Healey v. Mantell

• Decision Date: 15 November 2022
• Docket Number: AC 44878
• Citation: 216 Conn.App. 514,285 A.3d 823
• Parties: Gabrielle Ceruzzi HEALEY et al. v. Charles MANTELL et al.
• Court: Connecticut Court of Appeals

216 Conn.App. 514

285 A.3d 823

Gabrielle Ceruzzi HEALEY et al.

v.Charles MANTELL et al.

AC 44878

Appellate Court of Connecticut.

Argued October 3, 2022

Officially Released November 15, 2022

Damian K. Gunningsmith, New Haven, with whom, were Frank J. Silvestri, Jr., Westport, and, on the brief, John Horvack, Jr., Matthew R. Peterson, New Haven, and Kristen G. Rossetti, Westport, for the appellants (named defendant et al.).

Neal L. Moskow, Fairfield, with whom, was Deborah M. Garskof, for the appellees (plaintiffs).

Bright, C. J., and Prescott and Moll, Js.

PRESCOTT, J.

This appeal arises out of an action brought by the plaintiffs, Gabrielle Ceruzzi Healey and James Ceruzzi, against the defendants Charles Mantell and David Novicki for claims originating out of the defendants’ administration of the estate of Louis L. Ceruzzi, Jr. (decedent), the plaintiffs’ father.¹ The defendants were the coexecutors of the will and the cotrustees of trusts created by the will, and the plaintiffs were beneficiaries of one of these trusts.

The defendants appeal from the trial court's judgment granting their motion to dismiss the plaintiffs’ action in its entirety. The defendants do not challenge the judgment of dismissal itself² but, rather, they claim that, although the court properly granted their motion to dismiss, they nevertheless are aggrieved by certain additional determinations the court made that, although not necessary to the court's decision, could have a preclusive effect in a subsequent proceeding between the parties. Specifically, the defendants claim that the court improperly concluded that the plaintiffs had standing, as beneficiaries, to sue the defendants for their actions as coexecutors of the estate.³ We conclude that, because the court ultimately concluded that it lacked subject matter jurisdiction over the entire action because counts one and three were not ripe and the plaintiffs lacked standing to bring count two, its determination regarding standing to bring counts one and three was not essential to the court's decision and is dictum. Consequently, because the determination regarding standing is dictum and cannot have a preclusive effect in subsequent proceedings between the parties, the defendants are not aggrieved. Accordingly, we dismiss the appeal.

The record reveals the following relevant facts and procedural history. The decedent died testate on August 31, 2017. On September 11, 2017, the decedent's will was admitted to the Fairfield Probate Court and the defendants were appointed as the will's coexecutors. The will, inter alia, created two trusts, a marital deduction terminable interest trust (marital trust) and a residual trust for the benefit of the plaintiffs, the decedent's children (residual trust). Novicki and David Mack, a friend of the decedent, were named in the will as the cotrustees of all trusts created by the will. Mack declined to serve as a trustee, however, and Novicki appointed Mantell as cotrustee in Mack's place.

As provided in the will, the intended corpus of the residual trust was the residue of the decedent's estate, including all real, personal, and mixed property. After all expenses incident to the administration of the residual trust were deducted, the corpus of the residual trust was to be divided equally among the decedent's then living children and placed in separate trusts, one for the benefit of each child.⁴

On January 18, 2021, the plaintiffs commenced the underlying action, asserting that the defendants had improperly declined to fund the residual trust and pay the required distributions. The complaint contained three counts. Count one alleged that the defendants breached their fiduciary duties as coexecutors and cotrustees. Count two alleged that Mantell and the law firm committed legal malpractice. Count three alleged that Mantell engaged in negligent misrepresentation.

According to the complaint, the residue of the decedent's estate totaled $5.2 million at the time of the decedent's death. According to the distribution schedule set forth in the will, each plaintiff was entitled to an equal one-half share of the total corpus of the residual trust. Each plaintiff's $2.6 million share of the principal was to be invested, reinvested, and held in a separate trust for such plaintiff's benefit.

On the basis of their respective ages, the plaintiffs claimed that they were entitled to certain mandatory distributions of a percentage of their separate trust's principal. Specifically, Healey, who was thirty-seven at the time her father died, claimed that, per the distribution schedule set forth in the will, she was entitled to a distribution of the full amount of her trust's principal or $2.6 million. Ceruzzi, who was twenty-five at the time of the decedent's death, claimed that he was entitled to one quarter of his trust's principal or $650,000. Despite a claimed entitlement to distributions in these amounts, Healey received a distribution in the amount of only $50,000 from the defendants and Ceruzzi received no distribution.

The complaint further alleged that, although Mantell had made prior assurances that the plaintiffs would receive their distributions from the residual trust, the defendants failed to create and fund the residual trust and distribute its principal. On July 30, 2019, the defendants informed the plaintiffs that they would not be making any further distributions from the estate.⁵ The defendants explained that no distributions could be made because of contractual agreements with lenders that the defendants had entered into as a part of their efforts to continue the decedent's business operations.⁶

The defendants’ efforts to continue to carry out the decedent's business operations, an action that allegedly was not required by the will, resulted in the estate becoming illiquid. After the estate became illiquid, it was no longer able to fund the residual trust or pay the residual trust's mandated distributions.⁷

In response to the plaintiffs’ complaint, the defendants moved to dismiss the action in its entirety and filed a memorandum in support of the motion along with supporting exhibits. The motion to dismiss raised three jurisdictional defects. First, the defendants alleged that the plaintiffs, as beneficiaries of the residual trust, lacked standing to sue the defendants because only trustees have standing to pursue damages on behalf of a trust. Second, the defendants alleged that the plaintiffs’ claims were not ripe because the administration of the estate was not complete. Third, the defendants alleged that, in regard to the second count sounding in legal malpractice, the plaintiffs lacked standing because they were neither clients of the law firm or Mantell, nor intended third-party beneficiaries of their legal services.

The plaintiffs subsequently filed an objection to the motion to dismiss with supporting exhibits. In opposing the defendants’ motion to dismiss, the plaintiffs responded to each of the defendants’ jurisdictional challenges in turn. The plaintiffs first argued that, because the defendants acted in bad faith in their administration of the estate by prioritizing their own interests over the beneficiaries’ best interests, the plaintiffs had standing as beneficiaries of the residual trust to sue the defendants for breaching their fiduciary duties as coexecutors and cotrustees. The plaintiffs next argued that their claims were ripe because the plaintiffs’ injury was clear, and the amount due to the plaintiffs was "known and within the coexecutors’ ability to be satisfied." Finally, the plaintiffs argued that they had an attorney-client relationship with Mantell and the law firm because of representations made to the plaintiffs that Mantell was their attorney. Alternatively, the plaintiffs argued that they were third-party beneficiaries of the legal services provided by Mantell and the law firm.

On June 14, 2021, the court heard oral argument on the defendants’ motion to dismiss. On July 16, 2021, the court issued a memorandum of decision that granted the defendants’ motion and dismissed all three counts brought by the plaintiffs. In dismissing the second count, the court held that the plaintiffs lacked standing to allege legal malpractice because the plaintiffs did not allege in the complaint that they were clients of Mantell, nor did the allegations in the complaint support any inference that they were intended third-party beneficiaries of Mantell's or the law firm's legal services. In dismissing counts one and three, the court held that those counts were not ripe for adjudication because the decedent's estate was still being probated and therefore the plaintiffs had yet to experience any injury. For these reasons, the court granted the motion to dismiss in its entirety.

Despite the court's finding that it did not have jurisdiction over the plaintiffs’ claims because they were not justiciable, it nevertheless concluded that the plaintiffs had standing as beneficiaries of the residual trust to bring the first and third counts of the complaint. The court first determined that the allegations in the plaintiffs’ complaint properly asserted causes of action arising out of the defendants’ conduct both as coexecutors and as cotrustees. Thus, in order to establish that the plaintiffs lacked standing to bring the first and third counts of the complaint, the plaintiffs would need to lack standing as beneficiaries of the residual trust to sue the defendants for their actions as both coexecutors and cotrustees. The court found that the plaintiffs had standing as beneficiaries of the residual trust to bring their claims against the defendants in their capacity as coexecutors. Specifically, the court noted that the plaintiffs’ complaint alleged sufficient facts to support that the defendants acted in bad faith and, consequently, the plaintiffs’ claim fell within an exception to the general rule that beneficiaries lack standing to sue on behalf of the estate....