Ferri v. Powell-Ferri

• Decision Date: 16 June 2015
• Docket Number: No. 19317.,19317.
• Court: Connecticut Supreme Court
• Parties: Michael J. FERRI, Trustee, et al. v. Nancy POWELL–FERRI et al.

317 Conn. 223

116 A.3d 297

Michael J. FERRI, Trustee, et al.

v.Nancy POWELL–FERRI et al.

No. 19317.

Supreme Court of Connecticut.

Argued March 25, 2015.

Decided June 16, 2015.

Kenneth J. Bartschi, Hartford, with whom were Karen L. Dowd, Hartford, and, on the brief, Thomas P. Parrino, Westport, and Laura Shattuck, for the appellant (named defendant).

Jeffrey J. Mirman, Hartford, for the appellee (defendant Paul John Ferri, Jr.).

PALMER, ZARELLA, EVELEIGH, McDONALD, ESPINOSA and ROBINSON, Js.

Opinion

EVELEIGH, J.

This appeal arises from a dissolution action, dissolving the marriage of the named defendant, Nancy Powell–Ferri, and the defendant, Paul John Ferri, Jr. (Ferri). The dispositive issue in this appeal is whether the trial court properly rendered summary judgment in favor of Ferri on the cross complaint filed by Powell–Ferri on the ground that it failed to plead a legally sufficient cause of action. Specifically, Powell–Ferri's cross complaint alleged that Ferri had breached his duty to preserve marital assets during the pendency of their marital dissolution action by failing to take any affirmative steps to contest the decanting of certain assets from a trust by the plaintiffs, Michael Ferri and Anthony Medaglia, who were then serving as trustees.¹ We conclude that this state does not require a party to a dissolution action to take affirmative steps to recover marital assets taken by a third party and, accordingly, affirm the judgment of the trial court.

In its memorandum of decision, the trial court set forth the following relevant facts and procedural history. Powell–Ferri filed an action for dissolution of her marriage to Ferri on October 26, 2010, which is still pending. Ferri is the sole beneficiary of a trust created by his father, Paul John Ferri, Sr., in 1983 (1983 trust). The plaintiffs were named as trustees of the 1983 trust. Michael Ferri is Ferri's brother and business partner.

The 1983 trust provides that, after Ferri attained the age of thirty-five, he would have the right to withdraw principal from the trust in increasing percentages depending on his age. In March, 2011, while the underlying dissolution action was pending, the plaintiffs created a second trust whose sole beneficiary was Ferri (2011 trust). The plaintiffs then distributed a substantial portion of the assets in the 1983 trust to the 2011 trust.²

Unlike the terms of the 1983 trust, the terms of the 2011 trust do not allow Ferri to withdraw principal. Instead, under the terms of the 2011 trust, the plaintiffs have all of the control and decision-making power as to whether Ferri will receive any of the trust income or assets.

The trial court found that Ferri did not have a role in creating the 2011 trust or decanting any of the assets from the 1983 trust. The trial court further found that it was undisputed that Ferri took no action to recover the trust assets when Michael Ferri informed him of the creation of the 2011 trust and the decanting of the assets. The trial court characterized the reasoning behind this inaction as follows: “[Ferri] does not want to sue his family ... and he believes the [plaintiffs] are acting in his best interest.”

After the plaintiffs created the 2011 trust and transferred the assets from the 1983 trust to it, they instituted the present declaratory judgment action seeking a ruling from the court that they had validly exercised their authority in transferring the assets and that Powell–Ferri had no interest in the 2011 trust assets. Powell–Ferri filed a counterclaim asserting claims of common-law and statutory fraud, civil conspiracy, and seeking a declaratory judgment. After the trial court struck counts alleging fraud and conspiracy, Powell–Ferri filed a second amended counterclaim, later revised, asserting claims of breach of fiduciary duty, breach of loyalty, tortious interference with an expectancy, and seeking a declaratory judgment, as well as the cross complaint that is the subject of this appeal.

Ferri filed a motion for summary judgment, claiming that the cross complaint failed to state a cause of action, and that even if it did set out a cause of action, there was no genuine issue of material fact to support Powell–Ferri's claims. Powell–Ferri opposed the motion on procedural grounds, namely that summary judgment is not the proper means to test the legal sufficiency of a complaint, and on the merits.

The trial court granted the motion for summary judgment, concluding that Powell–Ferri failed to state a cause of action. The trial court reasoned that, while marital partners have a fiduciary responsibility of full and open disclosure to each other, that responsibility does not extend to require spouses to recover assets belonging to the marital estate. The trial court observed that while spouses may not dissipate assets, “at a minimum dissipation in the marital dissolution context requires financial misconduct involving marital assets, such as intentional waste or a selfish financial impropriety, coupled with a purpose unrelated to the marriage.” Gershman v. Gershman, 286 Conn. 341, 350–51, 943 A.2d 1091 (2008). The trial court concluded that there was no allegation that Ferri “engaged in intentional waste or selfish impropriety.” The court further reasoned that if such allegations were present, “[t]here is no societal expectation embodied in the law which impels or compels a divorcing spouse to take affirmative steps to recover an asset removed from the marital estate by the action of a third party alone.” Accordingly, the court determined that the cause of action Powell–Ferri urged should not be recognized in Connecticut. This appeal followed.³

I

On appeal, Powell–Ferri first claims that the trial court improperly rendered summary judgment in favor of Ferri on the ground that her cross complaint did not plead a legally sufficient cause of action. Specifically, Powell–Ferri claims that the trial court improperly concluded that Ferri did not have a duty to act to preserve marital assets during the pendency of a dissolution action. In response, Ferri claims that the trial court properly granted his motion for summary judgment because Connecticut should not recognize a new cause of action imposing a duty to act to preserve marital assets during the pendency of a dissolution action. We agree with Ferri.

We begin our analysis with the standard of review applicable to a trial court's decision to grant a motion for summary judgment. Practice Book § 17–49 provides that summary judgment “shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” A party moving for summary judgment is held to a “strict standard.” Ramirez v. Health Net of the Northeast, Inc., 285 Conn. 1, 11, 938 A.2d 576 (2008). “To satisfy his burden the movant must make a showing that it is quite clear what the truth is, and that excludes any real doubt as to the existence of any genuine issue of material fact.... As the burden of proof is on the movant, the evidence must be viewed in the light most favorable to the opponent.... When documents submitted in support of a motion for summary judgment fail to establish that there is no genuine issue of material fact, the nonmoving party has no obligation to submit documents establishing the existence of such an issue.... Once the moving party has met its burden, however, the opposing party must present evidence that demonstrates the existence of some disputed factual issue.... It is not enough, however, for the opposing party merely to assert the existence of such a disputed issue. Mere assertions of fact ... are insufficient to establish the existence of a material fact and, therefore, cannot refute evidence properly presented to the court under Practice Book § [17–45].... Our review of the trial court's decision to grant [a] motion for summary judgment is plenary.” (Internal quotation marks omitted.) Id.

It is undisputed that, in this state, the question of whether a party to a dissolution action has a duty to act to preserve marital assets is an issue of first impression. Therefore, in this appeal we must determine whether we will recognize a new cause of action. “An exhaustive search of Connecticut case law reveals no hard and fast test that courts apply when determining whether to recognize new causes of action. We do have the inherent authority, pursuant to the state constitution, to create new causes of action. Binette v. Sabo, 244 Conn. 23, 34, 710 A.2d 688 (1998). Moreover, it is beyond dispute that we have the power to recognize new tort causes of action, whether derived from a statutory provision or rooted in the common law. Rizzuto v. Davidson Ladders, Inc., 280 Conn. 225, 235, 905 A.2d 1165 (2006) ; see, e.g., Mead v. Burns, 199 Conn. 651, 663, 509 A.2d 11 (1986) (recognizing action for damages under Connecticut Unfair Trade Practices Act for violations of Connecticut Unfair Insurance Practices Act); Sheets v. Teddy's Frosted Foods, Inc., 179 Conn. 471, 480, 427 A.2d 385 (1980) (recognizing tort of wrongful discharge); Urban v. Hartford Gas Co., 139 Conn. 301, 307, 93 A.2d 292 (1952) (recognizing torts of intentional and negligent infliction of emotional distress).

“When we acknowledge new causes of action, we also look to see if the judicial sanctions available are so ineffective as to warrant the recognition of a new cause of action. Rizzuto v. Davidson Ladders, Inc., supra, 280 Conn. [at] 235–36 . To determine whether existing remedies are sufficient to compensate those who seek the recognition of anew cause of action, we first analyze the scope and applicability of the current remedies under the facts alleged [in the operative pleading]. Id. [at], 236 . Finally, we are mindful of growing judicial receptivity to the new cause of action, but we remain acutely aware of relevant statutes and do not ignore the statement of public...