Opinion
FSTCV146021170S
12-18-2015
Margaret E. Day, Co-Conservator of the Estate of Susan D. Elia for the Limited Purpose of Any Matters Relating to the Susan D. Elia Irrevocable Trust Dated September 15, 2011 v. Renee Seblatnigg, Sole Independent Trustee of the Susan D. Elia Irrevocable Trust Dated September 15, 2011 et al
UNPUBLISHED OPINION
CORRECTED MEMORANDUM OF DECISION ON MOTION FOR SUMMARY JUDGMENT
Donna Nelson Heller, J.
(Corrected to replace the word " with" with the word " without" before the phrase " the court's authorization" on page 23, line 9.)
The plaintiff Margaret E. Day, co-conservator of the Estate of Susan D. Elia for the limited purpose of any matters relating to the Susan D. Elia Irrevocable Trust dated September 15, 2011, commenced this declaratory judgment action, returnable March 4, 2014, against the defendants Renee Seblatnigg (Seblatnigg), sole independent trustee of the Susan D. Elia Irrevocable Trust dated September 15, 2011; First State Fiduciaries, LLC (First State Fiduciaries); Edward E. Pratesi (Pratesi); Hany D. Lewis (Lewis); Susan D. Elia (Elia); Marc W. Elia, as guardian of minor children Alden H. Elia, Ryder C. Elia, and Schuyler H. Elia; Christine E. Elia, as guardian of minor child Ennio Barry Simon; Attorney General George Jepsen; Sarah Wilbur Day; Matthew Lewis Striplin; Samuel Bowden Striplin; and Suzanne Palazzi Day. The plaintiff seeks a declaratory judgment that (i) the Susan D. Elia Irrevocable Trust dated September 15, 2011 (the Delaware irrevocable trust) is void ab initio and unenforceable, and (ii) that any and all assets transferred from Elia's conservatorship estate to the Delaware irrevocable trust or to any entity owned by the Delaware irrevocable trust shall be returned to the estate. On December 22, 2014, Elia filed an answer in which she admitted the material allegations of the complaint (#139.00). First State Fiduciaries moved to dismiss the complaint on March 4, 2015 (#152.00).
The plaintiff withdrew her claims against Lewis (#120.00) and Pratesi (#121.00) on May 29, 2014 and May 30, 2014. The claim against Seblatnigg was withdrawn on July 1, 2014 (#124.00). Seblatnigg's subsequent motion to intervene (#125.00) was denied because the court (Lee, J.) found that she no longer had an interest in the case. The court granted the plaintiff's motions for default as to Marc Elia (#132.87), Matthew Lewis Striplin (#133.86), Samuel Bowden Striplin (#134.86), Sarah Wilbur Day (#135.86), and Suzanne Palazzi Day (#136.86).
On February 26, 2015, the plaintiff filed a motion for summary judgment (#146.00), together with a memorandum of law, the affidavit of the plaintiff, and forty-two exhibits in support thereof (#147.00; #148.00; #149.00). First State Fiduciaries, the only defendant to oppose the motion for summary judgment, filed a memorandum in opposition (#156.00) on April 2, 2015. First State Fiduciaries also submitted the affidavits of Lewis and Seblatnigg (#157.00; #158.00), with twenty-eight exhibits (#159.00-#163.00), in support of its opposition to the motion for summary judgment. The plaintiff filed a reply memorandum (#178.00), with additional exhibits (#179.00), on June 24, 2015. First State Fiduciaries filed a surreply (#185.00) and exhibits (#186.00) on July 28, 2015. On August 20, 2015, the plaintiff submitted a supplemental exhibit (#192.00). First State Fiduciaries filed a supplemental exhibit (#193.00) on August 21, 2015. The Attorney General filed a statement of no objection to the plaintiff's motion for summary judgment (#194.00; #195.00) on August 14, 2015.
The parties' exhibits with respect to the plaintiff's motion for summary judgment (#146.00) and First State Fiduciaries' motion to dismiss (#152.00) are duplicative of one another to a large extent. In deciding the plaintiff's motion for summary judgment, the court has considered the exhibits offered in support of or in opposition to that motion. See Krevis v. Bridgeport, 262 Conn. 813, 816-17, 817 A.2d 628 nn.4-7 (2003) (referencing the various Practice Book provisions that outline the procedure in making and opposing a motion for summary judgment).
The plaintiff's motion for summary judgment and First State Fiduciaries' motion to dismiss were before the court on the short calendar for arguable matters on August 24, 2015. The court heard argument from counsel for the plaintiff, First State Fiduciaries, and Elia at that time. The court denied First State Fiduciaries' motion to dismiss (#152.01) and reserved decision on the plaintiff's motion for summary judgment. By order entered October 30, 2015, the court granted the plaintiff's motion for summary judgment and stated that this articulation would follow.
I
The material facts are not in dispute. Elia is seventy-one years old. She suffers from advanced Parkinson's disease and lung cancer. In June 2011, Elia applied to the Greenwich Probate Court for the voluntary appointment of a conservator of her person and her estate. Following a June 28, 2011 hearing in the Greenwich Probate Court, at which the court (Hopper, J.) saw Elia in person, heard her reason for seeking voluntary representation, and explained to her that appointing a conservator as requested would subject her and her property to the authority of the conservator, the court found that Elia resided or had domicile in the Greenwich Probate District; that the court had jurisdiction; that Elia had requested the appointment of a conservator of the person and the estate; and that the proposed conservators had accepted the position of trust. The Greenwich Probate Court accordingly granted Elia's application for voluntary representation. By decree issued on June 28, 2011 (the June 28, 2011 decree), the court appointed Seblatnigg the conservator of Elia's estate and Richard DiPaola (DiPaola) the conservator of Elia's person.
The June 28, 2011 decree provided that Seblatnigg, as the conservator of Elia's estate, had the power to manage the estate, to apply estate funds to support Elia, to pay her debts, and to collect debts due to her. At the time of Seblatnigg's appointment as conservator of Elia's estate, Elia owned or held an equitable interest in cash and securities valued in excess of $6,000,000, including those held in the Susan D. Elia Revocable Trust, a 2007 revocable trust governed by Connecticut law (the Connecticut revocable trust).
Seblatnigg was also a co-trustee of the Connecticut revocable trust. Elia appointed her and Salvatore Mulia, Elia's financial advisor, the co-trustees of the Connecticut revocable trust on June 9, 2011.
In September 2011, Seblatnigg consulted with the managers of First State Fiduciaries, Robert Mauceri, Esq. (Mauceri) and James Holder, Esq. (Holder), regarding the creation of an asset protection plan for Elia. They recommended to Seblatnigg that Elia establish and fund a self-settled irrevocable Delaware asset protection trust and a limited liability company, to be owned by the trust, to hold her assets.
Seblatnigg, as conservator of Elia's estate, entered into an asset protection services agreement on Elia's behalf with First State Facilitators, LLC (First State Facilitators), an affiliate of First State Fiduciaries, on September 15, 2011. Seblatnigg, as conservator, also signed a legal representation agreement on behalf of Elia with Mauceri. On the same day, Seblatnigg met with Elia and supervised her execution of the instrument that created the Delaware irrevocable trust. The trust instrument named Seblatnigg and Salvatore Mulia (Mulia) as the independent trustees of the Delaware irrevocable trust and named First State Fiduciaries as the protector of the Delaware irrevocable trust. Seblatnigg did not seek or obtain the approval of the Greenwich Probate Court to establish the Delaware irrevocable trust or to advise Elia to execute the trust instrument.
Mauceri signed the asset protection services agreement on behalf of First State Facilitators, as its manager. Elia was a named party to both agreements, which were signed by Seblatnigg as her conservator.
A Delaware limited liability company, Peace at Last, LLC (Peace at Last), wholly owned by the Delaware irrevocable trust, was formed on September 15, 2011 to hold Elia's assets. Beginning on September 20, 2011, Seblatnigg directed the transfer of more than $6,000,000 in cash and securities from Elia's conservatorship estate and the Connecticut revocable trust to the Delaware irrevocable trust or to Peace at Last. Seblatnigg did not seek or obtain the approval of the Greenwich Probate Court before she transferred the assets to the Delaware irrevocable trust or to Peace at Last.
The assets of the Connecticut revocable trust were held by Goldman Sachs Trust Company, N.A., a Delaware corporation. They were transferred to an account owned by Peace at Last at Morgan Stanley Smith Barney, LLC.
Seblatnigg resigned as the conservator of Elia's estate on April 5, 2013. The Greenwich Probate Court accepted Seblatnigg's resignation on May 21, 2013, subject to the allowance of her final account, and appointed Mulia the successor conservator of Elia's estate.
The Greenwich Probate Court appointed the plaintiff the co-conservator of Elia's person on May 23, 2013. On January 9, 2014, at Elia's request, the Greenwich Probate Court issued a decree (the January 9, 2014 decree) naming the plaintiff the co-conservator of Elia's estate for the limited purpose of any matters relating to Elia's interest in the Delaware irrevocable trust, because Mulia had a possible conflict of interest.
In March 2014, shortly after the plaintiff commenced this declaratory judgment action, First State Fiduciaries filed a petition in the Delaware Court of Chancery (the Delaware action) in which it sought an order compelling Morgan Stanley Smith Barney, LLC (Morgan Stanley), which held the assets of the Delaware irrevocable trust, to transfer the trust assets to the purported new sole trustee, the Bryn Mawr Trust Company of Delaware (Bryn Mawr Trust). Morgan Stanley filed an answer and counter-petition in the nature of an interpleader, in which it maintained that it had no interest in the trust assets, on May 19, 2014.
First State Fiduciaries submitted the March 2015 affidavit of Michael Doyle, a qualified trustee of the Delaware irrevocable trust, that had been previously filed in the Delaware action, in which Mr. Doyle represented that Morgan Stanley had frozen the trust assets.
The plaintiff contends that whether Bryn Mawr Trust was properly appointed the trustee of the Delaware irrevocable trust is a contested issue, noting that Morgan Stanley maintained in the Delaware action that it declined to transfer the trust assets to Bryn Mawr Trust because First State Fiduciaries had not provided sufficient evidence to show that Bryn Mawr Trust was the duly appointed trustee of the Delaware irrevocable trust.
The assets of the Delaware irrevocable trust were subsequently transferred to an account at Wilmington Trust Company with the approval of the Delaware court and by agreement of all parties to the Delaware action.
On May 16, 2014, the plaintiff moved to intervene in the Delaware action. The motion to intervene was granted on June 10, 2014. The plaintiff filed a response, counterclaim, and third party complaint in the Delaware action that day. On January 29, 2015, the plaintiff moved for a protective order and to stay discovery in the Delaware action. Morgan Stanley joined in the plaintiff's motion to stay the Delaware action.
On February 13, 2015, a special master in the Delaware action recommended that the court deny First State Fiduciaries' motion to compel and grant the plaintiff's motion for a protective order and a stay of any discovery. In a letter to counsel dated August 4, 2015, the special master indicated that she was recommending that the court stay the Delaware action in its entirety.
II
Practice Book § 17-49 provides that summary judgment " shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Practice Book § 17-49. " In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party." (Citation omitted; internal quotation marks omitted.) Connecticut Medical Insurance Co. v. Kulikowski, 286 Conn. 1, 5, 942 A.2d 334 (2008). " The party seeking summary judgment has the burden of showing the absence of any genuine issue [of] material facts which, under applicable principles of substantive law, entitle him to a judgment as a matter of law . . . and the party opposing such a motion must provide an evidentiary foundation to demonstrate the existence of a genuine issue of material fact." (Citation omitted; internal quotation marks omitted.) Schilberg Integrated Metals Corp. v. Continental Casualty Co., 263 Conn. 245, 252, 819 A.2d 773 (2003). " A material fact is a fact that will make a difference in the outcome of the case." (Internal quotation marks omitted.) United States Bank, N.A. v. Foote, 151 Conn.App. 620, 631, 94 A.3d 1267, cert. denied, 314 Conn. 930, 101 A.3d 952 (2014). " When a motion for summary judgment is supported by affidavits and other documents, an adverse party . . . must set forth specific facts showing that there is a genuine issue for trial, and if he does not so respond, the court is entitled to rely upon the facts stated in the affidavit of the movant." (Citation omitted.) Bartha v. Waterbury House Wrecking Co., Inc., 190 Conn. 8, 11-12, 459 A.2d 115 (1983).
" Summary judgment is a method of resolving litigation when pleadings, affidavits, and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law . . . The motion for summary judgment is designed to eliminate the delay and expense of litigating an issue when there is no real issue to be tried . . ." (Citations omitted; footnote omitted; internal quotation marks omitted.) Grenier v. Commissioner of Transportation, 306 Conn. 523, 534-35, 51 A.3d 367 (2012). As our Supreme Court recently observed, " [t]he fundamental purpose of summary judgment is preventing unnecessary trials." Stuart v. Freiberg, 316 Conn. 809, 822-23, 116 A.3d 1195 (2015) (citing Orenstein v. Old Buckingham Corp., 205 Conn. 572, 574, 534 A.2d 1172 (1987) (" [s]ummary judgment procedure, generally speaking, is an attempt to dispose of cases in a manner which is speedier and less expensive for all concerned than a full-dress trial")).
III
The plaintiff seeks summary judgment on the ground that Seblatnigg, as the conservator of Elia's estate, was required to obtain approval from the Greenwich Probate Court pursuant to General Statutes § 45a-655(e) prior to creating and funding the Delaware irrevocable trust. The plaintiff contends that because Seblatnigg failed to obtain such approval, the Delaware irrevocable trust is void ab initio and unenforceable, and the assets from Elia's conservatorship estate-including the assets from the Connecticut revocable trust, in which Elia held an equitable interest-that were transferred to the Delaware irrevocable trust and/or to Peace at Last, the limited liability company owned by the Delaware irrevocable trust, must be returned to Elia's conservatorship estate.
In response, First State Fiduciaries challenges the court's subject matter jurisdiction. First State Fiduciaries contends that the plaintiff lacks standing because she did not obtain the approval of the Greenwich Probate Court prior to commencing this declaratory judgment action on behalf of Elia's conservatorship estate. First State Fiduciaries next argues that the Probate Court lacked jurisdiction to appoint a conservator of Elia's estate, because Elia was domiciled in Florida when she sought the voluntary conservatorship in Connecticut, and had no authority over the assets of the Delaware irrevocable trust, because the trust assets were never located in Connecticut. First State Fiduciaries also claims that the plaintiff has failed to join two necessary parties-Bryn Mawr Trust, the putative trustee of the Delaware irrevocable trust, and Morgan Stanley, the former depository of the financial assets of the Delaware irrevocable trust. First State Fiduciaries finally argues that this action should not proceed and the issues before this court should be resolved instead in the Delaware action. The court will address each of these arguments in turn.
As noted above, the court denied First State Fiduciaries' motion to dismiss for lack of personal jurisdiction on August 24, 2015 (#152.01). The court found that it had personal jurisdiction over First State Fiduciaries. The court also noted that it had in rem jurisdiction over the assets from Elia's conservatorship estate that funded the Delaware irrevocable trust and/or Peace at Last.
A
First State Fiduciaries first claims that the plaintiff does not have standing because she did not seek the approval of the Greenwich Probate Court prior to commencing this action. " The question of standing implicates a court's subject matter jurisdiction . . . [A] court does not have subject matter jurisdiction over claims brought by persons who do not have standing." (Citations omitted; internal quotation marks omitted.) Orsi v. Senatore, 230 Conn. 459, 470, 645 A.2d 986 (1994). " Standing is the legal right to set judicial machinery in motion. One cannot rightfully invoke the jurisdiction of the court unless he [or she] has, in an individual or representative capacity, some real interest in the cause of action, or a legal or equitable right, title or interest in the subject matter of the controversy . . . When standing is put in issue, the question is whether the person whose standing is challenged is a proper party to request an adjudication of the issue . . . Standing is established by showing that the party claiming it is authorized by statute to bring suit or is classically aggrieved." (Citation omitted; internal quotation marks omitted.) Kawecki v. Saas, 132 Conn.App. 644, 648, 33 A.3d 778 (2011).
The plaintiff contends that she has standing pursuant to General Statutes § 45a-655(a), which sets forth the duties of a conservator of the estate. The court agrees. General Statutes § 45a-655(a) provides in pertinent part that a conservator of the estate " shall manage all the estate . . . and may sue for and collect all debts due the conserved person." General Statutes § 45a-655(a). A conservator of the estate does not have to obtain Probate Court approval before commencing an action pursuant to General Statutes § 45a-655(a). See Doyle v. Reardon, 11 Conn.App. 297, 300, 527 A.2d 260 (1987). Accordingly, the plaintiff has standing to prosecute this action.
(August 12, 2013, Tobin, J.) (" The plain language of [General Statutes § 45a-650] does not require or, indeed, allow the Probate Court to limit the duties or authority of a conservator appointed pursuant to an application for voluntary conservatorship."). That the plaintiff's appointment as co-conservator of Elia's estate was " for the limited purpose" of any matters relating to Elia's interest in the Delaware irrevocable trust does not affect her standing to prosecute this action. First, this action relates to Elia's interest in the Delaware irrevocable trust, so it falls within the express scope of the plaintiff's authority as co-conservator under the January 9, 2014 decree. In addition, nothing in the January 9, 2014 decree limits the duties or the authority of the plaintiff with respect to any matters regarding Elia's interest in the Delaware irrevocable trust. Cf. Whitnum-Baker v. Appeal from Probate, Superior Court, judicial district of Stamford-Norwalk, Docket No. CV-12-5013979-S
General Statutes § 45a-644(j) defines " property management" as " actions to (1) obtain, administer, manage, protect and dispose of real and personal property, intangible property, business property, benefits and income, and (2) deal with financial affairs."
B
First State Fiduciaries next argues that the Greenwich Probate Court did not have jurisdiction in June 2011 to consider Elia's application for the appointment of a conservator, and to appoint Seblatnigg the conservator of Elia's estate, because Elia had established a Florida domicile in 2010. In response, the plaintiff contends that Elia was properly before the Greenwich Probate Court because she was residing in Greenwich at the time of her application for a voluntary conservatorship.
First State Fiduciaries offers, inter alia, a certificate of Elia's Florida voter registration, her Florida driver's license, and an income tax return showing her Florida address in support of its contention that the Greenwich Probate Court lacked jurisdiction over Elia's application. First State Fiduciaries also filed a certificate of registration and Elia's 2010 and 2011 income tax returns, reflecting her Florida address, under seal.
Elia listed her residence in Greenwich in her application to the Greenwich Probate Court for voluntary representation. One of First State Fiduciaries' managers met with Elia at her Greenwich apartment on September 15, 2011 to explain the details of the various agreements and the Delaware irrevocable trust. All relevant trust documents were signed and notarized in Greenwich.
General Statutes § 45a-646 provides in pertinent part that " [a]ny person may make application to the court of probate in the district in which he resides or has his domicile for voluntary representation either for the appointment of a conservator of the person or a conservator of the estate, or both." (Emphasis added.) General Statutes § 45a-646. " Residence" and " domicile" are distinct concepts. In the Matter of Mary E. Bachand, 306 Conn. 37, 45, 49 A.3d 166 (2012). " [R]esidence is defined as: 1. The act or fact of living in a given place for some time . . . 2. The place where one actually lives, as distinguished from a domicile . . . Residence usu[ally] just means bodily presence as an inhabitant in a given place; domicile usu[ally] requires bodily presence plus an intention to make the place one's home. A person thus may have more than one residence at a tune but only one domicile . . . Moreover, a resident is [a] person who lives in a particular place." (Citations omitted; emphasis in original; internal quotation marks omitted). Id. at 44. " Connecticut courts have explored what constitutes residency in other probate related contexts, and have established that a person resides in a place where she is physically located for more than a temporary or transient period of time, and where the usual conditions of household life obtain." Id. at 44-45.
The court finds that no genuine issue of material fact exists as to whether Elia was residing in Greenwich at all relevant times. As set forth in the June 28, 2011 decree, the Greenwich Probate Court expressly found that Elia " resides or has domicile in this probate district, and jurisdiction of this matter appertains to this Court." Elia maintained a residence in Greenwich and was present in Greenwich during the conservatorship process; the fact that she also established a Florida domicile in 2010 does not defeat the jurisdiction of the Greenwich Probate Court. Pursuant to General Statutes § 45a-646, Elia was properly before the Greenwich Probate Court on her application for voluntary representation, and the Greenwich Probate Court had jurisdiction to enter the June 28, 2011 decree.
C
First State Fiduciaries also challenges the Greenwich Probate Court's authority over the assets that were transferred into the Delaware irrevocable trust, claiming that those assets were located outside of the state of Connecticut both before and after the creation and funding of the Delaware irrevocable trust. Specifically, First State Fiduciaries argues that because the assets of the Connecticut revocable trust were held in a Goldman Sachs account in Delaware and then transferred to a Morgan Stanley account, also in Delaware, they were never subject to the jurisdiction of the Greenwich Probate Court. The court does not agree.
Under our conservatorship statutes, the estate of a conserved person includes " the conserved person's interest in all property in which the conserved person has a legal or equitable present interest . . ." General Statutes § 45a-655(a). As discussed below, Elia's interest in the Connecticut revocable trust constituted an " equitable interest" under General Statutes § 45a-655(a) and, therefore, was part of her conservatorship estate and subject to the jurisdiction of the Greenwich Probate Court. The assets transferred from the estate to the Delaware irrevocable trust remain under the Probate Court's supervision until this court has determined whether those assets were transferred in violation of General Statutes § 45a-655(e). See Three Keys Ltd. v. SR Utility Holding Co., 540 F.3d 220 (3d. Cir. 2008) (applying Pennsylvania law).
D
First State Fiduciaries also claims that Bryn Mawr Trust, the putative trustee of the Delaware irrevocable trust, and Morgan Stanley, the former depository of the financial assets of the Delaware irrevocable trust, are necessary parties to this declaratory judgment action, and, therefore, the court cannot proceed in their absence. Whether the court lacks subject matter jurisdiction because the plaintiff has failed to join necessary parties depends, in the first instance, upon whether those parties are indeed necessary to the disposition of the matter before the court.
Our Supreme Court has defined " necessary parties as [p]ersons having an interest in the controversy, and who ought to be made parties, in order that the court may act on that rule which requires it to decide on, and finally determine the entire controversy, and do complete justice, by adjusting all the rights involved in it . . . [B]ut if their interests are separable from those of the parties before the court, so that the court can proceed to a decree, and do complete and final justice, without affecting other persons not before the court, the latter are not indispensable parties . . . In short, a party is necessary if its presence is absolutely required to assure a fair and equitable trial." (Citation omitted; internal quotation marks omitted.) Biro v. Hill, 214 Conn. 1, 5-6, 570 A.2d 182 (1990). The court's subject matter jurisdiction is implicated when necessary parties have not been joined in declaratory judgment actions. Mannweiler v. Laflamme, 232 Conn. 27, 36, 653 A.2d 168 (1995).
" [A]s a general rule, the trustee is a proper person to sue or be sued on behalf of a trust. It is within the trustee's power, and a duty of the trustee, to institute actions and proceedings for the protection of the trust estate and the enforcement of claims and rights belonging to the estate, and to take all steps as are reasonably necessary." (Internal quotation marks omitted.) Bank of New York v. Bell, 142 Conn.App. 125, 133 n.5, 63 A.3d 1026, cert. denied, 310 Conn. 901, 75 A.3d 31(2013). A trustee is, therefore, a necessary party to " remedy an injury with respect to the trust property." (Internal quotation marks omitted.) Id. When a trust is invalidated, however, the former trustee is no longer a necessary party. Cooley v. Cooley, 32 Conn.App. 152, 156-57 n.2, 628 A.2d 608 (1993).
Notwithstanding the general rule, a trustee is not a necessary party when its presence is not required to resolve a disputed claim. See, e.g., Mitchell v. Mitchell, Superior Court, judicial district of Waterbury, Docket No. FA-05-4005345-S (April 4, 2012, Bozzuto, J.); Carrington Asset Holding Co., LLC v. American Home Mortgage Servicing, Inc., Superior Court, judicial district of Stamford-Norwalk, Complex Litigation Docket, Docket No. X08-CV-09-5010295-S (September 27, 2010, Jennings, J.T.R.). In Carrington Asset Holding Co., LLC v. American Home Mortgage Servicing, Inc., supra, Superior Court, Docket No. X08-CV-09-5010295-S , the court explained that the general rule is " not inflexible, " and a trustee is not necessary when the interests of the party asserting nonjoinder are " separable" from the trust res. In other words, while a dispute may surround a trust, the trustee is not necessarily the real party in interest. See also Owusu v. Owusu, Superior Court, judicial district of Hartford, Docket No. FA-07-4028694-S (February 14, 2008, Wetstone, J.).
The plaintiff is seeking a declaratory judgment that the Delaware irrevocable trust is void ab initio and unenforceable because Seblatnigg, who was the conservator of Elia's estate at the time the trust was created, did not obtain the approval of the Greenwich Probate Court prior to establishing the Delaware irrevocable trust or before transferring assets from Elia's conservatorship estate to the trust or to Peace at Last, its wholly owned limited liability company. Neither Morgan Stanley nor Bryn Mawr Trust is a necessary party to the court's determination of these issues. Morgan Stanley is no longer the depository of the trust assets, and it is not at all clear that Bryn Mawr Trust ever became the trustee of the Delaware irrevocable trust. Neither of them has sought to intervene in this declaratory judgment action.
The court notes that First State Fiduciaries did not name Bryn Mawr Trust as a party to the Delaware action.
In addition, to the extent that Bryn Mawr Trust has any interest at stake in this action, that interest is sufficiently aligned with that of First State Fiduciaries. First State Fiduciaries is the real party in interest, and it adequately represents the interest of Bryn Mawr Trust, the putative trustee of the Delaware irrevocable trust.
E
First State Fiduciaries' final argument is that this court should not proceed in view of the pending Delaware action, which has been stayed. First State Fiduciaries contends that because the Delaware action would address a broader range of issues regarding the Delaware irrevocable trust than is before this court, all matters can and should be resolved in the Delaware Chancery Court--including those that are raised in this declaratory judgment action. The Delaware court has concluded otherwise, however, having stayed the Delaware action pending resolution of the dispositive motions in this case; this court will not disturb the ruling of the Delaware court. Accordingly, this action will not be stayed so that the Delaware action can proceed.
First State Fiduciaries also claims that the forum selection clause in the trust instrument, designating Delaware as the situs for resolving all disputes, is controlling here. If the Delaware irrevocable trust is void ab initio and unenforceable, however, the forum selection clause would be inapplicable in any event. See KI, Inc. v. KP Acquisition Partners, LLC, Superior Court, judicial district of Stamford-Norwalk, Complex Litigation Docket, Docket No. X05-CV-09-60027474-S (September 24, 2010 , Blawie, J.); Powell v. Spruce Peak Realty, LLC, Superior Court, judicial district of Middlesex, Docket No. CV-09-5006181-S (September 17, 2009, Jones, J.).
IV
Turning now to the merits of the plaintiff's motion for summary judgment, the plaintiff contends that Seblatnigg, as the conservator of Elia's estate, was required to obtain the approval of the Greenwich Probate Court prior to the creation of the Delaware irrevocable trust and before transferring assets from Elia's conservatorship estate to the Delaware irrevocable trust and the trust's wholly owned limited liability company, Peace at Last. The plaintiff claims that no genuine issue of material fact exists, as it is undisputed that Seblatnigg neither sought nor obtained the Greenwich Probate Court's approval, and, therefore, she is entitled to summary judgment in her favor declaring that the Delaware irrevocable trust is void ab initio and unenforceable, and ordering that all assets transferred to the Delaware irrevocable trust or to Peace at Last must be returned to Elia's conservatorship estate.
A
As codified in Part IV of Chapter 802h of Title 45a of the General Statutes, our conservatorship laws vest the Probate Court with jurisdiction over applications for voluntary and involuntary representation. Under General Statutes § 45a-648, any person may file an application for involuntary representation " alleging that a respondent is incapable of managing his or her affairs or incapable of caring for himself or herself and stating the reasons for the alleged incapability." General Statutes § 45a-648(a). If the Probate Court finds by clear and convincing evidence that the respondent is " incapable of managing the respondent's affairs, that the respondent's affairs cannot be managed adequately without the appointment of a conservator and that the appointment of a conservator is the least restrictive means of intervention available to assist the respondent in managing the respondent's affairs, the court may appoint a conservator of his or her estate . . ." General Statutes § 45a-650(f)(1). Section 45a-650(f)(2) sets forth a parallel provision for the Probate Court's appointment of a conservator of the person for an individual who is incapable of caring for himself or herself. With respect to an application for voluntary representation, General Statutes § 45a-646 provides in pertinent part that " [a]ny person may make application to the court of probate in the district in which he resides or has his domicile for voluntary representation either for the appointment of a conservator of the person or a conservator of the estate, or both." General Statutes § 45a-646.
Section 45a-650(f)(1) further provides that the court shall make such appointment after considering the factors set forth in subsection (g) of that section. Section 45a-650(g) provides that " [w]hen determining whether a conservator should be appointed the court shall consider the following factors: (1) The abilities of the respondent; (2) the respondent's capacity to understand and articulate an informed preference regarding the care of his or her person or the management of his or her affairs; (3) any relevant and material information obtained from the respondent; (4) evidence of the respondent's past preferences and life style choices; (5) the respondent's cultural background; (6) the desirability of maintaining continuity in the respondent's life and environment; (7) whether the respondent had previously made adequate alternative arrangements for the care of his or her person or for the management of his or her affairs, including, but not limited to, the execution of a durable power of attorney, springing power of attorney, the appointment of a health care representative or health care agent, the execution of a living will or trust or the execution of any other similar document; (8) any relevant and material evidence from the respondent's family and any other person regarding the respondent's past practices and preferences; and (9) any supportive services, technologies or other means that are available to assist the respondent in meeting his or her needs."
The powers and duties of a conservator appointed pursuant to an application for voluntary representation are no different from those of a conservator appointed pursuant to an application for involuntary representation. As set forth in § 45a-646, " [t]he conservator of the person or estate or both, shall have all the powers and duties of a conservator of the person or estate of an incapable person appointment pursuant to section 45a-659." Id. The primary difference between a voluntary conservatorship and an involuntary conservatorship is that the Probate Court, in granting an application for a voluntary conservatorship, " shall not make a finding that the petitioner is incapable." Id. See Reale v. Reale, Superior Court, judicial district of Tolland, Docket No. CV-12-FA-99-70340-S (January 12, 2000, Klaczak, J.). Thus, whether Seblatnigg had been appointed the conservator of Elia's estate as a result of a voluntary application or an involuntary application, her powers and duties as conservator would be the same.
B
A conservator of the estate is appointed by the Probate Court to " supervise the financial affairs of a person found to be incapable of managing his or her own affairs or of a person who voluntarily asks the Court of Probate for the appointment of a conservator of the estate . . . General Statutes § 45a-644(a). The powers and duties of a conservator of the estate are set forth in General Statutes § 45a-655(a), which provides that " [t]he conservator shall manage all the estate and apply so much of the net income thereof, and, if necessary, any part of the principal of the property, which is required to support the conserved person and those members of the conserved person's family whom the conserved person has the legal duty to support and to pay the conserved person's debts, and may sue for and collect all debts due the conserved person." General Statutes § 45a-655(a). " In general terms, a conservator of the estate is required to manage the conservatee's estate for the benefit of the conservatee . . ." Gross v. Rell, 304 Conn. 234, 250-51, 40 A.3d 240 (2012). A conservator of the estate, as an arm of the Probate Court, has an affirmative duty to protect the assets of a conserved person's estate. Dept. of Social Services v. Saunders, 247 Conn. 686, 708, 724 A.2d 1093 (1999).
Pursuant to General Statutes § 45a-655(a), a conservator of the estate has the duty to take inventory of " the value of the conserved person's interest in all property in which the conserved person has a legal or equitable present interest . . ." General Statutes § 45a-655(a). A conserved party's equitable interest in a pre-existing revocable trust is part of the conservatorship estate. See, e.g., Mirto v. Villano, Superior Court, judicial district of New Haven, Docket No. CV-10-6014122-S (June 27, 2013, Fischer, J.) (conservator of the estate has the duty to manage a conservatee's equitable interests, including assets held in trust); Lebo v. Anderson, Superior Court, judicial district of New London, Docket No. CV-11-6010615-S (May 31, 2013, Cosgrove, J.) (conservator has the duty to ensure that trustees related to the estate do not breach their fiduciary duty).
In accepting the appointment as the conservator of Elia's estate, Seblatnigg had a duty pursuant to General Statutes § 45a-655(a) to inventory and manage all property in which Elia had " a legal or equitable present interest." Elia's conservatorship estate included her equitable interest in the Connecticut revocable trust.
C
As our Supreme Court has explained, " a conservator has only such powers as are expressly or impliedly given to him by statute . . . In exercising those powers, he is under the supervision and control of the Probate Court . . . [which] is under an affirmative duty to protect the assets of an incompetent's estate . . . The court, and not the conservator, is primarily entrusted with the care and management of the ward's estate, and, in many respects, the conservator is but the agent of the court . . . Under our law, it is clear that the conservator acts under the supervision and control of the Probate Court in the care and management of the ward's estate." (Citations omitted; emphasis in original; internal quotation marks omitted.) Murphy v. Wakelee, 247 Conn. 396, 406-07, 721 A.2d 1181 (1998). " A conservator has an implied power to enter into contracts on behalf of his ward's estate where such contracts involve the exercise of the express or implied powers which are granted to the conservator by statute . . . If such a contract has been previously authorized by the Probate Court, or is subsequently approved by that court, the ward's estate will be bound thereto . . . The authorization or approval of the Probate Court, however, is essential, and without it the ward's estate is not liable." (Citation omitted; internal quotation marks omitted.) Zanoni v. Hudon, 48 Conn.App. 32, 36-37, 708 A.2d 222, cert. denied, 244 Conn. 928, 711 A.2d 730 (1998).
A conservator of the estate may create and fund a trust on behalf of a conserved person with the approval of the Probate Court. The Probate Court has statutory authority to authorize a conservator to establish a trust funded with estate assets. See Dept. of Social Services v. Saunders, supra, 247 Conn. at 708. General Statutes § 45a-655(e) provides in pertinent part that " [u]pon application of a conservator of the estate, after hearing with notice to the Commissioner of Administrative Services, the Commissioner of Social Services and to all parties who may have an interest as determined by the court, the court may authorize the conservator to make . . . transfers of income and principal from the estate of the conserved person in such amounts and in such form, outright or in trust, whether to an existing trust or a court-approved trust created by the conservator, as the court orders to or for the benefit of individuals, including the conserved person, and to or for the benefit of charities, trusts or other institutions . . ." General Statutes § 45a-655(e). Nothing in the statute authorizes a conservator to create and fund a trust with assets of the conserved person's estate without Probate Court approval. Indeed, such acts would be wholly inconsistent with the conservator's role as an agent of the Probate Court and with the statute itself, which specifically directs the court to " give consideration to . . . in the case of a trust, whether the trust should be revocable or irrevocable, existing or created by the conservator and court approved ." (Emphasis added.) General Statutes § 45a-655(e).
This subsection goes into much greater detail, providing in part that " [s]uch gifts or transfers shall be authorized only if the court finds that: (1) In the case of individuals not related to the conserved person by blood or marriage, the conserved person had made a previous gift to that unrelated individual prior to being declared incapable; (2) in the case of a charity, either (A) the conserved person had made a previous gift to such charity, had pledged a gift in writing to such charity, or had otherwise demonstrated support for such charity prior to being declared incapable; or (B) the court determines that the gift to the charity is in the best interests of the conserved person, is consistent with proper estate planning, and there is no reasonable objection by a party having an interest in the conserved person's estate as determined by the court; (3) the estate of the conserved person and any proposed trust of which the conserved person is a beneficiary is more than sufficient to carry out the duties of the conservator . . . both for the present and foreseeable future, including due provision for the continuing proper care, comfort and maintenance of such conserved person in accordance with such conserved person's established standard of living and for the support of persons the conserved person is legally obligated to support; (4) the purpose of the gifts is not to diminish the estate of the conserved person so as to qualify the conserved person for federal or state aid or benefits; and (5) in the case of a conserved person capable of making an informed decision, the conserved person has no objection to such gift. The court shall give consideration to the following: (A) The medical condition of the conserved person, including the prospect of restoration to capacity; (B) the size of the conserved person's estate; (C) the provisions which, in the judgment of the court, such conserved person would have made if such conserved person had been capable, for minimization of income and estate taxes consistent with proper estate planning; and (D) in the case of a trust, whether the trust should be revocable or irrevocable, existing or created by the conservator and court approved. The court should also consider the provisions of an existing estate plan, if any." General Statutes § 45a-655(e).
Under General Statutes § 45a-655(e), Seblatnigg, as conservator of Elia's estate, was required to make an application to the Greenwich Probate Court to have the Probate Court approve the establishment of the Delaware irrevocable trust and the proposed transfer of estate assets into the trust or into Peace at Last, the limited liability company wholly owned by the trust. Seblatnigg did not do so. Absent the prior approval of the Greenwich Probate Court, the Delaware irrevocable trust is void ab initio and unenforceable, and all transfers of estate assets into the Delaware irrevocable trust or directly into Peace at Last, were unauthorized and improper. All assets so transferred must be returned to Elia's estate.
D
Whether the fact that Elia herself, and not her conservator Seblatnigg, executed the instrument creating the Delaware irrevocable trust, and is identified as the grantor therein, somehow validates a trust that would be otherwise void and unenforceable appears to present an issue of first impression. If Elia had been found incapable of managing her finances before she signed the trust instrument, the Delaware irrevocable trust would unquestionably be void. Once a conservator has been appointed to manage the financial affairs of a person who is incapable of doing so, the conserved party no longer has the legal capacity to contract or transfer assets, and any contract or conveyance entered into by a person who has been adjudicated incompetent is deemed void, rather than voidable. See Doris v. McFarland, 113 Conn. 594, 605, 156 A. 52 (1931); see also Wiser v. Clinton, 82 Conn. 148, 151, 72 A. 928 (1908) (" the unrevoked appointment of a conservator furnishes conclusive evidence of the incapacity of the ward, so that his contracts and conveyances will be regarded as wholly void"); Wright-Kahn v. Appeal from Probate, Superior Court, judicial district of New Haven, Docket No. CV-09-403432-S (March 16, 2010, Corradino, J.) (" the rights of a conserved person to exercise certain rights . . . are restricted by the fact of the conservatorship having been established.").
When a conservator is appointed pursuant to a petition for voluntary representation, however, the restriction on the legal capacity of the conserved party is not as clearly framed. " Because no finding of incapacity is reached when applications for voluntary conservatorships are granted, and because the enabling statute is silent, it is not clear to what extent persons so represented remain legally capable to contract, convey title, or have charge of their persons. Retention of legal capacities of this kind would appear inconsistent with the purposes of voluntary representation." Whitnum-Baker v. Appeal from Probate, Superior Court, judicial district of Stamford-Norwalk, Docket No. CV-12-5013979-S (August 12, 2013, Tobin, J.) (citing and quoting Folsom, Incapacity, Powers of Attorney & Adoption in Connecticut § 2:5 (3d ed. 2000)). Nothing in the statute suggests that our legislature intended to distinguish between a voluntary and an involuntary conservatorship with respect to whether a conserved party retains any authority to manage his or her own estate while the conservatorship remains in effect; see Reale v. Reale, supra, Superior Court, Docket No. CV-12-FA-99-70340-S (January 12, 2000, Klaczak J.) ; the only difference is that under a voluntary conservatorship, the conserved party may seek to be released from the conservatorship upon thirty days' notice pursuant to General Statutes § 45a-647, and upon such release, the conserved party again has the legal capacity to manage his or her own affairs. Until such time, however, the conservator, as the agent of the Probate Court, has the exclusive authority to manage the affairs of the conserved person.
Section 45a-647 provides that " [a]ny person who is under voluntary representation as provided by section 45a-646 shall be released from voluntary representation upon giving thirty days' written notice to the Court of Probate."
This is consistent with the admonition to the petitioner on an application for voluntary representation, where the Probate Court is required by statute to advise the petitioner that issuance of a decree granting the application for voluntary representation will subject the petitioner and/or the petitioner's property to the authority of the conservator. See General Statutes § 45a-646.
No genuine issue of material fact exists as to whether Elia was under a voluntary conservatorship at the time she executed the instrument creating the Delaware irrevocable trust. While Seblatnigg, as conservator, could have created and funded the Delaware irrevocable trust with the Greenwich Probate Court's approval, she chose instead to do so without the court's authorization. As a result, the Delaware irrevocable trust is void ab initio and unenforceable, and all transfers of assets from Elia's conservatorship estate to the trust or to Peace at Last were unauthorized and improper.
The court notes that Seblatnigg entered into other agreements, such as the asset protection services agreement with First State Facilitators and the legal representation agreement with Mauceri, on Elia's behalf as her conservator.
V
Accordingly, the plaintiff's motion for summary judgment (#146.00) is granted. Judgment shall enter in favor of the plaintiff declaring that (i) the Susan D. Elia Irrevocable Trust dated September 15, 2011 is void ab initio and unenforceable, and (ii) all transfers of assets from Elia's conservatorship estate to the Susan D. Elia Irrevocable Trust dated September 15, 2011 or to its wholly owned limited liability company, Peace at Last, LLC were unauthorized and improper, and it is hereby ORDERED that the assets from Elia's conservatorship estate that were transferred to the Susan D. Elia Irrevocable Trust dated September 15, 2011 or to Peace at Last, LLC, shall be immediately returned to Elia's conservatorship estate.