Greene v. Greene
| Citation | 72 A.3d 496,52 Conn.Supp. 585 |
| Decision Date | 05 June 2013 |
| Docket Number | No. CV–12–6027420.,CV–12–6027420. |
| Parties | Kathryn E. GREENE et al. v. Kathryn H. GREENE. |
| Court | Connecticut Superior Court |
OPINION TEXT STARTS HERE
Eric L. Sussman, Hartford, for the plaintiffs.
John S. Bennet, Essex, for the defendant.
The Motion For Partial Summary Judgment now before the court involves an important issue in the law of trusts. Under what circumstances can the trustees and beneficiaries of a trust compel the judicial termination of the trust to settle litigation concerning an estate? For the reasons set forth below, the plaintiffs in this case have not followed a legally appropriate path to achieve this goal.
The materials submitted by the parties establish the following facts. Richard B. Greene (“Testator”), a resident of Guilford, died on September 28, 2006, leaving a substantial estate and several beneficiaries to fight over it. One of those beneficiaries was his wife, Kathryn H. Greene (“Wife”). The other principal beneficiaries were his four adult children from earlier marriages: Kathryn E. Greene, Philip J. Greene, Valerie Bennouna–Greene, and Stephanie Greene (“Children”). Two of the Children had children of their own who were grandchildren of the Testator (“Grandchildren”).
On March 21, 2006, the Testator executed both a will (“Will”) and the Richard B. Greene Revocable Trust (“Trust”). The Testator then made an inter vivos transfer of his real property (the bulk of his estate) to the Trust. This property consists of three improved properties in Guilford located at 21, 25, and 29 Whitfield Street and a fourth (unimproved) parcel located on Broad Street in Guilford.
The Will bequeaths all of the Testator's tangible personal property to the Wife. The entire residuary estate is bequeathed to the Trust. (In fact, however, most of the residuary estate had been transferred to the Trust during the Testator's lifetime.)
The Trust contains the following provisions (somewhat simplified here) relevant to this case:
Article II.B. The real property located at 29 Whitfield Street is to be transferred to the Wife.
Article III.A. The residuary estate is held in a marital trust. The Wife receives an amount of 2.5% of the fair market value of the trust principal annually. (Since the Trust has limited liquid assets, counsel advise the court that, in practice, the Wife receives a 2.5% annual share of the real property held by the Trust.)
Article III.B. On the death of the Wife, the property of the Trust is divided into four equal shares. Each share is to be held in trust for one of the Children.
Article III.C. On the death of a Child, that Child's share continues to be held in trust for that Child's descendants.
Article IV. The Trustees “are authorized in their discretion and for any reason which they deem sufficient to terminate any trust under Article III.C of this document and distribute any remaining trust property to the eligible income beneficiary ....” Significantly, the Trust gives no corresponding power to the trustees to terminate the marital trust established under Article III.A.
The Children claim that the Will is the product of undue influence. The status of the Will is presently before the Probate Court.
On March 21, 2007, the trustees of the Trust, the Children, and the Grandchildren signed a Mediation Agreement (“Agreement”) intended to resolve their differences. The Agreement (somewhat simplified here) provides that the properties located at 25 and 29 Whitfield Street will be transferred to the Wife, and the properties located at 21 Whitfield Street and Broad Street will be transferred to the Children. Anticipating that, following implementation of the Agreement, the Marital Trust will “qualify under Connecticut law as an uneconomical trust,” any balance remaining in the Marital Trust is to be transferred to the Wife “outright and free of trust.” The Agreement is signed by the cotrustees of the Trust, the Children, and the Grandchildren.
On February 20, 2012, the present action was commenced by service of process. The Children and Grandchildren are the plaintiffs, and the Wife is the defendant.
The plaintiffs' Amended Complaint consists of eight counts. The first two counts are the only counts involved in the motion now before the court. The First Count alleges breach of contract. It specifically alleges that the Wife has “repeatedly failed to perform her obligations” under the Agreement and that her “failure and refusal to perform her obligations under the Mediation Agreement constitute a breach of contract.” The Second Count alleges breach of the implied covenant of good faith and fair dealing. It specifically alleges that the Wife “has willfully, intentionally and in bad faith deprived Plaintiffs of the benefits set forth in the Mediation Agreement.”
The Motion For Partial Summary Judgment now before the court was filed by the Wife on March 27, 2013. The Motion seeks summary judgment as to the First and Second Counts of the Amended Complaint. With respect to the First Count, the Motion contends that the “distribution and termination” required by the Agreement “is contrary to the terms of the trust and ... illegal under Connecticut law.” The Motion contends that the Second Count “constitutes a claim springing from an illegal contract and is, therefore, unenforceable by the court ....” The Motion was argued on June 3, 2013. The plaintiffs filed a supplemental brief on June 4, 2013.
The procedural posture of this case is crucial to the outcome of the Motion. It is well established that, “ ‘If owing to circumstances not known to the settlor and not anticipated by him the continuance of the trust would defeat or substantially impair the accomplishment of the purposes of the trust, the court will direct or permit the termination of the trust.’ ” Connecticut Bank & Trust Co. v. Coffin, 212 Conn. 678, 705, 563 A.2d 1323 (1989), quoting 2 Restatement (Second), Trusts § 336 (1959). A court of equity always retains the power to terminate a trust under appropriate circumstances. Adams v. Link, 145 Conn. 634, 638, 145 A.2d 753 (1958). This can only be done, however, under certain conditions. As our Supreme Court has explained, “Conditions precedent which should concur in order to warrant termination of a testamentary trust by judicial decree are (1) that all the parties in interest unite in seeking the termination, (2) that every reasonable ultimate purpose of the trust's creation and existence has been accomplished, and (3) that no fair and lawful restriction imposed by the testator will be nullified or disturbed by such a result.” Id.
None of the Adams “conditions precedent” exist in this case. (1) While all of the parties in interest signed the Agreement, not all of them presently unite in seeking termination of the Trust. In the Motion For Partial Summary Judgment now before the court, the Wife seeks to have the termination provisions of the Agreement held “illegal under Connecticut law.” (2) Not every reasonable ultimate purpose of the Trust's creation and existence has been...
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