Opinion
FSTCV125013807S.
11-20-2012
Connie GRANT v. PROBATE APPEAL et al.
UNPUBLISHED OPINION
DAVID R. TOBIN, J.T.R.
This matter is an appeal from probate. Connie Grant (the " appellant") appeals from the decision of the court of probate for the district of Darien-New Canaan (Murray, J.) dated November 28, 2011. In that decision, the probate court denied the appellant's application (Ex. 18) filed pursuant to General Statutes § 45a-242(a) to remove attorney Thomas J. Drew (" Drew") as executor of the estate of Julia Grant, deceased.
The appellant appealed from the order of the probate court denying her application. Connecticut General Statutes § 45a-186(a) provides: " Appeals from any decision rendered in any case after a recording is made of the proceedings under section 17a-498, 17a-685, 45a-650, 51-72 or 51-73 shall be on the record and shall not be a trial de novo." In this case, no party claimed that a record or a recording of the proceedings before the probate court was made. Accordingly, the appellant's appeal was tried before the court as a trial de novo.
" In an appeal from probate there is a trial de novo in which the Appellant has the opportunity to present any evidence which could have been offered in the probate court, whether or not it was actually offered. And in the ordinary probate appeal, the superior court decides the matters on which the appeal was taken without regard to the action or decree of the probate court." Prince v. Sheffield, 158 Conn., 286, 294 (1969). When conducting a trial de novo the court must hear evidence and make " an independent determination, without regard to the result reached by the probate court." Prince v. Sheffield, supra, 158 Conn, at 286, 298-99. The court may not give any reference to the probate court's decision. Andrews v. Gorby, 237 Conn. 12, 16-17 (1996). The court may not consider any evidence of events which transpired after the probate court hearing. Gardner v. Balboni, 218 Conn. 220, 225 (1991); Andrews' Appeal from Probate, 78 Conn.App. 429, 438-440 (2003).
An evidentiary hearing on the appellant's application to remove Drew as executor was held on October 4 and 5, 2012. The standards for removal of fiduciaries by the probate court are set forth in General Statutes § 45a-242(a), which provides, in relevant part: " The court of probate having jurisdiction may, upon its own motion or upon the application and complaint of any person interested ... after notice and hearing, remove any fiduciary if: (1) The fiduciary becomes incapable of executing such fiduciary's trust, neglects to perform the duties of such fiduciary's trust, [or] wastes the estate in such fiduciary's charge ..."
" Our law makes clear that the removal of the fiduciary of an estate is an extraordinary remedy to be applied only when necessary to protect against harm caused by the continuing depletion or mismanagement of an estate ... [U]nderlying the rule ... is the recognition that the decedent has specifically chosen the fiduciary for the specific purpose of administering his estate and managing the claims of persons with conflicting interests in the estate ... The party seeking removal of a fiduciary has the burden of showing that the estate's interests will suffer continuing harm if the fiduciary is not removed." (Internal citations and quotation marks omitted.) Saccu's Appeal from Probate, 97 Conn.App. 710, 714 (2006).
BACKGROUND FACTS
At the evidentiary hearing the following facts were established. Julia Grant, a resident of Darien, died on January 31, 2011. She was survived by two sons, Michael Grant and Jordan Grant, and two daughters, Connie Grant and Victoria Grant. All of the children were adults of mature age. Julia Grant was predeceased by her husband, Lyle Dean Grant. Her will dated June 10, 1997 (Ex. 16) and a codicil dated November 18, 2010 (Ex. 17) were admitted to probate on April 25, 2011 and Drew's appointment as sole executor, as set forth in the codicil, was confirmed.
Drew had served as attorney for Julia Grant and her husband for a number of years prior to her death and had drafted both the will and the codicil. At the time of her death, Julia Grant lived with her daughters at 5 Oakland Terrace in Darien. That property was a single-family residence which was owned by Julia Grant and constituted the principal asset of her estate. The residence was encumbered only by a mortgage securing a home equity line of credit with a modest balance.
$2,970.92 according to a draft return of claims prepared by Drew. (Ex 7.)
The following provisions of the will are relevant to the court's determination of the issues in this case. Article II.A. of the will provided for the disposition of tangible personal property— all to the husband if he survived, if not, " to my then living children, in equal shares, per stirpes." Article II.C. of the will provided for the disposition of the residuary estate— all to the husband if he survived, if not, " to my children, in equal shares, per stirpes."
Article II.C. further provided that if the husband were to disclaim any property, that property would be distributed in accordance with Articles III. and IV. of the will. Article III. provided for the establishment of a " Family Trust." Article IV. stated the terms under which the trust was to be administered.
A significant provision of the will responsible, in large measure, for the conflicts which have afflicted the decedent's survivors and the present application for removal of Drew as executor is Article IV.G. That section provided:
G. Specific Instruction Regarding Real Property. Notwithstanding any other terms of this instrument in the event any real property or improvements are in the Family Trust established through this instrument, then upon the death of the survivor of myself and my spouse, my Trustee shall be required to sell or otherwise liquidate such real property and distribute the net proceed in accordance with the terms of this instrument unless all my surviving children unanimously agree to an alternate arrangement.
Since the decedent's husband did not survive her and no trust was or could have been established under the will, the provisions of Article IV.G of the will were not operative. The will did not contain a parallel provision requiring the executor of the estate to sell real property in the absence of an agreement of all of the surviving children. Drew's misunderstanding of the terms of the will and his mistaken belief that Article IV.G. required him to sell the decedent's residence was the genesis of the conflicts which have lasted since the decedent's death and much needless expense.
Article VIII of the will set forth the powers granted to the executor. Article VIII.A.2. set forth the power for the executor, in his discretion, to sell any real or personal property of the estate.
DREW'S RELIANCE ON A PURPORTED MANDATE IN THE WILL TO SELL THE RESIDENCE
Even before Julia Grant's will was admitted to probate, it became clear that the family was not in agreement as to the disposition of their mother's residence. The sons, who did not reside on the property, wished to have their sisters move out and to have the property sold without delay. The daughters wished to remain in residence at the home until it was sold, believing that they had the right to do so pursuant to General Statutes § 45a-321(b).
" The family of the decedent shall be allowed to remain in the dwelling house occupied by him at the time of his death, and may occupy such land and buildings connected therewith as the court considers necessary for their convenience and comfort until the same is sold, distributed or otherwise disposed of according to law."
While the petition for probate was pending, Drew made it clear to the Grant children that he believed that Article IV.G. of the will required him to sell the residence at 5 Oakland Terrace unless the children unanimously agreed otherwise. The evidence shows that Drew was in nearly constant communication via e-mail with Jordan Grant who was urging him to " start proceedings to remove Vicky & Connie from the house" (Ex. 20); " Get Vicky and Connie out of that house" (Ex. 67); " Those girls need to be evicted, period!" (Ex. 26).
At the time of his mother's death Jordan had certain unexplained tax issues that caused him to suggest that a limited liability company be formed with the four children as members. The residence would be transferred to the LLC and then leased to the daughters until it would be sold and the proceeds divided among the members. Drew actively supported the LLC concept which ultimately was abandoned when the Grant children could not agree on the terms under which the daughters could remain in the house and as to how the proceeds of an ultimate sale would be divided.
Shortly after his appointment as Executor, Drew was in conversations with Jordan Grant about retaining counsel to bring a summary process action against the appellant and her sister. (Ex. 22, Ex. 51, Ex. 53.) Apparently, Drew was of the opinion that it was necessary to evict the appellant and her sister before the residence could be placed on the market. The time and expense incurred by Drew in pursuing the eviction action was the direct result of his misapprehension of the duties imposed upon him under the will.
The appellant repeatedly warned Drew that his attempts to sell the house or to broker an arrangement to place the house in a limited liability company were not required under the will, and that there was no reason why the estate could not be closed without delay, leaving the Grant children to work out among themselves the basis on which they could place the house on the market. (Ex. 36, Ex. 44, Ex. 58, Ex. 59.) As early as May 31, 2011, in an e-mail to Jordan which Jordan forwarded to Drew, Connie wrote: " You're still not reading the will correctly. Maybe Tom isn't either ... The will does not say it sells immediately upon Mom's death ... That only applied if there was a trust and if none of us had reached the age of 40. There was no trust; selling the house after the last parent dies does not apply." (Ex. 58, 59.) In a June 23, 2011 e-mail to Drew, the appellant directly pointed out to Drew that, in the absence of a family trust, there was no mandate to sell the residence. In the same e-mail, Drew was advised that the decedent's four children could, and would, sell the residence as soon as possible. (Ex. 36.) These warnings were not heeded by Drew. However, Jordan became concerned that the appellant's claims might have merit.
In a March 8, 2011 e-mail to Drew, Jordan stated that the appellant's actions are " against you and my parents' wishes as outlined in their wills. (Ex. 34.) However, in a June 12, 2011 e-mail to Drew, Jordan stated: " I feel seeing as how she [the appellant] is now quoting specific paragraphs from the will that you really should explain to all of us exactly why she is wrong (or right)." In a July 8, 2011 e-mail to Drew, Jordan stated: " [The appellant] is really stuck on the wording of that one portion of the will. Why in hell would my mom have ever have it where the house deed was put in our names when she knew [the appellant] was going to be a problem." (Ex. 37, 38.) In an August 5, 2011 e-mail to Drew, Jordan again asked whether the appellant was correct in her claim that the house did not have to be sold. The evidence does not show that Drew responded to either of the e-mails. There is no indication that Drew ever responded to any of these e-mails.
There was no evidence that Drew ever advised Jordan or any of the other beneficiaries that the will did not require him to sell the residence. Drew's failure to inform the beneficiaries as to the operative provisions of the will was clearly the result of his own mistaken belief that he was required by the will to sell the residence. For example, in an e-mail dated June 15, 2011 to the appellant, he stated " Any deal re keeping the house is among you and your siblings. Please communicate any suggestions to them." (Ex. 11.) Moreover, in a June 22, 2011 e-mail to Jordan Grant, he stated: " Once the property is transferred out of the Estate and to the four of you or an LLC, for example, the wording of the will is gone. " (Emphasis supplied.)
DREW'S TESTIMONY
On the morning of the second day of the hearing, Drew testified that he continued to believe that the provisions of Article IV.G. of the will (requiring the trustee of the family trust to sell the residence in the absence of a unanimous agreement of the children) applied with equal force to him, in his capacity as executor. He acknowledged that there were no provisions of the will that expressly required the executor to sell the property. However, he claimed that the requirements of Article IV.G. were, nevertheless, applicable. By way of explanation, he testified: " My view towards this, Your Honor, is that the language is in here or the many, many, many wills I have done, I know that I don't put this language in a will, unless a client would tell me to do that. As so, I know my impression that I did that, because it was a very specific request by the clients." According to Drew, Article IV.G. was " to me a statement of intent as to what the testatrix desired. That's how I interpret that."
When it became clear that the court was skeptical of his reading of the will, Drew went on to claim that the " liquidity needs in the estate" also required its sale. When questioned by the court, Drew testified that he had not yet sought probate court approval to sell the residence and that he brought the action to evict the daughters without first requesting probate court approval. Drew admitted that he had not yet done an analysis of the estate's liquidity even though he now claimed that the lack of liquidity was, in part, his justification for deciding to evict the daughters and sell the residence more than eighteen months previously.
By the time the issue of the daughters' continued occupancy of the residence came before the probate court, the housing court had already entered judgment in favor of Drew and against the daughters. The housing court did not address the issue of the daughters' rights to continue in occupancy of the residence until the property was sold in accordance with General Statutes § 45a-321(b). (Ex. 9.)
DREW'S CLAIMS OF ILLIQUIDITY
On the afternoon of the second day of testimony, Drew presented to the court a " financial analysis" to the court that he had prepared earlier that day to support his claims of illiquidity. (Ex. 70.) That analysis purported to show that the sale of the residence was necessary in order to pay the decedent's debts and administration expenses. The analysis showed that the estate had liquid assets of approximately $17,041 (including $12,750 from the sale of the decedent's automobile) and anticipated disbursements of $64,839, leaving a projected deficit of $47,798. The apparent purpose of that analysis was to demonstrate that Drew had no choice other than to sell the decedent's residence in order to raise the funds required to pay debts and administration expenses.
As noted above, the provisions of the will did not require the executor to sell the residence. However, Article VIII.A.2. of the will also granted the executor the discretionary power to: " sell at public or private sale ... any real or personal property of the estate ..."
The anticipated disbursements included estimated legal fees of $23,491 and estimated executor's fees of $15,661 to be paid to Drew. These fees were estimated based on three percent and two percent of the gross taxable estate, respectively. The evidence shows that Drew had previously advised the beneficiaries that his fees would be based on time and hourly rates. (Exs. 21, 62 & 63.) Drew testified that he had not yet presented a bill to the estate or to the beneficiaries. However, he acknowledged that he had " spent a huge amount of time ... There's numerous matters. Again, I think it's up to 35 pleadings and four different tribunals have to respond to."
Included in Drew's list of anticipated disbursements were claims in the amount of $8,904.50, based on a draft of a return of claims prepared by Drew. (E.7.) However, the two largest claims shown on that list of claims were $2,970.92 for the balance of a home equity line of credit and $2,680.00 for legal fees claimed by Drew as a debt. Article I of the decedent's will expressly provided that the " claims of any mortgage" were not to be paid. There was no indication as to the nature of the legal services that Drew allegedly rendered to the decedent prior to her death. Moreover, there was no indication that Drew had applied to the probate court, as required by General Statues § 45a-403, for approval of his own claim.
There was no evidence as to whether the executor could have obtained additional cash by drawing down on the decedent's home equity line of credit or by obtaining a new loan secured by a mortgage or the residence. Article VIII.A.3. authorized the executor " [t]o borrow money at interest rates then prevailing from any individual, bank, or other source ... and to create security interests., by mortgage, pledge, or otherwise."
The codicil was executed barely two months prior to the decedent's death. However it was a simple one-page document hardly justifying a legal fee of over $2,500.
" A fiduciary shall not pay any personal claim of his own against the decedent's estate in his charge until such claim has been approved by the Court of Probate after public notice and hearing ..."
Another anticipated disbursement shown on Drew's analysis was an estimate of $5,000 for " funeral and final illness." Drew testified that this amount included funds that he intended to pay to Jordan Grant to reimburse him for the expenses he incurred in traveling to Florida to visit his mother during her final illness. When questioned, Drew stated that he had not, in fact, made any payments for " funeral and final illness."
The cost of travel to Florida would appear to be Jordan Grant's personal expenses rather than either expenses of the decedent's last illness or funeral expenses.
Drew's analysis also shows a total of $6,738 for real property tax installments due in July 2011 and January 2012. However, Drew testified that the July 2011 installment was not paid by him, but rather by the appellant and her sister.
Of the total of $64,839 in anticipated expenses shown on Drew's schedule, it appears that only $7,572.58 were clearly appropriate. These consisted of the following:
Claims (omitting those of the mortgagee and the unapproved claim of the executor): $3,253.58
Probate Court Fee:
$2,573.00
Hazard Insurance:
$1,746.00
Appraisal:
$ 500.00
Total:
$8,072.58
The balance of nearly $9,000 would have been available to compensate Drew for his reasonable fiduciary and legal services. Drew's support of the LLC concept proposed by Jordan Grant (see his e-mail to the beneficiaries dated June 11, 2011-Ex. 8) demonstrates either that the balance would have been sufficient to pay Drew for his services or that he was willing to defer a portion of his fees until the ultimate sale of the residence. In the course of the hearing, the appellant introduced a large number of e-mails authored by Drew, many of them addressing his efforts to evict the daughters and enable the sale of the residence. In addition, a number of letters from Drew addressed to one or more of the Grant children became exhibits in the hearing. In that correspondence, Drew made repeated references to the mandate he believed he had under the terms of the will to evict the daughters and sell the house. However, he never once claimed that a sale of the residence was required because of the estate's illiquidity.
The court finds that the possible illiquidity of the estate played no part in Drew's decision to evict the petitioner and her sister from the decedent's residence and to sell that property. The court finds that Drew's decisions and actions were solely the result of his misreading of the operative provisions of the decedent's will.
ADVERSE CONSEQUENCES OF DREW'S ADMINISTRATION OF THE ESTATE
Drew actively opposed the application of the appellant to remain in the residence pursuant to General Statutes § 45a-321(b) representing to the probate court that the continued presence of the appellant and her sister in the residence would obstruct the sale of the property. (Ex. 3.) It is not clear that Drew ever advised the probate court as to why he felt compelled to sell the property when the will did not require him to do so.
Drew's mistaken belief as to the terms of the will set in motion a series of events which greatly increased the administration expenses of the estate. Trial counsel was hired to commence an unnecessary action in the housing court to evict Connie and Victoria from the residence. The judgment of the housing court in favor of Drew merely states that judgment for immediate possession had entered in his favor after trial. (Ex. 72.) As noted above, Victoria and the appellant as tenants in common with their brothers would have had the right to continue in occupancy of the residence. Moreover, a transcript of the hearing held before the housing court shows that the court was not asked to address the rights of Victoria and the appellant under General Statutes § 45a-321(b). (Ex. 9.) It appears that the existence of the housing court decision ordering the eviction of Victoria and Connie led the probate court to deny the motion to remain in the residence as provided by § 45a-321(b).
In the notice of judgment, the name of the plaintiff is listed as " Estate of Julia Grant." An estate is not an entity. Isaac v. Mount Sinai Hospital, 3 Conn.App. 598, 600, cert. denied, 196 Conn. 807 (1985). It can neither sue nor be sued. Expressway Associate's II v. Friendly Ice Cream Corp. of Connecticut, 34 Conn. .App. 543, 547 (1994), cert. denied, 230 Conn. 915; Ellis, Executrix v. Cohen et al., 118 Conn.App. 211, 215-16 (2009). Accordingly, the only possible party plaintiff in the housing court case had to be the sole fiduciary, Drew.
Presumably, an action for partition by sale pursuant to Chapter 919 of the General Statutes would have been filed by either or both of the brothers before long.
As noted above, the parties agreed that since neither the appellant nor Victoria still reside in the residence, the appeal of that order of the probate court is now moot.
The eviction of Victoria and the appellant from the residence did not clear the way to an immediate sale. Drew testified that he had engaged Jordan Grant as a home improvement contractor to renovate or repair the residence in order to place it on the market. There is no provision in the will which expressly empowered the executor to renovate or make improvements to any real property comprising a portion of the decedent's estate. However, Article VIII.A.14. grants the executor the power: " [t]o perform all other acts necessary for the property management, investment and distribution of the estate ... property ..."
The engagement of Jordan as a home improvement contractor apparently occurred after November 18, 2012, the date of the probate court hearing on Drew's removal. Accordingly, the court cannot consider Drew's actions in that regard in connection with the merits of the appellant's application to remove him as executor. Gardner v. Balboni, supra.
The court finds that throughout the course of the administration of the estate Drew has exercised poor judgment. His misreading of the terms of the decedent's will led him to incur many unnecessary expenses, including the fees and costs for the action brought in housing court to evict the appellant and her sister as well as the " huge amount" of his own time for which he apparently expects to be compensated. From a review of the e-mails, it is clear that many hours of Drew's time were spent dealing with the conflicts within the family, which can be directly traced to Drew's misapprehension of the terms of the will. If the residence had simply been allowed to pass to the decedent's children, as contemplated by the operative provisions of the decedent's will, the estate could have quickly and efficiently closed.
The court finds that the evidence demonstrates that the appellant is correct in her claim that Drew has mismanaged the estate and wasted its assets. However, the power of the probate court to remove a fiduciary is a discretionary power chiefly addressed to the question of whether the removal is desirable from the viewpoint of the safety of the estate rather than solely as to the issue of whether there has been a breach of duty. Peck v. Searle, 117 Conn. 573 (1933). See also Wilhelm, Settlement of Estates in Connecticut 3d, § 3:20 (2010).
Although the court finds that Drew has neglected to perform his duties as executor of the decedent's estate and has wasted the assets of the estate placed in his charge, the evidence does not demonstrate that Drew's actions arose out of any dishonest purpose or a manifest desire for personal gain. As Drew has not yet been paid any fees for his fiduciary or legal services, the court is of the opinion that the safety of the estate will not be compromised by allowing him to remain in office as executor, despite his past conduct.
The will, as modified by the codicil, does not provide for a successor fiduciary. (Ex. 17.) Any successor fiduciary would have to be appointed by the probate court. In this case, the family is badly divided, perhaps due in no small measure to misunderstandings as to the terms of the will and whether the executor was required to sell the residence. Under these circumstances, appointing one or more of the children as fiduciaries is probably not a viable option for the probate court, but rather a recipe for further controversy and litigation. An independent successor administrator, c.t.a. d.b.n, appointed by the probate court would, at this point, probably have little choice but to continue on the path now being pursued by Drew. At this point, Drew's actions have, without doubt, rendered the estate illiquid. That lack of liquidity will almost certainly require the sale of the residence. As a practical matter, the renovations started by Drew will need to be completed before the residence can be sold for the best price available. At present, it is also apparent that the eviction of the appellant and Victoria cannot be undone.
The present appeal does not involve any issues regarding claims by the appellant and Victoria against Drew for losses they may have suffered as the result of their wrongful eviction.
After the sale of the decedent's residence, Drew will be required to prepare and file a final account which includes a claim for reasonable compensation for his services. In Connecticut, unlike other states, fiduciary compensation is not a matter of statute, but rather of common law. In the landmark case of Hayward v. Plant, 98 Conn. 374, 119 A. 341 (1923), our Supreme Court outlined the factors which must be considered in determining " reasonable" compensation for fiduciaries. The court listed nine factors to be considered: " [W]hat is fair in view of the size of the estate, the responsibilities involved, the character of the work required, the special problems and difficulties met in doing the work, the results achieved, the knowledge, skill and judgment required of and used by the executors, the manner and promptitude in which the estate has been settled and the time and service required, and any other circumstances which may appear in the case and are relevant and material to this determination." Id., at 385. In passing on the amount of Drew's compensation, the probate court will be required to consider not only the time spent by Drew in the administration of the estate, but also the enormous about of time and expense wasted by him because of his failure to read, understand and act in accordance with the applicable provisions of the decedent's will. Under the standards of Hayward v. Plant, supra, it appears that: 1) the estate was a relatively modest one which should not have presented any difficulties to an executor; 2) the only special problems and difficulties encountered by Drew in the administration of the estate were those which he created himself; 3) no special expertise or training was required to read the plain language of the will and determine that eviction of the decedent's daughters was not mandated; 4) the completion of the administration of the estate has been delayed indefinitely by Drew's mistakes. This court is confident that the probate court will consider all relevant factors in determining the amount of compensation that will appropriately compensate Drew for his services.
For the reasons stated above, the appellant's application to remove Drew as executor is denied. The court orders that no costs will be awarded to any party to this probate appeal.