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Ferri v. Powell-Ferri

Supreme Court of Connecticut

June 16, 2015

MICHAEL J. FERRI, TRUSTEE, ET AL.
v.
NANCY POWELL-FERRI ET AL

Argued March 25, 2015.

Page 298

[Copyrighted Material Omitted]

Page 299

Action for a declaratory judgment to determine, inter alia, the validity of the transfer of certain trust assets by the plaintiffs, brought to the Superior Court in the judicial district of Middlesex, where the named defendant filed counterclaims against the plaintiffs and a cross complaint against the defendant Paul John Ferri, Jr.; thereafter, the court, Munro, J., granted the motion for summary judgment on the cross complaint filed by the defendant Paul John Ferri, Jr., and rendered partial judgment thereon in his favor, and the named defendant appealed.

Affirmed.

SYLLABUS

The plaintiffs M and A, the trustees of two trusts established for the benefit of the defendant F, sought a declaratory judgment to determine, inter alia, the legality of transferring certain assets from one of those trusts to the other. Specifically, M and A transferred a substantial portion of the assets from a trust that permitted F to withdraw principal to a trust that prohibited such withdrawals without the trustees' approval. The defendant P, who had previously filed a separate action seeking the dissolution of her marriage to F, filed a cross complaint alleging that F had breached his duty to preserve marital assets by failing to affirmatively contest the transfer of assets by M and A. Subsequently, F filed a motion for summary judgment claiming, inter alia, that P's cross complaint failed to state a cause of action. The trial court found that F took no affirmative steps to recover the assets of the first trust, and also found that F did not have a role in either the creation of the second trust or the transfer of assets to it. The trial court, concluding that there was no allegation that F had engaged in financial misconduct such as intentional waste or selfish impropriety and that no law required F to take affirmative steps to recover assets removed from the marital estate by the actions of a third party alone, granted F's motion for summary judgment and rendered judgment thereon, from which P appealed. Held that the trial court properly rendered summary judgment in favor of F, this court having concluded that the existing judicial sanctions were not so ineffective as to warrant the recognition of a new cause of action imposing an affirmative duty on a spouse to recover marital assets taken by a third party during the pendency of a dissolution where the statutes (§ § 46b-80 and 46b-81) setting forth the obligations of spouses during the pendency of a dissolution proceeding, the automatic orders relating to assets of the marital estate during the pendency of a dissolution proceeding required pursuant to the rules of practice (§ 25-5), and the broad equitable powers available to the trial court when fashioning financial orders in a dissolution proceeding already provided significant remedies to P; furthermore, it was not procedurally improper for the trial court to decide the legal sufficiency of P's cross complaint within the context of a motion for summary judgment where, in light of this court's conclusion regarding P's cause of action, the defect could not be cured by repleading.

Kenneth J. Bartschi, with whom were Karen L. Dowd and, on the brief, Thomas P. Parrino and Laura Shattuck, for the appellant (named defendant).

Jeffrey J. Mirman, for the appellee (defendant Paul John Ferri, Jr.).

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

OPINION

Page 300

[317 Conn. 224] EVELEIGH, J.

This appeal arises from a dissolution action, dissolving the marriage of the named defendant, Nancy Powell-Ferri, and the defendant, Paul John Ferri, Jr. (Ferri). The dispositive issue in this appeal is whether the trial court properly rendered summary judgment in favor of Ferri on the cross complaint filed by Powell-Ferri on the ground that it failed to plead a legally sufficient cause of action. Specifically, Powell-Ferri's cross complaint alleged that Ferri had breached his duty to preserve marital assets during the pendency [317 Conn. 225] of their marital dissolution action by failing to take any affirmative steps to contest the decanting of certain assets from a trust by the plaintiffs, Michael Ferri and Anthony Medaglia, who were then serving as trustees.[1] We conclude that this state does not require a party to a dissolution action to take affirmative steps to recover marital assets taken by a third party and, accordingly, affirm the judgment of the trial court.

In its memorandum of decision, the trial court set forth the following relevant facts and procedural history. Powell-Ferri filed an action for dissolution of her marriage to Ferri on October 26, 2010, which is still pending. Ferri is the sole beneficiary of a trust created by his father, Paul John Ferri, Sr., in 1983 (1983 trust). The plaintiffs were named as trustees of the 1983 trust. Michael Ferri is Ferri's brother and business partner.

The 1983 trust provides that, after Ferri attained the age of thirty-five, he would have the right to withdraw principal from the trust in increasing percentages depending on his age. In March, 2011, while the underlying dissolution action was pending, the plaintiffs created a second trust whose sole beneficiary was Ferri (2011 trust). The plaintiffs then distributed a substantial portion of the assets in the 1983 trust to the 2011 trust.[2]

Unlike the terms of the 1983 trust, the terms of the 2011 trust do not allow Ferri to withdraw principal. Instead, under the terms of the 2011 trust, the plaintiffs [317 Conn. 226] have all of the control and decision-making power as to ...


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