Vito DiLustro v. Elisa Pascarella et al. (2011)

MEMORANDUM OF DECISION

The plaintiff father of the defendant Elisa Pascarella, and father-in-law of her husband, has commenced this action claiming (1) Breach of Contract (2) Unjust Enrichment (3) Resulting Trust (3) Conversion and (5) Constructive Trust.   The complaint alleges the defendants took title to a home in Branford, Connecticut contrary to an understanding the funds in the amount of $293,597.87 of the plaintiff were improperly used by the defendants.

The evidence has established the plaintiff, who is 75 years old had come to the USA from Italy in 1958.   Plaintiff was successful as a jeweler in East Haven, Connecticut.   He was also actively involved in real estate acquisitions from 1958 to 1993.   The plaintiff had divorced his former wife in 1980 at which time he had three grown children.   In 1993 plaintiff returned to Italy until his return to the USA in December 2008.   From 1993 until 2008 his daughter Elisa managed his financial affairs, and he had given her a power of attorney and had made her a joint owner of bank accounts, and other financial matters.   On visits to the USA the plaintiff would stay at the defendants' home located at 27 Dodge Avenue in East Haven, Connecticut.   The defendant Elisa also visited the plaintiff in Italy, and at a visit in September 2008, they discussed the purchase of a home by the plaintiff;  and then the defendants could live in the house with the plaintiff.   It was understood at that time the house, until his death, was owned by plaintiff and it would then be left to the defendants.   The plaintiff at that time expressed an intent to have a separate apartment area, and the defendants would have the general use of the house, and the defendants agreed to create an apartment for the plaintiff.

In December 2008 plaintiff sold his home in Italy and returned to live in the USA. Plaintiff then purchased a residence in Florida.   During his phone conversations with Elisa she told him defendants found a suitable home in Branford, Connecticut.   The house had been foreclosed by a bank and was in need of substantial renovations.   The defendant Rocco Pascarello was in the restoration business, and this house located in a nice area of Branford, Connecticut could be renovated by her husband.   The plaintiff in reliance on his trust in the defendant Elisa authorized her to negotiate this purchase of the house.   Elisa ultimately reached an agreement for the purchase price and the closing costs for the total sum of $293,000.00, and Elisa then advised her father that she had made all the arrangements for the closing.

Plaintiff went with the defendants to the closing at Attorney Florentine's office in Branford, Connecticut on June 26, 2009 and Elisa had two checks for the total sum of $293,597.84 which she had withdrawn from the accounts of her father and they were payable to the attorney.   At the closing only the plaintiff and defendants were present with Attorney Florentine, and plaintiff was advised all the documents were executed prior to the closing.   At the closing plaintiff was concerned regarding the absence of the sellers, and the refusal of the attorney to give him the keys to the property.   Plaintiff walked out of the office to leave when his daughter Elisa came out and told him he would be sued for breach of contract if he did not deliver the checks to the attorney.   Plaintiff came back to the room and delivered the checks.   Plaintiff was not shown any documents, nor was he shown the deed or was he advised regarding title ownership of this property.   Plaintiff at that time was not aware his daughter and her husband had the title documents as well as the purchase agreement stating the title owners were Rocco and Elisa Pascarella in survivorship.   It was not known by plaintiff that he was not the title owner of the house.   From June 26, 2009 until February 12, 2010 plaintiff was misled by defendants they were building an apartment for plaintiff in the house.   However at that time in February 2010 plaintiff was advised by Elisa that the defendants owned the house, and they did not want plaintiff to have an apartment there, and further they did not want him or his new wife in the house.

The plaintiff testified at the trial that after his daughter Elisa told him she doesn't want him near her, and she said she would give him back some money.   At that time plaintiff told her he wanted all of his money returned.   A few days later Rocco called plaintiff and told him defendants made a big mistake and they should return plaintiff's money.   Rocco about that time told plaintiff that he was not supposed to make an apartment for the plaintiff.

Prior to the negotiations in the fall of 2008, for the purchase of the home at 64 Meadow Wood Road in Branford, Connecticut the plaintiff and defendant Elisa had a discussion of a loan of $200,000.00 by the plaintiff to the defendants.   At the time defendants were intending to sell their home at 27 Dodge Avenue in East Haven, Connecticut and defendants were planning on the purchase of a new home for themselves with the proceeds for their home and the $200,000.00 to be loaned by the plaintiff.   Under that proposal the defendants were to repay the amount of the loan to the plaintiff.   This agreement did not occur, although the defendants did sell their home in 2010 for the sum of $235,000.00.   The discussions regarding a loan of $200,000 from the plaintiff never culminated in an agreement by the plaintiff to make that loan.

During the period the plaintiff was in Italy from 1993 to 2008 plaintiff fell in love with his current wife who he lived with in Italy.   Plaintiff's daughter during her visits with the plaintiff was aware of his relationship with his future wife Tamara.   After plaintiff returned to the USA in 2008 his current wife came to this country in October 2008.   Plaintiff married his wife November 10, 2008.   The defendants as well as his original family members resented his marriage and it resulted in strained relations between them.   As a result of the treatment from the defendants and the original family the plaintiff lived in Florida most of his time and only came home for three weeks at the time of the closing of the property in Branford on June 26, 2009.

At the trial the plaintiff's daughter Elisa was presented as a witness and she testified Plaintiff's Exhibit 8 the purchase agreement dated March 16, 2009 was for the seller Robin Tiernan to convey title to the defendants for $290,000.00.   She testified at the time of this agreement she was not acting for her father.   She never showed this agreement to her father.   She also stated Attorney Florentine was the defendant's attorney and all the documents were prepared and signed prior to June 26, 2009 when the title transfer occurred.   She also stated that when the price during negotiations went to $290,000 the plaintiff told her to buy the house and he had the money to pay the increased price.   She then testified she thought she didn't have to pay the money back, and she felt it was a gift to the defendants.

Throughout the trial the plaintiff disputed the claim of his daughter that the $293,000.00 was a gift, and he mentioned the understanding with the defendants was that the house title was to be in his name until his death when title would pass to defendants.   Plaintiff also continually claimed the defendants had no right to take the title to the house on June 26, 2009.

The issue in this matter is whether the plaintiff father had effected a valid inter vivos gift of $293,597.84, which included the closing expense, to the defendants from the financial accounts of the plaintiff.   Until the closing on June 26, 2009 defendant Elisa had no legal right to those funds except to act in a confidential and fiduciary capacity.   The checks drawn from plaintiff's accounts and payable to the closing attorney were the property of the plaintiff which she had drawn payable to Attorney Florentine for title to the property.   The claim of the defendant Elisa that this sum was a gift to the defendants is not supported by the evidence.  “A gift is the transfer of property without consideration ․ To make a valid gift inter vivos, the donor must part with control of the property, which is the subject of the gift with an intent that title shall pass immediately and irrevocably to the donee.”  Kriedel v. Krampitz, 137 Conn. 532, 79 A.2d 381 (1951).

A valid gift of personal property requires both the delivery of possession of the property to the donee and an intent on the part of the donor that title shall pass immediately to the donee.  Bergen v. Bergen, 177 Conn. 53, 56–57;  Kukanskis v. Jasut, 169 Conn. 29, 34.   The burden of proving intent and delivery rests upon the party claiming the gift.  Bergen v. Bergen, supra 56;  Parley v. Parley, 72 Conn.App. 742, 749.   Delivery of possession is the foundation of a transfer, without delivery there can be no transfer.  City National Bank v. Morrissey, 97 Conn. 480, 483 (1922).

The evidence does not establish the plaintiff ever intended to part with possession or to relinquish control of the $293,597.84 which had been withdrawn by the defendant to acquire title to the property by the defendants.   The plaintiff never had the intent to divest himself of all dominion over the funds and the title to the property taken in the name of the defendants.   The facts in this matter do not satisfy the legal standard for a gift as set forth in the case of Wasniewski v. Quick & Reilly, Inc., 282 Conn. 98 (2009).

When this action was commenced by the plaintiff a notice of lis pendens was filed on the land records regarding the title ownership of the defendants at 64 Meadow Woods Road, Branford, Connecticut.   The plaintiff has alleged in this action the defendants have been unjustly enriched by their actions, and they have unconscionably and wrongfully used the funds of the plaintiff and that a constructive trust should be imposed upon that property.

This court has found the funds taken by the defendants in the amount of $293,597.84 were not a gift.   The sum taken, and the circumstance in the manner in which title was taken in their name does compel the finding that a constructive trust was established.

“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 has 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, hold and enjoy ․ [Therefore], § aŒ constructive trust arises whenever another's property has been wrongfully appropriated and converted into a different form ․ [or] when a person holds title to property is subject to an equitable duty to convey it to another on the ground that [she] would be unjustly enriched if [she] were permitted to retain it.”  (Emphasis added;  internal quotation marks omitted.).  Cadle Co. v. Gabel, 69 Conn.App. 279, 288, 794 A.2d 1029 (2002).   Cited in Trevorrow v. Marcuccio, 125 Conn.App. 141, 146–47 (2010).

The case of Jarvis v. Lieder, 117 Conn.App. 129 (2009), dealt with similar issues related to a family relationship and issues of unjust enrichment, and the imposition of a constructive trust to protect the interests of the plaintiff in that case.

“In Beatty v. Guggenheim Exploration Co., 225 N.Y. 380, 386, 122 N.E. 378 (1919), Judge Cardozo wrote:  ‘A constructive trust is the formula through which the conscience of equity finds expression.   When property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest, equity converts him into a [trustee ․ ]’ The imposition of a constructive trust by equity is a remedial device designed to prevent unjust enrichment ․ Thus, 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.”  (Citations omitted;  internal quotation marks omitted.)  Cohen v. Cohen, supra, 182 Conn. 202–03.

This court has ample evidence of a confidential relationship existing between the plaintiff and the defendants, and the defendant daughter's fiduciary relationship with her father resulted in the improper use of the funds of the plaintiff.   The superior relationship of Elisa afforded her the opportunity to abuse the confidence reposed in her by the plaintiff.  Albuquerque v. Albuquerque, 42 Conn.App. 284 (1996).   This matter does require the finding that the plaintiff was entitled to retain an interest in the home despite the express terms of the deed.  Schmaling v. Schmaling, 48 Conn.App. 1, 18;  Apostles of the Sacred Heart v. Curott, 187 Conn. 591, 595 (1982).   A trust was created in this matter not by an agreement of the parties but by operations of the law.  Cohen v. Cohen, 182 Conn. 193, 202 (1980).

The defendants have unjustly been enriched by this wrongful conduct and they have failed to sustain the burden of proving any of the special defenses alleged.

A notice of lis pendens is appropriate in this case to protect the rights of the plaintiff to recover for the losses sustained by the plaintiff.

Based upon the factual conclusions reached by this court judgment shall enter for the plaintiff for the sum of $293,597.00 plus interest of 5% pursuant to Connecticut General Statutes Section 37–3a, plus postjudgment interest of 5%.

Howard F. Zoarski

Judge Trial Referee

Zoarski, Howard F., J.T.R.