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Lackman v. McAnulty

Supreme Court of Connecticut

December 28, 2016


          Argued October 14, 2016

          Bruce S. Beck, for the appellants-cross appellees (plaintiffs).

          Stephen G. Walko, with whom were Andrea C. Sisca and, on the brief, Julia E. Braun, for the appellees-cross appellants (named defendant et al.).

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


          ROBINSON, J.

         In this case, we consider whether a grantor's failure to record a separate document limiting his powers ‘‘ ‘as trustee' '' in accordance with General Statutes § 47-20, [1] when that grantor quitclaimed real property to himself as trustee, has the effect of nullifying the transfer of that property to the trust corpus, thereby allowing that grantor, as an individual, subsequently to devise that property through his will. The plaintiffs, Zara Lackman and Dylan Hunt, appeal[2] from the trial court's award of summary judgment in favor of the defendants, [3] who are beneficiaries of a trust settled by the decedent, Hugh I. Hunt. On appeal, the plaintiffs claim that the trial court improperly determined that the phrase ‘‘otherwise dispose of'' within § 47-20 does not include a specific devise in a will. The plaintiffs argue, therefore, that the decedent's failure to record a separate document limiting his powers as trustee when he quitclaimed a certain parcel of real property to himself as trustee subsequently allowed the decedent to devise the property to the plaintiffs in his will. We disagree with the plaintiffs, and conclude that § 47-20 does not apply in this case because it protects only the interests of third parties who obtain property by means of a conveyance from a grantor who had received that property as trustee in the first instance. Because § 47-20 did not nullify the decedent's quitclaim deed to himself as trustee, the property was a trust asset, and the specific devise in the decedent's will adeemed. Accordingly, we affirm the judgment of the trial court.[4]

         The record reveals the following facts and procedural history. On December 8, 1994, the decedent became the sole owner of the property, which is located at 6 North Street in the town of Goshen. On October 21, 1999, the decedent settled an inter vivos trust. The trust was revocable, and the decedent amended it on three separate occasions. In the first amendment, made on March 7, 2003, the decedent removed his daughter, Robyn Hunt Vogel as trustee, leaving himself as sole trustee, and funded the trust with $10 ‘‘together with any property added to the trust estate.'' This amendment also included a provision transferring the decedent's interest in the property at his death equally to his daughters, Alexandra A. Armitage and Samantha Hunt McAnulty. On June 30, 2004, the decedent amended the trust for a second time. Through that second amendment, the decedent eliminated, inter alia, the provision concerning the property in the previous amendment and replaced it with a more generalized provision distributing the remaining trust corpus equally to all of his daughters. The decedent also added a provision in the second amendment expressing his specific intent not to provide a distribution for his son, Hugh Hunt III. On February 24, 2006, the decedent made a third and final amendment to the trust, in which he, inter alia, equalized the trust distribution among all of his children, including his son.

         Shortly after the second amendment, on July 8, 2004, the decedent executed a quitclaim deed of the property to himself as trustee, placing the property into the trust corpus. The quitclaim deed then was recorded on the Goshen land records. However, no document specifying or restricting his powers as trustee ever was recorded. As the trial court noted, ‘‘[a]fter deeding the property to himself as trustee, the decedent never amended the trust to exclude the property, never conveyed the property out of the trust, and never revoked the trust.'' Subsequently, in 2011, the decedent executed a will through which he purported to devise the property to the plaintiffs and their father, Hugh I. Hunt III. In 2013, the decedent passed away. McAnulty, acting as the executrix of the decedent's estate, did not distribute the property to the plaintiffs because counsel advised her that the property remained in the trust, outside of the probate estate, and therefore could not have been devised through the will.

         The plaintiffs then brought this action against the defendants seeking, inter alia, a declaratory judgment determining, pursuant to General Statutes § 47-31, the rights and ownership interests of the defendants in the property.[5] The defendants also filed a counterclaim that sought judgment, pursuant to § 47-31, dismissing the plaintiffs' claims to the property and quieting title in favor of McAnulty and Katherine Hunt McNeil as successor trustees. Thereafter, the defendants moved for summary judgment, claiming that the property remained a trust asset at the time of the decedent's death and, as such, never became part of the decedent's probate estate. In response, the plaintiffs filed a cross motion for summary judgment claiming that, pursuant to § 47-20, the failure to record a separate, duly executed document setting forth the powers of the grantee rendered the quitclaim deed a nullity and, as such, allowed the decedent to dispose of the property through his will. On October 6, 2015, the trial court issued the operative memorandum of decision, [6] dismissing, inter alia, the plaintiffs' motion for summary judgment, and granting the defendants' motion for summary judgment as to count one of the complaint.[7]

         In its memorandum of decision, the trial court applied General Statutes § 1-2z to its analysis of § 47-20. In a thorough textual analysis, the trial court determined that the legislature's use of the word ‘‘such'' to modify the words ‘‘real estate'' and ‘‘interest'' in the second sentence, required it to read the two sentences of § 47-20 together. The trial court then determined that the dictionary definition of ‘‘dispose of'' encompassed both a permanent assignment and a more temporary designation. Although those two conflicting meanings could lead to ambiguity, the trial court reasoned that, when read in the context of the remainder of § 47-20, the statute clearly and unambiguously indicates that the legislature intended the phrase ‘‘dispose of'' only to include permanent transfers of real property. The court ultimately concluded that the phrase ‘‘otherwise dispose of'' as used in § 47-20, plainly and unambiguously did not include devising property through a will. Accordingly, the trial court granted the defendants' motion for summary judgment and quieted title to the property in their favor. The plaintiffs' appeal followed.

         On appeal, the plaintiffs claim that the trial court improperly interpreted § 47-20. Specifically, the plaintiffs assert that the phrase ‘‘dispose of'' within § 47-20 has a well recognized meaning under Connecticut law that includes devises in wills. Additionally, the plaintiffs contend that the phrase ‘‘or otherwise'' is meant to be read as broadly inclusive, and so, taken together with the phrase, ‘‘dispose of, '' § 47-20 plainly and unambiguously includes will devises. Thus, according to the plaintiffs' view of § 47-20, based in part on this court's decision in Benassi v. Harris, 147 Conn. 451, 162 A.2d 521 (1960), the property never became part of the trust corpus because the decedent failed to record a separate instrument limiting his powers as trustee, thereby rendering the term ‘‘trustee'' in the quitclaim deed without legal effect, leaving the decedent free to dispose of the property as if he had continued to hold it as an individual. Finally, the plaintiffs contend that the second sentence of § 47-20 does not limit the first sentence's applicability only to permanent transfers, in that the two sentences govern the rights of two different constituencies, namely, the rights of the grantee as trustee and the rights of a transferee receiving property from such grantee, respectively.

         In response, the defendants initially contend that § 47-20 does not apply to the question presented, as it only applies when there is a transfer of real estate from a grantee, as trustee, to a third party. The defendants further argue that the phrase ‘‘otherwise dispose of'' within § 47-20 does not include a will devise because the plaintiffs erroneously assume that the occasional colloquial use of the term ‘‘disposition'' to describe leaving property in a will must also include will transfers. The defendants contend that a fee interest in the property never transferred to the plaintiffs because a will devise is not a transfer of interest in real property, but is rather a statement of a future intent to transfer and, as such, no interest transferred prior to the decedent's death. In contrast, however, the defendants observe that the transfer of property from a grantor to a trustee is a present transfer of interest because it conveys legal title to the trustee with the beneficial interest in the property going to the beneficiaries of the trust. We agree with the defendants, and conclude that the plain and unambiguous language of § 47-20 does not apply in the present case, which does not involve a subsequent transfer of the property of the grantee ‘‘as trustee'' to a third party.[8]

         Whether § 47-20 applies to the facts of this case presents a question of statutory construction over which we exercise plenary review. Gonzalez v. O & G Industries, Inc., 322 Conn. 291, 302, 140 A.3d 950 (2016). ‘‘When construing a statute, [o]ur fundamental objective is to ascertain and give effect to the apparent intent of the legislature. . . . In other words, we seek to determine, in a reasoned manner, the meaning of the statutory language as applied to the facts of [the] case, including the question of whether the language actually does apply. . . . In seeking to determine that meaning . . . § 1-2z directs us first to consider the text of the statute itself and its relationship to other statutes. If, after examining such text and considering such relationship, the meaning of such text is plain and unambiguous and does not yield absurd or unworkable results, extra-textual evidence of the meaning of the statute shall not be considered. . . . When a statute is not plain and unambiguous, we also look for interpretive guidance to the legislative history and circumstances surrounding its enactment, to the legislative policy it was designed to implement, and to its relationship to existing legislation and common law principles governing the same general subject matter . . . .'' (Internal quotation marks omitted.) Id., 302-303. Significantly, ‘‘our case law is clear that ambiguity exists only if the statutory language at issue is susceptible to more than one plausible interpretation.'' State v. Orr, 291 Conn. 642, 654, 969 A.2d 750 (2009).

         In accordance with § 1-2z, we begin our analysis with the text of the statute. Section 47-20 provides in relevant part: ‘‘The word ‘trustee' or ‘agent', or the words ‘as trustee', or words of similar meaning, following the name of the grantee in a duly executed and recorded instrument which conveys, transfers or assigns real estate or any interest therein . . . do not, in the absence of a separate duly executed and recorded instrument defining the powers of the grantee, affect the right of the grantee to sell, mortgage or otherwise dispose of the real estate or interest therein in the same manner as if those words had not been used. No person to whom such real estate or interest therein has been transferred or mortgaged by such grantee is liable for the claim of any undisclosed beneficiary or principal or for the application of any money which may have been paid by such person therefor.'' When read in isolation, the first sentence, as viewed by the plaintiffs, appears to describe the precise factual scenario presently before us. Here, we have a grantor, the decedent, who quitclaimed the property to himself, as trustee, without recording a separate ...

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