MARGARET E. DAY, COCONSERVATOR (ESTATE OFSUSAN D. ELIA)
v.
RENEE F. SEBLATNIGG ET AL.
Argued
September 6, 2018
Procedural
History
Action
for a judgment declaring, inter alia, a certain trust void ab
initio and unenforceable, and for other relief, brought to
the Superior Court in the judicial district of Stamford,
where the court, Heller, J., granted the
plaintiff's motion for summary judgment and rendered
judgment thereon, from which the defendant First State
Fiduciaries, LLC, appealed to this court. Affirmed.
James
G. Green, Jr., with whom were Jeffrey A. Dorman and, on the
brief, Robert J. Mauceri, for the appellant (defendant First
State Fiduciaries, LLC).
Bridgitte E. Mott, with whom was Richard E. Castig-lioni, for
the appellee (plaintiff).
DiPentima, C. J., and Prescott and Flynn, Js.
OPINION
FLYNN,
J.
The
principal issue in this case is whether a settlor of a
revocable trust who is later under a voluntary
conservatorship may, while under conservatorship, acting on
her own behalf, convert the trust to an irrevocable trust
without action by her conservator and without her conservator
obtaining Probate Court approval. The defendant, First State
Fiduciaries, LLC, [1] appeals from the judgment of the Superior
Court granting the motion of the plaintiff, Margaret E. Day,
coconservator of the estate of Susan D. Elia, for summary
judgment and declaring that the Susan D. Elia Irrevocable
Trust dated September 15, 2011 (Delaware irrevocable trust)
was void ab initio and unenforceable, and that all transfers
of assets from Elia's conservatorship estate to the
Delaware irrevocable trust or its wholly owned limited
liability company, Peace at Last, LLC, were unauthorized and
improper and ordering that the assets from Elia's
conservatorship estate that were transferred to the Delaware
irrevocable trust to Peace at Last, LLC, [2]shall be
immediately returned to Elia's conservatorship estate.
On
appeal, the defendant claims that the court erred in granting
the plaintiff's motion for summary judgment in the
absence of an indispensable party, Bryn Mawr Trust Company of
Delaware (Bryn Mawr).[3] We conclude that the court properly
determined that Elia could not lawfully replace the
Connecticut revocable trust with the Delaware irrevocable
trust while under a conservatorship. We also conclude that
the court properly determined that the former conservator of
Elia's estate, Renee F. Seblatnigg, could not transfer
the assets of the conservatorship estate to the Delaware
irrevocable trust and that this transfer was void ab initio.
Finally, we conclude that Bryn Mawr was not an indispensable
party. We affirm the judgment of the trial court.
On
January 18, 2014, the plaintiff initiated the present action
in which she sought a declaratory judgment that (1) the
Delaware irrevocable trust was void ab initio and
unenforceable; and (2) any and all assets transferred from
Elia's estate to the Delaware Irrevocable Trust or to an
entity owned by the Delaware Irrevocable Trust be returned to
the estate.[4] The following procedural history relates
to the issues now on appeal. On February 26, 2015, the
plaintiff moved for summary judgment.
In its
memorandum of decision, the Superior Court set forth the
following undisputed material facts. ‘‘Elia is
seventy-one years old. She suffers from advanced
Parkinson's disease and lung cancer. In June, 2011, Elia
applied to the Greenwich Probate Court for the voluntary
appointment of a conservator of her person and her estate.
Following a June 28, 2011 hearing in the Greenwich Probate
Court, at which the court, Hopper, J., saw Elia in
person, heard her reason for seeking voluntary
representation, and explained to her that appointing a
conservator as requested would subject her and her property
to the authority of the conservator, the court found that
Elia resided or had domicile in the Greenwich Probate
District, that the court had jurisdiction, that Elia had
requested the appointment of a conservator of the person and
the estate, and that the proposed conservators had accepted
the position of trust. The Greenwich Probate Court
accordingly granted Elia's application for voluntary
representation. By decree issued on June 28, 2011 . . . the
court appointed Seblatnigg the conservator of Elia's
estate and Richard DiPaola . . . the conservator of
Elia's person.
‘‘The
June 28, 2011 decree provided that Seblatnigg, as the
conservator of Elia's estate, had the power to manage the
estate, to apply estate funds to support Elia, to pay her
debts, and to collect debts due to her. At the time of
Seblatnigg's appointment as conservator of Elia's
estate, Elia owned or held an equitable interest in cash and
securities valued in excess of $6, 000, 000, including those
held in the Susan D. Elia Revocable Trust, a 2007 revocable
trust governed by Connecticut law (the Connecticut revocable
trust).
‘‘In
September, 2011, Seblatnigg consulted with the managers of
First State Fiduciaries, [Attorney] Robert Mauceri . . . and
[Attorney] James Holder . . . regarding the creation of an
asset protection plan for Elia. They recommended to
Seblatnigg that Elia establish and fund a self-settled
irrevocable Delaware asset protection trust and a limited
liability company, to be owned by the trust, to hold her
assets.
‘‘Seblatnigg,
as conservator of Elia's estate, entered into an asset
protection services agreement on Elia's behalf with First
State Facilitators, LLC (First State Facilitators), an
affiliate of First State Fiduciaries, on September 15, 2011.
Seblatnigg, as conservator, also signed a legal
representation agreement on behalf of Elia with Mauceri. On
the same day, Seblatnigg met with Elia and supervised her
execution of the instrument that created the Delaware
irrevocable trust. The trust instrument named Seblatnigg and
Salvatore Mulia . . . as the independent trustees of the
Delaware irrevocable trust and named First State Fiduciaries
as the protector of the Delaware irrevocable trust.
Seblatnigg did not seek or obtain the approval of the
Greenwich Probate Court to establish the Delaware irrevocable
trust or to advise Elia to execute the trust instrument.
‘‘A
Delaware limited liability company, Peace at Last . . .
wholly owned by the Delaware irrevocable trust, was formed on
September 15, 2011, to hold Elia's assets. Beginning on
September 20, 2011, Seblatnigg directed the transfer of more
than $6, 000, 000 in cash and securities from Elia's
conservatorship estate and the Connecticut revocable trust to
the Delaware irrevocable trust or to Peace at Last.
Seblatnigg did not seek or obtain the approval of the
Greenwich Probate Court before she transferred the assets to
the [Susan D. Elia Irrevocable Trust dated September 15, 2011
(Delaware irrevocable trust)] . . . or to Peace at Last.
‘‘Seblatnigg
resigned as the conservator of Elia's estate on April 5,
2013. The Greenwich Probate Court accepted Seblatnigg's
resignation on May 21, 2013, subject to the allowance of her
final account, and appointed Mulia the successor conservator
of Elia's estate.
‘‘The
Greenwich Probate Court appointed the plaintiff the
coconservator of Elia's person on May 23, 2013. On
January 9, 2014, at Elia's request, the Greenwich Probate
Court issued a decree . . . naming the plaintiff the
coconservator of Elia's estate for the limited purpose of
any matters relating to Elia's interest in the Delaware
irrevocable trust, because Mulia had a possible conflict of
interest.
‘‘In
March 2014, shortly after the plaintiff commenced this
declaratory judgment action, First State Fiduciaries filed a
petition in the Delaware Court of Chancery (Delaware action)
in which it sought an order compelling Morgan Stanley Smith
Barney, LLC (Morgan Stanley), which held the assets of the
Delaware irrevocable trust, to transfer the trust assets to
the purported new sole trustee, the Bryn Mawr Trust Company
of Delaware . . . . Morgan Stanley filed an answer and
counterpetition in the nature of an interpleader, in which it
maintained that it had no interest in the trust assets, on
May 19, 2014.
‘‘On
May 16, 2014, the plaintiff moved to intervene in the
Delaware action. The motion to intervene was granted on June
10, 2014. The plaintiff filed a response, counterclaim, and
third-party complaint in the Delaware action that day. On
January 29, 2015, the plaintiff moved for a protective order
and to stay discovery in the Delaware action. Morgan Stanley
joined in the plaintiff's motion to stay the Delaware
action.
‘‘On
February 13, 2015, a special master in the Delaware action
recommended that the court deny First State Fiduciaries'
motion to compel and grant the plaintiff's motion for a
protective order and a stay of any discovery. In a letter to
counsel dated August 4, 2015, the special master indicated
that she was recommending that the court stay the Delaware
action in its entirety.'' (Footnotes omitted.)
The
court granted the plaintiff's motion for summary
judgment. The court determined that ‘‘[n]o
genuine issue of material fact exists as to whether Elia was
under a voluntary conservatorship at the time she executed
the instrument creating the Delaware irrevocable trust. While
Seblatnigg, as conservator, could have created and funded the
Delaware irrevocable trust with the Greenwich Probate
Court's approval, she chose instead to do so without the
court's authorization'' in violation of General
Statutes § 45a-655 (e).[5] The court ruled that
‘‘[u]ntil such time [as Elia sought and obtained
release from the conservatorship pursuant to General Statutes
§ 45a-647] . . . the conservator, as the agent of the
Probate Court [had] the exclusive authority to manage the
affairs of the conserved person.'' The court
concluded that the Delaware irrevocable trust was void ab
...