Nancy Powell–Ferri v. Paul John Ferri, Jr. (2013)

MEMORANDUM OF DECISION

The cross complaint defendant, Paul John Ferri, Jr. (Ferri) moves for summary judgment against the cross complaint plaintiff, Nancy Powell–Ferri (Powell–Ferri) on the cross complaint filed.   Both parties have filed memorandum in support of their respective positions.   In that cross complaint, Powell–Ferri claims her husband Ferri has breached his duty to preserve marital assets.

The salient facts are not in dispute.   After Ferri was told by his brother that the trust had been decanted he has done nothing to recover the assets or contest the process.   His reasoning is that he does not want to sue his family (his brother is a trustee and is also his business partner) and he believes the trustees are acting in his best interest.   The assertion here by Powell–Ferri is that her husband's failure to take any affirmative acts to contest the decanting of the 1983 Trust assets into the 2011 Trust is a violation of his duty to preserve marital assets and amounts to dissipation under the law.

Powell–Ferri acknowledges that her cause of action is unique and has not been developed in academia or recognized in any jurisdiction.   To that end, she argues that if the court were to conclude that it will not recognize this cause of action, it should not be done via a motion for summary judgment but instead via a motion to strike.

The proper mechanism to challenge the adequacy of a cause of action is normally a motion to strike.   Ferri argues that a motion for summary judgment is appropriate when the cause of action being stricken cannot be revived.

“The use of a motion for summary judgment instead of a motion to strike [to challenge the legal sufficiency of a complaint] may be unfair to the nonmoving party because [t]he granting of a defendant's motion for summary judgment puts the plaintiff out of court ․ [while the] granting of a motion to strike allows the plaintiff to replead his or her case.”  (Internal quotation marks omitted.)   Labriola v. McDonald, 274 Conn. 394, 401, 876 A.2d 522 (2005).   Pursuant to the standard established by the Labriola court, summary judgment is appropriate here only if Powell–Ferri has failed to state a legally recognized cause action and would not be able, even if permitted, to replead.  Id.

The court re-recites the law regarding the recognition of a new tortious cause of action as stated in an earlier decision between the parties.   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.)  (Citations omitted;  internal quotation marks omitted.)  Lodge v. Arett Sales Corp., 246 Conn. 563, 578–79, 717 A.2d 215 (1998).”  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).

There is a normal expectation of married individuals that they will act as fiduciary to each other during their marriage.   This fiduciary responsibility has extended to the dissolution of marriage process so far as it imposes a responsibility on each spouse of full and open disclosure to each other.   Billington v. Billington, 220 Conn. 212, 221, 595 A.2d 1377 (1991).   That responsibility has not, however, extended to the requirement to recover assets to the marital estate.   A canvas of the law finds that such a responsibility has been imposed upon a fiduciary only in the area of trust and bankruptcy law;  see Connecticut Nat. Bank v. D'Onofrio, 46 Conn.App. 199, 214, 699 A.2d 237 (1997);  Bank of New York v. Bell, 142 Conn.App. 125, 134 fn.5, 63 A.3d 1026 (2013).

In defining dissipation, our Supreme Court held, “․ leading treatises on domestic relations law ․ generally provide that a harmful or selfish expenditure of marital assets undertaken for a nonmarital purpose is required before one spouse can be found to have dissipated marital assets.   See, e.g., 2 B. Turner, supra, §§ 6:102 and 6:107;  24 Am.Jur.2d, Divorce and Separation §§ 560 through 562 (1998).   We conclude that, at a minimum, dissipation in the marital dissolution context requires financial misconduct involving marital assets, such as intentional waste or a selfish financial impropriety, coupled with a purpose unrelated to the marriage.”  Gershman v. Gershman, 286 Conn. 341, 351, 943 A.2d 1091 (2008).

No allegation is present that Ferri engaged in intentional waste or selfish impropriety.   If there was such conduct alleged then at least one element of the law would be present.   The court might then be constrained to consider whether he owed a duty to act affirmatively to mitigate the effects of his own conduct.   That is not present here.   There is no societal expectation embodied in the law which impels or compels a divorcing spouse to take affirmative steps to recover an asset removed from the marital estate by the action of a third party alone.   This would be a significant leap.

The implications of recognizing this cause of action are serious for the court system.   It can easily be anticipated that if this cause of action is recognized there will be a torrent of litigation by disgruntled (ex-) spouses where they believe that ‘something’ should have been done to prevent loss of an asset.   There is no other jurisdiction that has recognized a cause of action such as Powell–Ferri seeks here.

The court finds that this cause of action should not be recognized in the state of Connecticut.   The motion for summary judgment as to the cross complaint is granted.

Munro, J.

Munro, Lynda B., J.