Peter A. Latella v. Joseph F. Latella, Jr. et al. (2013)

MEMORANDUM OF DECISION

The plaintiff Peter A. Latella brings this action against his brother, the defendant Joseph F. Latella Jr., to quiet title to two parcels of real property on Prindle Road in West Haven, Connecticut, that were the subject of a conveyance by their father Joseph Latella Sr., now deceased.   As relief, the plaintiff originally claimed an undivided one-half interest in the properties.   Intervening in this case is Antoinette Latella, widow of the deceased, claiming that any conveyance of the properties was invalid, so that she, as the widow, is an owner of the property.   Also intervening in this action are the trustees of two trusts, the Peter A. Latella Spray Trust and the Joseph F. Latella Jr., Spray Trust.¹  These trusts claim ownership of the properties via the conveyance of Joseph Latella Sr. For reasons stated below, the court finds that the title to the properties exists in fee simple as an undivided one-half interest held in the two trusts.   Accordingly the court finds the facts and the law in favor of the Latella trusts, entering an order quieting title in their favor.

THE FACTS

The properties that are the subject of this dispute are located on Prindle Road, West Haven, Connecticut.   The deed at issue, Exhibit 3, describes irregularly shaped properties, generally bounded on the south by Prindle Road (884.26 feet);  on the east by a brook, a stone wall and land now or formerly owned by Alvan R. Corkin;  on the north by a stone wall separating it from land now or formerly owned by William F. Healey and others (537.02 feet);  and on the west by certain land owned by the U.S. government (744.49 feet) and by the Town of Orange (766.53 feet).   The property of about 36 acres is represented by a map, Exhibit 2. None of the parties in this litigation has raised any issue about the legal description of the property at issue.²

The subject property has been in the Latella family since the late nineteenth century.   Joseph Latella Sr., inherited it from his parents.   Joseph Sr., was a farmer, and raised pigs on the property.   Members of a younger generation of Latellas, including children of the plaintiff Peter A. Latella and the defendant Joseph F. Latella Jr., continued to be involved in operating certain businesses, including a licensed slaughterhouse, on the property, into the twenty-first century.³

In 1974, Joseph Latella Sr., in consultation with his attorney Stanley Bergman and his accountant Benson Cutler, caused two trust instruments to be drafted, one entitled the Peter A. Latella Spray Trust, Exhibit # 4, and one entitled the Joseph F. Latella, Jr., Spray Trust.   Peter Latella accompanied his father Joseph Sr., to Attorney Bergman's office when the trust documents were ready.   Both the Peter A. Latella Spray Trust and the Joseph F. Latella Jr., Spray Trust were executed on April 23, 1974.   They are both signed by Joseph F. Latella (Sr.) as grantor (settlor), and by Stanley N. Bergman and Benson Cutler as trustees.   Neither Peter A. Latella nor Joseph F. Latella Jr., signed their respective trust instruments.

The purpose of the trusts, as expressed in the trust indentures, was to receive and manage trust property for the benefit of the beneficiaries, who were, respectively, Peter A. Latella and Joseph F. Latella Jr., with provisions made in each instrument for the children of each brother to become successor beneficiaries under certain circumstances.   At the time of the execution of the trust instruments, no money, property, or other assets were placed in the trusts by Joseph F. Latella Sr., or by anyone else.

Then in February 1980, Joseph Latella (Sr.) executed a deed transferring the subject property to Stanley N. Bergman and Benson Cutler, Trustees.   That deed was thereafter recorded on the land records in the Town of West Haven at Volume 648, Pages 83–84.   Exhibit 3.

At some point later in the 1980s, after accepting his appointment as a trustee of the two trusts, Benson Cutler died.   Then on April 17, 1991, Stanley N. Bergman resigned as a trustee of the two trusts, with the consent of Joseph Latella Sr., and both Peter Latella and Joseph Latella Jr., Exhibit D.

In January 2003, Mario Gambardella was appointed successor trustee of the Peter A. Latella Spray Trust, pursuant to a clause in the trust instrument that governed the appointment of successor trustees.   In April 2003, William V. Gambardella was appointed successor trustee of the Joseph F. Latella, Jr., Spray Trust.   These new appointments, contained in two documents entitled Appointment of Successor Independent Trustee, were each recorded on the West Haven land records on December 9, 2003.

On August 19, 2005, Joseph Latella Sr., died.

Various family members have continued to conduct and operate businesses on the subject property during all these years.   When property taxes have come due on the properties, members of the extended Latella family, acting individually or through one of the family businesses, have made arrangements, irrespective of the trusts, to pay the outstanding tax obligations.

Neither of the current trustees has undertaken any real management the trusts because, it is explained, other than holding title to the real estate, the trusts have no income.   Until the current controversy, which appears largely to be over the recent exclusion of Peter Latella and his children from the running of one of the Latella businesses, neither Joseph Latella Jr., nor Peter A. Latella attempted to assert an individual legal interest in the subject property.   Rather until the current litigation, all of the current litigants operated as though the two trusts held an undivided one-half interest in the subject property.⁴

THE CURRENT LITIGATION POSTURE

Peter A. Latella commenced this action in March 2012, alleging that his father intended to create trusts to hold the subject property for the benefit of the two sons, but that the trusts were never created, “leaving the ownership of the property in limbo.”   Amended Complaint, ¶ 5, May 1, 2012 (# 101).   In the plaintiff's prayer for relief, he requested that the court issue a judgment that he was the owner of an undivided one-half interest in the subject property.

The defendant Joseph Latella Jr., denied Peter Latella's claim to ownership, and asserted four Special Defenses:  ownership by Joseph Latella Jr., based on adverse possession;  abandonment;  delay (laches);  and setoff because of payment of certain expenses of the property.   The plaintiff denied the Special Defenses, and the matter was claimed for trial.

In October 2012, the widow of Joseph Latella Sr., moved to be made a party to this action.   In her motion, Antoinette Latella asserted that she was the beneficiary of a trust created before his death by Joseph Latella Sr., into which all of his estate assets passed when he died.   She asserted that in a Codicil to his Will, Joseph Latella Sr., specifically excluded Peter A. Latella and Joseph Latella Jr., from taking any of his estate.   Antoinette Latella claimed that if the two trusts were invalid, she was the rightful owner of the subject property as the ultimate beneficiary of the decedent's estate of Joseph Latella Sr. The court (Maronich, J.) granted the Motion to Intervene.

On February 19, 2013, Antoinette Latella filed an Answer, Special Defenses, and a Counterclaim as to Peter Latella, and a Reply and Crossclaim as to Joseph Latella Jr. In her Answer and Reply, she denied the Latella brothers' claims of ownership of the property.   In her Special Defenses, she alleged that the February 14, 1980, deed of the property to the trustees was void ab initio, and that waiver, estoppel, laches, and the statute of limitations all applied to defeat the plaintiff's action.   In her Counterclaim and Crossclaim, she asserted that the deed was void, that it was the intention of Joseph Latella Sr., that neither Peter nor Joseph Jr., share in his estate, and that she/Antoinette was the sole beneficiary of the Joseph Latella (Sr.) Revocable Trust which inherited his residual estate at the time of his death.   In her prayer for relief, she requested a judgment declaring the trusts invalid, and a judgment declaring her or her deceased husband's estate to be the sole owner of the subject property.

Peter Latella and Joseph Latella Jr., in separate pleadings, denied the allegations of Antoinette Latella.   Additionally Joseph Latella Jr., asserted a Special Defense of lack of standing, to which Antoinette Latella responded that she had standing as the Administrator (sic) of the Estate of Joseph Latella Sr.

There the pleadings stood, as closed, and the case was tried to the court on May 21 and 22, 2013.   At the conclusion of the evidence and upon inquiry of the court, there began a colloquy about the absence of the trustees of the two putative trusts as parties to the case.   Since the defendant Joseph Latella Jr.'s position was that the trusts were valid and held good legal title to the property, and since the evolving position of Peter Latella seemed to be that the trusts were likely valid after all, the court inquired about the ability to quiet title, either for or against the trusts, if the trusts, through the trustees, were not parties to the case.

On May 23, 2013, the plaintiff Peter Latella filed a motion to add the trusts as party defendants.   The court granted the motion on June 20, 2013, and the trustee of each trust was served with a summons, complaint, and order citing them to appear in the instant matter.   Each trustee did subsequently appear by counsel, and each filed an Answer.   In addition Mario Gambardella, trustee of the Peter A. Latella Jr., Spray Trust, filed a Counterclaim, alleging that the trust of which he was trustee was valid and that it held good and marketable title in fee simple to one-half of the subject property.   In answer to the trustee's Counterclaim, the plaintiff Peter A. Latella admitted the allegation that the Peter A. Latella trust held title to one-half of the property, thus changing the position he adopted in his original complaint and also by implication admitting that the Joseph F. Latella, Jr., trust held title to the other one-half.

The court convened a status conference to determine if the pleadings could be declared closed, and if it was necessary to retry the case or open the evidence to receive additional evidence;  or, if no new evidence was to be received, whether the parties, all of them, were prepared to brief the matter and submit it to the court for decision based on the record that had been developed at trial on May 21 and 22.   At a hearing on October 8, 2013, it was conceded that any additional evidence would be cumulative of that already produced at trial and that the matter could be submitted for decision at the close of the briefing schedule set by the court:  November 5, 2013.

The positions of the plaintiff Peter A. Latella and the defendant Joseph Latella, Jr., were now similar—that the trusts were valid.⁵  This was also the explicit position of the trustee of the Peter A. Latella Trust and the implicit position of the trustee of the Joseph F. Latella Trust.   Antoinette Latella's position remained that the trusts were invalid, that the conveyance to the trusts was void, and that she, either in her individual capacity or her representative capacity, was entitled to a declaration that she was the rightful owner of the property.

Accordingly the court finds that the pleadings are closed and that all necessary parties are before the court, having had a full opportunity to be heard as to the issues in this matter.   In particular the court finds that the claims and defenses in the pleadings can reasonably be construed as requesting that the court make a finding on the issue of whether the trusts are valid entities such that the trustees of the two trusts hold, for the benefit of the trust's beneficiaries an undivided one-half interest in the subject property.

THE VALIDITY OF THE TRUSTS

The requisite elements of a valid and enforceable trust are:  “(1) a trustee, who holds the trust property and is subject to duties to deal with it for the benefit of one or more others;  (2) one or more beneficiaries, to whom and for whose benefit the trustee owes the duties with respect to the trust property;  and (3) trust property, which is held by the trustee for the beneficiaries.”   1 Restatement (Third), Trusts § 2, comment (f), p. 21 (2003).   The court finds that all of the elements of a valid and enforceable trust are present with respect to the two trusts in this case.

Each trust instrument initially appointed Mr. Bergman and Mr. Cutler as trustees of the two trusts.   It is true that, because of the death of one trustee and the resignation of the other, each trust was, for a time, without an independent trustee at its helm.   By 2003, a successor trustee had been appointed for each trust, and each still serves in that capacity.

It is not the case that the absence of a trustee for a finite period of time invalidates a trust.   Rather, in these trust instruments, of more than thirty-eight pages of text each (not including signature pages), provision was made for the appointment of a successor independent trustee should there be a vacancy;  and in 2003, with the consent of the settlor and the beneficiaries of the trusts, a new independent trustee was appointed for each trust, and the new appointments were registered in the land records of West Haven for all to see.

Antoinette Latella argues that the trusts are not true trusts because they have been largely moribund—that the trustees have done nothing to manage the property entrusted to them, not even taken inventory or attempted to collect rents or file tax returns.   But such active management is not required for the trust to be valid.   Indeed a trustee can be highly negligent in his duties (and the court makes no such finding here) without invalidating the trust of which he is trustee.   These trustees satisfied the basic terms of the two trust instruments, which were to receive and hold property for the benefit of the beneficiaries.   This they did.   This element has been satisfied.

As for the second element—that there be one or more beneficiaries—there has been no real contest in this case.   Each trust instrument clearly identifies the current beneficiary, Peter A. Latella and Joseph F. Latella Jr., respectively.   Each instrument contains detailed provisions for the potential continuation or, alternatively, the termination of the trust in the event of the death of the primary beneficiary.   At this point, Peter A. Latella and Joseph F. Latella Jr., are still living, and each remains the primary beneficiary of the trust bearing his name.

It is as to the third element—the holding of trust property—that there appears to be controversy and confusion.   When the trust instruments were first drafted and executed in 1974, the trusts held no property.   It was not until six years later that the settlor Joseph Latella Sr., first deeded property to the trustees to be held in the trusts for the benefit of the respective beneficiaries.   It is at that point that these trusts became valid and enforceable.

A trust arises when there is an actual conveyance or transfer of property to the trustee to be held and managed according to the terms of the trust instrument.   Am.Jur.2d, Trusts, § 46 (2005).

The fact that the conveyance in this case names the trustees, but does not fully set forth the name of the trusts (or even use the plural when referring to the “indenture” of April 23, 1974) is of no moment.   Nor is the fact that the conveyance occurred some years after the “indentures” were first drafted and signed.   To be sure, if there had never been any property given to the trustees to hold and manage, the trusts would not have arisen.

But unlike the ambiguous actions of the settlor in Palozie v. Palozie, 273 Conn. 538, 927 A.2d 903 (2007), Joseph Latella Sr., was quite open about the creation of the trust instruments and the donation of the subject property to the trusts.   The comprehensiveness of the language, the fact that the trust instruments were formally executed in the office of the settlor's lawyer, the initial appointment of the settlor's lawyer and accountant as independent trustees of each trust, and the conveyance of the subject property by publicly recorded deed, all manifest the intention of the settlor, with the full knowledge of the trustees and beneficiaries, to create these two valid and enforceable trusts.⁶

The court finds by more than a preponderance of the evidence, indeed by clear and satisfactory proof, that the two trusts are valid, that the conveyance of the subject property to the trustees in 1980 was a valid conveyance, and that the two trusts each hold title in fee simple to an undivided one-half interest to the subject property.

THE REMAINING CLAIMS

The court is unpersuaded by the evidence offered in support of the Special Defenses of the defendant Joseph Latella Jr., particularly as to the claim of adverse possession.   The court finds against the intervening defendant Antoinette Latella as to her Counterclaim and Crossclaim, having found that the property was conveyed away to the two trusts by her husband Joseph Latella Sr., during his lifetime.

CONCLUSION

The court finds in favor of the intervening defendant/counterclaimant Mario Gambardella, Trustee of the Peter A. Latella Spray Trust, and enters a declaratory judgment that the trustee(s) of the Peter A. Latella Spray Trust and the trustee(s) of the Joseph F. Latella Jr., Spray Trust each hold in trust an undivided one-half interest in the subject property for the benefit of the beneficiaries of their respective trusts.

Patty Jenkins Pittman, Judge

FOOTNOTES

FN1. A so-called spray trust is one in which the trustee has been given the discretion to decide how much of the trust assets or income will be distributed among the beneficiaries.   Black's Law Dictionary, under “trust:  spray trust,” or “sprinkle trust,” Ninth Ed., 2009..  FN1. A so-called spray trust is one in which the trustee has been given the discretion to decide how much of the trust assets or income will be distributed among the beneficiaries.   Black's Law Dictionary, under “trust:  spray trust,” or “sprinkle trust,” Ninth Ed., 2009.

FN2. It appears that Joseph Latella Sr., and other members of the Latella family at various times, owned property to the south of Prindle Road in West Haven, and also to the west in the Town of Orange.   Those parcels are not part of this litigation..  FN2. It appears that Joseph Latella Sr., and other members of the Latella family at various times, owned property to the south of Prindle Road in West Haven, and also to the west in the Town of Orange.   Those parcels are not part of this litigation.

FN3. Unfortunately there have been disagreements between the lineal descendants of Joseph Jr., and Peter Latella, so that the ownership and operation of these businesses may currently be in dispute.   The court finds the evidence of these subsequent family and business disagreements not to be probative on the disputed issues in this case..  FN3. Unfortunately there have been disagreements between the lineal descendants of Joseph Jr., and Peter Latella, so that the ownership and operation of these businesses may currently be in dispute.   The court finds the evidence of these subsequent family and business disagreements not to be probative on the disputed issues in this case.

FN4. The court is unpersuaded that the decedent Joseph Latella Sr., during his lifetime, or any of the current litigants or the businesses they operate, have taken any significant steps in derogation of the trusts or the intent of the trusts.   There is evidence that there have been negotiations to sell or grant to others some interest in the property, such as an easement or a lease.   The proposal for outright sale went nowhere.   The easement and lease issues were attempts to conduct orderly business affairs regarding the property and, like the payment of property taxes or the purchase of tax liens, are not sufficiently probative as to the actual title to the property to persuade the court that the title in the trusts must be declared invalid..  FN4. The court is unpersuaded that the decedent Joseph Latella Sr., during his lifetime, or any of the current litigants or the businesses they operate, have taken any significant steps in derogation of the trusts or the intent of the trusts.   There is evidence that there have been negotiations to sell or grant to others some interest in the property, such as an easement or a lease.   The proposal for outright sale went nowhere.   The easement and lease issues were attempts to conduct orderly business affairs regarding the property and, like the payment of property taxes or the purchase of tax liens, are not sufficiently probative as to the actual title to the property to persuade the court that the title in the trusts must be declared invalid.

FN5. While the defendant Joseph F. Latella argued that the trusts were valid, he asserted certain Special Defenses as to their current enforceability.   See, The Remaining Claims, infra..  FN5. While the defendant Joseph F. Latella argued that the trusts were valid, he asserted certain Special Defenses as to their current enforceability.   See, The Remaining Claims, infra.

FN6. The argument that the trust instruments fail because neither Peter A. Latella nor Joseph F. Latella Jr., signed the trust instruments is unavailing.   There is no requirement that a beneficiary sign or acknowledge such documents in order for a trust to be considered valid..  FN6. The argument that the trust instruments fail because neither Peter A. Latella nor Joseph F. Latella Jr., signed the trust instruments is unavailing.   There is no requirement that a beneficiary sign or acknowledge such documents in order for a trust to be considered valid.

Pittman, Patty Jenkins, J.