Donna H. Dudek, Trustee of the Felka Trust v. Errol Dudek (2011)

MEMORANDUM OF DECISION

This is a summary process action for possession of the subject premises at 893 Burbank Ave., Suffield, CT and as to land on the southerly side of Burbank Avenue and the westerly side of Woodworth Street, Suffield, CT. On September 29 and October 1, 2010, the parties appeared before the court for trial on the two-count complaint.   The plaintiff alleges that as to the subject properties, the defendant's original right or privilege to occupy the premises has been terminated.   The defendant denies the claim and asserts a number of special defenses and equitable counterclaims.

The court has weighed all the evidence and assessed the testimony and credibility of the witnesses and reaches the conclusions set forth herein by a fair preponderance of the evidence.

BURDEN OF PROOF

“While the plaintiff is entitled to every favorable inference that may be legitimately drawn from the evidence, and has the same right to submit a weak case as a strong one, the plaintiff must still sustain the burden of proof on the contested issues in the complaint and the defendant need not present any evidence to contradict it.”  Lukas v. New Haven, 184 Conn. 205, 211 (1981).   The general burden of proof in civil actions is on the plaintiff, who must prove all the essential elements of their cause of action by a fair preponderance of the evidence.  Gulycz v. Stop & Shop, 29 Conn.App. 519, 523, cert. denied, 224 Conn. 923 (1982).   Failure to do so results in judgment for the defendant.  Id. “․ [W]hat is necessarily implied [in an allegation] need not be expressly alleged.”  Pamela B. v. Ment, 244 Conn. 296, 308 (1998).

STANDARD OF PROOF

The standard of proof in summary process actions, a fair preponderance of the evidence, is “properly defined as the better evidence, the evidence having the greater weight, the more convincing force in your mind.”  (Internal quotation marks omitted.)  Cross v. Huttenlocher, 185 Conn. 390, 394 (1981).

ESSENTIAL ELEMENTS OF THE CLAIM

In a summary process action based on the plaintiff's claim that the defendants originally had the right or privilege to occupy the premises but any such right or privilege has terminated, the plaintiff must prove, by a fair preponderance of the evidence, all the elements of the case.   The essential elements are:  (1) the plaintiff is the owner of the property;  (2) the defendants originally had a right or privilege to occupy the premises but such right or privilege has terminated;  (3) the plaintiff caused a proper notice to quit possession to be served on the defendant to vacate the premises on or before a certain date;  and (4) although the time given the defendant to vacate in the notice to quit possession has passed, the defendant remains in possession of the premises.   Conn. Gen.Stat. § 47a-23(a)(3).

THE PLEADINGS

“The admission of the truth of an allegation [in a] pleading is a judicial admission conclusive on the pleader.”  Jones Destruction, Inc. v. Upjohn, 161 Conn. 191, 199 (1971).  “An admission in pleading dispenses with proof, and is equivalent to proof.”  (Citation omitted.)  Patchen v. Delohery Hat Co., 82 Conn. 592, 594 (1909).

SPECIAL DEFENSES

“[A] special defense is not an independent action;  rather, it is an attempt to plead facts that are consistent with the allegations of the complaint to demonstrate, nonetheless, that the plaintiff has no cause of action.”   (Internal quotation marks omitted.)  Valentine v. LaBow, 95 Conn.App. 436, 447 n. 10 (2005), cert. denied, 280 Conn. 933 (2006).   The defendants have the burden of proving the allegations in their special defenses by a fair preponderance of the evidence.   Lodovico v. Mihalcik, superior court, judicial district of Hartford at Hartford, Docket No. CV-07-50130991 (August 17, 2010, Rittenband, J.T.R.).

THE PROCEEDINGS

“The fact-finding function is vested in the trial court with its unique opportunity to view the evidence presented in a totality of the circumstances, i.e., including its observations of the demeanor and conduct of the witnesses and parties.”  (Internal quotation marks omitted.)  Cavoli v. DeSimone, 88 Conn.App. 638, 646, cert. denied, 274 Conn. 906 (2005).

“It is well established that in cases tried before courts, trial judges are the sole arbiters of the credibility of witnesses and it is they who determine the weight to be given specific testimony ․ it is the quintessential function of the factfinder to reject or accept certain evidence ․” (citations omitted;  internal quotation marks omitted.)  In re Antonio M., 56 Conn.App. 534, 540 (2000).  “The sifting and weighing of evidence is peculiarly the function of the trier [of fact].”  Smith v. Smith, 183 Conn. 121, 123 (1981).  “[N]othing in our law is more elementary than that the trier [of fact] is the final judge of the credibility of witnesses and of the weight to be accorded to the testimony.”  (Citation omitted;  internal quotation marks omitted.)  Toffolon v. Avon, 173 Conn. 525, 530 (1977).  “The trier is free to accept or reject, in whole or in part, the testimony offered by either party.”  Smith v. Smith, supra, 183 Conn. 123.  “Then determination of credibility as a function of the trial court.”  Heritage Square, LLC v. Eoanou, 61 Conn.App. 329, 333 (2001).

“[T]he trier is free to juxtapose conflicting versions of events and determine which is more credible ․ it is the trier's exclusive province to weigh the conflicting evidence and determine the credibility of witnesses ․ the trier of fact may accept or reject the testimony of any witness ․ the trier can, as well, decide what-all, none, or some-of the witnesses' testimony to accept or reject.”  (Citations omitted;  internal quotation marks omitted.)  State v. Osborne, 41 Conn.App. 287, 291 (1996).  “The trial court's function as the finder is to draw whatever inferences from the evidence or facts established by the evidence it deems to be reasonable and logical.”  In re Christine F., 6 Conn.App. 360, 366, cert. denied 199 Conn. 808 (1986).

FINDINGS OF FACT

The following factual findings apply to both counts of the plaintiff's complaint.

1. The plaintiff, Donna H. Dudek, in her capacity as trustee of the Felka trust, is the owner of the subject properties;

2.  The defendant originally had the right or privilege to occupy the premises based on the consent of his parents, the prior owners;

3.  The defendant's right or privilege to occupy the premises has been terminated by Donna H. Dudek, in her capacity as trustee;

4.  On or about November 4, 2008, the plaintiff caused a proper notice to quit possession to be served on the defendant to vacate the premises on or before November 14, 2008;

5.  Although the time given the defendant to vacate in the notice to quit has passed, the defendant remains in possession of the premises;

6.  The actions taken by the plaintiff related to this summary process action were within her powers as trustee (Plaintiff's Exhibit 1);

7.  Negative behaviors of the defendant, including but not limited to preventing an insurance company representative from inspecting the premises (resulting in the loss of insurance on the 893 Burbank Ave property), preventing the plaintiff from moving into the 893 Burbank Ave property to effectuate repairs to the premises, and denying the plaintiff access to the property, led the plaintiff to the conclusion that the defendant was preventing her from properly managing the properties as trustee;

8.  Since the plaintiff became owner of the subject properties, the trust has paid all real estate taxes, insurance bills, and most utility bills;

9.  The defendant has not paid any rent, use and occupancy, or other monies to the trust;

10.  Donna H. Dudek and the defendant are siblings;

11.  The subject properties are held in trust by the Felka family trust;

12.  The trust was created by the parties' father, Fred C. Dudek, in March of 2006;

13.  The trust was funded with the assets of Fred C. Dudek after his death in September of 2006;

14.  The assets of the trust totaled approximately $1,200,000 at the time of Fred C. Dudek's death;

15.  Other than a two- or three-year span between 1969 and 1971 the defendant has lived in the subject premises for his entire life;

16.  The defendant provided physical care and support to his parents in the years before their deaths;

17.  During the time the defendant provided care for his parents, he did not pay rent or use and occupancy to them, as none was requested.

Additional facts will be discussed as necessary.

The court finds that the plaintiff has established all the essential elements of its case by a fair preponderance of the evidence as to both counts of the complaint.

FIRST SPECIAL DEFENSE

The Defendant asserts in his first special defense that the intent of the trustors was to allow him to remain in possession of the subject premises during his lifetime.   The Court finds that nothing within the plain language of the trust supports this proposition.  Cooley v. Cooley, 32 Conn.App. 152, 159, cert. denied, 228 Conn. 901 (1993).   Further, the Court finds that nothing in the remaining evidence, including the testimony of witnesses, gives this court a legal basis to supercede the terms of the trust instrument.   Accordingly, this court finds that the defendant has failed to establish this first special defense by a fair preponderance of the evidence.

SECOND SPECIAL DEFENSE

The defendant asserts that as a trust beneficiary, he holds a beneficial interest in the premises.   In that regard, the defendant asserts that as a trust beneficiary in current possession of the premises, he is a co-owner of the premises and therefore not subject to a summary process action.

The court finds in relation to the defendant's first argument, that the defendant, as a trust beneficiary, has no ownership interest in the individual assets of the trust, including the subject premises.   The evidence adduced at trial does not establish that the defendant enjoys other than a beneficial interest in the trust assets.   A trust beneficiary “has no legal title or ownership interest in the trust assets;  his or her right to sue is ordinarily limited to the enforcement of the trust, according to its terms.” (internal citations omitted) Fandacone v. Fandacone, Superior Court Judicial District of New Britain, Housing Session, Docket No. NBSP-052634 (March 16, 2010, Gilligan, J.).

“In a trust, the trustee has legal title to the res of the trust ․ [t]he trustee is the legal owner of trust property, and as such, the trustee is the proper party for actions affecting title to trust property ․ the trustee has a title ․ to the trust property ․ and almost always has all the powers of management and control which are necessary to make the trust property productive and safe.” (internal citations omitted) Fandacone v. Fandacone, supra at 8. In the instant matter, the plaintiff is the owner of the subject premises as part of the trust assets and brought this matter in accordance with the powers enumerated in the trust instrument.  Scott v. Heinonen, 118 Conn.App. 577 (2009).

Accordingly, the court finds that the defendant has failed to establish his second special defense by a fair preponderance of the evidence.

THIRD SPECIAL DEFENSE

In his third special defense, the defendant asserts that he holds equitable title to the premises and has held such title prior to service of the notice to quit.   This assertion is based on the defendant's argument that his beneficial interest in the trust generally equates to an equitable interest in the individual assets of the premises as part of the trust estate.

The Court finds, based on the foregoing findings of facts and conclusions of law, that the defendant holds neither legal nor equitable title to the individual asset at issue in this matter, the subject premises, despite whatever beneficial or equitable interest the defendant might hold in the trust estate generally.  Stepney Pond Estates, Ltd. v. Monroe, 260 Conn. 406, 433 n.28 (2002).   Further, the defendant has failed to establish any beneficial ownership or right to the use and enjoyment of the premises, as opposed to his present beneficial use related to the privilege to occupy the premises conferred upon him by his deceased parents.  Scott v. Heinonen, supra at 583;  Bender v. Nuzzo, Superior Court, Judicial District of New Haven, Housing Session, Docket No. SPNH 9607 47892 (July 10, 1997, Levin, J.).

Accordingly, the court finds that the defendant has failed to establish his third special defense by a fair preponderance of the evidence.

FOURTH SPECIAL DEFENSE

The defendant seeks the imposition of a constructive trust upon the premises based, among other things, on claims that his deceased father promised him that he could remain in possession of the premises for the defendant's lifetime and that the defendant would be supported by the assets of the Felka trust.   In further support of this claim, the defendant asserts that “she” (either the trust or his sister as a beneficiary) would be unjustly enriched were he to be dispossessed from the premises as his current possession of the premises is the only benefit he has received as a trust beneficiary.

“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.”  Filosi v. Hawkins, 1 Conn.App. 634, 639 (1984);  Gulack v. Gulack, 30 Conn.App. 305, 311-12 (1993).   In order to find that a constructive trust exists and should be imposed, the court must find that a special or confidential relationship existed between the parties.  Id. In Connecticut, there are two types of confidential relationships in the context of constructive trusts:  “(1) where one party is under the domination of another and (2) where circumstances justify one party's belief that his or her welfare or instructions will guide the other's actions.”  Riccio v. Riccio, 75 Conn.App. 556, 559 (2003);  Starzec v. Kida, 183 Conn. 41, 43 n.1 (1981).

In the instant matter, there is no evidence of domination.   As it relates to the trust, it is clear that the plaintiff, as trustee, has a fiduciary duty to the trust beneficiaries, including the defendant.   To some extent then, the defendant's welfare, as a trust beneficiary, must guide the plaintiff's actions.   According to the trust instrument, however, the defendant's individual welfare alone is not the sole focus of the trust.

“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 to, in equity and good conscience, hold and enjoy ․ A constructive trust arises whenever another's property has been wrongfully appropriated and converted into a different form ․ [or] when 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 ․ the issue raised by a claim for a constructive trust is, in essence, whether a party has committed actual or constructive fraud or whether he or she has been unjustly enriched.”  (Citations omitted;  internal quotation marks omitted.)   Stornawaye Properties, Inc. v. O'Brien, 94 Conn.App. 170, 175-76 (2006);  Boudreau v. Boudreau, Superior Court, judicial district of Litchfield at Bantam, Docket No. CV-08-10826 (March 25, 2008, Marano, J.).

A constructive trust should be imposed to prevent the abuse of a confidential relationship.  Schmaling v. Schmaling, 48 Conn.App. 1, 13, cert. denied, 244 Conn. 929 (1998).   The [party seeking to have the court impose a constructive trust] bears the burden of establishing clear and satisfactory facts from which such a trust may be implied.  Starzec v. Kida, 183 Conn. 41, 45 (1981).

The court finds that the defendant has not sustained his burden of establishing clear and satisfactory facts from which a constructive trust may be implied.   First, the defendant has not established that any of the trust assets have been wrongly appropriated, or that there has been any attempt to wrongly appropriate trust assets, by the plaintiff.   Additionally, the defendant has failed to establish that the plaintiff, as trustee of the Felka trust, is under an equitable duty to convey possession of the subject premises, to the defendant.   The duties of the plaintiff, as trustee are clearly laid out in the trust instrument.   Those fiduciary duties extend to all of the trust beneficiaries, not the defendant alone.   The court finds nothing approaching fraudulent behavior in the actions of the plaintiff as trustee, as contained in the record.

Further, based on the entire record, there is insufficient evidence for this court to find that the plaintiff would be unjustly enriched if the Felka Trust were to regain possession of the premises.   The plaintiff would still be bound by the trust instrument and the defendant still retains the legal right to sue according to its terms, as necessary, to safeguard his rights as a trust beneficiary.

Accordingly, the court finds that the defendant has failed to establish his fourth special defense by a fair preponderance of the evidence.

FIFTH SPECIAL DEFENSE

In his fifth special defense, the defendant claims equitable defense against forfeiture.   Although the instant matter is not a traditional example of the landlord-tenant relationship, the courts of this state have held, that “[t]here are in fact four factors that the courts consider and weigh in considering claims for equitable relief in summary process actions.   The first factor ․ is whether the loss to be suffered by the tenant, if evicted, is disproportionate to the loss to the landlord if the tenant is not evicted ․ the second factor is whether the injury to the other party is reparable ․ the third factor ․ is the reason for the nonpayment and the extent to which the tenant is ‘culpable’ ․ the fourth factor ․ is the extent to which the tenant has demonstrated good faith in curing the default.”   East Hartford Housing Authority v. Parker, Superior Court, judicial district of Hartford-New Britain at Hartford, Docket No. SPH 9111-63027 (August 7, 1992, Holzberg, J.) [7 Conn. L. Rptr. 422].  “A court of equity will apply the doctrine of clean hands to a tenant seeking such equitable relief;  thus, a tenant whose breach was ‘wilful’ or ‘grossly negligent’ will not be entitled to relief.”   (Citations omitted;  internal quotation marks omitted.)  Fellows v. Martin, 217 Conn. 57 (1991).   See also Woodside Apartment v. Wilkerson, Superior Court, judicial district of Hartford, Housing Session at Hartford, Docket No. HDSP-138943 (January 8, 2007, Bentivegna, J.);   Bray v. Bray, Superior Court, judicial district of Tolland at Rockville, Docket No. CV08-4008904 (August 27, 2008, dos Santos, J.).

“Equity does not necessarily mean full compensation to the plaintiffs.   Equity is [j]ustice administered according to fairness as contrasted with the strictly formulated rules of common law ․ the term ‘equity’ denotes the spirit and habit of fairness, justness, and right dealing which would regulate the intercourse of men with men ․ [e]quity takes into consideration fairness to both the plaintiff and the defendant.”  (Citations omitted;  internal quotation marks omitted.)  Krasowski v. Fantarella, 51 Conn.App. 186, 199 (1998), cert. denied, 247 Conn. 961 (1999).  “It is fundamental that anyone going into equity and asking its aid submits to the imposition of such terms as well-established equitable principles require ․” (Internal citations omitted) Village II Glen Lochen v. Burnham, Superior Court, judicial district of Hartford at Hartford, Docket No. CV 07-4034048, (June 4, 2010, Peck, J.) [50 Conn. L. Rptr. 85].  “As he is seeking equity he must do equity.”  Caramini v. Telegulias, 121 Conn. 548, 553 (1936).

As to the first factor, the court cannot find that the loss to be suffered by the tenant, if evicted, is disproportionate to the loss to the trust if the defendant remains in possession of the premises.   The court cannot find that the subject premises, as part of the trust, are such a small portion of the trust assets that allowing the defendant to remain in possession of the premises is an equitable balance of the potential losses to the parties, especially given the defendant's status as a trust beneficiary.

As to the second factor, the court cannot find that the injury to the tenant is reparable.   This matter is not a matter sounding in non-payment of rent, where an arrearage can be paid to the plaintiff.   There is not a sufficient factual basis upon which court can rely to find that the defendant is willing or able to assist the plaintiff in fulfilling her fiduciary duties to him and the other trust beneficiaries as it relates to the premises as long as he is in possession of the premises.

As to the third factor, the court does assess some “culpability” to the defendant as it relates to the current situation.   The defendant is a trust beneficiary and occupant of the premises.   The evidence has demonstrated that the defendant is either unwilling or unable to cooperate with the plaintiff to make the subject premises fit for what the plaintiff indicated was her initial plan:  to allow the defendant to reside in a portion of the premises while renting out another part of the premises.   Additionally, the evidence suggests that the defendant's actions have frustrated the plaintiff's attempts to fulfill certain of her fiduciary duties and meet certain of her obligations as trustee.

Finally, the court finds that, even after having been notified of the effect his behaviors were having on the plaintiff's ability to fulfill her fiduciary duties as trustee, the defendant was either unwilling or unable to conform his behaviors in a manner sufficient to allow the trustee to timely insure the premises or prepare a portion of the premises for possible rental by a third party.   The court finds that the defendant has failed to establish that he acted in good faith in reaching a possible accord with the trustee regarding the premises.

Accordingly, the court declines to invoke equity to bar this forfeiture.

EQUITABLE COUNTERCLAIM

The defendant asserts as an equitable counterclaim that the plaintiff has breached her fiduciary duty to him as a trustee of the Felka trust.   It has been firmly established in the law that “a fiduciary or confidential 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 interest of the other.”  High-Ho Tower, Inc. v. Com-Tronics, Inc., 255 Conn. 20, 38 (2000).  “In the seminal cases in which this Court has recognized the existence of a fiduciary relationship, the fiduciary was either in a dominant position, thereby creating a relationship of dependency, or was under a specific duty to act for the benefit of another.”   Id. at 38.   In the instant matter, it is clear that the plaintiff, as trustee, owes a fiduciary duty to the defendant, as a trust beneficiary.   The defendant also owes a duty to the other trust beneficiaries to execute her duties according to the terms of the trust.   Once such a duty has been found by the court, it is the fiduciary's burden to prove “fair dealing” by clear and convincing evidence.  Oakhill Associates v. D'Amato, Sr. et al., 228 Conn. 723 (1994);  Gorelick et al. v. Montanaro, 119 Conn.App. 785, 807 (2010).

The defendant asserts that the plaintiff has not dealt fairly and/or impartially with him.   There has been a claim that the plaintiff as trustee has put her own interests as a trust beneficiary before those of the other beneficiaries, including the defendant.   The defendant asserts that the plaintiff's actions in seeking to evict him without inquiring as to alternative housing arrangements constitute a breach of her duties as a fiduciary.   The court is persuaded, based on the evidence adduced at trial, that the opposite has been established by the plaintiff.

The court finds that the actions of the plaintiff, in attempting to establish the viability of a portion of the premises as a rental property while allowing the defendant to remain in possession of another portion of the premises, was a fair and impartial exercise of her duties as fiduciary.   This effort was frustrated by the efforts of the defendant.   This court finds that the plaintiff testified credibly to her efforts to fulfill her fiduciary duties.   To the extent certain of her efforts have been unsuccessful, this court finds that there was no lack of due diligence, impartiality or fair dealing involved.

This court will not engage in interposing investment advice or second-guessing the actions of the trustee that resulted in a reduction in the value of the trust assets.   It is sufficient that this court find, by clear and convincing evidence that the actions of the trustee were in accordance with her fiduciary duty.

It should be noted that the trustee does not owe this duty of loyalty, fidelity and impartiality to the defendant alone, but also to the other trust beneficiaries.   The plaintiff is not required to give the defendant his choice as to which of the individual trust assets he seeks.   Further, there is no authority of which this court is aware that requires the plaintiff to deplete the res of the trust before looking to the subject premises.

Accordingly, the defendant has failed to prove his equitable counterclaim as the plaintiff has established, by clear and convincing evidence, her proper conduct as a fiduciary.

WHEREFORE, The Court enters judgment for immediate possession of the subject properties in favor of the plaintiff as to both counts of the complaint.

BY THE COURT

Hon. Vernon D. Oliver

Oliver, Vernon D., J.