Crystal Gabianelli et al. v. Bridjetta Germain (2011)

MEMORANDUM OF DECISION RE APPLICATION FOR PREJUDGMENT REMEDY (# 130.31)

FACTS AND PROCEDURAL HISTORY

The plaintiffs, Crystal and Andrew Gabianelli, commenced the present action against the defendant, Bridjetta Germain, by an application for a prejudgment remedy on October 18, 2010.

The plaintiffs' proposed complaint states a cause of action for unjust enrichment and alleges the following facts.   The plaintiffs are the issue of Josephine Gabianelli and Jerry Gabianelli, who were divorced by a dissolution judgment entered on March 23, 1992.¹  As part of the decree, the court ordered Jerry Gabianelli to maintain the plaintiffs as the irrevocable beneficiaries of his Federal Employee's Group Life Insurance (FEGLI) policy until each attained the age of eighteen.   Jerry Gabianelli and the defendant were married on September 25, 1993.   In 1994, when the plaintiffs were approximately seven and five years old, respectively, Jerry Gabianelli designated the defendant as the beneficiary of his FEGLI policy.   Jerry Gabianelli and the defendant were divorced on November 8, 2001.   Jerry Gabianelli died testate on June 24, 2009.

The plaintiffs further allege that the defendant wrongfully, unconscionably and fraudulently received $326,000 as the proceeds of the decedent's FEGLI policy.   The plaintiffs pray for the imposition of a constructive trust.

The plaintiffs and the defendant filed briefs in support of and in opposition to the plaintiffs' application on January 27, 2011.   The court held a hearing on the plaintiffs' application on the same date.

DISCUSSION

AStandard Of Review

“[T]he purpose of a prejudgment remedy ․ is to serve as security for the satisfaction of the plaintiff's judgment, should he obtain one ․ A prejudgment remedy is primarily designed to forestall any dissipation of assets by the defendant and to bring them into the custody of the law to be held as security for the satisfaction of such judgment as the plaintiff may recover in a manner consistent with the requirements of due process.”  (Citations omitted;  internal quotation marks omitted.)  TES Franchising, LLC v. Feldman, 286 Conn. 132, 148, 943 A.2d 406 (2008).  “The adjudication made by the court on [an] application for a prejudgment remedy is not part of the proceedings ultimately to decide the validity and merits of the plaintiff's cause of action.   It is independent of and collateral thereto.”  (Internal quotation marks omitted.)  Marlin Broadcasting, LLC v. Law Office of Kent Avery, LLC, 101 Conn.App. 638, 647, 922 A.2d 1131 (2007).

General Statutes § 52-278d(a) “clearly mandates that, in seeking a prejudgment remedy, a plaintiff must show probable cause that a judgment will issue in an amount equal to, or greater than, the amount of the prejudgment remedy sought.”  TES Franchising, LLC v. Feldman, supra, 286 Conn. 147.   “The legal idea of probable cause is a bona fide belief in the existence of the facts essential under the law for the action and such as would warrant a man of ordinary caution, prudence and judgment, under the circumstances, in entertaining it ․ Probable cause ․ does not demand that a belief be correct or more likely true than false ․ Under this standard, the trial court's function is to determine whether there is probable cause to believe that a judgment will be rendered in favor of the plaintiff in a trial on the merits.”  (Citations omitted;  internal quotation marks omitted.)  Id., 137.  “Section 52-278d(a) explicitly requires that a trial court's determination of probable cause in granting a prejudgment remedy include the court's taking into account any defenses, counterclaims or set-offs ․ Such consideration is significant because a valid defense has the ability to defeat a finding of probable cause.”  (Citation omitted;  emphasis in original;  internal quotation marks omitted.)  Id., 141.

B

Whether the Plaintiffs' Interest Vested upon the Entry of the Dissolution Judgment

The plaintiffs argue that the 1992 divorce judgment vested them with a present equitable interest in the proceeds of the decedent's FEGLI policy.   Accordingly, the plaintiffs maintain that their interest “could not be destroyed by [the] execution of a change [of] beneficiary form in favor of the defendant.”   In support of their argument, the plaintiffs rely primarily upon the decision reached in Cannata v. Cannata, Superior Court, judicial district of Middlesex, Docket No. CV 59965 (June 24, 1992, Austin, J.).

In opposition to the plaintiffs' application, the defendant relies upon the rule of Connecticut law that “any order of child support purporting to extend beyond a child's eighteenth birthday is outside the jurisdiction of the court and of no force and effect.”  (Internal quotation marks omitted.)  Broaca v. Broaca, 181 Conn. 463, 464, 435 A.2d 1016 (1980).   The defendant argues that “by both operation of the language of the divorce agreement itself and by operation of law, the obligation of the plaintiffs' father to provide insurance for their benefit terminated upon their reaching the age of majority.”   The syllogism follows that, since the decedent died after the plaintiffs reached the age of majority, the plaintiffs did not have an interest in the proceeds.   Therefore, the defendant asserts that she did not receive the proceeds wrongfully.

Contrary to the defendant's assertion, the occurrence of a condition stated in divorce decree does not terminate an interest in insurance proceeds thereby created.   Rather, the occurrence of the condition returns the power to change the beneficiary of the policy to the insured.  Williams v. Sistare, 36 Conn.Sup. 252, 417 A.2d 369 (1980).   Accordingly, the issue that the court must examine is whether the plaintiffs' interest vested upon the entering of the dissolution judgment in 1992.

“[A] constructive trust arises contrary to intention and in invitum, against one who, by fraud, actual or constructive, by duress or abuse of confidence, by commission of wrong, or by any form of unconscionable conduct, artifice, concealment, or questionable means, or who in any way against equity and good conscience, either has obtained or holds the legal right to property which he ought not, in equity and good conscience, [to] hold and enjoy ․ A constructive trust arises where a person who holds title to property is subject to an equitable duty to convey it to another on the ground that he would be unjustly enriched if he were permitted to retain it ․ If sufficient consideration appears to support the insured's promise to make the claimant the beneficiary of his interest therein, the claimant takes a vested interest in the proceeds.   And this is true regardless of the fact that the policy gives the insured the right to change the designation ․ A settlement of property rights arising from a contemplated divorce is satisfactory consideration for the acquisition of a vested interest in a policy designation.”  (Citations omitted;  emphasis added;  internal quotation marks omitted.)  Hunter v. Hunter, 41 Conn.Sup. 289, 292-93, 570 A.2d 246 (1989).  “This interest is superior to that of a named beneficiary who has given no consideration, notwithstanding policy provisions permitting the insured to change the designated beneficiary freely.”  (Internal quotation marks omitted.)  Id., 93.

The plaintiffs' contention that Cannata v. Cannata, supra, Superior Court, Docket No. CV 59965, is analogous to the present cause is incorrect.   In Cannata, a husband and wife had “entered into a stipulated judgment that resolved certain disputes arising out of the prior dissolution of their marriage,” a condition of which was that the husband agreed to maintain his child as the beneficiary of a life insurance policy provided by his employer until the child reached the age of majority.  Id. The husband changed the beneficiary to his second wife fraudulently and in contravention of the stipulated judgment.  Id. The husband died two years later and the insurance company issued the proceeds of the policy to his second wife.  Id. Based on these facts, the court granted the plaintiff's motion for summary judgment and established a constructive trust.  Id.

Cannata is distinguishable from the present case because the rights of the child in that case emanated from a stipulated judgment.   Thus, there was some degree of consideration supporting the assertion that the plaintiff's interest had vested at the time that the court entered the stipulated judgment.   In the present case, the 1992 dissolution judgment was not the result of a stipulation or settlement.   The decedent was bound by the decree to maintain the plaintiffs as the beneficiaries of his FEGLI policy, but there was no consideration underlying the terms of the judgment.   Accordingly, at trial, the court is likely to find that the plaintiffs' rights to the insurance proceeds did not vest in 1992.   Therefore, the court does not find probable cause that the plaintiffs are likely to prevail on the merits of their cause of action at trial.

C

Whether Federal Law May Preempt the Terms of the Divorce Decree

The defendant also argues in opposition to the plaintiffs' application that the provisions of the Federal Employee's Group Life Insurance Act (FEGLIA) ² preempt the Superior Court's equitable power to impose a constructive trust on the proceeds of a FEGLI policy.   In support of this argument the defendant relies upon 5 U.S.C. § 8709(d)(1), which provides in part:  “The provisions of any contract under this chapter which relate to the nature or extent of coverage or benefits ․ shall supersede and preempt any law of any State or political subdivision thereof, or any regulation issued thereunder, which relates to group life insurance to the extent that the law or regulation is inconsistent with the contractual provisions.”

In support of this argument, the defendant relies primarily upon Metropolitan Life Ins. Co. v. Sullivan, 897 F.Sup. 65 (E.D.N.Y.1995), aff'd, 196 F.3d 18 (2d Cir.1996), cert. denied, 519 U.S. 1122, 117 S.Ct. 972, 136 L.Ed.2d 856 (1997);  and Mercier v. Mercier, 721 F.Sup. 1124 (D.N.D., 1989).   The defendant contends that each of these cases support the proposition that § 8709(d)(1) preempts state divorce decrees.   See Metropolitan Life Ins. Co. v. Sullivan, supra, 897 F.Sup. 69 (section 8709(d)(1) “has been consistently applied by the federal appellate courts to preempt state court divorce decrees which preclude changes in the designation of beneficiaries in contradiction of section 8705(a)”).

The plaintiff replies that § 8709(d)(1) preempts state regulation of FEGLIA only where such regulation conflicts with federal law.   In support of this proposition, the plaintiff relies on the decision reached in Fagan v. Chaisson, 179 S.W.3d 35 (Tex.App.2005), which indicates a split in authority between the federal courts and various state courts over the breadth of the preemption clause codified at § 8709(d)(1).   See id., 42, citing Kidd v. Pritzel, 821 S.W.2d 566, 575 (Mo.Ct.App.1991) (“We hold that the [equity] claims of the plaintiffs are not pre-empted by FEGLIA.”);  Eonda v. Affinito, 427 Pa.Super. 317, 325, 629 A.2d 199, 123 (Pa.Super.Ct.1993) (constructive trust does not contravene any of the federal interests underlying FEGLIA and, therefore, is not preempted by FEGLIA);  Sedarous v. Sedarous, 285 N.J.Super. 316, 318-19, 666 A.2d 1362, 1363 (N.J.Super.App.Div.1995) (“We hold that FEGLIA does not preempt the power of the state court to impose a constructive trust on the proceeds of insurance after the death of the obligor spouse”);  McCord v. Spradling, 830 So.2d 1188, 1203 (Miss.2002) (FEGLIA does not preempt state court equitable actions).   The Fagan court recognized that “there is a higher standard for federal pre-emption in the area of domestic relations.”  Fagan v. Chaisson, supra, 179 S.W.3d 45.   The court joined the majority of state court decisions in finding that § 8709(d)(1) does not preempt a state court's equity jurisdiction “because there is nothing in the federal statutes, regulations, or case law preventing state courts from imposing a constructive trust on FEGLIA insurance proceeds.”  Id., 42.

Whether § 8709(d)(1) preempts the equitable prerogative of the Superior Court to impose a constructive trust on the proceeds of a FEGLI policy is an issue of first impression in Connecticut.   It stands to reason that this issue poses a significant hurdle for the plaintiffs at trial.   Therefore, for the purposes of the plaintiffs' application for a prejudgment remedy, the court does not find probable cause to believe that the plaintiffs are likely to prevail on the merits of their claim at trial.

CONCLUSION

For the foregoing reasons, the plaintiffs' application for a prejudgment remedy is denied.

The Court

By Hiller, J.

FOOTNOTES

FN1. See Gabianelli v. Gabianelli, Superior Court, judicial district of Ansonia-Milford, Docket No. FA 90 2790S (March 23, 1992, Mancini, A.T.R.)..  FN1. See Gabianelli v. Gabianelli, Superior Court, judicial district of Ansonia-Milford, Docket No. FA 90 2790S (March 23, 1992, Mancini, A.T.R.).

FN2. See the Federal Employee's Group Life Insurance Act, 5 U.S.C. § 8701 et seq..  FN2. See the Federal Employee's Group Life Insurance Act, 5 U.S.C. § 8701 et seq.

Hiller, Arthur A., J.