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Dinan v. Patten

Supreme Court of Connecticut

June 16, 2015

ALTHEA DINAN
v.
ANNE PATTEN ET AL

Argued September 17, 2014.

Page 276

[Copyrighted Material Omitted]

Page 277

Appeal from the decision of the Probate Court for the district of Fairfield specifying the method by which the plaintiff's statutory share of the estate of Albert A. Garofalo should be calculated and approving the appointment of distributors, brought to the Superior Court in the judicial district of Fairfield, and transferred to the judicial district of Waterbury, Complex Litigation Docket, where the matter was tried to the court, Agati, J.; judgment sustaining in part the plaintiff's appeal, from which the plaintiff appealed and the named defendant et al. cross appealed.

Affirmed.

SYLLABUS

Pursuant to statute (§ 45a-436 [a]), on the death of a spouse, a surviving spouse may elect to take a statutory share of the real and personal property passing under the will of the deceased spouse, such share being " a life estate of one-third in value of all the property passing under the will . . . after the payment of all debts and charges against the estate."

Pursuant further to statute (§ 12-401), " except when a testator otherwise directs in his will," the taxes of the estate must be " equitably prorated among the persons interested in the estate to whom . . . any benefit accrues . . . except that, in making such proration, allowances shall be made for any exemptions granted by the act imposing the tax and for any deductions allowed by such act for the purpose of arriving at the value of the net estate . . . ."

G, prior to his marriage to the plaintiff, executed a codicil to his preexisting will, thereby republishing his will, which devised nothing to the plaintiff. The beneficiaries to the will were the defendant P, who was G's daughter, and P's three children. Following G's death, the plaintiff timely elected her statutory share pursuant to § 45a-436. The plaintiff also challenged the validity of the will on the basis of undue influence and lack of testamentary capacity, and appealed to the Superior Court from the Probate Court's admission of the will and codicil to probate. The trial court rendered judgment upholding the validity of the will, and that judgment was affirmed by this court on appeal. Thereafter, the plaintiff requested that her statutory share be set out. Because the parties were unable to reach an agreement, the administrator of the estate filed a motion with the Probate Court, seeking direction from that court as to how to determine the amount of the plaintiff's statutory share. The Probate Court concluded that the statutory share should be calculated based on the value of the estate after the deduction of federal and state estate taxes, and should be valued as of the time that the final account was presented. The Probate Court appointed distributors to set out the statutory share, and determined that the plaintiff would be due income on that share from the date of G's death to the time of distribution, based on the average yield of the estate for that period. The plaintiff then appealed to the trial court, where P claimed that, because the plaintiff had contested G's will before requesting that her share be set out, the plaintiff was barred from recovering her statutory share by the doctrines of waiver, estoppel and election of remedies. The trial court rejected P's claim and reversed in part the decree of the Probate Court. The trial court disagreed with that portion of the decree that concluded that estate taxes are charges against the estate pursuant to § 45a-436 (a), and concluded that, consistent with public policy principles underlying § 12-401, the benefit of the marital deduction should inhere solely to the plaintiff. The trial court therefore concluded that the statutory share must be calculated on the basis of the value of the estate before the deduction of taxes, and affirmed the decree of the Probate Court as to all other issues. From the trial court's judgment, the plaintiff appealed and P cross appealed.

Held:

1. The trial court properly concluded that the doctrines of waiver, estoppel, and election of remedies did not bar the plaintiff from claiming her statutory share because she had contested G's will before she requested that her statutory share be set out; the plaintiff timely elected her statutory share within the time period specified in § 45a-436 (c), her decision to first pursue the challenge to the validity of the will before requesting that the administrator set out her share not being sufficient evidence that she intentionally relinquished her right to the statutory share, and because the trial court's factual finding that there was little support in the record for P's claim that she and the administrator of the estate had not set out the statutory share in detrimental reliance on the plaintiff's decision to contest the will was not clearly erroneous, P having conceded that she and the administrator did not believe that they were required to set out the statutory share until the plaintiff requested that it be set out, this court concluded that the plaintiff's action was not barred by either the doctrine of estoppel or the doctrine of election of remedies.

2. The trial court properly concluded that the plaintiff's statutory share must be based on the value of the estate prior to the deduction of federal and state estate taxes; although the phrase " debts and charges against the estate" in § 45a-436 (a) is not defined in that statute, the proration statute, when understood in conjunction with the state and federal marital deductions, clarifies that the surviving spouse's statutory share must be calculated prior to the deduction of any estate taxes, the purpose of the marital deduction being to benefit the surviving spouse, and allowing other persons with an interest in the estate to share in that benefit would be contrary to that purpose, and would also contravene the legislature's intent in the proration statute.

3. The plaintiff could not prevail on her claim that the trial court improperly concluded that the value of her statutory share should be calculated based on the value of the estate as of the date of distribution, rather than the value at the time of G's death: the statutory share of a surviving spouse must be calculated on the value of the estate at the time of distribution in order to avoid unreasonable and unjust results, because the value of all other shares is based on the value of the estate at the time of distribution and calculating the statutory share on the value of the estate at the time of the decedent's death could result in the surviving spouse's statutory share of a life estate in " one-third" of the value of the decedent's estate under § 45a-436 (a) amounting to either significantly greater or lesser than one-third in relation to the shares of the will's beneficiaries, and, if the value of the estate depreciated greatly between the time of the decedent's death and the time of distribution, beneficiaries of the will could possibly receive nothing, contrary to basic principles of equity; furthermore, although the purpose of the statutory share is to provide for the support and maintenance of the surviving spouse, the primary means of protecting the spouse's support needs during the settlement of the estate is the statutory support allowance (§ 45a-320).

4. The plaintiff could not prevail on her claim that, with respect to the period prior to the date of distribution, she was entitled to a reasonable rate of return, this court previously having determined in Bankers' Trust Co. v. Greims (110 Conn. 36, 147 A. 290) that a surviving spouse was entitled to the average yield of one third of the estate during that time.

5. The trial court properly concluded that the Probate Court did not abuse its discretion in appointing distributors to set out the plaintiff's statutory share; § 45a-436 (e) clearly grants the Probate Court the authority to act within its discretion to appoint distributors, and because the Probate Court grounded its decision on the contentiousness between the parties of this estate, the appointment of distributors was appropriate.

William J. Kupinse, Jr., with whom were Andrew M. McPherson, and, on the brief, Dennis M. Laccavole and Walter A. Flynn, Jr., for the appellant-cross appellee (plaintiff).

Michael P. Kaelin, with whom was William N. Wright, for the appellees-cross appellants (named defendant et al.).

Jeffrey A. Cooper filed a brief as amicus curiae.

Kelley Galica Peck, Richard A. Marone and Marilyn B. Fagelson filed a brief for the Connecticut Bar Association as amicus curiae.

Palmer, Zarella, McDonald, Espinosa, Robinson and Vertefeuille, Js.

OPINION

Page 278

[317 Conn. 188] ESPINOSA, J.

The present case requires us to consider the method by which General Statutes § 45a-436[1] [317 Conn. 189] (spousal share statute)

Page 279

requires a surviving spouse's statutory share to be calculated. The plaintiff, Althea Dinan, appeals, and the defendant Anne Patten, individually and in her capacity as trustee,[2] cross appeals, from the judgment of the trial court affirming in part the decree of the Probate Court.[3] The plaintiff claims that the trial court improperly: (1) concluded that the value of the statutory share should be calculated based on the value of the estate as of the date of distribution, rather than the value of the estate at the time of the decedent's death; (2) determined that with respect to the period prior to the date of distribution, the plaintiff was entitled to the average yield of one third of the estate during that time; and (3) concluded that the Probate Court properly appointed distributors to set out the statutory share. In the cross appeal, the defendant [317 Conn. 190] claims that the trial court improperly concluded that: (1) the plaintiff's claim to a statutory share was not barred by the doctrines of waiver, estoppel and election of remedies; and (2) because state and federal estate taxes are not " debts and charges against the estate" pursuant to the spousal share statute, the statutory share should be calculated prior to the subtraction of taxes from the value of the estate. General Statutes § 45a-436 (a). We affirm the judgment of the trial court, and address each of the parties' claims in turn.

The record reveals the following relevant facts as found by the trial court, and procedural history. The plaintiff's husband, Albert A. Garofalo (decedent), died on July 21, 2000. Prior to his marriage to the plaintiff, the decedent executed a codicil to his preexisting will, thereby republishing his will, which had devised nothing to the plaintiff. Dinan v. Marchand, 279 Conn. 558, 560, 903 A.2d 201 (2006). The beneficiaries to the will were Patten, who is the decedent's daughter, and her three children, Nicole M. Toth, Aaron M. Toth and Alexis P. Toth. On October 27, 2000, the plaintiff timely elected her statutory share pursuant to the spousal share statute, § 45a-436 (c). See footnote 1 of this opinion. The plaintiff also challenged the validity of the will on the basis of undue influence and lack of testamentary capacity, and appealed to the Superior Court from the Probate Court's admission of the will and the codicil to probate. Following a jury trial, the trial court upheld the validity of the will in accordance with the jury's verdict, and that judgment was affirmed by this court on appeal. Dinan v. Marchand, supra, 560-61.

On May 2, 2008, the plaintiff requested that her statutory share be set out. See General Statutes § 45a-436 (e). The request, and the failure of the parties to reach an agreement as to the value of the statutory share, prompted the current administrator

Page 280

of the estate, Donat [317 Conn. 191] C. Marchand,[4] to file a motion with the Probate Court seeking direction from the court as to how to determine the amount of the statutory share. The issues before us in this appeal pertain to the February 16, 2010 decree of the Probate Court, issued in response to the administrator's motion.

In its decision, the Probate Court first concluded that the statutory share should be calculated based on the value of the estate after the deduction of federal and state estate taxes. The court relied on the definition of the statutory share in the spousal share statute as " a life estate of one-third in value of all the property passing under the will, real and personal, legally or equitably owned by the deceased spouse at the time of his or her death, after the payment of all debts and charges against the estate. . . ." (Emphasis added.) General Statutes § 45a-436 (a). Because the court concluded that estate taxes are " charges" against the estate, it held that the statutory share must be set out after the taxes are deducted from the value of the estate. Next, the court exercised its discretion pursuant to § 45a-436 (e) to appoint distributors to set out the statutory share, observing that " [w]here distributors are appointed by a court of probate to divide an estate, they proceed upon the values determined by them as of the date of the distribution . . . ." Willis v. Hendry, 127 Conn. 653, 669, 20 A.2d 375 (1940). In determining the annual amount payable to the plaintiff on her statutory share, the Probate Court relied on this court's decision in Bankers' Trust Co. v. Greims, 110 Conn. 36, 48, 147 A. 290 (1929), and concluded that once her statutory share is set out, the plaintiff will be due income on that share [317 Conn. 192] from the date of the decedent's death to the time of distribution, based on the average yield of the estate for that period. Finally, the court concluded that the statutory share should be valued as of the time that the final account is presented.

The plaintiff appealed to the trial court, which tried the matter de novo. See In re Joshua S., 260 Conn. 182, 199, 796 A.2d 1141 (2002) (" [a]s a general matter, when a decision of the Probate Court is appealed to the Superior Court, a trial de novo is conducted" ). The court first rejected the defendant's claim that, because the plaintiff had contested the decedent's will before requesting that her share be set out, she was barred from recovering her statutory share by the doctrines of waiver, estoppel, election of remedies and laches. Turning to the substantive issues, the trial court reversed in part the decree of the Probate Court, only as to that court's ruling that the value of the estate after the deduction of taxes should serve as the basis for the statutory share.[5] The court disagreed with the Probate Court's conclusion that estate taxes constituted " charges" against the estate pursuant to

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the spousal share statute. General Statutes § 45a-436 (a). The court concluded instead that, consistent with the public policy principles underlying the state's proration statute, General Statutes § 12-401, the benefit of the marital deduction should inhere solely to the plaintiff. The court concluded, therefore, that the statutory share must be calculated on the basis of the value of the estate before [317 Conn. 193] the deduction of taxes. As to all other issues, the trial court affirmed the Probate Court decree. This appeal and cross appeal followed.[6]

For simplicity, before we set forth our rationale as to each of the five issues presented in the appeal and the cross appeal, we first summarize our holdings as to all of those issues, in the order in which we will discuss them. We hold that the trial court properly concluded that: (1) the doctrines of waiver, estoppel and election of remedies do not bar the plaintiff from seeking her statutory share; (2) because state and federal estate taxes are not " debts and charges against the estate" pursuant to the spousal share statute, the statutory share should be calculated prior to the subtraction of taxes from the value of the estate; General Statutes ยง 45a-436 (a); (3) the value of the statutory share should be calculated based on the value of the estate as of the date of the final accounting in anticipation of distribution, rather than the value of the estate at the time of the decedent's death; (4) with respect to the period prior to the date when her statutory share is set out, the plaintiff is entitled to the average yield of ...


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