Dalia v. Lawrence

• Citation: 226 Conn. 51,627 A.2d 392
• Decision Date: 22 June 1993
• Docket Number: No. 14501,14501
• Court: Supreme Court of Connecticut
• Parties: Frances J. DALIA v. Julia LAWRENCE et al.

Page 392

627 A.2d 392

226 Conn. 51

Frances J. DALIA v. Julia LAWRENCE et al.

No. 14501.

Supreme Court of Connecticut.

Argued Jan. 8, 1993.

Decided June 22, 1993.

Melissa A. Buckley, New Haven, for appellant (plaintiff).

Max F. Brunswick, with whom were Matthew E. Naclerio and Robert C. Ruggiero, New Haven, for appellees (defendants).

Before PETERS, C.J., and CALLAHAN, BORDEN, BERDON and NORCOTT, JJ.

BORDEN, Associate Justice.

The principal issue in this appeal is whether valid trust savings accounts, established by a decedent pursuant to General Statutes § 36-110(a), ¹ must be included in the statutory intestate share of the surviving spouse of the decedent pursuant to General Statutes (Rev. to 1989) § 45-273a(b). ² The plaintiff, Frances J. Dalia, the widow of Thomas Dalia (the decedent) and the administratrix of his estate, appeals from the judgment of the trial court, ³ rendered after a court trial, determining that title to certain personal and real property is in the defendants, Julia Lawrence, Carmen Dalia and Paul Dalia, the children of the decedent by a prior marriage. The plaintiff claims that the trial court improperly concluded that: (1) two trust savings accounts established by the decedent during his life were not part of the plaintiff's intestate share; (2) the transfer of certain real estate by the decedent during his life was a valid inter vivos gift; and (3) a certain survivorship bank account established by the decedent during his life was a valid inter vivos gift. We affirm the judgment of the trial court.

The plaintiff, acting both individually and as the administratrix of the decedent's estate, brought this action against the defendants, claiming that: (1) as the administratrix of the decedent's estate, she was entitled to immediate possession of certain bank accounts and real property in the defendants' possession; and (2) as the widow of the decedent, she was entitled to her intestate share of those accounts and real property. The trial court rendered judgment for the defendants. This appeal followed.

The trial court found the following facts: The plaintiff and the decedent married on September 1, 1967. After their wedding, the plaintiff and the decedent resided in a two-family house owned by the decedent in New Haven. On May 3, 1968, the decedent executed a quitclaim deed of the house to the three defendants. After the deed was recorded on the New Haven land records on May 7, 1968, it was mailed to the defendant Julia Lawrence.

The trial court further found that, after the defendants had become the owners of the house by virtue of the deed, they gave the decedent permission to continue to use and occupy the premises for the duration of his life, as if he were still the fee owner. Although from May 3, 1968, through November 21, 1989, when the decedent died, the insurance policy covering the house named the defendants as the owners of the premises, the decedent continued to bear all the expenses of the house, including taxes, insurance, sewer charges, repairs and mortgage payments. The decedent also continued to collect all the rental income generated by the property, entered into leases with tenants, and responded to the tenants' complaints and needs. The decedent reported all the income on his and the plaintiff's joint income tax returns, and took the available depreciation and expense deductions. On various occasions, the decedent stated to his accountant, his neighbors and the municipal authorities that he was the owner of the property. The decedent told his children that it was his intention that they have the property, in accordance with his promise to their mother.

The trial court specifically found that the defendants had proven, by clear and convincing evidence, that the decedent had intended to pass title immediately and irrevocably to the defendants, and that the recording of the deed, coupled with that intent, constituted an immediate legal delivery to the defendants. The court also specifically stated that this finding was not contravened by the fact that the decedent had continued to control the property, with the defendants' consent, during his lifetime.

The trial court also found that the decedent had opened two trust savings accounts: (1) an account with the Second Bank of New Haven, now the Bank of Boston, in his name as trustee for Carmen Dalia; and (2) an account with the Colonial Bank, also now the Bank of Boston, in the name of the decedent as trustee for Julia Lawrence. ⁴ With respect to both accounts, the decedent was the sole signatory, the accounts were listed under his social security number, and he continued to exercise complete control over the accounts and the funds in them. Under the rules of the banks, only the decedent was allowed access to the accounts during his life, and upon his death the funds would be payable to the named beneficiaries. The passbooks to these accounts were kept either in the decedent's house or in a safety deposit box located at one of the banks. The trial court found that, until he was near death, the decedent had been the only person who had opened the safety deposit box.

The decedent also opened a joint survivorship savings account with the Bank of Boston, in his name and that of Paul Dalia. This account was listed under the decedent's social security number, and until November 13, 1989, he exercised complete control over the account and the funds in it. Under the rules of the bank, both the decedent and Paul Dalia had access to this account while both were alive. The passbook was kept either in the decedent's house or in the safety deposit box mentioned above.

The trial court also found that on November 13, 1989, as the decedent was dying, he gave Paul Dalia the keys to the safety deposit box and told him: (1) to close out the joint survivorship account and use the funds, amounting to approximately $17,000, to pay for the decedent's burial and to buy a truck for himself; and (2) to hold the trust savings account passbooks for Julia Lawrence and Carmen Dalia. The trial court found that the decedent had delivered the joint survivorship account passbook to Paul Dalia with the authority to use the money in the account.

With respect to all the bank accounts, the trial court also found that the decedent had told the defendants that it was his intention that they have the money in the accounts, in accordance with his promise to the defendants' mother. With respect to the joint account, the court found that the plaintiff had failed to rebut the statutory presumption created by General Statutes § 36-3 that the decedent had intended to pass to Paul Dalia a present beneficial ownership interest in the account when the decedent opened the account.

On November 21, 1989, the decedent died intestate. On November 28, 1989, the bank paid Julia Lawrence the funds in the trust account for her, in the amount of approximately $14,000, and on November 29, 1989, the bank paid Carmen Dalia the funds in the trust account for her, in the amount of approximately $17,000. The defendants filed a state succession tax return conceding their tax liability for the full value of the real property and of the funds in the bank accounts. The department of revenue services assessed the defendants accordingly.

I

The plaintiff first claims that the trial court improperly concluded that the trust savings accounts were not part of the decedent's intestate estate for purposes of determining the plaintiff's intestate share. We disagree.

Some brief history is in order. In Fasano v. Meliso, 146 Conn. 496, 152 A.2d 512 (1959), this court held that a trust account, similar to the accounts in the present case, was invalid as "an attempted testamentary disposition of the trustee's own property in a manner forbidden by the Statute of Wills." Id. at 499, 152 A.2d 512. In response, "the 1961 General Assembly enacted Public Act No. 306 in order to overrule the consequence of that decision and to give full effect to a savings account trust deposit despite the requirements of the Statute of Wills." Manulik v. Devitt, 176 Conn. 663, 667, 410 A.2d 469 (1979). Number 306 of the 1961 Public Acts is now codified at General Statutes § 36-110(a).

In Manulik v. Devitt, supra, we concluded that a trust savings account that had been established by a mother as trustee for her daughter, the defendant in the case, was valid. After the mother's death, the plaintiffs, who were the defendant's brothers, contended that their mother had intended that the money in the account be divided equally among her children upon her death. Id. at 665, 410 A.2d 469. We held, however, that § 36-110(a) established "a conclusive presumption" that the depositor had intended to create a trust upon the terms stated in the statute; see footnote 4; and specifically that "the effect of the foregoing [presumption] 'shall not be denied, abridged or in any way affected because such signed statement ... fails to comply with ... the laws of this state prescribing the requirements to effect a valid testamentary disposition of property or because of any absence of delivery or compliance with other requirements to effect a valid gift or transfer in trust.' [General Statutes § 36-110(a)(2).]" Id. at 667, 410 A.2d 469.

In Manulik, moreover, we rejected the plaintiffs' argument that § 36-110 had been enacted solely for the protection of banks and that, therefore, the ownership of the trust account should be determined in accordance with the settlor's intent and "common-law prerequisites for the establishment of a valid trust." Id. at 668, 410 A.2d 469. We stated: "General Statutes § 36-110, as amended, attaches specific consequences to the acts of the depositor-trustee when compliance with the statute is satisfied. It is unmistakable that the statute was based upon the premise that the creation and maintenance of such an account itself manifested the depositor-trustee's intent and that this...