Opinion
No. FST CV 10 6004013 S
December 16, 2010
MEMORANDUM OF DECISION RE MOTION TO DISMISS (104.00)
I. FACTS
On March 10, 2010, the plaintiffs, Mark Everett and Robert Everett, filed a six-count complaint against the defendants, Montague Everett and Louann Cartiglia, alleging the following facts. The decedent, T.E. Montague Everett, executed a trust instrument in 1996, naming himself as trustee, his spouse as successor trustee and his four sons as co-successor trustees. The trust provided that upon the decedent's death the trust assets would be distributed in equal shares to the decedent's four sons. The decedent's last will and testament provided that any of his assets not owned by the trust at the time of his death were bequeathed to the trustee of the trust, which made the decedent's entire distributable estate governed by the trust. On February 19, 2003, the decedent executed the first amendment to the trust, appointing Mark Everett as the successor trustee. While serving in the trustee capacity in 2003, Mark Everett obtained information from the decedent's investment advisor indicating that investments owned by the trust at that time had a cash value of $820,000 and death benefits of approximately $1.75 million. On January 2, 2004, the decedent executed a second amendment to the trust, which removed Mark Everett as successor trustee, named the defendant as a co-trustee with the decedent, and gave both co-trustees the power to act alone with respect to trust transactions. The decedent and the defendant amended the trust on December 29, 2004, and March 10, 2005, to delete provisions designating the decedent's spouse as a potential trust beneficiary.
Montague Everett filed the motion to dismiss in the present matter; therefore, he will herein be referred to as the "defendant."
The decedent's four sons are the two plaintiffs, the defendant, Montague N. Everett, and Richard Everett, who is not a party to this suit.
The plaintiffs further allege that on or about May 20, 2005, the defendant exercised his power of attorney over the decedent to have the decedent cosign a mortgage loan for a New Milford, Connecticut property, in order for the defendant to acquire title to the property. In late 2005, the decedent sold his home in California and moved with his spouse from California to an assisted living facility in Stamford, Connecticut. While the decedent was living in Stamford, the defendant improperly used the decedent's personal credit card. According to account statements, as of December 2007, there was over $1 million in death benefits payable under investment accounts owned by the trust. The decedent passed away on March 26, 2008, in Stamford, Connecticut.
These account statements were obtained through the efforts of Richard Everett, who became the successor trustee after the defendant was removed as the fiduciary of the trust.
During the subsequent Connecticut Probate Court proceedings, the defendant's attorney provided the plaintiff's with a document estimating that the total taxable estate of the decedent was $1.5 million. No further documentation was provided by the defendant concerning this estimate. The defendant failed to file an inventory with the Probate Court nor provide the plaintiffs with any information regarding trust transactions since January 2004. The plaintiffs filed an application that was granted by the Stamford Probate Court requiring the defendant to account for the trust estate. Despite that order, the defendant failed to provide an accounting. The defendant was removed as the fiduciary for the trust because of his failure to account, and Richard Everett became the successor fiduciary. After his removal, the defendant indicated to the plaintiffs that there was only about $125,000 in trust assets, consisting of a loan of $75,000 from the decedent to Robert Everett, and a loan of $49,500 to the daughter of the decedent's spouse.
In the complaint, the plaintiffs also allege that the defendant "never adequately explained" the difference between his attorney's estimate of $1.5 million in trust assets and the later estimate of $125,000, nor did he provide information regarding how trust assets were used for the benefit of the decedent during his lifetime that would explain how trust assets in excess of $1 million disappeared during the period that the defendant served as trustee. After the decedent's death, the defendant had control over the assets belonging to the decedent's estate, including proceeds from the sale of real estate and approximately $450,000 that was withdrawn from an annuity account owned by the decedent. The plaintiffs maintain that the defendant improperly used assets belonging to the decedent's estate for the benefit of himself and the defendant Cartiglia.
In count one of the complaint, the plaintiffs allege that the defendant, as trustee, breached the fiduciary duties owed to them as beneficiaries of the trust, including the duty to refrain from self-dealing. In count two, the plaintiffs allege that the defendant, as an individual in control of assets belonging to the decedent's estate, breached the fiduciary duties owed to the plaintiffs as beneficiaries of the estate, including the duty to refrain from self-dealing. In count three, the plaintiffs allege that the defendant, in his individual capacity and as trustee, unjustly enriched himself through misuse of the trust and estate assets totaling approximately $2 million, to the detriment of the plaintiffs as beneficiaries of the trust and estate. In count four, the plaintiffs allege that the defendant, in his individual capacity and as trustee, converted trust and estate assets totaling approximately $2 million, to the detriment of the plaintiffs as beneficiaries of the trust and estate. In count five, the plaintiffs allege that the defendant, in his individual capacity and as trustee, stole trust and estate assets totaling approximately $2 million, which entitle them to treble damages under General Statutes § 52-564. In count six, the plaintiffs allege that the defendant is obligated to provide an accounting for the period he served as trustee of the trust pursuant to General Statutes § 52-401 et seq.
On May 14, 2010, the defendant filed a motion to dismiss accompanied by a memorandum of law on the ground of lack of jurisdiction, or alternatively, that Connecticut is a forum non conveniens. Subsequently, the plaintiffs filed an objection and memorandum of law in opposition to the motion dismiss, and the defendant filed a reply memorandum. The motion was argued at the September 20, 2010 short calendar.
II. DISCUSSION
"A motion to dismiss . . . properly attacks the jurisdiction of the court, essentially asserting that the plaintiff cannot as a matter of law and fact state a cause of action that should be heard by the court." (Internal quotation marks omitted.) Bacon Construction Co. v. Dept. of Public Works, 294 Conn. 695, 706, 987 A.2d 348 (2010). "The grounds which may be asserted in [a motion to dismiss] are: (1) lack of jurisdiction over the subject matter; (2) lack of jurisdiction over the person; (3) improper venue; (4) insufficiency of process; and (5) insufficiency of service of process." Zizka v. Water Pollution Control Authority, 195 Conn. 682, 687, 490 A.2d 509 (1985), citing Practice Book § 143, now § 10-31. "Because a lack of personal jurisdiction may be waived by the defendant, the rules of practice require the defendant to challenge that jurisdiction by a motion to dismiss." (Internal quotation marks omitted.) Golodner v. Women's Center of Southeastern Connecticut, Inc., 281 Conn. 819, 825, 917 A.2d 959 (2007).
"When a trial court decides a jurisdictional question raised by a pretrial motion to dismiss on the basis of the complaint alone, it must consider the allegations of the complaint in their most favorable light . . . In this regard, a court must take the facts to be those alleged in the complaint, including those facts necessarily implied from the allegations, construing them in a manner most favorable to the pleader." (Internal quotation marks omitted.) Conboy v. State, 292 Conn. 642, 651, 974 A.2d 669 (2009). "The motion to dismiss . . . admits all facts which are well pleaded, invokes the existing record and must be decided upon that alone . . . Where, however . . . the motion is accompanied by supporting affidavits containing undisputed facts, the court may look to their content for determination of the jurisdictional issue and need not conclusively presume the validity of the allegations of the complaint." (Internal quotation marks omitted.) Ferreira v. Pringle, 255 Conn. 330, 346-47, 766 A.2d 400 (2001).
"If the defendant challenging the court's personal jurisdiction is a foreign corporation or a nonresident individual, it is the plaintiff's burden to prove the court's jurisdiction." Cogswell v. American Transit Ins. Co., 282 Conn. 505, 515, 923 A.2d 638 (2007). In this context, "the court must undertake a two-part inquiry to determine the, propriety of its exercising such jurisdiction over the defendant. The trial court must first decide whether the applicable state long-arm statute authorizes the assertion of jurisdiction over the [defendant]. If the statutory requirements [are] met, its second obligation [is] then to decide whether the exercise of jurisdiction over the [defendant] would violate constitutional principles of due process." (Internal quotation marks omitted.) Kenny v. Banks, 289 Conn. 529, 533, 958 A.2d 750 (2008).
A. Personal Jurisdiction.
The defendant argues that as a nonresident individual he is not subject to the court's jurisdiction because the Connecticut long-arm statute does not authorize the assertion of personal jurisdiction over him as either an individual or as a trustee, and that even if the statutory requirement is met the exercise of jurisdiction over him would violate constitutional principles of due process. The defendant argues that since he has challenged whether the court has personal jurisdiction it is the plaintiffs' burden to prove the court's jurisdiction, and that the plaintiffs have failed to establish the factual allegations necessary for the long-arm statute to apply. The plaintiffs counter that the defendant is subject to personal jurisdiction under the state long-arm statute, General Statutes § 52-59b, because the complaint contains sufficient factual allegations to establish that the plaintiffs' claims arise out of the defendant (1) transacting business in Connecticut, and (2) committing tortious acts in Connecticut. The plaintiffs argue that the court's exercise of personal jurisdiction over the defendant comports with due process because the defendant has sufficient minimal contacts with the state of Connecticut.
1. Personal Jurisdiction under General Statutes § 52-59b.
Section 52-59b(a) provides, in relevant part, that "as to a cause of action arising from any of the acts enumerated in this section" jurisdiction may be exercised over a nonresident individual who: "(1) Transacts any business within the state; (2) commits a tortious act within the state . . . [or] (4) owns, uses or possesses any real property situated within the state . . ." General Statutes § 52-59b(a). For the court "to find [personal] jurisdiction over a nonresident defendant, only one of the provisions of § 52-59b needs to be satisfied." Pro Performance Corporate Services, Inc. v. Goldman, 47 Conn.Sup. 476, 483, 804 A.2d 248 [ 32 Conn. L. Rptr. 404] (2002).
The long-arm statute does not define what constitutes "transacts any business," but the Connecticut Supreme Court has "construe[d] the term 'transacts any business' to embrace a single purposeful business transaction." Zartolas v. Nisenfeld, 184 Conn. 471, 474, 440 A.2d 179 (1981). "A 'purposeful business transaction' is one in which the defendant has engaged in some form of affirmative conduct allowing or promoting the transaction of business within the forum state." Zemina v. Petrol Plus, Inc., Superior Court, judicial district of New Haven, Docket No. CV 97 128590 (March 3, 1998, Levin, J.) ( 22 Conn. L. Rptr. 94, 95). "In determining whether the plaintiffs' cause of action arose from the defendants' transaction of business within this state we do not resort to a rigid formula. Rather, we balance considerations of public policy, common sense, and the chronology and geography of the relevant factors." Zartolas v. Nisenfeld, supra, 184 Conn. 477.
The plaintiffs' argument that the defendant transacted business in the state is based on the following allegations: that the defendant used his power of attorney over the decedent "to cosign a mortgage loan for a New Milford, Connecticut property thereby making it possible for Defendants to acquire title to said property;" that the defendant improperly used the decedent's personal credit card while the decedent was living within the state; that the defendant failed to provide an accounting in violation of an order issued by a Connecticut Probate Court; and that the defendant misused "[e]state assets having a situs in Connecticut."
The allegation that the defendant acquired property in Connecticut by having the decedent cosign a mortgage most closely resembles the "single purposeful business transaction" analysis formulated in Zartolas. The plaintiffs argue that by having the decedent cosign for a mortgage loan the defendant engaged in self-dealing, which supports counts one and two of the complaint alleging that the defendant breached his fiduciary duty as both a trustee and as an individual. The defendant, however, argues that this allegation does not actually state that the defendant was acting in his capacity as trustee or that the alleged transaction affected the trust.
As stated in the complaint, the allegation concerning the purchase of the New Milford, Connecticut property does not set forth that the defendant was acting in his capacity as a trustee when he had the decedent cosign the mortgage or that the mortgage was signed in the name of the trust rather than the decedent himself. The complaint also fails to state that the defendant used trust assets in order to secure the mortgage, to pay for any portion of the mortgage or to pay any other costs associated with the property. Ultimately, this allegation merely asserts that the defendant had the decedent cosign for a mortgage by exercising his power of attorney and does not implicate any misuse of the powers granted to the defendant as a trustee. The plaintiffs' cause of action does not arise from the defendant's alleged purchase of the New Milford, Connecticut property; therefore, this factual allegation does not support the argument that the defendant is subject to personal jurisdiction under the transacting business prong of the long-arm statute.
Despite the allegation that the defendant used his position of having a power of attorney for the decedent in order to purchase property in Connecticut, the plaintiffs do not assert that the defendant is subject to personal jurisdiction under General Statutes § 52-59b(a)(4), which provides that jurisdiction may be exercised over a nonresident individual who: "owns, uses or possesses any real property situated within the state . . ." Based on the allegation in the complaint, the defendant's ownership of property in Connecticut could be sufficient to exercise personal jurisdiction over the defendant, even if the property was no longer in the defendant's possession at the time the suit was commenced. In paragraph five of the defendant's affidavit attached to the motion to dismiss, however, the defendant asserts: "I do not own any real estate in the State of Connecticut." The defendant does not address whether he ever owned the New Milford property in his memorandum of law in support of the motion to dismiss, the affidavit, or the reply memorandum in response to the plaintiffs' objection to the motion to dismiss. The following, from a footnote in Zartolas v. Nisenfeld, supra, 184 Conn. 477 n. 5, suggests that past ownership, use, or possession of real property in Connecticut may be sufficient to establish personal jurisdiction over a nonresident: "Although the plaintiffs have ignored [§]52-59b(a)(4), we note that under the New York long arm statute [on which the Connecticut statute is modeled] . . . courts have based jurisdiction upon a nonresident defendant's ownership, use, or possession of real property situated within the state, although at the time of suit the defendant's ownership, use or possession had ceased." (Citation omitted.)
The allegation that the defendant transacted business in Connecticut by misusing the decedent's personal credit card fails to assert that the defendant's conduct was improper in his capacity as trustee, or that trust assets were affected by his use of the personal credit card. Based on the facts presented in the complaint, the credit card was the decedent's personal card and not one connected directly to any trust-related accounts. The complaint fails to allege that the defendant used trust assets to pay for the expenses incurred on the personal credit card. Pursuant to § 52-59b, the alleged improper use of the credit card provides an insufficient basis for finding that the defendant transacted business in Connecticut.
With respect to the plaintiffs' allegation that the defendant's failure to comply with a Connecticut Probate Court order constituted the transaction of business, the defendant did not choose to direct any action towards the state in his contact with the Connecticut Probate Court. Further, the fact that the decedent's estate was probated in Connecticut was determined by the decedent's domicile in an assisted living facility in Connecticut at the time of his death, not by any affirmative action by the defendant. The defendant's contact with the probate court does not constitute transacting business pursuant to § 52-59b.
The allegations that the defendant misused estate assets having a situs in Connecticut are not supported by any specific factual allegations. Reading the allegations in the light most favorable to the plaintiffs, they seem to be alleging that the decedent had assets in Connecticut at the time of his death, that these assets were therefore part of the decedent's estate and should have poured over into the trust, but that the defendant misused these assets. The defendant argues that these allegations are devoid of facts regarding the administration of the trust in Connecticut. The question whether these estate assets were properly placed in the trust by the defendant is a critical factual dispute that must be determined by an evidentiary hearing. If it was determined that the defendant did conduct business transactions with estate assets in the state of Connecticut, then the defendant would be subject to personal jurisdiction pursuant to General Statutes § 52-59b(a)(1). An evidentiary hearing is necessary to determine whether the defendant's use of estate assets rises to the level of transacting business in Connecticut. Without such a hearing, the court cannot conclude there is jurisdiction based on General Statutes § 52-59b(a)(1).
"[W]here a jurisdictional determination is dependent on the resolution of a critical factual dispute, it cannot be decided on a motion to dismiss in the absence of an evidentiary hearing to establish jurisdictional facts . . . Likewise, if the question of jurisdiction is intertwined with the merits of the case, a court cannot resolve the jurisdictional question without a hearing to evaluate those merits . . . An evidentiary hearing is necessary because a court cannot make a critical factual [jurisdictional] finding based on memoranda and documents submitted by the parties." (Citations omitted; internal quotation marks omitted.) Conboy v. State, supra, 292 Conn. 652-54.
The plaintiffs also argue that the defendant is subject to personal jurisdiction in Connecticut under General Statutes § 52-59b(a)(2) for committing tortious acts within the state. The primary basis of the allegations in the plaintiffs' complaint is that the defendant improperly used his position as trustee and his power over the decedent's estate to appropriate assets that should have been distributed equally to all four sons of the decedent. The plaintiffs do not set forth how the defendant managed to carry out the alleged misappropriation. The facts in the complaint allege that the trust had a value of at least $1 million as late as four months before the decedent's death, but that upon administration of the trust after the decedent's death there was essentially no money remaining in the trust. The plaintiffs allege that the defendant breached his fiduciary duties by "diverting asserts belonging to the Estate" and by "fraudulently concealing misuse of Estate assets," that the defendant unjustly enriched himself through misuse of estate assets, and that the defendant converted estate assets. Nonetheless, these allegations do not specify what actions the defendant took to carry out the alleged misappropriation and which actions specifically occurred in Connecticut that would give rise to personal jurisdiction over the defendant under § 52-59b(a)(2).
The causes of action asserted in counts three, four and five for unjust enrichment, conversion and statutory theft are based upon the alleged misuse and misappropriation of trust and estate assets and are not supported by specific factual allegations. Read in the light most favorable to the plaintiffs, the allegations assert that the decedent had assets in Connecticut at the time of his death, that these assets were therefore part of the decedent's estate and should have poured over into the trust, but that the defendant misappropriated these assets. As was the case in determining whether the defendant's use of estate assets constituted transacting business under § 52-59b(a)(1), an evidentiary hearing would be necessary to determine and whether the defendant misused these estate assets in a manner that would constitute committing a tortious act within the state under § 52-59b(a)(2). If it was determined that the defendant did commit a tortious act in the state of Connecticut through the misuse or misappropriation of trust or estate assets, then the causes of action of unjust enrichment, conversion and statutory theft would arise from the commission of a tortious act within the state and the defendant would be subject to personal jurisdiction pursuant to § 52-59b(a)(2). The question of whether the decedent had any assets in Connecticut at the time of his death and whether these estate assets were misused or misappropriated by the defendant is a critical factual dispute that must be determined by an evidentiary hearing. In order to determine whether the court has personal jurisdiction over the defendant for the causes of action in counts three, four and five, an evidentiary hearing must be held to determine whether the defendant's use of estate assets constitutes committing a tortious act in Connecticut under § 52-59b(a)(2).
Counts one, two and six, however, do include factual allegations that the defendant committed tortious acts in the state of Connecticut by breaching his fiduciary duties to the plaintiffs, as both a trustee and individual, based upon his failure to provide an accounting of trust assets in compliance with the Stamford Probate Court, and by failing to provide the beneficiaries of the trust with information regarding estate assets alleged to be located in the state of Connecticut. "The requisite elements of a valid and enforceable trust are: (1) a trustee, who holds the trust property and is subject to duties to deal with it for the benefit of one or more others; (2) one or more beneficiaries, to whom and for whose benefit the trustee owes the duties with respect to the trust property; and (3) trust property, which is held by the trustee for the beneficiaries." (Internal quotation marks omitted.) Palozie v. Palozie, 283 Conn. 538, 545, 927 A.2d 903 (2007). "A fiduciary . . . relationship is characterized by a unique degree of trust and confidence between the parties, one of whom has superior knowledge, skill or expertise and is under a duty to represent the interests of the other." Dunham v. Dunham, 204 Conn. 303, 322, 528 A.2d 1123 (1987), overruled on other grounds by Santopietro v. New Haven, 239 Conn. 207, 213 n. 8, 682 A.2d 106 (1996).
There is no dispute that the trust in question existed or that the defendant, as trustee, had a fiduciary relationship with the plaintiffs. The dispute arises from the plaintiffs' allegation that the defendant breached his fiduciary duties to the plaintiffs within the state of Connecticut. "The essential elements to pleading a cause of action for breach of fiduciary duty under Connecticut law are: (1) That a fiduciary relationship existed which gave rise to (a) a duty of loyalty on the part of the defendant to the plaintiff, (b) an obligation on the part of the defendant to act in the best interests of the plaintiff, and (c) an obligation on the part of the defendant to act in good faith in any matter relating to the plaintiff (2). That the defendant advanced his or her own interests to the detriment of the plaintiff; (3). That the plaintiff sustained damages; (4). That the damages were proximately caused by the fiduciary's breach of his or her fiduciary duty." T. Merritt, 16 Connecticut Practice Series: Elements of an Action (2010-2011 Ed.) § 8:1, p. 534.
Upon the decedent's death in Connecticut in 2008, his last will and testament was probated in the state of Connecticut. According to the complaint, the defendant failed to file an inventory of the decedent's estate with the Probate Court, refused to provide the plaintiffs, as beneficiaries, with information regarding trust transactions, and failed to comply with a Probate Court order to provide an accounting of trust assets. The defendant was removed as the fiduciary of the trust based on the failure to provide the accounting of trust assets. "[T]he existence of a trust relationship is accompanied as a matter of course by the right of the beneficiary to demand of the fiduciary a full and complete accounting at any proper time . . . The scope of such accounting depends of course upon the circumstances of the individual case, and, as a general rule, should include all items of information in which the beneficiary has a legitimate concern." (Citations omitted; internal quotation marks omitted.) Zuch v. Connecticut Bank Trust Co., 5 Conn.App. 457, 462-63, 500 A.2d 565 (1985). Based on the fiduciary relationship between the defendant and the plaintiffs, the defendant had an obligation to provide the plaintiffs with information relating to the trust and any estate assets that would be bequeathed to the trust upon the decedent's death.
According to the allegations of the plaintiffs' complaint, the defendant breached his fiduciary duty to them, as beneficiaries of the decedent's trust and estate, by failing to provide (1) an inventory and accounting during the course of the Probate Court proceedings, and (2) information regarding estate assets alleged to be located in the state of Connecticut. This alleged breach of fiduciary duty constitutes the commission of a tortious act within the state because a fiduciary relationship existed between the parties, the defendant advanced his own interests at the expense of the plaintiffs' interests, and the plaintiffs sustained damages due to the defendant's breach of his fiduciary duty. Therefore, the defendant is subject to personal jurisdiction under § 52-59b(a)(2) on counts one, two and six.
B. Due Process.
The defendant argues that even if the court finds that the long-arm statutory requirement is satisfied this matter should be dismissed on the ground that it would violate constitutional principles of due process to assert personal jurisdiction over him, because he lacks the required minimum contacts with the state of Connecticut. In response, the plaintiffs counter that the defendant has sufficient minimum contacts with Connecticut that comport with the principles of due process. Specifically, they argue that the defendant has purposefully directed his activities at residents of this state, availed himself of the benefits and burdens of Connecticut law and could reasonably anticipate facing litigation here.
"[T]he constitutional due process standard requires that, in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice . . . The due process test for personal jurisdiction has two related components: the 'minimum contacts' inquiry and the 'reasonableness' inquiry. The court must first determine whether the defendant has sufficient contacts with the forum state to justify the court's exercise of personal jurisdiction . . .
"For the purposes of this initial inquiry, the Supreme Court of the United States has articulated, and this court has recognized, two types of personal jurisdiction. Either specific jurisdiction or general jurisdiction can satisfy the constitutional requirement of sufficient minimum contacts between the defendant and the forum. A state court will have specific jurisdiction over a nonresident defendant whenever the defendant has purposefully directed [its] activities at residents of the forum . . . and the litigation [has] result[ed] from alleged injuries that arise out of or relate to those activities . . . Whether a given defendant has contacts with the forum state sufficient to satisfy due process is dependent upon the facts of the particular case. Like any standard that requires a determination of reasonableness, the minimum contacts test . . . is not susceptible of mechanical application; rather the facts of each case must be weighed to determine whether the requisite affiliating circumstances are present . . .
"Once minimum contacts have been established, [t]he second stage of the due process inquiry asks . . . whether it is reasonable under the circumstances of the particular case." (Citations omitted; internal quotation marks omitted.) Cogswell v. American Transit Ins. Co., 282 Conn. 505, 523-25, 923 A.2d 638 (2007). "The twin touchstones of due process analysis under the minimum contacts doctrine are foreseeability and fairness. [T]he foreseeability that is critical to due process analysis . . . is that the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there." (Citations omitted.) CT Page 1345 United States Trust Co. v. Bohart, 197 Conn. 34, 41, 495 A.2d 1034 (1985).
The complaint sets forth a number of factual allegations that are relevant in analyzing the defendant's contacts with Connecticut. From January 2, 2004 until the decedent's death in 2008, the defendant and the decedent served as cotrustees of the trust. The decedent was a resident of Connecticut from late 2005 until his death. The trust provided that trust assets would be distributed to the trust beneficiaries upon the decedent's death, meaning the defendant knew there was a strong likelihood that the estate of the decedent would be probated in Connecticut, where the decedent was a domiciliary. The defendant participated in the Connecticut Probate Court proceeding, but failed to provide either an inventory or an accounting to comply with the Probate Court order. In addition, the alleged acquisition of title to the New Milford property and the use of the decedent's personal credit card while the decedent resided in Connecticut are evidence of further contacts with the state that are, at least tangentially, related to the defendant's role in managing the trust and the affairs of the decedent.
These factual allegations demonstrate that the defendant purposely directed activities towards residents of the state of Connecticut and had sufficient contacts with the state, such that he could reasonably anticipate being haled into court within the state. The allegations in the complaint are based entirely on the actions of the defendant in managing the decedent's affairs in the years before his death and, more importantly, the alleged tortious actions of the defendant in carrying out his duties to the plaintiffs following the decedent's death. The alleged tortious actions either occurred, or came to light, when the defendant was involved with the Connecticut Probate Court in the aftermath of the decedent's death. The court determines that the defendant has the required minimum contacts with Connecticut, that he could reasonably anticipate facing suit in the state, and that it comports with the principles of due process for the court to assert personal jurisdiction over the defendant.
C. In Rem Jurisdiction Over the Trust and Corpus of the Trust.
The defendant argues that the court lacks in rem jurisdiction over the trust and the trust corpus and therefore cannot render any decision that will directly affect the trust or trust assets. The plaintiffs argue that consideration of in rem jurisdiction is unnecessary because where a court has personal jurisdiction over the trustee of a trust, the court likewise has the jurisdiction to order the trustee to distribute trust assets. The plaintiffs further argue that in rem jurisdiction is not relevant to the present matter because "[t]his action is about wrongful conduct by [the defendant] not the interpretation or validity of the trust."
"If a court's jurisdiction is based on its authority over the defendant's person, the action and judgment are denominated 'in personam' and can impose a personal obligation on the defendant in favor of the plaintiff. If jurisdiction is based on the court's power over property within its territory, the action is called 'in rem' or 'quasi in rem.' The effect of a judgment in such a case is limited to the property that supports jurisdiction and does not impose a personal liability on the property owner, since he is not before the court." Shaffer v. Heitner, 433 U.S. 186, 199, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977). The defendant relies on Hanson v. Denkla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958), in support of his argument that, since the court does not have jurisdiction over the trust or the trust corpus, it should not exercise jurisdiction over the present action.
The decision in Hanson addressed an action seeking a declaration of who was entitled to disputed trust assets. The Supreme Court ruled that the Florida state courts did not have in rem jurisdiction over the corpus of the disputed trust, and did not have personal jurisdiction over the trustee, a nonresident trust company situated in Delaware, because the trustee did not have sufficient contacts with Florida. The present case differs from Hanson, however, in two significant respects. First, the court's jurisdiction is based on authority over the defendant's person, not the property of the trust. Analysis of the allegations has already established that the court has personal jurisdiction over the defendant. Second, the causes of actions set forth by the plaintiffs do not ask the court to determine who is entitled to trust assets. Rather, the allegations assert that the defendant is personally liable for engaging in tortious conduct based on the administration of the trust and the fiduciary obligations he owed to the plaintiffs, and the issue of whether the court has in rem jurisdiction over the trust and trust corpus is not relevant to the court's exercise of jurisdiction over the present case.
D. Forum Non Conveniens.
Lastly, the defendant, in the alternative, argues that even if the court finds jurisdiction over this matter, the court should dismiss the case on the ground that Connecticut is a forum non conveniens. The defendant argues that application of the four-step process articulated by the Connecticut Supreme Court in Durkin v. Intevac, Inc., 258 Conn. 454, 480, 782 A.2d 103 (2001), for analyzing forum non conveniens claims favors dismissal of the case, because New York or California is a better situated forum. The plaintiffs contend that Connecticut is an appropriate forum for the case to be heard and that the Durkin factors do not favor either New York or California significantly enough to overcome the presumption in favor of a plaintiff's choice of forum.
"A court that decides to dismiss a case on the ground of forum non conveniens has jurisdiction but elects to dismiss the case and defer to another forum." Durkin v. Intevac, Inc., supra, 258 Conn. 480. "The common law doctrine of forum non conveniens is an exception to the general rule that a court must hear and decide cases over which it has jurisdiction by statute or constitution, and recognizes the discretion of a court, in some few instances, where jurisdiction and venue are proper . . . to dismiss a suit because the court has determined that another forum is better suited to decide the issues involved." (Citations omitted.) Sabino v. Ruffolo, 19 Conn.App. 402, 405-06, 562 A.2d 1134 (1989). "The overriding inquiry in a forum non conveniens motion is not whether some other forum might be a good one, or even a better one than the [plaintiffs'] chosen forum. The question to be answered is whether [the plaintiffs'] chosen forum is itself inappropriate or unfair because of the various private and public interest considerations involved . . . Accordingly, the trial court, in exercising its structured discretion, should place its thumb firmly on the [plaintiffs'] side of the scale, as a representation of the strong presumption in favor of the [plaintiffs'] chosen forum, before attempting to balance the private and public interest factors relevant to a forum non conveniens motion.
"When . . . the plaintiffs are foreign to their chosen forum, the trial court must readjust the downward pressure of its thumb, but not remove it altogether from the plaintiffs' side of the scale. Even though the plaintiffs' preference has a diminished impact because the plaintiffs are themselves strangers to their chosen forum . . . Connecticut continues to have a responsibility to those foreign plaintiffs who properly invoke the jurisdiction of this forum . . . The defendants . . . continue to bear the burden to demonstrate why the presumption in favor of [the plaintiffs'] choice . . . should be disturbed . . .
"With these principles in mind, we turn to the four step process for examining forum non conveniens claims . . . First, the court should determine whether an adequate alternative forum exists that possesses jurisdiction over the whole case . . . Second, the court should consider all relevant private interest factors with a strong presumption in favor of — or, [where plaintiffs are foreign to their chosen forum,] a weakened presumption against disturbing — the plaintiffs' initial choice of forum . . . Third, if the balance of private interest factors is equal, the court should consider whether any public interest factors tip the balance in favor of trying the case in the foreign forum . . . Finally, if the public interest factors tip the balance in favor of trying the case in the foreign forum, the court must . . . ensure that [the] plaintiffs can reinstate their [action] in the alternative forum without undue inconvenience or prejudice." (Citations omitted; internal quotation marks omitted.) Durkin v. Intevac, Inc., supra, 258 Conn. 465-66.
Under the first Durkin factor, the defendant argues that there are two adequate alternative forums: the state of New York, because all the parties are residents there, and the state of California, because it is the situs of the trust. In arguing that California is more appropriate, the defendant asserts that it is "the court of primary supervision and the state of administration of the Trust" and that the decedent intended the trust to be governed by California law, as shown by the trust's choice of law provision. The plaintiffs concede that New York would be an adequate alternative forum, but argue, without providing any support or explanation, that California would not be adequate.
The threshold determination in applying the first Durkin factor is whether the alternative forum "possesses jurisdiction over the whole case." Durkin v. Intevac, Inc., supra, 258 Conn. 465. "[I]n rare circumstances, where the remedy offered by the other forum is clearly unsatisfactory, such as where the alternative forum does not permit any litigation of the subject matter of the legal controversy, the other forum may not meet the threshold requirement of an adequate alternative." Picketts v. International Playtex, Inc., 215 Conn. 490, 504 n. 13, 576 A.2d 518 (1990). In Durkin, the court granted the motion to dismiss for forum non conveniens subject to the defendant's stipulation that they would submit to the jurisdiction of the alternative forum. Durkin v. Intevac, Inc., supra, 258 Conn. 480-81. "Ordinarily, [the adequate alternative forum] requirement will be satisfied when the defendant is 'amenable to process' in the other jurisdiction . . . Both state and federal decisions have accepted such a stipulation as satisfying the 'amendable to process' requirement." Vargas v. General Electric Co., judicial district of Stamford-Norwalk at Stamford, Docket No. 08 5007137 (April 30, 2010, J. Jennings). Under the assumption that the defendant in the present case would consent to a similar stipulation agreement for the alternative forums he has suggested, and in the absence of any suggestion that, the New York or California courts could not provide an adequate remedy for the plaintiffs' allegations, both New York and California would be adequate alternative forums.
The court granted the forum non conveniens claim subject to the following: The defendants agreed to: "(1) consent to jurisdiction in Australia; (2) accept service of process in connection with an action in Australia; (3) make their personnel and records available for litigation in Australia; (4) waive any applicable statutes of limitation in Australia up to six months from the date of dismissal of this action or for such other reasonable time as may be required as a condition of dismissing this action; (5) satisfy any judgment that may be entered against them in Australia; and (6) consent to the reopening of the action in Connecticut in the event the above conditions are not met as to any proper defendant in this action." Durkin v. Intevac, Inc., supra, 258 Conn. 481 n. 23.
Under the second Durkin factor, the court must weigh the relevant private interest factors, which are identified as the following: "(1) the relative ease of access to sources of proof; (2) the availability of compulsory process for the attendance of unwilling witnesses, and the cost of obtaining attendance of willing witnesses; (3) the possibility of viewing the accident scene if such viewing is appropriate to the action; (4) the enforceability of a judgment; (5) the relative advantages and obstacles to a fair trial; and (6) all other practical problems that make the trial of a case easy, expeditious and inexpensive." Durkin v. Intevac, Inc., supra, 258 Conn. 467.
Here, the defendant argues that a balancing of the private interest factors weighs in favor of his forum non conveniens claim. The defendant argues that private interest factors number one and two weigh in his favor because "most of the physical evidence and fact witnesses are located in California . . . [and that] the witnesses who can attest to the making of the Trust and Trust-related transactions are located in California" and that the cost of these witnesses appearing in Connecticut would be prohibitively expensive. "The defendants . . . [bear] the burden of persuasion that the chosen forum is inconvenient to potential witnesses for the defense . . . When a dismissal is premised on the convenience of witnesses, more than a mere allegation to that effect is required . . . Rather, the defendant[s] must establish, with specificity, inconvenience to witnesses that is sufficiently prejudicial to justify dismissal . . . A party seeking to transfer a case . . . for the convenience of witnesses must identify the key witnesses to be called and must make a general statement of what their testimony will cover . . . The burden is upon it to give the names and locations of potential witnesses and the substance of their testimony . . . Sufficient information must be included in the affidavits to establish that the named witnesses are key witnesses who need to be called and that their testimony is material." (Citations omitted; internal quotation marks omitted.) Picketts v. International Playtex, Inc., supra, 215 Conn. 509-10.
The defendant in the present case has not provided any information identifying the specific witnesses necessary to this action, why their testimony is necessary, or why it will be inconvenient for the witnesses to appear before a Connecticut court (other than the implied inconvenience of California being far from Connecticut). Although the cost of witnesses traveling from California to Connecticut may be expensive, in the absence of any specific information regarding who these witnesses are and why they are necessary to the case, there is no way for the court to weigh the inconvenience of California witnesses potentially having to travel to Connecticut versus the more certain inconvenience of having all the parties who reside in New York travel to California. The defendant's argument that physical evidence is located in California is similarly insufficient based on the lack of specificity provided. Other than the relevant trust documents, portions of which have already been submitted to the court, and documents related to transactions involving trust and estate assets, it is not apparent what additional physical evidence will be necessary for the court's determination, and the defendant has not specifically identified any such evidence. Further, the defendant has not explained why such evidence, whether currently in California or elsewhere, could not easily be produced in Connecticut. The defendant's assertion that necessary witnesses and physical evidence are located in California is not adequate to support his argument that this private interest factor weighs in favor of dismissal for forum non conveniens.
The defendant further argues that private interest factor number four, concerning the enforceability of a judgment, weighs in his favor because a New York or California judgment will be easier to enforce in those states. Since the parties are all residents of New York, the defendant maintains that a judgment rendered in New York will be more easily enforced in the event that attachment of the parties' personal assets is necessary. The defendant also contends that California is best suited for any claims involving the trust or trust assets, presumably under the logic that California is the forum best suited in the event that attachment of the trust of trust assets is necessary.
Where a court renders a judgment in a matter over which it has personal and subject matter jurisdiction "[t]he full faith and credit clause of the United States constitution provides . . . that 'Full Faith and Credit shall be given in each State to the . . . judicial Proceedings of every other State . . .' U.S. Const., art. IV, § 1." Business Alliance Capital Corp. v. Fuselier, 88 Conn.App. 731, 736, 871 A.2d 1051 (2005). As previously discussed, jurisdiction in the present case is based on personal jurisdiction over the defendant and not in rem jurisdiction over the trust or trust corpus, therefore any judgment rendered by a Connecticut court would be based on the personal liability of the defendant and enforceability of the judgment would not be contingent on jurisdiction over the trust or trust assets. As full faith and credit would be given to any decision rendered by the Connecticut court in the present case, the enforceability of a judgment is not a private interest factor that weighs in favor of dismissal for forum non conveniens.
Concerning the relative advantages and obstacles to a fair trial, the defendant asserts, that private interest factor number five, weighs in favor of dismissal under forum non conveniens because the "[t]rust is governed by California substantive law." The defendant points out that this would be an obstacle to a fair trial in Connecticut because the parties would "be inclined to hire both California and Connecticut legal counsel . . . [which] would be inefficient and costly . . . [However] due to the limited resources of the parties, it is highly likely that some or all parties will forgo hiring California counsel . . ." Although the cost considerations that the defendant describes may be significant, these strategic decisions that must be made by the parties do not rise to the level of being an obstacle to a fair trial. Since both parties are New York residents who live in relatively close proximity to Stamford, Connecticut, they are similarly situated in terms of their relationship to both California and Connecticut, so neither party would have a relative advantage concerning issues relating to the application of California law. The potential need for the parties to interpret California substantive law does not create the relative advantages and obstacles to a fair trial that weighs in favor of dismissal for forum non conveniens.
The balance of the private interest factors do not weigh in favor of dismissal. At most the balance of these factors is equal, in which case the third Durkin factor directs that the court should consider whether any public interest factors tip the balance in favor of trying the case in the foreign forum. Although the defendant did not argue that the public interest factors favor a finding of forum non conveniens, the plaintiffs did argue that this factor favors the Connecticut forum because the action grew out of the tortious acts committed by the defendant in Connecticut.
The defendant argued that since the private interest factors were not equal, but weighed in favor of dismissal, the public interest factors did not need to be addressed.
The public interest factors identified in Durkin are the following: "(1) administrative difficulties for the courts, i.e., court congestion and the court's familiarity with the applicable law; (2) imposing the burden of jury duty on [the] people of a community with no relation to the litigation; (3) holding trial in the view of interested persons; and (4) having matters decided in their local forum." (Internal quotation marks omitted.) Durkin v. Intevac, Inc., supra, 258 Conn. 462. Since all the parties are residents of New York, public interest factors two, three, and four provide some support for New York as an alternative forum so that the burden of jury duty is imposed on those persons most interested in the trial who can decide the matters in their local forum. The forum of Connecticut does, however, have a relationship to the litigation since the alleged tortious actions committed by the defendant in Connecticut arise from his actions before the Connecticut Probate Court, and the forum includes persons who may have an interest in the trial. For these reasons, the public interest factors weigh slightly in favor of the New York forum.
Consideration of all the private and public factors shows that the defendant has failed to meet the burden necessary to demonstrate why the presumption in favor of the plaintiffs' choice of forum should not be honored. The court concludes the defendant's motion to dismiss the action on the ground of forum non conveniens should be denied.
III. Conclusion
The defendant's motion to dismiss is denied in part because: (1) the court has personal jurisdiction over the defendant under § 52-59b(a)(2), on counts one, two and six and the exercise of personal jurisdiction by the court does not offend constitutional principles of due process; (2) an evidentiary hearing is required to rule on the motion to dismiss as to counts three, four and five; (3) the issue of whether the court has in rem jurisdiction over the trust and trust corpus is not relevant to the court's exercise of jurisdiction over the present case; and (4) the defendant has failed to meet the burden necessary to warrant dismissal on the ground of forum non conveniens.
The parties shall work cooperatively with each other and with court, through its civil caseflow office, to schedule a hearing on the unresolved factual issues involving counts three, four and five.