Giulietti v. Giulietti

• Decision Date: 02 October 2001
• Citation: 65 Conn. App. 813,784 A.2d 905
• Court: Connecticut Court of Appeals
• Parties: JAMES GIULIETTI ET AL. v. JOHN L. GIULIETTI ET AL. VERNON VILLAGE, INC. v. JOHN L. GIULIETTI ET AL. JOHN J. GIULIETTI ET AL. v. JOHN L. GIULIETTI ET AL. JAMES GIULIETTI v. VERNON VILLAGE, INC., ET AL.

65 Conn. App. 813

784 A.2d 905

JAMES GIULIETTI ET AL. v. JOHN L. GIULIETTI ET AL.

VERNON VILLAGE, INC. v. JOHN L. GIULIETTI ET AL.

JOHN J. GIULIETTI ET AL. v. JOHN L. GIULIETTI ET AL.

JAMES GIULIETTI v. VERNON VILLAGE, INC., ET AL.

(AC 20391), (AC 20392), (AC 20393), (AC 20394)

Appellate Court of Connecticut.

Argued May 3, 2001.

Officially released October 2, 2001.

Lavery, C. J., and Mihalakos and Peters, Js. John L. Giulietti, pro se, the appellant (defendant in each case), with whom, on the brief, was Noah H. Starkey.

Michael J. Kopsick, for the appellees (plaintiffs in the first, second and fourth cases).

Robert J. Cary, Jr., with whom, on the brief, was John T. Asselin, for the appellees (plaintiffs in the third case).

Opinion

LAVERY, C. J.

John L. Giulietti, the defendant in each of four cases that were consolidated for trial, appeals from the judgments rendered against him and in favor of the various plaintiffs. This intrafamily litigation revolves around the defendant's allegedly improper effectuation of a plan to transfer ownership of a family's assets from the parents to their four adult children. The parties are a husband and wife, John J. Giulietti (Mr. Giulietti)¹ and Alma L. Giulietti (Alma); their four children, John L. Giulietti (attorney Giulietti), the defendant attorney whose actions are central to these appeals, and his siblings, James Giulietti (James), Anita Giulietti (Anita) and Joanne F. Hollis (Joanne); and Vernon Village, Inc., the private corporation that the family formed to run its mobile home park business. That corporation and the property at 325 Kelly Road in Vernon, on which the mobile home park is situated, comprise the property the distribution of which is implicated in these appeals. The four actions briefly may be described as follows. Appeal AC 20393 is from the judgment in a fraud and legal malpractice action that was brought by Mr. Giulietti and Alma against their son, attorney Giulietti,² in which they alleged that the latter failed to effectuate the property distribution as Mr. Giulietti had directed. Appeal AC 20391 is from the judgment in a partition action, brought by James and Joanne against their brother, attorney Giulietti,³ to secure an order for the partition and private sale of 325 Kelly Road. Appeal AC 20394 is from the judgment in a corporate dissolution action, brought by James against attorney Giulietti and Vernon Village, Inc., to dissolve the corporation due to management deadlock resulting from the family discord. Appeal AC 20392 is from the judgment in a usurpation of corporate opportunity action, brought by Vernon Village, Inc., against Mr. Giulietti⁴ and attorney Giulietti, for their allegedly improper purchase of real property adjacent to 325 Kelly Road.

The trial court rendered judgments against attorney Giulietti in the fraud and legal malpractice action, and in the usurpation of corporate opportunity action. The court disposed of the partition action by ordering 325 Kelly Road partitioned and sold, and the court found the corporate dissolution action moot in light of the relief it had ordered in the other actions.⁵ Attorney Giulietti now appeals from each of those judgments. His claims on appeal are as follows.

In appeal AC 20393, attorney Giulietti appeals from the judgment of the court concluding that he committed fraud and legal malpractice against his parents in his oversight of the family property distribution. He claims that the court improperly (1) failed to conclude that the legal malpractice and fraud claims were barred by the applicable statute of limitations, (2) concluded that an attorney-client relationship existed between him and Alma, (3) concluded that he committed fraud against Alma, (4) concluded that he committed fraud generally in respect to the property transfers and (5) enjoined him from filing notices with financial institutions pursuant to his petitions in the Vernon Probate Court for the appointment of conservators over his parents' estates.

In AC 20391, attorney Giulietti appeals from the court's judgment ordering the partition and private sale of 325 Kelly Road, and the imposition of a constructive trust in favor of his sisters on a portion of his fractional share. He claims that the court improperly (1) ordered a private sale rather than a public sale, and (2) imposed the constructive trust because there was insufficient evidence to justify the imposition of such a trust and procedural irregularities existed.

In AC 20394, attorney Giulietti appeals from the court's judgment that the corporate dissolution action was moot and the court's ruling that even if the action were not moot, he would be barred from electing to purchase James' shares of Vernon Village, Inc. He claims that the court improperly interpreted and applied General Statutes ? 33-900 so as to find the dissolution action moot and to disallow his election to purchase his brother's stock in Vernon Village, Inc.

In AC 20392, attorney Giulietti appeals from the court's judgment that he and Mr. Giulietti usurped a corporate opportunity of Vernon Village, Inc. He claims on appeal that the court improperly (1) allowed the action to proceed because it was not authorized by the company's board of directors, (2) found that the chance to purchase land adjacent to 325 Kelly Road constituted a corporate opportunity, (3) imposed a constructive trust on the subject property in favor of Vernon Village, Inc., and (4) removed him from the position of corporate director of Vernon Village, Inc.

We will address each of those claims, in the order presented, after setting forth the facts and procedural history relevant to the various issues. The record reveals the following facts and trial court holdings.

The Giulietti family business since 1959 was the ownership and management of Vernon Village, a mobile home park in Vernon. Mr. Giulietti and Alma owned all of the stock of Vernon Village, Inc., incorporated in 1966 to manage the park's business, and Mr. Giulietti held title to 325 Kelly Road, the site of the park. Vernon Village, Inc., operated the park under a series of informal month-to-month leases with Mr. Giulietti. Mr. Giulietti and James managed the day-to-day activities of the business. Attorney Giulietti graduated from law school in 1972 and, after about seven years of private practice, accepted Mr. Giulietti's offer to devote his efforts full-time to handling legal matters for the family and for its business. The two sons served as corporate officers of Vernon Village, Inc., since the early 1980s, James as president and attorney Giulietti as secretary. Joanne and Anita, during the times at issue in these appeals, lived out of state and did not participate substantially in the operation of Vernon Village, Inc., although Joanne at times served on its board of directors.

As Mr. Giulietti aged, he decided to begin transferring ownership of the family assets to his four children. He envisioned that his sons would continue to earn salaries by running the mobile home park and that otherwise the family assets would be shared by the children equally. In 1983 and 1984, Mr. Giulietti deeded to the four siblings, in equal portions, two additional pieces of real property that he owned in Vernon and South Windsor. Attorney Giulietti prepared the deeds to effectuate those transfers.

In late 1990, Mr. Giulietti and James met with the family's accountant, Bernard Blum, to discuss estate planning issues and to determine the best way to transfer the remaining family property from parents to children. Blum suggested a gradual transfer of 325 Kelly Road, a portion each year, so as to avoid incurring gift taxes. Mr. Giulietti directed attorney Giulietti to proceed with the transfer accordingly. Mr. Giulietti's directions were general, as he trusted his son to deal with the details.

Attorney Giulietti prepared a first deed, which transferred from Mr. Giulietti to the four children an unspecified fractional interest in 325 Kelly Road. He also drafted an antialienation agreement that barred conveyance or encumbrance of 325 Kelly Road by any of its owners without the unanimous consent of the others, and required that any inter-owner buyout would be at a price well below fair market value. He entitled that document simply "Agreement." By its terms, it would remain in effect until 2011 or until Mr. Giulietti's death, whichever occurred later. Attorney Giulietti also prepared a document entitled "Terms of Escrow" (hereinafter first escrow) that named attorney William G. Reveley as escrow agent. The first escrow provided that the first deed would be held, unrecorded, by Reveley until all four siblings signed the antialienation agreement. In late December, 1990, attorney Giulietti advised Mr. Giulietti to execute the deed and the first escrow. The same day, attorney Giulietti and James signed the antialienation agreement.

A few months later, the 325 Kelly Road property was appraised at $410,000. That value was conservative, taking into account the fact that the property was, in effect, subject to a long-term lease.⁶ On the basis of that value and the family's tax planning objectives, attorney Giulietti filled in the percentage conveyed by Mr. Giulietti to each child by the first deed as "4 7/8 percent."

On June 21, 1991, Joanne and Anita, not wanting to sign the antialienation agreement drafted by attorney Giulietti, sent their brothers a written counterproposal. Their proposed agreement would terminate with their father's death and would give each sibling a buyout right at the fair market value as determined by another appraisal to be performed after January 1, 1996. Attorney Giulietti rejected his sisters' counterproposal without consulting his father, although he told Anita and Joanne that Mr. Giulietti had rejected it.

On December 31, 1991, and December 31, 1992, respectively, attorney Giulietti prepared and Mr. Giulietti signed second and third deeds, each of...