Derblom v. Archdiocese Hartford
| Decision Date | 09 March 2021 |
| Docket Number | AC 42630 |
| Citation | 247 A.3d 600,203 Conn.App. 197 |
| Court | Connecticut Court of Appeals |
| Parties | Maria J. DERBLOM, Executrix (Estate of Fred H. Rettich), et al. v. ARCHDIOCESE OF HARTFORD |
Drzislav Coric, with whom was Cody A. Layton, for the appellants (plaintiffs).
Kay A. Williams, with whom was Lorinda S. Coon, for the appellee (defendant).
Lavine, Prescott and Alexander, Js.*
The plaintiffs—Maria J. Derblom, in her capacity as the executrix of the estate of Fred H. Rettich;1 eleven former students of Our Lady of Mercy School (OLM), a defunct Catholic school in Madison, and their parents;2 and Our Lady of Mercy School of Madison, Inc., which operates a private school that purports to be the successor of OLM—appeal from the judgment of the trial court granting a motion to dismiss filed by the defendant, the Archdiocese of Hartford,3 on the ground that the plaintiffs lack standing to bring an action concerning a bequest from Rettich to OLM. According to the plaintiffs, the court improperly (1) construed Rettich's bequest as an outright gift to OLM rather than as an endowment that resulted in a constructive charitable trust and (2) concluded that the plaintiffs lack standing because the state's attorney general has the exclusive authority to bring an action to enforce Rettich's gift and that the plaintiffs’ reliance on a common-law special interest exception to that exclusive authority was misplaced because the exception is limited to actions involving charitable trusts and, thus, is not applicable in the present case.4 We disagree with the plaintiffs and affirm the judgment of the court.
The following facts, as alleged in the complaint or as established by uncontested evidence submitted in conjunction with the motion to dismiss, and procedural history are relevant to our resolution of this appeal. In April, 2012, Rettich executed a will that contained a residuary clause in favor of OLM "or its successor, for its general uses and purposes."5 Beginning in 2004, OLM had become an archdiocesan school under the auspices of the defendant.
It was important to Rettich that residents of Madison be able to send their children to a Catholic school in Madison. Prior to the execution of his will leaving the residue of his estate to OLM, Rettich had donated $500,000 to OLM. OLM later sent a letter to Rettich that marked the anniversary of that donation and informed him that $200,000 of the donated funds had been used by OLM to establish an endowment to "ensure [OLM's] future." The letter stated that the money was "invested and protected by the Archdiocese of Hartford for the exclusive use of OLM by US Trust." In his will, Rettich made no reference to his earlier donation or to any endowed funds or existing trust benefiting OLM.6
Rettich died on September 27, 2013. Derblom administered Rettich's estate and, in April, 2015, she filed a final accounting of the estate with the Probate Court. The Probate Court accepted the accounting and ordered distribution in accordance with it. The amount of Rettich's residual estate was $4,745,110.86. The estate remitted that amount by check to OLM.7
More than two years later, in January, 2018, the defendant announced that it would be closing OLM and another parish school in Branford, St. Mary School.8 It indicated that it intended to open a new school, East Shoreline Catholic Academy (ESCA), which would be located at the former St. Mary School site in Branford. According to a press release appended to the underlying complaint,
On February 28, 2018, shortly after the announcement of OLM's closing, some parents of students attending OLM, including some of the plaintiff parents, formed the plaintiff corporation, Our Lady of Mercy School of Madison, Inc., with the intent to form a new Catholic school in Madison that, as alleged in the complaint, would "[keep] the current mission and vision of OLM intact."9 The plaintiffs further alleged that (Footnote added.)
In April, 2018, the plaintiffs initiated the underlying action. The complaint contained seven counts and incorporated by reference and attached a number of exhibits.11 Count one was brought on behalf of the plaintiff students and alleged that Rettich's bequest to OLM should be viewed as an endowment that resulted in a constructive trust benefitting the plaintiff students with the defendant acting as trustee. It asserted that the defendant has an equitable duty to convey the corpus of that alleged trust to the plaintiff corporation or, alternatively, back to Rettich's estate for distribution because the defendant "would be unjustly enriched if it were permitted to retain the endowment and disseminate it at its own discretion and for purposes wholly unrelated to the operation and preservation of OLM or a rightful successor." Count two, also brought on behalf of the plaintiff students, sounded in breach of fiduciary duty premised on the defendant's having closed OLM and its alleged misappropriation of the "endowment" from Rettich. Counts three and four were brought by the plaintiff parents and effectively tracked the first two counts, sounding in constructive trust and breach of fiduciary duty. Counts five and six were brought by the plaintiff corporation and Derblom, respectively, and, as in the prior counts, alleged the existence of a constructive trust and an equitable duty on the part of the defendant to convey any and all funds to the plaintiff corporation for the intended beneficiaries or, alternatively, to the estate. Finally, in count seven, Derblom asserted on behalf of the estate "a legal and/or equitable interest in the endowment made to OLM, by reason of danger of loss or uncertainty" and sought a declaratory judgment "determining [1] whether the endowment shall be conveyed to [the plaintiff corporation] or some other appropriate entity for the benefit of the [p]laintiffs; [and] [2] whether the endowment to OLM has lapsed with no clear successor and all funds shall be returned to [Rettich's estate] for dissemination to his rightful heirs at law."
The defendant filed a motion to dismiss the action in its entirety in July, 2018, arguing that none of the plaintiffs had standing "to bring an action to enforce the terms of a completed charitable gift to a school" and, as a result, the court was "without subject matter jurisdiction over the claims against the defendant ...." The defendant filed a memorandum in support of the motion to dismiss, in which it argued that, under Connecticut law, only the attorney general has standing to bring an action to enforce a charitable gift made for a stated purpose. Attached to the memorandum were several affidavits, copies of Probate Court documents related to the administration of Rettich's estate, and a copy of the check issued by the estate to OLM.
In September, 2018, the plaintiffs filed an objection to the motion to dismiss and accompanying memorandum in support of the objection. The plaintiffs argued that the because "[s]tanding is conferred on the [plaintiff students, the plaintiff parents, and the plaintiff corporation] via the special interest exception," citing Grabowski v. Bristol , Superior Court, judicial district of New Britain, Docket No. CV-95-0468889-S, 1997 WL 375596 (June 3, 1997) (19 Conn. L. Rptr. 623), aff'd, 64 Conn. App. 448, 780 A.2d 953 (2001).12 With respect to Derblom, the plaintiffs argued that she had standing apart from the other plaintiffs because, in the event the court were to determine that a constructive trust in favor of the other plaintiffs failed, she would have a real legal interest as executor of the estate to ensure that any trust funds were returned to the estate for redistribution to Rettich's heirs.
The defendant filed a reply to the plaintiffs’ objection. It argued, inter alia, that the common-law special interest exception relied on by the plaintiffs was inapplicable because it has been recognized in Connecticut only in the context of charitable trusts, not testamentary gifts. It also argued that, even if applicable, courts have construed the exception narrowly and the plaintiffs simply failed to establish a special interest sufficient to confer standing. The plaintiffs filed a supplemental memorandum of law rebutting the arguments of the defendant.
The motion to dismiss was argued to the court on October 22, 2018. On February 6, 2019, the court issued a memorandum of decision granting the defendant's motion to dismiss. The court concluded that the provision of Rettich's will leaving the residue of his estate to OLM constituted a testamentary gift and did not create a charitable trust. It further concluded that the exclusive power to enforce that type of gift lies with the attorney general pursuant to our common law and as codified in General Statutes § 3-125. It also concluded that any special interest exception to the exclusive power of the attorney general has been recognized and applied only in the context of charitable trusts, not gifts, and that enlarging the exception under the circumstances presented would undermine the nature of a gift, in which a donor immediately and irrevocably transfers and relinquishes any control over the gifted property. Finally, and in the alternative, the...
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