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Tatoian v. Tyler

Appellate Court of Connecticut

October 29, 2019

Richard TATOIAN, Trustee
Bruce D. TYLER, et al.

         Argued December 3, 2018.

         Appeal from the Superior Court in the judicial district of Tolland, Graham, J.

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[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

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          Bruce D. Tyler, Somers, self-represented, and Jay M. Tyler, self-represented, the appellants-cross appellees (defendants).

         Bruce S. Beck, Manchester, for the appellee-cross-appellant (plaintiff).

         Sheldon, Keller and Moll, Js.[*]


         KELLER, J.

         [194 Conn.App. 4] The plaintiff, Richard Tatoian, in his capacity as trustee of the Ruth B. Tyler Irrevocable Trust, brought the underlying vexatious litigation action against the defendants,

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Bruce D. Tyler (Bruce Tyler) and Jay M. Tyler (Jay Tyler). The defendants are among the beneficiaries of the trust. In 2010, Jay Tyler commenced an action (prior action) against, among others, the plaintiff and Bruce Tyler. Jay Tyler named the plaintiff as a defendant in all seven counts of his complaint, but counts three through seven of the complaint were brought against the plaintiff exclusively. Essentially, with respect to the plaintiff, Jay Tyler alleged in his [194 Conn.App. 5] complaint that, in a variety of ways, the plaintiff had performed deficiently as trustee and sought money damages and equitable relief. In 2011, Bruce Tyler brought a cross complaint in the prior action. All four counts of the cross complaint, which was brought against the plaintiff exclusively, are nearly identical to the claims raised in counts four through seven of the complaint. Bruce Tyler sought, inter alia, money damages. After the plaintiff prevailed in the prior action, he commenced the present action, sounding in common-law and statutory vexatious litigation, for, inter alia, attorney’s fees and costs he incurred, on behalf of the trust, in defending himself in the prior action. Following a court trial in the present action, the trial court found that the defendants lacked probable cause to bring one of the claims against the plaintiff in the prior action. Accordingly, the court rendered judgment in part in the plaintiff’s favor and awarded him a portion of the attorney’s fees and costs he incurred in defending the prior action.

         The defendants appeal from the judgment of the trial court and raise the following claims: (1) the court lacked subject matter jurisdiction over the plaintiff’s causes of action because he lacked standing at the time of the commencement of the present action; (2) the court improperly failed to consider whether the settlor of the trust, Ruth B. Tyler (Ruth Tyler), was subjected to undue influence in connection with the creation of the trust; (3) the court misinterpreted relevant law in its analysis of whether, in the prior action, the defendants had probable cause to claim that the plaintiff had violated General Statutes § 45a-541c by failing to diversify trust assets; and (4) the court misinterpreted relevant law in its analysis of whether the plaintiff could prevail in the present action merely by demonstrating that the defendants lacked probable cause to bring one of the claims that they brought against him in the prior action.

         [194 Conn.App. 6] The plaintiff cross appeals from the judgment of the trial court. He claims that, although the court properly concluded that one of the claims raised against him by the defendants in the prior action was not supported by probable cause, the court erroneously failed to conclude that the defendants lacked probable cause to bring the remaining claims and had acted with malice in bringing the claims.[1]

          We disagree with the claims raised in the defendants’ appeal but agree, in part, with the claim raised in the plaintiff’s cross appeal. Accordingly, we affirm in part and reverse in part the judgment of the trial court.



          In its initial memorandum of decision, the court found the following facts, many of which are not in dispute: "The defendants, [Jay Tyler] and [Bruce Tyler], are the sons of the late [Ruth Tyler]. The defendants ... have three brothers; Thomas J. Tyler [ (Thomas Tyler) ], Russell

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J. Tyler [ (Russell Tyler) ], and John E. Tyler, Jr. [ (John Tyler, Jr.) ].

          "Bruce Tyler and Thomas Tyler are attorneys licensed to practice in this state.

          "In 1984, [Bruce Tyler] represented his mother, Ruth Tyler, in executing a will that stated that the Tyler child with the lowest net worth would receive enough money from her estate to equalize that child’s net worth with that of the sibling with the second lowest net worth. [Bruce Tyler] gave Ruth Tyler the original of the 1984 will and he kept a copy for his records. [Bruce Tyler] did not tell his siblings about the 1984 will or provide them with a copy because he understood that as her attorney he had an obligation not to disclose such information without her consent.

         [194 Conn.App. 7] "Under the 1984 will, [Jay Tyler], the youngest of Ruth Tyler’s five sons, would have received the entirety of Ruth Tyler’s estate. [Jay Tyler] first learned about the 1984 will from [Bruce Tyler] after Ruth Tyler died in 2010.

          "In 1988, Ruth Tyler and her husband, John Tyler, the defendants’ father, executed new wills in which they divided their assets equally among their five sons. This 1988 will was also prepared by [Bruce Tyler], who was present when the will was executed and took the oaths. [Bruce Tyler] did not tell Jay Tyler that their parents had changed the will to leave their estate to their five children equally. At trial, [Bruce Tyler] claimed that he did not recall preparing the 1988 will for his parents.

          "In 1990, Ruth and John Tyler took out a loan on the family home in order to loan Jay Tyler $50,000. [Bruce Tyler] assisted his parents in obtaining the bank loan. Under his agreement with his parents, [Jay Tyler] was required to pay back the loan in full with interest and to make monthly payments to his parents.

          "In 1991, [Bruce Tyler] borrowed $25,000 from his parents to use for college tuition. He, too, was required to pay back this loan with interest. [Bruce Tyler] repaid his parents at least $10,000 on this loan.

          "John Tyler, Ruth Tyler’s husband, died in 1997.

          "In 1999, Ruth Tyler executed a new will with the assistance of her son, Thomas Tyler. Under this will, Ruth’s five sons would share equally in her estate; however, any outstanding loan amounts owed to her would be deducted from that child’s share of the estate and redistributed to the others. At that time, she [granted] her son [John Tyler, Jr.] her power of attorney.

          "[Bruce Tyler] could not recall if his mother told him about the 1999 will. [Jay Tyler] was not aware of the 1999 will until after his mother died.

         [194 Conn.App. 8] "On August 3, 2004, the plaintiff received a call from Thomas Tyler notifying him that his mother, Ruth Tyler, would be calling him to discuss estate planning. The next day, Ruth Tyler called the plaintiff, and they met on August 10, 2004. The plaintiff is an attorney who has practiced in Enfield for forty years in the area of trusts, wills, and estates. He had known Ruth Tyler for fifty years, as their families were neighbors.

          "At their meeting on August 10, 2004, Ruth Tyler explained that she had prepared a will in 1999, which she wished to maintain. She also told the plaintiff that she wanted to create a trust to preserve her assets in the event she went into a nursing home. They also discussed the execution of a living will and revised power of attorney, again designating her son, [John Tyler, Jr.]. The plaintiff met with [John Tyler, Jr.], who held Ruth Tyler’s power of attorney, and he gave the plaintiff a copy of the 1999 will.

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          "The plaintiff prepared the trust based on Ruth Tyler’s instructions and explained its contents to her in detail. In order to accomplish Ruth Tyler’s purpose to preserve her assets and avoid probate, the trust was irrevocable. The plaintiff was made the trustee of the trust. Ruth Tyler agreed to the trust provisions.

          "The trust adopted the provisions of the 1999 will, and provided that Ruth Tyler’s five sons would share equally in her estate, ‘subject to the direction that any sums due and owing to the [g]rantor [Ruth Tyler] by her sons [Bruce Tyler and Jay Tyler], shall be deducted from any share which they are to receive’ under the trust.

          "According to the trust, the trustee had ‘full power and authority to manage and control the trust estate,’ which included the right to invest and reinvest the trust assets. ‘The trustees may make and change such investments from time to time according to their discretion; and they may continue to hold any stocks, securities [194 Conn.App. 9] or other property received by them hereunder, without any duty of diversification.’ During his time as trustee, the plaintiff had discussions with an investment advisor but decided not to make any trades or any changes to the investments of the trust assets.

          "Under the section [of the trust entitled ‘(t)rustee (a)ccountings’], the trust provides: ‘The [t]rustee shall render an account at least once each twelve months to each adult beneficiary .... The account shall show the receipts, disbursements and distributions of principal and income since the last accounting, and the assets on hand. If no objection shall be made to any account so rendered within ninety (90) days after a copy thereof has been deposited in the mail addressed to any person entitled thereto, as hereinabove provided, such beneficiary shall be conclusively presumed to have approved or assented to all actions reflected in the account so rendered.’ Prior to Ruth Tyler’s death, the plaintiff only sent accountings to Ruth Tyler and [John Tyler, Jr.].

          "The trust identifies Ruth Tyler as grantor and refers to her as grantor throughout the trust. Although the trust includes some limited definitions, it does not define the term ‘beneficiary.’

          "The trust contains an incontestability of trust clause, which provides that ‘if any beneficiary’ under the trust shall contest the validity of the trust, they shall not be entitled to any benefit under the trust.

          "The trust also provides a provision entitled ‘Exculpation of Individual Trustees’ that provides: ‘No individual trustee shall be liable [for] any mistake or error of judgment, or for any action taken or omitted, either by the trustee or by any agent or attorney employed by the trustee, or for any loss or depreciation in value of the trust, except in the case of willful misconduct.’

          "After the trust was executed, Ruth Tyler’s assets were transferred to the trust. The assets included Bank [194 Conn.App. 10] of America stock held by Smith Barney as the investment advisor. The Bank of America stock had been owned by Ruth and John Tyler for many years. At year end in 2006, the trust estate had a value of just under $500,000, with $362,504 attributed to stocks. At some point, Ruth Tyler sold her home and those cash proceeds were added to the trust, making the value of the trust approximately $500,000.

          "Neither defendant Bruce Tyler [nor] Jay Tyler [was] aware that their mother created the trust until after her death in 2010; however, both were aware that she had wanted to do so.

          "Ruth Tyler died on April 1, 2010.

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          "The plaintiff liquidated the assets of the trust and converted them to cash for distributions to the beneficiaries. He also prepared accountings, which he filed with the Probate Court, and provided to the defendants. At that time, the value of the trust assets had decreased substantially to approximately $270,000, with the stock value having decreased to approximately $146,000 from its high several years before of $362,504.

          "After Ruth Tyler’s death, Bruce Tyler told Jay Tyler ... about the trust, and Bruce Tyler told Jay Tyler about the 1984 will. When [Jay Tyler], who is not a lawyer, learned about the trust, he had concerns that the plaintiff had kept the trust a secret and should have been providing him accountings during his mother’s lifetime. Although [Jay Tyler] disputed that he owed his mother any money, he was also concerned that his mother’s trust essentially disinherited him, which he did not believe she would do, leading him to believe that she had been influenced by Thomas Tyler. Jay Tyler believed that the plaintiff had conspired with Thomas Tyler and that they had unduly influenced Ruth Tyler to ‘cheat’ him out of his inheritance. Jay Tyler claimed that Thomas Tyler was not a nice person and enjoyed ‘putting Jay down,’ and [that] the fact that Thomas Tyler [194 Conn.App. 11] was aware of the trust and will, was a ‘red flag.’ Also, when Jay Tyler learned from Bruce Tyler that the trust had decreased substantially in value, he was concerned that the plaintiff had not complied with prudent investor rules, which he learned about from Bruce Tyler.

          "[Jay Tyler] decided that he wanted to bring a lawsuit for the purpose of seeking to have the 1984 will deemed operative, and pursuant to which he would benefit substantially. He asked his brother Bruce Tyler for assistance. At first, Bruce Tyler declined and told Jay Tyler to contact an attorney. When he spoke to Bruce Tyler a second time and again sought his assistance, Bruce Tyler agreed to help Jay Tyler with the paperwork. Bruce Tyler told Jay Tyler that he was not his attorney and that he was acting on his own.

          "With Bruce Tyler’s assistance, Jay Tyler prepared a complaint against all of his brothers, including Bruce Tyler, who were the other beneficiaries of the trust and heirs under the 1999 will, and the plaintiff as trustee. The suit was served on or about December 23, 2010, and was filed in [the judicial district of Fairfield at Bridgeport] on January 28, 2011....

          "[Jay Tyler’s] initial complaint alleged that the plaintiff had conspired [with Thomas Tyler] to keep the trust and the 1999 will a secret from him, that as a result of this conspiracy, Jay Tyler was wrongfully deprived of his share of Ruth Tyler’s estate, and that the plaintiff had a duty to communicate with Jay Tyler and to furnish him annual accounts of the trust during Ruth Tyler’s lifetime and failed to do so. He also made claims of undue influence against Thomas Tyler.

         "[Bruce Tyler] admitted all of the allegations of Jay Tyler’s complaint and filed a cross complaint against the plaintiff, dated March 21, 2011. In that complaint, Bruce Tyler asserted that the plaintiff had a duty to provide him with accountings for the trust during Ruth Tyler’s lifetime, and that the plaintiff had violated General Statutes § 45a-541, because he failed to act as a [194 Conn.App. 12] ‘prudent investor’ in investing and managing the assets of the trust. Bruce Tyler also alleged that the plaintiff failed to diversify the investments of the trust in violation of the same statute, and that his failure to provide accountings to Bruce Tyler during Ruth Tyler’s lifetime deprived him of his right to seek an order from the Probate Court to compel the plaintiff not to maintain the securities he

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had received in the trust, which right was claimed to be afforded by General Statutes § 45a-204.

          "On October 11, 2011, Bruce Tyler amended his cross complaint, with the court’s permission, to proceed against the plaintiff’s investment adviser and his employer, alleging that they were liable because the plaintiff had relied on their advice and management of the securities in the trust account. On February 7, 2012, Bruce Tyler’s cross complaint against the investment adviser and his employer was dismissed for lack of standing.

          "On April 10, 2012, [Bruce Tyler] amended his cross complaint against the plaintiff to add an additional claim alleging that the plaintiff should have sued an investment advisor who had provided advice seeking to recover the lost value of stocks owned by the trust and that the plaintiff was therefore liable to Bruce Tyler.

         "On June 21, 2012, [Jay Tyler] amended his complaint adding all of the additional claims against the plaintiff that had been previously made by Bruce Tyler in his cross complaint against the plaintiff.[2]

         "Judgment entered in favor of the plaintiff on Jay Tyler and Bruce Tyler’s operative complaints after the [194 Conn.App. 13] partial granting of summary judgment and a jury verdict.[3]

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          "To defend the claims against him in the [prior] action, the plaintiff, on behalf of the trust, hired counsel [194 Conn.App. 14] and has incurred attorney’s fees in the amount of $114,889 and costs in the amount of $2111.82." (Footnotes added and footnotes omitted.)

          In support of his vexatious litigation claims in the present action, the plaintiff, in his capacity as trustee, relied on the claims brought against him in the prior action in both the operative complaint brought by Jay Tyler and the operative cross complaint brought by Bruce Tyler. The plaintiff also alleged that all of the counts brought against him either were terminated by way of summary judgment or resolved by a jury in his favor. The plaintiff alleged that "[a]lthough ... [Bruce Tyler] was named as a defendant in the complaint and in the amended complaint [brought by Jay Tyler], in reality ... [Bruce Tyler] and ... Jay Tyler were not adversaries but were, in fact, acting in concert. Moreover, in addition to filing his cross complaint and the amendments thereto ... [Bruce Tyler] directed and controlled the initiation of the action, including preparing [194 Conn.App. 15] and arranging for service of the complaint and all other relevant pleadings filed by ... [Jay Tyler] as were necessary for the commencement and prosecution of the action."

          In count one, the plaintiff asserted a cause of action sounding in common-law vexatious litigation, seeking compensatory and punitive damages. The plaintiff alleged in relevant part: "The action, including the complaint and cross complaint, was brought and prosecuted by the defendants without probable cause in that the defendants lacked knowledge of the facts, actual or apparent, strong enough to justify a reasonable belief that they had lawful grounds to bring and prosecute the causes of action alleged against the plaintiff." The plaintiff alleged that "[i]n bringing and prosecuting the [prior] action, [the] defendants acted with malice based on one or more of the following: [a] [the] defendants

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lacked probable cause to bring and prosecute the action; [b] the action was brought and prosecuted primarily for an improper purpose; [c] the defendants knew or reasonably should have known that they had no valid claim against the plaintiff based on the facts asserted in the complaint, amended complaint, cross complaint and amended cross complaint and/or that any claims made by the defendants against the plaintiff would have been barred by the provisions of the trust or the laws of the state of Connecticut." The plaintiff alleged that "[t]he aforesaid actions on the part of the defendants were taken with a malicious intent unjustly to vex, annoy and harass the plaintiff" and "constitute vexatious litigation under Connecticut common law." The plaintiff alleged that he had incurred attorney’s fees and costs in defending the prior action and bringing the present action.

         In count two, the plaintiff, relying on the allegations set forth in count one, asserted a claim of statutory [194 Conn.App. 16] vexatious litigation, seeking double damages pursuant to General Statutes § 52-568 (1).[4]

         In count three, the plaintiff, also relying on allegations set forth in count one, asserted a claim for statutory vexatious litigation, seeking treble damages pursuant to § 52-568 (2).[5]

         The defendants separately filed answers and special defenses in which they denied the allegations that the complaint and the cross complaint had been brought without probable cause, that they had acted with malice in bringing and prosecuting the prior action, and that their actions had constituted vexatious litigation under the common law or § 52-568.[6] The respective pleadings filed by the defendants mirrored one another. First, the defendants claimed that, in bringing the prior action against the plaintiff, they lacked the requisite intent to have engaged in vexatious litigation. Second, the defendants claimed that the plaintiff commenced the present action prior to the termination of the prior action, thus depriving the court of subject matter jurisdiction over the plaintiff’s action. Third, the defendants claimed that the plaintiff lacked the authority under the trust to bring the present action. Fourth, the defendants claimed the present action reflected the plaintiff’s improper motivation in that, rather than acting in the best interest of the trust, he is motivated by his own [194 Conn.App. 17] malice and vindictiveness toward the defendants and not by any acts of the defendants. Fifth, the defendants claimed that in the present action the plaintiff had violated General Statutes § 52-226a by failing to obtain a certificate from the court in the prior action confirming that the action was vexatious in nature.[7] Sixth, the defendants

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claimed that the plaintiff had engaged in fraud. In his replies to the special defenses filed by the defendants, the plaintiff denied each and every allegation raised therein. Later, the court granted the plaintiff’s motion for summary judgment with respect to the second, third, and fifth special defenses raised by the defendants. At trial, the defendants expressly abandoned the first and fourth special defenses.

         After the court, Cobb, J., denied a motion filed by Bruce Tyler to dismiss the plaintiff’s vexatious litigation action,[8] a trial took place over the course of three days in May, 2016. Thereafter, the parties submitted posttrial briefs. On December 7, 2016, the court set forth its ruling in a thorough memorandum of decision.

         Having set forth its findings of fact, which we previously have recited in this opinion, the court addressed the merits of the plaintiff’s claims in relevant part as follows: "The cause of action for vexatious litigation permits a party who has been wrongly sued to recover damages.... In Connecticut, the cause of action for vexatious litigation exists both at common law and [194 Conn.App. 18] pursuant to statute. Both the common-law and statutory causes of action [require] proof that a civil action has been prosecuted .... Additionally, to establish a claim for vexatious litigation at common law, one must prove want of probable cause, malice and a termination of suit in the plaintiff’s favor.... The statutory cause of action for vexatious litigation exists under § 52-568, and differs from a common-law action only in that a finding of malice is not an essential element, but will serve as a basis for higher damages.... In either type of action, however, [t]he existence of probable cause is an absolute protection against an action for malicious prosecution, and what facts, and whether particular facts, constitute probable cause is always a question of law....

          "The court concludes that the ... commencement of the [prior] action against the plaintiff [by Jay Tyler], and [the] ... cross complaint against the plaintiff [by Bruce Tyler], satisfies the first element that they prosecuted actions against the plaintiff. The court also finds that the [prior] action terminated in the plaintiff’s favor, either by summary judgment or a jury verdict in the plaintiff’s favor. Thus, the court must determine the remaining elements; whether the [prior] action was prosecuted without probable cause and with malice.

          "The plaintiff conceded at argument that if he fails to prove his vexatious litigation claim as to one of the defendants’ claims in the [prior] action, this action fails. As explained below, the court finds that the plaintiff has failed to prove the defendants’ claim [in the prior action]— that the plaintiff failed to provide them with accountings— lacked probable cause, or that it was brought with malice. Because the court finds [that] probable cause existed for this claim, it is not necessary to address the other causes of action brought by the defendants in the [prior] action. Similarly, because the [194 Conn.App. 19] court finds the issues for the defendants, it is unnecessary for the court to address the defendants’ remaining special defense [that was based on fraud]." (Citations omitted; internal quotation marks omitted.)

          After discussing legal principles related to probable cause and observing that its existence in a particular case is a question

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of law, the court stated: "The plaintiff claims that count four of [Jay Tyler’s] operative complaint and count one of [Bruce Tyler’s] cross complaint alleging that the plaintiff improperly failed to provide them with accountings under the trust, lacked probable cause. In support of this claim, the plaintiff argues that this claim was disposed of in the plaintiff’s favor on summary judgment and that the language of the trust is clear and did not require that accountings be ...

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