Opinion
No. CV 06-4019877.
December 8, 2006.
MEMORANDUM OF DECISION ON DEFENDANT'S MOTION TO STRIKE
IS THERE A CAUSE OF ACTION IN CONNECTICUT FOR INTERFERENCE WITH AN EXPECTANCY OF INHERITANCE? That is a central issue in this case, and according to the defendant, no appellate level court in Connecticut has ever ruled on this issue. For the reasons set forth hereafter, this COURT FINDS THAT THERE IS A CAUSE OF ACTION FOR TORTIOUS INTERFERENCE WITH AN EXPECTANCY OF INHERITANCE.
FACTS
This case involves a certain piece or parcel of land known as 1 Yacht Club Road, Mystic, Connecticut. Plaintiff claims that a three-quarter interest in fee simple of said premises was owned by Margaret M. Kennedy, deceased, late of Rochdale, Massachusetts (also called the "decedent") who is/was the mother of the plaintiff. The other one-quarter interest was owned by Richard B. Kennedy and Paul S. Kennedy as co-trustees of the Francis E. Kennedy Trust. The plaintiff was a beneficiary of said trust and, as claimed, an equitable owner of the subject property and, in fact, the other beneficiaries, her siblings, had all conveyed their interests to the plaintiff by certificate of devise recorded in the Stonington Land Records at Volume 522 at p. 254 on or about June 3, 2003.
On or about March 8, 2004, the decedent executed a mortgage for all of said premises in the face amount of $237,500.00 to Fleet National Bank, the predecessor to the defendant, Bank of America (hereinafter also called "BOA"). Plaintiff also alleges that BOA or its predecessor at the time of execution of said mortgage had an existing loan relationship with a business known as Kennedy Die Castings, Inc. of Massachusetts, which loan was in default and/or non-performing and/or underperforming. The plaintiff's brothers, Paul and Robert Kennedy, owned and operated said business. According to the plaintiff's allegations the mortgage from Margaret Kennedy aforementioned was executed in order to provide some immediate cash to support the BOA's loan with Kennedy Die Castings. Instead of the funds from said mortgage going for the benefit of Margaret M. Kennedy, said funds were used to support BOA's own loan which was substantially at risk. Plaintiff's allegations further claim that decedent had promised the plaintiff that the plaintiff would inherit said property in Stonington free and clear of any encumbrances, and in fact the plaintiff was bequested said property in the decedent's Will presently being probated. Further, the plaintiff claims that the defendant, BOA, knew about the one-quarter interest in favor of the trust, that the plaintiff owned at least a one-quarter equitable interest of the subject property and that the property was to be left to her mortgage-free. Also, plaintiff alleges that the defendant, BOA, knew it was interfering with the plaintiff's expectancy of inheritance based on either actual notice or constructive notice of the trust and actual notice that the decedent had promised the plaintiff that she would receive the subject property free and clear of encumbrances. The First Count alleges interference with the plaintiff's expectancy of inheritance, and the Second Count sets forth the same allegations but also claims that the defendants' agents, servants or employees negligently and/or carelessly caused the $237,500.00 mortgage to be executed causing the property to be wrongfully encumbered despite the interests of the trust and that of the plaintiff. The Third Count alleges the same allegations in the First Count but also claims that the defendants' agents, servants or employees applied undue influence and pressure to the decedent to cause her to execute said mortgage. The Fourth Count sets forth the First Count, paragraph 12 of the Second Count and paragraph 12 of the Third Count and then claims that the defendant, BOA, violated the Connecticut Unfair Trade Practices Act (hereinafter also known as "CUTPA"). The Fifth Count alleges the First Count and paragraph 12 of the Second Count and claims that a dispute has arisen in regard to the validity of said mortgage and said note which the mortgage secures, and a judicial determination is needed in regard to same.
All of these allegations are contained in a Third Amended Complaint. By motion dated October 16, 2006, BOA filed a Motion to Strike the first four counts of the plaintiff's third amended complaint. So as not to be repetitious, the grounds of the Motion to Strike will be set forth as each count is discussed hereafter. Further facts will be described where necessary.
STANDARD OF REVIEW:
"The purpose of a motion to strike is to contest . . . the legal sufficiency of the allegations of any complaint to state a claim upon which relief can be granted. In ruling on a Motion to Strike, the court is limited to the facts alleged in the complaint. The court must construe the facts in the complaint most favorably to the plaintiff." (Emphasis added, internal quotation marks omitted.) Waters v. Autuori, 236 Conn. 820, 825, 676 A.2d 357 (1996).
"A motion to strike challenges the legal sufficiency of a pleading, and, consequently, requires no factual findings by the trial court . . . We take the facts to be those alleged in the complaint that has been stricken and we construe the complaint in the manner most favorable to sustaining it's legal sufficiency . . . [I]f facts provable in the complaint would support a cause of action, the motion to strike must be denied Vacco v. Microsoft Corp., 260 Conn. 59, 64-65, 793 A.2d 1040a (2002). Thus, we assume the truth of both the specific factual allegations and any facts fairly provable thereunder. In doing so, moreover, we read the allegations broadly, rather than narrowly." Parsons v. United Technologies Corp., 243 Conn. 66, 83, 700 A.2d 655 (1997); Craig v. Driscoll, 262 Conn. 312, 321 (2003) (emphasis added).
ISSUES AND FINDINGS First Count
Defendant claims that there is no cause of action in Connecticut for interference with an expected inheritance. Defendant admits that there is no Appellate or Supreme Court law in Connecticut on this issue. Defendant cites other cases of a lower level and a federal case which are either unclear in their rulings or are not sufficiently similar to the case at bar for this court to rely on said cases. Further, this court is not bound by the rulings in those cases.
There are several Superior Court cases that indicate that Connecticut does not recognize the tort of interference with an expectancy of inheritance. However, the facts of those cases differ from the case at bar. There is one case entitled Ellen Devlin v. United States of America, 352 F.3d 525 pp. 540, 543, 2d Circuit Court of Appeals (2003). This decision states that approximately 24 states have recognized "tortious interference with expectation of inheritance," less than 10 states have rejected it, and the rest have not decided. Additionally, the 2d Circuit stated: "the question thus becomes whether a person's interests as a named beneficiary or potential heir is a property interest that is protected by the tort law of Connecticut. We conclude that it is because Connecticut follows the majority of jurisdictions both in recognizing the tort of interfering with an inheritance, see Benedict v. Smith, 34 Conn.Sup. 63 (1977), and in recognizing an intended heir's cause of action against a lawyer for the negligent drawing of a will." Emphasis added. The case of Donald J. Moore et al. v. Shirley H. Brower et al., Judicial District of Waterbury Complex litigation docket 2006 Conn. Superior LEXIS 2158 (June 14, 2006) (Munro, J.) [ 41 Conn. L. Rptr. 681], mentioned Devlin, supra but held that the factual situation in Devlin did not apply to the case she was deciding. This court finds Benedict v. Smith inapplicable. It does not deal strictly with the tort of interfering with an inheritance but rather with an attorney losing a Will. A demurrer was sustained because there was no allegation of an attempt to probate the lost Will, presumably a copy. At least 24 jurisdictions have recognized tortious interference with an expected inheritance, and federal courts have approached the issue as indicated. However, it is true that no Connecticut Appellate or Supreme Court decisions have been rendered on this issue, which, of course, does not mean the Supreme Court will not recognize this tort, perhaps in this case.
This court finds that there is a cause of action in Connecticut for tortious interference with an expected inheritance for the following reasons:
1. Such a cause of action is very similar if not identical to a recognized cause of action in Connecticut; tortious interference with a contractual right.
2. The defendant cites with approval the case of DiMaria v. Sylvester, 89 F.Sup.2d 195 (D.Conn. 1999). Defendant claims that said case does not stand for a recognition of tortious interference with the expectancy of inheritance, but goes on to say that if Connecticut did recognize such a cause of action, the following elements must be alleged and proven in order to sustain such an action and bases these elements on states that recognize such a cause of action.
The elements are: (1) that defendant intentionally interfered with the giving or leaving of property to the plaintiff; (2) that defendant used unlawful means to accomplish the interference or had an improper purpose; and (3) proof of damages.
Taking each of these elements in the instant case, this Court notes that the defendant places great emphasis in its brief on the fact that paragraph 4 of the third amended complaint states, inter alia: "The defendant knew or should have known being charged with constructive notice of the undivided one quarter interest in favor of the trust and upon reasonable inquiry of the trustees that in fact the plaintiff owned equitably at least one quarter of the subject property and that the property was to be left to her mortgage free." This emphasis on the trust is misplaced in that Paragraph 4 states as well "The Defendant knew . . ." (emphasis added). Defendant claims that the plaintiff has to allege the requisite element of intent; that the defendant acted purposefully and knowingly. That is the very allegation in Paragraph 4 that "the defendant knew."
As far as the constructive trust is concerned, the allegations of the third amended complaint state that a certificate of devise was recorded in the Stonington Land Records in Volume 522 at pg. 254 on or about June 3, 2003 prior to the defendant's claimed mortgage. This, the plaintiff claims, established knowledge of the trust by the defendant. It is clear from the allegations that the name Kennedy is identified as the trustees of the trust, i.e., "The other one quarter interest was owned by Richard B. Kennedy and Paul S. Kennedy as co-trustees of the Francis E. Kennedy Trust." Paragraph 3 of the First Count. Since the proposed mortgagor was Margaret M. Kennedy, and the name Kennedy appears in the chain of title, it is not unreasonable to expect the defendant, during a title search, to recognize the Kennedy name in the chain of title and become aware of the trust. In a town the size of Stonington, it is unlikely that there are many Kennedys under the grantor index, so in doing a title search of Margaret M. Kennedy's holdings, the defendant would become aware of the other Kennedys by the certificate of devise aforementioned and should have noted the description of the property which should be the same description as used in the mortgage deed in favor of BOA. There is enough in the chain of title for the Defendant to have become aware of the trust of one-quarter interest in the subject property with the plaintiff as beneficiary. Certainly, there was information for the defendant to inquire further.
In addition, the plaintiff has alleged that BOA knew of the one-quarter interest in favor of the trust. Based upon actual notice, as well as constructive notice, by this knowledge it is clear that the Defendant acted purposely and knowingly and intentionally as required by the first element.
This is as to both the trust and the fact that the defendant knew of the decedent's intention to leave the property to the plaintiff free of encumbrances. The fact as alleged is that the defendant knew. This is sufficient under Parsons v. United Technologies Corp., supra.
As for the second element that the defendant used unlawful means to accomplish the interference or had an improper purpose, the allegations of the First Count, paragraphs 6, 7, 8 and 9, certainly indicate that the mortgage of $237,500.00 was based upon the misleading of the decedent in failure to explain the mortgage that she executed, BOA knew that she could not repay the loan because she was without income, and in paragraph 9, it is alleged that BOA conducted the mortgage closing without providing independent legal counsel to the decedent and that the purpose of the mortgage was to support an existing mortgage of Kennedy Die Castings which was already in default. Taking the allegations as being true, that is clearly an unlawful means to accomplish the interference, and specifically in paragraph 9, that the money was being used to support another mortgage of the BOA, the mortgage was clearly for an improper purpose.
As to proof of damages, the plaintiff was inheriting the entire property, the one-quarter interest through the trust and the three-quarter interest by devise in the decedent's will which was supposed to be free and clear of any mortgages. Therefore, the proof of damage is obviously the $237,500.00 encumbrance on the property. Accordingly, the allegations of the First Count satisfy the aforementioned elements of a tortious interference with an expected inheritance. For this reason, the Motion to Strike count one is denied.
Plaintiff has alleged that BOA knew of the trust, and although the allegations do not say how BOA knew other than the certificate of devise of the one-quarter interest, it is a reasonable inference from all these facts (including by a proper title search) that the defendant did have actual knowledge. The specific proof of that would have to be left to discovery, including depositions of the employees/agents of BOA. However, proof in the allegations is not necessary to successfully oppose a motion to strike, considering as well the law that states that the court should view the complaint in the light most favorable to the plaintiff.
Second count
The Second Count alleges on the part of the defendant, its agents, servants or employees negligently and carelessly causing said mortgage to be executed and causing the property to be wrongfully encumbered. This is set forth in paragraph 12 of the Second Count but is in addition to paragraphs 1 through 11 of the First Count. Defendant argues that the Second Count does not allege the existence of a duty to the plaintiff by the defendant. However, in the First Count which is incorporated into the Second Count, the allegations are that the defendant knew of the plaintiff's interest in the property by way of the trust and knew that "the property was to be left to the plaintiff mortgage free." Paragraph 4; also see Paragraph 5. It is certainly a reasonable inference that the defendant knew of the plaintiff's interests, and, therefore, owed a duty to the plaintiff not to interfere with the expected inheritance. Having the decedent execute the mortgage violated a duty to the plaintiff not to interfere with her expected inheritance.
It should also be noted that the subject mortgage which was attached to the complaint as an exhibit carries the signature only of the decedent. It would seem to this court that if the one-quarter interest was on the land records by certificate of devise as claimed, in order to secure that one-quarter interest, either the plaintiff or the trustees would have had to sign the mortgage; yet only the decedent's signature is on said mortgage. This presumably means that only three-quarters of the property is subject to the mortgage.
In any event, since the First Count is incorporated into the Second Count, the Second Count shows a duty of the defendant not to interfere with the expected inheritance of the plaintiff. Therefore, the Motion to Strike the Second Count is denied.
Third Count
As for the Third Count, which alleges that the defendant applied undue influence and pressure to the decedent to cause her to execute said mortgage, the First Count again is incorporated into the Third Count. In paragraph 12 of the Third Count, the allegations state in addition to the charge of undue influence and pressure that, inter alia: ". . . in disregard to the plaintiff's equitable interest in the subject property . . . in that the defendant failed to properly advise the decedent in regard to how said mortgage would be repaid; her obligations in regard to repayment; and the inability of the decedent to have the means to repay same, all to the plaintiff's special loss and damage." In addition, paragraphs 7, 8 and 9 clearly demonstrate undue influence. The fact that the decedent was approximately 97 years old in itself does not mean that she didn't understand what was going on. The Connecticut Superior Court has a judge who is presently 99 years old and is still going strong. However, it is inconceivable to this court how the decedent, even if she were competent at the time she executed the mortgage, would execute it knowing that she had no income, did not have the ability to repay the mortgage, in fact had not applied for the mortgage and was deprived of independent legal counsel in regard to the closing of said mortgage unless she was under undue influence and pressure. Further, since paragraph 10 states that the decedent had promised the plaintiff that the plaintiff would inherit the property free and clear of any encumbrance, then she was probably not informed that the money from the mortgage was being utilized to support Kennedy Die Casting's obligation to BOA. Moreover, it should be noted that if the mortgage were processed properly, there would have been an application by the decedent, and if she were competent, she would at least have explained the trust as an encumbrance on the property, and, perhaps, that she intended the property to go to her daughter. If she did advise BOA of that, and it proceeded with the mortgage closing or even if she did not disclose that information because she did not make a formal application, the facts as alleged can easily be construed as BOA exercising undue influence and pressure upon the decedent, thereby knowingly depriving the plaintiff of her interest in the property. The Motion to Strike the Third Count is, therefore, denied.
Margaret Kennedy could have changed her mind and intended to have the proceeds of the subject mortgage go to the plaintiffs siblings in Massachusetts despite Margaret Kennedy's promise to leave everything to her daughter, the plaintiff, including the subject property free and clear of a mortgage. If she had changed her mind as indicated, there would be no point in having a Will because according to the allegations she had no other assets, and there was nothing to bequeath to the plaintiff Of course, this will be a matter of proof at trial.
Count Four
As for the Fourth Count alleging a violation of the Connecticut Unfair Trade Practices Act (CUTPA), the defendant argues that the plaintiff lacks standing to assert a claim because any injury resulting from BOA's alleged conduct is far too remote and indirect and is derivative of Ms. Kennedy. The court rejects this argument. All of the allegations of the first three counts are incorporated into the Fourth Count. Based upon the allegations of undue influence, that the defendant knew it was tortiously interfering with the expected inheritance of the plaintiff, it is clear that the conduct of the defendant offended public policy; was immoral, oppressive, unethical and unscrupulous and caused substantial injury to consumers, competitors and other businessmen resulting in ascertainable losses to the plaintiff. It is clearly a violation of CUTPA if it can be proven. Also, BOA misreads the purpose of CUTPA. It is not just designed to benefit the individual, but it is to deter the type of activity which constitutes a violation of CUTPA. "A violation of CUTPA may be established by showing either an actual deceptive practice or a practice amounting to a violation of public policy." Vezina v. Nautilus Pools, Inc. (emphasis added), 27 Conn.App. 810, 819 (1992). If the allegations of the complaint are true, and BOA used undue influence or pressure to have the decedent execute the mortgage for the purpose of supporting another loan held by BOA which was in default and knowingly interfered with the expected inheritance of the plaintiff, this court cannot conceive of other conduct that so clearly offends public policy. Accordingly, the Motion to Strike the Fourth Count is denied.
Under the case law cited, the facts alleged and any facts provable thereunder are assumed to be true. Parsons v. United Technologies Corp., supra.
Since this court has denied the Motion to Strike each of the first Four Counts of the third amended complaint, it follows that the Motion to Strike the plaintiff's prayer for relief should be and hereby is denied.
Based upon paragraphs 5 and 10 of the First Count which are in all of the counts and in particular, the allegation that the defendant knew it was interfering with the plaintiff's expectancy of inheritance, it is a reasonable inference that the defendant knew it was interfering with the plaintiff's inheritance of three-quarters of the property under the decedent's will.
CT Page 22148