Michael J. Ferri, Trustee et al. v. Nancy Powell–Ferri et al. (2013)

MEMORANDUM OF DECISION

Before the court is a motion to strike filed by the plaintiffs and cross motions for summary judgment.   They are included in the same memorandum because the same operative facts apply to both.

The plaintiffs brought this action against the beneficiary of the first trust, Paul John Ferri, Jr. and his wife, Nancy Powell–Ferri, who is not a beneficiary of either trust.   In this action, the plaintiffs seek the court to declare that its conduct in decanting the assets of a certain trust to another trust, whose terms are materially different, was consistent with the purposes and language of the first trust and consistent with the public policy of the State of Connecticut.   The defendant Nancy Powell–Ferri opposes the plaintiffs and has brought her own cross motion for declaratory judgment in which she seeks the court to declare that the actions of the trustees in decanting the first trust assets into the second trust was violative of the terms of the first trust and a violation of the public policy of the state of Connecticut.

The defendant during all relevant times leading up to the commencement of this dissolution of marriage action was the beneficiary of a trust, known commonly as the “1983 Trust.”   By the terms of the trust and by virtue of the defendant's age, the defendant had an irrevocable vested interest in 75 percent of the corpus of the 1983 Trust at the commencement of this action.   During the time that this action has existed pendente lite, his irrevocable, vested interest aged into 100 percent of the corpus of the 1983 Trust.

The dissolution of marriage matter was returnable to court on November 16, 2010.   At the time of the dissolution of marriage and all pertinent times prior thereto the defendant Paul John Ferri, Jr., in both actions, was the beneficiary of a certain trust created by his father, Paul John Ferri, which trust is informally known as the 1983 Trust, so denominated to reflect the year in which it was created.   On or about March 28, 2011, the trustees of the 1983 Trust, Michael Ferri, the defendant's brother, and Anthony Medaglia, decanted the overwhelming majority of the 1983 Trust assets into a new trust, commonly known as the 2011 Trust.   The 1983 Trust assets are assets subject to the jurisdiction of this court under General Statutes § 46b–81 to the extent that they are vested.¹  The terms of the 2011 Trust are such that the defendant has no control over the assets which are managed entirely by the trustees for the defendant's benefit, solely as the trustees see fit.

The defendant Nancy Powell–Ferri has also brought a counterclaim against the plaintiffs sounding in tort.   She seeks the court's recognition of a new cause of action, intentional interference with an equitable interest, being her claims in the dissolution of marriage action to the assets of the first trust, that are no longer there.   The counterclaim defendant trustees have filed a motion to strike this claim.   Because the matter turns on the same operative facts as the motions for summary judgment, this decision also addresses that motion to strike.

The 1983 Trust was declared in Massachusetts.   Therefore, the court will apply the principles of Massachusetts law to the controversy before it.

PRIOR MOTION PROCEEDING

Prior to the queuing up of these motions for summary judgment, the court granted a motion of the defendant Nancy Powell–Ferri to strike an affidavit from the settlor filed by the trustees in support of their action.   In so doing, the court inferentially determined that it was parol evidence not necessary to the disposition of this case inasmuch as the 1983 Trust document itself is clear.

“In Kerwin v. Donaghy, 317 Mass. 559, 59 N.E.2d 299 (1945), [abrogated by, Sullivan v. Burkin, 390 Mass. 864, 460 N.E.2d 572 (1984) ], the Supreme Judicial Court observed that [u]nder the parol evidence rule, if the manifestation of intention of the settlor is integrated in a writing, that is, if a written instrument is adopted by him as the complete expression of his intention, extrinsic evidence, in the absence of fraud, duress, mistake or other ground for reformation or rescission, is not admissible to contradict or vary it.  [Kerwin v. Donaghy, supra, 317 Mass. 567–68, 59 N.E.2d 304, quoting Scott, Trusts (1939) §§ 38, 164.1]. The court added:  Though often stated in terms of the admissibility of evidence, the so called ‘parol evidence rule’ is really a rule of substantive law.   Extrinsic evidence, even though admitted, cannot control the words of a document that purports to express the whole transaction.  (Citation omitted.)  Id., 568, [59 N.Ed.2d 304].”  (Internal quotation marks omitted.)  In re Beatrice, 277 B.R. 439, 445 (Bankr.D.Mass.2002), citing Restatement (Second) of the Law of Trusts § 38 (1959).

“[A] trust document cannot be given the effect of carrying out the settlor's intent where its words cannot reasonably be read in a manner that expresses that intent.  [Kerr & Elliott v. Green Mountain Fire Ins. Co., 111 Vt. 502, 510–11, 18 A.2d 164, 168 (1941).  17A C.J.S., Contracts § 296(1) (1963) ].   The expression of intent may be ambiguous or vague, but it must be ascertainable in the words of the document.   Otherwise the document is relegated to the role of mere evidence of the author's intent, which may be believed or disbelieved by the finder of fact, and the way is laid open to the variation of legal documents by parol.   Evidence extrinsic to a document may be shown for the purpose of elucidating, but not of contradicting or changing its terms.   [Robert Industries, Inc. v. Spence, 362 Mass. 751, 754, 291 N.E.2d 407, 409 (1973) (and authorities cited) ].   The legal effect to be given a document must be based on the words of the document itself, [Putnam v. Putnam, 366 Mass. 261, 266, 316 N.E.2d 729, 731 (1974) ], and must place no impossible strain on the words used ․” (Citation omitted;  internal quotation marks omitted.)   Bourgeois v. Hurley, 8 Mass.App.Ct. 213, 216, 392 N.E.2d 1061, 1064 (1979).

The principles laid out here that underlie the granting of that motion are equally applicable in this matter.   The court must consider the words of the 1983 Trust to determine the scope of authority granted to the trustees to determine whether their actions were in compliance with that authority granted by the settlor.

SUMMARY JUDGMENT LAW

The plaintiffs' motion for summary judgment (# 164) seeks summary judgment in regard to their revised complaint for declaratory relief that they, as trustees, validly exercised their powers under the 1983 Trust in creating and funding the 2011 Trust from its assets, and, that the defendant Nancy Powell–Ferri has no right, title or interest, directly or indirectly, in or to the 2011 Trust or its assets, principal, income or other property.   They also seek summary judgment in their favor regarding the defendant Nancy Powell–Ferri's fourth count of her counterclaim, seeking declaratory relief.   Specifically, the defendant Nancy Powell–Ferri's motion for summary judgment (# 148) seeks summary judgment in her favor on the plaintiffs' revised complaint, dated September 19, 2011, and in regard to her counterclaim, count four, in which she seeks a declaration the transfer of the 1983 Trust assets was invalid and ineffective to shield the assets from her claims.   Both parties acknowledge that there are no genuine issues as to material fact as to the matters pertaining to the cross motions for summary judgment.

The primary purpose of a motion for summary judgment is to obtain a judgment in the case where there are no material facts in dispute.  “Summary judgment is a method of resolving litigation when pleadings, affidavits, and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law ․ The motion for summary judgment is designed to eliminate the delay and expense of litigating an issue when there is no real issue to be tried.”  (Citations omitted.)  Wilson v. New Haven, 213 Conn. 277, 279, 567 A.2d 829 (1989).   Any party may move for summary judgment upon any counterclaim or cross complaint as if it were an independent action.   Summary judgment is not available in administrative appeals.   See Practice Book §§ 17–44—17–51.   Therefore, the cross motions for summary judgment before the court are appropriately filed under the rule.   They are both sought in regard to the parties' respective declaratory judgment actions.

DECLARATORY JUDGMENT ACTIONS

General Statutes, Practice Book, and case law describe the substance and process matter ripe for a declaratory judgment action.  General Statutes § 52–29, “Superior Court may declare rights and legal relations,” states:  “(a) The Superior Court in any action or proceeding may declare rights and other legal relations on request for such a declaration, whether or not further relief is or could be claimed.   The declaration shall have the force of a final judgment.”

The Connecticut Practice Book rules define the scope of a declaratory judgment action and the conditions necessary for maintaining such action.  Practice Book § 17–54, “Declaratory Judgment;  Scope,” states:  “The judicial authority will, in cases not herein excepted, render declaratory judgments as to the existence or nonexistence (1) of any right, power, privilege or immunity;  or (2) of any fact upon which the existence or nonexistence of such right, power, privilege or immunity does or may depend, whether such right, power, privilege or immunity now exists or will arise in the future.

Practice Book § 17–55, “Conditions for Declaratory Judgment,” states:  “A declaratory judgment action may be maintained if all of the following conditions have been met:  (1) The party seeking the declaratory judgment has an interest, legal or equitable, by reason of danger of loss or of uncertainty as to the party's rights or other jural relations;  (2) There is an actual bona fide and substantial question or issue in dispute or substantial uncertainty of legal relations which requires settlement between the parties;  and (3) In the event that there is another form of proceeding that can provide the party seeking the declaratory judgment immediate redress, the court is of the opinion that such party should be allowed to proceed with the claim for declaratory judgment despite the existence of such alternate procedure.”

“[A] declaratory judgment must rest on some cause of action that would be cognizable in a non-declaratory suit ․ To hold otherwise would convert our declaratory judgment statute and rules into a convenient route for procuring an advisory opinion on moot or abstract questions ․ and would mean that the declaratory judgment statute and rules created substantive rights that did not otherwise exist.”  (Citations omitted;  internal quotation marks omitted.)   Milford Power Company, LLC v. Alstom Power, Inc, 263 Conn. 616, 625, 822 A.2d 196 (2003), quoting parenthetically Wilson v. Kelley, 224 Conn. 110, 116, 617 A.2d 433 (1992).

“[If] the plaintiffs' prayer for relief seeks not only a declaratory judgment but also general equitable relief, the plaintiffs are entitled to invoke the long arm of equity to receive whatever relief the court may from the nature of the case deem proper.   Any relief can be granted under the general prayer which is consistent with the case stated in the complaint and is supported by the proof provided the defendant will not be surprised or prejudiced thereby.”   (Internal quotation marks omitted.)  Pamela B. v. Ment, 244 Conn. 296, 308–09, 709 A.2d 1089 (1998), abrogated on other grounds by Gold v. Rowland, 296 Conn. 186, 211, 944 A.2d 106 (2010).

The court finds that both declaratory judgment actions before the court meet the criteria of law and practice.   That said, in ruling on the declaratory judgment actions before it, the court must determine:  (1) does Massachusetts law permit decanting, and (2) if decanting is to be determined permitted in Massachusetts, under the law of that jurisdiction would the decanting that occurred here be permissible under that law.   That is, if decanting is permitted, under the facts of this case, was the act of decanting permissible.   Finally, if both questions are answered in the negative, the court must then go on to determine the remedy available for the same.

STANDING OF DEFENDANT NANCY POWELL–FERRI

While plaintiff trustees bring this action for declaratory judgment it denies that the defendant Nancy Powell–Ferri lacks sufficient interest in the 1983 Trust to have standing to oppose its action, or, assert an action in opposition on her own.

When the defendant Nancy Powell–Ferri filed for a dissolution of marriage action against the defendant Paul John Ferri, Jr., she invoked the jurisdiction of the Superior Court pursuant to General Statutes §§ 46b–1, 81 and 82.   The court's jurisdiction under these statutes includes the power to assign ownership interest in marital property and to fashion alimony orders, inter alia, in light of the assignment of ownership of that marital property.   The 1983 Trust is marital property under Connecticut law.²  Therefore, the plaintiffs had an inchoate interest in that property, both for itself and for the value it represented in the equitable distribution of the entire estate by and between the parties.   That is, in fashioning the orders, the court would be cognizant of the trust value as it apportioned both other assets and as it determined any alimony order that might enter.

Further, to the extent that standing is substantive law, the law of Massachusetts is applicable.   As the Supreme Court of Massachusetts has stated:  “Who shall be made parties to a suit in equity cannot always be determined by definite rules, but rests to some degree in the discretion of the court.   Generally speaking, however, to a suit against trustees to enforce the execution of a trust, cestuis que trust, claiming present interests directly opposed to those of the plaintiff, should be made parties, in order that they may have the opportunity themselves to defend their rights, and not be obliged to rely upon the deference made by the trustees, or to resort to a subsequent suit against the trustees or the plaintiff, or to take the risk of being bound by a decree rendered in their absence.”  Sears v. Hardy, 120 Mass. 524, 529–30 (1876).   Accordingly, as described by the facts here, the court finds that the defendant Nancy Powell–Ferri is a proper party to assert her interests.

TRUSTS AT ISSUE

Following is the language of the 1983 Trust that is relevant to the controversy before the court.   The 1983 Trust language at issue is found in Article II, Disposition of the Trust Property.   It provides:

My Trustee shall hold and dispose of the trust property received by him upon the creation of this trust, as well as any other property hereafter received by him as Trustee hereunder, for my son, Paul John Ferri, Jr. (hereinafter referred to as ‘Paul’), as follows:

A.  So long as Paul is living, my Trustee shall, from time to time, pay to or segregate irrevocably for later payment to Paul, so much of the net income and principal of this trust as my Trustee shall deem desirable for Paul's benefit, accumulating and adding to the principal at the end of each fiscal year of the trust any income not so paid or segregated ․

B. My Trustee shall pay to Paul after he has attained the age of thirty-five (35) years such amounts of principal as he may from time to time in writing request;  provided, however, that the aggregate amount of such payments of principal made before he attains the age of thirty-nine (39) years shall not exceed one-fourth (1/4) of the value of the principal of such property as determined on his thirty-fifth (35th) birthday;  provided further that after Paul has attained the age of thirty-nine (39) years, the aggregate amount of such payments of principal made before he attains the age of forty-three (43) years shall not exceed one-half (1/2) of such value;  and provided further that after Paul has attained the age of forty-three years, the aggregate amount of such payments of principal made before he attains the age of forty-seven (47) years shall not exceed three-fourths (3/4) of such value.  (Internal quotation marks omitted.)

The trustee's powers are detailed in Article VI. He is commanded to do what he “deem[s] necessary or proper in connection with the due care, management and disposition of the property and income of the trust ․” The listed powers thereafter, while not “limiting the powers given by law or other provisions of this trust,” do not include the decanting of the trust assets.

The 2011 Trust, in salient part, provides at the first paragraph:  “The Trustee shall administer the Trust Property as follows:  (a) So long as Paul John Ferri, Jr. (‘Paul’) is living, the Trustee shall, from time to time, pay to Paul or segregate irrevocably for later payment to Paul, so much of the annual net income from the Trust Property and so much of the principal thereof as the Trustee, in its sole discretion, shall deem desirable for Paul's benefit.   The Trustee shall add undistributed annual net income to principal.”

The trust goes on to grant Paul John Ferri, Jr. the power of appointment during his lifetime all or the principal of the trust property but not to, inter alia, his creditors or Nancy Powell–Ferri.

A

Decanting and Other Jurisdictions

In jurisdictions where decanting is permitted, the substantive authority for the same within the “at issue” trust document requires broad, expansive and unrestrictive language describing the powers of the trustee.   As of July 29, 2013, only eleven jurisdictions have decanting statutes.³

“Decanting is the term generally used to describe the distribution of [irrevocable] trust property to another trust pursuant to the trustee's discretionary authority to make distributions to, or for the benefit of, one or more beneficiaries [of the original trust].   Potentially, common-law provides authority for decanting, but a[S]tate statute or the terms of the trust instrument may expressly authorize a trustee to decant trust property to another trust.   Trustees may decant to achieve a variety of favorable tax or nontax results or to address changes in [S]tate law or in other circumstances affecting management or administration of the trust after it has become irrevocable ․ In effect, a trustee with decanting power has the authority to amend an unamendable trust, in the sense that he or she may distribute the trust property to a second trust with terms that differ from those of the original trust ․ A trustee can only exercise a decanting power, however, in keeping with fiduciary obligations.”  (Citations omitted;  internal quotation marks omitted.)  Morse v. Kraft, 466 Mass. 92, 2013 WL 3853152, *2 (2013), quoting W. Culp & B. Mellen, “Trust Decanting:  An Overview and Introduction to Creative Planning Opportunities,” 45 Real Prop. Tr. & Est. L.J. 1, 2–3 (2010) (further explaining that “[t]he rationale that underlies decanting is that if a trustee has the discretionary power to distribute property to, or for the benefit of, one or more current beneficiaries, then the trustee, in effect, has a special power of appointment that should enable the trustee to distribute the property to a second trust for the benefit of such beneficiaries”).⁴

The purpose behind the passage of the states' decanting statutes has, generally speaking, been for tax planning.   W. Culp & B. Mellen, supra, 45 Real Prop. Tr. & Est. L.J. 15–16.   While several authors of articles on decanting have indicated that a beneficial use of decanting would be to add a spendthrift provision to protect a beneficiary from creditors, including a spouse in the event of a divorce;  cf. infra FN 15;  the writers provide the caveat that approval of the beneficiary should be required if such law were developed, which was absent here.

While decanting was approved in 2008 by the New Hampshire legislature;  see N.H.Rev.Stat. Ann. § 564–B:4–148; ⁵  “a trustee can only appoint property into a new, decanted trust if the interests of its beneficiaries will not be reduced in the decanted trust from what they were in the original trust (nothing appears to restrict the trustee from enlarging the interests of beneficiaries in the decanted trust).”   Erin Stearns, New Hampshire Bar Association, “Modification of Irrevocable Trusts under the Uniform Trust Code,” (January 16, 2009), available at http:// www.nhbar.org/publications/display-news-issue.asp?id.=4905 (last visited July 12, 2013).

An academic discussion of the value and limits of decanting in Tennessee is illuminative.   As one article states:  “[T]he new decanting power in Tennessee's UTC brings greater certainty and protection to the trustee, who might otherwise fear liability for so acting.   Moreover, the statute creates a specific method, and specific parameters, for such exercise of the power, without court order and without consent of beneficiaries ․ Is this a good thing?   That remains to be seen.   Are there limits?”   Dan W. Holbrook, “Can't Trust A Trust?   Decant!,” 40 Tennessee Bar Journal B.J. 20, 20 (2004).   After asking that question, the article goes on to look at examples that decanting would likely be permitted under Tennessee law.   The first example is of particular interest.  “[Assume in each case the trustee can freely invade principal to or for the benefit of the beneficiary].   Spendthrift.  Beneficiary B, age 24, is a spendthrift and is supposed to receive a distribution of all principal at age 25.   Instead, Trustee T (or perhaps the original trustor) creates a new trust now, and T decants old trust to the new trust, which doesn't pay to B until age 35.   Moreover, new trust contains a spendthrift provision lacking in old trust.”  Id., 20–21.   This Tennessee decanting example assumes the legitimacy of the decanting of a trust where the beneficiary will have funds ripen to absolute entitlement to a spendthrift trust, but before the ripening event.   In our case, the trustee has decanted after the ripening event.   The difference is not insignificant.

Some states explicitly provide that the trustee must have unlimited power.   For example, Florida's decanting statutes provides in relevant part:  “(1)(a) Unless the trust instrument expressly provides otherwise, a trustee who has absolute power under the terms of a trust to invade the principal of the trust, referred to in this section as the ‘first trust,’ to make distributions to or for the benefit of one or more persons may instead exercise the power by appointing all or part of the principal of the trust subject to the power in favor of a trustee of another trust, referred to in this section as the ‘second trust,’ for the current benefit of one or more of such persons under the same trust instrument or under a different trust instrument ․ (b) For purposes of this subsection, an absolute power to invade principal shall include a power to invade principal that is not limited to specific or ascertainable purposes, such as health, education, maintenance, and support, whether or not the term ‘absolute’ is used A power to invade principal for purposes such as best interests, welfare, comfort, or happiness shall constitute an absolute power not limited to specific or ascertainable purpose.”  (Emphasis added.)  Fla. Stat. § 736.04117. Indiana's decanting statute similarly provides:  “(a) Unless a trust expressly provides otherwise, a trustee who has absolute power under the terms of a trust (referred to in this section as the ‘first trust’) to invade the principal of the trust to make distributions to or for the benefit of one (1) or more persons may instead exercise the power by appointing all or part of the principal of the first trust in favor of a trustee of another trust (referred to in this section as the ‘second trust’) for the benefit of one (1) or more persons under the same trust instrument or under a different trust instrument ․ For purposes of this section, an absolute power to invade principal includes a power to invade principal that is not limited to specific or ascertainable purposes, such as health, education, maintenance, and support regardless of whether the term ‘absolute’ is used.”  Ind.Code 30–4–3–36.   See also R.I. Gen. Laws § 18–4–31.   The 1983 Trust would not meet this standard because it does not grant the trustees absolute or unlimited discretion.⁶

Some other states provide that decanting is permitted only upon valid notice given to the beneficiaries of the first trust.   See Fla. Stat. § 736.04117 (trustee give between twenty and sixty days notice to beneficiaries of the first trust);  Ind.Code § 30–4–3–36 (trustee give between twenty and sixty days notice to beneficiaries of the first trust);  Mo.Rev.Stat. § 456.4–419 (requiring that trustee notify the permissible beneficiaries of the second trust, but not of the first);  Nev.Rev.Stat. § 163.556 (permits but does not require notice beneficiaries);  N.C. Gen.Stat. § 36C–8–816.1 (trustee give between twenty and sixty days notice to beneficiaries of the first trust);  Ohio Rev.Code § 5808.18 (trustee give between twenty and sixty days notice to beneficiaries of the first trust).   Only one state requires court approval before decanting.  Ohio Rev.Code § 5808.18. An examination of all of these statutes, as well as those of Indiana and Florida, then leads to the conclusion that, in most circumstances, decanting by a trustee who did not have the broad power indicated, or did not provide beneficiaries with adequate notice, is not permitted.

B

Does Massachusetts Law Permit Decanting?

The state of Massachusetts does not have a statute approving of the process of decanting.  “In a state ․ which has no decanting statute, has not adopted the UTC [Uniform Trust Code], and which does not have case law supporting decanting, a court order is the best protection where significant changes to dispositive provisions are sought, at least absent a specific provision in the trust document authorizing such a transfer to a new trust.   In general, there is significant risk of liability, or at least serious criticism from beneficiaries (or future beneficiaries even if current beneficiaries consent) in proceeding solely in reliance on case law from other states, or less than clear, dispositive case law from the governing jurisdiction.”   The Demand to Decant:  Protecting the Trustee, SR003 A.

Subsequent to the argument in this matter, the Massachusetts Supreme Court issued its very first decision, in Morse v. Kraft (Kraft), approving the decanting of a trust.⁷  Morse v. Kraft, supra, 466 Mass. 92, 2013 WL 3853152.   As discussed further below, the approval of decanting in that case was limited to the facts of the matter before it.   The court specifically declined to issue a broader decision regarding decanting.   The decanting in the instant case results in reduction of the rights of the beneficiary.   The decanting has occurred after the date that the beneficiary had acquired an absolute, uncontroverted right to the assets decanted.   This is inconsistent with the principals of Massachusetts trust law and is not a circumstance that could be construed likely to receive the Massachusetts Supreme Court's tacit approval under the rubric established in its recent Kraft decision.

C

The Kraft Case and the Circumstances Permitting Decanting

While Massachusetts does not currently have statutory authority, it now has case law that provides for decanting in limited circumstances.   A brief description of the facts in the Kraft case is necessary, so that the circumstances there can be compared to those in the instant matter.   The Kraft trust was set up in 1982 with four sub-trusts benefitting each of the four children of Robert and Myra Trust.   That trust only permitted disinterested trustees to administer the trusts.   By definition, a disinterested trustee was not any of the four children who were the beneficiaries.   In the newly created trust, the beneficiaries are also trustees.   At the time of the creation of the original trust these children were very young minors;  now they are adults in their forties, age wise.   The reason for the decanting is to permit them to be engaged in the trust management.   The decanting is only advantageous for the trust, if there is no tax consequence as a result of the act of decanting.   The trustees, in the Kraft matter, were asking the court to determine whether the original 1982 Trust permitted the decanting, and whether the act of it triggers the generation skipping tax.

In noting that Massachusetts had never addressed the question before it, the court referred to two seminal cases from other jurisdictions in which decanting was permitted when the trust document gave the trustee power to act in its “sole and absolute discretion” and “absolute and uncontrolled discretion” consistent with its fiduciary duties.   The court discussed:  “A trustee's decanting power was first recognized in [Phipps v. Palm Beach Trust Co., 142 Fla. 782, 784, 196 So. 299 (1940) ], where the court determined that the terms of the trust—which authorized the trustee, in his or her sole and absolute discretion ․ to distribute the trust property to one or more trust beneficiaries—authorized the trustee to create a second trust for beneficiaries of the original trust.   Because the terms of the trust vested the trustee with unlimited discretion as to time, amount, manner, and condition any sums should be paid, the court applied what it termed [t]he general rule [of trust construction] ․ that the power vested in a trustee to [make distributions] in fee includes the power to create or appoint [trust property in] less than a fee unless the donor clearly indicates a contrary intent ․ Similarly, in [Wiedenmayer v. Johnson, 106 N.J.Super. 161, 164–65, 254 A.2d 534, aff'd, Wiedenmayer v. Villanueva, 55 N.J. 81, 259 A.2d 465 (1969) ], the court found the trustee's authority to transfer property in further trust in the broad discretion afforded the trustee under the trust agreement, which gave him absolute and uncontrolled discretion to distribute the trust property for the beneficiary's best interests.” ⁸  (Citations omitted;  emphasis added;  internal quotation marks omitted.)  Morse v. Kraft, supra, 466 Mass. 92, 2013 WL 3853152, *3.

Relying on Phipps v. Palm Beach Trust Co. and Wiedenmayer v. Johnson, the trustee in Kraft reasoned that “because the trust gives him unlimited discretion to make an outright distribution to and for the benefit of the beneficiaries, so too does it authorize a distribution in further trust if doing so would serve the beneficiaries' best interests.”  Morse v. Kraft, supra, 466 Mass. 92, 2013 WL 3853152, *4. Thus, the Massachusetts court looked to the language of the Kraft trust ⁹ to determine whether the trustee's contention “that his authority to distribute the property in further trust is inherent in the broad language of the trust” was analogous to “absolute and uncontrolled discretion.”

In interpreting the trust language, the court in Kraft emphasized that “the intent of the settlor is paramount.   See Hillman v. Hillman, 433 Mass. 590, 593, 744 N.E.2d 1078, [1080] (2001);  Walker v. Walker, 433 Mass. 581, 587, 744 N.E.2d 60, [65] (2001).   In determining such intention, we regard as particularly significant the language used by the donor viewed in light of the rule of law in effect in these circumstances at the time the powers in question were created.  [Loring v. Karri–Davies, 371 Mass. 346, 349, 357 N.E.2d 11, 13 (1976) ].   See Walker v. Walker, supra, [587].   We believe that ‘it is fair to suppose that the [donor] in using the language which appears in the [trust] had in mind the interpretation of similar words and clauses.’   Loring [v. Karri–Davies, supra, 349–50 ․” (Citations omitted;  internal quotation marks omitted.)  Morse v. Kraft, supra, 466 Mass. 92, 2013 WL 3853152 *4. Based on the language provided in the 1982 Trust, as well as the reading of similar trust language in Phipps v. Palm Beach Trust Co. and Wiedenmayer v. Johnson, the court in Kraft concluded that the 1982 Trust authorized distributions to the new trust for the benefit of the 1982 trust beneficiaries.

1

In the present case, the plaintiffs argue that because the language of the 1983 Trust that gives the trustee the power to segregate irrevocably a portion of the trust, it implicitly includes the power to decant the trust into another trust, as they have done.   As previously stated, in several jurisdictions, the trustee must have absolute power granted to it under the trust document.   Fla. Stat. § 736.04177;  Ind.Code § 30–4–3–36;  R.I. Gen. Laws § 18–4–31.   That power must essentially be the power to invade the principal.   The question therefore becomes whether the power to “segregate irrevocably” is equivalent to an “absolute” or “unlimited” power.   Here, the trustees argue that the power to segregate irrevocably is essentially that power.   For the following reasons, the court concludes that the “segregate irrevocably” language of the 1983 Trust is not equivalent to such absolute power.

The essence of the differences between the two trusts, and the cause of the controversy between the parties is that the 2011 Trust provides no unilateral rights of withdrawal from the trust and in the 1983 Trust had an absolute right of unilateral withdrawal to the extent of the stated percentages on his indicated birthdays.   Therefore, the core question before the court is whether under Massachusetts law, the power of the Trustees to “segregate property irrevocably for later payment to Paul” encompasses the power to decant the 1983 Trust assets to the 2011 spendthrift trust.

When a word is not defined in a statute it is appropriate to resort to the dictionary definition.  Kelo v. New London, 268 Conn. 1, 17, 843 A.2d 500 (2004) (“Thus, in construing the term, we look to its commonly approved usage, an inquiry that often is enhanced by the examination of dictionary definitions”).   Our Supreme Court has resorted to the dictionary for definitional guidance when construing contracts.   See, e.g., Connecticut Ins. Guaranty Ass'n v. Fontaine, 278 Conn. 779, 784–85, 900 A.2d 18 (2006) (in the context of insurance contracts);  Metropolitan Life Ins. Co. v. Aetna Casualty & Surety Co., 255 Conn. 295, 305–06, 765 A.2d 891 (2001) (same).¹⁰  By reason, the court should look in the first instance to the dictionary for the definition of “segregate.”  “Segregate” is defined in Merriam Webster dictionary as, “to separate or set apart from others or from the general mass:  isolate.”   Furthermore, no case law in Massachusetts suggests a particular definition for the term “segregate irrevocably” in the estate and trust nomenclature.   The use of the word “segregate” in trust law in Massachusetts appears to be limited to the duty of a trustee to segregate the trust assets from the trustee's own assets.   C.f. Markus v. Markus, 331 Mass. 394, 400 (1954) (“Trust funds should not be mingled with the personal funds of the trustee”).   See also Restatement (Second) of Trusts § 179.   The issues here are different.

The plaintiffs urge the court to interpret the word “segregate” to mean that the plaintiffs could separate or set apart or isolate the funds of the 1983 Trust by putting them in a new trust completely;  that this action isolates the funds.   The trustees rely on settled case law which provides that legal title to 1983 Trust remained with the trustees and, therefore, until and unless Paul John Ferri made a written request for the funds vested in him, their legal title remained with the trustees who could exercise the power to segregate irrevocably.   The trustees argue that this interpretation of the trust is consistent with the settlor's intent.

“The issue of intent as it relates to the interpretation of a trust instrument ․ is to be determined by examination of the language of the trust instrument itself and not by extrinsic evidence of actual intent.”   Heffernan v. Freedman, 177 Conn. 476, 481, 418 A.2d 895 (1979).   The construction of a trust instrument “presents a question of law to be determined in the light of facts [that] are found by the trial court or are undisputed or indisputable.”  (Internal quotation marks omitted.)  Connecticut National Bank & Trust Co. v. Chadwick, 217 Conn. 260, 266, 385 A.2d 1189 (1991).   Since the issue presented concerns the court's legal conclusion regarding intent of the settlor as expressed solely in the language of the trust she created, “we must decide that issue by determining, de novo, whether that language supports the court's conclusion.”  Canaan National Bank v. Peters, 217 Conn. 330, 335, 586 A.2d 562 (1991).   In the Kraft decision, the Massachusetts court noted, “[w]e regard this broad grant of almost unlimited discretion as evidence of the settlor's intent that the disinterested trustee have the authority to distribute assets in further trust for the beneficiaries' benefit.   Such interpretation is in keeping with the reading of similar trust language in [Phipps v. Palm Beach Trust Co., supra, 142 Fla. 782] and [Wiedenmayer v. Johnson, supra, 106 N.J.Super. 161] and our comparable holding in [Loring v. Karri–Davies, supra, 371 Mass. 346], all of which preceded the drafting of the 1982 Trust.”  Morse v. Kraft, supra, 466 Mass. 92, 2013 WL 3853152 *4.

The 1983 Ferri Trust was also drafted after the Phipps v. Palm Beach Trust Co. and Wiedenmayer v. Johnson cases.   A review of the language in the 1983 trust demonstrated that it does NOT use the same broad language of authority that was used in the trusts in Phipps v. Palm Beach Trust Co. and Wiedenmayer v. Johnson, or in the Kraft Trust.   The “segregate irrevocably” language is far narrower.

2

The narrower language “segregate irrevocably” must be read in context of the rest of the trust which granted property interests to the beneficiary that have matured and vested irrevocably.   The court must read the “segregate irrevocably for later payment to Paul” in the context of the entire trust.   The paragraph that language is in is followed by the paragraph that the Trustee “shall pay to Paul ․ as he may from time to time in writing request.”   Therefore it must be construed in that context.   The two paragraphs together make clear the funds that are for payment to Paul, and, that payment shall be made if requested by Paul under section B. The power of segregation is not, then, synonymous with the discretion to decide not to pay as in a spendthrift trust such as the 2011 Trust.   The court finds that the decantation of the 1983 assets into the 2011 Trust is in violation of the powers of the trustees and their duty to dispose of the trust property as stated in the 1983 Trust.   The fact that Paul has not asked for the property does not mean he does not have a right to it and/or that the trustees do not have a duty to pay it upon proper request.   The decanting frustrates those provisions and, therefore, cannot stand.

The provisions of the trust must be read in harmony with each other.   If the trustees' interpretation of “segregate irrevocably” were to stand, then the provisions of the paragraphs granting Paul John Ferri, Jr. absolute right to withdraw funds as he achieves birthdates would have no meaning.   In interpreting an instrument, the language of one paragraph must be read in harmony with the whole.   The settlor did not condition the beneficiary's receipt of assets when he achieved his birthdays upon any event (other than requesting the funds in writing) or approval of the trustees.   The trustees cannot frustrate that provision of the trust.   Therefore, if “segregate irrevocably” includes the power to create another trust, that trust must not constrict the interest of the beneficiary to be less than it is in the 1983 Trust.

The provisions of the 2011 Trust here are a radical deviation from the 1983 Trust in terms of the rights of the beneficiary under each.   In an old, but still good case, the Massachusetts Supreme Court found that where the trustees contemplated creating a new trust in which the purpose was “a radical change from the design of the testator,” where there was a testamentary trust, the trustee conduct was impermissible.  Thompson v. Lawrence, 248 Mass. 119, 125, 142 N.E. 801, 802–03 (1924).¹¹

To permit the decanting of the assets from the 1983 Trust to the 2011 Trust, under the circumstances here, would serve to improperly eviscerate the provisions of the 1983 Trust that gave the beneficiary an absolute right to the property of the trust upon written request.   That interpretation of the trust language cannot stand because the result is not contemplated in the language of the trust itself.   If the settlor had desired to make the trustee power absolute, unlimited, or the like, that language was freely available and in use in the world of trusts at that time.   He did not do so.   It is only that broad grant of power that has been construed to include decanting.   Anything less, as here, cannot defeat the intent of the subsequent trust section reposing in the beneficiary absolute right to the property.   Under the facts of this case, the trustees have decanted without trust authority.   Therefore the decanting cannot stand.

The court notes that the defendant Nancy Powell–Ferri had also attacked the decanting as an exercise in prohibited self-settling of a trust.   The court agrees with the plaintiff trustees that their conduct does not constitute the self-settling of a trust.   The defendant's construction of an argument that the case is similar to the matter of In re Brooks, 217 B.R. 98 (Bankr.D.Conn.1998) ¹² is unavailing.   The settlor is not the beneficiary here.   The argument fails.

The court grants summary judgment to the defendant Nancy Powell–Ferri on her motion regarding the fourth count of her counterclaim and denies it on the plaintiff trustees' motion regarding its revised complaint.   Further hearing must be held on the nature of the relief to be granted in light of this ruling.

MOTION TO STRIKE

“Whenever any party wishes to contest ․ the legal sufficiency of the allegations of any complaint, counterclaim or cross claim, or of any one or more counts thereof, to state a claim upon which relief can be granted ․ that party may do so by filing a motion to strike the contested pleading or part thereof.”  Practice Book § 10–39.  “It is fundamental that in determining the sufficiency of a complaint challenged by a defendant's motion to strike, all well-pleaded facts and those facts necessarily implied from the allegations are taken as admitted.”  (Internal quotation marks omitted.)  Coe v. Board of Education, 301 Conn. 112, 116–17, 19 A.3d 640 (2011).  “[P]leadings must be construed broadly and realistically, rather than narrowly and technically.”   (Internal quotation marks omitted.)   Connecticut Coalition for Justice in Education Funding, Inc. v. Rell, 295 Conn. 240, 253, 990 A.2d 206 (2010).   “A motion to strike is properly granted if the complaint alleges mere conclusions of law that are unsupported by the facts alleged.”  (Internal quotation marks omitted.)  Bridgeport Harbour Place I, LLC v. Ganim, 303 Conn. 205, 213, 32 A.3d 296 (2011).   This court takes “the facts to be those alleged in the [complaint] ․ and ․ construe[s] the [complaint] in the manner most favorable to sustaining its legal sufficiency.”  (Internal quotation marks omitted.)  New London County Mutual Ins Co. v. Nantes, 303 Conn. 737, 747, 36 A.3d 224 (2012).

“The purpose of a motion to strike is to contest ․ the legal sufficiency, of the allegations of any complaint ․ to state a claim upon which relief can be granted.”  (Internal quotation marks omitted.)  Fort Trumbull Conservancy, LLC. v. Alves, 262 Conn. 480, 498, 815 A.2d 1188 (2003).  “In ruling on a motion to strike, the court is limited to the facts alleged in the complaint.”  (Internal quotation marks omitted.)  Faulkner v. United Technologies Corp., 240 Conn. 576, 580, 693 A.2d 293 (1997).  “The role of the trial court [is] to examine the [complaint], construed in favor of the [plaintiff], to determine whether the [plaintiff has] stated a legally sufficient cause of action.”  (Internal quotation marks omitted.)  Dodd v. Middlesex Mutual Assurance Co, 242 Conn. 375, 378, 698 A.2d 859 (1997).  “It is fundamental that in determining the sufficiency of a complaint challenged by a defendant's motion to strike, all well-pleaded facts and those facts necessarily implied from the allegations are taken as admitted.”  (Internal quotation marks omitted.)  Connecticut Coalition for Justice in Education Funding, Inc. v. Rell, supra, 295 Conn. 252–53.

The motion to strike seeks to strike the fourth count of the counterclaim in which the defendant Nancy Powell–Ferri seeks the count to extend the cause of action of tortious interference with a business expectancy to her factual situation:  that is, where she has an expectancy of an increased amount ordered to her in the marital estate based upon the pre-decanted 1983 Trust.   It has been determined that the Supreme Court does have the authority to recognize a new tort cause of action.  “It cannot be doubted that we have the inherent power to recognize new tort causes of action, whether derived from a statutory provision;  see, e.g., Mead v. Burns, 199 Conn. 651, 663, 509 A.2d 11 (1986) (creating damages action under Connecticut Unfair Trade Practices Act for violations of Connecticut Unfair Insurance Practices Act);  or rooted in the common law.   See, e.g., Sheets v. Teddy's Frosted Foods, Inc., 179 Conn. 471, 480, 427 A.2d 385 (1980) (recognizing tort of wrongful discharge);  Urban v. Hartford Gas Co., 139 Conn. 301, 307, 93 A.2d 292 (1952) (recognizing torts of intentional and negligent infliction of emotional distress).”  Binette v. Sabo, 244 Conn. 23, 33, 710 A.2d 688 (1998).   Of course, before the matter finds itself at the Supreme Court it is confronted in the first instance by the trial court, in ruling on the motion to strike.   The new tort that the defendant seeks the court to recognize would result in a tort cause of action being available to a spouse in a dissolution who claims harm as a result of the other spouse's trustee, under the facts of this case, interfering with financial expectancy of the spouse in the dissolution of marriage action.

In deciding whether to recognize the new cause of action, it is helpful to first consider the purpose of torts.  “[T]he fundamental policy purposes of the tort compensation system [are] compensation of innocent parties, shifting the loss to responsible parties or distributing it among appropriate entities, and deterrence of wrongful conduct ․ It is sometimes said that compensation for losses is the primary function of tort law ․ [but it] is perhaps more accurate to describe the primary function as one of determining when compensation [is] required ․ An equally compelling function of the tort system is the prophylactic factor of preventing future harm ․ The courts are concerned not only with compensation of the victim, but with admonition of the wrongdoer ․ [I]mposing liability for consequential damages often creates significant risks of affecting conduct in ways that are undesirable as a matter of policy.   Before imposing such liability, it is incumbent upon us to consider those risks.”  (Internal quotation marks omitted.)  Rizzuto v. Division Ladders, Inc, 280 Conn. 225, 235–36, 905 A.2d 1165 (2006).

In analyzing this matter, then, the court must weigh “four factors to be considered in determining the extent of a legal duty as a matter of public policy:  (1) the normal expectations of the participants in the activity under review;  (2) the public policy of encouraging participation in the activity, while weighing the safety of the participants;  (3) the avoidance of increased litigation;  and (4) the decisions of other jurisdictions.”  Murillo v. Seymour Ambulance Ass'n, Inc., 264 Conn. 474, 480, 823 A.2d 1202 (2003).

In bringing this claim, the defendant Nancy Powell–Ferri analogizes it to a claim for tortious interference with business expectancy.   She asserts that the elements of the cause of action would be the same.  “A claim for tortious interference with contractual relations requires the plaintiff to establish (1) the existence of a contractual or beneficial relationship, (2) the defendants' knowledge of that relationship, (3) the defendants' intent to interfere with the relationship, (4) the interference was tortious, and (5) a loss suffered by the plaintiff that was caused by the defendants' tortious conduct.”  (Internal quotation marks omitted.)  Appleton v. Board of Education, 254 Conn. 205, 212–13, 757 A.2d 1059 (2000).

She claims that the elements are (1) her claims under General Statutes § 46b–81 under her dissolution of marriage action, (2) the trustees knew of the dissolution and that they knew the 1983 Trust was property subject to the family court's assignment to her, (3) the trustees intended to deprive her of that interest, (4) the decanting of the trust was wrongful, and (5) the harm to her is real because the 1983 Trust is not funded and so her property and alimony awards will be substantially less than if the decanting had not occurred.

The allegations, taken as true for purposes of a motion to strike are sufficient to support a claim for tortious interference.   Therefore the sole question before the court is whether to recognize the extension of this cause of action from a business expectancy to an equitable claim in a dissolution of marriage.

The defendant Nancy Powell–Ferri argues that the construction of the law of property and alimony in Connecticut, over the years has evolved toward our courts construing the relationship, for economic purposes, as a contractual relationship.   She points to the provisions of General Statutes § 46b–66, “Review of Agreements;  Incorporation into decree.   Arbitration,” which provides that in regard to agreements entered into by the parties regarding, inter alia, alimony and the disposition of property:  “If the court finds the agreement fair and equitable, it shall become part of the court file, and if the agreement is in writing, it shall be incorporated by reference into the order or decree of the court.”   See Barnard v. Barnard, 214 Conn. 99, 109, 570 A.2d 690 (1990) (noted that “[a] judgment rendered in accordance with such a stipulation of the parties is to be regarded and construed as a contract”).   The negotiation of that contract, she argues is what is being interfered with by the Trustee's act of decanting.   The decanting has deprived her of the ability to argue for and receive some of the assets decanted, or a larger share of others.   It is the expectancy of that which the decanting has suppressed the defendant argues.   The business-like nature of the marital venture is further seen in the recent cases construing pre-nuptial and post-nuptial agreement.   Regarding pre-nuptial agreements, our Supreme Court, emphasizing the contractual nature of the relationship wrote, “equitable considerations codified in our statutes ․ have no bearing on whether [a prenuptial] agreement should be enforced ․ In other words, whether ․ [a] court ․ thinks the agreement was a good bargain for the plaintiff does not enter into the analysis of the issue.”  (Internal quotation marks omitted.)  Crews v. Crews, 295 Conn. 153, 167, 989 A.2d 1060 (2010).

In the postnuptial case that followed thereon, the court clarified that while the relationship between the spouses is one of contract, it is not at arm's length:  “Other state courts have not only observed that spouses contract under different conditions;  they have also observed that postnuptial agreements should not be treated as mere ‘business deals.’  Stoner v. Stoner, 572 Pa. 665, 672–73, 819 A.2d 529 (2003).   They recognize that, just like prospective spouses, parties to these agreements do not quite deal at arm's length, but rather at the time the contract is entered into stand in a relation of mutual confidence and trust ․ Ordinarily and presumptively, a confidential relation or a relationship of special confidence exists between husband and wife.   It includes, but is not limited to, a fiduciary duty between the spouses, of the highest degree ․ Prospective spouses share a ‘confidential relationship’;  Friezo v. Friezo, [281 Conn. 166, 189, 914 A.2d 533 (2007) ];  but spouses share the institution of marriage, ‘one of the most fundamental of human relationships ․’ Davis v. Davis, 119 Conn. 194, 203, 175 A. 574 (1934).   Marriage is ‘intimate to the degree of being sacred.   It is an association that promotes a way of life ․ a harmony in living ․ a bilateral loyalty ․ Griswold v. Connecticut, 381 U.S. 479, 486, 85 S.Ct. 1678, 14 L.Ed.2d 510 (1965).   Courts simply should not countenance either party to such a unique human relationship dealing with each other at arms' length ․ Billington v. Billington, [220 Conn. 212, 221, 595 A.2d 1377 (1991) ].   Although marital parties are not necessarily in the relationship of fiduciary to beneficiary ․ [full and frank] disclosure is required of such parties when they come to court seeking to terminate their marriage.”  (Citations omitted;  internal quotation marks omitted.)  Bedrick v. Bedrick, 300 Conn. 691, 702–03, 17 A.3d 17 (2011).

The question for this court then is whether the nature of the marital relationship during dissolution is so different from an arm's length business transaction that it should not be construed as a relationship to which this tort should lie.   The court reaches the opposite conclusion.   Precisely because of the fiduciary and close nature of the marital relationship, the injured spouse should have a remedy for interference with an expectancy such as this.   For instance, the parties may have fashioned their financial lives with knowledge of the husband's interest in the 1983 Trust;  wiping it out as the trustees have may do her long-term and permanent economic damage.   The public policy in this state supports the notion of this cause of action being permitted to exist.   If it were not, then every spouse similarly situated to the defendant here may be harmed by the sleight of hand accomplished in the trustees' actions.   On the other hand, if a settlor of a trust wants to protect a beneficiary's interest in a trust from the claims of a spouse in a dissolution, then the settlor has to make his own intent clear in the language of the trust.   If the settlor were to so provide in the trust, then the parties in the family action would know the consequences of a dissolution of their marriage.   Such a provision was not in the 1982 Trust.

The court does not contemplate that allowing this cause of action will open the flood gates of litigation.   That the question before the court is a novel one lends itself to the irresistible inference that this factual scenario does not often occur.   However, when it does, a wronged plaintiff should have relief available to her if her allegations are proven.

Perhaps the most difficult of the criteria for recognizing a new cause of action here is the inability to quantify the damages.  “Unlike other torts in which liability gives rise to nominal damages even in the absence of proof of actual loss ․ it is an essential element of the tort of unlawful interference with business relations that the plaintiff suffers actual loss.”  Appleton v. Board of Education, supra, 254 Conn. 213.

All that the defendant can prove, looking at her allegations shed in the light most favorable to her, is that it is likely that she would receive substantially more in a settlement or trial if the 1983 Trust assets were in place.   This escapes a damage calculation.   See Goldman v. Feinberg, 130 Conn. 671, 37 A.2d 355 (1944).   For example, in Goldman v. Feinberg, in the context of unlawful interference with business, the court emphasized:  “It does not follow from this, however, that a plaintiff may recover for an interference with a mere possibility of his making a profit.   On the contrary, wherever such a cause of action as this is recognized, it is held that the tort is not complete unless there has been actual damage suffered ․ To put the same thing in another way, it is essential to a cause of action for unlawful interference with business that it appear that, except for the tortious interference of the defendant, there was a reasonable probability that the plaintiff would have entered into a contract or made a profit.”  (Emphasis added.)  Id. See also Patterson v. Sullo, Superior Court, judicial district of New London, Docket No. CV 11 6008633 (August 20, 2012, Martin, J.) (in the context of CUTPA, court emphasized importance of ascertainable loss, which is “a loss that is capable of being discovered, observed or established”).   Similarly, the defendant's allegation pertaining to the likelihood of receiving substantially more in a settlement of trial does not rise to the degree of reasonable probability necessary to establish proof of actual loss for claim such as this.   Thus, because damages cannot be calculated or quantified here, the court should not recognize the new cause of action.

Militating against that, however, is the argument that if a court denies a motion to strike a novel action, the plaintiff is not able to fully develop her facts/action and therefore when reviewing the issue the appellate authority does not have a well-developed record.   As Judge Corradino wrote:  “One whole purpose of motions to strike is to determine whether our jurisdiction should or should not recognize new causes of action.   Also appellate courts will often not be best positioned to determine whether our courts should recognize a new cause of action if trial courts by granting motions to strike do not allow full factual records to be developed.   So certainly there is no a priori reason why a motion to strike should be granted based on the fact that most lower courts have not permitted this type of claim to be made and the appellate courts have not given their imprimatur to it.”   Falconieri v. Choquette, Superior Court, judicial district of New Haven, Docket No. CV 96 0383034 (September 16, 1996, Corradino, J.) (17 Conn. L. Rptr. 658, 659).

Nevertheless, as can be seen, there is tension in the interests involved in recognition of this cause of action.   While its time may have come, it is not necessary under the facts of this case.   The court has declared the decanting act in this case invalid.   Therefore, a remedy will be forthcoming for the counterclaim plaintiff.   See generally ATC Partnership v. Coats North America Consolidated, Inc., 284 Conn. 537, 552–53, 935 A.2d 115 (2007) (“When we acknowledge new causes of action, we also look to see if the judicial sanctions available are so ineffective as to warrant the recognition of a new cause of action ․ To determine whether existing remedies are sufficient to compensate those who seek the recognition of a new cause of action, we first analyze the scope and applicability of the current remedies under the facts alleged by the plaintiff.”  [Citation omitted.] )   In light of that, the motion to strike is granted.

It is also worth noting that the trial courts in Connecticut are split on whether our state should recognize the claim of tortious interference with an inheritance.  “[I]t is true that no Connecticut Appellate or Supreme Court decisions have been rendered on [the issue of recognizing the claim of tortious interference with an inheritance], which, of course, does not mean the Supreme Court will not recognize this tort ․” Bocian v. Bank of America, N.A., Superior Court, judicial district of Hartford, Docket No. CV 06 4019877 (December 8, 2006, Rittenband, J.T.R.) (42 Conn. L. Rptr. 483).  “Despite the lack of case law, at least one court in the state has recognized the tort of tortious interference with an inheritance, stating that [s]uch a cause of action is very similar if not identical to a recognized cause of action in Connecticut;  tortious interference with a contractual right ․ The elements are:  (1) that defendant intentionally interfered with the giving or leaving of property to the plaintiff;  (2) that defendant used unlawful means to accomplish the interference or had an improper purpose;  and (3) proof of damages ․ A plaintiff may recover damages for tortious interference with a contract not only where the contract is thereby not performed ․ but also where the interference causes the performance to be more expensive or burdensome ․ Herman v. Endriss, 187 Conn. 374, 376–77, 446 A.2d 9 (1982).”  (Citations omitted;  internal quotation marks omitted.)   Van Eck v. West Haven Funeral Home, Superior Court, judicial district of New Haven, Docket No. CV 09 5031256 (August 4, 2010, Zoarski, J.T.R.).   Further, the Restatement of Torts does outline such an action.   See Restatement (Second), Torts, Intentional Interference with Inheritance or Gift § 774B (1979) (“One who by fraud, duress or other tortious means intentionally prevents another from receiving from a third person an inheritance or gift that he would otherwise have received is subject to liability to the other for loss of the inheritance or gift”).   See also DePasquale v. Hennessey, Superior Court, judicial district of Hartford, Docket No. CV 10 6007472 (August 27, 2010, Peck, J.) [50 Conn. L. Rptr. 605] (in finding the claim to be legally sufficient, the court partly relied upon how the Restatement, which is “an authority often relied on by our appellate courts in outlining the contours of tort law in our state, provides for a claim of tortious interference with an inheritance under circumstances similar to those of the more established cause of action of tortious interference with contract or business expectancy”).   There is no parallel recognition by the Restatement of the action sought here.

The defendant Nancy Powell–Ferri had also moved for summary judgment on the same count.   Inasmuch as the motion to strike has been granted, no further action than a denial, in light of that, is required on this portion of her motion for summary judgment.

MUNRO, J.

FOOTNOTES

FN1. See, infra, FN 2..  FN1. See, infra, FN 2.

FN2. As previously stated, “The 1983 Trust assets are assets subject to the jurisdiction of this court under General Statutes § 46b–81 to the extent that they are vested.”   See Gibson v. Gibson, Superior Court, judicial district of New Haven at New Haven, Docket Number FA–04–4000432S (October 18, 2004, Gilardi, J.) (37 Conn. L. Rptr. 693, 700) (Four trusts were analyzed to determine if they were marital property;  in two trusts the wife was the remainder beneficiary and the two trusts were held to be property subject to division in a marital dissolution.   The other two trusts were qualified personal residence trusts, one in Connecticut and the second in Florida.   The husband's mother resided in both properties.   The husband's interest in both trusts were held to be non-vested contingent interests and thus a mere expectancy.   His interest in the two trusts was held not to be property subject to division in a marital dissolution).   See also A. Rutkin, S. Oldham & K. Hogan, 7 Connecticut Practice Series:  Inheritances, Trusts and Other Estate Interests (2011) § 26.18, p. 530.   (“Where a spouse has an interest in a trust, there is a great temptation to attribute to him or her the value of the entire trust corpus, for property distribution purposes.   However, such a result should not be automatic, nor will it be appropriate in every instance.   Great care must be taken to identify the specific nature of the party's interest in the trust, to determine whether the interest is vested or unvested, and to determine whether that interest is subject to any contingencies which could prevent vesting or result in divestment.”).  FN2. As previously stated, “The 1983 Trust assets are assets subject to the jurisdiction of this court under General Statutes § 46b–81 to the extent that they are vested.”   See Gibson v. Gibson, Superior Court, judicial district of New Haven at New Haven, Docket Number FA–04–4000432S (October 18, 2004, Gilardi, J.) (37 Conn. L. Rptr. 693, 700) (Four trusts were analyzed to determine if they were marital property;  in two trusts the wife was the remainder beneficiary and the two trusts were held to be property subject to division in a marital dissolution.   The other two trusts were qualified personal residence trusts, one in Connecticut and the second in Florida.   The husband's mother resided in both properties.   The husband's interest in both trusts were held to be non-vested contingent interests and thus a mere expectancy.   His interest in the two trusts was held not to be property subject to division in a marital dissolution).   See also A. Rutkin, S. Oldham & K. Hogan, 7 Connecticut Practice Series:  Inheritances, Trusts and Other Estate Interests (2011) § 26.18, p. 530.   (“Where a spouse has an interest in a trust, there is a great temptation to attribute to him or her the value of the entire trust corpus, for property distribution purposes.   However, such a result should not be automatic, nor will it be appropriate in every instance.   Great care must be taken to identify the specific nature of the party's interest in the trust, to determine whether the interest is vested or unvested, and to determine whether that interest is subject to any contingencies which could prevent vesting or result in divestment.”)

FN3. The Morse v. Kraft, 466 Mass. 92, 2013 WL 3853152, *2 (2013), decision cited infra notes that only eleven jurisdictions have statutes permitting decanting.   The court has located another document, apparently reliable, that indicates that nineteen jurisdictions have statutorily approved decanting.   M. Culler et al., American Counsel of Estate and Trust Counsel, “State Decanting Statutes Passed or Proposed” (2013), available at http://wwxv.actec.org/public/Documents/Studies/Culler_Decanting_Statutes_ 07_01_2013.pdf..  FN3. The Morse v. Kraft, 466 Mass. 92, 2013 WL 3853152, *2 (2013), decision cited infra notes that only eleven jurisdictions have statutes permitting decanting.   The court has located another document, apparently reliable, that indicates that nineteen jurisdictions have statutorily approved decanting.   M. Culler et al., American Counsel of Estate and Trust Counsel, “State Decanting Statutes Passed or Proposed” (2013), available at http://wwxv.actec.org/public/Documents/Studies/Culler_Decanting_Statutes_ 07_01_2013.pdf.

FN4. “This view is in accord with the treatment of a trustee's discretionary power to distribute as a special power of appointment under the Restatement (Second) of Property:  Donative Transfers ․ and the Restatement (Third) of Property:  Wills & Other Donative Transfers ․ although the Third Restatement additionally highlights the fact that, unlike a run-of-the-mill special power of appointment, fiduciary standards are imposed on a trustee's discretionary distribution power.”   W. Culp & B. Mellen, supra, 45 Real Prop. Tr. & Est. L.J. 2, citing Restatement (Second), Property, Donative Transfers §§ 11.1 and Restatement (Third), Property, Wills & Other Donative Transfers § 17.1..  FN4. “This view is in accord with the treatment of a trustee's discretionary power to distribute as a special power of appointment under the Restatement (Second) of Property:  Donative Transfers ․ and the Restatement (Third) of Property:  Wills & Other Donative Transfers ․ although the Third Restatement additionally highlights the fact that, unlike a run-of-the-mill special power of appointment, fiduciary standards are imposed on a trustee's discretionary distribution power.”   W. Culp & B. Mellen, supra, 45 Real Prop. Tr. & Est. L.J. 2, citing Restatement (Second), Property, Donative Transfers §§ 11.1 and Restatement (Third), Property, Wills & Other Donative Transfers § 17.1.

FN5. N.H.Rev.Stat. Ann. § 564–B:4–148 provides in relevant part:  “(a) Unless the terms of the trust expressly provide otherwise, a trustee with the discretion to make distributions to or for the benefit of one or more beneficiaries of a trust (the ‘first trust’) may exercise that discretion by appointing the property subject to that authority in favor of another trust for the benefit of one or more of those beneficiaries (the ‘second trust’) ․”.  FN5. N.H.Rev.Stat. Ann. § 564–B:4–148 provides in relevant part:  “(a) Unless the terms of the trust expressly provide otherwise, a trustee with the discretion to make distributions to or for the benefit of one or more beneficiaries of a trust (the ‘first trust’) may exercise that discretion by appointing the property subject to that authority in favor of another trust for the benefit of one or more of those beneficiaries (the ‘second trust’) ․”

FN6. It is arguable that a trustee's authority to invade the principal of the trust may effectually be an “absolute” or “unlimited” discretion.   Nevertheless, several states have distinguished between a trustee who may invade the principal and has unlimited discretion from a trustee who may invade the principal and has limited discretion.   See 760 Ill. Comp. Stat. § 5/16.4;  N.Y. Est. Powers & Trusts § 10–6.6(b)–(s);  Ohio Rev.Code § 5808.18. Furthermore, it is worth noting that certain states expressly permit decanting regardless of whether the trustee has absolute discretion.  Alaska Stat. § 13.36.157 (prior to 2006, statute required “absolute discretion”);  Ariz.Rev.Stat. § 14–10819 (“regardless of whether a standard is provided in the instrument”);  N.C. Gen.Stat. § 36C–8–816.1 (“under any standard stated in the governing instrument”).   Likewise, certain states remain silent as to the discretion standard, therefore implying that decanting is permitted in situations in which there is no absolute discretion.  12 Del.Code § 3528;  N.H.Rev.Stat. § 564–B:4–418;  Nev.Rev.Stat. § 163.556;  Tenn.Code § 35–15–816(b)(27)..  FN6. It is arguable that a trustee's authority to invade the principal of the trust may effectually be an “absolute” or “unlimited” discretion.   Nevertheless, several states have distinguished between a trustee who may invade the principal and has unlimited discretion from a trustee who may invade the principal and has limited discretion.   See 760 Ill. Comp. Stat. § 5/16.4;  N.Y. Est. Powers & Trusts § 10–6.6(b)–(s);  Ohio Rev.Code § 5808.18. Furthermore, it is worth noting that certain states expressly permit decanting regardless of whether the trustee has absolute discretion.  Alaska Stat. § 13.36.157 (prior to 2006, statute required “absolute discretion”);  Ariz.Rev.Stat. § 14–10819 (“regardless of whether a standard is provided in the instrument”);  N.C. Gen.Stat. § 36C–8–816.1 (“under any standard stated in the governing instrument”).   Likewise, certain states remain silent as to the discretion standard, therefore implying that decanting is permitted in situations in which there is no absolute discretion.  12 Del.Code § 3528;  N.H.Rev.Stat. § 564–B:4–418;  Nev.Rev.Stat. § 163.556;  Tenn.Code § 35–15–816(b)(27).

FN7. The trustees had argued, prior to the decision in Kraft, that the Massachusetts Supreme Court in Kraft was poised to authorize such actions by a trustee.   At the time of briefing and argument, found that matter was not relevant to this court, because in the first instance the Massachusetts Supreme Court had not decided the matter;  and in the second instance, it presented a factually different set of circumstances for the Massachusetts court.   In Kraft, the trustee and the beneficiaries of the trust established by their father were seeking the court's permission to move the assets into a new trust without any tax consequences resulting.   This is narrowly focused and has attributes of notice to and cooperation of the beneficiaries, which is a substantially different scenario.   Further, the Kraft court explicitly rejected the amicus, Boston Bar Association's urging to extend decanting to “recognize an inherent power of trustees of irrevocable trusts to exercise their distribution authority by distributing trust property in further trust, irrespective of the language of the trust.”  Morse v. Kraft, 466 Mass. 92, 2013 WL 3853152 *5 (2013).   The Court noted that this should be addressed by the Massachusetts Legislature.   Notably, in 2011 and 2013, introduction of bills were introduced at the Massachusetts legislature seeking the statutory authority to decant.   The bills failed to advance to law both years.   S. 688 (Mass.2011);  S. 715 (Mass.2013).   Nevertheless, as it will be explained further below, the approval of decanting in Kraft case was limited to the facts of the matter before it and does not authorize the decanting that has taken place in this present matter..  FN7. The trustees had argued, prior to the decision in Kraft, that the Massachusetts Supreme Court in Kraft was poised to authorize such actions by a trustee.   At the time of briefing and argument, found that matter was not relevant to this court, because in the first instance the Massachusetts Supreme Court had not decided the matter;  and in the second instance, it presented a factually different set of circumstances for the Massachusetts court.   In Kraft, the trustee and the beneficiaries of the trust established by their father were seeking the court's permission to move the assets into a new trust without any tax consequences resulting.   This is narrowly focused and has attributes of notice to and cooperation of the beneficiaries, which is a substantially different scenario.   Further, the Kraft court explicitly rejected the amicus, Boston Bar Association's urging to extend decanting to “recognize an inherent power of trustees of irrevocable trusts to exercise their distribution authority by distributing trust property in further trust, irrespective of the language of the trust.”  Morse v. Kraft, 466 Mass. 92, 2013 WL 3853152 *5 (2013).   The Court noted that this should be addressed by the Massachusetts Legislature.   Notably, in 2011 and 2013, introduction of bills were introduced at the Massachusetts legislature seeking the statutory authority to decant.   The bills failed to advance to law both years.   S. 688 (Mass.2011);  S. 715 (Mass.2013).   Nevertheless, as it will be explained further below, the approval of decanting in Kraft case was limited to the facts of the matter before it and does not authorize the decanting that has taken place in this present matter.

FN8. It is worth noting that New Jersey, although it has a case law that provides for decanting, does not have similar statutory authority..  FN8. It is worth noting that New Jersey, although it has a case law that provides for decanting, does not have similar statutory authority.

FN9. “Article III.B. The Trustees shall pay to [the] child [for whose benefit a sub-trust is held] from time to time such portion or portions of the net income and principal thereof as the Disinterested Trustee shall deem desirable for the benefit of such child ․“Article VI.A. Whenever provision is made hereunder for payment of principal or income to a beneficiary, the same may instead be applied for his or her benefit ․“Article VII.  The Trustees shall have full power to take any steps and do any acts which they may deem necessary or proper in connection with the due care, management and disposition of the property and income of the trusts hereunder ․ in their discretion, without order or license of court.”   (Emphases in original, internal quotation marks omitted.)  Morse v. Kraft, supra, 466 Mass. 92, 2013 WL 3853152, *3–4..  FN9. “Article III.B. The Trustees shall pay to [the] child [for whose benefit a sub-trust is held] from time to time such portion or portions of the net income and principal thereof as the Disinterested Trustee shall deem desirable for the benefit of such child ․“Article VI.A. Whenever provision is made hereunder for payment of principal or income to a beneficiary, the same may instead be applied for his or her benefit ․“Article VII.  The Trustees shall have full power to take any steps and do any acts which they may deem necessary or proper in connection with the due care, management and disposition of the property and income of the trusts hereunder ․ in their discretion, without order or license of court.”   (Emphases in original, internal quotation marks omitted.)  Morse v. Kraft, supra, 466 Mass. 92, 2013 WL 3853152, *3–4.

FN10. Massachusetts follows the same principle.  “A general principle of statutory construction provides that a term should be given its plain and ordinary meaning, unless a contrary legislative intent is demonstrated ․ We usually determine the ‘plain and ordinary meaning’ of a term by its dictionary definition.”  (Citation omitted.)  Boylston v. Commissioner of Revenue, 434 Mass. 398, 405, 749 N.E.2d 684, 689 (2001)..  FN10. Massachusetts follows the same principle.  “A general principle of statutory construction provides that a term should be given its plain and ordinary meaning, unless a contrary legislative intent is demonstrated ․ We usually determine the ‘plain and ordinary meaning’ of a term by its dictionary definition.”  (Citation omitted.)  Boylston v. Commissioner of Revenue, 434 Mass. 398, 405, 749 N.E.2d 684, 689 (2001).

FN11. The Thomas court held:  “The plan proposed in the request now made of the trustees in substance, so far as shown in the record, involves a radical change from the design of the testator.   It provides for the creation of a new trust simultaneously with the payment of the fund to the nephew.   This new trust might in conceivable circumstances make the fund or its income subject to claims of creditors.   If an absolute right to the income is to be conferred on the nephew, that would be a material modification of the purpose of the testator.   The avowed design of the proposed trust is to make greater provision for the wife of the nephew than the testator made, and to direct the devolution of the fund after his death in a way different from that specified by the testator.   The proposed powers of the new trustees, whether greater, or less than, or the same as, those of the petitioners, will be exercised by others than those designated by the testator and they will not be responsible to the probate court for the execution of his wishes as declared in his will.   The terms of the new trust, subject to its dominant purposes already stated, are to be approved by the petitioners.   That is no part of their trust function and is not within the scope of their duties under the will.   That is something quite beyond the power ‘to pay to the said Amos E. Lawrence’ any part or the whole of the accumulations of the trust in their discretion when ‘satisfied that it is safe and proper to do so.’  “ Thompson v. Lawrence, supra, 248 Mass. 125–26, 142 N.E. 802–03 (1924)..  FN11. The Thomas court held:  “The plan proposed in the request now made of the trustees in substance, so far as shown in the record, involves a radical change from the design of the testator.   It provides for the creation of a new trust simultaneously with the payment of the fund to the nephew.   This new trust might in conceivable circumstances make the fund or its income subject to claims of creditors.   If an absolute right to the income is to be conferred on the nephew, that would be a material modification of the purpose of the testator.   The avowed design of the proposed trust is to make greater provision for the wife of the nephew than the testator made, and to direct the devolution of the fund after his death in a way different from that specified by the testator.   The proposed powers of the new trustees, whether greater, or less than, or the same as, those of the petitioners, will be exercised by others than those designated by the testator and they will not be responsible to the probate court for the execution of his wishes as declared in his will.   The terms of the new trust, subject to its dominant purposes already stated, are to be approved by the petitioners.   That is no part of their trust function and is not within the scope of their duties under the will.   That is something quite beyond the power ‘to pay to the said Amos E. Lawrence’ any part or the whole of the accumulations of the trust in their discretion when ‘satisfied that it is safe and proper to do so.’  “ Thompson v. Lawrence, supra, 248 Mass. 125–26, 142 N.E. 802–03 (1924).

FN12. In In re Brooks, court founds the trusts were “self-settled” where, pursuant to scheme devised by Chapter 11 debtor and his wife to remove stock certificates from reach of creditors while leaving him with any income from that property, debtor transferred certificates to wife, and wife then transferred certificates, along with funds belonging to her, to offshore trusts that named debtor as beneficiary.  In re Brooks, supra, 217 B.R. 102–03.   Court also explained that a trust which names the settlor as a beneficiary is invalid to the extent of the settlor's beneficial interest.   1 Restatement (Second) of Trusts (1959) § 156(2), p. 326 (“Where a person creates for his own benefit a trust for support or a discretionary trust, his transferee or creditors can reach the maximum amount which the trustee under the terms of the trust could pay to him or apply for his benefit”);  2 A. Scott & W. Fratcher, Law of Trusts (4th ed.1989) § 156, p. 168 (“It is against public policy to permit the owner of property to create for his own benefit an interest in that property that cannot be reached by his creditors”)..  FN12. In In re Brooks, court founds the trusts were “self-settled” where, pursuant to scheme devised by Chapter 11 debtor and his wife to remove stock certificates from reach of creditors while leaving him with any income from that property, debtor transferred certificates to wife, and wife then transferred certificates, along with funds belonging to her, to offshore trusts that named debtor as beneficiary.  In re Brooks, supra, 217 B.R. 102–03.   Court also explained that a trust which names the settlor as a beneficiary is invalid to the extent of the settlor's beneficial interest.   1 Restatement (Second) of Trusts (1959) § 156(2), p. 326 (“Where a person creates for his own benefit a trust for support or a discretionary trust, his transferee or creditors can reach the maximum amount which the trustee under the terms of the trust could pay to him or apply for his benefit”);  2 A. Scott & W. Fratcher, Law of Trusts (4th ed.1989) § 156, p. 168 (“It is against public policy to permit the owner of property to create for his own benefit an interest in that property that cannot be reached by his creditors”).

Munro, Lynda B., J.