuillan and Myshrall, the court believes that Mrs. Casinghino was willing to gift outright the $149,000 to McQuillan at the time; the transaction proceeded as a loan only at McQuillan's insistence, and the repayment terms of the loan were limited by the particular and idiosyncratic circumstances then existing. The expectations of both parties to the transaction was that the sale of the Dayton Road property would result in a net gain, and the first $149,000.00 of that gain would be used to reimburse Mrs. Casinghino. It does not appear that either of them contemplated, in May '2011, that the real estate market would be as inhospitable as it turned out, or that it would be necessary to lower the asking price so radically in order to sell the property. (Ultimately, after protracted marketing efforts, see Def. Exhibit A, the Dayton Road property sold at a loss in March 2014. See Def. Exhibit D.)
The listing price of the Dayton Road property in May 2011 was $569,900, and McQuillan believed that it was worth even more. The property sold in March 2014 for approximately $220,000 less than the initial asking price. McQuillan ended up paying $25,000 to settle the seller's obligations at the closing.
The court rejects plaintiffs' assertion that the sale of the Dayton Road property merely served as a timing mechanism triggering the repayment obligation, regardless of the existence or amount of any net proceeds. There is no evidence indicating that either party to the loan transaction believed, in May 2011, that McQuillan was able to, or would be required to, repay the loan from any source other than the Dayton Road property sale proceeds, and the court will not infer such an intention on this record. The court does not believe that Mrs. Casinghino would have insisted upon that repayment term in May 2011, and it seems clear that McQuillan would not have agreed to such a term. There also is no evidence that the parties to the loan considered, intended or agreed upon any alternative means or manner of repayment in the event that the sale proceeds were insufficient to fund repayment of the loan. It may be that Mrs. Casinghino, whether with or without Carol Merriman's assistance, ultimately fashioned her own " remedy" when she disinherited McQuillan in the new will executed by her in December 2011. That question is not before the court, and the court does not have sufficient information to reach any conclusions in that regard.
The court is aware of the fact that Mrs. Casinghino expressed a different intention after she began living with her daughter Carol A. Merriman. See Pl. Exhibit 2, Article IV (Casinghino's Last Will and Testament dated 12/13/11, hereinafter, the " Will"). Article IV expresses an intention to cut McQuillan off from sharing in the residuary estate " because I have made loans to her in an aggregate amount of at least Four Hundred Twenty Seven Thousand Dollars, all of which is unpaid as of the date hereof." The next sentence adds: " I direct that the loans [to McQuillan] shall not be discharged upon my death." This instrument was admitted into probate. See Decree Granting Administration or Probate of Will (Pl. Ex. 1.) The retrospective characterization of the terms of the loan contained in the Will is not controlling here. Mrs. Casinghino's circumstances had changed very significantly in the six-month period between the fund transfer in May 2011 and the execution of a new Will in December 2011, and her alliances evidently had changed too. This court must determine the terms of the loan as they existed at the time of the loan transaction.
Possible alternatives might have included loan forgiveness, payment from proceeds upon sale of the new residence (12 Church Hill Road, Glastonbury), advancement against any McQuillan's share of any inheritance, or something else. As noted, payment on demand (or within a reasonable time) following an unsuccessful sale of the Dayton Road property was not a realistic option, and almost certainly was not considered to be an alternative, at the time of the loan.
Finally, in light of the evidence at trial, the court will not place any weight on the agreement evidently made by her probate counsel on March 11, 2014, regarding the $149,000 loan. See Def. Exhibit H. The lawyer, Attorney Andrew Kearns, evidently appeared in Probate Court on that date and agreed to the existence and amount of the debt. Based on the evidence at trial, however, this court is quite certain that McQuillan did not authorize Kearns to make such an agreement, and she never would have done so. Why the lawyer acknowledged the debt, and what he intended, remains a mystery. But plaintiffs have stipulated that they do not consider this court to be bound as a matter of law by the probate decree of March 11, 2014 (Def. Exhibit H), nor have plaintiffs argued that the statement of the lawyer is a binding judicial admission or grounds for a finding of judicial estoppel. The court will not attempt to explain what happened on March 11, 2014, but is confident that McQuillan herself has never agreed that she owes her mother's estate $149,000 (with or without collection costs). Based on the evidence presented at trial, it is the opinion of this court that it would be unfair and unjust to find that such a debt exists based on the events of March 11, 2014.
The court need not determine whether the subject debt has been extinguished altogether, based on the non-occurrence of a condition precedent (i.e., the sale of the Dayton Road property at a loss), or whether it would be appropriate, under all of the circumstances, to find an implied term in the contract requiring repayment of the loan at some time in the future, e.g., upon sale of the Church Hill property. The only relief requested by plaintiffs is a money judgment. That relief is denied. See Kawasaki Kisen Kaisha Ltd. v. Indomar, 173 Conn. 269, 272-73, 377 A.2d 316 (1977).
Accordingly, judgment will enter for defendant. It is so ordered.