Lisa Marie Augustine Mingolello et al.  Administrators of the Estate of Edward T. Augustine, Jr. v. Dina DeCarlo (2014)

MEMORANDUM OF DECISION

The Administrators of the Estate of Edward T. Augustine, Jr. (“the Estate”) have brought suit against the defendant, Dina DeCarlo, alleging that while she had power of attorney for Edward T. Augustine (“Augustine”), she violated her fiduciary duty towards him when she authorized the transfer of real property via a quitclaim deed during the time that Augustine was in a coma.   The first quitclaim was to Augustine's two adult children ¹ who in turn quitclaimed it to the defendant.   The Estate contends that the first quitclaim was not authorized by the power of attorney.   Therefore the Estate alleges that the defendant “gifted” Augustine's real property to herself and also thereby breached her duty of fair dealing towards him.

The defendant admits that she had the power of attorney and that a fiduciary relationship existed but denies the allegations that there was a “gift” and that she breached her fiduciary duty.   She has also raised three special defenses, to wit:  (1) that the real property was hers due to a constructive trust;  (2) that the real property was hers due to a resulting trust;  and (3) that the Estate would be unjustly enriched if it were to obtain the real property.

The Estate has moved for summary judgment and has attached affidavits, which establish that Augustine was in a coma at the time of the property transfer and had no other legal representative at the time and that Augustine did not receive any compensation from the transfer.   The Estate argues that because Augustine was in a coma at the time, he could not have been consulted about the quitclaim nor could he have authorized it.   The Estate further contends that, as a matter of law, it is entitled to summary judgment because the power of attorney document does not allow the defendant to make a gift to herself and that was what occurred when she transferred the real property.²  Relying upon Murphy v. Wakelee, 247 Conn. 396, 400, 721 A.2d 1181 (1998), the Estate further contends that the defendant's fiduciary relationship prohibits her from using that relationship to her benefit and, once she does, the burden shifts to her to prove by clear and convincing evidence that the transaction was a result of fair dealing, good faith, and full disclosure, otherwise the transaction is voidable.   The Estate asserts that the defendant cannot meet that burden as a matter of law.

The defendant argues that there exists a material issue of fact because the first quitclaim gave the property to the co-administrators of the Estate who in turn quitclaimed the property to the defendant and, therefore, the defendant did not directly “gift” the property to herself.   The defendant has submitted affidavits to the effect that the co-administrators were fully informed about the transactions and acted voluntarily.   The defendant also points out that the Estate's argument that Augustine was in a coma and not consulted does not create a breach of fiduciary duty because the power of attorney contemplates exactly such a situation because it expressly states that it “SHALL NOT be affected by the subsequent disability or incompetence of the principal.”   Further, the defendant asserts that two of her special defenses raise the issue of whether the real property was part of the Estate.   The matter is now before the court on the parties' submissions.

DISCUSSION

“Practice Book § 17–49 provides that summary judgment shall be rendered forthwith if the 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.   In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party.”  (Internal quotation marks omitted.)  Brooks v. Sweeney, 299 Conn. 196, 210, 9 A.3d 347 (2010).

“In seeking summary judgment, it is the movant who has the burden of showing the nonexistence of any issue of fact.   The courts are in entire agreement that the moving party for summary judgment has the burden of showing the absence of any genuine issue as to all the material facts, which, under applicable principles of substantive law, entitle him to a judgment as a matter of law.   The courts hold the movant to a strict standard.   To satisfy his burden the movant must make a showing that it is quite clear what the truth is, and that excludes any real doubt as to the existence of any genuine issue of material fact ․ As the burden of proof is on the movant, the evidence must be viewed in the light most favorable to the opponent ․ When documents submitted in support of a motion for summary judgment fail to establish that there is no genuine issue of material fact, the nonmoving party has no obligation to submit documents establishing the existence of such an issue ․ Once the moving party has met its burden, however, the opposing party must present evidence that demonstrates the existence of some disputed factual issue ․ It is not enough, however, for the opposing party merely to assert the existence of such a disputed issue.   Mere assertions of fact ․ are insufficient to establish the existence of a material fact and, therefore, cannot refute evidence properly presented to the court under Practice Book § [17–45].”  (Internal quotation marks omitted.)  Ramirez v. Health Net of the Northeast, Inc., 285 Conn. 1, 10–11, 938 A.2d 576 (2008).

This court agrees with the defendant that material issues of fact remain in this case and therefore the motion for summary judgment is denied.

The first material fact remaining is whether the defendant “gifted” the property to herself.  “A gift is the transfer of property without consideration.   It requires two things:  a delivery of the possession of the property to the donee, and an intent that the title thereto shall pass immediately to him.”  Guinan's Appeal from Probate, 70 Conn. 342, 347, 39 A. 482 (1898).  “A gift is the transfer of property without consideration ․ To make a valid gift inter vivos, the donor must part with control of the property which is the subject of the gift with an intent that title shall pass immediately and irrevocably to the donee ․ In other words, a valid inter vivos gift of personal property requires both delivery of possession of the property to the donee and an intent on the part of the donor that title shall pass immediately to the donee ․ The burden of proving intent and delivery rests upon the party claiming the gift.”  (Citations omitted;  internal quotation marks omitted.)  Wasniewski v. Quick & Reilly, Inc., 292 Conn. 98, 103–04, 971 A.2d 8 (2009).  “A question of intent [as to the making of a gift] is a question of fact, the determination of which is not reviewable unless the conclusion drawn by the trier is one which cannot be reasonably made.”   (Internal quotation marks omitted.)  Giulietti v. Giulietti, 65 Conn.App. 813, 877–78, 784 A.2d 905, cert. denied, 258 Conn. 946, 788 A.2d 95 (2001).

Despite the plaintiff's assertions that this is an open and shut case, this court concludes the issues involved in the two quitclaim transactions as well as the intent of the defendant are material to this case and must be resolved by the trier of fact.

This court also finds that there remain questions of material fact regarding the alleged breach of fiduciary duty.   First, despite the plaintiff's proclamation that the defendant cannot meet her burden to prove that the transaction was not a breach of fiduciary duty, our Supreme Court has stated that “[t]here is, however, no imperative rule of equity that a transaction between the parties is necessarily, in every instance, voidable.   It is possible for the trustee to overcome the presumption of invalidity.”  Murphy v. Wakelee, supra, 247 Conn. 402, quoting State v. Culhane, 78 Conn. 622, 628, 63 A. 636 (1906).

“The essential elements to pleading a cause of action for breach of fiduciary duty under Connecticut law are:  (1) That a fiduciary relationship existed which gave rise to (a) a duty of loyalty on the part of the defendant to the plaintiff, (b) an obligation on the part of the defendant to act in the best interests of the plaintiff, and (c) an obligation on the part of the defendant to act in good faith in any manner relating to the plaintiff;  (2) That the defendant advanced his or her own interests to the detriment of the plaintiff;  (3) That the plaintiff has sustained damages;  and (4) That the damages were proximately caused by the fiduciary's breach of his or her fiduciary duty.”  (Internal quotation marks omitted.)   Banning v. Right Choice Real Estate, LLC, Superior Court, judicial district of Ansonia–Milford, Docket No. CV–10–6003818–S (February 22, 2011, Arnold, J.).

“Our law on the obligations of a fiduciary is well settled.  [A] fiduciary or confidential relationship is characterized by a unique degree of trust and confidence between the parties, one of whom has superior knowledge, skill or expertise and is under a duty to represent the interests of the other ․ The superior position of the fiduciary or dominant party affords him great opportunity for abuse of the confidence reposed in him ․ Once a [fiduciary] relationship is found to exist, the burden of proving fair dealing properly shifts to the fiduciary ․ Furthermore, the standard of proof for establishing fair dealing is not the ordinary standard of fair preponderance of the evidence, but requires proof either by clear and convincing evidence, clear and satisfactory evidence or clear, convincing and unequivocal evidence ․ Proof of a fiduciary relationship, therefore, generally imposes a twofold burden on the fiduciary.   First, the burden of proof shifts to the fiduciary;  and second, the standard of proof is clear and convincing evidence.

“Although not always expressly stated, the basis upon which the aforementioned burden shifting and enhanced burden of proof rests is, essentially, that undue influence will not be presumed ․ and that the presumption of fraud does not arise from the relationship itself.   We note, however, that [this] rule is somewhat relaxed in cases where a fiduciary relation exists between the parties to a transaction or contract, and where one has a dominant and controlling force or influence over the other.   In such cases, if the superior party obtains a possible benefit, equity raises a presumption against the validity of the transaction or contract, and casts upon such party the burden of proving fairness, honesty, and integrity in the transaction or contract ․ Therefore, it is only when the confidential relationship is shown together with suspicious circumstances, or where there is a transaction, contract, or transfer between persons in a confidential or fiduciary relationship, and where the dominant party is the beneficiary of the transaction, contract, or transfer, that the burden shifts to the fiduciary to prove fair dealing ․ A fiduciary seeking to profit by a transaction with the one who confided in him has the burden of showing that he has not taken advantage of his influence or knowledge and that the arrangement is fair and conscientious ․ Generally, therefore, when a breach of fiduciary duty is alleged, and the allegations concern fraud, self-dealing or a conflict of interest, the burden of proof shifts to the fiduciary to prove fair dealing by clear and convincing evidence.”  (Citations omitted;  emphasis altered;  internal quotation marks omitted.)  Cadle Co. v. D'Addario, 268 Conn. 441, 455–56, 844 A.2d 836 (2004).

“[Good faith] is a subjective standard of honesty of fact in the conduct or transaction concerned, taking into account the person's state of mind, actual knowledge and motives ․ Whether good faith exists is a question of fact to be determined from all the circumstances.”  (Internal quotation marks omitted.)   Jaser v. Fischer, 65 Conn.App. 349, 359–60, 783 A.2d 28 (2001).

Here, the defendant has raised issues of material fact regarding whether the property should be considered part of the Estate, whether the defendant intended to profit from the transaction, and whether she acted in good faith.   Such issues must be resolved by the trier of fact and this court cannot say as a matter of law that she cannot sustain a burden, if imposed, to prove that the transaction was not a breach of fiduciary duty.³

BY THE COURT

Jack W. Fischer, Judge

FOOTNOTES

FN1. The two adult children, who are now the co-administrators of the Estate, have filed affidavits stating that they signed the quitclaim thinking that it was valid but, upon conferring with an attorney, they no longer believe that is was valid and have thus commenced the instant action..  FN1. The two adult children, who are now the co-administrators of the Estate, have filed affidavits stating that they signed the quitclaim thinking that it was valid but, upon conferring with an attorney, they no longer believe that is was valid and have thus commenced the instant action.

FN2. The Power of Attorney agreement, which is submitted in support of the motion for summary judgment, provides in relevant part:  “NOTICE:  The powers granted by this document are broad and sweeping.   They are defined in Connecticut Statutory Short Form Power of Attorney Act, sections 1–42 to 1–56, inclusive, of the general statutes, which expressly permits the use of any other or different form of power of attorney desired by the parties concerned.KNOW ALL MEN BY THESE PRESENTS, which are intended to constitute a GENERAL POWER OF ATTORNEY pursuant to Connecticut General Statutory Short Form Power of Attorney Act:That I, EDWARD T. AUGUSTINE, JR., of 11 Goodwin Street, Stamford, Connecticut 06906, do hereby appoint DINA R. DECARLO, also of 11 Goodwin Street, Stamford, Connecticut 06906, as my attorney-in-fact TO ACT:If more than one agent is designated and the principal wishes each agent alone to be able to exercise the power conferred, insert in this blank the word ‘severally.’   Failure to make any insertion or the insertion of the word ‘jointly’ shall require the agent to act jointly.FIRST:  In my name, place and stead in any way which I could do, if I were personally present, with respect to the following matters as each of them is defined in the Connecticut Statutory, Short Form Power of Attorney Act to the extent I may be permitted by law to act through an agent:(Strike out and initial in the opposite box any one or more of the subdivisions as to which the principal does NOT desire to give the agent authority.   Such elimination of any one or more of subdivisions (A) to (L), inclusive, shall automatically constitute an elimination also of the subdivision (M).)(A) real estate transactions;  [ ](B) chattel and good transactions;  [ ](C) bond, share and commodity transactions;  [ ](D) banking transactions;  [ ](E) business operating transactions;  [ ](F) insurance transactions;  [ ](G) estate transactions;  [ ](H) claims and litigation;  [ ](I) personal relationships and affairs;  [ ](J) benefits from military service;  [ ](K) records, reports and statements;  [ ](L) health care decisions;  [ ](M) all other matters;  [ ](N) Special Provision [ ](Special provisions and limitations may be included in the statutory short form power of attorney only if they conform to the requirements of the Connecticut Statutory Short Form Power of Attorney Act.)SECOND:  With full and unqualified authority to delegate any and all of the foregoing powers to any person or persons whom my attorney(s)-in-fact shall select.THIRD:  Hereby ratifying and confirming all that said attorney(s) or substitute(s) may do or may cause to be done.SURVIVAL OF AUTHORITY UPON DISABILITY AND INCOMPETENCE OR PRINCIPALSThis Power of Attorney SHALL NOT be affected by the subsequent disability or incompetence of the principal..  FN2. The Power of Attorney agreement, which is submitted in support of the motion for summary judgment, provides in relevant part:  “NOTICE:  The powers granted by this document are broad and sweeping.   They are defined in Connecticut Statutory Short Form Power of Attorney Act, sections 1–42 to 1–56, inclusive, of the general statutes, which expressly permits the use of any other or different form of power of attorney desired by the parties concerned.KNOW ALL MEN BY THESE PRESENTS, which are intended to constitute a GENERAL POWER OF ATTORNEY pursuant to Connecticut General Statutory Short Form Power of Attorney Act:That I, EDWARD T. AUGUSTINE, JR., of 11 Goodwin Street, Stamford, Connecticut 06906, do hereby appoint DINA R. DECARLO, also of 11 Goodwin Street, Stamford, Connecticut 06906, as my attorney-in-fact TO ACT:If more than one agent is designated and the principal wishes each agent alone to be able to exercise the power conferred, insert in this blank the word ‘severally.’   Failure to make any insertion or the insertion of the word ‘jointly’ shall require the agent to act jointly.FIRST:  In my name, place and stead in any way which I could do, if I were personally present, with respect to the following matters as each of them is defined in the Connecticut Statutory, Short Form Power of Attorney Act to the extent I may be permitted by law to act through an agent:(Strike out and initial in the opposite box any one or more of the subdivisions as to which the principal does NOT desire to give the agent authority.   Such elimination of any one or more of subdivisions (A) to (L), inclusive, shall automatically constitute an elimination also of the subdivision (M).)(A) real estate transactions;  [ ](B) chattel and good transactions;  [ ](C) bond, share and commodity transactions;  [ ](D) banking transactions;  [ ](E) business operating transactions;  [ ](F) insurance transactions;  [ ](G) estate transactions;  [ ](H) claims and litigation;  [ ](I) personal relationships and affairs;  [ ](J) benefits from military service;  [ ](K) records, reports and statements;  [ ](L) health care decisions;  [ ](M) all other matters;  [ ](N) Special Provision [ ](Special provisions and limitations may be included in the statutory short form power of attorney only if they conform to the requirements of the Connecticut Statutory Short Form Power of Attorney Act.)SECOND:  With full and unqualified authority to delegate any and all of the foregoing powers to any person or persons whom my attorney(s)-in-fact shall select.THIRD:  Hereby ratifying and confirming all that said attorney(s) or substitute(s) may do or may cause to be done.SURVIVAL OF AUTHORITY UPON DISABILITY AND INCOMPETENCE OR PRINCIPALSThis Power of Attorney SHALL NOT be affected by the subsequent disability or incompetence of the principal.

FN3. While the defendant has admitted to a fiduciary relationship, it is unclear what its contours are.  “Rather than attempt to define a fiduciary relationship in precise detail and in such a manner to exclude new situations, [the Supreme Court has] instead chosen to leave the bars down for situations in which there is a justifiable trust confided on one side and a resulting superiority and influence on the other ․ Because of this policy, the existence of a fiduciary relationship becomes a question of fact.”  (Citation omitted;  internal quotation marks omitted.)   Leisure Resort Technology, Inc. v. Trading Cove Associates, Superior Court, judicial district of Middlesex at Middletown, Docket No. CV–00–0091180 (October 13, 2000, Gordon, J.).  “Whether a fiduciary relationship and duty exists may involve question of fact ․ Whether a fiduciary or special relationship exists has often been found to be a question of fact.”   Nathan v. Expocon Management Associates, Inc., Superior Court, judicial district of Stamford–Norwalk at Stamford, Docket No. CV–99–0175376 (June 28, 2001, Adams, J.)..  FN3. While the defendant has admitted to a fiduciary relationship, it is unclear what its contours are.  “Rather than attempt to define a fiduciary relationship in precise detail and in such a manner to exclude new situations, [the Supreme Court has] instead chosen to leave the bars down for situations in which there is a justifiable trust confided on one side and a resulting superiority and influence on the other ․ Because of this policy, the existence of a fiduciary relationship becomes a question of fact.”  (Citation omitted;  internal quotation marks omitted.)   Leisure Resort Technology, Inc. v. Trading Cove Associates, Superior Court, judicial district of Middlesex at Middletown, Docket No. CV–00–0091180 (October 13, 2000, Gordon, J.).  “Whether a fiduciary relationship and duty exists may involve question of fact ․ Whether a fiduciary or special relationship exists has often been found to be a question of fact.”   Nathan v. Expocon Management Associates, Inc., Superior Court, judicial district of Stamford–Norwalk at Stamford, Docket No. CV–99–0175376 (June 28, 2001, Adams, J.).

Fischer, Jack W., J.